- Manuli Hydraulics

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Manuli Rubber Industries (MRI) Group is a multinational company with a multidomestic
organisation focused on the design, manufacture and distribution of fluid conveying reinforced
rubber and metal components and systems for automotive, hydraulic and oil & marine applications.
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Dear reader,
in 2003 Manuli Rubber Industries Group has
achieved better results than in 2002.
Sales have grown by 3% at consolidated level. This
increase has been realised in spite of market conditions which were not ideal, determined by stagnation
in Europe and by the devaluation of the dollar and
the other main currencies against the Euro.
At Business Group level: the Hydraulics Business
Group grew by 6.5% thanks to the strengthening of
the sales network, initiated in 2002 and further consolidated in 2003; the Automotive Business Group
grew by 5.1%, achieving an increase in market share
particularly in the German market; the Oil & Marine
Business Group on the other hand recorded lower
sales due to short term factors.
For 2004, we are aiming to realise a growth in sales
in all three Business Groups. For the Hydraulics
Business Group, we are counting on further strengthening
our market share in hoses and fittings for applications requiring very demanding service performance,
Dardanio Manuli
Chairman and Chief Executive Officer
Manuli Rubber Industries
particularly in North America and Asia. We expect
significant growth in sales in the Automotive
Business Group, pulled forward by the new models
acquired with German customers. In the Oil & Marine
Business Group, the order portfolio already acquired
will allow growth to be resumed.
The economic results could be significantly conditioned by the trend of the exchange rate of the Euro
against the dollar and the other main currencies. To
meet this risk and to guarantee that the Group maintains its competitive position, we will continue with
our long term strategy of realising investments in
new production capabilities in countries with low
labour costs and with currencies which are more dollar linked.
During 2003 the Hydraulics Business Group
confirmed its technological and market leadership
position, with reference to the manufacture of reinforced rubber hoses and metal fittings, for use in
high and very high pressure systems.
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Activity to strengthen the international sales network
have continued. In fact, Manuli Hidraulica Brasil Ltda
was established and has since become operative,
with the purpose of strengthening the presence in the
South American market; a new assembly unit to
serve OEM customers has also been set up at Manuli
Hydraulics Europe, in the Czech Republic; expansion
of the metal fittings manufacturing plant in Poland
has also been initiated.
The activity of penetration into large OEM customers
has successfully gone forward; of particular note are
the agreements reached with Komatsu (UK), Volvo
(Canada), Tadano (Japan) and Sany (China).
Pressure Hoses Ltd., a UK company participated at
36.3% by Manuli Rubber Industries S.p.A., was
awarded the prize by Komatsu as the supplier of the
year 2003.
In France, Manuli Sonatra S.A. continued its commercial expansion, increasing the retail points of sale
to 47 (51 in May 2004), successfully over 9,000 customers, with a total number of catalogued references
exceeding 15,000.
Attention to the customer as a critical success factor
strengthened relationships with MRI’s commercial
partners through the development of specific services
and dedicated communication lines such as
customer service, help desk and quality call center.
The portal www.manuli-hydraulics.com, which was
created to facilitate communication and exchange of
information between MRI and the whole of its sales
network, has undergone improvements in the services
provided. The success and usefulness of the web
portal is testified by our customers; in 2003 around
60% of orders were placed using this system
(an increase over the 50% in the previous year).
Further investments have been planned to develop
an ever-improving service to customers in the context
of customer relationship management.
2003 saw the continuation of the activity of product
development and innovation, which led to the release
of a new edition of the general catalogue and to the
creation of additional catalogues for specific families
of products. In particular, the product range available
for mining applications has been extended together
with the availability of large bore hoses, both braided
and spiralled, for very high pressure systems.
With regards to fittings, the ONE-PIECE (MF3000)
range of fittings has been developed to respond to
the requirements of the American market. The project
has generated new families of end configurations
which will be made available also to the rest of the
market.
The entry of Manuli Refrigeration Connectors S.p.A.,
managed within the Hydraulics Business Group since
2003, will allow the development of a range of air
conditioning products based on the specific needs of
the “Off-Highway” customers.
During 2003 the Automotive Business Group
increased its sales volumes, in spite of the fact that
European market conditions were not particularly
favourable. The growth in sales allowed the Group to
consolidate its position of leadership in the European
air conditioning hose market.
Thanks to the new models acquired, the significance
of the German market has increased within the
Automotive Business Group’s large customer portfolio, the market share in France and Scandinavia has
also been strengthened.
In 2003 the Automotive Business Group significantly
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improved its results thanks to the positive outcome of
the industrial reorganisation and to the positive
implementation of the cost saving activities.
The growth in production volumes was realised
above all by the Polish plant in Tychy which doubled
its manufacturing capacity during 2003. To support
the further growth in volumes and in market share
forecasted for 2004, a new factory has been set up
in Poland, at Chelmek, a few kilometres away from
the Tychy plant.
The growth of this Business will not only take place
in Europe. Our company in Brasil, Manuli Auto Do
Brasil Ltda, has recently relocated to a larger production site in order to keep pace with the growth in
sales volumes which will be achieved following the
acquisition of new customers. In the first few months
of 2004, a company has also been set up in China
with the objective of serving our European customers
which have production facilities there.
The rationalisation and strengthening activities related
to the technical and commercial structure continued,
with the aim of improving customer service. In 2003,
the following quality certifications were obtained: ISO
TS 16949 for Manuli Auto France S.A. and ISO TS
16949 v. 2002 for Manuli Automotive S.p.A. and
Manuli Auto do Brasil Ltda.
The Automotive Business Group confirmed its position as European technological and cost leader in
reinforced rubber and composite hoses and flexible
hose assemblies for air conditioning systems. We will
continue our research and technological innovation
work to maintain and consolidate our competitive
position and our leadership.
by a contract for hoses for an important customer,
which will be invoiced in the course of 2004. Growth
is expected to be resumed during the current year.
All three Business Groups have continued with their
Research & Development activities with the
objective of maintaining their position of technological leadership as regards their products and of
responding increasingly better to our customers’
requirements. During 2003, the Group invested
almost 7 million euros in R&D costs, wholly expensed
in the income statement for the year.
The Group, which realises about 90% of its sales
abroad, continues in its growth strategy of both
sales and production at a multinational level. In this
context, attention to the quality of the organisation
and the training of Human Resources is an ever
increasing critical success factor which we are pursuing as a priority.
In spite of the fact that the Group is no longer listed on
the Italian Stock Exchange, it is our strong intention to
maintain and continue to implement the Corporate
Governance standards adopted last year.
Finally, I wish to thank, also on behalf of the Board of
Directors, our customers for their confidence and all
our employees for their increasing commitment to
providing satisfaction to our customers’ ever increasing needs.
In 2003 the sales of the Oil & Marine Business
Group fell with respect to 2002.
The decrease was determined partly by the market
slow down and the devaluation of the dollar (currency
of reference for this Business Group) and partly by
the saturation of the manufacturing capacity caused
Dardanio Manuli
Chairman & Chief Executive Officer
Manuli Rubber Industries
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The Manuli Rubber Industries Group is one of the
leading world manufacturers in the sector of
hydraulic hoses for fluid transmission at high and
very high pressure and also in the market of flexible
hoses for air conditioning systems for cars.
Set up in Milan in 1935, spurred on by the enterpreneurial idea of its founder Dardanio Manuli, the
Group has grown over the years thanks to its innovative capacity. Manuli Rubber Industries today has 28
companies operating in more than twenty countries
around the world, organised into three Business
Groups. In 2003 it reported sales of 358.3 million
euros and employed over 3,000 people.
The Manuli brand is well known for the superior
performance of its products.
MAIN EVENTS IN 2003
• The Automotive Business Group increased its
market share in Germany.
• Manuli Auto Polska doubled its production capacity and started up a new factory in Chelmek, just a
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few kilometers away from the Tychy plant.
Manuli Auto do Brasil relocated to a larger production plant and acquired new customers.
The Hydraulics Business Group further strengthened its sales network and set up Manuli
Hidraulica do Brasil in Rio de Janeiro and Manuli
Hydraulics Rus in Moscow.
The Hydraulic Business Group's OEM division
strengthened its assembly capacity, setting up a
new operating unit in the Czech Republic, Manuli
Hydraulics Europe.
Manuli Hydraulics Polska expanded its production
plant for metal fittings.
The www.manuli-hydraulics.com portal continued
its development strategy related to online orders,
achieving a percentage of about 60% on total
value of orders.
Research & Development activity continued its
expansion, thanks to the constant increase in
investments aimed at ever better meeting customers' needs.
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2003 NET SALES OF THE AUTOMOTIVE BUSINESS GROUP
MAY BE SPLIT AS FOLLOWS:
During 2003 net sales realised by the Automotive
Business Group, amounting to €177,286 thousand,
recorded an increase of 5.1% with respect to the previous year, in spite of the unfavourable economic situation in the Group’s market of reference. This positive
result was mainly achieved thanks to a strategy,
aimed at keeping production costs down, strengthening the customer portfolio and offering competitive
products destined for the new platforms of prestigious customers, among which the following should
be noted: Audi, BMW, Renault, Volkswagen, Volvo.
2003 furthermore saw a significant improvement in
the results of the Automotive Business Group Auto
thanks to the positive results of the industrial reorganisation and the control of costs, both of which
were initiated in previous years covering all the sites
at European level.
Particular note should be taken of the strengthening of
the manufacturing capacity in the Polish hub. Manuli
Auto Polska, with headquarters in Tychy, increased its
importance in the context of the group, its sales rising
by 109% compared to the previous year.
The new production unit of Manuli Auto
Polska in Chelmek - Poland.
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Air conditioning flexible hose assemblies for
the Volkswagen Golf.
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Standard operating conditions of the Polish factory
were reached in the second half of 2003, above all
thanks to the start of the production of items destined
for the new platform of the customer VW GOLF.
The importance of the Polish production hub was
further increased with the creation of the second
factory in Chelmek. This new manufacturing unit of
Manuli Auto Polska is situated just a few kilometres
away from the main factory at Tychy and covers an
area of approximately 10,000 square meters. The
first manufacturing processes were initiated in
February 2004.
The strategy of developing new manufacturing
locations did not stop at Poland but has developed
overseas, both in China and in Brasil. At the end
of 2003 the foundations were set for the future
Chinese factory, by incorporating Manuli Automotive
Components (Dalian) Co Ltd. (China). This Asian
company has as its mission the increase of market
share with the main European customers who are
developing their production facilities in China.
The new Chinese factory will witness the start of
industrial production in the first half of 2004, as supplier to BMW (Shenyang).
In Brasil our company Manuli Auto do Brasil Ltda
has just relocated to a larger production facility in
order to meet the growth in sales volumes achieved
through the acquisition of new customers.
The new Brazilian production unit covers an area of 7,300 sqm.
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Air conditioning flexible hose assemblies
for the new Volvo S50.
The main commercial events, which have caused the
increase in market share with the main customers, are:
• in the first half of 2003, the consolidation of sales
of air conditioning products for the Renault
MEGANE, thus continuing the development of the
partnership with Renault;
• in the second half of the year, the supply of air
conditioning assemblies for the new Volkswagen
platform both for the Golf and Audi A3 models;
• development of the sales of air conditioning
assemblies for the new P1X Volvo platform, futher
consolidating the Manuli Group’s lasting relationship with Volvo;
• development in sales of air conditioning assem-
blies for the OPEL CORSA (diesel engine), which was
started in the second half of 2003.
With regards to quality, activity continued leading to
the achievement of ISO TS 16949 certification for
Manuli Auto France S.A. and ISO TS 16949 v. 2002
certification for Manuli Automotive S.p.A. and
Manuli Auto do Brasil Ltda.
The Automotive Business Group thus continues its
path of growth, both in Europe and overseas, whilst
confirming its position as technological leader capable of offering a continuous activity of research and
innovation which is its characteristic trait, thus allowing the Manuli Group to consolidate its competitive
position in its markets of reference.
Air conditioning flexible hose assemblies
for Opel Corsa.
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Volvo Construction Equipment excavators with flexible hose assemblies supplied by Manuli Hydraulics Korea.
During 2003, the net sales of the Hydraulics
Business Group increased by 6.5% compared to the
previous year, reaching €173,790 thousand.
SPLIT OF 2003 NET SALES OF THE HYDRAULICS
BUSINESS GROUP BY GEOGRAPHICAL AREA:
The Hydraulics Business Group confirmed its position as European market leader for the production of
steel reinforced rubber hoses and metal fittings for
use in high and very high pressure systems.
It increased penetration of the North American market (USA, Canada and Mexico) and has grown in the
Far East area (China and Korea).
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Recognition achieved by Pressure Hoses from
the customer Komatsu as “Supplier of the Year
2003”.
Liugong excavator equipped with hose assemblies supplied by Manuli
Hydraulics Shanghai.
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As far as the OEM segment is concerned, whilst continuing its policy of growth with the main world players
in Europe, North America and the Far East, the OEM
division of the Hydraulics Business Group acquired
and developed important customers including
Komatsu – UK, Volvo – Canada, Tadano – Japan and
Liugong – China.
In February 2004, the participated company
Pressure Hoses Ltd, which specifically serves OEM
customers in the UK, was awarded the prize as best
supplier of the year by Komatsu for 2003.
In France, Manuli Sonatra S.A. continued to expand,
increasing the retail points of sale to 47 (51 in May
2004); these units, which distribute and sell
hydraulics products, are in a position to serve over
9,000 customers, for a total number of catalogued
references exceeding 15,000.
Attention to the customer as a critical success factor
strengthened relationships with MRI’s commercial
partners through the realisation of specific services
and dedicated communication lines such as “customer service”, “help desk” and “quality call center”. The portal www.manuli-hydraulics.com, which
was created to facilitate communication and
exchange of information between MRI and the whole
of its sales network, has undergone improvements in
the services offered, adapting them to the customers’ needs and requirements.
The new hose assembly unit, Manuli Hydraulics Europe,
located in the Czech Republic.
Manuli Hydraulics Europe covers an area of 3,000 sqm.
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Following a project initiated during 2002, which was
completed in the first few months of 2003, a training
programme was also issued, accessible to customers
also through the web portal. Total orders through the
web by customers in 2003 reached 60% of the overall value, an increase compared to the 50% recorded
in 2002. Further investment in the portal is forecast
to develop an ever-improving service to customers in
a CRM context.
During 2003, Manuli Hidraulica Brasil Ltda was set
up and became operative; this company is intended
to strengthen the Hydraulic Business Group’s
presence in the South American market. A new manufacturing unit was set up in the Czech Republic,
Manuli Hydraulics Europe, for the purpose of optimising the supply of hose assemblies to the major
European OEM customers; furthermore, the first
phase of expansion of the manufacturing plant for
metal fittings in Poland (Manuli Hydraulics Polska)
was completed; lastly the construction of the new
centralised warehouse for the distribution of fittings,
located in Poland, was initiated.
The metal fittings manufacturing plant of Manuli Hydraulics Polska covers an area of 15,000 sqm.
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Cover of the new products catalogue for the North American market.
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The new Shieldmaster™ products range for “Frost” (extremely
cold) and “Mine” (mining) applications.
2003 saw the continuation of the activity of product
development and innovation, which led to the
release of a new and more complete edition of the
general catalogue and to the creation of additional
catalogues for specific families of products.
In particular, the Hydraulics Business Group published and distributed the new “MF Fluid Connectors”
catalogue for the distribution of the range of
products destined for the North American market, in
addition to the recent MF4000 catalogue for the sale
of adaptors in order to offer its clients a complete
and integrated range.
Development and innovation activity also saw a consistent widening of products offered for mining
applications, thanks to the introduction of the
SHIELDMASTERTM MINE range of hoses, ideal for
applications operating in extreme conditions inside
mining environments which, due to the specific
nature of the application, require the products to be
able to perform at levels of excellence in terms of
resistance to abrasion, to ozone and to the spread of fire.
Lastly, development activity has also led to the exten-
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sion of the “large bore” range of hoses to the families
of very high pressure braided and spiralled hoses.
TM
With regards to fittings, the ONE-PIECE
range of fittings has been developed and further
widened, to meet the requirements of the American
market. The project has generated new families of
end configurations which will be made available also
to the rest of the market.
Lastly, the entry of Manuli Refrigeration Connectors
S.p.A., managed within the Hydraulics Business
Group since 2003, will allow the development of a
range of air conditioning products based on the
specific needs of the “Off-Highway” customers.
The focus of Manuli Refrigeration Connectors solely
on these markets guarantees a high qualitative standard as well as the constant search for technologically innovative solutions and products.
On the quality front, preparatory activities continued
in relation to obtaining ISO 14001 environmental
certification for the hose factory at Ascoli Piceno
(Italy) and the fittings factory at Myslowice (Poland).
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Large Bore Hose range extension promoted by the Hydraulics Business Group.
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Double carcass anti-pollution hoses
in use in the North Sea.
In 2003 sales realised by the Oil & Marine Business
Group amounted to €7,232 thousand, a decrease of
around 55% compared to 2002.
This contraction is partly due to the acquisition of a
contract for the supply of hoses for three OEM plants
destined for Algeria, which saturated a large part of
the production capacity of the Ascoli Piceno factory
for the whole of 2003. During 2004, the hoses for all
three OEM plants will be despatched, installed and
thus invoiced to the customer.
In addition, the relationship with Shell Corporation,
established years ago through a multiyear supply
contract, continued successfully.
For 2004 maintenance of the market share is fore-
casted, although both the climate of uncertainty, due
to political tension in the Middle East region as well
as the weakness of the dollar (the currency of reference for this market) could continue, influencing negatively sales and profitability.
Nevertheless the Oil & Marine Business Group is continually evolving; with the start of 2004, the technical
and commercial organisation was strengthened with
the addition of a new dedicated resource.
Furthermore, the design of new types of hoses has
been initiated, in order to improve the already well
established technical and qualitative standards of
our products, which have been on the market now for
several years.
Flexible long length flowlines being installed off the Gabonese Coast.
Installed flexible hose for load/unload oil on vessel.
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ENVIRONMENTAL POLICY
During 2003 the Manuli Rubber Industries Group continued the implementation of programmes aimed at
creating a development model which could be realised
through operational choices having no negative impact
on the environment and on people’s health.
The Manuli Rubber Industries Group’s attention for the
environment has taken shape through a series of initiatives involving the production units and the product
development centres of all the Business Groups.
In particular, in the context of the Hydraulics Business
Group, to be noted is the completion of the preliminary
activities concerning the achievement of the ISO
14001 certification for the Ascoli Piceno plant, which
should take place during the first half of 2004. This
certification is aimed at the creation of a management
system oriented towards the protection of the environment in terms of: subsoil control, water emissions, the
correct management of industrial waste disposal and
control of emissions into the atmosphere.
Lastly, Manuli Hydraulics Polska completed the project
aimed at achieving the ISO 14001 environmental
certification, previously also obtained by Manuli
Refrigeration Connectors and Manuli Hydraulics Korea,
companies belonging to the Hydraulics Business Group.
As far as the Automotive Business Group is concerned, activity continued in order to achieve quality
certification of the main production units according to
the standards established by ISO 14001. In particular,
in January 2004, the Manuli Auto Polska plant in
Tychy obtained ISO 14001 certification. As far as the
other production units are concerned, activities aimed
to obtain the relative certification by the end of 2004
have been initiated.
Still in the context of the Automotive Business Group,
which carries out in depth product development activity for very low permeability air conditioning systems,
the environmental policy is oriented towards the development of new products which will meet the new and
stricter environmental legislation which will be enacted by the European Union.
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BOARD OF DIRECTORS
in office untill the approval of the financial statements
at December 31, 2006
Dardanio Manuli - Chairman and Chief Executive Officer
Mario Manuli - Managing Director
Roberto Cagnazzo - Director
Maurizio Cossalter - Director
Sergio Erede - Director
Antonella Manuli - Director
Antonello Manuli - Director
Marco Manuli - Director
Sandro Manuli - Director
Stefano Meloni - Director
Giuseppe Pirola - Director
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BOARD OF STATUTORY AUDITORS
in office untill the approval of the financial statements
at December 31, 2006
Carlo Ticozzi Valerio - Chairman
Giorgio Ferrante - Auditor
Nicolino Cavalluzzo - Auditor
Beatrice Chiezzi - Substitute Auditor
Franco Caramanti - Substitute Auditor
INDEPENDENT AUDITORS
PricewaterhouseCoopers S.p.A.
Corso Europa 2, 20122 Milan
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RECLASSIFIED CONSOLIDATED INCOME STATEMENT
2003
%
2002
%
Change
incr. %
358,308
100.0%
347,908
100.0%
10 ,400
3.0%
Other revenues and income
3,390
0.9%
3,168
0.9%
222
7.0%
Changes in inventory of finished products
and work in progress
4,413
1.2%
(2,876)
-0.8%
7,289
n.s.
Value of production
366,111
102.2%
348,200
100.1%
17,911
5.1%
Purchase of materials
Changes in raw materials inventory
Services received
Other costs
(149,547)
(1,310)
(59,597)
(8,494)
-41.7%
-0.4%
-16.6%
-2.4%
(135,785)
1,809
(63,942)
(6,249)
-39.0%
0.5%
-18.4%
-1.8%
(13,762)
(3,119)
4,345
(2,245)
10.1%
-172.4%
-6.8%
35.9
Value added
147,163
41.1%
144,033
41.4%
3,130
2.2%
Cost of labour
(83,325)
-23.3%
(83,485)
-24.0%
160
-0.2%
Gross Operating Profit (EBITDA)
63,838
17.8%
60,548
17.4%
3,290
5,4%
Depreciation and amortisation
Other provisions
(21,262)
(2,806)
-5.9%
-0.8%
(22,097)
(1,977)
-6.4%
-0.6%
835
(829)
-3.8%
41.9%
Operating profit (EBIT)
39,770
11.1%
36,474
10.5%
3,296
9.0%
(1,651)
(3,962)
144
(971)
-0.5%
-1.1%
0.0%
-0.3%
(2,013)
(3,971)
(71)
(971)
-0.6%
-1.1%
0.0%
-0.3%
362
9
215
-
-18.0%
-0.2%
n.s.
0.0%
33,330
9.3%
29,448
8.5%
3,882
13.2%
(2,892)
-0.8%
(1,816)
-0.5%
(1,076)
59.3%
Profit before taxes
30,438
8.5%
27,632
7.9%
2,806
10.2%
Income taxes: current
deferred
(10,599)
1,803
-3.0%
0.5%
(13,170)
(358)
-3.8%
-0.1%
2,571
2,161
-19.5%
n.s.
PROFIT (LOSS) FOR THE PERIOD
21,642
6.0%
14,104
4.1%
7,538
53.4%
(amounts in thousands of euros)
Net sales
Net financial income and charges
Net profit and loss on exchange
Writedown/revaluation of equity investments
Amortisation of goodwill
Profit before extraordinary items
Net sundry income and charges
The figures are taken from the Manuli Rubber Industries
Group’s consolidated financial statements
at December 31, 2003.
Such financial statements have been audited by
PricewaterhouseCoopers, which issued its report,
with no exceptions, on April 14, 2004.
The financial statements and related report are deposited
with the company.
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RECLASSIFIED CONSOLIDATED BALANCE SHEET
2003
2002
Change
incr. %
88,245
51,189
2,336
18,665
82,206
49,838
2,218
12,400
6,039
1,351
118
6,265
7.3%
2.7%
5.3%
50.5%
160,435
146,662
13,773
9.4%
Trade accounts payable
Other payables
Accrued liabilities and deferred income
Amounts due to tax authorities
Provisions for risks and charges
63,171
14,494
2,786
10,551
7,950
52,290
12,760
2,448
6,545
7,664
10,881
1,734
338
4,006
286
20.8%
13.6%
13.8%
61.2%
3.7%
Total current liabilities
98,952
81,707
17,245
21.1%
WORKING CAPITAL
61,483
64,955
(3,472)
-5.3%
90,843
7,468
858
10,851
92,272
10,317
771
6,946
(1,429)
(2,849)
87
3,905
-1.5%
-27.6%
11.3%
56.2%
Total non current assets
110,020
110,306
(286)
-0.3%
CAPITAL EMPLOYED LESS CURRENT LIABILITIES
171,503
175,261
(3,758)
-2.1%
13,924
13,612
312
2.3%
157,579
161,649
(4,070)
-2.5%
5,018
1,503
6,095
1,004
78,408
35,265
21,642
5,018
1,503
6,095
1,004
69,080
38,399
14,104
9,328
(3,134)
7,538
13.5%
-8.2%
53.4%
GROUP SHAREHOLDERS’ EQUITY
148,935
135,203
13,732
10.2%
Medium/long term financial payables
Other medium/long term payables
(37,393)
(835)
(30,881)
(835)
(6,512)
-
21.1%
Medium/long term indebtedness
(38,228)
(31,716)
(6,512)
20.5%
53,244
21,802
(5,000)
1,602
5,910
69.3%
-100.0%
-27.6%
-23.3%
(amounts in thousands of euros)
Current assets:
Trade accounts receivable
Inventories
Prepayments and accrued income
Other current assets
Total current assets
Current liabilities :
Non current assets :
34
Tangible fixed assets
Intangible fixed assets
Equity investments and securities
Other non current assets
STAFF SEVERANCE INDEMNITIES
NET CAPITAL EMPLOYED
FUNDED BY :
Share capital
Share premium reserve
Revaluation reserve
Legal reserve
Other reserves
Profits brought forward
Profit for the year
Current liquid assets
Other current financial assets
Current portion of loans and other liabilities
Current financial liabilities
(4,208)
(19,452)
31,442
5,000
(5,810)
(25,362)
Short term net liquid funds (indebtedness)
29,584
5,270
24,314
n.s.
NET FINANCIAL POSITION
(8,644)
(26,446)
17,802
-67.3%
157,579
161,649
(4,070)
-2.5%
TOTAL SOURCES OF FUNDING
Manuli English
2-07-2004
15:47
Pagina 35
CONSOLIDATED CASH FLOW STATEMENT
31/12/03
31/12/02
21,642
14,104
Amortisation and depreciation
Amortisation of consolidation difference
Staff severance indemnities matured in the year
Accrual to (utilisation of) provisions for risks and charges
Gain on disposal of fixed assets
Writedown of equity investments and Goodwill
21,262
971
2,561
286
(7)
(144)
22,097
971
2,444
(4,761)
(108)
(2,987)
Total items not affecting liquid funds
24,929
17,656
SELF-FINANCING
46,571
31,760
(6,039)
(1,351)
(118)
(6,265)
(6,322)
3,028
(749)
2,364
(13,773)
(1,679)
Trade accounts payable
Other payables
Accrued expenses and deferred income
Payables to tax authorities
10,881
1,734
338
4,006
(5,778)
463
114
(2,166)
Total current liabilities
16,959
(7,367)
(amounts in thousands of euros)
Profit (loss) for the year
Items not affecting liquid funds:
Current assets:
Trade accounts receivable
Inventories
Prepayments and accrued income
Other current assets
Total current assets
Current liabilities:
Changes in current assets and liabilities
3,186
(9,046)
Cash flow from operating activity
49,757
22,714
Purchase of tangible fixed assets
Proceeds from sale of fixed assets
Increase in intangible fixed assets
(Increase) Decrease in financial fixed assets
(20,974)
535
(1,843)
(3,848)
(6,764)
148
(858)
5,591
(26,130)
(1,883)
(2,250)
(2,103)
(5,022)
1,434
(2,174)
632
(5,838)
(3,645)
13
-
17,802
17,186
(26,446)
(43,632)
(8,644)
(26,446)
Cash flow from investment activity
Staff severance indemnities paid in the year
Other changes in shareholders’ equity:
Dividends distributed
Translation differences and other movements
Cash flow from financial activity
Other changes (consolidation area)
INCREASE (DECR.) IN NET FINANCIAL POSITION
NET FINANCIAL POSITION AT BEGINNING OF YEAR
NET FINANCIAL POSITION AT END OF YEAR
35
Manuli English
2-07-2004
15:47
Pagina 36
CAPEX
1999-2003 trend of depreciation and capital expenditure of MRI Group in millions of euros.
TANGIBLE FIXED ASSETS 31/12/2003
Historical
cost
Amortisation
provision
Net
value
44.3
16.6
27.7
163.6
117.0
46.6
35.8
29.8
6.0
Land and buildings
Plant and machinery
Industrial and commercial equipment
Other assets
0.5
0.4
0.1
10.4
-
10.4
254.6
163.8
90.8
Historical
cost
Amortisation
provision
Net
value
Start up and expansion costs
0.4
0.2
0.2
Industrial patent rights
and rights to use intellectual property
8.4
6.2
2.2
Concessions, licences, trademarks and similar 1.1
0.7
0.4
Goodwill
3.4
3.4
Assets in progress and advances
0.6
Other
5.0
4.1
1.0
Consolidation difference
7.4
4.3
3.1
26.4
18.9
7.5
Assets under construction and advances
Total
36
INTANGIBLE FIXED ASSETS 31/12/2003
TOTAL
0.0
0.6
SHAREHOLDERS’ EQUITY
Shareholders’ equity
BALANCE AT
31/12/02
USE
Conversion
difference
Profit
for the year
Other
change
BALANCE AT
31/12/03
Share capital
5.0
-
-
-
-
5.0
Share premium reserve
1.5
-
-
-
-
1.5
Revaluation reserves
6.1
-
-
-
-
6.1
Legal reserve
1.0
-
-
-
-
1.0
Other reserves
69.1
12.2
(2.9)
-
-
78.4
(Profit)/loss brought forward
38.4
(3.1)
-
-
-
35.3
(Profit)/loss for the year
14.1
(14.1)
-
21.6
-
21.6
135.2
(5.0)
(2.9)
21.6
-
148.9
Total shareholders’ equity
Manuli English
2-07-2004
15:53
Pagina 37
NET FINANCIAL POSITION
1999-2003 trend of net financial position of MRI Group in millions of euros.
Net consolidated financial indebtedness is made up
as follows:
• Loans/financing received and other liabilities of a
financial nature: €61.9 million
• Short term availability €53.3 million
Financing received is made up mainly of long term
loans at soft rate interest and mortgages
Short term liquid funds are held mainly by Manuli
Rubber Industries S.p.A. and are generated by cash
flow of the business. Short term available funds of
Manuli Rubber Industries S.p.A. at December 31,
2003 were invested in the amount of €30 million in
monthly bank deposits. The amount invested was
split as follows: €25.0 million at the flat Euribor rate,
€5.0 million at the flat Euribor rate less 0.03%.
In detail, deposits at December 31, 2003 were held
with the following banks (millions of euros):
• Unicredit
• Mediobanca
• Banca di Roma
• Banca Popolare di Milano
15.0
5.0
5.0
5.0
30.0
euro/ml
euro/ml
euro/ml
euro/ml
euro/ml
37
Manuli English
2-07-2004
15:53
Pagina 38
RECLASSIFIED INCOME STATEMENT OF MRI SPA
(amounts in euros)
31/12/03
%
31/12/02
%
Change
incr.%
Net sales
135,060,729
100.0%
111,330,275
3,652,326
3,860,676
2.7%
2.9%
2,609,977
(419,809)
100.0%
23,730,455
21.3%
2.3%
-0.4%
1,042,349
4,370,838
39.9%
n.s.
142,573,731
105.6%
113,520,443
102.0%
29,143,641
25.7%
(68,781,453)
639,655
(24,048,428)
(1,242,131)
-50.9%
0.5%
-17.8%
-0.9%
(46,206,977)
50,411
(19,754,259)
(1,087,090)
-41.5%
0.0%
-17.7%
-1.0%
(22,574,476)
498,891
(4,294,169)
(155,041)
48.9%
n.s.
21.7%
14.3%
Value added
49,141,374
Cost of labour
(25,805,668)
36.4%
46,522,529
41.8%
2,618,845
5.6%
-19.1%
(21,774,356)
-19.6%
(4,031,312)
18.5%
Gross Operating Profit (EBITDA)
23,335,706
17.3%
24,748,173
22.2%
(1,412,467)
-5.7%
Amortisation and depreciation
Other provisions
(19,171,511)
(208,075)
-14.2%
-0.2%
(14,452,390)
(366,924)
-13.0%
-0.3%
(4,719,121)
158,849
32.7%
-43.3%
Operating profit (EBIT)
3,956,120
2.9%
9,928,859
8.9%
(5,972,739)
-60.2%
Net financial income and charges
Net profits and losses on exchange
Writedown/revaluation of equity investments
6,000,228
(1,443,507)
-
4.4%
-1.1%
0.0%
5,728,928
(1,093,094)
(4,213,549)
5.1%
-1.0%
-3.8%
271,300
(350,413)
4,213,549
4.7%
32.1%
-100.0%
Profit before extraordinary items
8,512,841
6.3%
10,351,144
9.3%
(1,838,303)
-17.8%
Sundry net income and charges
(1,562,947)
-1.2%
(1,280,388)
-1.2%
(282,559)
22.1%
Profit before taxes
6,949,894
5.1%
9,070,756
8.1%
(2,120,862)
-23.4%
Income taxes:
current
deferred
(1,278,268)
(878,575)
-0.9%
-0.7%
(5,124,181)
304,151
-4.6%
0.3%
3,845,913
(1,182,726)
-75.1%
n.s.
PROFIT (LOSS) FOR THE YEAR
4,793,051
3.5%
4,250,725
3.8%
542,326
12.8%
Other income and revenues
Changes in inventories of finished
products and work in progress
Value of production
Purchase of materials
Changes in inventory of raw materials
Services received
Other costs
38
Manuli English
2-07-2004
15:53
Pagina 39
RECLASSIFIED BALANCE SHEET OF MRI SPA
31/12/03
31/12/02
40,959,354
21,804,548
916,714
5,941,125
33,397,762
10,350,214
929,886
2,130,031
7,561,592
11,454,334
(13,172)
3,811,094
22.6%
110.7%
-1.4%
178.9%
69,621,741
46,807,893
22,813,848
48.7%
28,422,401
3,580,489
850,176
5,003,056
1,831,850
16,557,179
2,915,807
747,922
2,022,820
1,514,794
11,865,222
664,682
102,254
2,980,236
317,056
71.7%
22.8%
13.7%
147.3%
20.9%
Total current liabilities
39,687,972
23,758,523
15,929,449
67.0%
WORKING CAPITAL
29,933,769
23,049,370
6,884,399
29.9%
52,711,352
1,530,492
29,534,623
22,332,145
37,351,903
3,098,425
30,553,366
35,659,953
15,359,449
(1,567,933)
(1,018,743)
(13,327,808)
41.1%
-50.6%
-3.3%
-37.4%
Total non current assets
106,108,612
106,663,647
(555,035)
-0.5%
CAPITAL EMPLOYED LESS CURRENT LIABILITIES
136,042,381
129,713,017
6,329,364
4.9%
8,223,871
7,539,058
684,813
9.1%
127,818,510
122,173,959
5,644,551
4.6%
5,017,906
1,503,248
40,441,225
1,003,581
5,017,906
1,503,248
22,077,826
1,003,581
83.2%
-
60,623,702
35,264,916
4,793,051
49,546,262
38,399,157
4,250,725
18,363,399
11,077,440
(3,134,241)
542,326
SHAREHOLDERS’ EQUITY
148,647,629
121,798,706
26,848,923
22.0%
M/L term financial payables
Other m/l term payables
Long term financial payables
(12,084,499)
(1,554,236)
(14,306,590)
(1,095,520)
2,222,091
(458,716)
-
-15.5%
41.9%
(13,638,735)
(15,402,110)
1,763,375
-11.4%
37,424,222
(2,956,368)
13,004,276
5,000,000
(2,977,419)
24,419,947
(5,000,000)
21,051
-
187.8%
-100.0%
-0.7%
Short term net liquid funds (indebtedness)
34,467,854
15,026,857
19,440,997
129.4%
NET FINANCIAL POSITION
20,829,119
(375,253)
21,204,372
n.s.
127,818,510
122,173,959
5,644,551
4.6%
(amounts in euros)
Change
incr. %
Current assets:
Trade accounts receivable
Inventories
Accrued income and prepayments
Other current assets
Total current assets
Current liabilities:
Trade accounts payable
Other payables
Accrued liabilities and deferred income
Amounts payable to tax authorities
Provisions for risks and charges
Non current assets:
Tangible fixed assets
Intangible fixed assets
Equity investments and securities
Other non current assets
STAFF SEVERANCE INDEMNITIES
NET CAPITAL EMPLOYED
FUNDED BY :
Share capital
Share premium reserve
Revaluation reserves
Legal reserve
Reserve for treasury stock held
Statutory reserves
Other reserves
Profits brought forward
Profit for the year
Net medium/long term indebtedness
Current liquid assets
Other current financial assets
Current portion of long term debt and other liabilities
Current financial liabilities
TOTAL SOURCES OF FUNDING
22.4%
-8.2%
12.8%
39
Manuli English
2-07-2004
15:53
Pagina 40
CASH FLOW STATEMENT OF MRI SPA
31/12/03
31/12/02
Profit (loss) for the year
4,793,051
4,250,725
Items not affecting liquidity:
Amortisation of tangible fixed assets
Amortisation of intangible fixed assets
Staff severance indemnities matured in the period
Accrual to (use of) provisions for risks and charges
Writedown of equity investments
16,860,815
2,310,696
1,454,868
317,056
-
12,385,854
2,066,536
1,210,623
(4,620,020)
1,155,316
(amounts in euros)
Total items not affecting liquidity
20,943,435
12,198,309
25,736,486
16,449,035
(7,561,592)
(11,454,334)
13,172
(3,811,094)
(713,672)
368,405
(547,376)
1,161,126
(22,813,848)
268,484
11,865,222
664,682
102,254
(1,327,228)
(1,537,780)
265,269
204,785
(3,447,096)
11,304,929
(4,514,821)
(11,508,919)
(4,246,337)
14,227,567
12,202,697
(9,676,422)
127,021
(742,763)
14,346,551
(1,377,646)
423,017
1,058,367
(21,121,163)
Cash flow from investment activity
4,054,387
(21,017,425)
Staff severance indemnities paid in the period
Other changes in staff severance indemnities
Other changes to shareholders’ equity:
Dividends distributed
Share capital increase
Other changes in shareholders’ equity
Reserve for accelerated depreciation
(1,474,351)
704,296
(1,106,857)
-
(5,017,906)
8,565,289
145,090
(2,174,426)
(217,522)
SELF FINANCING
Current assets:
Trade accounts receivable
Inventories
Prepayments and accrued assets
Other current assets
Total current assets
Current liabilities:
40
Trade accounts payable
Other payables
Accrued expenses and deferred income
Amounts payable to tax authorities
Total current liabilities
Changes in current assets and liabilities
Cash flow generated by operating activity
Purchase of tangible fixed assets
Proceeds from sale of fixed assets
(Increase) decrease in intangible fixed assets
(Increase) decrease in financial fixed assets
CASH FLOW FROM FINANCIAL ACTIVITY
INCREASE (DECR.) IN NET FINANCIAL POSITION
NET FINANCIAL POSITION AT BEGINNING OF YEAR
NET FINANCIAL POSITION AT END OF YEAR
2,922,418
(3,498,805)
21,204,372
(12,313,533)
(375,253)
11,938,280
20,829,119
(375,253)
Manuli English
2-07-2004
15:53
Pagina 41
STRUCTURE OF THE GROUP
at DECEMBER 31, 2003
41
Manuli English
2-07-2004
15:53
Pagina 42
MANULI RUBBER INDUSTRIES S.p.A.
AUTOMOTIVE
Headquarters
Piazza della Repubblica 14/16
20124 Milano - Italy
tel. +39 02 62713.1
fax +39 02 62713.382
info@manulirubber.com
MANULI AUTO INTERNATIONAL SA
99, Grand-Rue
1661 Luxembourg
tel. +352 471817
fax +352 475354
info@manulirubber.com
Web Site
The following information is available in MRI’S web site
(www.manulirubber.com and www.manuli-hydraulics.com):
• Presentation of MRI Group
• Profile of the Business Groups
• Marketing and commercial events calendar
• Financial information
• Stock market performance
• Press releases
• Press cuttings
• Hydraulic products catalogue
e-mail: info@manulirubber.com
42
MANULI AUTO FRANCE SA
Le Jardin d’Entreprises 2,
Avenue Gustave Eiffel
BP 897
28011 Chartres - France
tel +33 237 304200
fax +33 237 301718
info@manuliautofr.com
MANULI AUTOMOTIVE S.p.A.
Via Boccaccio, 1
20090 Trezzano sul Naviglio
Milano - Italy
tel. +39 02 48459.1
fax +39 02 48459231
info@manulirubber.com
MANULI AUTO HOLLAND NV
Borchwerf, 39
4704 RG - Roosendaal - Holland
tel. +31 165 576657
fax +31 165 576658
info@manulirubber.com
MANULI AUTO IBERICA SL
Parcela n. 50 Poligono Industrial
39480 Guarnizo - Cantabria - Spain
tel. +34 942 558738
fax +34 942 558990
maib@manuliautoes.com
MANULI AUTO DO BRASIL Ltda
Rua Juscelino Kubitschesck de Oliveira
1361 Curitiba - Paranà - Brazil
Zip code: 81280 - 140
tel. +55 41 373 7005
info@manulirubber.com
MANULI AUTO POLSKA Sp.zo.o
Ul. Serdeczna, 42
33-100 Tychy - Poland
tel. +48 32 7890300
fax +48 32 7890201
manuli@manuliauto.pl
MANULI AUTOMOTIVE CHINA
Room 911, Asia Pacific Finance Centre
n.55 Renmin Road - Zhongshan District
116001 Dalian - China
tel. +86 411 88995842
fax +86 411 88995841
Manuli English
2-07-2004
15:53
Pagina 43
HYDRAULICS
MANULI HYDRAULICS POLSKA S.A.
Ul. Brzezinska 50
41-404 Myslowice - Poland
tel. +48 32 2220201
fax +48 32 2220120
mhpolska@manulihydraulics.com.pl
MANULI SONATRA S.A.
8 Rue Kepler, Z.I. de Gesvrine
44240 La Chapelle sur Erdre
Nantes - France
tel. +33 240 935799
fax +33 240 936956
std@manuli-sonatra.fr
MANULI OTIM S.A.
Z.A. La Fouquetière
Rue Branly B.P. 121
44154 Ancenis Cedex - France
tel. +33 240 988302
fax +33 240 988401
std@manuli-otim.fr
MANULI HYDRAULICS GmbH
Carl Benz Strasse, 5
D-68723 Schwetzingen - Germany
tel. +49 6202 28020
fax +49 6202 18306
info@manuli-gmbh.de
PRESSURE HOSES Ltd.
Nasmyth Business Centre
Green Lane - Patricroft
Manchester M30 0SN - U.K.
tel. +44 161 7878085
fax +44 161 7878086
info@pressurehoses.co.uk
MANULI HYDRAULICS Ltd.
Unit 26, Piccadilly Trading Estate,
Adair Street
Manchester M1 2NP - U.K.
tel. +44 161 2737383
fax +44 161 2737564
sales.office@manuliuk.com
MRO/OEM DIVISION ITALY
Zona Industriale Campolungo
63100 Ascoli Piceno - Italy
tel. +39 0736 3091
fax +39 0736 309755
info@manulirubber.com
MANULI HYDRAULICS EUROPE s.r.o.
Prumyslova 1500
691 23 Pohorelice - Czech Rep.
tel. +420 519 301 711
fax +420 519 301 712
mheurope@manulihydraulics.cz
MANULI HYDRAULICS KOREA Co. Ltd.
2 Dong - 7ho The third complex plant 36 Palyong-Dong
Changwon City, Kyungnam - South Korea
tel. +82 55 2376211
fax +82 55 2376215
pjh@manuli.co.kr
MANULI HYDRAULICS RUS 000
Lesnaya Str. 43, Office 453
101 509 Moscow - Russia
tel. +7 095 7754997
fax +7 095 7755650
mhrus@manulihydraulics.ru
MANULI HYDRAULICS (Shanghai) Co. Ltd.
Unit 1, Building 61, No.278 Jinhu Road
201206 Shanghai - China
tel. +86 21 58665108/58665238
fax +86 21 58664275
manulisha@sh163.net
MANULI HYDRAULICS FAR EAST Pte Ltd.
200 Middle Road # 08-03 Prime Centre
Singapore 188980
tel. +65 6337 2605
fax +65 6337 3089
info@manuli-singapore.com.sg
MANULI REFRIGERATION CONNECTORS S.p.A.
Via Bizzarri, 21
40012 Calderara di Reno
Bologna - Italy
tel. +39 051 6460916
fax +39 051 728416
mrc@manulirubber.com
MANULI FLUID CONNECTORS Pty. Ltd.
Unit 22 46/48 Abel Street - Penrith
New South Wales - 2750 - Australia
tel. +61 24 7216600
fax +61 24 7211772
info@manulirubber.com
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OIL & MARINE
MANULI HYDRAULICS (AMERICAS) Inc.
5892 W. 71st Street
Indianapolis - Indiana 46278 - U.S.A.
tel. +1 317 2800850
fax +1 317 2900247
admin@manuli-hydraulics.com
MANULI HYDRAULICS de MEXICO S.A. de C.V.
Belgrado No.1 Despacho 301 Col. Juarez
CP 06600 - Mexico, D.F.
tel. +52 55 52076099
fax +52 55 55143794
info@manulihydraulics.com
MANULI HIDRAULICA BRASIL Ltda.
Av. das Américas, 700 B6/S204
Barra da Tijuca - Rio de Janeiro - RJ
CEP 22640 - 100 - Brazil
tel. +55 21 21328183
fax +52 21 21328184
info@manulirubber.com
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IDEOGRAMMA
STUDIO NEON
IMAGE BANK MRI
GRAPHIC DESIGN
PHOTOGRAPHY
MANULI OIL & MARINE (USA) Inc.
2755 East Oakland Park Boulevard
Fort Lauderdale - Florida 33306 - U.S.A.
tel + 1 954 5613777
fax + 1 954 5630644
manuli@bellsouth.net