DR. WILHELM BINDER IMPRESSIONS OF A ... - Kendrion

THE
SPIRIT
ANNUAL
MAGAZINE
2011
WILHELM BINDER
IMPRESSIONS OF
OFDR.
A MAGNETISING YEAR

21%
increase in revenue
Celebration of
‘100 years of
electromagnetism’
with employees and
stakeholders
Signifi cant focus on
fl exibility
Facts & fi gures
Industrial Magnetic Systems
Industrial Drive Systems
Passenger Car Systems
Commercial Vehicle Systems
Kendrion N.V.
Growth
in revenue reported by
all business units
Selection of IFS as
ERP software provider
worldwide
Start of
greenfi eld
operation in India
Revenue Germany
EUR 148 million
Revenue
Rest of Europe
EUR 65 million
Subsidiaries
Partners
Revenue Americas
EUR 20 million
Very good
normalised net profi t
EUR 20.5
million
Acquisition of
FAS
Controls,
Inc.
in December 2011
Very satisfying
free cashfl ow
of almost
EUR 15 million
Revenue Asia
EUR 32 million
Strong
fi nancial position
Business
unit Passenger
Car Systems
awarded
Kendrion
Innovation
award
europe
Revenue
Rest of the world
EUR 3 million
Signifi cant
focus on
innovation
including the Dr. Wilhelm
Binder Symposium in
November 2011
Business
unit Industrial
Drive Systems
awarded
Kendrion
Flexibility
Award

est of the world
Revenue growth
14%
Revenue growth
19%
Revenue growth
30%
Revenue growth
11%
INDUSTRIAL MAGNETIC SYSTEMS
± 2,000 customers
Production facilities in Germany, Romania, the USA and China
Additionally, sales organisations in the UK, Austria, Switzerland and Italy
Developed the world’s fastest acting solenoid
INDUSTRIAL DRIVE SYSTEMS
± 100 customers
Production and sales in Germany
Additionally, sales offi ce in the UK and China
Development of Kendrion Optimised Brake (KOBRA)
PASSENGER CAR SYSTEMS
± 20 customers worldwide
Production facilities in Germany, Austria, the Czech Republic, Romania, the USA and China
Specialist leading on electromagnetic valves
Focusing on high-end products
Working on fuel systems and fuel effi ciency
Production capacity was expanded
COMMERCIAL VEHICLE SYSTEMS
Customers include major OEMs in global bus and truck market and all fi rst line suppliers
of air-conditioning systems
Production and sales in Germany, the USA, Mexico, Brazil, China and India
Objective is to evolve into global player and set standards quality and speed in R&D
>> 1

100 years of electromagnetism
Kendrion is like a ball that’s
been rolling since 1911,
spinning off other balls
brain ball product ball
>> 2 annual magazine 2011

that roll off on their own,
sometimes merging with still
more balls, almost by osmosis.
annual magazine 2011
land ball the 2011 celebrations of ‘100 years of electromagnetism’
at kendrion were opened with the unveiling of
‘the spirit of binder’ by jeremy lynch. since then the
artwork is exhibited at the villingen plant (germany).
jeremy lynch (1966, london) studied photography in
london and canada and now lives and works in berlin.
>> 3

Commercial Vehicle
Systems
Individual energy-saving
systems for commercial
vehicles and off-highway
applications
>> Organisation
Passenger Car Systems
Project solutions for specifi c customer
applications in the automotive
and special vehicle industries
The Executive Board would like to thank
the following people for their contribution
to this Annual Magazine Robert de Bakker,
Armin Beck, Michael Bernhard, Martina Bodenlos,
William Brown, Sameer Deshmukh, Heinz Freitag,
Manfred Gebhart, Alexander Glaser, Norman Graf,
Bernd Gundelsweiler, Jürgen Häberle, Ralf Heingl,
Sandra Hoer, Heinz Jankowski, Eberhard Kallenbach,
Horst Kayser, Jan van Kesteren, Miriam Kreutter,
Laurent Lebas, Karl Mascher, Waldemar Pförtsch,
Brad Price, Gerald Puchner, Markus Rekla,
Waldemar Schaermann, Maja Sanders,
Werner Schneider, Jörg Wallaschek, Ralf Wieland,
Burkard Wördenweber and Frank Zelano
Copy Wim Dieleman, teamtva! reclamebureau
Photography and images Jens Hagen Büro
für Fotodesign, Atelier Lutz Hugel, Siemens and
Marloes Withagen
Organisation Wijgert Gooijer and Wilma Stuiver
Concept and realisation C&F Report Amsterdam B.V.,
Meander Media
>> 4
Profi le
kendrion n.v., a solution provider, develops, manufactures and markets
innovative high-quality electromagnetic systems and components for customers all
over the world. Kendrion’s operations are carried out by four business units focused
on specifi c market segments, namely Industrial Magnetic Systems, Industrial Drive
Systems, Passenger Car Systems and Commercial Vehicle Systems.
kendrion has leading positions in a number of business-to-business niche markets.
Germany is Kendrion’s main market, although other countries are becoming
increasingly important.
Kendrion’s activities
Industrial Magnetic Systems
Electromagnetic components tailored to
the individual needs of advanced industries
Industrial Drive
Systems
Electromagnetic brakes and
clutches for the industrial
drive technology
kendrion develops advanced electromagnetic solutions for industrial applications.
These are used by customers all over the world in systems such as lifts, door-locking
systems, industrial robots, medical equipment, electrical switchbox systems, diesel
engines, air-conditioning installations, motor cooling systems and beverage dispensers.
Kendrion’s key customers include Bosch, Siemens, Daimler, Continental, Delphi,
Evobus, Hyundai and Yutong.
Kendrion’s shares are listed on NYSE Euronext’s Amsterdam market.
annual magazine 2011

Contents
06 12
16 22
It all started in 1911 when the company’s founder,
Wilhelm Binder, barely twenty years old, had a vision:
to create his own company, Binder und Mook Werkzeuge GmbH
in Villingen, Germany. In 1938, his son, Dr. Wilhelm Binder Jr,
joined the company and in 1953, after his father’s death,
he took over management of the company. Dr. Wilhelm Binder
has had no problems fi lling his father’s shoes. The company has
thrived under his leadership, expanding its operations and
initiating new research and development, and acquiring more
than 40 patents. In 2011, under the banner ‘100 years of electromagnetism’,
Kendrion celebrated its origin.
A portrait of Dr. Wilhelm Binder features on the cover of
this Annual Magazine.
This publication includes a summary of the offi cial 2011 Annual Report.
The offi cial 2011 Annual Report of Kendrion N.V. dated 28 February 2012,
on which KPMG Accountants N.V. issued an unqualifi ed independent
auditor’s report, is available on the corporate website (www.kendrion.com)
along with other publications such as press releases.
Kendrion N.V.
Euronext code 0000383511
Security code 38351
ISIN code 0000383511
Chamber of Commerce 30113646
annual magazine 2011
34
01 Facts & fi gures
02 100 years of electromagnetism
04 Organisation
06 Kendrion’s core
10 2011 Landmark events
12 Co-creation
14 Cutting edge
16 Going global
20 Picture riddle
21 Column
22 Tomorrow’s Wilhelm Binders
26 Novelty
28 Back to the future
30 Social and responsible
32 Let’s get personal
34 The Kendrion Executive Programme
36 Bottomline Financial performance
>> 5

‘In 2011, we saw a strong return on our investments in new product development,
tapped into new markets and expanded our R&D capabilities building on previous
investments there. All these things started off in 2010 and kept rolling straight into
2011. Many projects we launched in 2011 really got off to a fl ying start, especially our
diesel market products. We invested in people, market intelligence, assembly and test
lines, and in the targeted branding of our company. All these things helped to put us
in exactly the right place at exactly the right moment. In this ongoing process we are
extending our niche market position even more towards the USA and China. At the
same time we continue to invest in next steps to anticipate future developments and
operate successfully. Technological innovations defi nitely remain at the core of our
business, with energy saving as an important issue. And with our American and Chinese
markets in mind, we are also putting a strong focus on gasoline engine developments.’
>> 6
Kendrion’s core
Focus
on technology
heinz freitag
chief technology officer
Moving up in the leagues
piet veenema
chief executive officer
‘Our strategy and its undivided focus on
fl exibility, globalisation and market
segmentation have begun to pay off. We aim
to become a global player, which will further
reduce our vulnerability and enable us to
offer the local markets what they require.
It is working so well we saw strong growth
in turnover in all parts in the world, but
especially in Asia. Growth in the Americas and
in Europe was extremely satisfactory, with the
result that, even with growth in Germany of
more than 10%, its market share in our total
annual magazine 2011

turnover declined. Our acquisition of
FAS Controls, Inc. in Shelby, North Carolina,
USA, in the fi nal stages of 2011, fi ts in very
well with this picture. This was an immediate
success, contributing to our profi tability right
away and helping to strengthen our position
in the US automotive and truck market.
2012 will undoubtedly bring new challenges,
but as we move up to the next league we will
stick to the effective growth strategy we have
developed.’
annual magazine 2011
eiko ris
chief financial officer Preparing
for further growth
‘Searching for strategic growth was an important objective in 2011 and will
continue to be in 2012. We have managed to create an even distribution of
opportunities for all our business units, which is preferable from a span of
control point of view. In order to fully reap the benefi ts of acquisitions, we
are taking clear steps to strengthen our internal organisation. Very early
on, we knew how important it was to prepare Kendrion for further growth.
ICT and HR are critical in this. Do we have the right people with the right
competencies, expertise and experience in the right places, and can these
people deploy the right resources where they are needed? Our ERP project
HORIZON is a major investment in this, as is our ongoing recruitment and
development of staff. At the same time we are intensifying our efforts in
technological developments and globalising our engineering power.’
>> 7

>> 8
Kendrion’s core (continued)
Maximum effort
for maximum result
Innovation is our
driving force
Over the past few years the four members of
Kendrion’s Supervisory Board have worked
closely with the Board in developing the
company’s strategy. Now, they look back on
their work with satisfaction and watch Kendrion
reaping the fruits of their toil.
‘Of course, Kendrion has the economic recovery in its markets to thank for the company’s
excellent performance in 2011. But to seize the opportunities that come its way, a company
needs to have its priorities straight and know what it’s going for. By concentrating on
fl exibility and cost reductions during and after the 2008 crisis, we were in a perfect position
to take off when things turned around. Apart from this, our focus on innovation has
defi nitely helped put us where we needed to be,’ says Jan van Kesteren, Chairman of
the Supervisory Board.
>> Innovation incubator
In the past years, Kendrion has taken major steps forward in the fi eld of technology and
innovation. The company put together an Innovation Board, hosted a technology event for
its customers and developed a range of innovative products, such as the solutions for
common rail diesel systems. Supervisory Board member Horst Kayser explains: ‘Innovation
has become a priority and is now really driving the company’s development. Coming out of
a crisis is one thing, but keeping this up and achieving stable growth is the result of an
effective, driven innovation strategy.’
annual magazine 2011

The banks were sold on our
strategy and performance,
so will be our long-term
shareholders
The Kendrion Supervisory Board
from left to right:
R.L. de Bakker (Vice-Chairman)
M.E.P. Sanders (member)
S.J. van Kesteren (Chairman)
H.J. Kayser (member)
annual magazine 2011
>> Money spent well
‘A requirement for autonomous development and growth through acquisitions is a sound
fi nancial position. The existing facilities enabled Kendrion to acquire FAS Controls in
the USA at the end of 2011. This move was fully in line with the company’s goal of becoming
a global player, but Kendrion’s ambitions go further,’ says Supervisory Board member
Robert de Bakker. ‘The banks looked at our successful development and were sold on
our strategy and operational performance. We recently reached an agreement with the
bank consortium for an extension of our fi nancial options under acceptable conditions.
This will put us in a position to expand further with more acquisitions. And the banks are
not the only ones with an eye to Kendrion’s strategic success. Over 2011, Kendrion was
the best performing share on the Small Cap Index (AScX) of the NYSE Euronext Amsterdam
exchange, with an overall return of approximately 20%. With numbers like this, Kendrion
can be sure it is keeping its loyal long-term shareholders happy.’
>> Happy people – happy products
‘But in the end it’s all about people,’ says Supervisory Board member Maja Sanders.
‘Our success, and our goals for taking it to the next level, also put pressure on our people.
Our customers demand quality at all levels, knowledge transfer is vital, and where the
economy is headed remains a great unknown. At the same time we want Kendrion to
be a safe haven for our employees, a company that helps them to grow and develop
and a community that facilitates connections and creates mutual understanding.
That’s the balance we are constantly looking for.’
>> 9

>> 10
2011 Landmark events
With concerted effort
Within Kendrion Industrial Magnetic
Systems, Business Unit Manager
Norman Graf considers last year’s
biggest accomplishment the
restructuring, reorganisation and
modernisation of the production
areas in Germany and the USA
according to the principles of lean
Kendrion Industrial Drive Systems
(IDS) is proud of its long history
in spring-applied brakes.
In the 1990s, however, the company
decided to shift its focus to the
development and production of its
permanent magnet brakes, and
quickly became market leader in
manufacturing. The plant set-up
was segmented into four production
units, each dedicated to a specifi c
area: low volumes, high volumes,
technology lines and customerspecifi
c products. ‘Look upon our
business unit as an orchestra.
We have invested in people and
industrial magnetic systems (ims)
industrial drive systems (ids) michael bernhard
Moving forward with brakes
this segment. As a landmark event
in 2011, IDS developed KOBRA, the
Kendrion Optimised Brake, and has
started winning back some of the
market share it gave up. KOBRA is
a modular design-based standard
product for a variety of industrial
applications. IDS Business Unit
instruments and have reached the
next level in skills and competences.
Now, this year, we will be working
hard on making sure all these
individual elements play together
like a top-class orchestra.’
norman graf
Manager Michael Bernhard is
optimistic about Kendrion’s
prospects. ‘We have the know-how,’
says Bernhard. ‘And we have signed
a fi rst Letter of Intent for the Chinese
market, with production to start in
mid-2012. Kendrion is back in springapplied
brakes!’
annual magazine 2011

annual magazine 2011
Innovative valve design
Kendrion Passenger Car Systems
(PCS) is leading in valves for the
common rail diesel technology.
With a completely new design of
its fuel system valve, and in close
cooperation with a US customer,
PCS has now also penetrated the
very promising gasoline market.
For Business Unit Manager Bernd
Gundelsweiler, this fantastic result
passenger car systems (pcs)
commercial vehicle systems (cvs)
In 2011, Kendrion Commercial
Vehicle Systems (CVS) made a giant
leap forward with the delivery of
its fi rst products to truck OEM
Ashok Leyland after opening up its
greenfi eld operation in Pune, India.
CVS has always been very strong in
the bus market, but is now also
entering the truck market.
highlights the most important
development in 2011.
‘Our spill valve won the Kendrion
Innovation Award, and that success
story is about to get a great sequel
with our acquisition of FAS Controls
in North Carolina, USA, which will be
producing the gasoline valve for
the American market. What else
could you wish for?’
bernd gundelsweiler
Conquering India by truck
Business Unit Manager Bernd
Gundelsweiler explains. ‘A great
combined effort by the whole team
in India and our people in Germany,
based on a very clear strategy. And
with great potential in this quickly
emerging market – we have only just
begun, but we have already started
work on new promising projects
with Ashok Leyland.’
>> 11

>> 12
Co-creation
The world’s energy consumption
has increased immensely in
recent decades. Between 1973
and 2007 world electricity
demand rose by more than 300%.
Expansion of the high voltage
networks necessary to meet this
demand has not kept pace with
this extreme growth. Kendrion
and Siemens are partnering to
design solutions for this growing
problem.
Siemens’ 800-kilovolt
extra-high-voltage direct
current transformer.
Joint brainpower:
sparks fl y
The increasing pressure on the existing high voltage transfer systems has led to
considerably higher workloads, stability problems, higher thermal and mechanical
requirements for net components such as wires and lines, generators, transformers
and switches, and – last but not least – an increase in failures and blackouts.
There are many things that can cause a high voltage power distribution system to
fail: lightning strike, human error, overload or storm. But the result is always the
same: short circuits that damage the wires and the network as a whole. In order
to prevent this and limit the damage done to the absolute minimum, electricity
companies require high-quality high voltage switches with extremely fast breaking
times to minimise the risk of down time.
>> More than just a supplier
Gerald Puchner, Manager Research & Development at Kendrion Industrial Magnetic
Systems, explains the partnership. ‘Siemens – a global player in the fi eld of high
voltage power distribution – is constantly looking for the most effi cient and most
powerful solenoids to put in their high voltage switch systems, to give them a
unique selling proposition and competitive advantage. They needed a very fast
trigger solenoid for their high and medium voltage circuit breaker. We have been
selling electromagnets to Siemens for years and years, and this relationship has
grown into a strong partnership. We obviously have the core competencies to be
more than just a supplier, and are now working closely together with them – with
Kendrion bringing in expertise and experience – to design a solution.’
>> Joint effort
On the basis of co-creation, Kendrion and Siemens started researching options,
with the goal of reducing actuator switching times for switching off a high voltage
network in the event of emergency – by two-thirds. The Kendrion Design Engineer
on the project was Markus Rekla. Kendrion presented four options, two of which
did not fully meet the customer’s demands. After going back to the drawing board,
Markus then came up with the idea of combining the principles of a very fast,
dynamic solenoid and a standard solenoid: the hybrid electrodynamic actuator.
>> Sharing information
‘We simulated the solution on the computer and developed a prototype that
appeared to function as expected,’ Markus says. ‘We shared our information
with Siemens and made a sample product for them, which also turned out to be
successful. We are now in the process of starting the fi nal development and
have applied for a patent on the product. A co-creation success story that is to
be continued.’
annual magazine 2011

Real partnership
Karl Mascher is Siemens’ Manager Basic
Development of High Voltage Switch
Systems. He is convinced that by mid-2012
the new hybrid electrodynamic actuator
for Siemens will be available for delivery.
‘We are very happy with the result of our
joint development of high speed actuators,’
he says. ‘It is a very innovative solution,
in fact the only solution that enables us
to realise these very fast breaking times.
annual magazine 2011
We now have to convince our customers
that this state-of-the-art solution also
covers all their safety issues. We offer
them a totally different approach to their
switching problem, so that obviously
takes some getting used to. Siemens and
Kendrion have a valued long history
together and our cooperation – which
started in the 1990s, has always been very
good. For this project we have kept each
other informed on every single detail of
Testing a high voltage Siemens circuit breaker with over one million times the breaking capacity of a household fuse.
the development, from beginning to end.
We didn’t just meet once, but formulated
our assignment and waited for Kendrion to
come back with a solution. This has been
a real partnership. We are now considering
developing a version for bigger and even
more demanding applications, based on the
same principle.’
>> 13

The new cleanroom area in
Villingen is approximately
300 square metres, bringing
the total cleanroom production
space to approximately
900 square metres.
The expansion of the cleanroom
area means a considerable
growth in capacity,
and consequently in the number
of projects. In this way Kendrion
is meeting the increase in current
customer needs that demanded
the addition of a second
production line.
>> 14
Cutting edge
By building the facility
to comply with the
ISO 14644
Class 8 standard,
Kendrion can guarantee its
customers the availability of
the latest technology.
The new block heating in combination with the power system deliver
a phenomenal 75% reduction in energy
consumption for air conditioning. Annual operating costs are
just EUR 20,000, as compared to the EUR 80,000 of the former setup.
annual magazine 2011

The new cleanroom is
connected to the cleanroom
built four years ago.
Kendrion built its fi rst
cleanroom here almost
a decade ago.
A new cleanliness
laboratory and a new
metrology laboratory
to be constructed between
the two cleanrooms are in
the planning stages.
The new cleanroom has also been designed to
optimise logistic processes
(stocks, parts fl ows and avoiding mix-ups) and
laboratory facilities between the cleanrooms.
More than appearances
annual magazine 2011
Some of the most cutting-edge
technology is being used in the
automotive industry. In this sector,
using cleanrooms for the production of
components is a must. A cleanroom is
an environment with a controlled low
level of contamination typically used in
manufacturing or scientifi c research.
Kendrion’s common rail diesel valves
are designed to handle pressures of up
to 2,000 to 2,400 bar, and the standard
will soon be going up to 2,700 bar.
Even the smallest hair or the tiniest
dirt particle could lead to the
malfunctioning of the common rail
system. These valves are therefore
produced in Kendrion’s high-tech
cleanrooms in Villingen-Schwenningen,
Germany, the capacity of which is
being extended.
state-of-the-art
The development, design and
construction are based
on detailed customer specifi cations
on cleanliness, and the result
has been the client’s complete
certifi cation of Kendrion as an ‘above
state-of-the-art’ cleanroom facility.
>> 15

>> 16
Going global
Kendrion has very strong roots in Europe, with its real production
home base in Germany. But with our new development, production and
assembly sites in Brazil, China, Mexico and the USA, Kendrion has
made no secret about its strategic ambition to become a global player.
The most recent milestones in the company’s globalisation strategy
are the start of a greenfi eld operation in India and the acquisition
of FAS Controls, Inc. in the USA. Read all about Kendrion’s promising
business activities in the mature American economy and in the
dynamic emerging economy of India.
Heavy trucks crossing the Mojave Desert, California
New York by night
Electromagnetism knows
Kendrion FAS Controls Inc.
Shelby, North Carolina, USA
no boun
Travelling northeast from Atlanta, a side road will take you to the tiny city of Shelby,
North Carolina, home to some 21,000 inhabitants as well as FAS Controls, Inc., a company
founded a century ago by F.A. Smith. It was acquired by Industrial Opportunity Partners
(IOP) from Honeywell in 2007, and is soon to become a real Kendrion company after
an agreement between IOP and Kendrion was reached at the end of 2011, much to
FAS Controls Managing Director William Brown’s satisfaction. ‘This is a perfect match,’
he explains. ‘Kendrion is strong in automotive, and we are very well positioned in the
commercial vehicle heavy truck market. Kendrion has found its production location for
orders from its new US customers, in addition to profi ting from the advantages of synergy.
In two to three months our new production lines will be coming in from Italy and
Switzerland, and will be ready for production in 2013. And then, we’ll just do it!’
annual magazine 2011

daries
Famous interchange in Atlanta heavily used by truck traffi c
annual magazine 2011
LINNIG Corporation
Tucker, Georgia, USA
usa
Right in the middle of Georgia – in America’s
southeast, just North of Florida – where temperatures
rarely go below 5°C, lies the city of Atlanta, with
Tucker as one of its suburbs. Also the home of
Coca-Cola, it is from here that Kendrion Linnig
originally covered the American and Canadian bus
markets with its engineering, quality, production and
sales. But three years ago the company also entered
the truck market, with a very successful two-speed
radiator fan drive. With this reliable and durable
system Kendrion Linnig is mainly targeting the
vocational truck segment. ‘With our two-speed
technology we see great opportunities for further
growth. We can offer our customers energy savings
and noise reduction, both of which are solutions
to issues of growing importance here. We will
continue to pursue controlled development looking
for promising niches,’ says Managing Director
Jürgen Häberle.
>> 17

>> 18
Going global (continued)
Harvesters in a vast American prairie
– representative of Kendrion’s agricultural customers
Kendrion Tri-Tech, LLC
Mishawaka, USA
Mackinac Bridge, Michigan, the third-longest suspension bridge in the world
At the edge of Lake Michigan, in the state of Indiana (named for the ‘Indians’,
the indigenous peoples of this area) lies Mishawaka, an economically thriving city with
some 50,000 inhabitants. Here, on Magnetic Drive (!), you will fi nd Kendrion Tri-Tech,
manufacturer of quality solenoids, solenoid valves, actuators, coils and buzzers for the
beverage industry and the medical, power distribution and agricultural markets. Tri-Tech
has been part of Kendrion Industrial Magnetic Systems since August 2008, and now
employs 32. In 2011, the company expanded its plant and offi ce location to meet growing
market demands. ‘That was our best year ever,’ says Managing Director Brad Price, ‘and
we are about to enter new markets with new products. In 2011, we made the transition
from a diffi cult market to many promising developments in the years to come.’
annual magazine 2011

Indian local colour. In Pune’s hinterland many
automotive companies are setting up factories
annual magazine 2011
Kendrion LINNIG India Pvt. Ltd.
Pune, India
Pune – in the heart of western India, not far from
Mumbai – is not only India’s centre of information
technology and education, but also of industry,
especially automotive and diesel engines.
Pune is the country’s eighth-biggest city, home to
more than four million people. It is also the home of
Kendrion’s most recent start-up, which is now fully
operational. With nine people on the payroll and
another six outsourced, Kendrion India has started
supplying its fi rst products to a customer in the truck
market. ‘These fi rst products have been wellreceived
by our customer,’ says Managing Director
Sameer Deshmukh. ‘We are now ramping up
production. Our objective for 2012 is to fully meet
the customer’s demands, in quality and quantity.
New projects will help us realise our ambition to
move from single shift to full shift production.’
>> 19

>> 20
Picture riddle
Challenge your brain and fi nd out what you are looking at? Defi nitely, there is Kendrion inside…
See www.kendrion.com/Investor Relations/Introduction for the solution.
Make a guess
annual magazine 2011

Column
Innovation makes a previous product look outdated. And isn’t
that what we all want – to outclass our competitors and
ourselves? Make better or more effective products by using
enhanced processes and technologies? We sure do. So let’s
innovate. But how? Many companies struggle to be innovative or
stay innovative. Only 7% of all innovations make it to the market
and become a success. The very best companies have success
rates of 30%. The innovation process is often long and diffi cult.
Strict measures of quality management can help to enhance the
innovation process, but also make this longest of processes
even longer and increase the mortality rate of innovations within
the company – unless you add behavioural aspects.
Activate your
innovation cells
Behavioural innovation management, also called social
innovation, uses fi ve basic principles to orient a company
towards new and innovative behaviour. One: rhythm, which can
turn innovation into a habit. Two: a combined top-down and
bottom-up approach, which means that the goals come from top
down and opportunities and risks come from bottom-up. Three:
we also need an inner compass to tell us whether we are on the
right track. Four: ambitious goals are also indispensible, but
they need to be broken down into manageable steps. And last
but not least, we want drive. Drive enables teams to reach peak
performance. The tension between opportunity and risk can fi re
up individuals and teams alike. It mobilises entrepreneurship.
In addition to challenge, companies should also allow
entrepreneurship from within. One way to do so is by using
innovation cells. An innovation cell is a venture within the
company. One of the typical ingredients for an innovation cell is
an interdisciplinary team on one location working towards one
goal, a goal set out in a contract. Fixed preconditions ensure
effectiveness and pace. In addition, a challenging project creates
urgency and tension to stimulate creative potential. A critical
jury, including a panel of experts, provides regular feedback.
A high degree of autonomy and skills guarantee that the
challenge can be met. Next, break down all hierarchical
structures. Now all you need is a coach to jump start the team
and you’re on your way. Intrinsic motivation and fl ow will push
your innovation cell to heroic heights. And will make the
previous product look old. If you’re lucky.
annual magazine 2011
How to make
your last product
look old
prof. dr. burkard wördenweber
is managing director of phasix
gesellschaft für innovation mbh,
lippstadt, germany. he is honary
professor at the paderborn university,
germany and consultant in innovation
management. prof. wördenweber is
member of kendrion’s innovation board.
>> 21

>> 22
Tomorrow’s Wilhelm Binders
With his inventor’s spirit and wealth
of ideas, Dr. Wilhelm Binder led the
company his father founded in 1911 to
prosper and grow into what it is today:
an internationally-oriented, wellpositioned
industrial company
excelling in the commercial
application of the physical principles
of electromagnetism. His inventive
mindset and his visionary spirit
are still alive and kicking
100 years later.
‘I learn something new every
day. And what I really like is
that we are always taking our
products to the next level.
There is no end to innovation,
that’s what I live for.’
Manfred Gebhart (54) has been with
Kendrion Linnig for ten years now
and has specialised in the
development of innovative solutions
for buses, special vehicles and
genset applications. Over the years
he has seen big changes in the
relationship with customers where
innovations are concerned: ‘We now
control virtually all aspects of the
innovation and product development
cycle. While in the past, we might
have left it to our customers to test
newly developed products, now a
customer expects a product to meet
all his requirements and demands
right out of the box.’
>> Small, light, clean
‘Small, light and clean are the
central drivers of our innovative
developments. Take our clutches
for compressor drives. We constantly
work on the effi ciency of our
products, offering Original
Equipment Manufacturers (OEMs)
considerable benefi ts from an
energy reduction and cost saving
point of view. The customer expects
our quality to be high. That has
always been and still is Kendrion
Linnig’s reputation in the market.
Our quality image even makes Asian
customers choose our product,
even though they can get lower
prices elsewhere. German products
are hot!’
manfred gebhart
commercial vehicle systems (cvs)
>> Design and adapt
‘A new and very promising
development is our “Terminator
pneumatic fan clutch”. We are in
the process of getting this product
patented and have introduced four
different sizes for the American
market. We are also planning to
enter the Australian market with this
new product. Requirements differ
from those in the USA. But just like
we do for the Asian market, we
adapt our basic product to local
circumstances and demands.
This enables us to do things like
get our prices as low as we can go
without violating or negatively
infl uencing our quality. Talking about
being innovative...’
annual magazine 2011

‘Venturing beyond the
boundaries of our knowledge
and experience is very
challenging: exploring new
territory and questioning
what we know, what we do
and how we do it.’
Coincidentally, Miriam Kreutter (30)
and Ralf Heingl (40) have both
worked for Kendrion since 2006
– Ralf as a Development Engineer,
Miriam fi rst in marketing and now in
project management. At the moment
they are working closely together
on the development of a customerspecifi
ed high pressure valve and
taking it to batch manufacturing
level. ‘In this joint project with the
customer we have managed to
reduce the number of interfaces,
and in doing so, to decrease the
development time. This enabled us
to meet our customer’s demands
optimally and to add our know-how
to the development of the next
generation of engines.’
annual magazine 2011
>> Creativity
‘Innovation happens on the way to
your goal. It all begins with the
customer’s requirements. Often you
don’t even know how you are going
to meet them when you start. While
investigating concrete solutions,
immature ideas leap out at you,
and these are what eventually lead
to innovations. Creativity and the
freedom to use it are key factors
in the idea-generating process.
Innovation means daring to venture
beyond the boundaries of our
knowledge and experience. Often
a very challenging adventure.’
ralf heingl and miriam kreutter
passenger car systems (pcs)
Innovation happens
on the way to your goal
>> Confident
‘Personal contacts with a customer
are very important. They enable
us to get and stay ahead of other
players in the fi eld. Simply by being
the fi rst one the customer thinks
of and the one he has in mind with
his preliminary ideas gives us the
opportunity to participate in the
defi nition of the specifi cations
and demands our products have
to meet.’
Ralf Heingl and Miriam Kreutter are
confi dent that after successfully
fi nishing this project, Kendrion will
be in a position to develop a similar
product for other OEMs.
‘There’s nothing more challenging
than exploring new territory and
questioning what we know, what
we do and how we do it.’
>> 23

‘If you want to be creative
and innovative in your fi eld
of business, you need to
have the expertise and the
experience. It’s not enough
to know where to fi nd it or
look for it.’
Markus Rekla (38): ‘As a child and
teenager here in Villingen, Germany,
I saw well-known companies with
great reputations slowly going
downhill and in many cases
ultimately disappearing. Later in life
I came to understand that these
companies did not see the signs of
the times, lived on their success for
too long and simply responded too
late to changes in their environment.
>> Out of the box
‘As far as I am concerned, it all starts
and ends with developing and
acquiring knowledge. I think it’s
wrong to assume that knowing
where to fi nd the knowledge you
need is all it takes. Nothing comes
from nothing, if you ask me. That is
why I will never say that I know
everything about electromagnetism
and that if I can’t fi nd a solution
>> 24
Tomorrow’s Wilhelm Binders (continued)
there is no solution. Innovation is a
matter of thinking out of the box,
walking down unconventional paths,
working together and cleverly
combining insights and knowledge
from different areas.’
>> Talented people
At the moment Markus spends most
of his time working on the hybrid
electrodynamic actuator for highvoltage
switching applications, for
which speed is the most important
requirement. ‘Whenever I come up
against something interesting or
promising, Kendrion never puts any
obstacles in my way. I’ve always
been given the time and resources
I need for further research.
And that’s great because I think
creativity can only get sparked if you
get the time to really dive into the
matter. That’s the way to bind
talented people to your company!’
markus rekla
industrial magnetic systems (ims)
annual magazine 2011

‘Innovative engineers make
life easier and contribute to
more safety and convenience.
My ambition is to be part of
that.’
Waldemar Schaermann (30) has
worked at Kendrion since June 2010,
but his history with the company
goes back further than that.
While doing his studies, he did an
internship with Kendrion in 2006
and he wrote his fi nal thesis at the
business unit Industrial Magnetic
Systems in Donaueschingen,
Germany, in 2008. Today Waldemar
is the manager – and together with
Roland Benzing the developer and
engineer – of the KOBRA spring
applied brake project. ‘My fi rst “big”
project, and targeted at creating a
new design with new features and at
minimising manufacturing costs.
The product’s main benefi t is its
annual magazine 2011
modularity. We build a variety
of types, based on specially
constructed and reusable
components.’
>> Inquisitive and interested
‘Sometimes ideas come to me like
fi reworks. They just pop into my
head while I’m brainstorming, or at
other times, like when I’m in bed
with a problem keeping me awake.
I rarely stick to a fi rst idea, though.
I always try to fi nd alternatives or
other options. I’m basically very
inquisitive by nature and interested
in many different subjects and
topics, which really helps a lot.’
Waldemar is currently developing
another variety of a spring applied
waldemar schaermann
industrial drive systems (ids)
Sometimes ideas come to
me like fi reworks
brake for one of IDS’s biggest
customers. He is also working on
a miniaturised version, which places
extremely high demands on the
technical side.
>> High-level requirements
‘Kendrion must be innovative to be
competitive. The customers in so
many sectors all over the world have
their own high-level and complex
technical specifi cations. We can
meet these requirements and work
closely with our customers to fi nd
the best solutions. That’s where
innovation happens. We are certainly
on the right track with regard to
innovation, but that doesn’t mean
we can afford to relax.’
>> 25

showcase
>>
>> 26
Novelty
20.000 m
15.000 psi
10.000 psi
Less fuel,
more power
In 2008, Kendrion Passenger Car Systems (PCS) began the
development of a product for gasoline engines, similar to
PCS’ proven successful high and low pressure valves for
common rail diesel engines. The totally different
requirements and intensive process of development
demanded testing and targeted marketing. The spill valve
was specially designed for gasoline direct injection
technology, facilitating lower fuel consumption and higher
effi ciency for impressive overall performance
improvement. In 2010, an initial Letter of Intent with a
US-based company marked a break-through in the
gasoline engine sector and, equally importantly,
promising fi rst steps on the American market.
Together we design
a solution
annual magazine 2011

Small things
smart
ø 14 mm
When a renowned supplier to the aerospace
industry needed an impossibly tiny
electromagnetic brake for a new highprecision
device, Kendrion Industrial Drive
Systems was there with a unique solution:
a 14-mm diameter brake, the smallest in
the world. With special functional features
in the production and assembly process,
Kendrion was able to reach the exact
balance between excellent miniaturisation,
power consumption and cost structure
that the supplier needed. After successful
development and testing of the fi rst
prototypes, the focus is now on selecting
prototypes for pre-series and preparation
for production. The result is a recordbreaking
product and a smart
production process.
annual magazine 2011
Extremely
fast breaking
times minimise
the risk of down time
197 FT 1.5 IN
showcase
>> 27

>> 28
Back to the future
Trending topics in electromagnetism
What does the future of electromagnetism look like?
What trends can we discern? What developments might
impact Kendrion’s ambitions? We asked a number of
specialists and scientists working in different areas of
applied magnetism to peek into the crystal ball
and share their ideas with us.
>> Overall design partners
Up to now, solenoids have generally been seen as
sub-systems to be ordered and built to customer
specifi cations. While this approach results in clear
design responsibilities, it often fails to lead to the
best overall solution, because of fi xed design
constraints dictated by the overall system structure.
In many cases it would be possible to obtain much
better overall system performance if the designer
of the solenoid would be allowed to take part in
the overall design optimisation and contribute
expertise at a very early design stage.
Kendrion’s future success will also depend on
our ability to understand customer applications
and learn how to approach customers with new
ideas for improved overall system structures.
>> How electromagnetism helps save energy
Energy saving is a hot issue in all markets, especially for large solenoids with
high power consumption. As a result, Kendrion’s solenoids, which help to
reduce energy consumption in all kinds of areas, have become indispensable.
Global warming and the growth of the world population are forcing us to
move to new, more energy-effi cient systems, and this is driving the demand
for new application areas for solenoids. We consider the continuous further
development of these our social responsibility. The future of solenoids will
be shaped by the increasing need to conserve energy.
annual magazine 2011

Design integration of electromagnetic components
As demands in miniaturisation have increased, device packaging has become more and more
important. This trend is not limited to small scale systems. It is also important for large scale systems,
like the motor-shaft mounted cooling fan in a truck diesel engine with its electromagnetic clutch.
Various kinds of environmental stress, like high temperature and strong vibration environments,
then have to be taken into account in the design of the electromagnetic components and their
protection. Model-based design, lifetime durability analysis and accelerated experimental test
strategies will be important issues in the design of electromagnetic components.
annual magazine 2011
And now the good news…
there is no alternative
>> The mechatronic approach
Products are moving more and more from specialised
electromechanical solutions towards fully mechatronic
devices, such as electronic circuits and computer
numeric control devices. Consequently, an optimum
design is one that includes both solenoid and electronic
controls. Electronic expertise and capabilities in R&D
and sales need to be updated. The markets demand
a provider for mechatronic solutions.
There is no adequate replacement for solenoids on the horizon.
Other actuation principles, such as piezoelectric actuators,
voice coils, and shape memory actuators all have their own
specifi c ranges of application and generally cannot be suitable
replacements for solenoids.
>> 29

>> 30
Social and responsible
Running a business is a complex process
involving a number of very diverse elements
and components. Ecology and environment,
human resources, raw materials, equipment,
energy, supply chain cooperation, corporate
governance… the list goes on.
Doing business in a responsible way that
respects all these aspects is every bit as
complicated as this sounds, and demands
clear and transparent policy. The number
of companies developing such a policy is
growing. Kendrion is one of them.
In 2011, the company installed
an internal Corporate Social
Responsibility (CSR) Board to focus
on a few major themes: energy,
business ethics, supply chain
cooperation and human resources.
Within Kendrion, human resources
are a crucial area. The company
sees its people as its vital asset for
further development and is highly
concerned with aspects such as
employee satisfaction and health,
sickness and accident fi gures. This is
why Kendrion has implemented and
continues to implement all kinds of
measures that not only benefi t
Martina Bodenlos on babies and business
Kendrion but secure the retention
and satisfaction of its talented and
ambitious professionals.
>> Work-life balance
One important part of this is the
work-life balance: combining the
professional and personal life in an
effective, productive and healthy
way. ‘The discussion should not be
about Kendrion or private life, but
about Kendrion and private life,’
explains personnel specialist
Sandra Hoer. ‘We want to facilitate
our people in fi nding the right
balance between their job and their
Martina Bodenlos, a member of the Kendrion IDS marketing team, has been with the company
for more than eleven years. She started working again soon after she had given birth to
her daughter. Mainly from home, but also in the offi ce when needed, making use of the
Kids@Kendrion room: a special workspace combining a fully-equipped desk for the mother
and a fully-equipped play area for the child. ‘Simply fantastic,’ says Bodenlos. ‘During my
pregnancy and right after, this is where we met for quarterly information sessions and for a
cup of coffee with other mothers. That’s really important to stay on top of what’s happening.’
Social
sustainability,
the Kendrion
way
family life. At the moment we have
seven women in the company in
Villingen, Germany, who are either
on maternity leave or with very small
children and working part-time.
In the past, when employees like
these had their babies they were too
often simply lost to Kendrion. We
now aim to keep these expectant
mothers involved and engaged by
staying in touch with them during
their maternity leave and after they
have given birth. The pressure on us
to keep our good employees is
greater than ever.’
>> Flexible solutions
Kendrion’s basic rule in this is:
create fl exible solutions on an
individual basis. The company
attaches high value to diversity
in the workforce and to equal
opportunities. ‘In order not to lose
knowhow and experience, we are
fl exible in reaching agreements,
especially with our female
employees,’ says Hoer.
annual magazine 2011

‘The discussion should
not be about Kendrion
or private life, but about
Kendrion and
private life.’
‘We talk to each of them personally about
how they want to go about their new life.
When do they want to come back?
What kind of work could they do in their
particular situation? What instruments do
we have to provide them with? In this way
we arrive at individual solutions, such as
enabling a person to work from home
while maintaining contact with colleagues
or customers using a data connection.’
>> Personally
Sandra sees the situation from both
sides, because she herself is one of
the expectant mothers about to go on
maternity leave. ‘As far as I can assess
now, I plan to not work for about a year
but intend to come back after that,
if possible combining telecommuting
and coming to the offi ce. So if you ask
me whether our fl exible solutions work
as planned and intended, I can tell you
that I’m going to fi nd out fi rst-hand.’
(laughs)
annual magazine 2011
Reducing
energy
consumption
In Kendrion’s CSR policy,
environmental issues – energy
consumption, CO2 reduction,
sustainability – are a paramount
consideration, and we show it in two
ways. In our products, our goal
is to support our customers by
supplying the market with lowenergy
and CO2 emission-reducing
products and systems. At the same
time we focus on manufacturing our
products as effi ciently as possible,
using a minimum of energy and
emitting a minimum of CO2 ourselves
in the process. A recent example of
Kendrion’s attention to this is the
new combined heating and cooling
unit at the Villingen (Germany) plant.
Facility Manager Heinz Jankowski,
explains. ‘We have installed a stateof-the-art
system, which generates
240 kW electrical power and 362 kW
thermal power. It not only powers
our machinery, but it heats in winter
and cools in summer. ‘Not only
does this mean quick return on
investment, but also reducing our
energy consumption by 15% and our
CO2 emission by 600 tonnes per
year. Apart from this our energy
reduction programme entails smaller
projects, such as regaining heat from
our production processes.’
>> 31

>> 32
Let’s get personal
electromagnetic stops
Opening the boot of a car is easy with
a radio-controlled key. An electromagnetic
stop ensures that the boot does not
accidentally close on someone’s head
and that when closed, the boot locks
again at the touch of a button.
Kendrion magnetises
the world
car controls
A solenoid control valve ensures that the
perfect mix of fuel is fed to the combustion
chamber of your car. The solenoid on the
camshaft sets the perfect angle for the cam
to actuate the intake and outlet valve for
the perfect performance-consumption ratio.
The result: a powerful yet economical car.
cash dispensers
Solenoids in cash machines
sort, count and dispense the
amount asked for.
climate controls
A number of solenoids
ensure that the
temperature on climatecontrolled
buses is always
just right. These solenoids
also help save energy and
protect the environment.
Bet you didn’t know that not a day goes by
without you activating thousands of solenoids.
Let us show you how this works and introduce
you to the benefi ts electromagnets bring to you.
When switching on a coffee machine you hear the
familiar sound of three electromagnetic functions:
the pump, the dispenser, and the press.
lift systems
The sliding door of a lift
locks so you can’t fall
into the lift shaft. The lift
stops at the right fl oor.
An electromagnetic brake
holds the lift in position.
And there is an
additional safety lock,
operated by an
electromagnetic overspeed
regulator,
keeping you safe.
annual magazine 2011

wind energy
The pitching system of a
wind power plant is held and
positioned by a permanent
magnet brake. When the
pitches have to be repaired,
the brake ensures they
slow down smoothly.
filtration pump
in renal dialysis
Renal dialysis is a medical
process that becomes
necessary when the normal
functions of the kidneys
become compromised by
kidney failure. A Kendrion
solenoid in the fi ltration pump
pumps dialysate through
the dialyzer so contaminants,
toxic substances and water
will be separated from the
blood.
printing presses
In printing presses, solenoids
ensure that motors are slowed
and stopped, paper is cut,
solenoid valves for the paper
feed are actuated and paper
is dusted so that it doesn’t
stick together.
annual magazine 2011
sensor-controlled
taps
State-of-the-art sensorcontrolled
taps are
operated by an
electromagnetic valve
under the sink.
gensets
Engine heat is strongly affected by a number of different
factors, including ambient temperatures and load profi le.
Our fan clutch lets you control the fan speed, so you can
lower fuel consumption and CO2 emissions, putting reduced
operating costs at large volumes within your reach. For use
in power units like power plants or hospital generators.
automatic looms
Cardigans and jumpers are
manufactured on fully automatic
looms with 100 electromagnetic
parts. The same can be said for
much of what you wear: the seams
of trousers and the buttons on
jackets were also sewn with the
help of solenoids.
garbage trucks
Garbage bins are emptied into a truck.
An electromagnetic clutch is controlling
the hydraulic system that compacts
the rubbish.
Without being aware of it, in the course of a day one operates some
1,000 solenoids, many of them products of top quality brands.
What would our lives be like without solenoids?
>> 33

>> 34
The Kendrion Executive Programme
Building knowledge
and networks
Permanent education and personal growth
are at the core of Kendrion’s development
towards global market leadership and
a continuously innovative and strong
technology position. At the same time,
education and training challenge our
employees to grow. By offering these
opportunities, Kendrion aims to keep
its employees at all levels engaged and
interested, with the end result of retaining
expertise and experience within the
company, thus creating a mutually benefi cial
and self-sustaining cycle. As part of the
Kendrion Human Resources development
programme the management follows
a comprehensive training course at
the Rotterdam School of Management,
in the Netherlands, comprising of a series
of management and leadership modules:
the Kendrion Executive Programme.
laurent lebas managing director
kendrion magneta, germany
‘So far all modules have met my high expectations. But because
of my background I personally enjoyed Sales & Marketing by
Marian Dingena best. It really helps to step back a bit and look at
things from a strategic perspective. Some of the lessons learned
I could apply in practice straight away.’
brad price managing director
kendrion tri-tech, usa
‘The Kendrion Executive Programme offers the best set of
classes I have ever had. The programme has helped me to
grow in all aspects of the business. Each module gives me
something unique I have never experienced before. And I enjoy
the contacts with my international colleagues as much as the
programme itself.’
wijgert gooijer corporate
secretary/legal counsel,
kendrion n.v., netherlands
‘If I want to be a good business advisor
from a legal point of view I need to know
as much as possible about all business
processes and their relevance from a
risk perspective. That’s what the
programme teaches me. It is a highquality
programme and a great
opportunity to meet my colleagues.’
annual magazine 2011

Platform
The Kendrion Executive Programme
is a customised, international
modular teaching programme in
collaboration with the Rotterdam
School of Management (RSM).
Apart from the subject content the
programme offers a challenging
platform for internal networking,
the exchange of experiences,
sharing opinions and discussions
on business issues between the
participating managers. It also aims
to expand collaboration between
the business units and operating
companies.
armin beck head of project management
pcs, germany
‘The sponsorship by a Board or top management member
demonstrates how involved they really are.
In one of the modules Piet Veenema was my partner.
He was not there just for appearances, but really engaged
in the activities and was not afraid to show vulnerability.
I respect that.’
annual magazine 2011
>> Sponsor
The Kendrion Executive Programme
offers six modules over a total of
three years. The subjects covered
are communication & leadership,
sales & marketing, strategy, logistics
& supply chain management,
HR and project management.
The programme consists of generic
elements and theoretical insights,
but the content of each module is
tailor-made and adapted to the
Kendrion situation and day-to-day
business as much as possible.
This is how the programme
continues to meet the specifi c needs
ralf wieland director production and quality
management, kendrion binder magnete gmbh,
germany
‘It’s absolutely fantastic and inspiring to meet colleagues from
outside my own business unit. In combination with the content of
the modules it gives me a chance to look into different aspects of
the business and into management topics. For me information
sharing within Kendrion is the programme’s most valuable asset.’
alexander glaser managing director
linnig de méxico, mexico
‘The Kendrion Executive Programme shows that Kendrion is
interested in motivating, developing and training its employees,
and in cooperation between different business units. My favourite
module is the marketing module, because it puts the focus back
on the customer. We learned a lot about how to assess new
customers and how to see the customer’s needs. Useful lessons
and processes for every day.’
of the company and participants.
Each module is ‘sponsored’ by a
Kendrion Board or top management
member, who is not only involved in
preparing the course but also has
an active role to play when the
participants meet in Rotterdam.
werner schneider
director supply chain &
controlling pcs, germany
‘Good teachers, state-of-the-art
approach, not just sitting and
listening but interactive
participation, and always a very
practical link to our day-to-day
business. My focus is fi nance and
purchasing, but getting to know
other parts of the business is very
enriching. Leadership was my
favourite module so far. It gave me
a lot of insight into my own
personality.’
>> 35

>> 36
Bottomline Financial performance
Continuing growth
After the 2010 recovery from the economic crisis with 43%
organic growth, Kendrion continued this pace, achieving
further growth of 21%. This growth, in combination with
the acquisition of FAS Controls, Inc. in North Carolina,
USA, pushed Kendrion’s annual turnover to almost
EUR 300 million. The growth also had a further positive
effect on Kendrion’s operational results, helping the
company control its increasing costs. The reported results
over 2011 were negatively infl uenced by the fourth
quarter supplementary provision for the EC fi ne of over
EUR 39 million including legal expenses, as well as oneoff
acquisition expenses and a centenary bonus to our
employees. The numbers beyond those reported were
very good, with a normalised net profi t of EUR 20.5 million,
an increase of 39% over 2010.
>> Trust from our banks
Even with the provision for the EC fi ne, Kendrion’s bank
consortium, consisting of ING Bank, Rabobank and
Deutsche Bank, is convinced of the company’s strong
fi nancial position, and approved our request for an
additional acquisition facility of EUR 60 million in January
2012. The headroom for acquisitions is now approximately
EUR 70 million.
>> Increasing our global footprint
Kendrion is striving to become less dependent on
Germany and to spread revenue to other continents
worldwide. However, Kendrion’s current growth is largely
due to the success of the German economy and the
country’s strong export position in both the automotive
and Far East industries. Compared to last year, the spread
of revenue, based on customer location, developed as
follows:
EUR million 2011 Share 2010 Share Growth
Germany 148 55% 134 60% 11%
Rest of Europe 65 24% 51 23% 27%
Americas 20 8% 17 8% 19%
Asia 32 12% 18 8% 79%
Other 3 1% 2 1% 19%
Total 268 222 21%
Growth was evident in all regions. Germany’s share
decreased, while Asia had a larger share of revenue
during 2011. The strong growth was achieved in the
automotive, bus and truck business (China, India and
Thailand). Growth in the American countries was about
equal to the overall Kendrion growth. With the acquisition
of FAS Controls, the share of revenue in the Americas
automatically increases pro forma to 17%, whereas the
share of Europe is reduced from 79% in 2011 to 72%.
Kendrion understands that a signifi cant proportion of
the increased sales to customer bases in Germany was
destined for products they manufactured for their Asian
end-customers.
>> Cash flow
Kendrion’s free cash fl ow, being the net cash fl ows from
operating activities minus the cash outfl ow for
investments in capital expenditure and software in 2011
came out at EUR 14.6 million (normalised), being 71%
of our normalised net profi t – very satisfying given the
further organic growth and investments exceeding
depreciation.
>> Flexibility
Kendrion will retain its focus on fl exibility. Steps have
been taken to further improve the quality of the periodic
measurements. Flexibility came under pressure during the
year under review due to the scarcity on the German
labour market which resulted in a lack of available highlyqualifi
ed temporary staff and new employees’ nonacceptance
of fi xed-term contracts. Nevertheless,
throughout 2011 Kendrion’s fl exibility rate fl uctuated
between approximately 20-30%. This latter percentage
takes account of government working-hours reduction
schemes.
Kendrion carried out a sensitivity analysis to review the
relationship between a potential decrease in revenue
and the operating result.
Kendrion strives to keep pace with the volatility of market
demand and ultimately to mitigate a 35% decline in
revenue before incurring an operating loss and without
annual magazine 2011

edundancy expenses. However, as this is not feasible for
a longer period, structurally lower revenues result in the
need for fundamental changes to the organisation.
>> Dividend and profit appropriation
Kendrion endeavours to realise an attractive return for
shareholders, supported by a suitable dividend policy.
However, to provide the necessary assurances for its
continuity the company needs to retain a healthy fi nancial
position. When the dividend to be distributed to
shareholders is determined consideration also needs to
be given to the amount of profi t to be retained to support
the medium and long-term strategic plans of the company
and to maintain a minimum solvency ratio of 35%.
Kendrion strives to distribute an annual dividend of
between 35-50% of the net profi t. In principle, Kendrion
offers shareholders an opportunity to opt for dividend
in cash and/or in the form of ordinary shares in
Kendrion N.V.’s capital.
The Executive Board shall, in line with the new dividend
policy and with the approval of the Supervisory Board,
submit a proposal to the shareholders for the payment of
a dividend of 35% of the normalised net profi t of 2011.
The dividend is equivalent to an amount of EUR 7.1 million
(EUR 0.62 per ordinary share with a nominal value of
EUR 2.00 each).
A proposal will be submitted to the shareholders during
the General Meeting of Shareholders on 16 April 2012 for
the payment of the dividend, at the shareholder’s
discretion, in cash and/or in ordinary shares.
>> Prospects
The company made further progress in the implementation
of its strategy, and was able to realise an excellent return.
A strong fi nancial position, being a niche player and
having the ability to innovate are the features that will
form the basis for Kendrion’s further growth in the coming
years. In 2012, Kendrion will strengthen its investment
in its own organisation in view of the many growth
opportunities and the progress that has been made in
recent years. These plans are established in our Mid-term
Plan 2012-2014 entitled ‘Entering another league’.
Uncertainty regarding the future development of the
global economy is still high. Nonetheless, Kendrion would
appear to have an advantage in the fact that a sizeable
proportion of its revenue is realised in Germany, the
annual magazine 2011
country that currently is driving the European economy.
There is also uncertainty regarding developments in the
company’s other important home markets of China and
the USA, although the fi rst tentative signs of optimism
are beginning to appear in these countries. Based on
the information currently available, Kendrion expects to
achieve further growth in its revenue in 2012, mainly from
the projects acquired and developed by the Industrial
Magnetic Systems and Industrial Drive Systems business
units in recent years. The Passenger Car Systems business
unit does not expect to realise substantial growth in its
revenue from new projects in 2012 because of the time
needed to develop new projects, for instance for the US
market. Further growth in revenue is expected from the
second half of 2013. The Commercial Vehicle Systems
business unit expects to achieve further growth, mainly in
the BRIC countries. In addition, FAS Controls, Inc. will
begin to contribute to the revenue and result in 2012.
Kendrion will continue to strive to strengthen its market
position through acquisitions. The focus will remain on
acquiring strong niche players in Germany, Kendrion’s
most important market, however Kendrion will also look
to grow further especially in the USA and China in order to
further reduce its dependence on the European market.
While Kendrion looks to the future with a high level of
confi dence and expects to achieve a further improvement
in its revenue and profi t, the situation is such that
concrete forecasts regarding the development of its profi t
performance would not be appropriate at this stage.
>> 37

Bottomline Financial performance (continued)
EUR million, unless otherwise stated
Operations
Revenue
2010 221.9
2011 267.9 + 21%
1, 6
Operating result before amortisation (EBITA)
2010 24.2
2011 30.7 + 27%
Operating result before depreciation and amortisation
(EBITDA) 6
2010 32.9
2011 40.0 + 22%
Normalised net profi t 2
2010 14.8
2011 20.5 + 39%
EBITA 1, 6 /invested capital 4, 5 (ROI)
2010 18.7%
2011 22.2% + 19%
>
> >
>
>
Net investments
2010 8.9
2011 13.5 + 52%
Depreciation and amortisation
2010 10.1
2011 10.8 + 7%
Solvency (total equity/balance sheet total)
2010 64.7%
2011 40.0% -/-38%
3, 8
Working capital in % of revenue
2010 11.7%
2011 11.8% +1%
Share information 2
Normalised net profi t per share (EUR)
2010 1.30
2011 1.79 + 38%
EUR million, unless otherwise stated 2011 2010
Normalised net profi t 2 20.5 14.8
Organic growth 20.7% 42.9%
Net interest-bearing debt 25.9 5.2
Net interest-bearing debt / equity (gearing) 0.28 0.05
Net interest-bearing debt / operating result before depreciation and
amortisation (EBITDA) 5, 6 (0.07) 0.16
Operating result before amortisation (EBITA) 1, 6 / net fi nance costs 15.3 8.1
Outstanding shares at year-end (x 1,000) 11,493 11,316
>> 38 annual magazine 2011
>
>
>>
>

Realisation of targets
Organic growth
Target > 10% per year
Actual 20.7%
Return on Sales 6 (ROS)
Target > 10.0%
Actual 11.5%
4, 6
Return on invested capital
Target > 17.5%
Actual 22.2%
Other information
In EUR, unless otherwise stated 2011 2010 2009
Number of shares x 1,000 at 31 December 11,492 11,316 11,316
Market capitalisation at 31 December, EUR million 189.6 164.1 105.8
Enterprise value (EV) 215.5 169.3 119.7
Highest share price in the fi nancial year 18.99 15.10 10.30
Lowest share price in the fi nancial year 13.25 8.82 6.59
Share price on 31 December 16.50 14.50 9.35
Average daily ordinary share volume 17,489 13,642 4,230
EBITDA multiple (over EV) 5.39 5.10 9 9.30
Result normalised per share 1.79 1.30 0.37
Share price earnings ratio 9.27 9.93 26.71
1
EBITA excluding amortisation related to acquisitions
(part of other intangible assets).
2
Excluding EC fi ne and a.o. acquisition expenses in 2011
(2010 excluding incidental tax benefi t).
Solvency
3 Working capital and revenue are excluding FAS Controls, Inc.
4
Total invested capital is property, plant and equipment,
intangible assets and current assets less the current tax liabilities,
trade payables and other payables.
Target not below 35%
Actual 40%
Ratio of interest-bearing debt
and EBITDA
Target < 3.00
Actual 0.60
Free cash fl ow 7
5
Net interest-bearing debt, working capital and invested capital
is excluding FAS Controls, Inc.
6
Excluding EC fi ne and a.o. acquisition expenses in 2011.
7 Before cash fl ow relating to acquisitions.
8 Excluding an earn-out liability at year-end 2010.
9 Before Springtime (reorganisation plan).
Target healthy free cash fl ow in
relation to organic growth
in % of net profi t
Actual 71%
Dividend distribution
Target between 35-50% of
net profi t
Actual 35% of normalised
net profi t
annual magazine 2011 >> 39

Bottomline Financial performance (continued)
>> Developments in each business unit
Industrial Magnetic Systems
The Industrial Magnetic Systems business unit reported
a 14% increase in revenue in 2011. The increase was
achieved both by the introduction of several innovations
(including in machine building) and sharply rising
volumes at the principal existing customers, for instance
in machine building and the energy sector. A further
refocusing of sales and engineering activities by market
segments was carried out. A new sales offi ce was opened
in Italy in 2011. In addition, effi ciency was further
improved by further selective distribution of the activities
across the various production locations. The international
presence of Kendrion in the USA and China is a major
advantage. The business in the USA was signifi cantly
expanded with a view to future projects. There is a
considerable focus on further expansion of the activities
in China.
Industrial Drive Systems
Revenue of the Industrial Drive Systems business unit
rose 19% in 2011. Following the enormous growth in 2010
there was therefore also strong revenue growth in 2011,
attributable to the good performance of German machine
building, where this business unit has a strong market
position in the fi eld of brake systems for servomotors.
New products (under the name KOBRA – Kendrion
Optimised Brake) were developed, which will be
introduced in the market in 2012. The innovation of the
world’s smallest permanent brake system produced a new
order for the US aviation industry. Effi ciency and fl exibility
improved through selective investments in production.
In the second half of the year 2011 this business unit did
however have to contend with very sharply increased
prices of permanent magnets. Although these price rises
were passed on to the market, this occurred with some
delay. China and the USA are the main geographical areas
of expansion. In particular, major progress was achieved
in 2011 in China by the acquisition of new customers and
projects.
Passenger Car Systems
Passenger Car Systems achieved the highest organic
growth of revenue in 2011, of 30%. This business unit
experienced revenue growth in the course of the year
due to the strong increase worldwide of sales of the
German automotive industry, with revenue growth in
fact outpacing market growth due to the successful
introduction of several new projects. The Passenger Car
Systems business unit is responding swiftly to prevailing
trends in the automotive market (motor management,
downsizing of parts, greater switching ability, fuel
economy and CO2 reduction). Many new projects were
acquired as a result in 2011, which will lead to strong
revenue growth again as of 2013. With the acquisition of
FAS Controls, in combination with orders received earlier
in the USA, Kendrion signifi cantly strengthened its market
position in that country and strong growth is expected in
the coming years.
Commercial Vehicle Systems
The Commercial Vehicle Systems business unit achieved
revenue growth of 11% in 2011. The revenue growth was
achieved both in Germany and in the Far East. A greenfi eld
operation was launched in India, which is expected to
grow strongly in the coming years. Production
commenced at that location during the fourth quarter.
Growth in the US market was pressured by challenging
market conditions in the US bus market. By contrast,
new customers were acquired in the US truck market,
offering promising prospects for the coming years.
The engineering capacity of this business unit was
signifi cantly expanded in the second half of the year, with
a view to the growth targeted in the global truck market.
This business unit is able to pass on the sharp price rises
of permanent magnets to its customers for a considerable
part, but again with some delay.
>> 40 annual magazine 2011

Financial calendar
Wednesday 29 February 2012 Publication of the 2011 full-year fi gures
Monday 19 March 2012 Record date General Meeting of Shareholders
Monday 16 April 2012 General Meeting of Shareholders
Wednesday 18 April 2012 Ex-dividend date
Friday 20 April 2012 Dividend record date
Monday 23 April – Monday 7 May 2012, 3 pm Dividend election period (stock and/or cash)
Tuesday 8 May 2012 Determination stock dividend exchange ratio
Wednesday 9 May 2012 Publication of the results for the fi rst quarter of 2012
Thursday 10 May 2012 Cash dividend made payable and delivery stock dividend
Thursday 23 August 2012 Publication of the results for the fi rst six months of 2012
Wednesday 7 November 2012 Publication of the results for the third quarter of 2012
Wednesday 27 February 2013 Publication of the 2012 full-year fi gures
Monday 15 April 2013 General Meeting of Shareholders
>> Major shareholders
Pursuant to the Netherlands Financial Supervision Act,
Kendrion is aware, on the basis of the information in the
registers of the Netherlands Authority for the Financial
Markets (AFM), that the following shareholders possessed
an interest of more than 5% on 31 December 2011:
Shareholder Date of report
Parcom Capital (ING) 15.07% 1-10-2010
Menor Investments B.V. 7.92% 7-1-2009
Delta Lloyd N.V. 9.49% 6-5-2011
Darlin N.V. 5.09% 1-11-2006
Janivo Beleggingen B.V. 5.88% 4-10-2011
Jan Plas S.A. 5.02% 2-4-2009
J.N.A. van Caldenborgh 5.00% 4-3-2010
Total 53.47%
Movements in the share price from
3 January 2011 to 31 January 2012
Kendrion N.V. share AEX
ASCX AMX
annual magazine 2011
On 22 April 2011, Dr T. Tettamanti disclosed that its
indirect interest in Kendrion had fallen to 4.99% as from
21 April 2011. Other movements in the size of the interests
of Kendrion’s major shareholders also took place during
the course of 2011. These changes fall within the
disclosure thresholds as stipulated in the Financial
Supervision Act and, consequently, do not need to be
disclosed by the major shareholders. On 8 February 2012
Delta Lloyd Deelnemingen Fonds N.V. disclosed that it has
acquired a 5.10% interest in Kendrion.
60 Index
40
20
0
–20
–40
>> 3 January 2011
>> 31 January 2012
>> 41

Bottomline Financial performance (continued)
Consolidated statement of fi nancial position
at 31 December
EUR million 2011 2010
>> Assets
Non-current assets
Property, plant and equipment 55.2 46.5
Intangible assets 76.0 50.1
Other investments, including derivatives 0.5 0.0
Deferred tax assets 9.3 12.8
Total non-current assets 141.0 109.4
Current assets
Inventories 38.5 28.2
Current tax assets 1.0 0.3
Trade and other receivables 39.6 30.2
Cash and cash equivalents 9.2 9.0
Total current assets 88.3 67.7
Total assets 229.3 177.1
>> Equity and liabilities
Equity
Share capital 22.9 22.6
Share premium 64.6 68.4
Reserves 24.1 6.8
Retained earnings (20.2) 16.5
Total equity attributable to equity holders of the company 91.4 114.3
Minority interest 0.3 0.2
Total equity 91.7 114.5
Liabilities
Loans and borrowings 23.3 2.5
Employee benefi ts 6.5 7.0
Government grants received in advance 0.1 0.3
Provisions 46.4 2.7
Deferred tax liabilities 6.2 3.4
Total non-current liabilities 82.5 15.9
Bank overdraft 0.3 1.7
Loans and borrowings 11.5 10.0
Current tax liabilities 1.2 2.0
Trade and other payables 42.1 33.0
Total current liabilities 55.1 46.7
Total liabilities 137.6 62.6
Total equity and liabilities 229.3 177.1
>> 42 annual magazine 2011

Consolidated statement of comprehensive income
EUR million 2011
annual magazine 2011
EC fi ne
and a.o.
acquisition
expenses
2011
Incidental tax
(normalised) 2010 benefi t
2010
(normalised)
Revenue 267.9 – 267.9 221.9 – 221.9
Other operating income 1.0 – 1.0 0.8 – 0.8
Total revenue and other operating income 268.9 – 268.9 222.7 – 222.7
Changes in inventories of fi nished goods and work in progress (4.2) – (4.2) (2.4) – (2.4)
Raw materials and subcontracted work 139.1 – 139.1 110.7 – 110.7
Staff costs 72.8 – 72.8 62.0 – 62.0
Depreciation and amortisation 10.8 – 10.8 10.1 – 10.1
Other operating expenses 61.9 40.7 21.2 19.5 – 19.5
Results before net finance costs (11.5) (40.7) 29.2 22.8 – 22.8
Finance income 0.1 – 0.1 0.4 – 0.4
Finance expense (2.1) – (2.1) (3.4) – (3.4)
Net finance costs (2.0) – (2.0) (3.0) – (3.0)
Profit before income tax (13.5) (40.7) 27.2 19.8 – 19.8
Income tax expense (6.6) 0.1 (6.7) (3.2) 1.8 (5.0)
Profit for the period (20.1) (40.6) 20.5 16.6 1.8 14.8
Attributable to:
Equity holders of the company (20.2) (40.6) 20.4 16.5 1.8 16.5
Minority interest 0.1 – 0.1 0.1 – 0.1
Profit for the period (20.1) (40.6) 20.5 16.6 1.8 14.8
Other comprehensive income
Foreign currency translation differences for foreign operations 0.7 – 0.7 1.1 – 1.1
Net change in fair value of cash fl ow hedges, net of income tax (0.2) – (0.2) 0.9 – 0.9
Other comprehensive income for the period, net of income tax 0.5 – 0.5 2.0 – 2.0
Total comprehensive income for the period (19.6) (40.6) 21.0 18.6 1.8 16.8
Total comprehensive income attributable to:
Equity holders of the company (19.7) (40.6) 20.9 18.5 1.8 16.7
Minority interest 0.1 – 0.1 0.1 – 0.1
Total comprehensive income for the period (19.6) (40.6) 21.0 18.6 1.8 16.8
Basic earnings per share (EUR) (1.79) (3.58) 1.79 1.47 0.17 1.30
Diluted earnings per share (EUR) (1.79) (3.58) 1.79 1.47 0.17 1.30
This consolidated statement of comprehensive income with normalisation is not included in
the 2011 Annual Report of Kendrion N.V. The normalisation is unaudited.
>> 43

>> 44
Bottomline Financial performance (continued)
Two-year summary
EUR million, unless otherwise stated 2011 2010
>> Kendrion N.V. consolidated
Normalised statement of comprehensive income
Revenue 267.9 221.9
Organic growth 20.7% 42.9%
Normalised operating result (EBIT) 29.2 22.8
Normalised operating result before amortisation (EBITA) 1 30.7 24.2
Depreciation and amortisation 10.8 10.1
Normalised operating result before depreciation and amortisation (EBITDA) 40.0 32.9
Normalised profi t for the period 20.5 14.8
Statement of financial position at 31 December conform financial statements
Total assets 229.3 177.1
Total equity 91.7 114.5
Net interest-bearing debt 25.9 5.2
Working capital 2, 4 35.8 26.0
Invested capital 3, 4 176.7 129.3
Cash flow conform financial statements
Net cash from operating activities 27.6 25.6
Net investments 13.5 8.9
Free cash fl ow 6 14.6 17.4
Ratios – pro forma
Solvency 40.0% 64.7%
Net interest-bearing debt / EBITDA 3, 5 (debt cover) 0.6 0.2
Net interest-bearing debt / equity (gearing) 0.3 0.1
EBITA 1 / net fi nance costs (interest cover) 5 12.1 8.1
Working capital 2, 4, 5 in % of revenue 12.1% 11.7%
Market capitalisation as at 31 December 189.6 164.1
Net interest-bearing debt as at 31 December 25.9 5.2
Theoretic value of the organisation (Enterprise value) 5 215.5 169.3
Number of employees at 31 December (fte) 4 1,534 1,218
1 EBITA excluding amortisation related to acquisitions.
2 Relates to inventories, receivables minus non interest bearing debts.
3
Total invested capital is property, plant and equipment, intangible assets
and current assets less the current tax liabilities, trade payables and other
payables.
4
2011 including FAS Controls, Inc.
5
Pro forma. Unaudited.
6
Before cash fl ow acquisitions and disposals (2011 and excluding acquisition
expenses).
annual magazine 2011

›50
2009
3%
8
>> Facts & fi gures
CSR Board installed
and ambition statement established
CSR targets defi ned
operating companies ISO 14001 certifi ed for environmental
management
More than 50 sponsoring activities to strengthen local communities in which
Kendrion operates. Social Engagement Award granted by the department of economic
affairs of Baden-Württemberg, Germany
Kendrion joined the UN Global Compact in 2009
0
CO 2 reduction in 2012 and 10% in 2013 per million turnover for
biggest German production plants
fraud reports in 2011. Supplier Code of Conduct
to be introduced step by step
Human
Resources
CSR Report to be published on Kendrion’s
website early April 2012
40.4
9.4
60%
annual magazine 2011
450
718
0.7%
1,629
employees in 8 European countries and Brazil, China,
India, Mexico and the USA
450 women and 718 men in permanent employment
Average age of employees 40.4 years
Average of 9.4 service years
of employees are offered mineral water, fruit and infl uenza
vaccination for free
Training costs 0.7% of wage costs
2.9%
Low average absenteeism rate 2.9%
Corporate
Social
Responsibility

Aurora
Borealis
Electricity and magnetism both
play a part in this spectacularly
beautiful natural phenomenon.
Aurora borealis is caused by
solar wind, electrically charged
particles ejected from the sun.
On reaching the earth, the
particles collide with oxygen
atoms and nitrogen molecules
in the earth’s atmosphere,
causing them to glow in blurred
patterns of green, purple,
yellow and blue, just as the
electricity in a fl uorescent lamp
makes the gas glow inside.
Auroras are especially visible in
the polar region, as in other
latitudes the earth’s magnetic
fi eld defl ects the particles.
Aurora borealis is named after
the Roman goddess of the
dawn, Aurora, and the Greek
god of the north wind, Boreas.
Kendrion N.V.
Utrechtseweg 33
3704 HA Zeist
P.O. Box 931
3700 AX Zeist
The Netherlands
Telephone +31 (0)30 699 72 50
Fax +31 (0)30 695 11 65
E-mail info@kendrion.com
www.kendrion.com
Registered in Zeist, the Netherlands