2005-2006 Financial Statements and Management Report

70
THE NUMBER OF EMPLOYEES
WILL RISE IN 2006/2007 – MAINLY
OUTSIDE GERMANY.
Based on a continued positive performance, we expect the Group’s sales to remain strong in 2007/2008.
We continue to intensively pursue our sales target of €50 billion.
Earnings and dividend: Our long-term target for pre-tax earnings over the economic cycles is €2.5
billion. Having achieved this target in 2005/2006, we are confident we can repeat our performance in
2006/2007. We aim to achieve earnings of a similar magnitude in 2007/2008.
We will continue to pay a dividend based on our earnings performance.
Employees: We plan to have around 191,000 employees at September 30, 2007, an increase of 2%.
In 2007/2008 the headcount is expected to increase by a further 2%. Despite the anticipated increases,
the workforce in Germany is likely to decrease because for market- and cost-related reasons the
growth in employment will take place almost exclusively outside Germany. Training young people will
remain a high priority in the future and for this reason we will continue to provide apprentice training
beyond our own requirements. In view of the shortage of apprenticeship places on the market, we
aim to give as many young people as possible a sound start to their working lives. The Group’s total
personnel expense in 2006/2007 is expected to be around €9.5 billion; in the subsequent year it could
increase further.
Procurement: In the next two fiscal years, materials expense is again expected to amount to significantly
more than 50% of sales due to persistently high raw material prices and the increasing proportion
of purchased products and services. In view of our long-term, international supplier relationships,
we do not anticipate any bottlenecks in the procurement of raw materials, components, operating
materials or services in 2006/2007 or 2007/2008.
In fiscal year 2006/2007 we will continue our successful purchasing initiative, which will not only
further reduce overall costs but in the medium term also strengthen the quality of purchasing. One
aspect of this will be the expansion of our strategic supplier management system, under which we
identify the best suppliers worldwide so that we can focus on them more strongly and build long-term
partnerships with them. In this way we can limit or in some cases even reduce purchasing prices.