So ist das Leben /That's life / C'est la vie / Así es la vida / È la vita ...

above the previous year. Regarding more detailed explanations about the sales development, reference is
hereby made to the respective explanations about the divisions.
The reduction in the level of other operating income was particularly attributable to lower income from the
reversal of accruals. The high increase in cost of materials – when compared to sales – was essentially due to
the transfer of the HECTAS Group to Vorwerk Facility Management Holding KG. The considerable reduction
in personnel costs was mainly the result of the deconsolidation of the HECTAS Group. However, this was
partly compensated by higher personnel expenses at the akf group and in the Thermomix division. Interest
income fell due to lower earnings from installment receivables for high ticket items and special funds. Interest
expense could be reduced on account of a repayment of bank liabilities.
Management Report /
Financial Situation
Management Report / Financial Situation / 43
The European debt crisis was and continues to be the dominating theme concerning the development of
the global economy and the capital markets. Whereas the interest rates on German bonds and US
trea suries again fell markedly, the rates for Italian and Spanish sovereign debt increased sharply. The
policy of the IMF and the ECB is still focused on finding a crisis mechanism that will restore confidence
in European public finance, support the required debt reduction programs without impairing economic
growth too much.
The strategic alignment of the Vorwerk Group (without the akf group) to reduce both the absolute amount
as well as the term of our investments in government bonds resulted in lower interest income on account
of the development of interest rates, in particular those for German government issues. This combined
with a defensive investment policy in the global equity markets meant that we closed the year on a period
to period basis with a negative result for our financial investments – when taking realized and unrealized
income into account. As a consequence of the sharp, strategic reduction in (state) bonds, hidden reserves
were realized in the past; therefore, a significantly positive result from our investments was reported on
the whole.
The akf group consists of the bank and a leasing operation. The active business was refinanced as in
previous years with matching maturities. In the 2011 business year, receivables were sold within the scope
of an asset-backed commercial paper (ABCP) transaction. In addition, receivables were sold to the specialpurpose
vehicle KMU Portfolio S.A. within the scope of an ABS bond issued in the previous year, however
with the main risks being retained. All recognizable risks ensuing from loan transactions have been
adequately accounted for with individual value adjustments.