Annual Report 2010 - Frauenthal Holding AG

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40 Annual Report 2010 Strength through diversity automotive Components With revenue growth of 49 % and eBit at a respectable eur 3.9 m, the consolidation of the automotive Components division (FaC) has been a success. how is the division placed now? Baarman1 : We set ourselves three targets for 2010. The fi rst and most important was to return to the black – something that we have achieved with fl ying colours thanks to the twin effects of a moderate recovery of the market and the resounding success of the radical cost-reduction pro- „We set ourselves three targets for 2010 which were achieved“ gram. Secondly: consolidating and building on customer relationships in light of upcoming procurement decisions relating to new generations of vehicles. And thirdly, intensifying development of our products and reasserting our technological leadership. We achieved all of these targets. In addition, the industrial concept developed in 2009 has also proved its worth. This blueprint calls for fewer, but larger production facilities and increased fl exibility across the board. We now feel we are well prepared for a future that will continue to be shaped by market uncertainty. new commercial vehicle registrations advanced by a slender 8 % in europe. Which way will the market go? Baarman: In 2010 we saw an upswing in production as inventories began to return to normal, while commercial vehicle demand only took off in the latter part of the year. The effects of the economic recovery were fi rst felt by hauliers who began to make up for the investment backlog, and this upturn led to capacity bottlenecks for some freight forwarders. We believe that the transport industry’s experience of the economic crisis has made it more cautious and expect the market to become even more volatile as a result. The performance of export markets and Russia in particular will play a vital role in the fortunes of European production facilities. But here too we expect the recovery to continue, albeit at a slow pace. Unfortunately it 1) President and Chief Executive Offi cer of the Automotive Components Group 2) Senior Vice President and Chief Executive Offi cer of the Automotive Components Group is becoming increasingly diffi cult to forecast market demand even in the short term. Customer orders are coming in at ever shorter notice, meaning that we have to ensure that we can respond to demand with a maximum of fl exibility. restructuring activities have slashed capacity by 25-30 %. is FaC prepared for a scenario in which the market picks up and returns to pre-crisis levels? Unterwieser2 : Our production strategy centres on creating larger units with more competitive costs. We trimmed capacity at the spring factories in 2009 by disposing of the plants in Düsseldorf, Germany and Kraljevo, Serbia, and mothballing the works in Ravne, Slovenia. A selective expansion programme in 2011 and 2012 will take us back to the same spring capacity as before the crisis, but concentrated at much stronger units. This will mean that we are well placed to respond to expected demand growth, and can assure our customers of security of supply. To have enough capacity in 2011 and support expansion „our production strategy centres on creating larger units with more competitive costs.” programmes at other factories, we reactivated part of the Styria Vzmeti plant in Ravne at the start of this year. Relocation of tubular stabiliser bar production from the discontinued St. Avold operation to our French Douai site – which previously only made solid stabilisers – has turned the latter into the Group’s centre of expertise for all stabilisers. The Châtenois site – our centre of steel spring expertise – will be home to the Group’s new materials laboratory. This will speed up development of new materials in cooperation with the steelmakers. Our customers will benefi t from our improved R&D facilities, which will help us meet their wish for weight reductions and longer-lived products.
FaC has developed a new strategy – what sets it apart from previous objectives? Moser3 : We have moved on from the idea of a one-dimensional strategy, and have instead developed responses to a number of different market scenarios. Today we are constantly looking at ways of ensuring our success, no matter which scenario we actually face. Put simply, our new strategy places the emphasis on quality before quantity. We have to safeguard the long-term competitiveness of our Western European facilities in the face of fi erce competition from Turkey, Tunisia and India. This means always offering the most innovative suspension components, identifying shifts in customers’ requirements at the earliest possible stage through our development partnerships, and developing new solutions before our competitors. This is the only way to sustain profi table growth in high-wage countries. Baarman: The strategy development process itself was also a fi rst. Never before had so many employees from so many different locations and areas of expertise been invited to actively participate in strategy development. Everyone involved worked in teams to answer questions about market developments, competitors’ activities, our standing among customers and suppliers, as well as our core competences. Ultimately, 12 strategic aims were drawn up, and nine initiatives derived directly from them. Allow me to outline two examples – “I would like to turn the Frauenthal Automotive Components Group into a learning organisation.” The aim is to create an organisation that is in a state of permanent development – rather than one that resorts to one-off, large-scale restructuring. The successful introduction of the Continuous Improvement initiative marks an important 3) Member of the Frauenthal Holding AG Executive Board responsible for the Automotive Components Division Magnus Baarman, Hans-Peter Moser, Josef Unterwieser „i would like to turn the frauenthal automotive Components group into a learning organisation.“ step towards achieving this goal. The second point is the creation of a self-assured corporate identity. I am sure that our One Company approach can only serve to strengthen our standing with customers. Customers should never be in any doubt that the FAC Group is the most reliable partner in the industry thanks to its broad-based product portfolio, its research and development expertise and the uncompromisingly high technical and logistical standards – no matter which site is behind the product. 41
Page 1 and 2: ANNUAL REPORT 2010 Strength through
Page 3 and 4: CONSOLIDATION AND SOLID EARNINGS PE
Page 5 and 6: JuMp in earningS at induStrial hone
Page 7 and 8: taSk Franz Haring, 47, testing and
Page 9 and 10: Senior leadership team (Slt) The se
Page 11 and 12: CORPORATE GOVERNANCE Corporate gove
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Page 17 and 18: produCt SHT now operates six logist
Page 19 and 20: CorPorate governanCe PoliCy Frauent
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Page 23 and 24: indePendenCe oF the SuPerviSory Boa
Page 25 and 26: Governance, and monitored by the au
Page 27 and 28: ut the market still has much ground
Page 29 and 30: key Share ratioS Investor Relations
Page 31 and 32: Strength through diverSitY
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Page 35 and 36: 8 1 2 3 4 5 6 7 Linnemann-Schnetzer
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Page 39: solid stabilisers, but up to 15kg l
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Page 51 and 52: Business performance All three divi
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Page 57 and 58: 2010 2009 aSSetS EUR ’000 EUR ’
Page 59 and 60: Shareholder value Operating Review
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new interpretations 1) Consolidated
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Consolidated Financial Statements F
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IFRIC 19 Extinguishing Financial Li
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The following companies are fully c
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[21] Short-term provisions Changes
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Liabilities at 31 Dec. 2009 in EUR
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Sundry other income Consolidated Fi
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Change in deferred tax Consolidated
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e. StateMent oF CaSh FloWS Consolid
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EUR ’000 Consolidated Financial S
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2000 1800 1600 1400 1200 1000 800 6
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Liabilities EUR ’000 non-current
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opinion on the group operating revi
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CoMpanY finanCial StateMentS
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taSk Kamel Navarro, 31, aligning pa
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income statement Company Financial
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p.a. Poa PoC PoFa Pln reg. no. roCe
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Frauenthal Liegenschaftsverwaltung
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impressum Financial calender 2011 1
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Annual Report 2010 - Frauenthal Holding AG

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