The Vorwerk Annual Report 2OO8

MANAGEMENT REPORT KOBOLDconsistent growth from year to year and thus proves that even established and deeply-penetratedmarkets can offer growth perspectives for direct selling. The standing and development of Koboldin Italy is the result of resolute, persistent optimisation of the sales system in small steps, so as notto overwhelm the experienced staff in direct selling but to gradually take them along the path ofchange. Folletto is currently strengthening its customer care activities e.g. by optimising supplylines for consumables and financing options.Turnover at Kobold Germany in 2008 could just about be maintained at 213 millioneuros after the declines experienced in the three previous years. The Executive Board regardsthis as a partial success of great significance. The profound restructuring of the Kobold salesorganisation is now entering its decisive phase. The most fundamental step – the adoption ofnew direct sales concepts to complement the previous sales model – is planned for 2009. Fromthe restructuring of the German Kobold direct sales organisation, divisional management doesnot only hope to achieve long-term growth impulses for Germany but to learn more about theimplications of innovations for the entire division.Vorwerk Kobold is also progressing well in China. 6 per cent growth in salesvolumes is an excellent performance in view of the legal framework in China, one that is notexactly conducive to direct selling. The current continued focus on the urban centres Shanghaiand Beijing and the optimised sales system practised there may be applied to other regions ofChina. To this end, Vorwerk wishes to develop management staff from the existing organisationto take on leadership roles there.By contrast, the Kobold sales organisation in Spain and France could not develop to thedesired degree. The affects of the already long-continuing national economic slowdown in Spain,together with an erratic increase in the number of unemployed persons and very widespreaduncertainty among households have all had a choking effect.Sales in Austria could be stabilised with a newly-introduced sales system. The developmentin the Czech Republic has been pleasing as has the trend in exports through distributors.The establishment of the business in Russia is also developing very positively. This means thata stable base has been created to enable the Kobold vacuum cleaner business, which is todayhighly dependent on Italy and Germany, to be more diversified in the future.18