ANNUAL REPORT 2010/11 - Schumag AG

SCHUMAG AG 27❚ OVERALL STATEMENTON THE BUSINESS SITUATIONKey data 2010/11 2009/10 Change% % %Profitability of sales -1.6 -33.7 32.1Profitability of shareholders' equity -7.2 -112.2 >100ROI -1.1 -29.5 28.4ROCE -1.5 -38.3 36.8Working Capital (EUR million) 13.1 13.2 -0.1The expected improvement of the result situationof Schumag for the year under review has basicallymaterialized. The result before taxes of fiscal year2010/11 improved by EUR 13.9 million comparedto the previous year. It is to be taken into accounthere that the result is burdened by special effectsamounting to a total of EUR -4.2 million.In spite of the clearly negative earnings position inthe last few fiscal years the company has a capitalratio of 26 %.The positive development in 2010/11 basicallyresulted from the recovery of sales. In our corearea of precision engineering sales have nowarrived at about 87 % of the pre-crisis level. Thecontribution margins achieved have slightlyincreased compared with the previous year.A major part of the earnings effect results from theclear reduction of the rate of personnel expensesfrom 52 % to 40 %. During the crisis we expresslydecided to do without personnel cuts to a largeextent. Without this measures the sales growth infiscal year 2010/11 would have probably been lesssuccessful. Due to our efficient cost managementwe furthermore succeeded to a large extent inkeeping overheads at a constant level.The development of the assets situation can beregarded as almost constant compared withprevious years. Financial balance existed at alltimes.To sum up, we can state that the earnings situationhas improved but still continues to be unsatisfactory.The economic situation currently continues to bestrained, but we consistently work on a continuousimprovement in all areas of the company.❚ RESEARCH AND DEVELOPMENTResearch activities have so far been of minorsignificance in our branch but will be morerelevant in future due to market requirements.The focus of development at Schumag is on thecore area of precision engineering and concentrateson the automation and rationalization of seriesprocesses and on the creation of new productionprocesses.QualityIn the precision engineering division the analyticaltools for online process monitoring and for representationof the quality and productivity status arecontinuously developed. The daily evaluations aswell as the control loops observed have led to animproved quality awareness among the employeesas well as to an increase in productivity.