Annual Report 2001 - KSPG AG

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40 Management report on the Kolbenschmidt Pierburg Group The divisions Pistons The Pistons division develops, manufactures and distributes pistons for I.C. engines and piston compressors. The product range stretches from pistons for heavy-duty machines via pistons for all kinds of applications in passenger cars and trucks to pistons for ships and stationary applications. These pistons, which have a wide variety of uses, measure between 20 and 640 mm in diameter, and are made from aluminum, spherical castings and steel or a mixture of these materials. For a long time now, all the notable engine manufacturers have counted among our customers. KS Kolbenschmidt GmbH is the division’s parent. Sales drop due to burdens in US business In the past fiscal year, total sales of the Pistons division amounted to €571.5 million, equivalent to a drop of €35.0 million or 5.8 percent. The division’s performance was highly influenced by the North American automotive economy, not only affecting the indigenous operations but also infecting the Brazilian subsidiary. With a 3.2-percent gain, KS Kolbenschmidt AG’s sales amounted to €250.0 million, thus above the Western European market for passenger cars. Revenues generated from our own production, especially of largebore pistons, rose sharply, these however partly being negated due to Pistons 2000 2001 €million €million Net sales 606.5 571.5 EBIT 32.8 40.1 EBT 14.0 20.2 Net income 1.3 9.3 Capital expenditures 65.0 57.7 Headcount at Dec. 31 5,618 5,416 expectedly reduced merchandise sales as well as idle capacity in the second half of the year at one location. Within the small-bore pistons product group, sales of pistons for diesel engines (passenger cars) were clearly lifted, however at the expense of the gasoline engine (passenger cars) and commercial vehicle varieties, this matching the general market trend. At the European subsidiaries, Société Mosellane de Pistons S. A., Thionville, mainly active on the French market, managed to stabilize its sales of €59.8 million at the high prior-year level. The French carmakers’ strong demand for diesel pistons balanced any declines in gasoline engine business. In fiscal 2001 and at €26.8 million, the Czech company Metal a.s., Ústí, slightly topped the previous year’s sharp gain to €26.4 million. A number of start-up postponements prevented further growth. The North American market, the world’s biggest, was for the Pistons division in 2001 a period of severe sales problems. After €240.5 million in the previous year, in 2001 sales of only €208.9 million were generated, the changed euro-dollar parity abating the loss slightly. Apart from the general market trend, as for instance, the weakness of the US manufacturers and the soft demand for commercial vehicles, there were also internal causes such as the phase-out of projects and the loss of a parts distributor, both factors sharing in this decline. Affected are the two large companies active on the US market. After €118.7 million in 2000, Karl Schmidt Unisia Inc., Marinette, Wisconsin, generated sales in 2001 of €95.7 million, and KUS Zollner Division Inc., Fort Wayne, Indiana, contributed €90,7 million (down from €107.3 million) to the total. With sales of €15.3 million in 2001, the Canadian production company KUS Zollner Canada Ltd., Leamington, Ontario, on the other hand, surpassed the previous year’s €9,7 million. After a steep sales surge to €102.5 million in the previous year, the Brazilian subsidiary KS Pistões Ltda., Nova Odessa, had to contend with a decline to €93.5 million in 2001. Good domestic market sales failed to compensate for lower exports to North America and Western Europe. Previous year’s earnings clearly surpassed For fiscal 2001, Pistons achieved an EBT of €20.2 million, hence exceeding the previous year’s €14.0 million. ROS climbed to 3.5 percent. 3-D blank checking at the Neckarsulm plant
Alfinizing of diesel piston ring mounts at the Neckarsulm plant The divisions Pistons For 2001, KS Kolbenschmidt GmbH’s EBT amounted to a negative €43.0 million, compared to an equally negative €1.7 million the year before. The loss was exclusively caused by the write-down of the stake held in KS International Investment Corp., the intermediate holding company for the activities of Pistons and Plain Bearings in the USA and Canada. Apart from the strained earnings situation, especially at KS Bearings Inc., Greensburg, and KUS Zollner Division Inc., Fort Wayne, extensive restructuring expenses incurred for the realignment of both companies, also contributed to this loss. The previous year, too, had been burdened by write-down, albeit clearly below the 2001 level. This write-down did not, however, impact on the division’s bottom line. The good prior-year operating result at KS Kolbenschmidt GmbH was maintained. Under the P&L transfer agreement with, the (HGBbased) net loss of €46.5 million of KS Kolbenschmidt GmbH was absorbed by, Kolbenschmidt Pierburg AG. All the European and South American subsidiaries generated a positive EBT in the period under review. Meriting special mention is the Brazilian KS Pistões, which generated a rising profit thanks to changed parities and productivity improvements. Again, the French as well as the Czech subsidiaries turned in slightly improved profits at a stable sales level. The American Karl Schmidt Unisia Inc., Marinette, had to face a sharp drop in earnings chiefly due to sales reasons. At KUS Zollner Division Inc., Fort Wayne, falling sales and a worsening product mix in connection with cost burdens from restructuring work and rising expenses for health insurance and retirement were not offset by productivity improvement measures. For the company, this led to a clear loss. Zollner Canada Ltd., Leamington, on the other hand, again delivered an encouraging performance. At the Chinese joint venture Kolbenschmidt Shanghai Piston Co. Ltd. in which KS Kolbenschmidt GmbH holds a 35-percent stake and which is included at equity in the division’s segment accounts, sales were slightly bettered over the previous year, and the venture again closed the period well in the black. Capital expenditures below the previous year’s level In fiscal 2001, capital outlays by Pistons amounted to €57.7 million, hence €7.3 million below the prior year. The division’s gross cash flow amounted to €56.2 million in 2001, almost enough to fully fund the capital investments made. The total assets of €491.2 million reported by the division included equity of €154.0 million, equivalent to an equity ratio of 31.4 percent, a leap from the prior year’s 9.7 percent mainly attributable to two factors: Kolbenschmidt Pierburg AG increased the additional paid-in capital by €56.6 million and absorbed the net loss. Stable development in 2002 Against the background of a presumably slight global decline in the automotive market in 2002, for Pistons we predict an almost stable sales situation. At KS Kolbenschmidt GmbH, and especially at the North American companies, planned project start-ups are expected to stimulate sales. From today’s vantage point, the aim of the Pistons division is to avoid as much as possible any negative impact on profitability due to the–from today’s vantage point–difficult environment of 2002. Apart from the management of numerous product start-ups, another essential factor will be to boost performance at the Fort Wayne location. 43
Page 1 and 2: Kolbenschmidt Pierburg AG Rheinmeta
Page 3 and 4: Kolbenschmidt Pierburg at a glance
Page 5 and 6: Contents Agenda of the annual stock
Page 7 and 8: 6 Kolbenschmidt Pierburg AG Supervi
Page 9 and 10: 10 Kolbenschmidt Pierburg AG Letter
Page 11 and 12: 14 Management report on the Kolbens
Page 13 and 14: 18 Management report on the Kolbens
Page 15 and 16: Tool setting prior to machining the
Page 17 and 18: Coating unit for high-duty plain be
Page 19 and 20: Production line for car engine bear
Page 21 and 22: Final assembly of the variable inta
Page 23: Assembly of the steplessly variable
Page 27 and 28: 46 Lagebericht und Konzernlageberic
Page 29 and 30: Testing an engine block for leakage
Page 31 and 32: The PLU 401/121 for continuous fuel
Page 33 and 34: Ecotec test rig at the Neckarsulm p
Page 35 and 36: 62 Kolbenschmidt Pierburg AG Balanc
Page 37 and 38: Consolidated financial statements 2
Page 39 and 40: 70 Consolidated financial statement
Page 55 and 56: 102 Consolidated financial statemen
Page 61: 114 Consolidated financial statemen

Annual Report 2001 - KSPG AG

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