E_mg_GB_03_vorne-29_3_04

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26 Lurgi possesses huge potential in methanol and bio-fuels Once Lurgi has wound up its holding company and merged the operating business units Lurgi Oil Gas Chemicals and Lurgi Life Science with Lurgi AG, its cost structure will be considerably improved. Discontinuing chronically unprofitable businesses in the field of life science, which right from the outset has spectacularly failed to meet expectations, will reduce the pressure on costs. Instead, Lurgi will focus in the future on proprietary technologies used to manufacture petrochemical products such as methanol, propylene and synthetic fuels based on natural gas. A further focal point of its activities will be the food business, which includes technologies used to manufacture bio-diesel and bioethanol from renewable resources. Lurgi is already the market and technology leader in all of these applications. Lurgi Lentjes with a much leaner structure The Lurgi Lentjes Group specializes in the environmental-engineering and energy business within mg’s industrial plant engineering activities. Under the new structure, the two operating companies Lurgi Lentjes AG – including its waste-incineration, power-plant engineering and flue-gas desulfurization businesses – and Lurgi Bischoff GmbH – including its gas-cleaning activities – will be managed directly by mg technologies ag. The company will sell off its activities in the fields of flue-gas denitrification and dedusting as well as small industrial plant for the mono-incineration of sewage sludge. This restructuring of operating units will enable contracts to be handled more efficiently. Lurgi Lentjes possesses tried-and-tested proprietary technologies that hold out the prospect of sustainably profitable growth. Zimmer achieves strong growth in east Asia Zimmer is a globally active company specializing in the engineering of processes and industrial plant used to produce synthetic fibers and polymers. The company has been operating profitably for years. It has continued to optimize its structure by recently acquiring Fleissner, an engineering company, and expanding its product portfolio to include nonwovens. This provides Zimmer with further expansion opportunities for the future in addition to its strong potential in the synthetic-fiber market, especially in east Asia.
MANAGEMENT SHARE STRATEGY SPECIAL SECTION MANAGEMENT REPORT FINANCIAL STATEMENTS FURTHER INFORMATION 2004 will be the year of implementation The current year will be the year of implementation for the mg Group. It will implement the disposal of its chemicals division, including Dynamit Nobel and solvadis. It will implement the many structural initiatives aimed at reducing its holding-company costs from approximately a170 million originally to around a50 million per year. And it will implement the restructuring of its industrial plant engineering business. However, its strategic review will have to continue in 2004. Although the majority of restructuring measures were initiated in 2003, minor after-effects of this optimization process cannot be totally ruled out. Ambitious profitability and financial targets for 2005 By 2005, once its restructuring has been completed, mg will once again be able to grow – both organically and by acquisition. The mg Group’s sales – even including the planned disposal of its Boiler Plant business unit – will then be in the order of a4.5 billion. Its profitability will increase substantially. Assuming the economic environment improves, its pre-tax return on sales should be raised to five percent. mg’s management forecasts that GEA will earn an above-average return on sales in excess of eight percent. It aims to earn a return on sales of four to five per cent in its industrial plant engineering business. The disposal of Dynamit Nobel will sustainably strengthen shareholders’ equity. Its net debt will be transformed into a net cash position that will be available for future growth by acquisition. Enhancing shareholder value is the top priority The prime objective of this restructuring is to sustainably enhance mg’s shareholder value and to transform the company into a focused and highly profitable organization whose strong performance is rewarded by the capital markets. mg technologies ag is convinced that it has embarked upon the right course of action. The encouraging response from the capital markets and the strong performance of mg’s share price in 2003 vindicate the company’s strategy and provide an incentive to achieve its ambitious goals. 27
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Key Figures for the mg Group RESULT
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