Business Report 2005 - Interseroh

LETTER FROM THE MANAGEMENT BOARD
Dear Shareholders,
Your company, INTERSEROH AG, was founded 15 years ago. The German Packaging Ordinance
also came into effect 15 years ago. Both these dates in 1991 are inextricably linked with each other: in
order to organise the return and recycling of used packaging, new business concepts capable of
mastering this challenge across the whole of Germany had to be found. Concepts like that of
INTERSEROH.
The solution involved nothing less than organising a complex logistical structure beginning
with the collection of secondary raw materials – tin, paper, cardboard, pasteboard, plastic, glass and
wood – and ending in their return to the production cycle.
The much-regulated markets in which INTERSEROH moves have changed immensely since
1991. New markets have been added, partly due to growing demand and new production methods
and partly due to liberalisation. The international demand for raw materials and the ability to serve this
demand are moving more and more to the fore of these markets.
Herein lie, on the one hand, numerous opportunities for ongoing positive development in
INTERSEROH’s fields of business – while on the other, we must remain vigilant of the permanent risk
of volatile raw material prices and their growing influence on the services sector at all times.
On top of this, the various market levels of the INTERSEROH supply chain are increasingly
becoming characterised by internationalisation of the closed loop economy and concentration – be it in
the waste disposal sector or the structure of the clientele of our raw materials.
INTERSEROH has also changed in the last 15 years. Apart from many new services, the steel
and metal recycling segment has developed into an essential component of the INTERSEROH Group,
contributing a substantial share to the group’s overall results.
How, against this background, did the economic environment and our segments develop in
2005? Although the German economy was again marked by restrained development last year, the
services sector did grow satisfactorily. Whereas the volumes of raw materials registered with
INTERSEROH for recycling grew, the services sector experienced considerable losses in the recycling
of transport packaging and declines in the overall volume of secondary raw materials marketed.
Following an exceptional year in 2004 due to volatility and record prices, the scrap steel sector
was marked more by weak demand and lower prices in 2005.
In spite of the relatively difficult environment for both segments, we are satisfied with the result
of the overall group in fiscal 2005.
The coming years will see stronger competition in some of our main fields of business and
therefore also a further decline in our profit margins. At the same time, however, we intend to use the
chances open to us to enter liberalised markets, to grow there and also to develop new fields of
business at home and abroad.
Regardless of whether we are talking about the recycling of packaging, reuse of old products
or trade with secondary raw materials – we can only create value if through excellent organisation and
careful quality management we produce high-quality raw materials and market them worldwide.
Because in contrast to mineral resources, these modern sources of raw materials require less
technology and more organisation and coordination of services to tap.
With its activities, INTERSEROH closes economic material cycles for the lasting benefit of
trade and industry, business, waste disposal companies, consumers, and thus also the environment –
directly from end to start.
That these raw materials can find a new beginning not only in the production of classical
economic goods, but also in art is shown by various works by the Cologne-based artist Joachim
Röderer that illustrate this annual report. All these sculptures have been made from recycled metals.
Why not take some time off while reading this report to view the closed loop economy from another
angle?
The success of INTERSEROH can be attributed to the competence, commitment and
determination of all its employees. For that I would like to thank them all in the name of the
INTERSEROH Management Board. They will continue to be the motor for the dynamic development
of the company in the future as well.
We thank you, our shareholders, for your loyalty and interest, and our customers and business
partners for their confidence in us. You may rest assured we will face the challenges before us with
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