Andritz AG — Annual Report 2007

Feb 29, 2008

Key figures 2003-2007 of the Andritz Group (IFRS)

Financial Figures in MEUR

	2007	2006*	2005	2004	2003
Order Intake	3,750	2,891	1,975	1,837	1,394
Order Backlog as of 31.12.	3,843	3,397	1,696	1,439	1,054
Sales	3,283	2,710	1,744	1,481	1,225
EBITDA1)	242	194	131	115	84
EBITA2)	201	163	107	93	63
Operating Result (EBIT)	193	160	107	76	49
Earnings before Taxes (EBT)	198	166	110	77	49
Net Income	136	121	80	54	31
Cash flow from Operating Activities	33	143	237	208	5
Capital Expenditure3)	57	46	27	29	21
Employees as of 31.12. (excluding apprentices)	12,016	10,215	5,943	5,314	4,771
Fixed assets	630	609	308	276	279
Current assets	1,878	1,777	1,083	877	688
Equity4)	482	415	329	277	239
Provisions	395	386	190	160	150
Liabilities	1,631	1,585	873	717	577
Balance sheet total	2,508	2,386	1,391	1,153	967
EBITDA margin (%)	7.4	7.2	7.5	7.8	6.9
EBITA margin (%)	6.1	6.0	6.1	6.3	5.1
EBIT margin (%)	5.9	5.9	6.1	5.1	4.0
Net Income/Sales (%)	4.1	4.5	4.6	3.6	2.5
ROE (%)5)	28.2	29.2	24.3	19.5	13.0
Equity Ratio (%)	19.2	17.4	23.6	24.0	24.7
EV6)/EBITDA	7.9	9.1	6.3	4.4	5.2
Depreciation and amortization/Sales (%)	1.4	1.3	1.4	1.5	1.7
Impairment resp. amortization goodwill/Sales (%)	0.1	0.0	0.0	1.1	1.2

* restated

Stock Exchange related figures

	2007	2006	2005	2004	2003
Earnings per share (EUR)	2.57	2.31	1.53	1.03	0.57
Dividend per share (EUR)	1.007)	0.75	0.50	0.35	0.25
Payout ratio (%)	38.9	32.5	32.6	34.3	44.2
Equity attributable to shareholders per share (EUR)	9.07	7.86	6.25	5.18	4.50
Market Capitalization as of end of period (MEUR)	2,155.4	2,135.9	1,207.1	729.3	493.4

Note: On May 3, 2007, the Andritz share was split in a ratio of 1:4; historical share price data and stock exchange related figures were adjusted accordingly.

Notes

1) EBITDA: Earnings before Interest, Taxes, Depreciation, and Amortization; 2) EBITA: Earnings before Interest, Taxes, Amortization of identifiable assets acquired in a business combination and recognized separately from goodwill at the amount of 5,967 TEUR (2006: 2,895 TEUR) and impairment of goodwill at 2,771 TEUR (2006: 0 TEUR);

3) Additions to property, plant, and equipment and intangible assets; 4) Equity: Total shareholders' equity incl. minority interests;

5) ROE (Return On Equity): Net Income/Equity; 6) EV (Enterprise Value): Market capitalization based on year-end closing price minus net liquidity;

7) Proposal to the Annual General Meeting

00 Contents

Status Report	004
Statement by the Executive Board	012
Report of the Supervisory Board	012
Consolidated Financial Statements 2007 of the Andritz Group	013
Auditor's Report	014
Consolidated Balance Sheet	015
Consolidated Income Statement	016
Consolidated Cash Flow Statement	017
Consolidated Statement of Shareholders' Equity	018
Notes to the Consolidated Financial Statements	019

Financial glossary 052

STATUS REPORT

General economic conditions

In 2007, the global economy showed an overall solid, but regionally and temporally varied development. In the USA, economic growth weakened somewhat during the First Half of 2007, with private consumer spending and capital investments by companies declining, while at the same time inflation remained at a high level. In the Second Half of 2007, the economic development was mainly influenced by the subprime market crisis and the resulting collapse of the home mortgage market. The slump in housing and real estate prices led to the fear that consumer spending in the USA – the main contributor to the strong GDP growth during recent years – will decline significantly in the future, thus leading to a sustained slowdown of economic activities or potentially to a recession. As a consequence, the Federal Reserve Bank (FED) cut key interest rates in several steps from 5.25 to 4.25%, and provided an extensive amount of cash to the banking system to counter a potential liquidity crunch.

In Euroland, the economic activities developed very strongly during 2007. This was mainly driven by unchanged high domestic consumption and strong exports, despite the increasing strength of the Euro against the U.S. dollar. As a result, the European Central Bank (ECB) increased key interest rates to 4% in June 2007. During the subprime crisis, the ECB also injected cash to stabilize the liquidity crisis, but left key interest rates unchanged due to the continued strong economic activities.

In Asia, economic activities also remained very robust during 2007, with fast growth in both private consumption and corporate capital expenditure. GDP growth was particularly strong in China and India.

Source: OECD

Business development

Changes in consolidated companies/ acquisitions

The following material companies were not, or only partially, included in the Andritz Group's consolidated financial statements of the reference year 2006:

• Küsters Group (rolling and calendering technologies for paper and nonwoven textiles)
• Pilão Equipamentos Ltda. (services and and products for the pulp and paper industries)
• VA TECH HYDRO GmbH and its subsidiaries (one of the world's leading suppliers of electromechanical equipment and services for hydropower plants)
• CONTEC Decanter Inc. (service company for the repair and maintenance of centrifuges and separators)
• Coater Division of Bachofen + Meier (a globally active specialist for technologies and systems for paper coating)
• Sindus Human Technology (service company for pulp and paper plants)
• Tigép Kft. (production of heavy machinery, especially for Hydro Power)

Sales

Sales of the Andritz Group developed very favorably in 2007. At 3,282.5 MEUR, they increased by 21.1% compared to 2006 (2,709.7 MEUR), thus reaching a record level. In particular, Sales of the Pulp and Paper, Hydro Power, and Feed and Biofuel Business Areas increased significantly compared to last year. Organic Sales growth of the Group in 2007 was approximately 9.4%.

Order Intake and Order Backlog

The Order Intake of the Andritz Group amounted to 3,749.5 MEUR in 2007, thus increasing significantly compared to the very high level of 2006 (2,891.0 MEUR). The Rolling Mills and Strip Processing Lines, Hydro Power, and Feed and Biofuel Business Areas achieved strong organic growth rates of the Order Intake. Organic growth of the Order Intake in 2007 was approximately 14.7%.

The Group's Order Backlog also showed a strong increase compared to the reference date of last year, surging to 3,843.3 MEUR as of 31.12.2007 (31.12.2006: 3,397.1 MEUR). Thus, the Andritz Group has a solid visibility with regard to Sales for the coming months.

Sales by region 2007 (2006) in %

South America 10 (16) China 15 (15) Asia excl. China 10 (12) Others 6 (3)

Europe 43 (38) North America 16 (16)

Order Intake by region 2007 (2006) in %

Europe 41 (40) North America 20 (14) South America 10 (11) China 9 (16) Asia excl. China 15 (13) Others 5 (6)

Earnings

In step with Sales, Earnings before Interest and Taxes (EBIT) increased to 192.6 MEUR in 2007 (2006: 159.8 MEUR). All Business Areas, in particular the Hydro Power, Rolling Mills and Strip Processing Lines, and Feed and Biofuel Business Areas, showed a solid and satisfactory development of Earnings, thus more than offsetting the dilutive effect of VA TECH HYDRO on the Group's profitability expected at the time of the acquisition. As a result, the Group's EBIT margin, at 5.9% for 2007, was unchanged compared to last year (2006: 5.9%).

The financial result, at 5.5 MEUR in 2007, was lower compared to 2006 (6.1 MEUR). The tax rate in 2007 amounted to 31.3% (2006: 26.9%).

Net Income after deduction of Minority Interests amounted to 132.7 MEUR (2006: 118.5 MEUR).

Net worth position and capital structure

The balance sheet structure as of 31.12.2007 showed no major changes compared to 31.12.2006. Total assets as of 31.12.2007 amounted to 2,507.5 MEUR, thus 121.4 MEUR higher than as of 31.12.2006 (2,386.1 MEUR). The net working capital as of 31.12.2007 was 99.1 MEUR (31.12.2006: -93.6 MEUR).

The Group's net liquidity (cash and cash equivalents minus financial liabilities) as of 31.12.2007 amounted to 246.5 MEUR, thus significantly below the exceptionally high level as of 31.12.2006 (365.7 MEUR). The equity ratio as of 31.12.2007 was 19.2% (31.12.2006: 17.4%).

Shares and shareholder structure – disclosure according to § 243a UGB

Based on the resolution of the Annual General Meeting of March 29, 2007, the company's capital stock was increased by EUR 9,490,000, from EUR 94,510,000 to EUR 104,000,000 by converting the corresponding partial amount of the company's capital reserves shown in the Financial Statements as of December 31, 2006, in accordance with the Capital Adjustment Act, with no issue of additional no-par value bearer shares. As a result, the share capital of Andritz amounted to EUR 104,000,000 as of 31.12.2007. The Annual General Meeting also approved the resolution to split the Andritz shares in a ratio of 1:4, whereby their number was increased from 13,000,000 to 52,000,000 shares. As a result, the proportionate amount of the capital is EUR 2.00 per no-par value share.

There are no limitations concerning the voting rights or the transfer of shares. Approximately 26% of the shares are held by Certus Beteiligungs-GmbH, whose Managing Director is Wolfgang Leitner, Chief Executive Officer of Andritz.

At present, there is no authorized capital. On March 29, 2007, the Annual General Meeting of Shareholders authorized the Executive Board to buy back up to 10% of the total of shares of Andritz AG between April 1, 2007 and September 30, 2008. There are no powers of the Members of the Executive Board, especially regarding the possibility to issue or buy back shares, that do not result directly from legal stipulations.

As far as is known to the company, there are no holders of shares with special controlling rights. Employees exercise their voting rights directly. Furthermore, there are no stipulations regarding the appointment and removal of the Members of the Executive Board and the Supervisory Board and modifications of the company's Articles of Association that do not result directly from legal stipulations.

There are no significant agreements in which the company participates that would become effective, change, or end in the event of a change in the control of the company following a takeover bid. According to the terms of the Andritz corporate bond 2006–2013 issued in June 2006, all holders of a bond forming part of the issue shall, in the event of a change of control by a new large shareholder taking place and this change of control leading to a substantial impairment of the issuer's ability to fulfill its obligations from the bonds forming part of the issue, be entitled to accelerate maturity of their bonds and to require immediate repayment at the nominal value plus any interest accumulated until the day of repayment.

Compensation agreements exist between the company and some Members of its Executive Board in the event of change of control. There are no compensation agreements for the Supervisory Board and the employees.

Key financial figures of the Andritz Group

MEUR	2007	2006	Change in %
Sales	3,282.5	2,709.7	+ 21.1
Return on Sales1) (%)	5.9	5.9	-
EBITDA	242.3	194.2	+ 24.8
Operating Result (EBIT)	192.6	159.8	+ 20.5
Earnings before Taxes (EBT)	198.0	165.9	+ 19.3
Net Income	136.1	121.4	+ 12.1

1) EBIT/Sales

Total assets 2007: 2,507.5 MEUR

Assets

640.6 MEUR	1,268.1 MEUR		598.8 MEUR
Long-term assets: 25%	Short-term assets: 51%		Cash and cash equivalents: 24%
Shareholders' Equity and Liabilities
481.6 MEUR	352.3 MEUR	290.8 MEUR	1,382.8 MEUR
Shareholders' Equity incl. Minority Interests: 19%	Financial liabilities: 14%	Other long-term liabilities: 12%	Other short-term liabilities: 55%

Key balance sheet ratios

	2007	2006
Equity ratio2) (%)	19.2	17.4
Return on equity3) (%)	41.1	40.0
Return on investment4) (%)	7.7	6.7
Net liquidity5) (MEUR)	246.5	365.7
Net debt6) (MEUR)	-94.8	-216.9
Net working capital7) (MEUR)	99.1	-93.6
Capital employed8) (MEUR)	405.6	194.5
Gearing9) (%)	-19.7	-52.3

2) Shareholders' Equity/Total assets

3) Earnings before Taxes/Shareholders' Equity

4) EBIT/Total assets

5) Cash and cash equivalents minus financial liabilities

6) Interest-bearing liabilities including provisions for severance payments, provisions for pensions, and jubilee provisions minus cash and cash equivalents

7) Non-current and current receivables and other assets minus non-current and current liabilities excl. financial liabilities and provisions

8) Net working capital plus fixed assets

9) Net debt/Shareholders' Equity

Risk management and treasury

As a global company serving a variety of different markets and customers, the Group is subject to certain general and industry-specific risks. These risks mainly relate to the industries and markets served by the Group, the Group's business, major orders, and the conversion of the Backlog into Sales. Andritz has a long-established Group-wide risk management system whose main task is to identify nascent risks early and to take countermeasures. This is an important element in the active risk management within the Group.

The monitoring and management of financial risks are integral parts of Andritz's Group-wide accounting and controlling activities. Continuous controlling and regular reporting should attempt to ensure that major risks are identified at an early stage and countermeasures are taken, if necessary.

For most of the orders, the risk of payment failure by customers is reduced by bank guarantees and export insurances. Risks related to deliveries in countries with medium to high political risks typically are also insured. Interest and exchange rate risks are limited and controlled by using derivative financial instruments, in particular forward exchange contracts and swaps. Net currency exposure of orders in non-Euro currencies, mainly U.S. dollars and British pounds, is usually hedged by forward contracts. Cash flow risks are minimized by the Group's cash management system which controls cash in- and outflows of all relevant Andritz affiliates. It also monitors the Group's cash pooling activities in order to optimize net financing income.

However, there is no guarantee that the monitoring and risk control systems are sufficient or sufficiently effective, as the case may be.

Capex and cash flow

The Andritz Group's investments in tangible and intangible assets amounted to 57.0 MEUR in 2007, thus increasing by 24.7% compared to last year (2006: 45.7 MEUR). Capital expenditure mainly focused on building and workshop modernizations at some of the Group's existing sites as well as on capacity additions, especially in China.

Cash flow from operating activities amounted to 33.1 MEUR, down compared to last year (2006: 143.1 MEUR).

Key cash flow ratios

MEUR	2007	2006
Cash flow from operating activities	33.1	143.1
Capital expenditure1)	57.0	45.7
Free cash flow2)	-19.6	100.1
Free cash flow per share3)	-0.4	1.9

1) Additions to property, plant, and equipment and intangible assets

2) Cash flow from operating activities minus capital expenditure plus payments received from the sale of tangible and intangible assets

3) Free cash flow/total number of Andritz shares

Effects from exchange rates

Changes in exchange rates are hedged by forward rate contracts.

Non-financial performance indicators Manufacturing

The year under review was characterized by very high capacity utilization at all Andritz manufacturing sites. Increasing procurement problems in the material and semi-finished goods markets had to be countered by extremely high commitment and flexibility of all employees. Due to the very high Order Backlog, employment of temporary workers and outsourcing of manufacturing orders was further increased.

Investments in automated manufacturing processes, de-bottlenecking, and projects to further improve competitiveness and reduce lead times were successfully implemented. In the strongly growing markets of China, India, and South America, manufacturing capacity is being extended systematically.

Human Resources

Global training and further development of working skills of Andritz employees was once again a focus of Human Resources activities in 2007. Recruiting activities were extremely challenging due to the lack of well-trained applicants. Nevertheless, most relevant vacancies within the Andritz Group were well filled with highly qualified candidates. Transfers of employees to subsidiaries all over the world (mainly China) to support local business and organization development increased significantly. This is an important activity with regard to the internal growth of the Andritz Group.

Environmental protection

In 2007, environmental protection activities focused on training programs for employees as well as measures to save energy and to reduce traffic load, entailing CO2, CO, and NOx emission savings. A new traffic concept was developed for the Graz, Austria, location and the prerequisites for its implementation were established. This concept will be implemented in 2008 and will result in saving 4,000 kilometers on the company's premises and 13,000 kilometers in the district of Graz-Andritz per year. A pilot project to reduce the energy required for office lighting at the Graz site has revealed a savings potential of 20% in this area, which is planned to be realized in 2008 and 2009. A project involving the Andritz sites in Graz and Weiz, Austria was carried out where apprentices from the workshop in Graz repaired the hydro turbine in the company's power station in Weiz enabling them to deepen their knowledge in the field of renewable energy. In 2007, the Graz site was once more awarded the Ökoprofit certificate by the city of Graz for special performance with regard to environmental protection.

Research and Development

In 2007, the Andritz Group invested approximately 45.4 MEUR in Research and Development (2006: 35.4 MEUR). Including the expenditure for contract-related developments, the total R&D expenditure for new processes and products amounted to approximately 3% of Sales. More than 300 people work in the Group's research centers in the USA, Austria, Finland, Switzerland, and France to develop new processes and equipment and to expand Andritz's technological leadership.

For the Divisions of the Pulp and Paper Business Area, two major trends are driving customer investments today. First is the goal to reduce the investment cost per ton to its lowest possible level. This is leading to larger, single-line production units with no redundancy of systems. The second trend is to continue to make the production process more sustainable. Andritz's response to the sustainability requirement is evident in the new systems which have been adapted to the efficient processing of plantation fibers and technology which consumes much less energy than its predecessors. Considerable R&D effort is being employed to more effectively utilize biomass as an energy source.

In May 2007, Andritz, with its associated company Carbona, and UPM, one of the world's leading forest product companies, agreed to cooperate on the development of a technology for biomass gasification and synthesis gas purification. The joint pilot project will demonstrate gasification of the planned feedstock (wood residue) in an 8 MW gasifier and product gas cleaning to the point where it is suitable for treatment and conversion into biofuels with commercially available equipment. As part of the project, an extensive pilot plant testing program will be performed at the Gas Technology Institute (GTI), a renowned research and development organization in the USA. Final results are expected by the end of 2008.

The trend in wood processing is towards high-capacity lines. In order to serve this demand, the Division has developed bigger lines for both barked and debarked logs. A new chipper (the largest in the world) and a new high-capacity debarking drum have been developed. The Division also developed a new technology for separating sand and loose bark which can process logs that have been debarked in the forest.

Technology development in the fiberline area not only targets large greenfield mills, but also small- and medium-sized lines. Digester feedline enhancements, the larger scale of DD washers, the next generation of MC-equipment, and advanced control systems have been introduced. Reduced fresh water consumption and correspondingly lower effluent volumes are achieved by new washing concepts and by pressurizing/closing process steps to prevent emissions to the atmosphere.

For white liquor production, a new lime kiln was designed with a capacity exceeding 1,000 t/d. The application of centrifuge technology for dregs dewatering and washing is gaining acceptance. The centrifuge minimizes the impact of dregs in landfills. A system for the selective reduction of phosphorus in the lime circulation will be installed in a mill in Finland, which will enable further closing of the lime cycle and reduction of solid waste.

In the area of energy production from biomass, a development program was launched in 2006 to introduce advanced biomass-fired power boilers to the industry and the first power boilers are already under construction. High oil and gas prices have triggered growing interest in using biofuels in lime kilns, which are still significant consumers of fossil fuels in the pulp mill.

As experience with the operation of the High Energy Recovery Boiler (HERB) is accumulated, plans for the next steps to increase the electricity generation from black liquor are in place. As mills continue to close their chemical circulation loops to reduce emissions, chloride removal is becoming more important. The first leaching-based chloride removal process by Andritz is being constructed and this offers a lower cost alternative to the proven ash re-crystallization process. Significant development efforts have been made to reduce the operating costs of the evaporation plant. A new patented approach has been developed to address recent developments in thermal and electrical energy prices.

The research and development focus for pulp drying lines is to increase the production capacity of a single drying line based upon Twin Wire forming technology from approximately 4,000 t/d today to over 4,500 t/d or over 1,300,000 t/y of pulp. Energy consumption of the entire drying line will be reduced by simplifying the process and optimizing the 'biggest energy consumers' in the line.

In the paper machine area, developments in the tissue group include the introduction of the PrimeDry Steel, a Yankee dryer with higher performance and higher operational safety compared to a conventional cast iron Yankee. In the air engineering department, the focus was on energy-saving equipment. A new step in heat recovery from the exhaust of Yankee hoods – ReEvaporation – has been developed. Condensate is re-evaporated in a heat exchanger by using exhaust air. Up to 25% savings in primary steam is possible. A new web guiding device after the creping doctor – the PrimeTakeOff – has been introduced. The benefits are fewer paper breaks at higher machine speeds. The development of a modular Yankee hood allows the delivery of the huge hood body in smaller parts, with final assembly on-site.

Increasing system efficiency and reducing energy consumption are the focal points of development in the fiber preparation area. An ash washing machine (SpeedWasher) for Mixed Office Waste (MOW) papers and a pressurized disperser for Old Corrugated Container (OCC) grades have been introduced.

For mechanical pulping, a high-priority program is concentrating on simplifying processes and improving reliability of equipment to lower the investment/operating costs for customers. Two results of this effort in the last year have been the introduction of a new fiber centrifuge, which separates steam and fibers more effectively after the high-consistency refiner, and a new series of compression devices and screws. To meet future requirements, the Division invested in the modernization of its pilot plant in Springfield, Ohio, USA.

In the paper finishing area, the smallest shoe roll ever built (diameter: 710 mm) has been designed for the tissue industry. Patented features like additional lubrication and the edge relief system make it possible to achieve higher dryness without loss of bulk and with the fewest possible belt changes. A new design for the PrimeFeeder makes the entire process significantly more stable and helps reduce the time it takes a paper machine to reach full production after a sheet break.

In the Hydro Power Business Area both order-related developments and basic innovations were carried out successfully. In the Tokke, Norway and Larona, Indonesia contract (two Francis rehabilitation projects), the excellent performance of the new runner designs was the basis for receiving the contract awards for further runner deliveries. Hydraulic engineering studies were also initiated in other areas in order to provide customers with advanced and detailed information in a very early project stage.

For bulb units in the head range above 20 m, a new generation of 5-bladed runners has been developed and successfully tested on a model for a contract in China.

The development of large pumps for India and China, as well as the basic developments for new pump turbines, benefited from the synergies between the two product lines.

R&D activities in the field of hydrogenerator cooling focused on the optimization of several components of the ventilation circuits and on the enhancement of numerical tools for the ventilation design.

Based on practical experience with the newly developed StrafloMatrix™ Generator, which has been running in an Austrian hydropower plant for over two years, the special design of the high voltage stator winding, as well as the heat transfer from the end winding, were optimized.

In the course of cost reduction programs and the generator value-analysis project, a number of new technical concepts were analyzed. A concept for global impregnation of large-diameter stator cores, a new plate-rotor design, and an alternative damper winding fixture are among the most promising concepts.

One focus of R&D activities was on technologies for hydropower plant automation. SAT250, the cutting-edge control center and operator station system, has been optimized in the low-cost range, functionally and ergonomically. The system now covers all man-machine interfaces in a hydropower plant, from small turbine governor panels to sophisticated multi-site control centers for power plant groups. In electrical protection and excitation, a very new platform, the first technologically unified protection/excitation platform in the world, has been defined.

The Rolling Mills and Strip Processing Lines Business Area's R&D activities focused mainly on new coating technologies using electro-galvanizing and CVD (Chemical Vapor Deposition) technology. Pilot plants for both processes produced material that is used for application tests at potential customers.

In HCl recovery systems, the iron oxide by-product is important for the economy of the process. New process routes were investigated in order to produce iron oxide for the pigment market.

The delivery program of new-generation punching and metal-forming presses was extended. The new generation of presses features a modular design, which allows flexible adaptation to customer demands.

In the Environment and Process Business Area, research work by the Separation Technologies Division continued to concentrate on the optimization of the centrifuge product range in order to further enhance performance and/or reduce manufacturing costs. Another focus area was standardization of the filter press product family in order to shorten delivery times and reduce costs.

Driven by increasingly stringent requirements for highly efficient odor control systems, further efforts and tests have been conducted to minimize odor and TOC (Total Organic Carbon) compounds in the offgas from sludge drying plants. Especially for sewage sludge, with its unpredictable range of odorous substances, extensive R&D work is done to develop a reliable and ecological odor control system that – unlike thermal oxidizers – does not consume further primary energy and cause additional pollution by CO2.

Based on the strong market demand for biomass drying, the development of a large-scale belt dryer for biomass with an evaporation capacity of up to 16 t/h has been started with the target to achieve utmost energy efficiency by heat recovery from drying gases. This dryer will operate with nearly closed drying air loops and also recover the energy from the minimized dryer offgas stream. It will be able to run on waste heat or offgas from other processes as well as from combined heat and power plants (CHPs).

Also with respect to biomass drying, intensive pilot tests were carried out with a pilot-scale drying plant to obtain design and feasibility data for belt drying on various biomass materials such as sawdust for pellet mills, spent grain from breweries, rejects, sugar cane bagasse, and bark from the pulp and paper industry.

The Feed and Biofuel Business Area successfully launched a new-generation process control based on touch screen technology, for its small and medium-sized pet food and aquatic feed extruders.

To further strengthen the product range targeting the renewable energy sector, a new-generation hammermill for wood powder production in power plants was introduced to the market.

Outlook

In spite of the general global economic slowdown and the turmoil on the global financial markets, Andritz currently continues to see good project activity in all Business Areas.

For Pulp and Paper, project activity remains at a satisfactory level, with investments focusing on both greenfield plants and modernization/refurbishment of existing installations. The most active regions for new pulp mills and/or extension of existing mills are expected to be South America, Australia, and Asia. For Europe and North America, investments should focus on modernization/refurbishment of existing plants as well as on after-market services. In addition, it is expected that the global demand for processes and systems using renewable energy sources (biomass, such as forest residues, grass, straw, etc.), which also further enhance energy efficiency and minimize emissions, will increase.

In the area of Hydro Power Business, project activity is expected to continue at a high level in 2008. A large number of new hydropower stations are in the planning or construction stages, in particular in South America, China, and India. For Europe and North America, investments should continue to focus on modernization and rehabilitation due to the aging installed capacities, as well as on capacity increasing projects for existing plants. The demand for pumped storage systems should also remain at a high level due to the necessity of securing network stability. The market for small-scale hydropower stations should also develop positively, mainly pushed by increasing worldwide efforts for climate protection and the increased use of renewable energy sources.

In the area of Rolling Mills and Strip Processing Lines, investment activity for both carbon steel and stainless steel equipment continues at a solid level. In the area of stainless steel, a continued high demand from fast growing economies, like China and India, is anticipated. For Europe and the USA, project activity is expected to be focused on the modernization of existing plants, with one or more new projects being decided.

For Environment and Process, the market for sludge dewatering equipment should remain at a solid level. In addition, dewatering equipment for industrial applications for the petrochemical, minerals, mining, and food processing industries should continue to develop favorably. In the area of thermal drying, a gradual enhancement of project activity is anticipated, mainly driven by rising fuel prices, leading to increasing demand for drying plants with combined heat and power solutions, and plants with combined incineration.

In the area of Feed and Biofuel, the animal feed sector should develop solidly, with Eastern Europe and Russia, as well as Central and South America, being the most active regions. It is also expected that project activity in the aquaculture and the pet food industries should develop positively.

Investment activity for wood pelleting equipment should also remain at a very high level, in particular in North America, Northern and Western Europe, and in the 'new' regions of Southern Europe and South America.

Based on the high Order Backlog of over 3.8 billion Euros as of the end of 2007, and the expected good project activity in all of the Business Areas, Andritz expects Group Sales for 2008 to amount to approximately 3.5 billion Euros, with Earnings increasing at least at the same rate as Sales.

Significant events after December 31, 2007

Between the balance sheet date and the publication of this report, the turmoil on the international financial markets has persisted. The released economic indicators showed further signs of a global economic slowdown. A significant downturn of the global economy during 2008 might have a negative effect on the financial development of the Andritz Group.

On February 18, 2008 Andritz successfully concluded the issue of a public corporate bond with a volume of MEUR 150 and a tenor of seven years. At a denomination of TEUR 50 the Andritz corporate bond is endowed with an annual fixed coupon rate of 5.25%.

Disclaimer

Certain statements contained in this report constitute 'forward-looking statements.' These statements, which contain the words 'believe', 'intend', 'expect', and words of similar meaning, reflect the Management's beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law.

Statement by the Executive Board

REPORT OF THE SUPERVISORY BOARD

Pursuant to Article 82 (4) of the (Austrian) Stock Exchange Act, the Executive Board of Andritz AG herewith confirms

1. that, to its knowledge, the Consolidated Financial Statements 2007 drawn up in compliance with applicable financial reporting standards present, as fairly as possible, the financial position and financial performance of the entirety of the companies included in the consolidated figures of the Andritz Group;

2. that the Status Report presents the business development, the Earnings and the position of the entirety of the companies included in the consolidated figures of the Andritz Group in such a manner as to present as fairly as possible the financial position and financial performance and to describe the essential risks and uncertainties to which the Andritz Group is exposed.

The Executive Board of Andritz AG

Wolfgang Leitner (President and CEO), Franz Hofmann, Karl Hornhofer, Humbert Köfler, Friedrich Papst

Graz, February 2008

The Supervisory Board was regularly informed by the Executive Board, both verbally and in writing, of the status of the Company, its development, and major business transactions. The transactions that were subject to approval by the Supervisory Board were investigated and reviewed together with the Executive Board.

On March 29, 2007, Klaus Ritter was re-elected as Member of the Supervisory Board for the maximum duration according to the stipulations in the Articles of Association, i.e. until the end of the General Meeting of Shareholders which decides on the discharge for the business year 2011.

The Financial Statements of Andritz AG and the Consolidated Financial Statements as of December 31, 2007, as well as the Status Reports for 2007, were audited (including the accounts) and certified by AUDITOR TREUHAND GMBH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna, who had been appointed as auditors by the General Meeting of Shareholders.

The Supervisory Board examined the Financial Statements certified by the Auditors, as well as the proposed appropriation of profit and the Status Reports of the Executive Board, and concurs with the result of the Audit. The Supervisory Board approved the Financial Statement of Andritz AG, which is herewith adopted in compliance with Article 125, paragraph 2 of the Corporation Act.

Kurt Stiassny

Chairman of the Supervisory Board

Graz, February 2008

Consolidated Financial Statements 2007 of the Andritz Group (IFRS)

Auditor's Report	014
Consolidated Balance Sheet	015
Consolidated Income Statement	016
Consolidated Cash Flow Statement	017
Consolidated Statement of Shareholders' Equity	018
Notes to the Consolidated Financial Statements	019

AUDITOR'S REPORT

Report on the Consolidated Financial Statements

We have audited the following consolidated financial statements of Andritz-AG, Graz, Austria for the financial year from January 1, to December 31, 2007. These consolidated financial statements comprise the balance sheet as at December 31, 2007, the consolidated income statement, cash flow statement, and statement of changes in equity for the year ended December 31, 2007, and a summary of significant accounting policies and other explanatory notes.

Responsibility of the Legal Representatives for the Consolidated Financial Statements

The company's legal representatives are responsible for the preparation of the consolidated financial statements, which, in accordance with International Financial Reporting Standards as applicable in the EU, are to provide a fair presentation of the Group's financial position and financial performance. This responsibility includes: Set-up, implementation, and maintenance of an internal controlling system if this is relevant for the preparation of consolidated financial statements and fair presentation of the Group's financial position and performance so that these statements are free from material misstatement, whether due to fraud or error; selection and application of appropriate accounting policies; and making accounting estimates that are reasonable in consideration of existing circumstances.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the laws and regulations applicable in Austria and in accordance with the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). The standards require us to comply with the professional rules of conduct and to plan and perform the audit in a manner to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the consolidated financial statements. The selection of the procedures depends on the auditor's judgment, including the assessment of the risk of material misstatements in the financial statements, whether due to fraud or error. In making the risk assessments, the auditor considers the internal control system as far as relevant for the Group's preparation of the consolidated financial statements and the fair presentation of the financial position and performance, in order to set up appropriate audit procedures in consideration of the existing circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a sufficiently secure basis for our audit opinion.

Opinion

Our audit did not give rise to any objections. Based on the results of our audit, the consolidated financial statements, in our opinion, present fairly, in all material respects, the financial position of the Group as of December 31, 2007, and of its financial performance and its cash flows for the financial year from January 1, to December 31, 2007 in accordance with the International Financial Reporting Standards (IFRSs) as applicable in the EU.

Report on the Consolidated status report

On account of laws and regulations applicable in Austria the consolidated status report is to be checked for consistency with the consolidated financial statements and whether the other disclosures made in the consolidated status report do not give rise to misconception of the position of the Group.

In our opinion, the consolidated status report is consistent with the consolidated financial statements.

Vienna, February 19, 2008

AUDITOR TREUHAND GMBH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft

Walter MÜLLER Michael SCHOBER

(Austrian) Certified Public Accountants

AUDITOR TREUHAND GMBH is a member of

If the consolidated financial statements are disclosed or handed over to a third party in a version which differs from that certified by us, our prior approval is necessary if our audit opinion is included or our audit is mentioned.

Consolidated Balance Sheet

Consolidated Balance Sheet as of December 31, 2007

		2007	2006*
	Notes	(in TEUR)	(in TEUR)
Assets
Intangible assets	1.	46,373	50,990
Goodwill	1.	227,083	222,617
Property, plant, and equipment	1.	260,153	237,089
Shares in associated companies	1.	6,825	6,222
Other investments		32,997	32,738
Non-current receivables and other non-current assets	2./5./7.	10,221	6,132
Deferred tax assets	18.	56,982	58,969
Non-current assets		640,634	614,757
Inventories	3.	250,632	213,728
Advance payments made	4.	85,669	35,710
Trade accounts receivable	5.	400,163	347,368
Cost and earnings of projects under construction in excess of billings	6.	391,305	346,777
Other current receivables	7.	128,716	106,949
Prepayments and deferred charges		11,595	10,594
Marketable securities		101,887	39,592
Cash and cash equivalents		496,926	670,591
Current assets		1,866,893	1,771,309
Total assets		2,507,527	2,386,066

Share capital		104,000	94,510
Capital reserves		36,476	45,966
Retained earnings	8.	326,933	262,352
Equity attributable to shareholders of the parent		467,409	402,828
Minority interests		14,166	11,712
Total shareholders' equity		481,575	414,540
Bonds – non-current	11.	192,268	296,358
Bank loans and other financial liabilities – non-current	11.	28,804	21,826
Provisions – non-current	9./10.	184,214	182,002
Obligations under finance leases – non-current	11.	551	778
Other liabilities – non-current	12.	6,976	8,144
Liabilities for deferred taxes	18.	99,604	80,093
Non-current liabilities		512,417	589,201
Bonds – current	11.	99,995	0
Bank loans and other financial liabilities – current	11.	29,931	24,900
Obligations under finance leases – current	11.	799	599
Trade accounts payable		314,028	340,682
Billings in excess of cost and earnings of projects under construction	6.	388,034	391,934
Advance payments received		82,255	70,730
Provisions – current	9.	210,592	204,106
Liabilities for current taxes		20,182	22,605
Other liabilities – current	12.	367,719	326,769
Current liabilities		1,513,535	1,382,325
Total Shareholders ' equit y and liabilities		2,507,527	2,386,066

* restated

The following notes to the consolidated financial statements form an integral part of this consolidated balance sheet.

Consolidated Income Statement

Consolidated Income Statement for the year ended December 31, 2007

		2007	2006*
	Notes	(in TEUR)	(in TEUR)
Sales	13.	3,282,488	2,709,686
Changes in inventories of finished goods and work in progress		(440)	(46,933)
Capitalized cost of self-constructed assets		2,035	1,972
		3,284,083	2,664,725
Other operating income	14.	66,657	41,231
Cost of materials		(1,985,962)	(1,644,917)
Personnel expenses	15.	(676,603)	(516,933)
Other operating expenses	16.	(445,859)	(349,883)
Earnings before interest, taxes, depreciation and amortization (EBITDA)		242,316	194,223
Depreciation, amortization and impairment of intangible assets and property, plant, and equipment	1.	(46,984)	(34,384)
Impairment of goodwill	1.	(2,771)	0
Earnings before interest and taxes (EBIT)		192,561	159,839
Income/Expenses from associated companies		887	1,244
Interest result		4,370	5,290
Other income from financing activities		204	(448)
Financial results	17.	5,461	6,086
Earnings before taxes (EBT)		198,022	165,925
Income taxes	18.	(61,915)	(44,572)
Net income		136,107	121,353
Thereof attributable to:
Shareholders of the parent company		132,738	118,488
Minority interests		3,369	2,865
Weighted average number of no-par value shares		51,561,489	51,270,364
Earnings per no-par value share (in EUR)	19.	2.57	2.31
Effect of potential dilution of share options		269,688	332,496
Weighted average number of no-par value shares and share options		51,831,177	51,602,860
Diluted Earnings per no-par value share (in EUR)		2.56	2.30
Proposed or paid dividend per no-par value share (in EUR)	8.	1.00	0.75

* restated

The following notes to the consolidated financial statements form an integral part of this consolidated income statement.

Consolidated Cash Flow Statement

Consolidated Cash Flow Statement for the year ended December 31, 2007

	2007	2006*
	Notes (in TEUR)	(in TEUR)
Earnings before taxes (EBT)	198,022	165,925
Interest result	(4,370)	(5,290)
Depreciation, amortization, write-ups and impairment of fixed assets	49,643	34,475
Income/Expense from associated companies	(887)	(1,244)
Changes in non-current provisions	3,481	12,563
Results from the sale of fixed and financial assets	(1,545)	194
Other non-cash income/expenses	3,227	5,470
Taxes paid	(56,085)	(42,131)
Interest received	31,602	23,023
Interest paid	(24,142)	(18,592)
Gross cash flow	198,946	174,393
Changes in inventories	(33,286)	44,269
Changes in advance payments made	(50,061)	(57)
Changes in receivables, prepayments and deferred charges	(129,397)	(160,868)
Changes in current provisions	8,942	36,136
Changes in advance payments received	7,669	(75,964)
Changes in liabilities and deferred income	30,296	125,224
Cash flow from operating activities	33,109	143,133
Payments received for asset disposals	14,324	2,729
Payments made for investments in fixed tangible and intangible assets	(57,033)	(47,475)
Payments made for investments in financial assets	(8,143)	(5,143)
Cash flow due to purchase of minority interests and business acquisitions	I. (36,535)	(57,837)
Payments made for short-term financial investments	(60,758)	35,440
Cash flow from investing activities	(148,145)	(72,286)
Changes in interest-bearing borrowings	5,955	213,981
Dividends paid by Andritz AG	(38,690)	(25,550)
Other changes of investments by minority shareholders	(519)	299
Payments concerning own shares	(20,180)	1,354
Cash flow from financing activities	(53,434)	190,084
Change in cash and cash equivalents	(168,470)	260,931
Changes in cash and cash equivalents resulting from exchange rate fluctuations	(5,195)	(9,125)
Cash and cash equivalents at the beginning of the period	670,591	418,785
Cash and cash equivalents at the end of the period	496,926	670,591

* restated

The following notes to the consolidated financial statements form an integral part of this consolidated cash flow statement.

Consolidated Statement of Shareholders' Equity

Consolidated Statement of Shareholders' Equity for the year ended December 31, 2007*

									Total
								Minority	shareholders'
						Attributable to shareholders of the parent		interests	equity
				Other		Currency
		Share	Capital	retained	IAS 39	translation
(in TEUR)	Notes	capital	reserves	earnings	reserve	adjustments	Total
Status as at 1.1.2006		94,510	45,966	191,429	(3,172)	(8,316)	320,417	8,335	328,752
Currency translation adjustments	8.					(13,730)	(13,730)	(24)	(13,754)
Changes to IAS 39 reserve					3,845		3,845	(25)	3,820
Gains/(losses) recognized directly
in equity, net of taxes on income		0	0	0	3,845	(13,730)	(9,885)	(49)	(9,934)
Net income				118,488			118,488	2,865	121,353
Total gains/(losses) for the year		0	0	118,488	3,845	(13,730)	108,603	2,816	111,419
Dividends	8.			(25,550)			(25,550)	(583)	(26,133)
Changes from acquisitions				(4,144)			(4,144)	1,144	(3,000)
Capital increase from the
company's own reserves							0		0
Changes concerning own shares				1,354			1,354		1,354
Other changes				2,148			2,148		2,148
Status as at 31.12.2006*		94,510	45,966	283,725	673	(22,046)	402,828	11,712	414,540
Status as at 1.1.2007		94,510	45,966	283,725	673	(22,046)	402,828	11,712	414,540
Currency translation adjustments	8.					(12,378)	(12,378)	163	(12,215)
Changes to IAS 39 reserve					(29)		(29)		(29)
Gains/(losses) recognized directly
in equity, net of taxes on income		0	0	0	(29)	(12,378)	(12,407)	163	(12,244)
Net income				132,738			132,738	3,369	136,107
Total gains/(losses) for the year		0	0	132,738	(29)	(12,378)	120,331	3,532	123,863
Dividends	8.			(38,690)			(38,690)	(1,078)	(39,768)
Changes from acquisitions							0		0
Capital increase from the
company's own reserves		9,490	(9,490)				0		0
Changes concerning own shares				(20,180)			(20,180)		(20,180)
Other changes				3,120			3,120		3,120
Status as at 31.12.2007		104,000	36,476	360,713	644	(34,424)	467,409	14,166	481,575

* 2006 restated

The following notes to the consolidated financial statements form an integral part of this consolidated statement of shareholders' equity.

as of December 31, 2007

A. General

Andritz AG ('Andritz') is incorporated under the laws of the Republic of Austria and has been listed on the Vienna Stock Exchange since June 2001. The Andritz Group (the 'Group') is a leading producer of high-technology industrial machinery and operates through five strategic Business Areas: Pulp and Paper, Hydro Power, Rolling Mills and Strip Processing Lines, Environment and Process, and Feed and Biofuel.

The average number of employees in the Group was 10,949 in 2007 and 8,164 in 2006. The registered office address of the Group is at Stattegger Strasse 18, 8045 Graz, Austria.

The consolidated financial statements are the responsibility of the Executive Board and are acknowledged by the Supervisory Board. Various amounts and percentages set out in these consolidated financial statements have been rounded and accordingly may not total.

B. Summary of Significant Accounting Policies

The principal accounting policies adopted in preparing the financial statements of Andritz are as follows:

a. General

The financial statements were prepared in accordance with Standards formulated by the International Accounting Standards Board (IASB) endorsed by the European Union and whose application is mandatory for 2007. All interpretations formulated by the International Financial Reporting Interpretations Committee (IFRIC), whose application is also mandatory for 2007, have been taken into account. In the year under review Andritz has adopted all of the new Standards and Interpretations that are relevant to its operations and that are effective for accounting periods beginning on 1 January 2007.

In the current year, the Group has adopted IFRS 7 Financial Instruments: Disclosures which is effective for annual reporting periods beginning on or after 1 January 2007, and the consequential amendments to IAS 1 Presentation of Financial Statements.

The adoption of IFRS 7 and the changes to IAS 1 have led to an increase of the disclosures provided in these consolidated financial statements regarding the Group's financial instruments and management of capital.

Four Interpretations issued by the International Financial Reporting Interpretations Committee are effective for the current period. These are:

• IFRIC 7 Applying the Restatement Approach under IAS 29, Financial Reporting in Hyperinflationary Economies;
• IFRIC 8 Scope of IFRS 2;
• IFRIC 9 Reassessment of Embedded Derivatives; and
• IFRIC 10 Interim Financial Reporting and Impairment.

The adoption of these Interpretations had no impact on the enclosed consolidated financial statements.

At the date of authorization of these consolidated financial statements, the following Standards and Interpretations were issued but not yet effective:

• IAS 23 (Revised) Borrowing Costs (effective for accounting periods beginning on or after 1 January 2009);
• IFRS 3 (Revised) Business Combinations and consecutive amendments in other Standards (effective for accounting periods beginning on or after 1 January 2009);
• IFRS 8 Operating Segments (effective for accounting periods beginning on or after 1 January 2009);
• IFRIC 11 IFRS 2 Group and Treasury Share Transactions (effective for accounting periods beginning on or after 1 March 2007);
• IFRIC 12 Service Concession Arrangements (effective for accounting periods beginning on or after 1 January 2008);
• IFRIC 13 Customer Loyalty Programs (effective for accounting periods beginning on or after 1 July 2008); and
• IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective for accounting periods beginning on or after 1 January 2008).

The effects of the revised IAS 23 are currently analyzed by the Executive Board. The Executive Board believes at present, that no significant effects will impact the enclosed consolidated financial statements. The principal change to the Standard is to eliminate the previously available option to expense all borrowing costs when incurred.

IFRS 8 is a disclosure Standard which may result in a redesignation of the Group's reportable segments, but has no impact on the reported results or financial position of the Group.

The Executive Board intends first-time application of the Standards and Interpretations mentioned above for that period in which they come into force. The application of the Standards and Interpretations will have no essential impact on the equity and reported results of the consolidated financial statements in the year they are adopted for the first time.

The changes in IFRS 3 (including consecutive amendments in other Standards) could have an effect on future transactions which can not be estimated comprehensively at this time.

b. Reporting Currency

The consolidated financial statements are prepared in EURO.

c. Principles of Consolidation

The consolidated financial statements of the Group include Andritz and the companies that it controls. This control basically exists where Andritz owns, either directly or indirectly, more than 50% of the voting rights of a company's share capital and is able to govern the financial and operating policies of an enterprise so as to benefit from its activities. The equity and net income attributable to minority shareholders' interests are shown separately in the balance sheet and income statements, respectively. The purchase method of accounting is used for acquired businesses. Companies acquired or disposed of during the year are included or excluded in the consolidated financial statements from the date of acquisition or date of disposal.

Joint ventures with equal voting rights are consolidated on a proportionate basis.

Inter-company balances and transactions, including inter-company profits and unrealized profits and losses, have been eliminated. The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances.

d. Major Differences between Austrian and IFRS Accounting Principles

Goodwill: Goodwill from capital consolidation, as well as any goodwill arising from business mergers will be treated in accordance with IFRS 3. The Austrian Commercial Code allows a credit to reserves, with no effect on the income statement.

Construction contracts: According to Austrian accounting regulations, Sales and profits are first realized upon takeover by the customer ('completed contract method'). Under IAS 11, order completion is accounted for using the percentage of completion method in accordance with progress and pro rata profit realization. To complete each contract ('cost-to-contract method'), the extent of completion is established by considering the ratio of accumulated costs to estimated total costs.

Deferred taxes: If a tax liability is expected to arise when these differences are reversed, the Austrian Commercial Code requires the creation of deferred tax assets and liabilities for temporary differences. IFRS require the creation of deferred taxes for all temporary differences that arise between financial statements prepared for tax purposes and IFRS financial statements, measured at actual or enacted tax rates. Deferred tax assets must also be recorded for unused loss carry forwards and unused tax credits that are expected to be offset against taxable profits in the future.

Other provisions: In contrast to the Austrian Commercial Code, IFRS interprets the principle of prudence differently with respect to provisions. IFRS tends to place stricter requirements on the probability of an event occurring and on estimating the amount of the provisions.

Provisions for pensions: Differences may arise at application of the socalled corridor method or at initial recognition of actuarial gains or losses with equity. Basically, Austrian Commercial law allows the application of the principles of IAS 19.

Marketable securities: Austrian accounting principles require securities to be recorded at the lower of acquisition costs or market value. Under IFRS, marketable securities available for sale are to be valued at fair values and changes in the fair value are recognized directly in equity.

Foreign currency transactions: These two accounting systems require different treatments for unrealized profits arising from the valuation of foreign exchange items as of the balance sheet date. According to Austrian law, only unrealized losses are recorded, whereas IFRS also requires the recognition of unrealized profits of monetary items.

Non-current securities: In accordance with IFRS, non-current securities of the Group are classified as 'available for sale' and are valued at their quoted market price at the balance sheet date. The Austrian Commercial Code requires valuation at acquisition costs or a lower market value if there is a sustainable decrease of monetary items.

Hedging: According to the rules of IFRS, derivatives are recognized at fair value through profit or loss. This also applies to embedded derivatives if the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract.

C. Acquisitions

At the beginning of June 2007, Andritz acquired 50% of the Brazilian company Sindus Human Technology for approximately MEUR 5.9. Sindus specializes in servicing pulp and paper plants, thus complementing the existing service offering of the Pulp and Paper Business Area. Sindus is accounted for as a joint venture in the consolidated financial statements.

In December 2007, Andritz acquired 100% of the Hungarian manufacturing company Tigép ft.; Tigép will be used as manufacturing location for heavy machinery, especially for Hydro Power. Production bottlenecks can be eliminated or avoided by this increase of capacity.

Since their dates of the acquisition, the acquired companies contributed TEUR 5,875 to the Andritz Group's Sales and TEUR 387 to the Andritz Group's EBIT. If the businesses had been acquired at the beginning of 2007, the Group's Sales would have been 3,301,526 TEUR and the Group's EBIT would have amounted to 192,911 TEUR.

The aggregate purchase price of the business combinations effected in 2007 amounted to TEUR 27,887, direct costs of acquisition amounted to TEUR 192.

The estimated fair values of the assets acquired and liabilities assumed are as follows:

(in TEUR)	2007
Current assets	16,966
Intangible assets	2,566
Goodwill	7,229
Property, plant and equipment	14,020
Current liabilities	(10,224)
Non-current liabilities	(999)
Liabilities for deferred taxes	(1,671)
Net assets acquired	27,887

The goodwill recognized in cause of a business combination comprises acquired intangibles, which could not be recognized separately, such as experienced and trained workforce and the acquired market positions.

The initial accounting for the companies acquired in 2007 is based on preliminary figures. Disclosure of the carrying amounts of the acquired companies' assets and liabilities recorded immediately before the acquisitions in accordance with IFRS would be impracticable, as these amounts are not available according to IFRS.

The initial accounting for the companies acquired in 2006 was based on preliminary figures. The changes made for the acquisitions within the 12 months after the acquisition date according to IFRS 3 result in the following changes in assets and liabilities as of December 31, 2006:

(in TEUR)
Goodwill	15,225
Other current receivables	(1,750)
Other current liabilities	13,475

Due to these changes the respective notes have been restated accordingly.

D. Accounting and Valuation Principles

a. Intangible Assets

Intangible assets are accounted for at acquisition cost. After initial recognition, intangible assets are accounted for at cost less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The amortization period and the amortization method are reviewed annually at each financial year-end.

Concessions, industrial rights and similar rights and values

Amounts paid for concessions, industrial rights and similar rights and values are capitalized and then amortized on a straight-line basis over the expected useful life. The expected useful lives vary from 3 to 15 years.

Business combinations and goodwill

For business combinations and goodwill, IFRS 3 has been applied. According to this standard, goodwill is measured as the residual cost of the business combination after recognizing the acquiree's identifiable assets, liabilities and contingent liabilities. From 2005 on, any goodwill arising from business combinations is no longer amortized. Goodwill is tested for impairment in accordance with IAS 36 at least annually, or more frequently if events or changes in circumstances indicate that it might be impaired. In determining whether an impairment write-down is required, goodwill is allocated to the cash-generating units that are expected to benefit from the synergies of the business combination. If the carrying amount exceeds the value in use that is calculated by using a Discounted Cash-Flow (DCF) calculation an impairment loss is recognized. An impairment loss recognized for goodwill will not be reversed in a subsequent period. Future payment surpluses are based on internal forecasts, which are prepared in detail for the next business year and with simplifications for the following two years, and reflect the historical performance and management's best estimates about future developments. After this detailed planning horizon a constant level is assumed, if no grave reasons speak against it.

The discount rate used for DCF calculation is based on an interest rate which represents actual assessment of possible changes of exchange rates as well as specific risks of an asset. Under consideration of the applicable currency and the corresponding risk profile, a discount rate between 10.36% and 11.01% was applied.

Substantial goodwill was allocated at the acquisition date to existing cashgenerating units of Andritz AG (1999), of the Pulp Business acquired through the Andritz-Ahlstrom Group (2000/2001) as well as of the VA TECH HYDRO-Group in the Hydro Power Business Area (2006).

After reassessment of the identification and the measurement of the acquirees' identifiable assets, liabilities and contingent liabilities and the measurement of cost of the combination, any negative goodwill is recognized in profit or loss immediately.

b. Property, Plant and Equipment

Property, plant, and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. When assets are sold or retired, their cost and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is included in the income statement.

The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the fixed assets have been put into operation, such as repairs and maintenance and overhaul costs, are normally charged to income in the period in which the costs are incurred. Depreciation is calculated on a straight-line basis over the following estimated useful lives:

Buildings	20–50 years
Machinery and technical equipment	4–10 years
Tools, office equipment and vehicles	3–10 years

The useful life and depreciation methods are reviewed periodically to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment. Assets in the course of construction represent plant and properties under construction and are stated at cost. These include costs of construction, plant and equipment and other direct costs.

c. Financial Assets and Investments in Associated Companies

These long-term investments consist primarily of shares in associated companies, non-current securities and loans.

Investments in associated companies (generally investments of between 20% and 50% in a company's equity) where a significant influence is exercised by the Group are accounted for by using the equity method. An assessment of investments in associates is performed when there is an indication that the asset has been impaired or the impairment losses recognized in prior years no longer exist.

Non-current securities held on a long-term basis are initially recognized at acquisition costs including transaction costs and are classified as availablefor-sale investments. In subsequent periods, other non-current securities held on a long-term basis are valued at fair value. Changes of these fair values are recognized as gains or losses directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognized in equity is included in profit or loss of the period. Interest on these non-current securities is recognized directly in the income statement in the period during which they occur. Equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recorded at cost.

Financial assets classified as loans and receivables are measured at amortized costs using the effective interest method less any impairment losses.

d. Finished Goods, Work in Progress, Raw Materials

Inventories, including work in progress, are valued at the lower of cost and net realizable value after provision for obsolete and slow moving items. The net realizable value is the selling price in the ordinary course of business minus costs of completion, marketing and distribution. Cost is determined primarily on the basis of the FIFO method. For processed inventories, cost includes the applicable allocation of fixed and variable overhead costs. Unrealizable inventory has been fully written off. Contracts other than construction contracts are valued at production costs. For these contracts, the revenue is recognized when the ownership of the goods is transferred ('completed contract method').

e. Construction Contracts

Receivables from construction contracts and the related Sales are accounted for using the percentage of completion method. The construction contracts are determined by the terms of the individual contract, which are agreed at fixed prices. The extent of completion ('stage of completion') is established by the cost-to-cost method. Reliable estimates of the total costs and Sales prices and the actual figures of the accumulated costs are available on a monthly basis. Estimated contract profits are recorded in earnings in proportion to recorded Sales. In the cost-to-cost method, Sales and profits are recorded after considering the ratio of accumulated costs to the estimated total costs to complete each contract. Changes to total estimated contract costs and losses, if any, are recognized in the income statement of the period in which they are determined. For remaining technological and financial risks which might occur during the remaining construction period, an individually assessed amount is included in the estimated contract costs. Impending losses out of the valuation of construction contracts are recognized at the time of occurrence. Impending losses are recognized when it is probable that the total contract costs will exceed the contract revenues. For possible customer warranty claims, provisions are accounted for according to the profit realization. At the completion of a contract, the remaining warranty risk is reassessed.

f. Trade Accounts Receivable

Receivables are stated at face value after allowances for doubtful accounts.

g. Marketable Securities

Marketable securities consist of government bonds and bonds of first-class banks that are traded in liquid markets. They are held for the purpose of investing in liquid funds and are not generally intended to be retained on a long-term basis. Marketable securities are initially recognized at acquisition costs, including transaction costs and are classified as available-for-sale investments. In subsequent periods, marketable securities are valued at fair value. Changes of these fair values are recognized as gains or losses directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognized in equity is included in profit or loss of the period. Interest on the marketable securities is recognized directly in the income statement of the period it occurs in.

h. Cash and Cash Equivalents

Cash includes cash in hand and cash at banks. Cash equivalents might include short-term deposits with non-banks with original maturities of three months or less and that are not subject to any risk of change in value.

i. Share Capital

Only ordinary shares exist and all shares are issued and have the same rights.

On the basis of the Resolution of the General Meeting of Shareholders on 29 March 2007, a capital increase of TEUR 9,490 was accomplished from the company's own reserves and the Andritz shares were split in a ratio of 1:4 as of 3 May 2007; as a result, the total number of Andritz shares was increased from 13,000,000 to 52,000,000. All disclosures were adjusted according to the share split of 1:4 accomplished in 2007.

The share capital of Andritz AG amounts to TEUR 104,000 divided into 52,000,000 shares of no-par value.

Based on authorizations of the shareholders' meetings and with approval from the Supervisory Board, the Executive Board has decided on programs for acquisition of own shares (up to 5,200,000) between 1 October 2005 and 31 March 2007 as well as between 1 April 2007 and 30 September-2008. The price range is a lowest price of EUR 2.50 and EUR 5.00, respectively, and a highest price which must not exceed the average unweighted closing price over the ten preceding trading days by more than 30%. In 2006, 177,444 own shares were acquired at an average price of EUR 30.21 per share. 618,000 own shares were resold at EUR 9.38 per share to eligible executives under the Management Share Option Plan and 8,416 own shares were transferred to employees of Andritz AG in the course of an employee participation program. In addition, 16,000 own shares were sold at the Vienna Stock Exchange for an average price of EUR 40.60 per share. In 2007, 521,094 own shares were acquired at an average price of EUR 40.48 per share and 62,500 own shares were resold at a price of EUR 9.38 per share to eligible executives under the Management Share Option Plan. 6,928 own shares were transferred to employees of Andritz AG in the course of an employee participation program. At 31 December 2007, the Company held 887,502 own shares at a market value of TEUR 36,787. It is planned to use these shares for delivery of shares within the framework of the Management Share Option Plan.

j. Capital Reserves

Capital Reserves are created in accordance with Austrian requirements and include share premium amounts.

k. Retained Earnings

Retained earnings include retained income, IAS 39 reserve and currency translation adjustments.

l. Provisions

A provision is recognized when, and only when, the enterprise has a present obligation (legal or constructive) as a result of a past event and it is probable (i.e. more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.

m. Financial Instruments under IAS 39 and IFRS 7

Financial assets

A financial instrument is a contract between two entities which creates a financial asset at one entity and a financial liability or equity instrument at another entity. If the Group qualifies as a party to the contract concerning the contract regulations, a financial asset or financial liability is recognized in the consolidated balance sheet in accordance with the substance of the contractual arrangement. Financial instruments include cash and cash equivalents, marketable securities, trade and other accounts receivable and payable, non-current receivables, borrowings, issued bonds and other investments.

Financial instruments are recognized and derecognized on a trade. This is the day of purchase or sale of an investment on which the contract terms require delivery of the investment within the timeframe established by the market concerned, and financial instruments are initially measured at fair value plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value without transaction costs. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realize the asset and settle the liability simultaneously.

Financial assets can be classified into the following specified categories: financial assets 'at fair value through profit or loss' (FVTPL), 'held-to-maturity investments', 'loans and receivables' and 'available-for-sale' (AFS) financial assets. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Andritz Group classifies its financial assets either under FVTPL, loans and receivables or AFS.

Financial assets at FVTPL

The Andritz Group classifies its financial assets at FVTPL if the financial asset is held for trading, which applies only to derivatives. The Group uses derivative financial instruments to manage its foreign exchange rate risk, exposure to changes in fair value and commodity price risk, including foreign exchange forward contracts, interest rate swaps and commodity forwards. Financial assets at FVTPL are stated at fair value, with any resulting gain or loss recognized in profit or loss.

Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. Depending on the fair value of the derivative, it is either recognized under 'other receivables' or 'other liabilities', respectively bank loans and other financial liabilities.

AFS financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair value through profit or loss. Equity securities (e.g. shares), debt securities (e.g. bonds) and other investments (e.g. fund shares) held by the Andritz Group are designated as AFS financial assets.

AFS are stated at fair value. Resulting gains and losses arising from changes in fair value are recognized directly in equity in the investments revaluation reserve (IAS 39 reserve) with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets, which are recognized directly through profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognized in the investments revaluation reserve is included in profit or loss for the period. Dividends on AFS equity instruments are recognized in profit or loss when the Group's right to receive payments is established.

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the balance sheet date. The change in fair value attributable to translation differences that result from a change in amortized cost of the asset is recognized in profit or loss, and other changes are recognized in equity.

Loans and receivables

The Andritz Group classifies trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market as 'loans and receivables'. Loans and receivables are measured at amortized costs less any impairment.

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortized costs, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized through profit or loss.

The previously recognized impairment loss is reversed through profit or loss up to the extent of the initial impairment, if in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized. An exception are AFS equity instruments, any increase in fair value subsequent to an impairment loss is recognized directly in equity.

Financial liabilities and equity instruments issued by the Group: Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities can be classified either as financial liabilities at FVTPL or other financial liabilities.

Financial liabilities at FVTPL

The Andritz Group classifies financial liabilities at FVTPL if the financial liability is held for trading, which applies only to derivatives. The Group enters into a variety of derivative financial instruments to manage its exposure to changes in fair value, foreign exchange rate risk and commodity price risk, including foreign exchange forward contracts, interest rate swaps and commodity forwards. Financial liabilities at FVTPL are stated at fair value, with any resulting gain or loss recognized in profit or loss.

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Subsequently they are measured at amortized costs using the effective interest method, with interest expense recognized on an effective yield basis.

Fair value of financial instruments

The fair value of financial assets (liabilities) is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. In this context, a quoted market price is the best evidence for the fair value, if financial assets (liabilities) are traded on active markets. In case an active market does not exist, generally accepted valuation techniques are used to determine what the price would have been on the measurement date in an arm's length exchange motivated by normal business considerations. Valuation techniques include using recent arm's length market transactions between knowledgeable, willing parties, and if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. If no quoted market price (e.g. equity instruments) and no reliable valuation techniques are available, the financial instrument is measured at cost.

Effective interest method and amortized costs

The effective interest method is a method of calculating the amortized costs of a financial asset (liability) and of allocating interest income (expenses) over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset (liability), or, where appropriate, a shorter period. Interest is recognized on a time proportion basis that reflects the effective interest rate of the asset (liability). Dividends are recognized when the shareholders' right to receive payment is established.

Hedge accounting

The Group designated the bonds issued and the corresponding interest rate swaps into a hedging relationship accounted for as a fair value hedge.

At the inception of the hedge relationship, the Andritz Group documented the relationship between the hedging instrument and hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the swaps are highly effective in offsetting changes in fair values or cash flows of the hedged item.

All investments in a foreign entity are long-term investments and presently a sale of such an investment is not expected for the foreseeable future. According to the Group's hedging policy, there are no hedges of net investments in foreign currencies.

Fair value hedge

Applying the rules for hedge accounting has the impact that the gain or loss from remeasuring the hedging instrument at fair value is recognized through profit or loss. The gain or loss on the hedged item attributable to the changes of the hedged risk causes an adjustment of the carrying amount of the hedged item, which is also recognized through profit or loss. In this manner, the gains and losses resulting from the changes in fair value of the hedging instrument and the hedged item offset each other if the hedge is 100% effective.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized to profit or loss from that date.

n. Other Accounting and Valuation Principles Research and development costs

Expenditure for research and development is charged against income in the period incurred because the criteria for capitalization of development costs (IAS 38) are not met. In 2007, TEUR 45,400 and in 2006 TEUR 35,417 were recognized as expenses.

Revenue recognition (except for construction contracts)

Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Sales are recognized net of Sales taxes and discounts when delivery has taken place and transfer of risks and rewards has been completed.

Interest is recognized on a time-proportion basis that reflects the effective interest rate of the asset. Dividends are recognized when the shareholders' right to receive payment is established.

Borrowing costs

Borrowing costs are generally expensed as incurred.

Impairment of assets

Property, plant, and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount (the higher of fair value less costs to sell and value in use), an impairment loss is recognized in income for items of property, plant, and equipment and intangibles carried at cost. Recoverable amounts are estimated for individual assets or, if this is not possible, for the cash-generating unit.

Management share option plans

Due to the fact, that the management share option plans do not include cash-settlements, these corresponding expenses are disclosed directly within equity, according to the International Financial Reporting Standards.

o. Foreign Currency

Foreign currency transactions

Foreign currency transactions are recorded in the functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange rate differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the periods are recognized in the income statement in the period in which they arise.

Foreign entities

Foreign consolidated subsidiaries are regarded as foreign entities since they are financially, economically and organizationally autonomous. Their functional currencies are their respective local currencies. Financial statements of foreign consolidated subsidiaries are translated at year-end rates to the presentation currency with respect to the balance sheet. Expense and revenue items are translated using the average exchange rates for the year. All resulting translation differences are included in a currency translation reserve in equity.

As from 2005, any goodwill arising on the acquisition of a foreign entity is allocated to the acquired entity and is recorded using the exchange rate effective on balance sheet date.

Exchange differences arising on a monetary item that, in substance, forms part of the Group's net investment in a foreign entity are classified as equity in the consolidated financial statements until disposal of the net investment.

p. Employee Benefits

Defined benefit plans (provisions for pensions)

Some Group companies provide defined benefit pension plans for certain employees. The funds are valued every year by professionally qualified independent actuaries. The obligation and costs of pension benefits are determined using a projected unit credit method. The projected unit credit method considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past service costs are recognized on a straight-line basis over the average period until the amended benefits become vested. Gains or losses on the curtailment or settlement of pension benefits are recognized when the curtailment or settlement occurs. The actuarial gains or losses are included directly in the income statement of the period. The pension obligation is measured at the present value of estimated future cash flows using different discount rates for different countries.

Other Group companies provide defined contribution plans for certain employees. The related costs are expensed as they occur.

Severance payments

In certain countries the Group is also obliged by law to pay termination indemnities in some cases of termination of employment. No termination indemnities are payable for voluntary termination at the request of the employee. Expenses related to termination indemnities are accrued. The funds are valued every year by professionally qualified independent actuaries. The obligation and costs of pension benefits are determined using a projected unit credit method. The projected unit credit method considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past service costs are recognized on a straight-line basis over the average period until the amended benefits become vested. Gains or losses on the curtailment or settlement of pension benefits are recognized when the curtailment or settlement occurs. Actuarial gains or losses of the pension plans are included directly in the income statement of the period. The pension obligation is measured at the present value of estimated future cash flows using different discount rates for different countries.

q. Income Taxes

The income tax charge is based on profit for the year and considers deferred taxation. Deferred taxes are calculated using the balance sheet liability method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for income tax purposes.

Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the enterprise expects, at the balance sheet date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are recognized regardless of when the timing difference is likely to reverse.

Deferred tax assets are recognized when it is probable that sufficient taxable profits will be available against which the deferred tax assets can be utilized. At each balance sheet date, the Group reassesses unrecognized deferred tax assets and the carrying amount of deferred tax assets. The Group recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. The Group conversely reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax asset to be utilized.

Deferred tax is charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly to equity, including exchange rate differences arising on the translation of inter-company loans.

r. Use of Estimates

The preparation of financial statements requires the Executive Board to make estimates and assumptions that can affect the reported amounts of assets, liabilities, revenues and expenses as well as amounts reported in the notes. Actual results could differ from these estimates.

The Executive Board has made judgements in the process of applying the Company's accounting policies. Additionally, at the balance sheet date, the Executive Board made the following key assumptions concerning the future and has identified other key sources of estimation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

a) Construction contracts: The accounting for construction contracts is based on estimations for costs and recoverable earnings. Although these estimations are based on all information available on balance sheet date substantial changes after the balance sheet date are possible. These changes could lead to adjustments of assets and may influence earnings in subsequent periods.

b) Pension plans: The valuation of the various pension plans is based on a methodology applying some parameters, including the expected discount rate, rate of compensation and pension increase and return on plan assets. If the relevant parameters developed materially differently than expected this could have a material impact on the Company's defined benefit obligation and subsequently net periodic pension cost.

c) Impairments: The impairment analysis for goodwill, other intangible assets and tangible assets is principally based upon discounted estimated future cash flows from the use and eventual disposal of the assets. Factors like lower than anticipated Sales and resulting decreases of net cash flows and changes in the discount rates used could lead to impairments. Regarding the carrying value of goodwill, other intangible assets and tangible assets see Note F (Notes to the Consolidated Balance Sheet).

d) Employee incentive plans: The Stock Option Plans are measured based on the fair value of the options on the granting date. The estimated fair value of these options is based on parameters such as volatility, interest rate, share price, duration of the option and expected dividend.

e) Deferred taxes: In assessing the recoverability of deferred tax assets, the Executive Board considers whether it is probable that all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. If the Company does not generate sufficient taxable income, deferred tax assets on loss carry forwards cannot be used and will have to be provided for.

s. Contingencies

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is probable.

E. Segments

Business Areas

For management purposes the Group is divided into five main Business Areas on a worldwide basis. The strategic Business Areas are the basis upon which the Group reports its primary segment information. Financial information on business and geographical segments is presented in section H (segment information).

There are no material inter-area transactions. All consolidation entries are included in the relevant Business Area.

According to the monthly reporting scheme, which is the basis for the primary segment information, all Sales and all direct and indirect expenses (including overhead and administrative costs) are allocated to Business Areas.

F. Notes to the Consolidated Balance Sheet

1. Changes in Intangible and Tangible Assets

Acquisition or production costs

2007

(in TEUR)	Balance as at 1 January 2007	Currency translation differences	Additions	Changes due to business acquisitions	Disposals	Transfers	Balance as at 31 December 2007
Intangible assets	74,022	(435)	3,949	2,566	661	66	79,507
Goodwill	225,955	(1,929)	1,937	7,229	0	0	233,192
Land and buildings	191,664	(2,884)	8,839	5,898	4,357	3,106	202,266
Technical equipment and machinery	174,082	(4,139)	16,311	7,429	4,670	6,985	195,998
Other equipment, factory and office equipment	92,974	(1,578)	16,463	539	9,870	(901)	97,627
Assets in course of construction	8,075	(235)	7,437	71	218	(8,015)	7,115
Advance payments on tangible assets	1,431	(77)	4,034	262	96	(1,241)	4,313
Total property, plant and equipment	468,226	(8,913)	53,084	14,199	19,211	(66)	507,319
Total intangible and tangible assets	768,203	(11,277)	58,970	23,994	19,872	0	820,018

2006*

	Balance as at 1 January	Currency translation		Changes due to business			Balance as at 31 December
(in TEUR)	2006	differences	Additions	acquisitions	Disposals	Transfers	2006
Intangible assets	25,601	(503)	5,968	43,505	819	270	74,022
Goodwill	124,021	(4,371)	1,805	104,500	0	0	225,955
Land and buildings	132,516	(2,800)	5,734	48,948	1,581	8,847	191,664
Technical equipment and machinery	150,455	(4,589)	10,877	25,340	5,454	(2,547)	174,082
Other equipment, factory and office equipment	74,200	(2,196)	13,806	11,624	5,909	1,449	92,974
Assets in course of construction	4,416	(200)	8,042	3,860	811	(7,232)	8,075
Advance payments on tangible assets	523	(17)	1,241	472	1	(787)	1,431
Total property, plant and equipment	362,110	(9,802)	39,700	90,244	13,756	(270)	468,226
Total intangible and tangible assets	511,732	(14,676)	47,473	238,249	14,575	0	768,203
* restated

Depreciation and amortization

2007

(in TEUR)	Balance as at 1 January 2007	Currency translation differences	Depreciation and amorti zation for the year	Impairment	Disposals	Transfers	Balance as at 31 December 2007
Intangible assets	23,032	(303)	10,982	0	643	66	33,134
Goodwill	3,338	0	0	2,771	0	0	6,109
Land and buildings	63,071	(1,610)	6,053	437	421	72	67,602
Technical equipment and machinery	107,754	(2,852)	14,365	561	3,930	788	116,686
Other equipment, factory and office equipment	60,302	(1,688)	14,563	0	9,406	(926)	62,845
Assets in course of construction	10	0	23	0	0	0	33
Advance payments on tangible assets	0	0	0	0	0	0	0
Total property, plant and equipment	231,137	(6,150)	35,003	999	13,757	(66)	247,166
Total intangible and tangible assets	257,507	(6,453)	45,985	3,770	14,400	0	286,409

2006*

(in TEUR)	Balance as at 1 January 2006	Currency translation differences	Depreciation and amorti zation for the year	Impairment	Disposals	Transfers	Balance as at 31 December 2006
Intangible assets	16,856	(287)	6,655	0	160	(32)	23,032
Goodwill	3,338	0	0	0	0	0	3,338
Land and buildings	58,939	(1,434)	4,760	0	1,549	2,355	63,071
Technical equipment and machinery	110,233	(3,192)	11,442	0	4,820	(5,909)	107,754
Other equipment, factory and office equipment	52,390	(1,776)	11,527	0	5,425	3,586	60,302
Assets in course of construction	10	0	0	0	0	0	10
Advance payments on tangible assets	0	0	0	0	0	0	0
Total property, plant and equipment	221,572	(6,402)	27,729	0	11,794	32	231,137
Total intangible and tangible assets	241,766	(6,689)	34,384	0	11,954	0	257,507
* restated

Net book value

2007

	Costs as at	Accumulated	Net book value as at	Net book value as at
(in TEUR)	31 December 2007	depreciation	31 December 2007	31 December 2006*
Intangible assets	79,507	33,134	46,373	50,990
Goodwill	233,192	6,109	227,083	222,617
Land and buildings	202,266	67,602	134,664	128,593
Technical equipment and machinery	195,998	116,686	79,312	66,328
Other equipment, factory and office equipment	97,627	62,845	34,782	32,672
Assets in course of construction	7,115	33	7,082	8,065
Advance payments on tangible assets	4,313	0	4,313	1,431
Total property, plant and equipment	507,319	247,166	260,153	237,089
Total intangible and tangible assets	820,018	286,409	533,609	510,696

* restated

Finance leases

The net book value for technical equipment and machinery includes an amount of TEUR 777 (2006: TEUR 1,006) and the net book value for other equipment, factory and office equipment includes an amount of TEUR 448 (2006: TEUR 333) in respect of assets held under finance lease. The total of minimum lease payments at balance sheet date amounts to TEUR 1,403 (2006: TEUR 1,293). The lease contracts have terms from 60 up to 84 months.

Goodwill

(in TEUR)	2007	2006*
VA TECH HYDRO	97,836	95,767
Andritz Ahlstrom	32,577	35,287
Acquisition of Andritz AG	59,596	59,596
Other	37,074	31,967
	227,083	222,617

* restated

Impairment

In 2007, the goodwill arising from the acquisition of Pilão met the characteristics for impairment because the business did not develop according to plan. The impairment loss for this goodwill amounted to TEUR 2,771 and is related to the Pulp and Paper Business. It was included in the income statement under impairment of goodwill. The value of the reporting unit was estimated using discounted cash flow forecasts using a weighted average cost of capital of 11.01%. In 2006, there was no need for impairment of goodwill.

Furthermore, in 2007 the Company recorded impairment charges in the amount of TEUR 999 for buildings and technical equipment in the Pulp and Paper, and Feed and Biofuel Business Areas.

Shares in associated companies

Accumulated assets of material associated companies included in the consolidated balance sheet as of December 31, 2007 amounted to TEUR 50,607, total liabilities to TEUR 39,871, Sales amounted to TEUR 89,971 and net income amounted to TEUR 1,497.

2. Other Non-current Receivables and Assets

Other non-current receivables and assets consist of trade accounts receivable and other non-current receivables.

3. Inventories

(in TEUR)	2007	2006
Finished goods	59,896	64,834
Work in progress	88,252	83,404
Raw materials	102,484	65,490
	250,632	213,728

The write-down of inventory for obsolete and slow-moving items included as expense in the income statement amounts to TEUR 2,585 (2006: TEUR 4,570).

4. Advance Payments Made

The advance payments made and presented in the balance sheet relate to open purchase orders for ongoing contracts.

5. Trade Accounts Receivable

Total trade receivables (net of allowances) at December 31, 2007 amounted to TEUR 405,231 (2006: TEUR 350,123), whereas the long-term portion is included in the balance sheet item non-current receivables and other non-current assets.

(in TEUR)	2007	2006
Trade accounts receivable – short-term	400,163	347,368
Trade accounts receivable – long-term	5,068	2,755
	405,231	350,123
Thereof neither past due nor impaired	268,334	244,484
Thereof past due but not impaired	115,452	88,783
Thereof impaired	36,115	29,420
Valuation allowance	(14,670)	(12,564)
	405,231	350,123

The average credit period on Sales of goods depending on the business area is 30 to 90 days. Before accepting any new customer, the Group uses an internal credit scoring system to assess the potential customer's credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on an ongoing basis. About two thirds of the trade receivables are neither past due nor impaired.

Included in the Group's trade receivable balance are debtors with a carrying amount of TEUR 115,452 (2006: TEUR 88,783) which are past due at the reporting date for which the Group has not recognized any allowance as there has not been a significant change in credit quality and the amounts are still considered recoverable.

The roll-forward of the allowance for trade accounts receivable is as follows:

(in TEUR)	2007	2006
Allowance at beginning of the year	(12,564)	(5,130)
Foreign currency adjustment	(664)	(690)
Change in consolidation range	0	(3,010)
Charged to expenses	(4,469)	(5,679)
Amounts written-off	1,671	929
Released	1,356	1,016
Allowance at the end of the year	(14,670)	(12,564)

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The Executive Board believes that no further credit provision is required in excess of the allowance for doubtful debts already recognized.

6. Construction Contracts

(in TEUR)	2007	2006
Contract revenue recognized as Sales
in the current period	2,224,624	1,778,173
Contract costs incurred and recognized
profits (less recognized losses) to date	4,750,192	3,300,809
Advances received and progress billings	4,746,921	3,345,966
Amount of retentions	6,926	2,585

'The billings in excess of costs and earnings of projects under construction' represent primarily payments from customers for work not performed as yet, and fall entirely in the category 'not past due nor impaired'.

7. Other Receivables

(in TEUR)	2007	2006*
Receivables from associated companies	3,518	3,280
Financial instruments carried at fair value	18,029	11,265
Receivables from value-added tax	42,649	31,785
Receivables from prepaid income taxes	17,665	8,774
Receivables from other taxes and charges	5,690	1,995
Other	46,318	53,227
	133,869	110,326
thereof other current receivables	128,716	106,949
thereof other non-current receivables	5,153	3,377
	133,869	110,326

* restated

The Executive Board considers that the carrying amount of other receivables corresponds to their fair value.

8. Retained Earnings

Dividends

For 2007, a dividend of EUR 1.00 per outstanding share is proposed by the Executive Board. The dividend for 2006 of TEUR 38,690, which is equal to EUR 0.75 per share, was proposed by the Executive Board and was approved at the 100th Annual General Meeting of Shareholders on March 29, 2007. The dividend was paid to the shareholders on April 6, 2007.

On February 19, 2008, the Executive Board authorized the consolidated financial statements for the year ended December 31, 2007 according to IFRS. On February 16, 2007, the Executive Board authorized submission of the consolidated financial statements for the year ended December 31, 2006 according to IFRS to its Supervisory Board. The Supervisory Board is made up solely of members not employed within the Group and representatives of employees. The consolidated financial statements were presented to the Supervisory Board and subsequently to the General Meeting of Shareholders.

Currency translation adjustment

Equity and shareholder loans in foreign currency are not hedged against currency risks because the investments are considered to be permanent and the conversion to the reporting currency is not planned. Exceptions are made for planned disposal of investments or planned repayments of shareholder loans.

Additional capital disclosures

Andritz is committed to a strong financial profile, characterized by a conservative capital structure that gives excellent financial flexibility.

As of December 31, 2007 and 2006, equity and total assets of the Company were as follows:

(in TEUR)	2007	2006*
Total equity	481,575	414,540
Equity ratio	19.2%	17.4%
Total assets	2,507,527	2,386,066
* restated

Andritz is not subject to any statutory capital requirements. Commitments exist to sell or otherwise issue common shares in connection with established share-based payment plans. In recent years, commitments from share-based payment have primarily been satisfied through buy-back of the Company's shares (see Note 10).

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. Two bonds were issued in the past to safeguard the financial stability, and also to build the fundament for further growth of the Andritz Group. The capital structure of the Group consists of debt, which includes the borrowings, of cash and cash equivalents and equity attributable to equity holders of the parent, comprising share capital, capital reserves and retained earnings.

The capital structure is reviewed on an ongoing basis. As a part of this review, the cost of capital and the risks associated with each class of capital are considered. Based on this, the Group will balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

The Group's overall strategy remains unchanged from 2006.

Financial Statements

9. Provisions

2007

(in TEUR)	Balance as at 1 January 2007	Currency translation differences	Changes due to business acquisitions	Reclassi fication	Use	Reversal	Addition	Balance as at 31 December 2007
Provisions for severance payments	75,043	(337)	0	0	5,313	310	10,847	79,930
Provisions for pensions	59,318	665	0	0	4,656	779	2,417	56,965
Other non-current provisions	47,641	(502)	0	(1,321)	2,429	6,760	10,690	47,319
Non-current provisions	182,002	(174)	0	(1,321)	12,398	7,849	23,954	184,214
Current provisions	204,106	(1,831)	90	1,321	43,001	32,165	82,072	210,592

2006*

(in TEUR)	Balance as at 1 January 2006	Currency translation differences	Changes due to business acquisitions	Reclassi fication	Use	Reversal	Addition	Balance as at 31 December 2006
Provisions for severance payments	33,850	(8)	38,915	0	2,519	0	4,805	75,043
Provisions for pensions	28,493	(178)	30,618	0	3,380	942	4,707	59,318
Other non-current provisions	29,762	(733)	8,520	(3,590)	756	2,481	16,919	47,641
Non-current provisions	92,105	(919)	78,053	(3,590)	6,655	3,423	26,431	182,002
Current provisions	97,773	(2,443)	71,690	3,590	16,830	14,003	64,329	204,106

* restated

Other non-current and current provisions consist primarily of order-related provisions (2007: TEUR 240,307 and 2006: TEUR 234,737) for warranties, contingencies and impending losses.

10. Employee Benefit Obligations

Pensions

Some Group companies provide defined benefit pension plans for some classes of employees. Provisions for pension obligations are established for benefits payable in the form of retirement, disability and surviving dependant pensions. The benefits offered vary according to the legal, fiscal and economic conditions of each country. Benefits are dependent on years of service and, in some cases, on the respective employee's compensation.

The following table shows the changes of the benefit obligations for the years ended December 31, 2007 and 2006:

(in TEUR)	2007	2006*
Defined benefit obligation as at 1 January	147,136	42,411
Currency translation differences	(1,633)	(46)
Current service cost	4,178	2,027
Interest cost on obligations	6,495	3,352
Actuarial gains/losses	120	(4,824)
Benefits paid	(13,632)	(4,637)
Contributions by the plan participants	1,465	1,101
Past service cost	0	8
Effect of any curtailment or settlement	(779)	463
Business acquisitions		0 107,281
Defined benefit obligation as at 31 December	143,350 147,136
Fair value of plan assets		(86,385) (87,818)
Accrued liability as at 31 December	56,965	59,318

^* restated

Total pension obligations of TEUR 143,350 (2006: TEUR 147,136) include TEUR 90,857 (2006: TEUR 93,795) that are covered in part or in full by investments in funds (plan assets).

The following table shows the development of the fair value of the plan assets:

(in TEUR)	2007	2006*
Fair value of plan assets as at 1 January	87,818	12,661
Currency translation differences	(2,298)	(178)
Expected return on plan assets	4,080	1,654
Actuarial gains/losses	743	(3,017)
Contributions by the employer	3,553	2,184
Contributions by the plan participants	1,465	1,101
Benefits paid	(8,976)	(2,285)
Business acquisitions	0	75,698
Fair value of plan assets as at 31 December	86,385	87,818

* restated

The split of fair values of the plan assets is as follows:

(in TEUR)	2007	2006*
Equity instruments	27,284	24,592
Debt instruments	36,528	40,332
Property	12,972	13,380
Other assets	9,601	9,514
	86,385	87,818

* restated

Pension expense is comprised of the following:

(in TEUR)	2007	2006
Current service cost	4,178	2,027
Interest expense on obligations	6,495	3,352
Expected return on plan assets	(4,080)	(1,654)
Actuarial gains/losses recognized	(623)	(549)
Past service cost	0	8
Effect of any curtailment or settlement	(779)	463
	5,191	3,647
Payments to defined contribution plans	18,002	14,425
	23,193	18,072

Principal actuarial assumptions used to determine pension obligations as of December 31, 2007 and 2006 were as follows:

	2007		2006
(in %)	from	to	from	to
Discount rate	2.00	8.00	2.00	5.75
Wage and salary increases	3.00	6.00	3.00	4.00
Retirement benefit increases	2.50	2.50	2.50	2.50
Expected return on plan assets	-0.15	7.00	2.00	7.00

The average expected return was assumed as 5.25% due to the composition of the plan assets and under consideration of past experience. In 2007, the actual return on plan assets was approximately 1.26% (2006: approximately 4.6%).

Positive experience adjustments on obligations amounted to TEUR 341 (positive experience adjustment 2006: TEUR 18), positive experience adjustments on assets amounted to TEUR 917 (negative experience adjustment 2006: TEUR 165).

The expected payments to the pension fund for defined benefits are TEUR 3,178 for the fiscal year 2008.

Severance payments

The following table shows the changes in the severance benefit obligations for the years ended December 31, 2007 and 2006:

(in TEUR)	2007	2006
Defined benefit obligation as at 1 January	75,043	33,850
Currency translation differences	(337)	12
Current service cost	4,280	2,308
Interest cost on obligations	3,190	2,314
Actuarial gains/losses	3,377	(29)
Benefits paid	(5,279)	(2,540)
Contributions by the plan participants	111	0
Effect of any curtailment or settlement	(310)	0
Business acquisitions	0	39,128
Defined benefit obligation as at 31 December 80,075		75,043
Fair value of plan assets	(145)	0
Accrued liability as at 31 December	79,930	75,043

Severance expense is comprised of the following:

(in TEUR)	2007	2006
Current service cost	4,280	2,308
Interest expense on obligations	3,190	2,314
Expected return on plan assets	(10)	0
Actuarial gains/losses recognized	3,387	(29)
Effect of any curtailment or settlement	(310)	0
	10,537	4,593
Payments to defined contribution plans	301	419
	10,838	5,012

Principal actuarial assumptions used to determine severance obligations were the same as used for pension obligations.

Management share option plan

The 97th Annual General Meeting of Shareholders held on 30 March 2004 adopted a Share Option Program for Managers and Members of the Executive Board. The number of options granted to the different Managers varies, depending on the area of responsibility, between 6,000, 10,000 and 20,000 shares for Managers, to 40,000 for Executive Board Members and 50,000 for the CEO. The options are to be drawn from the pool of shares bought back under the corporate share buy-back program. One share option entitles the holder to the purchase of one share. In order to exercise a share option, eligible persons must be in active employment with Andritz AG or one of its affiliates from 1 May 2004 until before each date of exercise of an option. Another requirement is that Managers must have invested at least EUR 20,000 in Andritz shares from their own resources, and the Members of the Executive Board at least EUR 40,000.

The exercise price of the option is the unweighted average closing price of Andritz shares in the four calendar weeks following the 97th Annual General Meeting of Shareholders held on 30 March 2004. Options can be exercised between 1 May 2006 and 30 April 2008 (=period of exercise) provided that the average unweighted closing price of the Andritz share over twenty consecutive trading days within the period from 1 May 2006 to 30 April 2007 is at least 15% above the exercise price and the earnings per share in business year 2005 (based on the total number of shares listed); or that the earnings per share in business year 2006 (based on the total number of shares listed) are at least 15% above the earnings per share in business year 2003 (based on the total number of shares listed); or that the average unweighted closing price of the Andritz share over twenty consecutive trading days within the period from 1 May 2007 to 30 April 2008 is at least 20% above the exercise price and the earnings per share in business year 2006 (based on the total number of shares listed); or that the earnings per share in business year 2007 (based on the total number of shares listed) are at least 20% above the earnings per share in business year 2003 (based on the total number of shares listed).

If the conditions of exercise are met, 50% of the options can be exercised immediately, 25% after three months and the remaining 25% after a further three months. Share options can only be exercised by way of written notification to the company. The share options are not transferable. The shares purchased under the Share Option Program are not subject to a ban on Sales over a certain period.

The options granted in 2004 totaled 698,000. The exercise requirements regarding the share price increase and the earnings per share were fulfilled in 2006, so it was possible to exercise the options according to the other requirements of the program. The fair value of the options at the time of granting amounts to TEUR 1,220, whereas no expense incurred in 2007. The calculation of the fair value is based on the Black-Scholes Option Pricing Model. The share price at the time of granting the options was the closing price of the Andritz share on 17 May 2004 and amounted to EUR 9.26. The exercise price of EUR 9.38 was calculated in accordance with the rules of the option program. For the lifetime of the options, a period of two years was assumed. The expected dividend yield was fixed at 3%, a discount rate of 5% was used. The expected volatility was calculated on the basis of the historical development of the share price of the Andritz share during the 30 months preceding the granting date of the options. Further parameters for granting the options were not used.

The 99th Annual General Meeting of Shareholders held on 29 March 2006 adopted another Share Option Program for Managers and Members of the Executive Board. The number of options granted to the different Managers varies depending on the area of responsibility, between 6,000, 10,000 and 20,000 shares for Managers, to 40,000 for Executive Board Members and 50,000 for the CEO. The options are to be drawn from the pool of shares bought back under the corporate share buy-back program. One share option entitles the holder to the purchase of one share. In order to exercise a share option, eligible persons must be in active employment with Andritz AG or one of its affiliates from 1 May 2006 until before each date of exercise of an option. Another requirement is that Managers must have invested at least EUR 20,000 in Andritz shares from their own resources, and the Members of the Executive Board at least EUR 40,000.

The exercise price of the option is the unweighted average closing price of Andritz shares in the four calendar weeks following the 99th Annual General Meeting of Shareholders held on 29 March 2006.

The options can be exercised between 1 May 2008 and 30 April 2010 (=period of exercise) provided that the average unweighted closing price of the Andritz share over twenty consecutive trading days within the period from 1 May 2008 to 30 April 2009 is at least 15% above the exercise price and the earnings per share in business year 2007 (based on the total number of shares listed); or that the earnings per share in business year 2008 (based on the total number of shares listed) are at least 15% above the earnings per share in business year 2005 (based on the total number of shares listed); or that the average unweighted closing price of the Andritz share over 20 consecutive trading days within the period from 1 May 2009 to 30 April 2010 is at least 20% above the exercise price and the earnings per share in business year 2008 (based on the total number of shares listed) or the earnings per share in business year 2009 (based on the total number of shares listed) are at least 20% above the earnings per share in business year 2005 (based on the total number of shares listed).

If the conditions of exercise are met, 50% of the options can be exercised immediately, 25% after three months and the remaining 25% after a further three months. Share options can only be exercised by way of written notification to the company. The share options are not transferable. The shares purchased under the Share Option Program are not subject to a ban on Sales over a certain period.

The options granted in 2006 totaled 944,000. The fair value of the options at the time of granting amounts to TEUR 6,492, thereof TEUR 3,011 have been reported as proportionate expense in 2007. The calculation of the fair value is based on the Black-Scholes Option Pricing Model. The share price at the time of granting the options is the closing price of the Andritz share on 1 June 2006 and amounts to EUR 32.44. The exercise price of EUR 31.67 was calculated in accordance with the rules of the option program. For the lifetime of the options a period of two years was assumed. The expected dividend yield was fixed at 2.5%, a discount rate of 4.5% was used. As expected volatility, the value released by the Vienna Stock Exchange was applied. Further parameters of granting the options were not used.

Movements in options under the stock option plans for financial years 2007 and 2006 were as follows:

		2007	2006
	Number of options	Average exercise price per option (in EUR)	Number of options	Average exercise price per option (in EUR)
Total at the beginning of the year	1,021,500	29.98	695,500	9.38
Options granted	14,000	31.67	944,000	31.67
Options exercised	(62,500)	9.38	(618,000)	9.38
Options forfeited	(60,000)	31.67	0	0.00
Total at the end of the year	913,000	31.30	1,021,500	29.98
Exercisable at year-end	15,000	9.38	77,500	9.38

11. Statement of Liabilities

2007

	Remaining term less	Remaining term between	Remaining term between 4	Remaining term between	Remaining term over
(in TEUR)	than 1 month	1 and 3 months	and 12 months	1 and 5 years	5 years	Total
Bonds	0	0	99,995	192,268	0	292,263
Bank loans and other financial liabilities	16,731	1,847	11,353	25,160	3,644	58,735
Obligations under finance leases	343	114	342	551	0	1,350
	17,074	1,961	111,690	217,979	3,644	352,348

2006

(in TEUR)	Remaining term less than 1 month	Remaining term between 1 and 3 months	Remaining term between 4 and 12 months	Remaining term between 1 and 5 years	Remaining term over 5 years	Total
Bonds	0	0	0	100,000	196,358	296,358
Bank loans and other financial liabilities	10,557	12,368	1,975	19,590	2.236	46,726
Obligations under finance leases	26	148	425	778	0	1,377
	10,583	12,516	2,400	120,368	198,594	344,461

The interest-bearing borrowings consist primarily of current bank loans at floating interest rates and fixed rates.

Property, plant, and equipment amounting to TEUR 16,197 and TEUR 15,111 as at 31 December 2007 and 2006, respectively, has been pledged as security for long-term debt.

There are no credit defaults in the Andritz Group; all of the financial liabilities are settled on the due date.

The Executive Board considers that the carrying amount of liabilities corresponds to their fair value.

12. Other Liabilities

(in TEUR)	2007	2006*
Payables to associated companies	1,345	891
Personnel-related costs	78,795	71,586
Outstanding invoices for order-related costs	160,805	139,007
Deferred income	5,563	5,485
Financial instruments carried at fair value	6,901	0
Liabilities from value-added tax	15,573	6,318
Liabilities from commissions	7,578	8,374
Other	98,135	103,252
	374,695	334,913
thereof other current liabilities	367,719	326,769
thereof other non-current liabilities	6,976	8,144
	374,695	334,913

* restated

The Executive Board considers that the carrying amount of other liabilities corresponds to their fair value.

G. Notes to the Consolidated Income Statement

13. Sales

(in TEUR)	2007	2006
Contract revenue recognized as Sales
in the current period	2,224,624	1,778,173
Revenue recognized due to
After-Sales service	781,117	609,011
Other	276,747	322,502
	3,282,488	2,709,686

14. Other Operating Income

(in TEUR)	2007	2006
Profit on disposal of intangible
and tangible assets	1,681	527
Exchange rate gains	32,255	18,700
Rental income	2,572	2,107
Other	30,149	19,897
	66,657	41,231

15. Personnel Expenses

(in TEUR)	2007	2006
Wages	122,907	93,684
Salaries	409,165	318,691
Pension expenses	23,193	18,072
Severance expenses	10,838	5,012
Social security and payroll related duties	92,795	66,820
Other social payments	17,705	14,654
	676,603	516,933

16. Other Operating Expenses

(in TEUR)	2007	2006
Exchange rate losses	25,404	11,663
Sales expenses	192,379	164,981
Administrative expenses	36,309	29,567
Other	191,767	143,672
	445,859	349,883

17. Financial Results

(in TEUR)	2007	2006
Income/expenses from
associated companies	887	1,244
Other interest and similar income	29,462	24,632
Interest and similar expenses	(25,092)	(19,342)
Interest result	4,370	5,290
Other income / expenses from financing activities	204	(448)
	5,461	6,086

18. Income Taxes

(in TEUR)	2007	2006
Current tax expense	(43,326)	(45,107)
Changes in deferred taxes charged
to the income statement	(18,589)	535
	(61,915)	(44,572)

Changes in the deferred income tax account consist of the following:

(in TEUR)	2007	2006
Deferred tax assets	58,969	21,845
Liabilities for deferred taxes	(80,093)	(45,036)
Balance as at 31 December, as previously
stated	(21,124)	(23,191)
Deferred tax relating to the origination and reversal of temporary differences
income statement charge	(18,589)	535
charged to equity	(2,909)	1,532
	(42,622)	(21,124)
thereof
Deferred tax assets	56,982	58,969
Liabilities for deferred taxes	(99,604)	(80,093)

The reconciliation of the effective tax rate to the tax rate used is as follows:

(in TEUR)	2007	2006
Earnings before taxes (EBT)	198,022	165,925
Tax at the applicable tax rate
(25% in 2007 and 25% in 2006)	(49,506)	(41,481)
Non-deductable amortization of goodwill	(859)	0
Tax effect of
adjustment of using new tax rates	1,237	509
other changes	(12,787)	(3,600)
	(61,915)	(44,572)
Current tax expense	(43,326)	(45,107)
Changes in deferred taxes charged
to the income statement	(18,589)	535

The other changes refer mainly to changes of valuation allowances of deferred tax assets.

Deferred tax assets and liabilities for deferred taxes as at December 31, 2007 and 2006 are the result of the following temporary valuation differences between book values in the IFRS consolidated financial statements and the relevant tax bases:

2007			2006
		Deferred tax		Deferred tax
(in TEUR)	Assets	Liabilities	Assets	Liabilities
Intangible assets	3,240	(12,256)	1,805	(12,226)
Property, plant and equipment	2,947	(22,351)	2,945	(11,760)
Financial assets	7	(7,340)	7	(10,108)
Inventories	318,260	(4,621)	268,518	(2,065)
Receivables	9,793	(72,483)	2,733	(47,223)
Marketable securities and shares	0	(281)	0	(182)
Other assets	121	(2)	190	(93)
	334,368	(119,334)	276,198	(83,657)
Provisions	62,332	(28,496)	56,317	(36,198)
Liabilities	20,067	(323,023)	22,466	(275,355)
Deferred income	129	0	27	(13)
	82,528	(351,519)	78,810	(311,566)
Tax loss carry-forwards	63,073	0	60,264	0
Deferred tax assets/liabilities	479,969	(470,853)	415,272	(395,223)
Valuation allowance for deferred tax assets	(51,738)	0	(41,173)	0
Offset within legal tax units and jurisdiction	(371,249)	371,249	(315,130)	315,130
Net deferred tax assets and liabilities	56,982	(99,604)	58,969	(80,093)

In assessing the recoverability of deferred tax assets, management considers whether it is probable that all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Executive Board considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Executive Board believes it is probable that the Company will realize the benefits of the recognized deductible differences and operating loss carry-forwards.

19. Earnings per Share

Basic earnings per share (see Consolidated Income Statement) are calculated by dividing the net profit for the period attributable to ordinary shareholders of the parent company by the weighted average number of ordinary shares outstanding during the period.

Diluted basic earnings per share are calculated by dividing the net profit for the period attributable to shareholders of the parent company by the weighted average number of shares with consideration of no-par value share options.

H. Segment Information

Segment information is prepared on the following basis:

Business Areas

The Andritz Group conducts its business activities through the following Business Areas:

• a. Pulp and Paper (P+P)
• b. Hydro Power (HP)
• c. Rolling Mills and Strip Processing Lines (WB)
• d. Environment and Process (EP)
• e. Feed and Biofuel (FB)

Geographical segments

The Group's activities are conducted predominantly in Europe, North America and Asia.

2007

Business Area data

(in TEUR)	P+P	HP	WB	EP	FB	Transition	Total
Sales	1,462,206	910,043	408,001	364,432 137,806			0 3,282,488
Segment result before interest, taxes,
depreciation and amortization (EBITDA)	101,050	63,609	32,140	30,300	15,217	0	242,316
Total assets	706,595	753,301	159,316	232,004	76,595		579,716 2,507,527
Total liabilities	609,393	617,318	192,681	145,077	37,455		424,028 2,025,952
Capital expenditure	21,818	25,415	3,210	4,851	1,739	0	57,033
Depreciation, amortization, and impairment
of intangible assets and property, plant, and equipment*	17,716	19,905	2,491	5,005	1,867	0	46.984
Share of net profit/loss of associates	367	0	0	439	81	0	887
Shares in associated companies	2,513	2,254	0	1,488	570	0	6,825

Geographical segment data

				Rest of the world
(in TEUR)	Europe	North America	Asia	and consolidation	Total
External Sales	1,400,020	522,123	841,742	518,603	3,282,488
Total assets	3,385,135	539,209	264,748	(1,681,565)	2,507,527
Capital expenditure	39,211	3,356	12,063	2,403	57,033

2006**

Business Area data

(in TEUR)	P+P	HP	WB	EP	FB	Transition	Total
Sales	1,304,149	467,851	450,540	366,521 120,625			0 2,709,686
Segment result before interest, taxes,
depreciation and amortization (EBITDA)	89,642	33,276	32,824	25,568	12,913	0	194,223
Total assets	642,747	571,186	142,533	228,988	70,986		729,626 2,386,066
Total liabilities	649,677	544,550	155,756	161,987	34,438		425,118 1,971,526
Capital expenditure	21,658	13,498	2,346	6,510	1,656	0	45,668
Depreciation, amortization, and impairment
of intangible assets and property, plant, and equipment*	13,698	11,074	2,256	5,092	2,264	0	34,384
Share of net profit/loss of associates	562	0	0	439	243	0	1,244
Shares in associated companies	2,157	2,254	0	1,323	488	0	6,222

Geographical segment data

				Rest of the world
(in TEUR)	Europe	North America	Asia	and consolidation	Total
External Sales	1,018,071	433,331	735,845	522,439	2,709,686
Total assets	3,284,837	479,909	171,076	(1,549,756)	2,386,066
Capital expenditure	32,365	5,054	7,159	1,090	45,668

* Depreciation, amortization, and impairment of intangible assets and property, plant, and equipment includes TEUR 5,967 (2006: 2,895), which refers to amortization of identifiable intangible assets acquired in a business combination and recognized separately from goodwill.

** restated

I. Notes to the Consolidated Cash Flow Statements

Cash flows from acquisition of subsidiaries*

(in TEUR)		Business Area	Total	Total
	P+P	HP	2007	2006**
Cash and cash equivalents	(214)	(5,241)	(5,455)	(167,851)
Marketable securities	(807)	0	(807)	(708)
Receivables and other current assets	(623)	(762)	(1,385)	(328,203)
Inventories	(179)	(9,140)	(9,319)	(80,252)
Intangible assets	(2,400)	(166)	(2,566)	(45,252)
Property, plant, and equipment	(320)	(13,700)	(14,020)	(90,037)
Financial assets	0	0	0	(16,632)
Accounts payable and accrued expenses	1,856	9,385	11,241	580,559
Financial debt	0	1,653	1,653	20,371
Net assets/liabilities acquired	(2,687)	(17,971)	(20,658)	(128,005)
Cash and cash equivalents	214	5,241	5,455	167,851
Goodwill	(3,200)	(5,966)	(9,166)	(105,705)
Changes in minority interests	0	0	0	0
Changes in equity attributable to shareholders of the parent company	0	0	0	(4,144)
Purchase price not yet paid	(12,166)	0	(12,166)	12,166
Net cash flow	(17,839)	(18,696)	(36,535)	(57,837)

* converted by using exchange rates as per dates of transaction

** restated

J. Financial Instruments

a. Risk Management

As a global company serving a variety of different markets and customers, the Group is subject to certain general and industry-specific risks. These risks mainly relate to the industries the Group serves (e.g. uncertainty of future contracts, volatility of incoming orders, customer concentration, etc.), the Group's business (e.g. currency exposure, competitive position, legal proceedings, etc.), and to major orders (e.g. payment risks, liabilities and performance of projects, cost overruns, etc.).

Andritz has a long-established Group-wide management steering committee whose main task is to identify nascent risks early and to take counter-measures. This is an important element in the active risk management within the Group.

The monitoring and management of financial risks are integral parts of Andritz's Group-wide accounting and controlling activities. Continuous controlling and regular reporting should ensure the identification of major risks at an early stage and to take counter-measures, if necessary.

The Group seeks to minimize the effects of these risks by using derivative financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the Group's policies approved by the Executive Board, which provide written principles on financial risks. Moreover rules are defined for the use of derivative and non-derivative financial transactions as well as surplus cash. Compliance with policies and exposure limits is reviewed by the internal auditor on a continuous basis. The Group does not own or trade financial instruments for speculative purposes.

For most of the orders, the risk of payment failure by customers is reduced by bank guarantees and export insurances. Risks for deliveries in countries with a political risk are typically also insured. Interest and exchange rate risks are limited and controlled by using derivative financial instruments, in particular forward exchange contracts and swaps.

The Group enters into fixed forward foreign exchange contracts to manage its foreign exchange risk resulting from cash flows from current business activities. Transaction risk is calculated in each foreign currency and includes currency denominated assets and liabilities and certain off-balance sheet items such as highly probable future cash flows or firm commitments and highly probable purchases and sales. The currency risks of the Group occur due to the fact that the Group's operations, production sites and markets are located in various countries. The Group carries its forward exchange contracts at fair value. The remaining period of most of the cash flow hedges does not exceed one year.

Cash flow risks are minimized by the Group's cash management system which controls cash in- and outflows of all relevant Andritz affiliates. It also monitors the Group's cash pooling activities in order to optimize net financing income.

The Group manages liquidity risks especially by holding adequate reserves, by issuing bonds, by receiving substantial customer advances and by constantly monitoring the predicted and actual cash flows as well as reconciling maturity date profiles of financial assets and liabilities.

b. Liquidity Risks

Due to Group-wide finance and liquidity planning, Andritz maintains sufficient cash and cash equivalents or has available funding through an adequate amount of credit facilities to meet its commitments. Any excess cash is invested mostly in listed securities which are actively traded.

c. Credit Risks

Credit risks, or the risk of counterparties defaulting, are controlled by the application of credit approvals, limits and monitoring procedures. Where appropriate, the Group obtains guarantees from governmental export agencies or similar private institutions to reduce the risk of a counterpart defaulting. Furthermore, there is no existent concentration of default risk due to high diversification of contract parties across diverse industries and geographical areas.

Credit risk associated with the investment of liquid funds and securities is limited by the fact that the Group works only with banks which can demonstrate sound creditworthiness.

For certain financial assets and financial liabilities, the Group has a legally enforceable right to set off. These amounts are only reported on a net basis. For all existing risks, valuation allowances are included so that the Management believes that no other credit risk will occur.

Without considering risk minimization strategies as described above, the carrying amounts of financial assets recorded in the financial statements, grossed up for any allowances for losses, represent the Group's maximum exposure to credit risk of the corresponding categories.

(in TEUR)	2007	2006*
Held for trading	19,762	15,772
Available for sale	108,789	49,975
Loans and receivables	1,042,359	1,137,623
	1,170,910	1,203,370

* restated

The trade receivables in the category 'loans and receivables' are impaired by TEUR 14,670 (balance 2006: TEUR 12,564). In all other categories there was no need for an impairment.

The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities. The three largest customers contribute 15% of all incoming orders in various strategic business areas. As there is no significant concentration of credit risk, the Executive Board believes no further credit provision is required in excess of the allowance for doubtful debts already recognized.

d. Interest Risk

In June 2002, the Company issued a bond, for a nominal value of MEUR 100 with a repayment period of 6 years and a nominal interest rate of 6% p.a. For this bond an interest swap has been used to hedge the risk arising from the fixed interest rate of the bond. The interest swap changes the fixed interest rate for the whole period to a variable interest rate based on 1 month's Euribor. Therefore, there is the risk of a changing interest rate concerning the cash flows but the fair value of the bond is hedged and hedge accounting in the sense of IAS 39 was applied.

In June 2006, the Company issued another bond for a nominal value of MEUR 200 with a repayment period of 7 years and a nominal interest rate of 4.5% p.a. For this bond interest swaps have been used to hedge the risk arising from the fixed interest rate of the bond. The interest swaps change the fixed interest rate for the whole period to a variable interest rate based on the 1 month's Euribor. Therefore, there is the risk of a changing interest rate concerning the cash flows but the fair value of the bond is hedged and hedge accounting in the sense of IAS 39 was applied.

The contractual basic parameters of the swaps are similar to the ones of the bonds and therefore the hedges were 100% effective in hedging the fair value exposure to interest rate movements during the period. By applying the rules for hedge accounting, the gain or loss from the swaps to fair value was recognized through profit or loss. The gain or loss attributable to the changes of the hedged interest rate risk caused an adjustment of the bonds' carrying amounts and was also recognized through profit or loss. Therefore, the gains and losses resulting from the changes in fair value of the swaps and the bonds offset each other.

The details to the change of the fair value of the swaps designated as fair value hedge are as follows:

(in TEUR)	2007	2006
Fair value swap end of previous period	(2,647)	4,024
Fair value swap end of current period	(7,737)	(2,647)
Gain/loss recognized through
profit or loss	(5,090)	(6,671)

The Executive Board believes that the exposure to interest rate risk of remaining financial assets and liabilities is negligible. Consequently, additional material derivative instruments for hedging these interest risks are not used within the Group.

The weighted average interest rates at the balance sheet date were as follows:

(in %)	2007	2006
Cash on current accounts	2.1	1.9
Short-term deposits	4.6	3.4
Securities, short-term	4.6	7.0
Securities, long-term	3.1	2.8
Overdraft on current accounts	5.0	5.2
Short-term loans	10.7	10.7
Long-term loans	3.6	5.3
Bond	4.9	4.3

e. Sensitivity analyses

The Group's activities expose it primarily to the financial risks of changes in foreign currency, changes in fair value and changes in interest rates. The Group enters into financial derivatives to manage its exposure to foreign currency risk and the risk of changes in fair values. These market risk exposures are measured using sensitivity analyses.

Foreign currency sensitivity

Sensitivity analyses provide an approximate quantification of the exposure in the event that certain specified parameters were to be met under a specific set of assumptions. The Group is mainly exposed to the U.S. dollar.

The following explanations detail the Group's sensitivity to an increase and decrease in USD-Dollar against the Euro. The change represents the amount applied on internal reporting of foreign currency risk and represents the Executive Board's assessment of the possible change in foreign exchange rates.

The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a change in foreign currency rates.

With an increase of the U.S. dollar against the Euro of 10% Net income for the year 2007 would be decreased by TEUR 5,171 compared to the Net income reported now (2006: decrease of Net income for the year 2006 of TEUR 495). With a 10% decrease of the U.S. dollar against the Euro Net income for the year 2007 would be increased by TEUR 2,650 (2006: increase of Net income by TEUR 39). These changes are mostly due to the fair value adjustment of forward contracts for U.S. dollar according to new exchange rates.

Interest rate sensitivity

The sensitivity analyses have been determined based on the exposure to interest rates of the bonds. There is no risk of a changing interest rate concerning the cash flows for the company as the issuer of the fixed-interest bearing bonds, although there is the risk of changes in the fair value of the bonds. The Company entered into swaps to hedge against this risk of changes in the fair value, so that on a net basis, the Group has the liability to pay a variable interest rate based on 1 month's Euribor.

A 100 basis point change in interest rate is used when reporting interest rate risk internally to key management personnel and represents the Executive Board's assessment of the possible change in interest rates.

If interest rates had been 100 basis points higher and all other variables were held constant, this would have caused a change of the fair value of the swaps in the amount of TEUR -9,398 (2006: TEUR -11,562). This change would be offset by a basis adjustment of the bonds in the same amount.

If interest rates had been 100 basis points lower and all other variables were held constant, this would have caused a change of the fair value of the swaps in the amount of TEUR 9,375 (2006: TEUR 12,428). This change would be offset by a basis adjustment of the bonds in the same amount.

f. Fair Value of Financial Instruments

The following table compares the carrying values of financial instruments with their fair values:

2007

	At	Fair value not through	Fair value through	Carrying value	Market value
(in TEUR)	amortized costs	profit or loss	profit or loss	31.12.2007	31.12.2007
ASSETS
Investments
Available for sale	6,840	62	0	6,902	6,902
Loans and receivables	26,095	0	0	26,095	26,095
Receivables and other assets
Loans and receivables	519,338	0	0	519,338	519,338
Held for trading	0	0	19,762	19,762	19,762
Marketable securities
Available for sale	101,041	846	0	101,887	101,887
Cash and cash equivalents
Loans and receivables	496,926	0	0	496,926	496,926
	1,150,240	908	19,762	1,170,910	1,170,910
LIABILITIES
Financial liabilities
Measured at amortized costs	350,998	0	0	350,998	350,998
Not allocated to any IAS 39 valuation category	1,350	0	0	1,350	1,350
Trade accounts payable
Measured at amortized costs	314,028	0	0	314,028	314,028
Other liabilities
Held for trading	0	0	19,897	19,897	19,897
Measured at amortized costs	354,798	0	0	354,798	354,798
	1,021,174	0	19,897	1,041,071	1,041,071

2006*

	At	Fair value not through	Fair value through	Carrying value	Market value
(in TEUR)	amortized costs	profit or loss	profit or loss	31.12.2006	31.12.2006
ASSETS
Investments
Available for sale	10,437	(54)	0	10,383	10,383
Loans and receivables	22,355	0	0	22,355	22,355
Receivables and other assets
Loans and receivables	444,677	0	0	444,677	444,677
Held for trading	0	0	15,772	15,772	15,772
Marketable securities
Available for sale	38,668	924	0	39,592	39,592
Cash and cash equivalents
Loans and receivables	670,591	0	0	670,591	670,591
	1,186,728	870	15,772	1,203,370	1,203,370
LIABILITIES
Financial liabilities
Measured at amortized costs	343,084	0	0	343,084	343,084
Not allocated to any IAS 39 valuation category	1,377	0	0	1,377	1,377
Trade accounts payable
Measured at amortized costs	340,682	0	0	340,682	340,682
Other liabilities
Held for trading	0	0	16,217	16,217	16,217
Measured at amortized costs	318,696	0	0	318,696	318,696
	1,003,839	0	16,217	1,020,056	1,020,056

* restated

The following table shows the transition from the carrying values of financial instruments with their fair values:

2007

(in TEUR)	Amortized costs	Fair value not through profit or loss	Fair value through profit or loss	Carrying value 31.12.2007	Market value 31.12.2007
ASSETS
Held for trading
Derivatives	0	0	18,029	18,029	18,029
Embedded Derivatives	0	0	1,733	1,733	1,733
Available for sale
Non-current securities	6,840	62	0	6,902	6,902
Marketable securities	101,041	846	0	101,887	101,887
Loans and receivables
Loans granted	14,611	0	0	14,611	14,611
Investments in other companies	11,484	0	0	11,484	11,484
Non-current receivables and other non-current assets	10,221	0	0	10,221	10,221
Trade accounts receivable	400,163	0	0	400,163	400,163
Other receivables and assets – current	108,954	0	0	108,954	108,954
Cash and cash equivalents	496,926	0	0	496,926	496,926
	1,150,240	908	19,762	1,170,910	1,170,910
LIABILITIES
Held for trading
Derivatives	0	0	14,638	14,638	14,638
Embedded Derivatives	0	0	5,259	5,259	5,259
Financial liabilities measured at amortized costs
Bonds	292,263	0	0	292,263	292,263
Bank loans and other financial liabilities	58,735	0	0	58,735	58,735
Trade accounts payable	314,028	0	0	314,028	314,028
Other liabilities	354,798	0	0	354,798	354,798
Other liabilities, not allocated to any IAS 39 valuation category
Obligations under finance leases	1,350	0	0	1,350	1,350
	1,021,174	0	19,897	1,041,071	1,041,071

047 Notes to the Consolidated

Financial Statements

2006*

(in TEUR)	Amortized costs	Fair value not through profit or loss	Fair value through profit or loss	Carrying value 31.12.2006	Market value 31.12.2006
ASSETS
Held for trading
Derivatives	0	0	15,039	15,039	15,039
Embedded Derivatives	0	0	733	733	733
Available for sale
Non-current securities	10,437	(54)	0	10,383	10,383
Marketable securities	38,668	924	0	39,592	39,592
Loans and receivables
Loans granted	14,003	0	0	14,003	14,003
Investments in other companies	8,352	0	0	8,352	8,352
Non-current receivables and other non-current assets	6,132	0	0	6,132	6,132
Trade accounts receivable	347,368	0	0	347,368	347,368
Other receivables and assets – current	91,177	0	0	91,177	91,177
Cash and cash equivalents	670,591	0	0	670,591	670,591
	1,186,728	870	15,772	1,203,370	1,203,370
LIABILITIES
Held for trading
Derivatives	0	0	6,421	6,421	6,421
Embedded Derivatives	0	0	9,796	9,796	9,796
Financial liabilities measured at amortized costs
Bonds	296,358	0	0	296,358	296,358
Bank loans and other financial liabilities	46,726	0	0	46,726	46,726
Trade accounts payable	340,682	0	0	340,682	340,682
Other liabilities	318,696	0	0	318,696	318,696
Other liabilities, not allocated to any IAS 39 valuation category
Obligations under finance leases	1,377	0	0	1,377	1,377
	1,003,839	0	16,217	1,020,056	1,020,056

* restated

Fair value calculation

The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date.

At the balance sheet date, the fair values of forward contracts with banks were as follows:

(in TEUR)	2007	2006
Forward contracts with positive fair values	18,029	15,039
Forward contracts with negative fair values	(6,901)	(3,774)
	11,128	11,265

The remaining terms of the forward foreign exchange contracts are as follows:

	not ex ceeding	more than	Total	Total
(in TEUR)	1 year	1 year	2007	2006
US-Dollars	8,023	(927)	7,096	5,223
Swiss Francs	2,701	376	3,077	1,707
Singapore Dollars	1,641	0	1,641	2,826
Euros	133	923	1,056	712
Other currencies	(402)	(1,340)	(1,742)	797
	12,096	(968)	11,128	11,265

The fair value of the interest swaps presenting a total negative fair value as of end of 2007 was TEUR 7,737 (TEUR 2,647 as of end of 2006 being a positive fair value).

Cash and cash equivalents, current and non-current financial assets

The carrying amount of cash and other financial assets approximates the fair value due to the relatively short-term maturity of these financial instruments.

Non-current and current securities

The fair values of publicly traded instruments are based on quoted market prices. For all other instruments for which there are no quoted market prices, a reasonable estimate of fair value has been calculated based on the expected cash flows or the underlying net asset base for each investment. Non-current securities of the Group are classified as 'available for sale' and are valued at their quoted market price at the balance sheet date.

Receivables and payables

The historical carrying amounts of receivables and payables which are all subject to normal trade credit terms correspond basically to their fair values.

Short-term borrowings

The carrying amount approximates the fair value because of the short period to maturity of those instruments.

Long-term borrowings

The fair value of the long-term debts is based on the current interest rates available for debt with the same maturity profile. The fair value of non-current borrowings and other payables with variable interest rates approximates their carrying amounts.

The risks of changes in fair value have been hedged by interest rate swaps. Management believes that the exposure to interest rate risk of the remaining financial assets and liabilities is negligible.

IAS 39 Reserve

The table below shows the movements in the IAS 39 reserve in equity:

	Unrealized gain (loss) on hedging	Unrealized gain (loss) on	Unrealized gain (loss) total
(in TEUR)	activities	securities	IAS 39 reserve
Balance as at January 1, 2006	(3,834)	662	(3,172)
Gains and losses from changes in fair value	(104)	(150)	(254)
Deferred income taxes thereon	26	37	63
Transfers to income statement	5,557	280	5,837
Deferred income taxes thereon	(1,723)	(78)	(1,801)
Balance as at December 31, 2006	(78)	751	673
Gains and losses from changes in fair value	0	(285)	(285)
Deferred income taxes thereon	0	50	50
Transfers to income statement	104	169	273
Deferred income taxes thereon	(26)	(41)	(67)
Balance as at December 31, 2007	0	644	644

The net gains and losses for each category of financial instrument are as follows:

2007

(in TEUR)	Held for trading	Held for trading	Available for sale
	Deriva	embedded
	tives	Derivatives	Securities
Changes in fair values
recognized in profit or loss	(5,227)	5,537	(169)
Changes in fair values
recognized in equity	0	0	(285)
Recycling out of equity	0	0	169
Net gains/(losses)	(5,227)	5,537	(285)

2006

(in TEUR)	Held for trading	Held for trading	Available for sale
	Deriva	embedded
	tives	Derivatives	Securities
Changes in fair values
recognized in profit or loss	4,594	(9,063)	(280)
Changes in fair values
recognized in equity	0	0	(150)
Recycling out of equity	6,413	0	280
Net gains/(losses)	11,007	(9,063)	(150)

K. Leases

The Group has entered into various operating lease agreements for machinery, offices and other facilities as lessee. Lease terms do not contain restrictions on the Group's activities concerning dividends, additional debt or further leasing. Rental expense amounted to TEUR 30,978 in 2007 and TEUR 20,444 in 2006.

Future lease payments under non-cancelable operating lease agreements are as follows:

(in TEUR)	2007	2006*
Next year	13,611	7,751
1 year to 5 years	21,807	21,592
After 5 years	6,896	10,764
	42,314	40,107

* restated

L. Commitments

Commitments arising from contracts for expenditure on property, plant and equipment are only in the normal course of business. As of December 31, 2007, these commitments amounted to TEUR 14,443 (2006: to TEUR 2,661).

M. Contingent Liabilities

Various legal actions and claims are pending or may be asserted in the future against Group companies from claims incidental to the ordinary course of business. These most typically consist of project-related claims and disputes. Although the resolution of these matters within established reserves can not be guaranteed the Management believes, subject to the following paragraph, that the outcome of these legal actions and claims, individually or in the aggregate, will not have a material adverse effect on the Company's business, liquidity, result of operations or financial position.

As of December 2007, Andritz Inc., as subsidiary of the Company, was one of many defendants in a total of approximately 26 asbestos cases in the US. Nearly all of these cases involve claims by multiple plaintiffs against multiple defendants. In aggregate the cases involve a total of approximately 608 plaintiffs. Andritz Inc. does not believe it should be found liable in connection with any of these claims and plans to vigorously defend each claim. As the vast majority of claims against Andritz Inc. have not as yet been stated with specificity it is not possible for Andritz Inc. to assess the full extent of its potential exposure to asbestos litigation. Andritz Inc. has not had a judgment of liability rendered against it in connection with an asbestos claim. Approximately 90 asbestos cases and about 22,956 claims against Andritz have been dismissed, and one claim has been resolved without Andritz incurring any significant liability or expense. It is possible that the final adjudication or settlement of such proceedings has a material adverse effect on the Company's business, results of operations and financial condition. The Group believes it has potential sources of recovery including insurance and/or contractual indemnities from the previous owners of the relevant businesses of Andritz Inc. Whether any indemnities and/or insurance will apply depends on the particular facts of each plaintiff's claim. Because the claims against Andritz in most cases have not as yet been stated with specificity and for the reasons set forth below, it is not possible for the Group to assess the amount of its expected recovery. Certain indemnitors or insurers have contested and others may contest the applicability of the indemnity or insurance in question, and there can be no assurance that the Group will prevail in any dispute relating to the applicability of such insurance or indemnity to existing or future claims against a Group company.

N. Related Party Transactions

Only minor business relations exist with the shareholders. The shareholders are:

Free Float	72%
Certus Beteiligungs-GmbH	26%
Management	2%

Transactions with associated companies and not consolidated companies were not material.

Emoluments of the Executive Board

A provision of TEUR 4,318 in 2007 (TEUR 4,292 in 2006) was recorded for pensions of former Members of the Executive Board and their dependants; the current year expense for these pensions amounted to TEUR 343 for 2007 (TEUR 169 for 2006).

The following expenses have been recognized for the Executive Board:

(in TEUR)	2007	2006
Short-term benefits	9,383	9,490
Post-employment benefits	1,903	1,312
Share-based expenses	642	498
	11,928	11,300

The Members of the Supervisory Board received remunerations in the amount of TEUR 111 (2006: TEUR 41).

O. Subsequent events

On February 18, 2008 Andritz successfully concluded the issue of a public corporate bond with a volume of MEUR 150 and a tenor of seven years. At a denomination of TEUR 50 the Andritz corporate bond is endowed with an annual fixed coupon rate of 5.25%.

P. List of Consolidated Subsidiaries

		Ownership Interest
Material Affiliated Companies	Headquarters	direct	indirect
Andritz Denmark A/S	Esbjerg/Denmark	100%
Andritz Sprout A/S	Esbjerg/Denmark		100%
Andritz (USA) Inc.	Roswell/Georgia (USA)	100%
Andritz Inc.	Roswell/Georgia (USA)		100%
Andritz Separation Inc.	Arlington/Texas (USA)		100%
Andritz S.A.S.	Vélizy/France	100%
Andritz Selas S.A.S.	Gennevilliers/France		100%
Andritz Ingeniería S.A.	Madrid/Spain	100%
Andritz Oy	Helsinki/Finland	100%
Savonlinna Works Oy	Savonlinna/Finland		100%
VA TECH HYDRO Canada Inc.	Stoney Creek/Canada	100%
Andritz Ltd./Ltée. Andritz AB	Lachine/Canada Örnsköldsvik/Sweden	100%	100%
Andritz Fiber Drying AB	Växjö/Sweden		100%
Andritz Ltd.	Staffordshire/Great Britain	100%
Andritz-Kenflo Foshan Pump Co. Ltd.	Foshan/China	60%
Andritz Technologies Ltd.	Foshan/China	100%
Andritz Sprout B.V.	Geldrop/Netherlands	100%
Andritz Brasil Ltda.	Curitiba/Brasil	100%
Andritz KK	Tokyo/Japan	100%
VA TECH HYDRO GmbH	Vienna/Austria	100%
Andritz Deutschland Beteiligungs GmbH	Ravensburg/Germany	49%	51%
Andritz-Küsters GmbH	Krefeld/Germany		100%
Andritz GmbH	Hemer/Germany	6.25%	93.75%
Sundwig GmbH	Hemer/Germany		75%
Andritz Fiedler GmbH	Regensburg/Germany		100%
Andritz Separation GmbH	Cologne/Germany		100%
Andritz Fliessbettsysteme GmbH	Ravensburg/Germany		100%
Andritz Kaiser GmbH	Bretten-Gölshausen/Germany		100%
Lenser Filtration GmbH	Senden/Germany		100%
VA TECH ESCHER WYSS GmbH	Ravensburg/Germany		100%
VA TECH HYDRO India Pvt. Ltd.	Bhopal/India		100%
VA TECH ESCHER WYSS S.L.	Madrid/Spain		100%
VA TECH ESCHER WYSS S.r.l.	Vicenza/Italy		100%
VA TECH HYDRO AG	Kriens/Switzerland		100%

Graz, February 19, 2008

Wolfgang Leitner Franz Hofmann Karl Hornhofer Humbert Köfler Friedrich Papst

FINANCial Glossary

ATX

Austrian Traded Index

Price index calculated by the Vienna Stock Exchange, containing the most actively traded shares on the Vienna Stock Exchange. The ATX comprises approximately 20 shares, weighted in the index according to market capitalization and free float.

ATX Prime

Price index calculated by the Vienna Stock Exchange and containing all the shares of the ATX Prime Market segment.

Authorized capital

Authorization by resolution of the Shareholders' Meeting allowing the Managing Board to increase the share capital by a maximum of 50% within five years by issuing new shares.

Chart

Graph showing the daily, weekly, or monthly prices for a particular share for a certain period.

Continuous trading

Continuous handling of all orders where price and quantity requested match up. Transactions can be concluded at any time during the opening hours of the Stock Exchange.

Corporate Governance Code

The Corporate Governance Code represents a set of rules for the responsible management and control of a company.

Dividend

That part of a company's profits paid out to the shareholders. The amount of the dividend is proposed by the Managing Board of a company and approved in a resolution by the Shareholders' Meeting.

EBIT(D)A

Earnings before Interest, Taxes (Depreciation), and Amortization of goodwill

This earnings measure is of particular interest in cases where companies have large amounts of fixed assets which are subject to heavy depreciation charges or in the case where a company has a large amount of acquired intangible assets on its books and is thus subject to large amortization. EBITDA is a good measure of comparing companies within industries.

EBIT

Earnings before Interest and Taxes The EBIT is part of the profit and loss accounts; also often called 'operating profit.'

Ex-dividend

The price of the share is lowered by the amount of the dividend paid a few days before the day a dividend is paid out.

Free float

Portion of a company's shares that is held by a large number of private and institutional investors.

IFRS

International Financial Reporting Standards IFRS are international accounting standards drawn up by the International Accounting Standards Board (IASB). Complying with IFRS should enable investors and other relevant stakeholders to better compare annual accounts presented by companies from different countries.

IPO

Initial Public Offering

Admission of a company to list its shares on the Stock Exchange by selling company shares to the public.

Investor Relations

Interface between the company and the financial community. An Investor Relations department should regularly provide transparent, comprehensive, and up-to-date information on developments within the company to shareholders, financial analysts, and investors.

ISIN

International Securities Identification Number Individual identification number of a security, enabling computerized international registration of a security.

Market capitalization

Market price of a listed company. This is calculated by multiplying the current share price by the number of company shares.

Financial Glossary der Andritz GruppeLocationsof the Andritz Group

053

Million Euros

Net liquidity

Cash and cash equivalents minus interest-bearing financial liabilities.

No-par value share

Share with no-par value, referring to a certain interest in the company without stating a fixed amount.

Par value

Face value of a security. This is the amount the shareholder has contributed to the nominal share capital of the company. The par value gives no indication of the actual value of the share.

Prime Market

Market segment of the Vienna Stock Exchange which contains stocks that are admitted to listing on the Official Market or Semi-Official Market and meet special additional listing criteria.

Road show

The management of a listed company presents the company's activities, strategies, and longterm prospects to national and international institutional investors and retail shareholders.

Share

Certificate that represents a certain stake in the nominal capital of a stock company.

Shareholders' Meeting

Body of a stock company which usually meets at least once a year and takes resolutions on important company matters according to company law.

Share capital increase

Increase in the nominal capital of a stock company. Equity capital is paid into the company.

SPO

Secondary Public Offering Selling of further shares of a company that is already publicly listed.

Stock Option Program

A company grants options to a defined group of executives for the purchase of shares of the company, which may be exercised at an agreed price after agreed performance criteria are met.

Volatility

Measure of the average fluctuation of a share price over a certain period. In statistics, the volatility is equal to the standard deviation.

WBI

Wiener Börse Index

(Vienna Stock Exchange Index) The WBI contains all shares listed on the Official Market and the Semi-Official Market. The WBI, as overall index, reflects the development of the Austrian stock market as a whole.

Disclaimer:

This Annual Financial Report contains assumptions and forecasts which were based on the information available up to the copy deadline on 19 February 2008. If the premises for these assumptions and forecasts do not occur, or risks indicated in the Status Report and in the chapter 'Corporate Risks' of the Andritz Annual Report 2007 do arise, actual results may vary from the forecasts made in this Annual Financial Report. Although the greatest caution was exercised in preparing data, all information related to the future is provided without guarantee.

The online version of this Annual Financial Report as well as the online version of the Annual Report 2007 are available on the Andritz website (www.andritz.com) or directly on http://reports.andritz.com/2007/

Andritz AG

Stattegger Strasse 18 8045 Graz, Austria Phone: +43 316 6902 0 Fax: +43 316 6902 415 welcome@andritz.com www.andritz.com

For information please contact:

Dr. Michael Buchbauer Corporate Communications/Investors Relations michael.buchbauer@andritz.com Phone: +43 316 6902 2979 Fax: +43 316 6902 465

Editor: Dr. Michael Buchbauer Design and concept: section.d Printed by: Druckerei Bösmüller

Jahresabschluss 2007 der Andritz AG

Lagebericht Bilanz Gewinn- und Verlustrechnung Anhang

Lagebericht

Präambel

Der Jahresabschluss (Einzelabschluss) der Andritz AG wird nach den Bilanzierungsund Bewertungsvorschriften des österreichischen UGB aufgestellt. Entsprechend dieser Vorschriften sind die verbundenen Unternehmen im Rahmen des Finanzanlagevermögens ausgewiesen. Dadurch ergibt sich aus dem Einzelabschluss lediglich ein Ausschnitt der wirtschaftlichen Lage für die Andritz AG und ihre verbundenen Unternehmen.

Finanzielle Leistungsindikatoren der Andritz AG:

Die Kennzahlen wurden entsprechend dem Fachgutachten zur Mindestausgestaltung finanzieller Leistungsindikatoren im Lagebericht berechnet.

in MEUR bzw. in %	2006	2007
Auftragsstand	1.377,8	1.592,7
Umsatzerlöse	500,9	455,2
Ergebnis vor Zinsen und Steuern	138,1	50,2
Umsatzrentabilität	27,6%	11,0%
Eigenkapitalrentabilität	40,6%	10,6%
Gesamtkapitalrentabilität	11,6%	4,1%
Nettoverschuldung	211,1	266,1
Nettoumlaufvermögen	-1,8	-185,1
Eigenkapitalquote	25,3%	24,4%
Verschuldungsgrad	70,0%	90,3%
Ergebnis vor Zinsen, Steuern und Abschreibungen	154,0	68,6

Der Netto-Geldfluss aus laufender Geschäftstätigkeit betrug in 2007 +30,9 MEUR (2006: +24,5 MEUR), jener aus der Investitionstätigkeit -66,9 MEUR (2006: -146,7 MEUR) und jener aus der Finanzierungstätigkeit -38,7 MEUR (2006: +172,4 MEUR). Der Finanzmittelbestand am Ende der Periode reduzierte sich daher von 121,0 MEUR am 31.12.2006 auf 46,3 MEUR am 31.12.2007.

Nicht-finanzielle Leistungsindikatoren der Andritz AG:

Bezüglich der Themenbereiche Fertigung, Personalwesen und Umweltschutz wird auf die Ausführungen im Konzernlagebericht verwiesen, welche auch für die Andritz AG zutreffend sind. Im Bereich Forschung und Entwicklung ist die Andritz AG eines von mehreren Forschungszentren in der Andritz-Gruppe und in sämtlichen Geschäftsbereichen mit Ausnahme des Geschäftsbereichs Futtermittel und Biomasse in verschiedenen Projekten tätig.

Zur besseren Einsicht in die Vermögens-, Finanz- und Ertragslage basiert der folgende Lagebericht auf dem nach IFRS erstellten Konzernabschluss.

LAGEBERICHT

Wirtschaftliche Rahmenbedingungen

Die Weltwirtschaft zeigte im Jahr 2007 eine insgesamt solide, jedoch regional und zeitlich differenzierte Entwicklung. In den USA schwächte sich das Wirtschaftswachstum während des 1. Halbjahres 2007 ein wenig ab. Die Konsumausgaben der Privatverbraucher und die Unternehmensinvestitionen gingen zurück; die Inflation blieb auf einem sehr hohen Niveau. Im 2. Halbjahr 2007 war die wirtschaftliche Entwicklung vor allem durch die Krise des Subprime-Markts und den daraus resultierenden Einbruch des Hypothekenmarkts gekennzeichnet. Der Preissturz bei Immobilien und Liegenschaften gab Anlass zur Sorge, dass in Amerika die Konsumausgaben – in den vergangenen Jahren Haupttreiber des starken Wachstums des Bruttoinlandsprodukts – in Zukunft deutlich zurückgehen könnten, was zu einer anhaltenden Dämpfung der Wirtschaft oder sogar zu einer Rezession führen könnte. Die amerikanische Notenbank (FED – Federal Reserve Board) senkte daher in mehreren Schritten den Leitzins von 5,25 auf 4,25 Prozent und stellte den Banken erhebliche Geldmittel zur Verfügung, um einem möglichen Liquiditätsengpass entgegenzuwirken.

In Euroland war eine sehr gute Entwicklung der wirtschaftlichen Aktivitäten zu verzeichnen. Dies war vor allem auf den unverändert hohen Inlandskonsum sowie den trotz der zunehmenden Stärke des Euro gegenüber dem US-Dollar unverändert hohen Export zurückzuführen. Die Europäische Zentralbank (EZB) erhöhte daher den Leitzins im Juni 2007 auf 4 Prozent. Während der Subprime-Krise stellte die EZB ebenfalls Geldmittel bereit, um die Liquiditätskrise zu stabilisieren, änderte den Leitzins angesichts der anhaltend starken wirtschaftlichen Aktivitäten jedoch nicht.

Auch in Asien blieb die Wirtschaftsentwicklung – basierend auf anhaltend hohen privaten Konsumausgaben sowie Unternehmensinvestitionen – im Berichtszeitraum unverändert stark. Ein besonders starker Anstieg des Bruttoinlandsprodukts war in China und Indien zu verzeichnen.

Quelle: OECD

Geschäftsentwicklung

Veränderung des Konsolidierungskreises/Akquisitionen

Die folgenden wesentlichen Unternehmen waren in der Vergleichsperiode 2006 nicht oder nur zum Teil in den Konzernabschluss der Andritz-Gruppe einbezogen:

• Küsters-Gruppe (Walz- und Kalandertechnologien für Papier und Nonwoven)
• Pilão Equipamentos Ltda. (Services und Produkte für die Zellstoff- und Papierindustrie)
• VA TECH HYDRO GmbH und ihre Tochtergesellschaften (einer der weltweit führenden Anbieter von elektromechanischen Ausrüstungen und Services für Wasserkraftwerke)
• CONTEC Decanter Inc. (Reparatur und Instandhaltung von Zentrifugen und Separatoren)
• Bachofen + Meier, Sparte Beschichtung (weltweit tätiger Spezialist für Technologien und Systeme zur Papierbeschichtung)
• Sindus Human Technology (Serviceunternehmen für die Zellstoff- und Papierindustrie)
• Tigép Kft. (Fertigung von schweren Maschinen insbesondere im Bereich Wasserkraft)

Umsatz

Der Umsatz der Andritz-Gruppe entwickelte sich im Jahr 2007 sehr erfreulich. Mit 3.282,5 MEUR stieg er im Vergleich zu 2006 (2.709,7 MEUR) um 21,1% an und erreichte damit neuerlich einen Rekordwert. Insbesondere die Geschäftsbereiche Zellstoff und Papier, Wasserkraft sowie Futtermittel und Biomasse verzeichneten im Jahresvergleich deutliche Zuwachsraten. Das organische Wachstum der Gruppe betrug 2007 rund 9,4%.

Auftragseingang und Auftragsstand

Der Auftragseingang der Andritz-Gruppe stieg im Jahr 2007 auf 3.749,5 MEUR an und lag damit deutlich über dem sehr hohen Wert des Jahres 2006 (2.891,0 MEUR). Vor allem die Geschäftsbereiche Walz- und Bandbehandlungsanlagen, Wasserkraft sowie Futtermittel und Biomasse konnten starke organische Zuwächse beim Auftragseingang erzielen. Das organische Wachstum des Auftragseingangs betrug 2007 rund 14,7%.

Der Auftragsstand der Andritz-Gruppe zeigte ebenso einen starken Anstieg und erhöhte sich per 31. 12. 2007 auf 3.843,3 MEUR (31. 12. 2006: 3.397,1 MEUR). Damit verfügt die Andritz-Gruppe über eine gute Visibilität hinsichtlich der Umsatzentwicklung in den kommenden Monaten.

Ergebnis

Mit der Umsatzerhöhung stieg auch der Betriebserfolg (EBIT – Earnings before Interest and Taxes) auf 192,6 MEUR (2006: 159,8 MEUR). Alle Geschäftsbereiche, insbesondere die Bereiche Wasserkraft, Walz- und Bandbehandlungsanlagen sowie Futtermittel und Biomasse, zeigten eine solide und zufriedenstellende Ergebnisentwicklung und überkompensierten damit den auf die VA TECH HYDRO zurückzuführenden, beim Erwerb bereits erwarteten Verwässerungseffekt auf die Gruppenrentabilität. Die EBIT-Marge der Andritz-Gruppe lag mit 5,9% im Jahr 2007 auf Vorjahresniveau.

Mit 5,5 MEUR sank das Finanzergebnis 2007 gegenüber dem Vorjahr geringfügig (2006: 6,1 MEUR). Die Steuerquote betrug im Berichtsjahr 31,3% (2006: 26,9%).

Das Konzernergebnis nach Abzug von Minderheitsanteilen betrug 132,7 MEUR (2006: 118,5 MEUR).

Vermögens- und Kapitalstruktur

Die Bilanz zum 31. 12. 2007 weist im Vorjahresvergleich keine wesentlichen Veränderungen auf. Die Bilanzsumme per 31. 12. 2007 betrug 2.507,5 MEUR und war damit um 121,4 MEUR höher als per 31. 12. 2006 (2.386,1 MEUR). Das Nettoumlaufvermögen zum 31. 12. 2007 betrug 99,1 MEUR (31. 12. 2006: -93,6 MEUR).

Die Nettoliquidität (Flüssige Mittel plus Wertpapiere des Umlaufvermögens abzüglich Finanzverbindlichkeiten) der Andritz-Gruppe per 31. 12. 2007 betrug 246,5 MEUR und lag damit deutlich unter dem sehr hohen Niveau per 31. 12. 2006 (365,7 MEUR). Die Eigenkapitalquote per 31. 12. 2007 betrug 19,2% (31. 12. 2006: 17,4%).

Aktien und Aktionärsstruktur – Offenlegung gemäß § 243a UGB

Gemäß Beschluss der Hauptversammlung vom 29. März 2007 wurde das Grundkapital aus Gesellschaftsmitteln durch Umwandlung des im Konzernabschluss per 31. Dezember 2006 ausgewiesenen entsprechenden Teilbetrags der gebundenen Kapitalrücklage ohne Ausgabe zusätzlicher, auf Inhaber lautender Stückaktien und entsprechend dem Kapitalberichtigungsgesetz von 94.510.000 EUR um 9.490.000 EUR auf 104.000.000 EUR erhöht. Das Grundkapital der Andritz AG per 31. Dezember 2007 betrug damit 104.000.000 EUR. Die Hauptversammlung beschloss weiters einen Split der Andritz-Aktien im Verhältnis 1:4, wodurch sich die Gesamtzahl der Aktien von 13 auf 52 Millionen erhöht hat. Auf jede nennwertlose Aktie entfällt damit ein anteiliger Betrag am Grundkapital von 2,00 Euro.

Es bestehen keine Beschränkungen, welche die Stimmrechte oder die Übertragung von Aktien betreffen. Rund 26% der Aktien befinden sich im Besitz der Certus Beteiligungs-GmbH, deren Geschäftsführer Wolfgang Leitner, Vorstandsvorsitzender von Andritz, ist.

Es gibt derzeit kein genehmigtes Kapital. Aufgrund eines Beschlusses der Hauptversammlung vom 29. März 2007 ist der Vorstand ermächtigt, zwischen 1. April 2007 und 30. September 2008 bis zu 10 Prozent des Grundkapitals der Andritz AG zurückzuerwerben. Es gibt keine sich nicht unmittelbar aus dem Gesetz ergebenden Befugnisse für Mitglieder des Vorstands, insbesondere hinsichtlich der Möglichkeit, Aktien auszugeben oder zurückzukaufen.

Soweit der Gesellschaft bekannt ist, gibt es keine Inhaber von Aktien mit besonderen Kontrollrechten. Die Arbeitnehmer üben das Stimmrecht direkt aus. Es existieren darüber hinaus auch keine sich nicht unmittelbar aus dem Gesetz ergebenden Bestimmungen über die Ernennung und Abberufung der Mitglieder des Vorstands und des Aufsichtsrats und über die Änderung der Satzung der Gesellschaft.

Die Gesellschaft ist keine bedeutenden Vereinbarungen eingegangen, die bei einem Kontrollwechsel der Gesellschaft infolge eines Übernahmeangebots wirksam, sich ändern oder enden würden. Gemäß den Bedingungen der im Juni 2006 begebenen Andritz-Anleihe 2006-2013 ist jeder Inhaber von Teilschuldverschreibungen berechtigt, seine Teilschuldverschreibungen fällig zu stellen und sofortige Rückzahlung zum Nennbetrag zuzüglich der bis zum Tag der Rückzahlung aufgelaufenen Zinsen zu verlangen, falls ein Kontrollwechsel durch einen neuen Großaktionär erfolgt, und dieser Kontrollwechsel zu einer wesentlichen Beeinträchtigung der Fähigkeit der Emittentin führt, ihre Verpflichtungen aus den Teilschuldverschreibungen zu erfüllen.

Es existieren Entschädigungsvereinbarungen zwischen der Gesellschaft und Mitgliedern des Vorstands im Falle eines Kontrollwechsels. Es gibt keine Entschädigungsvereinbarungen für die Aufsichtsratsmitglieder und Arbeitnehmer.

MEUR	2007	2006	Veränderung in %
Umsatz	3.282,5	2.709,7	+21,1
Umsatzrendite1) (in %)	5,9	5,9	-
EBITDA	242,3	194,2	+24,8
Betriebserfolg (EBIT)	192,6	159,8	+20,5
Ergebnis vor Steuern (EBT)	198,0	165,9	+19,3
Konzernergebnis nach Steuern	136,1	121,4	+12,1

Finanzkennzahlen der Andritz-Gruppe

1) EBIT/Umsatz

Bilanzkennzahlen

MEUR	2007	2006
Eigenkapitalquote2) (in %)	19,2	17,4
Eigenkapitalrentabilität3) (in %)	41,1	40,0
Gesamtkapitalrentabilität4) (in %)	7,7	6,7
Nettoliquidität5) (MEUR)	246,5	365,7
Nettoverschuldung6) (MEUR)	-94,8	-216,9
Nettoumlaufvermögen7) (MEUR)	99,1	-93,6
Capital employed8) (MEUR)	405,6	194,5
Verschuldungsgrad9) (%)	-19,7	-52,3

• 2) Eigenkapital/Gesamtkapital 3) Ergebnis vor Ertragsteuern/Eigenkapital 4) Ergebnis vor Zinsen und Steuern/Gesamtkapital 5) Flüssige Mittel plus Wertpapiere des Umlaufvermögens abzüglich Finanzverbindlichkeiten 6) Verzinsliches Fremdkapital inklusive Rückstellungen für Abfertigungen, Pensionen und

Jubiläumsgelder abzüglich Flüssige Mittel und Wertpapiere des Umlaufvermögens 7) Umlaufvermögen exkl. Flüssige Mittel und Wertpapiere des Umlaufvermögens abzüglich

• Fremdkapital exkl. Finanzverbindlichkeiten und Rückstellungen 8) Nettoumlaufvermögen plus immaterielle Vermögenswerte und Sachanlagen
• 9) Nettoverschuldung/Eigenkapital

Risikomanagement und Treasury

Als ein global tätiges Unternehmen, das eine Vielzahl verschiedener Märkte und Kunden bedient, ist die Gruppe gewissen allgemeinen und branchenspezifischen Risiken ausgesetzt. Diese Risiken beziehen sich vor allem auf die von der Gruppe bedienten Industrien und Märkte, die Geschäftstätigkeit der Gruppe, Großaufträge und die Umsetzung des Auftragsbestands in Umsatz. Andritz verfügt über ein bewährtes, konzernweites Risikomanagementsystem, dessen Hauptaufgabe es ist, entstehende Risiken bereits in einem frühen Stadium zu identifizieren, um gegebenenfalls rasch Gegenmaßnahmen ergreifen zu können. Dieses System ist ein wesentlicher Bestandteil des aktiven Risikomanagements der Gruppe.

Die Überwachung und das Management von Finanzrisiken sind wichtige Bestandteile des gruppenweiten Controllings und Rechnungswesens von Andritz. Laufendes Controlling und regelmäßiges Berichtswesen sollen die Identifizierung von größeren Risiken zu einem sehr frühen Zeitpunkt und – sofern notwendig – die Einleitung von Gegenmaßnahmen sicherstellen.

Das Zahlungsausfallsrisiko von Kunden wird für einen Großteil der Projekte durch Besicherung von Zahlungen durch Banken sowie durch Abschluss von Exportversicherungen reduziert. Das Risiko bei Lieferungen in als politisch riskant eingestufte Länder wird üblicherweise ebenfalls versichert. Zins- und Wechselkursrisiken werden durch die Verwendung von derivativen Finanzinstrumenten, vor allem Devisentermingeschäften und Swaps, begrenzt und gesteuert. Bei nicht in Euro getätigten Geschäften (hauptsächlich solche in US-Dollar und Pfund Sterling) wird die Nettowährungsposition in der Regel durch den Abschluss von Termingeschäften gesichert. Cashflow-Risiken werden durch das Cashmanagement-System der Gruppe, das alle Cash-Zu- und -Abflüsse der großen Andritz-Tochtergesellschaften kontrolliert, minimiert. Das Cashmanagement-System überwacht auch das zentrale Pooling dieser Aktivitäten, um die Zinseinkünfte zu optimieren.

Es gibt jedoch keine Garantie, dass diese Überwachungs- und Steuerungssysteme ausreichend oder je nach Anlassfall auch ausreichend wirksam sind.

Investitionen und Cashflow

Die Investitionen in materielle und immaterielle Vermögenswerte betrugen 2007 57,0 MEUR und stiegen damit um 24,7% gegenüber dem Vorjahr an (2006: 45,7 MEUR). Die Investitionen der Gruppe betrafen im Wesentlichen Modernisierungen von Gebäuden und Werkstätten sowie, insbesondere in China, auch Kapazitätserweiterungen.

Der Cashflow aus laufender Geschäftstätigkeit betrug 33,1 MEUR und war damit niedriger als im Vorjahr (2006: 143,1 MEUR).

MEUR	2007	2006
Cashflow aus laufender Geschäftstätigkeit	33,1	143,1
Investitionen1)	57,0	45,7
Free Cashflow2)	-19,6	100,1
Free Cashflow je Aktie3)	-0,4	1,9

Cashflow-Kennzahlen

1) Zugänge zu Sachanlagen und immateriellen Vermögenswerten und Sachanlagen 2) Cashflow aus laufender Geschäftstätigkeit abzüglich Investitionen plus Einzahlungen aus dem Verkauf von immateriellen Vermögenswerten und Sachanlagen 3) Free Cashflow dividiert durch Aktiengesamtzahl

Auswirkungen von Wechselkursänderungen

Wechselkursänderungen werden durch entsprechende Terminkontrakte abgesichert.

Nicht-finanzielle Leistungsindikatoren

Fertigung

Im Berichtsjahr wurde in allen Andritz-Produktionsstätten eine sehr hohe Kapazitätsauslastung verzeichnet. Zunehmende Schwierigkeiten bei der Beschaffung von Materialien und Halbfertigprodukten konnten durch die hohe Flexibilität und Einsatzbereitschaft aller Mitarbeiter weitgehend kompensiert werden. Aufgrund des hohen Auftragsbestands wurde die Anzahl der eingesetzten Leiharbeiter bzw. das Outsourcing von Fertigungsaufträgen weiter erhöht.

Zur weiteren Steigerung der Wettbewerbsfähigkeit und zur Verkürzung der Lieferzeiten wurden Investitionen in die weitere Automatisierung der Produktionsabläufe und in den Abbau von Engpässen getätigt. In den stark wachsenden Märkten China, Indien und Südamerika werden die Produktionskapazitäten gezielt erweitert.

Personalwesen

Weltweite Schulung und Fortbildung der Andritz-Mitarbeiter waren auch im Jahr 2007 die Hauptziele des Andritz-Personalwesens. Die Rekrutierung neuer Mitarbeiter stellte angesichts des Mangels an gut ausgebildeten Bewerbern eine große Herausforderung dar. Der Großteil der relevanten freien Positionen in der Andritz-Gruppe konnte dennoch mit hoch qualifizierten Kandidaten besetzt werden. Das Ausmaß von Entsendungen von Mitarbeitern zu Tochterunternehmen auf der ganzen Welt (insbesondere nach China) zur Unterstützung der jeweiligen Geschäfts- und Organisationsentwicklung hat deutlich zugenommen; diese Entsendungen leisten einen entscheidenden Beitrag zur Sicherstellung des internen Wachstums der Gruppe.

Umweltschutzbelange

Die wesentlichen Schwerpunkte im Rahmen der Umweltschutzaktivitäten der Andritz-Gruppe im Jahr 2007 betrafen Mitarbeiterschulungen sowie Energiespar- und Verkehrsentlastungsmaßnahmen zur Reduktion von Kohlendioxid-, Kohlenmonoxidund Stickoxid-Emissionen. Für den Standort Graz, Österreich, wurde ein neues Verkehrskonzept entwickelt, mit dem die Fahrtkilometer innerhalb des Firmengeländes jährlich um 4.000 und innerhalb des Grazer Stadtbezirks Andritz um 13.000 Kilometer reduziert werden. Das Projekt wird 2008 umgesetzt werden. Im Rahmen eines Pilotprojekts zur Energieeinsparung bei der Bürobeleuchtung am Standort Graz wurde ein Einsparungspotenzial von 20 Prozent festgestellt; das Projekt wird in den Jahren 2008 und 2009 schrittweise umgesetzt werden. Im Rahmen eines weiteren Projekts haben Lehrlinge der Lehrwerkstätte Graz die Wasserturbine des unternehmenseigenen Kraftwerks in Weiz wieder instand gesetzt und so ihr Wissen im Bereich erneuerbare Energien erweitert. 2007 hat der Standort Graz wieder das ÖKOPROFIT-Zertifikat der Stadt Graz für besondere Leistungen im Bereich Umweltschutz erhalten.

Forschung und Entwicklung

Im Jahr 2007 investierte die Andritz-Gruppe rund 45,4 MEUR in Forschung und Entwicklung (2006: 35,4 MEUR). Einschließlich der auftragsbezogenen Entwicklungsarbeiten wurden rund drei Prozent des Umsatzes für die Entwicklung neuer Verfahren und Produkte aufgewendet. In den Forschungszentren der Gruppe in Österreich, Finnland, Frankreich, der Schweiz und den USA arbeiten mehr als 300 Mitarbeiter an der Entwicklung neuer Prozesse und Anlagen, um die Technologieführerschaft von Andritz weiter auszubauen.

In den Divisionen des Geschäftsbereichs Zellstoff und Papier wird die Investitionstätigkeit der Kunden heute vor allem von zwei Trends bestimmt. Erstes Ziel ist die größtmögliche Senkung der Investitionskosten je produzierter Tonne. Die Folge sind größere Produktionseinheiten in einer Linie ohne Redundanz. Der zweite Trend besteht in den anhaltenden Bestrebungen, die Produktionsprozesse nachhaltiger zu gestalten. Der Forderung nach Nachhaltigkeit begegnet Andritz durch neue Systeme, die für die effiziente Verarbeitung von Fasern aus Plantagenholz adaptiert wurden, sowie durch Technologien mit gegenüber den Vorgängersystemen deutlich reduziertem Energieverbrauch. Dazu gehören u. a. intensive Forschungs- und Entwicklungsarbeiten mit dem Ziel einer effizienteren Nutzung von Biomasse als Energiequelle.

Seit Mai 2007 arbeiten Andritz, dessen assoziiertes Unternehmen Carbona und UPM, eines der weltweit führenden Unternehmen der Forstindustrie, gemeinsam an der Entwicklung einer Technologie für die Gasifizierung von Biomasse und die Reinigung von Synthesegas. Das gemeinsame Pilotprojekt umfasst die Gasifizierung des vorgesehenen Ausgangsmaterials (Holzabfälle) in einem 8-MW-Gasifizierer und die Reinigung des erzeugten Gases, sodass es anschließend mit handelsüblichen Geräten behandelt und in Biotreibstoff umgewandelt werden kann. Die umfangreichen Pilotversuche werden am Gas Technology Institute (GTI), einem renommierten Forschungs- und Entwicklungsinstitut in den USA, durchgeführt. Die Endergebnisse werden bis Ende 2008 erwartet.

Im Bereich Holzplatztechnik geht der Trend zu Verarbeitungslinien mit sehr hohen Kapazitäten. Um diese Nachfrage abzudecken, hat die Division größere Linien sowohl für bereits entrindete als auch nicht entrindete Holzstämme entwickelt. Weiters wurden eine neue Hackmaschine (die größte der Welt) und eine neue Hochleistungsentrindungstrommel entwickelt. Mit einer von der Division entwickelten neuen Technik können Sand und lose Rindenstücke von im Wald entrindeten Holzstämmen abgeschieden werden.

Die technologischen Entwicklungsarbeiten der Division Faserlinie konzentrieren sich nicht nur auf große Neuanlagen, sondern auch auf kleine und mittelgroße Linien. Verbesserungen an Kochereieintragssystemen, größere DD-Wäscher, eine neue Generation von Mittelkonsistenz-Anlagen und moderne Steuerungssysteme wurden erstmals eingesetzt. Durch neue Waschkonzepte und geschlossene, unter Druck stehende Prozess-Stufen, die Emissionen in die Atmosphäre verhindern, werden der Frischwasserverbrauch und damit auch das Abwasservolumen reduziert.

Für die Weißlaugenproduktion wurde ein neuer Drehrohrofen mit einer Leistung von mehr als 1.000 Tagestonnen entwickelt. Der Einsatz der Zentrifugentechnik in der Entwässerung und Wäsche von Grünlaugenrückständen gewinnt immer stärker an Bedeutung. Die Zentrifugierung minimiert die durch diese Rückstände verursachte Umweltbelastung auf den Deponien. In einem finnischen Werk wird eine Anlage zur selektiven Reduktion des Phosphors im Kalkkreislauf errichtet. Diese Anlage ermöglicht eine noch weitergehende Schließung des Kalkkreislaufs sowie eine Reduktion der Festabfallmenge.

Im Bereich Energie aus Biomasse wurde bereits im Jahr 2006 ein Programm zur Entwicklung moderner, mit Biomasse beheizter Kessel gestartet. Die ersten Kessel befinden sich schon in Bau. Die hohen Öl- und Gaspreise haben zunehmendes Interesse am Einsatz von Biomasse in Drehrohröfen ausgelöst. Nach wie vor verbrauchen Drehrohröfen in Zellstoffwerken große Mengen fossiler Brennstoffe. Andritz verfügt über sehr umfangreiche Erfahrung mit HERB-Hochleistungsrückgewinnungskesseln. Die nächsten Entwicklungsschritte betreffen die Steigerung der Stromerzeugung aus Schwarzlauge. Mit zunehmender Kreislaufschließung in den Zellstoffwerken zur Reduzierung von Emissionen gewinnt die Chlorid-Abscheidung an Bedeutung. Das erste Andritz-System zur Beseitigung der Chloride in einem Auslaugeverfahren − eine kostengünstige Alternative zum bewährten Asche-Rekristallisationsverfahren − befindet sich in Bau. Ein weiteres Programm zielt auf die Senkung der Betriebskosten von Eindampfanlagen ab. Im Hinblick auf das steigende Preisniveau bei thermischer und elektrischer Energie wurde ein neues, patentiertes Verfahren entwickelt.

Die Forschungs- und Entwicklungsarbeiten im Bereich Zellstofftrocknungssysteme konzentrieren sich auf die Steigerung der Produktionskapazität einer einzelnen Trocknungslinie mit Doppelsiebformertechnologie von derzeit 4.000 auf mehr als 4.500 Tagestonnen bzw. 1.300.000 Jahrestonnen Zellstoff. Durch Prozessvereinfachungen und Optimierung der größten Energieverbraucher in der Linie wird der Energieverbrauch der gesamten Linie gesenkt.

In der Division Papiermaschinen hat die Produktgruppe Tissue unter dem Produktnamen PrimeDry Steel einen neuen Kreppzylinder aus Stahl auf dem Markt eingeführt. Die Hauptvorteile gegenüber konventionellen gusseisernen Zylindern sind höhere Leistung und Betriebssicherheit. Die Produktgruppe Lufttechnik hat eine neue Wärmerückgewinnungsstufe für die Abluft aus Yankee-Trockenhauben entwickelt. Hierbei wird Kondensat in einem Wärmetauscher unter Verwendung der Abluft verdampft; so können bis zu 25 Prozent Primärdampf eingespart werden. Ferner wurde das PrimeTakeOff-System zur Führung der Bahn nach dem Kreppzylinder am Markt eingeführt. Der Vorteil dieses Systems liegt in der Verringerung der Bahnabrisse bei höheren Maschinengeschwindigkeiten. Die Entwicklung einer Modulbauweise für die Yankee-Trockenhaube macht es möglich, den Haubenkörper in kleineren Bauteilen an die Baustelle zu liefern und dort zusammenzubauen.

Die Forschungs- und Entwicklungstätigkeit der Division Faserstoffaufbereitung konzentriert sich darauf, die Systemleistung von Stoffaufbereitungsanlagen zu erhöhen und den Energieverbrauch weiter zu senken. Die Division hat einen neuen Aschewäscher (SpeedWasher) zur Aufbereitung von gemischtem Büropapierabfall und einen unter Druck arbeitenden Disperger für OCC (Old Corrugated Container) entwickelt und am Markt eingeführt.

Vorrangige Ziele in der Refinertechnik sind die Prozessvereinfachung sowie die Verbesserung der Anlagenzuverlässigkeit, um die Investitions- und Betriebskosten der Anlagen für die Kunden zu senken. Ergebnisse der Entwicklungsprogramme sind eine neue Faserzentrifuge, mit der Dampf und Fasern nach dem Hochkonsistenzrefiner besser getrennt werden können, sowie eine Reihe von Druckvorrichtungen und -schnecken. Um auch für künftige Anforderungen gerüstet zu sein, wurde die Pilotanlage in Springfield, Ohio, USA, modernisiert.

Die Division Papierveredelung hat für die Tissue-Industrie die kleinste jemals gebaute Schuhwalze (Durchmesser: 710 mm) konstruiert. Damit können ohne Volumenverlust und bei sehr langen Bandstandzeiten höchste Trockengehalte erzielt werden. Ein neues PrimeFeeder-Design bewirkt einen stabileren Ablauf des gesamten Prozesses und verkürzt nach einem Bahnabriss die Zeit bis zur Wiederherstellung der vollen Produktionsleistung der Papiermaschine.

Der Geschäftsbereich Wasserkraft führte sowohl auftragsbezogene Entwicklungen als auch Grundlagenforschung erfolgreich durch. Die hervorragende Leistung des neuen Laufraddesigns im Rahmen der Aufträge Tokke (Norwegen) und Larona (Indonesien) – beides Rehabilitationen von Francisturbinen – führte zu Folgeaufträgen für weitere Laufräder. Strömungstechnische Untersuchungen wurden auch in anderen Bereichen unternommen, um den Kunden bereits in den ersten Phasen eines Projekts detaillierte technische Daten zur Verfügung stellen zu können.

Für Rohrturbinen, die bei mehr als 20 Meter Fallhöhe eingesetzt werden, wurde eine neue Laufradgeneration mit fünf Schaufeln entwickelt und für einen chinesischen Auftrag an einem Modell erfolgreich getestet.

Bei der Entwicklung von Großpumpen für indische und chinesische Aufträge sowie bei der grundlegenden Neuentwicklung von Pumpturbinen konnten zwischen den beiden Produktlinien Synergien genutzt werden.

Die Forschungs- und Entwicklungstätigkeit für die Kühlung von Hydrogeneratoren konzentrierte sich auf die Optimierung mehrerer Komponenten im Belüftungskreislauf und auf die Verbesserung der numerischen Tools für die Auslegung der Belüftung.

Basierend auf der zweijährigen Betriebserfahrung mit dem neu entwickelten STRAFLO MATRIX™-Generator in einem österreichischen Wasserkraftwerk konnten die spezielle Auslegung der Hochspannungsstatorwicklung und die Wärmeübertragung aus dem Wickelkopf optimiert werden.

Im Rahmen von Kostensenkungsprogrammen und eines Wertanalyseprojekts für Generatoren wurde eine Reihe neuer technischer Konzepte untersucht; die vielversprechendsten sind die Gesamtimprägnierung von Wickelkörpern mit großem Durchmesser, ein neues Plattenrotordesign und eine neuartige Dämpfungswicklungsbefestigung.

Ein weiterer Schwerpunkt der Forschungs- und Entwicklungsarbeiten betraf die Automation für Wasserkraftwerke. SAT 250, das führende System für Steuerwarten und Bedienstationen, wurde nun auch im Tiefpreissegment funktional und ergonomisch optimiert. Das System deckt nunmehr sämtliche Mensch/Maschinen-Schnittstellen in einem Wasserkraftwerk ab – von kleinen Turbinenreglerpulten bis zu komplexen Steuerwarten für ganze Kraftwerksgruppen. Auf dem Gebiet elektrischer Schutz und Erregung wurde eine völlig neue Plattform – weltweit die erste technologisch vereinheitlichte Erregungs- und Schutzplattform – definiert.

Die Forschungs- und Entwicklungstätigkeit des Geschäftsbereichs Walz- und Bandbehandlungsanlagen konzentrierte sich im Berichtsjahr auf neue Beschichtungstechnologien unter Anwendung elektrogalvanischer und CVD-Verfahren (CVD: Chemical Vapor Deposition). In Pilotanlagen für beide Prozesse konnten beschichtete Bänder hergestellt werden, die in Anwendungstests bei potenziellen Kunden verwendet werden.

Das in Salzsäureregenerationsanlagen als Nebenprodukt gewonnene Eisenoxid ist für die Rentabilität des Prozesses sehr wichtig. Neue Prozessabläufe wurden untersucht, um Eisenoxid für den Pigmentmarkt zu erzeugen.

Das Lieferprogramm der Stanz- und Umformautomaten der neuen Generation wurde erweitert. Diese neue Pressengeneration zeichnet sich durch Modulbauweise aus und kann daher flexibel an die unterschiedlichen Kundenanforderungen angepasst werden.

Die Forschungs- und Entwicklungstätigkeit der Division Separation Technologies des Geschäftsbereichs Umwelt und Prozess konzentrierte sich weiterhin auf die Optimierung des Zentrifugenangebots zur weiteren Verbesserung der Leistung und/oder Reduzierung der Herstellungskosten. Ein weiterer Schwerpunkt war die Standardisierung der Filterpressenproduktfamilie mit dem Ziel, die Lieferzeiten zu verkürzen und die Kosten zu senken.

Wegen zunehmend strengerer Auflagen für die Behandlung geruchsbelasteter Abgase wurden weitere Forschungsarbeiten und Versuche durchgeführt, um die Geruchsbelästigung durch Abgase von Schlammtrocknungsanlagen zu minimieren und die TOC-Werte (Total Organic Carbon) zu reduzieren. Dabei stellt die Entwicklung eines zuverlässigen und umweltfreundlichen Systems zur Geruchsreduktion – insbesondere bei Klärschlamm mit seinem schwer prognostizierbaren Gehalt an unangenehm riechenden Substanzen – einen Schwerpunkt der Forschungs- und Entwicklungstätigkeit dar. Ein solches System sollte nicht wie die thermische Nachverbrennung zusätzlich Primärenergie verbrauchen und CO2-Emissionen verursachen.

Aufgrund des starken Wachstums des Marktes für Biomassetrocknung wurde mit der Entwicklung eines großen Bandtrockners mit einer Verdampfungsleistung von bis zu 16 t/h begonnen. Ziel ist höchste Energieeffizienz durch Rückgewinnung der in den Trocknungsgasen enthaltenen Abwärme. Bei diesem Trockner soll die Trocknungsluft in einem nahezu vollständig geschlossenen Kreislauf geführt werden, und auch aus dem minimierten Abgasstrom aus dem Trockner soll die Energie zurückgewonnen werden. Ferner wird es möglich sein, diesen Trockner mit Abwärme oder Abgas aus anderen Prozessen und aus Kraft-Wärme-Kopplungen zu betreiben.

Ebenfalls im Bereich Biomassetrocknung wurden intensive Versuche mit einer Pilot-Trocknungsanlage durchgeführt, um Auslegungs- und Machbarkeitsdaten für den Einsatz von Bandtrocknern für verschiedene Arten von Biomasse (Sägespäne für Pelletieranlagen, Biertreber aus Brauereien, Rejekte, Zuckerrohrbagasse, Rinde aus der Zellstoff- und Papierindustrie) zu erheben.

Der Geschäftsbereich Futtermittel und Biomasse hat eine neue Generation von Prozess-Steuerungen mittels Touchscreens für kleine bis mittelgroße Extruder zur Erzeugung von Haustier- und Fischfutter erfolgreich am Markt eingeführt.

Das Produktprogramm für den Bereich erneuerbare Energien wurde um eine neue Hammermühlengeneration für die Herstellung von Sägemehl in Kraftwerksanlagen erweitert.

Ausblick

Trotz der allgemeinen Abschwächung der Weltwirtschaft und der Turbulenzen an den internationalen Finanzmärkten erwartet Andritz gegenwärtig in allen Geschäftsbereichen eine gute Projektaktivität.

Im Geschäftsbereich Zellstoff und Papier ist die Projektaktivität auf einem unverändert zufriedenstellenden Niveau, wobei sich die Investitionen sowohl auf Neuanlagen als auch auf die Modernisierung und Erneuerung bestehender Anlagen konzentrieren. Die größten Investitionen für neue Zellstoffanlagen und/oder Erweiterungen bestehender Anlagen werden in Südamerika, Australien und Asien erwartet. In Europa und Nordamerika sollte der Schwerpunkt der Investitionen auf der Modernisierung und Erneuerung bestehender Anlagen sowie dem Servicebereich liegen. Darüber hinaus ist mit einem Anstieg der Nachfrage nach Zellstoffsystemen und -verfahren zu rechnen, die erneuerbare Energiequellen (Biomasse, wie etwa Holzabfälle, Gras, Stroh etc.) nutzen, die Energieeffizienz steigern und Emissionen reduzieren.

Im Geschäftsbereich Wasserkraft wird für 2008 eine unverändert gute Entwicklung der Projekttätigkeit auf hohem Niveau erwartet. Insbesondere in Südamerika, China und Indien ist eine Reihe von Neuanlagen in Planung oder in Umsetzung. In Europa und Nordamerika sollten sich die Investitionen aufgrund des Alters der bestehenden Anlagen weiterhin auf Modernisierungen und Sanierungen sowie auch auf Kapazitätserweiterungen konzentrieren. Weiters wird erwartet, dass zur Gewährleistung der Netzstabilität eine unverändert starke Nachfrage nach Pumpspeicherkraftwerken zu verzeichnen sein wird. Aufgrund der zunehmenden weltweiten Anstrengungen im Bereich Klimaschutz und des steigenden Einsatzes erneuerbarer Energieträger sollte sich auch der Markt für Kleinwasserkraftwerke positiv entwickeln.

Im Geschäftsbereich Walz- und Bandbehandlungsanlagen befindet sich die Investitionstätigkeit für Kohlenstoffstahl- und Edelstahlausrüstungen auf solidem Niveau. Im Edelstahlbereich wird eine unverändert hohe Nachfrage in den schnell wachsenden Wirtschaftsräumen wie China und Indien erwartet. In Europa und in den USA sollte sich die Projektaktivität auf die Modernisierung bestehender Anlagen konzentrieren, wobei auch Entscheidungen für die eine oder andere neue Fabrik getroffen werden könnten.

Im Geschäftsbereich Umwelt und Prozess sollte sich die solide Projekttätigkeit bei Schlammentwässerungsanlagen fortsetzen. Eine günstige Entwicklung wird auch bei Entwässerungsanlagen für industrielle Anwendungen in Petrochemie, Mineralienindustrie, Bergbau und Lebensmittelindustrie erwartet. Im Bereich der thermischen Trocknung wird eine sukzessive Steigerung der Projektaktivität erwartet. Vor allem die steigenden Brennstoffpreise sollten zu einem Anstieg der Nachfrage nach Trocknungsanlagen mit Kraft-Wärme-Kopplungen und integrierter Verbrennung führen.

Im Geschäftsbereich Futtermittel und Biomasse sollte sich der Bereich Tierfutter zufriedenstellend entwickeln; die höchste Projektaktivität wird in Osteuropa, Russland sowie Zentral- und Südamerika erwartet. Auch in den Bereichen Fisch- und Haustierfuttererzeugung wird eine positive Entwicklung der Projektaktivität erwartet. Die Investitionstätigkeit bei Holzpelletieranlagen sollte insbesondere in Nordamerika, Nord- und Westeuropa sowie auch in den für dieses Produktsegment "neuen" Regionen Südeuropa und Südamerika erneut ein hohes Niveau erreichen.

Basierend auf dem hohen Auftragsstand von mehr als 3,8 Milliarden Euro per Ende 2007 und der erwartet guten Projektaktivität in allen Geschäftsbereichen rechnet Andritz für 2008 mit einem Gruppenumsatz von rund 3,5 Milliarden Euro und einer Erhöhung des Ergebnisses – zumindest im Gleichschritt mit der Umsatzerhöhung.

Vorgänge von besonderer Bedeutung nach dem Bilanzstichtag

Zwischen dem Bilanzstichtag und der Veröffentlichung dieses Berichts haben die Turbulenzen an den internationalen Finanzmärkten angehalten. Die veröffentlichten Wirtschaftsindikatoren deuteten auf eine globale Wirtschaftsabschwächung hin. Ein deutlicher Wirtschaftsabschwung im Verlauf des Jahres 2008 könnte möglicherweise negative Auswirkungen auf die finanzielle Entwicklung der Andritz-Gruppe haben. Am 18. Februar 2008 hat Andritz die Emission einer öffentlichen Unternehmensanleihe mit einem Volumen von MEUR 150 und einer Laufzeit von sieben Jahren erfolgreich abgeschlossen. Bei einer Stückelung von Nominale TEUR 50 ist die Andritz-Anleihe mit einem jährlichen Fixkupon in Höhe von 5,25% ausgestattet.

Disclaimer

Bestimmte Aussagen in diesem Bericht sind "zukunftsgerichtete Aussagen". Diese Aussagen, welche die Worte "glauben", "beabsichtigen", "erwarten" und Begriffe ähnlicher Bedeutung enthalten, spiegeln die Ansichten und Erwartungen der Geschäftsleitung wider und unterliegen Risiken und Unsicherheiten, welche die tatsächlichen Ergebnisse wesentlich beeinträchtigen können. Der Leser sollte daher nicht unangemessen auf diese zukunftsgerichteten Aussagen vertrauen. Die Gesellschaft ist nicht verpflichtet, das Ergebnis allfälliger Berichtigungen der hierin enthaltenen zukunftsgerichteten Aussagen zu veröffentlichen, außer dies ist nach anwendbarem Recht erforderlich.

B I L A N Z z u m 3 1 . D e z e m b e r 2 0 0 7

(Beträge in EUR)

A K T I V A

• 14.917.827,79 15.920 davon Gewinnvortrag 105.641.910,76 (Vorjahr TEUR 21.682)

										P A S S I V A
					31.1 2.20 06 TEU R					31.1 2.20 06 TEU R
öge gev erm n						A. Eige nka pita l
Imm ater ielle Ver mög enst änd ens geg e						I. Gru ndka pita l		104 .000 .000 ,00		94.5 10
1. Soft e, L izen und and Rec hte war zen ere		--			3.11 2
F irme rt nwe		67.5 77.7 65,7 8			78.8 41	II. geb und Kap italr ückl ene age n		39.6 31.3 73,2 3		49.1 21
			67.5 77.7 65,7 8		81.9 53
Sac han lage n						III. etzli che Gew innr ückl ges age		5.33 8.62 6,77		5.33 9
1. Gru ndst ücke und Bau ten		13.8 66.1 84,7 9			13.8 72
2. tech nisc he A nlag nd M asch inen en u		--			1.40 4	IV. Rüc klag e fü r eig Ant eile ene		28.0 57.8 58,2 3		8.27 1
3. and Anla , Be trieb nd G esch äfts statt ere gen s- u aus ung		--			644
4. gele istet e An zah lung nd A nlag en i n Ba en u u		1.05 1.64 3,00			--	V. Bila winn nzge		117 .710 .122 ,71		144 .332
			14.9 17.8 27,7 9		15.9 20	dav on G ewin rtrag 105 .641 .910 ,76 (Vor jahr TE UR 21.6 82) nvo
Fina nlag nza en									294 .737 .980 ,94	301 .573
1. Ante ile a rbun den en U nter neh n ve men		661 .024 .491 ,08			631 .348
2. Bete iligu nge n		100 .016 ,07			102	B. Rüc kste llung en
W apie re d es A nlag rmö ertp eve gen s		1.40 9.76 0,00			1.41 0	1. Rüc kste llung en f ür A bfer tigu nge n		36.5 75.4 47,0 0		34.0 67
4. stige Aus leihu son nge n		12.0 00.0 00,0 0			10.4 02	2. Rüc kste llung en f ür P ione ens n		4.89 3.99 7,35		4.54 2
			674 .534 .267 ,15		643 .262	3. Steu errü ckst ellun gen		343 .201 ,89		429
				757 .029 .860 ,72	741 .135	4. stige Rüc kste llung son en		134 .462 .933 ,89		136 .994
laufv öge erm n									176 .275 .580 ,13	176 .032
1. Roh -, H ilfs- und Bet rieb ssto ffe		8.76 7.93 5,55			5.02 2	C. Ver bind lichk eite n
2. ferti ge E gnis nd W rzeu se u aren		12.9 59.1 08,3 4			9.37 3	1. Anle ihen		300 .000 .000 ,00		300 .000
3. h nic ht a brec hen bare Lei stun noc gen	831 .112 .944 ,41				646 .195	2. Ver bind lichk eite übe r Kre ditin stitu ten n ge gen		1.21 8.12 6,85		1.17 5
mit e rhal tene n An zah lung chn et en v erre	(610 ,48) .026 .157				(433 ) .341	f Be 3. erha ltene Anz ahlu stell nge n au ung en	799 .503 .984 ,46			621 .236
		221 .086 .786 ,93			212 .854	mit V orrä ten ech nete r An teil verr	(614 ,07) .196 .089			(437 ) .421
4. gele istet e An zah lung en	9.52 3.33 8,78				8.84 0			185 .307 .895 ,39		183 .815
mit e rhal tene n An zah lung chn et en v erre	(4.1 9) 69.9 31,5				(4.0 80)	feru 4. Ver bind lichk eite s Lie n au nge n
		5.35 3.40 7,19			4.76 0	und Lei stun gen		58.6 56.3 34,0 4		59.9 11
			248 .167 .238 ,01		232 .009	übe 5. Ver bind lichk eite rbun den n ge gen r ve en
mög änd Ford und stige Ver enst erun gen son ens geg e						Unte rneh men		175 .026 ,87 .545		154 .146
1. Ford Lie feru d Le istun erun gen aus nge n un gen		24.9 10.0 86,7 2			18.0 46	6. stige Ver bind lichk eite son n		15.8 22.5 30,8 8		14.2 00
2. Ford enü ber verb und n Un ehm tern erun gen geg ene en		27.7 45.6 62,5 6			25.2 86	dav us S rn 1 74.4 28,0 0 (V orja hr T EUR 256 ) teue on a
3. stige For deru d Ve rmö stän de son nge n un gen sge gen		42.4 98.1 51,5 3			35.3 58	dav on i m R ahm en d ozia len S iche rhei t 2.1 85.2 49,8 3 (V er s	orja hr T EUR 1.8 25)
			95.1 53.9 00,8 1		78.6 90				736 .549 .914 ,03	713 .247
Wer iere und Ant eile tpap
1. eige ne A ntei le		28.0 57.8 58,2 3			8.27 1	D. Rec hnu bgre post ngsa nzu ngs en			2.36 9.71 5,00	2.80 1
2. stige We pier d An teile rtpa son e un		34.8 21.7 71,2 3	62.8 79.6 6		12.0 95 20.3 66
Ka best and, Gut hab en b ei K redi tinst itute ssen n			29,4 46.2 84.8 42,7 4		121 .031
				452 .485 .611 ,02	452 .096
hnu bgre post ngsa nzu ngs en				417 .718 ,36	422
				1.20 9.93 3.19 0,10	1.19 3.65 3				1.20 9.93 3.19 0,10	1.19 3.65 3

						31.1 2.20 06 TEU R						31.1 2.20 06 TEU R
A.	Anla öge erm n						A. Eige nka	pita l
	gev I. Imm ater ielle Ver enst änd						Gru I.	ndka pita l		104 .000 .000 ,00		94.5 10
	mög ens geg e 1. Soft izen und and Rec hte					3.11 2
	e, L war zen ere		--
	F irme 2. rt nwe		67.5 77.7 65,7 8			78.8 41	II. geb	und Kap italr ückl ene age n		39.6 31.3 73,2 3		49.1 21
				67.5 77.7 65,7 8		81.9 53
	II. Sac han lage n						III. ges	etzli che Gew innr ückl age		5.33 8.62 6,77		5.33 9
	1. Gru ndst ücke und Bau ten		13.8 66.1 84,7 9			13.8 72
	2. tech nisc he A nlag nd M asch inen en u		--			1.40 4	IV. Rüc	klag e fü r eig Ant eile ene		28.0 57.8 58,2 3		8.27 1
	3. and Anla , Be trieb nd G esch äfts statt ere gen s- u aus ung		--			644
	4. gele istet e An zah lung nd A nlag en i n Ba en u u		1.05 1.64 3,00			--	V. Bila	winn nzge		117 .710 .122 ,71		144 .332
				14.9 17.8 27,7 9		15.9 20	dav	on G ewin rtrag 105 .641 .910 ,76 (Vor jahr TE UR 21.6 nvo	82)
	III. Fina nlag nza en										294 .737 .980 ,94	301 .573
	1. Ante ile a rbun den en U nter neh n ve men		661 .024 .491 ,08			631 .348
	2. Bete iligu nge n		100 .016 ,07			102	B. Rüc kste	llung en
	W ertp apie re d es A nlag rmö 3. eve gen s		1.40 9.76 0,00			1.41 0	1.	en f bfer Rüc kste llung ür A tigu nge n		36.5 75.4 47,0 0		34.0 67
	4. stige Aus leihu son nge n		12.0 00.0 00,0 0			10.4 02	2.	en f Rüc kste llung ür P ione ens n		4.89 3.99 7,35		4.54 2
				674 .534 .267 ,15		643 .262	3.	Steu errü ckst ellun gen		343 .201 ,89		429
					757 .029 .860 ,72	741 .135	4.	Rüc stige kste llung son en		134 .462 .933 ,89		136 .994
B.	laufv öge Um erm n										176 .275 .580 ,13	176 .032
	räte I. Vor
	1. Roh ilfs- und Bet rieb ffe ssto		8.76 7.93			5.02 2	C. Ver bind	lichk eite
	-, H		5,55					n
	2. ferti ge E gnis nd W rzeu se u aren		12.9 59.1 08,3 4			9.37 3	1.	Anle ihen		300 .000 .000 ,00		300 .000
	3. h nic ht a brec hen bare Lei stun noc gen	831 .112 .944 ,41				646 .195	2.	Ver bind lichk eite übe r Kre ditin stitu ten n ge gen		1.21 8.12 6,85		1.17 5
	mit e rhal n An zah lung chn tene et en v erre	(610 .026 .157 ,48)				(433 .341 )	3.	erha ltene Anz ahlu f Be stell nge n au ung en	799 .503 .984 ,46			621 .236
			221 .086 .786 ,93			212 .854		mit V orrä ech r An teil ten nete verr	(614 .196 .089 ,07)			(437 .421 )
	4. gele istet e An zah lung en	9.52 3.33 8,78				8.84 0				185 .307 .895 ,39		183 .815
	mit e rhal n An zah lung chn tene et en v erre	(4.1 69.9 31,5 9)				(4.0 80)	4.	Ver bind lichk eite s Lie feru n au nge n
			5.35 3.40 7,19			4.76 0		und Lei stun gen		58.6 56.3 34,0 4		59.9 11
				248 .167 .238 ,01		232 .009	5.	Ver bind lichk eite übe rbun den n ge gen r ve en
	II. Ford und stige Ver mög enst änd erun gen son ens geg e							Unte rneh men		175 .545 .026 ,87		154 .146
	1. Ford Lie feru d Le istun erun gen aus nge n un gen		24.9 10.0 86,7 2			18.0 46	6.	stige Ver bind lichk eite son n		15.8 22.5 30,8 8		14.2 00
	2. Ford enü ber verb und n Un tern ehm erun gen geg ene en		27.7 45.6 62,5 6			25.2 86		dav us S teue rn 1 74.4 28,0 0 (V orja hr T EUR 256 ) on a
	3. stige For deru d Ve rmö stän de son nge n un gen sge gen		42.4 98.1 51,5 3			35.3 58		dav on i m R ahm en d ozia len S iche rhei t 2.1 85.2 49,8 er s	3 (V orja hr T EUR 1.8 25)
				95.1 53.9 00,8 1		78.6 90					736 .549 .914 ,03	713 .247
	III. Wer tpap iere und Ant eile
	1. eige ne A ntei le		28.0 57.8 58,2 3			8.27 1	D. Rec hnu	bgre post ngsa nzu ngs en			2.36 9.71 5,00	2.80 1
	2. stige We rtpa pier d An teile son e un		34.8 21.7 71,2 3			12.0 95
				62.8 79.6 29,4 6		20.3 66
	Ka best and, Gut hab en b ei K redi tinst itute IV. ssen n			46.2 84.8 42,7 4		121 .031
					452 .485 .611 ,02	452 .096
C.	Rec hnu bgre post ngsa nzu ngs en				417 .718 ,36	422
					1.20 9.93 3.19 0,10	1.19 3.65 3					1.20 9.93 3.19 0,10	1.19 3.65 3

Eventualverbindlichkeiten

701.416.751,36 804.882

GEWINN- UND VERLUSTRECHNUNG für das Geschäftsjahr vom 1. Jänner bis zum 31. Dezember 2007

(Beträge in EUR)

				2006 TEUR
1. 2.	Umsatzerlöse Bestandsveränderungen		455.231.455,23	500.900
	a) Veränderung des Bestands an fertigen Erzeugnissen sowie an noch nicht abrechenbaren Leistungen b) Veränderungen der Auftragsrückstellungen	188.503.736,32 1.685.212,92	190.188.949,24	94.831 (9.742) 85.089
3. 4.	andere aktivierte Eigenleistungen sonstige betriebliche Erträge a) Erträge aus dem Abgang vom Anlagevermögen		206.310,00	41
	mit Ausnahme der Finanzanlagen b) übrige	-- 17.628.669,77	17.628.669,77	31 15.623 15.654
5.	Aufwendungen für Material und sonstige bezogene Herstellungsleistungen
	a) Materialaufwand b) Aufwendungen für bezogene Leistungen	(389.151.712,60) (30.228.205,71)	(419.379.918,31)	(332.483) (24.162) (356.645)
6.	Personalaufwand a) Löhne b) Gehälter	(20.314.296,21) (73.084.575,84)		(17.498) (74.778)
	c) Aufwendungen für Abfertigungen und Leistungen an betriebliche Mitarbeitervorsorgekassen d) Aufwendungen für Altersversorgung e) Aufwendungen für gesetzlich vorgeschriebene Sozialabgaben	(5.614.741,75) (1.971.850,84)		(3.003) (1.225)
	sowie vom Entgelt abhängige Abgaben und Pflichtbeiträge f) sonstige Sozialaufwendungen	(21.483.024,15) (252.067,51)		(19.735) (218)
7.	Abschreibungen auf immaterielle Gegenstände des Anlagevermögens und Sachanlagen		(122.720.556,30) (14.623.973,95)	(116.457) (15.846)
8.	sonstige betriebliche Aufwendungen a) Steuern, soweit sie nicht unter Z 18 fallen b) übrige	(271.557,32) (124.626.485,29)		(178) (103.458)
			(124.898.042,61)	(103.636)
9.	Zwischensumme aus Z 1 bis 8 (Betriebserfolg)		(18.367.106,93)	9.100
	10. Erträge aus Beteiligungen davon aus verbundenen Unternehmen 51.441.847,04 (Vorjahr TEUR 32.618) 11. Erträge aus anderen Wertpapieren und Ausleihungen		51.441.894,73	32.618
	des Finanzanlagevermögens davon aus verbundenen Unternehmen 0,00 (Vorjahr TEUR 927)		1.757.856,00	1.229
	12. sonstige Zinsen und ähnliche Erträge davon aus verbundenen Unternehmen 1.010.420,51 (Vorjahr TEUR 1.306)		9.140.213,58	9.435
	13. Erträge aus dem Abgang von und der Zuschreibung zu Finanzanlagen und Wertpapieren des Umlaufvermögens		10.207.679,36	85.814
	14. Aufwendungen aus Finanzanlagen und aus Wertpapieren des Umlaufvermögens davon aus Abschreibungen -3.846.362,67 (Vorjahr TEUR -50) davon Aufwendungen aus verbundenen Unternehmen -3.655.850,56 (Vorjahr TEUR -50)		(4.010.802,27)	(87)
	15. Zinsen und ähnliche Aufwendungen davon betreffend verbundene Unternehmen -259.448,88 (Vorjahr TEUR -1.036)		(18.911.211,85)	(15.773)
	16. Zwischensumme aus Z 10 bis 15 (Finanzerfolg)		49.625.629,55	113.236
	17. Ergebnis der gewöhnlichen Geschäftstätigkeit		31.258.522,62	122.336
	18. Steuern vom Einkommen und vom Ertrag davon Weiterbelastung vom Gruppenträger 577.628,00 (Vorjahr TEUR 0)		596.907,64	(5.358)
	19. Jahresüberschuss		31.855.430,26	116.978
	20. Auflösung Rücklage für eigene Anteile 21. Zuweisung Rücklage für eigene Anteile		-- (19.787.218,31)	5.672 --
	22. Gewinnvortrag aus dem Vorjahr		105.641.910,76	21.682
	23. Bilanzgewinn		117.710.122,71	144.332

Jahresabschluss zum 31. Dezember 2007

A N H A N G

I. Bilanzierungs- und Bewertungsmethoden

Der Jahresabschluss zum 31. Dezember 2007 wurde unter Beachtung der Grundsätze ordnungsgemäßer Buchführung sowie unter Beachtung der Generalnorm, ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage zu vermitteln, aufgestellt. Für die Gewinn- und Verlustrechnung wird das Gesamtkostenverfahren angewendet.

Die immateriellen Vermögensgegenstände und das Sachanlagevermögen werden zu Anschaffungs- bzw. Herstellungskosten abzüglich planmäßiger linearer Abschreibungen bewertet. In Anlehnung an die steuerlichen Bestimmungen wird für Zugänge des ersten Halbjahrs eine volle Jahresabschreibung, für Zugänge des zweiten Halbjahrs die halbe Jahresabschreibung vorgenommen. Bei voraussichtlich dauernder Wertminderung werden außerplanmäßige Abschreibungen vorgenommen. Geringwertige Wirtschaftsgüter werden im Jahr des Zugangs voll abgeschrieben und als Abgang behandelt. Für die Abschreibung des Firmenwertes wird eine Nutzungsdauer von 14 Jahren zugrundegelegt, die Nachhaltigkeit ist durch die Marktpositionierung und die Zukunftsperspektiven der Andritz AG gegeben. Die Sätze der Normalabschreibungen entsprechen den unternehmensrechtlichen Vorschriften. Sie betragen für das übrige immaterielle Anlagevermögen zwischen 20 % und 25 %, für Gebäude und sonstige Baulichkeiten zwischen 2 % und 14,29 %, für technische Anlagen und Maschinen, andere Anlagen und Betriebs- und Geschäftsausstattung zwischen 10 % und 33,3 %.

Beteiligungen werden mit den Anschaffungskosten oder im Falle einer dauernden Wertminderung mit den niedrigeren Ertragswerten bewertet. Ausleihungen und Wertpapiere des Anlagevermögens werden zu den Anschaffungskosten oder den niedrigeren Kurswerten bewertet.

Die Vorräte und Forderungen werden unter Beachtung des strengen Niederstwertprinzips bewertet.

Aufträge werden mit ihren Herstellungskosten abzüglich allfälliger Vorsorgen für drohende Verluste bewertet. Gewinnrealisierungen erfolgen bei Endabrechnung der Kundenaufträge, für das Gewährleistungsrisiko werden Einzelvorsorgen gebildet.

Der Bilanzansatz der noch nicht abrechenbaren Leistungen wird mit erhaltenen Anzahlungen, soweit diese bereits angearbeitete Aufträge betreffen, offen saldiert.

Wertpapiere und eigene Anteile werden zu den Anschaffungskosten oder den niedrigeren Kurswerten bewertet.

Die Verpflichtungen aus vertraglichen Pensionszusagen und laufenden Pensionen, aus Abfertigungen sowie die kollektivvertraglichen Jubiläumsgelder sind nach versicherungsmathematischen Grundsätzen passiviert, wobei die Bewertungsvorschriften von IAS 19 angewandt wurden. Die Rückstellungen berücksichtigen die nach den Grundsätzen kaufmännischer Beurteilung erkennbaren Risiken und Verpflichtungen.

Anleihen werden mit ihren Rückzahlungsbeträgen ausgewiesen.

Fremdwährungsforderungen werden mit dem Entstehungskurs oder mit dem für die Bilanzierung maßgeblichen, niedrigeren Stichtagskurs bewertet. Fremdwährungsverbindlichkeiten werden mit dem Entstehungskurs oder mit dem für die Bilanzierung maßgeblichen, höheren Stichtagskurs bewertet.

Die Ansätze für die Vermögenswerte und Schulden entsprechen im Übrigen den bereits in den Vorjahren angewandten Grundsätzen.

Andritz AG Graz

II. Erläuterungen zur Bilanz

AKTIVA

Anlagevermögen

Entwicklung der Anschaffungskosten

(Beträge in EUR)

		Stand am	Zugänge	Abgänge	Stand am
		1.1.2007			31.12.2007
I.	Immaterielle Vermögensgegenstände
	1. Software, Lizenzen und andere Rechte	10.023.449,00	0,00	10.023.449,00	0,00
	2. Firmenwert	168.193.550,34	0,00	0,00	168.193.550,34
		178.216.999,34	0,00	10.023.449,00	168.193.550,34
II.	Sachanlagen
	1. Grundstücke und Bauten	41.113.573,84	914.471,00	0,00	42.028.044,84
	2. technische Anlagen und Maschinen	14.603.889,39	0,00	14.603.889,39	0,00
	3. andere Anlagen, Betriebs- und Geschäfts
	ausstattung*)	10.424.170,47	2.440.877,74	12.865.048,21	0,00
	4. geleistete Anzahlungen und Anlagen in Bau	0,00	1.051.643,00	0,00	1.051.643,00
		66.141.633,70	4.406.991,74	27.468.937,60	43.079.687,84
III.	Finanzanlagen
	1. Anteile an verbundenen Unternehmen	656.683.317,61	38.526.574,04	15.194.636,00	680.015.255,65
	2. Beteiligungen	151.946,19	0,00	1.816,82	150.129,37
	3. Wertpapiere des Anlagevermögens	1.584.190,00	0,00	0,00	1.584.190,00
	4. Sonstige Ausleihungen	10.759.992,65	1.598.110,00	358.102,65	12.000.000,00
		669.179.446,45	40.124.684,04	15.554.555,47	693.749.575,02
	Summe	913.538.079,49	44.531.675,78	53.046.942,07	905.022.813,20

*) Im Zugang und Abgang sind geringwertige Wirtschaftsgüter in Höhe von 2.440.877,74 EUR enthalten.

Entwicklung der kumulierten Abschreibungen

(Beträge in EUR)

		Stand am	Jahres-	Zuschreibung	Abgänge	Stand am
		1.1.2007	abschreibung			31.12.2007
I.	Immaterielle Vermögensgegenstände
	1. Software, Lizenzen und andere Rechte	6.911.269,31	0,00	0,00	6.911.269,31	0,00
	2. Firmenwert	89.352.823,60	11.262.960,96	0,00	0,00	100.615.784,56
		96.264.092,91	11.262.960,96	0,00	6.911.269,31	100.615.784,56
II.	Sachanlagen
	1. Grundstücke und Bauten	27.241.724,80	920.135,25	0,00	0,00	28.161.860,05
	2. technische Anlagen und Maschinen	13.199.685,69	0,00	0,00	13.199.685,69	0,00
	3. andere Anlagen, Betriebs- und Geschäfts
	ausstattung*)	9.780.152,90	2.440.877,74	0,00	12.221.030,64	0,00
		50.221.563,39	3.361.012,99	0,00	25.420.716,33	28.161.860,05
III.	Finanzanlagen
	1. Anteile an verbundenen Unternehmen	25.334.914,01	3.655.850,56	10.000.000,00	0,00	18.990.764,57
	2. Beteiligungen	50.113,30	0,00	0,00	0,00	50.113,30
	3. Wertpapiere des Anlagevermögens	174.430,00	0,00	0,00	0,00	174.430,00
	4. Sonstige Ausleihungen	358.102,58	0,00	0,00	358.102,58	0,00
		25.917.559,89	3.655.850,56	10.000.000,00	358.102,58	19.215.307,87
	Summe	172.403.216,19	18.279.824,51	10.000.000,00	32.690.088,22	147.992.952,48

*) In der Jahresabschreibung und in den Abgängen sind geringwertige Wirtschaftsgüter in Höhe von 2.440.877,74 EUR enthalten.

Buchwerte zum 31.12.2007

(Beträge in EUR)

			Anschaffungs-	kumulierte	Buchwerte
			werte	Abschreibungen
I.		Immaterielle Vermögensgegenstände
	1.	Software, Lizenzen und andere Rechte	0,00	0,00	0,00
	2. Firmenwert		168.193.550,34	100.615.784,56	67.577.765,78
			168.193.550,34	100.615.784,56	67.577.765,78
II.	Sachanlagen
	1.	Grundstücke und Bauten	42.028.044,84	28.161.860,05	13.866.184,79
	2.	technische Anlagen und Maschinen	0,00	0,00	0,00
	3.	andere Anlagen, Betriebs- und Geschäfts
	ausstattung		0,00	0,00	0,00
	4.	geleistete Anzahlungen und Anlagen in Bau	1.051.643,00	0,00	1.051.643,00
			43.079.687,84	28.161.860,05	14.917.827,79
III.	Finanzanlagen
	1.	Anteile an verbundenen Unternehmen	680.015.255,65	18.990.764,57	661.024.491,08
	2. Beteiligungen		150.129,37	50.113,30	100.016,07
	3.	Wertpapiere des Anlagevermögens	1.584.190,00	174.430,00	1.409.760,00
	4.	Sonstige Ausleihungen	12.000.000,00	0,00	12.000.000,00
			693.749.575,02	19.215.307,87	674.534.267,15
	Summe		905.022.813,20	147.992.952,48	757.029.860,72

Andritz AG Graz

Immaterielle Vermögensgegenstände

Der aus der Verschmelzung mit der Andritz Internationale Technologie AG stammende Firmenwert von 168 MEUR wird plangemäß über 14 Jahre verteilt abgeschrieben.

Sachanlagen

Der in den Grundstücken enthaltene Grundwert beträgt 1.517.506 EUR (Vorjahr: 1.517.506 EUR). Im Geschäftsjahr 2007 wurden sämtliche Sachanlagen und immaterielle Vermögensgegenstände mit Ausnahme des Firmenwerts und der Grundstücke und Bauten zum Buchwert an die Andritz Technology and Asset Management GmbH veräußert.

Finanzanlagen

Die Zugänge unter den Anteilen an verbundenen Unternehmen betreffen in 2007 getätigte Akquisitionen sowie Kapitalmaßnahmen bei bestehenden Tochtergesellschaften.

In den sonstigen Ausleihungen haben 1.440.000 EUR (Vorjahr: 0 EUR) eine Restlaufzeit von kürzer als einem Jahr.

Die aus steuerrechtlichen Gründen unterlassene Zuschreibung bei den Wertpapieren des Anlagevermögens beträgt 125.080 EUR (Vorjahr: 174.430 EUR).

Roh-, Hilfs- und Betriebsstoffe

Die Bewertung erfolgte zu durchschnittlichen Einstandspreisen oder den niedrigeren Wiederbeschaffungspreisen des Bilanzstichtags. Für nicht- oder schwergängige Materialien wurden angemessene Abwertungen vorgenommen.

fertige Erzeugnisse und Waren

Die fertigen Erzeugnisse wurden zu Herstellungskosten angesetzt. Wertberichtigungen wurden nach dem Grad der Verwertbarkeit bzw. dem kaufmännischen Vorsichtsgebot entsprechend in angemessener Höhe gebildet.

6

noch nicht abrechenbare Leistungen

Der Wertansatz bei diesen Leistungen erfolgte zu Herstellungskosten, wobei auch bei langfristiger Fertigung keine Zuschläge für Verwaltungs- und Vertriebskosten angesetzt werden. Wertberichtigungen wurden für aus Kundenaufträgen erwartete Verluste sowie für schwere Verwertbarkeit bei Vorratsaufträgen gebildet. Noch nicht verrechnete Anzahlungen von Kunden wurden, soweit die Aufträge bereits angearbeitet waren, in dieser Bilanzposition offen saldiert.

Forderungen und sonstige Vermögensgegenstände

(Beträge in TEUR)

	Restlaufzeit	Restlaufzeit	Bilanz
	bis 1 Jahr	> 1 Jahr	wert
	(Vorjahr)	(Vorjahr)	(Vorjahr)
Forderungen aus Lieferungen und Leistungen	24.908	2	24.910
	(17.829)	(217)	(18.046)
Forderungen gegenüber verbundenen Unternehmen	27.746	0	27.746
	(25.286)	(0)	(25.286)
Forderungen gegenüber Unternehmen, mit denen	0	0	0
ein Beteiligungsverhältnis besteht	(0)	(0)	(0)
sonstige Forderungen und Vermögensgegenstände	14.079	28.419	42.498
	(6.939)	(28.419)	(35.358)
	66.733	28.421	95.154
	(50.054)	(28.636)	(78.690)

Unter Beachtung des strengen Niederstwertprinzips wurden bei den Forderungen und sonstigen Vermögensgegenständen erkennbare Risiken durch Einzelwertberichtigungen berücksichtigt. Auslandsforderungen sind in den meisten Fällen durch Exportgarantien besichert. Unverzinsliche langfristige Forderungen aus Lieferungen und Leistungen wurden abgezinst.

In den Forderungen aus Lieferungen und Leistungen sind Erträge aus Zinsen in Höhe von 0 EUR (Vorjahr: 259.394 EUR) ausgewiesen.

In den Forderungen gegen verbundene Unternehmen sind 7.638.126 EUR (Vorjahr: 18.877.201 EUR) aus Lieferungen und Leistungen enthalten.

In den sonstigen Forderungen sind keine Erträge enthalten, welche erst nach dem Abschlussstichtag zahlungswirksam werden.

Andritz AG Graz

In den sonstigen Forderungen ist insbesondere eine Restforderung an die Bank Austria Creditanstalt AG für die Abdeckung bereits rückgestellter Verluste der Jahre 1983 und 1984 enthalten.

eigene Anteile

Der Vorstand hat auf Basis einer Ermächtigung der Hauptversammlung und mit Zustimmung des Aufsichtsrates Aktienrückkauf- und -wiederverkaufsprogramme beschlossen, welche den Erwerb von bis zu 5.200.000 Stückaktien im Zeitraum vom 1. Oktober 2005 bis 31. März 2007 bzw. vom 1. April 2007 bis 30. September 2008 ermöglichen. Zum 31. Dezember 2007 befinden sich 887.502 Stückaktien in Besitz der Andritz AG, dies entspricht einem Anteil am Grundkapital in Höhe von 1,71 % bzw. 1.775.004 EUR. Es ist vorgesehen, diese Aktien für die Bedienung der Optionen im Rahmen des Aktienbeteiligungsprogrammes für Führungskräfte zu verwenden.

Datum des Erwerbs	Anzahl der erworbenen	Anteil am Grundkapital	Anteil am Grundkapital	Gewichteter Durchschnittspreis	Wert der rückgekauften
	Stückaktien	in %	in EUR	je Aktie	Aktien
19.Nov.07	30.000	0,06%	60.000,00	36,10	1.083.096,00
20.Nov.07	5.000	0,01%	10.000,00	34,44	172.185,50
21.Nov.07	1.500	0,00%	3.000,00	35,38	53.070,00
22.Nov.07	20.000	0,04%	40.000,00	35,59	711.792,00
27.Nov.07	50.000	0,10%	100.000,00	37,38	1.869.000,00
29.Nov.07	40.000	0,08%	80.000,00	40,10	1.604.000,00
30.Nov.07	47.516	0,09%	95.032,00	41,21	1.958.305,42
03.Dez.07	70.000	0,13%	140.000,00	41,69	2.918.391,00
05.Dez.07	26.265	0,05%	52.530,00	40,99	1.076.610,23
06.Dez.07	75.000	0,14%	150.000,00	41,78	3.133.567,50
10.Dez.07	20.000	0,04%	40.000,00	42,45	849.016,00
11.Dez.07	55.000	0,11%	110.000,00	42,76	2.351.860,50
12.Dez.07	11.000	0,02%	22.000,00	42,45	466.910,40
13.Dez.07	52.369	0,10%	104.738,00	41,34	2.164.882,09
14.Dez.07	14.000	0,03%	28.000,00	39,11	547.608,60
17.Dez.07	2.249	0,00%	4.498,00	38,45	86.474,05
27.Dez.07	1.195	0,00%	2.390,00	39,83	47.599,96
SUMME	521.094	1,00%	1.042.188,00	40,48	21.094.369,25

in 2007 erworbene Stückaktien:

In 2007 wurden von berechtigten Führungskräften insgesamt Optionen zum Erwerb von 62.500 Stückaktien zu einem Preis von 9,38 EUR je Aktie ausgenutzt; die Bedienung erfolgte aus vorhandenen Beständen eigener Anteile; der auf diese Aktien entfallende Betrag des Grundkapitals ist 125.000 EUR, der Anteil am Grundkapital beträgt 0,12 %. Die aus den Verkäufen erzielten Erlöse wurden zur kurzfristigen Liquiditätssteuerung verwendet.

Weiters wurden im Rahmen einer Mitarbeiterbeteiligungsaktion 6.928 Stückaktien an Mitarbeiter der Andritz AG abgegeben.

Sämtliche Angaben wurden entsprechend dem in 2007 durchgeführten Aktiensplit (1 : 4) angepasst.

Andritz AG Graz

PASSIVA

Grundkapital

Am 24.4.2007 erfolgte nach einer Kapitalerhöhung aus Gesellschaftsmitteln ein Aktiensplit im Verhältnis 1 : 4.

Das Grundkapital der Gesellschaft beträgt 104.000.000 EUR (Vorjahr: 94.510.000 EUR). Es ist in 52.000.000 Stückaktien ohne Nennwert zerlegt.

Rücklage für eigene Anteile

Die Rücklage für eigene Anteile zum 31. Dezember 2007 beträgt 28.057.858 EUR; ihr stehen auf der Aktivseite ausgewiesene eigene Anteile in gleicher Höhe gegenüber.

Rückstellungen für Abfertigungen, Rückstellungen für Pensionen

Die Verpflichtungen aus den theoretischen Abfertigungsansprüchen der Dienstnehmer sowie die Rückstellungen für Pensionen wurden zum 31.12.2007 nach versicherungsmathematischen Grundsätzen unter Verwendung eines Zinssatzes von 4,5 % sowie eines Gehaltstrends von 3,0 % (IAS 19) berechnet. Die Korridormethode wurde nicht angewendet. Das rechnungsmäßige Pensionsalter entspricht wie im Vorjahr dem frühest möglichen Anfallsalter für die vorzeitige Alterspension gemäß der im Budgetbegleitgesetz 2003 verankerten Pensionsreform. Für die in 1999 an eine Pensionskasse übertragenen Pensionsansprüche wurde ein Gutachten nach den gleichen Grundsätzen erstellt. Zum 31. Dezember 2007 lag das Deckungskapital der Pensionsversicherung auf dem Niveau der entsprechenden Pensionsverpflichtungen.

Andritz AG Graz

sonstige Rückstellungen

	31.12.2007
	in MEUR
Auftragsbezogene Vorsorgen für
- fehlende Selbstkosten	29,9
- Gewährleistungen und Mehrkosten	50,6
Personalaufwendungen	37,7

Zu erwartende Auftragsverluste werden in Höhe der Unterschiedsbeträge zwischen den voraussichtlichen Gesamtselbstkosten und den Erlösen ermittelt und passiviert.

Die Rückstellung für unverbrauchte Urlaube ist mit 15,0 MEUR (Vorjahr: 13,0 MEUR) angesetzt.

Die Rückstellung für Jubiläumsgelder wurde nach versicherungsmathematischen Grundsätzen (IAS 19) berechnet.

Für zu erwartende Aufwendungen aus dem Aktienoptionenprogramm ist eine Rückstellung in Höhe von 0,3 MEUR (Vorjahr: 6,3 MEUR) passiviert; die Berechnung erfolgte auf Basis der Differenz des Buchwertes je Aktie aus dem Bestand der eigenen Anteile bzw. Börsekurs zum 31.12.2007 für noch zu erwerbende Anteile und dem Bezugspreis je Aktie entsprechend den Bedingungen des Optionenprogramms.

Verbindlichkeiten

(Beträge in TEUR)

	Restlaufzeit bis 1 Jahr	Restlaufzeit 1 bis 5 Jahre	Restlaufzeit > als 5 Jahre	Bilanz- wert	davon Hypothekar schulden
	(Vorjahr)	(Vorjahr)	(Vorjahr)	(Vorjahr)	(Vorjahr)
Anleihen	100.000	0	200.000	300.000	0
	(0)	(100.000)	(200.000)	(300.000)	(0)
Verbindlichkeiten gegenüber Kreditinstituten	239	979	0	1.218	0
	(0)	(1.175)	(0)	(1.175)	(0)
erhaltene Anzahlungen auf Bestellungen	148.536	36.772	0	185.308	0
	(118.348)	(65.467)	(0)	(183.815)	(0)
Verbindlichkeiten aus Lieferungen und
Leistungen	57.229	1.427	0	58.656	0
	(58.307)	(1.604)	(0)	(59.911)	(0)
Verbindlichkeiten gegenüber verbundenen
Unternehmen	162.552	12.993	0	175.545	0
	(84.236)	(69.910)	(0)	(154.146)	(0)
sonstige Verbindlichkeiten	14.592	1.176	55	15.823	183
	(12.986)	(1.030)	(184)	(14.200)	(234)
	483.148	53.347	200.055	736.550	183
	(273.877)	(239.186)	(200.184)	(713.247)	(234)

Am 4. Juni 2002 wurde von der Gesellschaft eine Anleihe in Höhe von 100 MEUR begeben. Die Laufzeit der Anleihe beträgt 6 Jahre, die Verzinsung liegt bei 6 % p.a. Am 19. Juni 2006 wurde eine weitere öffentliche Anleihe am Kapitalmarkt mit einer Laufzeit von 7 Jahren platziert; das Volumen beträgt 200 MEUR, die Kuponverzinsung wurde mit 4,5 % p.a. fixiert. Über das gesamte Volumen und die gesamte Laufzeit beider Anleihen wurden Zinsswaps abgeschlossen, mit denen die fixen Zinszahlungen der Gesellschaft gegen variable Zinszahlungen auf Basis 1-Monats-EURIBOR getauscht wurden.

In den Verbindlichkeiten gegenüber verbundenen Unternehmen sind 10.526.894 EUR (Vorjahr: 15.646.465 EUR) aus Lieferungen und Leistungen und 161.970.332 EUR (Vorjahr: 135.698.496 EUR) aus erhaltenen Anzahlungen enthalten.

In den sonstigen Verbindlichkeiten sind Aufwendungen in Höhe von 5.131.092 EUR (Vorjahr: 7.258.016 EUR) enthalten, welche erst nach dem Abschlussstichtag zahlungswirksam werden.

Andritz AG Graz

Eventualverbindlichkeiten

In den Eventualverbindlichkeiten sind Haftungen für verbundene Unternehmen in Höhe von 580.146 TEUR (Vorjahr: 660.374 TEUR) enthalten.

Die Eventualverbindlichkeiten entfallen zur Gänze auf übernommene Garantien.

Verpflichtungen aus der Nutzung von in der Bilanz nicht ausgewiesenen Sachanlagen

Diese betragen für die folgenden fünf Geschäftsjahre 30,0 MEUR, davon für 2008 7,0 MEUR und betreffen zur Gänze verbundene Unternehmen.

sonstige finanzielle Verpflichtungen

Zum 31. Dezember 2007 bestand ein Bestellobligo für Investitionsgüter in Höhe von 6,6 MEUR.

III. Erläuterungen zur Gewinn- und Verlustrechnung

Umsatzerlöse

(Beträge in TEUR)

	Inland	Export	2007 Gesamt	2006 Gesamt
Papier und Zellstoff	7.076	174.182	181.258	325.697
Walz- und Bandbehandlungsanlagen	8.981	121.123	130.104	95.888
Hydraulische Maschinen	13.776	51.968	65.744	39.329
Umwelt- und Prozesstechnologien	2.312	50.794	53.106	20.747
Sonstige	5.779	19.395	25.174	19.382
Nebenerlöse, Skonti	(155)	0	(155)	(143)
	37.769	417.462	455.231	500.900

Umsatzerlöse nach Märkten

		in TEUR
	2007	2006
Inland	37.769	19.771
Europäische Union	144.677	151.597
Übriges Europa	89.858	44.318
Nordamerika	16.530	7.398
Asien	133.696	266.265
Übrige Welt	32.701	11.551
	455.231	500.900

Der Exportanteil bei den Umsatzerlösen beträgt 92 %.

übrige sonstige betriebliche Erträge

In den übrigen sonstigen betrieblichen Erträgen sind neben diversen Mieterlösen (1.183 TEUR) und Erträgen aus Wechselkursdifferenzen (9.142 TEUR) insbesondere Verrechnungen an Tochtergesellschaften (3.653 TEUR) enthalten.

Aufwendungen für Abfertigungen und Leistungen an betriebliche Mitarbeitervorsorgekassen

In den Aufwendungen für Abfertigungen und Leistungen an betriebliche Mitarbeitervorsorgekassen sind Aufwendungen für Abfertigungen in Höhe von 5.288 TEUR enthalten. Der restliche Betrag von 327 TEUR betrifft Leistungen an betriebliche Mitarbeitervorsorgekassen.

übrige betriebliche Aufwendungen

Die übrigen betrieblichen Aufwendungen setzen sich im Wesentlichen aus auftragsbezogenen Kosten (71.891 TEUR), Wechselkursdifferenzen (7.743 TEUR) sowie aus Beratungs- (3.021 TEUR), Reise- (9.532 TEUR), Instandhaltungs- (6.868 TEUR) und sonstigen allgemeinen Verwaltungskosten zusammen.

Andritz AG Graz

Finanzergebnis

Die Erträge aus Beteiligungen von 51.442 TEUR (Vorjahr: 32.618 TEUR) stammen aus Gewinnausschüttungen von Tochterunternehmen. Die Erträge aus dem Abgang von Finanzanlagen in 2006 resultierten im Wesentlichen aus einem konzerninternen Verkauf von Anteilen der Andritz GmbH.

Steuern vom Einkommen und vom Ertrag

Die Steuern vom Einkommen und vom Ertrag betreffen insbesondere Ertragssteuern der Geschäftsjahre 2006 und 2007 sowie ausländische Quellensteuern. Seitens der Andritz AG als Gruppenträger erfolgten im Geschäftsjahr Weiterbelastungen an Gruppenmitglieder in Höhe von 578 TEUR.

	2007 TEUR	2006 TEUR
Körperschaftsteuer
2006	(506)	5.566
Vorjahre	0	(814)
Weiterbelastungen an Gruppenmitglieder	(578)	0
ausländische Quellensteuer	487	606
	(597)	5.358

Die gemäß § 198 Abs. 10 UGB aktivierbare Steuerabgrenzung hätte zum 31. Dezember 2007 7,9 MEUR betragen.

IV. Sonstiges

Beteiligungen, verbundene Unternehmen

(Beträge in TEUR)

	Sitz	Beteiligungsquote		in TEUR
Verbundene Unternehmen		direkt	indirekt	Jahresüberschuss	Eigenkapital
Anstalt für Strömungsmaschinen GmbH Staatlich autorisierte Versuchsanstalt
für Strömungsmaschinen	Graz / Austria	100%		41	1.383
Andritz Technology and Asset Management GmbH	Graz / Austria	100%		2.638	97.908
Andritz Finance GmbH	Vienna / Austria		100%	4.943	99.519
European Mill Service GmbH	Graz / Austria	50%		-210	-997
VA TECH Power & Water GmbH	Vienna / Austria	100%		-1.353	12.778
VA TECH HYDRO GmbH	Vienna / Austria	100%		3.319	169.769
VA TECH Bouvier Hydro S.A.S.	Grenoble / France		100%	1.505	3.774
VA TECH HYDRO India Pvt. Ltd.	Bhopal / India		100%	1.957	4.842
Andritz Deutschland Beteiligungs GmbH	Ravensburg / Germany	49%	51%	-1.624	196.009
Andritz-Küsters GmbH	Krefeld / Germany		100%	-1.940	25.025
Andritz GmbH	Hemer / Germany	6,25%	93,75%	4.115	55.304
Andritz Kaiser GmbH	Bretten-Gölshausen / Germany		100%	-2.353	335
Sundwig GmbH	Hemer / Germany		75%	12.085	42.024
Andritz Fiedler GmbH	Regensburg / Germany		100%	5.697	9.595
Andritz Fiedler Holding S. A. R. L.	Scorbé Clairvaux / France		100%	3	806
Andritz Fiedler S. A. S.	Chatellerault / France		100%	682	1.561
Andritz Separation GmbH	Cologne / Germany		100%	4.260	7.830
Andritz - Jochman s. r. o.	Spišská Nová Ves / Slovakia		70%		*)
Andritz Fliessbettsysteme GmbH	Ravensburg / Germany		100%	4.026	7.988
Lenser Verwaltungs GmbH	Senden / Germany		100%	19	262
Lenser Filtration GmbH	Senden / Germany		100%	1.061	12.560
Lenser Asia Sdn. Bhd.	Selangor / Malaysia		100%	609	1.495 *)
Andritz S.R.L.	Cisnadie / Romania		100%
VA TECH ESCHER WYSS GmbH	Ravensburg / Germany		100%	7.591	22.300
VA TECH ESCHER WYSS Flovel Ltd.	Faridabad / India		100%	885	3.133
VA TECH ESCHER WYSS S.L.	Madrid / Spain		100%	1.214	4.915
VA TECH ESCHER WYSS S.r.l.	Vicenza / Italy		100%	3.442	7.565 *)
VA TECH Aosta S.r.l.	Aosta / Italy		100%
VA TECH HYDRO AG	Kriens / Switzerland		100%	1.972	2.198
VA TECH SAT AG	Kriens / Switzerland		100%	18	840
VA TECH ESCHER WYSS S.A. de CV.	Morelia / Mexico		100%	253	-17
VA TECH HYDRO AS	Jevnaker / Norway		100%	1.866	4.507
VA TECH HYDRO do Brasil Ltda.	São Paulo / Brazil		100%	-31.480	-2.872
VA TECH (Beijing) Ltd.	Beijing / China		100%	941	2.647 *)
Elin Elmak Elektromekanik Sistemler Ticaret Ltd. Sirketi	Ankara / Turkey		100%
P.T. VA TECH Indonesia	Jakarta / Indonesia		51%	1.006	1.423 *)
VA TECH Elin Peru S.A.	Lima / Peru		100%		*)
VA TECH International (Pty) Ltd.	Randburg / South Africa		100%		*)
VA TECH Colombia Ltda.	Bogota / Columbia		100%		*)
VA TECH HYDRO Automation Praha s.r.o.	Prague / Czech Republic		100%		*)
VA TECH India Pvt. Ltd.	Faridabad / India		100%		*)
HGI Holdings Limited	Limassol / Cyprus	100%
Andritz BMB AG	Bülach / Switzerland	100%		-2.111	2.738
Andritz Separation Private Ltd.	Chennai / India	100%		-287	630 *)
Andritz spol. s. r. o.	Hradec Kralove / Czech Republic	100%
Andritz Denmark A/S	Esbjerg / Denmark	100%		1.529	9.816 **)
Andritz Sprout A/S	Esbjerg / Denmark		100%		*)
Andritz Sprout do Brasil Ltda.	Porto Alegre / Brazil		100%		*)
Andritz Sprout s. r. o.	Humenné / Slovakia		100%
Andritz Chile Ltda.	Santiago de Chile / Chile	100%		2.603	2.853
Andritz (USA) Inc.	Roswell / Georgia (USA)	100%		20.496	75.185 **)
Andritz Inc.	Roswell / Georgia (USA)		100%
Andritz Finance Inc.	Roswell / Georgia (USA)		100%
Delta Holding Corporation	Tualatin / Oregon (USA)		100%
Andritz-Separation Inc.	Arlington / Texas (USA)		100%
Andritz Filter Press Inc.	Arlington / Texas (USA)		100%
IDEAS Simulation & Control Inc.	Decatur / Georgia (USA)		100%
CyberMetrics Inc.	Alpharetta / Georgia (USA)		100%
Lenser Filtration Inc.	Lakewood / New Jersey (USA)		100%
Contec Decanter Inc.	San Leandro / California (USA)		100%
VA TECH HYDRO USA Corporation	Charlotte / North Carolina (USA)		100%
Andritz Küsters Inc.	Spartanburg / South Carolina (USA)		100%

Andritz AG Graz

	Sitz		Beteiligungsquote	in TEUR
Verbundene Unternehmen		direkt	indirekt	Jahresüberschuss	Eigenkapital
Andritz S. A. S.	Velizy / France	100%		3.187	16.542
Andritz Selas S. A. S.	Gennevilliers / France		100%	846	3.086
Andritz Sprout S. A. S.	Saint Martin Le Beau / France		100%	90	-278
Lenser Filtration S. A. R. L.	Haguenau / France		100%	-2	109
Jaybee Engineering (Holdings) Pty. Ltd.	Dandenong / Victoria (Australia)	100%		459	5.925 **)
Andritz Pty. Ltd.	Dandenong / Victoria (Australia)		100%
Andritz Ingenieria S.A.	Madrid / Spain	100%		861	1.603
Andritz Brasil Ltda.	Curitiba / Brazil	100%		4.337	19.712
Andritz Separation Industria e Comércio de
Equipamentos de Filtraçâo Ltda.	Pomerode / Brazil		100%	1.969	7.012
Sindus Andritz Tecnologia Humana Ltda.	Porto Alegre / Brazil		50%	423	1.315
Andritz Participações Ltda.	Vinhedo / Brazil	100%		-10	7.982
Andritz Pilão Equipamentos Ltda.	São Paulo / Brazil		100%	-1.600	2.951
Andritz Oy	Helsinki / Finland	100%		23.950	92.501
Savonlinna Works Oy	Savonlinna / Finland		100%	996	6.109
VA TECH HYDRO Canada Inc.	Ontaria / Canada	100%		3.687	27.461 **)
Andritz Ltd./Ltée.	Lachine / Canada		100%
Andritz Fiber Drying Ltd.	Lachine / Canada		100%
Universal Dynamics Ltd.	Richmond / Canada		100%
IDEAS Simulation & Control Ltd.	Richmond / Canada		100%
Andritz AB	Örnsköldsvik / Sweden	100%		4.697	8.903
Andritz Fiber Drying AB	Växjö / Sweden		100%	3.233	6.259
Andritz Lynson AB	Vallentuna / Sweden		86,25%	-1.098	-52
Andritz Ltd.	Staffordshire / Great Britain	100%		902	4.100
Andritz Selas UK Ltd.	Derbyshire / Great Britain		100%	71	461
Andritz-Kenflo Foshan Pump Co. Ltd.	Foshan / China	60%		2.290	6.938
Andritz Technologies Ltd.	Foshan / China	100%		1.472	14.330
Andritz - Wolfensberger Special Alloy Foundry Co., Ltd.	Foshan / China	65%		-1.076	1.810
Thermtec Holding B.V.	Rotterdam / Netherlands	100%		4.858	6.261 **)
Thermtec B.V.	Rotterdam / Netherlands		100%
Andritz Technologies Private Ltd.	Bangalore / India	100%		266	885
Andritz Sprout Limited	Hull / Great Britain	100%		545	1.898
Andritz Sprout B. V.	Geldrop / Netherlands	100%		3.594	15.317
Andritz B. V.	Den Helder / Netherlands		100%	394	1.300
Andritz 3SYS AG	Wohlen / Switzerland	80%		-2.626	-2.101
Andritz Singapore Pte. Ltd.	Singapore / Singapore	100%		1.766	3.195
Andritz (Thailand) Limited	Bangkok / Thailand	100%		36	129
Andritz Uruguay S. A.	Montevideo / Uruguay	100%		150	212
Andritz Industria S. A.	Montevideo / Uruguay	100%			*)
Andritz KK	Tokyo / Japan	100%		1.463	4.458
Andritz (Pty) Ltd.	Umhlanga / South Africa	100%		531	1.062
PT Andritz	Jakarta / Indonesia	100%			*)
Andritz Australia Pty Ltd.	Melbourne / Victoria (Australia)	100%		-6	174
LLC Andritz	St. Petersburg / Russia	100%		-168	-192
Tiszakécskei Gépgyár Kft.	Tiszakécske / Hungary	100%		0	17.770
sonstige Unternehmen
KAG, ECO Oil GmbH	Samara / Russia	31%
ASH DEC Umwelt AG	Vienna / Austria	2,87%
Warkaus Works Oy	Varkaus / Finland		50%
Alp Hydro SA	Chippis / Switzerland		49%
Enmas Andritz Private Ltd.	Madras / India		40%
Waplans Mekaniska Verkstads AB	Nälden / Sweden		40%
The Hydro Equipment Association Limited	London / Great Britain		33%
Carbona Oy	Helsinki / Finland		32%
Andritz R&M Service S.R.L.	Bucharest / Romania		25%
Motter Printing Equipment Ltd.	Kriens / Switzerland		20%
Orissa Power Consortium Ltd.	Hyderabad / India		19%
Birecik Baraj ve Hidroelektrik	Birecik / Turkey		4%
Venture Capital Zentralschweiz AG	Luzern / Switzerland		1%

*) wegen Unwesentlichkeit nicht im Konzernabschluss einbezogen **) konsolidiert

Andritz AG Graz

Die Angaben für Eigenkapital und Jahresüberschuss der verbundenen Unternehmen wurden den zur Erstellung des Konzernabschlusses herangezogenen Abschlüssen, welche entsprechend den "International Financial Reporting Standards" (IFRS) aufgestellt wurden, entnommen.

Beschäftigte

Im Jahresdurchschnitt wurden 1.381 Mitarbeiter (ohne Lehrlinge), davon 424 Arbeiter und 957 Angestellte, beschäftigt.

Aufwendungen für Abfertigungen und Pensionen

	TEUR
für Vorstandsmitglieder und leitende Angestellte	3.297
für andere	4.290
	7.587

Aktienbeteiligungsprogramm für Führungskräfte

Sämtliche Angaben wurden entsprechend dem in 2007 durchgeführten Aktiensplit (1 : 4) angepasst.

Optionenprogramm 1:

Die 97. ordentliche Hauptversammlung vom 30. März 2004 hat ein Aktienoptionenprogramm für leitende Angestellte und Mitglieder des Vorstandes beschlossen.

Die Anzahl der je berechtigter Führungskraft gewährten Optionen beträgt je nach Verantwortungsbereich 6.000, 10.000 oder 20.000, für Mitglieder des Vorstandes 40.000 und für den Vorsitzenden des Vorstandes 50.000. Die Optionen sollen aus von der Gesellschaft rückerworbenen eigenen Aktien bedient werden.

Eine Aktienoption berechtigt zum Bezug einer Aktie. Um eine Aktienoption ausüben zu können, muss der Berechtigte vom 1.5.2004 bis vor einem jeden Ausübungszeitpunkt dauernd in einem aktiven Arbeitsverhältnis zur Gesellschaft oder einer zum Andritz-Konzern gehörenden Gesellschaft gestanden haben. Weitere Voraussetzung ist ein Eigeninvestment in Andritz-Aktien von zumindest 20.000 EUR für leitende Angestellte und 40.000 EUR für Mitglieder des Vorstandes.

Der Ausübungspreis für die Aktienoptionen ist der ungewichtete Durchschnitt der Börsenschlusskurse der Andritz-Aktie während der vier auf die 97. ordentliche Hauptversammlung vom 30. März 2004 folgenden Kalenderwochen und beträgt 9,38 EUR.

Die Optionen können in der Zeit vom 1. Mai 2006 bis 30. April 2008 (= Ausübungszeitraum) ausgeübt werden und nur dann, wenn

• der ungewichtete Schlusskurs der Andritz-Aktie im Durchschnitt von zwanzig aufeinanderfolgenden Handelstagen im Zeitraum von 1. Mai 2006 bis 30. April 2007 mindestens 15 % über dem Ausübungspreis liegt und
• der Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2005 oder der Gewinn je Aktie des Geschäftsjahres 2006 (bezogen auf die Gesamtzahl der gelisteten Aktien) mindestens 15 % über dem Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2003 liegt

oder wenn

• der ungewichtete Schlusskurs der Andritz-Aktie im Durchschnitt von zwanzig aufeinanderfolgenden Handelstagen im Zeitraum 1. Mai 2007 bis 30. April 2008 mindestens 20 % über dem Ausübungspreis liegt und
• der Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2006 oder der Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2007 mindestens 20 % über dem Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2003 liegt.

Im Falle der Erfüllung der Ausübungsbedingungen können 50 % der Optionen sofort, 25 % der Optionen nach drei Monaten und die restlichen 25 % nach weiteren drei Monaten bezogen werden. Aktienoptionen können nur durch schriftliche Erklärung an die Gesellschaft ausgeübt werden. Die Aktienoptionen sind nicht übertragbar. Die in Ausübung der Aktienoptionen bezogenen Aktien unterliegen keiner Behaltefrist. Die Ausübungsbedingungen bezüglich Kursanstieg und Gewinn je Aktie wurden in 2006 erfüllt, sodass die Aktienoptionen entsprechend den übrigen Bedingungen des Programms gezogen werden können.

Optionenprogramm 2:

Die 99. ordentliche Hauptversammlung vom 29. März 2006 hat ein Aktienoptionenprogramm für leitende Angestellte und Mitglieder des Vorstandes beschlossen.

Die Anzahl der je berechtigter Führungskraft gewährten Optionen beträgt je nach Verantwortungsbereich 6.000, 10.000 oder 20.000, für Mitglieder des Vorstandes 40.000 und für den Vorsitzenden des Vorstandes 50.000. Die Optionen sollen aus von der Gesellschaft rückerworbenen eigenen Aktien bedient werden.

Eine Aktienoption berechtigt zum Bezug einer Aktie. Um eine Aktienoption ausüben zu können, muss der Berechtigte vom 1.5.2006 bis vor einem jeden Ausübungszeitpunkt dauernd in einem aktiven Arbeitsverhältnis zur Gesellschaft oder einer zum Andritz-Konzern gehörenden Gesellschaft gestanden haben. Weitere Voraussetzung ist ein Eigeninvestment in Andritz-Aktien von zumindest 20.000 EUR für leitende Angestellte und 40.000 EUR für Mitglieder des Vorstandes.

Der Ausübungspreis für die Aktienoptionen ist der ungewichtete Durchschnitt der Börsenschlusskurse der Andritz-Aktie während der vier auf die 99. ordentliche Hauptversammlung vom 29. März 2006 folgenden Kalenderwochen und beträgt 31,67 EUR.

Die Optionen können in der Zeit vom 1. Mai 2008 bis 30. April 2010 (= Ausübungszeitraum) ausgeübt werden und nur dann, wenn

• der ungewichtete Schlusskurs der Andritz-Aktie im Durchschnitt von zwanzig aufeinanderfolgenden Handelstagen im Zeitraum von 1. Mai 2008 bis 30. April 2009 mindestens 15 % über dem Ausübungspreis liegt und
• der Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2007 oder der Gewinn je Aktie des Geschäftsjahres 2008 (bezogen auf die Gesamtzahl der gelisteten Aktien) mindestens 15 % über dem Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2005 liegt

oder wenn

• der ungewichtete Schlusskurs der Andritz-Aktie im Durchschnitt von zwanzig aufeinanderfolgenden Handelstagen im Zeitraum 1. Mai 2009 bis 30. April 2010 mindestens 20 % über dem Ausübungspreis liegt und
• der Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2008 oder der Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2009 mindestens 20 % über dem Gewinn je Aktie (bezogen auf die Gesamtzahl der gelisteten Aktien) des Geschäftsjahres 2005 liegt.

Im Falle der Erfüllung der Ausübungsbedingungen können 50 % der Optionen sofort, 25 % der Optionen nach drei Monaten und die restlichen 25 % nach weiteren drei Monaten bezogen werden. Aktienoptionen können nur durch schriftliche Erklärung an die Gesellschaft ausgeübt werden. Die Aktienoptionen sind nicht übertragbar. Die in Ausübung der Aktienoptionen bezogenen Aktien unterliegen keiner Behaltefrist.

	Optionenprogramm 1		Optionenprogramm 2
	in 2007 ausgenützte Optionen	in 2008 ausnützbare Optionen	in 2007 eingeräumte Optionen	eingeräumte Optionen per 31.12.2007
Vorstand Wolfgang Leitner Franz Hofmann Karl Hornhofer Humbert Köfler Friedrich Papst Leitende Angestellte	0 40.000 0 0 0 22.500	0 0 0 0 0 15.000	0 0 0 0 0 14.000	50.000 40.000 20.000 20.000 40.000 728.000
GESAMT	62.500	15.000	14.000	898.000
Ausübungspreis je Aktie in EUR Wert Optionen gesamt in EUR	9,38 bei Ausübung 2.193.104	9,38 31.12.2007 481.050	31,67 31.12.2007 136.920	31,67 31.12.2007 8.782.440

Derivative Finanzinstrumente

Zum Bilanzstichtag bestanden folgende Devisentermingeschäfte (in TEUR):

	Umfang	Zeitwert
US-Dollar:	29.243	1.667
Pfund Sterling:	1.627	13
Singapore Dollar:	6.116	1.653
Andere Währungen	3.506	-83
Summe	40.492	3.250

Der beizulegende Zeitwert wird auf Basis der Terminkurse zum Bilanzstichtag durch Abzinsung des ermittelten Endwertes über die Restlaufzeit errechnet.

Die beizulegenden Zeitwerte für die Zinssicherung der Anleihen in Form von Zinsswaps betragen zum 31.12.2007 -7.737 TEUR (Vorjahr: -2.647 TEUR) und repräsentieren die Marktwerte zum Bilanzstichtag.

Weiters bestehen zum 31.12.2007 drei Zinsswaps zu Beteiligungsfinanzierungen (Umfang: 22.810 TEUR). Die beizulegenden Zeitwerte für die Zinssicherungen betragen zum 31.12.2007 -543 TEUR (Vorjahr: 0 TEUR) und repräsentieren die Marktwerte zum Bilanzstichtag.

Drohende Verluste aus derivativen Finanzinstrumenten werden in der Bilanz nicht passiviert, da diese mit bilanzierten Aktiv- bzw. Passivposten eine geschlossene Position bilden.

Andritz AG Graz

Vorstand und Aufsichtsrat

Die Vorstandsvergütungen betrugen:

	in TEUR
	2007 2006
Kurzfristige Leistungen	9.383	9.490
Leistungen nach Beendigung
des Arbeitsverhältnisses	1.903	1.312
Aktienbasierte Vergütungen	642	498
	11.928	11.300

Der Gegenwert der aktienbasierten Vergütungen wurde nach IFRS ermittelt.

Von verbundenen Unternehmen wurden keine Bezüge ausbezahlt. An ehemalige Vorstandsmitglieder und deren Hinterbliebene wurden 322.985 EUR ausbezahlt.

Die Mitglieder des Aufsichtsrats erhielten Vergütungen von 110.500 EUR.

Aufsichtsrat:

Gewählte Mitglieder:

Kurt Stiassny

Vorsitzender

Hellwig Torggler

Stellvertreter des Vorsitzenden

Peter Mitterbauer

Christian Nowotny

Fritz Oberlerchner

Klaus Ritter

Andritz AG Graz

Delegierte Mitglieder: Andreas Martiner Johann Tschrischnig (bis 12.3.2007) Martha Unger (seit 12.3.2007) Brigitta Wasserbauer

Vorstand:

Wolfgang Leitner Vorsitzender Franz Hofmann Karl Hornhofer (seit 1.1.2007) Humbert Köfler (seit 1.4.2007) Friedrich Papst Bernhard Rebernik (bis 31.3.2007)

Graz, am 19. Februar 2008

Der Vorstand

Wolfgang Leitner Franz Hofmann Karl Hornhofer Humbert Köfler Friedrich Papst

Bestätigungsvermerk

Wir haben den Jahresabschluss der ANDRITZ AG, Graz, für das Geschäftsjahr vom 1. Jänner 2007 bis 31. Dezember 2007 unter Einbeziehung der Buchführung geprüft. Die Buchführung, die Aufstellung und der Inhalt dieses Jahresabschlusses sowie des Lageberichtes in Übereinstimmung mit den österreichischen handelsrechtlichen Vorschriften liegen in der Verantwortung der gesetzlichen Vertreter der Gesellschaft. Unsere Verantwortung besteht in der Abgabe eines Prüfungsurteils zu diesem Jahresabschluss auf der Grundlage unserer Prüfung und einer Aussage, ob der Lagebericht in Einklang mit dem Jahresabschluss steht.

Wir haben unsere Prüfung unter Beachtung der in Österreich geltenden gesetzlichen Vorschriften und Grundsätze ordnungsgemäßer Abschlussprüfung durchgeführt. Diese Grundsätze erfordern die Prüfung so zu planen und durchzuführen, dass ein hinreichend sicheres Urteil darüber abgegeben werden kann, ob der Jahresabschluss frei von wesentlichen Fehldarstellungen ist und eine Aussage getroffen werden kann, ob der Lagebericht mit dem Jahresabschluss in Einklang steht. Bei der Festlegung der Prüfungshandlungen werden die Kenntnisse über die Geschäftstätigkeit und über das wirtschaftliche und rechtliche Umfeld des Unternehmens sowie die Erwartungen über mögliche Fehler berücksichtigt.

Im Rahmen der Prüfung werden die Nachweise für Beträge und sonstige Angaben in der Buchführung und im Jahresabschluss überwiegend auf Basis von Stichproben beurteilt. Die Prüfung umfasst ferner die Beurteilung der angewandten Rechnungslegungsgrundsätze und der von den gesetzlichen Vertretern vorgenommenen wesentlichen Schätzungen sowie eine Würdigung der Gesamtaussage des Jahresabschlusses. Wir sind der Auffassung, dass unsere Prüfung eine hinreichend sichere Grundlage für unser Prüfungsurteil darstellt.

Unsere Prüfung hat zu keinen Einwendungen geführt. Auf Grund der bei der Prüfung gewonnenen Erkenntnisse entspricht der Jahresabschluss nach unserer Beurteilung den gesetzlichen Vorschriften und vermittelt ein möglichst getreues Bild der Vermögens- und Finanzlage der ANDRITZ AG zum 31. Dezember 2007 sowie der Ertragslage des Unternehmens für das Geschäftsjahr vom 1. Jänner 2007 bis 31. Dezember 2007 in Übereinstimmung mit den österreichischen Grundsätzen ordnungsmäßiger Buchführung. Der Lagebericht steht in Einklang mit dem Jahresabschluss.

Wien, am 19. Februar 2008

AUDITOR TREUHAND GMBH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft

Mag. Walter Müller e.h. Mag. Michael Schober e.h. Wirtschaftsprüfer