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DMG MORI AG Annual Report 2003
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Annual Report
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Fascination. Innovation.
gildemeister group Key Figures
Sales Revenues Order Intake ebit Annual Profit / Loss Employees
Key Figures
The Consolidated Financial Statements of GILDEMEISTER Aktiengesellschaft for the year ended 31 December 2003 were prepared in accordance with International Financial Reporting Standards (IFRS).
| gildemeister group | 2003 | 2002 | Changes2003 against 2002 | |
|---|---|---|---|---|
| € m | € m | € m | % | |
| Sales revenues | ||||
| Total | 977.8 | 1,032.8 | -55.0 | -5 |
| Domestic | 475.7 | 491.7 | -16.0 | -3 |
| International | 502.1 | 541.1 | -39.0 | -7 |
| % International | 51 | 52 | ||
| Order intake | ||||
| Total | 981.8 | 981.0 | 0.8 | 0 |
| Domestic | 457.0 | 455.6 | 1.4 | 0 |
| International | 524.8 | 525.4 | -0.6 | 0 |
| % International | 53 | 54 | ||
| Order backlog* | ||||
| Total | 332.8 | 328.8 | 4.0 | 1 |
| Domestic | 122.5 | 141.2 | -18.7 | -13 |
| International | 210.3 | 187.6 | 22.7 | 12 |
| % International | 63 | 57 | ||
| Investment | 36.4 | 73.2 | -36.8 | -50 |
| Staff costs | 270.6 | 270.2 | 0.4 | 0 |
| Employees | 4,823 | 4,821 | 2 | 0 |
| plus trainees | 205 | 224 | -19 | -8 |
| Total employees* | 5,028 | 5,045 | -17 | 0 |
| ebitda | 71.1 | 54.9 | 16.2 | |
| ebit | 34.7 | 17.2 | 17.5 | |
| ebt | 10.3 | -7.5 | 17.8 | |
| Annual profit/loss | -3.6 | -18.7 | 15.1 |
1,103.1
981.0 981.8
| q1 2003* | 2.6 | ||
|---|---|---|---|
| q2 2003* | 8.4 | ||
| q3 2003* | 8.4 | ||
| q4 2003* | 15.3 |
2002 2003
incl. trainees
Machine tools
Services
Corporate Services
*in accordance with ifrs Total employees
GILDEMEISTER is one of the major manufacturers of metal cutting machine tools world-wide, whose range of products include both turning and milling technologies and future oriented "ultrasonic" and "laser" technologies. Our customers can rely on top quality, proficient technical services and state-of-the-art software products from a single source. 5,028 committed employees in eleven production plants and 50 national and international sales and services locations represent our formidable innovative power and a sales and service network covering all areas throughout the world. Our most important objectives are to strengthen the profitability of the company and increase shareholder value.
fascination. innovation. 7
Crossing borders. Progress doesn't happen just like that. Every day, the crossing of
existing technological borders requires new ways of thinking and the courage which turns visions into innovations. It is our task to create real added value for our customers – with intelligent, innovative and sustainable solutions. By GILDEMEISTER.
Maximum Speed.
Extreme acceleration values. >> When maximum speed and highest precision are asked for, the answer can only be provided by GILDEMEISTER. Our highly dynamic linear drives only reach their limits at g-accelerations. And the result of these immense speeds ? An advance into new dimensions.
Linear drives **>>**Maximum precision.
Time factor. >> Linear drives offer highest precision and better durability thanks to the direct and smooth transmission of power. At speeds exceeding 100m/min surfaces are worked rapidly and perfectly to the tiniest detail. This provides an enormous time-saving factor in the process of production.
3D-controls >> See more.
>> New perspectives provide new opportunities. 3D-controls with state-of-theart software technology offer maximum precision and optimal user-comfort through simple programming. New dimensions provide extra transparency and security for smooth manufacturing processes.
>>
What you see is what you understand. >> He who sees the most when programming, knows how to accomplish optimal results. A hightech control is the requirement for quality in the high-end area. Innovative solutions in hard and software don't happen by chance, but are provided by GILDEMEISTER. 13 14
fascination. innovation. 15 1
Working with higher precision. Working with higher precision.
Laser technology >> Trend-setting ideas.
The future leads the way. >> Perspectives change along with the demands. Thanks to our continuous re-adaptation, we gain new views and insights. And can therefore develop innovative technologies that will still be up-todate tomorrow. The range of services provided by GILDEMEISTER therefore includes laser technology – which enables the machining of metal parts at unequalled precision and speed.
Technology for the future.
Laser precision in record time. >> That which yesterday appeared utopian, is the order of the day today: Machines for 3 dimensional laser beam machining. At maximum speeds and with the highest precision. Laser technology by GILDEMEISTER. Used for 3D machining of contours, fine cutting and boring.
Services >> Recognise problems.
Solve problems. >>
Production running at full speed. >> A machine failure at this point would result in unneccessary costs. Therefore GILDEMEISTER has developed a whole range of innovative Powertools. Our products range from software to production monitoring and online fault elimination systems through to the intelligent Service Agent early warning system. Powertools provide better security, and thereby optimised production processes.
Save time.
<< Key Figures
GILDEMEISTER in Brief
Fascination. Innovation.
Report: Supervisory Board/ Executive Board
Business Report: General Economic Situation Corporate Situation
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Report of the Supervisory Board
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The Supervisory Board
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The Executive Board
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To Our Shareholders
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The Year 2003
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Group Annual Report of GILDEMEISTER Aktiengesellschaft
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business report
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General Economic Situation
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Overall Economic Development
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Development of the Machine Tool Manufacturing Industry
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Company Situation and Operational Performance
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Sales revenues
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Order Intake
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Order backlog
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Results, Assets and Financial Position
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gildemeister Share
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Corporate Governance
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Risk Reporting
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Investments
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Group Structure
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Organisation and Administration
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Legal Corporate Structure
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Procurement
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Production and Logistics, Products and Services
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Employees
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Marketing / Public Relations
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Segmental Reporting
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"Machine Tools"
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"Services"
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"Corporate Services"
116 Supplement/ Forecast/ Research and Development
- 116 Group Annual Report ctd.
- 116 supplementary report
- 120 forecast 2004
- 130 research and development
- 136 Survey of Products
148 Annual Financial Statements
- 148 Annual Financial Statements of GILDEMEISTER Aktiengesellschaft in accordance with IFRS
- 149 Notes to the Consolidated Financial Statements
- 184 Affiliated Companies
- 186 Corporate Directory
- 188 Consolidated Income Statement
- 189 Consolidated Balance Sheet
- 192 Statement of Changes in Group Equity and in shares to other shareholders
- 193 Consolidated Cashflow
- 195 Consolidated fixed Asset Movement Schedule
- 199 Segmental Reporting relating to Consolidated Financial Statements 2003
- 202 Auditor's Report
- 204 Group Overview / Multiple Year Overview
- 208 Index
- 209 Glossary
- 214 Financial Calendar
Dr.-Ing. Manfred Lennings has been Chairman of the Supervisory Board since January 1985. After completing his studies in Munich and at the Clausthal Mining Academy, he began his career at the engineering group Gutehoffnungshütte (ghh) in Oberhausen. As early as 1969 he was appointed deputy member of the executive board at ghh, became head of the Howaldtswerke-Deutsche Werft ag in Hamburg, and was the senior manager at ghh from 1975 to the end of 1983. Over the following years Dr. Lennings acted as consultant and member of many supervisory boards. In 1990 he was appointed to the Board of Directors at the Berliner Treuhandanstalt, where he was Chairman from 1993.
In the year 2003 an intensive exchange of information with the Executive Board remained the basis for the efficient operation of the Supervisory Board. Along with exercising its controlling functions, the support given to the group in implementing its strategies is a further important task. The following report sets out the Supervisory Board's main areas of activity with the required openness and transparency.
In the reporting year, the Supervisory Board carried out the duties incumbent on it in accordance with the law and the Articles of Association. It regularly advised the Executive Board on the management of the company and supervised the conduct of business. The Executive Board informed the Supervisory Board regularly, with up to date and comprehensive written reports covering all relevant issues on corporate planning and strategic development, the course of the business, the group's state of affairs, including the risk exposure and risk management. Divergencies in the development of the business from established plans and targets were explained in detail. The company's strategic orientation was co-ordinated with the Supervisory Board. All business transactions of importance were discussed in detail by the Supervisory Board on the basis of the reports issued by the Executive Board. Additionally, comprehensive information was supplied at all times through regular written and verbal reports by the Executive Board. The Executive Board informed the Supervisory Board directly regarding projects and events of particular importance separately from the regular meetings.
The Chairman of the Supervisory Board in particular remained in contact with the Executive Board on a regular basis, also outside Supervisory Board meetings, in order to be kept up to date on current business conditions and important external transactions. Actions of the Executive Board, which required the agreement of the Supervisory Board, were laid before it as resolution papers. Five Supervisory Board meetings were held in all. The members of the Supervisory Board were fully represented at most of the meetings.
The first meeting of the Supervisory Board was held on 27 March 2003. The main points on the agenda of this meeting, which was attended by eleven members, included the Annual Financial Statements, the Consolidated Financial Statements, the Management Report, the Group Management Report and also the agenda for the general meeting of shareholders. In addition, the Supervisory Board approved proposals for amendments to the articles of association in accordance with the German Code of Corporate Governance.
The meeting held on 15 May 2003 was attended by all members of the Supervisory Board. The Executive Board informed the members of the Supervisory Board on the latest business developments. It then introduced a proposal to transfer the investment of the holding company Macchine Utensili S.p.A. in GILDEMEISTER Italiana S.p.A. to GILDEMEISTER Aktiengesellschaft.
Following the general meeting of shareholders on 16 May 2003, the constituent meeting of the newly elected Supervisory Board took place. An item on the agenda of this meeting, amongst others, was the setting-up of the Finance and Auditing Committee, which was formed in 2003 in accordance with the recommendations of the German Code of Corporate Governance. All members of the Supervisory Board attended at this meeting. Items on the agenda for the meeting held on 12 September 2003 included the progress of the business in the first three quarters of the reporting year and a second forecast for 2003. The group's financing and future tax strategy were also discussed in depth. With respect to the annual audit for 2003, the Supervisory Board set out the key points of this audit. The members of the Supervisory Board were fully represented.
At its meeting on 28 November 2003, the Supervisory Board, after detailed discussion on sales, results, investment and personnel planning with the Executive Board, adopted the corporate plan for 2004 to 2006. In addition to the final discussion regarding group financing, the Executive Board reported to the Supervisory Board on the foundation of DMG Europe Holding GmbH. The meeting was attended by eleven members of the Supervisory Board.
In accordance with the recommendation of the German Code of Corporate Governance each member of the Supervisory Board is obliged to disclose promptly to the Supervisory Board any conflicts of interest that may arise from a position as an advisor or exercising a management function at customers, suppliers, lenders or other business partners. Such conflicts of interest did not occur during the reporting period. The joint report of the Supervisory Board and the Executive Board on "Corporate Governance" is included on pages 77 to 79 of this Annual Report.
The Personnel Committee of the Supervisory Board met on 16 May 2003. This Committee is responsible for staff matters concerning the Board members. A Committee meeting in accordance with Section 27 para. 3 of the German co-determination law (Mitbestimmungsgesetz) was not called.
The Finance and Auditing Committee met three times in the reporting year. It prepared negotiations and resolutions of the Supervisory Board on accounting and risk management issues. Another responsibility of the Finance and Auditing Committee is checking the efficiency of the work of the Supervisory Board. The object of the audit carried out included, along with criteria with respect to quality, the operations of procedures of the Supervisory Board, the exchange of information between the Committees and the plenary meeting, and the timely and sufficient supply of information to the Supervisory Board.
The Committee focused particularly on the preparation of the audit and approval of the Annual and Consolidated Financial Statements. Further points on the Committee's agendas in this respect included the required independence of the auditor, preparations for the audit assignment, establishing key items of the audit and negotiating the fee. The Committee's meeting for the discussion of the Annual and Consolidated Financial Statements was attended by the auditors. At the respective meetings of the Supervisory Board, the Committees reported in detail on their meetings and their work.
Two meetings have already been called by the Supervisory Board during the current financial year. The main point on the agenda of the extraordinary meeting on 28 January 2004 was the future strategic orientation of the GILDE-MEISTER group. The members of the Supervisory Board were fully represented. The Personnel Committee also met on this day.
For the meeting of the Supervisory Board on Financial Statements on 25 March 2004 the Annual Financial Statements, Consolidated Financial Statements, Management Report and Group Management Report of GILDE-MEISTER Aktiengesellschaft were all available, as were the Audit Reports issued by KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft, auditing company, Berlin/ Frankfurt am Main. The auditor was present at the Supervisory Board's deliberation on the Accounts and reported in detail on the course and the results of the audit and was available to provide supplementary information.
The papers were discussed extensively. In relation to the existing early risk recognition system, the auditor stated that the Executive Board had met the requirements of Sect. 91 para. 2 of the German Companies Act (AktG), particularly in respect of the establishment of a monitoring system, and that the system is suitable for the early recognition of developments that put the ongoing existence of the company at risk. Ten members of the Supervisory Board attended at this meeting. The Finance and Auditing Committee also met to prepare for the meeting. The main items on the agenda included the group's financing strategy, the risk management report and the Annual Financial Statements 2003.
The Annual Financial Statements for the year ended 31 December 2003 prepared by the Executive Board in accordance with applicable HGB rules and the Management Report of GILDEMEISTER Aktiengesellschaft were audited in accordance with the resolution of the shareholders' meeting of 16 May 2003 and subsequent assignment by the Supervisory Board of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft, auditing company, Berlin/Frankfurt am Main. The accounts auditor issued the unqualified audit certificate.
The Consolidated Financial Statements of GILDEMEISTER Aktiengesellschaft were prepared in accordance with International Financial Reporting Standards (IFRS). In accordance with the exemption provision in Section 292a HGB, Consolidated Financial Statements in accordance with HGB were not prepared. The auditor issued the
unqualified audit certificate to the Consolidated Financial Statements prepared in accordance with IFRS, and to the Group Annual Report.
On the basis of its own audit of the Annual Financial Statements, the Consolidated Financial Statements, the Annual Report and the Group Annual Report and of the proposal for the appropriation of the net profit for the year, the Supervisory Board agreed the results of the audit by the accounts auditor and approved the Financial Statements and the Consolidated Financial Statements. The Annual Financial Statements have therefore been certified in accordance with Section 172 of the German Companies Act (AktG). The Supervisory Board endorses the Executive Board's proposal for the appropriation of the net profit for the year of GILDEMEISTER Aktiengesellschaft.
On conclusion of the company's Ordinary General Meeting of Shareholders on 16 May 2003 the term of office of the incumbent Supervisory Board terminated. Prof. Dr.-Ing. Peter-Jürgen Kreher, Dr. Rupert Pfeffer and Hans Peter Schreib did not stand for re-election. All previous representatives of the shareholders were re-elected to the Supervisory Board. Günther Berger, Dr.-Ing. Jürgen Harnisch and Ulrich Hocker were newly elected. All employeeelected representatives on the Supervisory Board were also newly elected. Former employee-elected representative Heinz-Dethlef Rother was not re-elected and left office. Wulf Bantelmann was elected in his place. Mr Rother had become a member of the Supervisory Board on 1 February 2003 following the retirement of Arno Kruck. At its constituent meeting on 16 May 2003, the Supervisory Board elected Dr.-Ing. Manfred Lennings as Chairman of the Supervisory Board and Gerhard Dirr as Deputy Chairman.
The Supervisory Board would like to thank the retiring members of the Supervisory Board for their constructive co-operation, their expert advice and their commitment to the success of the company and its employees. The members of the Supervisory Board would like to extend their thanks to the Executive Board, the management, as well as all employees of the group companies for their active commitment. Many thanks go also to the employeeelected representatives for their objective and constructive collaboration in the interests of our company.
Bielefeld, 25 March 2004 THE SUPERVISORY BOARD
Dr.-Ing. Manfred Lennings Chairman
The Supervisory Board 35
Dr.-Ing. Manfred Lennings, Essen, born 1934, Chairman, Independent Industry Consultant
Gerhard Dirr, Vils/Austria, born 1964, Deputy Chairman, Chairman of the Works Council of deckel maho Pfronten GmbH
Wulf Bantelmann (since 16 May 2003), Bielefeld, born 1947, Chairman of the Works Council of gildemeister Drehmaschinen GmbH
Günther Berger (since 16 May 2003), Munich, born 1948, Divisional Executive Board member at the Bayerische Hypoand Vereinsbank ag
Harry Domnik, Bielefeld, born 1953, Representative of the ig Metall Administration, Bielefeld
Alfred Geißler, Pfronten, born 1958, Senior executives' representative
Dr.-Ing. Jürgen Harnisch (since 16 May 2003), Bochum, born 1942, Board member at ThyssenKrupp ag, Chairman of the Executive Board at ThyssenKrupp Automotive ag
Ulrich Hocker (since 16 May 2003), Düsseldorf, born 1950, Legal counsel, Chief Executive Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (dsw) (German association of securities owners)
Prof. Dr.-Ing. Walter Kunerth, Zeitlarn, born 1940, Independent Industry Consultant
Hans Henning Offen,
Großhansdorf, born 1940, Former Deputy Chairman of the Executive Board at the Westdeutsche Landesbank Girozentrale, Düsseldorf/Münster, Independent Industry Consultant
Peter Oxfart,
Creuzburg, born 1943, Chairman of the Works Council of deckel maho Seebach GmbH
Günther Johann Schachner, Peiting, born 1952, Executive Board member at ig Metall Frankfurt Representative of the ig Metall Administration, Weilheim
Prof. Dr.-Ing. Peter-Jürgen Kreher (until 16 May 2003), Grünwald, born 1934, Senior Advisor Droege & Comp., Düsseldorf
Arno Kruck (until 31 Jan. 2003), Bielefeld, born 1939, Former Chairman of the Works Council at the dmg Vertriebs und Service GmbH deckel maho gildemeister
Dr. jur. Rupert Pfeffer (until 16 May 2003), Geretsried, born 1934, Chairman of the Executive Board at the LfA Förderbank Bayern i. R.
Heinz-Dethlef Rother
(01 Feb. to 16 May 2003), Bielefeld, born 1950, Chairman of the Works Council at the dmg Vertriebs und Service GmbH deckel maho gildemeister
Hans Peter Schreib (until 16 May 2003), Legal counsel, Düsseldorf, born 1935, Member of the Executive Board at the Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (dsw) (German Association of Securities Owners)
Dr. Rüdiger Kapitza (49)
Chairman of the Executive Board since April 1996 and co-founder of the dmg Vertriebs und Service GmbH. Trained as a plant and machinery technician and commercial manager at gildemeister. Dr. Rüdiger Kapitza studied Economics in Paderborn and obtained his doctorate at the Johannes Gutenberg University in Mainz. He was appointed to the Executive Board of gildemeister Aktiengesellschaft in 1992 and takes responsibility for the corporate strategy, product development, sales and marketing, services, procurement, personnel and public/investor relations.
Prof. Dr.-Ing. Raimund Klinkner (39)
Studied Mechanical Engineering at the Munich University of Technology and has been a member of the Executive Board since May 1998; since 1 January 2003 as Deputy Chairman of the Executive Board. His areas of responsibility include production and logistics as well as special projects, such as the development of the production site in Shanghai. On 4 June 2003 Prof. Dr.-Ing. Raimund Klinkner was appointed honorary professor of Production Logistics at Berlin Technical University, Faculty VIII Economics and Management. Before he joined gildemeister, Dr. Raimund Klinkner worked in the car industry.
Michael Welt (49)
Appointed to the Executive Board in January 2003, Michael Welt is since June 2003, and following a restructuring of the Executive Board, responsible for controlling, finance and information technology (it). Michael Welt holds a degree in business administration (Dipl.-Kaufmann) and has been Commercial Director at deckel maho Pfronten GmbH since 1996. He continues to hold this appointment temporarily in addition to his other responsibilities. Before he joined gildemeister, Michael Welt was previously Manager in the mechanical and plant engineering industry.
Dear shareholders,
2003 was another challenging year for us, which continued to put us to the economic test: the continuing restraints on investment resulted in difficult market conditions in nearly all industrial countries and regions. China's growth market was once again the only exception to these conditions. Finally, towards the end of last year, the proverbial ray of hope appeared on the horizon in the form of a slight economic recovery. Not fully indicated in the usual economic data, this change for the better was last year also reflected in the stock exchanges. The stock markets showed noticeable improvements. Germany in particular showed strong signs of recovery. The GILDEMEISTER share also increased in value.
We have left behind us a difficult, but – in contrast to the rest of the industry – satisfactory year, in which we focused on strengthening our profitability. At € 977.8 million, sales revenues decreased by 5%. Order intake of € 981.8 million reached the figures for the previous year; which means that we succeeded in holding our ground, particularly in view of the 5% losses recorded by the rest of the industry. With respect to the overall year, we were able to achieve a pre-tax profit. EBIT amounted to € 34.7 million. EBT amounted to € 10.3 million. Despite the low sales volume, we were able to achieve an improvement in earnings with respect to EBIT and EBT of approximately € 18 million. The fact that the group still recorded a net loss for the year (€ 3.6 million) is primarily due to a tax back payment, non-deductible goodwill amortisation and items from international subsidiaries that cannot be set off against tax. We will therefore propose to the General Meeting of Shareholders to be held in May that no dividend is declared for the reporting year.
Order Intake in € million
Sales revenues in € million
| 2002 | 1,032.8 |
|---|---|
| 2003 | 977.8 |
(incl. trainees)
2002 2003 5,045 5,028 One thing is certain: The year 2003 has demonstrated that we were well prepared for the bad weather and were able to maintain course. Still, our innovative products are the basis of our success. This year's Annual Report has therefore been dedicated to the subject of "innovative technologies". We will continue consistently to develop our targeted innovation campaign in order to remain the leader in innovation and technology. Our customers' demands are the stimulation and drive for our development. It is our aim, with our modern productrange, to achieve long-term growth in all the major industrial markets. We will continue to optimise our range of products for the benefit of our customers. We will continue to focus attention in the service area. In this area, GILDE-MEISTER is working on new solutions for new challenges. We already benefit from our systems and service products that secure for us a considerable lead in comparison with our competitors. One of the crucial features of market leadership is the ability to serve markets promptly, reliably and with high quality. Parallel to the consolidation of our product range, we will continue to intensify our international presence during the years to come. Great prospects still await us in China. Here, the largest market for machine tools world-wide has developed in the past few years. We have utilised our opportunities in Asia and are now participating in the dynamic growth of this region. Our volume of business in Asia increased by 14% in a short space of time. On a medium-term basis we intend to expand in that region in order to generate more than 20% of our sales. We also aim high with respect to America, a major market that has gone through a crisis, but offers good prospects for the future. As soon as the American economy recovers, we expect the backlog of
investment projects here to be released, enabling us to benefit. A comprehensive overview of the past financial year is presented in our Annual Report. Once again we have tried to provide you with informative and varied reading matter.
Dear shareholders, we will make your Company secure for the future. It is and remains our aim to increase profitability. We are working towards all key performance ratios being positive again, and have the following plans for the financial year 2004: To increase order intake by approximately 5% and to increase sales by between 3-5%, subject to economic trends; on the basis of today's perspective, to improve EBT significantly – thereby achieving a profit for the year. It is our aim to attain a better result in order again to declare a dividend.
Our cost-cutting measures already initiated will be consistently pursued, whilst investments in fixed assets will be cut back severely following heavy investment in preceding years. We intend to reinforce the group's profitability by optimising internal processes in order to achieve a steady increase in productivity. Priorities for the next two years are the reduction of debt and the strengthening of the equity ratio. Targeted cost management, constant process optimisation and other measures will all ensure that our goals are achieved. The financial year 2004 will remain a challenge; however, we are well prepared and will return to the "road to growth" of the preceding years. Dear shareholders, my colleagues and I can assure you that GILDEMEISTER is well positioned for future growth. Our strategy is clearly defined and takes into account the needs of our target groups. By providing good conditions in a modern, international environment, we promote the active commitment of our employees. Thanks to a high standard of quality along with a high level of innovation we intend to retain our existing customers and acquire new ones. By a close and efficiency-orientated collaboration with our suppliers, we will, in a spirit of partnership, continue to realise further optimisation potential. We will be a reliable partner to those who provide us with outside capital. Above all, GILDEMEISTER shall remain a worthwhile investment for you, ladies and gentlemen, providing an even better return in the future. That is the objective for which we strive.
Yours truly
Dr. Rüdiger Kapitza Chairman of the Executive Board Bielefeld, 25 March 2004
Review >> The Year 2003
The Year 2003 42
January February March April May June
11 February 2002 sees another highlight: At the traditional deckel maho in-house exhibition in Pfronten, the group achieves an order intake for 84 machines worth € 16.6 million. For the first time, the new service products – the dmg Powertools – are presented at the ex-
The restructuring measures at the dmg Vertriebs und Service GmbH that were
more powerful and more flexible structure with an even greater customer proximity has been approved by
the market.
On 16 May 2003 the Annual General Meeting of Shareholders takes place in Bielefeld town hall; approximately 1,200 shareholders are present. With the approval of the company in General Meeting, gildemeister meets all applicable recommendations of the German Code of Corporate
In addition, the Suggestion Management dp support that has already proven itself at the German plants, is implemented at the European sites. The objective: an increase in the number of suggestions for improvement and, as a result, an increase in net
benefit.
At a Grand Opening on 15 January, gildemeister opens its new production plant in Shanghai – the first production site outside Europe. 152 standard machines have already been produced in the reporting year. A considerable increase in production is planned for the year 2004.
Michael Welt, Chief manager at deckel maho in Pfronten, is appointed to the Executive Board. He assumes responsibility for controlling and information technology, and as from June also finance.
hibition.
Following the award of the German Logistics Prize 2002, gildemeister, with its total logistics strategy, succeeds in convincing at a European level, and receives the"European Award for Logistics Excellence 2002". Executive Board member Prof. Dr. Raimund Klinkner receives the award in Marseille.
As a consequence of the new German stock market segmentation, the gildemeister share has, since 21 March 2003, been listed in the Prime Standard sdax. The change in the index listing had no effect on the performance.
At the largest Asian trade fair, the cimt in Peking, dmg scores a special success: with 81 machines sold we achieved an order intake totalling € 12.2 million. Equally important are the quotations that resulted with business after the fair.
Governance. In the production and logistics area, the development of shopfloor visualisation is intensified at the inter-
begun at the start of the year, show the first results: Our new
With the dmg Microset GmbH, gildemeister continues to expand its range of services relating to all aspects of machine tools. Tool Management is seen as one of the major cost-cutting potentials yet to be utilised in modern production
enterprises.
Harald Schartau, North Rhine-Westphalia's Minister for Economic Affairs and Employment, learns about gildemeister's activities in vocational training at the site in Bielefeld. He praises the company's high level of vocational training and the high
overall quality of the 205 trainees.
gildemeister increases its share in sauer to 95%. The machining of "advanced materials" is seen as a growth market. The ultrasonic technology used is unique in machine tool manufacture throughout the world. Its fields of application include the optical and medical industries as well as the motor and aerospace industries.
At the annual competition of the "manager magazin" the Annual Report of gildemeister again reached one of the highest positions. The jury confirmed, again, the company's role model character with respect to a transparent information policy.
gildemeister draws a positive conclusion from the emo in Milan. This most significant European machine tool trade fair in 2003 is another success for the technology group. gildemeister launches six world premieres to the trade.
With the Grand Opening of the new technology and assembly centre of sauer GmbH on 10 November, gildemeister strengthens the future oriented ultrasonic segment. Two new high-tech machines for 5-axis machining are introduced at this opening.
A further milestone in our globalisation strategy is the opening of the modern centre of technology of dmg Nippon in Yokohama.
As part of its re-structuring activities, and at the heart of Europe, gildemeister sets up the dmg Europe Holding GmbH, based in Klaus, Vorarlberg/ Austria. The new holding company controls the sales and service activities of all European dmg companies. The domestic market, Germany, continues to be controlled from Stuttgart.
July August September October November December
Business Report: General Economic Situation
In 2003, the global economy has gradually begun to show signs of recovery. With the end of the war in Iraq, international stock markets indicated a discernible price rally. In Asia the economic revival continued. China confirmed its role as the region's driving force, showing once again above average growth rates. In Japan, too, the economy recovered. The same happened in the USA. On the other hand, upward trends in most countries of the European Union (EU) were a lot weaker. In Germany the economy stagnated, whilst a slight recovery was noted in the second half of the year.
Overall economic development
Over the year 2003, the global economy saw a slight revival. The Japanese economy started to grow again, and the increase in production in the usa pulled other countries and regions along. Within the European Union, though, the recovery process was more tentative. This applies to Germany as well. According to provisional calculations by the Institute for World Economics (IfW) based at Kiel University, aggregate output rose globally by 3.4% (2002: 2.9%).
In Asia economic activity continued to improve. Fresh stimulus emanated from domestic demand in Japan, which was primarily due to a significant increase in investments. The crisis in the banking sector alleviated. Japan also profited from the improving economies in the remaining Asian regions. The gross domestic product rose by 2.7% (2002: 0.1%).
The boost in the us economy continued in the reporting year. Further tax reliefs resulted in an increase in demand, which particularly stimulated consumption. In addition, private households benefited from the low interest rates. Due to the positive earnings situation, corporate investments also picked up. However, these trends could not yet be felt in the machine tool industry. Exports profited from the low exchange rate of the us Dollar. The strongly expansive fiscal policy continued. The tax cuts and the costs of the involvement in Iraq placed a significant burden on the government budget. The gross domestic product rose by 3.1% over the entire year (2002: 2.4%).
In many parts of Europe, the economy only began to pick up during the second half of the year. The lead was taken by countries such as Finland, Ireland and Greece. Germany and the Netherlands were bottom. Whilst domestic demand was, overall, still weak, European exports picked up noticeably over the year. The rate of decline in corporate investments slowed down, however, consumption in private households hardly changed. The job market situation continued to be tight. According to provisional figures, the gross domestic product in the Euro zone rose by 0.5% in the reporting year (2002: 0.9%).
In Germany, economic activity stagnated again, however, slight upward trends were noted from the middle of the year. On several successive occasions, the Munichbased ifo Institute diagnosed an improvement in business climate, and, later on, in business conditions. According to provisional figures from the Federal Statistical Office in Wiesbaden, the gross domestic product dropped by 0.1% (2002: 0.2%). After 1993 (-1.1%), this was the second decline in economic performance since German re-unification. Over the second half of the year, added value gradually increased in both the manufacturing sectors and the major service sectors. The latest figures pertaining to the order intake in the manufacturing sector showed a noticeable increase, both with respect to domestic and international orders. In real terms, German exports increased by 1.1%, imports by 2% over the total year. At € 97 billion, the export surplus remained at very high level. Investment in new plant and machinery was 4% less in the reporting year. Private consumption did not bring much fresh stimulus to the economy. The situation in the job market remained extremely problematic. The annual average number of unemployed was 4.38 million, thereby exceeding the preceding year's figure by 8%. By the end of the year, 4.32 million people were out of work. At well over 40,000 the number of insolvencies reached a new record. The rate of inflation amounted to just 1.1%, thereby falling back to its lowest level since 1999. New borrowings in public spending were up again. At approximately 4% the deficit quota again missed the reference value of 3% provided in the Maastrich treaty.
Sources: Statistisches Bundesamt (Federal Statistical Office), Wiesbaden; Institut für Weltwirtschaft (Institute for World Economics (IfW), Kiel; ifo-Institut (Economic Research Institute), Munich
In comparison with industry trends, gildemeister was able to develop satisfactorily overall. As the major producer of metal cutting machine tools we maintained our leading position against international competition despite the difficult conditions in the global market. However, our export business was affected by the sometimes substantial devaluation of some currencies, mainly the Dollar and the Yen, against the Euro. More detailed explanatory notes on the development of the Euro in comparison with selected currencies are set out on page 50.
Development of the Machine Tool Manufacturing Industry
International Development
In 2003, global demand for machine tools continued to decline. According to its latest recently adjusted figures, the German Association of Machine Tool Manufacturers (vdw) expects a global output of € 32.1 billion for 2003. Production has therefore dropped again and has now fallen below the level for the year 1997; in the reporting year the decline amounted to 6% (previous year: 18%). The largest producer was once again Japan with € 7.0 billion and a 22% share in global output, after losing its first place to Germany in 2002. Germany came second with € 6.7 billion (21%). With € 3.7 billion (12%) Italy was able to maintain its place of the previous year, as did China with € 2.6 billion (8%). The usa remained fifth, ahead of South Korea. Japan, Germany, Italy, the pr of China, the usa and South Korea represent 74% of world-wide machine tool production (previous year: 72%).
| Shares in world-wide production | 2003 in % | 2002* in % |
|---|---|---|
| Europe | 49 | 52 |
| (of which Germany) | (21) | (22) |
| Pacific Region | 42 | 37 |
| (of which Japan) | (22) | (19) |
| America | 9 | 11 |
* Benchmark figures for 2002 are based on figures revised since last report
The individual world regions' shares in international production:
In the reporting year 55% of global production was exported. In exports, there was further confirmation of the leading roles of Germany with an export share of 63% (previous year: 60%) and Japan with an export share of 53% (previous year: 52%). Both countries together accounted for 45% by value of world exports (previous year: 42%). They were followed, at some distance, by Italy, Taiwan, Switzerland and the usa. Each of their shares – like the shares of the remaining countries – was below 10%.
The world-wide consumption of machine tools, also stated at € 32.1 billion, was distributed among the three major markets and the rest of the world as follows:
| World-wide consumption | Shares in world-wide consumption | 2003 in % | 2002* in % |
|---|---|---|---|
| of machine tools: | Europe | 38 | 41 |
| (of which Germany) | (12) | (14) | |
| Pacific Region | 42 | 37 | |
| (of which Japan) | (14) | (12) | |
| America | 17 | 20 | |
| Rest of the world | 3 | 2 |
* Benchmark figures for 2002 are based on figures revised since last report
In 2002 the pr of China became, for the first time, the world's largest market for machine tools and continued to expand its leading position. Consumption amounted to € 5.8 billion with an 18% share in consumption of all countries (previous year: 16%). Japan, with € 4.5 billion (14%) came second; and with € 3.9 billion (12%) Germany came third. Further important machine tool markets were the usa (10%), Italy (9%) and South Korea (7%).
With respect to imports of machine tools, the pr of China, with a 7% increase against the previous year, remained first ahead of the usa. 61% of the total consumption in China was imported. In the usa, on the other hand, total imports in the reporting year were 14% less than in 2002. Based on the total consumption in the usa, the import share rose slightly from 64% last year to 65% in the reporting year. German imports dropped by 15% and occupied third place, followed by Italy (-24%) and South Korea (+42%). With an 8% increase in domestic consumption, amounting to € 4.5 billion, imports in Japan in 2003 rose by 2% to € 0.3 billion, therefore occupying 12th place.
Source: The basis of the world machine tool statistics is the data published by the vdw (German Association of Machine Tool Manufacturers) (excluding parts and supplies). This data is requested by the national producers' associations of each individual country and is based on the current actual values or, for the remainder of the year, on careful estimations based on the updated values of the preceding year.
Explanatory notes on the problem of exchange rates
World Machine Tools Statistics
With the introduction of the common currency, possible exchange rate distortions ceased to play a role within the Euro states, but remain relevant with regard to third currencies, for example in respect of the us Dollar or the Yen. As the chart of the development of the Euro against selected currencies demonstrates, purchasing power in Europe, particularly with respect to Great Britain, Switzerland and the Czech Republic, has depreciated against the Euro in the order of 10%, 4% and 3% respectively. For us-American and Asian customers on the other hand, the Euro has noticeably risen in value. The revaluation of the Euro for investors in the United States amounts to 20%, in China and Taiwan to 19% each, in India and South Korea to 15% each and in Japan to 11%.
| Changes in the Euro in 2003 | usa (usd) | 20 |
|---|---|---|
| compared with 2002 against the | China (cny) | 19 |
| individual national currencies | Taiwan (twd) | 19 |
| in % | India (inr) | 15 |
| Source: Deutsche Bundesbank | South Korea (won) | 15 |
| Japan (yen) | 11 | |
| Great Britain (gbp) | 10 | |
| Switzerland (sfr) | 4 | |
| Czech Republic (czk) | 3 |
German Machine Tool Industry
In line with the international section trend, the year 2003 brought an 8% decrease in German machine tool production. This drop in production is mainly due to the fact that, as order backlogs have decreased, it was not possible to get an adequate level of follow-up orders so as to utilise existing production capacities. Whilst the intake of new orders decreased by 5% against the previous year, there was a 14% drop in domestic sales and a 3% drop in exports. Exports reached € 5.2 billion in the reporting year.
In comparison with the previous year, the order intake dropped by a total of € 8.4 billion (previous year: € 8.8 billion). These changes are due to the fact that domestic orders decreased by 15%, whilst international orders rose by 5%. Compared with the previous year, in which there was a 6% drop, the declining trend in incoming orders slowed down over the year.
order intake in Germany Real changes against the previous year in %
According to figures of the Munich-based Economic Research Institute (ifo), the business climate in the principal purchaser industries – the mechanical engineering, road vehicle construction and electrical engineering industries – showed a slight upward development over the second half of the year. Though mechanical and electrical engineering still showed negative figures, they appeared to improve. Road vehicle construction recorded a positive balance with slight upward trends particularly in the last four months.
In 2003, as in the previous year, the machine tool industry did not achieve any growth in production; it dropped to a total of € 8.8 billion, and therefore was 8% below the figure for 2002 (€ 9.6 billion). Whilst sales dropped by 13% during the first half of the year, the declining trend slowed down during the second half of the year, resulting, with respect to machine tools, in a total drop of just 5% over the entire year.
Of the metal cutting machines produced in Germany, 59% were exported in the reporting year (2002: 56%). Compared with the previous year, exports dropped by 3% to € 5.2 billion. Despite another drop of 8%, the United States remained the most important market for German machine tools; based on the available figures for the first three quarters of the year 2003, 13% of exports were attributed to this market (2002: 14% in the entire year). China succeeded in expanding its position as the second most important market with a 46% growth. The subsequent places in the ranking of their significance as purchasing countries were occupied by Great Britain with a 7% share (2002: 4%), France with a 6% share (2002: 8%), Italy with a 6% share (2002: 8%), Austria with a 5% share (2002: 4%) and Switzerland with a 5% share (2002: also 5%).
The 13% drop in imports to € 1.9 billion in the reporting year (2002: € 2.2 billion) together with the 14% drop in domestic sales, now worth € 3.6 billion (2002: € 4.2 billion) led to a 14% reduction in domestic consumption, now totalling € 5.6 billion. About 24% (2002: 29%) of the German machine tool imports originated from the European Union. As previously, Switzerland remained by a long way the largest supplier country. Other countries with substantial supply volumes included Japan, the Czech Republic, the usa, Italy, Great Britain, Poland and Austria.
At the end of 2002 capacity utilisation was 89.6%. During 2003, this value dropped to 79.9% in the second quarter, but has now recovered and amounts to 85.5%. A slightly higher capacity utilisation of 87.3% was achieved for metal cutting machines, whilst utilisation for non-cutting machines was noticeably lower, at 81.6%. The demand trend is also reflected in order backlog. The order backlog, expressed as production months, decreased from 6.7 at the beginning of the year to 6.0 months in June 2003. By October 2003 the backlog increased again to 6.4 months. This computed average value for the industry can only be a rough indicator of the order backlog due to its compilation. Along with standard machines with extremely short delivery times, it includes special machines and large press machine tools with long delivery times.
Employment in the German machine tool manufacturing companies decreased by 5% in the reporting year. During the first six months of 2003 the number of employees dropped to 63,900, further decreasing to 63,700 during the second half of the year.
According to estimates by the Association of German Machine Tool Manufacturers, profitability for most companies in the German machine tool industry has further deteriorated when compared with the previous year. A statement on this matter is difficult as only a few companies publish their figures. Reliable statements are only available in some cases so that the Association has to rely on estimates. The industry's returns on investment are, in total, far from satisfactory. The industry is not only affected by the cyclical effects and structural changes of the previous years, but also by the high product development costs and investments focused on future developments.
Source: vdw; vdma – Fachverband Werkzeugmaschinen und Fertigungssysteme (Trade Association for Machine Tools and Production Systems) Figures include parts and accessories, etc. (figures pertaining to the previous year were partly updated)
Business Report: Company Situation and Business Development
Despite the difficult conditions throughout the world, GILDEMEISTER was able to achieve sales revenues of € 977.8 million in the financial year 2003 (previous year: € 1,032.8 million). The order intake of € 981.8 € million was in line with the figures for the previous year (€ 981.0 million). Compared with the rest of the industry (-5%) GILDEMEISTER performed well. With respect to the overall year, we were able to achieve a pre-tax profit. EBIT amounted to € 34.7 million (previous year: € 17.2 million). EBT was € 10.3 million (previous year: € -7.5 million). GILDEMEISTER shows a post-tax loss for the year of € 3.6 million for the group (previous year: € -18.7 million), which is primarily due to a tax back payment, non-deductible goodwill amortisation and items from international subsidiaries that cannot be set off against tax.
GILDEMEISTER Aktiengesellschaft closed the financial year with a net profit of € 4.7 million (previous year: € 4.4 million). As previously announced, we propose not to distribute a dividend for the financial year 2003, but to transfer the accumulated profits to revenue provisions.
For the financial year 2004, gildemeister expects an increasing revival in demand. Thanks to our innovative products, user-orientated technologies and comprehensive technical services gildemeister is well prepared for the expected recovery in the market. By being well represented by the group's sales and service organisation in all the major industrial markets and with an adequate share in the market, we stand a good chance of maintaining our position against the competition.
On 31 December 2003 the gildemeister group comprised
_gildemeister Aktiengesellschaft as parent company and the following affiliated companies and their subsidiaries:
- _gildemeister Drehmaschinen GmbH, Bielefeld,
- _gildemeister Italiana S.p.A., Brembate di Sopra,
- _deckel maho Pfronten GmbH, Pfronten (indirect),
- _deckel maho Geretsried GmbH, Geretsried,
- _deckel maho Seebach GmbH, Seebach,
- _ famot Pleszew S.A., Pleszew,
- _ sauer GmbH, Idar-Oberstein,
- _ lasertec GmbH, Pfronten (indirect),
- _deckel maho gildemeister (Shanghai) Machine Tools Co., Ltd., Shanghai,
- _ a & f Stahl- und Maschinenbau GmbH, Würzburg,
- _dmg Vertriebs und Service GmbH deckel maho gildemeister, Bielefeld.
The consolidated company report includes all group companies controlled by gildemeister Aktiengesellschaft. With its fully owned subsidiaries, graziano Tortona S.p.A., Tortona, and saco S.p.A., Castelleone, gildemeister Italiana constitutes a subgroup. As does dmg Vertriebs und Service GmbH with each of its subsidiaries.
gildemeister operates in the metal-cutting technology sector. Business activities include "Machine Tools", "Services" and "Corporate Services". The group's corporate governance is directed to these business areas. "Machine Tools" is made up of "turning", "milling" and "laser/ultrasonic" technologies. All of our machines are classified as cutting machine tools, and all business segments are compatible with each other. "Services" is directly related, across all areas, to the machines: our services are available in all relevant international markets via dmg Vertriebs und Service GmbH. "Corporate Services", covers the business operations of gildemeister Aktiengesellschaft and the holding company Macchine Utensili S.p.A., Milan.
Sales Revenues
In 2003, the weak world-wide demand for machine tools also affected sales revenues development at gildemeister. Sales revenues amounted to € 977.8 million, and therefore were € 55.0 million or 5% below the high figures for the preceding year. In the fourth quarter sales revenues went up to € 276.3 million; however, our planned target was not quite realised. At € 475.7 million, domestic sales dropped slightly by € 16.0 million or 3%. International sales reached € 502.1 million (€ -39.0 million or -7%); this is 51% of the total (previous year: 52%).
In the "Machine Tools" segment, the ten production plants of the gildemeister group contributed 72% of the sales revenues from their six domestic and now four international sites (previous year: 74%). Milling technology from deckel maho represented 46% of total sales revenues (previous year: 50%), whilst the laser/ultrasonic technology represented more than 1% (previous year: 1%). The sales revenues contribution from gildemeister, graziano and famot turning technology amounted to 25% (previous year: 23%). External sales revenues of 28% (previous year: 26%) were attributed to the "Services" of dmg Vertriebs und Service GmbH, a & f Stahlund Maschinenbau GmbH and saco S.p.A. with its components business. With trading both on their own account and on a commission basis for the group companies and third-party products, the future orientated "Services" segment is operated primarily by dmg and its subsidiaries in Germany and abroad. The a & f business is engaged in the skilled procurement of mechanical machine parts and assembled structural components. saco, Castelleone, manufactures components and products primarily for automatic lathes.
Order Intake
In the financial year 2003, gildemeister achieved an order intake of € 981.8 million. In contrast to the rest of the industry (-5%) we succeeded in maintaining our overall order intake at the same level as the preceding year (€ 981.0 million).
As expected, our order intake of € 281.0 million rose in the fourth quarter, when compared with the preceding quarters and with the corresponding quarter of the preceding year (€ 243.9 million). The fresh stimulus emanating from the autumn trade fairs had, in part, a delayed effect. As a result we did not quite accomplish our target. Only as late as December we were able to achieve a higher order intake.
Incoming domestic orders of € 457.0 million (previous year: € 455.6 million) and international orders of € 524.8 million (previous year: € 525.4 million) remained at a constant level. The foreign share decreased by one percentage point to 53%.
In the year 2003, dmg Vertriebs und Service GmbH with its 38 technology centres operating world-wide, its consistent market proximity, direct selling covering all areas and the extensive range of customer-related services once again succeeded in maintaining its position despite heavy competition. In this respect the Japanese competition made its presence increasingly felt, as it profited from the exchange rate of the Euro against the Yen. The presence of the Japanese competition was also felt in the American market, since the increased value of the Euro was proportionally stronger against the Dollar than the increased value of the Yen. Both in the domestic market and in Europe, gildemeister maintained its competitive position despite the continued weakness of the market. In America the order intake did not quite reach the
figures for the preceding year; however, with the expected improved economic situation we can see potential for 2004. The order from Asia developed well. Particularly in China, but also in Japan and Korea we were able to increase our order intake significantly.
The drastic structural and organisational changes of dmg that were carried out in early 2003 have already proved successful in the reporting year. dmg has become more global and more flexible with an even closer customer proximity in 2003. The individual companies with their local technology centres continue to be managed in a proven way; however, objectives were tightened and adjusted in accordance with the changed conditions in the market. The direction and supervision of the companies was restructured, and overall responsibility grouped according to the German, European, American and Asian market regions.
In the reporting year, 72% of the order intake were attributed to the "Machine Tools" segment (previous year: 74%), 28% to the group's "Services" (previous year: 26%) and less than 0.1% to "Corporate Services".
In 2003, with roughly the same volume of order intake, a total of 4,674 turning, milling, laser/ultrasonic and used machines were sold to 3,385 different customers within Germany and abroad. The sales volume is therefore 9% less than in the preceding year. Due to a changed product mix, the average value per machine was 8% above the preceding year's value. During the course of the year selling prices were raised slightly within the limited market by between 0% to 3% depending on each specific product. The high pressure on selling prices has increased further due to the developments in the Euro exchange rate.
Our innovative high-tech products, the global expansion and re-structured management of our dmg sales and service companies, our presence at international trade fairs and last, but not least, our intensive marketing all contributed to the accomplishment of an order intake worth € 981.8 million. For example, our presence at this year's two major trade fairs, the cimt in Peking and the emo in Milan, as well as our in-house exhibitions in Pfronten, Bielefeld, Seebach, Leonberg and Bergamo, were crowned with success, with orders for 516 machines and an order intake totalling € 89.7 million. More than 4,400 new quotations were triggered by the above fairs, setting new trends for future development. Our innovations were met with great interest by the specialist audience.
Key Accounting was further expanded in the reporting year in order to meet our customers' increasing globalisation. In key accounting, which concerns the management of our major customers across all areas and products, we achieved an order intake of € 54 million in the current financial year (previous year: € 50 million), therefore again meeting expectations.
Order Backlog
On 31 December 2003, the order backlog amounted to € 332.8 million. When compared with the figure of € 328.8 million for the same time last year, this is an increase of just € 4.0 million (1%). 63% of the existing orders were attributed to international orders (previous year: 57%), which increased by € 22.7 million or 12% to € 210.3 million. Existing domestic orders dropped by € 18.7 million or 13% to € 122.5 million.
The order backlog corresponds to a production capacity utilisation of approximately three months. The average utilisation value, however, is mainly determined by the high technology machines in our production programme with correspondingly longer production times.
The order backlog for "Machine Tools" amounted to € 273.6 million at the end of the reporting year; this is an 82% share in the group's order backlog. Of these, 59% were international orders (previous year: 51%). The group's order backlog was attributed to "Services", primarily to dmg Vertriebs und Service GmbH and its subsidiaries were € 59.2 million or 18% of the total. The corresponding export share was 82% (previous year: 85%).
Results, Net Worth and Financial Position
Results 2003
In the financial year 2003, profitability of the gildemeister group has again improved noticeably. ebitda reached € 71.1 million (previous year: € 54.9 million), ebit amounted to € 34.7 million (previous year: €17.2 million) and ebt was at around € 10.3 million (previous year: € -7,5 million). We were therefore able to achieve an earnings improvement (ebit and ebt) of approximately € 18 million.
Despite the smaller sales volume, gildemeister succeeded in reinforcing its profitability. Thanks to consistent cost and process management we have improved the earnings margins in both the "Machine Tools" segment and the "Services" segment. The service business in particular was further expanded. Not only was the sales revenues volume increased, but we also achieved higher margins. With respect to the business development of the segments we refer to pages 108 ff.
| 2003 | 2002 | Changes againstprevious year | ||||
|---|---|---|---|---|---|---|
| € k | % | € k | % | € k | % | |
| Total work done | 995,709 | 100.0 | 1,046,599 | 100.0 | -50,890 | -4.9 |
| Cost of materials | -525,345 | -52.8 | -569,922 | -54.5 | 44,577 | -7.8 |
| Gross profit | 470,364 | 47.2 | 476,677 | 45.5 | -6,313 | -1.3 |
| Personnel costs | -270,577 | -27.2 | -270,156 | -25.8 | -421 | 0.2 |
| Other operating income | ||||||
| and expenses | -128,682 | -12.9 | -151,588 | -14.5 | 22,906 | -15.1 |
| ebitda | 71,105 | 7.1 | 54,933 | 5.2 | 16,172 | 29.4 |
| Depreciation of assets | -36,430 | -3.6 | -37,757 | -3.6 | 1,327 | -3.5 |
| ebit | 34,675 | 3.5 | 17,176 | 1.6 | 17,499 | 101.9 |
| Financial result | -24,414 | -2.5 | -24,672 | -2.3 | 258 | -1.0 |
| Profit/loss on ordinary activities | 10,261 | 1.0 | -7,496 | -0.7 | 17,757 | 236.9 |
| Taxes on profit | -13,840 | -1.4 | -11,214 | -1.1 | -2,626 | 23.4 |
| Annual profit/loss | -3,579 | -0.4 | -18,710 | -1.8 | 15,131 | 80.9 |
GILDEMEISTER group Income Statement
Total work done amounted to € 995.7 million and was therefore 4.9% or € 50.9 million below the figure for the preceding year (€ 1,046.6 million). We reduced the proportional cost of materials from 54.5% to 52.8% and are therefore back in line with the year 2000 level. This reduction is mainly due to optimisations in the process chain, specific reductions in the cost of materials per machine model and improved purchasing conditions. At € 470.4 million, the gross profit was 1.3% or € 6.3 million below the preceding year's figure (€ 476.7 million). The gross profit margin has thereby increased to 47.2% (previous year: 45.5%).
Personnel costs remained, overall, in line with the preceding year, however, percentage personnel costs increased from 25.8% to 27.2%.
The balance from other operating income and expenses dropped by € 22.9 million to € 128.7 million. Major savings were achieved in the marketing area and through reduced legal and consulting fees as well as reduced costs of guaranty commitments. Rental and leases amounted to € 18.3 million in the reporting year (previous year: € 17.1 million). On 31 December 2003 rental and leases obligations for the financial year 2004 stood at € 13.6 million.
Compared with last year (€ 37.7 million), depreciation decreased by 1.3% to € 36.4 million. The depreciation value includes goodwill amortisation of € 6.7 million.
The financial result of € -24.4 million improved by € 0.3 million in comparison with the previous year (€ -24.7 million). The annual loss amounts to € 3.6 million (previous year: € -18.7 million). Tax expenditure was primarily affected by a tax back payment, non-deductible goodwill amortisation and effects from international subsidiaries that cannot be set off.
Further details on revenue and expense items are set out in the Notes starting on page 149 ff.
Overall, the margins calculated on the basis of total turnover developed positively when compared with the previous year. Due to a gross profit margin that increased by 1.7 percentage points to 47.2%, and the savings achieved in other expenses, the ebitda margin was up to 7.1% (previous year: 5.2%). With a reduction in depreciation, the ebit margin increased by 1.9 percentage points to 3.5% (previous year: 1.6%). With an unchanged financial result, the ebt margin developed positively and increased by 1.7 percentage points to 1.0% (previous year: -0.7%).
The Annual Financial Statement and the Annual Report of the gildemeister Aktiengesellschaft are included in a separate report.
The distribution of dividends by the affiliated companies determines the result of gildemeister Aktiengesellschaft. In the past financial year, their profit for the year totalled € 4.7 million (previous year: € 4.4 million).
Due to the group's annual loss, the Executive Board and Supervisory Board will propose to the company in General Meeting on 14 May 2004, not to distribute a dividend for the financial year 2003, but to transfer the accumulated profits of gildemeister Aktiengesellschaft of € 9.1 million to revenue provisions.
Net Worth and Financial Position
GILDEMEISTER group Balance Sheet
| Changes against | ||||||
|---|---|---|---|---|---|---|
| 31 Dec. 2003€ k | % | 31 Dec. 2002€ k | % | previous year€ k | % | |
| Assets | ||||||
| Long and medium term assets | ||||||
| Fixed assets | 270,569 | 30.9 | 276,281 | 30.7 | -5,712 | -2.1 |
| Current assets | 31,652 | 3.6 | 34,725 | 3.9 | -3,073 | -8.8 |
| 302,221 | 34.5 | 311,006 | 34.6 | -8,785 | -2.8 | |
| Short term assets | ||||||
| Inventories incl. payments | ||||||
| on account | 264,365 | 30.2 | 250,768 | 27.9 | 13,597 | 5.4 |
| Receivables and other assets | 296,901 | 34.0 | 318,900 | 35.5 | -21,999 | -6.9 |
| Liquid funds | 11,425 | 1.3 | 17,689 | 2.0 | -6,264 | -35.4 |
| 572,691 | 65.5 | 587,357 | 65.4 | -14,666 | -2.5 | |
| Balance sheet total | 874,912 | 100.0 | 898,363 | 100.0 | -23,451 | -2.6 |
| Total equity and liabilities | ||||||
| Long and medium term | ||||||
| financial resources | ||||||
| Equity | 187,593 | 21.4 | 193,824 | 21.6 | -6,231 | -3.2 |
| Shares to other shareholders | 1,198 | 0.1 | 1,193 | 0.1 | 5 | 0.4 |
| Borrowed funds | ||||||
| Provisions | 49,765 | 5.7 | 46,645 | 5.2 | 3,120 | 6.7 |
| Creditors | 105,798 | 12.1 | 140,129 | 15.6 | -34,331 | -24.5 |
| 155,563 | 17.8 | 186,774 | 20.8 | -31,211 | -16.7 | |
| 344,354 | 39.3 | 381,791 | 42.5 | -37,437 | -9.8 | |
| Short term financial resources | ||||||
| Provisions | 84,194 | 9.6 | 101,741 | 11.3 | -17,547 | -17.2 |
| Creditors | 446,364 | 51.1 | 414,831 | 46.2 | 31,533 | 7.6 |
| 530,558 | 60.7 | 516,572 | 57.5 | 13,986 | 2.7 | |
| Balance sheet total | 874,912 | 100.0 | 898,363 | 100.0 | -23,451 | -2.6 |
Compared with last year, the balance sheet total of the gildemeister group decreased by 2.6% or € 23.5 million to € 874.9 million (previous year: € 898.4 million).
of the GILDEMEISTER group in %
The fixed assets on the assets side decreased by 2.1% or € 5.7 million to € 270.6 million (previous year: € 276.3 million). In this respect both intangible assets (€ -1.6 million) and tangible assets (€ -3.9 million) decreased. The asset additions are set out in more detail in the "Investments" chapter starting on page 83.
In the reporting year stock on hand showed a slight increase of 5.4% or € 13.6 million to € 264.4 million (previous year: € 250.8 million). Whilst the work in progress inventory dropped by € 2.2 million to € 88.4 million (previous year: € 90.6 million), raw materials and consumables recorded an increase of € 6.4 million to € 75.4 million (previous year: € 69.0 million). The inventory of finished goods increased by € 10.0 million to € 98.9 million (previous year: € 88.9 million). At 30.2%, the stock on hand share in the balance sheet total increased by a total of 2.3 percentage points, compared to 27.9% in the preceding year.
Based on total revenue, the stock turnover reduced from 4.1 to 3.7.
Compared with the previous year, receivables and other assets reduced by 7.1% or € 22.3 million to € 294.3 million (previous year € 316.6 million). Whilst other assets were up by € 13.3 million to € 34.7 million (previous year: € 21.4 million), trade debtors dropped by 12.1% or € 35.7 million to € 259.6 million (previous year: € 295.3 million).
Compared with the previous year, the debtor-sales ratio improved, turnover was up from 3.7 to 3.8.
At the balance sheet date, liquid funds totalled € 11.4 million, and were below the preceding year's figure (€ 17.7 million) by € 6.3 million. The relative share in the balance sheet total dropped from 2.0% to 1.3%.
In the structure of assets, the relative share of assets appropriated on a long and medium-term basis of 34.5% remained almost unchanged in comparison to the preceding year.
| Structure of the assets | 2002 | 30.7% | 69.3% | € 898.4 million | |
|---|---|---|---|---|---|
| 2003 | 30.9% | 69.1% | € 874.9 million | ||
| Fixed assetsCurrent assets |
With respect to total equity and liabilities, the annual loss and the change in revenue provisions resulted in a reduction in capital of 3.2% or € 6.2 million to € 187.6 million (previous year: € 193.8 million). The equity ratio decreased slightly by 0.2 percentage points to 21.4% (previous year: 21,6%). As of 31 December 2003 net indebtedness amounted to € 342.1 million (previous year € 319.5 million), which was primarily due to an increase in bills of exchange payable. The ratio of average net indebtedness to average equity (gearing) therefore rose from 164.8% to 182.4% when compared with the preceding year.
Long-term borrowed funds decreased by € 31.2 million to € 155.6 million. Their share in the balance sheet total decreased by 3.0 percentage points to 17.8% (previous year: 20.8%). The proportion of long-term provisions increased from 5.2% to 5.7%.
Long and short-term financing decreased by € 37.4 million or 9.8% to € 344.4 million in the reporting year. The assets appropriated on a long and medium-term basis are 113.9% financed (previous year: 122.8%) by funds that are available on a long and medium-term basis.
Short-term financing increased by € 14.0 million or 2.7% to € 530.6 million. The proportion of short-term provisions included in the above funds decreased by € 17.5 million or 17.2% to € 84.2 million (previous year: € 101.7 million). Short-term liabilities increased by € 31.5 million or 7.6% to € 446.3 million (previous year: € 414.8 million).
When compared with the previous year, the total equity and liabilities show a clear shift in the funding of total equity employed. The total fixed assets and stock on hand of € 534.9 million (previous year: € 527.1 million) are 64.4% covered (previous year: 72.4%) by long and medium-term funding. When compared with the previous year, the structure of total equity and liabilities indicate a slight decrease in the equity ratio and a reduction in provisions; the liabilities ratio has increased accordingly by 1.4 percentage points to 63.2% (previous year: 61.8%).
We will continue to pursue our efforts to reduce our liabilities. With a systematic receivables management and the harmonisation of payment terms as far as this is possible in the market, we will continue to focus on reducing our trade debtors. We are striving for another release of funds by reducing our stock on hand. In addition, we are looking into various options to strengthen our equity capital base and consolidate our borrowings focusing particularly on long-term borrowing.
Liabilities
GILDEMEISTER group cash flow
| Changes | |||
|---|---|---|---|
| 2003 | 2002 | againstprevious year | |
| T€ | € k | € k | € k |
| Cash flow from current operations | |||
| 1. Profit/loss for the year | -3,579 | -18,710 | 15,131 |
| 2. Depreciation of fixed assets | 36,430 | 37,757 | -1,327 |
| 3. Change in deferred taxes | 4,310 | -4,849 | 9,159 |
| 4. Change in long-term provisions | 3,120 | -76 | 3,196 |
| 5. Other income not affecting payments | -445 | -506 | 61 |
| 6. Change in short term provisions | -17,547 | 14,059 | -31,606 |
| 7. Profit / loss from disposal of fixed assets | -945 | -105 | -840 |
| 8. Changes in current asset items and in liabilities | |||
| _Stocks | -13,597 | 997 | -14,594 |
| _Trade receivables | 35,647 | 4,133 | 31,514 |
| _Other assets not to be allocated to investment or | |||
| financing activity | -13,965 | 14,785 | -28,750 |
| _Trade payables | -6,197 | 17,610 | -23,807 |
| _Other equity liabilities not be allocated to investment | |||
| or financing activity | 5,503 | -17,425 | 22,928 |
| 28,735 | 47,670 | -18,935 | |
| Cash flow from investment activity | |||
| 1. Receipts from the disposal of property, plant, | |||
| equipment and intangible assets | 3,880 | 4,766 | -886 |
| 2. Payments for investments in tangible fixed assets | -23,162 | -38,706 | 15,544 |
| 3. Payments for investments in intangible | |||
| fixed assets | -13,115 | -14,493 | 1,378 |
| 4. Payments for investments in financial assets | -243 | -23,484 | 23,241 |
| 5. Receipts from financial assets and disposals | 335 | 28 | 307 |
| -32,305 | -71,889 | 39,584 | |
| Cash flow from financing activity | |||
| 1. Payments (prev. receipts) for repayments (prev. year | |||
| from raising) of (financing) credits | -2,008 | 43,402 | -45,410 |
| 2. Distribution of dividends to shareholders | 0 | -17,328 | 17,328 |
| 3. Distribution of dividends to other shareholders | -63 | -755 | 692 |
| 4. Receipts from investment allowance / grant | 249 | 2,266 | -2,017 |
| -1,822 | 27,585 | -29,407 | |
| Changes affecting payments | -5,392 | 3,366 | -8,758 |
| Consolidation and exchange rate related changes | |||
| not affecting payments | -872 | -955 | 83 |
| Liquid funds as of 1 January | 17,689 | 15,278 | 2,411 |
| Liquid funds as of 31 December | 11,425 | 17,689 | -6,264 |
The flow of funds analysis (cash flow statement) records the payment flow in a financial year and represents the inflow and outflow of the company's liquid funds. In this process, the source of the funding employed is compared with the investment activity.
Based on the profit/loss for the year, the cash flow from current operations is indirectly traced back. It is calculated by adding to the annual profit those expenses that are not set off against any payments, and subtracting from it income that did not result in the receipt of monies. In this process, movements in balance sheet items pertaining to current operations are taken into account and adjusted for changes due to foreign currency conversion and changes in the consolidated group. The cash flow from investment activity and the cash flow from financing are each calculated in terms of actual sums paid. A reconciliation of the cash flow with the published consolidated balance sheet is therefore not possible.
At € 28.7 million, the cash flow (inflow of funds) from current operations was positive in the reporting year (previous year: € 47.7 million). Against the previous year this resulted in a reduced inflow of funds of € 19.0 million. Following the considerably reduced net loss for the year of € 3.6 million (previous year: € -18.7 million), the depreciation of € 36.4 million and the reduction in trade debtors of 35.6 million benefited the cash flow. Another positive effect was achieved by the change in deferred taxes (€ 4.3 million), in long-term provisions (3.1 million) and in other equity and liabilities (€ 5.5 million). In the financial year 2003, the change in short-term reserves of € 17.5 million (such as tax payments for the previous year), in inventories (€ 13.6 million), in other assets (€ 14.0 million) and in trade creditors (€ 6.2 million) all affected the cash flow.
Due to an investment volume that decreased noticeably when compared with the preceding year, the cash flow (outflow of funds) with respect to investment activity improved by € 39.6 million against the previous year. Net investments dropped by 55.1%, amounting to € 32.3 million in the reporting year compared to € 71.9 million in the previous year. Amounts paid out for investments in tangible fixed assets were around € 23.2 million, therefore falling 40.2% below the preceding year's figure. Further details are set out in the "Investments" section on page 83.
Following the high level of financial investments in the past year (€ 23.5 million), only € 0.2 million were invested in non-trading assets in the reporting year.
Development costs amounting to € 8.1 million were capitalised in the reporting year. This amount is included in the amounts paid out for investments in intangible fixed assets. There were no sales of companies or other business units during the reporting year.
In the financial year the cash flow (outflow of funds) from financing activity was € -1.8 million (previous year: inflow of funds: € 27.6 million). Following the inflow of funds from finance loans (€ 43.4 million) last year, a repayment of € 2.0 million
was made in the financial year. There were no investment and financing activities affecting payment in the reporting year. Liquid funds at the balance sheet date decreased by 35.4% to € 11.4 million, when compared with the preceding year (€ 17.7 million).
The value added statement represents the difference between the company's output and the consumption of products and services, in terms of value, purchased from other firms. The distribution statement shows the contribution of those participating in value-added activities – employees, company, lenders, shareholders/company members and government.
In the financial year 2003, the value added by the gildemeister group totalled € 305.4 million (previous year: € 287.5 million), representing a rise of 6.2% or € 17.9 million. In the distribution of the value added, obligations to payees/recipients exceeded the value added generated, requiring an adjustment from the company's capital of € 0.7 million. The following table shows the value added statement in detail.
Value added statement of the gildemeister group
| Change against | ||||||
|---|---|---|---|---|---|---|
| 2003 | 2002 | previous year | ||||
| € m | % | € m | % | € m | % | |
| source | ||||||
| Sales revenues | 977.8 | 95.6 | 1,032.8 | 96.3 | -55.0 | -5.3 |
| Other revenues | 44.5 | 4.4 | 40.1 | 3.7 | 4.4 | 11.0 |
| Operating performance | 1,022.3 | 100.0 | 1,072.9 | 100.0 | -50.6 | -4.7 |
| Raw materials and consumables | 525.3 | 51.4 | 569.9 | 53.1 | -44.6 | -7.8 |
| Depreciation | 36.4 | 3.5 | 37.8 | 3.5 | -1.4 | -3.7 |
| Other expenses | 155.2 | 15.2 | 177.7 | 16.6 | -22.5 | -12.7 |
| Purchased materials and services | 716.9 | 70.1 | 785.4 | 73.2 | -68.5 | -8.7 |
| Value added | 305.4 | 29.9 | 287.5 | 26.8 | 17.9 | 6.2 |
| 2003 | 2002 | Change againstprevious year | ||||
|---|---|---|---|---|---|---|
| € m | % | € m | % | € m | % | |
| distribution | ||||||
| Employees | 270.7 | 88.6 | 270.3 | 94.0 | 0.4 | 0.1 |
| Company | -0.7 | -0.2 | -27.7 | -9.6 | 27.0 | 97.5 |
| Lenders | 24.4 | 8.0 | 24.7 | 8.6 | -0.3 | -1.2 |
| Shareholders/minority interests | 0.1 | 0.0 | 0.3 | 0.1 | -0.2 | -66.7 |
| Government | 10.9 | 3.6 | 19.9 | 6.9 | -9.0 | -45.3 |
| Value added | 305.4 | 100.0 | 287.5 | 100.0 | 17.9 | 6.2 |
Distribution of the value added in the GILDEMEISTER group
2003: Total of € 305.4 million
| Employees | 88.6 | ||
|---|---|---|---|
| in % | Companies | -0.2 | |
| Lenders | 8.0 | ||
| Shareh./minority interests | 0.0 | ||
| Government | 3.6 |
2002: Total of € 287.5 million
| Employees | 94.0 | |||
|---|---|---|---|---|
| Companies | -9.6 | |||
| Lenders | 8.6 | |||
| Shareh./minority interests | 0.1 | |||
| Government | 6.9 | |||
gildemeister Share
The Trading Year 2003
Stock markets made a slow start in the trading year 2003, but picked up noticeably over the year. The Deutsche Aktienindex (dax) increased by a total of 37.1%, thereby performing better than the Dow Jones (+25.1%). Germany also led the way amongst the other European countries. The ftse-100-Index rose by just 13.5%. The Euro stoxx 50 was up by just 15.3%, whilst the Nikkei Index increased by 24.5%. After the high losses of the preceding years, the securities in the technology sector picked up noticeably. The American nasdaq climbed by 50.2% and the German tecdax by 50.9%. The mdax achieved 47.8% and the sdax even 51.3%. According to securities dealers, the improved situation is primarily due to the gradual revival in world-wide market conditions. However, a large number of shares continue to be underpriced, according to experts.
Key data of the GILDEMEISTER share
| (wkn)Security code number | 587800 |
|---|---|
| (isin) | de0005878003 |
| Stock symbol | |
| Exchange | GIL |
| ReutersStock exchange Frankfurt | GILG.F |
| Xetra-Handel | GILG.DE |
| Bloomberg | GIL |
GILDEMEISTER share performance figures
| 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | ||
|---|---|---|---|---|---|---|---|---|
| Capital stock | € m | 48.7 | 55.5 | 56.4 | 75.1 | 75.1 | 75.1 | 75.1 |
| m sharesNo. of shares 1) | 19.0 | 21.7 | 21.7 | 28.7 | 28.9 | 28.9 | 28.9 | |
| Year-end price 2) | € | 5.01 | 5.78 | 6.80 | 8.20 | 9.32 | 3.78 | 8.22 |
| Annual high 2) 3) | € | 7.52 | 9.31 | 7.30 | 10.30 | 9.90 | 12.07 | 8.25 |
| Annual low 2) 3) | € | 3.53 | 4.78 | 5.05 | 6.65 | 6.20 | 3.21 | 2.83 |
| Annual average market price 2) 4) | € | 5.38 | 6.26 | 6.20 | 8.66 | 8.78 | 8.24 | 5.25 |
| Dividend | € | - | 0.28 | 0.50 | 0.60 | 0.60 | - | - |
| Dividend total | € m | - | 6.1 | 10.9 | 17.2 | 17.3 | - | - |
| Dividend yield | % | - | 4.8 | 7.4 | 7.3 | 6.4 | - | - |
| Earnings per share 5) | € | -0.07 | 0.46 | 0.76 | 0.91 | 0.85 | -0.66 | -0.13 |
-
In 1999 the capital stock was split 1:10; the previous years' values were adjusted accordingly.
-
Since 1999 Frankfurt prices, before that Düsseldorf
-
Highest/lowest prices based on variable prices
-
Annual average price based on closing prices
-
since 2001 in acc. with ias 33
Development of the gildemeister share
The gildemeister share price performed well in 2003. An annual low of € 2.91 (12 March 2003) was followed by a steady upward rise. Whilst in the first quarter the price was € 3.74, it increased to € 4.11 over the first six months and to € 4,75 after nine months. On 1 October the price of our share was € 5.78. The closing price at the end of the year was € 8.22 (30 Dec. 2003). Its annual high of € 8.25 was recorded on 29 December. Over the year, the gildemeister share price increased by a total of 117.5%. Our security is therefore amongst the sdax leaders. As expected, the change in the index listing in the course of the new stock market segmentation of 21 March 2003 did not affect the performance of the gildemeister shares. Its current price is € 7.75 (19 March 2004).
Stock market listing, trading volume and market capitalisation
gildemeister shares are traded on the Frankfurter Wertpapierbörse, the most important and highest-volume market in Germany. They are also listed on the Rheinisch-Westfälische Börse based in Düsseldorf and the Berliner Börse. Investors can place orders for gildemeister shares from 9 am to 5.30 pm on all trading days via the Xetra electronic trading system.
In 2003, interest in gildemeister shares was again high and the trading volume, too, was at a high level. The average trade volume amounted to 51,307 shares (previous year: 79,525). The shareholders' structure of gildemeister Aktiengesellschaft is dominated by a high free float. In the reporting year, portfolio investment amounted to around 93% (previous year: 93%). Shareholders were largely private small investors and institutional investors. The largest share of 6.75% is held by Westlb ag, Düsseldorf. With respect to the free float, the turnover factor of the free share capital was 0.48 in the financial year.
The market capitalisation of gildemeister Aktiengesellschaft amounted to € 237.4 million compared to € 109.2 million in the previous year.
Earnings per share
In accordance with ias 33, earnings per share are determined by dividing the consolidated earnings by the average number of shares, as follows:
| Results for the year excluding minority interests | € -3,732 k |
|---|---|
| Number of underlying shares | 28,879,427 |
| Earnings per share in acc. w. ias 33 | -0.13 € |
There were no dilution effects in the shown reporting period.
Dividend
In the financial year 2003, gildemeister, like others, was unable to escape the weak global demand in machine tools. Due to the group's annual loss, the Executive Board and Supervisory Board will propose to the company in General Meeting on 14 May 2004, not to distribute a dividend for the past financial year, but to transfer the accumulated profits of the gildemeister Aktiengesellschaft of € 9.1 million to revenue provisions in order to strengthen the capital. We aim to attain a better result in order to make possible future dividends.
Investor Relations
The honest, transparent, comprehensive and timely exchanges with our investors and the entire capital market through our Investor Relations activities, contribute to strengthening the trust in our shares and to generating new circles of investors. Our activities with respect to Investor Relations are therefore an important element of the company's growth-orientated strategy.
We continued to intensify the contact with our institutional investors through road-shows, one-to-one meetings and company presentations both at home and abroad. For example, at the dvfa analysts conference in May 2003 we reported on the business development and prospects for gildemeister. In November we presented our company to the "German Mid Cap Conference 2003" in Frankfurt, which we used as a platform to establish contacts with European analysts, institutional investors and representatives of investment companies. We also had numerous discussions outside the above events. The Annual General Meeting of Shareholders, which was attended by approximately 1,200 shareholders, was held on 16 May 2003. All documents related to the general meeting can be viewed on the Internet. For the first time we have posted the speech given by the Chairman of the Executive Board on our website. Our Internet presence continues to play an important role at gildemeister. More and more private and institutional investors, financial analysts and business journalists utilise the comprehensive information on our website (www.gildemeister.com). Many prospective buyers posted queries via the Internet or requested further information. Further details are set out in the "Marketing / Public Relations" section on page 105.
An important instrument in our financial communication is the Annual Report, which can be downloaded from our website or viewed in a dynamic online version. Due to the large number of private small investors the demand for printed versions continues to be relatively high. 9,000 copies of our Annual Report were published in two languages. Once again we carried out our targeted mailing campaign, which ensured that every interested person received, on request, the printed version of our financial reports. With our regular quarterly reports and press releases we report promptly on the latest trends in our company.
Your contact at the gildemeister Investor Relations team:
gildemeister Aktiengesellschaft Birgitt Frein Gildemeisterstraße 60 33689 Bielefeld Phone: +49 (0) 52 05/74-3073 Fax: +49 (0) 52 05/74-3081 Internet: www.gildemeister.com E-Mail: [email protected]
Corporate Governance
At gildemeister, corporate governance, i.e. the responsible management and control of a company, enjoys a high standing. We welcome the various campaigns that were initiated in this respect both in Germany and internationally. At gildemeister, corporate governance is an essential element of our company ethos, which is geared towards a sustainable increase in company value to the benefit of our shareholders. In addition, we understand good corporate governance to be the cultivation of the trust of our customers, employees and the public in the management and control of the gildemeister group. The standards and rules of responsible corporate governance are incorporated in our Code of Practice and are complied with, along with the statutory provisions, by the management in the performance of all their corporate activities. We reported in detail on corporate governance in our Annual Report 2002; in the following we deal with major aspects and changes in the reporting year.
Declaration of compliance regarding the German Code of Corporate Governance
Our declaration of compliance regarding the German Code of Corporate Governance in accordance with Section 161 German Companies Act (AktG) is published on our website and is updated annually and in case of any changes and deviations from the Code. gildemeister currently meets all the recommendations included in the German Code of Corporate Governance as amended on 21 May 2003, with the exception of the Executive Board members' remuneration is not disclosed individually. At the Annual General Meeting of Shareholders on 16 May 2003 the Articles of Association of the gildemeister Aktiengesellschaft were amended to the effect that the Chairman and members of Supervisory Board committees will also be compensated.
Suggestions of the German Code of Corporate Governance
gildemeister also meets most of the so-called suggestions included in the Code. For example, the shareholder's meeting on 16 May 2003 also decided to introduce a longterm orientated, performance-related pay element for members of the Supervisory Board. With this regulation, gildemeister implemented the optional, but in our opinion very reasonable suggestion of the Code, that is to allow the Supervisory Board to participate in the long-term success of the company.
Deviations from the suggestions of the Code currently exist in the following areas:
Annual General Meeting of Shareholders: The proxy for the exercise of the shareholders' voting rights in accordance with directives is not available during the agm. The complete transmission of the meeting as webcast event is currently not intended. From our point of view the cost-benefit ratio of both items is currently inadequate. However, the speech given by the Chairman of the Executive Board was shown on our website for the first time.
Supervisory Board: To ensure continuity in the work of the Supervisory Board and equality of each Supervisory Board member we do not intend to introduce different terms of office for the shareholder representatives on the Supervisory Board.
Executive Board members' remuneration: The total compensation package of Executive Board members includes fixed and variable components including a component with a long-term incentive. The variable remuneration is geared towards the direct business performance of the enterprise. Apart from the duties and performance rendered by a member of the Executive Board, further criteria for the adequacy of the remuneration include the company's economic situation, performance and future prospects in view of its comparative environment.
Collaboration between corporate governance, risk management and capital market communication
Our claim to inform all target groups fully and reliably of all business trends at gildemeister, has a high priority in our daily work. Along with our in-depth communication with the capital markets and responsible management, supervision and control of the gildemeister group, a further important element of good corporate governance is the company's responsible management of business risks. The group-wide harmonised collaboration in these areas will constitute a key factor in the future development of our corporate governance.
Risk Reporting
Responsible management of risks is firmly established in the corporate governance for the technology group gildemeister. Due to our business strategy and our positioning in markets that are well-equipped to meet competition we are naturally exposed to a number of risks. To us, the taking of such risks is a prerequisite for corporate success; on the other hand it represents a risk potential. Our risk policy is therefore based on the principle of responsibly weighing rewards and risks, and of taking only those risks that are unavoidable for the pursuit of our objectives and do not jeopardise our companies' existence.
Our internal control and risk management system is integrated into the ordinary operation of our business; it serves the early identification, assessment and control of risks and awards. In this context both the Executive Board and the Supervisory Board are regularly informed on the current risk situation of each group company. In addition, we have defined threshold values which, when exceeded, result in the Executive Board being immediately informed. The functionality of our internal control system and risk management is checked within the remit of the annual audit. All potentials for improvement that are identified result in the adaptation of the systems used.
General economic risks: Major potential risks for the gildemeister group result primarily from cyclical influences in those markets that are relevant to the company. In our opinion there is an about 80% chance of a global economic revival in the current financial year. However, thanks to our careful planning, a delay in economic upturn will not result in a slump in performance at gildemeister.
gildemeister does not expect any substantial restrictions on business development due to the development of the capital markets and interest rate levels. However, both risks and rewards that are to be equally weighted, arise from changes in book value due to exchange rate fluctuation, particularly with respect to the euro-us-Dollar ratio. To a lesser extent, exchange-rate-related sales risks may arise from our international activities in the area of high technological machines. The above factors were taken into account in our planning. There are no risks arising from overall economic development that would jeopardise the group's existence in the foreseeable future.
Quite often, changes in law can only be predicted at short notice, particularly in tax law, and can result in major changes in the prevailing legal, tax and economic conditions of a company, such as gildemeister. For example, the group currently has loss carryovers of € 62.8 million that could be used for tax purposes, however, their continuance is dependent on future tax legislation in the respective countries.
The difficult overall economic conditions in Germany, aggravated by the Basel II provisions, are still reflected in the granting of external funds to many of our small to medium-sized customers. Along with the occasional loss on a contract, this resulted in an increased commitment of funds with respect to accounts receivable at gildemeister.
From gildemeister's point of view, industry sector risks result mainly from cyclical trends in the machine tool market. The risks arising from cyclical sector trends are faced by gildemeister via its technological superiority, attractive production programme and extensive customer base. Should the above expectations prove correct, the group's financial situation will not be significantly affected. Due to an ongoing consolidation phase in the machine tool industry, new competitors in the market are not expected. Actual risks from a sector-related concentration are not known. Also not expected is the launch of any significant new technologies without the participation of gildemeister.
Risks from financing and valuation: One of the key tasks of the gildemeister Aktiengesellschaft is the optimisation of the group's financing and the limiting of its financial risks. For the monitoring and control of the group's liquidity we use instruments for financial planning and financial analysis that have been further developed in the previous financial year.
The operative financial risks, for example in the debtors' area, are continuously monitored by supervising the terms of accounts receivable at both company and group level. This way, potential risks can be identified very early and appropriate countermeasures taken. The restrictive granting of credits, particularly to small to mediumsized enterprises, in preparation for Basel II has affected the terms for accounts receivable in the reporting year. The fund requirements arising from this policy are compensated for by using our suppliers' credits. gildemeister Aktiengesellschaft and its domestic subsidiaries meet their short-term resource requirements via a number of credit institutions that are controlled by two major banks of good standing. Our shortterm financing is managed via a cash management system. The relating syndicate
agreement with a total volume of € 180 million has been extended until 31 December 2005, as planned. In addition, a € 20 million guarantee loan facility was raised. Our international subsidiaries finance their resource requirements through credit agreements with local banks. There is no concentration, or even a dependence, on individual lenders.
About a third of our outside financing volume is secured against risk arising from changes in interest rates by agreements for long-term fixed interest rate or interest derivatives. In the reporting year money market rates were low. For the near future we forecast a slight decrease in the money market rate level in the Eurozone.
Most of our sales are completed in the Euro region, where there are no currency risks. The remaining currency risks are diminished by hedging transactions. The hedging against currency risks is carried out with each transaction through the group companies or gildemeister Aktiengesellschaft.
The goodwill arising from the acquisition of gildemeister Italiana S.p.A. is proportionaly amortised. Despite heavy spending on development and restructuring measures, the company recorded a much-improved result in the reporting year against the preceding year. Due to the positive business development, we expect an improved profitability in the future. As a result of the companies' future profitability, or of a reduction in the earnings tax rate in the individual countries, the accounting entry of capitalised deferred taxes at both the domestic and international companies may be corrected and posted to expenses.
To our knowledge, there are no legal risks, which could significantly affect the economic situation of the gildemeister group.
The increasing networking of our, in parts, complex electronic systems result in it risks, which we face through regular investments in hardware and software and a constantly updated system know-how. However, any risks arising from this area are controllable and their occurrence is rather unlikely.
Procurement risks consist primarily in the potential loss of suppliers and problems pertaining to quality. These risks are effectively limited through comprehensive procurement management and close contact with all major suppliers. Most of our materials are purchased in the euro region, therefore making the hedging against currency impacts unnecessary.
The permanent monitoring of our major production risks using key data covering production processes, throughput time and processing continuity enable us to reduce our stocks, bring down the level of capital commitment, and the realisation risk. In addition, a large number of other quality and production related data are employed for the monitoring, early recognition and reduction of possible risks in production.
Research and Development risks arise primarily from budget overruns, abortive developments and increased start-up costs of new products. The individual risk can reach as much as € 3 million per development project. Comprehensive development control and close collaboration with the sales organisation ensure an early reaction to risks in this area.
Overall risk: In conclusion, it can be said that the risk situation at the gildemeister group depends primarily on market risks. This statement applies to both the "Machine Tools" segment and the "Services" segment. The overall risk situation is controllable and the future existence of the gildemeister group is not jeopardised. The investments in our production programme carried out during the past years and our continually expanding market presence form a basis from which to achieve positive results for the financial year 2004, thereby further reducing the overall risk. Our numerous individual measures to reduce the commitment of funds and of debts also have a risk reducing impact. To the greatest possible extent, we have taken precautions against those business risks that could substantially affect the company's net worth, financies and profitability. Our group-wide risk management system is integrated into the ordinary operation of our business and is checked within the remit of the annual audit and continually developed further.
Investments
Following the heavy spending on materials and services in the preceding years and in view of the slack economy, capitalised balance sheet additions to property, plant and equipment decreased by 50% to € 36.4 million against the preceding year's figure of € 73.2 million. In this respect, investments in tangible and intangible assets amounted to € 27.2 million. Further intangible assets additions in the group worth € 8.1 million were due to the capitalisation of development costs in accordance with ifrs. In addition, € 1.1 million was invested in leased assets (finance lease). Another € 4.4 million were spent on the operating lease of office and plant equipment.
In the reporting period, depreciation of fixed assets, including capitalised development expenses, goodwill additions and finance leases amounted to € 36.4 million, which was below the preceding year's figure of € 37.8 million.
Our investment activities focused on the technology and assembly centre of sauer GmbH for the growing ultrasonics business, the technology centre of dmg Nippon in Yokohama and an industrial building neighbouring deckel maho Pfronten GmbH, which extends our factory site. This building will house our Technical Services, which used to be in rented offices. Following the opening of the new technology and presentation centre, the integration at Brembate of dmg Italia S.r.l. from Gorgonzola to the factory site of gildemeister Italiana S.p.A. was achieved.
Investments in the "Turning" division
In the reporting year, investments at gildemeister Drehmaschinen GmbH amounted to € 0.6 million. One of the main investments of € 0.2 million was in the production start-up for the new machine types. gildemeister Italiana S.p.A. invested € 1.1 million in the reporting year. Of this, € 0.4 million were spent on the extension of the presentation centre and the comprehensive re-structuring of the production areas and processes that were also necessary. These measures were carried out due to the start-up of the new sprint line, and to create additional office space in view of the move of dmg Italia S.r.l. from Gorgonzola to the factory site of gildemeister Italiana S.p.A. The amount invested by graziano Tortona S.p.A amounted to € 0.8 million in the reporting year.
To ensure the series start-up of the new machine types, € 0.2 million was spent on the restructuring of an assembly hall. Other investments made were primarily to maintain operational efficiency. In the reporting period, famot Pleszew S.A. invested € 1.8 million. To resolve a bottleneck in production capacities, caused by, amongst other things, a decrease in availability of individual machines, machining facilities were expanded with the largest cnc universal milling machine of deckel maho Pfronten GmbH. Investments in this respect amounted to € 1.4 million. In the "Turning" division development costs of € 1.4 million were capitalised.
Investments in the "Milling" division
The highest amount in the group of € 7.8 million was invested at the deckel maho Pfronten site. For the production start-up of new machine types, € 1.2 million was invested in models, tools and fixtures. Of the € 2.6 million invested in the it area, € 2.3 million were spent on the "Front Office" project, which serves to optimise operational sequences and processes within the group. The investments by deckel maho Geretsried GmbH amounted to € 0.9 million during the reporting period. To ensure a smooth series start-up, models, fixtures and measuring equipment worth € 0.4 million were purchased. In the office communication area € 0.2 million were invested on replacement hardware and software. The amount invested at deckel maho Seebach GmbH was € 1.7 million in the financial year. € 0.6 million of these investments were spent on models, tools and fixtures. € 0.7 million was spent on two traversing column machines from the company's own production programme.
Following the acquisition of the new production plant in Shanghai last year, only minor investments in tangible fixed assets of € 0.3 million were required at deckel maho gildemeister (Shanghai) Machine Tools Co.,Ltd. In the "Milling" division, € 5.6 million were attributed to the capitalisation of development costs.
Investments in the "Ultrasonic/Lasertec" division
In financial year 2003 sauer GmbH invested € 3.2 million. Of this, € 2.8 million were spent on the construction of a technology and assembly centre for the growing "Ultrasonic" division. In the reporting year, lasertec GmbH invested € 0.2 million in tangible fixed assets. In the "Ultrasonic/Lasertec" division, development costs of € 0.4 million were capitalised.
Investments in the "Services" division
dmg Vertriebs und Service GmbH invested € 5,9 million in the reporting year. In Yokohama the company moved into a modern technology centre. Investments in this respect amounted to € 1.3 million. A further € 0.5 million was invested in new tools and measuring equipment. € 4.2 million were invested in car replacements for the sales and services areas. These were financed through operating leases. € 0.2 million were invested in new plant and machinery at saco S.p.A. In the reporting year, a & f Stahl- und Maschinenbau GmbH invested € 0.1 million in tangible assets. € 0.3 million were spent on start-ups at dmg Microset GmbH. In the "Services" division, € 0.7 million were attributed to the capitalisation of development costs.
Group structure*
Production Plants
| gildemeister AktiengesellschaftBielefeld | gildemeister DrehmaschinenGmbH, Bielefeld 100% | |
|---|---|---|
| gildemeister Italiana S.p.A.Brembate di Sopra 100% | saco S.p.A.Castelleone, indirect 100% | |
| graziano Tortona S.p.A.indirect 100% | ||
| deckel maho Pfronten GmbHindirect 100% | ||
| deckel maho Geretsried GmbH100% | ||
| deckel maho Seebach GmbH100% | ||
| famot Pleszew S.A.99% | ||
| sauer GmbHIdar-Oberstein 95% | lasertec GmbH, Pfrontenindirect 100% | |
| deckel maho gildemeister(Shanghai) Machine Tools Co. Ltd.100% | ||
| Procurement | ||
| a & f Stahl- und Maschinenbau GmbH, Würzburg 90% | ||
| Sales and Service Organization | ||
| dmg Vertriebs und Service GmbHdeckel maho gildemeister (Holding), Bielefeld 100% |
* Simplified organizational structure acc. to leadership criteria
GILDEMEISTER is one of the major manufacturers of metal cutting machine tools world-wide with eleven production facilities and 50 national and international sales and service sites, 38 of which have prestigious technology centres.
| dmg Deutschland | dmg Europe | dmg America | dmg Asia | dmg Services |
|---|---|---|---|---|
| Stuttgart | Vorarlberg / Klaus | Chicago | Singapore | Bielefeld, Pfronten |
| dmg Stuttgart | dmg Italia S.r.l. | dmg America Inc. | dmg Asia Pacific Pte. Ltd. | dmg Service Drehen GmbH |
| Vertriebs und Service GmbH | Gorgonzola | Charlotte | Singapore | Bielefeld |
| dmg München | dmg Paris S.a.r.l. | dmg Chicago Inc. | dmg Malaysia sdn bhd | dmg Service baz GmbH |
| Vertriebs und Service GmbH | Les Ulis | Chicago / Schaumburg | Kuala Lumpur | Geretsried |
| dmg Hilden | dmg Lyon S.A.S. | dmg Houston Inc. | dmg Beijing | dmg Service ufb GmbH |
| Vertriebs und Service GmbH | Lyon, Scionzier | Houston | Beijing | Pfronten |
| dmg Bielefeld | dmg Büll & Strunz GmbH | dmg Los Angeles Inc. | dmg Shanghai Co. Ltd. | dmg Service ufb |
| Vertriebs und Service GmbH | Wiener Neudorf | Los Angeles | Shanghai | Seebach GmbH |
| dmg Berlin | dmg (Schweiz) ag | dmg Canada Inc. | dmg Xian Rep. Office | dmg Gebrauchtmaschinen |
| Berlin, Chemnitz | Zürich / Dübendorf | Toronto | Xian | GmbH, Geretsried, Bielefeld |
| dmg Frankfurt | dmg (uk) Ltd. | dmg México | dmg Guangdong Sales Office | dmg Trainings-Akademie GmbH |
| Vertriebs und Service GmbH | Luton | Monterrey | Guangdong | Bielefeld, Geretsried, Pfronten |
| dmg Danmark | dmg Brasil Ltda. | dmg Taiwan Ltd. | dmg Microset GmbH | |
| Kvistgård | São Paulo | Taichung | Bielefeld | |
| dmg Nederland B.V.Veenendaal | dmg Nippon K.K.Yokohama, Nagoya | |||
| dmg Belgium B.V.B.A.Zaventem | dmg Korea Ltd.Seoul | |||
| dmg Iberica S.L.Barcelona, Bilbao | dmg India Pvt. Ltd.Bangalore, Delhi | |||
| dmg Czech s.r.o.Brno, Trencin | dmg Australia Pty. LtdMelbourne, Sydney | |||
| dmg Polska Sp. z o. o.Pleszew |
Organisation and Administration
The gildemeister group is made up of eleven production plants, a & f Stahl- und Maschinenbau GmbH, dmg Microset GmbH and dmg Vertriebs und Service GmbH as well as their respective subsidiaries. gildemeister Aktiengesellschaft acts as the parent company for these companies.
deckel maho Geretsried GmbH is the parent company of deckel maho Pfronten GmbH, which in turn controls lasertec GmbH. These companies together with deckel maho Seebach GmbH, gildemeister Drehmaschinen GmbH, famot Pleszew S.A., the three companies of the subgroup gildemeister Italiana, sauer GmbH and deckel maho gildemeister (Shanghai) Machine Tools Co., Ltd., which was established in November 2002, represent the group's plants. a & f Stahl- und Maschinenbau GmbH is responsible for the supply of components. dmg Microset GmbH produces setting and measuring equipment for tool management. Another parent company is dmg Vertriebs and Service GmbH. With its numerous national and international subsidiaries and second-tier subsidiaries it is the production plant's sales and services interface with the market.
The gildemeister group considers all its companies as profit centres. The illustration of the group on pages 86-87 shows the management and control structure. To achieve optimal performance and results, clear rules determine the extent of responsibilities. Via the data processing infrastructure that is coordinated throughout the group, all operational processes and procedures are standardised. The data processing system thereby acts as an integral link within the group structure. Key functions across all areas of the group are performed centrally. These include the controlling and financial functions, personnel, marketing, the legal department as well as logistics and procurement. In the reporting year, 69 people were employed in the Executive Board departments. The organisational expenses of gildemeister Aktiengesellschaft amounted to € 12.8 million.
In the reporting year, the appointments to the executive units of gildemeister Aktiengesellschaft were as follows: Dr. Rüdiger Kapitza, as Chairman of the Executive Board, was responsible for Corporate Strategy and Product Development, Sales and Marketing, Services and Personnel as well as Public Relations and, from June 2003, Purchasing Coordination. Prof. Dr. Raimund Klinkner, as Deputy Chairman of the Executive Board, was responsible for Logistics, Purchasing (until June 2003) and Procurement, Investments, Production and Projects, as well as Personnel (production plants), and Mr Michael Welt was responsible for Controlling, Finance and Accounting and Information Technology. Mr Dieter Schäfer retired from the Executive Board of gildemeister Aktiengesellschaft on 31 October 2003.
Legal Corporate Structure
gildemeister Aktiengesellschaft has entered into profit and loss transfer agreements with the following group companies:
_gildemeister Drehmaschinen GmbH,
_dmg Vertriebs und Service GmbH deckel maho gildemeister,
_deckel maho Seebach GmbH.
The profit and loss transfer agreement between gildemeister Aktiengesellschaft and deckel maho Pfronten GmbH was terminated in the previous financial year.
gildemeister Aktiengesellschaft took over a 100% interest in gildemeister Italiana S.p.A. from its fully owned subsidiary, Holding Macchine Utensili S.p.A.
The interest of gildemeister Aktiengesellschaft in famot Pleszew S.A., Pleszew, Poland was increased to 99.4% in the financial year (previous year: 99.1%).
The interest in Hermann sauer GmbH & Co. kg was transferred into Hermann sauer GmbH with effect from 1 January 2003. The company changed the name of its business to sauer GmbH in the previous financial year. The participating interest was increased to 95.0%.
From mid-2003, dmg Microset GmbH has extended our range of services, supplying products for all aspects of tool management. gildemeister Aktiengesellschaft holds 100% of the participating shares.
At deckel maho Geretsried GmbH an increase in capital resulted from the contribution of a 94.9% interest in deckel maho Pfronten GmbH by gildemeister Aktiengesellschaft, which remains a 5.1% shareholder in deckel maho Pfronten GmbH.
dmg Gebrauchtmaschinen GmbH took over the participating interest in gildemeister Italiana s.r.o. from gildemeister Italiana S.p.A.
dmg Vertriebs und Service GmbH deckel maho gildemeister, as holding company, is responsible for the operative sales and services organisation units. It entered into management and profit and loss transfer and control agreements with the following subsidiaries:
_dmg Stuttgart Vertriebs und Service GmbH deckel maho gildemeister,
_dmg Berlin Vertriebs und Service GmbH deckel maho gildemeister,
_dmg Service Drehen GmbH deckel maho gildemeister,
_dmg Service baz GmbH deckel maho gildemeister,
_dmg Service ufb GmbH deckel maho gildemeister,
_dmg Service ufb Seebach GmbH deckel maho gildemeister,
_dmg Gebrauchtmaschinen GmbH deckel maho gildemeister,
_dmg Trainings-Akademie GmbH deckel maho gildemeister.
In the financial year 2003 the profit and loss transfer agreements with the following subsidiaries were terminated:
_dmg Bielefeld Vertriebs und Service GmbH deckel maho gildemeister,
- _dmg Frankfurt am Main Vertriebs und Service GmbH deckel maho gildemeister,
- _dmg München Vertriebs und Service GmbH für Werkzeugmaschinen
- deckel maho gildemeister,
- _dmg Hilden Vertriebs und Service GmbH deckel maho gildemeister.
With the exception of the dmg marketing companies in Canada, Mexico, China, India, Korea and Taiwan, the international subsidiaries of the dmg Vertriebs und Service GmbH were brought into dmg Nederland B.V. The participating interest in dmg Büll & Strunz in Austria was brought into the new dmg Europe Holding GmbH in Klaus, Austria. The reporting year saw the establishment of dmg Australia Pty. Ltd.
The gildemeister group has no major external shareholdings.
Branch offices
dmg Vertriebs und Service GmbH, Bielefeld, a fully owned subsidiary of gildemeister Aktiengesellschaft, maintains, apart from the 41 sales and service companies, the following international branch offices, which are not legally independent enterprises:
- dmg Danmark, _
- Filial af dmg Vertriebs und Service GmbH
- deckel maho gildemeister, Tyskland,
- Kvistgård/Dänemark
- dmg China deckel maho gildemeister Beijing Representative Office, Beijing/pr China
- dmg China deckel maho gildemeister Guandong Sales Office,
- Guandong/pr China
- dmg China deckel maho gildemeister Shanghai Representative Office, Shanghai/pr China
- dmg China deckel maho gildemeister
- Xian Representative Office,
- Xian/pr China
dmg Danmark operates as sales and service branch in Denmark. The sales offices of dmg Vertriebs und Service GmbH in Beijing, Guandong, Shanghai and Xian are accredited for the marketing of group products in the pr of China. dmg Technology Trading (Shanghai) Co., as a fully owned subsidiary of dmg Vertriebs und Service GmbH, Bielefeld, is responsible for the service activities in this market.
dmg Czech s.r.o.,Brno, Czech Republic, operates a branch office that is not legally independent:
dmg Czech s.r.o. deckel maho gildemeister Slowakei, Trencin/Slowakei _
dmg Nippon K.K., Yokohama, Japan, operates a branch office that is not legally independent:
dmg Nippon, _
Nagoya/Japan
Apart from running the operative business, dmg Vertriebs und Service GmbH, Bielefeld, acts mainly as a holding company. During the reporting year, business in the branch offices clearly continued to increase.
Procurement
In the financial year 2003, the gildemeister group, in close partnership cooperation with its suppliers, has continued to improve its purchasing and procurement position and has made further improvements in this field. In the reporting year, cost of raw materials, consumables and goods for resale amounted to € 525 million (previous year: € 570 million), € 437 million of which (previous year: € 466 million) were attributed to raw materials and consumables. The rate of turnover of raw materials and consumables therefore amounts to 52.8% (previous year: 54.5%).
The materials-group management, which was introduced in the financial year 2002 and is co-ordinated across all sites, was developed further as planned. It pools and synchronises the purchasing and procurement activities of the plants, and, at an operational level, supports the standardisation of design and development. Its organisational form complies with the de-centralised group structure and avoids bureaucratic obstacles. Thanks to these measures, the number of suppliers across all materials groups was reduced by 10%.
One of the achievements of our standardisation measures is the standardisation of the main subassemblies of the reengineered ctx 10 line. Thus a reduction in the complexity of the operational control system, as well as a reduction in development, production and service costs could be achieved. Certain other pragmatic measures contributed to ensuring the security of supply.
One of our key tasks in the procurement area was the further expansion of the co-Supply®-initiative, which was introduced in the past year: our partnership scheme for competitive, continuous supply chains. Other important activities included the foundation of an Internal Production Association for optimised capacity utilisation and the restructuring of procurement and purchasing at the Geretsried site.
The coSupply® campaign coordinates the related procurement activities of the supply partners, materials planning, logistics and purchasing activities, thereby increasing the competitiveness of the gildemeister products. In interdisciplinary teams across all sites and companies, gildemeister, together with the top 30 suppliers, develops optimisation potentials along the entire supply chain. Examples include activities in returns processing, or the specific provisions for the Shanghai site that was officially opened in January 2003. gildemeister therefore continues further to expand strategic supply partnerships. In the course of the logistic process optimisation, gildemeister also succeeded in negotiating improved conditions with the supply partners.
The third Suppliers Day of the gildemeister group again constituted the peak of the group's collaboration with its supply partners. 250 participants (previous year: 150) from the top supply companies watched the "Supplier-of-the-Year" awards for the innovation, quality, supply performance and overall winner categories.
The further tightening up and enhancing of the suppliers' structure in conjunction with the strengthening of the supply partnerships, contribute to the ongoing improvement of the supply situation of the gildemeister group. In addition, the quality of components will increase by, for example, speeding up the series production maturity of newly developed products through the supply partners' technical expertise. With these measures, gildemeister enhances its innovative power.
Castings with a total weight of 21,893 tons were ordered from 23 different suppliers during the course of the year. gildemeister obtains castings with a high complexity and with normal to high strength material, primarily from Germany. For castings of normal to low complexity and normal strength, the cost advantages were reflected by a small increase in the proportion of mid and east European suppliers. The training given to suppliers in the context of the coSupply® allows these suppliers to be developed further and thus facilitates their ability to deliver more complex components. That the supply of castings was at all times secure, is a result of the wide range of suppliers. The growing proportion of castings obtained from China not only increases the security of supply, in that the dependence on European suppliers is reduced; but above all, it improves the economics of local production in Shanghai, as the cost advantages of Chinese suppliers can be utilised.
famot Pleszew S.A. again increased its share in the total delivery of trunk machines, thus expanding its position as the group's major supplier of such machines. Altogether, the gildemeister factories purchased roughly every other machine as a cost and process optimised preassembled trunk machine.
In the course of the comprehensive restructuring measures at the Geretsried site, the Purchasing and Procurement departments were combined in order to simplify the more complex coordination required, and expedite processes. The success of these efforts is demonstrated by a 19% increase in stock turnover at the site. The site's new transhipment point (tsp) further strengthened these effects, and also enabled the outsourcing of the switch cabinet manufacture, which was also implemented in the reporting period.
The second transhipment point that was newly opened in the reporting year supplies the Bielefeld site. Both transhipment points have optimised the procurement logistics of components for assembly in these production plants.
In conjunction with all the measures undertaken in the procurement logistics area, the level in goods storage was largely maintained. Due to the increased complexity combined with the continuing strained market conditions, the level of raw materials and consumables was slightly increased so as to maintain our production flexibility. The related stock turnover thereby fell by 14% to 5.8. When compared to the industry and taking into account the entire spare parts inventory level, the average period of storage of raw materials, components and consumables of approximately 63 days remains at a good level.
Production and Logistics, Products and Services
In 2003 gildemeister continued to enhance and optimise both internal and external processes in Production and Logistics. The striving for continual improvements complies with gildemeister's own pull production system (Produktions- und Logistik-Leistung = production and logistics performance) which has been influenced by the Japanese concept of kaizen. The support for this optimisation approach comes from the group's entire staff. The respective pull co-ordinators at each production site act as the driving force and disseminators. They push ahead the optimisation of processes in numerous workshops and organise the transfer of technical skills, thereby supporting various projects, such as the series production start-ups of new products. Our enhanced processes were reflected particularly in cost improvements and increased flexibility. In addition, we have also improved the conditions so as to enable us to react to the expected market recovery at short notice. The positive impact, resulting from the establishment of a Group Development Co-ordinator in May 2003, was felt in Production and Logistics. The needs of this area are now increasingly reflected in the product development phase (for example: design for assembly). The co-ordination at the interface between Research and Development on the one hand and Production on the other hand is thereby intensified and enhanced. This in turn results in the prompt solution of problems that may arise during the build up of new product production.
The fact that the number of suggestions for improvement has increased again in 2003, reflects our employees' high commitment. During the reporting period, each employee in the production plants handed in an average of 4.32 suggestions for improvement; this is a 6% rise compared with the previous year (preceding year's figure: 4.07). A total of 14,154 suggestions for improvement was handed in (previous year: 13,869) with a total net benefit (benefit of suggestions minus costs of implementation) of € 2.7 million (previous year: € 2.8 million). Our staff's commitment resulted in gildemeister, for the fourth successive year, occupying the three leading positions in the German industry ranking of the dib (German Institute of Business Management).
The beginning of the year was dominated by the opening of the Shanghai production site on 15 January 2003. In February the group succeeded at a European level after being honoured twice last year by renowned juries for its implementation of its process-orientated, production-logistic restructuring plan. The jury of the European Logistics Association (ela) handed the group the "European Award for Logistics Excellence". This, the highest award for logistics in Europe, is given exclusively to enterprises and organisations whose logistic projects and strategies have won awards at a national level.
Following its success at home, the Assembly Monitoring System that was introduced in the preceding year, was transferred to our international production plants. It visualises the continuously updated production-logistic status of each assembly order and provides the navigation through the erp (enterprise resource planning) system data and its pda (production data acquisition) acknowledgement data. The assembly monitor can be viewed via the gildemeister Intranet, thereby helping all participants to obtain a quick insight into the assembly status and to take any actions that may be required.
The major event in Production and Logistics at the end of the reporting period was the opening of the new technology and assembly centre of sauer GmbH on 15 November.
To safeguard its position as technological leader amongst the global competition gildemeister pursues an innovation-orientated strategy, which is continuously implemented with the development and series production start-up of new products.
In this respect, the "Turning" division has formed a network, consisting of the four sister factories gildemeister Drehmaschinen, gildemeister Italiana, graziano and famot. This network has the most comprehensive turning machine production programme worldwide, ranging from universal turning machines through to cnc multi-spindle automatic lathes.
In the previous year gildemeister Drehmaschinen GmbH focused on the series production of the new machines and options, the presentation of which began at the autumn trade fairs 2002. In addition, the successful assembly line production for the ctx range was made more flexible as a result of continuous process optimisation. We are now able to assemble five machine types simultaneously in the so-called model mix process. Other pull optimisation measures enabled the adaptation of processes to the growing projects business, or were incorporated in the coSupply® activities.
In 2003 gildemeister Italiana S.p.A., the second largest company in the "Turning" Division and centre of expertise for the various automatic lathe lines, began to coordinate sales and production, and early this year opened a technology and presentation centre for this purpose. The area required for this project was cleared last year with an extensive restructuring of the production area and processes. All these measures were also carried out with regard to the planned start-up of the new sprint line that with approximately 90 units represents almost a third of the machines produced this year.
The Tortona site profited from the restructuring of its production programme that was completed in the previous year. In line with the gildemeister group "Eight Lines" product strategy, graziano Tortona S.p.A., in close collaboration and co-ordination with gildemeister Drehmaschinen and famot, is now the centre of expertise for the universal turning machines of the ctx line. It was therefore possible to close down the remaining branch of production at graziano in the reporting period. Whilst stocks were reduced, the company's flexibility and ability to react increased. The area thus gained now serves the series production assembly of the ctx 620 that was successfully taken up in 2003, an innovative machine with torque motor-spindle drive, linear motor on the X-axis and high-tech controls. The latest model, the ctx 510, completed the ctx 10 range. In addition, the company supported the production build-up of the new factory in Shanghai, particularly with the aid of the so-called ckd assembly kits.
In the reporting period, famot Pleszew S.A. increased trunk machine production (including the final machine parts) for the group by 37% to 1,704 (previous year: 1,246), thanks to numerous optimisation activities. famot is therefore the group's major supplier of trunk machines. The implementation of a pda system enhanced the process transparency. The methodical and planning-related conditions for using the pda system were created with the aid of a bottleneck-orientated logistics analysis; such an analysis was carried out at the site together with gildemeister Aktiengesellschaft during the summer months. The main activity in the production and logistics area started in December, with an increase in production capacity and the installation of a dmu 340 p. This machine, the largest of the gildemeister production programme, machines components such as machine beds. The site's outdated combined heating and power station was re-equipped to run on gas rather than coal. This resulted in a more economic operation, with fewer pollutants.
Along with 17 different types of base machine models, famot produces head stocks, large cast parts and complete machine tools. The production programme includes universal lathes and cnc universal turning machines as well as milling machines.
In the "Milling" division, too, the group offers a product portfolio that covers the whole range of applications. It ranges from small cnc universal milling machines to highly productive cnc machining centres and milling and turning centres through to the large universal cnc machining centres for 5-axis/5-sided simultaneous machining, in respect of which deckel maho is the technological leader.
The opening of the Shanghai production site enabled gildemeister to supply the steadily growing Chinese market. Due to the continuously increasing "local content", the site benefits from the cost advantages of the Chinese procurement market and also from tax privileges. deckel maho gildemeister (Shanghai) Machine Tools Co., Ltd., initially produced the two innovative standard machines, ctx 310 and dmc 64 v linear, and, since the middle of this year, the tried and tested dmc 63 v. In a usable area totalling 10,000 m2 , an assembly line, modelled on the pull-oriented German factories, was set up. This enabled the assembly of 152 machines in the first year alone.
At deckel maho Pfronten GmbH the reporting period was dominated by the continuing optimisation of production and logistics. There was also a number of production start-ups of new products, such as the dmc 60 s for milling from bar. The indexed flow assembly line that was brought into operation for the dmu 60 t last year was also used for the larger model at the beginning of the year. It allows for the so-called model mix assembly, thereby further increasing the flexibility and process quality of production.
At deckel maho Geretsried GmbH, activities in production and logistics were dominated by a major optimisation project covering all areas of corporate processes. Many of the site's task forces saw the introduction of teamwork; the second transhipment point opened in the reporting period was taken to production start-up, and production planning was reorganised. In this respect, completely new strategies were not developed, but the best practices from other sites adopted. The comprehensive value-added optimisation, for example, resulted in the complete outsourcing of the switch cabinet production to a system supply partner. With the dmc 75 v linear, the company also introduced an innovative machine for tool manufacture and mould making as the successor model to the dmc 70 v.
The reporting period at deckel maho Seebach GmbH was dominated by continual improvements in the production and logistics processes. This primarily included the preparation for the production build-up of new machine types and options, such as the new version of the dmp 60 v linear as a manufacturing cell with a robot for the automatic handling of components. Within the flexible plant network remit, the site produces, along with its production programme of small and medium-sized cnc universal milling machines and highly productive cnc machining centres, basic machines for the sauer group company.
In the "Ultrasonic/Lasertec" segment gildemeister offers high-tech products, sometimes with exclusive features, for the machining of complex components, including those made from challenging materials ("advanced materials"), such as ceramics, glass, silicon or metal carbide. Growth industries, such as the semiconductor or aerospace industry are typical sales markets for our products in this area.
The most significant action in this division, the opening of the new technology and assembly centre at sauer GmbH, formed the basis for another increase in production at the Stipshausen site. The 1,400 m2 increase in area allows for the processoptimised series production of ultrasonic machines. This initiative was preceded by training and workshops to pass on to the factory's staff the pull skills required for the optimisation and adaptation of processes, and to support a competitive, customerorientated production from the very start.
The ultrasonic technology, which is unique throughout the world being both technically and economically superior to all alternative processes, can also be found in the two dms line 5-axis machines that were premiered in 2003. Along with the ultrasonic machines, the production programme of sauer includes balanced, ultrasonic-diamond tools that complement the technology process and offer integrated solutions to the customer.
Machines for laser erosion, sonic enabled diamond cutting and drilling make up the production programme of lasertec GmbH, which, on behalf of the gildemeister group, operates in the future orientated microtechnology market. The lasertec GmbH production programme includes the dml 80 Powerdrill for the most delicate holes – launched in 2003 – the pure laser erosion machines of the dml 40 line for the machining of precision contours and cavities, the combination machine, dml 60 hsc – introduced in the preceding year – and the dml 80 Finecutting. These machines are distinguished by their versatile, modular design and high precision and dynamics.
Customers today demand a range of products that goes far beyond the basic machine tools. gildemeister meets these expectations with high-quality comprehensive service facilities from the "Services" segment, provided by dmg Vertriebs und Service GmbH. Along with the service and spare parts business, application technology, installation and training and tuition, this includes electronic updates, software products and updates in the mechanics field. An innovative highlight is the provision of software and online products in the dmg Powertools product range.
Via dmg Gebrauchtmaschinen GmbH the customer receives a complete service package that is geared to the life cycle of the machine, and includes not only the repurchase of machines, but also the technical reprocessing and resale of used machines. The range of products of this division is completed with products from saco S.p.A. and dmg Microset GmbH.
In the reporting period, saco has expanded its production programme and, thanks to the bar loader that was introduced at the emo in Milan, occupies a completely new market segment. In addition, the components and sub-assemblies, primarily for turning machine requirements, still cater for the full range of products. The company was also increasingly incorporated into the group network as internal supplier. This resulted in an increased production capacity utilisation on the site. An internal benchmarking for the valuation and improvement of processes accompanied these changes. The range of products of dmg Microset that was taken over in the reporting period completes the gildemeister group product range in this area with universal products for tool management, such as tool setting and measuring equipment for boring, turning and milling tools.
Employees
On 31 December 2003, gildemeister employed 5,028 co-operators, 205 of whom were trainees (previous year: 5,045). Compared with the previous year this is a decrease of 17 employees. In the reporting year, the group's reconstruction along with the further strengthening of the service area and the internationalisation of our production, resulted in a redistribution in staff numbers: whilst the production site in Shanghai and the sales and service companies in Asia, Europe and Germany were reinforced, staff levels at the productions sites at Geretsried, Bielefeld, Bergamo and Seebach were reduced in line with business development. In the promising "Ultrasonics/Lasertec" division we increased the number of staff slightly. In addition, the 22 employees of dmg Microset, which was consolidated for the first time, were included.
At the end of year 3,119 employees (62%) worked for the domestic companies and 1,909 (38%) for our international companies (previous year: 37%).
205 trainees have contributed to the continued high standard of vocational training, which safeguards the future of our company. A total of 47 trainees were taken on during the reporting year. The number of trainees to train in industrial mechanics and mechatronics was further increased. gildemeister offers vocational training in eleven different trades. Apart from the traditional training for trades requiring an apprenticeship, established courses of study are offered and developed in association with regional colleges of advanced vocational education and technical colleges.
The qualification structure of our employees demonstrates that specialist vocational training enjoys a very high status in the gildemeister group:
As illustrated by the figures in the graph showing their qualification structure, 95% of our employees have a professional qualification or are currently in training. As in the previous year, the number of employees taking part in further training is 1,877, which represents 37% of staff. One of the most extensive training activities in the reporting year was the training given to our domestic and foreign sales and service employees on the new generation of machines. A further focus includes the training activities in it and languages. A total of € 2.0 million (previous year: € 2.8 million) was spent on further training.
Personnel costs amounted to € 270.6 million (2002: € 270.2 million) in the reporting year. Of this, € 224.9 million were attributed to wages and salaries (2002: € 226.7 million); € 43.4 million to social insurance contributions (2002: € 42.1 million) and € 2.3 million to old-age pensions (2002: € 1.4 million). Overall, increases in basic wages and heavier spending on old-age pensions were counterbalanced by the drop in the average number of employees and a decrease in extra-work pay.
As part of the gildemeister group's part-time retirement plan, we have entered into 135 part-time retirement agreements (previous year: 113). For this purpose, we have applied the so-called "block model"; i.e. the whole period of part-time retirement is divided into active and passive phases of equal length. 84 employees were in the
active phase, 51 in the passive phase. The number of part-time retirement agreements thereby increased by 19%, when compared with the previous year. The purpose of the part-time retirement plan is to give more young people the opportunity of joining our attractive world of work.
gildemeister has a balanced age structure: 56% of our employees are younger than 40, and 84% are younger than 50.
In 2003, the number of traffic and operational accidents, 121, was 3% below the previous year's figure (previous year: 125). In relation to the total number of staff this is a decrease to 2.4% (previous year: 2.5%). The level of sickness was at an average 3.3% and thereby in line with the preceding year's level, but below the industry average of 3.9%.
During the reporting period, 18 employees at gildemeister celebrated their 40th anniversary and 53 employees their 25th anniversary. In addition, 66 employees were honoured for their 10-year service with the group. We would like to thank all our employees who are celebrating their jubilee for their loyalty to the company and their continuing commitment. At this point we would like to thank all our employees for their exemplary motivation. We would like to extend our thanks to our employee councils. Their unbiased and unbureaucratic mediation between company management and staff has contributed time after time to the rapid and goal-oriented implementation of decisions.
Marketing / Public Relations
In the reporting year gildemeister interacted both within the Group and with the outside world in a variety of ways. Our communication efforts complement the model of the market and value orientated corporate governance at gildemeister. We have again used a large number of communication methods: Trade fairs and in-house exhibitions, printed information, advertising, our web page, investor-relations activities and public relations work, all contributed to our impressive market image. The focus of our marketing activities was on our innovations and the completion of our product range. Activities in corporate design, sales, pricing and innovation policy were closely linked to our marketing actions. However, due to the increasingly difficult economic conditions, greater efforts were required and, at the same time, an increased cost consciousness. Our aims were the leveraging of marketing potentials and gaining access to new market segments, in order to continue the strengthening of our market position. gildemeister spent a total of € 16.1 million (2002: € 22.5 million) on marketing/public relations work.
Trade fairs and exhibitions are among the most important marketing instruments for capital goods. In the reporting year, dmg was present at 55 events at home and abroad. Our commitment was well worth it, as the response was good wherever we went, despite the difficult market conditions. In a slightly extended total exhibition area of 16,400 m2 , 491 turning, milling and ultrasonic/laser machines in production conditions were exhibited. A recorded audience of almost 26,000 generated a direct order intake of € 129 million. An event of particular significance was the emo in Milan. On nearly 1,200 m2 , our exhibits presented to the audience included six world premieres. 193 machines sold at the emo resulted in an order intake of approximately € 35 million. In the reporting year gildemeister invested € 8.3 million (2002: € 11.9 million) in trade fairs and exhibitions, representing 51% of the total (previous year: 53%).
At gildemeister, advertising means primarily product marketing. The customer journal was published with a total circulation figure of 1,200,000 in 41 editions and 20 languages. Distribution was carried out via direct mailing and hand-outs in 45 countries world-wide. However, the largest part of our product advertising is done in the form of illustrated catalogues and brochures. Its total volume was 670,000 copies (400,000 for the milling/ultrasonic/lasertec area and 270,000 for the turning area). Our brochures and catalogues were written in a total of eleven languages. In the
reporting year, 2.3 million product and event mailings in 20 different languages were sent out, which is a slight increase compared with the preceding year. The number of our daily mailings increased to 6,200. The year-end mailing was circulated 286,400 times in total. It was distributed in 32 versions and 17 languages. 631,000 supplements informed readers of dmg products in 74 magazines world-wide. They were published in 25 countries and 20 languages. The total expense for product marketing therefore amounted to € 6.9 million (2002: € 9.4 million), representing 43% of the total marketing expense (previous year: 42%).
Our Internet presence has developed into a central key area of our marketing/ public relations work, with a steadily increasing number of users. More and more customers, shareholders and all those whose attention has been drawn to our group, visit our website www.gildemeister.com, to obtain information on gildemeister or get in touch with us directly. The increasing interest from abroad has resulted in an increase in the number of language versions from four to nine. Spanish, us-English, Chinese, Korean and Japanese have all been added. Our website now has about 50,000 pages for each portal language. Our Internet pages inform readers of the latest developments in the company, current share prices and many other things. Annual and quarterly reports, delivery programmes, mailings and other printed information are increasingly requested as downloads. In the reporting year, more than 1.3 million visitors were registered in total, which is twice as many as in 2002.
E-commerce and dmg-Netservice have also become a major part of the day-today business at gildemeister. E-commerce complements traditional distribution channels. It represents another means to acquire new customers and sell machines. The dmg-Netservice, with one click of the mouse, allows access to the company's service know-how. Our advertising activities on all aspects of e-commerce tools amounted to € 0.9 million (2002: € 1.2 million), which represents 6% of the marketing expenses (previous year: 5%).
Public Relations activities constitute a further important element in corporate communication. They are based on a communication strategy that is aimed at enhancing and strengthening the positive public image of gildemeister on a long-term basis. A central element of the press and public relations activities is to inform competently, speedily, openly and reliably the print and electronic media as well as all other interested target groups on the current situation of the Group and its companies. We value the open and ongoing dialogue with the national and international economic and trade press, with shareholders and financial experts, and with those associations, institutions and decision-making organisations that are of special importance to us. The budget is used effectively and efficiently, and all activities thereby implemented are internationally co-ordinated in respect of content, design and timing. This ensures optimal results. In the reporting year a total of ten trade press events were held, allowing us to reach a total 360 journalists from 20 nations. This resulted in specialist press articles totalling more than 1,000 pages.
Segmental Reporting: "Machine Tools"
All affiliated companies of gildemeister Aktiengesellschaft, operating as production plants and producing machine tools form, with their new machine business, the "Machine Tools" segment. This segment includes the "Turning", "Milling" and "Laser/Ultrasonic" divisions.
In the "Turning" division, the following production facilities comprise the "Machine Tools" segment: gildemeister Drehmaschinen GmbH in Bielefeld, gildemeister Italiana S.p.A. in Brembate di Sopra, graziano Tortona S.p.A. in Tortona and famot Pleszew S.A. in Pleszew. gildemeister Drehmaschinen GmbH in Bielefeld offers an extensive production programme, consisting of the universal turning machine (nef), cnc universal turning machine (ctx), vertical turning machine (ctv) and production automatic turning machine (twin line) product lines as well as the turning-milling centres (gmx). gildemeister Italiana S.p.A. has a complete production programme for production turning machines, ranging from highly specialised multi-spindle lathes through to so-called "Swiss-type machines" from the speed line. The company is the group's specialist for multi-spindle automatic lathes. graziano Tortona S.p.A. is the second-largest producer of cnc universal turning machines and produces different types of the ctx line. famot Pleszew S.A. is the centre of expertise in the production of base machines for the Turning and Milling divisions. In addition, it produces complete machine tools for the nef, ctx and dmc v lines.
The "Machine Tools" segment also includes the "Milling" division. This includes deckel maho Pfronten GmbH, deckel maho Geretsried GmbH, deckel maho Seebach GmbH and the new factory of deckel maho gildemeister (Shanghai) Machine Tools Co.,Ltd. deckel maho Pfronten GmbH develops and produces universal milling machines, machining centres and milling and turning centres for the production programmes dmu-t, dmu-p and dmc-u. deckel maho Geretsried GmbH with its dmc-h and dmc-v range, represents the centre of expertise for horizontal and vertical machining centres. deckel maho Seebach GmbH produces small and medium-sized cnc universal milling machines and machining centres for the dmu, dmu/dmc eVolution, dmf and dmp-v lines. Along with the two innovative standard machines, ctx 310 and dmc 64 v linear, deckel maho gildemeister (Shanghai) Machine Tools Co.,Ltd., has also produced the well established dmc 63 v since the middle of the year.
The "Machine Tools" segment also includes the machines of those companies operating in the trend-setting ultrasonic/lasertec technology: sauer GmbH in Idar-Oberstein and lasertec GmbH in Pfronten. Thanks to its world-wide unique technology, sauer GmbH ensures gildemeister's access to the dynamically growing market of "ultrasonic" machining of hard-brittle materials ("advanced materials"), such as ceramics, glass, silicon and metal carbide. The trend-setting laser technology of lasertec GmbH is used in laser erosion, laser precision cutting and laser drilling applications.
Key Figures
"machine tools" segment
| Changes | ||||
|---|---|---|---|---|
| 2003 | 2002 | 2003 against 2002 | ||
| € m | € m | € m | % | |
| Sales revenues | ||||
| Total | 704.2 | 768.6 | -64.4 | -8 |
| Domestic | 331.2 | 331.0 | 0.2 | 0 |
| International | 373.0 | 437.6 | -64.6 | -15 |
| % International | 53 | 57 | ||
| Order intake | ||||
| Total | 708.6 | 723.1 | -14.5 | -2 |
| Domestic | 310.6 | 301.3 | 9.3 | 3 |
| International | 398.0 | 421.8 | -23.8 | -6 |
| % International | 56 | 58 | ||
| Order backlog* | ||||
| Total | 273.6 | 269.2 | 4.4 | 2 |
| Domestic | 111.9 | 132.5 | -20.6 | -16 |
| International | 161.7 | 136.7 | 25.0 | 18 |
| % International | 59 | 51 | ||
| Investments | 25.8 | 46.0 | -20.2 | -44 |
| Employees | 3,037 | 3,093 | -56 | -2 |
| plus trainees | 205 | 224 | -19 | -8 |
| Total employees* | 3,242 | 3,317 | -75 | -2 |
| ebitda | 47.5 | 43.0 | 4.5 | |
| ebit | 19.8 | 16.2 | 3.6 | |
| ebt | 6.8 | 0.4 | 6.4 |
* Reporting date 31 Dec.
In the financial year 2003, the continuing weakness in economic activity affected business development in the "Machine Tools" segment. Sales revenues amounted to € 704.2 million, thereby falling 8% (€ 64.4 million) below the preceding year's figure of € 768.6 million. The total share of the new machines business in group sales revenues was 72% (previous year: 74%). Domestic sales revenues of € 331.2 million remained in line with the preceding year's figure (€ 331.0 million). International sales revenues decreased by € 64.6 million or 15% to € 373.0 million in the reporting year. The export quota reduced to 53% (previous year: 57%).
Order intake in the segments amounted to € 708.6 million. Compared with industry trends, the 2% drop (€ 14.5 million) in the new machines business was noticeably smaller than it was in the previous year. Whilst domestic orders increased slightly by € 9.3 million or 3% to € 310.6 million, international orders decreased by € 23.8 million or 6% to € 398.0 million in the same period. The foreign share dropped from 58% to 56%. Total sales volume was below the preceding year's figure.
On 31 December 2003, order backlog amounted to € 273.6 million (previous year: € 269.2 million). Since domestic sales revenues exceeded the order intake in the reporting year, the domestic order backlog decreased by € 20.6 million or 16% to € 111.9 million. The backlog of international orders increased by € 25.0 million or 18% to € 161.7 million. The foreign share therefore rose to 59% (previous year: 51%).
Profitability in the "Machine Tools" segment improved despite the restrained business development (8% drop in volume). In contrast to the previous year, all companies profited from the optimisation in materials costs, the capacity adjustments and cost savings. There were no extra-budgetary outlays with respect to product launches in the reporting period. ebit amounted to € 19.8 million (previous year: € 16.2 million). The achieved percentage return on sales was up from 2.1% to 2.8%. ebt increased by € 6.4 million: from € 0.4 million to € 6.8 million.
Investments in this segment reduced by € 20.2 million to € 25.8 million when compared with the preceding year. Further details are set out in the "Investments" chapter on page 83.
At the end of the year, 3,242 employees (previous year: 3,317) worked in the "Machine Tools" segment. This represents 65% of the entire staff within the gildemeister group. Compared with the corresponding period of the preceding year this is a decrease of 2% or 75 employees. Whilst the production site in Shanghai and the Ultrasonic/Lasertec division were systematically reinforced, staff levels, particularly at the productions sites at Geretsried, Bielefeld, Bergamo, Seebach and Brembate di Sopra, were reduced in line with sales development. In 2003 the average personnel expense per capita in the "Machine Tools" segment at the domestic production plants amounted to € 56.0 K (previous year: € 55.9 K). The expense is more or less in line with the previous year's figure, since the increases in basic wages were counterbalanced by a decrease in overtime pay and in profit-sharing and bonus payments. Combined with the figure for the international production plants, this value amounts to € 45.1 K (previous year: € 44.5 K) in the "Machine Tools" segment.
Segmental Reporting: "Services"
The "Services" segment is operated by dmg Vertriebs und Service GmbH and its subsidiaries. With its products and technical services, it represents an independent division. This segment also includes the procurement services of a & f Stahl- und Maschinenbau GmbH, the components and tools of saco S.p.A. as well as the toolsetting equipment of dmg Microset GmbH. The services include the service and spare parts business, service products, such as the dmg Powertools, training products and training services and remuneration for installation and consulting activities, and the used machine business.
Key Figures
"services" segment
| Changes | ||||
|---|---|---|---|---|
| 2003 | 2002 | 2003 against 2002 | ||
| € m | € m | € m | % | |
| Sales revenues | ||||
| Total | 273.0 | 263.6 | 9.4 | 4 |
| Domestic | 143.9 | 160.1 | -16.2 | -10 |
| International | 129.1 | 103.5 | 25.6 | 25 |
| % International | 47 | 39 | ||
| Order intake | ||||
| Total | 272.6 | 257.3 | 15.3 | 6 |
| Domestic | 145.8 | 153.7 | -7.9 | -5 |
| International | 126.8 | 103.6 | 23.2 | 22 |
| % International | 47 | 40 | ||
| Order backlog* | ||||
| Total | 59.2 | 59.6 | -0.4 | -1 |
| Domestic | 10.6 | 8.7 | 1.9 | 22 |
| International | 48.6 | 50.9 | -2.3 | -5 |
| % International | 82 | 85 | ||
| Investments | 6.8 | 24.2 | -17.4 | -72 |
| Employees* | 1,717 | 1,663 | 54 | 3 |
| ebitda | 32.0 | 17.7 | 14.3 | |
| ebit | 25.3 | 10.5 | 14.8 | |
| ebt | 17.5 | 4.4 | 13.1 |
* Reporting date 31 Dec.
In all, business development in the "Services" segment was satisfactory in the reporting year. Sales revenues rose from € 263.6 million by 4% or € 9.4 million to € 273.0 million. The group sales contribution increased from 26% to 28%. Along with the service and spare parts business, the used machines business also recorded positive growth rates. At € 143.9 million, domestic sales revenues remained below the figure for the preceding year (€ 160.1 million) by € 16.2 million or 10%. The international sales revenues contribution increased by € 25.6 million (25%) to € 129.1 million. The relative share was 47% (previous year: 39%).
Order intake increased by € 15.3 million, and at € 272.6 million, exceeded the preceding year's figure of € 257.3 million by 6%. The domestic order intake dropped from € 153.7 million by € 7.9 million or 5% to € 145.8 million. New international orders amounting to € 126.8 million exceeded the preceding year's orders by 22%. The relative share thereby increased to 47% (previous year: 40%).
As the figures for sales and the order intake were about equal in the reporting year, the total order backlog of € 59.2 million (previous year: € 59.6 million) differed only slightly as at 31 December 2003.
In 2003 the "Services" segment with its growing volume of business also performed well with respect to earnings. At € 25.3 million, ebit increased noticeably by € 14.8 million against the previous year (€ 10.5 million). Both efficiency increases and margin effects resulted in an improved profitability. At € 17.5 million, ebt picked up noticeably (previous year: € 4.4 million). Overall, profit contributions from the other service products included in the result, increased adequately.
In the reporting period, investments in this segment amounted to € 6.8 million. Further details are set out in the "Investments" chapter on page 83.
At the end of the year, 1,717 employees or 34% of the group's personnel were working in the "Services" segment. This represents an increase of 54 employees or 3% when compared with the preceding year, which took place primarily in the European and Asian sales and service companies. 67% of this segment's employees were working in the services, spare parts logistics, application technology and training areas (previous year: 68%). The average personnel expense in the "Services" segment amounted to € 64.6 K (previous year: € 66.3 K).
Segmental Reporting: "Corporate Services"
The "Corporate Services" segment includes the gildemeister Aktiengesellschaft with its group-wide holding functions, such as group strategy, product development, logistics and production, funding, controlling, personnel management and marketing as well as the group-standardised data processing infrastructure. The Holding Macchine Utensili S.p.A. is also allocated in this business segment as finance company for the Italian production plants.
Key Figures
"corporate services" segment
| 2003 | 2002 | Changes2003 against 2002 | ||
|---|---|---|---|---|
| € m | € m | € m | % | |
| Sales revenues | 0.6 | 0.6 | 0.0 | 0 |
| Order intake | 0.6 | 0.6 | 0.0 | 0 |
| Investments | 3.7 | 3.0 | 0.7 | 23 |
| Employees* | 69 | 65 | 4 | 6 |
| ebitda | -3.4 | -7.9 | 4.5 | |
| ebit | -5.5 | -11.7 | 6.2 | |
| ebt | -9.0 | -14.4 | 5.4 |
* Reporting date 31 Dec.
Sales revenues and the order intake in the "Corporate Services" segment" of € 0.6 million consist mainly of income from rents. ebit were up by more than 50%, but at € -5.5 million remained negative (previous year: € -11.7 million). ebt amounted to € -9.0 million in the reporting year. On 31 December 2003, 69 employees (previous year: 65 employees) were working in this segment, representing an unchanged 1% of the group's staff. Investments related to the acquisition of property at the Bielefeld site, which is currently used by dmg Microset GmbH, and the expansion of the information and communication systems at gildemeister Aktiengesellschaft. In the reporting year investments totalled € 3.7 million.
Supplementary Report
Overall economic development moved further towards growth during the first few months of this year. Demand in German machine tools was up again.
GILDEMEISTER's performance at the start of the financial year 2003 was in line with forecasts. As expected, the order intake developed slowly. However, we noted a growing interest in machine investments over the first two months. We also expect a gradual recovery in the next few months due to existing demand. Sales improved when compared with the preceding year's level.
Economic Development 2004
Overall economic development improved during the first months of the current year. Upward economic trends are now noted in most industrial countries. Economic researchers expect this positive development to intensify over the year. The Organisation for Economic Co-operation and Development (oecd) sees the situation in a similar way. Once again the usa act as "economic locomotive".
Sources: Institute for World Economics (IfW), Kiel; Organisation for Economic Co-operation and Development (oecd), Paris
Economic trends in the German machine tool industry appeared to pick up slightly at beginning of the year: whilst demand continued to grow. At the start of the year, the industry's order intake pertaining to cutting machine tools was 2% above the preceding year's corresponding figure; sales were up by 9% (as at January 2004). The order backlog shown in production months, of 6.0 months, continued to pick up following its low in June 2003, and, according to estimates of the vdw, is likely to amount to about 6.4 months by the end of February 2004 (comparative figure for the preceding year: 6.9 months).
Quelle: vdw (Verein Deutscher Werkzeugmaschinenfabriken – Association of German Machine Tool Manufacturers)
Corporate situation after the end of the reporting year
gildemeister was able to start the financial year according to plan. The customary start-up delays in the course of business that are typical for this section could not entirely be avoided. In the first two months of this year, group sales revenues of € 141.2 million was 8% above the figure for the comparable months of the preceding year (previous year: € 131.0 million). Due to the holiday at New Year, customers' orders only fully picked up in the second half of the month. In February, the order intake rose again by 17% when compared with the restrained intake of the preceding month, reaching € 136.5 million for the first two months (previous year: € 148.0 million). Based on the current discussions regarding the accounts we expect a good month in March, so that the order intake in the first quarter 2004 will be in line with the preceding year's level, as planned. On 29 February, 2004, the order backlog of € 328.1 million was 1% below the existing orders at the end of 2003, and therefore also below the preceding year's comparative figure (previous year: € 345.8). A statement on the result for the first two months of the financial year is currently not possible. We will report on this development in our next Quarterly Report, which will be published on 6 May 2004.
Sales revenues of the GILDEMEISTER group in January and February in € million
2002 2003 2004 141.3 131.0 141.2
The successful development of key accounting continued throughout the first two months of the current financial year. Thanks to two major orders from Canada and the usa, worth € 4.5 million, the order intake in this area was above the preceding year's comparative figure.
With our intensive marketing activities during the first months of the year we continue to push forward current business operations right from the beginning of the year. For example, along with four smaller trade fairs and exhibitions at home and abroad, we premiered the first three innovations of the year 2004 at our traditional inhouse exhibition in our state-of-the-art production facility in Pfronten, and succeeded in selling 77 machines worth € 16.6 million. The 43 exhibited machine products and the dmg Powertools from the "Services" segment were met with great interest from the 2,230 specialists. In the first two months, selling prices were moderately raised by between 2-4% depending on each particular product.
In early 2003, the organisational structure at dmg Vertriebs und Service GmbH was geared to market and customer needs in line with the regional organisation. The financial year 2004 will see the further optimisation of the management structure and strengthening of the functional areas. With effect from 30 January 2004, 100% of the shares in dmg Microset GmbH were taken over by dmg Vertriebs und Service GmbH in line with the company's positioning in the "Services" segment. There were no further changes in the legal structure of the company. No acquisitions or sales of interests or operating units were made in the said period.
The fourth gildemeister Suppliers Day took place on 13 February 2004. The inhouse exhibition at the Pfronten production site again provided the organisational framework for this event. The Suppliers Day, which has proven itself a very useful forum for the increase in dialogue between gildemeister and its top supply partners, was dominated by the "Supplier of the Year Award 2003" in the quality, supply performance, innovation and overall winner categories.
With the ceremonial signing of the agreements from 17 March in Shanghai, gildemeister founded an endowed chair for machine tools and production logistics at the Chinese-German College for Postgraduate Studies (cdhk) at Tongji University in Shanghai. The Chinese-German College for Postgraduate Studies is a joint project by Tongji University and the German Academic Exchange Service (daad). With the endowed chair, which also receives public funds, gildemeister reinforces its innovation promoting commitment to research and science on the one hand, and underlines the role of the production site in Shanghai in view of the group's globalisation strategy on the other hand.
The presentation of three new machines by the end of February demonstrates gildemeister's innovative power. At the in-house exhibition in Pfronten deckel maho Pfronten GmbH introduced both the dmu 125 5-a and dmc 125 5-a models. At the same time, another machine of the successful speed line for cnc Swisstype automatic lathes from the Brembate factory was premiered.
Forecast 2004
Global economic development is brightening up and, according to most experts, will continue to improve throughout the current financial year. Growth forecasts are at around 4% (GDP). A key position is held by the USA, where economic activity has begun to pick up again.
Latest prognoses for 2004 with regard to mechanical engineering and particularly with regard to machine tools again expect growth. Following a 2% loss in the preceding year the German Mechanical Engineering Association (VDMA) is expecting a 2% increase in sales for 2004. The majority of the VDMA's trade units anticipate a positive development. Trends towards a recovery are expected this year with regard to machine tools, following the losses suffered in the preceding years. Forecasts for 2004 with respect to global development in the machine tool sector have not yet been published. We expect global consumption to be 4% above the level of 2003. The ifo Institute (Economic Research Institute, Munich) and the Association of German Machine Tool Manucaturers (VDW) expect an increase in order intake for German manufacturers (at home: more than 2%; abroad: more than 4%) and a 4% increase in production.
For the financial year 2004, GILDEMEISTER expects a continuously increasing recovery in demand. For the first quarter, we expect the order intake to be roughly in line with the preceding year's level. We intend to achieve a gradual increase of approximately 5% in the order intake over the current financial year. Our planning is based on new innovative products, the continuing expansion of our world-wide market presence, a steady consumption in Asia, noticeable upward trends in America and first indicators of a revival of the markets in Europe and at home. As a result of this and in view of our order backlog, we also intend to increase our sales revenues for 2004 by approximately 3-5% depending on economic trends. We will continue to push ahead with our innovations, thereby safe-guarding our technological lead. A further increase in efficiency is intended for the re-enforcement of the group's profitability. The object of our efforts is to show another significantly improved result (EBT) for the financial year 2004.
According to most experts, growth dynamics in overall economic development will increase in this year. Major political risks cannot be ruled out, but are currently not evident. Global forecasts, for example by the Institute for World Economics, predict a 4.1% increase in gross domestic product. The oecd was more cautious late last year, mentioning a possible profit of about 3%. A continuation in economic upturn is forecast for the usa. Tax reliefs may again result in an increase in consumer spending. The same applies to investments. The decline of the Dollar on the other hand and the high public deficit are seen with increasing scepticism. According to the International Monetary Fund (imf) the high level of indebtedness could constitute a potential risk for world-wide economic activity. The growth forecast by the Kieler Institute for World Economics (iwf) for the American economy is 4.1% with respect to the entire year 2004. As a result of the boost in global economy, experts also predict a strong increase in exports for Japan. Private consumption is also expected to increase gradually. The growth forecast in this respect is around 2.0%. After a slow start, Europe can expect an increased speed of expansion, according to the majority of experts. However, a braking effect could emanate from the high external value of the Euro. If the Euro continues to increase in value, this could turn into a risk to economic activity. The growth prognosis by the Kieler IfW for the Euro zone is 2.1%. The eu Commission expects 2.0%.
In 2003 Germany again had to put up with relatively small growth. The IfW expects the growth in gdp to be at 1.8%. In early January, The German Economic Research Institute (diw) corrected its forecast downward and now expects a growth of just 1.4%. At the end of 2003, the German Council of Economic Experts on the Assessment of Economic Trends forecast a 1.7% growth. If international economic conditions recover, German exports will also benefit. However, the possibility of the Euro exchange rate further increasing against the Dollar, remains an uncertain factor. This could lead to another slow-down in economic activity. The job market situation continues to be poor. Here, according to experts, any positive cyclical effects will not be noted before the end of the year. The situation in public spending also remains tight. It is seen as likely that the deficit quota of 3% will be exceeded again.
Sources: IfW (Institut für Weltwirtschaft – Institute for World Economics), Cologne diw (Deutsches Institut für Wirtschaftsforschung – German Economic Research Institute), Berlin German Council of Economic Experts on the Assessment of Economic Trends, Berlin oecd (Organisation for Economic Co-operation and Development), Paris imf (International Monetary Fund), Washington
The world-wide market for machine tools is expected to improve in the year 2004. Due to the anticipated improved demand, we expect both global output and world-wide consumption to be around 4% above the respective preceding year's figures. On the one hand, our forecast for the market volume is based on the positive economic outlook for China, Japan and other major markets in Asia, and on the economic recovery that has been evident in America since November 2003. On the other hand, we expect the first indicators of a revival of the European market to continue. With respect to the sales volume, we expect a similar increase against the previous year. There are no statements on the market and sales potential of machine tools as yet.
World-wide consumption of machine tools (1995 - 2005) in € billion
non-cutting machine tools cutting machine tools (like gildemeister)
Source: vdw world-wide machine tools statistics (exc. parts and supplies; revised figures since 1999)
* vdw estimate ** gildemeister estimate
The German machine tool industry in its forecast for sector trends expects further growth for 2004. The declining trends in the order intake slowed down noticeably over the past year. The order backlog dropped back to 6.0 months by the middle of the year, but then picked up again over the following months, reaching 6.4 months in February this year. Following a 79.9% low in the second quarter of the preceding year, the latest capacity utilisation was at 85.5%, which is a long way short of a full use of capacity. Against this background and in view of the revival in demand at the beginning of the year, the Economic Research Institute in Munich and the Association of German Machine Tools Manufacturers (vdw) expect an increase in order intake and a 4% growth in production to € 9.2 billion. With respect to the preceding year's production, worth € 8.8 billion, they do not expect any changes over the first half of the year, and a 6% growth over the last two quarters. As to the order intake of € 8.4 billion in the previous year, a good 2% growth pertaining to domestic sales and a more than 4% increase pertaining to exports was assumed. On a medium-term basis, the vdw and the Munich Economic Research Institute currently expect a growth phase over three years of a good 3% average per year between 2005 and 2007. Risks in this forecast are seen by the Association in the exchange rate development and a deterioration in efforts towards a political reform. The Association is confident that the growth force in world economics and common sense in German politics will win.
Source: "The German Machine Tool Industry in the Year 2003" vdw (Association of German Machine Tool Manufacturers) (Figures including parts and supplies, etc.)
Major changes in the industry's structure are currently not evident. At the moment and for the foreseeable future, we do not expect any negative effects or risks for gildemeister due to any possible change in the market's competitive situation. On the contrary, gildemeister with its innovative and modern products and its global market presence has a real opportunity to defend and develop its leading position as a producer of metal-cutting machine tools against the international competition.
During the past years, gildemeister invested heavily in materials and services for the development of new products and in the expansion of its sales and service organisations. Thanks to its user-orientated technologies and comprehensive technical services gildemeister is well prepared for the expected recovery of the market. The world-wide presence of the dmg sales and service organisations in all the major industry markets has created the conditions required for the building of adequate market shares.
For the current financial year, we expect a continuously increasing recovery of demand. In January and February, order intake amounted to € 136.5 million (preceding year's value: € 148.0 million). For the first quarter of 2004, we expect, subject to the forthcoming discussions regarding the accounts, the order intake to be at the preceding year's level, as planned. Thanks to our innovative machines, we intend to increase our share of the world-wide market volume. We expect demand to increase over the year. We intend to achieve a gradual increase of approximately 5% in the order intake during the current financial year. Our planning is based on new innovative products, the continuing expansion of our world-wide market presence, a steady consumption in Asia, noticeable upward trends in America and first indicators of a revival of the markets in Europe and at home. With regard to the regional distribution of new orders, another shift in favour of the Asia region is likely. The high pressure on selling prices has further increased due to the Euro exchange rate development.
In the first two months, group sales revenues reached € 141.2 million (preceding year's figure: € 131.0 million). Based on the expected order intake for the current financial year and our still satisfactory order backlog, we intend to improve our sales in 2004 by 3-5% depending on economic trends. In this respect we expect sales for the first quarter of this year to be in line with the preceding years' figures. As to the later quarters of the year, we are planning for a sales revenues development that should be above the level of the preceding year's quarters. With a domestic sales contribution of approximately 43-46%, we expect around 29-32% for the rest of Europe, 7-10% for North America and a sales contribution of about 14-17% for Asia. The distribution shown is based on the assumption that current economic trends, particularly in Asia and America, will continue this year. With regard to sales development for the following two years, we see a definite growth potential.
Expected sales distribution 2004 of the GILDEMEISTER group by regions
By the end of February 2004, order backlog within the group had marginally decreased to € 328.1 million. This represents a still sufficient capacity utilisation, however, it offers only a limited means to fully counterbalance fluctuations in the order intake for individual machine types. Despite the generally adequate level of orders, gildemeister, like others, is therefore affected by the still restrained order intake in some areas of the company, with the result that the smooth processing of some orders cannot always be guaranteed.
In line with plans, the first quarter will close with a negative result (ebt). The 'Services' segment continues to be operated at full capacity with regard to personnel. We intend to double the sales revenues volume related to Powertool software products in 2004. Our machines' production capacity was adjusted last year with regard to staff levels according to site and necessity. We do not expect any major changes in this respect in the current financial year. We will continue to push ahead with our innovations, thereby safe-guarding our technological lead. Based on our consistent pursuit of measures to improve our earning power and increase efficiency in sales, along with the reduced investments particularly in tangible fixed assets and materials, we are planning for a considerable improvement in ebt for the financial year 2004, thereby achieving a annual profit. It is our objective to attain a better result in order to distribute another dividend.
We want to improve our financial structure, and will meet future risks with a variety of measures aimed at reducing the commitment of funds with respect to inventories and accounts receivable through an increase in the rate of turnover (see also page 80). We also intend to look into the strengthening of our capital base and into options for the effective consolidation of our financing, where we will focus on longterm financing requirements. The aim of our activities is the future safeguarding of our supply of liquidity in view of the ongoing changes in market conditions for capital goods, and is intended to provide the foundation for the strategic readjustments of our divisions.
In 2004, the gildemeister group's risk management will continue to be developed further and consistently. It is a living system, which is complete in itself, thereby gaining in effectiveness and efficiency over time. From today's perspective, known risks can be controlled, and the future existence of the gildemeister group is not jeopardised.
For the financial year 2004 the planned investment volume for tangible and intangible assets amounts to around € 18 million, which is noticeably below the level of planned depreciation. A further € 5 million for tangible fixed assets must be added, to be financed through leasing. The investments are intended for the provision of tools, fixtures, measuring equipment for new machine types and equipment replacement. The highest amount of € 2.5 million was invested at dmg Vertriebs und Service GmbH with its 50 sales and service sites. € 0.4 million of the investment budget of gildemeister Aktiengesellschaft will be spent on the implementation of a groupstandardised erp system at the European sales and service sites. gildemeister Drehmaschinen GmbH has designated investments of € 0.6 million in the current financial year for the production of new machine types. The planned investment volume of the subgroup gildemeister Italiana S.p.A. totals € 1.5 million. € 0.6 million will be spent
on the relocation of dmg Italia S.r.l. from Gorgonzola to the new technology and presentation centre at the gildemeister Italiana S.p.A. site in Brembate di Sopra. Investments of € 0.7 million are planned at famot Pleszew S.A. At deckel maho Pfronten GmbH, € 1.3 million will be invested in tools, fixtures and measuring equipment, for example for the introduction of the new machines of the dmu p line. The Geretsried site is planning to spend € 0.5 million on the production of new machine types. At deckel maho Seebach GmbH, the group's centre of expertise in mechanical production, € 0.1 million will be spent on replacement equipment. The site is planning to invest a total of € 0.5 million. The Shanghai site plans to spend € 0.3 million for the purchase of an air conditioning system in the production hall. The structure of investments is well balanced amongst the varying requirements of the production sites and markets. According to current assessments, no risks are involved with the intended investments.
Assuming a recovery of market conditions, the investments planned for 2005 will be in line with the level of depreciation.
In Procurement gildemeister will give another boost to its systematic, co-ordinated materials group management in the course of the planned expansion of the coSupply® activities. For this purpose the group's s BaaN erp system will be expanded over the year, in order to gain additional functions and new processes. In this respect, various adjustments within the BaaN system will also be implemented, resulting in improved business processes with our supply partners. The changed processes described above were developed together with some of our top supply partners in the jointly held coSupply® workshops.
Along with the increased procurement of trunk machines, our value added optimisation strategy also pursues the increased procurement of cast iron from countries in Central and Eastern Europe. This switch was due to the intensive development of local suppliers from the above countries in numerous coSupply® workshops. Since the cast iron bought in Germany constitutes a value-specific share of approximately 64%, the switch will have a positive impact on the group's liquidity thanks to better purchase prices. According to market development, purchase prices might have to be agreed on retrospectively, as required.
The Shanghai site plans to expand its local purchasing volume noticeably, in order to increase the "local content" to more than 80%. For example. one of the activities in this respect is the increase in the volume of cast iron purchased in China. Thanks to these activities deckel maho gildemeister (Shanghai) Machine Tools Co., Ltd. will be able to leverage the cost advantages of the Chinese procurement market.
Reliability in supply with respect to aggregates, modules and structural components is safeguarded through long-term basic agreements. This also includes an increase in quality assurance agreements, which are an essential factor in the further improved safeguarding of the purchasing volume.
The Production and Logistics area will be dominated by the strategic restructuring of the factories' product and production specific responsibilities. Our new strategy will see a new delegation of authorities amongst the factories. The aim of this is to reinforce our innovative ability by pooling responsibilities in the development area on the one hand, and the efficient manufacture of production programmes at our international sites on the other hand. This development of our previously internal network will also be instrumental in improving capacity utilisation thanks to an increased flexibility in production. The synergies gained by the new strategy will result in a more efficient use of existing assembly capacities, for example through an increased flexibility in production. An expansion in capacity at the existing factories is therefore not planned.
The company's increased ability to react and agility in production is also safeguarded through a variety of optimisation measures at the factories, such as the activities provided by the kvp workshops. The main aim of these measures is the reduction in processing times, the most important production-logistic parameter. We thereby create the conditions for the financial processing of the series start-up management of a wide variety of new products planned for 2004.
With regard to products and services our orientation toward innovation – the basis of our technological supremacy strategy – is once again evident in the development of 20 new products in the "Machine Tools" segment.
In the "Turning" division, the Brembate site will constitute an innovative focus with five new machines in the speed and sprint lines, All the companies' new products have linear drives to increase economic efficiency and dynamics at continuing high precision.
In the "Milling" division deckel maho Pfronten and deckel maho Geretsried will introduce the horizontal machining centres that were developed jointly by both companies. deckel maho Pfronten will also introduce two horizontal machining centres for heavy machining operations, two new cnc milling machines and two cnc machining centres for 5-axis/5-sided machining. The Geretsried site complements the vertical machining centre line for mould building with a larger design. The two companies together therefore constitute a clear focus with respect to the innovations of the "Milling" division.
The "Ultrasonic/Lasertec" division continues the systematic expansion of its trend-setting technologies by introducing a new ultrasonic machine for precision mechanical applications.
In all the above divisions, the shift in market requirements is also reflected in the expanded and enhanced range of options available. In this respect we expect another increase in customer-specific solutions in the course of the projects business.
In the "Services" segment, the gildemeister group will expand its range of innovative service and software products as reflected in the increasing importance of this market. For example, for the expansion of the dmg Powertools product family, more efficient multimedia applications are being developed. With these innovations the dmg Vertriebs und Service GmbH creates the conditions for the sharp increase in the sales volume pertaining to software products that is expected in the financial year 2004. Overall, the gildemeister group with its innovative delivery programme is well prepared for a market recovery in the current financial year.
For 2004, we are planning to complete the change in the legal corporate structure of the dmg sales and service organisations that was begun in 2003, in line with the management and control structure of these companies. To achieve high flexibility in commercial authority and for the pooling of our participation activities, a management and profit and loss transfer agreement was entered into by gildemeister Aktiengesellschaft and gildemeister Beteiligungen ag, Bielefeld, on 16 March 2004. The agreement is subject to approval by the company in General Meeting on 14 May 2004. In the course of the strategic restructuring of the factories' product and production specific responsibilities, adjustments in organisation and administration are planned.
We will continue to face up to the extreme competition for good junior staff. In addition, we will build up potential skilled and executive personnel from our own ranks with the specific vocational and further training of our employees. We already give young people an opportunity to prove their skills at national and international trade fairs. In addition, an intensified "exchange of best practices" amongst the trainees of the group companies is intended to promote a more efficient vocational training. In the year 2004 we will enhance the "Corporate Services" segment in the Finances/Controlling area. In the "Machine Tools" and "Services" segments, gildemeister will adjust to market conditions, as required.
The aims and focal points of gildemeister's activities in Research and Development will not change significantly from the preceding years. The integration of the machining technologies (such as turning and milling) will be continued as will the increases in machine precision and dynamics. The ever increasing importance of software products is reflected in the expansion of Research and Development in the "Services" segment. In this respect gildemeister will, in 2004, continue its systematic and close collaboration with the suppliers of systems and research organisations in the fundamental research, applied research and experimental development areas.
Our strategic objectives remain the guiding principle our expenses and the number of staff in Research and Development follow. We will develop the skills of our employees in this area via co-ordinated training activities, thereby safe-guarding the basis for the further development of our technological leadership.
Research and Development
GILDEMEISTER gears all business processes to market requirements and customer satisfaction. Our products reflect this approach in their strict bias toward innovation. In the reporting year GILDEMEISTER developed 10 new products, which were presented at international trade fairs and exhibitions, such as the EMO in Milan. Over 90% of the current delivery programme consists of machines that were developed during the last three years.
In the financial year 2003, spending on, and investments in, Research and Development decreased by € 4.4 million to € 43.1 million. Our high number of construction engineers was maintained at 397; representing 13% of the workforce at the production plants. This continued commitment safeguards our innovative know-how. Savings were achieved through a reduction in outside services, such as development services by external engineering departments.
Long-term, high-priority focal points of our future research and development policy include the integration of technologies, the ultrasonic and laser machining of "advanced materials", the increase in machine dynamics, tool management and software products. The integration of technologies does not only link turning and milling machining tasks, but also laser and milling processes. The machining speeds rise thanks to the use of fast and, at the same time, precise linear drives and dynamic kinematics. The consistent expansion of the range of applications for the machining of modern, hard-brittle materials through the further development of ultrasonic machining safeguards our unique position in this area. gildemeister optimises customer benefit with respect to its machines by using open controls, the high-performance of which increases the productivity of the entire machine tool system. In addition, the combination of applications from the dmg Powertools product family, such as dmg-Netservice, the mf-Programmer 3d or the dmg-Service Agent, increases our systems' total utility.
Qualification structure in the development/construction area as demonstrated by the Seebach site
Since May 2003, the co-ordination across all sites of interdisciplinary development teams has been carried out by the development co-ordinator. Along with the regular monitoring and controlling of the development projects in view of the achievement of objects with respect to contents, constructiveness, organisation and finances, the responsibilities of the development co-ordinator also include group-wide product development discussions (peg) and the standardisation committee. He is also responsible for the gildemeister-internal, groupware-based system for the support of the series start-up management and "preventative quality assurance". This system makes the co-operation over all sites and departments ("Simultaneous Engineering") considerably easier.
Research and development costs at the GILDEMEISTER group in %*
*of relevant sales generated at the production plants in the "Machine Tool" segment
In the production development discussions the factories discuss and agree with each other and with the best sales pros, on matters such as product characteristics, market potential and requirements or the implementation of new technological trends. Our innovative power is evident in the 15 patents and four utility models that were registered in Europe, the usa and Japan in the reporting period.
gildemeister Drehmaschinen GmbH represents an example of the group's bias toward research and innovation. The company currently participates in several research projects supported by the German Federal Ministry of Education and Research. In collaboration with university institutes, such as the Institute for Machine Tool and Management Studies in Karlsruhe or the ifw at Hanover University and with control manufacturers and users, the site researches in the high-precision machine tools area and virtual product creation. Another project is aimed at the capture of, and improvement in, the life cycle of machine tools with respect to costs and quality.
In the "Turning" division gildemeister Drehmaschinen GmbH expanded its range of products with two new machine types and innovative options. The expenses pertaining to developments amounted to € 7.4 million and are therefore 30% below the level of the preceding year (2002: € 10.7 million). The completion of the main development work with respect to the gmx line, and rationalisation measures with the aid of the interdisciplinary co-ordination across all sites, resulted in an improved development quality, increased development speeds and a decrease in costs.
The ctx 410, which was developed in close collaboration with graziano Tortona S.p.A. and introduced in Milan, completes the range of products with its attractive costperformance ratio and strengthens the group's market position in the universal cnc turning area. Along with the expansion of options for the linking and integration in automated processes, particularly in respect of the two-spindle turning centres of the twin line and the vertical turning machines of the ctv line, the expansion of the gmx
line for turning-milling centres constituted the centre of activities. Thanks to its adoption of the innovative deckel maho milling spindle technology, this successful range of machines for the integrated machining of complex components sets new standards in respect of machine dynamics and cutting performance. It was completed by the gmx 200, which was introduced at the emo in Milan.
In the reporting period gildemeister Italiana S.p.A. worked hard on the further expansion of the automatic lathes of the sprint line. The sprint 20 linear and sprint 32 linear that were introduced last year will be complemented by two other types over the year 2004. The speed line of highly dynamic and high-precision cnc Swisstype automatic lathes with linear drives will also be expanded. Related projects were intensely pursued in 2003.
In line with the product programme reorientation process started in 2001, graziano Tortona S.p.A. rigorously pursued the further development of the two ctx lines of cnc universal machines. The most important exhibit from graziano was introduced at the emo in Milan: the ctx 510, the largest machine of the ctx 10 line co-ordinated by this company. A comprehensive "identical parts" strategy was thereby implemented, which maintains the speed of response of the decentralised group structure at the same time. As with the smaller sister models, we offer our new products with cnc controls from the three major manufacturers, in order to enhance the gildemeister group's superiority in the control-supported product and service area.
famot Pleszew S.A., as centre of expertise in the production of trunk machines, is making an important contribution to the optimisation of our value added. The company made the focus of its development work the production of new trunk machine types for sister plants within the group. The work on three further trunk machines of the dmu and ctx lines progressed according to plan and will end with the production run-up during 2004. famot also continued the development of the smallest model in the ctx 10 line; this will be introduced in 2004.
In 2003 the gildemeister group introduced four new machines in the "Milling" division. At the same time, numerous development projects were pursued, which will be presented in 2004 and 2005. deckel maho Pfronten GmbH expanded all its product lines with new developments or new options in the reporting period, thereby safe-guarding its superiority in the steadily growing market for 5-axis/5-sided machining. At the emo in Milan, the company introduced a particularly dynamic machine from the successful dmu line; it complements the range of products for mould making. At the same time, it introduced a compact manufacturing cell for 5-axis/5-sided machining with a very good price-performance ratio. Following the presentation of the optional head
spindle, the dmc 60 s now allows for highly productive integrated "off the peg" machining of complex workpieces . The company also introduced the new dmu/dmc 100 at the emo. This machine in the patent-applied-for "duoblock®" construction complements the operative range of the successful dmu p- and dmc u lines in the medium dimension segment and represents a jump in development with respect to productivity, dynamics and precision.
Traditionally, development work at deckel maho Geretsried GmbH area focuses on the market segments for entry, mould making and production machines. The site's major innovation was the dmc 75 v linear, which was presented in Milan. This machine is the trendsetter for a vertical machining centre line for tool manufacture and mould making. It has its linear drives in all rotational axes ensuring high-precision machining with highest dynamics. With respect to horizontal machining centres for serial production the company is about to introduce a new line of products that has been developed in close collaboration with deckel maho Pfronten. Parallel to the development of the ctx line, the modular organisation principle and "identical parts" strategy are rigorously implemented across both sites.
The focal point of Research and Development at deckel maho Seebach GmbH was the expansion of the dmp v line of high-precision, highly-productive vertical production milling machines with erosion-resistant linear drives and unusually short chip-to-chip tool changing times. In 2003, following the production start-up of the dmp 60 v linear, the company introduced the broadly expanded robot variant. For example, this version allows for the linking of machines to automated manufacturing cells, thereby expanding the field of application in line with market trends. In addition, the dmp v line was expanded with a smaller type at the emo in Milan. The development project for the expansion of the dmf traversing column machine line with linear X-axes was continued with smaller types; the new machines will be introduced at the metav in June 2004.
In the gildemeister group's "Ultrasonic/Lasertec" division the development projects were continued as planned. sauer GmbH is developing a machine for the machining of smaller workpieces. This project will be completed with the presentation at the abm in Stuttgart in September 2004. Thanks to the ultrasonic technology which is unique in the machine tool building industry, the project safe-guards our head start in the growth market for ultrasound-supported machining of hard-brittle materials (so-called "advanced materials") such as ceramics (zirconium oxide), glass (Zerodur, Macor), silicon, composites (carbon fibre), metal carbide, sapphire or ruby. In addition, our specialists support our customers by expanding the technological database with machining parameters for the various materials used.
In laser machining, we secure our world-wide competitive edge in the production of filigree, high-precision parts with the aid of in-depth development activities in the technological areas of 3d laser, FineCutting, PowerDrill and the combined hsc laser machining. Based on a modular and therefore flexible machine concept, the dml 80 Powerdrill was introduced in the reporting period. Due to the linking of different laser systems for example, this machine allows for the individual adjustment to a variety of customer needs gildemeister will continue to safe-guard its technological lead with innovative, user-orientated developments and increase customer satisfaction with contemporary service products and offers.
Turning: With 8 product lines, GILDEMEISTER offers the demanding user a production programme for turning machines, the diversity of which is unique in the world. There are appropriate solutions for every requirement: from universal and vertical turning machines to two-spindle turning centres and multi-spindle automatic turning machines through to turning and milling centres for complex integrated machining using just one setting. Turning machines by GILDEMEISTER can be relied on thanks to their trend-setting functions, such as state-of-the art linear technology, which contributes to an increased productivity for our customers.
TX 320 linear CTX 420 linear CTX 520 linear CTX 620 linear
GD 26 GD 32
GM 20-6 GM 35-6 GM 35-8
GM 42-6
8 Product lines >> Turning
Milling: User-orientated technology, purposeful innovations and trend-setting production strategies – not only within the GILDERMEISTER group does the name of DECKEL MAHO stand for milling technology at its best. Our 7 milling product lines also set global standards when compared internationally. CNC universal milling machines, CNC machining centres for 5-axis machining, vertical and horizontal machining centres, traversing column machines and milling and turning centres - the high-tech solutions provided by DECKEL MAHO open new milling horizons for each machining transaction.
DMU cnc Universal Milling Machines
01
CNC
02 DMU P/ DMU eVolution cnc Universal Milling Machines for 5-sided/5-axes Machining
03 DMC U/ DMC eVolution cnc Machining Centres
04
DMC V Vertical Machining Centres
DMC H Horizontal Machining Centres
06
linear
linear
05
DMF Travelling Column Machines
07
DMP V Vertical Production Milling
DMP 45 V linear DMP 60 V linear DMP 60 V linear mit Roboter
DMF 220 linear DMF 300 linear DMF 360 linear DMF 500 linear
MU 100 P DMU 125 P / 125 FD DMU 160 P / 160 FD DMU 200 P / 200 FD DMU 340 P
Giga Milling Centre
80 U / 80 FD DMC 100 U DMC 125 U / 125 FD DMC 160 U / 160 FD DMC 200 U / 200 FD DMC 340 U
7 Product lines **>>**Milling
Ultrasonic/Lasertec: The new ultrasonic and lasertec technologies offer completely new opportunities in the high-precision machining of "advanced materials" and finest cavities.
Ultrasonic: Thanks to this technology GILDEMEISTER has taken the lead even at international level. The DMS ultrasonic line enables ultrasoundsupported machining of "advanced materials". Compared with traditional machining processes, this innovative machine design results in a productivity that is up to five times higher, with higher precision, better surface quality, and, with regard to the processed work-piece geometries, a substantially higher flexibility.
Lasertec: The future belongs to laser technology – world-wide. Even today, the range of products of our LASERTEC GmbH includes machines for threedimensional laser machining, laser fine cutting and laser boring or which combine high-speed milling and laser machining.
DMS 50-5 ultrasonic DMS 70-5 ultrasonic
DML 80 FineCutting DML 80 PowerDrill
Product lines **>>**Ultrasonic / Lasertec
Preliminary Note
In its Annual Report 2003, GILDEMEISTER publishes the group's figures in accordance with IFRS. Since GILDEMEISTER Aktiengesellschaft is still obliged to prepare its Annual Financial Statements pursuant to the German Commercial Code (HGB), the Annual Report and the Financial Statements of GILDE-MEISTER Aktiengesellschaft cannot be combined with the Group Annual Report and the Notes to the Annual Consolidated Financial Statements.
The Annual Financial Statements set out below represent only the figures for the GILDEMEISTER group. For the individual accounts of GILDEMEISTER Aktiengesellschaft pursuant to HGB, please refer to the Annual Financial Statements and the Annual Report, which are available as a separate document.
Notes to the Consolidated Financial Statements of GILDEMEISTER Aktiengesellschaft, Bielefeld
1 Application of Regulations
The Consolidated Financial Statement of gildemeister Aktiengesellschaft for the year ended 31 December 2003 were prepared in accordance with the International Financial Reporting Standards (ifrs) of the International Accounting Standards Board (iasb), London, Great Britain, applicable on the reporting date. All International Accounting Standards (ias) and interpretations by the International Financial Reporting Interpretations Committee/Standing Interpretations Committee (ifric/sic) required for the accounting period 2003 were applied. The aim of this presentation on the basis of internationally accepted accounting principles is our group's improved international comparability and increased transparency for an external audience.
The conditions for an exemption of gildemeister Aktiengesellschaft from the requirement to prepare Consolidated Financial Statements according to German accounting principles are met pursuant to Section 292 a German Commercial Code (hgb). The Consolidated Financial Statements and Group Annual Report that will be lodged at the Commercial Register and published in the Bundesanzeiger (Federal Official Gazette) are in accordance with the group accounting standard laid down by the European Union (83/349/ewg). This standard was interpreted pursuant to the interpretation of the German Accounting Standard No. 1 (drs 1) "Befreiender Konzernabschluss nach § 292 a hgb" of the Deutsche Rechnungslegungs Standards Committee e.V. (drsc). For the exemption from the requirement of providing Consolidated Financial Statements in accordance with German law the Consolidated Financial Statements were amended by further notes pursuant to Section 292 a German Commercial Code (hgb).
The following notes include statements and comments that, pursuant to ifrs, must be included as Notes to the Consolidated Financial Statements along with the Balance Sheet, the Income Statement, the Statement of Shareholders' Equity and the Cash Flow Statement. For a better and clearer representation we have summarised individual items in the Balance Sheet and the Income Statement; these are shown separately in the Notes with further explanatory notes.
The group currency is Euro. All amounts are shown in thousand Euro (€ K).
The Consolidated Financial Statements and the Group Annual Report of gildemeister Aktiengesellschaft are lodged at the Commercial Register of Bielefeld District Court (hrb 7144).
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At the reporting date the gildemeister group comprised of 61 companies (previous year 60), including gildemeister Aktiengesellschaft, 60 of which (previous year: 59) were included in the Consolidated Financial Statements as part of the full consolidation process. gildemeister Aktiengesellschaft has the direct or indirect majority of voting rights in, or has a dominant influence over, the fully consolidated companies. This includes three leased companies ("Special Purpose Entities"). dmg Charlotte Inc., Charlotte, usa, the fully owned subsidiary of dmg America Inc., Charlotte, usa, did not have an operative business in the accounting period and is not included in the consolidated group due to its minor impact on the group's net worth, financial and profit situation.
Due to the first-time inclusion of the following companies, the consolidated group has changed since the accounting period 2002:
_dmg Europe Holding GmbH, Klaus, Austria, and _dmg Australia Pty. Ltd., Clayton Victoria, Australia.
Whilst 100% of the shares in dmg Europe Holding GmbH were acquired, dmg Australia Pty. Ltd. was newly formed as a fully owned subsidiary of dmg Asia Pacific Pte. Ltd. Both companies were fully consolidated for the first time in December.
dmg Australia Pty. Ltd. will not begin its operative business before the accounting period 2004.
Following the accrual of its shares to the general partner sauer GmbH, sauer kg was dissolved in the accounting period 2003 and is therefore no longer included in the consolidated group.
In the past accounting period gildemeister Aktiengesellschaft acquired 100% of the shares in gildemeister Italiana S.p.A. from the Holding Macchine Utensili S.p.A.
dmg Gebrauchtmaschinen GmbH took over 100% of the shares in gildemeister Italiana s.r.o. from gildemeister Italiana S.p.A.
Other changes within the consolidated group that occurred during the reporting year included the selling of shares in dmg Bielefeld Vertriebs und Service GmbH, dmg Frankfurt am Main Vertriebs und Service GmbH, dmg München Vertriebs und Service GmbH für Werkzeugmaschinen, dmg Berlin Vertriebs und Service GmbH and dmg Hilden Vertriebs und Service GmbH by dmg Vertriebs und Service GmbH deckel maho gildemeister to dmg Stuttgart Vertriebs und Service GmbH.
dmg Vertriebs und Service GmbH deckel maho gildemeister contributed its international subsidiaries to dmg Nederland B.V., with the exception of the dmg sales companies in Canada, Mexico, China, India, Korea and Taiwan, The share in dmg Büll & Strunz GmbH was contributed to dmg Europe Holding GmbH.
The consolidated group has therefore not changed significantly since the previous year so that the comparability with the Consolidated Financial Statements of the previous year is not affected.
There were no disposals or close-downs of plants or operating units in the past accounting period.
No prorata consolidation or inclusion under the equity method was required either in the accounting period or in the previous year.
An overview of all affiliated companies is included at the end of the Notes on pages 184 to 185.
The consolidation of capital in all affiliated companies is carried out through the acquisition method (ias 27 "Consolidated Financial Statements and Accounting for Investments in Subsidiaries" or ias 22 "Business Combinations"). With this method, the initial costs of the investments are set off against the group share in equity of the consolidated subsidiaries at the acquisition date, which normally corresponds to the date of the initial inclusion. Any remaining balance is allocated to the assets and liabilities insofar as their current market value differs from the carrying amount. Any remaining asset-side difference is shown as goodwill and will be written off and recognised as income over a period of up to 15 years. 3 Consolidation principles
Any shares in the equity of the subsidiaries that the parent company is not entitled to are shown as "shares held by other shareholders".
Any reciprocal receivables and payables between the companies included in the Financial Statement were set off against each other. Intercompany profits from intragroup supplies were eliminated; deferred tax charges and deferred tax refunds from consolidation transactions recognised in the Income Statement were included. Intragroup sales revenues are, as is any intragroup income, set off against the relating expenses without being recognised in the Income Statement.
The applied consolidation methods remained unchanged with respect to the figures for the preceding years in comparison with the figures for the accounting period 2003.
4 Accounting and Valuation Principles
All Annual Financial Statements of those companies that were included in the Consolidated Financial Statements were prepared at the reporting date of the Consolidated Financial Statements and in accordance with uniform accounting and valuation principles pursuant to ias 27 "Consolidated Financial Statements and Accounting for Investments in Subsidiaries".
For this purpose, those accounts that were prepared in accordance with local regulations were adjusted to the group-standardised accounting and valuation principles of gildemeister Aktiengesellschaft to the extent that they do not comply with ifrs and the deviations in the valuation are material.
The accounting and valuation principles remained unchanged with respect to the figures for the preceding years in comparison with the figures for the accounting period.
The drawing up of the Consolidated Financial Statements in accordance with ifrs requires that assumptions are made and estimates are used that will affect the amount and the Statement of the Assets and Liabilities, income and expenses and contingent liabilities shown in the balance sheet. These assumptions and estimates relate primarily to the definition of useful economic life, to the accounting and valuation of reserves and to the feasibility of future tax reliefs. In individual cases, the actual values may differ from the assumptions and estimates made. Pursuant to ias 8 "Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies", changes will be taken into account at the time of their discovery and recognised in the Income Statement.
Intangible assets and tangible assets
Useful economic life of assets
| Software and other intangible assets | 3 to 4 years |
|---|---|
| Development costs | 3 to 5 years |
| Goodwill | 10 to 15 years |
| Office and factory buildings | 10 to 50 years |
| Plant and machinery | 6 to 20 years |
| Office and plant equipment | 2 to 20 years |
Acquired and internally generated intangible assets were capitalised pursuant to ias 38 "Intangible Assets", if it is probable that the use of the asset will result in an economic benefit and the costs of the asset can be reliably determined. They were shown at acquisition or production costs, reduced by scheduled linear depreciation resulting from use.
Development costs of machine tool projects and service products were capitalised at their final manufacturing costs, as far as the definite charging to expense requirement pursuant to ias 38 "Intangible Assets" was possible, the technical feasibility and marketing established and the anticipated generation of future economic benefit demonstrated. The final manufacturing costs include those costs that can be directly and indirectly ascribed to the development phase. Capitalised development costs are written off by regular depreciation from the start of production over the expected product life cycle. Research costs are shown as expense in the period when they were incurred.
Pursuant to ias 22 "Business Combinations", goodwill arising from initial consolidation was capitalised and reduced in value by regular depreciation over its expected useful economic life.
Intangible assets and tangible assets were measured at their procurement or production costs, reduced by regular depreciation through use. Depreciation was normally carried out by the straight-line method in accordance with the useful life. Low value items were fully written off in the year of their addition. A revaluation of tangible fixed assets pursuant to ias 16 "Property, Plant and Equipment" was not carried out. There was no property held as financial investment pursuant to ias 40 "Investment Property".
The production costs of assets produced by the company itself include those that can be directly ascribed to the production process, and necessary elements of production-related overheads. This includes production-related depreciation, pro-rated administration costs and pro-rated costs arising in relation to social contributions.
Pursuant to ias 23 "Borrowing Costs" are not treated as part of initial or final manufacturing costs. Costs of repair are immediately charged to expenses.
Leases, including plant and equipment leased by way of sale-and-lease-back arrangements, were recognised as finance leases, if all the risks and rewards incident to ownership are substantially transferred to the lessee. Leasing agreements for leased plant and equipment that meet the criteria of a finance lease pursuant to ias 17 "Leases", were capitalised at the lessee's at their procurement costs or at the lower cash value of the minimum lease payments. Depreciation is carried out by scheduled linear depreciation corresponding to the economic life at most to the contract period. The relating financial obligations arising from future lease payments were carried as liability under other liabilities.
With respect to intangible assets (including capitalised development costs and goodwill) and tangible fixed assets, the impairment of the carrying amount is regularly reviewed pursuant to ias 36 "Impairment of Assets". In so far as the asset's recoverable amount is below its carrying amount, non-scheduled depreciation will apply. The recoverable amount is the higher of an asset's net selling price and value in use. If the reasons for non-scheduled depreciation no longer apply, a reversal of depreciation will be carried out with respect to the procurement or production costs depreciated by regular depreciation.
Financial assets
Financial assets were shown in the balance sheet at their initial costs. In the reporting year depreciation amounted to € 3 K.
Current assets
Valuation of the inventories was at the lower of the initial or final manufacturing costs or the net selling price. Pursuant to ias 2 "Inventories" elements of the production costs include, along with production material and manufacturing labour, pro-rated materials and production overheads and pro-rated administrative expenses and expenses arising in relation to social contributions. Pursuant to ias 23 "Borrowing Costs" are not treated as part of initial or final manufacturing costs. Inventory risks arising from the period of storage and reduced usability were recognised through appropriate reductions in value.
Lower values at the balance sheet date arising from a reduction in sales revenues were recognised. Raw materials and consumables as well as merchandise were measured primarily by the average cost method.
There were no production orders not yet processed in accordance with ias 11 "Construction Contracts" at the balance sheet date.
Receivables and other assets were shown in the balance sheet at their par value or procurement costs. All identifiable risks were taken into account by adjusting their relating accounts accordingly.
Current asset securities are recognised at the lower of their initial cost or fair market value at the balance sheet date.
Liquid funds are assessed at face value.
Deferred taxes
Pursuant to ias 12 "Income Taxes" deferred taxes are assessed in accordance with the concept of accounting oriented liability method. For this purpose, deferred tax assets and liabilities were basically recognised for all temporary accounting and valuation differences between the ifrs commercial balance sheet valuations for group purposes and the tax valuations (temporary differences), and with respect to consolidation processes recognised in the Income Statement. Deferred tax assets for future financial benefits arising from tax-loss credits were also reported in the balance sheet. However, deferred tax assets for all deductible temporary differences and for tax-loss credits were only recognised to the extent that it is probable that future taxable profit will be available, against which the temporary differences or unused tax losses can be utilised. The deferred taxes were calculated on the basis of revenue tax rates that, pursuant to ias 12 "Income Taxes", at the time of realisation apply or have been enacted in the individual countries in accordance with the current legal status. Deferred tax assets and liabilities were balanced out only to the extent that an offset was legally permissible. Deferred tax assets and liabilities were not discounted in accordance with the provisions contained in ias 12 "Income Taxes".
Provisions and liabilities
Pension provisions are calculated on the basis of the "Projected Unit Credit Method" pursuant to ias 19 "Employee Benefits". Under this method, not only those pensions known and pension rights accrued at the balance sheet date are recognised, but also expected future increases in pension payments and salaries by estimating the relevant factors impacting on such payments. Calculation is based on actuarial reports taking into account biometric calculation principles. The amounts not yet shown in the balance sheet emanate from actuarial gains and losses from inventory changes and deviations between assumptions made and actual development. Actuarial profits and losses are only recognised as income or expense if they exceed a ten percent margin of the defined benefit obligation. Distribution is carried out over the participating employees' expected average residual period of service.
Pursuant to ias 37 "Provisions, Contingent Liabilities and Contingent Assets" other provisions will only be recognised in case of an existing present obligation to third parties, the use of which is probable and if the anticipated amount of the required provision can be reliably estimated. The probability of occurrence must exceed 50%. In each case the most probable amount of performance was recognised. Calculation was at full cost. Provisions with a remaining term of more than one year were discounted according to the usual market conditions.
Liabilities were recognised at their amounts repayable. Liabilities arising from finance leases are shown in other liabilities at the cash value of the future lease payments. Customer payments on account were charged to liabilities.
Derivative financial instruments
The hedging of risk positions from currency and interest rate fluctuations is often carried out through the use of derivative financial instruments such as forward currency transactions and interest rate swaps. The hedging covers risks arising from changes in interest rates from underlying transactions and, in the case of currency risks, also risks from pending supply transactions. For the hedging of currency risks arising from transactions within the gildemeister group only forward currency transaction are used. Interest hedging tools (swaps) are used to reduce the effect from changes in the interest rate on the cost of finance for a floating rate investment credit. With respect to derivative financial instruments the gildemeister group is exposed to a credit risk that arises from the non-performance of contractual agreements by the other party. This credit risk is minimised by only entering into transactions with parties of superb financial standing.
Pursuant to ias 39 "Financial Instruments: Recognition and Measurement" all derivative financial instruments are recognised at their fair market value, regardless of the purpose or intention for which they were entered into.
Forward currency transaction are measured individually at the futures price at the balance sheet date, and any price differences from the agreed futures price will be recognised in the Income Statement.
The changes in market value of the interest rate swap agreements where hedge accounting is applied are shown in equity. Due to the existence of "cash flow hedges" that are used to counterbalance future cash flow risks arising from existing transactions, the unrealised profits and losses corresponding to the amount of the hedged transaction (hedge effective portion) are initially recognised directly in equity. The portion of the change in fair market value, which is not hedged by the underlying transaction (hedge ineffective portion), is recognised directly in the Income Statement. A book transfer to the Income Statement is carried out at the same time when the hedged underlying transaction affects profit or loss.
The conclusion and processing of derivative financial instruments is based on binding internal regulations defining scope, responsibilities, reporting and controlling.
Sales revenues
Pursuant to the criteria laid down in ias 18 "Revenue", sales revenues arising from the sale of products are recognised at the time of transfer of the significant risks and rewards, if a price has been agreed or can be determined and it can be assumed that such price will be paid. Sales revenues from services are recognised after the services were rendered.
Charges billed to the customers for deliveries and work and services – reduced by revenue reductions, contractual penalties and discounts – are reported in the sales revenue.
The currency conversion of all Annual Financial Statements of the international group companies that were prepared in foreign currencies was carried out in accordance with the "functional currency" principle (ias 21 "The Effects of Changes in Foreign Exchange Rates"). Since all subsidiaries operate their business independently in financial, economic and organisational respects, their respective currencies represent the respective local currency. All assets and liabilities were translated at the average rate of exchange of the balance sheet date, and all revenue and expense at the average annual market price. The translation differences arising from items being translated at different rates in the Balance Sheet and the Income Statement, were recognised directly in equity. The exchange differences arising from the currency translation of the equity capital were also transferred to equity. 5 Foreign currency conversion
In the individual financial statements monetary items (cash, accounts receivable and liabilities) in a foreign currency were measured at the exchange rate on the reporting date. Non-monetary items in foreign currencies are stated at the historical
values. The differences arising from the currency translation of monetary items were shown in the Income Statement.
Goodwill resulting from the acquisition of international companies was translated at the exchange rates at the time of the transactions.
Accounting in accordance with the regulations contained in ias 29 "Financial Reporting in Hyper-inflationary Economies" was not required, since the gildemeister group has no significant subsidiaries with registered offices in a hyper-inflationary economy.
The exchange rates of the major currencies developed as follows:
| Current price / reporting date = 1 € | Average market price = 1 € | ||||
|---|---|---|---|---|---|
| Currencies | iso code | 31 Dec. 2003 | 31 Dec. 2002 | 31 Dec. 2003 | 31 Dec. 2002 |
| British Pound | gbp | 0.70700 | 0.65020 | 0.68991 | 0.62786 |
| Swiss Franc | chf | 1.55900 | 1.45250 | 1.51762 | 1.46711 |
| Polish Zloty | pln | 4.72550 | 4.00720 | 4.42218 | 3.85461 |
| Czech Koruna | czk | 32.55000 | 31.42000 | 31.92462 | 30.85308 |
| us-Dollar | usd | 1.26100 | 1.04150 | 1.13420 | 0.94532 |
| Canadian Dollar | cad | 1.62900 | 1.63850 | 1.59053 | 1.48353 |
| Mexican Pesos | mxn | 14.15000 | 10.74000 | 12.23538 | 9.17769 |
| Brazilian Real | brl | 3.64390 | 3.71120 | 3.49605 | 2.80832 |
| Japanese Yen | jpy | 134.85000 | 124.19000 | 131.15846 | 117.91462 |
| Singapore Dollar | sgd | 2.14350 | 1.80860 | 1.97509 | 1.69129 |
| Malaysian Ringgit | myr | 4.77410 | 3.97540 | 4.30331 | 3.59109 |
| Indian Rupee | inr | 57.50000 | 49.95000 | 52.87385 | 45.91462 |
| Chinese Renminbi | cny | 10.43610 | 8.62470 | 9.40129 | 7.82555 |
| Taiwan Dollar | ntd | 42.62680 | 36.29610 | 38.92038 | 32.64442 |
| Korean Won | krw | 1499.13000 | 1252.42000 | 1350.97538 | 1175.77308 |
| Australian Dollar | aud | 1.67880 | 1.84970 | 1.74734 | 1.74050 |
6 Material accounting and valuation methods deviating from the German Commercial Code (HGB)
When compared with hgb accounting, valuation and consolidation methods the following material differences arise at the gildemeister group (Section 292 a para. 2 no. 4 b German Commercial Code (hgb)):
- Deviating valuation of stocks (ias 2 "Inventories"),
- Formation of deferred taxes based on the balance-sheet orientated liability method (for so-called temporary differences) and for future economic benefits arising from taxable deferred losses (ias 12 "Income Taxes"),
- Reversal of tax depreciation abroad (ias 16 "Property, Plant and Equipment"),
- Change in the assignment of economic ownership in finance leases (ias 17 "Leases"),
- Valuation of the pension provisions in accordance with the Projected Unit Credit Method (ias 19 "Employee Benefits"),
- Foreign currency translation in accordance with the functional currency principle (ias 21 "The Effects of Changes in Foreign Exchange Rates"),
- Treatment of goodwill at the acquisition of a company (ias 22 "Business Combinations"),
- Consolidation of Special Purpose Entities (ias 27 "Consolidated Financial Statements and Accounting for Investments in Subsidiaries" in conjunction with sic-12 "Consolidation - Special Purpose Entities"),
- Exclusion of formation of expense provisions due to the non-existence of an external obligation and of provisions where the probability of their use is below 50% and valuation of provisions at the most probable value (ias 37 "Provisions, Contingent Liabilities and Contingent Assets"),
- Capitalisation of development costs (ias 38 "Intangible Assets") and
- Accounting and fair market value valutation of derivative financial instruments (ias 39 "Financial Instruments: Recognition and Measurement").
Notes to individual balance sheet items
7 Intangible assets
€ 66,084 K of the goodwill shown relates to the asset-side difference, reduced by depreciation, from the consolidation of investments and € 1,072 K (previous year: € 1,556 K) to goodwill, reduced by depreciation, from the individual financial statements. The decrease in value of goodwill is shown by regular depreciation over ten years, with the exception of the goodwill arising from the acquisition of the share in gildemeister Italiana of € 54,421 K (previous year: € 58,965 K) the value of which is decreased by regular depreciation over 15 years.
In the accounting period depreciation of goodwill amounted to € 6,727 K.
Capitalised development costs relate to new machine tool projects in the domestic and international production companies and to development costs for service products of the dmg Vertriebs und Service GmbH. Development costs capitalised at the end of the accounting period amount to € 23,847 K (previous year: € 19,711 K). Research and development costs directly charged to expenses amount to € 33.4 million in the accounting period 2003 (previous year: € 37.4 million).
The amount stated for industrial property rights and similar rights includes acquired patents, design patents and trade marks as well as data processing software. Rights and software are amortised by regular depreciation over a useful economic life of three to four years.
Decrease in value of intangible assets was accounted for by non-scheduled depreciation and amounted to € 749 K in the reporting year. No reversals of depreciation were carried out.
Changes in the group's intangible assets are shown in the Consolidated Fixed Asset Movement Schedule. Investments are explained in further detail in the Group Management Report.
8 Tangible assets
Changes in the group's tangible assets are shown in the Consolidated Fixed Asset Movement Schedule. Investments are explained in further detail in the Group Management Report.
The change in currency between the balance sheets dates is shown in the Consolidated Fixed Asset Movement Schedule under "Other changes".
Neither non-scheduled depreciation nor reversals of depreciation were required for tangible fixed assets in the reporting year.
Land and buildings are mortgaged for the security of long-term bank loans.
The tangible assets include leased assets of € 8,900 K (previous year: € 10,660 K), that must be charged to the respective group company as beneficial owner due to the structuring of the underlying leases ("finance lease").
The carrying amounts of capitalised lease items are divided as follows:
| 31 Dec. 2003 | 31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Land and buildings | 3,935 | 4,073 |
| Plant and machinery | 3,422 | 4,789 |
| Other fixed assets, office plant and equipment | 1,543 | 1,798 |
| 8,900 | 10,660 |
9 Financial assets
Changes in the group's financial assets are shown in the Consolidated Fixed Asset Movement Schedule. Fair market values correspond to the book values.
In the reporting year depreciation amounted to € 3 K.
An overview of the affiliated companies and information on principal places of business, equity capital, capital shares and results for the accounting period 2003 are set out in a separate summary at the end of the Notes on pages 184 to 185.
gildemeister Aktiengesellschaft has entered into management and profit and loss transfer agreements with the following companies:
_gildemeister Drehmaschinen GmbH,
_deckel maho Seebach GmbH,
_dmg Vertriebs und Service GmbH deckel maho gildemeister.
dmg Vertriebs und Service GmbH deckel maho gildemeister has entered into management and profit and loss transfer agreements with the following subsidiaries:
_dmg Stuttgart Vertriebs und Service GmbH deckel maho gildemeister,
_dmg Berlin Vertriebs und Service GmbH deckel maho gildemeister,
_dmg Service Drehen GmbH deckel maho gildemeister,
_dmg Service baz GmbH deckel maho gildemeister,
_dmg Service ufb GmbH deckel maho gildemeister,
_dmg Service ufb Seebach GmbH deckel maho gildemeister,
_dmg Trainings-Akademie GmbH deckel maho gildemeister,
_dmg Gebrauchtmaschinen GmbH deckel maho gildemeister.
The management and profit and loss transfer agreement with deckel maho Pfronten GmbH was terminated in the past financial year.
The management and profit and loss transfer agreements between dmg Vertriebs und Service GmbH deckel maho gildemeister and dmg Bielefeld Vertriebs und Service GmbH, dmg Hilden Vertriebs und Service GmbH, dmg München Vertriebs und Service GmbH für Werkzeugmaschinen and dmg Frankfurt am Main Vertriebs und Service GmbH also terminated in 2003.
10 Inventories
Inventories increased by € 13,596 K when compared with the previous year. This is primarily due to the increase in finished goods. Interim profits of € 14,759 K were made in inventories from deliveries and services (previous year: € 15,134 K). Differences compared to the previous year were consolidated and recognised in the Income Statement.
Of the inventories reported as at 31. December 2003, € 50,433 K (previous year: € 55,390 K) was reported at their net disposal value.
Due to changed valuations with respect to the usability of production and spare parts in raw materials and consumables the downward valuation adjustments have decreased by approximately € 7.3 million in comparison with the method used in the previous year.
| 11 Receivables and | Balance sheet at31 Dec. 2003 | Not due withinone year | Balance sheet at31 Dec. 2002 | |
|---|---|---|---|---|
| other assets | € k | € k | € k | |
| 1.Trade receivables | 259,618 | 0 | 295,265 | |
| 2. Other assets | 34,676 | 2,155 | 21,360 | |
| 294,294 | 2,155 | 316,625 | ||
| Balance sheet at 31 Dec. 2002 | 1,642 | 316,625 |
Existing individual risks are recognised by direct method of depreciation. In receivables the fair market values correspond with the values shown in the balance sheet. Other assets include the following items:
| As at31 Dec. 2003 | As at31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Tax refund claims | 16,790 | 9,081 |
| Accounts receivable debtors and payments on account | 7,406 | 4,898 |
| Factoring settlement account | 2,460 | 740 |
| Receivables from employees and former employees | 1,251 | 1,110 |
| Security deposits and other security payments | 1,152 | 1,191 |
| Re-insurance for socail-security for the employees | 955 | 696 |
| Short-term lending to third parties | 642 | 443 |
| Market value of derivative financial instruments | 308 | 430 |
| Other | 3,712 | 2,771 |
| 34,676 | 21,360 |
- The current asset securities include securities available-for-sale that are shown at 12 Securities
- The statement pertains mainly to bank balances. 13 Cash in hand, Bundesbank balances
The movement of liquid funds constituting the financial resources pursuant to ias 7 "Cash Flow Statements" is shown in the Cash Flow Statement.
14 Deferred taxes
and bank balances
Deferred tax assets and liabilities are allocated to the following accounts:
market prices. These are held by gildemeister Aktiengesellschaft.
| 31 Dec. 2003 | 31 Dec. 2002 | |||
|---|---|---|---|---|
| Assets | Liabilities | Assets | Liabilities | |
| € k | € k | € k | € k | |
| Fixed assets | 2,652 | 15,186 | 3,831 | 15,936 |
| Current assets | 527 | 1,621 | 574 | 1,436 |
| Provisions | 3,670 | 378 | 3,454 | 403 |
| Liabilities | 6,306 | 704 | 8,275 | 7 |
| Taxable deferred losses | 21,661 | - | 23,785 | - |
| Consolidation | 6,041 | 2,392 | 5,418 | 2,667 |
| 40,857 | 20,281 | 45,337 | 20,449 | |
| Balancing out | -11,359 | -11,359 | -12,449 | -12,449 |
| Total | 29,498 | 8,922 | 32,888 | 8,000 |
The total deferred taxes shown in the balance sheet of € 29,498 K (previous year: € 32,888 K) include capitalised tax reduction claims of € 21,661 K (previous year: € 23,785 K) arising from the expected future utilisation of existing deferred losses carried forward. The realisation of these deferred losses is guaranteed with sufficient security.
In December 2003 the law implementing the German Government's protocol declaration regarding the mediation committee's proposals to the Tax Concessions Pruning Act (Gesetz zur Umsetzung der Protokollerklärung der Bundesregierung zur Vermittlungsempfehlung zum Steuervergünstigungsabbaugesetz) (so-called Basket II Act) was passed.
Due to these changes, deferred losses in corporations can only be utilised to up to 60% of taxable income.
Only losses of up to € 1 million (the so-called basic sum) can be carried forward indefinitely. The minimum taxation regulation applies to both corporate income and trade deferred losses and has, in principle, been effective since 1 January 2004. With respect to time, tax losses at home can still be carried over indefinitely.
The valuation of deferred taxes is adjusted if sufficient future income cannot be expected when all impacting factors are taken into account. The valuation applied is subject to changes due to future development.
Deferred taxes amounted to € 78,083 K (previous year: € 72,243 K), of which € 15,332 K (previous year: € 8,722 K) were not recognised.
Deferred taxes are calculated on the basis of income tax rates that at the time of realisation apply or are expected in the individual countries in accordance with the current legal status.
Taking into account trade earnings tax and the solidarity surcharge (Solidaritätszuschlag), this results in a tax rate of 39% (previous year: 39%) for domestic companies. Tax rates abroad are between 22% and 42%.
The prepaid expenses primarily include interest, rent and leases as well as insurance premiums. The capitalised total of € 4,740 K (previous year: € 3,935 K) is due within one year. 15 Prepaid expenses
16 Equity
The movement of individual components in group equity for the accounting periods 2003 and 2002 are shown in the Statement of Changes in Equity and in shares held by other shareholders.
Subscribed capital
The share capital of gildemeister Aktiengesellschaft is € 75,086,510.20 and is divided into 28,879,427 individual share certificates issued to the holders with an accounting par value of € 2.60.
The Executive Board is authorised, with the approval of the Supervisory Board, to increase the share capital by up to € 37,500,000.00 in nominal terms during the period up to 31 March 2006 by issuing new shares for contributions in cash or in kind. This authority can be exercised in tranches. For tranches of at least € 29,000,000.00 the shareholders' statutory subscription right is guaranteed. With respect to a tranche of up to € 7,500,000.00
a) new shares can be issued for contributions in kind;
or
b) new shares can be issued for a cash payment, which at the time of its deposit does not fundamentally fall short of the stock exchange quotation.
In cases a) and b) the shareholders' statutory subscription right is to be excluded by resolution of the Executive Board.
For a further tranche of up to € 1,000,000.00, new shares for contributions in cash can be issued to employees of the company and to employees of subsidiaries and affiliated companies; in this case the shareholders' statutory subscription right is likewise to be excluded by resolution of the Executive Board.
Capital provision
Capital provision includes the share premium and has not changed since the previous year.
Revenue provision
Statutory provision
The statutory provision of € 680,530.00 has not changed compared to the previous year.
Other revenue provisions
Revenue provisions also include prior-period profits generated by the companies included in the Consolidated Financial Statements as far as they were not distributed. Revenue provisions also include the offset of liabilities-side differences from the consolidation of investments of those subsidiaries that were consolidated before 1 January 1995, and the adjustments made directly in equity in accordance with the first application of ifrs rules. Finally, they show the differences arising from foreign currency translation not reported in profit or loss in the financial statements of international subsidiaries and the post-tax effects from the valuation of financial instruments in equity. Deferred taxes recognised directly in equity amount to € 548 K (previous year: € 894 K).
A detailed overview of the composition of, or changes in, other revenue provisions in the accounting period 2003 and in the previous year is included in the Statement of Changes in Equity and in shares held by other shareholders.
Proposed appropriation of earnings
In accordance with the German Companies Act (AktG), the Annual Financial Statements of gildemeister Aktiengesellschaft form the basis for the appropriation of profits of the accounting period. The dividend payable to shareholders depends from the balance sheet profits shown in the Annual Financial Statements of gildemeister Aktiengesellschaft.
The accounting period 2003 of gildemeister Aktiengesellschaft closes with an annual profit of € 4,744,886.20. It will be proposed at the General Meeting of Shareholders on 14 May 2004 to transfer the balance sheet profits of € 9,094,374.70 to other revenue provisions.
17 Shares held by other shareholders Shares held by other shareholdes include external holdings in the consolidated equity capital of the included companies and totalled in the accounting period 2003 to € 1,198 K (previous year: € 1,193 K).
18 Provisions for pensions
The provisions for pensions are formed for liabilities from vested rights and from current payments to entitled active and former employees of the companies of the gildemeister group and their dependants. According to the respective legal, economic and tax conditions prevailing in each country, there are different forms of pension insurance, which are usually based on the duration of employment and the employees' remuneration.
Employee pension schemes are usually based on either contribution-oriented or performance-oriented benefit systems.
For Defined Contribution Plans, the respective company does not enter into any liablities other than the payments of conributions to purpose-built funds. In the accounting period 2003, the relating expenses amounted to € 2,208 K (previous year: € 1,380 K).
In the case of benefit-oriented pension plans the company is obliged to pay the promised benefits to active and former employees ("defined benefit plans"), whereby a distinction is made between pension plans that are financed through provisions and those that are financed through a fund.
In the gildemeister group, pension commitments are financed through transfer to provisions. The fund-financed pension commitments are marginal.
The amount of the pension obligation (present value of future pension commitments or "defined benefit obligation") was calculated on the basis of actuarial methods by estimating the relevant factors impacting on the pension commitment. Along with the assumptions on life expectancy, the following premisses for the parameters to be applied to the actuarial calculations in the reports were defined:
| Germany | Rest of Europe | ||||
|---|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | ||
| % | % | % | % | ||
| Interest rate | 5.50 | 5.75 | 4.00-6.00 | 4.50-6.00 | |
| Salary trend | 0.00 | 0.00 | 3.00-6.00 | 3.00-6.00 | |
| Pension trend | 1.00 | 1.20 | 0.00 | 1.50 |
The pension development includes expected future increases in salary that are assessed annually and are subject to, amongst other things, inflation and the duration of employment at the company. Since the pension commitments that were entered into at the domestic subsidiaries are not subject to future increases in salary, salary development was not taken into account when determining the relating company pension provisions.
Due to increases or reductions in the present value of defined-benefit obligations, actuarial gains or losses may arise, which may result, amongst others, from changes
in the calculation parameters or changes in the risk development assessment relating to the pension commitments. The pension provisions net value can be derived from the following:
| 31 Dec. 2003 | 31 Dec. 2002 | ||
|---|---|---|---|
| € k | € k | ||
| Cash value of the provisions-financed pension commitments | 32,987 | 32,663 | |
| + | Cash value of the funds-financed pension commitments | 714 | 395 |
| = | Cash value of the pension commitments | 33,701 | 33,058 |
| - | Market value of planned assets | -1,239 | -949 |
| = | Cash value of pension commitments | ||
| (after deducting of the planned assets) | 32,462 | 32,109 | |
| - | Balance of actuarial profits/loss not yet | ||
| included in the balance sheet | -4,389 | -3,383 | |
| = | Net value of the balanced amounts on the reporting date | 28,073 | 28,726 |
| of which are pension provisions | 28,930 | 29,328 | |
| of which are assets (-) | -857 | -602 |
Of the company pension provisions amounting to € 28,930 K (previous year: € 29,328 K), € 27,982 K (previous year: € 28,514 K) are attributed to German group companies; representing about 97% of the total.
In the accounting period 2003, total expenditure amounted to € 1,905 K (previous year: € 1,766 K), comprising of the following components:
| 31 Dec. 2003 | 31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Current expenditure for service | 136 | 104 |
| +Interest expenditure | 1,790 | 1,725 |
| -Expected asset income of the fund | -53 | -64 |
| +Actuarial profits (-) and losses (+) | 32 | 1 |
| =Total expenditure of payment-oriented pension plans | 1,905 | 1,766 |
| 31 Dec. 2003 | 31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Balance sheet value as at 1 January | 28,726 | 29,870 |
| +Personnel costs | 1,905 | 1,766 |
| -Pension payments made on allocation to funds | -2,558 | -2,911 |
| +Asset transfers | 0 | 1 |
| Balance sheet value as at 31 December= | 28,073 | 28,726 |
| of which pension provisions | 28,930 | 29,328 |
| of which assets (-) | -857 | -602 |
In Germany, pension-like obligations include provisions for future contributions to the Pension Security Association (Pensionssicherungsverein) that were also determined by actuarial methods.
19 Tax provisions and other provisions
The following lists the major contents of provisions:
| As at 31 Dec. 2003 | As at 31 Dec. 2002 | |||
|---|---|---|---|---|
| Total | duewithin1 year | Total | duewithin1 year | |
| € k | € k | € k | € k | |
| Tax provisions for deferred taxes | 13,004 | 13,004 | 19,324 | 19,324 |
| Personnel costs | 40,986 | 20,151 | 38,169 | 20,852 |
| Risks from warranties and retrofittings | 25,933 | 25,933 | 31,280 | 31,280 |
| Obligations arising from sales | 9,949 | 9,949 | 11,992 | 11,761 |
| Invoices not yet received | 5,259 | 5,259 | 7,933 | 7,933 |
| Legal and consultancy fees and costs of preperation | ||||
| of accounts | 3,283 | 3,283 | 4,130 | 4,130 |
| Anticipated losses related to incomplete contracts | 1,209 | 1,209 | 920 | 920 |
| Other | 5,405 | 5,405 | 5,310 | 5,310 |
| 92,024 | 71,189 | 99,734 | 82,186 | |
| Total | 105,028 | 84,193 | 119,058 | 101,510 |
The tax provisions include taxes on profit and other company taxes that were set up for prior accounting periods and for the accounting period 2003.
Tax provisions of € 4,530 K were set up for tax arrears arising from a tax investigation relating to the accounting periods 1999 to 2001.
The provisions for personnel costs in the group include € 10,117 K for part-time retirement (previous year: € 7,920 K) and € 3,622 K for anniversary bonuses (previous year: € 3,299 K). The provisions for anniversary bonuses and part-time retirement will be discounted and carried as liability at their present value.
The other obligations primarily include provisions for initial operations to be carried out, invoiced sales and other services.
The movement in the other provisions is shown in the Analysis of Provisions:
| As at01 Jan. 2003 | Transfers | Used | Retransfers | Otherchanges | As at31 Dec. 2002 | |
|---|---|---|---|---|---|---|
| € k | € k | € k | € k | € k | € k | |
| Tax provisions | 19,324 | 10,699 | 15,968 | 908 | -143 | 13,004 |
| Personnel costs | 38,169 | 25,365 | 20,871 | 1,509 | -168 | 40,986 |
| Risks from warranties | ||||||
| and retrofittings | 31,280 | 8,028 | 12,830 | 500 | -45 | 25,933 |
| Obligations arising from | ||||||
| sales | 11,992 | 8,676 | 8,868 | 1,605 | -246 | 9,949 |
| Invoices not yet received | 7,933 | 5,225 | 7,716 | 204 | 21 | 5,259 |
| Legal and consultancy fees | ||||||
| and costs of preperation of | ||||||
| accounts | 4,130 | 3,115 | 3,549 | 378 | -35 | 3,283 |
| Anticipated losses related to | ||||||
| incomplete contracts | 920 | 726 | 352 | 85 | 1,209 | |
| Other | 5,310 | 3,112 | 2,394 | 483 | -140 | 5,405 |
| 99,734 | 54,247 | 56,580 | 4,764 | -613 | 92,024 | |
| Total | 119,058 | 64,946 | 72,548 | 5,672 | -756 | 105,028 |
The other changes include changes in the consolidated group, foreign currency adjustments and book transfers.
20 Liabilities
| Balance | of which | of which | of which | Balance | |
|---|---|---|---|---|---|
| sheet at | due within | due within | due after | sheet at | |
| 31 Dec. 2003 | 1 year | 1-5 years | 5 years | 31 Dec. 2002 | |
| € k | € k | € k | € k | € k | |
| 1.Bank loans and overdrafts1) | 322,216 | 227,062 | 76,381 | 18,773 | 324,223 |
| 2. Payments received on account | 21,243 | 21,243 | 0 | 0 | 30,461 |
| 3. Trade creditors | 125,099 | 124,107 | 992 | 0 | 131,296 |
| 4. Bills of exchange payable | 31,360 | 31,360 | 0 | 0 | 13,149 |
| 5. Other payables2), 3) | 35,379 | 29,678 | 4,400 | 1,301 | 38,141 |
| 535,297 | 433,450 | 81,773 | 20,074 | 537,270 | |
| Outstanding in each maturity period at | |||||
| 31 Dec. 2002 | 409,289 | 108,578 | 19,403 | 537,270 |
-
of which secured by mortgage: € 53,767 K (previous year: € 53,255 K)
-
of which from taxes: € 10,392 K (previous year: € 10,729 K), of which social security contributions: € 6,754 K (previous year: € 6,421 K)
-
of which fair market values of derivative financial instruments: € 1,406 K (previous year: € 2,292 K)
| 31 Dec. 2003 | 31 Dec. 2002 | |||||||
|---|---|---|---|---|---|---|---|---|
| Currency | amount | Carrying Rem. termin years | Effectiveinterest rate | Currency | Carryingamount | Rem. termin years | Effectiveinterest rate | |
| € k | % | € k | % | |||||
| Loans | EUR | 129,955 up to 13 | 2.69-10.90 | EUR | 158,278 | up to 9 | 1.50-12.00 | |
| Loans | jpy | 2,197 | up to 8 | 0.95-2.50 | jpy | 2,416 | up to 9 | 0.95-2.50 |
| Overdrafts | various | 190,064 | up to 1 | 3.00-21.00 | various | 163,529 | up to 1 | 3.00-12.00 |
| 322,216 | 324,223 |
Set out below are major bank loans and overdrafts
The group's bank loans and overdrafts include a credit with an initial volume of € 80.0 million, on which 67.0% of the share capital of gildemeister Italiana S.p.A., Brembate di Sopra, Italy, was pledged to the lending banks. The credit's value at 31 December 2003 was stated at an amount of € 36,364 K. With respect to another credit, originally amounting to € 18,783 K, to finance the acquisition of further shares in gildemeister Italiana S.p.A., a further 14.0% of the share capital of gildemeister Italiana S.p.A. was pledged to the lending bank. The value of this credit at the end of the accounting period was stated at an amount of € 14,449 K.
In addition, deckel maho Seebach GmbH, Seebach, and various dmg sales and service companies assigned fixed and current assets to the lending banks as further securities for long-term credits.
Short-term working funds are provided by several banks for gildemeister Aktiengesellschaft and - as part of the group's cash management – for all domestic subsidiaries. At the balance sheet date the available short-term credit facilities – to be used as either overdraft facility, credit by way of bank guarantee or acceptance credit - total € 180.0 million. The remaining term of the basic consortium agreement (stuff – Short Term Unique Financial Facility) was until 31 December 2003 and was extended in December 2003 for a further two years until 31 December 2005.
The shares of deckel maho Pfronten GmbH, Pfronten, deckel maho Seebach GmbH, Seebach, deckel maho Geretsried GmbH, Geretsried, gildemeister Drehmaschinen GmbH, Bielefeld and dmg Vertriebs und Service GmbH deckel maho gildemeister, Bielefeld, to the nominal value of € 69,181 K are pledged firstly in favour of the lending banks and secondly to a foreign banking consortium.
The international share in bank loans and overdrafts amounts to approximately 42.4%.
All bank loans and overdrafts of € 322,216 K correspond with their fair market values. In other liabilities, the fair market values of short-term liabilities and of medium and long-term liabilities correspond with the values shown in the balance sheet. Liabilities that, in legal terms, arise after the balance sheet date, only have a minor impact on the company's financial situation.
Liabilities arising from finance leases amount to € 5,451 K (previous year: € 7,792 K). They are recognised, without future interest payable, under other liabilities. All future payments arising from finance leases total € 6,178 K (previous year: € 8,817 K).
The minimum lease payments from the respecting lease agreements are as follows:
| 31 Dec. 2003 | 31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Total future minimum lease payments | ||
| Due within one year | 2,046 | 4,400 |
| Due between one and five years | 3,902 | 4,225 |
| Due in more than five years | 230 | 192 |
| 6,178 | 8,817 | |
| Interest included in future minimum lease payments | ||
| Due within one year | 307 | 398 |
| Due between one and five years | 407 | 598 |
| Due in more than five years | 13 | 29 |
| 727 | 1,025 | |
| Cash value of future minimum lease payments | ||
| Due within one year | 1,738 | 4,002 |
| Due between one and five years | 3,495 | 3,627 |
| Due in more than five years | 218 | 163 |
| 5,451 | 7,792 |
21 Deferred income
Deferred income results primarily from the subgroup gildemeister Italiana at an amount of € 1,857 K (previous year: € 1,958 K). It pertains to deferred future interest earnings from a specific financing programme of the Italian state (Sabatini funding).
Pursuant to ias 20"Accounting for Government Grants and Disclosure of Government Assistance", this account also includes investment allowances of € 3,951 K (previous year: € 4,147 K) granted by the joint aid programme "Improvement of the Regional Economic Structure". In the accounting period 2003 investment subsidies of € 249 K (previous year: € 2,266 K) were paid that were included in the deferred income. This item will be closed in accordance with the depreciation procedure for tax-privileged capital assets and recognised in the Income Statement.
22 Contingencies and other financial liabilities
No provisions were set up for the following contingent liabilities, which are assessed at their nominal values, since the risk of usage is deemed as not very probable:
| As at31 Dec. 2003 | As at31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Contingencies | ||
| Bill commitments | 19,724 | 19,971 |
| Guarantees | 4,841 | 6,181 |
| Warranties | 6,680 | 5,523 |
| Other contingencies | 13,035 | 9,709 |
| 44,280 | 41,384 |
Other financial obligations consist mainly of lease agreements and long-term tenancy agreements.
The total of minimum lease payments from permanent tenancies and lease agreements (finance leases and operating leases) is made up as set out below (by due dates). The agreements have terms of 2 to 22 years; some of them include options to extend or purchase options.
| 31 Dec. 2003 | 31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Total face value of future minimum lease payments | ||
| Due within one year | 15,614 | 17,509 |
| Due between one and five years | 12,913 | 18,703 |
| Due in more than five years | 678 | 599 |
| 29,205 | 36,811 |
Of which are attributed to operating leases:
| 31 Dec. 2003 | 31 Dec. 2002 | |
|---|---|---|
| € k | € k | |
| Total face value of future minimum lease payments | ||
| Due within one year | 13,568 | 13,111 |
| Due between one and five years | 9,011 | 14,478 |
| Due in more than five years | 448 | 405 |
| 23,027 | 27,994 |
There are no irredeemable sublettings agreements that have to be included in the total future minimum lease payments. There are no contingent rents that are recognised in the Income Statements.
Tangible assets commitments amount to € 2,354 K (previous year: € 1,959 K).
23 Derivative financial instruments
The face and fair market values of derivative financial instruments existing at the balance sheet date are set out below:
| Face values | Fair market values | |||
|---|---|---|---|---|
| 31 Dec. 2003 | 31 Dec. 2002 | 31 Dec. 2003 | 31 Dec. 2002 | |
| € k | € k | € k | € k | |
| Forward currency transactions | 29,271 | 33,269 | 306 | 430 |
| Interest rate swaps | 36,364 | 50,909 | -1,406 | -2,292 |
| 65,635 | 84,178 | -1,100 | -1,862 |
The face values correspond with the non-balanced total of the currency and interest portfolio. The fair market values shown correspond to the price, at which third parties would assume the rights or obligations arising from the financial instruments. The fair market values are the current values of the derivative financial instruments excluding any adverse trends in value from underlying transactions. The fair market values of the derivative financial instruments used are determined on the basis of quoted market prices or through accrual methods based on customary market models.
All of the forward exchange dealings carried out mature within one year.
Interest rate swaps are used by the group company Holding Macchine Utensili S.p.A., Milan, Italy, and mature within 3 years. They provide for payment at a fixed interest rate with a 5.41% - 5.42% p.a. margin and a 3-month Euribor as reference rate.
As of 31 December 2003, positive effects of € 541 K arising from the market valuation of financial instruments allotted to cash flow hedges were recognised directly in equity.
Notes to segmental reporting
24 Explanatory notes to segments
In segmental reporting pursuant to ias 14 "Segment Reporting", the business activities of the gildemeister group are distinguished between business segments requiring primary segment reporting and geographical areas requiring secondary segment reporting.
The business activities of the gildemeister group consist of the "Machine Tools", "Services" and "Corporate Services". This segmentation follows the group's corporate governance. Each group company is allocated to the segment pertaining to its respective economic activities.
The "Machine Tools" segment includes the group's new machines business and consists of the "turning", "milling" and "ultrasonic/lasertec" technologies. This includes the lathes and turning centres of
_gildemeister Drehmaschinen GmbH, Bielefeld,
_gildemeister Italiana S.p.A., Brembate di Sopra, Italy,
_graziano Tortona S.p.A., Tortona, Italy,
_famot Pleszew S.A., Pleszew, Poland,
_deckel maho gildemeister (Shanghai) Machine Tools Co., Ltd.,
the milling machines and machining centres of
_deckel maho Pfronten GmbH, Pfronten,
_deckel maho Seebach GmbH, Seebach,
_deckel maho Geretsried GmbH, Geretsried,
_deckel maho gildemeister (Shanghai) Machine Tools Co., Ltd.,
the ultrasonic machines of _sauer GmbH, Stipshausen/Idar-Oberstein,
and the laser machines of _lasertec GmbH, Pfronten.
All of our machines are classified as cutting machine tools, and all business segments are concurrent with each other.
The "Services", which covers all areas, is directly related to the machine tools and, with its products and technical services offered, represents an independent segment. It primarily includes dmg Vertriebs und Service GmbH deckel maho gildemeister, Bielefeld, and its subsidiaries.
Along with the remuneration for introduction and consulting services, the segment also includes the service and spare parts business, service products such as dmg Powertools, tuition products and training services, initial operations and the used machine business. It also includes the procurement services of a & f Stahl- und Maschinenbau GmbH, Würzburg, the components and tools of saco S.p.A., Castelleone, Italy, as well as the setting equipment of dmg Microset GmbH.
The "Corporate Services" segment includes gildemeister Aktiengesellschaft with its group-wide holding functions, such as group strategy, product development, logistics and production, financing and controlling, personnel and marketing as well as the group-standardised data processing infrastructure. Another area is key accounting, the management of our major customers, which has been centralised to include all areas and products in order to meet the increasing globalisation of international companies. The Holding Macchine Utensili S.p.A., Milan, Italy, is also allocated in this business segment as finance company for the Italian production plants.
25 Explanatory notes to segmental information
The definition of terms used in individual segmental information is in line with the management principle for the value-orientated corporate governance of the gildemeister group. Segmental information is in principle based on the same accounting and valuation methods as the Consolidated Financial Statements.
Segmental assets include all assets tied up in the business including shares, goodwill and prepaid expenses; it does not include income tax claims.
Segmental debts consist of the outside capital and financial liabilities including provisions and deferred income; they do not include income tax liabilities.
Investments include additions to property, plant and equipment and intangible assets.
Depreciation pertains to segmental fixed assets and includes depreciation of goodwill arising from the consolidation of investments.
The "Reconciliation" column represents the elimination of intercompany accounts receivable and liabilities, income and expenses and results between the segments.
The secondary segmentation is based on the corporate seats of the group companies and is divided into the geographical areas: Germany, rest of Europe, North America, Asia and rest of the world, which includes Mexico and Brazil.
Notes to the Cash Flow Statement
26 Cash Flow Statement
The Cash Flow Statement pursuant to ias 7 "Cash Flow Statements" records the payment flow in an accounting period and represents the inflow and outflow of the company's liquid funds. The payment flow is distinguished between cash flow from running operations and cash flow from investment and financing activity.
The financing resources set out in the Cash Flow Statement includes all liquid funds stated in the balance sheet, i.e. cash in hand, Bundesbank balance and bank balances as far as that these are available within three months. The cash flow from running operations was determined indirectly by adding to the group's profit for the year those expenses that are not set off against any payments, and subtracting from it income that does not result in the receipt of monies. Effects from foreign currency translation and changes in the consolidated group are adjusted accordingly. By contrast cash flow from investment and financing activities has been calculated based on payments.
The financial investments of the accounting period 2003 include the acquisition of the remaining 49.0% shares in dmg Microset GmbH, Bielefeld, at a purchasing price of € 123 K and the acquisition of 100.0% of the shares in dmg Europe Holding GmbH, Klaus, Austria, at a purchasing price of € 35 K. The purchasing prices were settled with cash. Cash amounting to € 35 K was taken over with the acquisition.
The outflow of interest of € 24,736 K (previous year: € 25,361 K) and the inflow of interest of € 1,882 K (previous year: € 2,414 K) correspond to interest paid and interest earnings, with the exception of interest components in the transfer to reserves.
Income tax paid in the accounting period 2003 amounted to € 21,891 K (previous year: € 13,595 K).
Notes to individual accounts in the Income Statement
27 Sales revenues
Consideration receivable for deliveries and services charged to the customer and reduced by any sales deductions, contract penalties and cash discounts are shown in sales revenues.
The sales revenues are broken down by distribution areas as follows:
| 2003 | 2002 | |
|---|---|---|
| € k | € k | |
| Germany | 475,688 | 491,719 |
| eu (exc. Germany) | 253,362 | 284,579 |
| usa | 52,263 | 65,811 |
| Asia | 96,277 | 93,214 |
| Rest of the world | 100,173 | 97,491 |
| 977,763 | 1,032,814 |
The sales revenues are explained in detail in the "Segmental Reporting" chapter of the Management Report.
28 Other capitalised payments
Other own work capitalised primarily arises from the capitalisation of development costs of machine tool projects according to ias 38 "Intangible Assets".
| 29 Other operating | |
|---|---|
| revenues |
| Income unrelated to accounting period | € k | € k |
|---|---|---|
| Retransfer of provisions | 4,779 | 10,373 |
| Retransfer of value adjustments | 1,817 | 1,080 |
| Profit on asset disposals | 1,389 | 385 |
| Receipt of payment for written off delinguent accounts | 17 | 42 |
| Other income unrelated to accounting period | 1,089 | 1,167 |
| 9,091 | 13,047 | |
| Other operating income | ||
| Use of provisions | 5,946 | 2,882 |
| Changes in exchange rates | 4,051 | 4,266 |
| Cost allocation and reimbursement of expenses | 2,026 | 1,657 |
| Compensation for damages | 820 | 532 |
| Letting and leasing | 599 | 725 |
| Release of asset-based bonuses | 447 | 506 |
| Bonus and allowances | 318 | 157 |
| Other | 3,277 | 2,483 |
| 17,484 | 13,208 | |
| Total | 26,575 | 26,255 |
Payments received primarily pertain to expenses for external production. 30 Cost of materials
In the accounting period the group's employee pension plan contributions amounted to € 2,323 K (previous year: € 1,421 K). 31 Personnel costs
Remuneration of the active Executive Board members totalled € 1,926 K (previous year: € 1,385 K), including € 450 K for variable profit-sharing bonuses (previous year: € 450 K). € 625 K (previous year: € 642 K) were paid to former Executive Board members and their surviving dependants.
Company pension provisions of 7,240 K (previous year: 6,731 K) were set up for former Executive Board members and their surviving dependants.
Advances and credits to officers were not granted. No liability in favour of officers was assumed.
There are no stock option plans or similar security-orientated incentive systems of the company. Stock option plans or similar remuneration components with a longterm incentive effect for officers do therefore not exist either. Notices by members of the company's Executive or Supervisory Boards or by certain other persons affiliated to such members, on the acquisition or disposal of shares or related rights of purchase or disposal (such as options) or rights that are directly dependent on the company's stock exchange price, were not received.
Neither did the group companies of the gildemeister group pay any remuneration, or grant similar benefits, to officers for services personally rendered, including, without limitation, consulting and introduction services.
In comparison with the previous year the number of persons employed has developed as follows:
| Average number ofpersons employed | At the balance sheet date | |||
|---|---|---|---|---|
| 2003 | 2002 | 2003 | 2002 | |
| Wage earners | 1,788 | 1,891 | 1,725 | 1,830 |
| Salary earners | 3,061 | 3,021 | 3,098 | 2,991 |
| Trainees | 199 | 199 | 205 | 224 |
| 5,048 | 5,111 | 5,028 | 5,045 |
32 Other operating expenses
| 2003 | 2002 | |
|---|---|---|
| € k | € k | |
| Expenses unrelated to the accounting period | ||
| Losses from fixed asset disposal | 444 | 280 |
| Other taxes | 353 | 17 |
| Other expenses unrelated to the accounting period | 766 | 1,052 |
| 1,563 | 1,349 | |
| Other operating expenses | ||
| Rental and leases | 18,272 | 17,147 |
| Travelling and entertainment expenses | 17,629 | 18,951 |
| Freight out, packaging | 16,880 | 17,085 |
| Other external services | 16,397 | 17,654 |
| Marketing and trade fairs | 16,098 | 22,537 |
| Sales commissions | 11,263 | 16,037 |
| Cost of preperation of accounts, legal and consultancy fees | 9,923 | 13,874 |
| Exchange rate and currency losses | 8,117 | 8,795 |
| Stationery, post and telephone expenses | 7,803 | 8,983 |
| Transfer to provisions | 7,049 | 10,146 |
| Other personnel costs | 4,819 | 4,767 |
| Losses from the decline in the value of current assets | 3,365 | 4,241 |
| Insurance | 3,284 | 3,129 |
| Investor Relations | 1,034 | 1,246 |
| Monetary transactions and capital procurement | 1,725 | 1,703 |
| Other taxes | 1,165 | 792 |
| Licences and trade marks | 503 | 620 |
| Other | 8,368 | 8,786 |
| 153,694 | 176,493 | |
| Total | 155,257 | 177,842 |
The transfer to provisions results primarily from expenses for guarantee commitments, retrofitting and losses from pending transactions.
In the accounting period 2003 € 158 K (previous year: € 135 K) were transferred to provisions for Supervisory Board members' remuneration.
The Supervisory Board members' remuneration pursuant to Section 12 of the gildemeister Aktiengesellschaft Articles of Association breaks down as follows:
| Fixed RemunerationRemuneration for committeework | VariableRemuneration | Total | ||
|---|---|---|---|---|
| € k | € k | € k | € k | |
| Dr.-Ing. Manfred Lennings, Chair | 20 | 3 | 0 | 23 |
| Gerhard Dirr, Deputy Chair | 15 | 3 | 0 | 18 |
| Wulf Bantelmann (since 16 May 2003) | 6 | - | 0 | 6 |
| Günther Berger (since 16 May 2003) | 6 | - | 0 | 6 |
| Harry Domnik | 10 | 5 | 0 | 15 |
| Alfred Geißler | 10 | 3 | 0 | 13 |
| Dr.-Ing. Jürgen Harnisch (since 16 May 2003) | 6 | - | 0 | 6 |
| Ulrich Hocker (since 16 May 2003) | 6 | - | 0 | 6 |
| Prof. Dr.-Ing. Walter Kunerth | 10 | 3 | 0 | 13 |
| Hans Henning Offen | 10 | 6 | 0 | 16 |
| Peter Oxfart | 10 | - | 0 | 10 |
| Günther-Johann Schachner | 10 | - | 0 | 10 |
| Prof. Dr.-Ing. Peter-Jürgen Kreher (until 16 May 2003) | 4 | - | 0 | 4 |
| Arno Kruck (until 31 Jan. 2003) | 1 | - | 0 | 1 |
| Dr. jur. Rupert Pfeffer (until 16 May 2003) | 4 | - | 0 | 4 |
| Heinz-Dethlef Rother (01 Feb. to 16 May 2003) | 3 | - | 0 | 3 |
| Hans Peter Schreib (until 16 May 2003) | 4 | - | 0 | 4 |
| Total | 135 | 23 | 0 | 158 |
33 Other interest receivables and similar income
34 Net interest payable and other similar charges
Interest receivable and similar income of the entire group amounted to € 2,113 K (previous year: € 2,414 K).
Net interest payable, amounting to € 24,736 K (previous year: € 25,361 K), primarily relates to the group's loan interests.
Net interest payable and other similar charges also include the interest component of € 1,791 K (previous year: € 1,725 K) from the transfer to company pension provisions.
There were no extraordinary charges and income in the accounting period 2003. 35 Exraordinary charges and income
36 Taxes on profits
This account represents current and deferred tax expenditure and income that breaks down as follows:
| 2003 | 2002 | |
|---|---|---|
| € k | € k | |
| Current taxes | 10,886 | 19,781 |
| Deferred taxes | 2,953 | -8,568 |
| 13,839 | 11,213 |
Current taxes for the domestic companies include corporate income and trade tax, and for the international companies comparable earnings-linked taxes that were determined on the basis of the appropriation of profits. The computation was made on the basis of the tax regulations applicable to the individual companies. In the accounting period 2003, an amount of € 1,320 K (previous year: € 1,160 K) resulted from tax income for prior years. An amount of € 4,445 K (previous year: € 3,391 K) is included for tax expenses for prior years.
Deferred tax income unrelated to the accounting period of € 3,816 K (previous year: € 472 K) is set off by deferred tax expenditure unrelated to the accounting period of € 4,150 K (previous year: € 5,441 K).
Current income tax expenditure was reduced by € 1,552 K (previous year: € 384 K) due to the use of tax loss credits not yet recognised from previous accounting periods. Another reduction of € 876 K (previous year: € 418 K) was carried out with respect to deferred tax expenditure due to tax loss not yet recognised from prior periods.
Writedowns of recognised deferred tax assets from tax losses in prior years were carried out in the reporting year at an amount of € 3,645 K (previous year: € 3,662 K).
Current taxes in relation to extraordinary items and the discontinuance of business divisions did not occur in the reporting year. Due to the continued application of the accounting methods no additional tax expenditure or income arose. There were no material errors in the past so that no consequences arose in this respect.
Deferred taxes are calculated on the basis of income tax rates that at the time of realisation apply or are expected in the individual countries in accordance with the current legal status. Taking into account trade earnings tax and the solidarity surcharge (Solidaritätszuschlag), this results in a tax rate applicable to the valuation of deferred taxes of 39% (previous year: 39%) for domestic companies. Tax rates abroad are between 22% and 42%.
Deferred tax assets and liabilities were recognised directly in equity, and at the balance sheet date amounted to € 548 K (previous year: € 894 K). In the accounting period 2003, the recognised income tax expenditure of € 13,839 K (previous year: € 11,213 K) increased by € 9,725 K (previous year: increase of € 14,136 K) when compared with the expected income tax expenditure of € 4,114 K (previous year: income tax earnings of € 2,923 K), which would in theory arise if the domestic tax rate of 40% (previous year: 39%) applicable for the accounting period 2003 had been applied at group level. The increase in the domestic tax rate was due to the German Flood Victim Solidarity Act (Flutopfersolidaritätsgesetz) which provided for an increase in the statutory corporate income tax rate to 26.5% for the tax assessment period 2003. The previous corporate income tax rate of 25.0% has applied again since the start of the assessment period 2004.
The difference between current and expected income tax expenditure is due to the following:
| 2003 | 2002 | |
|---|---|---|
| € k | € k | |
| Result of ordinary business before taxes | 10,284 | -7,496 |
| gildemeister revenue tax in percent | 40 | 39 |
| Theoretical tax income/expenditure | 4,114 | -2,923 |
| Tax consequences on the following influences | ||
| Adjustment due to differing tax rate | 220 | 705 |
| Effects from changes in tax rate | 247 | 0 |
| Tax reduction due to revenues exempt from taxation | -898 | -1,514 |
| Depreciation of goodwill from capital consolidation | 2,478 | 2,118 |
| Deferred taxable losses | 2,477 | 4,902 |
| Tax increase due to non-deductibe expenses | 4,809 | 3,440 |
| Tax yield or losses for prior years | -807 | 2,231 |
| Current tax expenses arising from a tax investigation | 4,228 | 0 |
| Deferred tax assets arising from a tax investigation | -2,709 | 0 |
| Other adjustments | -320 | 2,254 |
| Taxes on corporate income and revenue | 13,839 | 11,213 |
Other shareholders are entitled to a profit of € 153 K (previous year: € 347 K). 37 Profit share to other shareholders
In accordance with ias 33 "Earnings per Share", the undiluted earnings per share ("Basic Earnings per Share") are determined by dividing the consolidated earnings – excluding profit shares by other shareholders – by the average number of shares, as follows: 38 Earnings per share
| 2003 | 2002 | ||
|---|---|---|---|
| Group result excluding profit share to other shareholders | € K | -3,732 | -19,057 |
| Number of shares | 28,879,427 | 28,879,427 | |
| Earnings per share | € | -0.13 | -0.66 |
There are no diluted earnings per share for either the accounting period 2003 or the preceding year.
Other explanatory notes
- No material events have occurred after the balance sheet date except for those set out in the "Business Development" chapter of the Group Annual Report. 39 Events occurring after the reporting date
- Affiliated companies and persons in accordance with ias 24 "Related Party Disclosures" are, in principle, members of the Executive Board and the Supervisory Board as well as the companies of the gildemeister group including non-consolidated subsidiaries. Sales and proceeds between affiliated companies are carried out "at arm's length". 40 Information about relationship to closely related companies and persons
- The declaration of compliance in accordance with Section 161 AktG was made on 28 November 2003 and has been made accessible to the shareholders on our website www.gildemeister.com. 41 Corporate Governance
184 Notes to the Consolidated Financial Statements of GILDEMEISTER Aktiengesellschaft, Bielefeld
Affiliated Companies
| Affiliated Companies | Profit/loss for | ||||
|---|---|---|---|---|---|
| Equity 1) | Participationquota | the accountingperiod 20031) | |||
| National Currency | € k | in % | € k | ||
| Production plants and procurement/components | |||||
| gildemeister Drehmaschinen GmbH, Bielefeld 2/17) | 16,650 | 100.0 | 0 | ||
| Holding Macchine Utensili S.p.A., Milano, Italy | 20,289 | 100.0 | -5,163 | ||
| gildemeister Italiana S.p.A., Brembate di Sopra, Italy6) | 40,212 | 100.0 | -3,193 | ||
| graziano Tortona S.p.A., Tortona, Italy 6) | 4,189 | 100.0 | |||
| saco S.p.A., Castelleone, Italy 6) | 9,302 | 100.0 | |||
| deckel maho Geretsried GmbH, Geretsried 17) | 57,423 | 100.0 | 14,934 | ||
| deckel maho Pfronten GmbH, Pfronten 3/16/17) | 26,000 | 100.0 | 0 | ||
| lasertec GmbH, Pfronten 4/16/17) | 4,487 | 100.0 | 0 | ||
| deckel maho Seebach GmbH, Seebach 2/17) | 8,363 | 100.0 | 0 | ||
| famot Pleszew S.A., Pleszew, Poland | pln k | 10,140 | 2,146 | 99.4 | 274 |
| sauer GmbH, Stipshausen/Idar-Oberstein 17) | 2,455 | 95.0 | 923 | ||
| deckel maho gildemeister (Shanghai) Machine Tools Co., Ltd., Shanghai, China | cny k | 7,792 | 747 | 100.0 | -1,592 |
| a & f Stahl- und Maschinenbau GmbH, Würzburg 17) | 1,248 | 90.0 | 1,066 | ||
| Sales and service companies | |||||
| dmg Vertriebs und Service GmbH deckel maho gildemeister, Bielefeld 2/17) | -15,666 | 100.0 | -18,186 | ||
| (Group financial statements) | |||||
| dmg Stuttgart Vertriebs und Service GmbH | |||||
| deckel maho gildemeister, Leonberg 7/8/17) | 3,001 | 100.0 | |||
| dmg München Vertriebs und Service GmbH für Werkzeugmaschinen | |||||
| deckel maho gildemeister, Munich 9/17) | 929 | 100.0 | |||
| dmg Hilden Vertriebs und Service GmbH | |||||
| deckel maho gildemeister, Hilden 9/17) | 935 | 100.0 | |||
| dmg Bielefeld Vertriebs und Service GmbH | |||||
| deckel maho gildemeister, Bielefeld 9/17) | 957 | 100.0 | |||
| dmg Berlin Vertriebs und Service GmbH | |||||
| deckel maho gildemeister, Berlin 8/9/17) | 301 | 100.0 | |||
| dmg Frankfurt am Main Vertriebs und Service GmbH | |||||
| deckel maho gildemeister, Bad Homburg 9/17) | 310 | 100.0 | |||
| dmg Europe Holding GmbH, Klaus, Austria 7) | 291 | 100.0 | |||
| dmg Büll & Strunz GmbH, Wiener Neudorf, Austria 10) | 1,427 | 51.0 | |||
| dmg Nederland B.V., Veenendaal, Netherlands 7) | 25,173 | 100.0 | |||
| dmg Italia S.r.l., Gorgonzola, Italy 11) | 1,046 | 100.0 | |||
| dmg Paris S.a.r.l., Les Ulis, France 11) | 4,298 | 100.0 | |||
| dmg Lyon S.A.S, Lyon, France 14) | 766 | 100.0 | |||
| dmg (Schweiz) ag deckel maho gildemeister, Dübendorf, Switzerland 11) | chf k | 8,315 | 6,161 | 100.0 | |
| dmg (U.K.) Ltd., Luton, Great Britain 11) | gbp k | 283 | 536 | 100.0 | |
| dmg Belgium B.V.B.A., Zaventem, Belgium11) | 993 | 100.0 | |||
| deckel maho gildemeister Iberica S.L., Berriz, Spain11) | 273 | 100.0 | |||
| dmg Czech s.r.o., Brno, Czech Republic 11) | czk k | 57,512 | 1,761 | 100.0 | |
| dmg Polska Sp.z o.o., Pleszew, Poland 11) | pln k | 3,810 | 728 | 100.0 | |
| dmg America Inc., Charlotte, usa 11) | usd k | 11,228 | 8,904 | 100.0 | |
| dmg Charlotte Inc., Charlotte, usa 12) | usd k | 1 | 1 | 100.0 | |
| dmg Chicago Inc., Schaumburg, usa 12) | usd k | 163 | 129 | 100.0 | |
| dmg Houston Inc., Houston, usa 12) | usd k | 224 | 178 | 100.0 | |
| dmg Los Angeles Inc., Los Angeles, usa 12) | usd k | 1,092 | 866 | 100.0 |
Affiliated Companies
| Participation | the accounting | ||||
|---|---|---|---|---|---|
| Equity 1) | quota | period 20031) | |||
| National Currency | € k | in % | € k | ||
| Sales and service companies (continued) | |||||
| deckel maho gildemeister Brasil Ltda., São Paulo, Brasil 11) | brl k | 36 | 11 | 100.0 | |
| dmg Asia Pacific Pte. Ltd., Singapore 11) | sgd k | 4,605 | 1,841 | 100.0 | |
| dmg Australia Pty. Ltd., Clayton Victoria, Australia 14) | aud k | 1,567 | 933 | 100.0 | |
| dmg Malaysia sdn bhd, Puchong/Kuala Lumpur, Malaysia 11) | myr k | 1,898 | 405 | 100.0 | |
| dmg Nippon K.K., Yokohama, Japan 11) | jpy k | 300,298 | 2,227 | 100.0 | |
| dmg Canada Inc., Toronto, Canada 7) | cad k | 741 | 454 | 100.0 | |
| deckel maho gildemeister México, S.A. de C.V., Monterrey, Mexico 7) | mxn k | 22 | 2 | 100.0 | |
| dmg Technology Trading (Shanghai) Co. Ltd., Shanghai, China 7) | cny k | 2,893 | 66 | 100.0 | |
| dmg deckel maho gildemeister (India) Pvt. Ltd., Bangalore, India 7) | inr k | 5,996 | 104 | 100.0 | |
| dmg Machinery Taiwan Ltd., Taichung, Taiwan 7) | ntd k | 2,009 | 47 | 100.0 | |
| dmg Korea Ltd., Seoul, Korea 7) | krw k | 100,146 | 67 | 100.0 | |
| dmg Service Drehen GmbH deckel maho gildemeister, Bielefeld 7/8/17) | 1,500 | 100.0 | |||
| dmg Service baz GmbH deckel maho gildemeister, Geretsried 7/8/17) | 1,000 | 100.0 | |||
| dmg Service ufb GmbH deckel maho gildemeister, Pfronten 7/8/17) | 1,500 | 100.0 | |||
| dmg Service ufb Seebach GmbH deckel maho gildemeister, Seebach 7/8/17) | 110 | 100.0 | |||
| dmg Gebrauchtmaschinen GmbH deckel maho gildemeister, Geretsried 7/8/17) | 2,517 | 100.0 | |||
| gildemeister Italiana s.r.o., Zlín, Czech Republic 15) | czk k | 3,175 | 98 | 100.0 | |
| dmg Trainings-Akademie GmbH deckel maho gildemeister, Bielefeld 7/8/17) | 271 | 100.0 | |||
| Other | |||||
| gildemeister Beteiligungen Aktiengesellschaft, Bielefeld | 45 | 100.0 | -5 | ||
| dmg Microset GmbH, Bielefeld 17) | 668 | 100.0 | 0 | ||
| mitis Grundstücks-Vermietungs Gesellschaft mbH & Co. | |||||
| Objekt Bielefeld kg, Düsseldorf 18) | - | 98.0 | |||
| dmg Marketing & Services sdn bhd, Selangor, Malaysia 7) | myr k | 500 | 105 | 40.0 | |
| bil Leasing GmbH & Co 736 kg, Munich 19) | - | ||||
bil Leasing GmbH & Co 748 kg, Munich 20) -
-
The figures correspond with the financial statements prepared in accordance with local regulations; they do not show the respective companies' contribution to the Consolidated Financial Statements. Foreign currencies with respect to equity were translated at the market price on reporting date.
-
Management and profit and loss transfer agreement with gildemeister Aktiengesellschaft
-
Participating interest of deckel maho Geretsried GmbH
-
Participating interest of deckel maho Pfronten GmbH
-
Management and profit and loss transfer agreement with deckel maho Geretsried GmbH
-
Participating interest of gildemeister Italiana S.p.A.
-
Participating interest of dmg Vertriebs und Service GmbH deckel maho gildemeister
-
Management and profit and loss transfer agreement with dmg Vertriebs und Service GmbH deckel maho gildemeister
-
Participating interest of dmg Stuttgart Vertriebs und Service GmbH deckel maho gildemeister
-
Participating interest of dmg Europe Holding GmbH
-
Participating interest of dmg Nederland B.V.
-
Participating interest of dmg America Inc.
-
Participating interest of dmg France S.a.r.l.
-
Participating interest of dmg Asia Pacific Pte. Ltd.
-
Participating interest of dmg Gebrauchtmaschinen GmbH deckel maho gildemeister
-
Management and profit and loss transfer agreement with deckel maho Pfronten GmbH
-
The domestic subsidiary has complied with the conditions required by Section § 264 para. 3 German Commercial Code (hgb) regarding
the application of the exemption regulations and therefore walves the disclosure of its annual financial statements and relating documents. 18) Percentage in voting shares 49,0%, special purpose entity of gildemeister Aktiengesellschaft
-
Special purpose entity of dmg Frankfurt am Main Vertriebs und Service GmbH deckel maho gildemeister, Bad Homburg, excluding capital share
-
Special purpose entity of dmg Stuttgart Vertriebs und Service GmbH deckel maho gildemeister, Leonberg, excluding capital share
Profit/loss for
Corporate Directory
- Supervisory Board seats pursuant to Sect § 100 AktG
- * Membership with comparable domestic and international control bodies of business enterprises
Supervisory Board
Dr.-Ing. Manfred Lennings,
Essen, Chairman,
- Independent Industry Consultant • Deutsche Post ag, Bonn
- enro ag, Essen
- ivg Immobilien ag, Bonn
- * Bauunternehmung E. Heitkamp GmbH, Herne (since 6 Nov. 2003)
- * Deilmann-Haniel GmbH, Dortmund (since 6 Nov. .2003)
- * Heitkamp-Deilmann-Haniel GmbH, Herne, Chairman
Gerhard Dirr,
Vils/Österreich, Deputy Chairman, Chairman of the Works Council at deckel maho Pfronten GmbH, Pfronten
Wulf Bantelmann (since 16 May 2003), Bielefeld, Chairman of the Works Council at gildemeister Drehmaschinen GmbH, Bielefeld
Günther Berger (since 16 May 2003), Munich, Divisional Executive Board member at the Bayerischen Hypo- und Vereinsbank ag, Munich
Harry Domnik,
Bielefeld, 1st Secretary of the
ig Metall-headquarters, Bielefeld
* ThyssenKrupp Umformtechnik GmbH, Ludwigsfelde
Alfred Geißler,
Pfronten, Senior Executives' representative
Dr.-Ing. Jürgen Harnisch (since 16 May 2003), Bochum, Board member at ThyssenKrupp ag, Düsseldorf Chairman of the Executive Board at
ThyssenKrupp Automotive ag, Bochum
-
ThyssenKrupp Bilstein GmbH, Ennepetal
-
ThyssenKrupp Drauz GmbH, Heilbronn, Chair
-
ThyssenKrupp Federn GmbH, Hagen
-
ThyssenKrupp Gerlach, Homburg/Saar, Chair
-
ThyssenKrupp Technologies ag, Essen
-
ThyssenKrupp Umformtechnik GmbH, Ludwigsfelde, Chair
-
* Hülsbeck & Fürst GmbH & Co. kg, Velbert, Chair
-
* inpro Innovationsgesellschaft für fortgeschrittene Produktionssysteme in der Fahrzeugindustrie mbH, Berlin
-
* kmc Klausmeier Marketing Consultants GmbH, Meerbusch
-
* ThyssenKrupp Automotive Sales & Technical Center, Inc., Troy/Michigan, usa, Chairman
-
* ThyssenKrupp Budd Company, usa
-
* ThyssenKrupp Presta ag, Eschen, Liechtenstein
-
* ThyssenKrupp Sofedit s.a.s., France
Ulrich Hocker (since 16 May 2003), Düsseldorf, Legal counsel, Chief manager Member of the Executive Board at the Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (dsw), Düsseldorf
- cbb Holding ag, Cologne
- e.on ag, Düsseldorf
- Feri Finance ag, Bad Homburg
- Karstadt Quelle ag, Essen
- ThyssenKrupp Steel ag, Duisburg
- * Phoenix Mecano ag, Switzerland, Chairman of the Board of Directors
- * Gartmore Capital Strategy Fonds, Jersey
Prof. Dr.-Ing. Walter Kunerth,
Zeitlarn, Independent Industry Consultant
- Basler ag, Ahrensburg, Chairman
- Götz ag, Regensburg, Chairman
- Paragon ag, Delbrück, Chairman
- * Autoliv Inc., Stockholm
- * Suspa Holding GmbH, Altdorf, Chairman
Hans Henning Offen,
Großhansdorf, Former Deputy Chairman of the Executive Board at the
- WestIntell ag, Düsseldorf, Chairman (until 30 July 2003)
- Kaufhof Warenhaus ag, Cologne (until 13 March 2003)
- rwe Plus ag, Essen (until 30 Aug. 2003)
- ThyssenKrupp Materials ag, Düsseldorf (until 30 Aug. 2003)
- tui ag, Hanover/Berlin (until 18 June 2003)
- * Familienstiftung Schwarz, Neckarsulm
- * Kaufland Stiftung & Co. kg, Neckarsulm
- * Lidl Stiftung & Co. kg, Neckarsulm
Peter Oxfart,
Creuzburg, Chairman of the Works Council at deckel maho Seebach GmbH, Seebach
Günther-Johann Schachner,
Peiting, Executive Board member at ig Metall Frankfurt, 1st Secretary of the ig Metall headquarters, Weilheim
Prof. Dr.-Ing. Peter-Jürgen Kreher
(until 16 May 2003), Grünwald,
Senior Advisor Droege & Comp., Düsseldorf
- Dürkopp Adler ag, Bielefeld, Deputy Chairman
- * dst Werkzeugmaschinenbau GmbH, Mönchengladbach
- * Burton Holding GmbH, Melle/Buer, Chairman
- * Albert Ziegler GmbH & Co. kg, Giengen/Brenz, Chairman
Arno Kruck (until 31 Jan. 2003), Bielefeld, former Chairman of the Works Council at the dmg Vertriebs und Service GmbH deckel maho gildemeister, Bielefeld
Dr. jur. Rupert Pfeffer (until 16 May 2003),
Geretsried, Chairman of the Executive Board at LfA Förderbank Bayern i. R., Munich
* König Ludwig Musical ag & Co. kg, Füssen
Heinz-Dethlef Rother
(01 Feb. to 16 May 2003), Bielefeld, Chairman of the Works Council at the dmg Vertriebs und Service GmbH deckel maho gildemeister, Bielefeld
Hans Peter Schreib (until 16 May 2003),
Düsseldorf, Legal counsel, Member of the Executive Board at Deutschen Schutzvereinigung für Wertpapierbesitz e.V. (dsw), Düsseldorf
- K + S ag, Kassel
- Metro ag, Cologne
Bielefeld, 24 March 2004 gildemeister Aktiengesellschaft
The Executive Board
Executive Board
Dipl.-Kfm. Dr. Rüdiger Kapitza, Bielefeld, Chairman
Prof. Dr.-Ing. Raimund Klinkner,
Bielefeld, Deputy Chairman (since 01 Jan. 2003) • Dürkopp Adler ag, Bielefeld
Dipl.-Kfm. Michael Welt,
Pfronten (since 01 Jan. 2003)
• Staufen Akademie Beratung und Beteiligung ag, Bad Boll
Dipl.-Kfm. Dieter Schäfer,
Steinhagen (until 31 Oct. 2003)
Consolidated Income Statement for the period from 1 January to 31 December 2003 of gildemeister Aktiengesellschaft, Bielefeld
| 2003 | 2002 | ||||
|---|---|---|---|---|---|
| App. | € | € | € | € | |
| 1.Sales revenues | 27 | 977,762,604 | 1,032,814,223 | ||
| 2.Increase in finished goods and | |||||
| work in progress | 9,567,188 | 987,329,792 | 3,969,693 | ||
| 3.Other capitalised payments | 28 | 8,379,319 | 9,814,819 | ||
| 4.Other operating revenues | 29 | 26,574,946 | 26,254,602 | ||
| 1,022,284,057 | 1,072,853,337 | ||||
| 5.Cost of materials | 30 | ||||
| a) Cost of raw materials, | |||||
| consumables and | |||||
| goods for resale | 436,648,416 | 466,066,779 | |||
| b) Cost of purchased services | 88,696,599 | 525,345,015 | 103,855,300 | ||
| 6.Personnel costs | 31 | ||||
| a) Wages and salaries | 224,912,914 | 226,630,161 | |||
| b) Social contributions and | |||||
| pensions and other benefits | 45,663,764 | 270,576,678 | 43,525,840 | ||
| 7.Depreciation of assets | 36,430,415 | 37,757,207 | |||
| 8.Other operating expenses | 32 | 155,257,325 | 987,609,433 | 177,842,485 | |
| 9.Operating result | 34,674,624 | 17,175,565 | |||
| 10. Net interest payable | 33 | 2,112,710 | 2,414,000 | ||
| 11. Interest payable and other similar charges | 34 | 26,526,852 | 24,414,142 | 27,085,637 | |
| 12. Profit/loss on ordinary activities | 10,260,482 | -7,496,072 | |||
| 13. Taxes on profit | 36 | 13,839,399 | 11,213,443 | ||
| 14. Annual profit/loss | -3,578,917 | -18,709,515 | |||
| 15. Profit share of other shareholders | 37 | -153,282 | -347,105 | ||
| 16. Annual profit/loss to gildemeister | -3,732,199 | -19,056,620 | |||
| Earnings per share in accordance with ias 33 | -0.13 | -0.66 |
Group Balance Sheet as at 31 December 2003 of gildemeister Aktiengesellschaft, Bielefeld
| Assets | As at | As at | ||||
|---|---|---|---|---|---|---|
| 31 Dec. 2003 | 31 Dec. 2002 | |||||
| App. | € | € | € | |||
| A. Fixed Assets | ||||||
| I. | Intangible assets | 7 | ||||
| 1.Goodwill | 67,156,425 | 73,883,164 | ||||
| 2. Development costs | 23,846,698 | 19,711,170 | ||||
| 3. Industrial property and | ||||||
| similar rights | 8,765,826 | 6,001,440 | ||||
| 4. Payments on account | 26,010 | 1,760,616 | ||||
| 99,794,959 | 101,356,390 | |||||
| II. Tangible assets | 8 | |||||
| 1.Land and buildings | 127,888,995 | 124,948,331 | ||||
| 2. Technical equipment and machinery | 17,416,380 | 22,930,158 | ||||
| 3. Other equipment, factory and office equipment | 22,587,039 | 25,512,976 | ||||
| 4. Payments on account and | ||||||
| construction in progress | 2,657,695 | 1,090,053 | ||||
| 170,550,109 | 174,481,518 | |||||
| III. Financial assets | 9 | |||||
| 1.Shares in affiliated companies | 206,970 | 87,793 | ||||
| 2. Securities | 16,774 | 223,744 | 355,115 | |||
| 270,568,812 | 276,280,816 | |||||
| B. Current Assets | ||||||
| I. | Inventories1. | 10 | ||||
| Raw materials and consumables2. Work in progress | 75,421,184 | 69,022,576 | ||||
| 3. Finished goods and goods for resale | 88,417,178 | 90,628,502 | ||||
| 4. Payments on account | 98,876,857 | 88,851,507 | ||||
| 1,649,398 | 2,265,624 | |||||
| 264,364,617 | 250,768,209 | |||||
| II. Receivables and other assets1. | 11 | |||||
| Trade debtors2. Other assets | 259,617,967 | 295,265,443 | ||||
| 34,675,819 | 21,359,665 | |||||
| 294,293,786 | 316,625,108 | |||||
| III. Securities | 12 | 21,276 | 177,656 | |||
| IV. Cash in hand, Bundesbank balances | ||||||
| and bank balances | 13 | 11,424,971 | 17,689,040 | |||
| C. Deferred Taxes | ||||||
| 14 | 29,497,986 | 32,887,802 | ||||
| D. Prepaid Expenses | 15 | 4,740,174 | 3,934,674 | |||
| 874,911,622 | 898,363,305 | |||||
| Equity and Liabilities | As atAs at | ||||||
|---|---|---|---|---|---|---|---|
| 31 Dec. 2003 | 31 Dec. 2002 | ||||||
| Notes | € | € | € | ||||
| A. Equity | 16 | ||||||
| I.Subscribed Capital | 75,086,510 | 75,086,510 | |||||
| II. Capital provisions | 48,734,269 | 48,734,269 | |||||
| III. Revenue provisions | |||||||
| 1.Statutory provisions | 680,530 | 680,530 | |||||
| 2. Other revenue provisions | 63,091,651 | 69,322,876 | |||||
| 187,592,960 | 193,824,185 | ||||||
| B. Shares to other Shareholders | 17 | 1,198,004 | 1,193,154 | ||||
| C. Provisions | |||||||
| 1.Pension provisions | 18 | 28,929,573 | 29,327,719 | ||||
| 2. Tax provisions | 19 | 13,003,959 | 19,324,439 | ||||
| 3. Other provisions | 19 | 92,024,593 | 99,733,735 | ||||
| 133,958,125 | 148,385,893 | ||||||
| D. Gross Liabilities | 20 | ||||||
| 1.Bank loans and overdrafts | 322,215,606 | 324,223,113 | |||||
| 2. Payments received on account | 21,243,021 | 30,461,347 | |||||
| 3. Trade creditors | 125,099,138 | 131,296,022 | |||||
| 4. Bills of exchange payable | 31,360,323 | 13,148,476 | |||||
| 5. Other creditors | 35,379,268 | 38,141,449 | |||||
| 535,297,356 | 537,270,407 | ||||||
| E. Deferred Taxes | 14 | 8,921,452 | 8,000,348 | ||||
| F. | Deferred Income | 21 | 7,943,725 | 9,689,318 | |||
| 874,911,622 | 898,363,305 | ||||||
Group Balance Sheet as at 31 December 2003 of gildemeister Aktiengesellschaft, Bielefeld >>
Development of Group Equity and in shares to other Shareholders
of gildemeister Aktiengesellschaft, Bielefeld, for the period 1 January 2002 to 31 December 2003
| Revenue provisions | ||||||||
|---|---|---|---|---|---|---|---|---|
| Changes from Market valuation | ||||||||
| SubscribedCapital | Capitalprovisions | Revenueprovisions | Foreigncurrencytranslation | Derivatefinancialinstruments | Groupequity | Sharesto othershareholders | Total | |
| € k | € k | € k | € k | € k | € k | € k | € k | |
| As at 01 Jan. 2002 | 75,087 | 48,734 | 106,046 | 2,547 | -1,237 | 231,177 | 10,773 | 241,950 |
| Dividend | -17,328 | -17,328 | -755 | -18,083 | ||||
| Annual profit/loss | -19,057 | -19,057 | 347 | -18,710 | ||||
| Changes in currency | -3,012 | -3,012 | -3,012 | |||||
| Change in market valuation of | ||||||||
| derivative financial instruments | -161 | -161 | -161 | |||||
| Withdrawals fromrevenue provisions | ||||||||
| Consolidation transactions/ | ||||||||
| other changes | 2,205 | 2,205 | -9,172 | -6,967 | ||||
| As at 31 Dec. 2002 | 75,087 | 48,734 | 71,866 | -465 | -1,398 | 193,824 | 1,193 | 195,017 |
| Revenue provisions | ||||||||
|---|---|---|---|---|---|---|---|---|
| Changes from Market valuation | ||||||||
| SubscribedCapital | Capitalprovisions | Revenueprovisions | Foreigncurrencytranslation | Derivatefinancialinstruments | Groupequity | Sharesto othershareholders | Total | |
| € k | € k | € k | € k | € k | € k | € k | € k | |
| As at 01 Jan. 2003 | 75,087 | 48,734 | 71,866 | -465 | -1,398 | 193,824 | 1,193 | 195,017 |
| Dividend | -129 | -129 | ||||||
| Annual profit/loss | -3,732 | -3,732 | 153 | -3,579 | ||||
| Changes in currency | -3,040 | -3,040 | 13 | -3,027 | ||||
| Change in market valuation ofderivative financial instruments | 541 | 541 | 541 | |||||
| Withdrawals fromrevenue provisions | ||||||||
| Consolidation transactions/other changes | -32 | -32 | ||||||
| As at 31 Dec. 2003 | 75,087 | 48,734 | 68,134 | -3,505 | -857 | 187,593 | 1,198 | 188,791 |
See explanatory notes included in the Consolidated Financial Statements p. 164 ff.
Consolidated Cash Flow of gildemeister Aktiengesellschaft, Bielefeld
| Change | |||
|---|---|---|---|
| 2003 | 2002 | againstprevious year | |
| T€ | € k | € k | € k |
| Cash flow from current operations | |||
| 1. Annual profit/loss | -3,579 | -18,710 | 15,131 |
| 2. Depreciation of assets | 36,430 | 37,757 | -1,327 |
| 3. Change in deferred taxes | 4,310 | -4,849 | 9,159 |
| 4. Change in long-term provisions | 3,120 | -76 | 3,196 |
| 5. Other income not affecting payments | -445 | -506 | 61 |
| 6. Change in short-term provisions | -17,547 | 14,059 | -31,606 |
| 7. Profit/loss from disposal of fixed assets | -945 | -105 | -840 |
| 8. Changes in current assets and in liabilities | |||
| _Inventories | -13,597 | 997 | -14,594 |
| _Trade receivables | 35,647 | 4,133 | 31,514 |
| _Other assets not from investment or | |||
| financing activity | -13,965 | 14,785 | -28,750 |
| _Trade payables | -6,197 | 17,610 | -23,807 |
| _Other equity liabilities not from investment | |||
| or financing activity | 5,503 | -17,425 | 22,928 |
| 28,735 | 47,670 | -18,935 | |
| Cash flow from investment activity | |||
| 1. Amounts received from the disposal of property, plant, | |||
| equipment and intangible assets | 3,880 | 4,766 | -886 |
| 2. Amounts paid out for investments in tangible assets | -23,162 | -38,706 | 15,544 |
| 3. Amounts paid out for investments in intangible assets | -13,115 | -14,493 | 1,378 |
| 4. Amounts paid out for investments in financial assets | -243 | -23,484 | 23,241 |
| 5. Amounts received from the disposal of financial assets | 335 | 28 | 307 |
| -32,305 | -71,889 | 39,584 | |
| Cash flow from financing activity | |||
| 1. Amounts paid out (prev. year received) for repayments | |||
| (prev. year from raising) of (financing) credits | -2,008 | 43,402 | -45,410 |
| 2. Distribution of dividends to shareholders | 0 | -17,328 | 17,328 |
| 3. Distribution of dividends to other shareholders | -63 | -755 | 692 |
| 4. Amount received from investment allowance / grant | 249 | 2,266 | -2,017 |
| -1,822 | 27,585 | -29,407 | |
| Changes affecting payments | -5,392 | 3,366 | -8,758 |
| Consolidation and exchange rate related changes | |||
| not affecting payments | -872 | -955 | 83 |
| Liquid funds as at 1 January | 17,689 | 15,278 | 2,411 |
| Liquid funds as at 31 December | 11,425 | 17,689 | -6,264 |
194 Consolidated Financial Statements of GILDEMEISTER Aktiengesellschaft, Bielefeld
Consolidated Fixed Asset Movement Schedule
as at 31 December 2003 of gildemeister Aktiengesellschaft, Bielefeld
Aquisition and production costs
I. Intangible assets
-
- Goodwill
-
- Development costs
-
- Industrial property and similar rights
-
- Payments on account
II. Tangible assets
-
- Land and buildings
-
- Technical equipment and machinery
-
- Other equipment, factory and office equipment
-
- Payments on account and construction in progress
III. Financial assets
-
- Shares in affiliated companies
-
- Securities
Total fixed assets
Depreciation As at Other
| 01 Jan. 2003 | changes | |
|---|---|---|
| € | € | |
| I.Intangible assets | ||
| 1. Goodwill | 31,525,935 | 0 |
| 2. Development costs | 2,272,897 | 0 |
| 3. Industrial property and similar rights | 31,530,912 | -80,120 |
| 4. Payments on account | 555,249 | 0 |
| 65,884,993 | -80,120 | |
| II. Tangible assets | ||
| 1. Land and buildings | 38,725,119 | -318,011 |
| 2. Technical equipment and machinery | 37,930,181 | -784,238 |
| 3. Other equipment, factory and office equipment | 55,547,786 | -622,662 |
| 4. Payments on account and construction in progress | 0 | 0 |
| 132,203,086 | -1,724,911 | |
| III. Financial assets | ||
| 1. Shares in affiliated companies | 0 | 0 |
| 2. Securities | 1,641 | 0 |
| 1,641 | 0 | |
| Total fixed assets | 198,089,720 | -1,805,031 |
| As at | Other | As at | |||
|---|---|---|---|---|---|
| 01 Jan. 2003 | changes | Additions | Disposals | Book transfers | 31 Dec. 2003 |
| € | € | € | € | € | € |
| 105,409,099 | 0 | 0 | 31,727 | 0 | 105,377,372 |
| 21,984,067 | -4,857 | 8,107,337 | 0 | 482,560 | 30,569,107 |
| 37,532,352 | -117,633 | 4,981,852 | 34,515 | 1,239,996 | 43,602,052 |
| 2,315,865 | -135 | 26,145 | 0 | -1,708,170 | 633,705 |
| 167,241,383 | -122,625 | 13,115,334 | 66,242 | 14,386 | 180,182,236 |
| 163,673,450 | -1,532,477 | 8,519,536 | 520,154 | 1,572,509 | 171,712,864 |
| 60,860,339 | -1,312,885 | 2,149,286 | 3,413,844 | 52,899 | 58,335,795 |
| 81,060,762 | -1,129,873 | 8,648,879 | 2,550,711 | 376,415 | 86,405,472 |
| 1,090,053 | -115,457 | 3,844,270 | 144,962 | -2,016,209 | 2,657,695 |
| 306,684,604 | -4,090,692 | 23,161,971 | 6,629,671 | -14,386 | 319,111,826 |
| 87,793 | -949 | 120,126 | 0 | 0 | 206,970 |
| 356,756 | 0 | 0 | 339,982 | 0 | 16,774 |
| 444,549 | -949 | 120,126 | 339,982 | 0 | 223,744 |
| 474,370,536 | -4,214,266 | 36,397,431 | 7,035,895 | 0 | 499,517,806 |
Net book value
| As at | As at | As at | |||
|---|---|---|---|---|---|
| Additions | Disposals | Book transfers | 31 Dec. 2003 | 31 Dec. 2003 | 31 Dec. 2002 |
| € | € | € | € | € | € |
| 6,695,012 | 0 | 0 | 38,220,947 | 67,156,425 | 73,883,164 |
| 4,449,512 | 0 | 0 | 6,722,409 | 23,846,698 | 19,711,170 |
| 3,417,595 | 32,161 | 0 | 34,836,226 | 8,765,826 | 6,001,440 |
| 52,446 | 0 | 0 | 607,695 | 26,010 | 1,760,616 |
| 14,614,565 | 32,161 | 0 | 80,387,277 | 99,794,959 | 101,356,390 |
| 5,491,329 | 74,568 | 0 | 43,823,869 | 127,888,995 | 124,948,331 |
| 5,174,729 | 1,401,257 | 0 | 40,919,415 | 17,416,380 | 22,930,158 |
| 11,146,433 | 2,253,124 | 0 | 63,818,433 | 22,587,039 | 25,512,976 |
| 0 | 0 | 0 | 0 | 2,657,695 | 1,090,053 |
| 21,812,491 | 3,728,949 | 0 | 148,561,717 | 170,550,109 | 174,481,518 |
| 0 | 0 | 0 | 0 | 206,970 | 87,793 |
| 3,359 | 5,000 | 0 | 0 | 16,774 | 355,115 |
| 3,359 | 5,000 | 0 | 0 | 223,744 | 442,908 |
| 36,430,415 | 3,766,110 | 0 | 228,948,994 | 270,568,812 | 276,280,816 |
Consolidated Fixed Asset Movement Schedule as at 31 December 2003 of gildemeister Aktiengesellschaft, Bielefeld >>
198 Consolidated Financial Statements of GILDEMEISTER Aktiengesellschaft, Bielefeld
Segmental Reporting relating to the Consolidated Financial Statements 2003 for gildemeister Aktiengesellschaft, Bielefeld
Segmentation by business segments
| "Machine Tools" | Change | "Services" | |||
|---|---|---|---|---|---|
| 2003 | 2002 | against previous year | 2003 | ||
| € k | € k | € k | % | € k | |
| Sales revenues with third parties | 704,185 | 768,552 | -64,367 | -8.4 | 272,989 |
| ebitda | 47,493 | 43,019 | 4,474 | 10.4 | 32,043 |
| ebit | 19,798 | 16,235 | 3,563 | 21.9 | 25,346 |
| Net interest income | -12,992 | -15,865 | 2,873 | 18.1 | -7,872 |
| Profit/loss on ordinary business | 6,806 | 369 | 6,437 | 1,744.4 | 17,474 |
| Segment assets | 664,679 | 675,339 | -10,660 | -1.6 | 371,126 |
| Segment liabilities | 463,615 | 486,295 | -22,680 | -4.7 | 371,619 |
| Investments | 25,819 | 46,016 | -20,197 | -43.9 | 7,643 |
| Depreciation | 27,695 | 26,784 | 911 | 3.4 | 6,697 |
| Employees | 3,242 | 3,317 | -75 | -2.3 | 1,717 |
Segmentation by geographical areas
| Germany | Change | Rest of Europe | Change | North America | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2002 | 2003against previous year | 2002 | against previous year | 2003 | 2002 | against previous year | |||||
| € k | € k | € k | % | € k | € k | € k | % | € k | € k | € k | % | |
| Sales revenues with | ||||||||||||
| affiliated companies | 483,180 | 534,624 | -51,444 | -9.6 | 105,432 | 89,669 | 15,763 | 17.6 | 3,692 | 3,811 | -119 | -3.1 |
| Sales revenues with | ||||||||||||
| third parties | 586,877 | 615,082 | -28,205 | -4.6 | 289,622 | 310,343 | -20,721 | -6.7 | 49,074 | 62,216 | -13,142 | -21.1 |
| Segment assets | 1,200,499 | 1,144,942 | 55,557 | 4.9 | 378,472 | 511,894 | -133,422 | -26.1 | 30,269 | 49,221 | -18,952 | -38.5 |
| Investments | 28,780 | 61,763 | -32,983 | -53.4 | 5,884 | 39,824 | -33,940 | -85.2 | 222 | 181 | 41 | 22.7 |
| rvices" | Change | "Corporate Services" | Change | Transition | Group | Change | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2002 | against previous year | 2003 | 2002 | against previous year | 2003 | 2002 | 2003 | 2002 | against previous year | |||
| €к | €к | 0/0 | €к | €к | €к | 0/0 | €к | €к | €ĸ | €к | €κ | 0/0 |
| 263,644 | 9,345 | 3.5 | 589 | 618 | $-29$ | $-4.7$ | 0 | 0 | 977,763 1,032,814 | $-55,051$ | $-5.3$ | |
| 17,681 | 14,362 | 81.2 | $-3,377$ | $-7,918$ | 4,541 | 57.4 | $-5,054$ | 2,151 | 71,105 | 54,933 | 16,172 | 29.4 |
| 10,528 | 14,818 | 140.7 | $-5,496$ | $-11,738$ | 6,242 | 53.2 | $-4,974$ | 2,151 | 34,674 | 17,176 | 17.498 | 101.9 |
| $-6,091$ | $-1,781$ | $-29.2$ | $-3,550$ | $-2,716$ | $-834$ | $-30.7$ | $\mathbf 0$ | $\mathbf 0$ | $-24,414$ | $-24,672$ | 258 | 1.0 |
| 4,437 | 13,037 | 293.8 | $-9,046$ | $-14,453$ | 5,407 | 37.4 | $-4,974$ | 2,151 | 10,260 | $-7,496$ | 17,756 | $-236.9$ |
| 348,274 | 22,852 | 6.6 | 484,513 | 484.604 | $-91$ | 0.0 | $-645.406$ | $-609.854$ | 874,912 | 898.363 | $-23,451$ | $-2.6$ |
| 328,305 | 43,314 | 13.2 | 226,402 | 230.804 | $-4,402$ | $-1.9$ | $-375,515$ | $-342.058$ | 686,121 | 703.346 | $-17,225$ | $-2.4$ |
| 24,203 | $-16,560$ | $-68.4$ | 3,739 | 37,623 | $-33,884$ | $-90.1$ | $-804$ | $-34,691$ | 36,397 | 73,151 | $-36,754$ | $-50.2$ |
| 7,153 | $-456$ | $-6.4$ | 2,119 | 3,820 | $-1,701$ | $-44.5$ | $-80$ | 0 | 36,431 | 37,757 | $-1,326$ | $-3.5$ |
| 1,663 | 54 | 3.2 | 69 | 65 | 4 | 6.2 | $\mathbf{0}$ | 0 | 5,028 | 5,045 | $-17$ | $-0.3$ |
| Asia | Change | Other | Change | Transition | Group | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 | 2002 | against previous year | 2003 | 2002 | against previous year | 2003 | 2002 | 2003 | 2002 | against previous year | |||
| €к | €к | €к | $\frac{0}{0}$ | €к | €к | €к | 0/0 | €к | €ĸ | €к | €к | €к | $\frac{0}{0}$ |
| 8,619 | 9.294 | $-675$ | $-7.3$ | 1,225 | 615 | 610 | 99.2 -602,148 | $-638,013$ | $\mathbf{0}$ | 0 | 0 | 0.0 | |
| 50,815 | 45,173 | 5,642 | 12.5 | 1,375 | 0 | 1.375 | 0.0 | 0 | 0 | 977,763 | 1,032,814 | $-55,051$ | $-5.3$ |
| 72,094 | 56,773 | 15,321 | 27.0 | 1,348 | 440 | 908 | 206.4 | $-807,770$ | $-864,907$ | 874,912 | 898,363 | $-23,451$ | $-2.6$ |
| 2,222 | 5.640 | $-3,418 -60.6$ | 93 | 988 | -895 | $-90.6$ | $-804$ | $-35,245$ | 36,397 | 73.151 | -36,754 | $-50.2$ |
Segmental Reporting relating to the Consolidated Financial Statements 2003 for gildemeister Aktiengesellschaft, Bielefeld >>
Auditor's Report
We have audited the consolidated financial statements, compromising the balance sheet, the income statement and the statements of changes in shareholders´ equity and cash flows as well as the notes to the financial statements prepared by the gildemeister Aktiengesellschaft for the business year from 01 January 2003 to 31 December 2003. The preparation and the content of the consolidated financial statements in accordance with International Financial Reporting Standards (ifrs) are the responsibility of the Company´s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. It should be understood that auditing the content of the "Entsprechendserklärung", in particular § 161 German Stock Corporation Law in the group management report, is not object of our audit.
We conducted our audit of the consolidated financial statements in accordance with German auditing regulations and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (idw). Those standards require that we plan and perform the audit such that it can be assessed with reasonable assurance whether the consolidated financial statements are free of material misstatements. Knowledge of the business activities and the economic and legal environment of the Group and evaluations of possible misstatements are taken into account in the determination auf audit procedures. The evidence supporting the amounts and disclosures in the consolidated financial statements is examined on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the net assets, financial position, results of operations and cash flows of the gildemeister group for the business year in accordance with International Financial Reporting Standards.
Our audit, which also extends to the group management report prepared by the Company´s management for the year from 01 January 2003 to 31 December 2003, has not led to any reservations. In our opinion on the whole the group management report provides a suitable understanding of the Group´s position and suitably presents the risk of future development. In addition, we confirm that the consolidated financial statements and the group management report for the business year from 01 January 2003 and 31 December 2003 satisfy the conditions required for the Company´s exemption from its duty to prepare consolidated financial statements and the group management report in accordance with German law.
Berlin and Frankfurt am Main, 24 March 2004
kpmg Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
Rehnen Droste Auditor Auditor
Group Overview / Multiple Year Overview 204
| hgb | ifrs | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| gildemeister group | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | against prev.year in % | |
| Sales revenues | € k | 444,543 | 580,328 | 690,363 | 923,298 | 1,145,390 | 1,032,814 | 977,763 | -5 |
| Domestic | € k | 249,357 | 340,361 | 408,987 | 483,363 | 567,900 | 491,719 | 475,688 | -3 |
| International | € k | 195,186 | 239,967 | 281,376 | 439,935 | 577,490 | 541,095 | 502,075 | -7 |
| % International | 44% | 41% | 41% | 48% | 50% | 52% | 51% | ||
| Total work done | € k | 447,319 | 583,558 | 700,012 | 912,884 | 1,198,623 | 1,046,599 | 995,709 | -5 |
| Personnel costs | € k | 126,877 | 145,786 | 171,405 | 212,544 | 274,152 | 270,156 | 270,577 | 0 |
| Depreciation | € k | 7,388 | 9,960 | 14,946 | 25,492 | 34,952 | 37,757 | 36,430 | -4 |
| Financial result | € k | -11,339 | -10,562 | -11,903 | -18,681 | -23,387 | -24,672 | -24,414 | -1 |
| Profit/loss on | |||||||||
| ordinary activities | € k | 9,371 | 29,615 | 34,452 | 44,192 | 54,737 | -7,496 | 10,260 | 237 |
| Annual profit/loss | € k | 6,433 | 16,142 | 32,663 | 38,079 | 25,785 | -18,710 | -3,579 | 81 |
| Adjusted results | |||||||||
| ebitda | € k | 28,097 | 50,137 | 61,302 | 88,365 | 113,076 | 54,933 | 71,105 | 29 |
| ebit | € k | 20,710 | 40,177 | 46,356 | 62,873 | 78,124 | 17,176 | 34,675 | 102 |
| ebt | € k | 7,243 | 17,015 | 34,452 | 44,192 | 54,737 | -7,496 | 10,261 | 237 |
| Result before shares to | |||||||||
| other shareholders | € k | 6,810 | 17,991 | 33,586 | 39,667 | 24,672 | -19,057 | -3,732 | 80 |
| Fixed assets | € k | 54,162 | 73,939 | 98,234 | 210,486 | 247,634 | 276,281 | 270,569 | -2 |
| Intangible assets | € k | 11,140 | 16,327 | 18,676 | 80,179 | 85,099 | 101,356 | 99,795 | |
| Tangible assets | € k | 42,771 | 57,497 | 79,452 | 130,300 | 162,225 | 174,482 | 170,550 | |
| Financial assets | € k | 251 | 115 | 106 | 7 | 310 | 443 | 224 | |
| Current assets | € k | 234,019 | 279,835 | 320,830 | 490,050 | 629,792 | 622,082 | 604,343 | -3 |
| Inventories | € k | 116,819 | 123,908 | 124,973 | 160,420 | 249,771 | 250,768 | 264,365 | |
| Receivables incl. deferred tax | |||||||||
| assets + prepaid expenses | € k | 108,723 | 147,366 | 182,270 | 305,534 | 364,743 | 353,625 | 328,553 | |
| Liquid funds | € k | 8,477 | 8,561 | 13,587 | 24,096 | 15,278 | 17,689 | 11,425 | |
| Equity1) | € k | 46,179 | 81,582 | 107,174 | 195,687 | 231,177 | 193.824 | 187,593 | -3 |
| Subscribed capital | € k | 48,697 | 55,453 | 56,398 | 75,087 | 75,087 | 75,087 | 75,087 | |
| Capital reserve | € k | 0 | 13,513 | 12,568 | 48,734 | 48,734 | 48,734 | 48,734 | |
| Revenue reserve | € k | 0 | 681 | 19,793 | 39,068 | 83,055 | 70,003 | 63,772 | |
| Accumulated profit/loss | € k | -6,579 | 6,713 | 13,202 | 18,455 | 24,301 | 0 | 0 | |
| Shares to other shareholders | € k | 4,061 | 5,222 | 5,213 | 14,343 | 10,773 | 1,193 | 1,198 | 0 |
| Outside capital | € k | 242,002 | 272,192 | 311,890 | 504,849 | 635,476 | 703,346 | 686,121 | -2 |
| Participating certificate capital | € k | 7,669 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Special account for investment | |||||||||
| allowances | € k | 66 | 50 | 1,632 | 1,219 | 0 | 0 | 0 | |
| Provisions | € k | 57,434 | 62,141 | 81,472 | 113,928 | 139,302 | 148,386 | 133,958 | |
| Payables incl. deferred | |||||||||
| tax liabilities + deferred income | € k | 176,833 | 210,001 | 228,786 | 389,702 | 496,174 | 554,960 | 552,163 | |
| Balance sheet total | € k | 288,181 | 353,774 | 419,064 | 700,536 | 877,426 | 898,363 | 874,912 | -3 |
| Employees (annual average) | 2,239 | 2,442 | 3,142 | 3,936 | 4,918 | 4,912 | 4,849 | -1 | |
| Employees (31 Dec.) | 2,255 | 2,496 | 3,175 | 4,447 | 5,030 | 4,821 | 4,823 | 0 | |
| Trainees | 101 | 121 | 165 | 190 | 204 | 224 | 205 | -8 | |
| Total employees | 2,356 | 2,617 | 3,340 | 4,637 | 5,234 | 5,045 | 5,028 | 0 |
| hgb | ifrs | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| gildemeister group | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | against prev.year in % | |
| Efficiency ratios | |||||||||
| Profit on sales (ebit)= ebit / Sales revenues | % | 4.7 | 6.9 | 6.7 | 6.8 | 6.8 | 1.7 | 3.5 | 106 |
| Profit on sales (ebt)= ebt / Sales revenues | % | 1.6 | 2.9 | 5.0 | 4.8 | 4.8 | -0.7 | 1.0 | 243 |
| Equity return 1)= Annual Profit/loss / equity (as of 01 Jan.) | % | 14.6 | 35.0 | 40.0 | 35.5 | 11.4 | -8.1 | -1.8 | 78 |
| Return on total assets= ebt + Interest on outside capital /average total capital | % | 7.5 | 8.7 | 12.1 | 11.5 | 9.7 | 2.2 | 4.1 | 86 |
| roi - Return on Investment= ebt / average total capital | % | 2.6 | 5.3 | 8.9 | 7.9 | 6.6 | -0.8 | 1.2 | 250 |
| Sales per employee= Sales revenue / average numberof employees (exc. trainees) | € k | 198.5 | 237.6 | 219.7 | 234.6 | 232.9 | 210.3 | 201.4 | -4 |
| ebit per employee= ebit / average numberof employees (exc. trainees) | € k | 9.2 | 16.5 | 14.8 | 16.0 | 15.9 | 3.5 | 7.2 | 106 |
| roce - Return on capital employed 1)= ebit / Capital Employed | % | 10.9 | 16.2 | 14.8 | 12.0 | 12.0 | 2.6 | 5.2 | 100 |
| Value added | € m | 147.6 | 173.5 | 218.1 | 275.7 | 352.6 | 287.5 | 305.4 | 6 |
| Value added per employee | € k | 65.9 | 71.0 | 69.4 | 70.0 | 71.7 | 58.5 | 63.0 | 8 |
| Balance sheet ratios | |||||||||
| Capitalisation ratio of fixed assets= Fixed assets / total assets | % | 18.8 | 20.9 | 23.4 | 30.1 | 28.2 | 30.8 | 30.9 | 0 |
| Working intensity of current assets= Current assets / total assets | % | 80.7 | 78.4 | 75.9 | 69.3 | 68.6 | 65.1 | 65.2 | 0 |
| Equity ratio= Equity / total capital | % | 16.0 | 23.1 | 25.6 | 27.9 | 26.3 | 21.6 | 21.4 | -1 |
| Ratio of outside capital | |||||||||
| to total capital= Outside capital / total capital | % | 84.0 | 76.9 | 74.4 | 72.1 | 73.7 | 78.4 | 78.6 | 0 |
| Assets and liabilities structure= Fixed assets / current assets | % | 23.3 | 26.6 | 30.9 | 43.4 | 41.2 | 47.2 | 47.5 | 1 |
| Capital structure= Equity / outside capital | % | 19.1 | 30.0 | 34.4 | 38.8 | 35.8 | 27.5 | 27.3 | -1 |
Fortsetzung >>
| hgb | ifrs | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| gildemeister group | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | against prev.year in % | |
| Ratios pertaining to financial position | |||||||||
| Cash ratio= Liquid funds (from balance sheet) /short-term liabilities (up to 1 year) | % | 4.8 | 4,2 | 5,8 | 7,0 | 3,5 | 3,6 | 2,2 | -39 |
| Ratio of financial current assetsto short-term liabilities= (liquid funds + short-term receivables) /short-term liabilities (up to 1 year) | % | 66.1 | 75.0 | 81.2 | 91.5 | 80.7 | 67,1 | 59,1 | -12 |
| Current ratio= (liquid funds + short-term receivables + stocks) /short-term liabilities (up to 1 year) | % | 132.9 | 135.5 | 134.3 | 137.9 | 130.2 | 111.4 | 106.1 | -5 |
| Net indebtedness= amounts owed to banks + bills payable –liquid funds – current investments | € m | 85.7 | 104.1 | 124.4 | 214.9 | 278.0 | 319.5 | 342.1 | 7 |
| Gearing1)= net indebtedness –equity before shares held by other shareholders | % | 185.5 | 127.6 | 116.1 | 109.8 | 120.3 | 164.8 | 182.4 | 11 |
| Working Capital= current assets – short-term borrowed capital | € m | 89.8 | 109.7 | 136.5 | 226.4 | 283.2 | 176.0 | 136.7 | -22 |
| Net Working Capital= stocks + payments on account –customer prepayments +trade receivables – trade payables | € m | 155.4 | 179.1 | 217.9 | 318.9 | 402.1 | 386.5 | 379.3 | -2 |
| Capital Employed= equity + provisions + net indebtedness | € m | 189,3 | 247,8 | 313,0 | 524,5 | 648,5 | 661,7 | 663,7 | 0 |
| Structural analysis ratios | |||||||||
| Turnover rate of raw materialsand consumables= Cost for raw materials and consumables /stocks of raw materials and consumables | 4.9 | 5.1 | 6.3 | 5.9 | 6.9 | 6.8 | 5.8 | -15 | |
| Turnover rate of stocks= sales / stocks | 3.8 | 4.7 | 5.5 | 5.8 | 4.6 | 4.1 | 3.7 | -10 | |
| Turnover rate of receivables= sales revenues (incl. 16% vat on domestic revenues) /average trade receivables | 5.3 | 5.5 | 5.2 | 4.7 | 4.4 | 3.7 | 3.8 | 3 | |
| Total capital-sales ratio= Sales revenues / total capital | 1.5 | 1.6 | 1.6 | 1.3 | 1.3 | 1.1 | 1.1 | 0 | |
| dso (Days sales outstanding)=(average trade receivables / (sales revenues(inc. 16% vat on domestic revenues)) x 365 | 69.4 | 66.0 | 70.0 | 77.7 | 83.6 | 97.6 | 96.1 | -2 |
| hgb | ifrs | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| gildemeister group | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | against prev.year in % | |
| Productivity ratios | |||||||||
| Intensity of materials | % | 56.4 | 54.9 | 55.0 | 53.1 | 54.0 | 54.5 | 52.8 | -3 |
| = cost of materials / gross performance | |||||||||
| Intensity of staff= Staff costs / gross performance | % | 28.4 | 25.0 | 24.5 | 23.3 | 22.9 | 25.8 | 27.2 | 5 |
| Cash flow & investments | |||||||||
| Cash flow from current operations | € m | 20.3 | 18.6 | 23.9 | -5.0 | 31.5 | 47.7 | 28.7 | -40 |
| Cash flow from investment activity | € m | -38.7 | -144.7 | -70.7 | -71.9 | -32.3 | 55 | ||
| Cash flow from financing activity | € m | 20.1 | 161.0 | 31.3 | 27.6 | -1.8 | -107 | ||
| Free cash flow | € m | -8.2 | -39.4 | -29.7 | -0.8 | -3.7 | -363 | ||
| = cash flow from current operations+ cash flow from investment activity(exc. cash flow from financial investments) | |||||||||
| CapEx (Capital Expenditure) | € m | 13.5 | 29.8 | 37.6 | 39.5 | 80.2 | 73.2 | 36.4 | -50 |
| Share & valuation | |||||||||
| Market capitalisation | € m | 95.2 | 125.4 | 147.6 | 235.3 | 269.2 | 109.2 | 237.4 | 117 |
| Company value= market capitalisation + amounts owedto banks + bills of exchange + other liabilities+ pension reserves – liquid funds | € m | 224.3 | 272.9 | 319.3 | 506.8 | 619.9 | 496.1 | 643.8 | 30 |
| Earnings per share2)= result after minority interests / number of shares | € | -0.07 | 0.46 | 0.76 | 0.91 | 0.85 | -0.66 | -0.13 | 80 |
| Price-earnings ratio (per)= market capitalisation / ebt | 13.1 | 7.4 | 4.3 | 5.3 | 4.9 | -14.6 | 23.1 | 258 | |
| Company value-ebitda ratio= company value / ebitda | 8.0 | 5.4 | 5.2 | 5.7 | 5.5 | 9.0 | 9.1 | 1 | |
| Company value-ebit ratio= company value / ebit | 10.8 | 6.8 | 6.9 | 8.1 | 7.9 | 28.9 | 18.6 | -36 | |
| Company value-Sales ratio= company value / Sales | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.7 | 40 |
-
Under hgb inc. minority interests; under ifrs exc. minority interests
-
Under hgb in acc. w. dvfa/sg; the share capital was split 1:10 in 1999; the figures for the previous years were adjusted accordingly.
| A | Administration | 88 |
|---|---|---|
| Affiliated Companies | 189 |
- B Balance sheet 64, 160, 189 Branch offices 90 Business Report 44
- C Cash flow 68,193 Communication 105 Corporate Governance 77 "Corporate Service" segment 56, 114, 175, 199 Corporate Situation 54, 117 Corporate suggestion system 96 Course of business 37, 54
- D Depreciation 62, 85, 195 Dividend 63, 72, 75
- E Equity 69 Executive Board/executive units 36, 88, 187
- F Financial assets 83, 154, 161 Financial position 64 Flow of funds analysis 68, 193 Forecast 120 Further training 103, 129
- G Group Structure 55, 86, 89, 184
- I Income Statement 62, 176, 188 Internet 166 Investments 83, 125 Investor Relations 75
- L Legal Corporate Structure 89, 128 Logistics 96, 127
- M "Machine Tools" segment 56 Market capitalisation 74 Market environment 72 Market presence 55 Marketing 105
N Net worth position 64 Notes 149
- O Orders position 38, 60, 116, 117, 124 Organigramme 86 Organisation 88 Overall Development 45, 117, 121
- P Part-time retirement 103 Press 107 Procurement 191, 126 Production 96, 127 Products 96, 128 Profitability 54, 61 Public Relations 107
- R Research and Development 129, 130 Results 61, 124 Risk management 75, 125
- S Sales 56, 117, 124 Sector trends 48, 117, 120, 122 Segmental Reporting 108, 174, 199 "Services" Segment 56, 112, 174, 199 Share prices 73 Staff 102 Supervisory Board 27, 35, 186 Supplementary report 200 Supplying plants 86
- T Technical services 101 Training 102
- V Value added 70
- Y Year 2003 116, 120
Commercial glossary
| Accruals and deferrals | Payments in the reporting period that affect the profit or loss of a period after the balance sheet date |
|---|---|
| Business on a commissionbasis | dmg Vertriebs und Service GmbH and its subsidiaries receive a commission for arranging an order with theproduction companies. They act in their own name and on account of a third party. |
| Cashflow | Flow of financial funds from current business activities over a certain period, adjusted by significant charges andincome not affecting payment |
| cimt | "China International Machine Tool". The cimt is the third largest trade fair world-wide for engineering and tools.It takes place every other year, alternating between Peking and Shanghai |
| Corporate Governance | The responsible management and supervision of com-panies geared towards the creation of long-term value |
| Current assets | Assets for the short-term operation of the business |
| dax | Bluechip Index of the Deutsche Börse. It includes the 30 largest equities by market capitalisation and order-bookbusiness from traditional and technology industries that are listed in the "Prime Standard" |
| Deferred taxes | Interperiod differences between calculated taxes on profit or loss from a commercial and tax balance sheet,with the object of showing tax expenditure in accordance with the correct commercial result |
| Dow-Jones-Index | Stock market index for the 30 major American securities |
| ebitda | Earnings before interest, taxes, depreciation and amortisation |
| ebit | Earnings before interest and taxes |
| ebt | Earnings before taxes |
| egg | Profit or loss on ordinary activities |
| emo | "Exposition mondiale de la Machine Outil". The emo is seen as the main trade fair in metal working and is the largesttrade fair for machine tools world-wide. It takes place every other year, alternating between Hanover and Milan. |
| Equity / equity capital | Funds made available to a company by its owners through deposit and/or contribution or from retained earnings |
| Equity return | Profit for the year to equity ratio |
| euro-stoxx 50 | This index consists of the 50 major companies from the eu states (the so-called Blue Chips) and is weighted bymarket capitalisation, trading volume and industry. |
| Finance Lease | Leasing relation in which risks and rewards are mainly carried by the lessee. The lessee becomes the beneficialowner of the leasing object without the title being passed to him. The leasing object is reported in the lessee'sbalance sheet. |
| Fixed assets | Assets intended to serve the company's business activities on a continuing basis |
|---|---|
| Flow of funds analysis | Statement of the movement of liquid funds/flow of funds taking into account the sources and application of fundsduring the financial year |
| Free Float | Part of the share capital in portfolio investments |
| ftse – 100 | Abbreviation for the Financial Times Stock Exchange 100 stock index. It includes the 100 major quoted securitiesin Great Britain. |
| Gearing | Net indebtedness to equity ratio |
| Goodwill | Percentage of the purchase price of a company which exceeds the value of the assets calculated as fractional values |
| ifrs | International Financial Reporting Standards. Internationally applicable accounting standards to ensure international comparability of group accounts and to meet information requirements of investors and other readers ofannual accounts by providing a higher degree of transparency. |
| Market capitalisation | This is the current price of a listed company. It is determined by the share's market value multiplied by the totalnumber of shares. |
| mdax | Index for medium-sized companies from traditional industries; as index for selected securities ranking directlybelow the dax. It includes 50 securities listed in the "Prime Standard" segment. |
| nasdaq | National Association of Securities Dealers Automated Quotations is an electronic trading system run by nasd.The nasdaq sees the trading of young dynamic companies from growth industries. |
| Net indebtedness | Balance of interest-bearing asset and debit items (amounts owed to banks and bills payable minus current assetsecurities and liquid funds) |
| Nikkei-Index | Japanese stock market index. Criterion is the market capitalisation rate. |
| Operate Lease | Risks and rewards are borne by the lessee, who thereby carries the investment risk. From the lessee's point ofview, an operating lease operates like a tenancy agreement. These agreements are entered into on the conditionthat they cannot be terminated during the agreed term. |
| Outside capital | Summarising term for provisions, creditors and deferred income shown on the liabilities side of a balance sheet |
| Return on total capitalemployed | Profit before taxes and interest on borrowed capital to average total capital ratio |
| roce | Return on capital employed: ebit to total capital, reserves and net indebtedness ratio (Return on capital employed) |
| roi | Return on investment: earnings before taxes to average total capital (Return on investment) |
| sdax | Index for selected smaller companies (small caps) from the classic sector. It ranks directly below the mdax andincludes 50 securities listed in the "Prime Standard" segment |
| Tecdax | is the index for selected medium-sized (midcap) companies from the technology industry. As index for selectedcompanies it ranks directly below the dax and included 30 securities listed in the "Prime Standard" segment. |
|---|---|
| Three major global markets | The three global markets, America, Asia and Europe |
| Trading for own account | dmg Vertriebs und Service GmbH and/or its subsidi-aries sell machines purchased from the production companiesin their own name for own account |
| Xetra trading system | Electronic stock exchange trading system |
Technical glossary
| Benchmark | External or in-house comparison of companies or departments using selected key figures. |
|---|---|
| Cavity | A cavity is a small hollow mould. |
| ckd set | At sites where complex procurement processes are (as yet) not possible or profitable, so-called completelyknocked down sets are used for the assembly of multistage products. ckd sets include all component parts andsub-assemblies of a product and only require assembly processes for the construction of the end product. |
| coSupply® | coSupply® represents the comprehensive partnership approach for powerful supply partnerships atgildemeister, characterised by the three functions: "communication", "co-operation" and "competence" andstriving for enhanced competitiveness. |
| ctv | The ctv product line includes universally arranged lathes with a vertically placed head spindle, providing for integrated handling of components and an option of automated integrated machining. |
| ctx | The ctx product line provides a differentiated programme of cnc universal lathes with a variety of options for bothsimple and demanding machining tasks. |
| dmc eVolution/dmc u | The dmc eVo/dmc u product line provides cnc machining centres for 5-sided / 5-axis machining in serialproduction. |
| dmc h | The dmc h product line provides horizontal machining centres with high dynamics and precision for a wide rangeof uses, from general machine construction to serial production. |
| dmc v | The dmc v product line provides vertical machining centres with high dynamics and precision for high demands inboth the tools manufacture and mould making industries and for small-lot and medium-sized serial production. |
| dmf | The dmf product line provides traversing column machines with large machining areas, effective pendulummachining in two separate work areas, high cutting performance, dynamics and precision with fast traverse speedsof the traversing column. |
dmg Netservice Interactive online remote access to the control of machines for fault analysing and programming support.
| dml | The laser machines from the dml product line offer economic options for high-precision machining of filigreeworkpieces, including those made from materials that are difficult to machine. |
|---|---|
| dmp v | The dmp v product family includes vertical machining centres for production milling with especially high dynamicsand short non-productive times through linear direct drives and a new type of tool change design. |
| dms | The dms product line consists of ultrasonic machines for ultrasound-supported machining of hard-brittle materials.The product line offers boring, milling and grinding operations in one machine – with optional five axes for 5-sidedintegrated machining (see also "Ultrasonic") |
| dmu | This products line with its well developed programme of cnc universal milling machines for 5-sided machiningoffers a good starting point into modern milling. |
| dmu eVolution/dmu p | This product line includes cnc machining centres for 5-sided / 5-axis machining used in serial production |
| duoblock® | The patent applied for Duoblock™ construction combines the advantages of a traversing column structure withthose of a portal construction and thanks to its thermo-symmetrical design ensures maximum precision, rigidityand dynamics. |
| E-Business/e-Commerce | These terms represent the whole range of electronic Internet-supported communication between companies andend users. Their essential contribution is the paperless exchange of business information. Applications rangefrom relaying information through sales to world-wide simultaneous auctions between partners via the Internet. |
| erp-System | Standard application software for Enterprise Resource Planning (for example sap /r3, BaaN); It is intended to beused in, and adapted to, a variety of organisational conditions and business processes in various companies.It continuously supports processes, for example in materials and merchandise management or finances. |
| gmc / gm | The gmc / gm product line includes cnc multi-spindle turning centres and multi-spindle automatic lathes.gmc machines offer state-of-the-art control technology with 3d programming and integrated spindle engines,which can be equipped with linear drives on the x-axes to achieve the highest dynamics and precision. |
| gmx | The turning and milling centres of the gmx product line integrate state-of-the-art milling and turning technologyinto high-precision 6-sided integrated machining of complex workpieces. |
| Intranet | Based on Internet technology, the Intranet is a universal network for company-internal communication protectedfrom external dangers. |
| Laser technology | Laser technology or laser beam machining is an eroding process for machining metallic materials and materialsthat are not easily machinable, such as high-tech ceramics, silicon or metal carbide. using a spotbeam with a highenergy level. With this process it is possible to create filigree cavities and perform laser fine cutting or drillingtasks in the 2d and 3d areas. |
| Linear drive technology | Linear drive technology uses a contactless, electro-magnetic driving principle that does not rotate as in traditionalmethods, but has a linear moving direction. Mechanical intermediate elements are therefore no longer necessary sothat the engine itself moves the machine axes with high precision and acceleration but with hardly any wear. |
- monoblock™ Unlike a traditional construction, where the machine frame consists of several components (bed, stand, etc.), the core of the machine in monobloc construction is formed by a rigid and compact basic body
- nef The nef product line offers an operator-friendly entry-level universal lathe for modern turning technology at an affordable price. Thanks to their universal design, the machines are suitable for piece part manufacture and small-lot production.
- pda system: A production data acquisition system for the capture of company-specific information (such as technical and logistical production parameters). The pda forms the database of the technical and logistical monitoring and controlling, thereby representing the key basis of the corporate control system (for example as part of an erp system).
- pull pull stands for Produktions- und Logistik-Leistung (performance of production and logistics) and has been the gildemeister production system since June 1998. Modelled on examples from the motor industry (Toyota production system, tps), it combines different components and individual activities with the aim of increasing efficiency, in one continual improvement process, in production and in the production-related areas, such as materials planning, receipt of goods and stock of goods.
- Series start-up management: System-supported method for recording, communication, processing and control of start-up specific tasks with the aim of taking new machines to serial maturity faster. The gildemeister-internal system uses the Lotus Notes communication and GroupWare application.
- speed The speed product line provides cnc Swis-stype automatic lathes for the machining of simple to complex long parts in small to medium lot sizes.
- sprint The sprint product line consists of one-spindle cnc automatic bar machines for flexible and economic integrated machining of short parts in small to medium lot sizes.
- Transshipmentpoint A logistical programme where a service provider brings together incoming freight from various suppliers to one place and delivers them to the plants in time for production. Outgoing freights are transhipped in a similar way. The service provider is also responsible for the fine-tuning of the process with the suppliers.
- twin The twin product line provides two-spindle turning centres with independent turning spindles for the integrated machining of demanding chuck and rod parts.
- Ultrasonic An ultrasound-supported manufacturing process for the economic machining of hard-brittle high-tech materials ("advanced materials") such as ceramics, glass, silicon, composites, metal carbide, hardened steel, sapphire, ruby or mother-of-pearl. The ultrasonically energised main spindles combine with the traditional machining process (for example milling) through a high-frequency oscillating motion. Compared with traditional machining processes, this machine design results in a productivity that is up to five times higher, longer tool lives and at the same time better surface quality, and, with regard to the processed workpiece geometries, a substantially higher flexibility.
| 29March 2004 | Press conference on Financial Statements |
|---|---|
| 29March 2004 | Publication of the Annual Report 2003 |
| 30March 2004 | Discussion with analysts |
| 06May 2004 | 1st Quarterly Report 2004 (1January to 31March) |
| 14May 2004 | General meeting of shareholders |
| at 10am at the town hall in Bielefeld | |
| 05August 2004 | 2nd Quarterly Report 2004 (1 April to 30June) |
| 09November 2004 | 3rd Quarterly 2004 (1July to 30September) |
| 15February 2005 | Press release on provisional figures |
| for the financial year 2004 | |
| 20May 2005 | General meeting of shareholders |
| at 10am at the town hall in Bielefeld | |
Contact
gildemeister Aktiengesellschaft Public Relations Gildemeisterstraße 60 D-33689 Bielefeld, Germany Phone: +49 (0) 52 05/74-3001 Fax: +49 (0) 52 05/74-3081 Internet: www.gildemeister.com E-Mail: [email protected]