Group Annual Report
2007
B S H B O S C H U N D S I E M E N S H A U S G E R ÄT E G M B H
Something special
The BSH brands, in all the company’s product areas – Cookers, Home
Laundry, Dishwashers, Dryers, Refrigeration, Freezers, Floor Care or
Consumer Products – stand for innovative technology, outstanding
design, best quality and excellent service. These are brands that people trust, because they offer something special: All over the world,
BSH products are making people’s lives better.
Main Brands
Special Brands
Regional Brands
Group Annual Report 2007
CONTENT
5
Foreword
8
The big difference
All over the world, from Hong Kong and Singapore to Munich – BSH’s reputation
is assured through the quality of its products. The reasons for this are many.
14
On the road to success
Through systematic personnel development, BSH ensures that its employees
can work in positions in which they are best able to develop their potential.
20
A system that adds value
With the introduction of the BSH production system a global standard has been
created that will lead to optimal use of resources along the entire value chain.
26
A matter of common sense
With its cutting edge climate protection projects, BSH is setting standards –
and proving that ecology and economy need not be mutually exclusive.
32
Supervisory Board Report
34
Board of Management, Supervisory Board
36
36
49
53
55
Management Report
Development of business
Net assets, financial position, and results of operations
Significant opportunities and risks for future development
Anticipated Trend
58
58
59
60
61
62
Group Financial Statements
Consolidated Statement of Income
Consolidated Balance Sheet
Consolidated Statement of Cash Flow
Statement of Recognized Income and Expense
Consolidated Statement of Changes in Shareholders’ Equity
63
Notes to the Consolidated Financial Statements
94
Share owner BSH Bosch und Siemens Hausgeräte GmbH
95
Independent Auditors’ Report
96
Summary of Past Performance
3
4
“The figures are conclusive
proof of our success” –
Dr. Kurt-Ludwig Gutberlet,
President and CEO of BSH.
FOREWORD
Strong in competition
The year 2007, to which this report relates, was an anniversary year
for BSH. It is now four decades since Robert Bosch GmbH, Stuttgart,
and Siemens AG, Munich merged their respective home appliance
divisions and formed BSH Bosch und Siemens Hausgeräte GmbH.
In the years since, BSH has systematically developed itself from mere
exporter to Europe to one of the world’s leading home appliance
manufacturers.
Growth against the trend
In this our anniversary year it is once again apparent that BSH is one
of the most competitive companies in the home appliance sector.
We have again succeeded not only in winning new market shares in
most markets but also in growing profitably, despite having to contend
with a difficult operating climate. Rising oil and commodity prices,
the rapid devaluation of the US dollar and the worsening of the crisis
in real estate have dampened the mood among companies and consumers alike. The markets in Western Europe and North America were
impacted in particular. Reduced construction activity in the US has
caused the market for white goods there to collapse, but in spite of this,
BSH still managed to achieve 18 percent growth. Even in Germany,
which is one of our most important markets, the going was tough in
2007, with demand for large home appliances weaker than the economy overall. In spite of this, however, BSH posted higher growth than
the competition. In China, where market growth was 14 percent last
year, we increased our sales by 32 percent, and in Eastern Europe
our growth rate of 22 percent was four times that of the market.
Global sales for the group as a whole grew by 6 percent to 8.8 billion
euros. In addition to this, earnings rose 18 percent year on year.
Figures like these make it impossible to dispute our success.
The factors that contributed to our success
This success is no accident, of course: it is the result of targeted action
on our part. One factor involved has definitely been our consistent
policy of investment in our production facilities, and in innovative
product lines. In Germany, we have invested heavily in our dishwasher
and cookers production plants, and this year has also seen the successful ramp-up of a new generation of washing machines.
5
6
The Board of Management
of BSH (from left to right):
Prof. Werner Vogt,
Dr. Kurt-Ludwig Gutberlet,
Dr. Wolfgang Colberg,
Jean Dufour
FOREWORD
In Nanjing, China, we are in the process of massively expanding our
appliance park there. In St. Petersburg, Russia, we have opened a new
refrigeration factory and have started building a new washing machine
factory. In Çerkezköy, Turkey, we have expanded the dishwasher factory, and in the Polish city of Łódz we inaugurated a new development
and testing center for dryers. This list is far from exhaustive, and merely
offers a sample of our activities during 2007.
Another important factor in the success of BSH can be described as
“process excellence.” Universal processes allow us, as a global operator,
to collaborate across functions, countries and departments efficiently
and in a targeted way. In the last few years we have put a great deal
of effort into continually optimizing these processes, and in doing so
have developed the instruments both to measure the quality of these
processes and to constantly improve them. This has created the kind
of transparency needed for value-based management of the group.
However, the most important success factor for BSH is the global
workforce of almost 39,000 employees, who share our vision and give
their all for the company on a daily basis. For this we would like to
offer them our heartfelt thanks.
Strong for the future
The year 2007 will not only be remembered as the latest high point
in the company’s history, but also as the year in which the consequences of climate change, in all their drama, finally entered public
consciousness. For years, BSH has been in the vanguard of the development and production of energy-efficient home appliances. There
is therefore a strong case for our playing a leading role in promoting
them, and we intend to step up our efforts in this area still further.
BSH sees one of its future functions as being to make an important
contribution to climate protection through appliances that conserve
resources. And it has now been shown that commitment of this sort
pays off.
Even if the challenges BSH has to face in the future are no less daunting,
it is in a strong position to stay on its current growth course. We have
a strategy, and if we continue to pursue it systematically there is no
reason why our success of recent years should not continue.
Dr. Kurt-Ludwig Gutberlet
Dr. Wolfgang Colberg
Jean Dufour
Prof. Werner Vogt
7
The big
difference
All over the world, from Hong Kong and Singapore to
Munich – BSH’s reputation is assured through the
quality of its products. The reasons for this are many.
10
Products for a better life
Paradise Island residential complex in Singapore
was fitted exclusively
with built-in appliances by
Gaggenau, a BSH brand.
As head of International Sales at BSH, Dirk
Hoffmann travels a lot – today in Munich,
tomorrow in Hong Kong or Singapore – and
the day after, perhaps some place off the map
in Saudi Arabia. And what Dirk Hoffmann and
his colleagues sell in the process is traded in
units of impressive magnitude. They call the
type of business they do “project business,”
and it represents the high-end segment of
the international built-in appliance market –
not fitting single kitchens with a cooker, refrigerator and dishwasher;
but fitting out entire upscale neighborhoods and enormous housing
complexes. From the Verve Suites in Kuala Lumpur and the World
Trade Center in Dubai to the amazing high-rise “Arch” in Hong Kong,
an increasing number of luxury properties are being fitted entirely
with appliances from Bosch, Siemens or Gaggenau.
Thinking in terms of processes
“German engineering” and perfect logistics are sought after the world
over. However, there’s plenty of work for Dirk Hoffmann to do before
these factors come into play. For example, when it becomes public
that a new site in, say, Malaysia, is to be developed, a certain amount
of detective work is required, and all available information channels
have to be tapped. Who is the developer? What exactly do they need?
As Dirk Hoffmann explains, “It’s the first project that counts: once
we’ve shown what we can do, the rest practically takes care of itself.
Once you represent a model for success for a developer, they’ll usually
continue to want to collaborate with you – they see you as a reliable
partner.” BSH has found that the most effective recipe for success in
such cases is to make sure that you supply more than just the “bare
product.” Hoffmann sums this up as follows: “We have the most
success in those markets where we offer a full project management
service.” By this he means that if you supply the hardware, you get
the opportunity to supply the software – and then, as well as supplying top quality products, you can impress with your smooth handling
of the order.
Even the most luxurious
kitchen is only as good
as the equipment in it.
The BSH appliances make
the difference.
Previous page:
Dr. h. c. Dirk Hoffmann
in front of the Hong Kong
skyline.
CORE COMPETENCE
Time is money, especially in construction. On day Y, exactly at Z o’clock,
appliance X must be outside the door of the completed apartment on
the 17th floor and ready to install. Dirk Hoffmann knows exactly what
his contacts need: “If we make sure that there are no delays – even
perhaps time to spare – that’s worth its weight in gold to developers.
For them, each day saved could mean selling or letting the property a
day earlier. So our process management can create considerable
added value for them.”
How this works in practice is explained by the Head of Growth Markets
Corporate Sales, Dr. Peter Böhm, using Hong Kong as an example:
“BSH’s site manager is already on the spot eight weeks before completion, observing the progress of this 2000-apartment project. It
would be absolutely fatal if we were to deliver the appliances before
everything was ready for them to be installed.” BSH generally uses
certified service partners for installation work, and even trains their
employees in advance. The acceptance inspection is then carried out
using its own personnel. Nothing is left to chance – from the planning
through to coordinating the various works to be carried out by the
electrical and gas engineers, plumbers and kitchen furniture manufacturers. “We think in terms of processes,” says Böhm, “and it’s not
just a question of establishing the perfect workflow: it means once
we have demonstrated perfect performance and quality, being able
to deliver it over and over again in subsequent projects. And that’s
definitely where our strength lies.” The idea is that, for the developer,
the decision to use BSH should mean “all-round peace-of-mind.”
Dr. Peter Böhm has
global responsibility
for growth markets.
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Success breeds success
Good performance is rewarded with more orders – sometimes in
other countries. As the big developers with annual sales figures in the
billions tend to be global operators, the effects of a good reference
can be felt in other countries, indeed other continents, as well. As
Dirk Hoffmann says, “If we have established a very good business
relationship in a country like Malaysia, and the developer then does
a similar project in, say, Dubai, then we can count ourselves in, right
from the planning stage.” For those responsible at BSH, this opens
up broad prospects. According to Hoffmann, BSH has orders on its
books for as far ahead as 2011, but he says they still have to plan way
beyond that date. Hoffmann and Böhm are talking specifically about
projects in the Near East here, but using their expectations of future
business as a guide, the company is also keen to position itself elsewhere. And Hoffmann is not only talking about the growth potential
of his own division: “When we manage to establish awareness not
just of the BSH brand but also of our solution competence, then we
have a head start in any business we might do as a result in core
business areas.”
The added value of BSH
Kuala Lumpur, Dubai, Hong Kong… but back in Munich, Rudolf Walfort
explains what an ordinary customer, who isn’t buying electrical appliances as part of a multimillion-euro luxury villa purchase, stands to
gain from all this. For customers like these, what is it that tips the
scales in favor of BSH over one of its competitors? What added value
do they get when they opt for Bosch, Siemens, Gaggenau or one of
the other BSH brands? Walfort, who is responsible for built-in cooking
appliances at BSH, can immediately think of a whole series of things
that are in fact unique in the market: Slide® and Hide®, for example,
the oven door that is fully set into the appliance – a concept that is
CORE COMPETENCE
not just practical, but also won the iF product design award; or the
liftMatic oven which, because it is wall-mounted, opens up a host of
new layout options for the customer. Instead of having a drop-down
oven door or pull-out rack, at the press of a button a lift lowers the
entire oven floor, together with the suspended baking shelves.
Then there are TwistPad controls, not to mention the whole area of
sensor technology and automated programming… “
That’s just a small selection from my product area,” says Walfort,
“all developed by the company and all product features with USP
potential. But I don’t really like talking about individual product
features. The real added value delivered by BSH is its system competence, and it’ll be quite a while before anyone catches up with us in
that area.” System competence? Rudolf Walfort gives us an example.
“Take food: more and more people are discovering steam cooking,
a particularly vitamin-conserving method. Well, we’ve had a series
of products for steam cooking in our portfolio for a long time. On the
other hand, vitamin-conserving cooking methods are of no use if the
vitamins have already been destroyed beforehand! This is why we
must concern ourselves with food being stored correctly – either deep
frozen or at around 0°C. So to us, system competence in this context
means that we must look at the whole food chain, from purchase
onwards, and bring solutions onto the market – across all product
areas – that are coordinated down to the last detail.” This also means
constantly having to think about how people’s circumstances – and
thus their needs – change. “Scenario analysis” is what Rudolf Walfort
calls this constant peering into the future, this development of visions
aimed at offering people the products that can make their lives better,
whether they live in Munich, Dubai or Hong Kong.
Rudolf Walfort sees the
added value of BSH as
being primarily its system
competence – both in
relation to the entire
supply chain and in the
way its various product
lines are perfectly coordinated.
13
On the
road to
success
Through systematic personnel development,
BSH ensures that its employees can work
in positions in which they are best able to
develop their potential.
16
Challenges and opportunities
The ability to integrate
and cooperate is a key
requirement of BSH
employees.
In a company that has always stood out
from the competition as regards quality,
innovation and cutting edge technology,
high levels of technical competence, creativity
and commitment in its employees are crucial.
Dr. Wolfgang Colberg, Personnel Director at
BSH Bosch und Siemens Hausgeräte GmbH,
therefore has a clear strategy with regard to
the company’s employees: “We want everyone, and by that I really do mean everyone –
from assembly line workers to management – to make a measurable
contribution to company profits, and thus take some responsibility
for the company as a whole. It’s a question of give and take, because
it gives everyone the chance to be part of a successful company.”
“Challenges and opportunities” are thus the key words in the search
for and development of potential in BSH’s 39,000 employees worldwide, as for about a year now, the company’s development promotion
schemes have been coordinated at a global level on the basis of a
universal new competence model.
Managers from its own ranks
BSH systematically pursues a long-term, value-based growth strategy
– the key phrase here being “long-term,” as Dr. Colberg explains:
“ ‘Long-term’ means that we think in terms of fifteen or twenty years
or more. That sort of growth strategy creates quite different opportunities from most. Our employees have extremely attractive jobs with
long-term prospects within the company. We’re always offering new
functions, including in the international domain.”
“We make sure that our
employees are successful” –
Dr. Wolfgang Colberg,
Personnel Director on the
Board of Management of BSH.
EMPLOYEES
On this basis, Colberg can permit himself to make quite specific and
challenging demands of employees. ”Obviously, we want top people
in our company,” he says, “but it’s not enough to just find the best
people on the job market and then expect success to follow automatically. We also try to identify ways in which we can help individual
employees to do their jobs even better, and to derive more satisfaction from them.” This is partly because BSH tries to fill management
positions from its own ranks, and these candidates need to be identified at an early stage.
Take Monika Gruber, for example: she is currently global Head of
Controlling for the Consumer Products Division. Thirteen years ago,
after passing her school-leaving exams, she applied to study for a
cooperative education degree at BSH. This is a dual course, in which
theory phases at the university of cooperative education (BA) alternate with work experience phases at various BSH sites. “I wanted
financial independence from the start, and I wanted the opportunity
of combining theory with practical work within a company,” she
explains. She was one of the first to spend part of her training
abroad, actually writing her dissertation in Australia. In those days,
it was still quite a struggle to get a placement abroad but, as she
says, “Now, all BA students go abroad for at least one semester –
and I believe this intercultural experience is really important.” After
completing her studies, she started work as a section head in Controlling, for Consumer Products. Seven years’ deployment in Spain and
Scandinavia followed. In Scandinavia, she started as Head of Business Administration for Norway and later became Head of Controlling
for the whole of northern Europe as well, finally returning to Munich
in 2007. Monika Gruber is in no doubt that her successful career so
far is in no small part due to the support she has received from BSH’s
Human Resources Division along the way: “I was able to complete
two training courses every year, and they were always practice-based
and relevant to the work I was doing at BSH. They also gave me a
cross-divisional perspective and broadened my horizons. In all the
countries I worked in, I learned the language and got to know people,
After seven years abroad,
Monika Gruber is back at
the Munich headquarters
where she is Head of
Controlling, Consumer
Products.
17
18
Head of Personnel Development, Andrea Werner:
“Our universal competence model provides a
common framework for
personnel development
at BSH.”
so I have built up my own, personal international network.” This network that Monika Gruber has built up, the source of which is basically
BSH’s International Executive Pool, contains a member of junior management from no fewer than four countries – China, the US, Turkey and
Russia. They meet twice a year to discuss problems and hammer out
issues. Gruber simply says: “BSH was offering a great opportunity here,
so I took it.”
People who really fit in
Monika Gruber’s career at BSH over the last 13 years has been due both
to her own ability and to the company’s targeted development promotion
measures. That is not to say that fate, committed line managers and
her own initiative didn’t also have a lot to do with it. These days, in a
company constantly facing the challenges of global competition, finelytuned instruments are needed for placing the right people in the right
positions. As Dr. Colberg says: “It is important to us to find people who
really fit in here. For this we needed a universal competence model that
defined exactly what we require of people at BSH. Having such a model
creates clarity and consistency. Also, because it reflects our corporate
culture, it helps employees identify with the company.”
At BSH, it is Personnel Development (PE) that is responsible for developing and implementing this universal competence model and the
instruments it applies. Head of Personnel Development, Andrea Werner,
adopted a practice-based approach. Within four or five months her team,
working in conjunction with top managers from throughout BSH, had
identified the necessary criteria and, from them, developed the universal
12-competence model. It was approved in July 2007, and has since been
implemented in BSH’s Orientation Centers (OCs), which are similar to its
better-known Assessment Centers, which are used for personnel selection. However, unlike them, according to Andrea Werner the sole purpose
of the OCs is to determine where in the company employees should
EMPLOYEES
The continuing professional development of its
personnel is of central
importance to BSH.
work, and thus help them decide what direction they would like
their development at BSH to take. The list of competences is divided
into four main areas – strategy and management skills, methods and
problem-solving skills, leadership and social skills and personnelrelated skills. In each of the four groups there are also three subskills, all of which have been specifically derived from daily routine
at BSH. “For example,” says Andrea Werner, “it is essential that our
people are capable of integrating and cooperating. We have so many
interfaces that in the search for solutions we have to work with different people and functions everywhere. If you can’t do that, then you’ll
find it hard to get on at BSH.” Other key qualifications are, for example,
performance motivation and commitment or – and to Dr. Colberg this
is particularly important – process competence. Colberg: “We’ve been
working for years on ensuring that our employees’ thinking is processoriented, and that they don’t all isolate themselves in their own little
“ivory towers.” Intercultural competence, too, is absolutely essential
in a global enterprise like BSH.”
An upward spiral
The next challenge will be to apply the various parts of the program
they have worked out over the past year to actual personnel work in
the field, and this will include integrating it into a suitable “talent
management” IT system. “If we want to promote global careers, we
must make sure that all personnel development measures worldwide
are linked,” says Andrea Werner, “and it’s our new competence
model that will provide the basis for this.” Dr. Colberg is convinced
they’re on the right track with this initiative: “We make sure that our
employees are successful, and that they have fun being successful.
In this way, we create an upward spiral in which success breeds success.” So it’s a case of onwards and upwards, both for the employees
and for BSH.
19
A system
that adds value
The introduction of the BSH production
system sets a global standard for the optimal use
of resources along the entire value chain.
22
Standards for greater efficiency
Following a pilot phase in
Traunreut, the BSH production system will be
rolled out at all sites
worldwide.
The world of engineers is one of facts, figures,
mathematical formulae and logical interrelationships – engineers are only interested in
what can be measured and calculated. “You
know,” says mechanical engineer Simon Mayer,
manager of BSH’s factory in Traunreut, “I’m a
numbers person. I look at the numbers, and
then I make decisions.” One decision was an
easy one for Simon Mayer, as he explains:
“Here at Traunreut, we wanted to be one of
the first to introduce BSH’s new production system, as we see it as
offering a fantastic opportunity, not only to deliver more quality, more
flexibility and more value, but to be able to measure and quantify
these factors as well.”
100 percent in 2009
Great expectations. But what exactly is this production system? Put
briefly, it is a holistic approach, the aim of which is only to produce
what the customer wants, and to do so as quickly and cost-efficiently
a possible. This is why it’s becoming increasingly important to implement universal standards throughout the group. In a globalized market,
the effects of factors such as shorter innovation cycles, a constantly
increasing number of variants and ever more stringent quality requirements – at the same time as falling market prices – are being increasingly felt. Global operators such as BSH do not have time to rest on their
laurels; they must rise to these challenges before it is too late, not just
by applying best practice in production, but by being prepared to try
out new concepts as well.
“Three years ago we started looking into the idea more closely,” remembers Simon Mayer. “There had already been forerunners in Nauen and
Giengen. Then, in early 2006 the decision was finally taken to roll out
a universal production system throughout the group worldwide, and
we at the Traunreut factory asked to be used for the pilot. After that,
everything happened very quickly, and the changeover process has
been under way since mid-2006. Now, at the end of 2007, we have
gone over to the new production system in about 30 to 40 percent
Each individual step in the
production process is
examined down to the last
detail and then optimized.
Previous page:
Katrin Fehr and Werner
Schmid in the cooker
plant at Traunreut.
PRODUCTION SYSTEM
of the factory – i.e. the whole of our newly designed cooker assembly
unit has gone over to it, and our cooktop assembly unit is due to be
converted during 2008. This means we’re right on schedule for Traunreut to be 100 percent based on the new system from 2009.” By then,
all other BSH factories will have started rolling out the new system.
Taking people with you
Simon Mayer may be a numbers person, but it was not long before
he realized that most of the challenges he faced with the introduction
of the BSH production system were not technical in nature, but psychological. As he reports, there was obviously a certain amount of
prejudice to overcome, with people muttering things like: “Now what
have they thought up to make our lives more difficult?” Although it
was important to dispel these prejudices and fears right from the start,
it was also important to take them seriously. “We mustn’t forget,”
Mayer says, “that with the new system, the way people work together
has completely changed. We have to make sure that each individual
has a full understanding of the whole production process. But as a
result, each individual must also be prepared to question whether
their particular step in the work process is actually useful – and
that’s not an easy thing to do.” So for Simon Mayer it was particularly
important to “take his people with him.” Every employee at the plant,
from manager to assembly worker, had to be helped to come to the
“We saw the opportunities
it offered, so we wanted
to be in on it from the
start” – Simon Mayer,
manager of the cooker
factory in Traunreut.
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24
For Stefan Lauwitz, one
of the greatest advantages
of the new system is its
transparency.
clear and logical conclusion that a production system of this sort
brings benefits for everyone and, in the final analysis, is actually much
better than all the other options. Stefan Lauwitz, Head of Corporate
Production Technology at headquarters, who is coordinating the rollout of the system from the group’s headquarters in Munich, adds
that a production system of this sort is also a matter for the bosses,
saying: “The whole changeover, and the new thinking that goes with
it, must be seen to be being experienced by everyone. First and foremost, it’s essential that management takes the trouble to know and
understand these processes, because only what I understand myself
can I put into practice and communicate to others.”
Working in a value-creating way
First of all, workshops for around one hundred managers were held
at Traunreut. Over the course of a day-and-a-half, they learned what
the changes to the production sequence mean, how they are to be
implemented, what the production system is supposed to achieve
and, not least, about the new philosophy behind it all. Cooker production was the first to be radically changed, with five principles,
namely “producing according to demand,” “solid product start and
discontinuation,” “challenging and fostering employees,” “avoiding
errors” and “avoiding waste” being applied. Standing right where
it’s all happening, on the production line itself, Katrin Fehr, who is
responsible for time management, explains what has changed: “The
work done at each workstation can be divided into two kinds – valuecreating and non-value-creating. Our aim was to create conditions
that ensured that the proportion of value-creating work was as large
as possible. For example, two steps forward and two steps back, or
turning round to pick up another screwdriver, are clearly not valuecreating.” By analyzing problems such as these at every single workstation they were able to optimize workflows, which are now defined
down to the last action – and for each station. Katrin Fehr says that
for the workers in assembly this was a really big change at first: “People
had the feeling they were losing some of their personal freedom at
their workstations. However, they soon noticed that there were plenty
of advantages to the new way of doing things. The new workflows
PRODUCTION SYSTEM
Gearing the production
lines to the requirements
of the people who work
on them minimizes the
proportion of non-valuecreating work.
increase productivity and actually make work easier.” But assembly
is not the only factor in the equation. The BSH production system
affects the whole value chain, from the purchase of raw materials
and components, through storage and logistics and production in
the factories to the actual delivery of appliances. When they analyzed
this value chain, Simon Mayer and his co-workers noticed that, at
30 to 50 minutes, the processing times for materials in the factory
accounted for a very small section of the chain in terms of time.
However, it took ten days for the product made from these materials
to be finished and to leave the factory. According to Mayer, this was
attributable to the length of the storage phases between the individual
production phases. “We immediately changed the technical setup
to make the various production areas more closely linked. By doing
this we were able to make massive reductions in the size of the buffer
stocks, and now it’s more value that’s created in the workstream,
instead of more handling.”
“We can do it”
Stefan Lauwitz distils the production system concept down to one
essential point, saying: “No matter what we do, the first thing is to
create transparency. Then we can see where value is being created
and where resources are still being wasted – and that’s something
we can systematically improve. And by creating transparency and
universal standards, we’re also making it possible for the immense
knowledge and experience that exist within our organization worldwide to be shared and made accessible to everyone.” Transparency
is all well and good, but what about the numbers, Simon Meyer – do
they add up? In response to this question, Simon Mayer leans back
and looks relaxed: “We’ve made really good progress there already,”
he says. “Our sales department is now able to influence production
from the fifth working day. That’s a considerable improvement. We’re
achieving enormous reductions in warehouse stocks as a result. And
then there’s the target we’ve set ourselves, here in Traunreut, of saving several million euros through the production system – and I think
we can do it, too.”
25
A matter of common
sense
With its cutting edge climate protection
projects, BSH is setting standards – and
proving that ecology and economy need
not be mutually exclusive.
28
Pioneering work in climate protection
Few thought it would work – putting brand
new, energy efficient refrigerators into shacks
in shanty towns – but it is working, and achieving threefold benefit – social, ecological and
economic – into the bargain. The idea is as
simple as it is effective. At any rate, this BSH
model is receiving the highest praise from
non-governmental organizations because it
combines – in exemplary fashion – the three
pillars of sustainability.
Production of energyefficient refrigerators at
BSH’s plant at Hortolândia
in Brazil.
Dr. Herbert Mrotzek,
Head of Corporate
Environmental Protection
and Health and Safety.
Previous page:
Márcio Vazquez in front of
old refrigerators awaiting
recycling.
BSH’s Refrigerator Exchange initiative, on which it has collaborated
with local energy providers in the favelas in various Brazilian cities, is
one of many projects that bear witness to the company’s consistent
commitment to climate protection. It is the result of many years’
research and experience, as it is not only since the recent debate on
climate change that BSH has been one of the leading companies in
the sector in developing energy-efficient and resource-sparing appliances. The year 2007 will thus go down in memory not least as the
year in which the Nobel Peace Prize was awarded to Al Gore and the
Intergovernmental Panel on Climate Change; but it was also the year
in which mankind truly became aware, for the first time, of the dramatic global consequences of climate change. BSH has landmark
years of its own to remember, however: back in the nineties, for
example, Bosch unveiled one of the first fully CFC- and FC-free refrigerators – a pioneering contribution toward combating climate change.
“We can justifiably say that since the seventies, we have shown a
good deal of the pioneering and entrepreneurial spirit when it comes
to energy efficiency and sparing resources,” says Dr. Herbert Mrotzek,
Head of the Corporate Environmental Protection and Health and
Safety department, which BSH set up as early as 1991. Its stated mission is to continually improve climate protection through innovative
solutions.
ENVIRONMENT AND SOCIETY
Saving energy in day-to-day operations
As over 90 percent of the environmental damage caused by large
home appliances occurs during normal use, this is where BSH can
make the greatest contribution to ecological equilibrium, i.e. in the
environmentally friendly design of its products. This includes reducing
the amounts appliances consume because, as Dr. Mrotzek explains:
“Older appliances often consume more than twice as much electricity
and water as new ones.”
It was this fact that provided the inspiration for the Refrigerator
Exchange initiative in the favelas of Brazil: Brazil’s economy is growing, and the resulting increased demand for energy is causing considerable problems. Energy providers there are therefore required by the
state to invest 0.5 percent of their revenues in efficiency programs.
According to Márcio Vazquez, who was responsible for getting the
project off the ground, the favelas probably contain the oldest appliance stock in the world.
In these deprived settlements, some of which have as many as
300,000 inhabitants, refrigerators that either totally lack insulation
or are at best badly insulated, have been the norm. And because
many favela residents are not officially registered as living there, they
tap illegally into the grid, which is another problem Brazil’s energy
providers have to contend with.
As Márcio Vazquez explains: “The benefit is twofold: providing poor
households with free refrigerators automatically increases the official
percentage of people with electricity, and at the same time we are
reducing energy consumption by installing more efficient appliances.”
An incredible 45,000 have been replaced in the course of one year,
and BSH is organizing the whole process – delivering, collecting and
recycling. “That way, we ensure that the old refrigerators don’t continue to be used,” says Vazquez. Following the success of this pilot
project, BSH is engaged in intensive talks with the Brazilian government, which is currently working on a major program of investment
aimed at building on the benefits described above.
Energy champions in all BSH companies
The network of international associations, universities, energy
providers and industry partners that BSH has built up over the years
is proof of the incalculable value of its many years’ experience working to protect the environment. “We keep a close eye on technical
and social developments in all areas and are constantly looking to
see where we can forge useful collaborations, to make sure that new
technologies are used for the benefit of all,” is how development
engineer Horst Werkmann from Electronics, Drives and Systems (EDS),
one of BSH’s innovation centers, describes his department’s aims.
Márcio Vazquez (photo, top of page):
BSH coordinates the whole process of
replacing old refrigerators in the favelas,
including the recycling.”
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30
For example, it is one of the dreams of this BSH think tank to design
a washing machine or dishwasher that only springs into life when a
wind turbine is running, or there is sun to supply solar power collectors with energy – an intelligent network, in fact. “It is important not
to rest on our laurels, and instead to keep looking far into the future,”
is the way Werkmann sees it. This is why, at BSH, they have actually
started to bring together all the resource-conservation activities currently under way within the company into a single project. The importance being attached to this project is evidenced by the high caliber
of the steering team that has been put together for it – it includes
two members of BSH’s Board of Management, for example. The company’s strengths are to be pooled in five modules, starting in Product
Development, Marketing and Corporate Communications and continuing with work in groups and policy committees, so that the individual
projects can be coordinated and their impact made even greater.
Jean Dufour, Member of the Board of Management, says, quite simply,
that “‘Energy excellence’ must become a BSH-wide movement.”
An important step in the right direction is the appointment of socalled “Energy Champions” in all BSH subsidiaries, whose job, as
local experts, will be to champion environmental concerns all over the
world and link up the individual country-specific structures involved.
According to Dr. Mrotzek: “This will allow us to put the diverse experience and special expertise in the field of energy efficiency that exists
in the various countries at the disposal of the whole company. We
were always leaders in this field,” he says, “and in future we want to
be the benchmark for the sector.”
Horst Werkmann (with Kira
Marquardt) from the BSH
think tank, EDS – “looking
far into the future.”
Progress in quantum leaps
While we must look to the future, it should be acknowledged that
what has been achieved to date is still enormous – the water consumption of washing machines reduced by up to 67 percent since
1990, and the electricity consumption of refrigerators cut up to
79 percent, to name just two statistics. What has been achieved
is really impressive, but is there not still some real room for improvement? Dr. Christian Zimmermann from BSH’s product area Cooling is
optimistic.
ENVIRONMENT AND SOCIETY
“Obviously, progress is not linear,” he says, “it comes in stages, and
time and again, new technologies can result in quantum leaps.” He
also stresses how important it is to persevere, and continues: “With
every new product we develop, energy efficiency is always part of the
specifications, and when we set up a new production platform, we
anticipate a jump to the next energy efficiency class, or even to the
one after that – and worldwide, too, even if that new energy class is
still nowhere to be seen in the existing standards.” This produces a
strong leverage effect, which is often also the result of collaborating
with components suppliers. As Dr. Zimmermann says: “We not only
optimize internally, for example in the layout of our appliances, but
also work very closely with our suppliers on the development of components. This considerably increases the effectiveness of our own
efforts.” The developers concern themselves with the whole life cycle
of a new appliance, from its environmentally friendly production and
energy-efficient use to the ecological requirements for its recycling.
Only if you avoid using critical substances right from the start can you
be sure of avoiding polluting the environment when you recycle a
refrigerator, for example. As Dr. Zimmermann puts it: “To produce
appliances that are environmentally compatible throughout their life
cycle is our clearly stated aim.”
Dr. Christian Zimmermann
from the product area
Cooling.
An investment that pays for itself
This philosophy obviously comes at a price. But even if it does result
in slightly higher production costs, the investment is certainly worth
it for the customer. Constantly making customers aware of this fact,
however, is not the job of the developers, but of the experts in Marketing. Their advertising campaigns leave customers in no doubt as
to the economic benefits of energy-saving technology, especially in
times of rising energy prices. Customers are also reminded that they
are making an important contribution to the ecological equilibrium of
the planet without having to sacrifice the slightest bit of convenience
or comfort. Energy efficiency is quite clearly a matter of common
sense, and it is also becoming a worldwide trend. The last word goes
to Dr. Zimmermann: “Because of our cutting edge technology, it is
with our name that this trend is largely associated, and of that we are
very proud.”
Outstandig ecological and
social engagement and
performance: the Brazilian
team lead by Ivana Ribeiro
31
32
Supervisory Board Report
During the year under review, the Board of Management reported
regularly to the Supervisory Board on the performance of the company
and on its major decisions, both orally and in writing.
The 2006 financial statement, the development of business during
fiscal 2006 and in the year 2007, and the Business Plan 2008,
including HR and financial planning, were explained to the Supervisory Board by the Board of Management at the two regular Supervisory Board meetings held during the year. The Board of Management reported to the Supervisory Board on the company’s economic
development and the competitive situation in the relevant markets,
particularly in Europe, Turkey, Russia, the USA, South America, and
China, as well as the progress in implementing the corporate growth
program and its further development. The Supervisory Board provided
comprehensive advice on these topics.
The Supervisory Board also discussed the Board of Management’s
report on the situation in the product areas, in particular the Refrigeration, Laundry and Dishwashers areas, and the investment projects
in China and Russia.
Rudi Lamprecht,
Chairman of the
Supervisory Board.
The Supervisory Board also addressed topics including the development of material and market prices, as well as personnel and selling
costs, the internationalization of purchasing, asset management and
business risks stemming from the situation in the financial markets,
exchange rate developments and the rise in energy costs. The Supervisory Board sought details from the Board of Management about
the Group’s Risk Management System, and offered advice on the
establishment of a Compliance Management System.
The Supervisory Board’s discussions also encompassed technical,
sales-related and political issues around the energy efficiency of
home appliances and further cuts in energy consumption, research
and development topics, including the introduction of new ranges of
appliances, projects associated with the Protos plant oil stove, competitor analysis and mergers and acquisitions in the home appliance
sector.
In addition to its official sessions during the course of the year, regular
discussions also took place between the Board of Management and
the Chairman of the Supervisory Board and his deputies.
The financial statement of BSH Bosch und Siemens Hausgeräte GmbH
and the consolidated financial statement as of December 31, 2007,
and the management report for BSH Bosch und Siemens Hausgeräte
GmbH and the Group management report have been audited by
Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Munich,
and have been given their unqualified approval. The reports prepared
by the auditors were presented to all members of the Supervisory
Board. The Supervisory Board thoroughly examined the documents
concerned, which were also discussed in full at the Supervisory
Board’s meeting to approve the balance sheet, which was held in the
presence of the auditors.
SUPERVISORY BOARD REPORT
The Supervisory Board raises no objections and concurs with the findings of the audit. It approves the financial statement of BSH Bosch
und Siemens Hausgeräte GmbH and the consolidated financial statement, and recommends that the shareholders adopt the financial
statement and the consolidated financial statement and approve the
Board of Management’s proposal about the use of net income.
Dr. Peter Moritz stepped down from the Supervisory Board with effect
from May 8, 2007, followed by Mr. Volker Pruschke on August 31,
2007. We have thanked them both for their valuable contributions.
They were succeeded as members of the Supervisory Board by
Mr. Dominik Asam and Mr. Thomas Horst Bauer, on May 8, 2007 and
October 8, 2007 respectively.
Dr. Jürgen Radomski left the Supervisory Board at the conclusion of its
meeting on December 7, 2007. Dr. Radomski had been a member of
the Supervisory Board of BSH Bosch und Siemens Hausgeräte GmbH
since 1995, serving as the body’s Chairman or Vice-Chairman for over
six years. During this period he played a key role in shaping the development of the company. The Supervisory Board has expressed its
thanks to Dr. Radomski for his great contribution to the company’s
current position. Mr. Karl-Heinz Seibert was elected to succeed him
on the Supervisory Board with effect from December 7, 2007.
The Supervisory Board would like to thank the Board of Management
and the company’s employees for their successful endeavors over the
past year.
Munich, April 30, 2008
For the Supervisory Board
Rudi Lamprecht
Chairman of the Supervisory Board
33
34
Board of Management
Dr. sc. pol. Kurt-Ludwig Gutberlet
Chairman
Chief Executive Officer,
Corporate Strategy,
Corporate Communications,
Law and Industrial Policy,
Internal Audit,
Consumer Products,
Customer Service
Dr. sc. pol. Wolfgang Colberg
Chief Financial Officer,
Finance and M&A,
Business Administration,
Corporate Development and Controlling,
Labour Relations Director, Human Resources,
Information Technology,
Purchasing,
Tax, Customs,
Insurance
Jean Dufour
Chief Sales and Marketing Officer,
Corporate Sales,
Brand Management,
Logistics
Prof. E. h. Werner Vogt
Chief Operating Officer,
Chief Technology Officer,
Product Area Dishwashers,
Product Area Cookers,
Product Area Cooling,
Product Area Laundry,
Electronic Systems and Drives,
Corporate Technology
Supervisory Board
BOARDS
Rudi Lamprecht, Munich
Chairman of the Supervisory Board
Member of the Managing Board of Siemens AG
(until Dec. 31, 2007)
Advisor to the Managing Board of Siemens AG
(since Jan. 1, 2008)
Volker Pruschke, Stuttgart
(until Aug. 31, 2007)
Director, Sales and Marketing Coordination
Consumer Goods and Industrial Technology;
Marketing Communications and
Brand Management of Robert Bosch GmbH
Elmar Freund, Bad Neustadt
Vice-Chairman
Chairman of the Group Works Committee
Dr. rer. pol. h. c., Dr. techn. h. c. Jürgen Radomski,
Munich
(until Dec. 7, 2007)
Member of the Managing Board of Siemens AG
Wolfgang Chur, Stuttgart
Vice-Chairman
Member of the Board of Management
of Robert Bosch GmbH
Dominik Asam, Munich
(since May 8, 2007)
Head of the Board of Management
of Siemens Financial Services GmbH
Thomas Bauer, Stuttgart
(since Oct. 8, 2007)
Director, Sales and Marketing Coordination
Consumer Goods and Industrial Technology;
Marketing Communications and
Brand Management of Robert Bosch GmbH
Ellen Bonna-Knöpp, Giengen
Chairperson of the Works Committee
of the Giengen plant
Artur Fischer, Rosenheim
Senior Authorized Representative of the
IG Metall trade union,
Rosenheim Administrative Office
Peter Kern, Frankfurt
Union Secretary to the Executive Committee
of the IG Metall trade union
Gerhard Kümmel, Stuttgart
Member of the Board of Management
of Robert Bosch GmbH
Dr. rer. pol. Peter Moritz, Munich
(until May 8, 2007)
Member of the Board of Management,
Siemens Financial Services GmbH
Gotthard Romberg, Stuttgart
Formerly Member of the Board of Management
of Robert Bosch GmbH
Wolfgang Rückert, Traunreut
Vice-Chairman of the Works Committee
Traunreut plant
Dieter Schweisfurth, Hamburg
Head of Sales, Bosch Northern Region
BSH Bosch und Siemens Hausgeräte GmbH
Karl-Heinz Seibert, Munich
(since Dec. 7, 2007)
Head of Mergers, Acquisitions and Postclosing
Management, Siemens AG
Franz Veh, Dillingen
Chairman of the Works Committee,
Dillingen plant
Lothar Wiedeberg, Berlin
Vice-Chairman of the Works Committee,
Berlin plant
Prof. Dr.-Ing., Dr.-Ing. E.h. Klaus Wucherer,
Erlangen
Member of the Managing Board of Siemens AG
(until Dec. 31, 2007)
Advisor to the Managing Board of Siemens AG
(since Jan. 1, 2008)
35
36
Management Report
A. Development of business
Development of the sector and of the economy as a whole
A host of factors acted as a drag on the global economy in 2007.
Rising crude oil and commodity prices, the more rapid decline in the
US dollar, and the worsening US property crisis all depressed business and consumer sentiment. Nevertheless, at 3.9 percent, economic
growth in 2007 was only slightly less than the strong rate of expansion recorded in 2006 (4.1 percent). The main boost came once again
from investment activity, although consumer spending also continued
to make a noticeable contribution to growth.
At regional level, economic trends again varied considerably. In the
USA, the property crisis had a particularly noticeable impact. Growth
in 2007 was therefore significantly lower than in previous years at
2.2 percent, with the main decline in construction activity. The American economy was buoyed only by the weakness of the US dollar,
which resulted in an upturn in US exports.
As in previous years, the emerging economies experienced an
extremely favorable economic trend. Latin America continued to
benefit from very high commodity prices, which boosted investment
activity and to an increasing extent consumer spending as well. At
5.3 percent, economic growth was roughly on a par with the previous
year (+5.1 percent). South America’s most important economy, Brazil,
saw growth accelerate to 5.4 percent despite the continued appreciation of its currency.
Among the emerging economies, those in Asia continued to achieve
the strongest rate of growth, expanding by 8.9 percent. The best performers in 2007 were once again China (+11.5 percent) and India
(+9.2 percent).
Europe picked up where it left off in 2006 by continuing to deliver a
very encouraging performance. The continent as a whole achieved a
growth of 3.4 percent in 2007 (2006: +3.5 percent) with Central and
Eastern Europe an above-average rate of growth (6.5 percent). Thanks
primarily to the strength of the global economy, the fast pace of
expansion in Western Europe was largely unchanged at 2.8 percent
(2006: +2.9 percent). Neither persistently high crude oil prices, the
surge in the euro, nor the sharp increase in value-added tax in Germany had a significantly adverse effect on the economic environment.
Alongside exports, investment activity proved to be a further factor
underpinning Western Europe’s economic upturn.
At 2.5 percent, growth in Germany was slightly less than the strong
rate of expansion recorded in 2006 (2.9 percent). This figure is better
than originally expected given the 3.0 percentage point increase in
value-added tax and the sharp rise in energy prices.
BUSINESS PERFORMANCE
Demand for large home appliances in Germany was weaker than the
economy as a whole. In the absence of the purchases that had been
brought forward to beat the upcoming increase in value-added tax,
thereby boosting unit sales at the end of 2006, revenue declined by
around 6,0 percent in 2007. At the end of the year, demand once
again slowed more sharply than expected.
Built-in appliances were slightly harder hit by this negative trend, as
average prices in this segment, excluding the effect of value-added
tax, also fell. In Germany, as in Europe, the shift toward energy efficient home appliances continued.
As the largest European market for home appliances, Germany also
influenced the trend across Western Europe as a whole in 2007.
Alongside Germany, the markets in the United Kingdom, Spain, and
Turkey recorded figures reflecting a negative trend. In the United
Kingdom and Spain, demand for home appliances was negatively
impacted mainly by the weak property market. Turkey recorded a
surprisingly sharp decline compared with previous years. Here, consumers were unnerved by factors such as the political environment,
which resulted in a negative trend in the demand for home appliances.
Since the positive trend in the markets in Italy, the Netherlands, and
Sweden barely made up for the decline in core markets, market revenue in Western Europe remained roughly on a par with 2006.
Once again, there was an encouraging trend in the demand in Eastern
Europe, primarily in Poland, Ukraine, and the Baltic states. In contrast
to previous years, growth in Russia was moderate by Eastern European
standards.
The overall market growth rate for Europe, including Turkey and Russia,
was around 1 percent.
As in previous years, the emerging economies of Latin America saw
a positive trend in the demand for large household appliances. Growth
in Asia continued to be driven by China, which again expanded at a
double-digit rate.
In the USA, the property crisis and accompanying slowdown in residential construction activity had a significant impact on the demand
for home appliances. After years of solid growth, the market saw a
sharp decline in unit sales. Due to the weak dollar, the sector also
recorded a fall in revenue in euro terms in 2007.
Due mainly to the trend in the US market, but also to the subdued
markets in Western Europe, the global market for large home appliances was roughly on a par with the previous year in euro terms.
Revenue trends
In the year under review, BSH Bosch und Siemens Hausgeräte GmbH
(referred to in the text as “the Group” or “BSH”) generated consolidated revenue of EUR 8.818 billion, a year-on-year increase of
6.1 percent. After currency adjustments, the increase in revenue
stood at 7.0 percent.
MANAGEMENT REPORT
37
38
MANAGEMENT REPORT
Consolidated revenue in Germany fell by 5.6 percent to EUR 1.716 billion. Following a sharp rise of 9.4 percent, revenue outside Germany
accounted for 80.5 percent of the total (2006: 78.1 percent).
In Western Europe, including Turkey but excluding Germany, the Group
increased revenue by 5.5 percent, outperforming the market in most
Western European countries. Above all, the markets in France, Germany,
and Italy enabled BSH to achieve above-average revenue growth.
Sales by Region
1.4 % Others
8.4 % Asia
3.4 % Latin America
19.5 % Germany
6.2 % North America
9.4 % Eastern Europe
51.7 % Western Europa
excluding Germany, including Turkey
In Eastern Europe, BSH continued to deliver the revenue growth
seen in previous years, increasing revenue by 24.4 percent and thus
outstripping the strong comparative figure for 2006.
BSH achieved exceptional revenue growth in almost all countries
in Eastern Europe, where Poland and Russia in particular made a
significant contribution to consolidated revenue.
In the North American market, BSH was able to increase consolidated
revenue by a further 7.8 percent year on year in euro terms despite the
property market crisis and the weak dollar. The lines of dishwashers,
cookers and laundry appliances produced by the Group in the USA
once again helped it to outstrip prior-year growth.
Stable demand for home appliances in Latin America also lifted consolidated revenue in the year under review.
BSH continues to post sharp increases in revenue in Asia. The Group
achieved significant revenue growth primarily in China with the help
of its laundry and refrigeration appliances and also in Hong Kong and
Singapore.
The Group also achieved strong revenue growth in Australia/Oceania.
Production
BSH operates a development and production network comprising
44 production facilities at 31 sites worldwide, allowing it to compete
at an international level in a globalized economy.
By dovetailing development and manufacturing, the Group enhances
its production flexibility. At the same time, BSH’s direct proximity to
customers in regional markets ensures that it is able to respond as
quickly as possible to changes and requirements.
In doing so, BSH competes successfully with globally active rivals and
in a changing competitive environment where innovation cycles are
becoming ever shorter and quality requirements ever more exacting.
BUSINESS PERFORMANCE
In the year under review, BSH started to reorganize its production
processes, optimize procurement and production logistics, and
standardize processes across the entire value chain by introducing a
uniform production system.
Transparent processes enable weaknesses to be identified and eliminated, thereby increasing productivity and cost efficiency.
The growth in consolidated revenue in 2007 resulted in a further
increase in the facilities’ output. Capacity in Germany and Europe
underwent a double-digit increase. Overall, production capacity utilization was at almost equally high levels in Germany, Europe, and
overseas.
As well as being committed to delivering constant improvements in
productivity, the Group continues to make no compromises in setting
the highest standards of quality for its products, while at the same
time accommodating requirements relating to function, equipment,
and design. By increasing capacity in selected areas, BSH will continue to pave the way for profitable growth.
Procurement
The overall picture in 2007 was one of difficult procurement markets
coupled with a continued upward trend in prices. The main influencing
factors in this context were the surges in nickel and crude oil prices
and substantial increases in the prices of copper and chrome.
Due to increases in the cost of iron ore, coal, and scrap, steel prices
almost remained at a high level. In addition, rising energy costs had
a negative impact on producer prices.
Although, in previous years, BSH’s long-term supply agreements had
lessened the impact of rises in commodity prices, these price rises
increased costs to a greater extent in the year under review, particularly component costs.
By carrying out numerous rationalization activities, the Group was
nevertheless able to keep increases in the cost of materials to a
reasonable level. This was also achieved with the help of copper and
nickel hedges and by inviting selected suppliers to enter into BSH
framework agreements where larger quantities of primary products
are required. Procurement thus made a very positive contribution to
the Group’s competitiveness.
Because of the continued strong demand for primary products,
especially from China and India, BSH anticipates further increases
in material prices in 2008.
Due to the ongoing rise in global market prices, products such as
plastics that depend on crude oil or oil derivatives are expected to
see further severe price increases.
MANAGEMENT REPORT
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40
MANAGEMENT REPORT
The process of consolidation under way among global suppliers will
continue in 2008. Mirroring past events in the steel market, suppliers
of plastic pellets are now making efforts to consolidate.
BSH is responding to the trend toward greater consolidation among
suppliers of primary products by making even greater use of the
market opportunities available worldwide.
To avoid economically unviable situations in which it is dependent
on particular suppliers, BSH will redouble its efforts to place specifications for materials and their processing across as broad a supply
market as possible. Qualitative requirements will in each case have
to be aligned with technical standards.
Against this background, it will be necessary to attach ever greater
importance to supplier training and expanding the base of capable
procurement sources offering a consistently high standard of quality.
As part of an ongoing process, efforts continue to reduce the cost of
materials through improved technical solutions. In the year under
review, these activities to some extent checked the cost increases
resulting from market prices. Going forward, rationalization activities
will continue to be a key factor in BSH’s success.
Investment*
in EUR million
400
350
378
358
300
Investments
Investment by the Group in intangible assets and property, plant,
and equipment (excluding goodwill) increased by 5.8 percent to EUR
378 million, which equates to 4.3 percent of consolidated revenue.
Germany accounted for EUR 140 million of the total invested in intangible assets and property, plant, and equipment and other countries
for EUR 238 million, with Asia, North America, and then Eastern
Europe the main focal points.
Of the total amount invested, 34.5 percent was spent on new products, 24.2 percent on expansion and rationalization activities, and
29.8 percent on land, buildings, logistics, information technology,
and other items. Investment in replacement assets accounted for
11.5 percent.
250
200
150
100
50
0
2007
2006
* Investments in intangible
assets and property, plant,
and equipment (excluding
goodwill)
Finances
Current and noncurrent financial liabilities fell by a total of EUR
93 million in the year under review, partly as a result of the EUR
59 million repayment on a short-term loan made by BSH Finance
Management GmbH, Vienna. The decline in current financial liabilities
of EUR 3 million is due to the reduction of those liabilities and above
all to the opposite effect of the reclassification of noncurrent financial
liabilities in Germany in the amount of EUR 106 million.
BUSINESS PERFORMANCE
The Group has agreed on a long-term capital expenditure facility of
EUR 50 million for its subsidiary in Turkey with the European Investment Bank in Luxembourg. The agreement is somewhat special in that
it is the first to offer the choice between euros, Turkish lira, and other
currencies when tranches of the loan facility are drawn down concurrently.
Cash and cash equivalents increased by EUR 148 million to EUR
453 million in the year under review, mainly as a result of successful
asset management. The cash changes in trade receivables and
payables are particularly notable in this context.
The Supplier Finance Program (SFP) implemented by BSH in Germany
and Poland in 2006 was further developed in the year under review.
In coordination with commercial banks, suppliers, and specialists,
the Group started to prepare for this SFP in the USA and to roll it out
in Turkey and Brazil bearing in mind the experiences to date.
As in the previous year, currency risks from operating activities were
continuously ascertained, evaluated, and hedged in accordance with
the hedging policy defined in the Group’s financial guidelines in a
rolling process with a horizon of up to 12 months. Such risks are
hedged primarily using forward exchange contracts and occasionally
using option contracts.
In the year under review, interest rate risks continued to be countered
mainly by taking out fixed-rate loans.
In 2007, BSH introduced cash flow hedge accounting as part of
currency management at Group level.
Extensive documentation had to be prepared, procedures defined,
and detailed discussions held with experts before the Group could
continue to roll out cash flow hedge accounting with selected subsidiaries abroad in fiscal 2008.
As in previous years, the Group pursued those risk-adjusted investment strategies that have proven the most successful in practice in
investing its funds.
Despite the volatile market environment, its investment securities
once again made substantial contributions to earnings in the year
under review.
To optimize liquidity in the Group, BSH continues to use the Groupwide, centrally controlled cash management system.
A central Treasury Controlling unit provides continuous monitoring,
identification, and evaluation of potential treasury risks in the Group.
BSH retained its external long-term rating of “A-/stable” from international rating agency Standard & Poor’s in 2007.
MANAGEMENT REPORT
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MANAGEMENT REPORT
Human resources and social issues
At December 31, 2007, BSH employed a total of 38,950 people
worldwide, including apprentices/trainees. Of this total, 24,890
(2006: 23,731) were employed internationally and 14,060 (2006:
14,223) in Germany. At the end of the year, there were 682 employees
in various stages of apprenticeship/traineeship, 447 of whom were
located in Germany.
Headcount was increased mainly at the companies in China, Turkey,
and Russia. Personnel restructuring was carried out in Germany,
Spain, and Latin America for local facility-related reasons.
Workforce by Region
15 % Asia
4 % Latin America
36 % Germany
5 % North America
10 % Eastern Europe
30 % Western Europe
exluding Germany, including Turkey
In fiscal 2007, human resources (HR) activities at international level
focused on stepping up and systematically implementing a HR policy
that also includes the subsidiaries.
At national level, HR activities in Germany focused on introducing
and implementing the framework agreement on pay (ERA) as of
July 1, 2007. This agreement brought a complete change of wage
scale for the German employees concerned.
At December 31, 2007
On the whole, the uniform approach to HR policy recently adopted
by BSH was systematically pursued at Group level, resulting in turn
in organizational improvements in daily workflows.
A standardized and systematized method of international personnel
development was introduced with a view to further optimizing
appointments to key positions in the Group.
To safeguard this HR strategy, BSH provides intensive personnel
development through programs such as the Junior Executive Pool,
the International Executive Pool, and the Senior Executive Program.
A BSH competence model has been developed for application internationally to support the business model throughout the Group. This
is used as the basis for personnel and management development.
On the employer branding front, BSH competed for the Top Employer
2007 award run by crf and German magazine Karriere. Its fourth
place position was an excellent achievement. This commendation
is a clear indication that BSH is highly attractive to skilled workers
and managerial staff.
Among the companies voted Germany’s top employers by manager
magazin, BSH achieved excellent rankings among the 100 best
employers in the economists and engineers categories.
As part of its university marketing drive, BSH was represented at
various recruitment fairs in Germany and agreed on a premium collaboration arrangement in the field of marketing with the LudwigMaximilians-Universität in Munich. This collaboration arrangement
will increase knowledge transfer between academia and industry via
case studies and presentations and through the company’s direct
contact with students.
BUSINESS PERFORMANCE
MANAGEMENT REPORT
On March 5, 2007, the German federal government and the country’s
leading industry associations extended the National Pact for Training
and Young Skilled Workers. This political initiative aside, BSH is making
a valuable contribution by continuing to offer the same high number
of training positions in Germany (447).
Once again therefore, the Group went far beyond its actual requirements in providing training in 2007.
On innovative, needs-based programs with an international thrust,
highly capable and performance-driven recruits are prepared for business administration roles in the workplace. In the year under review,
the BSH JuniorFirma program provided the first opportunity for
trainees and students to develop an entrepreneurial mindset and
take responsibility for tasks.
With a view to providing further training for BSH employees, the
Group currently has 72 authors in place worldwide, who are tasked
with preparing information and education programs. Web-based
training on the professional development portal is playing an increasingly important role and thus supporting continuing professional
development in the workplace.
The increasing number of employees on international delegation
within the Group is of particular importance. The 201 expatriates in
30 countries, 50 inbounds at BSH sites in Germany, and 21 employees involved in cross-country transfers reflect the increasingly international profile of the Group’s HR activities.
Environmental protection
BSH is aware of its responsibility toward the environment and society.
The company has underlined its commitment to corporate social
responsibility by declaring its support for the ten principles of the
United Nations Global Compact and signing the CECED Code of Conduct,
the code of conduct of the home appliance industry. Internally, these
have been incorporated into the corporate principles and the Business
Conduct Guidelines published in 2006, formalizing the obligation on
all employees to implement them.
A central concern of BSH is to develop and produce environmentally
compatible, energy-efficient home appliances. Innovative technological and environmental standards are rigorously applied within
the BSH Group to ensure that this objective is achieved. BSH thus
increases its competitiveness, safeguards its employees’ jobs, and
makes a major contribution toward resource conservation and climate
protection.
A centrally controlled environmental and quality management system
in place throughout the Group ensures both compliance with, and
further development of, the standards at all production sites. At the
end of the year under review, a total of 39 of the Group’s 44 production
facilities were certified under ISO 14001, the international standard
for environmental management systems.
Environmental Figures
for Production
Energy per
ton product
(kWh/t product)
Waste per
ton product
(kg/t product)
Water per
ton product
(m3/t product)
689
714
89.9 88.1
1.36 1.51
CO2 emissions
per ton product* 45.2 49.5
(kg/t product)
2007 2006
*Excluding proportion from
electrical energy generation
and transport
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MANAGEMENT REPORT
There have been continuous improvements in the environmental
indicators in recent years, demonstrating that the internal objectives
have been very well implemented. For the period to 2010, new BSH
targets provide for an annual reduction in specific energy consumption
of three percent, an annual reduction in specific water consumption
of five percent, and an annual reduction in specific waste volumes of
two percent.
BSH’s capital investment and operating expenses for productionrelated environmental protection worldwide amounted to EUR 20 million in the year under review.
Climate change is seen as a global social and economic challenge of
our time. Its main triggers include the high carbon dioxide emissions
(CO2) that result from the use of fossil fuels. Reducing energy consumption is therefore a key lever in checking CO2 emissions.
The CO2 emitted during production at BSH sites results from the use
of gas and heating oil.
In 2008, BSH will for the first time publish its carbon footprint,
showing the CO2 emissions from all BSH activities in fiscal 2007 and
including the CO2 emissions resulting from energy and electricity
consumption at production and sales sites and Group headquarters,
travel and customer service activities, and the transportation of
goods from the production facilities to customers.
Over 90 percent of all environmental impacts occurring in the course
of a product’s life result from the consumption of electricity, water,
and cleaning agents during the product’s use. BSH developers therefore pay special attention to the appliances’ usage phase.
Since 1990, the amount of electricity consumed by refrigeration
appliances in Germany has been reduced by almost 80 percent on
average. In the same period, the amount of electricity and water
consumed by cookers, washing machines, and dishwashers has
fallen by 30 to 40 percent, depending on the appliance and usage.
There are currently around 188 million large appliances more than
ten 10 years old still being used in homes throughout the 25 member
states of the European Union. BSH is actively working in its own
product marketing and within the European Committee of Domestic
Equipment Manufacturers (CECED) to accelerate the replacement of
the high number of inefficient old appliances still in use throughout
Europe. Around 44 terawatt hours of electricity and 22 million tons of
CO2 could be saved each year if old home appliances were replaced
with new, highly efficient products at an earlier stage.
As part of its responsibility to take back products and dispose of old
appliances in an environmentally sound way, BSH is working hard
toward uniform quality standards in recycling. Together with the WEEE
Forum, which represents European waste electrical and electronic
equipment management schemes, the CECED, and the European Electronics Recyclers Association (EERA), a voluntary standard has been
BUSINESS PERFORMANCE
MANAGEMENT REPORT
drawn up for the recycling of household cooling and freezing appliances, thereby providing the first pan-European requirements with
respect to the recycling of end-of-life cooling appliances containing
environmentally hazardous CFC and HCFC and environmentally compatible hydrocarbon.
BSH published its 15th Environmental and Corporate Responsibility
Report in 2007. Additional information about environmental protection within the Group and at our international production facilities is
available on the Internet at www.bsh-group.com.
Research and development
In the year under review, the Group invested EUR 259 million in
research and development, which equates to 2.9 percent of revenue
(2006: 2.8 percent).
Its investment in research and development, which helps pave the
way for numerous patent applications and grants and BSH property
rights, makes BSH one of the most innovative companies in the
industry.
Research and
Development Costs
in EUR million
At December 31, 2007, BSH had over 2,100 research and development
staff, some 1,150 of them in Germany. This headcount highlights the
importance of R&D to the Group.
In a globalized environment, BSH has organized its worldwide development network into centers of excellence. By strategically combining
and localizing the individual skills, the Group fosters the efficiency
and overall success of the development network, thereby enabling
BSH to improve its innovativeness and strong competitiveness.
Measures taken to increase the energy efficiency of BSH’s home
appliances provide an excellent example of its innovations in 2007.
Further enhancing its considerable development capabilities and
ensuring that it remains ahead in terms of innovation are among
BSH’s strategic objectives. The Group realizes that only by continuing
to innovate can it gain further significant competitive advantages.
Against this background, BSH applies a successful intellectual property strategy centered on maintaining and bolstering the Group’s
own portfolio of industrial property rights worldwide.
Its innovative, high-quality products enabled BSH to be successful
in the marketplace in the period under review. This is reflected more
specifically in the awards it received in product tests carried out by
German and international consumer organizations. In 66 of the 94
tests involving BSH products in 2007, the Group emerged as “Overall
winner” or “Best Buy.”
Brand design is regarded as playing a key role in communicating
the innovativeness of BSH products to consumers. The 112 national
and international design prizes awarded in 2007 highlight BSH’s
outstanding expertise in combining both development and design.
300
250
259
235
200
150
100
50
0
2007
2006
as a percentage of sales
3.0
2.9
2.5
2.8
2.0
1.5
1.0
0.5
0
2007
2006
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MANAGEMENT REPORT
Significant developments in fiscal 2007
Due to the excellent trend in revenues in the growth markets of China
and Russia, BSH continued to step up its business activities during
the period under review. These investments aim to extend its market
position in China and Russia and increase the proportion of exports.
The production line for side-by-side refrigerators at the Chuzhou
production site in the Chinese province of Anhui was successfully
brought on stream in fiscal 2007. The foundations were also laid for
the production line at the new facility for fridge freezers, which will
become operational in 2008.
At the Appliance Park operated by BSH Electrical Appliances Co., Ltd.,
Nanjing in the province of Jiangsu, construction work began on the
new production facility for washing machines. The building used for
the production of small home appliances was also extended.
Production of BSH refrigeration appliances for the Russian market
started on schedule and using modern manufacturing equipment
following the completion of the logistics and production facilities in
St. Petersburg.
The aim here is to meet market requirements by promptly supplying
Russian customers with the latest generation of refrigeration appliances. Product advice and marketing are provided by the Group’s
own Moscow-based sales company, OOO BSH Bytowaja Technika.
As well as investing heavily in the growth markets of Asia, BSH also
continues to expand its capacity in European markets.
Due to the increase in unit sales, Turkish company BSH Ev Aletleri
Sanayi ve Ticaret A.Ş. is now also manufacturing dishwashers on
the new production line at the Çerkezköy site and delivering them
to local and European markets.
Within the Group, the Dillingen site in Germany continues to produce
the majority of the dishwashers sold.
Aided by the Group’s closely interlinked development and production
activities, the site is producing all the latest dishwasher ranges for
the global market.
The production facility at the Nazarje site in Slovenia was extended
for the purposes of manufacturing new ranges of small home appliances.
New and innovative products receive the attention of the sites in the
development and production network through to market launch and
beyond. At the Lipsheim site in France, for example, a center of excellence has been set up for the new steam ovens and steam and convection ovens that were launched in 2007.
At the Łódz site in Poland, a new development and test center for
tumble dryers has been opened to further develop appliance series
after their market launch.
BUSINESS PERFORMANCE
The foundations were laid for a new cooker production facility in
Hortolandia, Brazil with a view to supplying the Latin American market.
2007 was a year of anniversaries, first and foremost the 40th anniversary of BSH Bosch und Siemens Hausgeräte GmbH.
BSH can look back on a long history of appliance production in
Germany spanning many years.
Owned by BSH since 1982, Neff GmbH has been producing home
appliances at the site in Bretten for 130 years. Around 1,300 employees plan, develop, and produce electric ovens and cookers, switching
elements, and ventilation hoods for BSH customers in over 20 countries. The BSH company produces 1.6 million appliances a year.
The Giengen site has been producing modern refrigeration appliances
for the Group since 1949. The total number of units produced now
stands at 60 million. Giengen is home to the BSH Group’s center of
excellence for refrigeration appliances.
The Dillingen site celebrated 30 years of dishwasher production.
A total of 40 million units have been produced in Dillingen and sold
all over the world during that time.
At its Fürth site, BSH celebrated the 40th anniversary of the Group’s
spare parts logistics center. Established by Siemens AG as a warehouse for white and brown goods, Fürth is now home to the Group’s
central spare parts logistics center and central receivables processing
for Germany.
The relocation of payables processing for Germany to a central
Shared Service Center in Fürth, a process initiated in September
2006, was completed for the time being on December 31, 2007, when
the accounts were transferred. As planned, the project will move
immediately on to the next phases, in which existing processes will
be optimized and further developed.
The process of centralizing the accounting activities of all German
companies at the Munich site had been successfully completed by
the end of the year.
In the year under review, Group parent BSH GmbH brought another
of its investments under the umbrella of BSH Home Appliances Holding GmbH, Vienna, in this case an equity interest in the company in
Slovakia by way of a non-cash capital increase.
Dutch company BSH Huishoud-elektro B.V., Amsterdam transferred
two of its investments in France and Italy to BSH Home Appliances
Holding GmbH, Vienna in the form of a non-cash dividend.
MANAGEMENT REPORT
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MANAGEMENT REPORT
By acquiring minority interests in BSH subsidiaries and through
capital increases at Group companies, BSH GmbH increased its
noncurrent financial assets by EUR 51 million.
In 2007, the sales companies in Canada, Malaysia, and Ukraine were
consolidated, or included in the consolidated financial statements,
for the first time.
Effective January 1, 2008, BSH signed an agreement to acquire the
sales company Willem van Rijn Huishoud-elektro B.V., thereby taking
over direct marketing of the Bosch and Neff brands in the Netherlands.
N E T A S S E T S , F I N A N C I A L P O S I T I O N , A N D R E S U LT S O F O P E R AT I O N S
MANAGEMENT REPORT
B. Net assets, financial position, and results of operations
In fiscal 2007, the Group’s total assets increased by 5.5 percent year
on year to EUR 6,276 million. This increase is primarily attributable
to the rise in current assets, which at EUR 3,699 million now account
for 58.9 percent of total assets.
While inventories changed only slightly as a proportion of total assets,
trade accounts receivable fell by 1.4 percentage points. Despite a EUR
510 million increase in revenue, this became possible as a result
of the Group carrying out targeted receivables management, while
applying the same measurement criteria as in the previous year.
Cash and cash equivalents increased substantially to EUR 453 million
and as a result rose by 2.1 percentage points year on year as a proportion of total assets.
The EUR 148 million improvement in cash and cash equivalents at
the end of the year is attributable to net cash from operating activities in the amount of EUR 754 million, net cash used in investing
activities of EUR 341 million, and net cash used in financing activities
of EUR 261 million.
Net cash from operating activities was impacted in particular by
the increase in trade accounts payable, the fall in depreciation and
amortization of noncurrent assets, and profit after income taxes.
The net cash outflow in investing activities is due mainly to investments in intangible assets and property, plant, and equipment
amounting to EUR 388 million.
The net cash outflow in financing activities was caused by the change
in financial liabilities and the dividend payments to parent companies.
Exchange rate fluctuations and changes in the consolidated group, on
the other hand, had a minor impact on cash and cash equivalents.
The reclassification of noncurrent financial assets accounted for EUR
53 million of the increase in current securities to EUR 90 million.
Noncurrent financial assets amounted to EUR 719 million, a slight
decline of EUR 27 million compared with 2006.
This item includes investment securities of EUR 542 million, financial
investments, and other receivables and assets.
Property, plant, and equipment and intangible assets increased by
9.4 percent as a result of investments and including depreciation
and amortization expense.
Deferred tax assets at the reporting date fell to EUR 203 million
(2006: EUR 293 million), due primarily to the change in the discount
rate used to calculate pension provisions to 5.40/5.25 percent
(2006: 4.50/4.25 percent).
Balance Sheet Structure
2007
2006
8%
36 %
6%
39 %
Cash, cash equivalents, andsecurities
Receivables and other assets
18 %
17 %
Inventories
38 %
38 %
Noncurrent assets
6,276
5,950
Total assets (in mill. of EUR)
2007
2006
11%
10 %
Trade accounts payable
12 %
14 %
Financial liabilities
27 %
29 %
Provisions
12 %
12 %
Other liabilities
38 %
35 %
Shareholders’ equity
6,276
5,950
Total liabilities and shareholders’ equity
(in EUR million)
49
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MANAGEMENT REPORT
The use of loss carryforwards also led to a reduction in deferred tax
assets.
The measurement of deferred taxes was additionally affected by the
reduction in the German rate of income tax from 38.29 percent to
29.35 percent and the slight change in temporary differences in noncurrent assets and provisions.
Sales Trend
in bill. of EUR
9
8.818
8
8.308
7
6
5
4
3
2
1
0
2007
2006
Profitability Trend*
in EUR million
700
600
637
542
500
Current and noncurrent liabilities increased by EUR 11 million year
on year to a total of EUR 3,904 million, while falling as a proportion
of total equity and liabilities by 3.2 percentage points.
There was a correspondingly positive change in equity, which rose by
EUR 315 million to EUR 2,372 million, thus accounting for 37.8 percent
of total equity and liabilities.
Total current liabilities increased only slightly in fiscal 2007, by 2.8
percent to EUR 2,074 million.
While current financial liabilities, after repayments and the reclassification of items from noncurrent financial liabilities, remained almost
unchanged year on year, trade accounts payable rose sharply in the
period under review, by EUR 117 million or 19.2 percent.
Other current liabilities amounted to EUR 723 million at the balance
sheet date compared with EUR 705 million a year earlier.
However, current provisions fell sharply, by EUR 75 million to EUR
363 million, which equates to 5.8 percent of total equity and liabilities.
This fall was due to the use of provisions and reclassifications to noncurrent provisions.
Noncurrent liabilities declined by EUR 46 million to EUR 1,830 million
and as a proportion of total equity and liabilities by 2.4 percentage
points, due primarily to the reclassification of items from noncurrent
to current financial liabilities and the reduction in provisions for pension obligations.
Conversely, noncurrent provisions rose sharply, by EUR 100 million
to EUR 515 million at the balance sheet date. The additions relate to
provisions for sales expenses, personnel obligations, and taxes and
to other provisions.
Pension obligations fell in fiscal 2007 due to the change in the
discount rate from 4.50/4.25 percent to 5.40/5.25 percent.
400
300
The decline in deferred tax liabilities is attributable to the
increase/reduction in temporary differences in other provisions
and noncurrent financial assets respectively.
200
100
0
2007
2006
* Profit before income taxes
The Group’s equity increased by 15.3 percent in the period under
review to EUR 2,372 million, due primarily to the changes in retained
earnings including dividend payments, consolidated net profit for
the period, and items recognized directly in equity.
N E T A S S E T S , F I N A N C I A L P O S I T I O N , A N D R E S U LT S O F O P E R AT I O N S
In 2007, the Group increased revenue by half a billion euros to EUR
8,818 million, thereby fully achieving its ambitious targets in Western
and Eastern Europe, North and South America, and Asia.
The ratio of cost of sales to revenue changed by 5.3 percent year on
year and therefore by less than the 6.1 percent increase in revenue.
Gross profit was therefore slightly higher year on year, reflecting the
result of a range of activities aimed at putting in place efficient production and procurement processes.
The revenue growth in the year under review was achieved on the
back of higher selling expenses. In the same period, administrative
expenses fell both in absolute terms and as a percentage of revenue.
Selling and administrative expenses amounted to EUR 2,263 million
in total and as a percentage of revenue increased by 0.9 percentage
points.
BSH’s research and development expenditure amounted to EUR
259 million. Accounting for a steadily rising percentage of revenue
(currently 2.9 percent), it illustrates the importance attached to innovating and further developing our high-quality products.
Net other operating income and expenses changed by a total of
EUR 89 million year on year. Other operating income exceeded
other operating expenses by EUR 47 million in the year under review
(2006: expenses exceeded income by EUR 42 million).
The sharp rise in other operating income compared with 2006 is attributable to exchange rate gains on foreign-currency receivables and
liabilities and income from the reversal of write-downs of receivables.
Other operating expenses fell due to the reduction in additions to
provisions that are not function-related. Miscellaneous other operating expenses charged in 2006 were not recognized in fiscal 2007.
Compared with 2006, there was only a minor improvement of EUR
3 million in total in net interest income/expense and other net financial
income/finance costs, the total of which declined to EUR 23 million.
At EUR 637 million, profit before income taxes substantially exceeded
the prior-year figure. As a percentage of revenue, it stood at 7.2 percent
in the year under review.
In line with the increase in profit, income tax expense rose to EUR
226 million. The change of EUR 56 million includes an increase in
deferred tax expense of EUR 65 million.
The Group tax rate at the reporting date was 35.5 percent.
BSH’s consolidated net profit for 2007 rose by EUR 40 million to EUR
404 million, with minority interest falling only slightly.
MANAGEMENT REPORT
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MANAGEMENT REPORT
Key factors affecting profits
In addition to safeguarding its competitiveness over the medium to
long term, one of the Group’s main objectives is to ensure continuity
and further improvements in its consolidated net profit. The Group’s
cost and operating structures are continuously being improved
through rolling benchmark projects in all business units and through
the worldwide exchange of best practice.
The strong growth in revenue, by EUR 510 million to EUR 8.818 billion,
also enabled the Group to achieve a substantial increase in consolidated net profit.
As in previous years, the major contributors to the Group’s performance included the companies in Poland, the United Kingdom, Turkey,
and Spain together with the German production companies.
On the positive side, the smaller national companies without exception
posted year-on-year increases in profit.
While the large production companies in Poland and Turkey were not
quite able to match prior-year profits, the Spanish subsidiary in particular suffered a sharp fall in profits compared with 2006 due to the
downturn in the Spanish market.
The Chinese companies continued their run of success by recording
sharp increases in revenue and profits.
Despite the fall in the value of sterling, sharp increases in revenue,
improved margins, and lower costs resulted in an excellent showing
at the UK company, which therefore made a substantial contribution
to consolidated net profit.
Consolidated net profit was depressed by the overall difficult situation in Brazil and the USA with regard to costs and exchange rates.
Stagnating revenues, exchange rate-related increases in the cost
of exports, and non-operating expenses prevented the Brazilian
company from posting a profit despite its improved cost structure.
Due to sharp increases in the cost of purchasing volumes caused by
the fall in the US dollar and rising commodity prices, operating profit
at the American company was on a par with the previous year despite
strong revenue growth in local currency. The company’s profit was
also impacted by higher selling expenses and warranty expenses.
As in the previous year, appropriate provisions were recognized at all
Group companies for known and other risks at the balance sheet date.
In the year under review, provisions for warranties and special risks
were adjusted in line with the changes in revenue and actual costs.
SIGNIFICANT OPPORTUNITIES AND RISKS FOR FUTURE DEVELOPMENT
C. Significant opportunities and risks for future development
In the year under review, a compliance working group was set up to
structure a system of compliance management for the BSH Group.
Since January 1, 2008, a Corporate Compliance Committee (CCC) has
been responsible at Group level for the design and management of
the BSH Compliance Organization and for the development and implementation of specific training programs (roll-out from the first quarter
of 2008 onwards). In the first quarter, a Compliance Committee Office
was set up at Group level to support the CCC. An external ombud has
also been put in place, and regional Compliance Officers are
appointed internationally at regional, national, or company level.
BSH Compliance Management assists the operating units in complying with all legislation, BSH guidelines, and the Business Conduct
Guidelines.
Concurrently, the Business Continuity Management Program was
stepped up at selected business units and national companies.
Risk reporting continues as part of the risk management process.
All existing insurance agreements were reviewed with regard to their
content and the level of cover and adapted in line with current requirements and terms. In addition, an international transport insurance
program providing an adequate level of risk cover was designed for
BSH and appropriate agreements were concluded for subsequent years.
The Group continues to rely on the proven treasury controlling and
value contribution monitor systems used in the finance unit to control
interest rate and currency management activities. BSH uses these
information systems to identify, weight, and assess interest rate and
currency risks throughout the Group and thus manage its hedging
transactions as well.
Due to exceptional price increases in the procurement market for
nonferrous metals, crude oil derivatives, and logistics services,
framework supply agreements for future procurement volumes were
in some cases concluded at higher price levels than in the past.
BSH aims to counteract the expected rise in costs by carrying out
numerous rationalization and other activities.
More specifically, this includes targeted activities aimed at increasing
commodity hedging. It also includes inviting suppliers to enter into
BSH framework agreements for large quantities of components, particularly suppliers of primary products such as steel and plastic pellets, in which case quantity and price structures are mutually agreed.
MANAGEMENT REPORT
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MANAGEMENT REPORT
BSH will respond to the process of consolidation under way among
global suppliers by making greater use of the market opportunities
available worldwide.
In addition, the Group will organize procurement opportunities by
placing specifications for materials and their processing across an
even broader supply market. In each case, the qualitative requirements on purchased materials will have to be in line with the applicable technical standards.
In future, the Group will attach greater importance to supplier training
and expanding its base of capable procurement sources offering a
consistently high standard of quality.
A general aim of the Group is to reduce material costs through
improved technical solutions.
As regards the markets, the US property crisis in particular poses
risks to the performance of the economy as a whole, which may also
affect the growth of the home appliances market.
Due to the increasing number of global competitors, some of them
aggressive, the pressure on the revenue and market share of established providers is growing. The relocation of production from highcost to low-cost locations, overcapacity, and consolidation among
retailers are also pushing down manufacturers’ revenues and margins.
At the same time, countertrends are emerging, such as the switch
to more energy efficient appliances and the growth in the market for
built-in appliances, where BSH operates as a premium provider with
an above-average share.
In addition, the Group faces currency risks as a result of exchange
rate movements, primarily affecting the US dollar and the pound
sterling, prices risks in the commodity market, and increases in
energy costs.
It successfully hedges currency and commodity risks using suitable
derivatives and procurement contracts.
As in the past, BSH remains focused on strong growth in the markets
of Eastern Europe and China and expansion at low-cost locations. At
the same time, the Group continues to invest in innovations and new
products at the BSH sites, particularly in Germany, and in its highly
qualified and motivated employees. This strategy has so far proven
successful, enabling BSH to make a very positive contribution to job
security in Germany and Western Europe.
In conclusion, BSH is able to state that it knows of no risk at this
time that jeopardizes the continued existence of the Group as a going
concern.
A N T I C I PAT E D T R E N D
D. Anticipated Trend
BSH expects global economic growth in 2008 to be weaker than
over the last three years and roughly in line with its long-term trend
of 3.0 percent.
Economic conditions will continue to be negatively impacted primarily by the worsening US property crisis and the resulting turmoil in
the financial sector of industrialized nations. These events are not
expected to severely depress global growth, however, as economic
growth in emerging economies is underpinned increasingly by domestic
demand and has therefore become less dependent on trends in
industrialized nations.
At regional level, BSH is cautious on the economic outlook for the
USA, where growth is expected to be just 1.25 percent. The adjustments in the property market are not yet at an end. The weaker trend
in the USA will also have an adverse impact on prospects in Latin
America, as a result of which growth is likely to be slower than in
2006 and 2007.
For the emerging economies of Asia, the forecast is for continued
strong growth, particularly in China where economic growth is likely
to be spurred not only by continued heavy investment in the expansion and modernization of infrastructure and production capacity,
but also by this summer’s Olympic Games. At the same time however,
the Chinese government has redoubled efforts to avert the threat of
an overheating economy. GDP growth is expected to weaken slightly
to around 10 percent.
Economic growth in Europe is likely to be comparatively robust again
in 2008. Despite the risks created by Europe’s heavy dependence
on exports and the strong impact of the global economy on the situation in Europe, a further upturn is expected in domestic business.
Above all, the extremely stable trend seen in the labor market
through to the end of 2007, the prospect of further relatively sharp
pay increases in 2008, and the likelihood that energy prices will
stabilize point to stronger growth in consumer spending.
Overall, therefore, BSH expects economic growth in Europe to slow
only slightly in 2008 to 2.5 percent (2007: 3.4 percent); in Germany,
it anticipates a change of 2.0 percent (2007: 2.5 percent).
However, growth is expected to slow more sharply in the United Kingdom, Spain, and Ireland, where in previous years the property market
has been a key driver of growth.
In the absence of the effects of the 2007 increase in value-added tax,
Germany is again expected to see a slightly positive trend in demand
for large home appliances in 2008.
It is presumed that this trend will also impact positively on the
Western European market as a whole, even if market growth in the
United Kingdom and Spain continues to be weak.
MANAGEMENT REPORT
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MANAGEMENT REPORT
BSH estimates that sector revenue will be slightly more modest in
Eastern Europe where, as unit sales continue to rise, prices are likely
to come under pressure due to increasingly fierce competition and
the expansion of local production capacity among other things.
BSH therefore expects growth in Eastern Europe to be slightly lower
than in 2007.
In Latin America, demand for large home appliances will continue
to grow, although not at the fast pace recorded in 2007. The countries
of Asia will continue to act as a stabilizing force in the global home
appliances market and grow at a slightly faster pace overall than in
2007, especially China.
The property crisis will continue to have a noticeable effect on the
US home appliances market in 2008.
On the whole, BSH expects growth in the global market for large
home appliances to be restrained yet slightly higher than in the
previous year, as the large Western markets will likely fail to provide
any significant impetus.
The Group will continue to exploit its regional growth potential
outside Western Europe, focusing firmly on the growth markets of
China, Eastern Europe, and North America. However, it also intends
to leverage additional revenue potential in Western Europe.
Alongside the regional opportunities for growth, the expansion of
the global segment for built-in appliances and BSH’s new premium
segments comprising side-by-side refrigerators and steam ovens
present further opportunities.
The Group will also fully dedicate its energy and resources to technologies that enable further improvements in the energy efficiency
and environmental compatibility of home appliances.
Assisted by its outstanding expertise in the segment for built-in appliances, its major international brands Bosch and Siemens, and its
worldwide, high-quality, and efficient customer service organization,
BSH will continue to cement and extend its leading market position
in Germany and Europe. In doing so, it will also aim to increase its
global market share by further improving the functionality, quality,
and design of BSH appliances and marketing itself internationally.
A N T I C I PAT E D T R E N D
Despite the major challenges it faces in procurement and sales markets, the Group’s budget sets ambitious revenue and profit targets.
Rolling benchmarking in all business units and a systematic focus
on value across all Group activities will contribute toward achieving
these targets.
January 2008 saw revenue and profit meet the planning targets. This
positive start to the fiscal year, the Group’s clear organizational and
strategic alignment, and its implementation in day-to-day operations
indicate that BSH will once again achieve its ambitious corporate
targets in 2008.
Munich, February 26, 2008
BSH Bosch und Siemens Hausgeräte GmbH
The Board of Management
MANAGEMENT REPORT
57
58
Group Financial Statements
Consolidated Statement of Income
January 1
to December 31, 2007
(in EUR million)
Note
2007
2006
Revenue
4
8,818
8,308
Cost of sales
5
5,683
5,399
3,135
2,909
Gross profit
Selling and administrative expenses
6
2,263
2,063
Research and development expenses
7
259
235
Other operating income
8
200
160
Other operating expenses
8
153
202
0
1
9
0
0
Interest result
10
– 14
– 11
Other financial result
11
–9
–15
637
542
226
170
411
372
7
8
404
364
Goodwill impairment
Income from investments
Profit before income taxes
Income taxes
12
Profit after income taxes
Minority interest
Consolidated net profit
13
CO N S O L I D AT E D B A L A N C E S H E E T
G R O U P F I N A N C I A L S TAT E M E N T S
Consolidated Balance Sheet
Note 12/31/2007 12/31/2006
ASSETS
Current assets
Cash and cash equivalents
15
453
305
Securities
16
90
22
Trade accounts receivable
17
1,819
1,809
Other current assets
18
234
243
Inventories
19
1,103
1,019
3,699
3,398
Total current assets
Non-current assets
Non-current financial assets
20
719
746
Property, plant, and equipment
21
1,403
1,284
Intangible assets
22
252
229
Deferred tax assets
12
203
293
Total non-current assets
2,577
2,552
Total assets
6,276
5,950
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Financial liabilities
23
260
263
Trade accounts payable
24
728
611
Other current liabilities
25
723
705
Current provisions
25
363
438
2,074
2,017
492
582
Total current liabilities
Non-current liabilities
Financial liabilities
23
Other non-current liabilities
26
11
5
Non-current provisions
26
515
415
Provisions for pensions
and similar obligations
27
795
856
Deferred taxes
12
17
18
1,830
1,876
Total non-current liabilities
Shareholders’ equity
Subscribed capital
28
125
125
Retained earnings and other reserves
28
1,816
1,539
404
364
27
29
Total shareholders’ equity
2,372
2,057
Total shareholders’ equity and liabilities
6,276
5,950
Consolidated net income
Minority interest
28
as at
December 31, 2007
(in EUR million)
59
60
G R O U P F I N A N C I A L S TAT E M E N T S
CO N S O L I D AT E D S TAT E M E N T O F C A S H F LO W
Consolidated Statement of Cash Flow
(in EUR million)
Note
2007
2006
411
372
12
226
170
637
542
–7
–8
253
282
0
3
14
11
Earnings after tax
Income taxes
Profit before tax
Minority interest
13
Depreciation and amortization of tangible and intangible assets
Gains and losses on disposals of assets
Net interest expense
Interest paid
– 84
– 58
Interest received
71
42
Income tax paid
–171
– 145
44
– 88
Change in inventories
– 94
– 205
Change in trade accounts receivable
and other accounts receivable
– 41
– 355
11
–5
Other noncash income and expenses
Changes in assets and liabilities
Change in securities (held for trading)
Change in trade accounts payable and other liabilities
Change in provisions
Change in deferred taxes
Cash inflow from operating activities
29
Payments for financial investments
Payments for investments in intangible assets
and property, plant, and equipment
Proceeds from the disposal of assets
137
175
– 49
134
33
–7
754
318
0
–3
– 388
– 364
15
8
Increase in financial receivables
0
– 201
Decrease in financial receivables
63
7
– 474
– 416
443
328
– 341
– 641
– 158
– 130
Investments in securities (available for sale)
Sales of securities (available for sale)
Cash outflow from investing activities
29
Dividends
Minority interest
4
–1
131
328
– 238
– 141
29
– 261
56
152
– 267
29
305
575
Exchange rate-related change in cash and cash equivalents
Consolidated group-related change in cash and cash equivalents
Closing balance, cash and cash equivalents
29
–4
0
453
–3
0
305
Proceeds from the issue of financial liabilities
Repayment of financial liabilities
Net cash inflow/outflow from financing activities
Net change in cash and cash equivalents
Opening balance, cash and cash equivalents
S TAT E M E N T O F R ECO G N I Z E D I N CO M E A N D E X P E N S E
G R O U P F I N A N C I A L S TAT E M E N T S
Statement of Recognized Income and Expense
2007
2006
– 13
8
2
0
Actuarial gains (+)/losses (–) from defined benefit pension
commitments and similar obligations
86
– 22
Exchange differences on translating foreign subsidiaries
24
– 34
– 33
9
66
– 39
Net profit after tax
411
372
Total recognized income and expense for the year
477
333
Net loss (–)/gain (+) from financial instruments available for sale
Net gain on fair value of financial instruments
used for hedging purposes (CFH)
Deferred tax relating to components of income and
expense recognized directly in equity
Income and expense recognized directly in equity
(in EUR million)
61
G R O U P F I N A N C I A L S TAT E M E N T S
CO N S O L I D AT E D S TAT E M E N T O F C H A N G E S I N S H A R E H O L D E R S ’ E Q U I T Y
Consolidated Statement of Changes in Shareholders’ Equity
(in EUR million)
125
1,690
42
35
–
– 64
1,828
st
tere
orit
y in
Total
shareholders’
equity
Min
Fair
-v
me alue m
nt o
f se easur
e
cur
itie s
De r
iv
inst ative f
rum ina
ent ncia
s (C
l
FH )
Act
u
on arial g
pen ains
sion /lo
pro sses
visi
ons
Equ
i
t
y
of t
h e h o ld e r
par
ent s
ing
de
arn
Ret
a
ine
cap
i
bed
At December 31, 2005
s
Cur
re
ad j n c y t r
u st
me anslat
nt
ion
Accumulated other comprehensive income
tal
Note 28
Su b
sc r i
62
31
1,859
– Profit after income taxes
–
364
–
–
–
–
364
8
372
– Dividend payments
–
– 125
–
–
–
–
–125
–5
– 130
– Foreign currency
translation differences
–
–
– 34
–
–
–
– 34
–2
– 36
– Financial instruments
–
–
–
9
–
–
9
–
9
Net actuarial
gains/losses
–
–
–
–
–
–14
–14
–
– 14
– Other changes
–
–
–
–
–
–
–
–3
–3
125
1,929
8
44
–
–78
2,028
29
2,057
– Profit after income taxes
–
404
–
–
–
–
404
7
411
– Dividend payments
–
– 152
–
–
–
–
–152
–6
– 158
– Foreign currency
translation differences
–
–
24
–
–
–
24
0
24
– Financial instruments
–
–
–
–10
1
–
–9
–
–9
Net actuarial
gains/losses
–
–
–
–
–
51
51
–
51
– Other changes
–
–1
–
–
–
–
–1
–3
–4
125
2,180
32
34
1
– 27
2,345
27
2,372
– Pensions:
At December 31, 2006
– Pensions:
At December 31, 2007
Notes to the Consolidated Financial Statements
1 General
BSH Bosch und Siemens Hausgeräte GmbH
was formed in 1967 as a joint venture of
Robert Bosch GmbH, Stuttgart, and Siemens
AG, Berlin and Munich. The activities of the
BSH Group (hereafter referred to as “Group”
or “BSH”) comprise: the manufacture or procurement and marketing, as well as research
and development, of industrial products in
the area of electrical engineering, precision
mechanics, and related technology, especially in the area of home appliances; the
manufacture or procurement and marketing
of goods for use as accessories, auxiliary
materials, or tools with the manufactured or
marketed products. The address of the Group’s
registered office is Carl-Wery-Strasse 34,
81739 Munich, Germany. The Supervisory
Board will approve the consolidated financial
statements for publication on April 30, 2008.
2 Presentation of accounting policies
The following accounting policies were used
in the preparation of the consolidated financial statements of BSH.
2.1 Statement of compliance
The consolidated financial statements of
BSH for the year ended December 31, 2007,
have been prepared in accordance with the
mandatory International Financial Reporting
Standards (IFRS) issued by the International
Accounting Standards Board (IASB), London,
applicable at the balance sheet date.
2.2 Basis of presentation
The Group currency of BSH is the euro;
unless stated otherwise, all amounts are
reported in millions of euros (EUR million).
The income statement is presented using the
cost of sales method. To enhance the clarity
of presentation, various items have been
aggregated on the face of the balance sheet
and income statement. These items are disclosed and explained separately in the notes
to the financial statements.
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
The consolidated financial statements have
been prepared on the basis of historical cost,
with the following exceptions:
– “Financial assets held for trading” and
“Available-for-sale financial assets” are
recognized at fair value.
The accounting policies described below
have been consistently applied over the
reporting periods covered by these consolidated financial statements.
The companies in the Group have consistently applied the accounting policies.
2.3 Newly issued accounting standards
All International Financial Reporting Standards
(IFRS), International Accounting Standards
(IAS), and interpretations of the International
Financial Reporting Interpretations Committee/
Standing Interpretations Committee (IFRIC/SIC)
mandatory for fiscal year 2007 have been
applied.
The following standards/interpretations have
not been applied in advance of their mandatory implementation date: IFRS 8, IAS 23
(rev. 2007), IAS 1 (rev. 2007), IFRIC 11, IFRIC 12,
IFRIC 13 and IFRIC 14. The effects are not
expected to be material.
2.4 Foreign currency translation
Foreign currency transactions included in the
single-entity financial statements of BSH
GmbH and the subsidiaries are translated at
the exchange rate prevailing at the transaction date. At the balance sheet date, monetary items denominated in foreign currency
are recognized using the closing rate. Any
translation differences are recognized in the
income statement.
The financial statements of consolidated
subsidiaries prepared in foreign currency are
translated on the basis of the functional currency concept (IAS 21 “The Effects of Changes
in Foreign Exchange Rates”) using the modified closing rate method. The foreign subsidiaries that are part of the BSH Group carry
out their activities independently from a
63
64
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
financial, economic, and organizational point
of view, and for this reason, the functional
currency is always the same as the company’s
local currency. With effect from January 1, 2007,
the Turkish regional company switched its
functional currency from the euro to the
Turkish lira. The change is attributable to
the fact that the economic environment
within which our Turkish company conducts
its activities is shaped by the lira. All assets
and liabilities (but not shareholders’ equity)
are translated at the closing rate. Items
included in the income statement are translated at the annual average rate. All resulting
exchange rate differences are taken directly
to a currency translation reserve in equity.
Companies are consolidated from the time
the BSH Group obtains the option of control
and deconsolidated when the option of control ceases.
The financial statements of BSH GmbH and
its consolidated subsidiaries have been prepared, audited, and consolidated in accordance with IAS 27, applying accounting policies that are uniform throughout the BSH
Group.
Germany
Consolidated as of Dec. 31, 2006
First consolidated 2007
Deconsolidated in 2007
Consolidated as of Dec. 31, 2007
In the single-entity financial statements of
BSH Bosch und Siemens Hausgeräte GmbH
and the subsidiaries, foreign currency receivables and payables are measured on initial
recognition at the exchange rate on the date
of the transaction. Any exchange rate gains
and losses at the balance sheet date are
recognized in income.
Changes in exchange rates against one euro
for the most important currencies used in
currency translation are as follows:
Closing rate
12/31/2007 12/31/2006
Average rate
2007
2006
US dollar
1.4721
1.3170
1.3705
1.2561
Sterling
0.7334
0.6715
0.6843
0.6817
Turkish lira
1.7102
1.8515
1.7776
1.7968
Brazilian real
2.6077
2.8193
2.6694
2.7327
10.6669
10.3137
10.4175
10.0049
Chinese yuan renminbi
2.5 Basis of consolidation
and consolidation principles
The consolidated financial statements
include BSH GmbH and all companies under
its control. This control usually exists if BSH
GmbH, directly or indirectly, holds over 50 %
of the voting rights of the subscribed capital
of an entity or has the power to govern the
financial and operating policies of the entity.
The interests of minority shareholders in the
Group’s equity are reported separately on the
face of the balance sheet and income statement.
Other
Countries
Total
11
50
61
0
3
3
0
1
1
11
52
63
See section 3 of the notes for more information on changes to the basis of consolidation.
The entities included in the consolidation also
include a special fund. As of December 31, 2007,
four (2006: eight) companies were not consolidated because they have no operating
activities or the operating activities are
insignificant. This has no material impact on
the net assets, financial position, and results
of operations of the Group. In addition,
BSH Bosch und Siemens Hausgeräte Altersfürsorge GmbH, Munich, is not consolidated
because its assets are defined as plan assets
and these are deducted from pension provisions in accordance with IAS 19. The consolidated financial statements and group management report of BSH GmbH are published
in the electronic German Federal Gazette.
See Annex II of the notes to the consolidated
financial statements for more information on
shareholdings.
Acquisitions are accounted for on the basis
of the fair value applicable at the date of
acquisition or first-time consolidation. Any
positive difference between purchase price
and fair value is recognized as goodwill.
Intragroup balances, intragroup transactions,
and any resulting intragroup profits and
losses are eliminated in full. Deferred taxes
are recognized for consolidation transactions
recognized in the income statement.
A CCO U N T I N G A N D VA LU AT I O N M E T H O DS
2.6 Revenue
Revenue from the sale of products is recognized when ownership or risk is transferred
to the customer, a price has been agreed or
can be determined, and its payment can be
expected. Revenue is reported net of discounts, price reductions, customer bonuses,
and rebates.
Royalties are recognized on an accrual basis
in accordance with the substance of the relevant agreement.
2.7 Research and development costs
Research expenditure is expensed as
incurred. Likewise, development expenditure
is recognized as an expense when incurred.
Project development costs that fully meet the
following criteria are exempt from this rule:
– The product or system is clearly defined
and the relevant expenditure can be clearly
assigned and reliably measured.
– The technical feasibility of the product can
be demonstrated.
– The product or system will be either marketed or used internally.
– The assets will generate future economic
benefits (e. g., the entity can demonstrate
the existence of a market for the product
or, if it is to be used internally, its usefulness).
– There are adequate technical, financial, and
other resources to complete the project.
Costs are capitalized from the time the above
criteria are first met. Costs recognized as
expenses in previous accounting periods are
not capitalized retrospectively.
2.8 Trade accounts receivable
Trade receivables are reported at amortized
cost. Any necessary write-downs, which are
based on the probable risk of default, are
taken into account. Non-interest-bearing or
low-interest bearing receivables with maturities of more than one year are discounted.
If the requirements of IAS 32.42 are met,
receivables and payables are netted.
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
2.9 Inventories
Inventories are recognized at the lower of
cost and/or net realizable value. Net realizable value is the estimated selling price in
the ordinary course of business less the estimated costs of completion and the estimated
costs necessary to make the sale. Work in
process and finished goods are recognized at
cost. This includes all costs that are directly
attributable to the manufacturing process,
plus a reasonable portion of the production
overhead, including production-related
depreciation and amortization, proportionate
administrative expenses, and proportionate
social security costs. Borrowing costs are
not capitalized. Inventory risks that result
from the duration of storage or reduced marketability are taken into account by applying
write-downs. Lower values as of the reporting
date due to reduced sales proceeds are recognized accordingly.
2.10 Financial assets
The shares in non-consolidated affiliated
companies and associates reported under
financial assets are recognized at cost,
unless a different market value is available.
According to IAS 39, financial investments
are broken down into the following categories:
(a) Held-to-maturity investments,
(b) Financial assets held for trading or at fair
value through profit or loss,
(c) Available-for-sale financial assets and
(d) Loans and receivables.
Financial assets with fixed or determinable
payments and fixed maturity that the Company has the positive intent and ability to
hold to maturity, other than loans and receivables, are classified as held-to-maturity
investments. Financial assets obtained
principally to generate a profit from shortterm fluctuations in price or exchange rates
are measured and classified at fair value.
Available-for-sale financial assets and financial assets held for trading and are recognized
at market value, if available. If no market value
is available, they are recognized at cost.
65
66
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Changes in the fair value of financial assets
held for trading are recognized through the
income statement.
All other financial assets, other than loans
and receivables originated by the Company,
are classified as available-for-sale financial
assets. Until realized, gains and losses on
the fair-value measurement of an availablefor-sale financial asset are recognized
directly in equity, taking deferred taxes into
account.
An impairment loss is recognized on available-for-sale securities and financial assets
whose market value has fallen below their
cost and this fall is not expected to be
reversed.
2.11 Property, plant, and equipment
Property, plant, and equipment is measured
at cost, less straight-line depreciation and,
in some cases, impairment losses. Low-value
assets are fully depreciated in the year of
acquisition. The cost of self-created property,
plant, and equipment comprises all direct
costs and a reasonable portion of the necessary material and production overheads.
This includes production-related depreciation
and amortization, as well as a proportion of
the costs for the Company’s pension plan
and voluntary employee benefits. Borrowing
costs are not capitalized.
Depreciation is based on the following useful
lives:
Buildings
12 –33.3 years
Machinery and equipment
6 –13.0 years
Office equipment and vehicles 3 – 8.0 years
Land is not depreciated.
In accordance with IAS 36, “Impairment of
Assets,” impairment losses are recognized
on property, plant, and equipment if both
the realizable value and the value in use of
the asset concerned fall below its carrying
amount. If the reasons for impairment losses
no longer apply, corresponding write-ups are
performed, at a maximum of the book value.
Depreciation and impairment losses are
reported under functional costs and other
operating expenses. Write-ups are shown
under other operating income.
2.12 Intangible assets (excluding goodwill)
Purchased and self-created intangible assets
are recognized at cost. Assets with finite useful lives are amortized over their useful lives
using the straight-line method.
Amortization is based on the following useful
lives:
Normal useful life in the company (contract,
license period etc.)
Purchased software
4 years
Self-created intangible assets
4 – 6 years
Amortization is on a linear basis over a
period of four to six years. The expense is
allocated to functional area according to
source. If impairment is identified, an impairment loss is recognized. If the reasons for an
impairment loss no longer apply, the impairment loss is reversed, but such that the
increased carrying amount of the asset does
not exceed the carrying amount initially recognized for the asset net of amortization that
would otherwise have applied. Assets with
infinite useful lives are not amortized.
Amortization and impairment losses are
reported under functional costs and other
operating expenses. Write-ups are shown
under other operating income.
2.13 Goodwill
Goodwill is capitalized in accordance with
IFRS 3. Goodwill is tested for impairment
regularly at least once a year; if required, an
appropriate impairment loss is recognized.
In accordance with IAS 36, “Impairment of
Assets,” an impairment requirement is determined by comparing the expected discounted
future cash flows of the cash-generating unit
in question with the relevant goodwill amount
assigned to the unit.
A CCO U N T I N G A N D VA LU AT I O N M E T H O DS
2.14 Pension provisions
Provisions for pensions and other postretirement benefits are recognized using the projected unit credit method as specified in
IAS 19, “Employee Benefits.” In addition to
the pensions and vested benefits known as
of the balance sheet date, this method takes
into account expected future increases in
salaries and pensions. Provisions for pension
obligations are recognized net of any plan
assets where such assets exist. The calculation is based on actuarial reports taking into
account biometric calculation methods.
As specified in IAS 19.93A onward, actuarial
gains and losses incurred in the fiscal year
are reported in the statement of recognized
income and expense (SORIE) and recognized
directly in equity.
2.15 Provisions
A provision is reported only if a present
(legal or constructive) obligation exists as a
result of a past event, it is probable that an
outflow of resources embodying economic
benefits will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation. Provisions
are tested at each balance sheet date and
adjusted to the current best estimate.
Where the effect of the time value of money
is material, the provision amount is the
present value of the expenditure expected
to be required to settle the obligation.
Where discounting is used, the carrying
amount of a provision increases in each
period to reflect the passage of time. This
increase is recognized under other net financial income/finance cost. The related change
in tax provision is recognized under tax
expense.
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
2.16 Derivative financial instruments
Derivative financial instruments are employed
solely for hedging purposes, in order to
reduce exchange rate, interest and fair value
risks from operating business or the resultant
finance requirements. According to IAS 39, all
derivative financial instruments such as interest rate, cross-currency and combined interest rate and cross-currency swaps, as well as
forward exchanges are to be recognized at
fair value, regardless of the purpose or intention behind them. The fair value of derivative
financial instruments is determined on the
basis of market data and recognized valuation methods. The mark-to-market valuation
of the derivative financial instruments is performed using computer-aided methods by
the discounting of cash flows or by using
option price models with parameters in line
with market conditions. The effective part
of the change in market value of the derivative financial instruments, for which Hedge
Accounting is employed, is recognized in
equity capital as part of the other comprehensive income. Transfer to the income statement takes place at the same time as the
realization of the underlying transaction
being hedged. That part of the change in
market value not covered by the underlying
transaction is to be recognized directly in
income. If Hedge Accounting cannot be
employed, the change in fair value of the
derivative financial instruments is recognized
in income.
The change in market value of the derivative
financial instruments not qualifying for hedge
accounting is shown under other operating
expenses and income. The changes affecting
interest rate derivatives are recognized in
other financial income.
If this involves “combined instruments,” for
which separate valuation of the embedded
derivative instruments is not possible, the
entire “combined instrument” is recognized
as affecting the current result at fair value.
67
68
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
2.17 Leases
A lease is classified as an operating lease
if the lessor retains substantially all the risks
and rewards incident to ownership. Lease
payments under an operating lease are
recognized as an expense over the term of
the lease relationship using the straight-line
method.
4 Revenue
Revenue was primarily generated from electrical appliances and gas appliances, as well
as from related customer services; it breaks
down as follows:
Germany
2007
%
2006
%
1,716
19.5
1,817
21.9
Western Europe
(excluding Germany,
2.18 Government grants
A government grant is not recognized until
there is reasonable assurance that the Company will comply with the conditions attaching to it, and that BSH will receive the grant.
Government grants are recognized as income
on a systematic and rational basis over the
periods necessary to match them with the
related costs that they are intended to compensate. Grants received for the acquisition
of property, plant, and equipment are treated
as a reduction in the purchase cost of such
assets. Other grants received are initially
recognized as a liability on the balance sheet
(deferred income under other liabilities) and
then recognized in income with the corresponding depreciation over the useful life of
the asset concerned.
3 Changes in the consolidated group
BSH Home Appliances Corporation Ltd./Électroménagers BSH Ltée, Mississauga, Canada,
BSH Home Appliances Sdn. Bhd., Kuala
Lumpur, Malaysia and TOV BSH Pobutova
Technika, Kiev, Ukraine, have been included
in the consolidated financial statements for
the first time. The company BSH Ufesa Industrial, S.A. (Echarri-Aranaz) was deconsolidated with effect from December 31, 2007.
The additions are not significant, and have
been consolidated by means of the acquisition method. Comparability of the consolidated group with that of the previous year
has not been adversely affected by the
change.
including Turkey)
4,557
51.7
4,319
52.0
Eastern Europe
827
9.4
665
8.0
North America
550
6.2
510
6.1
Latin America
304
3.4
282
3.4
Asia
741
8.4
587
7.1
123
1.4
128
1.5
Other Countries
Total
8,818 100.0
8,308 100.0
5 Cost of sales
The cost of sales figure of EUR 5,683 million
(2006: EUR 5,399 million) comprises the full
production-related costs incurred in the manufacture of the products sold.
6 Selling and administrative expenses
Selling and administrative expenses
amounted to EUR 2,263 million (2006: EUR
2,063 million) and comprised solely costs,
income, and expenses allocated to these
categories. General administrative expenses
include personnel and material costs, and
depreciation/amortization in head office
departments, that cannot be assigned to production, sales and marketing, or research
and development.
7 Research and development costs
Research and development costs of EUR
259 million (2006: EUR 235 million) include
research costs and development expenditure
that has not been capitalized. No development costs were capitalized during fiscal year
2007 (2006: EUR 0 million).
N OT E S T O T H E S TAT E M E N T O F I N CO M E
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
8 Other operating income and expenses
2007
2006
Income from the reversal of provisions (not function-related)
18
11
Foreign currency gains from trade accounts receivable and payable
38
26
Income from the reversal of valuation allowances and write-ups
25
12
Leasing income
3
3
Income from the disposal of assets
5
1
Income from foreign exchange derivatives
43
41
Income from costs transferred to third parties
43
22
Miscellaneous other operating income
25
44
Total other operating income
200
160
Expenses to set up provisions (not function-related)
18
47
Foreign currency losses from trade accounts receivable and payable
47
30
Expenses incurred through valuation allowances
41
29
4
4
Expenses in connection with the disposal of assets
Other taxes
Losses on foreign exchange derivatives
Expenses from cost transfers
Miscellaneous other operating expenses
Total other operating expenses
9 Income from investments
Income from investments primarily comprises
dividends paid by Kreisbaugesellschaft
Heidenheim GmbH, Giengen.
10 Net interest expense
2007
Interest income
Interest expenses
2006
70
52
– 84
– 63
–14
–11
62
34
7
16
– 83
– 61
– of which to non-consolidated
affiliated companies
EUR – 0.5 million
(2006: EUR – 0.3 million)
Net interest result
– of which from financial instruments from
measurement categories as per IAS 39:
Loans and receivables
Financial assets, available for sale
Financial liabilities,
valued at amortized cost
2
6
19
19
0
15
22
52
153
202
11 Other financial result
Other financial result is derived from the
market-value measurement of financial
instruments, the disposal of securities, the
measurement of receivables for liabilities
denominated in foreign currency, the reversing of the discount to provisions, together
with other financial income and expenses.
In 2007, available-for-sale financial assets
were sold. This resulted in a reduction in
equity of EUR 23 million (2006: EUR 17 million) and the recognition in income of an
equivalent figure under other financial result.
Amortization amounting to EUR 2 million
(2006: EUR 0 million) was recognized.
12 Income taxes
By origin, the BSH Group’s taxes on income
break down as follows:
Effective taxes
Interest income and expense calculated
under the effective interest rate method was
recognized in income for financial assets and
financial liabilities not measured at fair
value.
Deferred income taxes
Total income taxes
2007
2006
–172
–181
– 54
11
– 226
–170
69
70
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Income taxes paid or payable in the various
countries as well as deferred taxes are
reported under income taxes. Deferred taxes
are calculated on the basis of temporary
differences between the carrying amounts
of assets and liabilities in the IFRS financial
statements and the tax base, and on the
basis of consolidation transactions and
recoverable loss carryforwards. The calculation is based on the tax rates expected to be
in force in the various countries at the time
the tax materializes. In all cases, the rates
are derived from the laws and provisions in
force or enacted at the balance sheet date.
The reported income tax expense in the
year under review of EUR 226 million is EUR
18 million lower than the expected income
tax expense of EUR 244 million that would in
theory arise if the German tax rate were to be
applied to the consolidated profit before tax.
The reconciliation between the expected tax
expense and the reported tax expense is as
follows:
Profit before tax
2007
2006
637
542
Expected taxes when using the tax
rate applicable to the parent company
of 38.29 %
The corporate income tax rate in 2007 in
Germany was 25 % plus a solidarity surcharge
of 5.5 % of the corporate income tax itself.
Taking into account trade tax at 11.92 %, the
overall tax rate for German companies was
38.29% (2006: 39%). In light of corporate
tax reform in Germany, fiscal 2008 will see the
overall tax rate fall to 29.35 %. The reduction
in the tax rate has already been taken into
account in determining deferred tax.
(2006: approx. 39 %)
244
212
Effects of differences in foreign tax rates
–78
– 70
Effects of changes in tax rates
Effects of permanent differences
15
0
5
34
Other variances
(incl. change to write-downs
of deferred tax assets)
40
–6
Reported income tax expense
226
170
Corporate tax rate in percent
35.5
31.4
Deferred tax assets and liabilities are derived from the following individual balance sheet items:
Deferred
tax assets
Deferred
tax liabilities
2007
2006
2007
2006
5
5
67
69
Receivables and other assets
20
20
13
18
Inventories
53
50
3
5
Liabilities
30
34
2
3
Pension provisions
60
107
1
0
Other provisions
67
93
0
1
Intangible assets and property, plant, and equipment
0
0
2
6
Tax loss carryforwards and tax credit
Available-for-sale securities
130
124
0
0
Gross total
365
433
88
102
Write-downs
– 91
– 56
0
0
Netting
–71
– 84
– 71
– 84
Deferred taxes after netting
203
293
17
18
NOTES TO THE BALANCE SHEET
Deferred tax assets are recognized to the
extent that it is probable that future taxable
profit will be available. At each balance sheet
date, a new assessment is made of unrecognized deferred tax assets and of the carrying
amount of deferred tax assets. A write-down
of deferred tax assets was performed on tax
loss carryforwards and tax assets amounting
to EUR 78 million (2006: EUR 56 million) and
on deductible temporary differences totaling
EUR 13 million (2006: EUR 0), as direct use in
the foreseeable future appears unlikely. The
change in the write-downs was recognized in
the income statement. Of the total amount
from these potential tax advantages of EUR
91 million (2006: EUR 56 million), EUR 56 million (2006: EUR 46 million) can be carried
forward without limitation and 35 EUR million
(2006: EUR 10 million) for more than three
years.
As at December 31, 2007, the BSH group has
unused tax loss carryforwards amounting to
EUR 321 million (2006: EUR 375 million). The
durations of the tax loss carryforwards are
shown in the following table:
Utilization periods
2007
2006
15
0
Limited carryforward ability,
less than three years
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
13 Minority interest
The profit attributable to the minority interest
in BSH Ev Aletleri Sanayi ve Ticaret A.Ş.,
Istanbul, and BSW Household Appliances Co.,
Ltd., Wuxi, is EUR 7 million (2006: EUR 8 million).
14 Other income statement disclosures
The functional costs include the following
personnel expenses:
Wages and salaries
Social security contributions
Retirement and support services
Personnel expenses
2007
2006
1,361
1,333
260
237
83
84
1,704
1,654
The cost of materials totals EUR 4,436 million
(2006: EUR 4,278 million).
The breakdown of the average number of
employees for the year is as follows:
2007
2006
blue-collar staff
6,605
6,820
white-collar staff
5,416
5,265
BSH GmbH
334
346
Other companies in Germany
apprentices
1,715
1,641
Companies outside Germany
25,348
23,024
Total
39,418
37,096
Can be carried forward with restrictions,
more than three years
Can be carried forward without restrictions
96
90
210
285
321
375
The level of the tax loss carryforwards, not
taking account of deferred tax assets, stands
at 201 EUR million (2006: EUR 165 million).
The deferred taxes recognized directly in
equity include deferred tax liabilities on
financial instruments and derivative financial
instruments amounting to EUR 2 million
(2006: EUR 4 million) and deferred tax assets
on actuarial gains and losses related to
pension liabilities totaling EUR 11 million
(2006: EUR 46 million).
15 Cash and cash equivalents
The breakdown of cash and cash equivalents
is as follows:
2007
2006
26
42
6
6
Deposits with banks
421
257
Cash and cash equivalents
453
305
Checks
Cash on hand
All items under cash and cash equivalents
are due within three months, as in 2006.
16 Securities
In accordance with IAS 39, securities are classified as available for sale and recognized at
a market value of EUR 90 million (2006: EUR
22 million).
71
72
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
17 Trade accounts receivable
Trade accounts receivable (third parties)
18 Other current assets
2007
2006
1,904
1,915
Trade accounts receivable
(non-consolidated affiliated companies)
Other receivables (third parties)
0
2
–108
Prepaid expenses
Trade accounts receivable, net
1,819
1,809
Current derivative financial instruments
Trade accounts receivable
1,904
1,917
(note 30)
of which neither impaired nor overdue
as at date of financial statement
nonconsolidated affiliated companies
1,597
1,569
and employees
Write-downs on other current assets
of financial statement and overdue
Total other current assets
109
145
less than 1 month
56
86
between 1 month and 3 months
25
23
more than 3 months
28
36
The development of write-downs on trade
receivables is as follows:
2007
At Jan. 1
106
0
1
19
12
9
11
160
115
Amounts receivable from tax authorities
of which not impaired as at date
in the following time bands:
2006
48
Other receivables due from
– 85
Valuation allowances
2007
108
–2
–2
234
243
Prepaid expenses primarily consist of IT service payments made in advance.
19 Inventories
2006
104
Work in process
Raw materials, consumables, and supplies
2007
2006
759
719
33
36
245
204
46
Exchange rate difference
2
Change in consolidated group
0
0
Spare parts
51
Additions
9
19
Advance payments made
15
14
Utilization
31
12
Total
1,103
1,019
3
2
85
108
Reversal
At Dec. 31
–1
Finished goods and merchandise
As regards trade receivables which are
neither impaired nor in default, there were
no indications as at the balance sheet date
that the debtors are unable to meet their payment obligations. Additionally, the majority
of trade receivables are insured, individually
and on a nationally-specific basis, by the
companies concerned.
The spare parts item comprises components
held in warehouses to cover a 10-year parts
warranty on home appliances. The writedown included in the year under review was
EUR 103 million (2006: EUR 96 million).
20 Non-current financial assets
Financial assets
Financial investments
Other non-current assets
As at December 31, the 2007 the carrying
amount of trade receivables stood at EUR
3 million, for which the contractual conditions
were renegotiated (2006: EUR 8 million).
Trade receivables include an amount of EUR
0.1 million (2006: EUR 0.3 million) with a
maturity of more than one year.
Non-current financial assets
2007
2006
681
714
0
4
38
28
719
746
Non-current financial assets comprise the
following: The following table shows the
breakdown of other non-current assets:
Loans (third parties)
2007
2006
2
5
Non-current derivative
financial instruments (note 30)
5
3
Miscellaneous other non-current assets
31
20
Total other non-current assets
38
28
NOTES TO THE BALANCE SHEET
EUR 1 million of the loans have been impaired
(2006: EUR 5 million), and there are no overdue loans.
21 Property, plant, and equipment
The statement of changes in assets (see
Annex I) shows a breakdown of the property,
plant, and equipment items aggregated on
the face of the balance sheet, together with
the changes in these items in the year under
review.
At the balance sheet date, obligations
incurred in connection with the acquisition
of property, plant, and equipment amounted
to EUR 3 million (2006: EUR 3 million), with
constraints on disposal totaling EUR 5 million
during the fiscal year. Government grants
with a total value of EUR 0 million (2006: EUR
8 million) were deducted from new additions
in the year under review, comprising development funds for German regions suffering from
structural weaknesses.
22 Intangible assets
Please refer to the statement of changes in
assets (Annex I) for information on changes
in intangible assets.
Additions under this item included the costs
of purchased software, tool licenses, and
industrial and similar rights. A significant
item in intangible assets was goodwill, for
the most part attributable to the subsidiaries
in Turkey and the USA. Additions to intangible assets (goodwill) of EUR 10 million
resulted from the acquisition of additional
shares in a subsidiary (2006: EUR 6 million).
To meet the requirements of IFRS 3, in combination with IAS 36, and to test for goodwill
impairment, the cash-generating units have
been defined to coincide with the legal entities, and an impairment test has been performed.
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
For the impairment test, the carrying amount
of each cash-generating unit is determined
by allocating assets and liabilities, including
attributable goodwill and intangible assets.
An impairment loss is recognized if the recoverable amount of a cash-generating unit is
lower than its carrying amount. The recoverable amount is the higher of fair value less
costs to sell and value in use.
For its impairment tests, BSH uses a Discounted Cash Flow (DCF) method to determine the expected future cash inflows of the
cash-generating unit. The calculation of the
cash flows of each cash generating unit is
based on business plans with a planning
horizon of three years. We have assumed a
uniform rate of increase due to inflation of
1.0% p. a. after the end of the three-year
planning period. Country-specific discount
rates vary between 8.0 % p. a. and 15.5 % p.a.
(between 8.0 % p.a. and 13.9% p. a. in 2006),
including the risk mark-up.
All goodwill items recognized in the consolidated balance sheet and assigned to cashgenerating units were tested for impairment.
No impairment was recognized (2006: EUR
1 million).
23 Current and non-current
financial liabilities
Current and non-current financial liabilities
comprise primarily liabilities to banks.
The financial liabilities have the following
remaining periods to repayment:
2007
2006
up to one year
260
263
1– 5 years
386
382
over 5 years
106
200
Total
752
845
Financial liabilities due within one year are
reported as current financial liabilities; financial liabilities due in more than one year are
classified as non-current financial liabilities.
73
74
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
The following tables show the contractually
agreed (undiscounted) interest and redemption payments for primary financial liabilities
and the derivative financial instruments with
negative market value:
25 Other liabilities and provisions (current)
The breakdown of items under current
provisions and other current liabilities is as
follows:
2007
Carrying 2008 2009 2010 2011 2012 > 2013
amount
12/31/2007
Provisions for taxes
2006
50
49
Other provisions
313
389
Current provisions
363
438
90
Trade accounts payable
728
728
0
0
0
0
0
Bank loans and overdrafts
752
260
11
63
199
59
175
Notes payable
61
97
86
2
3
2
2
2
Advance payments received
30
14
4
4
0
0
0
0
0
Deferred liabilities
404
383
1
6
61
56
Other financial liabilities
Derivative financial instruments
Deferred income
Carrying 2008 2009 2010 2011 2012 > 2013
amount
12/31/2006
Trade accounts payable
611
611
0
0
0
0
0
Bank loans and overdrafts
845
283
114
4
54
190
200
Other financial liabilities
110
99
2
2
2
2
4
2
2
0
0
0
0
0
Derivative financial instruments
Taxes payable
Current derivative financial instruments
(note 30)
4
2
Miscellaneous other liabilities
162
154
Other current liabilities
723
705
The statement of changes in provisions
(note 26) gives details of changes in current
provisions.
24 Trade accounts payable
Trade accounts payable are recognized at the
higher of their nominal amount and repayment amount; all trade accounts payable are
due within one year, as in 2006.
26 Other liabilities and provisions
(non-current)
The following table shows the breakdown of
non-current other liabilities and non-current
provisions:
2007
2006
Miscellaneous other liabilities
11
5
Other non-current liabilities
11
5
Provisions for taxes
115
102
Other provisions
400
313
Non-current provisions
515
415
The following table shows the breakdown of non-current other liabilities and non-current
provisions:
Jan. 1, 2007
Exchange rate differences
Utilization
Reversal
Provisions
for taxes
Personnel
and social
security
obligations
Obligation
relating to
the sales
function
Other
provisions
Total
151
267
272
163
853
1
1
–1
0
1
25
61
124
31
241
1
28
37
20
86
Additions, including interest cost
42
53
222
46
363
Reclassification
–3
–8
–1
0
–12
165
224
331
158
878
50
68
208
37
363
115
156
123
121
515
Dec. 31, 2007
Current portion of provisions
Non-current portion of provisions
NOTES TO THE BALANCE SHEET
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
The additions include expenses from reversing the discount of EUR 7 million (2006: EUR
5 million). The reclassifications are shown
under accrued liabilities.
The breakdown of pension obligation funding
is as follows:
The provisions for personnel and social security obligations include primarily obligations
for partial retirement, personnel restructuring, and long-service bonuses. The provisions
for obligations relating to the sales function
include primarily provisions for warranty obligations. Other provisions include provisions
for guarantees, contractual agreements at
home and abroad, environmental protection
and other risks.
Net present value of unfunded pension obligations
27 Provisions for pensions
and other postretirement benefits
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
41
35
45
39
Net present value of funded pension obligations
768
82
814
85
External plan assets
– 66
– 65
– 66
– 61
0
0
0
0
Unrecognized actuarial gains (+)/losses (–)
Unrecognized past services costs
0
0
0
0
743
52
793
63
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
793
63
818
62
0
0
0
–2
Pension obligation
The pension provisions changed as follows in
the course of fiscal 2007:
Brought forward
Exchange rate differences
27.1 Defined benefit plans
On December 31, 2007, the pension obligations in Poland, Portugal, Singapore, Slovenia
and the United Arab Emirates were taken into
account in the consolidation for the first time.
There are postretirement benefit entitlements
for employees in Germany, primarily granting
capital/pension benefits and fixed individual
amounts. For employees in other countries
(Belgium, United Kingdom, Portugal, Sweden,
Switzerland, Spain and Norway), the benefits
mainly depend on the number of years of
service and the salary received immediately
prior to retirement. The postretirement benefits granted in France, Greece, Italy, Austria,
Poland, Singapore, Turkey and the United
Arab Emirates are lump-sum payments.
The postretirement benefits in Germany are
mainly financed by the recognition of pension
provisions; part of the obligation is met
through a support fund. In other countries,
they are mainly financed through insurers
and pension funds.
The defined benefit obligation is measured
annually using the projected unit credit
method.
In accordance with IAS 19.93A, the SORIE
method is used to determine the pension
provisions and the pension costs. Actuarial
gains and losses are disclosed in the SORIE
and recognized directly in equity.
Transfer values
Pension and capital amounts paid by the company
1
0
0
0
–34
–3
– 32
–1
Employer contributions to external funds
–2
–5
–6
–5
Reversal (–)/addition (+)
60
8
–11
8
Deferred compensation
0
0
3
0
Amount recognized in SORIE
–75
–11
21
1
Pension provison
743
52
793
63
Germany
Other
countries
Germany
Other
countries
In Germany, contributions from the deferred
compensation amounting to EUR 3 million
were shown under “service cost” for the
first time in 2007. In recent years, these
contributions have been shown in personnel
expenses.
The expense recognized in the income statement breaks down as follows:
2007
2007
2006
2006
Service cost
26
5
22
5
Interest cost
38
5
34
5
Expected return on external plan assets
–3
–3
–3
–3
Amortization of actuarial gains (–)/losses (+)
0
0
0
0
Amortization of past service cost
0
1
0
0
Expense (+)/income (–) from curtailment and settlement
–1
0
– 64
1
Reversal (–)/addition (+) of deferred compensation
60
8
–11
8
The total expense is recognized in the functional areas.
75
76
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
The reconciliation of benefit obligations and assets is as follows:
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
859
124
881
115
0
0
2
0
Service cost
26
5
22
5
Interest cost
38
5
34
5
0
1
0
1
–75
–11
21
2
0
–4
0
–2
–3
Present value of the obligation at beginning of year
Deferred compensation
Employee contributions
Actuarial gain (–)/loss (+)
Exchange rate effects
Total amount of pensions and capital paid
– 40
–5
–37
Past service cost
0
1
0
0
Transfer values
1
1
0
0
Effect of curtailments and settlements
Present value of the obligation at end of year
Market value of plan assets at beginning of year
0
0
– 64
1
809
117
859
124
53
66
61
62
Expected income from external plan assets
3
3
3
3
Actuarial gain (+)/loss (–)
0
0
0
1
Exchange rate effects
0
–3
0
0
Employer contributions to external pension funds
2
5
6
6
Employee contributions to external pension funds
0
1
0
1
–5
–2
–5
–3
Transfer values
0
0
0
0
Effects of termination benefits
0
0
0
0
66
65
66
61
Amounts of pension and capital paid by external funds
Market value of plan assets at end of year
For 2008, contributions paid to external funds are expected to be
a total of EUR 4 million.
The actual return on plan assets was as follows:
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
Expected return on external plan assets
3
3
3
3
Actuarial gain (+)/loss (–)
0
0
0
1
Actual value of plan assets at end of year
3
3
3
4
The amounts disclosed in the statement of recognized income and
expense (SORIE) are as follows:
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
75
11
–21
–1
0
0
0
0
75
11
–21
–1
Total amounts disclosed in the SORIE
–37
–1
–112
–12
Deferred taxes on actuarial gains (+)/losses (–)
–32
–3
8
0
11
0
43
3
– 26
–1
– 69
–9
Actuarial gain (+)/loss (–)
Effect of asset limitation (IAS 19.58(b))
Amount recognized in SORIE
Totals recognized in shareholders’ equity
Net actuarial gains/losses reported in equity
NOTES TO THE BALANCE SHEET
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
The actuarial gains and losses incurred are attributable to the following categories:
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
Difference between expected and
actual return on external plan assets
0
0
0
1
Difference between expected and actual values
1
–2
17
1
assumptions
74
13
– 38
–3
Total actuarial gains (+)/loss (–)
75
11
– 21
–1
Adjustment due to changes in measurement
The breakdown in the other prior reporting period in accordance with
IAS 19.120A (p) is as follows:
Germany
Other
countries
Germany
Other
countries
2005
2005
2004
2004
post-retirement benefit obligations
44
36
41
30
External plan assets
62
53
61
44
5
6
3
3
Actuarial gains (+)/losses (–) included in SORIE
17
6
–74
–5
Target/actual variance
18
–1
0
0
Present value of unfunded
Actual income from external plan assets
The breakdown of the reported plan assets is as follows:
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
%
%
%
%
Shares and other securities
33.0
47.0
22.2
52.5
Bonds
34.0
23.0
33.6
29.8
6.5
13.0
12.2
6.9
26.5
17.0
32.0
10.8
100.0
100.0
100.0
100.0
Real estate
Other assets
Total
23.4% (2006: 20.7 %) of the plan assets reported for Germany are
invested in the sponsors of the support fund.
The expected return on the reported external
plan assets is as follows:
2007
2006
%
%
Shares and other securities
7.0
8.5
Bonds
4.1
5.8
Real estate
4.5
4.8
Other assets
4.0
5.3
Weighted total
5.0
6.1
77
78
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
In Germany, part of the plan assets comprises receivables of the pension trust from
BSH GmbH. As at December 31, 2007, the
receivables stood at EUR 15 million (2006:
EUR 14 million). The plan assets otherwise
include no further property in own use or
other assets employed by BSH.
The expected return on external plan assets
for companies outside Germany ranges
between 4.0 % and 6.7 %.
The expected return on each asset class is
comparable to that reported for Germany.
The expected return per asset class is derived
from the relevant risk premium on the return
on AA-rated corporate bonds (the return on
AA-rated corporate bonds determines the
relevant discount rate).
The calculation of the pension obligations
and pension expense was based on the
following assumptions:
Discount rate
Germany
Other
countries
Germany
Other
countries
2007
2007
2006
2006
%
%
%
%
5.25
5.40
4.50/4.25
4.50
Expected return on external plan assets
5.00
5.80
5.00
5.10
Salary inflation
3.00
3.70
3.00
3.70
Pension inflation
1.80
–
1.80
–
The pension obligations of German companies
have been remeasured as of December 31,
2007, using a discount rate of 5.25% p.a.
The measurement assumptions for companies outside Germany are weighted average
values.
The expected long-term return on investment
is determined on the basis of publicly available and internal capital market studies and
predictions for each category of asset.
In Germany, the 2005G Heubeck tables
were used as the basis for the biometric
calculation.
Employee turnover probabilities were estimated for specific age groups and genders.
27.2 Defined contribution plans
In 2007, the Company made contributions of
EUR 83 million (2006: 80 million) to defined
contribution plans (employer contributions to
statutory pension insurance).
27.3 Partial retirement agreements
and long-service bonus commitments
In some countries, there are also obligations
relating to partial retirement agreements
and long-service bonus commitments. The
amount of the obligation for these plans was
around EUR 104 million at the end of 2007
(2006: EUR 122 million); the expense recognized in 2007 amounted to EUR 18 million
(2006: EUR 7 million).
28 Shareholders’ equity
The statement of changes in shareholders’
equity shows the changes in the BSH Group’s
equity and its components.
The exchange differences resulting from the
translation of the financial statements of subsidiaries outside Germany are recognized
directly in equity in the currency translation
reserve.
In accordance with IAS 19, the actuarial
gains/losses item comprises actuarial
gains/losses on pension provisions (net of
deferred taxes) recognized directly in equity.
The reserve for available-for-sale securities
includes the measurement gains or losses
on securities and derivative financial instruments, net of deferred taxes, recognized
directly in equity.
Retained earnings and reserves include the
income earned in the past by the companies
included in the consolidated financial statements, insofar as they have not been paid as
dividends, and the changes in accumulated
other equity capital.
The minority interest item includes the paidin capital and the net profit for the year generated by the sales companies whose shares
are held by Robert Bosch GmbH and Siemens
AG. This item also includes the minority interest in the equity of BSH Ev Aletleri Sanayi ve
Ticaret A.Ş., Istanbul, and BSW Household
Appliances Co., Ltd., Wuxi, including any
attributable pro rata profit or loss.
NOTES TO THE FINANCIAL INSTRUMENTS
A dividend of EUR 152 million (2006: EUR
125 million) was paid out to the shareholders
on May 10, 2007 according to their holdings.
BSH-D recorded a net profit of EUR 195 million for the period in its annual statutory
financial statement, and the management of
the Group is proposing that a total of EUR
190 million be distributed to shareholders.
29 Notes to the cash flow statement
The cash flow statement reports how the
BSH Group’s cash and cash equivalents
changed in the course of 2007 as a result
of cash inflows and outflows. In accordance
with IAS 7 (“Cash Flow Statements“), a
distinction is made between cash flows from
operating, investing, and financing activities.
The cash flow statement is determined using
the indirect method starting from the profit
before tax. The net cash from operating activities is determined after applying adjustments for non-cash income and expenses,
primarily depreciation and amortization,
and after taking into account any changes
in working capital. Investing activities comprises additions under non-current assets
and the purchase or sale of securities. Cash
flows from financing activities shows cash
inflows and outflows from the drawdown or
repayment of financial liabilities and from
dividends.
The cash and cash equivalents reported in
the cash flow statement comprises cash on
hand, checks, and bank balances, providing
they are available within three months. The
effect of exchange rate changes on cash and
cash equivalents and the effect of changes
in the basis of consolidation are reported
separately. The changes in the balance sheet
items reported in the cash flow statement
cannot be directly reconciled to the balance
sheet statement because they have been
adjusted for exchange rate effects. The
exception to this is the figure for cash and
cash equivalents. Cash and cash equivalents
includes an amount of EUR 0 million (2006:
EUR 1 million) that is subject to exchange
control restrictions.
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
30 Financial instruments
A financial instrument is a contract that
simultaneously leads to a financial asset in
one entity and a financial liability or equity
instrument in another. Financial instruments
involve primary as well as derivative assets
or liabilities. Derivative financial instruments
are used to hedge items on the balance
sheet and future cash flows.
IAS 39 gives four categories of financial
instruments:
– Financial investments held to maturity
– Financial assets/liabilities held for trading
– Available-for-sale financial assets
– Loans and receivables
– Other financial liabilities
In the BSH Group, financial instruments are
generally classified as “loans and receivables”
or as “available for sale.” The primary financial liabilities are assigned to the category
“other financial liabilities.” Derivative financial instruments not qualifying for hedge
accounting are classified as “held for trading.”
Financial instruments are shown on the balance sheet upon purchase or sale on the settlement date under usual market conditions.
Net gains/losses by category
2007
2006
Loans and receivables
31
11
Financial assets available for sale
25
31
16
18
– 83
– 63
Financial assets and financial liabilities
at fair value through profit or loss
Financial liabilities measured
at amortized cost
The net gains/losses from loans and receivables include changes in the write-downs,
gains and losses from derecognition and
payments received, exchange rate gains and
losses and increased valuations of originally
written-down or derecognized credits and
receivables.
79
80
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Net gains and losses from the availablefor-sale financial assets comprise gains and
losses from the derecognition of availablefor-sale financial assets and interest income
from these financial instruments. For the
amount of unrealized gains and losses from
the available-for-sale financial assets recognized directly in equity during the fiscal
year, and the amount removed from equity
and recognized as income in the year, see
Consolidated Statement of Changes in Shareholders’ Equity.
Net gains or losses on financial assets and
liabilities recognized as income at fair value
include not only the effects of changes in
market value, but also interest expenses or
income from these financial instruments.
The net income from financial liabilities valued at amortized cost is made up of interest
expenses and currency gains and losses.
NOTES TO THE FINANCIAL INSTRUMENTS
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Carrying amounts and fair values by categories and classes
12/31/2007
Measurement
categories
IAS 39
Carrying
amount
12/31/2006
Fair Value
Carrying
amount
Fair Value
ASSETS
Cash
LaR
453
453
305
305
Trade accounts receivable
LaR
1,819
1,819
1,809
1,809
Other financial receivables
LaR
203
203
252
252
Financial assets available for sale
AfS
597
597
573
573
FAHfT
13
13
14
14
n. a.
2
2
–
–
FVTPL
36
36
28
28
Derivative financial assets not qualified for hedge accounting
Derivative financial assets (hedge accounting)
Financial assets with embedded derivatives
LIABILITIES
Trade accounts payable
FLAC
728
728
611
611
Bank loans and overdrafts
FLAC
752
737
845
836
Other financial liabilities
FLAC
217
217
233
233
0
Finance lease liabilities
Derivative financial liabilities not qualified for hedge accounting
Derivative financial liabilities (hedge accounting)
Financial liabilities with embedded derivatives
n. a.
0
0
0
FLHfT
4
4
2
2
n. a.
–
–
–
–
FVTPL
–
–
–
–
Of which aggregated by measurement categories
Loans and receivables (LaR)
2,475
2,475
2,366
2,366
Available-for-sale financial assets (AfS)
597
597
573
573
Financial assets held for trading (FAHfT)
13
13
14
14
1,697
1,682
1,689
1,689
4
4
2
2
36
36
28
28
192
192
144
144
513
513
475
475
Financial liabilities measured at amortized cost (FLAC)
Financial liabilities held for trading (FLHfT)
Financial assets at fair value through profit or loss (FVTPL)
Reconciliation to balance sheet
Other non-financial receivables
(included in other current assets, securities
and non-current financial assets)
Other non-financial liabilities
(included in other current and non-current liabilities)
LaR
Loans and Receivables
AfS
Available for Sale
FAHfT
Financial Assets Held for Trading
FLAC
Financial Liabilities measured at Amortized Cost
FLHfT
Financial Liabilities Held for Trading
FVTPL
Fair Value Through Profit or Loss
81
82
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
30.1 Non-derivative financial instruments
30.2 Derivative financial instruments
Available-for-sale financial instruments
Available-for-sale financial instruments are
always reported at fair value. The fair value
is generally the market value. If there is no
active market, fair value is determined using
a generally accepted measurement technique.
Hedging policy and financial derivatives
The activities of BSH are impacted by a
number of factors, including exchange rate
fluctuations. It is the aim of the Company’s
business policies to limit these risks with
hedging measures. Hedging transactions are
conducted exclusively with first-rate national
and international banks. A limit is imposed
on transactions with each contract partner.
Investments in nonconsolidated subsidiaries
and associates
Shares in nonconsolidated subsidiaries and
associates are always reported at amortized
cost; impairment losses are recognized
where appropriate. There is no active market
for these companies and fair value cannot
therefore be reliably determined with reasonable time and effort.
Loans/receivables and financial liabilities
Credits/loans and financial liabilities are
measured at amortized cost using the effective interest method, provided they are not
related to hedges. In particular these are
– Loans under financial assets
– Trade receivables and trade payables
– Other current assets and liabilities
As last year, loans under financial assets
essentially have a maturity in excess of four
years, whereas trade accounts receivable and
payable are, as last year, due within one year.
The amortized cost of a financial liability is
calculated as the amount in which a financial
asset or a financial liability was measured on
initial recognition, less any repayments,
impairment losses, or uncollectibility writedowns, and net of the premium/discount.
The premium/discount is allocated using the
effective interest rate method over the life of
the financial asset or liability.
For current receivables and liabilities, amortized cost is the nominal amount or the
repayment amount.
There is no substantial concentration of payment default risk in reported receivables, nor
is disclosure required.
Binding internal rules and guidelines provide
firm guidance on permitted actions and
responsibilities for hedging, especially the
hedging relationship with operating business
and financial investment or financing transactions. BSH does not use derivative financial instruments for speculative purposes.
The Group employs the treasury controlling
and value contribution monitor used in the
finance unit to control interest and currency
management activities. These information
systems are used to support the identification and assessment of interest rate and
currency risks throughout the Group for the
next twelve months, based on planned cash
flow. This takes place according to the minimum hedging rates stipulated in the company’s financial guidelines, and taking
account of the strategy laid down by the Treasury Committee which meets regularly under
the chairmanship of a member of executive
management.
If hedge accounting is used, changes in the
fair value of derivative financial instruments
are shown in the shareholders’ equity as
part of accumulated other shareholders’
equity. If hedge accounting cannot be
employed, the changes in market value are
recognized in the income statement.
NOTES TO THE FINANCIAL INSTRUMENTS
Exchange rate risks
As a basis for controlling its exposure to
exchange rate risks, BSH primarily uses a
Group-wide cash-flow reporting system,
differentiated by currency; the subsidiaries
outside Germany prepare rolling monthly
reports for headquarters.
Most of the hedging instruments used are
forward exchange contracts; options are used
in some cases. To monitor the risks from
financial derivatives, hedges are marked to
market on each bank working day; this valuation, plus additional information such as
exchange rate gains or losses and risks, is
available to the employees concerned and
to the managers responsible.
The nominal volumes of the reported hedges
represent the total of purchase and selling
amounts on which the hedges are based.
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
The market values disclosed in the above list
were determined on the basis of information
available on the balance sheet date. They
represent the settlement amounts (redemption values) of the financial derivatives.
Redemption values are calculated on the
basis of quoted prices and standardized
procedures. The maximum credit risk of derivative financial instruments is limited to the
total positive market values in the event of
default by a contract partner of BSH GmbH
or the BSH Group companies.
Changes in the value of financial instruments
from the hedging of planned transactions
and available-for-sale financial instruments
are recognized directly in accumulated other
shareholders’equity. As at December 31, 2007,
EUR 35 million (2006: EUR 44 million) are
included in shareholders’ equity after the
deduction of deferred taxes. Of this, the
Nominal volumes
2007
Maturity
Up to
1 year
Market value
2006
1 year to
5 years
Up to
1 year
2007
2006
1 year to
5 years
Derivatives with positive market value
Foreign currency derivatives not qualifying
for hedge accounting
Currency forwards
320
–
371
–
6
6
Currency options
17
–
101
–
0
0
8
40
30
49
7
7
10
–
50
–
–
1
–
–
–
–
–
0
37
–
–
–
2
–
231
–
288
–
3
2
Other foreign currency derivatives
Interest rate and other derivatives not qualifying
for hedge accounting
Other interest rate derivatives
Other price hedging instruments
Foreign currency derivatives, hedge accounting
Currency forwards
Derivatives with negative market value
Foreign currency derivatives not qualifying
for hedge accounting
Currency forwards
Currency options
–
–
124
–
–
0
13
–
–
–
0
–
Other interest rate derivatives
13
–
–
–
0
–
Other price hedging instruments
86
–
6
–
1
0
Other foreign currency derivatives
Interest rate and other derivatives not qualifying
for hedge accounting
83
84
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
effects of cash flow hedges amount to EUR
1 million (2006: EUR 0 million). The cash flow
hedges have not as yet been revealed any
lack of effectiveness for fiscal year 2007.
Fluctuations in market prices can have significant risks for the BSH Group. Changes in
exchange rates, interest rates and share
prices affect worldwide operating business,
as well as investment and financing activities.
To represent these risks, IFRS 7 calls for sensitivity analyses which indicate the effects of
hypothetical changes in relevant risk variables
on net income and equity. The periodical
effects are determined by relating the hypothetical changes in the risk variables to the
inventory of financial instruments on the day
of the financial statement. This assumes that
the inventory as at the date of the financial
statement is representative of the entire year.
BSH has implemented a system based on the
sensitivity analysis, made up of various risk
analysis and risk management methods. The
sensitivity analysis approximately quantifies
the risk that can occur subject to the given
assumptions, if particular parameters are
changed to a defined extent. The risk assessment here assumes:
– a simultaneous, parallel 10 % devaluation/
upward revaluation of the US dollar against
euro
– a simultaneous, parallel 10 % devaluation/
upward revaluation of the pound sterling
against euro
– a simultaneous, parallel 10 % devaluation/
upward revaluation of the Turkish lira
against euro
– a parallel shift in the interest curves of
all currencies by 100 base points (1 percentage point)
– a 10 % rise or fall in the prices of all listed
investments classified as available-for-sale
financial assets
The potential economic effects of this represent estimates. They are based on the
assumption that the market changes implied
within the framework of the sensitivity analysis occur. As a result of the global market
developments actually taking place, the
actual effects on the consolidated income
statement can diverge significantly from
these.
More than half of BSH’s subsidiaries are
located outside the euro zone. As the
Group’s reporting currency is the euro, the
company translates the financial statements
of these companies into euros. In order to
address translation-related currency effects
in risk management, the working hypothesis
that investments in foreign companies are in
all cases long term in nature, and the returns
are continuously reinvested, is applied.
Translation-related effects occurring when
the value of net asset positions converted
into euros changes as a result of exchange
rate fluctuations are recognized in the shareholders’ equity in the BSH consolidated
financial statement and are not included in
the sensitivity analysis.
NOTES TO THE FINANCIAL INSTRUMENTS
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Foreign currency risks (conversion)
USD +10 %
On Dec. 31, 2007
USD –10 %
On Dec. 31, 2006
On Dec. 31, 2007
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Cash (1)
1
0
0
Trade accounts receivable (2)
4
0
4
15
0
9
On Dec. 31, 2006
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Effect on
net income
Effect on
other
movements
in shareholders’ equity
0
–1
0
–4
0
0
0
0
–4
0
0
–15
0
–9
0
–5
Financial assets
Other assets FVTPL (3)
Financial assets AfS (4)
0
1
1
5
0
–1
–1
–17
0
–18
0
17
0
18
0
3
1
–4
5
–3
–1
4
–5
Derivatives FVTPL
4
0
0
0
–3
0
0
0
Trade accounts payable (5)
0
0
–1
0
0
0
1
0
–3
0
–2
0
3
0
2
0
before tax
1
0
–3
0
0
0
3
0
Total pre-tax effect
4
1
–7
5
–3
–1
7
–5
Derivatives FVTPL
Effects on financial assets before tax
Financial liabilities
Financial liabilities (6)
Effects on financial liabilities
Foreign currency risks (conversion)
GBP +10 %
On Dec. 31, 2007
GBP –10 %
On Dec. 31, 2006
Effect on
net income
On Dec. 31, 2007
On Dec. 31, 2006
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Effect on
other
movements
in shareholders’ equity
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Cash (1)
1
0
Financial assets AfS (4)
0
0
0
0
0
–1
0
0
0
0
0
0
0
–1
0
–1
0
2
0
3
0
Derivatives CFH (7)
0
–4
0
0
0
4
0
0
Effects on financial assets before tax
0
–4
–1
0
1
4
3
0
0
Financial assets
Derivatives FVTPL
0
Financial liabilities
Derivatives FVTPL
0
0
–11
0
0
0
7
Trade accounts payable (5)
3
0
3
0
–3
0
–3
0
–1
0
–2
0
1
0
2
0
before tax
2
0
–10
0
–2
0
6
0
Total pre-tax effect
2
–4
9
0
Financial liabilities (6)
Effects on financial liabilities
–11
0
–1
4
The pound sterling is listed in accordance with IFRS 7.42, as significant transactions take place in this currency
throughout the fiscal year that are not reflected in the balances on the balance sheet date.
85
86
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Foreign currency risks (conversion)
TRY +10 %
On Dec. 31, 2007
TRY –10 %
On Dec. 31, 2006
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Effect on
net income
On Dec. 31, 2007
Effect on
other
movements
in shareholders’ equity
Effect on
net income
On Dec. 31, 2006
Effect on
other
movements
in shareholders’ equity
Effect on
net income
Effect on
other
movements
in shareholders’ equity
0
Financial assets
Cash (1)
0
0
1
0
0
0
–1
–5
0
26
0
5
0
–26
0
4
0
1
0
–4
0
–1
0
–1
0
28
0
1
0
–28
0
–8
0
–1
0
8
0
1
0
7
0
–5
0
–7
0
5
0
12
0
–8
0
–12
0
8
0
before tax
11
0
–14
0
–11
0
14
0
Total pre-tax effect
10
0
14
0
–10
0
–14
0
Trade accounts receivable (2)
Other assets FVTPL (3)
Effects on financial assets before tax
Financial liabilities
Derivatives FVTPL
Trade accounts payable (5)
Financial liabilities (6)
Effects on financial liabilities
AfS
FVTPL
CFH
Available for Sale financial assets
Fair Value Through Profit or Loss
Cash Flow Hedge
In 2006, the functional currency of the Turkish subsidiary (BSH-TR) was the euro. For reasons of comparability, it is
assumed for the foreign currency valuation scenario that the Turkish lira was already the functional currency of BSH-TR
in 2006.
Explanatory notes:
(1) Cash includes checks, cash on hand and deposits with banks. The currency risk encompasses corresponding revaluations.
(2), (5) Trade accounts receivable and payable encompass both the external and company-internal receivables and payables subject to the risk of revaluation.
(3) Other assets encompass in particular company-internal loan receivables and cash pool amounts subject to revaluation risks as a result of currency fluctuations.
(4) AfS financial assets encompass in particular securities. In the case of interest-bearing financial instruments, a currency change brings about a change in market
values which influences the result. No account is taken here of mutual funds in pensions and money market funds. Currency fluctuations in the case of stock and
mutual funds in stocks would likewise be shown via the revaluation reserve.
(6) Financial liabilities include both external borrowings and company-internal loan liabilities. The currency risk encompasses corresponding revaluations.
(7) Derivative instruments with hedge accounting (cash flow hedge) include only currency exchanges. For the effective part, the influence of currency changes is thus
recognized direct in equity.
Interest risks
In order to determine the interest risk, a flat-rate 1 % increase or cut in the interest level is simulated. The changes
in interest expense or income thus derive from the nominal volumes concerned. Changes in the market values of
fixed-income securities and derivatives that react to interest rates are determined by calculation of the Basis Point
Value (1 % = 100 BP).
NOTES TO THE FINANCIAL INSTRUMENTS
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Interest risk
+1%
–1%
On Dec. 31, 2007
Effect on
net income
On Dec. 31, 2006
Effect on
other
movements
in shareholders’ equity
Effect on
net income
On Dec. 31, 2007
Effect on
other
movements
in shareholders’ equity
Effect on
net income
On Dec. 31, 2006
Effect on
other
movements
in shareholders’ equity
Effect on
net income
Effect on
other
movements
in shareholders’ equity
0
Financial assets
Cash (1)
4
0
3
0
–4
0
–3
Financial assets AfS (2)
0
–6
0
–9
0
6
0
9
Derivatives FVTPL (3)
1
0
3
0
–1
0
–3
0
Effects on financial assets before tax
5
–6
6
–9
–5
6
–6
9
Derivatives FVTPL (4)
–2
0
0
0
2
0
0
0
Financial liabilities (5)
–1
0
–1
0
1
0
1
0
–3
0
–1
0
3
0
1
0
2
–6
5
–9
–2
6
–5
9
Financial liabilities
Effects on financial liabilities
before tax
Total pre-tax effect
AfS
FVTPL
Available for Sale financial assets
Fair Value Through Profit or Loss
Explanatory notes:
(1) Cash includes checks, cash on hand and deposits with banks. A change in the interest level would result in an increased/reduced interest income based on the
demand and fixed-term deposits existing on the date of the balance sheet and accounts with balance interest calculation.
(2) AfS financial assets encompass securities in particular. In the case of interest-bearing securities, a currency change brings about a change in market values, which
is reflected in the revaluation reserves. No account is taken here of mutual funds in pensions and money market funds. Stock funds and mutual funds in stocks are
here in particular subject to the other price risk, which is basically reflected in the revaluation reserves, and only in the case of existing impairments recognized as
income does the simulation take place via the income statement.
(3), (4) Derivatives not qualifying for hedge accounting include currency forwards, currency options, stock index futures, cross-currency swaps and interest rate index
futures. An effect of the particular scenarios is in each case recognized as income.
(5) Financial liabilities include both external borrowings and company-internal loan liabilities. A change in the level of interest would result in increased/reduced
interest expenses based on the variable non-current interest-bearing borrowings existing on the balance sheet date.
Other price risks
Within the framework of the other price risk, a 10 % flat-rate increase or reduction in the stock prices is simulated, with
the result that the stock prices or the corresponding stock price indices (relative to the mutual funds invested in stock
funds or relative to the index futures concerned) are shown as being 10 % higher or lower.
Other price risks
Stocks +10 %
On Dec. 31, 2007
Stocks –10 %
On Dec. 31, 2006
Effect on
net income
Effect on
other
movements
in shareholders’ equity
Financial assets AfS (1)
4
15
Derivatives FVTPL
0
Effects on financial assets before tax
4
–9
before tax
Total pre-tax effect
Effect on
net income
On Dec. 31, 2007
Effect on
other
movements
in shareholders’ equity
Effect on
net income
On Dec. 31, 2006
Effect on
other
movements
in shareholders’ equity
Effect on
net income
Effect on
other
movements
in shareholders’ equity
–15
0
Financial assets
15
0
–4
–15
0
2
0
0
0
–2
0
15
17
0
–4
–15
–17
0
0
–2
0
9
0
2
0
–9
0
–2
0
9
0
2
0
–5
15
15
0
5
–15
–15
0
Financial liabilities
Derivatives FVTPL (2)
Effects on financial liabilities
AfS
FVTPL
Available for Sale financial assets
Fair Value Through Profit or Loss
87
88
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Explanatory notes:
(1) AfS financial assets encompass securities in particular.
In the case of interest-bearing securities, a currency change
brings about a change in market values, which is reflected in
the revaluation reserves. No account is taken here of mutual
funds in pensions and money market funds. Stock funds and
mutual funds in stocks are here in particular subject to the
other price risk, which is basically reflected in the revaluation
reserves, and only in the case of existing impairments recognized as income does the simulation take place via the income
statement.
(2) Derivatives not qualifying for hedge accounting include
currency forwards, currency options, stock index futures, crosscurrency swaps and interest rate index futures. An effect of
the particular scenarios is in each case recognized as income.
Credit and liquidity risks
The liquidity risk for the company consists in
its possibly being unable to meet its financial
liabilities, for example the repayment of
financial liabilities and the payment of purchase commitments. BSH limits this risk by
means of effective central cash-management,
global access to lines of credit provided by
highly rated credit institutes and a syndicated
loan primarily concluded for contingencies.
A significant portion of the external bank
credits has been taken out over the long term,
thus excluding short-term liquidity risks from
repayment obligations. To supplement the
above-mentioned liquidity management tools,
BSH continuously follows up the financing
options offered on the financial markets. In
addition the Group monitors developments
relating to availability and cost. A major
objective here is to secure BSH’s financial
flexibility and to limit unreasonable refinancing risks.
No deficits from financial investments subject to credit risks had been identified as at
the date of the financial statement.
31 Leases
The breakdown of future minimum lease
payments under non-cancelable leases is as
follows:
Maturity
2007
2006
within one year
47
47
second to fifth year
95
84
more than five years
72
88
214
219
Total
The minimum lease payments relate primarily
to rents paid for real estate. Payments under
rental agreements and leases amounting to
EUR 57 million were recognized in income in
2007 (2006: EUR 49 million).
The leases for the land belonging to BSHAF-D
and leased to BSH-D and BSH Hausgeräte
Service Nauen GmbH (BSHHSN-D) had initial
terms that expired on March 31, 2003 (BSH-D)
and November 30, 2005 (BSHHSN-D) respectively. From these dates, the lessees had the
right to request from the lessor a five-year
renewal of the lease. This option is available
up to four times. BSH-D exercised its first
option for a renewal up to March 31, 2008;
BSHHSN-D also exercised its first option for
a renewal up to November 30, 2010. BSHAF-D
is assuming that the leases will be renewed
on all four occasions.
32 Contingent liabilities
and other financial liabilities
No provisions have been recognized for the
following contingent liabilities, stated at their
nominal values, because it is not deemed
probable that the risk will occur.
Surety and letters of support
2007
2006
16
15
Guarantees on notes
1
3
Other contingent liabilities
1
0
18
18
Total
33 Related party disclosures
The following companies or persons are
related parties for BSH GmbH under IAS 24:
– Robert Bosch GmbH, Stuttgart, Germany
– Siemens AG, Munich and Berlin, Germany
– Companies directly or indirectly controlled
by BSH GmbH,
– Other consolidated and non-consolidated
affiliated companies of the Robert Bosch
Group and the Siemens Group,
– Members of the executive management or
the Supervisory Board,
– Companies in which Robert Bosch GmbH,
Siemens AG, or members of the management hold a significant portion of the voting
rights.
NOTES TO THE BALANCE SHEET
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Transactions with these related parties are
conducted on an arm’s length basis. The
goods and services bought from related
parties mainly comprise production supplies
and sales services, and a small amount of
training and other services. The goods and
services supplied to related parties primarily
involve the sale of household appliances.
Sales, receivables and liabilities of BSH
GmbH with related companies:
2007
Robert Bosch
Group
Siemens
Group
2006
Robert Bosch
Group
Siemens
Group
Receivables
0
15
0
16
Liabilities
2
11
2
11
Sales
0
108
0
96
34 Remuneration of members of the Board of
Management and the Supervisory Board
The remuneration paid to the Supervisory
Board amounted to EUR 0.1 million (2006:
EUR 0.1 million); executive management
remuneration amounted to EUR 3.4 million
(2006: EUR 3.7 million). Former members
of executive management and their surviving dependents received payments of EUR
1.4 million, including pensions and transitional payments (2006: EUR 1.8 million). As
of December 31, 2007, provisions amounting
to EUR 19.7 million (2006: 22.2 million) were
recognized for pensions and benefit entitlements for these persons.
In 2007, as in 2006, there were no loans to
members of the executive management or
the Supervisory Board. The members of the
executive management and the Supervisory
Board are listed in the annexes.
Munich, February 28, 2008
BSH Bosch und Siemens Hausgeräte GmbH
Executive Management
89
G R O U P F I N A N C I A L S TAT E M E N T S
Appendix I
Consolidated Statement of Changes in Assets
January 1 to
December 31, 2007
(in EUR million)
I. Property, plant, and equipment
pos
als
Dis
ns
itio
Add
Cha
n
con ges in
s oli
dat the
ed g
rou
Cur
re
lati ncy tr
on
a
diff nsere
nce
s
. 1,
Jan
e
200
7
p
Purchase and production cost
Not
90
21
Land and buildings
727
2
0
30
16
Technical equipment and machinery
1,339
18
0
69
32
Other equipment, operating, and
office equipment
1,217
2
1
94
46
110
0
0
130
3
43
–1
0
43
0
3,436
21
1
366
97
Patents, licenses, etc. (excl. software)
30
0
0
1
0
Software
57
0
0
7
0
Goodwill
190
12
0
10
0
3
0
0
0
0
280
12
0
18
0
29
–1
0
0
0
Development expenses
3
0
0
0
0
Intangible assets being created
0
0
0
4
0
32
–1
0
4
0
3,748
32
1
388
97
Assets under construction
Advance payments on property,
plant, and equipment
II. Intangible assets
22
Purchased intangible assets
Advance payments on intangible assets
Self-created intangible assets
Software
CO N S O L I D AT E D S TAT E M E N T O F C H A N G E S I N A S S E S T S
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Depreciation, amortization, impairment losses
Carrying
07
tion
s
9
3
–2
326
445
154
1,548
989
11
0
95
30
45
–2
1,108
440
– 44
1,224
850
1
0
126
42
– 48
0
887
337
–103
134
3
0
0
2
2
0
0
3
131
– 35
50
0
0
0
0
0
0
0
0
50
0
3,727
2,152
14
0
245
83
0
–4
2,324
1,403
–1
30
22
–1
0
2
0
2
0
25
5
3
67
48
0
0
7
0
–2
0
53
14
0
212
3
0
0
0
0
0
0
3
209
–2
1
0
0
0
0
0
0
0
0
1
0
310
73
–1
0
9
0
0
0
81
229
0
28
10
–1
0
2
0
0
0
11
17
0
3
0
0
0
1
0
0
0
1
2
0
4
0
0
0
0
0
0
0
0
4
0
35
10
–1
0
3
0
0
0
12
23
0
4,072
2,235
12
0
257
83
0
–4
2,417
1,655
De c
ersa
Rev
Cur
re
200
. 1,
Jan
De c
* Including EUR 7 million impairment of property, plant and equipment.
. 31
, 20
22
l
0
pos
als
2
nt y
310
7
771
. 31
, 20
28
Rec
lass
ifica
Rec
lass
ifica
Dec. 31,
2007
Dis
ear
*
Cha
n
con ges in
s oli
dat the
ed g
rou
Cur
re
lati ncy tr
on
diff ansere
nce
s
07
tion
s
p
amounts
91
G R O U P F I N A N C I A L S TAT E M E N T S
Consolidated Statement of Changes in Assets
January 1 to
December 31, 2006
(in EUR million)
I. Property, plant, and equipment
pos
als
Dis
ns
itio
Add
Cha
n
con ges in
s oli
dat the
ed g
rou
Cur
re
lati ncy tr
on
a
diff nsere
nce
s
. 1,
Jan
e
200
6
p
Purchase and production cost
Not
92
21
Land and buildings
709
–9
0
17
8
Technical equipment and machinery
1,329
–10
0
75
51
Other equipment, operating, and
office equipment
1,068
–8
0
100
42
Assets under construction
59
0
0
122
1
Advance payments on property,
plant, and equipment
53
–1
0
34
0
3,218
– 28
0
348
102
Patents, licenses, etc. (excl. software)
33
–3
0
1
1
Software
48
0
0
6
1
Goodwill
187
–3
0
6
0
4
0
0
3
0
272
–6
0
16
2
29
0
0
0
0
3
0
0
0
0
32
0
0
0
0
3,522
– 34
0
364
104
II. Intangible assets
22
Purchased intangible assets
Advance payments on intangible assets
Self-created intangible assets
Software
Development expenses
CO N S O L I D AT E D S TAT E M E N T O F C H A N G E S I N A S S E S T S
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Depreciation, amortization, impairment losses
Carrying
5
0
0
310
417
–4
1,339
979
–5
0
106
46
– 45
0
989
350
99
1,217
714
–4
0
134
39
45
0
850
367
– 70
110
0
0
0
3
0
0
0
3
107
– 43
43
0
0
0
0
0
0
0
0
43
0
3,436
1,983
– 11
0
270
90
0
0
2,152
1,284
0
30
27
–2
0
1
1
–3
0
22
8
4
57
39
0
0
7
1
3
0
48
9
0
190
2
0
0
1
0
0
0
3
187
–4
3
0
0
0
0
0
0
0
0
3
0
280
68
–2
0
9
2
0
0
73
207
0
29
7
0
0
3
0
0
0
10
19
0
3
0
0
0
0
0
0
0
0
3
0
32
7
0
0
3
0
0
0
10
22
0
3,748
2,058
–13
0
282
92
0
0
2,235
1,513
De c
ersa
Cur
re
200
. 1,
Jan
De c
* Including EUR 33 million impairment of property, plant and equipment and EUR 1 million impairment of intangible assets.
. 31
, 20
27
l
Rev
06
tion
s
0
pos
als
–2
nt y
290
6
727
. 31
, 20
18
Rec
lass
ifica
Rec
lass
ifica
Dec. 31,
2006
Dis
ear
*
Cha
n
con ges in
s oli
dat the
ed g
rou
Cur
re
lati ncy tr
on
diff ansere
nce
s
06
tion
s
p
amounts
93
94
Share owner BSH Bosch und Siemens Hausgeräte GmbH
as at Dezember 31, 2007
Appendix II
Capital
investment in %
Consolidated subsidiaries according to IAS 27.12
Capital
investment in %
South America
BSH Electrodomésticos S.A., Buenos Aires
Germany
Constructa-Neff Vertriebs-GmbH, Munich
50
100
BSH Continental Eletrodomésticos Ltda., São Paulo
100
BSH Continental da Amazônia Ltda., Manaus
100
Neff GmbH, Munich
100
BSH Electrodomésticos S.A.C., Callao-Lima
100
BSH Hausgeräte Service GmbH, Munich
100
Briky S.A., Montevideo
100
BSH Hausgerätewerk Nauen GmbH, Nauen
100
BSH Hausgeräte Service Nauen GmbH, Nauen
100
Asia
Gaggenau Hausgeräte GmbH, Munich
100
BSW Household Appliances Co., Ltd., Wuxi
60
BSH Vermögensverwaltungs-GmbH, Munich
100
BSH Home Appliances Co., Ltd., Chuzhou
100
BSH Hausgeräte Vetriebs GmbH, Munich
100
Jiangsu BS Home Appliances Sales Co., Ltd. Nanjing
100
Europe
BSH Electrical Appliances (Jiangsu) Co., Ltd. Nanjing
100
BSH Home Appliances Ltd., Hong Kong
100
BSH Home Appliances S.A., Brussels
100
BSH Home Appliances Ltd., Tel Aviv
100
BSH Hvidevarer A/S, Ballerup
100
BSH Home Appliances Pte. Ltd., Singapore
100
BSH Kodinkoneet Oy, Helsinki
100
BSH Home Appliances Ltd., Auckland
100
BSH Electroménager S.A.S., Saint Ouen
100
BSH Home Appliances Pty Ltd, Clayton, Victoria
100
Gaggenau Industrie S.A.S., Lipsheim
100
BSH Home Appliances Ltd., Bangkok
100
BSH Ikiakes Syskeves A.B.E., Athens
100
BSH Home Appliances Manufacturing Ltd., Kabinburi
100
BSH Home Appliances Ltd., Milton Keynes
100
BSH Home Appliances FZE, Dubai
100
BSH Elettrodomestici S.p.A., Milan
100
BSH Home Appliances Sdn. Bhd., Kuala Lumpur
100
BSH Huishoud-elektro B.V., Amsterdam
100
Gaggenau Nederland B.V., Nieuwegein
100
Africa
BSH Husholdningsapparater A/S, Oslo
100
BSH Home Appliances (Pty) Ltd., Johannesburg
BSH Hausgeräte Gesellschaft mbH, Vienna
100
BSH Home Appliances Holding GmbH, Vienna
100
Consolidated subsidiaries according to IAS 27.13 (b)
BSH Finance Management GmbH, Vienna
100
Robert Bosch Hausgeräte GmbH, Munich
BSH Sprzet Gospodarstwa Domowego Sp.z o.o.,
100
–
Siemens-Electrogeräte GmbH, Munich
–
100
Constructa GmbH, Munich
–
100
Not consolidated subsidiaries according to IAS 27.13
BSH Electrocasnice S.R.L., Bucharest
100
BSH Bosch und Siemens Hausgeräte Altersfürsorge GmbH,
OOO BSH Bytowaja Technika, Moscow
100
Munich
OOO BSH Bytovye Pribory, St. Petersburg
100
Warsaw
BSHP Electrodomésticos, sociedade unipessoal, Lda.,
Carnaxide
100
BSH Hushållsapparater A.B., Stockholm
100
Not consolidated subsidiaries due to immateriality
BSH Hausgeräte AG, Geroldswil
100
BSH Home Appliances Sarl, Tunis
100
BSH Drives and Pumps s.r.o., Michalovce
100
BSH électroménagers S.A., Luxemburg
100
BSH Hišni Aparati d.o.o., Nazarje
100
BSH Electrodomésticos España, S.A., Huarte
100
Plus one subsidiary without business operation
BSH PAE, S.L., Vitoria
100
Profilo Elektrogeräte-Vertriebsgesellschaft mbH, Munich
BSH Krainel, S.A., Vitoria
100
BSH domácí spotřebiče s.r.o., Prague
100
BSH Ev Aletleri Sanayi ve Ticaret A.Ş., Istanbul
96, 75
BSH Háztartási Készülék Kereskedelmi Kft., Budapest
100
TOV BSH Pobutova Technika, Kiev
100
North America
BSH Electrodomésticos, S.A. de C.V., Mexico City
100
BSH Home Appliances Corporation,
Huntington Beach/New Bern
100
BSH Home Appliances Ltd./Électroménagers BSH Ltée,
Mississauga
100
100
Independent Auditors’ Report
We have audited the consolidated financial
statements prepared by BSH Bosch und
Siemens Hausgeräte GmbH, Munich, comprising income statement, balance sheet,
statement of changes in equity, cash flow
statement, and the notes to the consolidated
financial statements, together with the group
management report for the business year
from January 1 to December 31, 2007. The
preparation of the consolidated financial
statements and the group management
report in accordance with IFRS as adopted
by the EU, and the additional requirements
of German commercial law pursuant to
§ 315a Abs. (paragraph) 1 HGB are the
responsibility of the parent company’s
management. Our responsibility is to express
an opinion on the consolidated financial
statements and on the group management
report based on our audit.
We conducted our audit of the consolidated
financial statements in accordance with
§ 317 HGB and German generally accepted
standards for the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (Institute of Public Auditors
in Germany). Those standards require that
we plan and perform the audit such that
misstatements materially affecting the presentation of the net assets, financial position,
and results of operations in the consolidated
financial statements in accordance with the
applicable financial reporting framework and
in the group management report are detected
with reasonable assurance. Knowledge of the
business activities and the economic and
legal environment of the Group and expectations as to possible misstatements are taken
into account in the determination of audit
procedures. The effectiveness of the accounting-related internal control system and the
evidence supporting the disclosures in the
consolidated financial statements and the
group management report are examined primarily on a test basis within the framework
of the audit. The audit includes assessing the
annual financial statements of those entities
included in consolidation, the determination
of entities to be included in consolidation,
the accounting and consolidation principles
used, and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial
N OT E S T O T H E CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
statements and the group management
report. We believe that our audit provides a
reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our
audit, the consolidated financial statements
of BSH Bosch und Siemens Hausgeräte
GmbH, Munich, comply with IFRS as adopted
by the EU, the additional requirements of
German commercial law pursuant to § 315a
Abs.1 HGB, and give a true and fair view of
the net assets, financial position, and results
of operations of the Group in accordance with
these requirements. The group management
report is consistent with the consolidated
financial statements and as a whole provides
a suitable view of the Group’s position and
suitably presents the opportunities and risks
of future development.
Munich, February 28, 2008
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Dr. Plendl
Prosig
Wirtschaftsprüfer
Wirtschaftsprüfer
(German Public Auditors)
95
96
Summary of Past Performance
BSH Bosch und Siemens Hausgeräte GmbH (Group)
(in EUR million)
2007
IFRS
2006
IFRS
2005
IFRS
2004
HGB
2003
HGB
2002
HGB
2001
HGB
2000
HGB
8,818
6
81
8,308
13
78
7,340
7
78
6,844
9
77
6,296
0
74
6,289
3
73
6,092
–3
71
6,278
15
71
39.0
38.0
35.5
34.5
34.4
35.7
35.6
36.5
1,704
1,654
1,448
1,486
1,458
1,448
1,392
1,354
Investment in tangible fixed assets*
In percent of sales
378
4.3
358
4.3
333
4.5
278
4.1
275
4.4
278
4.4
220
3.6
190
3.0
Depreciation of tangible fixed assets*
In percent of capital investment
257
68
281
78
223
67
197
71
188
68
175
63
197
89
207
109
Balance sheet total
6,276
5,950
5,325
4,311
3,844
3,611
3,584
3,493
Fixed assets
2,374
2,259
1,957
1,571
1,484
1,277
1,291
1,154
Inventories
1,103
1,019
828
741
643
669
633
669
Trade receivables
and other current assets
2,053
2,052
1,655
1,587
1,407
1,181
1,209
1,295
Share capital and reserves
In percent of balance sheet total
2,372
38
2,057
35
1,859
35
1,535
36
1,176
31
961
27
837
23
711
20
Provisions
1,673
1,709
1,581
1,462
1,426
1,380
1,322
1,255
EBITDA
908
834
731
770
696
684
715
593
EBIT
651
553
505
541
486
474
470
348
Results from ordinary activities
637
542
500
520
473
434
459
312
Net income for the year
(before profit transfer)
411
372
386
367
278
257
241
199
Sales
Year-to-year change in percent
Foreign share of sales in percent
Workforce
(in thousands
at Jan.1 of the following year)
Personnel expenses
*Including intangible assets, excluding goodwill.
Oslo
Helsinki
Stockholm
St. Petersburg
Ballerup
Moscow
Amsterdam Nauen
Warsaw
Berlin
Bad Neustadt
Milton Keynes Brussels
Łódz
Bretten
Kiev
Prague
Luxembourg
Michalovce
Dillingen
Paris Giengen
Traunreut
Lipsheim
Munich Vienna
Budapest
Geroldswil
Nazarje
Bucharest
Milan
Toronto
Santander
Vitoria
Estella
Huarte
Chuzhou
Nanjing
Wuxi
Çerkezköy
Istanbul
Esquiroz
La Cartuja
Montañana
Hong Kong
Athens
Lisbon
Tunis
New Bern
La Follette
Kabinburi
Huntington Beach
Tel Aviv
Bangkok
Dubai
Kuala Lumpur
Singapore
Mexiko City
Callao
Johannesburg
Hortolândia
São Paulo
Melbourne
Group Headquarters
Subsidiaries
Factories
Cooking
Refrigeration/Freezing
Dishwashing
Buenos Aires
Washing/Drying
Consumer Products
Motors, pumps
Wide-coverage sales and customer service network
As at: May 2008
Auckland
BSH Bosch und Siemens Hausgeräte GmbH
Carl-Wery-Straße 34
D-81739 Munich
Tel.
Fax
+49 89 4590-01
+49 89 4590-2347
www.bsh-group.com
© BSH Bosch und Siemens Hausgeräte GmbH, 2008
General information and ordering the following reports:
Konzern-Geschäftsbericht 2007
Group Annual Report 2007
Verantwortung für Umwelt und Gesellschaft 2007
Environmental and Corporate Responsibility 2007
Corporate Communications
Tel.
+49 89 4590-2809
Fax
+49 89 4590-2128
E-Mail corporate.communications@bshg.com