Annual Report 2015

Non-financial performance indicators

As well as financial ratios, the following non-financial performance indicators play a decisive role in the sustained success of the technotrans Group.

Sustainability

technotrans subscribes to the principles of sustainable business development. The group parent and its subsidiaries treat employees, suppliers and business partners in a fair and respectful manner. They advocate the protection of the environment and of the earth’s resources, and are mindful of their social responsibility. They bind their employees into a culture of unfailing regard for the law and for ethical standards. At technotrans we accept that responsibility worldwide in a variety of ways, for instance through our commitment to the Global Compact initiative of the United Nations (UN), or through the group-wide code of behaviour introduced in 2011. We always base our actions on the THINK-LEARN-ACT corporate philosophy that is actively practised throughout the entire group. The UN Global Compact is a strategic initiative that seeks to promote corporate social responsibility and sustainability in organisations and enterprises. Its centrepiece is ten universally acknowledged principles spanning human rights, labour standards, environmental protection and anti-corruption measures.

technotrans has been a member of this initiative since 2006. We want to play an active role in furthering its long-term goal of defining the social and ecological aspects of globalisation, while also consciously measuring our activities and strategies against these standards. Implementing the ten principles is a permanent challenge in our day-to-day work. technotrans upholds the protection of human rights. We advocate compliance with worldwide labour standards, and are involved in the fight against child and forced labour. By offering approved student internships to young people, we offer them an opportunity to get to know the world of work during the school holidays through arrangements that meet all the statutory requirements, so that they can form a better picture of their own career direction. We do not tolerate discrimination of any kind against employees in our company (whether based on gender, skin colour, nationality, religion, social background, disability or other aspects). We adopt a zero tolerance stance towards any such misconduct at the workplace. We have also set ourselves the goal of making family and working life compatible. Our employees are appointed solely on the basis of their qualifications – and nothing else. Checks are regularly carried out to assess whether the guidance to that effect, as laid down for instance in management manuals or compliance guidelines, has been followed. This audit again brought to light no departures from the application of the principles in respect of labour standards and human rights in our group in 2015.

We (technotrans) are successful internationally. But all over the world there are the weak, who will have no future prospects if we do not join together to support them. Children and young people are in an even more precarious position. They need our help particularly urgently. That is why technotrans has been an active supporter of Friedensdorf International (Aktion Friedensdorf e.V.) since 2011; it performs constructive work with long-term benefits for the future. This charity attends to children from war-torn and crisis zones, supporting them with medical and psychological help, education, projects and relief supplies.

In its economic activity, technotrans consciously seeks to help the environment by preserving resources. We develop technologies that redefine the benchmark and are designed for energy-saving components and low-emission solutions. We are currently exploring a highly promising solution for sustainable energy storage technology in stationary and mobile applications. We will continue to give high importance to environmental protection and sustainability in our product development work and use of resources.

Corruption is a danger to everyone. It hampers development, deepens poverty and has a devastating effect on society, both economically and socially. High quality and reliability have built up our good reputation in the markets and repeatedly facilitate our access to new customers. To protect our group against potential losses, we maintain transparency and implement internal control mechanisms. In particular, we have adopted a worldwide, binding set of anti-corruption guidelines.

Much remains to be done, all over the world. For that reason, we will continue to do all in our power to support the Global Compact through our business activities and strategies, and will make adjustments as necessary to bring ourselves into line with these principles.

Employees

The number of employees in the technotrans Group at the end of the financial year increased from 781 to 828. Of the 810 employees on average in the year under review of 2015, 71 were in part-time employment. This represents a share of 8.8 percent.

technotrans was again able to respond flexibly to temporary fluctuations in the level of orders in 2015 by means of time accounts and temporary employees, with time credits then earned or used as necessary. The German production locations saw a volume-led increase in capacity in the production-focused areas in the year under review. Taking account of the planned growth, we consequently only plan further increases in capacity in isolated cases.

Revenue per employee rose only slightly year on year from € 146 thousand to € 152 thousand. This key performance indicator therefore falls short of former levels and from an operational perspective is not yet satisfactory. However from a strategic viewpoint it is still important for technotrans to hold onto qualified expertise carriers in order to unlock new markets and as a basis for future growth.

technotrans traditionally treats training as a very important matter. On the one hand it aims to continue recruiting juniors from within its own ranks. On the other hand it is in the interests of both society and the company to respond in a timely manner to the challenges of demographic change. The fact that society is growing older and that skilled staff are in short supply is already having an impact. This development will become even more marked over the next few years. The number of apprentices in the group increased to 80 (previous year: 77) at December 31, 2015. The apprentice total for technotrans AG, Sassenberg, of 60 was slightly higher than at the end of 2014 (56 apprentices). The proportion of apprentices at the group parent was therefore almost 14 percent. One initiative specifically seeks to create additional apprenticeships for high-school graduates as an attractive alternative to “studying in overcrowded lecture theatres”. The range of vocations for which technotrans now provides training is correspondingly diverse:

For many years technotrans AG has been punching above its weight in the standard of training it provides for juniors. This commitment again paid dividends in the 2015 financial year. Kevin Fislake (20), who started training at technotrans as a Mechatronics Engineer for Refrigeration Technology in 2011, completed his apprenticeship in January 2015 as the Chamber of Commerce’s top performer. In order to broaden the horizons of its apprentices during their training, technotrans encourages exchanges between the apprentices and their colleagues at neighbouring businesses. It also aims to promote specialist exchanges within the group.

technotrans is a technology company. That is reflected in the qualifications of its employees. Not counting the apprentices, 40 percent of employees have undergone training leading to qualifications, 22 percent have an engineering qualification and 23 percent have an academic background. technotrans is furthermore a young company: around 47 percent of the workforce are under 40 years old, and only 5 percent are over 60. The average age is just over 40; this figure has therefore risen slightly compared with the previous year.

The specialist and social expertise of a company’s employees are its most valuable asset. By way of personnel development, internal and external training as well as vital advancement measures were again provided for employees in 2015 to keep them well qualified for the challenges of the future. technotrans will continue with its systematic personnel development in this area over the coming years. In addition to specialist training, the priority in the year under review was on leadership and junior leadership training.

To make it easier for employees to balance working and family life, technotrans has established a partnership with a municipal kindergarten at the Sassenberg location in order to provide flexible child care options for children who have not yet reached school age. The arrangements are aimed especially at women who would like to keep pursuing their career objectives while bringing up a family.

Personnel expenses totalled € 42.2 million in 2015 (previous year: € 39.8 million). The increase results on the one hand from the pay increase made in the financial year and on the other hand from the capacity buildup in the growth-driving technology areas of the production plants. One-off severance payments were significantly lower than in the previous year, falling from € 0.9 million to € 0.1 million. The personnel costs ratio for the group (personnel expenses as a proportion of revenue) was 34.3 percent (previous year: 35.4 percent). The aim is to reduce the personnel costs ratio further in future.

The remuneration of employees at technotrans AG is a reflection of their individual positions within the company. They are each allocated to grades, which in turn comprise a number of remuneration bands. Annual decisions on percentage pay increases are negotiated between the Board of Management and the Works Council. Pay increases averaging 3.0 percent were agreed for the 2016 financial year.

The employees’ profit share is in addition tied to the EBIT margin. Upward of an EBIT margin of 5 percent, a bonus is paid out to those who are not entitled to a management bonus. Performance-related pay components e.g. for service technicians were also introduced. There have been other fringe benefits such as employee-financed occupational health insurance cover for all employees at German locations since 2014; this provides top-up insurance cover where there are gaps in the cover afforded by the statutory health insurance schemes. technotrans will become even more involved in heath management in the future.

Throughout the group, managers receive (management) bonuses that are agreed individually in their contracts and depend half on the attainment of company targets, and half on their personal performance. They receive part of annual pay increases in the form of shares. There are no other incentive schemes involving share components.

Corporate Communications

Corporate communications by the technotrans Group cover the management of communication processes taking place between the company and external customers, service providers etc., as well as internal employees. The aim is to position products and services on the market, and also to create acceptance and establish long-term relationships with the company’s various different target groups. The corporate communications tools used within the technotrans Group include e.g. classic advertising and sales promotions, social media, corporate identity, employee communications and investor relations. Classic advertising remains a major component within the marketing mix, alongside the now-established online media. The aim is to raise awareness of the group further by means of advertisements in trade journals in the relevant industries such as the printing and laser industry, stamping and forming technology, machine tools, and battery and inverter cooling. Press releases in the form of product information bulletins and user features complete the range of press work and provide important details on both well-established and new products.

Industry exhibitions remain an important aspect of corporate communications at technotrans. As a marketing instrument, they are still one of the key forms of B2B communication. Shows work because they give the company the opportunity to present itself to a specialist international audience and establish direct personal contact with the visitors to shows, who for the most part are the decision-makers at their companies. The technotrans Group’s show calendar was very extensive in 2015, comprising everything from industry exhibitions and specialist conferences to small-scale congresses. The season was kicked off in March 2015 with the Laser World of Photonics in Shanghai, China. The group – comprising technotrans, Termotek and KLH – took this opportunity to present its solutions in the field of cooling and temperature control technology for the laser industry. The counterpart to the China show was the Laser World of Photonics in Munich, Germany, which took place in June. The show is held every two years and is likewise aimed at a specialist audience from the world of lasers. The technotrans Group and its two subsidiaries teamed up to present itself as a full-liner for cooling systems in the laser industry. The 12th Blechexpo provided a platform for the new spray lubrication system badged as the spray.xact easy. At the international industry exhibition for sheet-metal working in Stuttgart, technotrans presented its solutions for stamping and forming technology. With spray.xact, the company offers metal processors various versions of its established lubrication system with no spray mist.

technotrans AG put in its first appearance at Fabtech, which took place in Chicago, USA, in November. At North America’s largest industry exhibition for sheet-metal working, the entire product range for the lubrication of coils, blanks and profiles was demonstrated and the spray.xact was presented to an impressed audience. The spray lubrication systems also enjoyed a successful debut in São Paulo, Brazil.

In 2015 technotrans took the opportunity to present the company and its products with a print focus at two different industry exhibitions: the Expográfica in Mexico, and the World Publishing Expo in Hamburg. At the Hamburg show, technotrans placed the spotlight on the modernisation of web offset printing presses. From October 5 to 7, the company presented how its peripherals can enable users to get more out of established presses. The show appearance focused mainly on the installation of new and the substitution of existing spray dampening systems in order to boost competitiveness. technotrans AG showcased its mobile and stationary cooling solutions for the first time at busworld 2015. At the international industry exhibition for the bus and coach industry from October 16 to 21 in Kortrijk, Belgium, the company presented modules for energy storage cooling systems that have been specially tailored to buses and coaches. The spotlight was especially on flat-design cooling systems for lithium-ion batteries as well as on heat exchangers for charging stations and inverters. Energy storage device cooling systems made in the Westphalian town of Sassenberg are now being used to good effect in trams and buses worldwide, or for cooling charging stations for rail and bus projects. technotrans presented its solutions for the laser and machine tool industry and for stamping and forming technology at smaller, more specialised events such as the Engineering Design Show in Coventry, UK, the Battery Conference in Aachen, Germany, and, for the third time, the Stamping Technology Congress in Dortmund.
Among the shows in 2016, the drupa in Düsseldorf, Germany, is an especially big event. Over a period of eleven days in June, technotrans will be showcasing its solutions for sheet-fed, web, newspaper, flexographic and digital printing there. Visitors can look forward to exhibits that feature innovative, forward-looking technology and already meet future ERP (energy related product) guidelines or ecodesign standards. Later on in the year technotrans will be making its second appearance at InnoTrans, an international industry exhibition for transport technology in Berlin that is held every two years. Its presentation there will again focus on the mobile cooling systems for batteries and heat exchangers for charging stations and inverters. With electric mobility increasingly moving into the mainstream, technotrans’ cooling and temperature control have already met with an enthusiastic reception among both manufacturers of energy storage devices and manufacturers of buses and trams. To generate interest in the show presence, the group’s activities there are being publicised through numerous PR measures. A large number of trade magazines report on technotrans products before, during and at the shows.

The rapid development in information and communications technology presents a succession of new challenges and opportunities to corporate communications. Social networks such as YouTube, Xing, LinkedIn, Facebook and Twitter have long made their mark on the communication strategies and forms. technotrans’ platforms have now become established features of the social media landscape.

The motto of this year’s Annual Report ‘growing together’ is also reflected in the new visual identity of the technotrans Group. The corporate identity has been completely revamped and infused with new vitality. The group will in future be identifiable as such thanks to a uniform brand identity. Alongside the engaging brand labels, the focus is on the colour scheme. It can be used to handle four different levels of communication spanning marketing, sales, product presentation and corporate presentation in a flexible way, depending on the specific requirements, while nevertheless preserving a consistent overall impression of the corporate design. Carefully placed design elements recur throughout. The website will in future adopt a ‘responsive design’ and thus satisfy current web requirements. In other words, the page view adapts to the format of the device on which it is being displayed: desktop, tablet or smartphone.

Good communication and information are important and arguably decisive success factors in smooth collaboration in and between organisations. Communication is an ongoing occurrence! Everyone processes a wide range of information in the course of a working day. The technotrans Group handles internal communication across locations, and even worldwide, over the intranet.

The shares of technotrans AG have been traded on the stock market since March 1998. As a company listed in the Prime Standard segment, we must meet the highest possible standards of transparency. Investor relations work includes such tasks as regular financial reporting in German and English. The shares of technotrans AG were converted from bearer to registered shares in October 2008. Since the changeover, we have also been able to communicate directly with our company’s shareholders. Knowing the shareholder structure furthermore enables us to target our investor relations work even better. We continued to devote considerable energy to corporate communications in the year under review.

Transparency and credibility are the cornerstones of our communications with the capital market. All publications are also available on the internet. Regardless of whether someone is a shareholder or is merely interested in the company, and whether they hold a large or small number of shares, in addition to providing written reports we explain individual aspects and answer questions in telephone conferences or face-to-face talks. The result of an information policy that is candid and open to scrutiny is a relationship of trust with all capital market operators, based on mutual respect, and we value it very highly.