ANNUAL REPORT 2009 WITH RENEWED ENERGY

Transcription

1 ANNUAL REPORT 2009 WITH RENEWED ENERGY

2 The Fraunhofer-Gesellschaft Research of practical utility lies at the heart of all activities pursued by the Fraunhofer-Gesellschaft. Founded in 1949, the research organization undertakes applied research that drives economic development and serves the wider benefit of society. Its services are solicited by customers and contractual partners in industry, the service sector and public administration. At present, the Fraunhofer-Gesellschaft maintains more than 80 research units in Germany, including 59 Fraunhofer Institutes. The majority of the 17,000 staff are qualified scientists and engineers, who work with an annual research budget of 1.6 billion. Of this sum, more than 1.3 billion is generated through contract research. Two thirds of the Fraunhofer- Gesellschaft s contract research revenue is derived from contracts with industry and from publicly financed research projects. Only one third is contributed by the German federal and Länder governments in the form of base funding, enabling the institutes to work ahead on solutions to problems that will not become acutely relevant to industry and society until five or ten years from now. Affiliated research centers and representative offices in Europe, the USA and Asia provide contact with the regions of greatest importance to present and future scientific progress and economic development. With its clearly defined mission of application-oriented research and its focus on key technologies of relevance to the future, the Fraunhofer-Gesellschaft plays a prominent role in the German and European innovation process. Applied research has a knock-on effect that extends beyond the direct benefits perceived by the customer: Through their research and development work, the Fraunhofer Institutes help to reinforce the competitive strength of the economy in their local region, and throughout Germany and Europe. They do so by promoting innovation, strengthening the technological base, improving the acceptance of new technologies, and helping to train the urgently needed future generation of scientists and engineers. As an employer, the Fraunhofer-Gesellschaft offers its staff the opportunity to develop the professional and personal skills that will allow them to take up positions of responsibility within their institute, at universities, in industry and in society. Students who choose to work on projects at the Fraunhofer Institutes have excellent prospects of starting and developing a career in industry by virtue of the practical training and experience they have acquired. The Fraunhofer-Gesellschaft is a recognized non-profit organization that takes its name from Joseph von Fraunhofer ( ), the illustrious Munich researcher, inventor and entrepreneur. 1

3 ANNUAL REPORT 2009 WITH RENEWED ENERGY

4 Ladies and gentlemen, The past year has been both exciting and challenging. The Fraunhofer-Gesellschaft celebrated its 60th anniversary in 2009, and profited from the occasion to look back over many years of successful research and sustained growth. Nevertheless, we are conscious of the fact that this positive development would not have been achieved without a willingness to change. Fraunhofer has never ceased in its efforts to adapt to new circumstances as they arise, not merely content to fulfill its mission as a driver of innovation for industry but always striving to improve. We aim to continue to apply this strategy in the future with even greater conviction. And that is one of the reasons why this Annual Report, the first to be published after our anniversary year, bears the motto with renewed energy. In 2009, the financial and economic crisis significantly slowed the development of economies around the world, and governments and companies have had to employ all the means at their disposal to soften its impact. Many of the measures introduced to manage the situation have brought about welcome improvements, but we will still have to live with the consequences of the crisis for a long time to come. Huge investments will be necessary to repair the damage and ensure that such events never happen again. For our part, the important thing now is to grasp the available opportunities to position our organization favorably in the changed world markets by offering innovative products and processes. It won t be easy, but with new energy it ought to be achievable!

5 The debate on climate change shows no signs of abating. The Copenhagen conference showed that the governments of the world are at last coming to accept that CO 2 emissions are the main cause of global warming even if still too little in the way of concrete political action emerged from the meeting. At least there is consensus that far greater priority must be given in future to renewable energy sources, which release significantly less CO 2, and to energy-saving technologies. The energy industry itself plans to build large-scale solar powergenerating plants in the Sahara desert and create a unified network to link all the wind turbines in Europe. This not only demonstrates industry s willingness to share in the responsibility but also means that it views such concepts as a viable commercial proposition. We need to focus our technical skills and resources on these new energies from renewable sources interpreting our motto with renewed energy literally as well as figuratively. The latest surveys reveal that we continue to be considered one of the most popular employers in Germany. This is excellent news, because it gives us a strong profile that enables us to compete successfully for the best scientists, researchers and engineers. And this in turn is important because we need outstanding talent to tackle the intellectual challenges of our scientific work. Intelligence is the most valuable resource in today s highly complex world. It is a remarkable and virtually inexhaustible source of energy, springing forth in abundance from the inquiring minds of educated people. And this store of energy is what we need to tackle the other energy problems. Renewed energy is what we need today in every sense! Sincerely, Many of the challenges that present themselves today directly concern the area of applied research, and this is precisely the domain in which the Fraunhofer-Gesellschaft has its mission. Our institutes possess a wealth of specialist knowledge on subjects related to renewable energies, and industry is in greater need of innovations than ever before. The demand for our expert services is correspondingly high, and contributing to the continued growth of the organization. Our current research budget amounts to over 1.6 billion euros, and we provide interesting and challenging work for more than 17,000 highly motivated employees. Hans-Jörg Bullinger President of the Fraunhofer-Gesellschaft 3

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7 REPORT OF THE EXECUTIVE BOARD The Executive Board Management report 2009 Report of the Senate on the financial year REVIEW OF FRAUNHOFER RESEARCH Projects and results FINANCIAL REPORT Balance sheet at December 31, 2009 Income statement for the financial year 2009 Reconciliation between income statement and performance statement (cash-basis accounting) SERVICE Addresses Editorial notes 5

8 REPORT OF THE EXECUTIVE BOARD

9 THE EXECUTIVE BOARD MANAGEMENT REPORT 2009 REPORT OF THE SENATE ON THE FINANCIAL YEAR 2009

10 REPORT OF THE EXECUTIVE BOARD THE EXECUTIVE BOARD Prof. Dr.-Ing. Hans-Jörg Bullinger Corporate Management, President of the Fraunhofer-Gesellschaft Hans-Jörg Bullinger is professor of industrial science and technology management at the University of Stuttgart. He founded the Fraunhofer Institute for Industrial Engineering IAO and was its director for over 20 years, before becoming President of the Fraunhofer-Gesellschaft in Hans-Jörg Bullinger also represents the applied research community as an advisory member of Chancellor Merkel s Council for Innovation and Growth and is chairman of the Research Union Economy Science, which was founded to implement the German government s High-Tech Strategy. Innovation is the single most important factor in helping the economy emerge from the crisis. Fraunhofer is ready and willing to support all companies with its excellent research capabilities. 8

11 Prof. Dr. rer. nat. Ulrich Buller Senior Vice President Research Planning Ulrich Buller was head of the central research planning department, director of the Fraunhofer Institute for Applied Polymer Research IAP and chairman of the Fraunhofer Group for Materials and Components prior to being elected a member of the Fraunhofer-Gesellschaft Executive Board in For us at Fraunhofer, the current Future of Energy Year is an opportunity to market our comprehensive skills and many years of experience in renewable energy even more intensively. 9

12 REPORT OF THE EXECUTIVE BOARD Prof. (Univ. Stellenbosch) Dr. rer. pol. Alfred Gossner Senior Vice President Finance and Controlling, IT Alfred Gossner pursued a career with the Allianz Group in various international postings. Before moving to the Fraunhofer-Gesellschaft in 2002, he served as a member of the board of management of Allianz Versicherungs-AG. Efficient structures and an excellent array of services are important reasons for the Fraunhofer- Gesellschaft s ongoing success and steady growth in recent years. 10

13 Prof. Dr. phil. Marion Schick Senior Vice President Human Resources and Legal Affairs Marion Schick is a prominent member of the German academic world. Before taking up her post on the Executive Board of the Fraunhofer-Gesellschaft in 2008, she served for many years as the president of the Munich University of Applied Sciences. Fraunhofer is one of the most attractive employers for young scientists and technicians. We want to strengthen our top position even further; as a leading research nation, Germany will benefit from that, too. 11

14 SUMMARY OF KEY FIGURES AND RATIOS

15 Fraunhofer-Gesellschaft s business development Total business volume (cash basis) in million (operations and capital expenditure) Change 17% 5% 11% 6% 15% Total assets/total equity and liabilities in million Change 21% 9% 12% 5% 6% Breakdown of expenditure in %¹ Personnel expense ratio Non-personnel expense ratio Capital expenditure ratio Breakdown of revenue in %² Total Industry Public sector³ International EU Employees 4 12,400 12,775 13,630 15,090 17,150 1 Total operating expense/business volume (excluding change in license-fee revenue reserve after deduction of transfer to foundation fund capital) 2 Project revenue/operating budget and imputed depreciation allowance for contract research activities (including change in license-fee revenue reserve) 3 Public sector includes German federal and Länder governments, EU, research grants and other R&D/non-R&D 4 Numbers of employees at December 31, including part-time staff 13

16 REPORT OF THE EXECUTIVE BOARD MANAGEMENT REPORT 2009 Mission and profile of the Fraunhofer-Gesellschaft Economic and political background 2009 As one of the leading organizations for applied research in Germany and Europe, the Fraunhofer-Gesellschaft s core purpose is to pursue knowledge of practical utility. With its staff of approximately 17,000 employees, the Fraunhofer-Gesellschaft promotes and conducts applied research within an international context. Its research is of direct value to private and public enterprise and provides substantial benefit to society. By orienting the focus of its work towards the key technologies of the future, the Fraunhofer-Gesellschaft plays a central role in the innovation process at a national and European level. Through its affiliated research centers and representative offices in Europe, the USA and Asia, the Fraunhofer-Gesellschaft enjoys direct contact with the regions of greatest importance to present and future scientific progress and economic development. The organization s more than 80 research entities, including 59 Fraunhofer Institutes, spread across numerous locations in Germany, generate a total business volume of 1.6 billion, of which 1.3 billion is from contract research. Roughly two-thirds of the Fraunhofer-Gesellschaft s contract research revenue is derived from contracts with industry and publicly funded research projects, while the remaining third comes from the federal and Länder governments. This equips the organization to finance pre-competitive research projects that promise to be of future benefit to industry and society. The world economic crisis and continuing turbulence on the financial markets triggered a 5-percent drop in Germany s gross domestic product (GDP) in 2009 and the worst economic slump in the history of the Federal Republic of Germany. Hardest hit by the economic crisis were, above all, the automobile, mechanical engineering and plant construction industries, the growth sectors of recent years. The decline in the economy that started in the fourth quarter of 2008 gathered speed at the start of In the course of the year a slight stabilization was achieved thanks to the German government s two economic stimulus programs. Still, towards the end of 2009, the recovery looked to be running out of steam again, with GDP hovering at the previous year s level. The drop in GDP stemmed mainly from a collapse in exports. For the first time since 1993, the German economy was battered by a drop in foreign trade, an area that had been the mainstay of the country s economic success for so many years. Exports fell by 14.7 percent and, after rising continually for three years, investment expenditure was substantially lower in 2009 compared with the previous year. Gross investments decreased by 12.5 percent. Domestic demand provided the only modest contribution to growth, with decisive stimulus coming from government spending, which grew by 2.7 percent. Consumer spending, by comparison, rose by a mere 0.4 percent after adjustment for inflation. In spite of the economic crisis, unemployment grew only marginally in The large-scale extension of short-time work was the main reason employment levels remained generally unchanged over the previous year. 14

17 The federal government s monetary and fiscal measures to stabilize the economy pushed up government spending and added to public debt. In 2009 the public sector posted a financial deficit of 77 billion. As a result, after achieving a balanced budget the year before, Germany failed for the first time in four years to meet the 3-percent deficit criterion set down in the Treaty of Maastricht. Even in the face of the economic crisis, German spending on research and development (R&D) rose again in 2009, thus underscoring the significance of innovative technologies as a key driver of future economic growth. Indeed, the economic future of a knowledge-based society like Germany depends on its power to innovate and tap into lead markets. In 2009 the federal government raised its research budget by 9 percent. What is more, ample funds were made available for R&D via the federal government s economic stimulus programs, its High-Tech Strategy for Germany initiative, and its joint Excellence Initiative with the Länder governments. On current estimates, research investment by German business reached 57 billion; in spite of the huge drop in revenues, this figure was still in line with the previous year. Nevertheless, the EU member states and the federal government fell short of their joint goal to boost the share of R&D spending to 3 percent of GDP by Fraunhofer-Gesellschaft s business development Its 60th anniversary year turned out to be a highly successful one for the Fraunhofer-Gesellschaft. Despite the worldwide global crisis, the organization enjoyed strong growth in Successful integrations and the high volume of capital expenditure on major infrastructure are particularly noteworthy. Total business volume grew by 15 percent a major increase over 2008 reaching a new all-time high of 1617 million. It comprises expenditure on contract research (the main area of R&D activities), defense research, and major infrastructure capital expenditure. In all three areas, business volume reached record levels in the financial year Expenditure on contract research activities rose by 49 million in the year under review to reach 1340 million. At 87 million, expenditure in the defense research sector was more than double the previous year s figure, while the 190 million spent on major infrastructure was 118 million higher than in The German government and private enterprise must work harder to enhance innovation. Innovation holds the key to economic growth in countries like Germany, which are highly developed but lacking in natural resources. In its coalition agreement, the German government pledged to boost R&D spending and legislate tax breaks for R&D in an effort to order to ramp up corporate spending in this area. Above and beyond this, we need to create conditions that nurture innovation and must invest more in the training of high-quality scientific personnel. That will underpin future growth, employment and prosperity in Germany. 15

18 REPORT OF THE EXECUTIVE BOARD Management report 2009 Fraunhofer-Gesellschaft total business volume (cash basis) in million = in million In the following, we report on income and expenditure items of the performance statement for each separate type of research. For information on our accounting principles, please refer to the notes to the financial statements (not included in the English version of the annual report). Personnel expenses for contract research activities rose by 12 percent to 697 million in 2009, mainly owing to growth in staffing levels. Aside from growth through integrations, in 2009 we filled some 900 new positions in contract research and also increased the number of research assistants. This counter-cyclical investment in human resources is proof positive of the Fraunhofer-Gesellschaft s commitment to promoting employment and workplace stability. Non-personnel expenses reached 483 million, and operational expenses were roughly in line with A comparatively high transfer to provisions in 2008 meant that, all in all, nonpersonnel expenditure was lower in In contract research we invested 160 million in plant and technical equipment, office equipment and minor construction work, enabling the Fraunhofer Institutes to upgrade their technical infrastructure, a major factor in their business success. Contract research Defense research Major infrastructure capital expenditure 16

19 Expenditure and income for contract research activities (in million) Personnel expenses Non-personnel expenses Change in the special license-fee revenue reserve and allocation to foundation capital Current capital expenditure Expenditure Imputed depreciation allowance Project revenue Industrial revenue of which license-fee revenue Federal and Länder governments European Commission Other income Base funding including reserves Income The Fraunhofer-Gesellschaft can report a positive trend in earnings for Project revenue from industry and publicsector customers reached 916 million. At 7 percent, the growth rate was disproportionately high relative to expenditure. Over two-thirds of total expenditure was financed from project revenue, reflecting the organization s own financial structure. The proportion of project revenue from the public sector grew strongly, at the expense of industrial revenue. Industrial revenue reached 407 million, of which 329 million was from industrial contracts and 78 million from patent licensing fees. With a drop of 10 percent in industrial revenues, the effect of the economic crisis was much more subdued here than in the mechanical engineering and plant construction industries, key lines of business for the Fraunhofer-Gesellschaft. On the other hand, the huge increase in public-sector contracts meant that existing capacity was fully utilized. 17

20 REPORT OF THE EXECUTIVE BOARD Management report 2009 As expected, the 78 million in license-fee revenue was lower than the previous year. This directly reflects the very high income from lump-sum mp3 licensing fees in previous years, which licensees paid in preference to periodic fees. Lower industrial revenue was more than made up for by strong growth in public-sector project revenue. Public-sector project revenue from the federal and Länder governments totaled 317 million in the 2009 financial year. Owing to the anticyclical behavior of public-sector customers, revenue was just under 30 percent higher than 2008, with revenue from Länder government projects up by as much as 56 percent. In the financial year 2009, the Fraunhofer-Gesellschaft generated revenues of 156 million from contract research projects with international partners; this includes 18 million in revenues from foreign subsidiaries. Despite the global economic crisis and its impact on international markets, the Fraunhofer-Gesellschaft was for the most part able to maintain its excellent performance of the previous year thanks to a successful strategy of internationalization. Other income from R&D activities rose to 23 million and includes 10 million from contracts with universities. The Fraunhofer-Gesellschaft intends to intensify its close partnerships with universities, as the shared use of resources offers numerous benefits. Changes in contract research revenue in million = in million Revenues from the German Research Foundation (DFG), other foundations and research funding organizations amounted to 20 million, which is 2 million above last year s figure and includes 9 million from projects funded by the Fraunhofer- Zukunftsstiftung (Fraunhofer Future Foundation). Industrial revenue (excluding license fees) License-fee revenue Federal and Länder governments European Commission Other sources 18

21 Other revenue from the organization s own activities came to 84 million, up 24 million over the previous year. The main revenue items were a gain of 32 million from the reversal of reserves, and 17 million in interest income and income from the sale of securities held as current assets. The Fraunhofer-Gesellschaft also acted as trustee for research contracts awarded by the BMVg to researchers outside the organization itself. These research funds held in trust, amounting to 2 million, are not included in the Fraunhofer- Gesellschaft s expenditure and income. Base funding from the federal and Länder governments increased by 3 percent in accordance with the agreements in place. In the financial year 2009, the defense research segment was extended by the three institutes of the former Forschungsgesellschaft für Angewandte Naturwissenschaften e.v. (FGAN Research Establishment for Applied Science), which was integrated in the Fraunhofer-Gesellschaft on January 1, As a result, expenditure jumped by 49 million to 87 million, which amounts to 5 percent of the organization s total business volume (cash basis). This expenditure can be broken down into 55 million in personnel expenses, 19 million in non-personnel expenses, and 13 million in current capital expenditure. 56 million was received in the form of base funding from the German Federal Ministry of Defense (BMVg), while a further 31 million was financed mainly through additional BMVg projects. The defense-related research institutes also successfully apply their technological expertise to contract research projects for the civil sector, developing solutions for customers in industry and public administration. Defense research and contract research complement each other, and combining them can generate synergies. Another advantage of this dual-use philosophy is that it permits the cost-efficient utilization of available R&D capacities. The defense-related institutes generated 20 million in income from civil contract research, which is posted under contract research activities. Major infrastructure capital expenditure relates to infrastructure projects financed by the federal and Länder governments. In 2009, the Fraunhofer-Gesellschaft invested a total of 190 million (2008: 72 million) in institute buildings and initial laboratory equipment for its institutes. This broke all previous records for major infrastructure capital expenditure and was primarily the result of the federal and Länder stimulus programs. The economic stimulus program I of the German Federal Ministry of Education and Research (BMBF) provided an additional 65 million in funding to strengthen research infrastructure. Through a wide variety of projects, investments were made in the energy-conserving refurbishment of buildings and in technical equipment for use in research fields such as energy storage, resource-conserving production or electromobility. The federal government s economic stimulus program II provided further funding for new infrastructure projects, in which the federal and Länder governments invested a total 8 million in In addition to initial funds for the energy-conserving refurbishment of buildings provided by the German Federal Ministry of Transport, Building and Urban Development (BMVBS), strategic investments were funded mainly by the Länder Baden-Württemberg, Rhineland-Palatinate and Saxony-Anhalt. 19

22 REPORT OF THE EXECUTIVE BOARD Management report 2009 To finance this major infrastructure capital expenditure, the Länder governments utilized 55 million from the European Regional Development Fund (ERDF). In the year under review many building projects entered the final stages of construction. However, the main thrust of major infrastructure capital expenditure was on providing the institutes with state-of-the-art technical laboratory equipment. In mid-2009, the new building of the Fraunhofer Research Institution for Electronic Nano Systems ENAS was inaugurated, and all departments of the Fraunhofer ENAS located in Chemnitz can now work under one roof for the first time. With 31 offices and 20 laboratories, the new building offers space for 100 staff. In the year under review, 7 million was spent completing the building and purchasing the initial equipment, with 60 percent of these funds coming from the European Union and 20 percent each from the Free State of Saxony and the federal government. As part of a joint initiative of the Fraunhofer Institutes for Solar Energy Systems ISE and for Mechanics of Materials IWM, the Fraunhofer Center for Silicon Photovoltaics CSP is being set up in the eastern German towns of Halle (Saale) and Schkopau. The research to be carried out there in future will cover the entire value-chain of thin silicon solar cells and will provide support for the photovoltaic companies located in Saxony-Anhalt. In the year under review, 13 million was invested in construction and the purchase of initial equipment, including the latest vacuum thin-film systems, structural analysis units and systems for cleaning silicon wafers. 50 percent of the financing came from the European Regional Development Fund (ERDF) and 25 percent each from the federal and Saxony-Anhalt governments. Towards the end of 2009 work began on expanding the office space and clean-room facilities at the Fraunhofer Institute for Silicon Technology ISIT in Itzehoe, where research will focus on developing power electronics components and innovative microsensors, as well as on devising new techniques for the optimized production of microsystems. Money was also spent upgrading the existing facilities and purchasing new equipment for the clean rooms already in place. The funds invested amounted to 6 million, half of which was provided by the European Regional Development Fund, the other half coming in equal parts from the federal and Schleswig-Holstein governments. In the year under review, the Fraunhofer Institute for Ceramic Technologies and Systems IKTS was able to invest 11 million in major infrastructure projects, profiting from exceptional funding made available by the government of the Free State of Saxony. Part of the funds went towards the purchase of a new back-end line, testing systems for defective battery cells, scanning electron microscopes and a plasma facility. This exceptionally high capital expenditure on major infrastructure enabled the Fraunhofer-Gesellschaft to further modernize its infrastructure and research capacities. 20

23 Major infrastructure capital expenditure 2009 Institute/Research institution in million Institute/Research institution in million 50:50 federal/länder Chemical Technology 1 Pfinztal 4 Structural Durability and System Reliability Darmstadt 5 Manufacturing Engineering and Automation Stuttgart 4 Physical Measurement Techniques Freiburg 3 Integrated Circuits Erlangen 2 Wood Research Braunschweig 2 Toxicology and Experimental Medicine Hannover 2 Surface Engineering and Thin Films Braunschweig 2 Industrial Engineering Stuttgart 1 Wind Energy and Energy System Technology Bremerhaven 1 Interfacial Engineering and Biotechnology Stuttgart 1 Other projects :25:25 ERDF 2 /federal/länder Silicon Technology 1 Itzehoe 6 Non-Destructive Testing 1 Saarbrücken 3 Applied Polymer Research 1 Potsdam-Golm 3 Digital Media Technology 1 Ilmenau 1 Other projects :20:20 ERDF 2 /federal/länder Electronic Nano Systems 1 Chemnitz 7 Photonic Microsystems 1 Dresden 4 Applied Optics and Precision Engineering 1 Jena 1 12 Other funding arrangements Silicon Photovoltaics 1 Halle/Schkopau 13 Ceramic Technologies and Systems Dresden 11 Electron Beam and Plasma Technology Dresden 6 Cell Therapy and Immunology Leipzig 5 Reliability and Microintegration 1 Berlin 5 Telecommunications, Heinrich-Hertz-Institut Berlin 3 Photonic Microsystems Dresden 3 Material and Beam Technology Dresden 3 Non-Destructive Testing Dresden 3 Large Structures in Production Engineering Rostock 3 Transportation and Infrastructure Systems Dresden 2 Silicate Research Würzburg 1 58 Economic stimulus program I Topics related to energy-efficient production 32 Electromobility 14 Energy-conserving refurbishment 7 Microtribology 6 Energy Efficiency Center of Innovation Dresden 6 Promotion of cooperation with Croatia 3 68 Economic stimulus program II Federal government 2 Länder governments Länder share treated as project 2 ERDF = European Fund for Regional Development 21