Corporate Social Responsibility Report

Transcription

1 Corporate Social Responsibility Report

2 Key Figures *) excluding High Tech Coatings **) Average Note: Changes relative to the last CSR report are due to changes in data collection methods. Income Statement and Balance Sheet (in million EUR) Sales Percentage of sales outside Austria in % EBIT Earnings after taxes Non-current assets Liabilities Group equity Equity as % of total capital Cash flow from operations Investments (excluding financial investments) Breakdown of Economic Added Value (in million EUR) Operating costs Personnel costs Payments to investors Payments to public entities Investments in the community Retained monetary value Employees Employees, yearly average 2,706 2,855 2,613 Female employees in % Number of apprentices as of January 31*) Accident rate, total (per 1,000 employees) Fluctuation in % Environment Total energy consumption (MWh) 150, , ,487 Specific energy consumption*) (energy consumption in MWh per ton of product) = energy efficiency 6.2** Total CO 2 emissions (t) 45,471 47,275 43,605 Specific CO 2 emissions*) (CO 2 emissions in tons per ton of product) Resource efficiency, total (use of resources in tons per ton of product) 1.52**

3 Corporate Structure Miba Sinter Group Miba Bearing Group Miba Friction Group New Technologies Group Miba Sinter Austria Vorchdorf, Austria Miba Sinter Slovakia Dolný Kubin, Slovakia Miba Sinter USA McConnelsville, USA Sterling Hights, USA Miba Gleitlager Laakirchen, Austria Miba Bearings US McConnelsville, USA Miba Precision Components Suzhou, China Miba Frictec Roitham, Austria Miba Steeltec Vráble, Slovakia Miba HydraMechanica Sterling Hights, USA EBG Kirchbach, Austria DAU Ligist, Austria Miba Precision Components Suzhou, China Mahle Metal Leve Miba Sinterizados Indaiatuba, Brazil Miba France Meudon, France Miba Deutschland Fellbach/Wolfsburg, Germany Miba Italia Turin, Italy Miba Automation Systems Laakirchen, Austria Advanced Bearing Material Greensburg, USA Miba Far East Singapore Miba Coating Group High Tech Coatings Vorchdorf/Niklasdorf, Austria Production sites Sales and Engineering office All companies are 100% subsidiaries except from High Tech Coatings (50.1%), Advanced Bearing Materials LLC (50%) and Mahle Metal Leve Miba Sinterizados Ltda. (30%) Teer Coatings Droitwich, UK Miba Coatings Trading Suzhou, China

4 Miba 2015 Who We Are: Miba is an international group producing high-performance and technologically demanding power train components. We support our customers worldwide from development to implementation of individual solutions. Miba technology and our wealth of experience make motor vehicles, trains, ships, aircraft and power plants more efficient, more powerful and more environmentally friendly. Our Mission: Innovation in Motion Miba technology enables resource-efficient mobility. Our Values: Technological Leadership: We develop superior technologies for the future. We are driven by a thirst for knowledge and by commitment. Our technological leadership is built on employees who are committed to: Lifelong Learning: New challenges keep us moving ahead. Personal development is a fixed component of our activities. Entrepreneurship: We are Miba. Thinking as an entrepreneur, and having the opportunity to proactively shape corporate activities: That is the secret to our success. Passion for Success: We are fully committed to achieving the highest precision and unquestionable quality day in, day out. Our Vision & Goals: We ensure our competitive edge by investing approximately six percent of sales in research and development and in training and education. Our profitable core business growth enables us to build up a new business area in future-oriented key technologies. This is the basis for reaching and exceeding EUR 1 billion in sales. Our Vision: No power train without Miba technology. Our Strategy: We are an owner-oriented listed company with a presence in the world s economic growth centers. All our actions are based on our commitment to financial independence, social responsibility and sustainability. Our four business areas focus on attractive niches, in which we continue to constantly strengthen our worldwide number 1 position. Our outstanding employees are the engine of our success. We constantly improve our processes and strive for Business Excellence. Our Strategy: Global No. 1 in economically attractive and technologically demanding market segments.

5 Content Preface 3 Board member interview 4 Overview of Miba 6 Successful Management in Economically Difficult Times 9 Building Our Future Together 25 We Take Proactive Measures to Protect the Environment 45 We uphold our social responsibility 67 Faces Behind the CSR Process 72 About This Report 73 Outlook 75

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7 Honoring Our Commitments We are pleased to present the second Miba CSR report. At Miba, CSR is all about pursuing commercial success based on an environmentally sound approach and a sense of responsibility towards our employees and society. Sustainable action in all areas is part and parcel of Miba s corporate strategy. Since the company was founded over 80 years ago, activities have always been structured so as to also benefit subsequent generations. A formal CSR process was launched in 2007, and our activities in the areas of the environment, employees and society now undergo ongoing assessment. Taking inventory in this way forms a basis for concrete goals and action agenda. During the economic crisis we continued pursuing our vision and objectives and proved that during difficult times we honor our commitments. This second CSR report shows how Miba has developed over the last three years: Clearly we are getting closer to achieving our targets. CSR creates added value for Miba and its environment and is an important cornerstone of our operations. We are on the right track and very proud of that. 3 Peter Mitterbauer Chairman of the Management Board of Miba AG Norbert Schrüfer Member of the Management Board of Miba AG, CEO Miba Friction Group Wolfgang Litzlbauer Member of the Management Board of Miba AG, CEO Miba Bearing Group Harald Neubert Member of the Management Board of Miba AG, CEO Miba Sinter Group

8 Miba Back on Track With Sustainable Growth Miba Management Board member and CSR ambassador Norbert Schrüfer on success and responsibility Mr. Schrüfer, the first CSR report was prepared in What has happened in the meantime? 4 I have a sense that during the crisis we scored points with employees, because we communicate openly and honestly at all times. That s the most important prerequisite for building trust. Norbert Schrüfer: The last two years have been shaped by the worldwide recession, and Miba has not remained unaffected by it. Nonetheless, I believe we ve managed and survived the crisis very well: We ve worked hard to hold onto our core team and wherever possible kept capacity changes to a minimum. I have a sense that during the crisis we scored points with employees, because we communicate openly and honestly at all times. That s the most important prerequisite for building trust. Moreover, we continued with our CSR activities during the crisis, e.g., we continued to implement action agenda for protecting the environment and reducing emissions. We ve improved the data-gathering process for CSR key figures, and that alone has raised consciousness about CSR across the organization. Are there any CSR activities of which you re particularly proud? Norbert Schrüfer: For me, one of the highlights is that we ve pushed ahead with the health program. We take care of our employees because they re important to us. During the crisis, health initiatives would have been the easiest to cut. Naturally, development and sales activities continue during a crisis, as we don t want to saw off the branch on which we re sitting. Activities such as preventive healthcare are more difficult to argue for because they don t directly boost sales or results. Instead, they can help create a better sense of unity and make employees identify more closely with the company. We re expecting our preventive healthcare activities to yield benefits even if they re difficult to measure. Precisely for that reason the health program is a highlight for me. And at the international level? Norbert Schrüfer: We ve continued our workshops concerning management of resources and energy, which are an opportunity for site managers and their environmental staff from Austria and Slovakia to meet. I ll give you an example of one outcome from these meetings: A system for extending the life of cooling lubricants, developed by Miba Sinter Austria in Vorchdorf, is now also being used at Miba Sinter Slovakia in Dolný Kubín and

9 Miba Steeltec in Vráble. This is an example of successful know-how transfer, not only between different sites, but also across different divisions. Let s look forward for a moment. What will be the main CSR activities over the next two years? Norbert Schrüfer: We need to maintain and increase the momentum we ve built up following the crisis. We need to get back on track with sustainable growth. CSR will help us accomplish that. Over the next few years Miba will grow via environment-friendly technologies. We need to be more efficient with energy in all our areas of business, whether it s in tractor clutches, marine diesel engines or car engines. Customers are calling for lower oil consumption and lower carbon dioxide emissions. We can make key developments available to meet that global trend and challenge and help customers achieve the aforementioned objectives. That will be the basis for future growth. Over the next few years Miba will grow via environment-friendly technologies. 5 Which interest groups will Miba focus on in particular? Norbert Schrüfer: The trick is to address all the issues in a similar manner, and not divert all one s efforts to just one area at the expense of others. Without doubt, one key focus will be on customers, because we want to grow. Another focus will of course be on our employees. They help us achieve that growth. But that doesn t mean that in future we ll be less concerned with the environment, society or suppliers. What do you specifically want from CSR? Norbert Schrüfer: CSR sounds a bit too much like some esoteric corporate activity a lot of fancy words covering issues which are actually unimportant. What I want is that CSR be genuinely understood for what it is, namely completely normal, completely practical work managing the most important factors driving sustainable corporate success. What I want is that CSR be genuinely understood for what it is, namely completely normal, completely practical work managing the most important factors driving sustainable corporate success.

10 Overview of Miba Miba is an international group headquartered in Laakirchen, Upper Austria, and producing high-performance and technologically demanding power train components. Miba supports its customers worldwide from development to implementation of individual solutions. Miba technology and our wealth of experience make motor vehicles, trains, ships, aircraft and power plants more efficient, more powerful and more environmentally friendly. 6 Our Mission: Innovation in Motion Miba technology enables resource-efficient mobility. Miba engine bearings Engine bearings are crucial components that significantly affect engine function and service life. They are used in diesel and gas engines in ships, heavy-duty vehicles, locomotives and power stations. They minimize friction during operation and protect the engine against damage and breakdown. In the medium-speed diesel engine segment, Miba s products make it the global market and technology leader. The bearings produced by Miba Bearing Group withstand higher ignition pressures, thus increasing engine efficiency. Miba sintered components Sintered components are high-precision, high-strength components used in car engines, transmissions, steering systems, brakes and shock absorbers. Miba is the technology leader in the production of a wide range of sintered components. These components are lighter-weight through their complex design and precisely tailored density, creating significant potential for improved efficiency and reduced fuel consumption. Miba friction materials Friction materials are the decisive performance elements in vehicle clutches and brakes, optimizing speed and power. They are used in tractors, trucks, construction machinery, high-speed trains, motorcycles, airplanes and wind power stations. Miba Friction Group components reduce weight and transmission size.

11 Miba coatings High Tech Coatings develops customized coating solutions. The unit s core technologies include low-friction coatings for functional surfaces, electroplated overlays and PVD coatings. These coatings ensure maximum service life and optimal functionality. Power electronics EBG and DAU, part of the Miba Group, are innovative specialists in passive electronic components, e.g., resistors and cooling systems for power electronics. High-performance components for power electronics are one of the keys to more efficient drive systems and the steadily growing area of renewable energy such as wind power. 7

12 Miba s goal of long-term profitable growth remains unchanged even during economically difficult times, and sustainability principles continue to form an integral part of corporate strategy. In the challenging business year, Miba used own funds to finance investments in setting up or expanding new sites in strategically important markets. Miba continues to count on technological leadership and competitive cost structures, while making a 8 solid liquidity base and a highly skilled team top priorities.

13 Successful Management in Economically Difficult Times Keeping to our objectives Miba, a strategic partner to the international engine and automotive industry, sticks to its values and goals even during economically difficult times. Miba continues to stand for Technological Leadership, Lifelong Learning, Entrepreneurship and Passion for Success. Miba s goal is to grow profitably over the long term. As part of the Miba 2015 strategy, Business Excellence is defined as a tool which helps Miba achieve its objectives. Business Excellence is an overarching concept for numerous initiatives that have been in place in the group for a long time. It stands for top corporate quality and thus for excellence in all processes. The three pillars on which Business Excellence is based, namely self-assessment, exchange of experience and excellence projects, allow us to create internal and external benchmarks. Based on a structured approach, all processes are assessed according to specified criteria, thus ensuring transparency. Synergies across boundaries between sites and business areas are spotted and utilized. This formalized process helps the group push ahead even more quickly. 9 In the business year and in the first half of , Miba benefitted from the global upwards trend in its markets. However, from the second half of on, there were major collapses in demand in most areas. The following year, 2009, was particularly challenging for the entire economy and hence for Miba as well. The first three quarters of the business year were significantly impacted by the worldwide recession. In the fourth quarter, however, the first signs of an improving economic climate became noticeable. Miba generated positive earnings in every quarter and ultimately achieved group sales of EUR million, a decline of 16.8 percent from the previous year. In the business year, Miba Bearing Group accounted for the lion s share of sales: 42.4 percent or EUR million. Miba Sinter Group accounted for 40.2 percent or EUR million of group sales. Miba Friction Group accounted for EUR 50.5 million, i.e., 16.2 percent of group sales. High Tech Coatings generated the remaining 1.2 percent of group sales, totaling EUR 3.9 million. By comparison with the rest of the industry, Miba performed well.

14 10 Miba Bearing Group Miba Sinter Group Miba Friction Group Miba Coating Group Sales volume by business segment (in million EUR) Group sales: 387,7 Group sales: 374,6 Group sales: 311, Miba operates twelve production sites on three continents and is thus close to its customers in the world s most important business centers. Up to now, Europe has been the Miba Group s largest market, generating 63 percent of sales. The North American free trade zone (NAFTA), especially the USA, accounts for 17 percent of sales, unchanged from the previous year. Sales growth was achieved in Asia, bringing the East Asian growth markets share of Miba Group sales to 17 percent. Sales Volume by market (percentage) Europe NAFTA Asia Other Driving sustainability by acting consistently Despite the economic crisis, Miba has continued to invest in the future. There has been special emphasis on R&D to maintain the group s technological edge in core segments. R&D expenditures remained unchanged at a high level. Right from the start, it was Miba s intention to get through the crisis without significant changes to the core team. The company needed its highly qualified, proven employees for when the economy began to pick up again. Earnings before interest and taxes (EBIT) were heavily affected by declining sales in Clear strategic positioning toward technologically sophisticated products and

15 consistent implementation of measures that counteracted the crisis, as well as strict cost discipline, made it nonetheless possible to achieve positive EBIT in At EUR 16.4 million, EBIT was significantly below the previous year s level of EUR 34.5 million. Earnings before taxes (EBT) totaled EUR 15.5 million, likewise below the previous year s total of EUR 30.9 million. Earnings after taxes stood at EUR 12.3 million (compared to EUR 20.8 million the previous year). 11 The EUR-3.5-million decline in cash flow from operations from EUR 51.6 million to EUR 48.1 million resulted primarily from the drop in earnings. With the reported cash flow from operations, the Miba Group was once again able to finance its investments fully through the company s own capital resources. 72 percent of investments made in went to the sites in the USA and China. These investments helped Miba expand its position in these strategically significant markets. The equity capital is 60.1 percent, reflecting the solid capital and financial structure of the Miba Group. In million EUR EBT EBIT Cash flow from operations Equity as % of total capital

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17 We Exploit Growth Potential Going where the growth is The vision of No power train without Miba technology can only be fulfilled if Miba has a strong presence in the markets where future growth will take place. Decisions on acquisitions or the expansion and relocation of production sites are made based on the need to stay competitive over the long term. In , Miba opened a friction materials plant in Vráble, Slovakia, and a production site for engine bearings and sintered components in Suzhou, China. The next business year, expansion of the Chinese site began, and in summer 2009 the first large-scale bearings went into serial production. 13 To exploit market opportunities in the area of high-tech sintered components, in the business year, Miba Sinter Group began construction of a new plant in McConnelsville, Ohio. This opened in June At the same time, a new production line for high-performance engine bearings for trucks went live at the sister site Miba Bearings US. The key factors for setting up the new plant in McConnelsville were the synergies with Miba Bearings US and the proximity to Miba s American customers. In the business year, a new production site in Austria went live. High Tech Coatings in Vorchdorf develops and produces innovative coating solutions for the international automotive industry. In April 2010, Miba broadened its competencies and portfolio in the area of highly specialized surface coatings by acquiring the British coatings specialist Teer Coatings. This strategic expansion is a way to exploit the group s own growth potential and also enhances customers ability to innovate and compete. Cutting-edge machinery and systems with efficient production processes are a prerequisite for high-quality, cost-efficient products and for meeting worldwide demand. The volume of investment from to was EUR 98.6 million, an important contribution to steadily enhancing Miba s technological leadership.

18 Investments excluding financial investments (in million EUR) Austria EU excl. Austria Asia NAFTA In September 2010, Miba acquired two Styrian producers of high-performance components for power electronics. These acquisitions will keep Miba on track for growth and constitute a move into an area of technology and products with enormous future potential. EBG and DAU are innovative specialists in passive electronic components such as resistors and cooling systems for power electronics. At their Kirchbach and Ligist sites in Styria, Austria, the companies, which hitherto have been family-owned, employ around 130 people. The new companies will broaden Miba s product portfolio and boost its competencies in future-oriented technologies. As well as moving into this new area of business, Miba is also growing in its core segments. As of January 1, 2011, Miba Friction Group will acquire the off-road business of HOERBIGER Antriebstechnik. During the 2011 business year, production of friction disks for off-road applications will be shifted in a step-by-step manner from Schongau, Germany, to Miba s sites in Austria and Slovakia. Over the medium term this will create more than 100 new jobs at Miba s Roitham and Vráble sites. Also as of January 1, Miba will acquire HOERBIGER Drive Technology India Pvt. Ltd. in Pune, India, which employs 25 people. This will enhance Miba s global presence.

19 Environment-oriented advances Market requirements such as improved performance, reduced emissions and legal regulations mean products must meet ever-tougher standards. Miba offers its customers products that are market leaders in cost effectiveness, quality, efficiency and eco-friendliness. Miba s high-quality, environment-efficient technologies make a significant contribution to change in the ecological system and at the same time help drive customers commercial success. The pursuit of environment-friendly processes leads to new methods and technologies that help preserve the environment, reduce raw material consumption or increase efficiency. 15 Spotting trends early opens up new market segments. A good example is Miba s early involvement in the wind energy segment as a producer of brake linings. We are currently developing a new friction material for wind turbines. This friction material will have higher energy load ratings, which means increased performance at the same cost. This is in line with the trend towards improved performance in wind turbines, particularly offshore. Miba is also involved in initial product development of transmission and rotor bearings for wind power plants. New generations of bearings feature higher load capacity and lower operating risk, making it possible to meet new environmental regulations. Miba engine bearings are, for example, used in biogas and landfill gas engines. These engines burn methane gas from biogenic waste in landfills. The engines drive generators which then generate power from waste. Miba Automation Systems produces mobile processing machines for the energy industry, an area which already accounts for over 50 percent of its sales.

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21 We Stay a Step Ahead Technology leadership: a key driver Miba focuses on the needs of its customers who demand high-tech solutions at competitive prices. Technological leadership is one of Miba s core values and forms the basis for profitable growth. Thanks to Miba s focus on R&D, its products are market leaders. In the period to , Miba invested EUR 54 million in R&D. Despite the drop in sales in recent business years due to the financial crisis, Miba has continued to invest in the future. 17 Between and , R&D expenditures were increased and were kept at that increased level in the business year. In , R&D expenditures were equivalent to roughly four percent of sales; in , the figure was six percent. Examples of Miba innovations include new production processes, patent applications and numerous supplier awards. In 2009, 16 patents and utility patents were applied for. As of the end of January 2010, Miba held 149 currently valid patents. Miba Sinter Group received the ixetic Supplier of the Year award in 2008 and The deciding factors in these awards were the high quality standard of Miba products, the low defect rate and reliable and timely delivery. In early 2010, the American company Caterpillar honored Miba Gleitlager with the Supplier Quality Excellence Process (SQEP) certificate in bronze. Excellent process control, continuous improvement and high quality standards are among the basic qualifications for this award. To encourage development activities, Miba Bearing Group launched the Innovation Award for the best ideas in technology in In 2009, the second Innovation Award was won by engine bearing surfaces specialist Jakob Zidar for his newly developed antifretting bearing. Bearings with the new CuSn 10 antifretting layer for trucks and medium-speed diesel engines are already in serial production Investment in R&D (in million EUR)

22 Customers benefit from our innovations Miba customers have to address legal requirements, e.g., EU rules on fleet CO 2 emissions for car producers. As a technology leader, Miba gets involved in development processes at an early stage and helps customers meet these challenges. Thanks to its global presence, years of experience and ongoing technological progress, Miba can guarantee 18 its clients customized and cost-effective solutions. Superior quality, efficiency, innovation and reliability are at the center of all activities. Strategy is focused on offering customers optimum solutions based on in-depth know-how in core processes. Miba is part of a broad network of development partners and thus able to steadily build know-how. That, in turn, helps drive customers ability to innovate and stay competitive. In fall 2008, Miba for the first time conducted a customer satisfaction survey simultaneously across all divisions. 58 percent of customers stated that Miba is ahead of its competitors in terms of technological competence, and that they were particularly satisfied with the quality and functionality of the products and with Miba s technological potential. The next customer satisfaction survey of how customers view Miba will be conducted in the second half of Making resource-efficient mobility a reality The global trend is towards lighter vehicles which consume less fuel while offering the same levels of comfort and performance. Miba products are high-precision, high-performance components. Miba sintered components are used, for example, in variable camphasers and double-clutch transmissions, thereby reducing fuel consumption and CO 2 emissions in passenger cars. Miba Friction Group saves weight in truck and passenger car components for manual transmissions and reduces the size of transmissions. That means more power can be transferred via smaller, lighter components. Miba Bearing Group bearings help improve efficiency in engines, for example by withstanding higher ignition pressures. By developing innovative types of bearings, Miba helps modern engines deliver high performance efficiently and in an eco-friendly manner, even under extreme conditions. Miba Coating Group coatings optimize the friction and wear characteristics of machine elements, thereby enhancing the functioning and working life

23 of numerous applications. PVD coatings, when used in place of bearings or bushings, reduce the number of components required: Less installation space is needed, weight is reduced and costs are lowered as a result. Legal regulations concerning problem substances are getting more stringent. This presents companies with serious challenges. Miba takes a proactive stance to these challenges, e.g., the company is already prepared for the anticipated ban on lead. 19 Various future trends make new vehicle drives necessary. Scarcity of resources, climate change and the pursuit of sustainability are all reasons why mobility is undergoing change. Miba stays abreast of these changes by developing future-oriented technologies in the area of resource-efficient mobility and energy-efficient drives. Efficiency in production At Miba, cost savings and benefits to the environment go hand in hand. Miba achieved considerable energy savings by decoupling power consumption from increased production figures, e.g., by using advanced hydraulic presses which use half as much power as conventional presses. Miba uses waste heat from production and thereby reduces CO 2 emissions. A good example is the heating and cooling system at Laakirchen which won the Upper Austrian environment award in This investment resulted in significant reductions in energy and water consumption. The power saved corresponds to the annual consumption of 600 households. For further details on how Miba boosts its commercial success via an environmentally responsible approach, see page 45 ff.

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25 We Create Added Value for all Stakeholders As an employer and investor of significant sums at all locations, Miba contributes to economic growth and social stability. The company supports the economy of the surrounding regions through capital investment, taxes and social security contributions, thus helping maintain infrastructure. In the countries in which Miba operates, it has paid EUR 16.9 million in taxes in recent years. Attractive returns for shareholders 21 The Miba share was not able to escape investor uncertainty at the outset of the worldwide financial and economic crisis beginning in September 2008, and the share price initially fell. In the business year, it recovered somewhat and stabilized in the period following fall The Miba share continued to fare well in the first half of the business year. Miba s dividends policy is commensurate with the economic conditions, offering shareholders appropriate returns on capital employed, thus ensuring the group can continue to finance growth using own funds. In million EUR Payments to investors of which interest expense of which dividend paid (previous year) Miba shares have been traded on the Vienna Stock Exchange since Miba always maintains absolute transparency and accountability in its relations with shareholders. It observes the Austrian Code of Corporate Governance and provides timely, comprehensive information regarding its current financial and earnings position and operations. Miba s continuity is based on its ownership structure. Mitterbauer Beteiligungs-Aktiengesellschaft holds percent of the shares. Institutional and private investors own percent of the shares and the remaining 5.10 percent is held by Miba AG in the form of own shares. Miba is an owner-managed company: CEO Peter Mitterbauer has headed the company founded in 1927 by his father since Franz Peter Mitterbauer, the son of Peter Mitterbauer, started at Miba in a managerial position in Therese Mitterbauer, the daughter of Peter Mitterbauer, has been part of the management team at High Tech Coatings since 2008.

26 Miba AG s Management Board, chaired by Peter Mitterbauer, establishes corporate strategy in conjunction with the Supervisory Board. The interests of Miba s principal shareholder Mitterbauer Beteiligungs-Aktiengesellschaft are represented by its sole Management Board Member Peter Mitterbauer. An important employer and an engine of economic growth 22 One of Miba s most important contributions to regional development is the safeguarding and creation of jobs. Miba had an average of 2,613 employees at eleven sites around the world in compared with 2,855 the previous year. The decrease in personnel resulted from capacity adjustment measures and was primarily concentrated at the Slovak sites. Miba set itself the declared goal of holding onto its qualified core staff despite the difficult months, while adjusting the personnel structure appropriately. Personnel expenses amounted to EUR million in the business year. In the first few months of the business year, Miba was able to increase its personnel thanks to satisfactory capacity utilization. Miba had a total of 2,874 employees worldwide as of July 31, That represents an increase of 333 employees or 13.1 percent compared with the same date the previous year (2,541 employees). For further information on how Miba fulfills its responsibility to employees, see page 37 ff. Transparent payment flows 1 The difference between economic value generated and economic value distributed, as per the GRI guidelines. ( The chart illustrating the different areas of expenditure clearly indicates that the volume of expenses fell due to reduced business activity in and Over the past year, the biggest drop was in payments to suppliers and employees; payments to investors and to public entities also fell. Nonetheless, in the period from to , the retained monetary value 1 in fact rose by 20 percent to EUR 32.3 million, thanks to rigorous cost management and progress in cash management.

27 Payment flows in million EUR Retained monetary value 1 Taxes Dividend Interest expense Wages and salaries Operating costs Honest, fair market participant Miba is an honest, fair market participant, and adheres to national laws and international agreements. A code of ethics covering the receiving of gifts and personal privileges, approved by the Miba Management Board during the business year and disseminated throughout the group, states that Miba employees must refuse gifts in excess of an agreed amount. Miba s Corporate Controlling conducts regular group-wide corruption audits. Over the past few years no cases of corruption have been reported, and there are currently no known cases of corruption, nor any court proceedings in connection with corruption.

28 Miba s employees are the engine that drives Miba s success. Their hard work, innovative strength and commitment to quality and service make a key contribution to corporate growth. Per the Miba core value Lifelong Learning, the group provides support for employees personal and professional growth. Health protection and workplace safety are of special importance to Miba. 24

29 Building Our Future Together Sticking together as a team In , the Miba Group had an average of 2,613 employees, compared with 2,855 the previous year. As of January 31, 2010, i.e., the reporting date, the headcount stood at 2,620 (compared to 2,825 on January 31, 2009). The decrease in personnel resulted from capacity adjustment measures and was primarily concentrated at the Slovak sites. Miba set itself the declared goal of holding onto its qualified core staff despite the difficult months. That is reflected in the fact that, while sales fell 17 percent, personnel levels were reduced by less than ten percent. At Austrian sites, for example, between February 2009 and January 2010 around 400 of 1,600 employees worked shorter hours (to varying degrees). Around 100 employes took tailored courses as part of training leave before returning to work at Miba. Miba also responded to the dramatic drop in orders by implementing a broad range of other personnel measures, e.g., consumption of overtime and vacation time, reduced working hours, reduced salaries and the introduction of new models for working hours. In taking these actions in response to the global economic crisis, Miba always kept its core values in mind and acted as a responsible employer. 25 Employee headcounts by country (average for the year) Austria 1, Slovakia USA China Singapore Spain * UK ** Miba Group 2, * Spain: sold as of August 1, 2007 ** UK: operations shut down as of end of 2007

30 26 In the first half of the business year, staff headcounts rose significantly. The increase took place largely at the sites in Slovakia and China. In Slovakia, it proved possible to rehire many of the former employees. Miba had a total of 2,874 employees worldwide as of July 31, That represents an increase of 333 employees or 13.1 percent compared with the same date the previous year (2,541 employees). After adjustment for the first-time inclusion of Teer Coatings Ltd., staff headcount rose by 10.9 percent, i.e., 276 new employees. During the business year, Miba employed on average 47 temporary workers. That figure is set to increase in the business year. Miba does its utmost to integrate temporary workers and make them feel part of social life at the company. At Miba, numerous skilled workers are in fact former temporary workers who were taken on Temporary workers (average for the year) Employees by type Hourly-wage employees Salaried employees Apprentices 5 % 30 % 65 %

31 Miba is a long-term employer, as reflected in the fact that on average employees stay with the company for ten years. The Austrian sites, where employees from three generations work for Miba, are a good example. This reflects a healthy loyalty to the company. Miba s goal is to keep fluctuation levels down, to keep know-how and experience in the company, and to ensure employees view Miba as their true home from a professional standpoint. Group-wide, fluctuation rose to 13 percent in and to 16 percent in , including staff of retirement age who left the company as planned. This increase is attributable to the strong first six months of and the weak second half as the global economic crisis unfolded, as well as the ensuing dramatic changes in personnel requirements in various areas. Necessary staff reductions in made this fluctuation even more pronounced. Fluctuation levels are expected to fall significantly in Employee fluctuation (percentage) Employees opinions matter The Miba employees dedication and high levels of loyalty have made it possible for Miba to stand its ground well in these challenging times. Employees opinions and a relationship based on partnership and integrity are important to Miba. A standardized Miba employee survey is conducted every two years at all Miba sites. In 2008, the questions on the survey were modified: It now yields responses about internal changes within Miba and about other companies. The survey includes questions on, for example, working conditions, management and communication. In comparison to 2008, in 2010 the survey participants gave higher scores in the following areas: their immediate supervisors, distribution of information by site management, and healthrelated measures. As a follow-up to the survey, results are presented and analyzed at each site; action agenda are then prepared and implemented. All employees are invited to participate in improvement projects. In the 2008 survey, employees indicated that they wanted regular informational events. As a result, site managers now provide reports on current topics and areas of emphasis, and make themselves available to employees to answer questions. In the past business year in particular, Miba was

32 especially concerned with keeping employees informed about the current situation. The results of the 2010 survey indicate that employees are satisfied with the changes that have been made. 28 Around 66 percent, or 1,894 employees, participated in the survey in May 2010, a seven-percent increase relative to Employee satisfaction is measured using an engagement index ranging from 0 to 100. In 2010, the engagement index was at 69, i.e., unchanged relative to 2008, which in light of the difficult economic conditions should be considered a very positive outcome. Both these results show that we are well on the way to achieving the Miba 2015 vision, which sets a target of 75 for the survey response rate and a target of 75 for the engagement index. Employee survey response rate and engagement index (percentage) Survey response rate Engagement index 69 69

33 Open, transparent communication Miba emphasizes open, transparent communication. The core elements of Miba s internal communications are the employee magazine Miba Magazine and wall newspapers which are posted at all locations. Both are published in three languages and provide information on key topics, events, trends and people in and around Miba. The most important contribution to communication is made by managers, who proactively make information on current developments available. In addition, they make themselves available to employees to answer questions and address concerns. 29 One of the most important dialog instruments for staff development is the appraisal interview. Conducted once a year, it plays a key role in providing support for and assessing employees. The Management Development Dialog is an instrument used to support and assess managers and their behaviors. Introduced at all Miba sites in 2007 and conducted every two years, it is used as a staff development tool for managers. In addition, Miba now uses a succession planning instrument to link all these tools together and gather findings. This new instrument provides support for career planning for employees, including senior managers. It provides employees with comprehensive information on their career prospects and helps the company fill strategically important key positions over the short and medium term. It will be implemented group-wide in the coming year.

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35 We Provide Staff Development Opportunities to Drive the Company Forward Investing in training and staff development Miba is heavily oriented to Lifelong Learning as a core value. Miba employee guidelines stating that employees must invest their knowledge, ideas and commitment in the company create a basis for a successful future. In return, Miba invests in vocational and further training and offers exciting challenges in an international environment and is thus able to ensure quality, growth and returns. 31 In the difficult business year, Miba continued to provide a wide range of training and staff development opportunities. The increased use of internal experts as trainers brought Miba training courses high quality and custom-made content under costeffective conditions. Training young up-and-comers in-house The dual system apprenticeship approach has been in place at Miba s Austrian sites for several decades. As of September 1, 2010, 118 young men and women were undergoing production technician and electrical engineering technician apprenticeships at Austrian sites a record high in the history of apprenticeships at Miba also saw a record high, with 40 apprentices in their first year of apprenticeship. Even in the difficult year 2009, Miba offered 27 young Austrian school-leavers a chance to start an apprenticeship at the company. The economic recovery is reflected in apprentice headcounts in 2010: On September 1, an additional 30 young men and women began apprenticeships at Austrian sites. Number of apprentices in first year of apprenticeship in Austria* Miba Gleitlager Miba Sinter Austria Miba Frictec Total * As of September 1, 2010

36 32 The dual system apprenticeship approach, which is the standard approach in Austria, is not in place elsewhere in the group. Nevertheless, Miba does train apprentices in Slovakia. Because the Slovak school and apprenticeship system differs from that in Austria, Miba has developed an in-house apprenticeship scheme with the help of a local vocational school. The first intake of apprentices began their apprenticeships in Dolný Kubín in the business year. Currently, there are over 30 young people in apprenticeships at Miba s Slovak sites. In total, there are around 150 young people in apprenticeships at Miba in Austria and Slovakia. At a time when employee headcount group-wide fell by around ten percent, the apprentice headcount in Austria and Slovakia rose by nine percent. Number of apprentices in Austria and Slovakia Apprentice headcounts are increasing, which helps prevent shortages of up-and-coming employees and keeps the company well supplied with internal candidates for positions. Apprenticeships constitute a secure future, given the challenging nature of labor markets. Based on that insight, last year Miba hired all of the apprentices who completed their apprenticeships in that period. The company began keeping records regarding apprenticeships in the mid-1950s. Since then, around 1,200 young people have undergone apprenticeships at Miba, thus creating a firm foundation for their professional future. Miba offers high-achieving apprentices the opportunity to combine the apprenticeship with a higher technical college degree or study at a university of applied sciences and provides scholarships and educational leave. Miba apprentices perform extremely well in competitions, reflecting the high quality of Miba s apprenticeships. Outstanding results in recent industrial apprenticeship competitions, e.g., in the production technician category for Upper Austria, are testament to the quality of a Miba apprenticeship. Commitment is rewarded with the possibility of promotion, and many former Miba apprentices are now in managerial positions. The Laakirchen site is a good example of this: The two biggest production units are currently headed by former Miba apprentices.

37 Ongoing staff development opportunities Staff development programs have played an important role at Miba for many years. Miba proactively encourages staff to develop their professional and personal competencies. The corporate value of Lifelong Learning is reflected in the Miba Academy, Miba s training and development center in Laakirchen which offers numerous courses and customized training courses in specialized fields every year including in leadership and communication, work techniques, languages, IT and health. 33 The international Miba Leadership Academy (MLA) enhances the strategic and intersite cooperation of current and future managers. Graduates have forged careers in different areas of the company. Since the MLA was founded in 2003, 67 employees from sites throughout the group have graduated from it. The international Miba Management Academy (MMA) is oriented to developing entrepreneurial thinking and behaviors, building overarching business insight and enhancing the ability to actively control the operating result. Since the MMA was launched in 2004, 95 employees have graduated from it. Tailored group- and site-specific programs are also part of the overall picture in training and staff development at Miba. The Bearing Engineering Academy (BEA), for example, one of Miba Bearing Group s international training programs in specific technical fields, creates a framework for knowledge transfer between experienced and younger employees in technology. Since this program was launched in 2007, a total of 40 Miba employees have graduated from it. The next BEA program is planned for fall Another staff development initiative is Planet Enterprise, a business simulation exercise. This two-day program builds entrepreneurial thinking and behaviors. Participants learn to trace interconnections and ways to influence outcomes. Over 200 participants are taking part in this business simulation exercise in

38 Miba offers staff development opportunities to employees of all age groups and target groups. The principle of Lifelong Learning is applied consistently throughout the group, and helps strengthen the group s international network. Clearly defined leadership principles 34 At Miba, leadership is viewed as an entrepreneurial responsibility. Miba helps create and maintain skilled jobs and encourages each employee to take individual responsibility. To encourage sustained leadership responsibility and provide managers with insight and orientation regarding corporate values, the Miba Leadership Principles were implemented in 2006: Performance Commitment, Execution, Integrity, Delegating Responsibility, Respect, Courage and the Miba Spirit ensure Miba s success as a company. Along with the Miba values Technological Leadership, Lifelong Learning, Entrepreneurship and Passion for Success, these principles form the basis of a uniform corporate approach. Managers have special tasks to fulfill: They are responsible for putting the staff mission statement into practice and for complying with the employees right to development and professional leadership. Miba s objective is to ensure it can fill managerial positions with internal hires, which is one reason why national and international development programs at all levels play a key role for managers at Miba, including during difficult economic times.