Annual Report 2001 - KSPG AG

Kolbenschmidt Pierburg AG 

Rheinmetall Allee 1 

40476 Düsseldorf, Germany 

Postfach 104261 

40033 Düsseldorf 

Phone (+49-2131) 520-2115 

Fax (+49-2131) 520-2116 

www.kolbenschmidt-pierburg.com 

Annual Report 2001 

Kolbenschmidt Pierburg AG

Division Air Supply & Pumps Pistons Plain Bearings Aluminum 

Technology 

Product groups 

Major locations 

Sales 

(€million) 

Organization and management structure 

of the Kolbenschmidt Pierburg Group as of March 1, 2002 


(listed) 

Sales: €1.8 billion 

Employees: 11,600 

Systems and 

components for air 

supply, fuel supply, 

emission control 

Oil and water pumps, 

vacuum pumps, 

fuel delivery units 

Germany 

France 

Italy 

Spain 

USA 

Brazil 

China (joint venture) 

Passenger car pistons 

Piston modules 

Commercial-vehicle 

pistons 

Large-bore pistons 

Germany 

France 

Czech Republic 

USA 

Canada 

Brazil 

China (joint venture) 

Plain bearings 

Bushings 

Thrust washers 

Dry bearings for 

low-maintenance and 

maintenance-free 

operation (Permaglide) 

Nonferrous extrusions 

Germany 

USA 

Brazil 

Germany 

Motor Service 

Engine blocks Automotive parts for 

engine repair and 

workshops 

820 570 150 140 150 

Employees 4,000 5,400 1,000 800 400 

Germany 

France 

Great Britain 

Turkey 

Brazil 

Czech Republic

Kolbenschmidt Pierburg at a glance 

€million 1997 1) 1998 1999 2000 2) 2001 

(HGB) (HGB) (HGB) (IAS) (IAS) 

Net sales 

EBITDA (earnings before interest, 

1,076.3 1,473.3 1,527.1 1,776.2 1,825.5 

taxes, depreciation and amortization) 

EBIT (earnings 

142.8 167.2 184.4 202.0 238.2 

before interest and taxes) 63.3 68.3 69.2 54.5 90.3 

EBT (earnings before taxes) 57.4 61.9 61.1 21.6 49.5 

Net income 51.6 54.0 26.6 7.4 31.8 

EpS (earnings per share) (€) 

DVFA/SG 1.74 3) 1.37 1.21 

IAS 0.28 1.18 

Cash dividend per share, net (€) 0.51 0.77 0.77 0.77 0.50 

plus bonus plus bonus 

of €0.26 of €0.53 

Capital expenditures 

(excl. financial assets) 82.9 125.5 177.9 171.1 174.6 

Amortization/depreciation 92.7 110.7 129.0 147.5 147.9 

Capital stock 68.0 68.0 68.1 68.1 71.7 

Accounting equity 323.0 327.3 263.2 319.9 345.1 

Cash flow 132.5 161.0 150.3 160.8 174.4 

Employees (Dec. 31) 10,804 11,443 11,789 12,164 11,662 

1) Fiscal 1997 includes the former Kolbenschmidt Group only prorated from April 1 to Dec. 31, 1997 

2) Consolidated financial statements retroactively restated to conform to IAS 

3) Determined according to the DVFA/SG formula of 1996

Annual Report 2001 


Contents 

Agenda of the 

annual stockholders’ meeting 

Supervisory and Executive Boards 

Report of the Supervisory Board 

Letter to the stockholders 

Report of the Executive Board 

Kolbenschmidt Pierburg stock 

Management report on the 

Kolbenschmidt Pierburg Group 

The divisions 

Parent’s financial statements 2001 * 

Consolidated financial statements 2001 

Notes 

4 

6 

8 

10 

11 

12 

13 

15 

18 

21 

24 

31 

35 

36 

40 

44 

48 

52 

56 

62 

63 

66 

67 

68 

69 

70 

74 

84 

98 

103 

104 

105 

109 

110 

112 

Reporting format 

Business trend 

Results of operations 

Capital and capital expenditures 

Employees 

Research and development 

Risks of future development (risk report) 

Prospects 

Air Supply & Pumps 

Pistons 

Plain Bearings 

Aluminum Technology 

MotorEngineering 

Motor Service 

Balance sheet 

Income statement 

Consolidated balance sheet 

Consolidated income statement 

Cash flow statement 

Statement of changes in equity 

Segment report 

Accounting principles 

Comments on the consolidated balance sheet 

Comments on the consolidated income statement 

Comments on the cash flow statement 

Comments on the segment reports 

Supplementary disclosures 

Auditor’s report and opinion 

Group of consolidated companies 


* For the full annual accounts of Kolbenschmidt Pierburg AG 

(including the notes), visit us at 

www.Kolbenschmidt-Pierburg.com 

or, to obtain a hard copy, write to: 

Rheinmetall Allee 1, 40476 Düsseldorf, Germany

4 


Agenda 

for the annual stockholders’ meeting 

Our stockholders are hereby invited 

to the annual stockholders’ meeting 

to be held on Wednesday, June 05, 

2002, at 11 a.m., in the Festhalle 

Harmonie, Allee 28, Heilbronn, 

Germany. 

(1) 

Presentation of Kolbenschmidt Pierburg 

AG’s adopted annual accounts 

and management report, as well as of 

its consolidated financial statements 

and Group management report and 

the Supervisory Board report, all for 

fiscal 2001 

(2) 

Vote on the appropriation of net 

earnings 

(3) 

Vote on the official approval of the 

acts and omissions of the Executive 

Board for fiscal 2001 

(4) 

Vote on the official approval of the 

acts and omissions of the Supervisory 

Board for fiscal 2001 

(5) 

Appointment of statutory auditors for 

fiscal 2002 

(6) 

Election of supplementary Supervisory 

Board members 

(7) 

Authorization to acquire treasury stock 

under the terms of Art. 71(1)(8) AktG 

The preceding agenda text has been 

abridged. Legally binding will be the 

agenda of the Company’s annual stockholders’ 

meeting as published in the 

German Federal Gazette (“Bundesanzeiger”). 

Final inspection of a DC intake 

manifold at the Nettetal plant

6 



Supervisory Board 

Klaus Eberhardt 

Düsseldorf, 

Executive Board Chairman of Rheinmetall AG, 

Düsseldorf 

Chairman 

Dr. rer. soc. Rudolf Luz *) 

Weinsberg, 

Union secretary of the German Metalworkers 

Union (“IG Metall”), Heilbronn/Neckarsulm office, 

Neckarsulm 

Vice-Chairman 

Wigand Frhr.v.Salmuth 

Heidelberg, 

Chairman of the Stockholders' Committee of 

Röchling Industrie Verwaltung GmbH, Mannheim 

Additional Vice-Chairman 

(up to June 12, 2001) 

Dr. jur. Erich Coenen 

Frankfurt/Main, 

Executive Board member of Commerzbank AG, 

Frankfurt/Main (up to June 12, 2001) 

Dr.-Ing. Ludwig Dammer *) 

Düsseldorf, 

Central Production Engineering, 

Pierburg AG, Neuss 

Rolf Dollmann *) 

Neckarsulm, 

Chairman of the General Works Council of 

KS Kolbenschmidt GmbH, Neckarsulm 

(up to March 31, 2002) 

Dipl. rer. pol. Werner Engelhardt 

Karlsruhe, 

Management Board Chairman of Röchling 

Industrie Verwaltung GmbH, Mannheim 

(up to January 14, 2002) 


(from September 10, 2001, to January 14, 2002) 

Georg Hadlaczki *) 

Mühlhausen, 

Member of the Works Council of the 

St. Leon-Rot plant of KS Gleitlager GmbH, 

St. Leon-Rot 

Dr. jur. Martin Hirsch 


Lawyer and partner of the law firm 

Gleiss Lutz Hootz Hirsch, 

Frankfurt/Main 

Dr. Bernd M. Hönle 

Weisenheim a. S., 

Management Board member of 

Röchling Industrie Verwaltung GmbH, 

Mannheim (as from June 12, 2001) 

Erich Hüskes *) 

Nettetal, 

Member of the Works Council of the Nettetal 

plant of Pierburg AG, Neuss 

Dr. jur. Klaus Kessler 

Stuttgart, 

Lawyer 

Dr. Schelling & Partner GbR 

Deutsche Schutzvereinigung für 

Wertpapierbesitz e.V., Stuttgart 

Heinrich Kmett 

Fahrenbach/Robern 

Works Council Vice-Chairman of 

KS Kolbenschmidt GmbH, Neckarsulm 

(as from April 1, 2002) 

Jürgen Lemmer 

Bad Homburg, 

Executive Board member of 

Commerzbank AG, Frankfurt/Main 

(as from June 12, 2001) 

Dr. rer. oec. Herbert Müller 

Bochum, 


Rheinmetall AG, Düsseldorf 

(as from March 28, 2002) 

Dr. Siegfried Roth *) 

Rüsselsheim, 

Secretary at the General Secretariat of 

IG Metall, Frankfurt/Main 

*) elected by the employees 

For details of further board memberships of 

Supervisory Board members, see pages 112 et seq. 

Executive Board 

Dr. Gerd Kleinert 

Gottmadingen 

Chairman 

Development, Coordination 

(as from November 1, 2001) 

Dr. Dieter G. Seipler 

Meerbusch 

Chairman 

R&D, Coordination 

(up to October 31, 2001) 

Dr. W. Hans Engelskirchen 

Kaarst 

Production 

Dr. Jörg-Martin Friedrich 

Ludwigsburg 

Human Resources 

Heinz-Ludger Heuberg 

Wülfrath 

Finance, Controlling 

(up to February 28, 2002) 

Georg Liebler 

Düsseldorf 

Sales 

Dr. Peter Merten 

Herrsching 

Finance, Controlling 


For details of further board memberships of Executive Board members, 

see page 114. 

7

8 


Report of the Supervisory Board 


Chairman of the Supervisory Board 

In fiscal 2001, Kolbenschmidt Pierburg 

AG’s Supervisory Board performed the 

functions and duties incumbent on it 

under law and the memorandum & 

articles of association. The Supervisory 

Board monitored the Company’s management 

and conduct of business by 

the Executive Board. 

The Executive Board regularly reported 

to the Supervisory Board on the Company’s 

and the Group’s position and 

development, as well as on fundamental 

issues of business policy, management 

and corporate planning, including 

finance, capital expenditure and 

human resources planning. In addition, 

the Supervisory Board was regularly 

briefed in writing on the Kolbenschmidt 

Pierburg Group’s business position 

and trend. 

The Supervisory Board met twice each 

in the first and the second half-year 

periods of 2001. The Supervisory 

Board’s Personnel Committee members 

convened three times in fiscal 2001 

(April 25, 2001; September 10, 2001; 

and November 22, 2001) and took the 

actions considered necessary. 

When the Finance Committee met on 

April 3, 2001, it dealt with the preparatory 

deliberations about the 2000 

annual accounts and, on June 20, with 

the preparations for, and voting on, 

the capital increase by means of the 

distribute-capture method. There was 

no reason for the Slate Submittal 

Committee to convene. 

The full Supervisory Board was duly informed 

about its committees’ activities. 

At the full Supervisory Board meetings, 

the members discussed in detail the 

situation and development of the 

Group, the various divisions and all 

major Group companies in Germany 

and abroad, as well as all material 

transactions. 

Furthermore, the Supervisory Board 

dealt with issues of strategic and 

organizational orientation and, at its 

meeting of November 22, 2001, 

deliberated on the Group's mediumterm 

plan. All Executive Board actions 

requiring Supervisory Board approval 

were timely and fully submitted to the 

Supervisory Board for information and 

decision. After scrutiny and detailed 

discussion, all issues were approved. 

In particular, the Supervisory Board 

dealt with and approved 

– the financial reorganization concept 

for KUS Zollner, the US Pistons 

subsidiary, 

– the conclusion of a P&L transfer 

and direct-control agreement with 

Pierburg AG, 

– the changeover to IAS as primary 

group accounting system, 

– the capital increase through a 

distribute-recapture transaction. 

The annual accounts and management 

report of the Company, as well as the 

consolidated financial statements and 

Group management report of Kolbenschmidt 

Pierburg AG for the fiscal year 

ended December 31, 2001, including 

the accounting system, were all audited 

by Düsseldorf-based PwC Deutsche 

Revision AG, Wirtschaftsprüfungsgesellschaft, 

which had been appointed 

as statutory auditors by the 

annual stockholders’ meeting of June 

12, 2001. On March 22, 2002, the statutory 

auditors issued their unqualified 

opinion on both sets of financial statements. 

In the scope of their audit engagement, 

the statutory auditors also 

had to examine whether the Executive 

Board implemented the legally required 

procedures, especially set up a monitoring 

system that would early on 

identify any risks likely to jeopardize 

the Company’s continued existence as 

a going concern. The auditors stated 

that the Executive Board met the requirements 

of Art. 91(2) German Stock 

Corporation Act (“AktG”). At a joint 

meeting held on April 8, 2002, with the 

auditors (who reported on major audit 

conclusions and answered queries), 

the Supervisory Board’s Finance 

Committee discussed the separate 

annual accounts of the Company and 

the consolidated financial statements 

for the fiscal year ended December 31, 

2001, on the basis of the audit reports 

and findings. No objections were 

raised. All members of the Supervisory 

Board received their copies of both 

sets of financial statements, the management 

reports and audit reports in 

due course prior to the Supervisory 

Board’s annual accounts meeting on 

April 18, 2002. At this meeting, in 

which the statutory auditors also participated 

to the extent that the separate 

and consolidated financial statements 

were discussed, the Supervisory Board 

carefully reviewed all of these documents 

and concurs with the results of 

the auditors' examination after its own 

review of the separate and consolidated 

financial statements, the management 

reports on the Company and 

the Group, and the profit appropriation 

as proposed by the Executive Board. 

No objections were raised. At its meeting 

of April 18, 2002, the Supervisory 

Board approved the annual accounts 

for fiscal 2001 as submitted by the 

Executive Board, which are thus adopted. 

The Executive Board proposes for 

the appropriation of the net earnings 

for fiscal 2001 that a cash dividend of 

€0.50 per no-par share be distributed. 

The Executive Board argued that the 

dividend had to be reduced in the 

wake of the difficult business and 

shrinking results of operations in the 

year under review which affected 

both the Company and the Group. 

The Supervisory Board endorses the 

profit distribution as proposed by the 

Executive Board. The Executive Board’s 

report concerning affiliations for fiscal 

2001 according to Art. 312 AktG and 

the pertinent report of the statutory 

auditors were submitted to the Supervisory 

Board, which examined the 

report of the Executive Board and concurs 

with it, as with the results of the 

examination by the statutory auditors. 

The auditors issued the following 

opinion on the dependency report of 

the Executive Board concerning 

affiliations: 

“Based on our examination, which we 

performed with due professional care, 

and on our evaluation we certify that 

(1) the facts stated in the report are 

valid; 

(2) the Company’s consideration for 

the legal transactions referred to 

in the report was not unreasonably 

high.” 

After reviewing the final results of its 

own examination, the Supervisory 

Board has found no reasons for objections 

to the Executive Board’s concluding 

representation in the report on 

affiliations for fiscal 2001. 

Versus the year before, the Supervisory 

Board changed as follows: With effect 

as of the close of the annual stockholders’ 

meeting on June 12, 2001, 

Wigand Frhr. v. Salmuth and Dr. Erich 

Coenen stepped down from this Board, 

and so did Mr. Werner Engelhardt as 

of January 14, 2002. Mr. Rolf Dollmann 

resigned from the Supervisory Board 

as of March 31, 2002, to go into retirement 

at April 1, 2002. The Supervisory 

Board thanks Wigand Frhr. v. Salmuth, 

Dr. Erich Coenen, Mr. Werner Engelhardt, 

and Mr. Rolf Dollmann for their 

dedicated work in the Company’s best 

interests. At the election of supplementary 

Supervisory Board members, 

the Company’s annual stockholders’ 

meeting of June 12, 2001, elected 

Dr. Bernd M. Hönle and Jürgen Lemmer 

Supervisory Board members. The Supervisory 

Board meeting of June 12, 2001, 

appointed Dr. Hönle to the Company’s 

Finance Committee. The Düsseldorf 

Local Court of Registration appointed 

Dr. Herbert Müller and Mr. Heinrich 

Kmett as Supervisory Board members. 

In fiscal 2001 and early 2002, Kolbenschmidt 

Pierburg AG’s Executive Board 

changed, too: Executive Board Chairman 

Dr. Dieter Seipler and Mr. Heinz- 

Ludger Heuberg asked to be released 

from their Executive Board duties with 

effect as of October 31, 2001, and 

February 28, 2002, respectively. The 

Supervisory Board complied with both 

requests and appointed Dr. Gerd 

Kleinert Executive Board Chairman 

effective November 1, 2001, and 

Dr. Peter Merten Executive Board member 

with effect as of March 1, 2002. 

The Supervisory Board thanks 

Dr. Seipler and Mr. Heuberg for their 

services on behalf of Kolbenschmidt 

Pierburg AG. 

Moreover, the Supervisory Board thanks 

all employees of the Kolbenschmidt 

Pierburg Group for their dedication and 

commitment in the fiscal year 2001. 

Düsseldorf, April 18, 2002 

The Supervisory Board 


Chairman 

9

10 


Letter to the stockholders 

Dear Stockholders: 

Fiscal 2001 was a period in which the 


successfully upheld its position in a 

market that is becoming more difficult. 

Given the worsening economy, it was 

inevitable that the Group’s operating 

results would decline. Still, with an 

EBIT margin of 4.9 percent, we were 

able to largely compensate for the 

burdens piling up in the marketplace 

in 2001. The driving force behind this 

positive result was organic growth 

inside Europe. With sales up by 2.8 

percent in 2001, Kolbenschmidt Pierburg 

again managed to outpace the 

market. 

Nonetheless, we still did not achieve 

in 2001 our basic target of a sustained 

EBIT-based return on sales (ROS) of 

6.3 percent, mainly due to the ailing 

US economy. 

Forecasts indicate that the economy 

will continue to contract in the United 

States and Europe in 2002. We are 

facing up to these challenges and endeavoring 

to improve our performance 

through further consolidation and enhancement 

of our operating results. 

Kolbenschmidt Pierburg will focus on 

its core business in the period ahead, 

review marginal activities, and concentrate 

on enhancing shareholder 

value through operational improvements. 

Earnings growth with limited 

capital employed will, even more 

than up to now, take priority over sheer 

sales growth, in particular business 

expansion engendered through acquisitions. 

A review of our non-core businesses in 

2001 prompted us to shed our majority 

stake in the MotorEngineering division. 

This logical decision proved successful 

not only for our group but also for the 

employees all of which were taken 

over by the new owner. 

At four major locations, whose losses 

are currently burdening our earnings 

at around €50 million, extensive restructuring 

programs have been in 

force since the end of 2000. Most of 

these will be successfully completed 

in the course of 2002. As these lossmakers 

are gradually eliminated, the 

earnings generated by other subsidiaries 

will in future flow undiluted to 

the Group’s profit. 

Market capitalization/EBIT 

Basis: Price as of Dec. 31 

Dividend in € 

Dividend incl. bonus 

After only a few months, it is evident 

that the year 2002 will not bring about 

any economic relief. Yet thanks to our 

sound technological and financial 

bases plus the highly consistent valueadding 

policies we have adopted, we 

expect to close 2002 by again outperforming 

the market. In the continuation 

of this successful course, I ask 

you, our stockholders, in the name of 

my Executive Board colleagues, for 

your ongoing confidence. 

Sincerely, 


Executive Board Chairman 

5.3 

3.7 

2000 2001 

1.30 

0.53 

0.77 

2000 

0.50 

2001 

Executive Board report 

Kolbenschmidt Pierburg Stock 

Share prices compared with M-DAX, 

indexed to the Kolbenschmidt Pierburg stock price on January 2, 2001 (up to March 28, 2002) 

16 

14 

12 

10 

8 

6 

€ 

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 

01 01 01 01 01 01 01 01 01 01 01 01 02 02 02 

M-DAX Kolbenschmidt Pierburg AG 

Phoenix AG 

Continental AG 

Worldwide, 2001 was a period of 

plunging stock prices, the most important 

US barometer, the Dow Jones, 

losing just under six percent, NASDAQ 

as much as 19 percent. The Euro Stoxx 

shed over 20 percent, tumbling from 

4,770 to 3,806 points. 

Compared with year-end 2000, the DAX 

slumped by almost 20 percent from 

6,433 to 5,160 points. Following the 

events of September 11, the DAX was 

at times 45 percent below December 

31, 2000. This indicates that in the 

final three months of 2001, these steep 

losses were followed by a recovery, 

which lifted the DAX over 1,600 points 

above its yearly low. Sectorwise, automobile 

shares put in the relatively 

best performance in 2001, BMW rising 

12 percent, DaimlerChrysler 8 percent, 

with only Volkswagen receding almost 

6 percent. 

The M-DAX slid by 7.4 percent in 2001 

(from 4,675 to 4,326 points) and was 

thus caught up in the general trend of 

the period. 

Kolbenschmidt Pierburg AG stock 

gained in the course of last year. At the 

close of 2000, our stock had fallen to 

an unsatisfactory €10.75, but then as 

the year progressed, rebounded by 

June, rising to €16.10 (+49.8 percent). 

On an annual average, the stock price 

was 18 percent higher than at the end 

of 2000, a commendable performance 

particularly against the background 

of the capital increase obtained by 

applying the distribute-recapture 

method around mid-year. We will do 

our utmost to perpetuate this trend in 

the course of the present fiscal period. 

Other comparable M-DAX listed automotive 

stock, Phoenix and Continental, 

fell by almost 20 percent, in contrast. 

The early months of 2002 saw a continuation 

of Kolbenschmidt Pierburg 

stock’s upswing, with the year-end 

2001 price of €12.65 gaining up to 

€2 in the first months. 

As to 2002, we expect the stock markets 

to show a slight recovery, given a 

revival in the world economy in the 

second half of 2002. This will open 

up further growth potentials for our 

stock, which is still comparatively 

underpriced. 

Fiscal 2001 was again another very 

successful year for our Investor Relations 

efforts, the first annual accounts 

conference for financial analyst being 

held in Frankfurt/Main by Kolbenschmidt 

Pierburg AG. The very many 

interested analysts and their positive 

response, endorsed the success of 

our Investor Relations work. At a DVFA 

conference staged at the IAA in 

Frankfurt, Kolbenschmidt Pierburg AG 

presented itself to a broad audience 

of investors and, in October, a further 

such event was organized to accompany 

the opening of our Shanghaibased 

joint venture. Completing the 

picture are our quarterly teleconferences 

on the current business situation. 

Analysts, investors and banks alike 

commend our enlightening annual 

report and, in a survey conducted by 

Manager Magazin, the annual report 

2000 generally scored very high. 

The rating agencies, too, have once 

more confirmed that Kolbenschmidt 

Pierburg AG pursues a circumspect 

and safe financial policy and, despite 

the tougher markets in 2001, rated 

our company BBB/A-2 (S&P) and Baa2 

(Moody’s), hence investor’s grade for 

our debt securities. 

11



Management report on the Kolbenschmidt Pierburg Group 

Reporting format 

This report on 2001 is the first annual 

report the Kolbenschmidt Pierburg 

Group has prepared in accordance with 

the IASB’s International Accounting 

Standards (IAS). To ensure a meaningful 

comparison, the prior-year data 

(in 2000 still based on the German 

Commercial Code, or “HGB”) was 

subsequently restated to conform to 

IAS and contrasted to the IAS-based 

disclosures for fiscal 2001. 

Kolbenschmidt Pierburg AG’s 



The changeover to IAS as primary 

accounting basis meant that three 

special-purpose property companies 

had to be additionally included in the 

consolidation group as of December 

31, 2000 as well as 2001. 

Set up as of April 1, 2001, together 

with SAIC, one of China's biggest 

automotive companies, the joint 

venture Kolbenschmidt Pierburg 

Shanghai Nonferrous Components 

Co. Ltd. (KPSNC), Shanghai, China, 

has been included at equity in the 

Air Supply & Pumps division. 

MotorEngineering is a division operating 

in the market for exhaust gas, 

flowmeter and workshop measuring 

equipment for developing and servicing 

I.C. engines and accounts for a 

mere 2 percent of the Group’s annual 

sales. Thus, it is not eligible for inclusion 

as one of the Kolbenschmidt 

Pierburg Group’s core businesses 

and therefore effective the turn of 

2001/2002, AVL Holding GmbH, Graz, 

Austria, as part of a joint venture 

agreement, has taken over a majority 

stake in the division’s parent company 

Pierburg Instruments GmbH, in which 

it is also exercising industrial management. 

While this company’s income 

statement is reflected in Kolbenschmidt 

Pierburg AG’s consolidated 

financial statements, its balance sheet 

as of December 31, 2001, is not. In 

future, this company will be included 

at equity. Additionally, the 100-percent 

stake held in Pierburg Instruments Inc., 

Auburn Hills, Michigan, USA, a company 

serving the American market with 

the development, manufacture, and 

marketing of flowmeter and exhaust 

gas measuring equipment, was deconsolidated 

and sold as of January 1, 

2001, to AVL Michigan Holding Inc., 

Plymouth, Michigan, USA. 

As of January 1, 2001, Vehicle Spares 

Ltd., Dublin, Ireland, was sold and 

likewise deconsolidated. 

Regarding changes in the consolidation 

group, the comparative figures 

for the past two years are those certified 

in the annual accounts; due to 

the marginal significance of such 

changes, a comparable restatement 

has been waived. 

Dr. W. Hans Engelskirchen Dr. Jörg-Martin Friedrich Georg Liebler Dr. Peter Merten 

12 13 

Business trend 

Fiscal 2001 for Kolbenschmidt Pierburg 

was overclouded by the worsening 

economic conditions in the course of 

the year. Nonetheless, most of the 

Group’s companies successfully upheld 

their position in the markets, the 

consequence being that Group sales 

gained by 2.8 percent to €1,825.5 

million. Five of the six divisions played 

their part in improving sales revenues 

over the previous year. The growth 

regions in 2001 were Western Europe 

and South America, whereas the 

Group’s activities in North America 

suffered from reduced customer calloffs 

and project postponements. 

World production down 

Passenger car production by 

selected regions 

(million units) 

Following the upswing of 2000, auto 

and LCV production in Asia in 2001 

re-declined (down 1.7 percent). It was 

particularly in the volume markets of 

Japan and South Korea that car production 

fell by 2.1 and 3.4 percent, 

respectively. LCV production in these 

countries also dropped, by 6.0 and 

1.7 percent, respectively. In contrast 

and although from a relatively low 

baseline, car production in China 

again revved up, by 28.1 percent to 

0.7 million units. Including the LCVs, 

which account for a major slice of 

automotive output in China, production 

added up to 1.8 million units (up 

10.4 percent). 

On the basis of the existing projections, 

world production of autos and 

light commercial vehicles (LCVs, under 

3.5 t) in 2001 dropped by 3.1 percent 

to 53.6 million, of which automobiles 

accounted for 39.8 million (down 2.3 

percent) and LCVs for 13.8 million 

(down 5.5 percent). A major problem 

for the carmakers is the declining 

sales in major world markets (NAFTA, 

Japan), which are hardly retrievable 

elsewhere. 

Within NAFTA, the United States produced 

much fewer autos (around 4.9 

million, down 11.9 percent) and LCVs 

(around 6.3 million, down 9.0 percent) 

than back in 2000, even though the 

final quarter of the period saw a number 

of special campaigns such as zerointerest 

financing, cash incentives, 

and early re-leasing options, which 

together did help prop up sales, 

Western/Eastern Europe 

2000 

2001 (provisional) 

NAFTA 

Asia incl. Japan 

8.4 

7.4 

Western Europe in 2001 again showed 

a slight gain in the production of cars 

and LCVs, this time by 1.4 percent to 

16.8 million units. Whereas France 

and Germany boosted production to 

just over 3.5 million vehicles (up 7.8 

percent) and 5.2 million (up 3.5 percent), 

respectively, output in Italy fell 

to a good 1.5 million units (down 9.5 

percent) as in Spain to just under 2.9 

million units (down 1.9 percent) and 

Britain to just under 1.7 million units 

(down 7.1 percent). In Germany, exports 

rose by 5 percent to a good 3.6 million 

units. In contrast, the number of newly 

registered vehicles fell by 1.4 percent 

in Western Europe. The number of 

foreign makes registered declined by 

though at the expense of severely 

eroded earnings. Production figures 

in Canada slumped too, cars falling to 

1.3 million units (down 17.2 percent) 

and LCVs to 1.2 million (down 8.4 percent). 

In South America, the number of cars 

and LCVs produced gained by 1.9 percent 

to around 1.9 million units. Whereas 

production in Brazil advanced by 

over 8 percent, the figure for Argentina 

crumbled by almost 31 percent due to 

that nation’s economic woes. 

–11.9% 

Sales growth 

despite 

tough conditions 

13.1 

12.9 

–1.5% 

17.2 

17.4 +1.2% 

6 percent whereas German brands 

gained by almost 1 percent. 

Diesel engines 

advancing 

Diesel engine cars and station wagons 

once more progressed in the markets 

of Western Europe, particularly those 

of the mass producers Volkswagen, 

PSA, and Renault, which offer a large 

number of diesel engines. In Germany 

and France, the proportion of such 

vehicles as a percentage of car and 

station wagon production, rose by 

almost 4 percent to some 38 and 41 

percent, respectively.

14 



Non-German sales 

over 66 percent at 

Kolbenschmidt Pierburg 

Sales breakdown by regions 

(in %) 

Sales growth in five 

of six divisions 

Kolbenschmidt Pierburg’s business 

continues to be highly international. 

Unchanged from 2000, Group sales 

to customers outside of Germany 

exceeded 66 percent. In fact, this 

would have been even higher, but 

for the dents inflicted by the North 

American automotive market. For the 

automotive vendor industry, this is an 

important region, and here the proportion 

of sales fell by 1 percentage point 

from the prior-year level. Whereas 

sales to customers in Western Europe 

(excluding Germany) gained one 

percentage point to 44 percent, the 

proportion of sales in the other regions 

remained unchanged. This also applies 

to sales to German OEMs, which once 

more accounted for 34 percent of the 

total. 

17 

3 

2 1 

3 2 1 

Europe (excl. Germany) 

34 

16 

North America 


South America 

43 

Germany 

Asia 

Other 

Fiscal 2001 was a period in which five 

out of the six divisions posted sales 

growth, in some cases quite appreciable, 

with Air Supply & Pumps and 

Aluminum Technology stepping up 

sales versus the previous year by 

€49.4 million and €19.6 million, respectively. 

In fact, Air Supply & Pumps 

achieved a new record of €819.8 

million. It was the Air Supply unit, in 

particular, that grabbed an extra share 

of business from the mounting wave 

of diesel engine cars. Heavy year-earlier 

cost input for preparing the series 

production start-up of several new products 

allowed Aluminum Technology to 

grow its sales to €135.8 million. 

Compared with the previous year, 

steep sales hikes were recorded in 

Europe (up €51 million) and Germany 

(up €17 million). Business in Asia 

throve, too, with additional sales of 

€8 million. Within these three regions, 

sales growth outpaced the local automotive 

market. In contrast, sales in 

North America dropped by around 

€25 million. The South American 

automotive market was likewise 

infected by the situation in North 

America, with the result that the 

improvement fell short of the yearearlier 

addition, reaching only around 

€5 million. 

44 

34 

Likewise successful performers in 

their respective markets were Plain 

Bearings (sales of €153.2 million), 

MotorEngineering (€37.8 million) 

and MotorService (€151.3 million) 

with increases between €2 million 

and €8 million. In fact, it was only 

the Pistons division that had to 

contend with sales losses of €35.0 

million to €571.5 million, due to its 

heavy involvement in the North 

American market and the latter’s 

feeble automotive economy. 

Sales by divisions 

(in %) 

Compared with the previous year, there 

were no substantial changes in the 

shares of the divisions as a percentage 

of consolidated sales. With an increase 

of two percentage points, Air Supply & 

Pumps managed to cement its position 

as the highest sales generator among 

the divisions, with Pistons falling back 

correspondingly by two percentage 

points. 

The Kolbenschmidt Pierburg Group’s 

core business in fiscal 2001 was once 

again sales to automotive industry 

Results of operations 

Starting with the 2001 annual accounts, 

the Kolbenschmidt Pierburg Group 

changed its primary accounting basis 

to IAS, thus adding transparency to 

its consolidated financial statements. 

Moreover, IAS-based financial information 

facilitates comparative analyses 

among other internationally operating 

companies which use the same accounting 

standards. 

To create a reproducible starting basis, 


2000, originally prepared in accordance 

with the regulations of the 

German Commercial Code (“HGB”), 

were retrospectively restated to 

conform to IAS rules. Apart from the 

differences arising from the disparity 

of HGB and IAS rules, also additional 

material conclusions subsequently 

reached in 2001 and retroactively 

8 

2 

7 

33 

8 

42 


8 



shedding new light on business in 

2000 were reflected in the restated 

2000 financial statements, in due 

accordance with the recommendations 

published by IDW, the German Institute 

of Sworn Public Auditors & Accountants, 

in RH HFA 1.001. This approach meant 

that, according to IAS, certain expenses 

and income were allocated to other 

periods than under HGB regulations. 

While IAS rules hardly affected the 

disclosure of sales in Kolbenschmidt 

Pierburg’s consolidated financial statements, 

the disclosure of earnings was, 

inter alia, influenced by the different 

rules for (i) goodwill capitalization 

and amortization, (ii) accounting for 

expenses for pension accruals, (iii) 

the nonrecognition of HGB-based 

accrued restructuring expenses, and 

(iv) the accounting treatment of untaxed/special 

reserves. 


Pistons 


Motor Service 

OEMs worldwide which account for 

around 85 percent of the total volume 

(down from 86 percent). And, as in the 

previous year, about 10 percent of 

Group sales revenues was generated 

with engine repair shops and workshops 

(spares, parts and measuring 

equipment), while nonautomotive 

business (such as large-bore pistons 

for stationary applications and continuous 

castings) contributed some 

5 percent (up from 4 percent) of Group 

sales. 

2 

7 

31 

Disclosure of earnings 

rebased on IAS 

8 

44 

15



Earnings before taxes (EBT) by the 

Kolbenschmidt Pierburg Group in 

2001 reached €49.5 million, well 

in excess of the year-earlier €21.6 

million. 

At €90.3 million, EBIT topped the 

previous year’s €54.5 million, while 

EBITDA in 2001 clearly surpassed the 

year-earlier level to reach €238.2 

million (up 18 percent). 

Year-earlier EBT 

well exceeded 

Expense structure of the Group 

(in %) 

Value added 

per capita up 

by 8 percent 

1.2 

12.8 

8.2 

29.3 

48.5 

The pretax return on sales (EBT-based 

ROS) for the Kolbenschmidt Pierburg 

Group in 2001 amounted to 2.7 percent 

(up from 1.2 percent), and EBIT-based 

to 4.9 percent (up from 3.1 percent). 

EBITDA as a proportion of sales came 

to 13.1 percent (up from 11.4 percent). 

From an operational viewpoint, earnings 

are still heavily handicapped by 

the weak US economy, which clearly 

emphasized the need to restructure a 

number of our companies in this region 

of the world. As a consequence, the 

already initiated restructuring and 

reorganization programs for the US 

locations were thoroughly revised 

and amplified. One of the production 

locations will substantially be closed 

down in 2002 and facilities at another 

will be reduced to two mass-produced 

products. Even though such expenses 

will partly burden earnings in 2002, 

profitability improvements are budgeted 

for the US activities of the Group 

as early as this year. 

Total operating 

performance 

€1,804.5 million 

EBT 

Sundry 

Cost of materials as a percentage of 

total operating performance rose, in 

particular due to the geographical 

relocation of value-adding processes, 

whereas the Group’s payroll ratio was 

slightly lower. The burdening effect 

on earnings of the individual personnel 

expense increases was outcompensated 

within the Group through a 

The Group’s earnings in 2001 were 

squeezed by even keener pricing 

competition in the automotive market 

as well as by higher levels of the cost 

of materials and personnel expenses. 

This earnings pressure was counteracted 

through sweeping rationalization 

efforts, engineering improvements, 

and a marked reduction in purchase 

prices. Growth in excess of budget 

led to unit cost economies of scale 

while closer cooperation among the 

international production locations 

allowed us to consistently allocate 

products to the least expensive of the 

production locations. 

Total operating 

performance 

€1,833.3 million 

Amortiz./depreciation 

Personnel expenses 

2000 Cost of materials 


2.7 

10.3 

8.1 

28.5 

50.4 

headcount reduction and the again 

large share of production outside of 

Germany. As a consequence, it proved 

possible to raise sales per capita by 

4.8 percent to €0.152 million (up 

from €0.145 million). Concurrently, 

value added per capita advanced by 

8.0 percent to €0.054 million. 

Kolbenschmidt Pierburg again invested 

heavily in tangible assets during 2001 

with the target of entrenching market 

position and furthering growth. Total 

amortization and depreciation remained 

at around €148 million. 

Among the divisions, Plain Bearings 

and Motor Service (aftermarket) turned 

in very creditable performances with 

EBT-based ROS of 9.9 and 8.8 percent, 

respectively. Pistons, too, managed 

to largely absorb the burdens from its 

extensive US operations through success 

in Europe and South America to 

achieve an ROS of 3.5 percent. Finally 

and in its last year of full consolidation 

by Kolbenschmidt Pierburg, the Motor- 

Engineering division achieved a sharp 

earnings improvement, attributable 

to both the very successful operations 

as well as the book gains related to 

the transfer of the majority stake. 

Despite the dividend payments partly 

accruing through the disposal of the 

Value added by the Kolbenschmidt 

Pierburg Group in 2001 advanced by 

around 4.9 percent to €645.2 million 

and broke down as follows: 

Distribution of value added 2000 2001 

KSPG AG stockholders 3% 2% 

Employees 86% 83% 

Lenders 3% 3% 

Treasury 6% 5% 

Companies of the Group 2% 7% 

majority stake held in the MotorEngineering 

subsidiary, the biggest of the 

divisions, Air Supply & Pumps (Pierburg), 

fell short of expectations with 

an ROS of only 1.5 percent. The same 

applies to Aluminum Technology 

which failed to break even in 2001, 

generating a negative EBT of €3.6 

million. Earnings at Pierburg were 

squeezed by the need to restructure 

the Berlin and Nettetal locations as 

well as the poor performance of the 

US subsidiary. At the engine block 

division, Aluminum Technology, 

concurrent production start-ups in 

the summer of 2001 and the related 

preproduction costs prevented any 

profit from being achieved. 

Big differences 

in division returns 

on sales 

Group EBT by divisions 2000 2001 

€million €million 

Air Supply & Pumps 7.2 12.3 

Pistons 14.0 20.2 

Plain Bearings 4.5 15.1 

Aluminum Technology (5.2) (3.6) 

MotorEngineering (1.5) 7.5 

Motor Service 10.4 13.4 

Others/consolidation (7.8) (15.4) 

Group 21.6 49.5 

16 17

18 




net income for 2001 totaled €31.8 

million (up from €7.4 million), which 

limited the income tax load ratio to 

35.8 percent of EBT. We assume that 

the average income tax burden within 

the Kolbenschmidt Pierburg Group will 

Income tax load ratio 

limited to 36 percent 

remain at around 37 percent in the 

years ahead. Net ROS 2001 (after taxes) 

came to 1.7 percent. A decisive contribution 

to the higher net income came 

from the improved EBT; in contrast, 

capitalized deferred tax assets in 2001 

sank versus the year before. Deferred 

taxes were recognized in 2001 for 

temporary differences between the 

financial statements and the tax accounts 

as well as for loss carryovers 

available short term to reduce the tax 

load. 

Achieving the long-term targets set 

for the returns on sales and capital 

proved impossible in the difficult 

year 2001. In the current year 2002, 

we will center our efforts on getting 

closer to our self-set ambitious targets. 

Targets and achievements Target Actual Actual 


Return on sales (EBT-based ROS) 4.5% 1.2% 2.7% 

Return on sales (EBIT-based ROS) 6.3% 3.1% 4.9% 

Return on capital employed (ROCE) 15.0% 6.3% 10.1% 

Capital expenditure 

ratio almost unchanged 

Capital expenditure by divisions 

(in %) 

Capital and capital expenditures 

During fiscal 2001, the Kolbenschmidt 

Pierburg Group spent altogether 

€174.6 million (up from €171.1 million) 

on intangible and tangible assets 

(capitalized). The IAS-based disclosure 

includes the additions of leased assets. 

Despite the modestly higher amount 

compared with the previous year, the 

ratio of capital expenditures to sales 

was again 9.6 percent. 

1 1 


In 2000, capital expenditures had been 

more or less fully shared between the 

German and non-German operations. 

In 2001, in contrast, the larger share 

went into expanding the domestic 

production operations (approximately 

62 percent or €107.7 million). 

Spending abroad accounted for around 

38 percent or €66.9 million of the 

funds invested, with emphasis on the 

locations in Western Europe (€34.1 

million). Due to the weak economy, 

capital outlays in North America 

dropped from €37.3 million to €23.1 

million. 

9 

Pistons 

12 

7 

2000 

44 




7 


38 

Motor Service 

Other 

33 

1 1 

46 

Premachining a 

BMW V8 engine block 

at the Neckarsulm plant

20 



Investments in 

innovative projects 

Most of the capital expenditures by 

Air Supply & Pumps during the past 

fiscal year concentrated on completing 

two production lines for intake manifolds 

and setting up extra capacities 

for electric throttle bodies. For the 

growing segment of emission control 

products, further production facilities 

were created for manufacturing exhaust 

gas recirculating valves and 

control dampers in order to share in 

the growth opportunities. 

Outside of Germany, the European 

water and oil pump operations were 

further expanded. To address the 

growing proportion of diesel engines 

and the related demand for vacuum 

pumps, this division's activities for 

these products were again extended 

in France and Italy. In the United States, 

spending focused on the start-up of 

a new line for manufacturing electric 

throttle bodies. 

Inside Germany, Pistons devoted its 

efforts to enlarging capacities, both 

in the foundries as well as in the 

machining shops, in order to implement 

new products related to new 

engine programs of notable OEMs. 

Efforts were also stepped up toward 

automating the engine test rigs. 

Gross cash flow 

clearly improved 

Investments at the US subsidiaries of 

the Pistons division centered on the 

restructuring and expansion of the 

manufacturing lines in order to achieve 

a further pronounced enhancement in 

productivity. The subsidiaries in France 

and the Czech Republic installed production 

lines for new product start-ups. 

Plain Bearings pushed ahead with 

expanding the Papenburg-based plant. 

As part of this project, further facilities 

were set up for completing the connecting-rod 

bearing production line 

and other manufacturing equipment 

for car engine bearings. Papenburg 

also saw the start-up of a second 

coating line for high-duty slide bearings 

(sputter line). The St. Leon-Rot factory 

spent most of the funds on facilities 

for cladding and for mass-producing 

bushings. 

Aluminum Technology focused its 

expenditure on extending the lowpressure 

casting capacities to cater 

for budgeted sales increases assured 

through customer projects. Together 

with an associate, this division also 

continued work on setting up plant 

for finish-machining engine blocks 

used in the premium off-road vehicle 

of a German carmaker. 

Capital outlays by Motor Service 

amounted to €1.0 million in fiscal 

2001 (up from €0.8 million). Most 

of the spending was related to the 

relocation of a French subsidiary. 

The Group’s gross cash flow for the 

year ended December 31, 2001, was 

ramped up significantly in comparison 

to 2000, from €160.8 million to 

€174.4 million. With amortization/depreciation 

virtually unchanged and 

With the transfer of our majority stake, 

MotorEngineering’s capital expenditure 

is no longer reflected in Kolbenschmidt 

Pierburg AG’s consolidated financial 

statements. 

Financial investments in fiscal 2001 

added up to €21.6 million, mainly 

due to the new Chinese joint venture 

by Air Supply & Pumps; this follows a 

mere €1.1 million in the previous year. 

Amortization and depreciation (excluding 

goodwill amortization) by the 

Kolbenschmidt Pierburg Group as of 

December 31, 2001, amounted to 

€145.6 million, approximating the 

year-earlier level of €144.8 million. 

Capital expenditures in 2001 exceeded 

amortization and depreciation by 

19.9 percent. Goodwill amortization 

came to €2.3 million in 2001. 

pension accruals receding, the improvement 

was ascribable to the upgraded 

net income. The €174.6 million 

capital expenditures in 2001 were 

almost fully funded from the cash 

flow. 

At €1,343 million as of December 31, 

2001, total assets inched down €46 

million from the year-earlier €1,389 

million, despite the higher business 

volume. The ratios and proportions 

continued healthy on either side of 

the balance sheet. 

Fixed assets accounted for 59 percent 

of total assets, thus definitely up in 

relative and absolute terms (7.1 percentage 

points or €71.6 million). 

Tangible assets were increased to 

secure future business but financial 

assets rose, too, mainly due to the 

fair valuation of one investee when 

applying IAS 39 for the first time, and 

to the addition of two joint ventures. 

Employees 

As of December 31, 2001, Kolbenschmidt 

Pierburg AG along with its 

subsidiaries in Germany and abroad 

employed a workforce of 11,662, down 

from 12,164 at December 31, 2000. 

The decline by 502 was the outcome 

of the deconsolidation of MotorEngineering 

plus retrenchments at various 

locations in Germany and abroad. 

Affected by the measures were in 

particular the Fort Wayne plant of 

KUS Zollner Division Inc., as well as 

the Greensburg site of KS Bearings Inc. 

and the Berlin and Nettetal plants of 

Pierburg AG. The retrenchment programs 

at the Berlin plant of Pierburg AG, 

to be continued this and next year, 

have been accompanied by agreements 

on a reconciliation of interests 

and a severance package. 

In contrast, the ratio of current to total 

assets shrank by 7.1 percentage points 

to 37.5 percent. The program to scale 

down inventories and trade receivables 

was successfully implemented. Cash 

& cash equivalents were whittled down 

by €33.6 million to €21.2 million. 

Total equity (i.e., stockholders’ equity 

plus minority interests) improved by 

€25.1 million from €319.9 million to 

€345.1 million. Kolbenschmidt Pierburg’s 

equity base was strengthened 

not only by the increased capital stock 

and additional paid-in capital after the 

dividends and bonuses distributed 

for 2000 were recaptured but also 

through the healthy net income. The 

equity ratio gained accordingly, rising 

from 23.0 percent in 2000 to 25.7 

percent as of December 31, 2001. 

Headcount down 

During 2001, an average of 228 persons 

were on limited-term contracts. This 

compares with 165 the year before. 

The domestic companies of the Kolbenschmidt 

Pierburg Group had a 

workforce of 6,160 as of December 

31, 2001 (down from 6,328). Of these, 

4,519 were blue- and 1,641 whitecollar. 

German operations accounted 

for around 53 percent of the total headcount. 

Personnel expenses incurred by 

Kolbenschmidt Pierburg AG and its 

subsidiaries in 2001 added up to 

€522.1 million. This total included in 

2001 €414.4 million for wages and 

salaries, €46.0 million for social 

security taxes, and €61.7 million for 

pension expenses. 

Sound asset and 

capital structure 

In fiscal 2001, the collective agreement 

for the metalworking industry signed 

back in 2000 was in force and expired 

February 28, 2002. This agreement 

meant a 2.1-percent pay raise in Germany 

as from May 1, 2001. 

Domestic workforce 

at 53 percent 

The new parameters set by the collectively 

negotiated agreement for preretirement 

part-time arrangements 

were applied on the basis of a general 

works agreement. These are tailored 

to the specific needs of the Kolbenschmidt 

Pierburg Group’s German 

operations and allow us to deploy 

preretirement part-time to improve 

age and skill structures at the various 

operations and units. 

21

Tool setting prior to machining 

the large-bore pistons at the 

Neckarsulm plant 

Further agreements were concluded on 

the deployment of flexible working 

hour arrangements and the introduction 

of group work at one of the plants. 

Skilled and motivated employees in 

Germany and abroad are essential if 

we are to master the challenges posed 

by our markets and enhance the value 

of the Group. We prize employees that 

identify with the Group and whose 

know-how we are able to retain for 

lengthy periods. The stock appreciation 

rights (SAR) program for the second 

and third management tiers was continued 

in 2001. Hence, all managers 

now have a part of their pay anchored 

to Kolbenschmidt Pierburg’s stock price 

performance and, as a consequence, 

shareholder value notions are given 

even greater emphasis throughout 

the Group. 

A large number of training courses not 

only in the field of modern working 

techniques but also in management 

and communication were staged in 

order to promote the skills of our employees 

in and outside of Germany. 

This ongoing enhancement of employee 

skills and motivation is essential 

in order to cope with changes due to 

new technologies and the ongoing 

progress toward state-of-the-art and 

efficient forms of business organization. 

One ingredient of this is the continuous 

improvement process in effect at all 

the plants. The corporate suggestions 

schemes with their continuously growing 

improvement potential are also 

helping to fine-tune some of the internal 

work flows. In submitting these 

suggestions, employees are demonstrating 

their interest in improving 

the organization of the operations at 

which they work. 

Apprentice training was again pursued 

resolutely and is necessary in order to 

increase the efficiency of our operations 

within the competitive environment. 

As of December 31, 2001, we 

employed 358 apprentices and vocational 

trainees worldwide. 

The employee representatives at all 

the companies cooperated constructively 

in putting into effect our measures. 

This constructive cooperation 

with the works councils, the spokesperson 

committees of the managerial 

employees and the employee representatives 

on the Supervisory Board 

was and is an important foundation 

stone in the success of the Group as 

a whole. 

We thank all the employees of the 

Kolbenschmidt Pierburg AG companies 

for their dedicated efforts and commendable 

achievements in fiscal 2001. 

Stock appreciation rights 

program continued 

Employees 12-31-2000 12-31-2001 Change 

Air Supply & Pumps 4,109 4,010 –99 

Pistons 5,618 5,416 –202 

Plain Bearings 1,094 1,045 –49 

Aluminum Technology 689 772 +83 

MotorEngineering 210 0 –210 

Motor Service 396 381 –15 

Others 48 38 –10 

Total, Group 

thereof 

12,164 11,662 –502 

Germany 6,328 6,160 –168 

abroad 5,836 5,502 –334 

23



Research and development 

Whereas the consolidation process 

among the automotive manufacturers 

has almost come to a standstill, the 

relationship between manufacturers 

and their vendors is still undergoing 

change. Broader platform-based model 

ranges together with the necessity to 

Even now, Kolbenschmidt Pierburg 

with its products “for every aspect of 

the engine” is a longstanding and 

successful partner of the international 

carmakers in the development of 

Expenses for R&D 

again raised 

differentiate among vehicle types, the 

extension of product ranges but with 

ever shorter model lifetimes as well 

as a concentration on core competencies 

all lead to the outsourcing of tasks 

previously performed by the assemblers 

themselves. This trend is also 

true of development and production 

functions, the vendors having to 

functional, economic, low-emission 

and cost-optimized engine components. 

In order to maintain this reputation 

and widen it within the product 

sectors, where Kolbenschmidt Pierburg 

is represented with the individual 

components but still lacks sufficient 

first-tier systems competence, the 

internal and external expenses for 

research and development in fiscal 

2001 again rose, to €79.8 million, 

exceeding the already high previous 

R&D by divisions 2000 2001 


Air Supply & Pumps 45.3 49.3 

Pistons 19.2 19.9 

Plain Bearings 2.1 2.4 

Aluminum Technology 8.0 5.0 

MotorEngineering 4.5 3.2 

Group 79.1 79.8 

High technical competence 

in the divisions 

In fiscal 2001, the Group made quite 

some progress toward its targets of 

emission control, performance 

gains, as well as consumption and 

weight reduction through the series 

start-up or ongoing development of 

a number of innovative products. 

The basis for this are the successful 

R&D efforts within the Group's 

divisions: 

Air Supply & Pumps’ technical competence 

was proven with numerous 

innovative projects, such as electric 

coolant pumps for the main cooling 

circuit, regulated oil pumps, motorized 

exhaust gas recirculating valves for 

direct-injection gasoline and diesel 

engines as well as complete predelivery 

units for diesel applications. All these 

projects were developed ready for 

series production by interdisciplinary 

teams. Furthermore, work started on 

the gestation of sensors and valves 

for fuel-cell propulsion systems. The 

worldwide first steplessly variable 

intake manifold module from thinwalled 

magnesium for boosting performance 

and torque went into series 

shoulder ever greater responsibilities. 

A decisive factor in the success or 

failure of an automotive vendor industry 

is more than ever before the 

vendor’s ability to deliver innovative 

contributions within the value-adding 

chain culminating in the automobile. 

year’s level. This is equivalent to 4.4 

percent of sales (up from €79.1 million 

or 4.5 percent). In all, in the Kolbenschmidt 

Pierburg Group almost 6 percent 

of the total workforce was entrusted 

with research and development 

tasks as of December 31, 2001. 

production and proved successful. 

Various electronically controlled throttle 

bodies (drive-by-wire) and exhaust 

gas recirculating valves for gasoline 

and diesel engines on the European 

and North American market, valueoptimized 

oil and water pumps (for 

commercial vehicles, too) likewise 

came on stream. 

Value engineering teams are busy finetuning 

series products for improving 

the cost/revenue situation. In this way, 

potentials for current projects and 

rationalization approaches for succeeding 

product generations are worked 

out and implemented. 

Visual inspection of the 

piston shaft coating at the 


24 25

Coating unit for 

high-duty plain bearings 

at the Papenburg plant 

In the Air Supply & Pumps division, 

€49.3 million was spent in fiscal 

2001 for research & development 

activities, equivalent to 6.0 percent 

of sales. 

In the Pistons division, the share of 

pistons for passenger car diesel 

engines again climbed, a trend set 

to continue over the years ahead. To 

address this, R&D staff in 2001 developed 

solutions for high-duty diesel 

pistons in passenger car engines rated 

at 55 kW and more per liter displacement. 

For various European customers, 

pistons are currently being developed, 

with ratings partly clearly above today’s. 

So far, there has not been any breakthrough 

in the market for direct-injection 

gasoline engines, despite the very 

many development projects and some 

successful series launches in the past 

year. Kolbenschmidt Pierburg is well 

prepared for a partial substitution of 

conventional gasoline engines thanks 

to its new casting technology matured 

in the course of last year which enables 

a less costly production of the necessary 

complex surface geometry. Further 

projects in this sector are under development. 

In recent years, articulated pistons for 

commercial vehicles have been developed 

for various customers and are 

now being or about to be series-produced. 

We are already working on follow-up 

models for cylinder pressures 

of 250 bar or more. Steel pistons, also 

for diesel engine commercial vehicles, 

are being advanced according to plan. 

A similar engineering trend as for commercial 

vehicle engines is also evident 

in the case of large-displacement engine 

pistons. Continuously increasing 

cylinder pressures require even higherduty 

pistons and in answer to this, 

multipart steel pistons are being produced 

for several customers to take 

the place of the existing spherical casting/steel 

variety. Moreover, a onepiece 

steel piston is being developed 

for medium-diameter cylinders. The 

first of both designs were delivered to 

customers for field tests. 

The mounting wave of development 

projects and the growing complexity 

of the project themselves place high 

demands on the organization’s capabilities, 

its processes, process stages 

and structures. In order to dig deeper 

into the market and secure technological 

leadership, the KS OPUS project 

(Optimized Processes Up to Series 

production) is being advanced. KS 

OPUS’s aim of vastly raising innovation 

potentials and streamlining development 

processes was impressively 

achieved. The efficiency and effectiveness 

of such processes were clearly 

improved and it is planned to promote 

the KS OPUS project outside of Europe. 

In the Pistons division, expenses for 

research & development activities 

amounted to €19.9 million, or 3.5 

percent of sales. 

In 2001, the focus of R&D activities in 

the Plain Bearings division was again 

materials development against the 

background of rising demands for 

environmentally compatible materials 

and the EU regulation regarding 

scrapped cars to take effect in 2004. 

In the case of steel/aluminum materials, 

development activities headed 

in two directions, on the one hand, 

focusing on use in the high-duty 

direct-injection diesels set for series 

production in 2002, the aim being to 

have the division grab a larger share 

in the growth of this engine breed. 

On the other hand, connecting-rod 

bearings are being developed which 

can be used on both direct-injection 

gasoline as well as diesel engines. 

In 2002, the first of these can go into 

series production. 

Efforts in the area of steel/plastic 

composites for the maintenance-free 

and low-maintenance Permaglide 

bearings product group are intended 

at further enhancing temperature resistance 

through material refinements 

and, at the same time, dispensing 

with lead. Apart from compliance with 

environmental requirements, this is 

one way to tap further applications. 

An engineering process for achieving 

self-sufficiency in the growing market 

of connecting-rod bearings used in 

direct-injection engines was a major 

development project within strategic 

product planning. 

The R&D expenses of Plain Bearings 

totaled €2.4 million in 2001, equivalent 

to 1.6 percent of sales. 

27

28 



The core competence of Aluminum 

Technology is the casting of engine 

blocks from aluminum according to 

various processes. Due to the ongoing 

substitution of gray cast iron by lightweight 

aluminum, the market is still 

growing. Given the continuously rising 

technical requirements and falling 

market prices, close and cooperative 

OEM teamwork and simultaneous 

engineering have proven themselves. 

The division’s development activities 

focus on process refinements, further 

and new developments of cylinder 

sleeve concepts, material developments 

including technologies for local 

material reinforcement and added 

downstream machining (vertical integration). 

The strategy of sharpening 

our profile over rivals through wideranging 

concepts and specific problem 

solutions over competitors is making 

good progress. 

Maintaining high quality standards 

while keeping manufacturing costs 

down calls for constant and reproducible 

processes. The division’s process 

development covers the entire production 

chain from the casting to the 

ready-to-ship product. Computer-aided 

simulation tools for mold filling and 

solidification are used in the development 

of new products right from the 

start. In fact, computer-aided process 

planning comprises the entire valueadding 

chain. Conventional engineering 

techniques are constantly being 

fine-tuned, too. The automatic monitoring 

and controlling of the casting 

process have become an integral 

element of production technology. 

New technical solutions concentrating 

on the central and critical element of 

the engine block, the cylinder sleeve, 

will continue to be the force driving 

new product concepts. The fact that the 

division has all the standard solutions, 

especially for gasoline engines, as 

well as concepts of its own, will enable 

it to stand out in the marketplace. 

Within this context, a megaproject for 

a new aluminum engine block to go 

into a strong-selling V6 engine was 

awarded by a German carmaker. 

The commencement of new projects, 

mainly in the low-pressure casting 

sector, was a focal point of product 

and process development. In recent 

years, more and more high-performance 

passenger car diesel engines 

have been using an aluminum engine 

block. In two ambitious projects, including 

a ten-cylinder V-engine, the 

preproduction phase was successfully 

completed. In 2001, innovative 

ideas for engineering the cylinder 

sleeve were again explored. 

This division’s R&D expenses amounted 

to €5.0 million in the past fiscal 

year, 3.7 percent of sales. 

In fiscal 2001, R&D activities by Motor- 

Engineering focused on the core areas 

of exhaust gas measuring units, flowmeters, 

and measuring equipment for 

workshops. 

In the measurement of exhaust gases, 

product generation 4000 made further 

advances. The same applies to the 

CVS 4000 exhaust gas dilution system, 

the particle collector, and the minidiluter. 

A new automated CHD 4000 

dynamometer saw development startup. 

These efforts continued against 

the background of employing only the 

latest technologies to achieve the 

prescribed cost reduction targets. 

The expected series production of gasoline 

engine high-pressure injection 

systems (GDI) in Europe and the USA 

was shelved beyond the year 2001 

and hence resulted in a postponement 

for Pierburg Instruments Inc. in the USA 

in the use of precision flowmeters for 

high-pressure applications. In 2002, 

the product range is being rounded 

off with a system metering the intake 

air of I.C. engines in order to meet 

customer demands for single-source 

measuring units. 

The measuring equipment for workshops 

unit pushed ahead with a PCaided 

version of the diesel opacimeter 

for measuring diesel exhaust gases. 

Work continued on an intelligent 

interface for communicating with 

automotive control units. The basis 

for this are the expected EOBD regulations 

(European On-Board Diagnosis) 

as well as the alternative exhaust gas 

inspection methods of a well-known 

German carmaker. Work on a new 

monochrome graphics adapter for 

gas testers was also completed, as 

was the origination of software for 

bidirectional data communication 

between gas tester and computer. 

MotorEngineering spent €3.2 million 

on R&D activities, equivalent to 8.4 

percent of sales. 

Final inspection at the 

solenoid assembly line 

at the Neuss plant

Production line for 

car engine bearings shells 


Risks of future development 

(risk report) 

Doing business inevitably entails risks 

and rewards. At Kolbenschmidt Pierburg, 

business opportunities are 

seized and risks only accepted when 

these are considered in all likelihood 

to be controllable and conducive to 

the economic success of the Group. 

Given this, risk management is an 

essential element of the processes 

and decisions within our group. 

General economic and industry 

sector risks 

Kolbenschmidt Pierburg AG and its 

subsidiaries develop and manufacture 

components, modules and systems 

for the international automotive industry 

and hence, the Group and its 

subsidiaries are in their future business 

development largely dependent on 

how the automotive climate develops 

worldwide. 

The year 2001 was a period in which 

the world's automotive industry was 

battered by a recession unforeseeable 

to this extent a year ago, and by the 

terrorist attacks on the World Trade 

Center in New York, and on the Pentagon, 

Washington, on September 11, 

2001. The reverberations will in all 

likelihood be felt until far into the 

current fiscal year 2002. According 

to forecasts by market research organizations 

and industry associations, 

2002 will generally see declining production 

and shipments in the three 

most important automotive markets 

of North America, Japan, and Western 

Europe. Particularly lackluster are the 

prospects in the USA. Ever since the 

aftermath of the terrorist attacks, the 

US manufacturers have been launching 

zero-interest car financing programs. 

This may have triggered demand but 

The instruments for the identification, 

analysis, control and monitoring of 

risks as part of the risk management 

system are defined groupwide. 

Embedded in the annual strategic and 

operative plans and accompanied by 

monthly controlling reviews, risk reports 

and meetings of the Risk Committee, 

these risk management instruments 

ensure that any potential risks 

are identified in good time. In this way, 

any necessary remedial action can be 

initiated early on at the individual 

companies, divisions, or at a Group 

level. Moreover, whenever a defined 

ceiling is exceeded, the Supervisory 

Board is alerted. 

the consequence is that new cars initially 

planned for 2002 were bought 

in 2001 in some instances. The decline 

in Western Europe and Japan will 

probably not be so severe as in North 

America. 

Some of our US customers have to 

contend with financial problems and 

the same applies to major rival suppliers 

to the auto industry. Although 

the Kolbenschmidt Pierburg Group 

may in some instances benefit from 

competitor weakness, itself it is exposed 

to risk through the financial 

problems of some customers. This is 

reflected in reduced call-offs and fewer 

orders placed with the Kolbenschmidt 

Pierburg AG subsidiaries. 

The impact of individual markets on the 

economic situation of Kolbenschmidt 

Pierburg is abated by the Group’s 

measured globalization from an 

economic point of view. Additionally, 

downsizing measures already launched 

the year before in the United States, 

including programs for restructuring 

and improved integration at individual 

subsidiaries, are being hastened. At 

the start of the new fiscal year, Kolbenschmidt 

Pierburg AG decided to shut 

down a part of the Ft. Wayne, Indiana, 

plant at the turn of 2002/2003, in order 

to accelerate the return to profit- 

Verifying the risk management system 

for workability is among the functions 

of the statutory auditors (elected by 

the stockholders’ meeting) during 

their annual audit. 

The potential risks to which the Kolbenschmidt 

Pierburg Group is exposed 

subdivide into general economic, industry 

sector, performance, financial 

as well as legal risks. 

ability of the division’s US subsidiaries. 

A consequence is that this plant at 

Ft. Wayne will only be used for mass 

production, the idled machines being 

largely employed elsewhere by other 

Group companies. 

In the wake of the industry’s woes, 

customers have stepped up their pressure 

to obtain further price reductions. 

This risk is contained by the creation 

of additional product and process 

innovations to generate broader 

price/cost latitude and the realization 

of product and process innovations 

as well as the enactment of continuous 

improvement processes and the enforcement 

of strict cost management. 

In the 2001 annual accounts, the accrual 

for impending losses on uncompleted 

contracts adequately provides 

for any losses related to individual 

products. 

The current collective agreements 

between the employer federations 

and the German Metalworkers’ Union 

expired February 28, 2002. At the end 

of January, the Metalworkers’ Union 

was demanding pay increases of 6.5 

percent, which met with wide criticism. 

Consensus will prove difficult and 

industrial action at some of the 

Group’s German locations cannot be 

ruled out. 

31

32 



Performance risks 

Kolbenschmidt Pierburg intends to 

continue to outpace the international 

automotive industry by generating 

better-than-average growth rates. 

The steep organic growth budgeted in 

Financial risks 

Due to the international nature of the 

Kolbenschmidt Pierburg Group’s business, 

certain currency and interest 

rate risks may arise which are profiled 

centrally by Kolbenschmidt Pierburg 

AG's Treasury and hedged by means 

of currency futures and forwards, as 

well as caps wherever possible. It is a 

fact that the progressing globalization 

of procurement, production and financing 

will gradually curb the effect of 

parities, especially between the dollar 

Legal risks 

Sufficient insurance contracts have 

been taken out to adequately cover 

risks from loss or damage by natural 

forces and the resulting business interruption, 

as well as warranty, product 

liability, and callback risks. The existing 

insurance cover is regularly reviewed 

for adequacy and, where necessary, 

adapted. At the same time, 

ongoing projects for process reliability 

as well as extensive quality assurance 

programs aim at avoiding the occurrence 

of such risks. In the 2001 balance 

sheet, adequate accruals provide for 

such risks where covered not at all or 

not fully (deductible loss). 

the sales plans for fiscal 2002 calls 

for a large number of complex and 

technologically advanced new-product 

start-ups which because of their 

number, extent and in some instances 

the limited availability of skilled labor, 

inherently involve risks. A comprehen- 

and the euro, on the financial result. 

Because of the nature and mix of our 

customers, credit risks are very low. 

The auto assemblers will continue to 

download value-adding and engineering 

development functions to the industry 

vendors. This, in turn, premises 

the considerable financial resources 

required by the vendors if they are to 

prefinance their R&D and fund the 

cost input caused by the necessary 

additions to tangible assets. Any 

investment resources deployed by 

A certain tax risk emanates from 

unexercised option rights under the 

warrant bond issue floated by Kolbenschmidt 

AG. However, Kolbenschmidt 

Pierburg AG assumes, supported by 

the prevailing view of tax law pundits 

and in jurisprudence publications, 

that bond redemption is unlikely to 

entail any tax burden; however, the 

final judgment in a comparable case 

has not yet been passed. 

Moreover, certain risks exist from proceedings 

pending before the court of 

competent jurisdiction which have 

been instituted by 10 stockholders for 

review of the share exchange ratio 

under the merger of Kolbenschmidt 

Pierburg (Rheinmetall shareholdings), 

as well as for additional cash compensation. 

Kolbenschmidt Pierburg con- 

sive project management scheme is 

being applied through all the phases, 

from conceptualization, invitation to 

bid through to series start-up and 

mass production to ensure that these 

new products translate into profitable 

growth. 

any of the Kolbenschmidt Pierburg 

Group’s divisions are therefore subject 

to a particularly strict scrutiny in terms 

of efficiency both during the budgeting 

and PIA approval stages in order thus 

to relieve cash flows. In view of the 

gloomy economic prospects, further 

possibilities of cutting back on capital 

expenditure are presently being explored. 

tinues to believe in the underlying 

share exchange ratio fairly reflecting 

corporate value relations and that 

therefore the proceedings still underway 

represent only a slight risk. An 

additional provision in 1999 still allows 

for the fees and charges associated 

with such court proceedings. 

From today’s vantage point, potentially 

ruinous material risks do not exist for 

Kolbenschmidt Pierburg AG or its divisions, 

nor do any other risks that might 

have a long-term significant adverse 

effect on either the Company’s or the 

Group’s net assets, financial position 

or results of operations. 

Final inspection of the steplessly 

variable intake manifold on the 

BMW V8 at the Nettetal plant

Final assembly of the variable 

intake manifold on the GM V6 

at the Nettetal plant 

Prospects 

At the start of 2002, production and 

car sales were somewhat down in the 

global automotive industry. In the 

United States and following the financial 

incentives of the final quarter of 

2001, fewer vehicles were sold than a 

year ago. In Western Europe, the first 

two months of the current year failed 

to match the year-earlier production 

and sales figures. 

There is still vast uncertainty regarding 

what lies ahead in 2002. So far, the 

markets have not collapsed as feared. 

In all, we expect production figures in 

2002 to show a worldwide decline, 

most steeply probably in the United 

States, whereas Europe and, especially, 

Germany will only suffer slight losses. 

As to the remaining markets important 

to Kolbenschmidt Pierburg such as 

Brazil and China, we expect 2002 to 

show growth. 

In terms of units sold, the heavy-duty 

vehicles have suffered much more 

than the light-duty. Among the lightduty, 

it is the cars that are least affected 

by the shrinkage. 

Kolbenschmidt Pierburg managed to 

contain its sales decrease in the first 

two months of 2002 to less than 1 percent, 

this being solely due to the deconsolidation 

of the MotorEngineering 

division, which this year is no longer 

providing the Group with sales revenues. 

Despite the further contraction 

in the United States, the OEM markets 

of Air Supply & Pumps, Pistons, Plain 

Bearings, and Aluminum Technology 

all showed marginal sales rises. 

On the basis of orders and products 

already placed or scheduled by our 

customers for the months ahead, we 

expect sales for the first half of 2002 

to approximate the magnitude of the 

previous year. For the year as a whole, 

we expect, and contrary to market 

trends, to show a slight uptrend versus 

the 2001 level thanks to gains through 

soon-to-be-launched products. 

Once again, Kolbenschmidt Pierburg 

will achieve this sales growth in 2002 

through extensive investments in R&D 

and additions to tangible assets. 

Nevertheless and in view of stalling 

business, special attention will be 

paid to the cost efficiency of such 

investments in 2002. 

Our top priority in 2002 is to maintain 

and enhance our own organic profitability. 

This is a target we have set 

ourselves in particular in view of the 

lackluster market expected in 2002. 

And this is why restructuring programs, 

substantial productivity enhancements 

and process improvements, in particular 

with new-product start-ups, will 

have to largely compensate for 

increasing costs and heavier price 

pressure. For 2002 and assuming 

only slight increases in sales, the 

Kolbenschmidt Pierburg Group is 

targeting earnings of the magnitude 

of the previous period. 

Production figures 

declining worldwide 

in 2002 

Same earnings 

level envisaged 

35

36 


The divisions 


Air Supply & Pumps is our division that 

develops, manufactures, and markets 

systems and components for use in the 

series production of autos. Air supply, 

emission reduction, fuel supply, and 

pumps are the subdivisions. As the 

parent of Air Supply & Pumps, Pierburg 

AG controls all shareholdings in the 

division’s companies. 

Changes to the 

business portfolio 

As of April 1, 2001, Pierburg AG founded 

together with Shanghai Automotive 

Industry Company Ltd. (SAIC) the 

joint venture Kolbenschmidt Pierburg 

Shanghai Nonferrous Components Co. 

Ltd. (KPSNC) in Shanghai. Pierburg AG’s 

stake amounts to 50 percent. The venture 

makes it possible for Air Supply 

& Pumps to access the strategically 

important Chinese automotive market. 

At the same time it is an excellent platform 

to further widen sales opportunities. 

The joint venture develops, manufactures 

and markets intake manifolds, 

cylinder heads, and steering gear 

components. Moreover, it aims at 

extending the range to complete firsttier 

oil and water pump assemblies. 

Air Supply & Pumps 2000 2001 


Net sales 770.4 819.8 

EBIT 16.8 24.8 

EBT 7.2 12.3 

Net income 7.3 14.1 

Capital expenditures 75.4 80.4 

Headcount at Dec. 31 4,109 4,010 

As of December 31, 2001/January 1, 

2002, AVL Holding GmbH in Graz, 

Austria, was merged into Pierburg 

Instruments GmbH (previously wholly 

owned by Pierburg AG) by capital increase. 

AVL now holds a majority stake 

in the joint venture and will take over 

management control. Pierburg Instruments 

GmbH’s stake in Pierburg Instruments 

Inc., Auburn Hills, USA, 

was completely sold to AVL Michigan 

Holding Inc., Plymouth, USA, as of 

January 1, 2001. 

In fiscal 2001 and at €819.8 million, 

sales by Air Supply & Pumps were 

€49.4 million above the previous 

year’s level of €770.4 million (up 

6.4 percent), the main reason for the 

sales increases being the mounting 

wave of diesel vehicles in a high-volume, 

yet stalling Western European 

car market. 

Sales gains due to 

rising share of dieselengine 

passenger cars 

At Pierburg AG, sales amounted to 

€470.1 million in 2001. Hence, the 

previous year’s €465.6 million inched 

up 1 percent. Sales advances in solenoid 

valves, exhaust gas recirculating 

valves, electric throttle bodies, and 

electric auxiliary water pumps as well 

as oil and vacuum pumps outcompensated 

the budgeted declines in intake 

manifolds and intake manifold modules 

as well as electric fuel pumps. 

All the division’s companies managed 

to boost sales over the previous year. 

Carbureibar S.A., Spain, up 19.9 percent 

or €19.8 million, Pierburg Inc., 

USA, up 45.0 percent or €13.5 million 

and Pierburg S.a.r.l., France, up 12.0 

percent or €11.8 million, generated 

better-than-average sales, whereas 

Pierburg S.p.A., Italy, up 0.1 percent 

or €0.2 million, gained only slightly. 

In the air supply unit, the sales increase 

by €36.7 million (7.9 percent) 

was mainly attributable to the throttle 

body, exhaust gas recirculating valve 

and solenoid valve product groups, 

these having benefited from the 

launch of new product families, the 

high proportion of diesel engines and 

re-tightened exhaust gas regulations. 

Intake module sales fell over the previous 

year, chiefly due to the receding 

shipments for a megaproject. Secondary 

air systems sales continued at the 

year-earlier level. 

Fuel pump assembly line 

at the Neuss plant

Assembly of the steplessly 

variable intake manifold on the 

BMW V8 at the Nettetal plant 

The divisions 


Pump sales climbed €12.7 million to 

€321.0 million (up 4.1 percent). The 

oil pump, water pump and vacuum 

pump groups had a good year. Fuel 

pump sales shrank as a consequence 

of a strategy of concentrating on 

sophisticated and profitable types of 

pump. 

Earnings up 

In fiscal 2001, earnings at Air Supply 

& Pumps rose. EBT was boosted by 

€5.1 million to €12.3 million, ROS 

climbed from 0.9 to 1.5 percent. 

In the year under review, Pierburg AG 

posted an EBT gain of €5.3 million to 

€9.0 million due to earnings improvement 

from restructuring measures at 

the Nettetal and Berlin locations as 

well as extensive product-related 

rationalization efforts. The OEMs’ ongoing 

price squeeze eroded earnings. 

Moreover, start-up losses for new 

products likewise took a toll on EBT. 

The return on sales was upped 1.9 

percent (from 0.8 percent). 

The division’s non-German companies 

showed a mixed performance. 

Carbureibar S.A., Spain, had a good 

year, the company again improving 

EBT over the previous period, and 

hence largely contributing to the 

division’s earnings, despite a slightly 

poorer sales mix and several start-ups. 

Pierburg Inc., USA, managed to upgrade 

its performance over the prior 

year, basically due to strong sales 

gains while failing to break even because 

of heavy start-up costs for new 

projects and unbudgeted special 

freight charges. At Pierburg S.à.r.l., 

France, productivity advancements 

and climbing sales raised EBT. In all, 

EBT was well in the black. Restructuring 

expenditures from the takeover 

of pump operations at Magneti Marelli 

as well as declining sales from former 

businesses at Pierburg S.p.A., Italy, 

squeezed earnings to a degree only 

partly compensated by productivity 

enhancements. EBT was negative. 

Another improvement 

in financial indicators 

The financial strength of the Air Supply 

& Pumps division was continuously 

built up in 2001, the period’s gross 

cash flow reaching €83.0 million. 

The capital expenditures of €80.4 

million incurred in 2001 were thus 

fully funded by the gross cash flow. In 

comparison to the year before, total 

assets crept down by an insignificant 

€0.3 million to €554.8 million. 

Accounting equity diminished by 

€9.4 million to €143.7 million, slimming 

the equity ratio from 27.6 percent 

at December 31, 2000, to 25.9 at the 

close of 2001. 

Prospects 

Despite the clouded climate in the 

automotive markets of Western Europe 

and North America, Pierburg AG and 

Air Supply & Pumps expect 2002 

sales to top the previous year’s level. 

Momentum will be delivered by the 

numerous start-ups of the year 2001, 

for the first time having a full-period 

impact and hence leading to sharp 

sales rises, mainly for the intake manifold, 

throttle body, vacuum pump and 

water pump product groups. 

For 2002, earnings are generally 

expected to improve at Pierburg AG 

and Air Supply & Pumps due to the 

2001 cost input and lower burdens 

from production start-ups. 

39

40 


The divisions 

Pistons 

The Pistons division develops, manufactures 

and distributes pistons for 

I.C. engines and piston compressors. 

The product range stretches from 

pistons for heavy-duty machines via 

pistons for all kinds of applications in 

passenger cars and trucks to pistons 

for ships and stationary applications. 

These pistons, which have a wide 

variety of uses, measure between 20 

and 640 mm in diameter, and are made 

from aluminum, spherical castings and 

steel or a mixture of these materials. 

For a long time now, all the notable 

engine manufacturers have counted 

among our customers. KS Kolbenschmidt 

GmbH is the division’s parent. 

Sales drop 

due to burdens 

in US business 

In the past fiscal year, total sales of 

the Pistons division amounted to 

€571.5 million, equivalent to a drop 

of €35.0 million or 5.8 percent. The 

division’s performance was highly 

influenced by the North American automotive 

economy, not only affecting 

the indigenous operations but also 

infecting the Brazilian subsidiary. 

With a 3.2-percent gain, KS Kolbenschmidt 

AG’s sales amounted to 

€250.0 million, thus above the Western 

European market for passenger 

cars. Revenues generated from our 

own production, especially of largebore 

pistons, rose sharply, these 

however partly being negated due to 

Pistons 2000 2001 


Net sales 606.5 571.5 

EBIT 32.8 40.1 

EBT 14.0 20.2 




expectedly reduced merchandise 

sales as well as idle capacity in the 

second half of the year at one location. 

Within the small-bore pistons product 

group, sales of pistons for diesel 

engines (passenger cars) were clearly 

lifted, however at the expense of the 

gasoline engine (passenger cars) and 

commercial vehicle varieties, this 

matching the general market trend. 

At the European subsidiaries, Société 

Mosellane de Pistons S. A., Thionville, 

mainly active on the French market, 

managed to stabilize its sales of 

€59.8 million at the high prior-year 

level. The French carmakers’ strong 

demand for diesel pistons balanced 

any declines in gasoline engine 

business. In fiscal 2001 and at €26.8 

million, the Czech company Metal a.s., 

Ústí, slightly topped the previous 

year’s sharp gain to €26.4 million. 

A number of start-up postponements 

prevented further growth. 

The North American market, the 

world’s biggest, was for the Pistons 

division in 2001 a period of severe 

sales problems. After €240.5 million 

in the previous year, in 2001 sales of 

only €208.9 million were generated, 

the changed euro-dollar parity abating 

the loss slightly. Apart from the general 

market trend, as for instance, the 

weakness of the US manufacturers 

and the soft demand for commercial 

vehicles, there were also internal 

causes such as the phase-out of projects 

and the loss of a parts distributor, 

both factors sharing in this decline. 

Affected are the two large companies 

active on the US market. After €118.7 

million in 2000, Karl Schmidt Unisia 

Inc., Marinette, Wisconsin, generated 

sales in 2001 of €95.7 million, and 

KUS Zollner Division Inc., Fort Wayne, 

Indiana, contributed €90,7 million 

(down from €107.3 million) to the 

total. With sales of €15.3 million in 

2001, the Canadian production company 

KUS Zollner Canada Ltd., 

Leamington, Ontario, on the other 

hand, surpassed the previous year’s 

€9,7 million. 

After a steep sales surge to €102.5 

million in the previous year, the Brazilian 

subsidiary KS Pistões Ltda., 

Nova Odessa, had to contend with a 

decline to €93.5 million in 2001. 

Good domestic market sales failed 

to compensate for lower exports to 

North America and Western Europe. 

Previous year’s earnings 

clearly surpassed 

For fiscal 2001, Pistons achieved an 

EBT of €20.2 million, hence exceeding 

the previous year’s €14.0 million. ROS 

climbed to 3.5 percent. 

3-D blank checking 


Alfinizing of diesel piston ring 

mounts at the Neckarsulm plant 

The divisions 

Pistons 

For 2001, KS Kolbenschmidt GmbH’s 

EBT amounted to a negative €43.0 

million, compared to an equally negative 

€1.7 million the year before. The 

loss was exclusively caused by the 

write-down of the stake held in KS 

International Investment Corp., the 

intermediate holding company for the 

activities of Pistons and Plain Bearings 

in the USA and Canada. Apart from the 

strained earnings situation, especially 

at KS Bearings Inc., Greensburg, and 

KUS Zollner Division Inc., Fort Wayne, 

extensive restructuring expenses 

incurred for the realignment of both 

companies, also contributed to this 

loss. The previous year, too, had been 

burdened by write-down, albeit clearly 

below the 2001 level. This write-down 

did not, however, impact on the division’s 

bottom line. The good prior-year 

operating result at KS Kolbenschmidt 

GmbH was maintained. Under the P&L 

transfer agreement with, the (HGBbased) 

net loss of €46.5 million of KS 

Kolbenschmidt GmbH was absorbed 

by, Kolbenschmidt Pierburg AG. 

All the European and South American 

subsidiaries generated a positive EBT 

in the period under review. Meriting 

special mention is the Brazilian KS 

Pistões, which generated a rising profit 

thanks to changed parities and productivity 

improvements. Again, the French 

as well as the Czech subsidiaries 

turned in slightly improved profits at 

a stable sales level. The American Karl 

Schmidt Unisia Inc., Marinette, had to 

face a sharp drop in earnings chiefly 

due to sales reasons. At KUS Zollner 

Division Inc., Fort Wayne, falling sales 

and a worsening product mix in connection 

with cost burdens from restructuring 

work and rising expenses for 

health insurance and retirement were 

not offset by productivity improvement 

measures. For the company, this led 

to a clear loss. Zollner Canada Ltd., 

Leamington, on the other hand, again 

delivered an encouraging performance. 

At the Chinese joint venture Kolbenschmidt 

Shanghai Piston Co. Ltd. in 

which KS Kolbenschmidt GmbH holds 

a 35-percent stake and which is included 

at equity in the division’s segment 

accounts, sales were slightly 

bettered over the previous year, and 

the venture again closed the period 

well in the black. 

Capital expenditures 

below the previous 

year’s level 

In fiscal 2001, capital outlays by 

Pistons amounted to €57.7 million, 

hence €7.3 million below the prior 

year. The division’s gross cash flow 

amounted to €56.2 million in 2001, 

almost enough to fully fund the capital 

investments made. 

The total assets of €491.2 million 

reported by the division included 

equity of €154.0 million, equivalent 

to an equity ratio of 31.4 percent, a 

leap from the prior year’s 9.7 percent 

mainly attributable to two factors: 

Kolbenschmidt Pierburg AG increased 

the additional paid-in capital by 

€56.6 million and absorbed the net 

loss. 

Stable development 

in 2002 

Against the background of a presumably 

slight global decline in the automotive 

market in 2002, for Pistons we 

predict an almost stable sales situation. 

At KS Kolbenschmidt GmbH, and 

especially at the North American companies, 

planned project start-ups are 

expected to stimulate sales. 

From today’s vantage point, the aim 

of the Pistons division is to avoid as 

much as possible any negative impact 

on profitability due to the–from today’s 

vantage point–difficult environment 

of 2002. Apart from the management 

of numerous product start-ups, another 

essential factor will be to boost performance 

at the Fort Wayne location. 

43

44 


The divisions 


This division’s business concentrates 

on the development, manufacture and 

marketing of metal bearings for engine 

and other applications, as well as 

maintenance-free dry bearings for the 

automotive and mechanical engineering 

sectors. Moreover, copper-based 

continuous castings (tubes, bars, profiles) 

are also produced. KS Gleitlager 

GmbH is the division’s parent company. 

Sales raised further 

In the past fiscal year, the division’s 

sales volume was stepped up from 

the already high 2000 level by 3.2 

percent to €153.2 million. KS Gleitlager 

GmbH clearly increased sales, 

by 9.2 percent to €135.1 million 

(year-on-year). On account of the full 

start-up of customer projects in the 

engine bearings sector, incremental 

sales of around €5.5 million were 

achieved. With the division’s high-duty 

plain bearings (sputter technology), 

further shares were acquired in the 

market for direct-injection diesel 

engines. 

Plain Bearings 2000 2001 


Net sales 148.4 153.2 

EBIT 6.8 17.7 

EBT 4.5 15.1 




The Permaglide product group contributed 

to the sales increase through 

new automotive applications as well 

as through higher market shares. 

The mechanical engineering market, 

crucial for the rising volume of continuous 

castings business, was stable, 

sales here advancing by around €2.2 

million over the year before. 

In fiscal 2001, KS Bearings Inc., USA, 

generated sales revenues of €26.1 

million, hence not re-achieving the 

prior year’s €31.2 million. The sharp 

economic downturn in the USA, especially 

in the heavy-duty sector with 

much reduced orders over 2000, is 

mainly responsible. 

The South American KS Bronzinas 

Ltda., Brazil, boosted sales in fiscal 

2001 from €1.8 million to €2.1 million 

thanks to new customer projects and 

intensified export activity. 

Electroplating shop for 

trimaterial bearings 

at the Papenburg plant

46 

Lagebericht und Konzernlagebericht 

Checking the light-metal bushings 

for shape and dimensions 


The divisions 


In fiscal 2001, the division’s EBT 

soared from €4.5 to €15.1 million, 

thus returning 9.9 percent on sales. 

At KS Gleitlager GmbH, the significantly 

improved earnings were ascribable to 

the metallic plain bearings product 

group. The pretax loss at KS Bearings 

Inc., USA, worsened over the previous 

year. Apart from the sales decrease 

this was attributable to expenses for 

a partial shutdown and relocation under 

the approved and already initiated 

restructuring program. KS Bronzinas 

Ltda., Brazil, upgraded its EBT over 

the previous year as a result of higher 

sales. 

Improved earnings 

In the past fiscal year, the division 

generated a gross cash flow of €16.0 

million. The total investment volume of 

€12.7 million was thus fully financed 

from the annual cash flow. As of yearend 

2001, Plain Bearings showed 

sound capital ratios. With total assets 

of €77.7 million, the division’s equity 

came to €16.9 million, equivalent to 

an equity ratio of 21.8 percent. 

For KS Gleitlager GmbH, we presently 

expect ongoing good business with 

sales inching up for all product groups 

and markets in Europe. With the commissioning 

of another coating line for 

high-duty plain bearings, the division’s 

own production in Papenburg is being 

extended in order to meet mounting 

market demands. 

Despite fiercer competition and the 

sustained pressure on margins, KS 

Gleitlager GmbH is targeting an EBT 

level above that of fiscal 2001 due to 

its product innovations and productivity 

enhancements. 

At the American subsidiary KS Bearings 

Inc., the shutdown and partial 

relocation project is top on the agenda 

in 2002. Following the discontinuation 

of some nonprofitable product groups 

in 2001, the entire parts manufacture 

at Greensburg is being relocated to 

the new site at Fountain Inn, South 

Carolina, and Papenburg. This project, 

which is designed to re-achieve profitability, 

is scheduled for completion 

mid-2002. 

With sales up, the Brazilian subsidiary 

KS Bronzinas Ltda. expects to again 

deliver a profit. 

In 2002 as a whole, the division aims 

at higher segment earnings than in 

fiscal 2001. 

47

48 


The divisions 


Aluminum Technology subsumes the 

Kolbenschmidt Pierburg Group’s manufacture 

of cylinder crankcases (engine 

blocks) from aluminum and aluminumsilicon 

alloys. Pressure, low-pressure 

and squeeze casting processes are 

all applied. Through the planned collaboration 

with a partner, the division 

hopes to access the module manufacturing 

market–downstream machining 

and part assembly of engine blocks. 

The necessary costs were already inputted 

in 2001. 

Sales clearly raised 

Due to its specific product range, the 

division managed in 2001 to generate 

a net sales gain of €19.6 million to 

€135.8 million, mainly at the parent 

company KS Aluminium-Technologie 

AG. The addition of a total €20.9 

million at this company is made up of 

Aluminum Technology 2000 2001 


Net sales 116.2 135.8 

EBIT (1.7) 0.7 

EBT (5.2) (3.6) 

Net income/(net loss) (4.4) (3.1) 


Headcount at Dec. 31 689 772 

higher series production sales (up 

€7.9 million) and a steep increase in 

development and tooling revenues 

(up €13.0 million). The rise in seriesproduction 

business was ascribable 

to higher shipments by our customers 

in the large-displacement engine sector, 

the start-up of new engine generations 

and a slight improvement in 

market shares. The again rising development 

and tooling sales over the 

high prior-year level reflect the division’s 

intense activities in preparing 

new products. 

Visual inspection of a 

BMW V8 engine block 


Testing an engine block 

for leakage at the 


The divisions 


Less loss Further earnings 

In 2001 and at a negative €3.6 million, 

EBT at Aluminum Technology improved 

over the previous year's pretax loss of 

€5.2 million, as did the negative ROS 

from 4.5 to 2.7 percent. In the past fiscal 

year, KS Aluminium-Technologie 

AG’s earnings were again burdened 

by high start-up costs for new products 

in the low-pressure casting sector. 

Idle capacities at the new foundry as 

well as a product cancellation depressed 

EBT, customer compensation 

failing to completely recover the costs. 

From added tooling sales, no commensurately 

higher profits were earned, 

since tooling products incorporate 

little added value. KS Doehler Jarvis 

GmbH and Werkzeugbau Walldürn 

GmbH again delivered slight profits, 

however somewhat under the corre- 

sponding year-earlier level. The collectively 

negotiated pay raise and heavy 

start-up costs for the new series products 

generally burdened earnings. 

The development costs and cost input 

for process engineering required for 

the new low-pressure casting products, 

on the other hand, were clearly scaled 

back. 

The heavy investments in fiscal 2001 

due to numerous series production 

start-ups as well as the additional 

preparation for more new products 

(€21.2 million, up from €16.4 million) 

were as in the year before not covered 

by the gross cash flow of €8.7 million. 

Due to the additional sales and the 

necessary cost input, total assets 

rose as of December 31, 2001, by 4.9 

percent to €129.7 million, as expected. 

With equity of €20.6 million at yearend 

2001, the division’s equity ratio 

amounted to 15.9 percent (down from 

19.2 percent). 

improvement 

expected in 2002 

In fiscal 2002, further product startups 

will significantly contribute to 

series-production sales, whereas 

older models will slowly phase out. 

Moreover, the current year will be 

affected by the start-up management 

of the products rolled out in 2001 and 

ready for series production in 2002. 

Despite the substantial cost input, 

which will squeeze earnings, the 

division expects a profit improvement 

through further sales and productivity 

enhancements. 

51

52 


The divisions 


MotorEngineering comprises the 

exhaust gas measuring equipment, 

workshop equipment, and flowmeter 

product groups. 

Industrial management 

transferred 

Within the Kolbenschmidt Pierburg 

Group, Pierburg Instruments GmbH 

had been the parent company for 

MotorEngineering until December 31, 

2001. As part of a joint venture and 

since the turn of 2001/2002, AVL 

Holding GmbH, Graz, Austria, has 

acquired and held a majority stake in 

Pierburg Instruments GmbH and has 

taken over industrial management. 

At the same time, the wholly owned 

subsidiary Pierburg Instruments Inc., 

Auburn Hills, Michigan, USA, operating 

in the American market for the development, 

production and marketing of 

flowmeter and exhaust gas measuring 

equipment, was sold and transferred 

as of January 1, 2001, to AVL Michigan 

Holding Inc., Plymouth, Michigan, USA. 

MotorEngineering 2000 2001 


Net sales 30.4 37.8 

EBIT (1.2) 8.4 

EBT (1.5) 7.5 

Net income/(net loss) (0.7) 6.1 


Headcount at Dec. 31 210 -- 

24-percent sales rise 

In fiscal 2001, sales by MotorEngineering 

were revved up by around 24 percent, 

from €30.4 million to €37.8 

million. 

Pierburg Instruments GmbH generated 

sales of €34.3 million in 2001 (up from 

€25.6 million), the measuring equipment 

for workshops group posting 

sales of €10.6 million after €7.6 million 

a year before. The sales gain over 

2000 resulted from rising sales of 

workshop measuring equipment to 

a leading German carmaker. 

In 2001, the flowmeters unit generated 

sales of €4.8 million, thus missing the 

previous year’s record by only €0.2 

million. The relocation in December 

2001 of the entire production line including 

the test rigs led to the slightly 

lower level over the previous year. The 

launch of the KMA 121 new measuring 

system was well received by the market, 

a megaorder by a carmaker largely 

contributing to the tall order backlog. 

Assembling the 

PLU 401/121 measuring unit 

at the Neuss plant

The PLU 401/121 for continuous 

fuel consumption metering 

at the Neuss plant 

The divisions 


Within Pierburg Instruments GmbH, the 

exhaust gas measuring unit generated 

sales of €18.9 million, hence €5.9 

million higher than one year before. 

The start-up difficulties encountered 

with the new AMA 4000 measuring 

system were successfully overcome. 

A wave of incoming contracts led to 

a very high order backlog, which, at 

€15.2 million, already meets 75 percent 

of the sales budgeted for all of 

2002. 

In 2001, Pierburg Instruments Inc. 

posted sales of €5.4 million, €1.2 million 

below the year 2000. The economic 

situation in the USA meant that customers 

were most unwilling to invest, 

especially in the latter half of the year, 

and thus order intake for this company 

declined. 

Adjusted ROS at 5.3 

percent 

In 2001, MotorEngineering yielded an 

EBT of €7.5 million after the previous 

year’s negative €1.5 million. Adjusted 

for the book gains from the disposal 

of Pierburg Instruments Inc. (€5.5 million), 

EBT was €2.0 million, equivalent 

to 5.3 percent of sales. 

Within Pierburg Instruments GmbH, 

the workshop measuring equipment 

unit expects sales to stay steady for 

this year. Due to high customer acceptance 

of the new 4000 product generation 

and tall order backlogs for the 

exhaust gas measuring unit as well 

as additional sales opportunities for 

flowmeter products through the globally 

present AVL distribution organization, 

Pierburg Instruments GmbH 

predicts healthy sales. Given these 

circumstances the present fiscal year 

2002 is expected to once again deliver 

sound earnings which will be included 

at equity in the consolidated financial 

statements of, pro rata of the voting 

interest held by, Kolbenschmidt Pierburg 

AG. 

55

56 


The divisions 

Motor Service 

The Motor Service division subsumes 

the Kolbenschmidt Pierburg Group’s 

worldwide aftermarket activities for 

engine repair shops and the workshop 

trade. With economic effect as of January 

1, 2001, the Irish company Vehicle 

Spares Ltd. was sold to an Irish competitor 

due to poor market presence 

combined with faltering sales and 

repeated losses. This investor still 

represents the KS brand in Ireland. 

Sales slightly widened 

In fiscal 2001, the Motor Service division 

generated sales of €151.3 million 

(up from €149.0 million). The declining 

sales at the subsidiaries were outcompensated 

by rising sales at the 

parent company MSI Motor Service 

International GmbH. Despite the loss 

of Irish business, sales were elevated 

by more than €2 million over the previous 

year. 

Motor Service 2000 2001 


Net sales 149.0 151.3 

EBIT 13.4 16.8 

EBT 10.4 13.4 



Headcount at Dec. 31 396 381 

All the traditional product groups 

posted, in some cases even steep, 

growth rates over fiscal 2000. Sales 

advanced especially in the regions of 

Eastern Europe, the Near/Middle East, 

Africa, Central America, and the Far 

East. Also generating momentum were 

improved customer service, customer 

loyalty programs and more customer 

staff training courses. 

Earnings well up 

With an EBT of €13.4 million, the previous 

year’s earnings of €10.4 million 

were again clearly raised. ROS thus 

amounted to 8.9 percent following 

the year-earlier 7.0 percent. 

Apart from the added sales, the higher 

earnings at the parent company MSI 

Motor Service International GmbH 

were also ascribable to better profit 

contributions compared with one year 

before. Moreover, the logistics, purchase 

and sales units were streamlined 

and thus rendered more efficient. 

Despite much higher sales, headcount 

growth lagged behind. The extra work 

was handled through overtime. 

The German subsidiary MTS Motorenteile-Service 

GmbH managed to slash 

its 2001 loss compared with 2000. 

Due to the still difficult market environment 

because of higher competitive 

pressure by OEMs, the company failed 

to break even. As part of a costs reengineering 

program, the foundation 

for a leaner organization was laid. All 

the logistic processes are now handled 

at a single location. 

Checking pistons 

prior to dispatch at 

the Neckarsulm plant

Ecotec test rig 

at the Neckarsulm plant 

The divisions 

Motor Service 

The French KS Motorac S.A. also implemented 

a restructuring program in fiscal 

2001. The related expenses squeezed 

earnings below the previous year’s 

level. Besides reviewing customer 

structures and product ranges, the program 

mainly comprised the concentration 

of warehousing functions at 

Lyon. The warehouse in Paris was 

closed by mid-year; apart from marketing, 

which is still handled in Paris, 

all the other corporate processes are 

carried out from the Lyon location. 

The British KS Winston Ltd. managed 

to whittle down its loss over the previous 

year. As of mid-2001, new management 

was appointed in order to 

achieve the company’s turnaround 

in the year 2002. The second half of 

2001 was characterized by restructuring 

measures as, for instance, closing 

two of the warehousing locations and 

optimizing logistics processes. 

In 2001, the environment for the Turkish 

KS Istanbul A.S. company was 

clouded by the plunging Turkish lira 

and the related national economic 

crisis. The loss in 2001 was mainly 

caused by the necessity of revaluing 

hard-currency liabilities. The Czech 

distribution company KS Motor Servis 

CZ s r.o. generated a slightly positive 

EBT. Due to plunging sales because 

of the devaluation of the Brazilian 

currency over the US dollar and the 

collapse of the Argentine market in 

2001, KS Produtos Automotivos S.A. 

showed a slump in earnings while not, 

however, slipping into the red. 

At €1.0 million (0.7 percent of sales), 

capital expenditures in the Motor 

Service division in 2001 were slightly 

above the previous year’s €0.8 million 

(0.5 percent of sales), absorbing only 

a minor portion of the cash flow of 

€9.6 million. 

With equity of €18.2 million and a 

related equity ratio of 16.5 percent in 

2001 (down from 18.0 percent), the 

division has sufficient funds for future 

growth. 

2002 at a high level 

Fiscal 2002 is expected to result worldwide 

for MSI and all of its subsidiaries 

in a continuation of high-volume business 

combined with sustained profitability. 

In 2002, an important goal will 

be to ensure groupwide product availability, 

implement customer loyalty 

programs while simultaneously securing 

long-term supply sources. The 

core product lineup will be augmented 

by new production runs, especially of 

the plain bearings and pistons, as 

well as a program of items for “every 

aspect of the engine.” 

59

Balance sheet and income statement 

for the year ended December 31, 2001 


62 


Balance sheet of Kolbenschmidt Pierburg AG, Düsseldorf 

as of December 31, 2001, according to HGB 

ASSETS 

€million 12-31-2000 12-31-2001 

Fixed assets 

Intangible assets 0.0 0.0 

Tangible assets 0.2 0.3 

Financial assets 256.8 313.4 

Current assets 

Receivables and sundry assets 

257.0 313.7 

Trade receivables 0.0 0.6 

Due from group companies 166.1 126.9 

Sundry assets 0.4 3.3 

Cash & cash equivalents 24.2 7.5 

190.7 138.2 

Prepaid expenses & deferred charges 0.0 0.0 

EQUITY & LIABILITIES 

447.8 452.0 

€million 12-31-2000 12-31-2001 

Stockholders’ equity 

Capital stock 68.1 71.7 

Additional paid-in capital 162.1 174.0 

Reserves retained from earnings 49.9 22.3 

Net earnings 34.6 14.0 

314.7 282.0 

Untaxed/special reserves 6.1 4.1 

Accruals 

Accruals for pensions and similar obligations 10.9 11.3 

All other accruals 31.9 13.4 

42.8 24.7 

Liabilities 

Due to banks 55.3 82.9 

Trade payables 0.6 0.7 

Due to group companies 28.2 57.5 

Sundry liabilities 0.2 0.2 

84.2 141.3 

447.8 452.0 

Income statement of Kolbenschmidt Pierburg AG 

for the year ended December 31, 2001, according to HGB 

€million 2000 2001 

Income from investments 49.6 (4.0) 

Net interest income 6.0 4.3 

Net financial result 55.6 0.3 

Other operating income 21.3 13.5 

Personnel expenses (7.4) (7.4) 

Amortization/depreciation/write-down (0.1) (0.1) 

Other operating expenses (17.5) (15.5) 

Earnings before taxes (EBT) 51.8 (9.2) 

Income taxes (17.2) (4.4) 

Net income/(Net loss) 34.6 (13.6) 

Transfer from reserves retained from earnings 0.0 27.6 

Net earnings 34.6 14.0 

63

Consolidated financial statements 2001 


Consolidated financial statements 2001 of Kolbenschmidt Pierburg AG 


Consolidated balance sheet as of December 31, 2001 

ASSETS 

€million Note 12-31-2000 12-31-2001 

Fixed assets (7) 

Intangible assets (8) 50.5 53.5 

Tangible assets (9) 657.4 681.7 

Investments stated at equity (10) 5.2 27.5 

Other financial assets (10) 5.8 27.8 

Current assets 

718.9 790.5 

Inventories (11) 264.9 244.3 

Trade receivables (12) 280.5 203.6 

All other receivables and sundry assets (12) 19.3 34.5 

Cash & cash equivalents (13) 54.8 21.2 

619.5 503.6 

Income tax assets (14) 46.3 45.3 

Prepaid expenses & deferred charges 3.9 3.6 

EQUITY & LIABILITIES 

Total equity (15) 

Kolbenschmidt Pierburg AG stockholders’ equity 

1,388.6 1,343.0 

Capital stock 68.1 71.7 

Additional paid-in capital 162.1 174.0 

Other reserves 

Group net income proratable to 

68.2 52.4 

Kolbenschmidt Pierburg AG stockholders 7.6 32.1 

306.0 330.2 

Minority interests 13.9 14.9 

Accruals 

319.9 345.1 

Accruals for pensions and similar obligations (16) 291.3 287.7 

Other accruals (17) 144.9 121.4 

Liabilities 

436.2 409.1 

Noncurrent financial debts (18) 209.4 199.1 

Current financial debts (18) 138.3 77.9 

Trade payables (18) 162.4 152.6 

All other liabilities (18) 60.3 101.3 

570.4 530.9 

Income tax liabilities (19) 44.3 34.6 

Deferred income (20) 17.8 23.3 

1,388.6 1,343.0 


Consolidated income statement for fiscal 2001 

€million Note 2000 2001 

Net sales (21) 1,776.2 1,825.5 

Net inventory changes, other work and material capitalized (22) 28.3 7.8 

Total operating performance 1,804.5 1,833.3 

Other operating income (23) 34.4 57.1 

Cost of materials (24) (874.60) (924.0) 

Personnel expenses (25) (528.0) (522.0) 

Amortization/depreciation/write-down (26) (147.5) (147.9) 

Other operating expenses (27) (238.8) (210.2) 

Operating result 50.0 86.3 

Net interest expense (28) (32.9) (40.8) 

Net investment income and other financial results (29) 4.5 4.0 

thereof profit shares of investees stated at equity 0.5 0.7 

Net financial result (28.4) (36.8) 

Earnings before taxes (EBT) 21.6 49.5 

Income taxes (30) (14.2) (17.7) 

Group net income 7.4 31.8 

Minority interests (31) 0.2 0.3 

Group earnings (after minority interests) 7.6 32.1 

EBIT * 54.5 90.3 

EBITDA ** 202.0 238.2 

Earnings per share (EpS) (32) €0.28 €1.18 

* EBT plus net interest expense 

** EBT plus net interest expense and amortization/depreciation/write-down 

66 67

68 



Cash flow statement for fiscal 2001 

€million Note (33) 2000 2001 

Cash & cash equivalents at Jan. 1 (BoP) 45.2 54.8 

Group net income 7.4 31.8 

Amortization/depreciation/write-down of fixed assets 147.5 147.9 

Change in pension accruals 5.9 (5.3) 

Cash flow 160.8 174.4 

Net result from fixed-asset disposal 0.2 0.1 

Change in other accruals 27.9 (23.3) 

Change in inventories 

Change in receivables, liabilities (excl. financial debts) 

(38.8) 9.5 

and prepaid & deferred items 1.8 (24.3) 

Gain from deconsolidation 0.0 (5.4) 

Other noncash expenses and income, net (22.7) (3.5) 

Net cash provided by operating activities 129.2 127.5 

Cash outflow for additions to tangible and intangible assets (171.1) (174.7) 

Cash inflow from the disposal of tangible and intangible assets 6.6 1.3 

Cash outflow for additions to consolidated subsidiaries and financial assets (10.0) (11.9) 

Cash inflow from the disposal of consolidated subsidiaries and financial assets 0.6 21.0 

Net cash used in investing activities (173.9) (164.3) 

Capital paid in 0.0 15.4 

Dividends paid out (20.5) (34.6) 

Financial debts raised 97.6 37.9 

Financial debts redeemed (22.9) (15.7) 

Net cash provided by financing activities 54.2 3.0 

Cash-based change in cash & cash equivalents 9.5 (33.8) 

Parity-related change in cash & cash equivalents 0.1 0.2 

Total net change in cash & cash equivalents 9.6 (33.6) 

Cash & cash equivalents at Dec. 31 (EoP) 54.8 21.2 


Statement of changes in equity 

€million Note (15) Group 

net income Stockproratable 

holders’ 

Reserves to Kolben- equity of 

Addi- Reserves from fair schmidt Kolbentional 

retained Currency and Pierburg AG schmidt 

Capital paid-in from translation other All other stock- Pierburg Minority Total 

stock capital earnings differences valuation reserves holders AG interests equity 

Balance at January 1, 2000 68.1 162.1 80.5 11.8 92.3 0.0 322.5 13.0 335.5 

Capital contributions 0.0 0.0 0.0 

Dividend payments (20.5) (20.5) (20.5) (20.5) 

Currency adjustments (3.6) (3.6) (3.6) 1.1 (2.5) 

Group net income 0.0 7.6 7.6 (0.2) 7.4 

Balance 

at December 31, 2000 68.1 162.1 60.0 8.2 0.0 68.2 7.6 306.0 13.9 319.9 

Adjustment from the first-time 

application of IAS 39 12.9 12.9 12.9 12.9 

Balance at January 1, 2001 68.1 162.1 60.0 8.2 12.9 81.1 7.6 318.9 13.9 332.8 

Capital contributions 3.6 11.9 0.0 15.5 15.5 

Dividend payments (34.6) (34.6) (34.6) (34.6) 

Currency adjustments 0.5 0.5 0.5 1.3 1.8 

Differences from changes 

in consolidation group (1.9) (1.9) (1.9) (1.9) 

Other comprehensive income 7.6 (0.3) 7.3 (7.6) (0.3) (0.3) 

Group net income 0.0 32.1 32.1 (0.3) 31.8 

Balance 

at December 31, 2001 71.7 174.0 31.1 8.7 12.6 52.4 32.1 330.2 14.9 345.1 

69

70 



Segment report by divisions (primary segments) 

Segments Note (34) 

€million 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 

Balance sheet 

Segment assets 478.7 512.6 457.1 487.5 76.0 76.7 123.7 129.7 20.1 0.0 103.5 108.3 1,259.1 1,314.8 74.7 7.0 1,333.8 1,321.8 

thereof investments at equity 0.0 19.9 5.2 7.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.2 27.5 0.0 0.0 5.2 27.5 

Total equity 153.1 143.7 44.9 154.0 4.8 16.9 23.7 20.6 0.8 0.0 19.1 18.2 246.4 353.4 73.5 (8.3) 319.9 345.1 

Segment liabilities 193.6 226.7 116.7 106.4 27.3 30.2 36.7 39.4 3.1 0.0 22.9 21.3 400.3 424.0 29.4 9.2 429.7 433.2 

Capital employed 285.1 285.9 340.4 381.1 48.7 46.5 87.0 90.3 17.0 0.0 80.6 87.0 858.8 890.8 45.3 (2.2) 904.1 888.6 

Net financial debts 5.9 15.5 176.4 111.1 24.3 10.2 54.9 60.6 14.1 0.0 58.7 65.8 334.3 263.2 (41.4) (7.4) 292.9 255.8 

Income statement 

Net external sales 758.8 813.6 589.2 551.2 136.0 138.5 115.9 135.3 27.5 35.7 148.6 150.9 1,776.0 1,825.2 0.2 0.3 1,776.2 1,825.5 

Intersegment transfers 11.6 6.2 17.3 20.3 12.4 14.7 0.3 0.5 2.9 2.1 0.4 0.4 44.9 44.2 (44.9) (44.2) 0.0 0.0 

Total segment sales 770.4 819.8 606.5 571.5 148.4 153.2 116.2 135.8 30.4 37.8 149.0 151.3 1,820.9 1,869.4 (44.7) (43.9) 

1,776.2 1,825.5 

thereof Germany (%) 42.6 40.9 19.2 19.9 57.8 58.3 63.7 56.2 45.0 64.0 11.0 9.8 34.8 35.0 0.0 0.0 33.7 33.7 

thereof abroad (%) 57.4 59.1 80.8 80.1 42.2 41.7 36.3 43.8 55.0 36.0 89.0 90.2 65.2 65.0 0.0 0.0 66.3 66.3 

EBITDA 1) 82.1 93.1 87.1 93.8 17.4 28.0 10.4 11.9 (0.7) 8.8 15.3 18.2 211.6 253.8 (9.6) (15.6) 

202.0 238.2 

thereof P/L of investments at equity 0.0 0.4 0.5 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.7 0.0 0.0 0.5 0.7 

thereof write up 0.0 0.0 0.0 2.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.5 0.0 0.0 0.0 2.5 

Amortization/depreciation/write-down (65.3) (68.3) (54.3) (53.7) (10.6) (10.3) 

(12.1) (11.2) (0.5) (0.4) (1.9) (1.4) (144.7) (145.3) (2.8) (2.6) (147.5) (147.9) 

thereof write-down 0.0 0.0 0.0 0.0 (1.4) (1.3) (0.5) 0.0 0.0 0.0 (0.1) 0.0 (2.0) (1.3) 0.0 0.0 (2.0) (1.3) 

EBIT 16.8 24.8 32.8 40.1 6.8 17.7 (1.7) 0.7 (1.2) 8.4 13.4 16.8 66.9 108.5 (12.4) (18.2) 54.5 90.3 

Net interest expense (9.6) (12.5) (18.8) (19.9) (2.3) (2.6) (3.5) (4.3) (0.3) (0.9) (3.0) (3.4) (37.5) (43.6) 4.6 2.8 (32.9) (40.8) 

EBT 7.2 12.3 14.0 20.2 4.5 15.1 (5.2) (3.6) (1.5) 7.5 10.4 13.4 29.4 64.9 (7.8) (15.4) 21.6 49.5 

Income taxes 0.1 1.8 (12.7) (10.9) (6.4) (9.1) 

0.8 0.5 0.8 (1.4) (2.5) (5.5) (19.9) (24.6) 5.7 6.9 (14.2) (17.7) 

Net income/(Net loss) 7.3 14.1 1.3 9.3 (1.9) 6.0 (4.4) (3.1) (0.7) 6.1 7.9 7.9 9.5 40.3 (2.1) (8.5) 7.4 31.8 

EBIT margin (%) 2.2 3.0 5.4 7.0 4.6 11.6 (1.5) 0.5 (3.9) 22.2 9.0 11.1 3.7 5.8 0.0 0.0 3.1 4.9 

Other data 

Pension expense 10.0 8.3 8.9 10.2 2.3 1.1 1.5 0.9 0.5 0.2 0.2 0.3 23.4 20.8 1.0 1.0 24.4 21.8 

Capital expenditures 75.4 80.4 65.0 57.7 11.9 12.7 16.4 21.2 0.3 0.0 0.8 1.0 169.8 173.0 1.3 1.6 171.1 174.6 

ROCE 6.3 8.7 9.9 11.1 13.2 37.2 (2.3) 0.8 (8.7) 0.0 17.0 20.0 8.2 12.4 0.0 0.0 6.3 10.1 

Headcount at Dec. 31 4,108.5 4,009.5 5,618.0 5,416.0 1,094.0 1,045.0 689.0 772.0 209.5 0.0 396.5 381.5 12,115.5 11,624.0 48.0 38.0 12,163.5 11,662.0 

1) Operating result + net financial result + amortization/depreciation/write-down 

Air Supply 

& Pumps 

Pistons Plain Bearings Aluminum 

Technology 

MotorEngineering Motor Service Aggregated total 

of segments 

Others/Consolidation/ 

Holding Company 

Group 

71

72 



Segment report by regions (secondary segments) 

Segments Note (34) 

Germany 

Net external sales by customer location 316.4 329.5 104.6 97.7 73.9 75.0 73.7 75.8 13.6 22.1 16.3 14.8 598.5 614.9 

Segment assets 256.6 306.1 129.8 161.4 50.3 53.7 123.7 129.7 14.5 0.0 77.2 85.5 652.1 736.4 

Capital expenditures 45.8 52.8 16.4 21.5 7.6 10.3 16.4 21.2 0.2 0.0 0.5 0.3 86.9 106.1 

Other Europe 




North America 




South America 




Other regions 

Air Supply 

& Pumps 

Pistons Plain Bearings Aluminum 

Technology 

MotorEngineering Motor Service Aggregated total 

of segments 

€million 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 




73

74 


Notes 


(1) General 

The consolidated financial statements 

of Kolbenschmidt Pierburg AG and its 

subsidiaries for the fiscal year 2001 

have for the first time been prepared 

in accordance with the International 

Accounting Standards (IAS) of the 

International Accounting Standards 

Board (IASB) and comprise balance 

sheet, income statement, cash flow 

statement, segment reports, and statement 

of changes in equity. 

All IAS effective at balance sheet date 

have been applied, as have the Interpretations 

of the Standing Interpretations 

Committee (SIC). The requirements 

of IAS 12 and IAS 19 (both 

revised 2000) have voluntarily been 

satisfied in the restated annual 

accounts 2000. The IAS 39 rules are 

applied as from Jan. 1, 2001, restatement 

of the prior-year comparatives 

having been waived under the terms 

of IAS 39. The effects of the first-time 

application of IAS 39 have been recognized 

as of Jan. 1, 2001, in equity only 

(other reserves). 

For enhanced transparency of presentation, 

certain items of the consolidated 

income statement and 

balance sheet have been subsumed 

in captions, however, which are 

broken down and detailed further 

below in these notes. The consolidated 

income statement has been 

prepared in the total-cost format. 

The consolidated financial statements 

are presented in euro (€), based on 

the official exchange rate of €1.00 = 

DM 1.95583. Amounts are almost 

throughout indicated in €million. 

With its IAS-based consolidated financial 

statements, Kolbenschmidt Pierburg 

AG has exercised the exemption 

option under the terms of Art. 292a 

HGB, viz. to draw up the consolidated 

accounts in accordance with internationally 

accepted accounting principles 

in lieu of consolidated financial 

statements according to German 

commercial accounting regulations. 

The assessment of whether the consolidated 

financial statements and 

group management report meet the 

prerequisites of Art. 292a HGB has 

been made in conformity with the 

DRSC interpretation in German 

Accounting Standard DRS-1. The 

present consolidated statements 

substantially reflect the following 

accounting and valuation methods in 

derogation of the German Commercial 

Code (HGB): 

– capitalization of internally created 

intangible assets 

– recognition at fair value of certain 

primary and derivative financial 

instruments 

– translation of non-euro receivables 

and payables at the current closing 

rate and recognition in net income 

of the resulting translation 

differences 

– capitalization of the asset and 

recognition of the residual liability 

under capital leases according to 

the definition criteria of IAS 17 

– measurement of pension accruals 

according to the projected unit 

credit (PUC) method with due 

regard to future pay rises and the 

corridor rule of IAS 19 

– waiver of providing for accrued 

liabilities if the probability of accrual 

utilization is below 50 percent 

– discounting of noncurrent accruals 

– accounting for deferred taxes 

according to the liability method 

The fiscal year of Kolbenschmidt Pierburg 

AG and its subsidiaries equals 

the calendar year. Kolbenschmidt 

Pierburg AG prepares consolidated 

financial statements on a voluntary 

basis, waiving the optional exemption 

under the terms of Art. 291(1) HGB. 

Kolbenschmidt Pierburg AG’s consolidated 

accounts will be included 

through the voluntarily prepared 

group accounts of Düsseldorf-based 

Rheinmetall AG in the statutory consolidated 

financial statements of 


Mannheim, as the great grandparent 

and highest tier of consolidation. 

Rheinmetall AG's consolidated financial 

statements will be deposited with 

the Commercial Register of the Local 

Court of Düsseldorf under number 

HRB 39401, and those of Röchling 

Industrie Verwaltung GmbH with the 

Commercial Register of the Local 

Court of Mannheim under number 

HRB 3594. 

75

76 


Notes 


(2) Transition to IAS By rebasing the primary accounting 

system on IAS, international comparability 

of Kolbenschmidt Pierburg AG’s 

consolidated financial statements 

and other financial information about 

the Group has been enhanced. 

Reconciliation 

of equity to IAS 

€million 

The changeover to IAS has been based 

on the assumption that the IAS had 

The equity adjustments are mainly predicated on the following material facts: 

always been applied (SIC-8). The differences 

from restatements resulting 

from the Jan. 1, 2000 opening balances 

were recognized in equity only, to 

the debit or credit of the other reserves 

and the minority interests. The synopsis 

below summarizes the reconciliation 

of equity as of Dec. 31, 1999 (HGB), 

to equity as of Jan. 1, 2000 (IAS). 

Total equity (incl. minority interests) acc. to HGB at 12-31-1999 263.2 

Goodwill 35.0 

Tangible assets 56.8 

Current assets 9.0 

Untaxed/special reserves 11.2 

Accruals for pension and similar obligations (50.6) 

Other accruals 2.0 

Income taxes 2.2 

Sundry 6.7 

Total equity (incl. minority interests) acc. to IAS at 1-1-2000 * 335.5 

* IAS-based total equity (stockholders’ equity + minority interests) as of Jan. 1, 2000, includes minority interests of €13.0 million. 

– Goodwill created on or after Jan. 1, 1995, from acquisitions is capitalized in accordance with IAS 22 and amortized 

by straight-line charges over its useful life. Under HGB regulations, part of such goodwill was offset against the 

reserves retained from earnings. 

– Tangible assets, to which partly declining-balance depreciation had been charged, are now depreciated on a 

straight-line basis, except for the property, plant and equipment of insignificant companies. 

– Tangible assets held under capital leases (aka finance leases) are capitalized and the future rents (excluding 

interest portion) concurrently recognized as liability. According to SIC-12, special-purpose leasing firms are 

consolidated, too. Where sale & leaseback transactions are involved, the gains on asset disposal realized under 

HGB regulations have been recognized as deferred income. 

– Being based on tax regulations, untaxed/special reserves are not disclosed in the consolidated financial 

statements according to IAS. 

– The pension accruals, previously stated in the HGB-based accounts in accordance with Art. 6a German Income 

Tax Act (“EStG”), have been redetermined and are annually remeasured to account for future pay, pension and 

interest rate rises. 

–Accruals for impending losses from uncompleted contracts are recognized at direct production cost with due regard 

to directly proratable indirect materials and indirect labor, including production-related depreciation and pension 

expenses but excluding any general administrative and selling expenses. In conformity with IAS 37, expenses are 

not provided for. 

– Assets and liabilities from any future income tax relief or burden (deferred taxes) are recognized according to the 

liability method, based on the future tax load. Deferred taxes also include assets created by the offset of tax loss 

carryovers against anticipated future profits, however, always provided that their realization is reasonably certain. 

– Moreover, the Sundry line mainly mirrors the effects of IAS rules for the accounting treatment of development costs. 

(3) Group of consolidated companies Besides Kolbenschmidt Pierburg AG, 

the consolidated accounts include all 

German and foreign subsidiaries in 

which Kolbenschmidt Pierburg AG 

holds the majority of voting rights 

(whether directly or indirectly). Principally, 

companies are initially consolidated 

or deconsolidated when control 

is transferred. Associated affiliates 

and joint ventures are stated at equity. 

The additions to investees stated at 

equity involve the following: 

12-31-2000 Additions Disposals 12-31-2001 

Fully consolidated companies 47 -- (4) 43 

thereof German 20 -- (1) 19 

thereof foreign 27 -- (3) 24 

Investees stated at equity 1 2 -- 3 

thereof German -- 1 -- 1 

thereof foreign 1 1 -- 2 

The disposals from the consolidation 

group concern, apart from Pierburg 

Instruments GmbH, the following 

companies: 

– With effect as of December 31, 

2001/January 1, 2002, the share 

capital of Pierburg Instruments 

GmbH was raised to admit a new 

majority shareholder, thus reducing 

the Kolbenschmidt Pierburg Group’s 

equity interest in Pierburg Instruments 

GmbH to a mere 49 percent. 

As of December 31, 2001, this company 

is carried at equity. While 

Pierburg Instruments GmbH had 

– As and when the controlling 

majority was transferred as of 

December 31, 2001, the shares in 

Pierburg Instruments Inc. were 

sold at a price of €6.0 million. 

been fully consolidated in fiscal 

2000, this company has been 

carried at equity as from fiscal 2001. 

– The other addition to investees 

carried at equity refers to Kolbenschmidt 

Pierburg Shanghai Nonferrous 

Components Co. Ltd., a 

joint venture formed in China with 

effect as of April 1, 2001. The share 

of €11.5 million was paid up cash. 

– Moreover, the shares in Vehicle 

Spares Ltd. were sold and transferred 

at a price of £1 with economic 

effect as of January 1, 2001. 

– In the year under review, 

SEM Bailly Compte S.A.S. was 

merged into Pierburg S.à.r.l. 

77

78 


Notes 


The divestments and shareholding 

reductions in the period impacted on 

major asset and liability lines as of 

December 31, 2001, and the consol- 

€million 

The subsidiaries and the investees 

stated at equity which are included in 


of Kolbenschmidt Pierburg AG are 

idated income statement for fiscal 

2001 as follows: 

Fixed assets (0.6) 

Current assets (excl. cash & cash equivalents) (19.1) 

Cash & cash equivalents (0.3) 

Income tax assets/prepaid expenses & deferred charges (0.3) 

(20.3) 

Pension accruals (2.1) 

Other accruals (1.3) 

Financial debts (0.6) 

Trade payables and all other liabilities (1.9) 

Income tax liabilities/deferred income (0.1) 

(6.0) 

Net sales (1.6) 

Operating result 0.3 

EBT 0.3 

Net income 0.3 

listed on pages 110 and 111. A comprehensive 

listing of the shareholdings 

of Kolbenschmidt Pierburg AG will be 

deposited with the Commercial 

(4) Consolidation principles The financial statements of consolidated 

German and foreign companies 

are prepared in accordance with 

groupwide uniform accounting and 

valuation methods. 

Companies in which a direct or indirect 

majority stake is held and over 

which a controlling influence can be 

exercised are subsidiaries. Subsidiaries 

included for the first time 

are consolidated according to the 

purchase method, specifically the 

book value method under the terms 

Register of the Local Court of 

Düsseldorf (HRB 34883). 

of IAS 22, by offsetting the cost of 

shares acquired against the subsidiaries’ 

prorated equity. Any difference 

between cost and prorated 

equity is, if based on hidden reserves 

or burdens, allocated at the Group’s 

percentage shareholding in such 

hidden reserves or burdens to the 

subsidiaries’ assets and liabilities. 

Any net equity over cost is allocated 

to the assets of companies acquired 

and released over the assets’ average 

useful lives. Any residual net equity 

under or over cost is capitalized as 

goodwill or badwill within intangible 

assets. Goodwill is amortized over its 

estimated useful life. Any residual 

net equity under cost from pre-1995 

acquisitions has been offset against 

the Group's reserves retained from 

earnings. Upon deconsolidation the 

residual book values of goodwill and 

badwill are accounted for accordingly 

when measuring the net gain or loss 

on disposal. 

Expenses and income from intragroup 

transactions, as well as intercompany 

receivables and payables are elimi- 

Variations in the year of major 

currencies versus the €: 

In the local-currency financial statements 

of consolidated companies, 

currency receivables and payables 

nated in consolidation. Intercompany 

profits and losses are eliminated unless 

insignificant. Deferred taxes are 

recognized for temporary differences 

from consolidation, as required by 

IAS 12. 

Companies in which stakes between 

20 and 49 percent are held and over 

which a controlling influence is 

exercised (so-called associated affiliates) 

are stated at equity. To determine 

their goodwill (if any), principles 

analogous to consolidation are adopted, 

goodwill amortization being 

(5) Currency translation The functional currency concept has 

been adopted to translate the annual 

financial statements of non-German 

group companies into €. As a rule, 

their functional currency equals the 

local currency, except for a Turkish 

subsidiary. Therefore, assets and 

liabilities are translated at the mean 

current rates and the income statements 

at the annual average rates. 

The translation differences resulting 

herefrom, as well as those from translating 

prior-year carryovers are recognized 

in, and only in, equity. Goodwill 

created from the capital consolidation 

are translated at the current rate while 

for the translation of foreign-currency 

cash & cash equivalents, the current 

recognized in net investment income. 

Joint ventures (jointly controlled companies 

in which a 50-percent stake is 

owned) are also carried at equity. 

of non-German companies is carried 

at historical cost. 

The functional currency of the Turkish 

subsidiary is the euro (€), and its 

financial statements are accordingly 

prepared in €. Nonmonetary assets 

and liabilities are translated at the 

historical rate, income statement lines 

at the monthly average rates. The exchange 

rate gains/losses from this 

translation are recognized in financial 

income or expense, as appropriate. 

Mean rate in € at Annual average rate in € 

12-31-2000 12-31-2001 2000 2001 

1 Brazilian real 0.5513 0.4852 0.5883 0.4823 

1 pound sterling 1.6044 1.6418 1.6431 1.6139 

1 Canadian dollar 0.7179 0.7092 0.7276 0.7221 

1 Czech koruna 0.0285 0.0312 0.0281 0.0294 

1 US dollar 1.0750 1.1334 1.0791 1.1176 

buying rate is used. Currency translation 

differences are duly recognized 

in the net financial result. 

79

80 


Notes 


(6) Accounting and 

valuation methods 

The following unchanged useful lives 

underlie amortization: 

The following unchanged asset depreciation 

ranges (ADRs) apply to 

property, plant & equipment within 

tangible assets: 

Intangible assets 

Purchased intangible assets are capitalized 

at (acquisition) cost, internally 

created intangibles from which the 

Group is believed to derive future 

economic benefits and which can 

reliably be measured are recognized 

at production cost, either type of 

intangible asset being amortized by 

straight-line charges over the estimated 

useful life. Production cost covers 

all costs directly allocable to the production 

process, including any proratable 

production-related overheads. 

The cost of finance is not capitalized. 

R&D costs are principally expensed. 

Development costs are exceptionally 

capitalized and amortized on a 

straight-line basis if a newly developed 

product or process can be 

clearly defined, technologically realized 

and used either internally or is 

destined for marketing (IAS 38), 

and if there is a reasonable assurance 

that its costs will be recovered by 

future cash inflows. If certain factors 

hint at an impairment and the recoverable 

amount is below amortized 

cost, an intangible asset is written 

down. Wherever the reason for writedown 

has ceased to exist, the charge 

is reversed and the asset written up 

accordingly. 

Concessions, franchises, industrial property rights 2-20 years 

Development costs 5 years 

Goodwill from consolidation or the 

statement at equity is amortized 

over its estimated period of benefit, 

as a rule 15 to 20 years. The period 

is estimated with due regard to the 

Tangible assets 

Tangible assets are carried at depreciated 

cost less any write-down. The 

production cost of internally made 

tangible assets comprises all costs 

directly allocable to the production 

process, including the proratable production-related 

overheads. Borrowing 

expected benefits from the market 

position achieved through the acquisition 

and from the acquiree’s valueadding 

potential. 

costs are not capitalized as part of 

cost. Tangible assets are principally 

depreciated on a straight-line basis 

over their estimated useful lives unless 

in exceptional cases another 

method better reflects the pattern of 

use. 

IAS 40 is not applied since no investment 

properties exist. 

Buildings 20-77 years 

Other structures 8-20 years 

Production plant and machinery 3-20 years 

Other plant, factory and office equipment 2-23 years 

Tangible assets obtained under capital 

leases are capitalized at the lower 

of their fair values or the present value 

of minimum rents and depreciated 

over the shorter of their estimated 

useful lives or underlying lease terms 

(IAS 17). If certain factors hint at an 

impairment and the recoverable 

amount is below depreciated cost, 

a tangible asset is written down. 

Wherever the reason for write-down 

has ceased to exist, the charge is 

reversed and the asset written up 

accordingly. 

Financial assets The shares in nonconsolidated group Long-term loans bearing interest at 

companies and in associated affiliates 

not stated at equity and the other 

fair market rates are carried at par. 

long-term securities, all shown as The shares in associated affiliates 

financial assets, are carried at their and joint ventures disclosed as such 

fair values. The fair value of nonlisted are stated at equity. Based on the cost 

shares is derived from the going at share acquisition date, the invest- 

concern value, the latter being determent book value is increased or 

mined by means of generally accepted decreased to reflect the changes in 

appraisal and valuation techniques. equity of the associated affiliates or 

Changes in fair value are not recog- joint ventures to the extent such 

nized in income until realized. changes are allocable to the shares 

However, if a value has been impaired held by the Kolbenschmidt Pierburg 

and fallen below cost, even unrealized 

losses are recognized in net income. 

Group. 

Inventories and prepayments 

received 

Inventories are recognized at cost, 

as a rule applying the average-price 

method to acquisition cost whereas 

production cost includes the absorbed 

costs according to IAS 2 and is determined 

on the basis of normal workloads. 

Specifically, capitalized production 

cost comprises direct costs 

plus any portions of indirect materials, 

indirect manufacturing costs (labor, 

etc.), as well as production-related 

depreciation and pension expenses, 

but excludes any borrowing costs 

(IAS 23). Risks inherent in inventories 

due to reduced utility or to obsolescence 

are adequately allowed for. If 

the net realizable value (NRV) of any 

inventories at balance sheet date is 

below their carrying value, such in- 

ventories are written down to NRV. 

If the NRV of inventories previously 

written down has risen, the ensuing 

write-up is offset against cost of 

materials (raw materials and supplies) 

or shown as increase in inventories 

of finished products and work in 

process (WIP). 

Prepayments received from customers 

are recognized as liabilities. 

Receivables and sundry assets Receivables and sundry assets are fair-valued as of the balance sheet 

capitalized at cost. Adequate allowances 

provide for bad debts and 

doubtful accounts. Non-euro receivables 

are translated at the mean 

current rate. Short-term securities are 

date. Changes in fair value are not 

recognized in income until realized. 

However, if a value has been impaired 

and fallen below cost, even unrealized 

losses are recognized in net income. 

81

82 


Notes 


Deferred taxes 

Deferred taxes are duly recognized on 

the differences between the values of 

assets and liabilities in the consolidated 

balance sheet and those in the 

individual companies' tax accounts if 

such different values entail a higher 

or lower taxable income than would be 

the case if the consolidated balance 

sheet prevailed. Differences between 

the investment book value in the tax 

accounts and the investee’s equity 

are not recognized since, for lack of 

any intention to dispose of such investees, 

the valuation differences will 

not reverse in the foreseeable future. 

Deferred tax assets also include tax 

reduction claims from the expected 

future utilization of tax loss carryovers 

(if their realization is reasonably certain). 

If the recent history of a company 

reports a series of losses, deferred 

tax assets from unutilized tax 

losses or credits are only recognized 

to the extent that the company shows 

sufficient taxable temporary differences 

or that conclusive substantive 

evidence exists which suggests with 

reasonable assurance that sufficient 

taxable income will be earned by the 

company to utilize the hitherto unused 

tax losses or credits. Deferred taxes 

are determined by applying the local 

tax rates current or anticipated in each 

country at the time of realization. 

Due to the reduction in corporate income 

tax rates, resolved and meantime 

enacted in Germany under the 

tax reform, to a standard 25 percent, 

the prior-year deferred tax rate had to 

be clipped from 50 to 40 percent in 

Germany. Deferred tax assets and liabilities 

that reverse in future periods 

were adjusted accordingly, to the 

debit or credit of net income or equity, 

depending on whether initially recognized 

in net income or in reserves. 

Deferred taxation rates outside of 

Germany ranged between an unchanged 

32.5 and 38 percent. 

Minority interests Minority interests represent those equity as well as to Group net income. 

Accruals 

Accruals for pensions and similar obligations 

are determined according to 

the internationally accepted projected 

unit credit (PUC) method, which is 

predicated not only on expected future 

pay and pension increases but 

also other actuarial assumptions. 

The actuarial gains and losses ensuing 

from differences between actuarial 

assumptions and actual trends 

of the underlying parameters give rise 

to a gap between the present value of 

portions of a subsidiary’s net income 

and equity which are allocable to 

shares not held by Kolbenschmidt 

Pierburg AG, whether directly, or indirectly 

via other subsidiaries. Minority 

interests are shown in separate lines, 

in addition to debt and stockholders’ 

the defined benefit obligation (DBO) 

and the pension liabilities accrued 

in the balance sheet. Actuarial gains 

and losses outside a 10-percent corridor 

of the DBO are distributed over 

the average residual service years of 

employees. The fair market value of 

any existing pension fund assets is 

deducted from pension accruals. 

Service cost is treated as personnel 

expense while the interest portion of 

pension provisions in the fiscal year 

is shown within the net financial 

result. 

Minority interests in losses are offset 

against the majority interests in the 

Group’s equity and Group net income 

unless a contractual obligation exists 

for the minority shareholders to absorb 

and offset such losses. 

The remaining accruals according to 

IAS 37 provide at balance sheet date 

for all identifiable legal and constructive 

commitments and obligations to 

third parties if based on past transactions 

or events and if their amount, 

due date or maturity is uncertain. If 

the probability of their utilization exceeds 

50 percent, accruals are measured 

at the best estimate of settlement 

amount. Noncurrent accruals are 

shown, if the effect of discounting is 

significant, at the settlement amount 

discounted as of balance sheet date. 

Liabilities Pursuant to IAS 39, liabilities are capital leases are recognized at the 

measured at amortized cost, which 

as a rule equals their settlement or 

repayment amounts. Liabilities under 

Prepaid and deferred items Such items are shown to appropriately Public grants and subsidies for 

recognize pro rata temporis (p.r.t.) 

prepaid rents, interest, insurance 

premiums, non-public investment 

grants or allowances, etc. 

present value of rents. Liabilities denominated 

in any non-euro currency 

are translated at the mean current rate. 

capital expenditures are recognized 

as deferred income in line with IAS 20. 

Operating income and expenses Net sales (revenues) and other oper- Operating expenses are recognized 

Derivative financial instruments 

Within the Kolbenschmidt Pierburg 

Group, financial derivatives are solely 

used to hedge against currency and 

interest rate risks from operations. 

In the prior-year accounts as of Dec. 

31, 2000, valuation units were regularly 

created between an underlying 

transaction and the offsetting hedge 

provided that, if intended and viewed 

at arm’s length, both the underlying 

transaction and the hedge were interrelated 

for one use and functional 

purpose, with the result that gains 

and losses from the underlying transactions 

and the hedge would very 

likely level. Where currency forwards 

contrasted with an asset or liability 

at balance sheet date, currency translation 

was based on the hedged rate. 

Where currency forwards referred to 

cash inflows or outflows in foreign 

currency, the derivative was not rec- 

ating income are recognized upon performance 

of the contract for goods/ 

services or upon passage of risk to 

the customer. 

ognized due to the offsetting effect 

of the underlying transaction. 

An accrual provided for impending 

losses if a derivative was used to 

hedge proposed currency transactions 

and its market value was negative. 

Future interest rate differences from 

interest rate swaps were not recognized 

due to the compensatory effect 

of the underlying transaction. Option 

premiums paid when contracting interest 

rate or currency hedges, were 

carried under sundry assets at the 

lower of cost or market until the option 

was either exercised or expired. 

Upon the first-time application of IAS 

39 Financial Instruments as from 

January 1, 2001, a financial derivative 

is initially recognized at settlement 

date, which would normally lag just a 

few days behind the trading date. 

Principally, any changes in the fair 

value of financial derivatives are 

immediately recognized in net income 

unless an effective hedge exists that 

when caused or when the underlying 

service, etc. is used. 

satisfies the criteria of IAS 39. In this 

case, the changes in the derivative’s 

value would not impact on net income 

until after the hedged underlying 

transaction has fallen due or 

been settled. If the derivative is a 

cash flow hedge (CFH) and hence 

used to effectively hedge expected 

future cash flows, changes in the 

financial derivative’s fair value are 

recognized under the other reserves 

only and not in net income. 

Changes in the value of financial derivatives 

used in fair value hedges 

(FVHs) to effectively hedge the fair 

value of recognized assets and liabilities 

are posted to net income as 

are any changes in the hedged assets 

or liabilities (where appropriate, by 

adjusting their book values), with the 

result that the compensatory effects 

are all reflected in the income statement. 

83

84 


Notes 


(7) Fixed-asset analysis 

€million 

1-1-2001 

First-time 

application 

of IAS 39 

Book 

Changes 

in 

consolidation 

Translation 12-31- 

Additions Disposals transfers group 

differences 2001 1-1-2001 Additions Disposals Write-up 

Intangible assets 

Development costs 

and other internally created intangible assets 8.7 0.0 4.3 0.0 0.0 0.0 0.0 13.0 3.8 1.7 0.0 0.0 0.0 0.0 0.0 5.5 4.9 7.5 

Concessions, franchises, industrial property rights and licenses 18.9 0.0 1.1 2.7 0.3 (2.6) 0.0 15.0 13.9 1.8 2.7 0.0 0.0 (2.6) 0.0 10.4 5.0 4.6 

Goodwill 61.5 0.0 0.0 0.0 (0.5) (1.3) 0.4 60.1 18.4 2.3 0.0 0.0 (0.5) 0.3 0.4 20.9 43.1 39.2 

Badwill from consolidation (6.6) 0.0 0.0 0.0 0.0 0.0 0.0 (6.6) (3.8) 0.0 0.0 (1.6) 0.0 0.0 0.0 (5.4) (2.8) (1.2) 

Prepayments on intangibles 0.3 0.0 3.4 0.0 (0.3) 0.0 0.0 3.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 3.4 

Tangible assets 

Land, equivalent titles and buildings 

82.8 0.0 8.8 2.7 (0.5) (3.9) 0.4 84.9 32.3 5.8 2.7 (1.6) (0.5) (2.3) 0.4 31.4 50.5 53.5 

(incl. buildings on leased land) 330.7 0.0 2.5 0.5 2.6 (0.2) 0.7 335.8 118.5 11.5 0.2 0.0 0.0 0.0 0.1 129.9 212.2 205.9 

Production plant and machinery 1,016.8 0.0 65.6 17.5 25.8 (0.7) 8.0 1,098.0 685.2 95.8 17.1 0.0 0.5 (0.8) 4.8 768.4 331.6 329.6 

Other plant, factory and office equipment 248.9 0.0 37.8 24.3 8.5 (3.5) (2.1) 265.3 183.4 34.8 23.7 0.0 0.0 (3.1) (1.8) 189.6 65.5 75.7 

Prepayments on tangibles, construction in progress 48.1 0.0 59.9 1.3 (36.4) (0.2) 0.4 70.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 48.1 70.5 

Financial assets 

1,644.5 0.0 165.8 43.6 0.5 (4.6) 7.0 1,769.6 987.1 142.1 41.0 0.0 0.5 (3.9) 3.1 1,087.9 657.4 681.7 

Shares in joint ventures 0.0 0.0 12.0 0.0 0.0 0.0 0.0 12.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12.0 

Shares in associated affiliates 7.7 0.0 8.4 0.6 0.0 0.0 0.0 15.5 2.5 0.0 0.0 2.5 0.0 0.0 0.0 0.0 5.2 15.5 

Other long-term securities 3.7 21.6 0.0 0.0 0.0 0.0 0.0 25.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.3 3.4 25.0 

Other long-term loans 2.5 0.0 1.2 0.8 0.0 0.0 0.0 2.9 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 2.4 2.8 

13.9 21.6 21.6 1.4 0.0 0.0 0.0 55.7 2.9 0.0 0.0 (2.5) 0.0 0.0 0.0 0.4 11.0 55.3 

Total 1,741.2 21.6 196.2 47.7 0.0 (8.5) 7.4 1,910.2 1,022.3 147.9 43.7 (4.1) 0.0 (6.2) 3.5 1,119.7 718.9 790.5 

(8) Intangible assets The intangible assets mainly comprise 

goodwill from consolidation, as well 

as capitalized development costs. 

In the year under review, research 

expenses of €79.8 million were 

incurred (up from €79.1 million). 

Total amortization of intangible assets 

of €5.8 million (down from €6.5 million) 

includes write-down of €0.1 million 

(up from €0 million). The badwill 

was amortized to other operating income 

at €1.6 million (up from €1.3 

million). 

Gross values Amortization/depreciation/write-down 

Net values 

Book 

transfers 

Changes 

in 

consolidation 

group 

(9) Tangible assets Depreciation in the period totaled 

€142.1 million (down from €147.6 

million) and includes write-down at 

€1.3 million (down from €2.0 million). 

Under an impairment test, one company 

wrote down production plant and 

machinery due to the closedown of 

production lines which was approved 

in a final restructuring plan. 

Translation 

differences 

12-31- 


12-31- 

2000 

12-31- 


Encumbrances of €20.2 million (virtually 

unchanged) rest on land and 

buildings to collateralize long-term 

investment loans. Moreover, production 

plant and machinery of €9.7 

million (up from €2.2 million) and 

future fixed-asset additions of €4.0 

million (down from €11.5 million) 

were assigned as security for an investment 

loan. 

85

86 


Notes 


Rents falling due under capital leases 

in the years ahead: 

The tangible assets capitalized under 

capital leases and from the consolidation 

of special-purpose leasing 

firms total €89.6 million (down from 

€99.2 million), of which €44.8 million 

(down from €46.2 million) is allocable 

to a long-term property lease and to 

the consolidation of several specialpurpose 

leasing firms formed to fi- 

Rents due in succeeding years under capital leases 

nance various properties and buildings; 

another €44.8 million (down 

from €53.0 million) refers exclusively 

to capital leases for production plant 

and machinery used in current production. 

Leases for personal property 

principally provide for a purchase 

option. Lease terms vary between 

4 and 10 years. 

€million 2002 2003-2006 after 2006 

Rents 13.7 49.8 45.7 

Discount 0.9 8.3 11.5 

Present values 12.8 41.5 34.2 

Rents include €37.4 million of 

payments to banks of consolidated 

special-purpose leasing firms. 

Rents due in succeeding years under operating leases 

€million 2002 2003-2006 after 2006 

Land and buildings 2.0 5.5 23.1 

Production plant and machinery 1.6 1.9 0.0 

Other leases 0.6 1.4 0.0 

The rents for land and buildings chiefly 

refer to a long-term property lease that 

neither includes a purchase option 

nor a firmly agreed passage of title 

and, therefore, is an operating lease. 

4.2 8.8 23.1 

In the year under review, €2.3 

million was paid under operating 

leases and recognized in net 

income. No subleases existed. 

(10) Financial assets Analysis of shares in joint ventures 

and associated affiliates: 

€million 

Joint ventures 

Kolbenschmidt Pierburg Shanghai 

Nonferrous Components Co. Ltd. 0.0 11.6 0.5 0.0 0.0 0.1 12.0 

Associated affiliates 

Pierburg Instruments GmbH, a subsidiary 

fully consolidated in 2000, 

has been stated at equity as of 

December 31, 2001. 

Long-term securities 

The Kolbenschmidt Pierburg Shanghai 

Nonferrous Components Co. Ltd. 

joint venture was formed with effect 

as of April 1, 2001. The joint venture’s 

€million 

Book 

value 

1-1-2001 Additions 

P/L share 

Kolbenschmidt Shanghai Piston Co. Ltd. 5.2 0.0 0.5 0.6 2.5 0.0 7.6 

Pierburg Instruments GmbH 0.0 7.9 0.0 0.0 0.0 0.0 7.9 

5.2 7.9 0.5 0.6 2.5 0.0 15.5 

Assets 1) 22.5 

Equity 10.6 

Debt 2) 12.0 

Net sales 15.4 

EBT 0.5 

1) including income taxes and prepaid expenses & deferred charges 

2) accruals, liabilities, income taxes, deferred income 

The other long-term loans are carried 

at amortized cost pursuant to IAS 39. 

proratable assets, liabilities, income 

and expenses presented the following 

balances at Dec. 31, 2001: 

€million 12-31- 12-31- 


Book value 3.4 25.0 

Fair value 25.0 25.0 

Unrealized gain 21.6 21.6 

All these securities are available for 

sale. The first-time application of IAS 

39 implied the initial fair valuation of 

one investee. €21.6 million was recognized 

as unrealized gain within equity. 

Dividend 

payments Write-up 

Goodwill 

amortization 

Book 

value 

12-31- 


Long-term securities at a total book 

value of €0.8 million for which no 

quoted market price is available and 

whose fair value cannot reliably be determined 

are stated at amortized cost. 

87

88 


Notes 


(11) Inventories 

(12) Receivables and sundry assets 

€million 12-31- 12-31- 


Raw materials and supplies 79.7 81.0 

Work in process 75.9 54.9 

Finished products and merchandise 104.4 107.1 

Prepayments made 4.9 1.3 

The book value of inventories stated 

at the lower NRV totals €68.9 million 

(down from €74.7 million). In the 

year under review, €2.8 million (down 

from €4.9 million) of inventories pre- 

The disclosed book values of the 

monetary assets covered by these 

items approximate their fair values. 

Under an ABT program, the Kolbenschmidt 

Pierburg Group sells trade 

receivables on a revolving basis up 

to a maximum volume of €129 million. 

After these receivables had still re- 

264.9 244.3 

viously written down was written up 

as NRV had risen. 

Inventories do not collateralize any 

liabilities. 

€million thereof thereof 

12-31- due after 12-31- due after 

2000 1 year 2001 1 year 

Trade receivables 

thereof due from 

280.5 0.0 203.6 0.1 

group companies 0.0 0.0 3.4 0.0 

joint ventures and associated affiliates 0.0 0.0 1.2 0.0 

All other receivables and sundry assets 19.3 1.2 34.5 3.4 

299.8 1.2 238.1 3.5 

quired recognition as assets in 2000, 

contract amendments effective as from 

2001 resulted in the sold receivables 

being treated as such pursuant to IAS 

39 and hence no longer recognized in 

the balance sheet. As of Dec. 31, 2001, 

the receivables sold had a par value of 

€99.0 million. 

Breakdown of the remaining 

receivables and sundry assets: 

(13) Cash & cash equivalents 

(14) Income tax assets 

The deferred taxes include tax reduction 

claims of €22.4 million (up from 

€16.6 million) derived from loss carryovers 

utilizable in future periods. Loss 

carryovers are stated on the basis of 

corporate planning data at the amount 

of budgeted future taxable income. 

€million 12-31- 12-31- 

Accounts due for/from 


non-income taxes 5.9 11.2 

financing 1.9 7.8 

prepayments made 1.1 6.2 

guaranty fund 1.5 1.3 

investment grants/allowances 1.0 0.9 

sundry assets 7.9 7.1 

€million 12-31- 12-31- 


Cash on hand and in bank (incl. checks) 47.1 21.2 

Due under intercompany finance arrangements 7.7 0.0 

The accounts due under intercompany 

finance arrangements result from the 

investment of monies due on demand 

from Rheinmetall Finanz GmbH. 

Over and above the deferred tax assets 

from loss carryovers and tax credits, 

German and foreign tax loss carryovers 

exist at a total €131.7 million 

(up from €92.4 million) which was not 

recognizable. The German loss carryovers 

are not subject to expiration 

19.3 34.5 

54.8 21.2 

Such investments are not exposed 

to any valuation risk. Their fair value 

approximates their book value. 

€million 12-31- 12-31- thereof thereof not 

2000 2001 recognized in recognized in 

Deferred taxes net income net income 

from temporary differences 22.7 18.4 18.3 0.1 

from loss carryovers 16.6 22.4 22.4 0.0 

39.3 40.8 40.7 0.1 

Income tax refundable by the tax office 7.0 4.5 4.5 0.0 

46.3 45.3 45.2 0.1 

whereas the foreign ones as a rule are 

(e.g., in the United States utilizable 

within 20 years). Furthermore, deferred 

tax assets from temporary 

differences at a total €104.6 million 

(up from €93.3 million) were not 

recognized. Deferred taxes adjusted 

89

90 


Notes 


in prior periods were written up at 

€0.6 million (up from €0 million). 

According to the German Tax Reduction 

Act of Oct. 23, 2000, the changeover 

from the imputation system to 

the split rate system (split income 

taxation) is accompanied by a 15-year 

transition period during which dividends 

distributed from EK-40 equity 

portions formerly subject to the full 

(15) Total equity Kolbenschmidt Pierburg AG’s capital 

stock amounts to €87.1 million and is 

divided into 28,003,395 no-par bearer 

shares of fully voting common stock. 

There is no unpaid capital subscribed. 

The Executive Board is authorized to 

raise the capital stock on or before 

June 30, 2003, after first obtaining the 

Supervisory Board’s approval, by issuing 

once or several times new stock 

against cash contributions for an aggregate 

maximum of €25.6 million, duly 

granting the stockholders their subscription 

rights. However, the Executive 

Board is authorized with the Supervisory 

Board’s prior approval to exclude 

subscription rights to fractions and, 

moreover, to the extent required to 

grant the holders of option or conversion 

rights under bonds (whether 

floated or yet to be issued) the same 

statutory subscription right of Kolbenschmidt 

Pierburg AG stockholders as 

if such stock options or conversion 

rights had already been exercised 

(authorized capital I). In the year under 

review, part of the authorized capital I 

was utilized pursuant to Art. 4(2) of 

the Company’s articles of association 

to raise the capital stock by €3.6 million 

by issuing 1,400,200 no-par bearer 

shares of common stock. After this increase, 

a total 28,003,395 bearer 

shares of issued common stock have 

been outstanding. 

German income tax now entail a corporate 

income tax reduction and 

those distributed from EK-02 equity 

portions exempt from corporate income 

tax increase corporate income 

tax. As of December 31, 2001, EK-40 

portions no longer existed and, therefore, 

no potential for any deferred tax 

relief did either. The potential for deferred 

tax burdens amounts to €0.5 

million. 

Furthermore, the Executive Board is 

authorized to raise the capital stock 

on or before June 30, 2003, after first 

obtaining the Supervisory Board’s 

approval, by issuing once or several 

times new stock against cash contributions 

for an aggregate maximum of 

€6.6 million. With the Supervisory 

Board’s prior approval, the Executive 

Board may generally exclude the 

subscription rights if issuing the new 

stock at a price that is not significantly 

below the market price. If the Executive 

Board does not exercise its authority 

to exclude subscription rights, such 

subscription may with the Supervisory 

Board’s approval nonetheless 

be excluded for fractions and to the 

extent required to grant the holders 

of option or conversion rights under 

bonds (whether already floated or yet 

to be issued) the same statutory subscription 

right of Kolbenschmidt Pierburg 

AG stockholders as if such stock 

options or conversion rights had 

already been exercised (authorized 

capital II). 

Moreover, the Executive Board has 

been authorized to acquire on or before 

December 12, 2002, treasury stock 

equivalent to an aggregate maximum 

of 10 percent of the current capital 

stock. In the year under review, the 

authority to repurchase any of the 

Company’s stock was not exercised. 

€million 

Upon transfer of the stock premium 

from the capital increase, the additional 

paid-in capital rose by €11.9 

million to €174.0 million. 

The other reserves include, besides 

the reserves retained by Kolbenschmidt 

Pierburg AG from earnings, 

also the other comprehensive income, 

which breaks down into the reserve 

for adjustments due to the first-time 

application of the IAS (which are recognized 

in equity only), differences 

from currency translation, as well as 

reserves from fair valuation. 

The analysis in 2001 of such reserves 

presents the following picture: 

Initial application of IAS 39 (Jan. 1, 2001) 

Deferred taxes on differences 

0.0 21.6 21.6 

from the first-time application of IAS 39 (Jan. 1, 2001) 0.0 (8.7) (8.7) 

Balance at January 1, 2001 0.0 12.9 12.9 

Changes in the fair valuation of derivatives (0.4) 0.0 (0.4) 

Deferred taxes on changes in the hedge reserve 0.1 0.0 0.1 

Balance at December 31, 2001 (0.3) 12.9 12.6 

(16) Accruals for pensions and 

similar obligations 

Hedge 

reserve 

The differences from the fair valuation 

of interest rate swaps (which mature in 

2005) were transferred to the hedge 

reserve. 

These accruals provide for obligations 

under vested rights and current pensions 

payable to eligible active and 

former employees and their surviving 

dependants. Such commitments 

primarily encompass pensions, both 

basic and supplementary. The individual 

confirmed pension entitlements 

are based on benefits that vary according 

to country and company and, 

as a rule, are measured according to 

service years and employee pay. 

Being a noncurrent provision for the 

accumulated postretirement benefit 

obligation, the accrued health care 

obligations to the retirees of some 

US group companies are also included 

in the pension accruals recognized 

hereunder. 

Securities 

available 

for sale 

Reserves 

from fair 

valuation 

The separate financial statements of 

Kolbenschmidt Pierburg AG close the 

fiscal year with net earnings of €14.0 

million, proposed to be distributed in 

full to pay a cash dividend of €0.50 

per no-par share of stock. 

The company pension system consists 

of both defined-contribution and defined-benefit 

plans. Under a DCP, the 

company incurs no obligations other 

than the payment of contributions to 

earmarked funds. These pension expenses 

are shown within personnel 

expenses. In the year under review, 

a total €32.6 million (up from €31.9 

million) was paid to DCPs. 

Under defined benefit plans, a company 

is obligated to meet its confirmed 

commitments to active and former 

employees. In accordance with IAS 19, 

the projected unit credit (PUC) method 

is used to measure accrued defined 

benefit obligations. To this end, the 

present value of the defined benefit 

91

92 


Notes 


obligation (DBO) is determined 

through actuarial techniques on the 

basis of assumptions about mortality, 

pay and pension rises, employee 

turnover, interest rate trends, as well 

as additional parameters. The fair 

The following actuarial parameters 

has been assumed to determine 

the present value of the DBO of all 

German pension obligations: 

Analysis of pension accruals 

as of December 31: 

Breakdown and reconciliation of pension accruals: 

value of current plan assets is offset 

against the accrual. Service cost is 

disclosed within personnel expenses, 

interest cost and expected return on 

plan assets being shown under the 

net interest result. 

in % 12-31- 12-31- 


Discount rate 6.25 5.75 

Pay rise 3.00 3.00 

Pension rise 1.25 1.25 

Expected return on plan assets 8.84 8.87 

Locally adjusted assumptions 

underlie the obligations to employees 

abroad. 


Carryover 272.4 291.3 

Translation difference 11.2 3.8 

Change in consolidation group 7.6 (2.2) 

Pensions paid (25.0) (24.9) 

Annual provision 25.1 19.7 

Balance at December 31 291.3 287.7 

€million 12-31- 12-31- 


Present value of non-funded DBO 252.9 273.9 

Present value of plan-funded DBO 118.6 133.7 

Total present value of DBO 371.5 407.6 

Plan assets at fair value (77.7) (80.7) 

Adjustment for unrecognized actuarial losses (2.5) (39.2) 

Accruals for pensions and similar obligations 291.3 287.7 

Breakdown of plan assets: 

Breakdown of pension expense: 

The €36.7 million hike of the unrecognized 

adjustment of actuarial losses 

to €39.2 million was caused at €9.9 

million by the reduced German DBO 

discount rate (down from 6.25 to 5.75 

percent). Another €13.9 million of the 

increase was attributable to the negative 

variance of the expected return 

on the US plan assets from the actual 

income realized in the fiscal year. 

The rising retiree rate in 2001 and the 

€million 12-31- 12-31- 


Guaranteed deposits 6.6 8.1 

Equities 45.5 38.8 

Government and corporate bonds 25.3 18.3 

Cash & cash equivalents 0.3 15.5 

Plan assets 77.7 80.7 

In 2001, plan assets returned a loss of 

€4.6 million, comparing with a profit 

of €1.5 million the year before. 

higher health care costs stepped up 

actuarial losses by €6.9 million and 

€4.6 million, respectively. The remaining 

surge in actuarial loss was 

accounted for by the lower discount 

rate for US DBO, down from 7.0 to 

6.5 percent. Under the terms of IAS 19, 

actuarial gains and losses are expensed 

over the average residual 

service years if outside a corridor 

of 10 percent of total DBO. 


Current service cost 8.4 4.5 

Amortized actuarial gains and losses (0.1) 0.1 

Past service cost 0.1 0.1 

Effects of plan curtailments/settlements 0.0 0.1 

Expected return on plan assets (7.0) (6.9) 

Compounding of expected pension obligations 23.0 23.9 

24.4 21.8 

93

94 


Notes 


(17) Other accruals (18) Liabilities 

€million 

1-1-2001 Utilized 

Released 

Added/ 

newly 

provided 

Compounded 

Change in 

consolidation 

group 

Translation 

differences/ 

sundry 

Warranties 24.3 (6.0) (2.8) 3.4 0.2 (0.3) 0.2 19.0 

Identifiable losses 29.9 (17.3) (0.8) 2.8 0.0 0.0 0.8 15.4 

Yet unbilled costs 4.3 (3.9) (0.1) 6.2 0.0 (0.2) 0.0 6.3 

Restructuring 5.4 (2.9) (0.5) 0.9 0.0 0.0 0.1 3.0 

Personnel 55.6 (36.4) (1.0) 36.1 0.0 (0.8) (0.1) 53.4 

Other 25.4 (10.2) (2.8) 11.6 0.2 0.0 0.1 24.3 

€million 

12-31- 


144.9 (76.7) (8.0) 61.0 0.4 (1.3) 1.1 121.4 

Known specific warranty risks are 

accrued at the anticipated amount of 

the obligation. 

Accruals for identified losses provide 

for binding purchasing obligations. 

Any economic risks beyond are also 

adequately provided for. 

Accruals for obligations to personnel 

basically provide for accrued vacation, 

residual annual leave, overtime and 

flextime at a total €22.0 million 

(down from €24.5 million), for preretirement 

part-time work at €10.6 

within 1 year 

million (down from €11.1 million), 

and for termination benefits at €8.4 

million (up from €6.3 million). 

The other accruals cover environmental 

risks, bonuses, discounts and 

rebates, as well as legal, consultancy 

and audit fees. 

Unchanged versus the year before, 

no refunds are expected from accruals. 

The following cash outflows are expected 

from each of the noncurrent 

accrual categories: 

1-5 years 

after 5 years 

Warranties 15.4 3.6 0.0 19.0 

Identifiable losses 15.4 0.0 0.0 15.4 

Yet unbilled costs 6.3 0.0 0.0 6.3 

Restructuring 2.6 0.4 0.0 3.0 

Personnel 45.2 6.7 1.5 53.4 

Others 23.2 0.7 0.4 24.3 

Total 

108.1 11.4 1.9 121.4 

€million 

Financial debts 

due to banks 193.1 29.8 53.2 168.9 45.9 30.5 

due to nonconsolidated group companies 0.0 0.0 0.0 18.5 18.5 0.0 

under leases 58.1 12.0 18.1 88.5 12.8 32.5 

other 96.5 96.5 0.0 1.1 0.7 0.4 

347.7 138.3 71.3 277.0 77.9 63.4 

Trade payables 162.4 162.4 0.0 152.6 152.6 0.0 

All other liabilities 

prepayments received on orders 10.4 10.4 0.0 3.4 3.4 0.0 

notes payable 5.2 5.2 0.0 5.2 5.2 0.0 

sundry liabilities 44.7 44.7 0.0 92.7 91.2 0.0 

The sundry liabilities break down as follows: 

12-31- 

2000 

thereof 

due 

within 

96 


Notes 


The analysis below reflects the terms 

and book and fair values of financial 

debts: 

Due to banks 

Weighted average 

rate 2001 

% 



% 

Rates fixed 

up to 

Book value 

12-31-2000 

€million 

Fair value 

12-31-2000 

€million 

Book value 


€million 

Fair value 


€million 

4.5 2002 31.4 31.4 44.9 44.9 

4.9 2004 46.0 43.8 46.0 45.8 

7.9 2005 51.9 53.1 52.4 58.0 

5.4 2020 25.6 20.5 25.6 19.8 

Due to the banks of nonconsolidated special-purpose leasing firms 

Due under capital leases 



% 

Rates fixed 

up to 

5.96 2008 38.2 35.3 37.4 37.6 

Rates fixed 

up to 

Book value 

12-31-2000 

€million 

Book value 

12-31-2000 

€million 

Fair value 

12-31-2000 

€million 

Fair value 

12-31-2000 

€million 

Book value 


€million 

Book value 


€million 

Fair value 


€million 

Fair value 


€million 

4.0 2002 5.3 4.9 0.0 0.0 

6.5 2003 3.7 4.0 0.8 0.9 

6.1 2004 6.5 7.3 3.3 3.5 

5.9 2005 7.0 7.0 3.1 3.2 

5.1 2006 0.0 0.0 6.8 7.3 

8.1 2008 6.7 6.7 15.6 18.6 

6.5 2009 1.4 1.3 1.2 1.3 

6.5 2010 4.0 3.9 3.7 4.0 

6.5 2011 2.0 1.9 2.0 2.1 

7.7 2020 0.0 0.0 7.6 9.3 

The monies maturing in 2002 are 

short-term borrowings whose book 

values approximate their fair values. 

(19) Income tax liabilities 

€million 

Deferred taxes 4.2 17.9 9.2 8.7 

Current income taxes 40.1 16.7 16.7 0.0 

The deferred tax assets and liabilities refer to the following: 

(20) Deferred income 

12-31- 

2000 

The deferred public grants and subsidies 

mainly refer to investment grants. 

In the year under review, grants of 

€4.1 million (down from €5.3 million) 

were received. 

12-31- 


thereof 

recognized in 

net income 

thereof not 

recognized in 

net income 

44.3 34.6 25.9 8.7 

€million 12-31- 12-31- 12-31- 12-31- 

2000 

assets 

2000 

liabil. 


assets 


liabil. 

Loss carryovers and tax credits 16.6 0.0 22.4 0.0 

Tangible assets 15.3 (56.5) 13.4 (67.0) 

Pension accruals 25.1 0.0 22.6 0.0 

Other accruals 12.1 (0.4) 9.8 0.0 

Liabilities 56.3 (38.6) 89.3 (75.8) 

Sundry 12.3 (7.1) 31.5 (23.3) 

Offset (98.4) 98.4 (148.2) 148.2 

39.3 (4.2) 40.8 (17.9) 

€million 12-31- 12-31- 


Deferred grants by customers 10.6 19.7 

Deferred public grants and subsidies 7.2 3.6 

17.8 23.3 

97

98 


Notes 


(21) Net sales For a breakdown of the net sales of 

€1,825.5 million (up from €1,776.2 

(22) Net inventory changes, other 

work and material capitalized 

(23) Other operating income 

(24) Cost of materials 


Change in inventories 

of finished products and work in process 17.0 (11.3) 

Other work and material capitalized 11.3 19.1 

The cost of materials decreased in 2001 

as inventories were written up at €2.8 

million (down from €4.9 million). 

28.3 7.8 


Cost of raw materials, supplies, 

million) by divisions and regions, see 

the segment reports. 


Income from the release of accruals 4.0 7.8 

Income from damages/claims 2.2 6.8 

Gain from the deconsolidation of subsidiaries 

Income from the payment of bad debts charged off 

0.0 4.8 

and from the reversal of bad-debt allowances 1.5 3.0 

Income from credit notes for prior periods 1.9 2.7 

Income from investment grants 1.9 1.6 

Income from the release of badwill 1.3 1.6 

Rental income 1.8 1.5 

All other 19.8 27.3 

34.4 57.1 

and merchandise purchased 808.7 841.7 

Cost of services purchased 65.9 82.3 

874.6 924.0 

(25) Personnel expenses 

(26) Amortization/ 

depreciation/write-down 


Wages and salaries 420.8 414.4 

Social security taxes 

Expenses for pensions 

46.2 46.0 

and related employee benefits 61.0 61.6 

Pension expense primarily reflects 

the annual provision for accrued 

pension liabilities — cf. Note (23) — 

and the DCP contributions. 

The companies consolidated for the 

last time in 2000 accounted for 217 

employees. 

For a breakdown by amortization and 

depreciation, see the notes to the respective 

fixed-asset lines. 

Write-down was charged to tangible 

and intangible assets at €1.3 million 

528.0 522.0 

Annual average headcount 2000 2001 

Air Supply & Pumps 4,077 4,058 

Pistons 5,772 5,563 

Plain Bearings 1,115 1,069 

Aluminum Technology 677 725 

MotorEngineering 210 193 

Motor Service 395 390 

Other 49 42 

12,295 12,040 

(down from €2.0 million), largely 

for impairment losses of production 

plant and machinery which, due to 

restructuring, can no longer be used 

in the future. 

99

100 


Notes 


(27) Other operating expenses 


M&R 47.7 55.1 

Other general administration 36.7 43.8 

Selling, promotion and advertising 29.7 25.7 

Rheinmetall Group allocations and service fees 13.1 16.9 

Legal, consultancy and audit fees 7.3 10.9 

Rents 11.2 10.4 

Other payroll incidentals 12.4 9.0 

Non-income taxes 6.5 6.6 

Losses from damaging events 0.4 5.9 

Severance packages, termination benefits, preretirement part-time work 5.6 5.8 

Insurances 6.0 5.6 

Outsourced support services 3.6 2.7 

Warranties 7.1 2.2 

Write-down of current assets 6.4 1.8 

All other 45.1 7.8 

(28) Net interest expense 

Income from the release of accruals 

was offset at €20.6 million (up from 

238.8 210.2 

€11.6 million) against other operating 

expenses. 


Interest income 

return on plan assets 7.0 6.9 

from long-term loans and financial receivables 0.0 0.2 

other interest and similar income 1.7 0.9 

Interest expense 

8.7 8.0 

from capital leases (2.6) (2.8) 

compounding of pensions (23.0) (23.9) 

compounding of other noncurrent accruals (0.3) (0.4) 

other interest and similar expenses (15.7) (21.7) 

(41.6) (48.8) 

(32.9) (40.8) 

(29) Net investment income and 

other financial results 

(30) Income taxes 


Net investment income 

from joint ventures 0.0 0.4 

from associated affiliates 0.5 2.8 

from other long-term securities 0.7 0.8 

Other financial results 

1.2 4.0 

from foreign exchange 3.3 0.3 

from financial derivatives 0.0 (0.3) 

The table below reconciles the expected 

to the recognized tax expense, 

which is determined by multiplying 

EBT by a tax rate of 40 percent (down 

4.5 4.0 


Current income tax expense 31.1 18.1 

Refunds for prior years (0.5) (4.0) 

Deferred taxes (16.4) 3.6 

14.2 17.7 

from 50). This tax expense comprises 

German corporate income tax, the 

solidarity surtax thereon, and municipal 

trade tax. 


EBT 21.6 49.5 

Expected tax expense 10.8 19.8 

Differences from German tax rates 1.0 (1.0) 

Differences from foreign tax rates (1.4) (1.3) 

Losses of subsidiaries not subjected to deferred taxation 11.4 11.1 

Tax-exempt income and nondeductible expenses (5.3) (3.5) 

Nondeductible goodwill amortization 0.7 1.2 

Adjustment for nonperiod income taxes 0.6 (0.5) 

Reduction of deferred taxes due to tax rate change (1.3) 0.0 

Tax privileges for capital expenditures 0.0 (2.4) 

Tax changes from accounting for the tax burden on next-year distribution (3.3) (4.9) 

Other 1.0 (0.8) 

Effective tax expense 14.2 17.7 

Effective tax rate in % 66% 36% 

Expected tax rate in % 50% 40% 

101

102 


Notes 


(31) Minority interests Minority interests in profit came to 

€0.9 million (down from €1.4 million) 

and in loss to €1.2 million (down from 

€1.6 million). 

(32) Earnings per share (EpS) EpS is obtained by dividing the weighted 

average number of shares issued 

and outstanding in the fiscal year into 

the Group’s earnings. The capital was 

increased by issuing 1,400,200 new 

no-par shares in mid-July 2001. 

Neither as of December 31, 2001 nor 

2000, were any shares outstanding 

that could dilute earnings per share. 

Therefore, both in the year under review 

and the previous year, the undiluted 

EpS equals the diluted EpS. 

€ 2000 2001 

Group earnings 

(after minority interests) 7,563,080 32,123,570 

Weighted average number of shares 26,603,195 27,244,953 

Earnings per share (EpS) 0.28 1.18 

Comments on the cash flow statement 

(33) Cash flow statement The cash flow statement conforms with 

IAS 7 and breaks down into the cash 

flows generated by operating, investing 

and financing activities. The effects of 

changes in the consolidation group are 

eliminated but they and parity changes, 

if impacting on cash & cash equivalents, 

are shown in separate lines. 

Starting from the beginning of period 

(BoP) balance of cash & cash equivalents, 

this statement shows a slightly 

higher cash flow of €174.4 million. 

The net cash provided by operating 

activities was virtually unchanged at 

€127.5 million and included a cash 

inflow from interest of €1.1 million 

(down from €1.7 million) and a cash 

outflow for interest of €21.3 million 

(up from €15.3 million). Income taxes 

paid came to €37.6 million (up from 

€21.5 million), those refunded totaling 

€1.5 million (down from €2.6 million). 

The dividends received from associated 

affiliates and investees amounted to 

€0.7 million (up from €0.6 million). 

The net cash used in investing activities 

sank €9.6 million to €164.3 million. 

The cash outflow for acquisitions totaled 

€11.6 million and represented 

the purchase price of Kolbenschmidt 

Pierburg Shanghai Nonferrous Components 

Co Ltd., an investee carried at 

equity. The disposal of Pierburg Instruments 

Inc. produced a cash inflow of 

€6.0 million. When the stake in Pierburg 

Instruments GmbH was transferred, 

a €14.4 million loan was repaid. All 

acquisitions and disposals were settled 

in cash. 

Cash inflows and outflows from 

financing activities almost balanced. 

The remaining finance requirements 

are shown in the change in cash & 

cash equivalents. Cash & cash equivalents 

are identical in the cash flow 

statement and balance sheet. 

103

104 


Notes 

Comments on the segment reports Supplementary disclosures 

(34) Segment reports In accordance with the Kolbenschmidt 

Pierburg Group’s internal controlling 

organization, the Group breaks down 

into six divisions, viz. 

– Air Supply & Pumps 

– Pistons 

– Plain Bearings 

– Aluminum Technology 

– MotorEngineering 

– Motor Service 

as primary segments. 

The “Others/consolidation” column 

includes, apart from the Group’s 

parent (Kolbenschmidt Pierburg AG), 

further companies not allocable to any 

defined segment, as well as 

consolidation transactions. 

With economic effect as of December 

31, 2001, the MotorEngineering division 

was deconsolidated, which is 

why no balance sheet data is reported 

for 2001 for this segment. 

Responsibilities are clearly separated 

between the segments and Kolbenschmidt 

Pierburg AG, which performs 

the functions of a strategic management 

holding company. Both corporate 

governance and internal reporting 

have been structured accordingly. 

The companies belonging in each 

segment/division result from the list 

headed “Group of consolidated companies” 

on pages 110 and 111. In line 

with the Kolbenschmidt Pierburg 

Group’s shareholder value concept, 

segment assets and liabilities include 

the essential assets (excluding cash 

& cash equivalents) and liabilities (excluding 

pension accruals and financial 

debts). Capital employed (CE), which 

is used to generate EBIT, is deter- 

mined as the difference between 

segment assets and liabilities. The 

return on capital employed (ROCE) 

equals EBIT divided into average 

capital employed (average of the 

balances at December 31, 2000 and 

2001). Net financial debts reflect the 

sum total of financial debts (current 

and noncurrent) less cash & cash 

equivalents. 

The intersegment transfers principally 

indicate sales among divisions and 

are priced as if at arm’s length. 

EBITDA means earnings before interest, 

taxes, depreciation and amortization. 

Write-up of badwill has consistently 

been included in EBITDA. The EBIT 

margin equals EBIT divided into total 

segment sales. 

Capital expenditures and amortization/depreciation 

refer to tangible 

and intangible assets (including 

goodwill). 

(35) Contingent liabilities 

Contingent liabilities under bonds and 

guaranties total €2.6 million (up from 

€1.9 million), while none exist to joint 

venture creditors. 

Due to its hardly probable utilization, 

the provision for several accrued liabilities 

with a potential impact on 

future net incomes of €0.9 million 

(up from €0 million) had to be waived. 

(36) Other financial obligations As of December 31, 2001, the commitments 

to purchase tangible and intangible 

assets totaled €36.6 million (up 

from €31.4 million). 

(37) Subsequent events After closing the fiscal year, Kolbenschmidt 

Pierburg AG’s Executive Board 

decided to shut down part of the 

Ft. Wayne, Indiana, plant at the turn 

of 2002/03 in order for the US Pistons 

subsidiaries to return to sustained 

profitability as early as possible. 

(38) Stock appreciation rights 

(SARs) 

Since 1999, the Kolbenschmidt Pierburg 

Group has granted qualifying 

managerial staff SARs for them to 

participate in any stock appreciation. 

SAR programs are basically phantom 

stock option plans under which participants 

receive a cash compensation 

upon exercise that equals the difference 

between the stock price at exercise 

date and the base (reference) 

price. There are two different programs. 

For managerial staff, this base price 

has been fixed at the arithmetic mean 

of the closing prices quoted on the 10 

market days preceding plan commencement; 

for executive board members, 

the base price is determined at 

50 percent from the arithmetic mean 

of the closing prices of Kolbenschmidt 

Pierburg common stock and, at 25 

percent each, from the arithmetic 

Refunds of €0.3 million (up from €0 

million) are expected for contingent 

liabilities. 

One consequence is that this plant at 

Ft. Wayne will be reformatted for its 

use as mass production location only, 

the idled machines being largely employed 

elsewhere by other companies 

of the Group. 

mean of Rheinmetall preferred and 

common stock. Either SAR program 

has an overall term of 7 years: after 

a 3-year qualifying period, SARs may 

be exercised during defined time windows 

during the residual 4-year term. 

If not exercised during such period or 

when eligible staff leave Kolbenschmidt 

Pierburg for any reason other than retirement 

or death, the SARs become 

forfeited and lapse. SARs cannot be 

exercised unless and until the base 

price has been exceeded by 25 percent 

or more on the day of exercise. 

105

106 


Notes 


(39) Hedging policy and 

financial derivatives 

Key parameters of the SAR programs 

launched to date: 

SAR 

program 

Executive board 

Exercisable 

after 

Base 

price 

Number 

issued 

thereof 

forfeited 

after 

12-31-00 

thereof 

forfeited 

in 


SARs as of 

12-31-01 

1998 end-2001 18.09 70,000 0 30,000 40,000 

1999 end-2002 12.95 60,000 0 30,000 30,000 

2000 end-2003 9.24 60,000 0 30,000 30,000 

100,000 

Managerial staff 

1999 end-2002 15.07 247,500 5,000 7,500 235,000 

2000 end-2003 13.29 247,500 0 2,500 245,000 

At the end of 2001, Kolbenschmidt Pierburg 

AG’s Executive Board resolved to 

continue the SAR program. The SARs 

under the 2001 program will mostly be 

granted in Q1/2002, a minor portion 

having been promised within the year 

The operations and financial transactions 

of Kolbenschmidt Pierburg as 

an international group are exposed to 

financial risks, mainly from exchange 

rate volatility and interest rate changes. 

In accordance with the groupwide implemented 

risk management system 

of Kolbenschmidt Pierburg AG, such 

risks are not only identified, analyzed 

and measured but also managed 

through derivative financial instruments. 

No such derivatives may be acquired 

for speculation. Counterparties of Kolbenschmidt 

Pierburg Group companies 

for contracting financial derivatives are 

exclusively German and foreign banks 

of prime standing. By setting these 

high standards on counterparties, the 

risk of uncollectible debts is minimized. 

All transactions involving financial derivatives 

are subject to stringent monitoring, 

which is particularly ensured by 

the strict segregation of the contracting, 

settlement and control functions. 

480,000 

under review. Obligations under SARs 

are fair-valued pro rata temporis by 

using an option price model. An accrual 

of €0.3 million (up from €0 million) 

provides for the obligations incurred up 

to December 31, 2001. 

Currency risk 

Due to the international nature of the 

Kolbenschmidt Pierburg Group’s business, 

certain operational currency 

risks arise from the fluctuating parity 

of the euro to other currencies. Open 

positions exposed to a currency risk 

are principally hedged through financial 

derivatives, generally currency 

forwards or futures. 

Interest rate risk 


financing activities also use such 

funding tools as floating-rate facilities. 

Interest rate hedges such as caps/ 

floors/collars and interest rate swaps 

contain the risks emanating from 

market rate changes. 

These hedges are contracted centrally 

by Kolbenschmidt Pierburg AG. The 

interest rate swaps are embedded in 

a cash flow hedge with loan arrange- 

ments and, therefore, the differences 

from fair value remeasurement are 

recognized in equity only (reserves 

retained from earnings). 

As of December 31, 2001, the currency 

and interest rate hedges tabled below 

have existed, their notional volumes 

being shown non-netted and thus reflecting 

the total amounts of all indiv- 

idual contracts. Being marked to the 

market at December 31, the fair values 

of financial derivatives correspond to 

prices in arm’s length transactions. 

Currency hedges 

Notional volume Maturing after 

Fair market values 

€million 12-31-00 12-31-01 

(months) 12-31-00 12-31-01 

Currency forwards/futures 98.9 40.6 3 (0.9) (0.5) 

Interest rate hedges 

Notional volume Maturing after 

Fair market values 

€million 12-31-00 12-31-01 

(months) 12-31-00 12-31-01 

Swaps 15.6 15.2 42 (0.9) (1.5) 

Other derivatives 25.0 25.0 33-35 0.1 0 

(40) Transactions with 

related companies 

The subsidiaries consolidated by Kolbenschmidt 

Pierburg AG directly or 

indirectly maintain ordinary business 

relations with many nonconsolidated 

group companies, as well as associated 

affiliates and joint ventures. Any and 

all trade transactions conducted in the 

scope of ordinary day-to-day business 

with unconsolidated related companies 

conform with the arm’s length principle. 

In addition, Rheinmetall AG as Kolbenschmidt 

Pierburg AG’s majority stockholder 

as well as Rheinmetall service 

companies provide extensive services 

to companies of the Kolbenschmidt 

Pierburg Group, including (without 

being limited to) legal, tax and PR consultancy 

and support, data processing 

and insurance services. 

In the scope of the cash management 

system of majority stockholder Rheinmetall 

AG, the Kolbenschmidt Pierburg 

Group invests and/or borrows cash & 

cash equivalents within the Rheinmetall 

Group. All cash management 

business is transacted as if at arm’s 

length. 

107

108 


Notes 


Volume of services provided to/by 

related companies: 

€million Volume of 

services rendered 

2000 2001 2000 2001 

Rheinmetall AG 0.2 0.2 6.4 4.9 

Rheinmetall Service Gesellschaft mbH 0.0 0.0 0.0 1.2 

Rheinmetall Finanz GmbH 0.1 0.0 0.0 0.0 

Rheinmetall Informationssysteme GmbH 1.5 1.6 20.9 22.6 

Jagenberg London Ltd. 0.0 0.0 0.2 0.2 

(41) Supervisory and Executive Boards 

For their duties performed on behalf of 

the parent and its subsidiaries, Executive 

Board members received a total 

€1.9 million in the year under review 

for 2001 and €0.1 million for 2000; in 

fiscal 2000, they had received a total 

€2.5 million for 2000. For the accrued 

pension obligations to former Management 

or Executive Board members and 

their surviving dependants, a total 

€3.8 million has been provided (up 

from €3.5 million). Supervisory Board 

fees amounted to €0.2 million in fiscal 

2001 (virtually unchanged). 

Düsseldorf, March 21, 2002 


The Executive Board 

Volume of 

services utilized 

Dr. Kleinert 

Dr. Merten Liebler 

Dr. Engelskirchen Dr. Friedrich 

Auditor’s report and opinion 


Düsseldorf, Germany 

Independent group 

auditor’s report and opinion 

We have audited the consolidated financial 

statements prepared by Kolbenschmidt 

Pierburg AG and consisting 

of balance sheet, income statement, 

statement of changes in equity, 

cash flow statement and the notes 

thereto, for the fiscal year ended December 

31, 2001. The consolidated 

financial statements in accordance with 

the IASC’s International Accounting 

Standards (IAS) are the responsibility 

and assertions of the Company’s 

Executive Board. Our responsibility 

is, based on our audit, to express an 

opinion on whether the consolidated 

financial statements conform with IAS. 

We have conducted our audit of the 

consolidated financial statements in 

accordance with German auditing 

regulations and with due regard to 

generally accepted standards on the 

audit of financial statements as established 

by IDW, the Institute of Sworn 

Public Auditors in Germany. Those 

standards require that we plan and 

perform the audit to obtain reasonable 

assurance about whether the consolidated 

financial statements are free of 

any material misstatement. An audit 

includes examining, on a test basis, 

the evidence supporting the amounts 

and disclosures in the consolidated 

financial statements. The audit also 

involves assessing the accounting 

principles used, and significant estimates 

made, by the Executive Board, 

as well as evaluating the overall presentation 

of the consolidated financial 

statements. We believe that our audit 

provides a reasonable basis for our 

opinion. 

Based on our audit, it is our opinion 

that the consolidated financial statements, 

in accordance with the IAS, 

present a true and fair view of the 

Group’s net assets, financial position 

and results of operations as well as of 

its cash flows in the fiscal year under 

review. 

Our audit, which in accordance with 

German auditing regulations also 

covered the group management report 

as prepared by the Executive Board 

for the fiscal year ended December 31, 

2001, has not resulted in any objections 

or exceptions. It is our opinion 

that the group management report 

presents fairly both the Group’s overall 

position and the risks inherent in its 

future development. In addition, we 

confirm that the consolidated financial 

statements and group management 

report for the fiscal year ended 

December 31, 2001, satisfy the requirements 

for exempting the Company 

from preparing consolidated financial 

statements and a group management 

report in accordance with German law. 

Düsseldorf, March 22, 2002 

PwC Deutsche Revision 

Aktiengesellschaft 

Wirtschaftsprüfungsgesellschaft 

Bovensiepen Schwalm 

Wirtschaftsprüfer Wirtschaftsprüfer 

109

110 


Group of consolidated companies 

Group of consolidated companies as of December 31, 2001 

Kolbenschmidt Pierburg AG, Düsseldorf € 283,484,550 

Equity Interest held (%) 

(IAS) direct indirect 


Pierburg AG, Neuss 3) € 109,501,360 100 

Carbureibar S.A., Abadiano, Spain € 28,526,688 100 

Pierburg S.à r.l., Basse-Ham (Thionville), France € 21,100,554 100 

Pierburg Inc., Fountain Inn (Greenville), SC, USA US$ 4,677,391 100 

Pierburg do Brasil Ind. e Comércio Ltda., Nova Odessa, Brazil Rs 5,724,735 100 

Pierburg S.p.A., Lanciano, Italy € 9,342,155 100 

Société Mosellane de Services Holding S.A., Basse-Ham (Thionville), France € 3,321,034 100 

Société Mosellane de Services S.C.I., Basse-Ham (Thionville), France € 10,151,913 100 

Kolbenschmidt Pierburg Shanghai Nonferrous Components Co. Ltd., Shanghai, China 2) Yuan 153,872,081 50 

Calor Grundstücksverwaltungsgesellschaft mbH & Co KG, Grünwald € (2,011,045) 95 


Pierburg Instruments GmbH, Neuss 2) € 18,120,537 49 

Pistons 

KS Kolbenschmidt GmbH, Neckarsulm 3) € 172,742,684 100 

KS Pistões Ltda., Nova Odessa, Brazil RS 97,346,268 100 

KS International Investment Corp., Southfield, MI, USA US$ 159,168,982 100 

Karl Schmidt Unisia Inc., Marinette, WI, USA US$ 59,245,348 80 

KS Large Bore Pistons Inc., Marinette, WI, USA US$ 5,511,929 100 

Karl Schmidt Unisia, Zollner Division, Inc., Fort Wayne, IN, USA US$ (77,790,358) 80 

Zollner Canada Limited, Leamington, Canada Can$ 6,989,642 80 

KS France S.A., Paris, France € 18,600,757 100 

Société Mosellane de Pistons S.A., Basse-Ham (Thionville), France € 19,435,736 100 

Metal a.s., Ústí, Czech Republic Ck 405,060,697 87 

Kolbenschmidt Shanghai Piston Co., Ltd., Shanghai, China 2) ˘ 

Yuan 182,616,790 35 

Tiro Grundstücks-Verwaltungsgesellschaft mbH & Co KG, Grünwald € (331,382) 0 


KS Gleitlager GmbH, St. Leon-Rot 3) € 13,106,935 100 

KS Bearings Inc., Greensburg, USA US$ 326,148 100 

KS Bronzinas Ltda., Nova Odessa, Brazil Rs 7,542,972 100 


KS Aluminium-Technologie AG, Neckarsulm € 16,700,200 100 

Werkzeugbau Walldürn GmbH, Walldürn € 709,725 100 

KS Doehler-Jarvis GmbH, Neckarsulm € 986,174 65 

KS Aluminium Beteiligungs-GmbH, Neckarsulm € 3,571 100 

Motor Service 

MSI Motor Service International GmbH, Neckarsulm 3) Equity Interest held (%) 

(IAS) direct indirect 

€ 15,811,430 100 

G. Krull Gesellschaft mit beschränkter Haftung, Neckarsulm € 10,269 100 

MTS Motorenteile-Service GmbH, Neuenstadt € (450,857) 100 

KS Motorac S.A., Le Blanc Mesnil, France € 1,280,795 100 

KS Winston Ltd., Maidenhead, UK £ (171,840) 100 

Kolbenschmidt Istanbul Dis Ticaret ve Pazarlama A.S., Istanbul, Turkey € 1,983,772 51 

KS Produtos Automotivos Ltda., São Paulo, Brazil Rs 9,596,188 92 

KS Motor Servis CZ s.r.o., Trmice, Czech Republic Ck ˘ 

15,352,681 64 

Litos Grundstücks-Verwaltungsgesellschaft mbH & Co KG, Grünwald € (802,270) 0 

Other 

Kolbenschmidt Liegenschaftsverwaltung GmbH Berlin, Berlin € 7,273,979 100 

KS Grundstücksverwaltung Beteiligungs-GmbH, Neckarsulm € 28,989 100 

KS Grundstücksverwaltung GmbH & Co. KG, Neckarsulm € 10,702,325 100 

IDEKO Industrie Einkauf- und Koordination GmbH, Neckarsulm € 55,204 100 

KS Airbag AG, Neckarsulm € 46,736 100 

KS Auto- und Motorteile AG, Neckarsulm € 47,203 100 

Kolbenschmidt Pierburg K.K., Yokohama, Japan ¥ 6,669,726 100 

1) consolidated pro rata 

2) included at equity 

3) P&L transfer agreement with Kolbenschmidt Pierburg AG 

111

112 




Dipl.-Math. Klaus Eberhardt, 

Düsseldorf, 

Executive Board Chairman 

of Rheinmetall AG, Düsseldorf 

Chairman 

Dr. rer. soc. Rudolf Luz *) 

Weinsberg, 

Union secretary of the German 

Metalworkers Union (“IG Metall”), 

Heilbronn/Neckarsulm office, 

Neckarsulm 

Vice-Chairman 

Member of comparable German or foreign 

boards: 

- Aesculap AG & Co. KG, Tuttlingen 

advisory board member 

- Wirtschaftsfördergesellschaft 

Raum Heilbronn GmbH, Heilbronn 

supervisory board member 

Dipl.-Ing. Wigand Frhr. v. Salmuth 

Heidelberg, 

Chairman of the Stockholders’ 

Committee of 


Mannheim 



Member of further supervisory boards: 

- Rheinmetall DeTec AG, Ratingen 

chairman 

- STN ATLAS Elektronik GmbH, Bremen 

chairman 

- ADITRON AG, Düsseldorf (as from April 2, 2001) 

2nd Member of further supervisory boards: 

- Rheinmetall AG, Düsseldorf 

additional vice-chairman 

vice-chairman (as from June 8, 2001) 


- Jagenberg AG, Neuss 

vice-chairman 

chairman 

- Rheinmetall Elektronik AG, Düsseldorf 


chairman 

(as from March 20, 2001) 


chairman 

2 

- Pierburg AG, Neuss 

chairman 

Member of comparable German 

or foreign boards: 

- Preh Group, Bad Neustadt/Saale 

chairman of the shareholder committee 

- Shareholder Committee EMG, Hamburg 

chairman 

nd vice-chairman 

- ADITRON AG, Düsseldorf 

2nd vice-chairman 





- Mauser Waldeck AG, Waldeck 

vice-chairman 

- DeTeWe Beteiligungs AG, Berlin 

vice-chairman 

Dr. jur. Erich Coenen 


Executive Board member 





- Security Capital European Realty, Luxembourg 

- CargoLifter AG, Berlin 

Dr.-Ing. Ludwig Dammer *) 

Düsseldorf, 

Central Production Engineering, 




Rolf Dollmann *) 

Neckarsulm, 

Chairman of the General Works 

Council of KS Kolbenschmidt GmbH, 

Neckarsulm 

(up to March 31, 2002) 

Dipl. rer. pol. Werner Engelhardt 

Karlsruhe, 

Management Board Chairman of 


Mannheim (up to January 14, 2002) 


(from Sep. 10, 2001–Jan. 14, 2002) 



chairman 


chairman 


- STN Atlas Elektronik GmbH, Bremen 

- Pierburg AG, Neuss (up to Jan. 14, 2002) 

- BEA Holding AG, Düsseldorf 

chairman 

- DeTeWe - Deutsche Telephonwerke 

Beteiligungs AG, Berlin 

chairman 

- Francotyp-Postalia Beteiligungs AG, 

Birkenwerder 

chairman 

- Seeber Beteiligungs AG, Mannheim 

chairman 

- Gossen-Metrawatt GmbH, Nürnberg 

chairman 




- Seeber Srl., Leifers, Italy 

- Camille Bauer AG, Wohlen, Switzerland 

Georg Hadlaczki *) 

Mühlhausen, 

Member of the Works Council 

of the St. Leon-Rot plant of 

KS Gleitlager GmbH, St. Leon-Rot 

*) employee representative 

Dr. jur. Martin Hirsch 


Lawyer 

Law firm of Gleiss Lutz Hootz Hirsch, 

Frankfurt/Main 




- BARTEC Barlian Holding AG, Bad Mergentheim 

chairman 

- Bestfoods Deutschland GmbH & Co. OHG, 

Heilbronn 

Dr. Bernd M. Hönle 

Weisenheim a. S., 

Management Board member of 


Mannheim (as from June 12, 2001) 






- Jagenberg AG, Neuss (as from March 2001) 


(as from AGM 2001) 

- BEA Holding AG, Düsseldorf 

- DeTeWe - Deutsche Telephonwerke 

Beteiligungs AG, Berlin 

- Francotyp-Postalia Beteiligungs AG, 

Birkenwerder 

- PFEIFFER & MAY Grosshandel AG, 

Karlsruhe 

- Seeber Beteiligungs AG, Mannheim 

Erich Hüskes *) 

Nettetal, 

Member of the Works Council 

of the Nettetal plant of 


Dr. jur. Klaus Kessler 

Stuttgart, 

Lawyer 

Dr. Schelling & Partner GbR 

Deutsche Schutzvereinigung für 

Wertpapierbesitz e.V., Stuttgart 

Member of a further supervisory board: 

- Schleicher & Co. International AG, Markdorf 

Heinrich Kmett 

Fahrenbach/Robern 

Works Council Chairman of 

KS Kolbenschmidt GmbH, 

Neckarsulm (as from April 1, 2002) 

Member of a further supervisory board: 

- KS Kolbenschmidt GmbH, Neckarsulm 

Jürgen Lemmer 

Bad Homburg, 



(as from June 12, 2001) 


- Buderus AG, Wetzlar 

- Clearing Bank Hannover AG, Hannover 

chairman 

- GKN Automotive International GmbH, Lohmar 

chairman 

- Commerz International Capital Management 

GmbH, Frankfurt/Main 



- ARGOR-HERAEUS S.A., Mendrisio, Switzerland 

Director 

- Banque Marocaine du Commerce Extérieur, 

Casablanca, Morocco 

Director 

- Korea Exchange Bank, Seoul, Korea 

Non-Standing Director 

- Majan International Bank SAOC, Ruwi, 

Sultanate of Oman 

Director 

- Verlagsbeteiligungs- und Verwaltungsgesellschaft 

mbH, Frankfurt/Main 

advisory board member 

- ADIG-Investment Luxemburg S.A., Luxembourg, 

Luxembourg 

Director 

- Commerz (East Asia) Ltd., Hong Kong, China 

Chairman of the Board of Directors 

- Commerz Securities (Japan) Company Ltd., 

Hong Kong/Tokyo 

Director 

- Commerzbank Europe (Ireland) Unltd., Dublin, 

Ireland 


- Commerzbank International (Ireland Unltd., 

Dublin, Ireland 


- Commerzbank International S.A. (DISAL), 

Luxembourg, Luxembourg 

Director 

- Commerzbank (South East Asia) Ltd., 

Singapore 


Dr. rer. oec. Herbert Müller 

Bochum, 


Rheinmetall AG, Düsseldorf 








Dr. Siegfried Roth *) 

Rüsselsheim, 

Union Secretary at 

the General Secretariat of IG Metall, 

Frankfurt 


- Ford-Werke AG, Cologne 

- Ford Deutschland Holding GmbH, Cologne 

113

114 


Executive Board of Kolbenschmidt Pierburg AG 


Dr. rer. nat. Dipl.-Phys. 

Dieter G. Seipler 

Meerbusch 

Chairman (up to Oct. 31, 2001) 


Supervisory board memberships: 


- KS Gleitlager GmbH, St. Leon-Rot 

(chairman) 



- Karl Schmidt Unisia Inc., Marinette, USA 

(chairman) 

- Pierburg S.p.A., Lanciano, Italy 

- Carbureibar S.A., Abadiano, Spain 


Gottmadingen 

Chairman (as from Nov. 1, 2001) 





(chairman) 




(Chairman) 

- Pierburg S.p.A., Lanciano, Italy 

- Carbureibar S.A., Abadiano, Spain 

Dr.-Ing. W. Hans Engelskirchen 

Kaarst 

Production 




- KS Aluminium-Technologie AG, Neckarsulm 

(chairman) 

Dr. jur. Jörg-Martin Friedrich 

Ludwigsburg 

Human Resources 






- Kolbenschmidt Istanbul Dis Ticaret 

ve Pazarlama A.S., 

Istanbul, Turkey 

- KS International Investment Corp., 

Southfield, USA 

- KS France S.A., Paris, France 

Dipl.-Kfm. Heinz-Ludger Heuberg 

Wülfrath 

Finance/Controlling 

(up to Feb. 28, 2002) 





Dipl.-Betriebswirt Georg Liebler 

Düsseldorf 

Marketing 



(chairman) 


- Société Mosellane de Mécanique S.A., 

Thionville, France 




- Carbureibar S. A., Abadiano, Spain 

- Pierburg Inc., Fountain Inn (Greenville), USA 

- Hirschmann Ges.m.b.H., Rankweil, Austria 

- Märkisches Werk Halver GmbH, Halver 

advisory board chairman 

- Preh Group, Bad Neustadt/Saale 

Member of the shareholder committee 

Dr. Peter P. Merten 

Herrsching 

Finance/Controlling 

(as from Mar. 1, 2002) 





115

Annual Report 2001 - KSPG AG

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