Consolidated Financial Statements - L. Possehl & Co. mbH

Elastomer-Processing: Pleasing business development
The Elastomer-Processing business division (Harburg-Freudenberger
Group) demonstrated very positive business development during
the reporting period. Continued investment activity within the tire
industry resulted in an increase in both incoming orders and sales.
The market recovery stretched across regional producers as well
as to globally operating tire manufacturers. By working the market
successfully, this business division was able to further cement existing
customer relationships and successfully expand the base of customers
during the past year.
Signifi cant sales growth was achieved in the natural rubber technology
division due to increased demand, particularly for heating presses. But
demand in the rubber compound technology area was also satisfactory.
The Harburg-Freudenberger Group achieved sales that were not quite
as strong in the tire lay-up machines and in the extrusion division.
The edible oil division also achieved very positive development in order
backlog. Production expansion in the fi eld of bio-diesel, among other
things, reaped profi ts for this division.
Sales from services also increased signifi cantly, parallel to the increased
sales from mechanical systems.
In addition to Harburg-Freudenberger Maschinenbau GmbH and its two
domestic production sites, the subsidiary in Croatia also achieved a noticeable
increase in sales. Due to the strong business expansion in the
fi eld of heating presses, the number of people employed was able to be
increased. The production and sales company in the USA also achieved
positive results during the period under review. A higher degree of independent
operation together with an increase in trading activities for the
German parent company was a decisive factor in this case.
Two new sales companies were established in France and Russia during
the period under review. Business is expected to expand over the next
several years.
The positive development of this business division will presumably continue
in 2006. The backorders, which continue to be at a high level, indicate
that sales will be at the previous years‘ level. However the market
opportunities arising from new and existing business relations are seen
alongside intense quality and pricing competition in all relevant product
areas. The research and development measures taken hold of in the
past as well as the excellent market positioning of products and service
of the Harburg-Freudenberger Group lead us to expect a positive, but
overall slowly evolving corporate development in the future.
Special-Purpose Construction: Revenue from truck
tolls will lend further impetus to the successful
business development
The long-standing building crisis that started in the mid-1990s continued
again into 2005. It has likely to have bottomed out during this year,
however. The truck toll introduced in 2005 will have a positive effect on
the business of the current year. The fi rst public funds for expanding
traffi c routes have already begun to fl ow in. During the next several
years, a total of 51 % of the toll income is expected to fl ow into this division,
thus for example into a plan for countering traffi c jams as well as
into an expansion program for various sections of the autobahn.
Our Spezialbau Group focuses its activities on the fi elds of jointing technology
and coating work both for the new construction of streets and
for the preservation, repair and safeguarding of traffi c routes. Based on
the positive framework conditions, there is a promising market volume
for these business activities in the future.
Possehl Spezialbau was able to become successfully established on
the market in 2005. Sales increased by almost 6 % compared to the
previous year. The major reasons for this success were a broad range of
offerings, internal product development, good machinery and a broad
presence throughout Germany and Europe.
In addition to the management company in Wiesbaden, the success
within the subsidiaries also contributed to the good performance – even
though the diffi cult situation with the Spanish company burdened the
fi nancial statements of 2005 once again. All of the other subsidiaries
clearly exceeded their planned objectives. A number of different large
projects for the coating of runways, which help increase fl ight safety in
airports at home and abroad, were able to be successfully completed.
Another important factor for the business success of the business
division is the fact that the parent companies and subsidiaries utilize
combined synergies in their collaboration.
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