PDF, 3.2 MB - Pfleiderer AG

In closing down the Rheda-Wiedenbrück plant, we have made an active contribution to the
urgently needed consolidation of the engineered wood market in Germany. While this has been
a painful process for those employees affected, it has led to a sustained reduction in production
over-capacity and a marked improvement in prices. Following years of unsatisfactory business in
this market, supply and demand for raw particleboard in Germany have now reached a state of
equilibrium. When taking on and fulfilling orders, Pfleiderer Engineered Wood can now look forward
to achieving adequate value-added.
Pfleiderer Engineered Wood Poland again had a successful year, making an important contribution
to the positive results of the Pfleiderer Group. By increasing our production capacity at our two
sites at Grajewo and Wieruszów, we have strengthened our leading competitive position in what
remains a dynamic market. And towards the end of 2005, our new engineered wood production
plant in Novgorod in Russia starts production. This will give us access to a new market for which
the groundwork has been well laid and which promises to offer attractive growth and development
opportunities over the long term.
Major International Successes for Pfleiderer track systems
Pfleiderer track systems posted record sales in fiscal 2004, as well as winning the biggest single
order in its history. This came from Turkey, to whom we will be supplying around 680,000 sleepers.
As a result, our plants in Hungary and Romania are fully booked up for the next 15 months.
This impressive international success underlines the tradition of competence that Pfleiderer track
systems has built up and expanded as a supplier of sleepers for the rail traffic sector. A holistic
system supplier, Pfleiderer track system’s monolithic track technology for high-speed links has
proved especially successful in Europe and Asia. Now, new strategic alliances are preparing the
way for market entry in India, China and South Korea.
On the Road to Further Growth and Increased Earnings Power
The pleasing progress in operative growth and performance achieved by our enterprise is clearly
borne out by all the financial and operational figures reported in our financial statements for 2004.
Group sales increased by around 6 percent, while the share of foreign business also grew and
now stands at 53.8 percent. That shows that we are on the right track. The improved EBITDA
margin at 10.4 percent and the increased sales margin at 3.5 percent are certainly welcome
figures – although we only see them as an “interim” stage on the road to even greater earnings
power and value added. This we intend to achieve through three strategic routes:
1. by increasing profitability in Germany,
2. exploiting growth potential in Eastern Europe and Russia,
3. entering new markets.
In Germany, market conditions remain stagnant, with no apparent potential for qualitative growth
in the near future. For that reason, continuing to optimize the way we operate while significantly
improving cost structures to achieve higher value added must remain our first priority. One
example of how we can achieve this is the new PHW 2006 project, where employees are actively
participating in a large number of measures being introduced on our sites.
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INTRODUCTION BY BOARD OF MANAGEMENT