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management report post-closure report/outlook pfleiderer ag 65
Future Results
Sales and earnings growth in fiscal 2003 depends on growth within the Group’s Business
Centers. If the markets in which we operate and the policies that affect them remain stable,
sales and earnings growth in the Pfleiderer Group will remain stable. Nevertheless, developments
in the business centers could move in other directions. In view of the fact that the German
economy is only expected to grow slightly in the coming year, Pfleiderer expects the main
momentum for growth to come from abroad, particularly from eastern Europe. In this respect,
it is of fundamental importance to strengthen the market leadership of our wood-based activities
in Poland and gain new customers and market shares.
The Wood-Based Panels Business Center will continue to face difficult operating conditions.
Sales and earnings expectations are therefore very cautious for the German market.
For that reason, we are making big efforts to expand the international share of sales from its
present level of 52.5 percent. In order to obtain greater independence from the German
market, we are focusing on exports to European countries. This particularly applies to markets
where Pfleiderer has already been introduced, such as the U.K. or France, but where we
still have a low market share. These are areas where more growth can be obtained without
the market volume itself having to increase. Activities by our Polish affiliates have developed
pleasingly in the past. Exports to the Russian markets are an important factor here. This is
an area we intend to build on in 2003 and we expect non-German business with wood-based
panels to provide stable sales and earnings results.
Due to planning certainty among customers in the Track Systems Business Unit, business
here is expected to continue to grow in 2003. On the other hand, sales and results in the
Telecommunication Business Unit are expected to be modest in 2003, due to current weak-
ness in the markets. However, this should be compensated by the Business Units Poles & Towers
and Track Systems. Growth is still being generated from systems business with our Solid Track
Systems. Apart from the “HSL-Zuid” project, other international projects in the planning stage
are expected to produce orders in the coming year. Pfleiderer can count on its competence in
project engineering in this field, especially when it comes to constructing high-speed links.
In Germany, Pfleiderer is already market leader with its existing product portfolio of concrete,
steel and fiberglass masts. However, there are great opportunities elsewhere in Europe
and in the USA for these products. Our concentrated strategy of internationalization in Europe
and the construction of production capacity in the USA will enable us to expand business in
this segment over the next few years while maintaining our margins. Emphasis is being placed
on building on cross-selling potential among sales structures, at the same time enabling us to
gain additional markets. Further training given to our employees, as well as the opening of foreign
branches, means that we are aiming for higher rates of growth than the market average.