A successful year for the Greiner Group Following the splitting of Greiner Holding AG in 2001, the development of Greiner Bio-One International AG and Greiner Holding AG is considered separately, Accordingly, this consolidated annual report contains remarks on both holdings within the framework of the Greiner Group, which despite a difficult economic situation, enjoyed a successful year in 2002.
FloodingIn August 2002, our location in Kremsmünster was hit by some of the severest flooding ever seen in Austria. 90% of the company premises were affected and partially laid waste. As a result of the magnificent efforts of our employees, innumerable voluntary helpers and partner companies, the most important plants were back in operation after only a week. The financial aspects of the standstill in production and damage to machinery were fully covered by insurance. The devastation to homes incurred by our employees was partly alleviated by donations from the company.
Economic analysis / Business situationIn Europe, the 2002 financial year commenced with the introduction of the euro as official tender. Due to long-term preparations in the Group Divisions, this transition posed no problems.
The subsequent discussion concerning the possible inflationary effects of the euro led to a fall in retail purchasing, which was also tangible in Group Divisions such as Eurofoam. During 2002, there were also dramatic scenes in the international stock exchanges. The negative atmosphere derived from the bursting of various bubbles and what were partially, excessive price corrections also influenced the economic situation, particularly as there was a fundamental change in the business policy of the major banks. Their restrained financial policy led to a further increase in economic tension, particularly in Germany.
Following the success of its military operations in Afghanistan, the US government extended its "war on terror" and contrary to the wishes of the UN Security Council, commenced preparations for action against Iraq.
As a result of the ensuing crisis, the US dollar lost ground to the euro and the oil price rose sharply. The current influence of the Iraq crisis on the European economy can only be regarded as thoroughly negative.
However, as mentioned in previous reports, the Greiner Group’s large divisions are only partially dependent upon the economic cycle. Price rises among the producers of raw materials were only possible in isolated cases. Moreover, due to the economic and political climate at the end of 2001, the Group companies decided to reduce their investment budgets in 2002. As a consequence, for the Greiner Group 2002 again proved to be a successful year.
Strong growth despite economic difficultiesDespite problematic economic conditions, during the period under review, consolidated Greiner Group sales rose by 5% from EUR 600 m to EUR 630 m.
Greiner Holding AG sales developmentSales in the Greiner Holding AG during 2002 increased by only 2% from EUR 467 m to EUR 477 m. Investments in the past year were correspondingly lower.There were falls in sales in the Purtec (-12.9%), Extrusion (-5.8%) und Eurofoam (-1.2%) Divisions. All other Group Divisions achieved solid sales growth, particularly Greiner Perfoam with +18% and Greiner Packaging with + 7%.
Greiner Bio-One International AG sales developmentGreiner Bio-One International AG continued to show strong growth and raised its sales by 16% from EUR 133 m to EUR 154 m. Bioscience sales were up by +8% and Preanalytics sales by +25%.
Sales by regionThe geographical distribution of sales changed little in the past year. 50% of products continued to be produced in Austria, 21% in Germany and 17% in the CEE countries. Shifts of only one percentage point occurred.
New locations in East and WestDuring 2002, the Greiner Group expanded its international presence with 10 additional locations. The Greiner Group now has 95 locations, 77 production and 18 sales units, in 22 countries.
InvestmentsIn 2002, the Greiner Group invested considerably less than in the preceding year.Around half of investment took place in Austria and a quarter of all investments were made by Greiner Bio-One International AG. The largest investments in the Greiner Holding occurred in the Greiner Packaging Division. A slightly higher level of investment is planned for 2003.
Human resources / Education and further trainingThe Greiner Group work force increased by around 3%. The most significant rises took place at Greiner Extrusionstechnik, followed by Greiner Bio-One and Greiner Perfoam. This growth was entirely the result of recruitment at existing locations.
In national terms, 35% of the work force was employed in Austria, which represented growth of around 1.5%. 35% of personnel were employed in the CEE states and 17% in Germany. The largest additions to the work force took place outside these areas. The number of employees in other countries rose by 99 to 13%. This was largely the result of further expansion at the Greiner Bio-One subsidiary in the USA and an increase in the work force at Sandherr in Switzerland.
Employee education and further training remained a priority in 2002. The Greiner Academy launched in the autumn in 2000, which offers an MBA-like training programme for all first and second level managers, successfully completed its second year. 37 participants attended the course programme held in German. Two courses are again planned for 2003 with 18 and 19 participants, to be held in German and English respectively.
In 2002, the Greiner Group employed a total of 127 apprentices, 33 of whom commenced their studies in September 2002. 13 apprentices concluded their training in 2002, 7 passing with honours. During 2003, the Greiner Industrial Training (GIT) centre in Kremsmünster will be modernised and expanded. The competent teachers in the apprentice and further training areas are available to both Group and external companies.
OutlookThe 2003 budget envisages overall growth of approximately 8% for the Greiner Group. This expansion will be distributed among all Group Divisions with the exception of Eurofoam and Greiner Extrusion Technology. Budgetary planning in these two areas took the economic developments in the upholstered furniture and construction branches into account.
Risk assessment for 2003A recovery in the global economy will depend on the outcome of the Iraq war and its consequences. As reported, this will also have an effect on raw material prices. The rise in interest rates linked to an economic upturn, in combination with new rules relating to equity stipulations (Basel II) may again lead to an increase in the cost of loans. At a political level, during 2003 the USA can again be expected to go it alone in its global battle with terror. This could once more have a negative, psychological influence on the world’s economy.
As a result of the innovative orientation of the majority of the Greiner Group’s Divisions, should the world economy develop in a normal manner then no major dangers to the attainment of the budgeted targets is apparent.
Thanks to our staffIn this connection, the Board of Directors would like to express its thanks to the entire work force for its commitment, know-how and motivation capacity with regard to the achievement of established objectives.
Dkfm. Dr. Peter Greiner
Dr. Axel Greiner
Boris Greiner, MBA
Kremsmünster, May 2003
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