G ro u p A n n u al R e p o rt 2 0 11
B S H B O S C H U N D S I E M E N S H A U S G E R ÄT E G M B H
Group Annual Report 2011
Total Commitment. Top Performance.
B S H B O S C H U N D S IE M E N S H A U S G E R Ä T E G M B H in EUR million 2011 2010 Sales revenue 9,654 9,073 Year-to-year change in % 6 8
International sales revenue proportion (%) 79 79
EBITDA* 943 1,052
EBIT* 647 754
Profit before tax 538 691
Consolidated net profit 373 465
Capital expenditure on fixed assets** 453 403
As percentage of sales revenue 4.7 4.4
Depreciation, amortization and impairment losses on fixed assets** 296 298
As percentage of capital investment 65 74
Balance sheet total 7,435 6,901
Equity 2,409 2,408
As percentage of total equity and liabilities 32 35
* 2010 values after adjusting the reporting of interest expenditure and income from plan assets from pension, semi-retirement and long service bonus obligations. See the Notes to the Consolidated Financial Statements for further explanations.
** Excluding goodwill.
| Key Figures
BSH Bosch und Siemens Hausgeräte GmbH (Group)
in EUR million 2011 2010 2009 2008 2007 2006 2005
Sales revenue 9,654 9,073 8,405 8,758 8,818 8,308 7,340
Year-to-year change in % 6 8 – 4 – 1 6 13 7
International sales revenue proportion (%) 79 79 78 80 81 78 78
Employees 45.6 42.8 39.6 40.3 39.0 38.0 35.5
(in thousands at 01.01. of the following year)
Personnel expenses* 1,893 1,807 1,688 1,646 1,663 1,480 1,411
Capital expenditure on fixed assets** 453 403 294 382 378 358 333
As percentage of sales revenue 4.7 4.4 3.5 4.4 4.3 4.3 4.5
Depreciation, amortization and
impairment losses on fixed assets** 296 298 320 299 257 281 223
As percentage of capital expenditure 65 74 109 78 68 78 67
Balance sheet total 7,435 6,901 6,443 6,173 6,276 5,950 5,325
Fixed assets and non-current financial
assets 2,655 2,688 2,496 2,349 2,374 2,259 1,957
Inventories 1,305 1,226 1,032 1,074 1,103 1,019 828
Trade receivables from sales of goods and services and other
current assets 2,691 2,199 1,954 2,031 2,053 2,052 1,655
Equity 2,409 2,408 2,535 2,396 2,372 2,057 1,859
As percentage of total equity and liabilities 32 35 39 39 38 35 35
Provisions 1,760 1,857 1,702 1,593 1,673 1,709 1,581
EBITDA* 943 1,052 905 867 949 868 768
EBIT* 647 754 585 568 692 587 542
Profit before tax 538 691 517 510 637 542 500
Consolidated net profit 373 465 324 311 411 372 386
* 2005 – 2010 values after adjusting the reporting of interest expense and income from plan assets from pension, semi-retirement and long service bonus obligations. See the Notes to the Consolidated Financial Statements for further explanations.
** Excluding goodwill.
G ro u p A n n u al R e p o rt 2 0 11
B S H B O S C H U N D S I E M E N S H A U S G E R ÄT E G M B H
Group Annual Report 2011
Total Commitment. Top Performance.
B S H B O S C H U N D S IE M E N S H A U S G E R Ä T E G M B H in EUR million 2011 2010 Sales revenue 9,654 9,073 Year-to-year change in % 6 8
International sales revenue proportion (%) 79 79
EBITDA* 943 1,052
EBIT* 647 754
Profit before tax 538 691
Consolidated net profit 373 465
Capital expenditure on fixed assets** 453 403
As percentage of sales revenue 4.7 4.4
Depreciation, amortization and impairment losses on fixed assets** 296 298 As percentage of capital investment 65 74
Balance sheet total 7,435 6,901
Equity 2,409 2,408
As percentage of total equity and liabilities 32 35
* 2010 values after adjusting the reporting of interest expenditure and income from plan assets from pension, semi-retirement and long service bonus obligations. See the Notes to the Consolidated Financial Statements for further explanations.
** Excluding goodwill.
BSH Bosch und Siemens Hausgeräte GmbH (Group)
in EUR million 2011 2010 2009 2008 2007 2006 2005
Sales revenue 9,654 9,073 8,405 8,758 8,818 8,308 7,340
Year-to-year change in % 6 8 – 4 – 1 6 13 7 International sales revenue proportion (%) 79 79 78 80 81 78 78
Employees 45.6 42.8 39.6 40.3 39.0 38.0 35.5
(in thousands at 01.01. of the following year)
Personnel expenses* 1,893 1,807 1,688 1,646 1,663 1,480 1,411
Capital expenditure on fixed assets** 453 403 294 382 378 358 333
As percentage of sales revenue 4.7 4.4 3.5 4.4 4.3 4.3 4.5
Depreciation, amortization and
impairment losses on fixed assets** 296 298 320 299 257 281 223
As percentage of capital expenditure 65 74 109 78 68 78 67
Balance sheet total 7,435 6,901 6,443 6,173 6,276 5,950 5,325
Fixed assets and non-current financial
assets 2,655 2,688 2,496 2,349 2,374 2,259 1,957
Inventories 1,305 1,226 1,032 1,074 1,103 1,019 828
Trade receivables from sales of goods and services and other
current assets 2,691 2,199 1,954 2,031 2,053 2,052 1,655
Equity 2,409 2,408 2,535 2,396 2,372 2,057 1,859
As percentage of total equity and liabilities 32 35 39 39 38 35 35
Provisions 1,760 1,857 1,702 1,593 1,673 1,709 1,581
EBITDA* 943 1,052 905 867 949 868 768
EBIT* 647 754 585 568 692 587 542
Profit before tax 538 691 517 510 637 542 500
Consolidated net profit 373 465 324 311 411 372 386
* 2005 – 2010 values after adjusting the reporting of interest expense and income from plan assets from pension, semi-retirement and long service bonus obligations. See the Notes to the Consolidated Financial Statements for further explanations.
Das Vollflächeninduktions-Kochfeld CX 480.
01 Mehr Flexibilität und Freizügigkeit. Mit dem Vollflächeninduktions-Kochfeld CX 480 von Gaggenau ist erstmals die gesamte Fläche als Kochzone nutzbar. Das Kochgeschirr wird automatisch erkannt und dort erhitzt, wo es gerade steht.
TM TM • Johannesburg • Jeddah• Dubai • Tel Aviv • St. Petersburg Çerkezköy •Istanbul •Kiev •Moscow •Helsinki •Stockholm • Lisbon Casablanca • Buenos Aires • Milton Keynes • Oslo •
| BSH Worldwide
Factories: Cooking Refrigeration/Freezing Dishwashing Washing/Drying Consumer Products Motors, pumps Group Headquarters • Subsidiaries Paris • • Amsterdam Brussels • Luxembourg • Milan • Zaragoza • Lipsheim Giengen •Ballerup Geroldswil • •Vienna •Prague •Regensburg Munich • Nazarje • Michalovce • Athens Nauen Berlin La Cartuja Montañana Esquiroz Bad Neustadt Bretten Dillingen Traunreut • Budapest • Bucharest •Warsaw Lód´z Kabinburi Wuxi Chuzhou • Mumbai • Bangkok • Hong Kong • Seoul • Kuala Lumpur • Singapore Melbourne • Auckland • • Nanjing Irvine • • Toronto • Mexico City New Bern La Follette • Montevideo • São Paulo Lima Santander Estella •Huarte Vitoria BSH Bosch und Siemens Hausgeräte GmbH Main Brands
Bosch and Siemens: these two brands are known worldwide and have a long history, underpinning our international success. Bosch stands for reliable, durable prod-ucts; Siemens stands for innova-tion, leading-edge technology and quality design.
Special Brands
The BSH brand portfolio includes the special brands Gaggenau and Neff, Thermador, Constructa, Viva, Ufesa and Junker. These ensure we meet the wide-ranging requirements of our various cus-tomers.
Regional Brands
Regional brands are the market leaders which garner respect in their countries of origin. Brands with which our regional consumers particularly identify include Balay in Spain, Pitsos in Greece, Profilo in Turkey and Coldex in Peru. Such brands help strengthen BSH’s position in these countries. BSH Bosch und Siemens Hausgeräte GmbH
was founded in 1967 as a joint venture be-tween Robert Bosch GmbH, Stuttgart, and Sie-mens AG, Berlin/Munich. The company is now the third-largest home appliances manufac-turer worldwide, and number one in Europe, with sales of EUR 9.654 billion in 2011. The Group’s product portfolio spans the entire spectrum of modern domestic ap-pliances. It ranges from stoves, ovens and extractor hoods to dishwashers, washers and dryers, fridges and freezers to small appli-ances (Consumer Products) such as vacuum cleaners, coffee machines, kettles, irons and hairdryers.
On December 31, 2011 the Munich-based group had 42 factories across Europe, Asia and North America as well as a global net-work of sales and customer service outlets in almost 50 countries. BSH employed over
45,600 people in 2011, with over 70 percent of these in Europe.
In spring 2012, BSH was ranked as a top employer in Germany by the CRF Institute in the sixth consecutive year; the company also achieved this top accolade for the first time in Poland and the Netherlands. BSH was awarded first place in the innovation manage-ment category of the top employer ranking for engineers.
Environmental and climate protection have always been firmly anchored in the Group‘s corporate strategy. BSH’s energy- and water-saving household appliances contribute to the efficient use of resources. We have listed our most efficient appliances in a Super Ef-ficiency Portfolio since 2009. BSH has also set itself a 2015 target to reduce resource use in manufacturing and administration by 25 percent.
Das Vollflächeninduktions-Kochfeld CX 480.
01 Mehr Flexibilität und Freizügigkeit. Mit dem Vollflächeninduktions-Kochfeld CX 480 von Gaggenau ist erstmals die gesamte Fläche als Kochzone nutzbar. Das Kochgeschirr wird automatisch erkannt und dort erhitzt, wo es gerade steht.
• Johannesburg • Jeddah• Dubai • Tel Aviv • St. Petersburg Çerkezköy •Istanbul •Kiev •Moscow •Helsinki •Stockholm • Lisbon Casablanca • Buenos Aires • Milton Keynes • Oslo •
| BSH Worldwide
Factories: Cooking Refrigeration/Freezing Dishwashing Washing/Drying Consumer Products Motors, pumps Group Headquarters • Subsidiaries Paris • • Amsterdam Brussels • Luxembourg • Milan • Zaragoza • Lipsheim Giengen •Ballerup Geroldswil • •Vienna •Prague •Regensburg Munich • Nazarje • Michalovce • Athens Nauen Berlin La Cartuja Montañana Esquiroz Bad Neustadt Bretten Dillingen Traunreut • Budapest • Bucharest •Warsaw Lód´z Kabinburi Wuxi Chuzhou • Mumbai • Bangkok • Hong Kong • Seoul • Kuala Lumpur • Singapore Melbourne • Auckland • • Nanjing Irvine • • Toronto • Mexico City New Bern La Follette • Montevideo • São Paulo Lima Santander Estella •Huarte Vitoria brands are known worldwide and have a long history, underpinning our international success. Bosch stands for reliable, durable prod-ucts; Siemens stands for innova-tion, leading-edge technology and quality design.
the special brands Gaggenau and Neff, Thermador, Constructa, Viva, Ufesa and Junker. These ensure we meet the wide-ranging requirements of our various cus-tomers.
leaders which garner respect in their countries of origin. Brands with which our regional consumers particularly identify include Balay in Spain, Pitsos in Greece, Profilo in Turkey and Coldex in Peru. Such brands help strengthen BSH’s position in these countries. was founded in 1967 as a joint venture
be-tween Robert Bosch GmbH, Stuttgart, and Sie-mens AG, Berlin/Munich. The company is now the third-largest home appliances manufac-turer worldwide, and number one in Europe, with sales of EUR 9.654 billion in 2011. The Group’s product portfolio spans the entire spectrum of modern domestic ap-pliances. It ranges from stoves, ovens and extractor hoods to dishwashers, washers and dryers, fridges and freezers to small appli-ances (Consumer Products) such as vacuum cleaners, coffee machines, kettles, irons and hairdryers.
On December 31, 2011 the Munich-based group had 42 factories across Europe, Asia and North America as well as a global net-work of sales and customer service outlets in almost 50 countries. BSH employed over
of these in Europe.
In spring 2012, BSH was ranked as a top employer in Germany by the CRF Institute in the sixth consecutive year; the company also achieved this top accolade for the first time in Poland and the Netherlands. BSH was awarded first place in the innovation manage-ment category of the top employer ranking for engineers.
Environmental and climate protection have always been firmly anchored in the Group‘s corporate strategy. BSH’s energy- and water-saving household appliances contribute to the efficient use of resources. We have listed our most efficient appliances in a Super Ef-ficiency Portfolio since 2009. BSH has also set itself a 2015 target to reduce resource use in manufacturing and administration by 25 percent.
TM TM
In what was a difficult financial year, BSH once again managed to exceed its
revenue expectations and generate positive earnings. This confirms that we
have embarked on the right path. Thanks to the development of attractive
home appliances that deliver top performance with low energy consumption,
we can stay on track even in turbulent times.
| B S H S T a y S T H e c o u r S e 118
This report was printed climate neutrally on FSc-certified Hello Silk paper.
right of amendment reserved, errors excepted. Printed in Germany. May 2012.
© BSH Bosch und Siemens Hausgeräte GmbH.
reproduction and use in all media, whether complete or in part, subject to approval.
BSH Bosch und Siemens Hausgeräte GmbH
carl-Wery-Strasse 34, 81739 Munich, Germany Tel. +49 89 4590-01 Fax +49 89 4590-2347 www.bsh-group.com Media contact: corporate communications Tel. +49 89 4590-2809 Fax +49 89 4590-2128 [email protected]
The annual report and the following further publications are available in German and english:
• Sustainability Report 2011 • Our Super Efficiency Portfolio 2011 • BSH at a Glance 2012
Total Commitment. Top Performance. With Responsibility.
excellent, committed employees are what characterizes BSH Bosch und Siemens Hausgeräte GmbH, today more than ever. They are the power behind the strong performance of our products and solutions and therefore form the foundation for our economic success. It is one of our fundamental principles, which we have internalized, that every - thing we do must demonstrate our commitment to society and the environment. our annual and Sustainability reports will show how economic success and responsible action are mutually interdependent. Both reports are available as pdf versions on the Internet at:
www.bsh-group.com
|
Independent Auditors’ Report
We have audited the consolidated financial statements prepared by BSH Bosch und Siemens Hausgeräte GmbH, Munich, comprising the balance sheet, the income statement and state-ment of comprehensive income, the cash flow statestate-ment, the statestate-ment of changes in equity and the notes to the consolidated financial statements, and management report for the busi-ness year from January 1 to December 31, 2011. The preparation of the consolidated financial statements and group management report according to the International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), and the additional requirements of German commercial law pursuant to § 315a (1) HGB (German Commercial Code) are the res-ponsibility of the parent company’s management. Our resres-ponsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position, and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence sup-porting the disclosures in the consolidated financial statements and the group management report
are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the de-termination of entities to be included in consolidation, the accounting and consolidation prin-ciples used, and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements of BSH Bosch und Siemens Hausgeräte GmbH, Munich, comply with IFRS, as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a (1) HGB and give a true and fair view of the net assets, financial position and results of operations of the group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the group’s posi-tion and suitably presents the opportunities and risks of future development.
Munich, April 5, 2012
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
(Prof. Dr. Plendl) (Prosig)
Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)
| Contents
4 | Foreword
8 | The Art of Coffee
At the BSH plant in Traunreut, Bavaria, Andreas Liebl and his team busy themselves perfecting the technology to create expert espresso, with an optimum crema on top. With the passion of an Italian barista, the team strive to get the best aroma from their beans.
12 | Cultural Program
At the BSH Technology Center for Laundry Care in Berlin, Kathrin Redlin creates washing cycles for a globalized world. Because laundry habits vary from culture to culture.
16 | Follow the Trail
At BSH in Bad Neustadt, Bavaria, Roland Illig and his team are on the trail of lost energy in the Floor Care Development Center. Their detecti-ve work has uncodetecti-vered a particularly efficient vacuum cleaner. 20 | Globetrotters
Across China by freight train: Christoph Rohr knows the stresses BSH appliances must endure. He uses his understanding to develop the ideal packaging.
24 | A Source of Inspiration
At the BSH site in Hoofddorp, near Amsterdam, Ronald Wassenaar re-volutionizes the kitchen-planning process. He and his team of advisors cater to customers’ individual wishes so they find the appliances that best fit their desires. Afterwards they plan the rest of the kitchen.
3 | C O N T E N T S
28 | Essay
Energy efficiency is the key to implementing the energy transition in Germany.
By Dr. Kurt-Ludwig Gutberlet,
Chairman of the Board of Management 33 | Supervisory Board Report
35 | Board of Management, Supervisory Board
36 | Group Management Report
37 Development of Business
53 Net Assets, Financial Position and Results of Operations
59 Management of Opportunities and Risks
63 Outlook
65 | Consolidated Financial Statements
66 Consolidated Statement of Income 67 Consolidated Statement of Comprehensive Income 68 Consolidated Balance Sheet
70 Consolidated Statement of Cash Flows 71 Consolidated Statement of Changes in Shareholders’ Equity
72 | Notes to the Consolidated Financial Statements
72 Accounting Policies
82 Notes to the Consolidated Statement of Income
87 Notes to the Balance Sheet 112 Consolidated Statement of
Changes in Fixed Assets 116 | Shareholdings of BSH Bosch
und Siemens Hausgeräte GmbH
117 | Independent Auditors’ Report
118 | Imprint
| BSH Worldwide
| Summary of Past Performance
24 20
The BSH Board of Management: (from left to right)
Jean Dufour, Winfried Seitz, Johannes Närger
5
BSH Stays the Course
Fiscal 2011 was no easy year for the global economy. Although recovery from the global financial crisis initially continued, the second half of the year was increasingly affected by the EU debt crisis. The economic difficulties, which led to declines in demand in several traditional markets in Western Europe, were exacerbated by turbulences in the foreign exchange markets, which cannot remain without consequences for a globally operating company like BSH.
Despite this difficult economic environment, BSH succeeded in exceeding its revenue expec-tations with a year-on-year increase of more than six percent in group sales to 9.654 billion euros. This positive development was attributable, among other things, to our home market. The German economy enjoyed growth despite the deteriorating debt crisis in Europe, and we were able to benefit more than most from this development. The market for home appliances in Germany has shown encouragingly robust growth, and we have been able to consolidate our domestic position even further. Thanks to strong figures for built-in appliances and the increasing demand for energy-efficient models, BSH has been able to post an eight percent rise in sales. As a result, our sales in Germany crossed the two-billion euro mark for the first time in our company’s history.
This confirms that we have embarked on the right path. BSH has already been investing for decades in the development and optimization of home appliances that combine maximum convenience and attractive product design with especially low resource consumption. This strategy requires a lot of stamina, which we indeed have, thanks to our ownership structure. The rising demand for our products proofs that we offer the right answers to counter mounting competition from manufacturers. By deciding to buy our products, consumers express their appreciation of the inventive spirit and persistence of our developers. In light of the interna-tional pioneering role that Germany wants to play in the transition to renewable energies, this trend fills us with confidence, also with regard to our growth oppor tunities in other mature markets.
However, the main growth drivers for BSH are outside of Germany. As in previous years, our business development in particular in Turkey and Russia was especially dynamic. Although these successes were diminished somewhat by negative exchange rate effects, we neverthe-less posted a growth rate of 15.5 percent to over 1.8 billion euros in these Eastern European countries. In China, our sales rose by 20 percent despite a slowdown in the economic growth. Our business also developed very positively in the rest of Asia as well as in Australia and Oceania. We did, however, suffer declines in some Western European markets and in the U.S. While sales revenue in Western Europe fell slightly, due primarily to the effects of the debt crisis, the revenue decline in the U.S. was caused predominantly by our exit from the 27-inch segment in laundry care and the development of the U.S. dollar.
Overall, BSH once again managed to generate an encouraging consolidated net profit of 373 million euros in this volatile environment in the year under review. To maintain and strengthen our position among the world’s leading home appliance manufacturers, we not only invested
| F O R E W O R D
The BSH Board of Management: (from left to right)
Jean Dufour, Winfried Seitz, Johannes Närger
just under 300 million euros in research and development in the year under review, but also 453 million euros in new products, new production plants and in extending capacity at existing factories in Germany and abroad. True to our sustainable growth strategy, we paid strict attention to maintaining a sound financial position with low third-party indebtedness in these endeavors. Our solid financials and positive outlook were also recognized by international rating agency Standard & Poor’s, which confirmed our good credit rating and our outstanding creditworthiness.
Our stable profitability, a strong competitive position, the development lead in energy-efficient appliances, a global market and manufacturing presence, and the sound financial position give us the certainty that BSH will also be able to stay on track in the future, and not just under “fair weather” conditions. For fiscal 2012, we expect at best a stagnating market in Western Europe, with the exception of Germany, where we forecast a slight increase. Growth rates in China of, in part, more than 20 percent are most likely to be a thing of the past, and growth in Eastern Europe is expected to be slightly below the figure for the previous year.
Business per formance over the first few months of 2012 confirms that we face increasingly difficult market development. Despite this fact, we aim at continuing to increase our sales revenue in 2012.
Comprehensive service, intelligent solutions for transport and
logistics, technical perfection and the continuous optimization of
our product portfolio. Our employees at all our sites put in
every effort possible so that BSH can continue in future as a
leading manufacturer of home appliances to generate added value
for its customers and shareholders.
Good coffee at the press of a button, quality without compromise,
product intelligence for the best result. Inner values that often comprise
decades of intensive development work. Despite all their knowledge
of electronics, mechanics and thermodynamics, Andreas Liebl and
his fellow employees at the Traunreut development center never forget
what matters most: getting the best flavor from roasted coffee beans.
With the Fiery Enthusiasm of an Italian Barista
“That‘s it. That‘s what the perfect ‘crema’ looks like,” says Andreas Liebl while using his spoon to draw a half-moon in the golden brown layer of the espresso in front of him. He raises the spoon, and the countless mini - scule bubbles in the espresso cup immedi-ately form a closed surface again. “That’s what makes the difference in turning an ordinary espresso into a superb one. And, after all, enjoyment is what we want to give to the customer.”
This kind of commitment is what drives Liebl and his team of 100 coffee machine experts every day. BSH is one of the few manufactur-ers in the world that develop and produce the large part of the coffee machines’ important components in-house, like the brewing unit, the grinding gear, the engine or the electron-ics assembly.
The team of developers is just as diverse as the product portfolio: engineers next to mecha-tronics specialists and young guns next to old hands. Together they make sure that their machines produce coffee with superb flavor and aroma. Their benchmark is the profes-sional barista – the enthusiastic coffee artisan who fulfills every customer‘s wishes with style, elegance and, most of all, precision.
It takes only a few seconds for a modern coffee machine to turn beans and water into the perfect cup of coffee – whether it‘s a full-bodied espresso, a perfectly layered latte macchiato, or a cappuccino with creamy milk foam that sticks to the spoon. To make sure that the result tastes as good as it does in the bistros of Rome, Milan or Naples, even the smallest detail has to be just right: How does the ceramic grinder produce the perfect balance of coarsely and finely ground coffee beans? How can the machine build up the perfect water pressure? And how can it vary the water temperature by the second in order to extract the most flavor from each bean? “We test until everything fits together perfect-ly,” says Liebl, “because we want our cus-tomers to get the perfect cup of coffee every time they use the machine.”
Creating the Perfect Taste is a Matter of Technique
Albert Ostermaier is one of the truly old hands at BSH. For 37 years he has been devel-oping coffee machines for BSH. Today he is a specialist for the brewing unit. Brewing unit is a plain term for a highly complex compo-nent that takes care of lots of things: it holds back unwanted tannins and lets only the typical coffee flavors pass through. Oster-maier checks each individual part in the lab with a constant focus on what matters most:
Smell, taste and touch – to sharpen their senses, Andreas Liebl (fourth from the left) and his fellow developers regularly test various kinds of coffee. After all, only someone with the passion of a barista can develop machines that turn out excellent coffee every time.
11
the coffee’s taste. And whenever the sea-soned engineer looks at the perfect golden-brown ‘crema’, he still feels elated.
Engineers Give a Bean for Coffee Beans
These days, a sophisticated espresso machine has over 500 parts. It houses pre - cisely adjusted sensors, microchips and circuit boards. The interior is similar to a high-performance computer. The interaction of mechanical and electronic components is becoming increasingly complex. “The machine knows when the bean container is empty, when it needs water or when parts need cleaning,” explains developer Joachim Knauer. That’s why the team comprises more and more trained mechatronics technicians who know their way around moving parts and their controls. Engineers and mechatronics technicians also take part in regular tasting seminars. After all, they want to develop products that coffee lovers will be eager to purchase.
And since the whole process of preparing excellent coffee should be as easy as poss-ible, new machines froth the milk and brew the coffee in a single step. Their design has also been improved, so that cups and glasses of any size now fit underneath the spout. And the machines are so intuitive to use that press - ing a single button is usually all it takes. Small details, but together they make a huge difference.
Maximum convenience is also a major selling point for the latest models in the Tassimo line of hot beverage systems. The machines use special pods called T Discs for many different kinds of beverages, including tea and hot chocolate, from many well-known brands. With Tassimo, BSH provides the tailor-made answer to changing lifestyles: “More and more people want to enjoy coffee in different variations at home,” says Dr. Stephan Straub, who heads the department in which Tassimo products are developed.
A Barcode that Says It All
The small, intelligent beverage systems are very popular. Since BSH hit the market in 2008, the sales volume has doubled to two million machines. Its unique feature is the barcode on each T Disc, which tells the machine instantly which program it needs to run to turn its contents into aromatic tea, flavorful coffee or tasty hot chocolate. The barcode determines the proper temperature curve and the correct amount of water. Needless to say, the espresso T Disc also delivers the perfect ‘crema’ every time – the team in Traunreut wouldn’t be satisfied with anything less.
Left: Albert Ostermaier makes sure that the coffee develops its full aroma. With the brewing unit he extracts the coffee’s aroma and ensures the perfect flavor. Right: Dr. Stephan Straub and his team develop Tassimo multi-beverage machines, which prepare coffee, tea and cocoa. | T H E A R T O F C O F F E E
| C U L T U R A L P R O G R A M
Action, easy going or turbo – Kathrin Redlin designs a wide variety
of programs for a global audience. Not for radio or television, but
for washing machines. With her software she makes sure that the
machines best meet the needs of the various international markets.
The right temperature or spin speed depends not only on the properties
of the fabrics being washed, but primarily on what is customary in
Sophisticated Technologies for Today’s Markets
BSH’s new Technology Center for Laundry Care in Berlin is a modern, futuristic-looking building with a bright and shiny exterior. Here, 700 employees, half of them engineers or technicians, develop the washers and dryers of the future. They provide answers for global and regional laundry trends. Nothing on a new washing machine is left to chance – neither the number or names of the program cycles nor the size or looks of the exterior. And certainly not the sound the machine makes in the spin cycle. Kathrin Redlin is one of the creative minds in this facility. She develops the various pro-grams that consumers can select by pressing a button or turning a rotary knob. Her résumé could not fit better: She started out as a dress - maker, learning everything there is to know about fabrics and how to handle them. She then learned programming as a data pro - cessing specialist, and finally she completed a course of studies in clothing engineering. Redlin knows exactly how fabrics respond to different temperatures, water quantities and cycle lengths. She also knows how certain laundry customs come about. “We absorb a lot from our parents,” she explains. In the USA, for example, people like to wash their clothes frequently, and often in cold water
and in short cycles. Greeks, on the other hand, appreciate the cycle with extra-hot water. In India, “hand wash” does not mean gentle cleaning, but rather the thorough kneading and beating of heavily soiled clothes. Only nine percent of Germans use the pre-wash cycle, but virtually no one would purchase a machine without this option. Whether hot or cold, short or long – at the end of the day, everyone wants their laundry to come out perfectly clean. The developers at BSH know that the top purchasing criterion for a washing machine is cleaning performance.
Regional Challenges
Since BSH sells its products all over the world, Redlin also concerns herself with traditional clothing from other cultures. Currently her focus is on saris, the colorful wraps often made from artfully woven silk which are worn by Indian women. “The goal is to wash the long fabric bands in such a way that they don’t come out the machine in one huge knot,” explains the 43-year-old. In 2012 BSH starts erecting a factory for washing machines in India, the engineers need to master many challenges for the Indian market: power failures, strongly fluctuating water line pressures or power plugs that are shaped differently in almost every region must not impair the washing performance.
Dr. Andreas Hanau and Kathrin Redlin check the laundry’s cleanliness. Although laundry habits differ greatly around the world, there’s one thing that customers want most of all: really clean laundry.
15
“The trick is to come up with the easiest possible answers to a wide range of require-ments,” explains engineer Dr. Andreas Hanau. That’s why BSH develops appliances that share the same basic structure and adds details for regional customization. One such example is Russia, where customers prefer machines that are not as deep as those in most other countries, because space is at a premium in their often tight apartments. In response, the developers are designing a kind of washing machine kit that comprises housing and drum components with different depths. To build deeper models, they simply use longer components for the housing and the drum than for the more space-saving models. Customers get what they want, and the efficient building block kit saves time, material and money in terms of development and production.
The Kit Principle
The developers are also working hard to turn out washing machines that produce the per- fect sound, ranging from their normal opera- ting noise to their acoustic signals. In China, for example, the machines are often located in living rooms and run predominantly in the evening hours, when electricity rates are lower. Since this is also the time when the family sits at the dinner table, Chinese customers prefer machines that are especially quiet.
The path to a pleasant-sounding wash cycle leads through Wolfang Harbich’s sound lab, a well-insulated acoustic chamber that sits on springs in order to eliminate any interfering noise which might intrude from the outside. Here the washing machines sit in front of microphones, just like vocalists. “The spin cycle should never make a low, rumbling sound,” says Harbich. If a sound is perceived as displeasing, the user might think that the machine is malfunctioning – that’s why we are working so hard on designing perfect machine sounds.”
Sound Tells the Story
When it comes to developing new washers and dryers, sound provides important infor- mation about hidden weak spots. For exam-ple, Harbich has already been able to improve machine housings and motors with his work. Among his tools is even an acoustic camera, which converts sounds into images that are similar to those produced by heat-sensing cameras. They make every rattle and buzz visible and – most importantly – pinpoint their location so that technicians can figure out their cause.
Whether the focus is on sound, volume, special wash programs or the pre-wash cycle: the BSH developers optimize washing machines to meet the needs of customers in all of the world’s regions and cultures.
Left: At the Technology Center for Laundry Care in Berlin, around 700 employees have been developing the washers and dryers of the future since 2011.
Right: The washing machine as a recording star. Wolfgang Harbich ensures not only that the prototype makes a pleasant sound – its acoustic emissions can also help detect even the most subtle potential for improvement.
In just a few years, Roland Illig and his team of developers at the BSH
site in Bad Neustadt have managed to significantly reduce the power
consumption of vacuum cleaners. While the discussion with regard to
an EU energy label for vacuum cleaners is still ongoing, BSH is already
developing particularly efficient models. With innovative nozzles,
optimized interior air flow and new dust bags, the most energy-efficient
Siemens model draws only 850 watts for strong cleaning performance.
Whether it is our vacuum cleaners or our Super Efficiency Portfolio of
appliances that already carry an EU label: in terms of energy efficiency,
performance and convenience we deliver far more than we have to.
Reclaiming Lost Energy
The corpus delicti measures a mere few micrometers, comes in various colors and shapes and originates in birch forests, exhaust pipes or even sand storms: the dust particle. It takes a lot more than a magnifying glass to track it down, which is why it became a prime piece of evidence in the search for lost energy.
Day after day, millions of people use vacuum cleaners that consume a lot more energy than they have to. Of the up to 2,000 watts which older models draw from the power grid, only one-fifth is used for the actual cleaning task in many cases. The team of 55 developers at the BSH site in Bad Neustadt decided to do something about this glaring inefficiency by using innovative detection methods to look for all this lost energy. Their air flow facility is their forensics lab, and their measuring probe is their magnifying glass.
“To find out what happens inside the vacuum cleaner, the flow engineers took a close look at the path taken by each dust grain,” ex - plains Roland Illig, head of floor care develop-ment at BSH. What they found out is that a large portion of the energy is simply lost in turbulence. Each air stream also creates little vortexes at its edges, and vacuum cleaners are unfortunately no exception. “These
vor-texes cause grains of dust to swirl around unnecessarily,” explains Illig. Making sure that they ultimately wind up in the dust bag takes extra energy, which turns vacuuming into an activity that wastes more electricity than it should. “Our goal is therefore to make sure that each dust grain arrives at its destination without vortex detours,” says Illig.
Power Drains: Air Vortexes in Action
Fluid mechanics allows engineers to precisely predict the flow of materials in enclosed systems. The path taken by a grain of dust is no exception. To compute the air flow within a vacuum cleaner hose, for example, a special-ist needs only pen and paper – the calcula-tion is relatively easy. With irregularly shaped components like the floor nozzle, things become a lot more difficult. To optimize the route taken by a dust particle in such parts, developers employ computer programs to compute the complex air flow and map it three-dimensionally. Based on the results of this detailed search, the developers are able to design vacuum cleaners that generate almost no vortexes in their interior.
Thoroughly optimized floor nozzles aren’t the only thing that makes sure that energy-effi-cient models deliver strong cleaning perfor-mance in every corner and on any material. Even the dust bag, which used to be nothing
Here are the winners: Two vacuum cleaners developed by Roland Illig and his team were ranked in first place by Stiftung Warentest, Germany’s independent consumer product testing orga ni z-ation in 2011 (issue 4/11). The organization praised, among other things, the appliances’ low power consumption – the result of sophisticated air stream design.
19
but a simple paper contraption, today contrib-utes to energy efficiency with the use of new high-performance materials. And sometimes it’s small product design modifications that make a vacuum cleaner more efficient, such as reducing the diameter of the wand by one millimeter or adding a fin in the model’s interior. In the past five years, BSH has submitted more than 40 patents on average for each new model series in Germany to protect innovations that reconcile conveni-ence, performance and energy efficiency. This kind of development effort pays off. In just a few years, the engineers managed to double the efficiency of their vacuum cleaners. The most energy-efficient model from Siemens uses up to 64 percent less power than the brand’s older models. If it were to replace every vacuum cleaner in Germany, the energy saved would be enough to supply 2,500 average four-person house-holds for an entire year.
“Vacuum cleaners still offer huge potential as far as energy efficiency is concerned,” says Illig. One contributing factor will be the EU energy efficiency label, which already helps consumers today in selecting refrigerators and clothes dryers.
Always That Bit More Efficient
Although its details are still being discussed, BSH’s engineers are already working hard to make sure that their products will far exceed the new label’s requirements – just like the dryers, washing machines and refrigerators in BSH’s Super Efficiency Portfolio, that far ex ceed the EU’s requirements in terms of energy consumption, performance and convenience.
One prime example is the company’s heat pump dryer. Equipped with a condenser that flushes itself with the water collected from the laundry, it is the only appliance in its class that can guarantee long-term energy efficiency. Unlike competing models it does not need to be cleaned manually after every other cycle. That way, BSH delivers maximum convenience while making sure that the model’s energy efficiency does not suffer. Stiftung Warentest, Germany’s leading con- sumer watchdog, agreed and gave the model the highest rating in its test in January 2012.
Double Test Win
Two vacuum cleaner models from BSH recently won top ratings as well: the Siemens Z 3.0 among traditional models and the Bosch Roxx’x among bagless models. This kind of success is no accident, but the result of tireless development work. In the labs at BSH, new models have to deliver not only under the standard conditions like those used by Stiftung Warentest. “We conduct a whole series of additional tests, which are based on the findings of our customer service organi z-ation,” says Illig. Animal hairs on rough sisal fibers or cookie crumbs in deep-pile carpeting – BSH vacuum cleaners have to deliver clean - ing performance even under the toughest conditions. “Performance is everything when it comes to ensuring that customers are completely satisfied with our models,” says Illig. That’s why the energy detectives at BSH’s air flow lab are working so hard to leave the competition in the dust.
The self-cleaning heat pump dryer is the only one of its kind that maintains its energy efficiency rating over the long term. Mechatronic technician Alex Volk uses a prototype to demon-strate those parts of the test winner that are critical for the automatic self-cleaning process. | F O L L O W T H E T R A I L
On their trip from the factory to the customer, appliances often travel
across entire continents. They must be able to withstand heat, cold,
humidity and rough handling without suffering any damage. Christoph
Rohr from BSH‘s distribution logistics department has analyzed the
shipping routes and all the challenges they face. In his lab he can
simulate the trip in a railcar across the Siberian tundra just as easily
as a truck shipment across India or a ride on a bicycle rickshaw over
bumpy country roads. With optimized packaging, all appliances will
make it to their destinations without a scratch.
Home Appliances on Tour: The Right Travel Outfit Makes the Difference
When they sit on the showroom floor it is impossible to tell that each appliance was once a passenger. In many cases they have traveled for thousands of miles on trucks, in ships, in railcars or on the bicycle rickshaws of Asian customers. Especially on long trips they have to withstand a lot: Vibrations on potholed streets; temperatures ranging from minus 30 to plus 80 degrees Celsius; high humidity when containers are loaded, which rains down on the printed boxes once the air cools down on the open sea. It is not unusual for the appliances to be subjected to g-forces of up to 11 g’s when trucks hit potholes or railcars are switched.
The fact that the appliances nevertheless make it to their destination unscathed is not luck, but is thanks to the experience of BSH’s packaging experts. In various tests they subject the products and their travel outfits of paper, plastic and styrofoam to the same conditions they will encounter in a container and on the road. They make sure that the customers’ enjoyment of their new appliance will not be diminished by scratches or dents. “At some point we began to question every-thing,” says Christoph Rohr, who developed the packaging tests. “We looked at the most
common testing methods and realized that they have very little to do with reality. That’s when we started to look at what really happens.” For the trained nautical and industrial engineer this meant hitting the road together with the appliances. For example, he accompanied the products and suffered the same bumps and vibrations when they were trucked across thousands of miles of roads in China and India.
Robust and Lean
The challenge: On the one hand, the appli-ances must be optimally protected. On the other, the packaging must not be too thick so that it takes up as little extra space as possible. This reduces the number of trips and protects the environment.
Rohr’s pioneering trips were followed by systematically recording the road conditions. To accomplish this, he equipped trucks with measuring devices and GPS units. The combination of location data and vibration, temperature and humidity readings is used to create detailed trip profiles, which can
Christoph Rohr has made unloading containers faster and more efficient: Thanks to his Slip Tarp, a patented floor covering that is unrolled in the container before loading, loads can now be pulled out in one piece.
23
then be displayed on an electronic map or used for stress tests. To run these tests, the BSH engineers simply place a new appliance on the vibrating table or into the climate chamber, and the virtual trip can begin. Based on the results, they can then design the right packaging for shipments anywhere in the world.
Quick loading and unloading procedures are the goals of every logistician, because more speed means more productivity. Along the way, Rohr also invented a simple method for saving a lot of time when loading and unload-ing small appliances such as vacuum clean-ers, toastclean-ers, etc. The innovation, which has been patented in the meantime, is called Slip Tarp – a carpet made of robust material that is rolled out in the container before the loading process. In the past, the products could be unloaded only through the narrow end of the container, which blocked the warehouse gates. Particularly with the large number of small products fitting into a con-tainer, this procedure took a relatively long time. The Slip Tarp allows all the contents to be pulled out of the container in three large blocks. Workers can now reach the units from all sides and quickly forward them to their next destination.
Reaching the Destination and Sparing the Environment
“While working on ways to speed up the un - loading process, I received a tote bag made from this special material at a trade show. And that is what gave me the idea,” explains Rohr. “I am glad that I had the opportunity to give it a try without knowing in advance whether it would work.” Such improvements are also possible because BSH conducts its global logistics operations mostly in-house. BSH pays attention not only to speed, but also to the environment. In Giengen, the company’s largest logistics center in Ger-many, BSH maintains a special freight rail- way yard with a storage area for containers that would cover several soccer fields. From here, the containers ride piggyback to several large German ports, from where they are shipped all over the world. The share of rail freight is rising steadily. “In 2008 we made 25 percent of our shipments by rail. Today the
figure’s already 45 percent,” says site man-ager Manfred Brauckmann. The benefit for the environment is that shipping by train instead of truck generates up to 60 percent less carbon dioxide.
Safe, fast and green – the logistics engineers of BSH are mastering this ‘triple play’ to optimize their shipping activities. In doing so, they pay just as much strict attention to quality as their colleagues in development and production. From the logistics engineers’ point of view, it is a pity that the refrigerators and dishwashers cannot tell the customers about their travel adventures and the effort that went into making sure that they arrived at their destination safe and sound and on time.
BSH coordinates most of its global logistics operations itself. Manfred Brauckmann (left) and Marco Passira make sure that all appliances reach their destination safely, quickly, and as environmentally friendly as possible.
Since a built-in kitchen usually needs to last for the next ten to twenty
years, Ronald Wassenaar and the team at the Dutch BSH subsidiary do
everything in their power to help customers choose the solution that
best suits their needs and will be enjoyed for many years to come. The
“House of Inspiration” in Hoofddorp near Amsterdam invites dealers
and private customers to acquaint themselves with the latest trends
and product innovations in an inspiring setting.
Inspiration for More Quality of Life
Spider plants, white orchids, calla lilies – a wall of more than 2,000 plants stretches over three floors in the “House of Inspiration”, bringing living nature into the building and providing a pleasant atmosphere. The entire complex is covered by a glass roof with solar panels, flooding the atrium and the galleries on each floor with natural daylight.
The “House of Inspiration” is innovative in every respect. It reflects the values and prin- ciples of BSH, such as innovation, customer service, employee orientation, responsibility for the environment and society, and sus-tainable value creation. The building was designed and built according to the cradle- to-cradle principle, which means that all materials and furnishings are recycled when they reach the end of their useful life. It also uses rainwater and solar energy. In addition, the facility is home to more than just the spacious showrooms, with its upper floors housing the workplaces of the 270 office staff who work for the Dutch subsidiary BSH Huishoudapparaten B.V. The concept of ser- vice has top priority in all areas – not only with regard to customers and dealers, but also in accounting, IT or marketing.
Hospitality manager Hans van der Bilt and his team make sure that guests feel welcome as soon as they set foot in the building: A friendly
glance, a freshly brewed latte macchiato, and consultants who provide information tailored to the customers’ needs – the trained hotel professional knows what people want. “Cus-tomers sense that when they come to us, they can sit back and relax as they plan a kitchen that really suits them,” says van der Bilt.
Top Service as a Matter of Principle
Nothing is for sale in the showrooms, how-ever. “After all, we are not competitors, but partners for specialist dealers,” says market-ing head Ronald Wassenaar. That is also why the “House of Inspiration” does not just target customers, but was also designed to meet the specific needs of dealers. Whether the specialist dealers are familiarizing themselves with new product features in entertaining cooking classes, learning about the latest trends in the training center or auditorium, or getting ideas about how to present the various brands in an attractive manner on limited floor space – they leave Hoofddorp inspired to drive their own business forward.
Wassenaar also wants to revolutionize the decision-making process involved in buying a kitchen: “Today, customers give a lot of thought to finishes, work surfaces and cabinet layouts. Only once they have decided on the ‘look’ of the kitchen do they then quickly and randomly pick out appliances,” he says. They
The “House of Inspira-tion” on the outskirts of Amsterdam embodies BSH’s principles such as environmental protection and service orientation. In the facility’s four showrooms, customers and dealers can learn about the latest trends from Bosch, Siemens, Neff and Gaggenau, try out appliances in a play- ful manner or attend cooking classes.
27
Hospitality manager Hans van der Bilt and his team have one main mission – to perfectly cater to their customers’ needs. Based on their cooking and shopping habits, the BSH team can point out which appliances will work best for their particular needs.
do not realize that it is the appliances that make all the difference when it comes to actually enjoying the kitchen. “Ideally, customers should therefore start out by selecting the appliances that best meet their way of life, their cooking habits and their demands in terms of user-friendliness, design and environmental compatibility, and then put together the right kitchen.”
The “House of Inspiration” is the best place for this since the consultants cater for the individual needs of each customer. For example, selecting the right refrigerator depends not only on the size of the house-hold, but also on the shopping frequency. “People who go to the grocery store only once a week will benefit in particular from the Vitafresh function, which keeps fruit and vegetables fresh longer,” says Wassenaar.
Always Take the Customer’s Point of View
But it’s not just about products either. The facility also demonstrates innovative design solutions – sometimes in a playful manner. For example, customers can use a magnetic wall to arrange the various kitchen elements and find the most ergonomic layout. “Before playing with this wall, some customers had no idea that they could install their dish-washer at chest height to avoid having to keep bending down when loading and unloading dishes,” says Wassenaar. In a
testing cubicle, customers can compare the noise of the latest dishwasher model with the kind of noise produced by a nearby freeway or gentle birdsong. And at an inter active display, visitors can even throw pots and bottles against the glass front panels of appliances to see for themselves that they are scratch-proof.
Four Brands under One Roof
Unlike in Germany, where people tend to be more familiar with this marketing tool in the automotive sector, showrooms for kitchen appliances are quite common in the Nether-lands. At BSH, the showrooms are part of an innovative customer relationship manage-ment concept. The goal is to target customers who are considering buying a kitchen and to cater for their individual needs over the long term. “Our particular strength lies in the fact that we can present four brands under one roof and allow people to experience them hands-on,” says Wassenaar. Customers who have spent a Saturday in the “House of Inspi- ration” leave Hoofddorp with the positive feeling that they have been able to gain a comprehensive overview of what the market has to offer. And ultimately it is the specialist dealers who also benefit from this concept: “Customers who have been to a showroom are already well-informed when they enter the store – and they also appreciate quality.”
| Essay
German industry as a whole has the potential to save 30 billion kilowatt
hours of electricity. If all home appliances in Germany over 10 years old
were updated, 15 billion kWh could be saved. A further 12.3 billion kWh could
be saved in relation to home appliances through incentive schemes
administered by German electricity suppliers. The transition of energy
systems towards sustainability can only be achieved if energy is seen as
part of regulatory policy.
29
| Regulatory Policy Must Refocus
on Energy Efficiency
Energy efficiency and climate protection have been key to corporate strategy at BSH Bosch und Siemens Hausgeräte GmbH since it was established in 1967. In recent decades, these issues have grown in importance – not least due to Germany’s definitive withdrawal from nuclear power.
The decision to phase out nuclear means that, by 2022 at the latest, Germany will have something in common with most other countries in the world. No nuclear power, almost no fossil fuels of its own, and more questions than answers in terms of the financing and utilization of alternative energy sources. At the same time, the current IEA World Energy Outlook estimates that global energy consumption will actually rise by at least one third by 2035.
A paradigm shift: Promote energy saving not energy production
The question is therefore now much more pressing than previously: how can energy demand be reduced without hampering economic growth? In our approach to energy production, we remain transfixed like a rabbit in the headlights. Energy efficiency is only gradually being considered an important part of the energy transition. The focus of our concern should shift from what we can produce to what we can avoid producing. Energy efficiency is not only a short-term answer to the pressing gap in energy supply, but also a long-term opportunity to use energy more productively.
In the interest of climate protection by 2020, the EU plans to reduce its energy consumption by 20 percent compared with 1990 levels. yet according to estimates by the European Commission, without additional measures being taken, only half of this reduction target will be achieved. The German federal government has set an even higher target of
40 percent reduction by 2020. yet a wide gap is emerging between the words spoken by politics and industry and their deeds. Other EU countries are providing significant support for these reductions, but Germany is dragging its feet. The reduction target is an urgent necessity and cannot be achieved simply by the sum of reasonable measures taken individually. We need fresh thinking in terms of regulatory policy. The energy transition requires a shift in regulatory policy: electricity companies must be included in the obligation if we are to achieve the EU reduction target. Saving energy is also worthwhile from a financial perspective. Production costs per kilowatt hour in Germany are on average three times as high
as the cost of re - ducing consumption by the same amount. Despite the variation between conditions in different countries, energy efficiency remains the neatest way to defuse the worldwide energy problem. Energy
efficiency is attractive because it does not require consumers to do without the home comforts they are used to. It is politically workable, because it does not elicit resist-ance in the same way as the construction of wind farms or new overhead power lines. Above all, it is quick and can be achieved with today’s technology.
However, we must not get carried away: energy efficiency operates at different speeds.
The German corporate energy efficiency initiative (DENEFF) has identified an energy-saving potential of 30 billion kWh in German industry. But each individual investment must be assessed against its outcome in terms of energy savings and in relation to the relevant
“Production costs per
kWh in Germany are
three times as high as
the cost of reducing
consumption by the
same amount.”
plant and process – a cumbersome adminis-trative procedure with an uncertain outcome. It is much simpler to save electricity through home appliances. For 17 years, the European energy label has displayed a standard energy rating for each appliance. Domestic appliances have a high energy-efficiency potential because they make up 40% of household electricity consumption. If all domestic
appliances in Germany over 10 years old were exchanged for highly efficient appliances, 15 billion kWh could be saved each year. Thus the potential for saving energy through the use of more efficient home appliances is equivalent to half of the poten-tial savings from German industry. Across Europe, 30 percent of all household electrical appliances are over 10 years old. If all these appliances were replaced with highly efficient ones, an annual saving of 44 billion kWh could be achieved – the equivalent of Portu-gal’s annual energy consumption.
Due to the great potential for energy saving in the household appliance sector, it would be worth politicians providing incentives here. The core message for a new energy efficiency policy could be summarized as: explain, promote, apply penalties and provide leader-ship.
Explain: More clarity and distinction between efficiency classes
Only very few consumers know the difference between the A and A+++ ratings. The top priority for responsible regulatory policy would therefore be to explain and clarify energy consumption and how to avoid it. This applies to all areas – from the whole-house Energy Performance Certificate to the light bulb. We note that labeling systems tend to develop and establish themselves worldwide, and advise interested governments and
non-governmental organizations throughout the world on domestic appliances. It is true that an international comparator will remain just a dream for some time to come. yet all systems should observe one major funda-mental principle, namely that of taking technological progress into account. We therefore strongly support the dynamic updating of the energy label criteria. Above all, the nomenclature for energy standards must be clearer, allowing distinctions to be identified at a glance.
Promote: Create incentives to buy
Initially, it would seem that the simplest tool for motivating consumers to buy more effi -cient appliances would be a program of state support, i.e. a direct or indirect subsidy for the purchase of appliances in the highest efficiency class. For many years, we have been discussing this type of measures with policy makers. Compared to the eagerness with which subsidies are applied in other areas – the German government paid some EUR 9 billion to subsidize solar energy in 2011 – in this case modest sums could make a big difference. However, irrespective of the fact that the public purse is empty, there are other reasons to be skeptical of such programs. Intelligent regulatory policy does not mean distributing large amounts of public money: it also means using financial resources efficiently.
Apply penalties: Implement minimum standards, eliminate energy guzzlers
It would be more effective to ban inefficient appliances. But in the EU and elsewhere, it is clear that we are far from taking such a step. Fridges in class A consume 2.5 times as much energy as appliances in the current top energy efficiency class A+++. But a ban on marketing A-class appliances will come into force much too late: on July 1, 2012. There are no comparable restrictions on other energy guzzlers in private households. For example, tumble dryers: annual electricity consumption can be reduced by almost two thirds, from 350 kWh to around 120 kWh, by using super-effi-cient appliances. No European legislator has yet grasped this opportunity. Dryers in energy
“Intelligent regulatory
policy does not mean
distributing
large amounts of
public money.”
31
efficiency class D may still be sold in Europe. Without more radical minimum standards, we run the risk of hampering a tangible improve-ment in efficiency standards. One need only to look at the sales figures for home appliances with low energy efficiency ratings to see that supply can create demand.
Provide leadership: Intelligent policy-making as the “game changer”
In the battle against the waste of energy, regulatory policy has more subtle methods than outright bans. Using a more nuanced approach would keep public costs low while exploiting market forces. Since policy can only exercise a limited direct influence on con-sumer behavior – and even then only using means that are dubious from a political, tax - payer and/or market perspective – it should aim to exercise indirect influence via energy suppliers.
On this issue, the EU is on the right track. In its proposal for a directive on energy efficien-cy, the European Commission puts forward market-oriented measures to implement energy savings. Energy suppliers would be obliged to achieve annual savings quotas. Critics of this approach are too quick to label this as redolent of a planned economy, with its restriction on manufacturers’ sales volumes and energy-saving obligation on consumers. They are missing the point. The savings targets are consistently based on the previous year’s sales volume. Energy suppliers who are particularly successful on the market and in promoting efficiency can therefore continue to grow and expand. A system of white certificates would mean that savings made could be traded.
White certificates provide a market incentive for energy suppliers to reward their customers for improved efficiency. The certificates would release great creativity, and could in the best case scenario create new branches of the energy service sector, as efficiency measures are currently certainly not part of energy producers’ core business. Thus energy con- sumption would probably be reduced much more quickly and effectively subject to the free play of market forces than it would be
using intervention aimed directly at the consumer.
The conditions under which white certificates would operate must
of course be framed so that targets are achievable and like is compared with like. They must also address quantity structures that are attractive to the
economy as a whole, while also permitting their effectiveness to be measured. In con - trast to other measures, the cost of procuring highly efficient home appliances is transpar-ent and can basically be funded by house-holders themselves, whether they own or rent. What is more, the large, stable numbers involved ensure reliable framework condi-tions for a white certificate system. Support-ing energy efficiency measures in private households through programs implemented by energy suppliers would enable annual savings of 12.3 billion kWh to be made from household electrical appliances alone. This corresponds to 10 percent of overall electric-ity consumption in the private sector. Coun-tries where the level of efficiency is currently lower would be able to make much greater progress.
If we are to tackle the energy transition thoroughly, then the kilowatt hours saved must be made tradable. This sounds more radical than it is. Energy efficiency is not only of moral value, it is also of economic value.
Dr. Kurt-Ludwig Gutberlet
Chairman of the Board of Management
“Energy efficiency
is not only of moral
value, it is also of
economic value.”
| Supervisory Board Report
33 Supervisory Board Report
33 S U P E R V I S O R Y B O A R D R E P O R T
| Supervisory Board Report
During the year under review, the Board of Management reported regularly to the Supervisory Board on the performance of the company and on its major decisions, both orally and in writing.
The development of business and employment during the preceding financial year 2010, as well as the 2010 financial statement and management report, were explained to the Supervisory Board by the Board of Management at the two regular Supervisory Board meetings held during the year. During 2011, the Board of Management reported to the Supervisory Board on the development of business in the company’s various sales regions, particularly in Germany, Spain, Greece and Turkey, the rest of Western and Eastern Europe, in China, Russia, India, Central and Southeast Asia, and North America. The Board of Management also presented the key data for the 2012 Business Plan to the Supervisory Board. The Supervisory Board discussed these topics in detail.
Other advisory efforts by the Supervisory Board focused on the development of competition in the European and non-European home appliance markets as well as the company’s response to changing market conditions.
The Supervisory Board also deliberated on the development of the Product Areas, on projects aimed at further developing markets, on the planned construction of an Appliance Park in India, the expansion of our factory in Russia and site development in New Bern, USA and Berlin.
The topics addressed by the Supervisory Board also included development