Management and control
The composition of the Schaltbau Group’s Executive Board was completely changed during the first six months of the year under report. As previously described in the Management Report 2016 published at the end of April 2017, Dr Bertram Stausberg was appointed Spokesperson of the Executive Board with effect from 1 April 2017 and Thomas Dippold became Chief Financial Officer as from 1 January 2017. Due to the necessity to restructure the Schaltbau Group, subsequent to the end of the period under report Dr Martin Kleinschmitt was appointed Chief Restructuring Officer (CRO) with effect from 9 August 2017.
The following members left the Executive Board during the period under report:
– Mr Helmut Meyer concluded his tenure (which was temporary from the beginning) on the Executive Board on 31 May 2017 and rejoined the Schaltbau Group’s Supervisory Board with effect from 1 June 2017.
– Mr Ralf Klädtke, responsible for the Mobile Transportation Technology segment, resigned with effect from 30 June 2017 in order to take up new tasks outside the Schaltbau Group.
Furthermore, the following changes were made to the composition of the Group’s Supervisory Board during the period under report:
– After ending his activity on the Executive Board, Mr Helmut Meyer rejoined the Schaltbau Group’s Supervisory Board with effect from 1 June 2017.
– The previous Chairman of the Supervisory Board, Mr Hans Jakob Zimmermann, and Supervisory Board member Mr Friedrich Smaxwil both resigned from their posts with effect from 8 June 2017.
– Supervisory Board member Ms Marianne Reindl resigned from her position with effect from 9 June 2017.
– On 8 June 2017, the Annual General Meeting of the shareholders of Schaltbau Holding AG elected Mr Andreas Knitter as member of the Supervisory Board for the first time.
– In a Supervisory Board meeting held subsequent to the Annual General Meeting on 8 June 2017, from among its members the Board elected Dr Ralph Heck as new chairman and Mr Helmut Meyer as deputy chairman.
The two currently vacant seats on the Supervisory Board will be filled within the near future.
The Annual General Meeting of Schaltbau Holding AG took place in Munich on 8 June 2017. Due to the loss recorded in the financial statements of the Group’s parent company, no resolution needed to be adopted regarding the appropriation of net profit. The proposal put forward by the administration to create two new authorised capitals (Authorised Capital 2017/I and Authorised Capital 2017/II) was not adopted, as the required qualified majority was not reached. The partially utilised Authorised Capital 2013 therefore continues to be in effect until 5 June 2018.
All other items on the agenda put forward for resolution were passed with a sufficient majority.
The redevelopment of the strategic reorientation and operational restructuring of the Schaltbau Group was begun at the end of 2016 and intensified with the appointment of Dr Bertram Stausberg as new Spokesperson of the Executive Board on 1 April 2017. The first steps towards implementation have already been taken. Primary aims include the creation of a strong, customer-centred Group platform as well as the long-term securing of the Group’s financial basis. Over the next few months, further measures will be initiated to boost efficiency, improve margins and reduce complexity. At the same time, steps will be taken to revise low-margin projects on foreign markets. There is an immediate need for restructuring, particularly in the Stationary Transportation Technology segment as well as in several of the Group’s foreign subsidiaries, where adjustments to cost structures are urgently required. – 3 –
Firstly, at the forefront of product development there is a need to create a group-wide standard BUS communication solution for the various subsystems in the Schaltbau Group’s portfolio. In view of the increasing automation and digitalisation of rolling stock in general, on this basis the Schaltbau Group intends to increasingly connect its various subsystems to form larger system units. Schaltbau is well positioned in a market that has strong potential, particularly with regard to boarding systems.
Moreover, in the "after sales" field, maintenance and the provision of a range of services for rolling stock are to be systematically expanded in all of the Group’s subsidiaries. In addition, the modernising of trains, systems and components for markets in Germany, Austria and Switzerland will be concentrated under the umbrella of Schaltbau Refurbishment, which is part of the Mobile Transportation Technology segment. At the beginning of the current year, several areas of business were transferred to Schaltbau Refurbishment that had previously been assigned to other Group companies. The Schaltbau Group is also active in this field in the United Kingdom via its entity Schaltbau Transportation UK.
Group reporting entity
The Group reporting entity of the Schaltbau Group has changed only minimally compared to the entity reported on in the Group financial statements 2016. In the second quarter 2017, the previously consolidated Shenyang Bode Transportation Equipment was sold to the newly formed joint venture Zhejiang Yonggui Bode Transportation Equipment Co. Ltd., in which the Schaltbau Group holds 49 per cent of the shares. The joint venture is included in the Group reporting entity in the Schaltbau Group’s consolidated financial statements using the equity method.
The figures previously recorded for the first half of 2016 have been adjusted with retrospective effect as from 1 January 2015 to allow for additions made to the Group reporting entity and therefore do not correspond with the figures published in the half-yearly financial statements for 2016 (see explanatory notes to the consolidated financial statements for details). – 4 –
Furthermore, when comparing figures for the first six months of 2017 with those of the first half of 2016, it should be noted that the Spain-based subsidiary Schaltbau Sepsa has only been fully consolidated in the Schaltbau Group since 30 September 2016 (Mobile Transportation Technology segment). Moreover, the Warning Systems business in the Stationary Transportation Technology segment was sold to a buyer outside of the Schaltbau Group during the first half of 2016.
At the beginning of 2017, all refurbishment activities within the Group were restructured and are now concentrated in the subsidiary Schaltbau Refurbishment. In 2016, the majority of these activities were still allocated to the Stationary Transportation Technology segment.
Financial and economic report
General economic and sector-specific environment
According to the International Monetary Fund (IMF), in 2017 the world economy is forecast to grow by 3.5 per cent and therefore somewhat faster than in the previous year (3.1 per cent). Although growth in the eurozone and in China was somewhat stronger than expected during the first half of the year, in July the IMF downwardly adjusted its predictions for the USA by 0.2 percentage points. The IMF sees the greatest risks to global growth in increasing political uncertainty, financial policy risks in China and the USA, escalating protectionism, and geopolitical tensions. Particular factors of importance for the Schaltbau Group are the domestic political situation in Turkey as well as in the USA.
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