Name. Industry. Year ANNUAL REPORT

Transcription

1 Name Industry Year L OG IST I C S 2005 ANNUAL REPORT

2 Key Figures according to the International Financial Reporting Standards (IFRSs) in thousand Change in % Net Sales Industry Solutions 593, , Air & Ocean 353, , Regional Logistics Services 891, , Holdings 1,074 1, Total Net Sales 1,839,597 1,730, Segment results (before restructuring costs and impairments) Industry Solutions 2,879 6, Air & Ocean 11,269 7, Regional Logistics Services 20,670 23, Holdings and Consolidation 7,037 10, Other financial income (expenses), net 493 8,108 N/A Earnings before interest and taxes (EBIT) before restructuring costs and impairments 27,288 35, Restructuring costs 6,055 N/A Impairment of long-lived Assets 34,196 1,380 2,378.0 Impairment of Goodwill 6,856 N/A Earnings before interest and taxes (EBIT) 19,819 34,047 N/A Net result 52,978 5,176 N/A Attributable to Shareholders of Thiel Logistik AG 1 53, N/A Attributable to Minority shareholders 436 4, Earnings per share in Euro N/A Operating Cash Flow 21,842 60, Free Cash Flow 11,989 48, EBITDA 2 63,906 76, Net financial debt Shareholders equity (incl. minority interest) 322, , Number of Employees 8,807 8, comparable with the former term Net income (loss) 2 before restructuring costs and impairments

3 Thiel Logistik Portfolio* Board of Directors Executive Committee Holding Industry Solutions Air & Ocean Regional Logistics Services Centers of Competence Shared Services *As of January 1, 2006 Net Sales EBIT in million in million 2 1, , , , ,

4 Eight Centers of Competence bundle know-how within the Group and make this available to all business units as best practice solutions. With this suort function, the Centers of Competence encourage the integration of the different business units and ensure the implementation of high-quality logistics solutions. Logistics Networks Suly Chain Solutions Automotive Chemicals Purchasing Facility Management Marketing Contract Management Sales by Segment 05 in milion Industry Solutions Air & Ocean Regional Logistics Services 1, Segment Results (before one-off effects) 05 in million Industry Solutions 11.3 Air & Ocean 20.7 Regional Logistics Services

5 Content Foreword by the Executive Committee... 2 Corporate Governance Report... 4 Report on the Stock and Corporate Bond Management Report Group Portrait Economic Conditions and the Logistics Market Overview: Development Financial Position and Performance Value-oriented Company Management Research and Development Capital Expenditure and Investments Employees Industry Solutions Thiel FashionLifestyle Thiel Media Thiel Furniture Thiel Automotive Air & Ocean Regional Logistics Services Quehenberger Südkraft Delacher Sulementary Report Risk Report Outlook Report Consolidated Statement of Income Consolidated Balance Sheet Consolidated Statement of Cash Flows Consolidated Statement of Changes in Shareholders Equity Notes to Significant Subsidiaries Declaration by the Board of Directors Auditors Report Financial Calendar Imprint

6 Foreword Executive Committee Looking back on a highly eventful fiscal year 2005 and looking forward to a year 2006 full of ambitious targets, the Executive Committee would like to share with you our customers, business associates, shareholders, and employees a private view on the company. When we were assigned executive management responsibility within the Board of Directors in the fall of last year, the main issue for us was how to achieve and maintain a sustainable, stable, and positive development for Thiel Logistik following the turbulences of the past few years. We quickly realized what would be the most important requirement for our success: your confidence in the Thiel Group. As important as the capital market may be, particularly for a listed company, the focus has to be on our customers having full confidence in the ability of Thiel Logistik to perform both today and in the future. For this reason, we reaffirmed the decision made three years ago to conduct business operations in a distinctly decentralized organizational structure. This is the ideal way of promoting proximity to the customer and the market, ensuring fast decision-making and guaranteeing highly motivated employees carrying individual responsibility. Successful and stable customer relationships combined with extremely pleasing growth rates in the majority of our business units proves that this strategy is right. In future, we will be better bundling the specialist logistics know-how developed in successful customer projects on a cross-departmental basis and utilize the economies of scale with regard to administrative processes within our Group. By introducing the eight Centers of Competence, establishing Shared Services and by giving the holding an exclusive Group management function, we have succeeded in combining the advantages of a decentralized set-up for operations with a highly efficient organizational structure, in which all employees have access to the specialist knowledge available in the Group. We are sure that this structure, which will enable us to implement the adopted strategy more rigorously, will make an important contribution to developing our existing customer relations even further and, above all, creating new and lasting customer relationships. This places us in an ideal position to achieve our target of generating primarily organic growth in the Thiel Group over the next few years. Our employees have quickly recognized the oortunities offered by these changes and have given their full suort to the concept, despite the fact that the implementation of the Centers of Competence meant redefining personal responsibilities and competencies in many cases. Jointly with the entire management team we are convinced that the success of Thiel Group depends on the quick establishment and promotion of procedures allowing a fast and efficient use of general functions across the different business areas. This has certainly been helped by the fact that we filled the management vacancies in the Centers of Competence and in Shared Services exclusively with experienced managers from within the Group. The open dialogue with our employees, the extended responsibilities that were often placed with young, talented managers and the reinforced commitment from the major shareholder, gained and strengthened the confidence of the employees in the Thiel Group. 0002/ 0138

7 Foreword Executive Committee Last but not least, we will only be able to gain or increase the confidence of the capital market through the successful development of the Group and through open and transparent communications. We areciate the recognition for the transparency and accuracy of our information policy, including on difficult issues, and our efforts to present the new organizational structure and the prospects for our further development to our shareholders, analysts and credit partners in a clear and concise manner in recent months. We are determined to continue our efforts in this regard without restrictions. Although there is still some uncertainty regarding the development of the coming months, we can reiterate our statement that in 2006 we will make a step towards our mediumterm goal of an EBIT margin of three percent. We have often been aroached about the corporate governance structure implemented in fall These questions often focused on whether the management and control functions are sufficiently separated. It is aarently difficult to communicate the corporate governance of a company listed on the German stock exchange but based in Luxembourg. Luxembourg corporate law currently only recognizes a one-board system, in which the Board of Directors is responsible for the tasks allocated to the Executive Board ( Vorstand ) and Supervisory Board ( Aufsichtsrat ) under the German Stock Corporation Act ( Aktiengesetz ) as a single management body with both executive and non-executive members. We have acknowledged the feedback received in the course of this discussion and will propose to aoint an additional non-executive member be aointed to the Board of Directors at the company s Annual General Meeting in April. This will mean that the governing bodies of the Board of Directors (Audit Committee and Aointments & Remuneration Committee), which exercise the fundamental control functions, will be formed of three highly experienced and independent non-executive members in the future. We would like to thank you, our customers, business associates, shareholders and employees for continuing to suort Thiel Logistik on the road ahead. Grevenmacher, Luxembourg, March 2006 Berndt-Michael Winter Dr. Antonius Wagner Stefan Delacher Klaus Hrazdira 0003/ 0138

8 Corporate Governance Report Board of Directors The Board of Directors l-r standing: Klaus Hrazdira (Designated member), Dr. Antonius Wagner (Deputy Chairman), Berndt-Michael Winter (Chairman), Stefan Delacher; seated: Dr. Yves Prussen, Prof. Dr. Dr. h.c. Werner Delfmann Corporate Governance Report The Board of Directors of Thiel Logistik AG manages the business and is committed to transparent company management and control. Thiel Logistik AG is a company with worldwide operations, with its registered office in Luxembourg. The company s management and oversight structures are based on Luxembourg law, on the Articles of Association, on German capital market laws (owing its inclusion in the German stock market s Prime Segment) and finally on the German Corporate Governance Code (implemented in a form that is specific to the company, and with only a few exceptions). The Board of Directors of Thiel Logistik AG has issued the following declaration of compliance on December 7, 2005 pursuant to 161 of the German Stock Corporation Act (AktG) and made it available to its shareholders via the Thiel Logistik AG website at / 0138

9 Corporate Governance Report Board of Directors Declaration by the Executive Board and Board of Directors of Thiel Logistik AG pursuant to Article 161 of the Stock Corporation Act (AktG): Since the last declaration of compliance on January 7, 2005, the company has been in compliance with the recommendations of the Government Commission on the German Corporate Governance Code (code version of May 21, 2003) as published in the electronic Federal Gazette on July 4, 2003, with the exceptions stated below. On December 7, 2005, the Executive Board and the Board of Directors resolved to continue to comply with the recommendations of the code (version of June 2, 2005) announced by the Justice Ministry on July 12, 2005, and reported in the official section of the Electronic Federal Gazette on July 21, 2005, with the following exceptions which are identical in content to those previously stated. It should be noted in this respect that the company is a joint stock company as prescribed by Luxembourg law, with a singletier Board of Directors. The Board of Directors manages the company in accordance with Luxembourg corporate law. The Board of Directors has transferred responsibility for the day-to-day business to an Executive Committee, which is composed solely of members of the Board of Directors. In addition to the members of the Executive Committee, the Board of Directors has two non-executive members of the Board of Directors. 1. Code section 3.8 The company s existing D & O insurance provides no insurance cover for willful breach of duty. Where there is insurance cover, there is no deductible for members of the Board of Directors. In the case of publicly listed companies, no standard practice has yet developed regarding the deductible for D & O insurance for company officers, contrary to the recommendation of the German Corporate Governance Code. The company is therefore rejecting a deductible at present. 2. Code section paragraph 1 The recommendation that the Board of Directors plenum should advise on and examine the compensation structure of the Executive Board, which corresponds to the Executive Committee, is not in keeping with the legal structure of a Luxembourg joint stock company with executive and non-executive members of the Board of Directors. It is thus regarded as aropriate that the Aointments & Remuneration Committee of the Board of Directors alone advises on and determines the compensation structure of the executive members of the Board of Directors. This Committee is composed solely of non-executive members of the Executive Board. 3. Code section sentence 2 In order to protect privacy, no details are given concerning compensation paid to the executive members of the Board of Directors on an individual basis. 4. Code section sentence 1 Because a single-tier Board of Directors under Luxembourg law involves no distinction between Executive Board and Supervisory Board, there is no occasion for an Executive Board chairperson to become Supervisory Board Chairperson or Chairperson of a Supervisory Board Committee. 5. Code section paragraph 2, sentence 1 Members of the Board of Directors are entitled to stock options from the existing Stock Option Plan. The Stock Option Plan specifies the maximum number of stock options for each particular group of those who are entitled, but not in the form of performance-related compensation. 6. Code section paragraph 3 In order to protect privacy, no details are given concerning compensation paid to the non-executive members of the Board of Directors on an individual basis. 7. Code section With regard to the list of third party companies in which the company has a shareholding that is not of minor importance for the company, all details are stated except for those concerning the result, however. Grevenmacher, December 7, 2005 Berndt-Michael Winter (Chairman of the Board of Directors) Dr. Antonius Wagner (Deputy Chairman of the Board of Directors) 0005/ 0138

10 Corporate Governance Report Board of Directors Governing bodies of the company Thiel Logistik AG, headquartered in Grevenmacher, is subject to Luxembourg corporate law. The previous management and oversight structure, divided into an Executive Board and a Board of Directors had adapted to the corporate governance rules for a German stock corporation, but has been replaced with a new management structure. The Board of Directors in accordance with Luxembourg corporate law and in keeping with the Articles of Association is now the sole management body of the Group. The former Executive Board, whose establishment had not been a requirement under corporate law, was dissolved. In addition to the Board of Directors, the Annual General Meeting, the meeting of shareholders, is the company s second governing body. All boards are obliged to act in the interests of the shareholders and the company. Thiel Logistik AG reports to its shareholders on the business development and the financial position and performance four times during the fiscal year according to a fixed financial calendar. Ad hoc announcements are published as legally required. The Board of Directors has established binding regulations for conduct that complies with the law, for dealing with conflicts of interest and for handling insider information and stock transactions of executives (Directors Dealings). With the enactment of the German Investor Protection Enhancement Act (AnSVG) in October 2004, the company took precautionary measures to comply with insider legislation and investor protection regulations. Board of Directors The Board of Directors is the body, elected by the Annual General Meeting, that exercises both managerial and supervisory duties. It is formed of executive and non-executive members. The Board of Directors discusses business performance at regular intervals, adopts annual planning and strategy, and monitors its implementation. The Board of Directors compiles the interim reports and the annual financial statements of Thiel Logistik AG, taking into consideration the auditor s reports and the results of the examination by the Audit Committee. The Executive Committee is responsible for the executive management and daily business (gestion journalière). The Executive Committee is also responsible for developing the corporate strategy, preparing the corporate budget, risk management, allocating resources and supervising the management of the operating business units. The Executive Committee collaborates closely with the non-executive members of the Board of Directors, who are primarily responsible for the control functions within the Board of Directors. The rules of procedure for the Board of Directors stipulate the formation of committees, whose duties and responsibilities are consistent with the requirements of the German Corporate Governance Code. The Board of Directors has created an Audit Committee and an Aointments & Remuneration Committee, both of which are formed by nonexecutive members of the Board of Directors only. These committees fulfill the functions delegated to them by the rules of procedure in the name and on behalf of the Board of Directors. 0006/ 0138

11 Corporate Governance Report Board of Directors Wherever Board of Directors members might have been faced with conflicts of interest during the Board of Directors deliberations, the Board of Directors members concerned do not take part in that discussion nor in the adoption of that resolution. Members of the Board of Directors serve for a maximum period of six years. The Board of Directors has given itself rules of procedure that govern its tasks and mode of operation. Annual General Meeting The Annual General Meeting, which is held in April in accordance with the Articles of Association, is the decision-making body of the shareholders of Thiel Logistik AG. The shareholders of Thiel Logistik AG participate in making basic decisions through this body. Thiel Logistik AG enables its shareholders to exercise their rights as shareholders through proxies (who must follow the shareholders instructions) without participating in the Annual General Meeting in person. The Chairman of the Board of Directors chairs the Annual General Meeting. The Annual General Meeting adopts resolutions on all matters assigned to it by law, and these resolutions are binding on all shareholders and the company. This includes, in particular, the aroval of the annual and consolidated financial statements, the aropriation of profits, the discharge of the Board of Directors from liability for its management activities and the choice of an auditor for the annual financial statements. Amendments to the Articles of Association and capital measures are adopted exclusively by the Annual General Meeting and implemented by the Board of Directors. Risk management Thiel Logistik AG has a system for recording and monitoring business and financial risks. The risk management system, which as mandated by the Board of Directors, has been examined by the auditor in accordance with the provisions alicable to German companies listed on the stock exchange, is designed to recognize corporate risks at an early stage and to control them. In addition, the system aims to ensure that corporate goals are achieved. The principles of Thiel Logistik AG s internal control system have been defined and established in such a way as to ensure accurate and timely accounting for all business transactions, and to provide reliable information about the company s financial situation for internal and external use. However, since in general even the internal control and risk management system cannot avoid risks, absolute protection against losses or fraudulent acts is not possible. Accounting and auditing Accounting for the Thiel Logistik Group has been carried out according to the IFRSs (International Financial Reporting Standards) for the first time for the 2005 fiscal year. The individual financial statements for Thiel Logistik AG are prepared in accordance with the accounting standards of the Grand Duchy of Luxembourg. The consolidated financial statements are prepared by the Board of Directors, audited by an independent auditor and subsequently aroved by the Annual General Meeting. The Annual General Meeting elects the independent auditor. The Audit Committee determines the focus of the audit, the auditor s fee and checks the independence of the auditor. 0007/ 0138

12 Corporate Governance Report Board of Directors Financial disclosure Thiel Logistik AG places a high value on transparency. Through regular, open, and current communication the company simultaneously informs its shareholders and all capital market participants, financial analysts, shareholder associations, the media and the interested public about the company s status and business developments. In fiscal year 2005 press conference, half-year press conference, and the Annual General Meeting were broadcasted live on the internet via the company s homepage. Compliance With the enactment of the German Investor Protection Enhancement Act (AnSVG) in October 2004, the company created a Compliance Committee and established the internal structures required. During the 4th quarter of 2004, an insider database was set up, the compliance officer reported on a regular basis, and all the employees concerned were given information about their responsibilities under the new legal requirements. The Compliance Committee also ensured that there was compliance with insider regulations in the 2005 fiscal year. Additionally, the company made provisions for any events of major significance within the Group companies to be reported immediatelly, assessed and the information passed to the relevant bodies. Directors Dealings No reportable business transactions in accordance with Article 15a of the German Securities Trading Act (WpHG) were carried out by members of the company s Board of Directors or other management staff in the 2005 fiscal year, with the exception of the sale of 15,000 company shares on April 20, 2005 by Dr. Klaus Eierhoff, then the Chairman of the Executive Board and member of the Board of Directors of the Thiel Logistik AG. No members of the Board of Directors hold shares or related financial instruments that are directly or indirectly greater in value than one percent of the shares issued by the company. Stock option program A stock option plan for share options for members of the Board of Directors, managing directors and other managers was aroved by the Annual General Meeting of February 10, The Board of Directors was authorized to increase share capital to issue shares from the stock option plan by a total of 8,000,000 euros from authorized capital. The allocation of share options could take place between February 2000 and March 14, For options issued prior to listing on the stock market, the strike price is set at the share issue price at the time of the IPO. For all other options, the strike price is set on the day of allocation and is calculated from the average share price over ten days prior to the day of allocation. Please refer to Note 41, Share-based Payment, of this Annual Report for details on the stock option plan. Meetings of the Board of Directors and its committees The Board of Directors held a total of 12 meetings during the fiscal year. Seven meetings took place as meetings in person, five via telephone conferences. 0008/ 0138

13 Corporate Governance Report Board of Directors The Board of Directors adopted resolutions primarily on the following topics: Strategic planning Investments and divestments Compilation of the annual and consolidated financial statements Risk report for the 2005 fiscal year Budget 2006 Changes to the management and organizational structure Merger of business units under corporate law Adoption of new rules of procedure Examination of efficiency of the Board of Directors The Audit Committee met four times during the 2005 fiscal year, dealing with the annual and consolidated financial statements, quarterly reports, the implementation of the treasury guideline, segment reporting and the current situation of the Group-wide cash pooling system. The former Financial Committee met twice during the past fiscal year, dealing with strategic planning and financial and investment planning. The Aointments & Remuneration Committee met seven times, dealing with the main principles of the remuneration of members of the Board of Directors, personnel policy for the Group and changes to the management and organizational structure of the company. Annual and consolidated financial statements The annual and consolidated financial statements for Thiel Logistik AG for the fiscal year ending on December 31, 2005, compiled by the Board of Directors, were audited by the auditors Ernst & Young S.A. and given an unqualified auditors opinion. The auditor confirmed that both the management report and the Group management report were in accordance with the relevant financial statements. Remuneration of the Board of Directors The company s Annual General Meeting determines the remuneration of non-executive members of the Board of Directors. The remuneration of members of the Executive Committee is determined by the Aointments & Remuneration Committee of the Board of Directors and is regulated by employment contract agreements. The remuneration of members of the Executive Committee of Thiel Logistik AG is guided by the amount and structure of the remuneration of Executive Boards in comparable companies, taking the special areas of responsibility of the individual members into account. The remuneration system is based on the following elements: 0009/ 0138

14 Corporate Governance Report Board of Directors Remuneration comprises two components: fixed remuneration and a variable bonus. The bonus depends on the attainment of financial and qualitative goals, which can be set for one or several years. The three measurement criteria are: Economic Value Added (EVA) of the Thiel Group Earnings before Interest and Taxes (EBIT) of the Thiel Group Strategic and qualitative targets An annual target income is set in all contracts, which assumes that the targets of all three criteria have been achieved in full and at exactly one hundred percent. The relative proportion of the variable remuneration component in the target income rises as the target income itself increases. It corresponds to a minimum of 40 percent of the target income for achievement of all targets for the year The bonus can be between 0 percent and 200 percent of the target bonus, depending on quantitative results and qualitative performance. There is no minimum guaranteed bonus amount. The remuneration of members of the Executive Committee is thus dependent on performance to a great extent. Pension commitments and other fringe benefits are also granted. The Aointments & Remuneration Committee of the Board of Directors can set a special remuneration allowance and allocate share options in accordance with legislation and resolutions by the Annual General Meeting. Two members of the Executive Committee carry out their tasks based on an agreement on procurement of management services with DELTON AG adopted by the Aointments & Remuneration Committee. A fixed monthly amount is charged to Thiel Logistik AG, the amount of which is also based on the remuneration of the Executive Boards at companies comparable to Thiel Logistik AG. 0010/ 0138

15 Corporate Governance Report Board of Directors Members of the Board of Directors Berndt-Michael Winter (*1954), Chairman, Executive member Chairman of the Management Board (CEO), DELTON AG, Bad Homburg (D) External positions: Chairman of the Supervisory Board, DELTON Vermögensverwaltung AG, Bad Homburg (D) Chairman of the Supervisory Board, CEAG AG, Bad Homburg (D) Member of the Supervisory Board, Mast-Jägermeister AG, Wolfenbüttel (D) Dr. Antonius Wagner (*1961), Deputy Chairman, Executive member Member of the Management Board (CFO), DELTON AG, Bad Homburg (D) Positions within the Thiel Group: Deputy Chairman of the Supervisory Board, Microlog Logistics AG, Cologne (D) (since October 25, 2005) Member of the Supervisory Board, Kraftverkehr Bayern GmbH, Munich (D) (until October 19, 2005) External positions: Sole Management Board member of DELTON Vermögensverwaltung AG, Bad Homburg (D) Member of the Supervisory Board, CEAG AG, Bad Homburg (D) Stefan Delacher (*1961), (since September 20, 2005) Executive member Positions within the Thiel Group: Member of the Board of Directors, GST Plateforme Européenne, S.A.S., Scionzier (F) (until March 18, 2005) Chairman of the Supervisory Board of delacher Logistics AG, Wolfurt (A) Chairman of the Board of Directors, Delacher + Co. Transport AG, Muttenz (CH) (until April 8, 2005) Member of the Supervisory Board, Delacher + Co. Transport Kft., Budapest (HU) Member of the Supervisory Board, Microlog Logistics AG, Cologne (D) Member of the Supervisory Board, Quehenberger Logistik AG, Bergheim (A) External positions: Member of the Advisory Council, BERTSCH HOLDING GmbH, Bludenz (A) Prof. Dr. Dr. h.c. Werner Delfmann (*1949), Non-executive member Professor at the University of Cologne (D) External positions: Chairman of the Supervisory Board, KNOWTICE AG, Frankfurt am Main (D) (until October 31, 2005) Chairman of the Executive Board of Arbeitsgemeinschaft Verpackung und Umwelt e.v., Berlin (D) 0011/ 0138

16 Corporate Governance Report Board of Directors Dr. Yves Prussen (*1947), Non-executive member Attorney in Luxembourg (L) External positions: Member of the Board of Directors, Banque Degroof Luxembourg S.A. (L) Member of the Board of Directors, Richemont Finance S.A. (L) Member of the Board of Directors, Alliance Capital (Luxembourg) S.A. (L) Member of the Board of Directors, JP Morgan Asset Management Holdings (Luxembourg) S.à r.l. (L) (formerly Robert Fleming (Luxembourg) S.à r.l. (L)) Members of the Board of Directors proposed to the Annual General Meeting: Klaus Hrazdira (*1963), Executive member Positions within the Thiel Group: CEO, Quehenberger Logistik AG, Bergheim (A) Member of the Supervisory Board, Delacher + Co. Transport Kft., Budapest (HU) Member of the Supervisory Board, delacher Logistics AG, Wolfurt, (A) Member of the Supervisory Board, Südkraft Logistik GmbH, Munich (D) Managing Director at: Logotec Logistikservice GmbH, Vienna (A) Quehenberger Internationale Holding GmbH, Bergheim (A) Logochem Logistikservice GmbH, Krems (A) Quehenberger-Hellmann Worldwide Logistics GmbH, Salzburg (A) Welz Internationale Spedition GmbH, Salzburg (A) (until September 12, 2005) Dr. Michael Kemmer (*1957), Non-executive member Former member of the Executive Board (Chief Risk Officer), HypoVereinsbank AG, Munich (D) Members of the Executive Committee: Berndt-Michael Winter, Chairman Dr. Antonius Wagner, Finance Stefan Delacher, Industry Solutions and Air & Ocean Klaus Hrazdira, Regional Logistics Services Board of Directors Committees: Audit Committee: Dr. Yves Prussen, Chairman Prof. Dr. Dr. h.c. Werner Delfmann Aointments & Remuneration Committee: Prof. Dr. Dr. h.c. Werner Delfmann, Chairman Dr. Yves Prussen Members who have left the Board of Directors and the former Executive Board: Dr. Klaus Eierhoff (Chairman of the Executive Board and Member of the Board of Directors until June 30, 2005) Martin Löffler (Member of the Executive Board until July 31, 2005) 0012/ 0138

17 Report on the Stock & Bond Investor Relations Report on the Stock and Corporate Bond Development in the German and European share markets There was positive development in the German and European share markets in This was particularly the case for small and mid-caps in the German MDAX and SDAX, which developed better overall in 2005 than the leading German index, DAX. Development in share price Price development for Thiel Logistik shares was initially better than MDAX and SDAX at the start of the year and reached its annual high at the beginning of February at 5.38 euros. In light of the expectations for the current fiscal year, which were lowered in April 2005, the share price did not follow the general stock exchange trend. Following a decline in the second quarter, and achieving an annual low of 2.67 euros during the second half of August, the price picked up slightly and remained largely stable in the final quarter of Thiel Logistik shares were included on the MDAX until June 2005, since then they have been a member of SDAX million Thiel Logistik AG shares were traded on the German stock exchanges in This corresponds to a turnover of million euros. The average volume per trading day was 237,224 shares with an average daily turnover of 868,523 million euros. An opening price of 4.17 euros and a closing price of 2.97 euros (in XETRA trading) correspond to a year-on-year price development of 28.8 percent for Shareholders structure DELTON AG remains the major shareholder of Thiel Logistik AG with percent of shares as of December 31, The free float amounts to percent. Stefan Delacher, executive member of the Board of Directors, continues to hold 8,000 Thiel Logistik stock options. The other members of the Board of Directors and the Executive Committee have neither Thiel Logistik shares nor options to purchase shares in the company. Key figures of Thiel Logistik shares in 2 Dec. 31, 2005 Dec. 31, 2004 Share price Share capital 139,343, ,343, Number of shares outstanding in shares 111,474, ,474,987 Nominal amount per share Stock exchange capitalization (free float) in million Earnings per share (0.48) 0.01 Operating cash flow per share EBITDA/EV / 0138

18 Report on the Stock & Bond Investor Relations Key data for Thiel Logistik shares Stock exchange abbreviation TGH ISIN LU German SIN Indices SDAX, L-SDAX, Prime Transportation & Logistics, Prime IG Logistics, Prime All Share, Classic All Share European bonds slightly positive due to sustained low interest rates Key interest rate remained almost unchanged in 2005 in the euro area, which is the most significant area for Thiel Logistik AG. The prices of high yield European company bonds rose in 2005 despite increased interest rates outside Europe. Development of the corporate bond slightly below the overall market Similar to the share price, the development of the Thiel corporate bond was positive at first. After reaching a high in February 2005, the bond price fell significantly. The credit spread, which shows the risk of a selected paper traded on the financial markets compared to a safe alternative, increased to a high of 742 basis points above 3M Euribor. This amounted to 514 basis points at the end of the year. Company rating and bond rating The lowering of expectations for 2005 led to a reassessment of external ratings for the corporate bond and the company. In August, the rating agency Moody s lowered its rating for the Thiel Group by one level to B2. Standard & Poor s followed with a credit rating of B in November The senior subordinated bond continues to be rated two rating levels lower than the Group by both agencies. Investor Relations activities Investor Relations activities had the task of presenting and explaining the development of the Thiel Group and the company shares and corporate bond transparently in The press and analysts conference in March 2005 and the press and telephone conferences held for the disclosure of quarterly figures and important company announcements served this purpose. Furthermore, numerous discussions were held with investors and analysts interested in Thiel shares or the corporate bond as part of roadshows and individual meetings, in which representatives of the management also participated. In addition to participating in capital market conferences such as the German Equity Forum, Thiel Logistik AG invited investors to attend its first investors day for institutional investors in December The event at the company site in Vienna focused on the presenting of the new Group structures, the activities of the Quehenberger business unit and the successful development of the Eastern European business in the Thiel Group. 0014/ 0138

19 Report on the Stock & Bond Investor Relations Share of Thiel Logistik AG vs. benchmark indices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Thiel Logistik AG XETRA SDAX Prime Transport Corporate Bond of Thiel Logistik AG Credit Spread* in b.p.** Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Corporate Bond Thiel Logistik 04/12 8 % vs. SWAP Rate ML Index Bonds Corporate Rating B ML Index Bonds Corporate Rating CCC * Credit Spread = Risk premium on safe alternative ** b.p. = basis points 0015/ 0138

20 Name Industry Year Management Report L O G I S T I C S 2005

21 Contents Management Report Group Portrait Economic Conditions and the Logistics Market Overview: Development Financial Position and Performance Value-oriented Company Management Research and Development Capital Expenditure and Investments Employees Industry Solutions Thiel FashionLifestyle Thiel Media Thiel Furniture Thiel Automotive Air & Ocean Regional Logistics Services Quehenberger Südkraft Delacher Sulementary Report Risk Report Outlook Report... 53

22 Group Portrait Management Report Group Portrait Logistics plays a key role in value creation for many companies. This concerns far more than transportation, warehousing or distributing merchandise and goods. In times of globalization and the international division of labor, logistics chains are becoming increasingly complex. Trade volumes are growing and consumer and industrial goods have to be transported over increasingly greater distances within increasingly shorter time periods. This calls for logistics experts with integrated concepts, who combine traditional transportation services and warehousing with suly chain management, contract logistics and value-added services on a global basis. Industry and trade require innovative logistics solutions and efficient networks now more than ever before. Thiel Logistik specializes in integrated solutions for contract logistics, outsourcing and suly chain management. The Group focuses on leading industries and regions, for which individual solutions are developed along the customer s entire value chain. The Thiel Group combines modern logistics instruments to flexible, individual solutions tailored to customers needs which develop as requirements increase. Based on this aroach, the Thiel Group thus already has a leading market position in key areas. Strategically, Thiel Logistik focuses on the three business segments of Industry Solutions, Regional Logistics Services and Air & Ocean. In the Industry Solutions business segment, the entire logistics value chain is covered for the fashion industry and fashion-related products (Thiel FashionLifestyle), press and media (Thiel Media), new furniture (Thiel Furniture) and until the end of the year 2005 for the automotive sector (Thiel Automotive). The Quehenberger, Südkraft and Delacher business units belong to the Regional Logistics Services business segment. These regional subsidiaries of the Thiel Group provide logistics solutions for their local customers, focusing on Central and Eastern Europe. The Air & Ocean business segment ensures that there are seamless connections to the international sales and procurement markets. The merger of Südkraft and Thiel Automotive took place in 2005, effective from January 1, The new business unit Microlog-Südkraft was allocated to the Regional Logistics Services business segment at the start of the 2006 fiscal year. From January 1, 2006, the internal reporting system was also adjusted accordingly. The structure of the Thiel Group combines both decentral and central elements in a well balanced manner. Elements of decentralization aly to business operations, whereby the business units are responsible for their own operations and make their decisions in accordance with the Group strategy. Eight Centers of Competence have been established, which bundle know-how within the Group, and make this available to all business units as best practice solutions and ensure their implementation. With their suort function, the Centers of Competence encourage the integration of the different business units and set standards for the development and implementation of high quality logistics solutions. This coordinating function is carried out in close cooperation with the business units. Ongoing quality management and consistent further close training for managers and employees safeguard the innovation process. This structure combines the economy of scale of the Thiel Group with the customer-orientation of the operating companies. 0018/ 0138

23 Economy and Logistics Market Management Report Centers of Competence Logistics Networks Suly Chain Solutions Automotive Chemicals Purchasing Facility Management Marketing Contract Management In order for the operating companies to be able to concentrate on their core business, administrative processes such as accounting or human resources administration have been combined as much as possible and carried out by Shared Service Centers. This standardization makes processes more efficient, more cost-effective and increases the quality of work. The administrative functions of three business units are already being bundled in the Thiel Shared Service Center in Aschaffenburg today. The Group holding focuses on Group management functions. Economic Conditions and the Logistics Market Due to the international orientation of the activities of the Thiel Group, the global economic development has a high relevance for the business. Compared to 2004, global economic growth slowed in 2005 but remained strong, achieving an increase of 3.2 percent year-on-year (2004: 3.8 percent). North America and the Asia-Pacific region demonstrated strong momentum with growth rates of 3.5 and 7.8 percent. However, there was only slight economic recovery in Japan and the Euro area with growth rates of 2.3 and 1.1 percent. Foundering domestic demand restricted growth, particularly in the euro area (World Bank). Economic situation in Germany, Austria and Switzerland Germany, Austria and Switzerland are core markets for the Thiel Group. The German economy grew by only 1.1 percent year-on-year in As in the previous year, this low level of growth was almost exclusively driven by exports. Domestic investments remained low despite historically low interest rates. Private consumption stagnated due to increased energy prices and the difficult labor market situation. 0019/ 0138

24 Economy and Logistics Market Management Report For Austria year-on-year increase of 1.8 percent in gross domestic product (OECD) is anticipated in Austria benefited from fast-growing trade with Southeastern Europe and the CIS states. There was a considerable decrease in investments in equipment in Austria in 2005 following the end of tax privileges for companies. Due to the rise in oil prices, private consumption also only made a weak contribution to growth. Swiss economic growth is expected to have slowed to 1.2 percent (2004: 2.1 percent). The increase in orders received in the manufacturing industry in the second half of the year only boosted the weak export demand slightly by the end of the year Economic situation in Central and Eastern Europe The economic situation in Central and Eastern Europe had a particular effect on the Regional Logistics Services and Industry Solutions business segments. In comparison to Western Europe, countries in this region also posted strong growth in 2005 with average rates of four to five percent. This high level of momentum was largely due to exports, which increased in the second half of the year in particular. However, interest rate rises and revaluation pressure had a negative impact on investment activity. Economic situation in the Far East and Southeast Asia The Thiel Group s air and ocean forwarding business benefited in particular from strong economic growth in Asia, which is considerably influenced by dynamic development in China. Chinese economic growth was up by 9.3 percent compared to 2004 (OECD). The liberalization of the quota system in the international textile and clothing industry led to an increase in exports; the relaxed monetary policy and the reduction of bureaucracy also increased domestic demand in China. Logistics market The logistics market benefits from the internationalization trend in the economy. Trade continues to grow at a stronger rate than production, with goods and merchandise being transported over increasingly greater distances within increasingly shorter time periods. Due to international integration the proportion of logistics value added in the gross domestic product of the companies increases. It was aroximately seven percent in 2005 in Germany. Overall, cost pressure continued to increase in the logistics industry in This is due to intensified competition due to fiercer competition from Eastern Europe, and the introduction of tolls and rising fuel prices. The concentration process continued in the already stagnant markets for land and general cargo transportation, where logistics groups are buying out small system partners to increase the efficiency of their own networks. Large logistics groups are using their economies of scale and their regional strengths to expand their range of services for 0020/ 0138

25 Economy and Logistics Market Management Report specific customers or industries in the contract logistics market, which continues to be attractive. Increasing integration of logistics service providers into the value-added process leads to increased demands. High-quality services and value-added services are increasingly being called for in addition to traditional outsourcing of transportation or storage. The logistics market in Germany has an aroximate size of 170 billion euros per year according to the latest Top 100 der Logistik study. Almost half of this estimated transaction value is already outsourced to service providers. The logistics business in Germany has grown by an average of 2.1 percent per year for the past three years. According to the SCI Logistics Barometer 2005, there was a considerable improvement in the business climate on the German logistics market compared to the previous year due to increased use of capacity. The European Union is becoming one of the largest economic areas in the world following its Eastern enlargement. Logistics service providers are also benefiting from this development, particularly as the new EU states are no longer just production sites but are increasingly becoming attractive sales markets for goods from Western Europe. The logistics market volume in the new EU accession countries amounts to around 30 billion euros per year. Around one third of this relates to contract logistics services. The logistics volume outsourced to service providers was around 3.6 billion euros in A market potential of around 45 billion euros for Eastern European states bordering on the EU is assumed per year (TU Berlin, EastLog 2003). The increasing distribution of high-value goods for the automotive and engineering industry and the manufacturers of metal and plastics is driving growth in the logistics market in Eastern Europe, which corresponds to around nine percent each year (BVL-Österreich). Outsourcing accounts for only 1.5 to four percent of the total logistics market volume of 150 to 200 billion euros in China. The market is characterized by very low concentration. There is considerable potential for improvement in logistics with regards to infrastructure and processes, shown in the proportion of logistics costs in the total costs, which is around 17 percent in China (Fraunhofer IFF/EU). Detailed information on the framework conditions for individual services and the particularities of different countries, markets and industries can be found in the Segment Reporting (pages 37 to 49). 0021/ 0138

26 Overview: Development Management Report Overview: Development Significant sales growth one-off expenses have a negative impact on earnings The Thiel Group continued to increase sales in Positive organic growth resulted in stable operating development during the course of the year. This was primarily due to the air and ocean forwarding business, which continues to benefit from the sustained economic upturn in Asia, and due to the activities in Central and Eastern Europe. Thiel Logistik grew substantially in both regions in The Eastern European network was expanded with the acquisition of the Slovak logistics company Proxar. Success can be seen in earnings for the Air & Ocean and Regional Logistics Services business segments, which developed above average as they adapted to meet the demands of growth regions with their expanded range of services. Earnings problems in the Thiel Automotive business unit in particular and start-up problems in the new Thiel Furniture distribution center meant that it was necessary to revise earnings expectations, with the earnings guidance for 2005 consequently being adjusted downwards in April and August. Extensive organizational and structural changes were agreed and implemented during the year to improve the operating earnings situation. This resulted in significant one-off expenditure for the reorganization of the companies affected. Impairments of long-lived assets and goodwill were also recorded in the second half year of New management structure at Thiel Logistik AG The Board of Directors of Thiel Logistik AG gave the Group a new management and organizational structure. Since September the Board of Directors has been the sole management body of the Group, in accordance with Luxembourg corporate law and the Articles of Association. The former Executive Board, whose establishment had not been a requirement under corporate law was dissolved. An Executive Committee was formed to fulfill operational tasks, in which the members of the Board of Directors were allocated the following responsibilities: Berndt-Michael Winter as Chairman, Dr. Antonius Wagner for Finance and Stefan Delacher for the Industry Solutions and Air & Ocean business segments. Klaus Hrazdira, whose election to the Board of Directors cannot take place until the Annual General Meeting in April 2006, is responsible for the Regional Logistics Services business segment within the Executive Committee. Prof. Dr. Dr. h.c. Werner Delfmann and Dr. Yves Prussen continue to be non-executive members of the Board of Directors. Dr. Michael Kemmer will be proposed to the Annual General Meeting in April 2006 for election as a further non-executive member of the Board of Directors. 0022/ 0138