Vorwerk Annual Report 2010
Trautes Heim, Glück allein /
Home, sweet home /
/
On est bien chez soi /
Casa, dolce casa / Mi casa
es su casa /Welcome ...
Management Report / Thermomix
Editorial //17
01
Management Report / Thermomix
Editorial //17
01
Introduction
Vorwerk is at home all around the world.
But what does “being at home” truly mean?
Home is a place we associate more than any
other with emotions and values, such as family,
happiness, and a sense of security. A place
of refuge – a place where we long to find the
ideal world we all dream of.
This year, our Annual Report takes you on
an entertaining journey into that world. Along
the way, we will be taking a closer look at some
of the little things that shape our ideas and
memories of home.
So make yourself comfortable. Get ready for
some pleasant smells, the crackling of an open
fire and cosy warmth, all of which make us feel
that it’s really good to be home. / Welcome
Contents
06 A Review of Vorwerk
Management Report 2010
11 General Section on
Business Development
16 Direct Sales, Vorwerk Kobold
19 Direct Sales, Vorwerk Thermomix
21 Direct Sales, JAFRA Cosmetics
23 Direct Sales, Lux Asia Pacific
24 Vorwerk Engineering
28 akf group
29 HECTAS Facility Services
Contents / 03
33
34
36
40
41
42
Vorwerk Carpets
Vorwerk Direct Selling Ventures
Human Resources
Assets and Earnings Situation
Financial Situation
Opportunities and Risks
45 Consolidated Financial
Statements 2010
59 The Main Companies
in the Vorwerk Group
62 Sources / Imprint
04 / At home in / SWITZERLAND
Grüezi /
Zermatt
46° 1' N / 7°44' E
Essentially, a slipper is a loose, comfortable indoor shoe to be worn at
home. It has found its way – in all
manner of colours and styles – into
homes all over the world, including
beautiful Switzerland, where it warms
the feet during the cold winters.
The slipper’s conquest of the sitting
room in many European countries
created a new species of man – the
“henpecked husband”, or doormat
on which his wife metaphorically
wipes her slippers. He has little to say
in his own four walls.
06 / A Review of Vorwerk
A Review of Vorwerk
Head Office of the Vorwerk Group (Holding Company)
Vorwerk & Co. KG
Mühlenweg 17 - 37
42270 Wuppertal, Germany
Telephone +49 202 564-0, Fax -1301
www.vorwerk.de / www.vorwerk.com
Executive Board
Walter Muyres (Managing Partner)
Reiner Strecker (Managing Partner)
Peter Oberegger (Managing Partner until 31 December 2010)
Georg Müller (since 1 January 2011)
Supervisory Board
Dr. Jörg Mittelsten Scheid, Wuppertal (Chairman)
Prof. Dr. Ing. Pius Baschera, Zurich/Switzerland (Vice Chairman)
Dr. Axel Epe, Düsseldorf (Vice Chairman)
Günther Busch, Mülheim/Ruhr
Dipl.-Ing. Rainer Christian Genes, Stuttgart
Verena Klüser, Munich
Jens Mittelsten Scheid, Munich
Sabine Schmidt, Waltrop (since 1 January 2011)
Karen Schmidt-Paas, Neuss (until 31 December 2010)
A Review of Vorwerk / 07
Key figures for the Vorwerk Group
in million €*
2007
2008
2009
2010
Group sales (incl. sales tax)
1,777
1,832
1,826
2,372
Balance sheet total
1,643
1,648
1,734
2,720
809
856
920
1,112
49
52
53
61
Partners‘ equity
Partners‘ equity in % (akf group at equity)
Partners‘ equity in % (akf group fully consolidated)
Financial assets
41
27
53
67
55
418
422
427
928
1,183
1,164
1,221
1,685
640
600
670
658
Capital investments**
27
48
45
226
Depreciation**
39
38
39
185
Personnel costs
436
452
466
480
Number of employees
22,570
22,255
21,580
22,096
Self-employed advisers
543,415
555,718
589,251
601,664
Other fixed assets
Current assets
Liquid resources
* akf group up to 2009 included in the consolidated statements at equity, fully consolidated from 2010
** Without financial investments
08 / A Review of Vorwerk
International Presence
Subsidiaries
Austria, Belgium, Brazil, China, Czech Republic, Dominican Republic, France,
Germany, Hungary, India, Indonesia, Italy, Japan, Luxembourg, Mexico,
Netherlands, Philippines, Poland, Portugal, Russia, Singapore, Spain, Switzerland,
Taiwan, Thailand, United States of America,Vietnam
Distributors
Angola, Argentina, Australia, Azerbaijan, Brunei, Canada, Caribbean, Chile,
Columbia, Croatia, Cyprus, Ecuador, England, Estonia, Finland, Greece,
Hong Kong, Ireland, Israel, Kazakhstan, Latvia, Lebanon, Lithuania, Malaysia,
Morocco, New Zealand, Norway, Peru, Romania, Scotland, Slovakian Republic,
Slovenia, South Africa, South Korea, Sweden, Turkey, Ukraine, United Arab
Emirates, Zimbabwe
A Review of Vorwerk / 09
The Vorwerk Group comprised the following business
segments in the year 2010:
Direct Sales, Vorwerk Kobold / Direct Sales, Vorwerk
Thermomix / Direct Sales, JAFRA Cosmetics / Direct Sales,
Lux Asia Pacific in Asia / Vorwerk Engineering /
akf group / HECTAS Facility Services / Vorwerk Carpets
Vorwerk Group /
Divisional turnover 2010
16 %
akf group
1%
3%
€ 376 m
30 %
Others
Kobold
€ 21 m
Carpets
€ 718 m
€ 69 m
8%
HECTAS
€ 199 m
1%
Lux Asia Pacific
€ 32 m
19 %
22 %
€ 447 m
€ 510 m
JAFRA Cosmetics
Thermomix
10 / At home in / MEXICO
Bienvenidos / Acapulco
16°50' N / 99°55' W
Colours are very important in Mexico. Houses have brightly painted walls on the
outside and lots of colourful accessories on the inside. Take the ”corazón”, for instance. It stands, among other things, for a sense of security, harmony, wistfulness,
trust and love. It’s also a popular souvenir, which means that you can give your
heart to someone – even if it’s the person you’ve lost it to.
Management Report / General Section / 11
Management Report /
General Section on
Business Development
The Vorwerk Group is reflecting on a successful year in 2010, one in which both turnover as well as earnings increased considerably. Group turnover rose in the 127th business year by 29.9 percent to 2.372
billion euros. The reasons for this are to be found both in the sometimes distinct growth of almost all
existing business segments as well as in the first-time full consolidation of akf group. Yet even without
inclusion of akf, a clear increase in turnover of 9.3 percent could be recorded. The direct sales companies
contributed in particular to this, recording a significant increase in turnover of 10.8 percent. HECTAS
Facility Services also closed the year under review with an increase. Vorwerk Carpets achieved the level
of previous year in terms of sales, but with much improved earnings. The amount of new business at
akf group was almost at the level of previous year.
Further progress was made in terms of the internationalisation of the Vorwerk Group: the turnover
generated outside Germany was 66 percent, in direct sales it was even as much as 84 percent.
The most successful division at Vorwerk Group is currently the sales of the versatile Thermomix kitchen
appliance. In 2010 the sales organisations in Italy and Spain each sold more than 100,000 appliances, both
France and Germany managed to sell more than 90,000 units. This business is therefore spread across a
broad base, one which provides a solid foundation for future growth.
The Vorwerk Kobold Division also achieved an increase in turnover, due to a great extent to the Italian
sales organisation Vorwerk Folletto. Impulses came for example from the worldwide launch of the new
vacuum cleaner Kobold VK 140.
JAFRA Cosmetics likewise developed very well. Mexico, our largest market by far, did not only return
a new record level of turnover with 351.9 million euros, but JAFRA Mexico also managed to bring the
number of consultants to a new high of 494,577. The newly opened sales organisation in India means
that JAFRA Cosmetics is also represented in the Asian region for the first time.
The earnings of the Vorwerk Group could be significantly increased as against previous year. The inclusion
of akf group and the associated increase in balance sheet total meant that the equity capital ratio was
running at 41 percent. A partners’ equity capital ratio of 61 percent would result as against 53 percent in
previous year had there been an unchanged consolidation group. The liquid assets amounted to 658.2
million euros. Vorwerk will continue to take specific advantage of the entrepreneurial scope that such
figures allow.
12 / Management Report / General Section
2010 has shown that Vorwerk has emerged stronger from the financial and economic crisis. The project
“Fit for the Future” that had already been initiated one year before was of decisive importance in this
respect. The Vorwerk Group had especially prepared itself for the implications of the financial crisis with
internal measures that reduced costs and increased efficiency across all areas of the company.
The Vorwerk Group occupies a leading position among direct selling companies worldwide. In a current
ranking of the top 100 direct selling companies listed in “Direct Selling News”, a publication issued in the
USA, the Vorwerk Group takes third place.
Overall, 623,760 people were working for Vorwerk worldwide in 2010. That is an increase of 2.1 percent
in comparison with the previous year. More than 601,000 of these people were working as self-employed
advisers and consultants in direct selling. As one of the leading direct selling companies worldwide,
Vorwerk offers attractive career opportunities and scope for personal as well as professional development.
Particularly in growing and emerging markets, more and more women are recognising the chances for
greater personal and financial independence by committing to the reputable direct sale of high quality
products. The chances of determining the level of income for oneself and of contributing to the family
income are aspects that are being taken advantage of more and more. Committed, ambitious and motivated persons are still required across all areas of the Vorwerk direct sales activities. Vorwerk offers high
quality products, recognised sales systems and fairness in interactions with advisers and customers.
The Vorwerk Group is sub-divided into eight divisions and its own companies are present in 27 countries.
Moreover, Vorwerk products are available in 39 additional countries. Management Boards are responsible
for running the respective divisions.
Strategic leadership for the entire Vorwerk Group is the responsibility of the Holding Company in Wuppertal. The members of the Executive Board are the Managing Partners Walter Muyres and Reiner Strecker
as well as the Executive Vice President Human Resources Georg Müller. Dr. Jörg Mittelsten Scheid,
member of the Vorwerk owner family, is Chairman of the Supervisory Board at the Vorwerk Group.
Thanks and Outlook
The dedication and motivation of the staff, customer advisers and consultants are of significant
importance for the development of the company. The Executive Board would like to take this opportunity
to sincerely thank all “Vorwerkers” for their commitment. One very distinctive feature of the Vorwerk
culture has always been the trusting relationships to one another. The objective of the newly launched
“ONE Vorwerk” project is to reinforce this aspect and increase its focus in our everyday activities.
The mutual exchange of ideas and concepts is one of the requirements for continued future success.
Management Report / General Section / 13
Vorwerk intends to further increase the Group’s sales volume and earnings level over the next two
years. Success in this respect will very much depend upon continuing to keep the career and income
opportunities attractive for advisers and consultants, as with the recent changeover of the sales system
at Kobold Germany. A growth in staffing levels will always be a prerequisite for the further development
of direct selling activities. This is the reason why great importance will be attached in the coming years
to recruiting new sales and management staff.
In the service sector – i.e. at HECTAS and akf group – new possibilities and growth opportunities will occur
as the overall level of economic activity continues to improve. Moreover, akf group is benefitting from
greater cooperation with the Vorwerk sales companies in the area of consumer finance. Vorwerk Carpets,
with its positioning in the premium market segment, is well prepared for the forthcoming investments in
the real estate sector. The respective outlook in the individual divisions will be described in more detail in
the following sections of the Management Report.
Divisional turnover
in million € (incl. sales tax)
2007
2008
2009
2010
1,495.5
1,530.3
1,540.1
1,706.7
Division Vorwerk Kobold incl. Fitted Kitchens*
686.7
695.8
695.4
717.9
Division Vorwerk Thermomix
330.8
386.2
419.8
509.6
Division Vorwerk Feelina**
3.8
3.3
0.9
0.0
Division JAFRA Cosmetics
432.2
409.1
390.2
447.5
42.0
35.9
33.8
31.7
186.6
201.2
195.1
198.9
77.9
79.1
69.5
69.4
Direct sales
Division Lux Asia Pacific
HECTAS Facility Services
Vorwerk Carpets
akf group***
Others
Group turnover
375.7
16.9
21.1
21.7
21.3
1,776.9
1,831.7
1,826.4
2,372.0
*
Vorwerk Fitted Kitchens until 30 June 2008
** Vorwerk Feelina until 31 January 2009
*** akf group up to 2009 included in the consolidated statements at equity, fully consolidated from 2010
14 / At home in / GERMANY
Grüß Gott /
Bad Tölz
47°46' N / 11° 33' E
The garden gnome is probably
the most iconic symbol of
German hominess. But these little
fellows are actually unfortunate
little devils. Armed with a shovel,
pick or wheelbarrow, they are
doomed to perform daily hard
labor behind fences and hedges.
Luckily, their real fans have
joined forces in the Garden
Gnome Liberation Front, and
thanks to them, many a bearded
fellow has now found his way
out into the open countryside.
Down with slavery!
16 / Management Report / Vorwerk Kobold
Management Report /
Direct Sales,
Vorwerk Kobold
Turnover increased to 717.6 million euros
Vorwerk Folletto remains market leader in Italy
Small, light, agile and extremely powerful: the new Kobold VK 140 vacuum cleaner sets the standard.
Vorwerk vacuum cleaners have traditionally stood for the very highest quality. This aspect was also in the
foreground of the development of the new Kobold model that was launched in all markets during the year
under review. Whereas other cleaners merely skim across the surface, the new Kobold VK 140 cleans deep
down. The rotating circular brushes in the motorised nozzle even loosen deeply embedded dirt in an initial
vacuuming stage. Thanks to its wide suction intake opening, the Kobold can clean floors more quickly than
other vacuum cleaners – and with 50 percent less power consumption. It can be used both on carpeting
as well as hard floors. The upright vacuum cleaner Kobold and the Tiger canister-type version that is available in some markets are highly regarded and appreciated products among customers.
The Vorwerk Kobold Division with its sales companies in a total of ten countries as well as the distributor
business increased its turnover once again in the year under review and achieved a volume of 717.6 million
euros (without Fitted Kitchens). Vorwerk Kobold therefore remains the largest division within the Vorwerk
Group in terms of sales.
*
1 000 x
Purer than Normal Room Air
People who vacuum with a Kobold VK 140 can breathe easily. That’s
because the VK 140’s multi-patented, TÜV safety-certified filter system
traps more than 99.99 percent of allergenic house dust, leaving the
air it emits 1000 times cleaner than normal room air. Good news, and
not just for allergy sufferers!
Management Report / Vorwerk Kobold / 17
A considerable increase was recorded by the sales company Vorwerk Folletto in Italy, the strongest Kobold
sales organisation worldwide. Turnover increased by 8.3 percent to 429.6 million euros. Vorwerk Folletto
thereby continued the positive development of past years and demonstrated most spectacularly that
growth can also be achieved in saturated markets. The first foreign direct sales subsidiary of the Vorwerk
Group – founded in 1938 – thereby managed to maintain its position as market leader in Italy during the
year under review.
In Germany, the second largest Kobold sales country, the sales system was completely restructured in the
year under review. As a consequence of this restructuring phase and the new sales processes associated
with it, turnover fell by 9.3 percent to 181.8 million euros. The new sales system is entirely aligned to
growth. In the new system, an adviser is responsible for customers in a firmly agreed area and is therefore
a direct contact person. The product and service quality are critical factors for many customers in making
a purchasing decision. Vorwerk Kobold Germany is attaching emphasis to linking high quality products with
personal, expert consultation. The advisers agree appointments with customers and are quickly on location
with their expertise whenever needed. This system is not only attractive for customers, but also for advisers: good career opportunities, a free allocation of time spent on the job and room for individual creativity
guarantee a solid base for workplace self-determination. The product range is being extended step by step,
so Vorwerk Kobold Germany can once again look forward to growing sales volumes in the coming years.
Exports and even some of the smaller Kobold countries in terms of sales volume contributed to the positive
development of the overall division. Spain for example – following the high loss in business as a result of
the financial and economic crisis in 2009 – managed to grow by 21.7 percent in the year under review and
achieved a turnover of 16.4 million euros. The measures that were initiated there at an early stage to
improve the motivation of the Spanish advisers and cautious modifications to the sales system have had
a sustained positive impact.
Whereas the Chinese sales organisation – measured in euros – closed at approximately the same level as
previous year (turnover 2010: 32.1 million euros), Vorwerk Austria was able to record a slight improvement
in sales volume of 2.5 percent to 23.9 million euros. The sales organisation in the Czech Republic also
closed the year under review with a small increase (2.6 percent to 14.6 million euros turnover) as did
Vorwerk France (2.2 percent to 8.3 million euros turnover). Business grew significantly with distributors,
i.e. independent sales partners in those countries where Vorwerk does not have a sales organisation of its
own. The increase here was as high as 25.9 percent with a total sales volume of 4.9 million euros.
The strategic measures and changes adopted in recent years, particularly in the German Kobold sales
organisation, have created essential preconditions for the long-term development of the division. In the
coming years this focus will continue in terms of strengthening and further development of the existing
sales companies.
18 / At home in / FRANCE
Salut / Chalonnes-sur-Loire
47° 21' N / 0°46' W
Once upon a time, the fireplace was the focal point of every home. It was the meeting place,
the place where people slept, assembled and ate their food. The hearth has lost none of its
attraction – even if not every home has one these days. Today people cook with the Thermomix,
sleep in warm beds and have a central heating system to keep their home heated to exactly
the right temperature. But when it comes to creating a cosy atmosphere, there’s nothing to beat
a glowing fire in the hearth. Bring a little romance into your home. Crackle, crackle, pop.
Management Report / Vorwerk Thermomix / 19
Management Report /
Direct Sales,
Vorwerk Thermomix
Marked increase in turnover of 21.4 percent
Continued extension of services for customers
In the year under review, the Vorwerk Thermomix Division improved on the already very satisfactory previous year, and with a turnover volume of 509.6 million euros achieved an increase of 21.4 percent. Moreover, the division again recorded a significant increase in earnings.
Thermomix is the “multi-talent” in the kitchen. It assumes the function of 12 different kitchen devices:
it can chop, stir, cook as well as weigh – and all in just a single appliance, without any changing of attachments. Gentle steam cooking means that fresh ingredients can unfold their true flavour while largely
preserving the nutrients. This makes the Thermomix the ideal companion for a fresh, balanced and healthy
diet. The benefits are convincing more and more people worldwide who are familiar with the Thermomix
based on a demonstration in their own home by a well-trained representative. However, not only is the
product convincing, but also the sales approach: Thermomix offers attractive career opportunities,
particularly for women.
The Secret’s in the Mix
*
12
The Thermomix is a genuine multi-talent. Can it knead? Oh yes. Cook?
Without a doubt. Not to mention weigh, stir, chop, grind, pulverize,
blend and boil. In fact, the Thermomix combines the functions of
no less than 12 individual kitchen appliances in one. And that means
excellent meals guaranteed, regardless where they are prepared – in
household kitchens or 3-star restaurants.
20 / Management Report / Vorwerk Thermomix
The growth of the division can be attributed in particular to the four large Thermomix countries Italy, Spain,
France and Germany. Vorwerk Contempora, the Thermomix sales organisation in Italy, managed to maintain
its leading position in the year under review. Turnover again increased by 14.7 percent to 142.0 million
euros. Vorwerk Espana recovered considerably after the crisis year of 2009 and was even able to exceed
its own expectations. A sales volume of 107.6 million euros (an increase of 11.9 percent) meant that they
were able to hold on to second place.
The success story of recent years continued in both Germany and France with double-digit growth rates.
Turnover proceeds in France rose by 52.3 percent to 97.9 million euros. Germany, at 93.9 million euros,
achieved growth of 32.4 percent.
The recipe for success at the Thermomix sales companies lies in a concentration on the core business and
a strengthening of the idea of service. This aspect is being suitably addressed with international cookery
books, the opening of Thermomix studios and the continued establishment of internet communities.
All decisions are taken both from the customer point of view as well as from that of the free-lance and
independent representatives. A regular exchange of “best practices” ensures a high degree of professionalism within the division. This open form of communication nurtures entrepreneurship at all levels of
the sales organisation and is a basic requirement for sustained success.
In the current year, the focus will be on developing the mid-sized and smaller Thermomix countries. It is
true that Poland, Taiwan and Mexico improved slightly against previous year. In Mexico, still a very young
organisation, the sales model has to be better adapted to the local circumstances. The same applies to
the sales organisation in Taiwan where the necessary adjustments are currently being discussed and
implemented. Turnover in Portugal almost reached the level of previous year (28.9 million euros) with an
increase being expected for 2011 in view of the market potential in this country.
Exports also contributed to the positive development of the entire division. The business conducted with
independent sales partners, the so-called distributors, increased by 13.1 percent to 13.2 million euros.
Moreover, further steps towards internationalisation were taken in the year under review with the
establishment of the sales organisation in the Czech Republic.
The Vorwerk Thermomix Division intends to expand existing markets in the coming years as well as to
continue to develop new sales areas throughout the entire world.
Management Report / JAFRA Cosmetics / 21
Management Report /
Direct Sales,
JAFRA Cosmetics
Turnover increased to 447.5 million euros
Sales of cosmetics launched in India
JAFRA Cosmetics mainly enables women anywhere in the world to achieve an income that is self-determined and related to their own performance through the direct sale of high quality cosmetics. Sales
systems are flexibly applied in this respect: depending on the country and the cultural background, JAFRA
consultants either present their products at a sales party or in person-to-person consultations. The range
at JAFRA Cosmetics comprises skin and body care, colour cosmetics, fragrances and spa products. The
focus of sales activities is in Mexico and the USA. JAFRA Cosmetics has been a part of the Vorwerk Group
since 2004. Cosmetics is one of the fastest growing segments in international direct selling.
The JAFRA Cosmetics Division achieved a turnover of 447.5 million euros and an improved earnings
situation in the year under review. Turnover thereby grew by 14.7 percent against previous year. The
number of consultants worldwide increased by 2 percent to over 569,000 and almost 500,000 of them
were active in Mexico.
JAFRA Cosmetics is the undisputed market leader in the direct sale of cosmetics there. Once again, the
Mexican sales organisation recorded an improvement against previous year and achieved a sales volume
of 351.9 million euros (plus 16.6 percent) – and this despite non-optimal circumstances. Public safety in
Mexico, a still dissatisfactory economic development and natural disasters in some parts of the country
created a difficult environment for consultants to work in. JAFRA Mexico developed specific programmes
aimed at support and motivation and in this way maintained the level of productivity and attained a new
record number of consultants.
700
All Beauty Needs
Line up all of the JAFRA products and they would soon stretch several
meters. And no wonder, when you consider that the full range totals
over 700 products. From fragrances through skin and body-care products
to colour cosmetics for the discerning woman – and man – the JAFRA
cosmetics range offers something for everyone. As you can see, beauty
sometimes means being spoilt for choice.
22 / Management Report / JAFRA Cosmetics
In the second largest market, JAFRA USA, sales proceeds of 57.5 million euros meant that the company
was slightly above the level of previous year. Low productivity – caused by a distinct loss of purchasing
power among American consumers – was compensated for by an increase of 3.1 percent in the number
of consultants. JAFRA Cosmetics developed better than comparable competitors, both in terms of
product sales and in the number of consultants. The results of a programme to develop management
staff implemented in the last quarter of the year under review will provide a good starting point for new
growth in 2011. The establishment of a new central logistics depot in Dallas will also provide support in
this respect.
The sales organisation in Brazil – barely two and a half years old – could fully meet the expectations in the
year under review and has already established itself as a constant within the JAFRA organisation. A turnover of 9.7 million euros meant that JAFRA Brazil grew by 81.4 percent. JAFRA sees great future potential
in this third largest direct sales market in the world and the largest in Latin America.
Likewise, the European markets showed a positive tendency, with Italy, Austria and the Netherlands
achieving double-digit growth rates in turnover. JAFRA Germany is slightly below the level of the previous
year, but the Swiss organisation recovered considerably in the final quarter of the year under review after
making adjustments to the sales system. Overall turnover in the European companies was 27.1 million
euros (plus 5.2 percent).
JAFRA Russia – still a comparatively small sales company when measured in terms of the Russian market
potential – sustained the robust development of the previous year.
To continue with the internationalisation of the JAFRA Cosmetics Division, a new “Business Development
Team” has been established. The focus will be particularly on Asian markets offering attractive growth
potential. JAFRA has been present on the Asian market for the first time since October 2010: the sale of
cosmetics started in India, together with a joint-venture partner, the Indian Ruchi Group.
JAFRA is represented in a total of 17 countries either with its own company or through distributors.
All JAFRA products are developed at the company’s own R&D facilities at its headquarters in Westlake
Village, California, in close cooperation with renowned laboratories in the USA, France, Switzerland,
Germany and Italy. A newly developed, up-market colour cosmetics series was successfully launched
in Mexico in the year under review and will be available in other markets in 2011.
To specifically position the brand and to support the consultants, JAFRA has prepared a strategy for using
digital media that has been implemented with the launch of the new website in the year under review
and at the beginning of 2011.
Management Report / Lux Asia Pacific / 23
Management Report /
Direct Sales,
Lux Asia Pacific
Turnover stabilised, earnings situation improved
Enhanced customer loyalty through CRM
Under the brand name of Lux, Vorwerk primarily sells water purifiers and vacuum cleaners in the Asian
region. The most important markets are Indonesia and Thailand. The Lux Asia Pacific Division achieved a
turnover of 31.7 million euros in 2010. Thanks to improved margins based on optimised product combinations and great efforts in cost reduction, the division made a positive contribution to the overall earnings
of the Vorwerk Group in 2010.
Lux Asia Pacific is one of the few direct selling companies that has specialised in selling high-ticket
household goods in the rapidly growing Asian market. The objectives for the year 2010 were to stabilise
the business and simultaneously improve in the earnings situation. Both targets were achieved despite
difficult political circumstances and the associated unrest in Thailand in the first half of 2010.
The strategic new alignment of the division, however, already led to a pleasing development in the last
quarter of 2010. Lux Asia Pacific therefore sees positive prospects for the year 2011.
Various projects will also be implemented this year to further strengthen the business, such as the planned
launch of a new air purifier. To address households with a lower income level, a good quality vacuum
cleaner at a favourable introductory price will be offered for the first time in 2011.
*
2-3 l.
As Precious as Water
We humans need to drink 2-3 liters of water a day. For all those who value good
water quality, there’s the alva water purifier. Its innovative technology filters tap water,
eliminating bacteria and germs and thus also making an important contribution to
quality of life – especially in countries where clean drinking water is not the norm.
24 / Management Report / Lux Asia Pacific / Vorwerk Engineering
Moreover, the newly developed “City Concept” aims at increasing the possibilities for advisers to demonstrate products by addressing potential customers at publicly accessible information stands. Customer
loyalty is to be enhanced with improved customer relationship management. In addition, expanded sales
of so-called consumables are planned.
Management Report /
Vorwerk Engineering
Development of new products advanced
Additional vocational training workplaces created
As the developer and manufacturer of high quality household appliances for the Vorwerk direct sales organisations, the Engineering Division is especially dependent on business development at the sales companies. The main facilities are located in Wuppertal, Germany, with R&D as well as manufacturing being
situated there. Other locations include Cloyes (France), Arcore (Italy) and Shanghai (China).
Currently, the Engineering Division is facing particularly serious challenges that already resulted in organisational changes in 2010. The new business model at Vorwerk Kobold Germany requires a wider product
portfolio. For this reason, development of new, additional room-care products was intensified in the year
under review. The first innovations will be introduced to the market in 2011. For the future it will be essential that in cooperation with marketing, product management and sales, new products are launched onto
the market more quickly. In order to do this, far more cooperation agreements and strategic partnerships
with external companies will be entered into. This explains why Vorwerk has acquired a participation in a
technology company in the USA. The objective of this cooperation is to launch a new product for private
households onto the market as early as 2011.
The employment situation at the Engineering Division stabilised in the year under review. Thanks to the
overall positive development of the sales companies, and particularly at Thermomix, the workplaces could
be secured at all locations. The crisis-related short-time working that had to be applied for towards the end
of 2009 for some sections of the German production plant could already be lifted in the first quarter of
2010. Further momentum resulted from the additional activities associated with the product launch of the
new Kobold VK 140 vacuum cleaner.
At home in / ITALY / 25
Buongiorno /
Florence
43°46' N / 11°15' E
The letterbox is our little gateway to the world.
Every day we look inside and wonder whether
there will be a letter for us today. What joy
we feel when there’s an envelope inside from
good friends and loved ones.
Getting mail means that someone is thinking
of me – even if it’s only a bill.
26 / At home in / ITALY
Management Report / Vorwerk Engineering / 27
Even Faster than Formula One
*
60,000
rpm
The powerful, maintenance-free motor of the Kobold VK 140 generates an
impressive 60,000rpm for optimum suction power. By way of comparison,
a Formula One car only manages 10,000rpm. We don’t want to make a lot of
noise about it, but at just 74dB, the Kobold VK 140 is also one of the
quietest vacuum cleaners in the world.
Innovation will continue to be a major issue for Engineering in the future, too. Under the strategic management of Vorwerk International – located in Switzerland – the notion of innovation is increasingly being
interpreted in a much broader sense. In this context, the division is focusing more and more on a structured
innovative approach that comprises all the core processes such as research and development, manufacturing and procurement. Besides the classic product innovations, process and procedural innovations
are now being increasingly strived for. Additionally, the growth strategy prevailing at the Vorwerk direct
sales organisations necessitates an efficient, international value chain. The set-up at both R&D and
manufacturing is therefore oriented towards a clear allocation of value creating elements and assignment
profiles as well as focusing regionally on competencies. Every location within the division therefore has a
clearly defined task in the international production network.
The division pursues a policy of continual development of management staff to secure the successor
planning process. Annual development interviews, the measures thus derived, the identification and
targeted application of development functions as well as the implementation of “development centres”
for the assessment of potential are just some of the development instruments. These activities are carried
out in all locations at regular intervals.
At the Engineering location in Wuppertal, additional vocational training workplaces were created in the year
under review for the development of skilled workers. Moreover, manufacturing has been brought in line
with the latest developments in respect of workplace ergonomics. Initiatives targeting health management
supplement these measures.
The Engineering Division anticipates a further increase in the utilisation of the manufacturing facilities in
the current business year. Due to the increasing significance of international markets, both for procurement
and for sales and production, Engineering believes it is exposed to more risk from exchange and raw
material price fluctuations than before.
28 / Management Report / akf group
Management Report /
akf group
Vehicle finance constitutes the solid foundation
Refinancing base broadened with deposit-taking transactions
Contrary to the expectations of many market participants, Germany has done relatively well despite the
financial and economic crisis. Gross domestic product probably grew by 3.7 percent as against 2009.
Prospectively, an improvement in consumption now also seems to be imminent. In terms of investments
– the core business area of akf group with its companies in Germany, Spain and Poland – this recovery has
only been noticeable since the second quarter of 2010. Even the number of vehicle registrations in the
year under review fell back to the already low level of 2008 after the environmental incentive scheme for
motor vehicles in Germany expired. Since akf group strategically provides support for small and mediumsized companies in the area of investment finance and for the automotive trade in the field of sales finance,
the amount of new business originated by the bank in 2010 could not quite reach the level achieved in
previous year and is now running at 446.1 million euros with a turnover of 375.7 million euros.
As in previous years, vehicle finance with a proportion of some 68 percent was once again the mainstay
of the business in the year just closed. The financing of machinery and other equipment amounted to about
32 percent.
The German Federal Financial Supervisory Authority (BaFin) granted akf group permission to conduct
business as a licensed deposit-taking institute. This activity was taken up towards the end of the year in a
test phase. This business was then made accessible to all potential customers in Germany at the beginning
of 2011. Accounts can be opened and transactions conducted online under www.akf24.de. This diversification of the refinancing base generated by an extension of the deposit-taking business will make the bank
even more independent.
akf group anticipates a positive development for fiscal years 2011 and 2012. Charges for risk provisions
should – following the trend of the second half of 2010 – turn out to be much more moderate. The reluctance of small and medium-sized companies with regard to making new investments in production equipment had already eased towards the end of 2010. It meant that akf group was able to start the year 2011
with a higher number of deals in the pipeline as a result of longer delivery periods. The planned extension
to consumer finance activities for the Vorwerk sales companies will mean that following the German
market, the Spanish and the Italian markets will be accessed and developed.
Management Report / akf group / HECTAS / 29
43
How About a Heifer?
Whatever your investment plans, you can rely on the akf group to lease
or finance pretty much anything that moves – on four wheels or four
legs. The diverse assets that we finance even include cows, and we found
a good financing solution for 43 magnificent specimens. We currently
finance and lease 65,533 mobile assets, from vehicles of all kinds to
complete machinery systems.
The planned level of new business is therefore much higher than that achieved in the year under review.
To accomplish this, akf group will continue to present itself to potential end customers in the finance sector as well as to manufacturers and dealers as a reliable and competent partner. To refinance new business,
attractive investment opportunities will be offered to the general public in Germany within the scope of
the deposit-taking business that began in 2010. Additionally, continuing the revolving securitised transactions and other refinancing alternatives such as bilateral loans and sale of receivables as well as the ABCP
transaction will meet any liquidity requirements at any time. In view of these circumstances, business is
expected to develop far better than in the year under review.
Management Report /
HECTAS Facility Services
International services from a single source
Sustainability concepts implemented
HECTAS is one of the leading providers of infrastructural facility management in Europe and offers customers individual services associated with real estate. The entire market for infrastructural facility management has become more and more integrated with cross-border services from a single source being increasingly in demand. The strategic alignment as a pan-European, highly professional, industrial service
provider has proven successful for HECTAS and was consequently pursued further in the year under
review.
30 / At home in the / USA
Hello /
Phoenix
33° 27' N / 112°4' W
If there’s a doormat,
it’s home. Wherever
Mr. and Mrs. Smith
park their mobile four
walls, the first thing
they do is lay the mat
on the doorstep.
This keeps their home
nice and clean – until
it’s time to dust themselves off and head
for some place new.
32 / Management Report / HECTAS
Overall, the sector continued to suffer in 2010 from the implications of the financial and economic crisis
with – by comparison to previous year – stagnating market volumes. In these difficult market circumstances, HECTAS successfully maintained its position and achieved an original growth in turnover of 2.0
percent to 198.9 million euros, but with an earnings situation that was not quite satisfactory.
This positive development in turnover – despite increasing pricing pressure in the market – was accomplished thanks to other performance improvements by the sales organisation in both the key account and
mid-sized segments. Thanks to a sustained customer care approach, the number of terminated contracts
as well as cutbacks in turnover from the existing customer base could be reduced.
Germany remains the largest HECTAS market. Many existing customers invited new tenders for their
facility services. The high quality standards prevailing at HECTAS meant that many of these tenders could
be won back. Overall, HECTAS Germany closed the business year 2010 with a growth in turnover of 7.1
percent and is now running at 92.5 million euros.
By contrast, in the Benelux region HECTAS did not maintain its turnover level (minus 4 percent as against
previous year). Keener price competition made it difficult to acquire new customers. However, improved
and sustained customer care meant that many existing customers could be kept.
A small drop in sales volumes was also recorded by Austria (minus 2 percent), an aspect that was primarily
still due to the after-effects from the crisis year of 2009. By contrast, HECTAS recovered markedly in
Eastern Europe: a more intensive addressing of customers by the sales organisation more than compensated for the loss in turnover from the year 2009. HECTAS Eastern Europe had recorded an increase of
10.1 percent by the close of the year under review.
The amount of staff at the HECTAS Group did not change noticeably in the year under review when regarded
in terms of the overall sales volume. The main projects in 2010 continued the focus on cushioning the impli-
*
95
The World at Work
HECTAS has a culture – and its employees come from many different
cultures. In fact, 12,000 people of 95 nations work for HECTAS,
maintaining high standards of hygiene, safety and order – in buildings
located across nine European countries. When we’ve done a good
job, the customer’s satisfied smile speaks a language that’s understood
everywhere.
Management Report / HECTAS / Vorwerk Carpets / 33
cations from the financial and economic crisis. Continual intensification of the sales activities, unrelenting
customer care and optimisation of the cost structures were and continue to be the main focus of attention.
Other projects were aimed at widening the service portfolio and at developing new market segments.
Sustainability and “green cleaning” are important themes in the market for infrastructural facility management. HECTAS has developed feasible concepts in these areas and together with more intensive activities
in public relations, market communication and internet optimisation, managed to enhance brand awareness and to further develop both quantitatively and qualitatively the perception of the brand HECTAS.
HECTAS sees opportunities in the current business year to develop the company further given the continued consolidation of the markets for infrastructural facility management in Europe. The current uncertainties with regard to the general economic circumstances, however, will mean that any further expansion
into new European countries will be pursued cautiously.
Management Report /
Vorwerk Carpets
Stable turnover despite difficult environment
Triumphant yet again in customer survey
Vorwerk Carpets achieved a turnover of 69.4 million euros in a difficult market environment and was thereby able to stabilise sales at the level of previous year, but with a much improved earnings situation. The
foundations for this development in 2010 were the rapid and resolute measures taken on the cost side as
a consequence of the financial and economic crisis.
Besides exports, the German economic upswing in 2010 was particularly due to new investment dynamism
and an increasing level of demand among private consumers. However, parallels to the German home
textile market and for the carpeting company can only be drawn to a limited extent in this respect. Although
a revival in domestic demand as against previous year became noticeable in the second half of 2010,
a distinct increase in demand for exports and from the contract business sector is not expected until 2011.
Vorwerk Carpets continues to place emphasis on outstanding quality and on the company’s innovative
power and once again captured 1st place in 2010 in a customer survey conducted by the trade journal
“BTH Heimtex/BBE-Kundenbarometer”. Vorwerk Carpets are popular among the trade not only in terms
of the goods themselves – quality and saleability – but also due to the clear sales policy and well organised
and properly functioning logistics operations. Additionally, from the point of view of the trade, Vorwerk
Carpets has the best sales force in the field and the company continues to lead in terms of sales promotions, progressiveness, future perspectives and amiability.
34 / Management Report / Vorwerk Carpets / Vorwerk Ventures
This means that the foundations for another positive development in the future have been laid. Vorwerk
Carpets wants to participate in the upswing in the German economy and thereby return to the path of
growth that had characterised the business for five years up until the start of the crisis.
The internationalisation strategy is to be continued with high quality, innovative products and new market
segments as well as sales channels are to be actively developed with modified sales approaches. This is
the reason why Vorwerk Carpets started to work together with other licensed and cooperation partners in
2010. Examples for innovative products are the textile tile “SCALE” and “FreeSCALE” by Hadi Teherani.
They open up new horizons in interior decoration in terms of creativity, function and design and break with
the convention of standard tile designs. The new shapes even extend to include fascinating free forms
without any rectangular features in the FreeSCALE range.
Our Fastest Carpet
*
574.8
km/h
There’s no faster way to travel than on a Vorwerk carpet. After all,
our carpet factory is the exclusive outfitter of the French high-speed
TGV trains – one of which set a speed record on April 3, 2007
when it accelerated to a heady 574.8km/h. We also outfit the German
ICE trains that reach speeds of up to 368km/h. This means that
even at top speed your feet will remain comfortably on the ground.
Management Report /
Vorwerk Direct Selling Ventures
Advancing young companies
Access to innovations in direct selling
The Vorwerk Group gains insights into innovations in direct selling through its investment in young enterprises. In this way, the venture capital company contributes to advancing change and renewal within the
Vorwerk Group. Vorwerk Direct Selling Ventures has been investing in companies pursuing a promising
direct sales concept since 2007. This entity makes its investment decisions without any compelling regard
to the current strategy of the Vorwerk Group, and consequently it has the scope to invest in completely
new segments that have the potential for rapid growth and high profitability.
The objective of Vorwerk Direct Selling Ventures is to create the fundamental conditions for a productive
know-how transfer of expertise between the young entities and the various companies within the Group
At home in / CHILDHOOD / 35
Mmmmmh /
The land of
delightful smells
51°16' N / 7°11' E
Favourite foods, fresh laundry and
fragrant apple trees awaken lots of
wonderful memories of childhood
and of home. Join us on a journey
of discovery through the land
of delightful smells – and follow
your nose …*
* Rub your finger lightly over
the marked areas and sniff!
36 / Management Report / Vorwerk Ventures / Human Resources
to the mutual benefit of both the associated companies and Vorwerk. The venture capital activities also
support Vorwerk in recognising at an early point in time any sweeping developments in direct selling as
well as in finding potential partner companies.
Vorwerk Direct Selling Ventures invests worldwide and has participations in companies in Germany,
Austria and the USA. Activities in 2010 focused on the areas of online and multi-channel direct selling.
Innovative companies such as Dinner-for-Dogs, Enjo, meinauto.de, Ringana and Stowa are a part of the
portfolio at Vorwerk Ventures. Vorwerk Ventures has been making a positive contribution to the Group’s
earnings since 2009.
Management Report /
Human Resources
Number of staff and advisers again increased
Family-friendly personnel policy
The number of people working for Vorwerk worldwide continues to grow. In 2010 an average number of
623,760 people were active either as employees or as self-employed advisers and consultants for the
companies of the Vorwerk Group. The number of employees increased to 22,096, the number of selfemployed advisers and consultants reached a new record level of 601,664. This was particularly due to
a significant rise in the number of consultants at JAFRA Cosmetics in Mexico and representatives at
Vorwerk Thermomix.
As a reliable family-owned company, the Vorwerk Group allows people everywhere in the world to succeed
with outstanding products and services. Vorwerk offers attractive career opportunities and scope for entrepreneurial development. Vorwerk’s approach to meeting the ever-increasing challenges posed by a
constantly changing market environment is a centrally-steered and integrated talent management
programme. The objective hereby is to strengthen the management responsibility of the individual, to
identify talent anywhere in the world and to implement systematic successor planning.
The identification and development of our management staff is of particular significance in this respect. It
is the task of management to recognise the strengths and development needs of their staff, to discuss
this with them and to define development measures.
All managers are expected to lead by example: to identify with the objectives of Vorwerk, to demonstrate
exemplary conduct and willingness to perform and to live the Vorwerk culture.
Management Report / Human Resources / 37
A decisive factor here is the recruitment of new management staff for the direct sales organisations. New
growth perspectives can only be exploited if it is also possible in the future to acquire our own management
personalities for sales activities. Vorwerk attaches great importance to cooperation based on trust and open
communication across all divisions and hierarchies. Respect and fairness in dealing with one another are
core values of the family-owned company. The family-friendly personnel policy is reflected both in the
nurturing of the “work-life balance” for staff with various – sometimes quite individual – solutions as well
as in the flexible working time schedules. Staff desires and requirements are taken seriously. Their satisfaction is evaluated regularly in an international employee survey.
Staff (annual average)
2007
2008
2009
2010
4,562
4,625
4,416
4,157
968
954
1,062
1,377
Division Vorwerk Feelina
23
23
7
0
Division Lux Asia Pacific
3,439
2,411
2,241
2,084
Division JAFRA Cosmetics
1,543
1,635
1,726
1,952
11,558
12,105
11,647
11,848
342
352
345
329
Direct sales
Division Vorwerk Kobold
Division Vorwerk Thermomix
HECTAS Facility Services
Vorwerk Carpets
akf group*
Others
222
135
150
136
127
22,570
22,255
21,580
22,096
9,736
9,335
9,140
8,788
16,361
18,569
20,670
21,979
Division Vorwerk Feelina
280
152
4
0
Division Lux Asia Pacific
1,887
1,799
1,622
1,720
28,264
29,855
31,436
32,487
Self-employed sales advisers JAFRA Cosmetics
515,151
525,863
557,815
569,177
Self-employed sales advisers in total
543,415
555,718
589,251
601,664
250
220
216
566,235
578,193
611,047
623,760
546,897
558,872
592,322
604,496
Total**
Self-employed sales advisers (annual average)
Division Vorwerk Kobold
Division Vorwerk Thermomix
Self-employed sales advisers „household appliances“
akf group*
Total Vorwerk workforce
of which sales advisers **
*
**
akf group was evaluated at equity up to and including 2009 and fully consolidated since 2010
Including employed sales adivisers
Servus /
Linz
48°19' N / 14°18' E
At home in / AUSTRIA / 39
40 / Management Report / Assets and Earnings Situation
Management Report /
Assets and Earnings Situation
The assets situation of the Vorwerk Group as of balance sheet date on 31 December 2010 is characterised
by a first-time consolidation of the akf companies.
886.6 million euros of the increase in the balance sheet total of 986.1 million euros (= 57 percent) are accounted for by the assumption of all the asset and debt items from the companies of akf group within the
scope of their full inclusion in the consolidated financial statements. The considerable increase in balance
sheet total within this context is due to the first-time inclusion of an amount of 501.9 million euros for rental
assets from leasing transactions. The decline in the level of participations in associated companies due to a
change in the consolidation approach at akf group (transitional consolidation to full consolidation) have been
set against an inclusion in the financial assets of a bond issued by akf group in an amount of 31.5 million euros.
The increase in the level of trade accounts receivable is mainly due to the increase in the Kobold and
Thermomix (high ticket items) segments as well as at JAFRA and corresponds to the development in turnover. To avoid any supply bottlenecks, inventory levels were correspondingly increased in these divisions.
The liquid resources and short-term marketable securities amount to 658,2 million euros and are now only
slightly below the level of previous year despite repayment of financial obligations in an amount of 132.0
million euros. The market value of the securities continues to be above the book value. The financial obligations increased by 331.5 million euros as a result of the inclusion of the mainly third-party financed akf
group. Besides other liabilities and provisions/accruals, the items on the liabilities side are characterised
by customer obligations in an amount of 340.4 million euros and the deferred income item that includes
rental receivables sold to third-party banks for the purpose of refinancing the rental assets of akf group.
The proportion of partners’ equity is running at 41 percent despite the distinct increase in balance sheet
total. A partners’ equity capital ratio of 61 percent would result in comparison with 53 percent in the previous year in the context of an assumed unchanged consolidation group (akf at equity). The equity/fixed
assets ratio is at 100 percent. Moreover, 14 percent of the receivables and other assets are financed longterm with equity capital.
Vorwerk achieved a Group turnover volume of 2,372.0 million euros in the business year, a figure that was
30 percent higher than that achieved in previous year. Even without taking the turnover at akf group into
account, a significant increase in sales proceeds (gross) of 9 percent was reported. Expenditure on
materials rose over-proportionately by 17 percent, primarily on account of the development in raw
material prices as well as the rate of exchange. The result from participations reported in previous year
was mainly attributable in the year under review to the full consolidation of akf group.
Management Report / Financial Situation / 41
The first-time full consolidation of akf group consequently led to an increase in personnel costs of 4 percent.
Although there was a significant reduction in expenditure for retirement pensions on account of the risk
provisions for pension obligations already made in the previous year, wages and salaries increased in
accordance with the number of staff working at the various divisions, thus resulting in a slight decrease in
personnel costs in comparison with the previous year even without akf group.
Financial Situation
Politicians, central banks and financial markets were increasingly forced to come to terms with the debt
crisis of individual member states of the eurozone throughout the past year. Global share markets developed positively from the point of view of a euro investor, something that was however mainly attributable
to the currency effect and thereby to the weakening of the euro. The interest rate for German bonds fell
to a historical low, whereas bonds issued by the so-called “PIIGS” reflected a much higher rate of interest.
The Vorwerk Group (without akf group) took advantage of the developments on the financial markets to
slightly enhance its global position in equity investments and to adjust its regional position. The proportion of
alternative investment strategies was also extended in order to stabilise earnings and cash flow objectives.
In turn, the good development in investments in securities with fixed interest rates could be used to realise
earnings and to greatly reduce the financial obligations from the sales proceeds. Our external financial
obligations were thereby reduced to 43 million euros. This amount will eventually become due for payment
in the first two months of the 2011 business year.
Overall, the Vorwerk Group managed to achieve a result that is well above plan when considering the
realised as well as unrealised earnings from financial management. To be able to better and more efficiently
control the risks involved in the financial activities, attention was focused on a centralisation of the cash
holdings, the management of currency and raw material risks and Group-wide cash management.
akf group is made up of a banking operation and a leasing sector. Active business transactions were
refinanced with matching maturities as in previous years. Besides the classic form of refinancing using
bank loans, a revolving ABCP programme and a similarly open-ended ABS bond continued to be used for
refinancing purposes in the year under review with new receivables being sold. These receivables
continue to be managed by akf bank.
Refinancing in the leasing sector is mainly effected through the forfeiture of leasing receivables falling due
in the future to third-party banks – with which general agreements exist with respect to the purchase of
such receivables – and through short and medium-term bank loans.
42 / Management Report / Opportunities and Risks
Management Report /
Opportunities and Risks
The Vorwerk Group has diversified significantly over the past ten years and is today operational across various
business segments, product groups and countries. The Group has good opportunities of participating in the
positive developments of the markets in the future, too, on account of this structure. The focus will continue
to be on direct selling in this respect and thereby on a sales approach that is still growing dynamically. Since
Vorwerk combines different types of direct selling “under one roof” and ensures regular know-how transfer
between the product divisions, new growth trends can be recognised at an early point in time and taken advantage of to further develop the company.
At the same time the Vorwerk Group is exposed to a range of risks. Effective planning, reporting and monitoring
systems have been put in place in the individual companies to protect against risks. In principle, uniform guidelines apply across all divisions. They are defined by the Executive Board at Vorwerk & Co. KG and are monitored
in the form of a reporting process to ensure they are adhered to. The processes are continually reviewed – even
in manufacturing – and adjusted when risks are identified.
The investment strategy at the Vorwerk Group primarily pursues the target of securing assets long-term.
The internal Finance Committee regularly reviews the strategy with the aim of avoiding any identified risks.
To further improve the opportunity/risk profile, the portfolio was again supplemented in 2010 with new asset
categories. Risks ensuing from exchange rate fluctuations were also taken into consideration and hedged as
far as possible for operative business activities.
Opportunities and risks for the future development of the Vorwerk Group ensue from the focus on direct selling.
The great opportunities offered by this sales channel are to be seen against the background of specific risks.
The proportion of direct sales, for instance, is relatively low when seen against the overall level of sales by the
trade. This could lead to a lack of perception among legislators at national and international level. Vorwerk
therefore runs PR campaigns targeted at decision-makers, is a member of associations such as Direct Selling
Europe (DSE) and maintains its own information bureau at the European Union in Brussels. The objective is to
provide information about the development opportunities offered by direct selling and to sensitise decisionmakers to the specifics of the system. In particular, the attractive income and career opportunities for customer
advisers and consultants may not be allowed to be pushed into the background of public perception. Reputable
direct selling creates the possibility worldwide of being able to achieve a self-earned income that is based on
the principles of individual performance and commitment.
Management Report / Opportunities and Risks / 43
To further spread the risks, Vorwerk pursues a policy of internationalisation of the business segments.
The target is to further reduce the risks that could result from an unbalanced dependency on the development
of individual country companies.
The Vorwerk Group operates in a permanently changing competitive environment in which the high quality of
the products continues to play a decisive role in the differentiation to potential competitors.
Direct selling is principally very much dependent on the recruitment and training of sales advisers and management staff. A centrally-steered, talent-management programme and a Group-wide personnel policy based on
uniform guidelines take this factor into account.
A differentiated approach also has to be taken with respect to the opportunities and risks at akf group. In the
future, too, other competing institutions will withdraw from the leasing markets serviced by the bank’s sister
companies due to the stricter requirements applying to the implementation of internal accountability systems,
reporting obligations stipulated by regulatory law and the still difficult refinancing conditions. This will open up
opportunities to further increase the purchase of receivables from the sister companies.
As long as the problems of the single European currency – ensuing from the difficulties of some member
states of the currency union – have not been solved, it cannot be excluded that banks with exposures in the
corresponding bonds of these countries will again come under pressure and that this could once more make
refinancing more difficult on the interbank markets. The diversification of the refinancing base through the
extension of the deposit-taking business will make the bank more independent in this respect.
Overall, existing default risks and those ensuing from future developments continue to be steered and
monitored on the basis of proven, exacting standards and the IT-aided rating system. Following the 2009 and
2010 business years in which high provisions for risks had to be made on account of the general economic
environment, a distinct easing of the situation is expected for the current business year.
From today’s point of view there are no risks that could have a negative impact on the long-term existence of
the Vorwerk Group. In recent years the high equity ratio and the improvement in the worldwide strategic
position have led to the creation of higher, risk-covering volumes. Moreover, this broad base on the global
market means that Vorwerk is generally well protected against implications for the corporation ensuing from
problems experienced in regional, industry or product-specific areas.
There have been no events of any material significance that have occurred since the balance sheet date
for the year 2010.
44 / At home in / THAILAND
/
Pattani
6°50' N / 101°20' E
A popular pet in Thailand.
The gecko.
Consolidated Financial Situation / 45
Consolidated
Financial Statements /
2010
46 Consolidated
Balance Sheet
48 Consolidated Profit
and Loss Account
50 Movements in
Fixed Assets
52 Explanatory Notes
58 Auditors’ Report
46 / Consolidated Financial Statements / Consolidated Balance Sheet
Consolidated Balance Sheet
As at 31 December 2010
Assets
31.12.2010
akf at equity
31.12.2010
31.12.2009
€ 000
€ 000
€ 000
A. Fixed Assets
I. Intangible Assets
1. Concessions, patents, trademarks and similar rights
as well as licences thereto
2. Goodwill
3. Payments on account
16,643
14,861
12,845
261,561
261,561
272,756
65
65
1,167
278,269
276,487
286,768
II. Tangible Assets
1. Land, land rights and buildings,
including buildings on third-party land
2. Technical plants and machinery
3. Other fixtures, fittings and office equipment
4. Rental assets
5. Payments on account and assets under construction
55,368
55,368
51,981
51,109
51,109
49,137
30,687
36.470
35,288
501.901
0
0
4,490
4,490
8,194
649,338
146,255
139,999
49,269
III. Financial Assets
1. Participations in associated companies
310
61,721
2. Other participations
13,455
13,365
8,378
3. Long-term investments
41,049
9,548
9,232
4. Other loans
Fixed Assets
155
155
316
54.969
84,789
67,195
982.576
507,531
493,962
27,407
27,407
22,855
4,746
4,746
6,070
66,363
66,363
55,836
B. Current Assets
I. Inventories
1. Raw materials and consumables
2. Work in progress, services in progress
3. Finished products and merchandise
4. Payments on account
93
93
322
98,609
98,609
85,083
410,537
410,537
379,711
(1,268)
(1,268)
(1,244)
440,073
0
0
II. Receivables and other Assets
1. Trade accounts receivable;
of which with a remaining term of more than 1 year:
2. Accounts receivable from customers from banking and leasing
business;
of which with a remaining term of more than 1 year:
3. Accounts receivable from associated companies
4. Other assets;
of which with a remaining term of more than 1 year:
III. Other Securities
IV. Cheques, Cash in Hand, Bank Balances
Current Assets
C. Prepaid Expenses and Deferred Charges
D. Deferred Tax Assets
(1,137)
(0)
(0)
357
7,414
11,945
77,339
65,610
74,498
(4,228)
(2,507)
(2,268)
928,306
483,561
466,154
356,076
359,076
418,426
302,178
334,533
251,345
1,685,169
1,275,779
1,221,008
9,596
8,496
8,114
42,960
41,886
11,073
2,720,301
1,833,692
1,734,157
Consolidated Financial Statements / Consolidated Balance Sheet / 47
As at 31 December 2010
Equity and Liabilities
31.12.2010
akf at equity
31.12.2010
31.12.2009
€ 000
€ 000
€ 000
1,110,386
1,115,967
919,211
1,493
1,493
344
-129
-129
670
A. Partners‘ Equity
1. Capital shares, reserves, capital contributions
of silent partners, net profit of parent company,
currency conversion difference
2. Compensating item for minority interests
in capital and reserves
in profits
1,364
1,364
1,014
1,111,750
1,117,331
920,225
122,626
120,303
118,672
34,406
33,023
25,774
179,086
172.249
149,672
336,118
325,575
294,118
505,742
42,523
174,259
29,474
29,474
18,903
340,363
59,432
48,913
B. Provisions and Accruals
1. Provisions for pensions and similar obligations
2. Provisions for taxes
3. Other provisions and accruals
C. Liabilities
1. Amounts payable to banks
2. Advance payments received
3. Trade accounts payable
4. Notes payable
5. Amounts payable to associated companies
89
89
93
2,979
3,148
2,071
6. Other liabilities;
260,875
230,141
253,104
of which taxes:
(52,066)
(51,247)
(51,675)
of which within the scope of social security:
D. Deferred Income
E. Deferred Tax Liabilities
(12,984)
(12,723)
(11,027)
1,139,522
364,807
497,343
130,019
23,087
22,471
2,892
2,892
0
2,720,301
1,833,692
1,734,157
0
0
197
9,840
9,840
10,195
508
478
492
55,065
0
0
Contingent Liabilities
1. Bills of exchange
2. Secondary liability for pension obligations
transferred to the relief fund
3. Liability for sureties
4. Irrevocable lending commitments
48 / Consolidated Financial Statements / Consolidated Profit and Loss Account
Consolidated Profit and
Loss Account
For the Period 1 January to 31 December 2010
2010
akf at equity
2010
2009
€ 000
€ 000
€ 000
1,996,324
1,996,593
1,826,408
375,681
0
0
2,372,005
1,996,593
1,826,408
1. Sales revenue (gross)
a) Revenue from sales (gross)
b) Income from loan and leasing transactions (gross)
less sales tax
2. Change in finished goods and work in progress
3. Own work capitalised
4. Other operating income;
of which income from currency conversion:
346,534
294,660
267,676
2,025,471
1,701,933
1,558,732
11,610
11,610
-13,515
372
372
1,534
2,037,453
1,713,915
1,546,751
108,252
107,134
70,115
(9,497)
(9,497)
(0)
269,158
269,161
227,564
21,363
21,363
19,826
290,521
290,524
247,390
5. Raw materials and consumables:
a) Expenditure on materials
and purchased merchandise
b) Expenditure on purchased services
6. Expenditure from loan and leasing transactions
132,086
0
0
1,723,098
1,530,525
1,369,476
390,718
375,335
363,032
7. Personnel costs:
a) Wages and salaries
b) Social security contributions
and pensions;
of which for retirement pensions:
89,308
86,447
103,184
(12,650)
(11,490)
(31,311)
480,026
461,782
466,216
185,097
41,904
39,046
1,137
13,626
8,176
(44)
(12,536)
(7,086)
8. Depreciation and amortization on tangible and
intangible fixed assets
9. Result from participations;
of which from associated companies:
10. Income from other securities and
long-term loans
11. Other interest and similar income;
of which income from the discounting of provisions:
224
224
122
54,294
52,718
50,343
(881)
(881)
(0)
12. Write-down of financial assets and
marketable securities
13. Interest and similar charges;
of which expenditure from accrued interest on provisions:
14. Collective heading;
of which expenditure from currency conversion;
Other items not shown separately
(Other operating costs, taxes, net profit for the year)
19
19
45
29,017
24,429
11,270
(8,040)
(7,964)
(0)
1,084,594
1,068,959
911,540
(14,771)
(14,771)
(0)
Consolidated Financial Statements / 49
Number
of the year
*
12,899,600
doors opened to our advisers in 2010,
inviting them to demonstrate the advantages
of the Vorwerk Group products.
50 / Consolidated Financial Statements / Movements in Fixed Assets
Movements in Fixed Assets
From 1 January to 31 December 2010
Gross values
As at
1.1.2010
Currency
conversion
differences
Additions*
Additions
Disposals
Book
transfers
As at
31.12.2010
€ 000
€ 000
€ 000
€ 000
€ 000
€ 000
€ 000
39,041
335,177
3,633
—
6,954
—
1,899
—
1,524
—
2,016
—
52,019
335,177
I. Intangible Assets
1. Concessions, patents,
trademarks and similar rights
as well as licenses thereto
2. Goodwill
3. Payments on account
1,230
87
—
65
47
-1,270
65
375,448
3,720
6,954
1,964
1,571
746
387,261
118,068
4,308
—
2,522
534
1,253
125,617
204,888
2,585
—
13,399
5,496
1,372
216,748
123,159
4,311
5,724
15,541
6,354
394
142,775
—
—
905,324
185,628
236,398
68
854,622
II. Tangible Assets
1. Land, land rights and
buildings, including
buildings on third-party land
2. Technical plants
and machinery
3. Other fixtures, fittings
and office equipment
4. Rental assets
5. Payments on account and
assets under construction
8,194
902
—
6,852
7,625
-3,833
4,490
454,309
12,106
911,048
223,942
256,407
-746
1,344,252
III. Financial Assets
1. Participations in
49,269
—
—
10
48,969*
—
310
2. Other participations
associated companies
8,393
—
136
5,186
200
—
13,515
3. Long-terms investments
9,285
—
105,500
632
74,312
—
41,105
320
12
—
—
175
—
157
67,267
12
105,636
5,828
123,656
—
55,087
897,024
15,838
1,023,638
231,734
381,634
—
1,786,600
4. Other loans
* Additions/disposals due to change in the consolidated group
Consolidated Financial Statements / Movements in Fixed Assets / 51
Accumulated depreciation / amortization
Net values
As at
1.1.2010
Currency
conversion
differences
Additions*
Additions
Disposals
As at
31.12.2010
As at
31.12.2010
As at
31.12.2009
€ 000
€ 000
€ 000
€ 000
€ 000
€ 000
€ 000
€ 000
26,196
62,421
2,066
—
5,157
—
3,375
11,195
1,418
—
35,376
73,616
16,643
261,561
12,845
272,756
63
—
—
—
63
—
65
1,167
88,680
2,066
5,157
14,570
1,481
108,992
278,269
286,768
66,087
1,099
—
3,298
235
70,249
55,368
51,981
155,751
1,206
—
13,431
4,749
165,639
51,109
49,137
92,472
3,026
4,268
11,781
5,278
106,305
36,470
30,687
—
—
355,226
142,015
144,520
352,721
501,901
—
—
—
—
—
—
—
4,490
8,194
314,310
5,367
359,494
170,525
154,782
694,914
649,338
139,999
—
—
—
—
—
—
310
49,269
15
—
45
—
—
60
13,455
8,378
53
—
—
7
4
56
41,049
9,232
4
—
—
—
2
2
155
316
72
—
45
7
6
118
54,969
67,195
403,062
7,433
364,696
185,102
156,269
804,024
982,576
493,962
52 / Consolidated Financial Statements / Explanatory Notes
Explanatory Notes to consolidated Financial Statements
pursuant to §§ 13 (3) in association with 5 (5) PublG
I. Introductory Remarks
III. Classification, Accounting and Valuation Methods
Vorwerk & Co. KG is publicly disclosing its worldwide consolidated
The balance sheet and the profit and loss account are laid out for
financial statements for the 2010 business year in accordance with
reporting purposes in accordance with the format stipulated in
the requirements of the German Publication and Disclosure Law
§§ 290 ff, 266 and 275 of the HGB for corporate entities. On account
(PublG) and the German Commercial Code (HGB). The require-
of the first-time full consolidation of akf group, the balance sheet
ments of the German Accounting Law Modernisation Act (BilMoG)
and the profit and loss account have been enlarged to include bank-
– a mandatory standard since 1 January 2010 – have been applied
ing and leasing-specific items, insofar as the assets and liabilities
for the first time. Figures from previous years have permissibly not
included there could not be allocated to already existing items. For
been adjusted (pursuant to Article 67 Section 8, sentence 2 of the
disclosure purposes, the option provided for under the German
German Commercial Code Introductory Act in its new version).
Publication and Disclosure Law (to show capital, reserves and
profit as partners’ equity) has been exercised. In this respect the
Apart from the information disclosed pursuant to § 313 Section 2
investments of silent partners are also included in partners’ equity
of the HGB, this Annual Report complies with the requirements of
since they are of an equity-capital-similar nature because they are
§ 13 of the PublG in association with §§ 294 to 315 of the HGB.
provided with a subordination clause. Moreover, with respect to
§ 13 Section 3 sentence 2 of the PublG, information is also provided
II. Consolidated Group
in the explanatory notes to the consolidated financial statements
The parent company is Vorwerk & Co. KG (Holding Company). The
pursuant to § 5 Section 5 of the same PublG. In this respect the
Group companies do business in the following commercial seg-
taxes and annual surplus in the consolidated profit and loss account
ments: manufacture and direct sale of high quality household appli-
(for disclosure) as a part of the explanatory notes pursuant to
ances and cosmetics as well as facial and body-care products,
§ 5 Section 5 of the PublG have been included with other operating
infrastructural facility services and carpeting. One newly-founded
costs under the collective heading other items not shown sepa-
company and another entity pursuant to § 290 Section 2 No. 4 of
rately. Vorwerk & Co. KG’s accounting and valuation principles also
the HGB in its new version have been included in the consolidated
pertain to the consolidated financial statements. Valuations at akf
figures for the first time in the year under review. Nine companies
group have been adopted unchanged pursuant to § 308 Section 2,
have been removed from the consolidated group because they
sentence 2 of the HGB. The financial statements of non-German
were either liquidated or merged. A foreign-based logistics com-
subsidiaries drawn up in accordance with national rules and regula-
pany has been included in the figures and evaluated at equity as an
tions that vary from German legal requirements have been adjusted
associated company in accordance with the provisions of §§ 311
in line with what is known as the Handelsbilanz II (Type II Com-
and 312 of the HGB. Pursuant to § 311 Section 2 of the HGB, two
mercial Balance Sheet). The valuation methods applied can be
associated companies of less significance have not been incorpo-
regarded as a uniform valuation as defined in § 308 Section 1 of the
rated in the consolidated figures at equity, but instead have been
HGB. They remain largely unchanged from those applied in previ-
included at acquisition cost.
ous year apart from some modifications that will be explained
below as a consequence of BilMoG. Purchased intangible assets
The akf companies and their substantial subsidiaries have been
have been capitalised at their cost of procurement and their prob-
fully included for the first time in the consolidated figures for the
able useful service life has been correspondingly depreciated lin-
year 2010 on account of the parent/subsidiary company relation-
early, pro rata in their year of acquisition.
ship and the control that can be exercised (§ 290 Section 1 of the
HGB in its new version in association with § 11 Section 1 of the
The period for scheduled straight-line depreciation of goodwill
PublG in its new version). These companies had been evaluated at
acquired against payment is 30 years.
equity up to and including 2009.
In the case of tangible fixed assets and rental assets (allowing for
contractual periods and residual book values), where the period of
usefulness is limited, the acquisition or manufacturing cost has
Consolidated Financial Statements / Explanatory Notes / 53
been depreciated in accordance with the probable useful service life
cation of the projected unit credit method to evaluate pension
at scheduled straight-line rates. Depreciation of additions to the tang-
accruals amounted to 1.1 million euros and has been included
ible fixed assets is effected on a pro rata basis as a matter of prin-
under extraordinary expenditure.
ciple. Should the fair market value of individual assets be below their
book value, additional non-scheduled write-downs will be made in
Other accruals and provisions with a remaining term of more than
the case of a probable continuation of the reduction in value.
one year have been discounted – in accordance with their remaining term – at the average market interest rate prevailing over the
Financial assets have been valued at cost or lower attributable value
past seven business years. In evaluating semi-retirement and anni-
and loans at nominal value. The movements in fixed assets can be
versary provisions, the same valuation parameters as for pension
seen in the corresponding “Movements in Fixed Assets” table.
obligations have been fundamentally applied, apart from caserelated, remaining terms for semi-retirement obligations.
Inventory has been valued at average acquisition cost or manufacturing cost in accordance with the principle of lowest value. Apart
Liabilities have been shown at the amount payable. The capital with
from the direct costs, the manufacturing costs only include reason-
participation rights – included under other liabilities – has been
able proportions of the material and manufacturing overheads
reported at nominal value.
involved as well as the depreciation on the fixed assets caused by
manufacturing.
Deferred income mainly includes special rental payments and
advanced rental payments attributable to future business years as
Receivables and other assets have been shown at nominal value
well as accrued net present cash values from receivables sold to
less appropriate provisions for bad debts and other write-downs.
banks. Such amounts will be reversed linearly in accordance with
Claims against customers from factoring and hire purchase trans-
the duration and pursuant to the principle of loss-free evaluation.
actions have been reported at their present net value less an individual or general level of provision.
IV. Foreign Currency Conversion
All financial statements of the subsidiary companies of the Group
Marketable securities have been evaluated at acquisition cost or at
that are included in the consolidation, but which are located outside
the lower attributable value as of balance sheet date. Liquid funds
the eurozone have been converted into euros from the respective
have been stated at nominal value.
currency using the modified closing rate method. The items of the
balance sheet – with the exception of the equity capital item that is
Receivables, other assets, obligations, inventory and liquid funds
converted into euro at a historical value – were converted at the
in foreign currencies have been valued at the mean spot exchange
mean spot exchange rate. The items of the profit and loss account
rate on balance sheet date. In the case of foreign currency items
are converted at average rates.
with a remaining term of more than one year, the acquisition cost
and realisation principle have been adopted. The requirements of
Income and expenditure shown in the corresponding profit and
§ 340 h of the HGB have been applied to the foreign currency con-
loss accounts have been converted at the average rate of exchange
version of the assets and liabilities of the companies of akf group.
for the year 2010 (modified closing rate valuation method). The
resulting differences of 0.4 million euros after conversion have
Revaluations have been made if applicable in accordance with
been included without profit effect within the partners’ equity. The
§ 253 Section 5 of the HGB in its new version. All identifiable risks
conversion effects resulting from the change in rates between bal-
and uncertain liabilities have been appropriately considered to their
ance sheet dates led to a 13.5 million euro increase in partners’
settlement amount in the formation of the provisions.
equity, but having no effect on profits.
To duly consider the risks in the accrual amounts for pensions, duly
V. Balance Sheet Date and Consolidation Principles
determined in accordance with the projected unit credit method
The companies included in the consolidated financial statements
and on the basis of the Heubeck 2005G guideline tables, an aver-
all have 31 December as their balance sheet date with the excep-
age market interest rate of 5.15 percent has been generally applied
tion of one company that has its close of year on 31 March. Con-
as a discount, an amount that results from a presupposed 15 year
solidation of the balance sheets and profit and loss accounts included
term. The trend in salaries has been assumed to be 2.5 percent, in
therein was carried out in accordance with the following principles:
pensions 1.4 percent. The impact on earnings from this first appli-
54 / Consolidated Financial Statements / Explanatory Notes
1. Capital Consolidation
3. Consolidation of Earnings
Capital consolidation for acquisitions prior to 31 December 2009
The consolidation of expenditure and income contained in the
was effected in accordance with the book value method. Capital
items shown in the consolidated profit and loss account comply
consolidation for first-time consolidations in the 2010 business
with § 305 of the HGB. Inter-company sales and the corresponding
year has been carried out pursuant to the revaluation method. In
level of expenditure as well as other, mutual inter-company
this respect the book values of the holdings have been set against
expenditure and income from the consolidated companies’ profit
the equity capital level of the corresponding subsidiary companies
and loss accounts have been set against each other.
including reserves and the result brought forward at the date of
acquisition following a revaluation of the individual balance sheet
4. Deferred Taxation
items and disclosure of hidden reserves.
Deferred taxation is assessed on the basis of the differences
between the commercial and taxation balance sheets, insofar as
The first-time consolidation of the JAFRA Group has been stated
these indicate a tax burden or relief. Moreover, deferred taxation
as goodwill after the appropriation of hidden reserves to assets and
considers possible losses and interest carried forward, provided
liabilities. Pursuant to § 253 Section 3 of the HGB, the goodwill of
they are expected to be taken up within the next five years.
the JAFRA Group will be written off over the individual operational
lifetime of more than five years. This is derived from the use of the
There is no statement of a surplus between the deferred tax assets
brand and brand-similar benefits which, besides the sales system
and liabilities in the individual financial statements. Contrary to this,
and the expertise of the staff in R&D, constitute essential elements
advantage is taken of the right – pursuant to § 274 Section 1, sen-
of the goodwill of the company. The remaining debit differences
tence 2 in association with § 300 Section 2, sentence 2 of the HGB
from previous years have been stated separately in the partners’
– to exercise this option to state the surplus in the consolidated
equity. Should any credit differences have resulted from this net-
financial statements. Deferred tax assets and liabilities are netted
ting in previous years, such have been incorporated into the
against one another and reported when the preconditions for such
reserves in previous years on account of their reserve character.
prevail. For the purposes of the consolidated financial statements,
There were no differences ensuing from the first-time consolida-
deferred taxation as per § 306 of the HGB is aggregated from the
tion in the business year under review.
individual financial statements pursuant to § 274 of the HGB.
The participating interests of other shareholders in the equity
Deferred taxation is not scheduled for variances in the first-time
capital subject to consolidation and in the results of the subsidiary
reporting of the value of company goodwill. Additionally, deferred
companies included in the consolidation have been shown in the
taxation is not scheduled for differences between the valuation of
compensating item for minority interests.
a subsidiary, associated company or joint venture from a taxation
point of view and the commercial evaluation of the net assets
The consolidation of a foreign-based logistics company at equity
reported in the consolidated financial statements.
has been effected in accordance with the book value method. In
this respect the valuation principles prevailing at this associated
As of 31 December 2010 future tax burden/relief calculated from
company have been adopted without change. Vorwerk’s share of
deviating valuations in the tax balance sheet ensued largely from
profits from companies consolidated at equity has been included in
the amounts receiveable and payable from / to associated compa-
the profit and loss account as the result from participations in asso-
nies, the inventory levels and provisions for pensions. When cal-
ciated companies.
culating taxation for consolidation entries affecting profits pursuant
to § 306 of the HGB, a uniform Group-wide average rate of taxation
2. Consolidation of Debt
of 30 percent has been applied in general to the consolidation of
Amounts due as receivables or payables in respect of companies
debt and the elimination of intermediate results; otherwise com-
within the consolidated group have been offset against each other
pany-specific tax rates have been applied. The calculation of
for consolidation purposes (§ 303 of the HGB).
deferred taxation for individual financial statements has been
effected on the basis of tax rates applying for individual companies.
Consolidated Financial Statements / Explanatory Notes / 55
VI. Other Statutory Disclosures Pursuant to § 314 of the HGB
and Explanatory Notes to Various Items in the Consolidated
Balance Sheet and Consolidated Profit and Loss Account
1. Remaining Terms for Liabilities
31.12.2010
31.12.2009
in € 000
Remaining
term < 1 y
Remaining
term > 5 y
Remaining
term < 1 y
Total
Remaining
term > 5 y
Total
Amounts payable to banks
289,128
0
29,474
0
505,742
49,111
0
174,259
29,474
18,903
0
339,113
18,903
102
340,363
48,718
0
48,913
89
0
89
93
0
93
2,979
0
2,979
2,071
0
2,071
Other liabilities
252,161
2,363
260,875
244,430
3,277
253,104
TOTAL liabilities
912,944
2,465
1,139,522
363,326
3,277
497,343
Advanced payments received for orders
Trade accounts payable
Bills of exchange payable
Amounts payable to associated companies
2. Securitised Liabilities
4. Profit and Loss Account
akf group issued a bearer bond to a third party in the 2008 business
year in a total amount of 27 million euros and a term of five years,
Group sales (incl. sales tax)
an item that is stated under other liabilities.
Breakdown by Region
2009
2010
million €
million €
3. Contingent Liabilities, Other Financial Commitments and
Germany
428.8
800.8
Off-balance Transactions
Europe
952.0
1,077.3
Obligations arising from rental, tenancy and leasing contracts
North America
363.8
422.0
amounted to 93.1 million euros for the following years as of balance
Rest of world
81.8
71.9
sheet date, 39.0 million euros of which fall due in 2011. Order obli-
Total
1,826.4
2,372.0
gations for investments in tangible fixed assets amount to 4.0 million euros (2.8 million euros in previous year). There are long-term
Group sales divided according to business division are shown in the
obligations arising from contracts with suppliers to an amount of
Group Management Report.
28.3 million euros as of balance sheet date.
Extraordinary income of 2.0 million euros and extraordinary exThere are no future obligations arising from off-balance-sheet trans-
penditure in an amount of 2.9 million euros resulted exclusively
actions that are of significance for the assessment of the financial
from the first-time application of BilMoG.
situation.
5. Present Value of Derivative Financial Instruments
The risk of recourse from the joint liability for the pension obliga-
Exchange rate futures and options as well as interest rate swaps
tions that have been transferred to the relief fund can more or less
and options are used at the Vorwerk Group for hedging purposes
be excluded since the fund can meet its long-term obligations from
both for operative business activities as well as in the area of for-
its own cash assets.
eign currency financing. The present value of a derivative financial
instrument is the price at which a party would acquire the rights
The risk of guarantees being called upon is estimated to be low
and/or obligations entailed in this financial instrument from another
since it is mostly a case of contract fulfilment guarantees that are
party. The book and present values of the financial instruments of
limited to the term of the individual agreement.
the Vorwerk Group are reported as follows:
56 / Consolidated Financial Statements / Explanatory Notes
This applied to financial obligations in a nominal amount of 2.4 billion
Derivative financial instruments
Nominal value
Book value
in € 000
Currency options
Currency futures
42,505
- 1,396
Present value
JPY in the year under review. In this respect currency fluctuations
31.12.2010
were secured by means of a micro-hedge with a currency future in
- 1,285
the same nominal amount as the basic transaction.
38,128
-329
1,703
Interest rate swaps
544,520
- 1,558
- 2,581
Additionally, possible interest rate fluctuations were similarly
Interest rate options
265,000
1,026
- 5,179
hedged to the same nominal value through the conclusion of a
4,366
0
0
Interest rate futures
70,700
0
0
Commodity swaps
2,186
0
356
Currency swaps
payer swap transaction. In this case, too, it was a micro-hedge.
Both the basic transaction and the hedging instruments reach
maturity on 28 February 2011.
Provisions for threatening losses in an amount of 1.7 million euros
have been formed to cover eventualities in exchange rate future
transactions and on account of negative market values for the interest rate swaps entered into by way of a hedge at the portfolio level.
Changes to the fair values:
+ 4.1 million €
Securing transactions in micro-hedge
- 4.1 million €
Basic transaction in micro-hedge
The nominal value of the derivative financial instruments is determined using the exchange rate valuation on closing date. The pres-
Since the value-determining factors between the basic transaction
ent values of exchange rate futures are determined according to
and the hedging instruments in respect of the currency, nominal
the closing rate as of balance sheet date, taking forward discounts
amount, term and interest rate dates conform to one another, an
and premiums into account. The present values of currency options
effectiveness of 100 percent can be expected until maturity.
are assessed on the basis of option price models pursuant to Black
& Scholes. The present values of interest rate hedging instruments
7. Information on Shares in Investment Funds
(interest rate swaps) as well as commodity swaps are determined
The Vorwerk Group holds 100 percent of the units of the VWUC
on the basis of discounted, anticipated future cash flows with the
Fund. The VWUC Fund has mixed fund assets pursuant to German
current market interest rates or market interest rates for raw ma-
investment law.
terials for the remaining term of the financial instruments being
applied. The interest rate swap in JPY is already included in an
The target of the investment policy is to generate an attractive
accounting unit and is therefore not taken into account from a bal-
increase in value in euros with a longer-term strategy. To achieve
ance sheet point of view.
this investment objective, the assets are invested in fixed-interest
securities as well as money market instruments and liquid funds.
Transactions are allocated to the banking book at akf group and
Moreover, the Fund can invest in securities on the equity markets
serve the purpose of securing the interest rate risks there. The
and in units of open and closed investment funds (shares, com-
credit-equivalent amount calculated in accordance with the mark-
modities and real estate). To secure as well as to invest and effi-
to-market method is running at 3.824 million euros. The sum of the
ciently manage the assets, the Fund may, in addition, also deploy
fair values derived using the mark-to-market method, but which are
derivatives and other techniques and instruments as well as secu-
not directly associated with an actual, fixed-interest derivative
rities lending.
transaction amount to -6.576 million euros. Provisions in an amount
of 1.558 million euros have been formed for transactions showing
Value of the units and variance to the book value
a negative market value.
in € 000
6. Accounting of Hedging Instruments
VWUC Fund
Book value
Market value
Difference
289,913
390,346
100,433
At the Vorwerk Group basic transactions and financial instruments
with divergent changes in value or payment flows are comprised
Vorwerk received a gross dividend of € 11.863 million euros
to accounting units.
(2.6021 € per unit) for the fund’s business year (1 December 2009 –
30 November 2010).
Consolidated Financial Statements / Explanatory Notes / 57
The Fund’s units could be redeemed on any stock exchange trading
day in the year.
The Fund’s units were evaluated throughout the entire year in
accordance with the lowest value principle.
8. Other Information
No market-uncustomary business has been transacted by the parent company or by the subsidiaries with related companies or persons.
The fees for the auditors amounted to 496,900 euros, for tax consultancy 44,600 euros and for other services rendered 26,800
euros in the year under review.
Average annual staffing level
2009
Employees*
Direct sales personnel
Vorwerk Kobold
Vorwerk Thermomix
Vorwerk Feelina
JAFRA Cosmetics
Lux Asia Pacific
2010
21,580
22,096
589,251
601,664
9,140
8,788
20,670
21,979
4
0
557,815
569,177
1,622
1,720
*Including employed sales advisers; akf group fully consolidated since 2010
Management at the parent company Vorwerk & Co. KG is in the
hands of the Managing Partners Walter Muyres, Jüchen, Reiner
Strecker, Wuppertal (since 1 January 2010) and Peter Oberegger,
Düsseldorf (until 31 December 2010).
Wuppertal, 15 April 2011
Walter Muyres
Reiner Strecker
58 / Consolidated Financial Statements / Auditors’ Report
Auditors’ Report
The foregoing consolidated balance sheet and profit and loss
presentation of the net assets, financial position and results of
account, the explanatory notes (without any listing of investment
operations in the consolidated financial statements in accordance
holdings) together with the Group Management Report as intend-
with German principles of proper accounting and in the Group
ed for publication comply with the legal requirements.
Management Report are detected with reasonable assurance.
Knowledge of the business activities and the economic and le-
Wirtschaftsprü-
gal environment of the Group and expectations as to possible
fungsgesellschaft, Essen, expressed the following opinion on
misstatements are taken into account in the determination of
the complete consolidated financial statements and the Group
audit procedures. The effectiveness of the accounting-related
Management Report:
internal control system and the evidence supporting the disclo-
PricewaterhouseCoopers
Aktiengesellschaft
sures in the consolidated financial statements and the Group
“Audit opinion
Management Report are examined primarily on a test basis
within the framework of the audit. The audit includes assessing
We have audited the consolidated financial statements –
the annual financial statements of the companies included in con-
prepared by the Vorwerk & Co. KG, Wuppertal, comprising the
solidation, the determination of the companies to be included in
balance sheet, profit and loss account and explanatory notes –
consolidation, the accounting and consolidation principles used
and the Group Management Report for the business year from
and significant estimates made by the Managing Partners as well
1 January to 31 December 2010. The preparation of the consoli-
as evaluating the overall presentation of the consolidated finan-
dated financial statements and the Group Management Report
cial statements and the Group Management Report. We believe
in accordance with German commercial law is the responsibility
that our audit provides a reasonable basis for our opinion. Our
of the Managing Partners of the company. Our responsibility is
audit has not led to any reservations. In our opinion, based on the
to express an opinion on the consolidated financial statements
findings of our audit, the consolidated financial statements com-
and the Group Management Report based on our audit. We con-
ply with the legal requirements and give a true and fair view of
ducted our audit of the consolidated financial statements in ac-
the net assets, financial position and results of operations of the
cordance with § 317 of the German HGB (German Commercial
Group in accordance with German principles of proper accounting.
Code) and the generally accepted standards for the audit of finan-
The Group Management Report is consistent with the consoli-
cial statements promulgated by the Institut der Wirtschaftsprüfer
dated financial statements and as a whole provides a suitable
in Deutschland (IDW). Those standards require that we plan and
view of the Group’s position and appropriately presents the op-
perform the audit such that misstatements materially affecting the
portunities and risks of future development.”
Essen, 15 April 2011
PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Peter Albrecht
Thomas Hofmann
Auditor
Auditor
Companies in the Vorwerk Group / 59
Vorwerk Group /
The Main Companies
60 / Companies in the Vorwerk Group
The main Companies in the Vorwerk Group
Germany
Vorwerk & Co. KG
Mühlenweg 17 - 37
42270 Wuppertal
Spain
Vorwerk España M.S.L., S.C.
Avda. Arroyo del Santo, 7
28042 Madrid
Vorwerk & Co. Interholding GmbH
Mühlenweg 17 - 37
42270 Wuppertal
France
Vorwerk France s.c.s.
5, rue Jacques Daguerre
44306 Nantes Cedex 3
Vorwerk & Co.
Beteiligungsgesellschaft mbH
Mühlenweg 17 - 37
42270 Wuppertal
Vorwerk Direct Selling
Ventures GmbH
Mühlenweg 17 - 37
42270 Wuppertal
Deutschland
Switzerland
Vorwerk International
Mittelsten Scheid & Co.
Verenastr. 39
8832 Wollerau
Belgium
Vorwerk & Co. KG
Bruxelles Bureau
47, Rue Montoyer
1000 Brüssel
Direct Sales, Vorwerk
Italy
Vorwerk Folletto s.a.s. di Vorwerk
Management s.r.l.
Via Ludovico di Breme, 33
20156 Milano
Vorwerk Contempora s.r.l.
Via Ludovico di Breme, 33
20156 Milano
Germany
Vorwerk Deutschland Stiftung & Co. KG
Geschäftsbereich Kobold
Mühlenweg 17 - 37
42270 Wuppertal
Vorwerk Deutschland Stiftung & Co. KG
Geschäftsbereich Thermomix
Mühlenweg 17 - 37
42270 Wuppertal
China
Vorwerk Household
Appliances Co., Ltd.
9F, Vorwerk Plaza
1768 Yishan Road
201103, Shanghai
Vorwerk Engineering
Germany
Vorwerk Elektrowerke GmbH & Co. KG
Mühlenweg 17 - 37
42270 Wuppertal
France
Vorwerk Semco S.A.S.
20, route de Montigny
28220 Cloyes-sur-le-Loir
Italy
Vorwerk Folletto Manufacturing s.r.l.
Via Garibaldi, 27
20043 Arcore-Milano
Portugal
Vorwerk Portugal Electrodomesticos
LDA
Rua Quinta do Paizinho
Edificio Bepor, Bloco 2 - 2° Esq.
2790-237 Carnaxide/Lisboa
China
Vorwerk Household Appliance
Manufacturing (Shanghai)
Co., Ltd.
Songze Ave. 8777
Qinpu District
201700, Shanghai
Austria
Vorwerk Austria GmbH & Co. KG
Schäfferhofstr. 15
6971 Hard/Bregenz
Direct Sales, JAFRA Cosmetics
Poland
Vorwerk Polska Sp.z o.o.
ul. Strzegomska 2 - 4
53-611 Wroclaw
Czech Republic
Vorwerk CS k.s.
Pod Pekařkou 1/107
147 00 Praha 4
Taiwan R.O.C.
Vorwerk Lux (Far East) Ltd.
Taiwan Branch (H.K.)
5F, No. 85, Section 1
Chuang Hsiao East Road
Taipei City
Japan
Vorwerk Nippon K.K.
Crescendo Bldg. 2F
2-3-4 Shin-Yokohama
Kohoku-ku, Yokohama-shi
Kanagawa-ken
222-033
Mexico
Vorwerk México S. de R.L. de C.V.
Av. Paseo de las Palmas No. 320, Local
PB-A
Col. Lomas de Chapultepec
Delegación Miguel Hidalgo C.P. 11000
México D.F.
Headquarters & USA
JAFRA Cosmetics International, Inc.
2451 Townsgate Road
Westlake Village, CA 91361
Mexico
JAFRA Cosmetics International,
S.A. de C.V.
Blvd. Aldolfo López Mateos #515
Colonia Tlacopac
Delegación Alvaro Obregón
01040 México, D.F.
Germany
JAFRA Cosmetics GmbH & Co. KG
Leonrodstr. 52
80636 München
Brazil
Distribuidora JAFRA de Cosmeticos, Ltd.
Alameda dos Maracatins 659
Moema – São Paulo/SP
CEP 04089-011
Italy
JAFRA Cosmetics S.p.A.
Via Cesare Battisti 58
21043 Castiglione Olona
Switzerland
JAFRA Cosmetics AG
Riedstr. 3/5
6330 Cham
Companies in the Vorwerk Group / 61
Austria
JAFRA Cosmetics
Handelsgesellschaft mbH
Schäfferhofstr. 15
6971 Hard/Bregenz
Netherlands
JAFRA Cosmetics International B.V.
Geograaf 30
6921 EW Duiven
Dominican Republic
JAFRA Cosmetics Dominicana S.A.
Gustavo Mejia Ricart No. 121
Ensanche Julieta
Santo Domingo
Russia
JAFRA Cosmetics International LLC
10 Pervyi Volokolamskiy proezd
123060 Moskva
India
JAFRA Ruchi Cosmetics (India)
Private Ltd.
Odeon Cinema
D-Block
Connaught Place
New Delhi
Mexico
JAFRA MANUFACTURING
Av. La Estacada #201
Parque Industrial Querétaro
Santa Rosa de Jauregui
Querétaro, Querétaro
CP 76220
Direct Sales, Lux Asia Pacific
Headquarters
Lux Asia Pacific Pte Ltd.
390 Havelock Road
#08-02 King’s Centre
Singapore 169662
Indonesia
P. T. Luxindo Raya
JL. Agug Timur 9
Blok 01/29-30
Sunter Agung Podomoro
14350 Jakarta
Thailand
Lux Royal (Thailand) Co., Ltd.
523-525 Lux Building
Sukhumvit 71, Phra Khanong-Nua
Wattana, Bangkok 10110
Taiwan R.O.C
Vorwerk Lux (Far East) Ltd.
Taiwan Branch (H.K.)
2F, No. 2 Ruiguang Road
Neihu District
114 Taipei City
Philippines
Lux Appliance Philippines Inc.
986 Standford Street
(corner EDSA)
Mandaluyong City 1550
Vietnam
LUX Company Ltd
70 Huynh Van Banh Street
Ward 15
Phu Nhuan District
Ho Chi Minh City
akf Financial Services
Germany
akf bank GmbH & Co KG
Friedrichstr. 51
42105 Wuppertal
akf leasing GmbH & Co KG
Friedrichstr. 51
42105 Wuppertal
akf servicelease GmbH
Johannisberg 7
42103 Wuppertal
Spain
akf bank GmbH & Co KG, S.E.
P.E. La Moraleja
Av. de Europa 12, 3a
28108 Alcobendas/Madrid
akf servicelease España S.L.
P.E. La Moraleja
Av. de Europa 12, 3a
28108 Alcobendas/Madrid
Poland
akf leasing polska S.A.
Al. Jana Pawla II 15
00-828 Warszawa
Italy
akf servicelease italia s.r.l.
Via Ludovico di Breme, 33
20156 Milano
HECTAS Facility Services
Germany
HECTAS Gebäudedienste
Stiftung & Co. KG
Am Diek 52
42277 Wuppertal
HECTAS Gebäudereinigung
Stiftung & Co. KG
Am Diek 52
42277 Wuppertal
HECTAS Sicherheitsdienste GmbH
Am Diek 52
42277 Wuppertal
Netherlands
HECTAS Bedrijfsdiensten C.V.
Geograaf 30
6921 EW Duiven
Austria
HECTAS Gebäudedienste
Ges.mbH. & Co. KG
Sonnwendgasse 18
9020 Klagenfurt
Poland
HECTAS USŁUGI sp.z.o.o.
ul. Grabiszynska 241 B
53-234 Wrocław
Czech Republic
HECTAS Technické
a Bezpecnostní Sluzby, s.r.o.
Luzická 9
61600 Brno – Zabovresky
Belgium
HECTAS Schoonhouden BVBA
Kernenergiestraat 75
2610 Wilrijk
Luxembourg
HECTAS Gebäudedienste SaRL
38, Avenue Gordon Smith
7734 Colmar-Berg
Hungary
HECTAS Magyarország
Épületfenntartó Kft.
Hungária krt. 140 –144, Stock III
1146 Budapest
Vorwerk Carpets
Vorwerk & Co. Teppichwerke
GmbH & Co. KG
Kuhlmannstr. 11
31785 Hameln
Deutschland
62 / Imprint
Sources
Ute Kaiser, page 4f., 10, 19, 25f., 30f., 38f., 44;
Silja Götz, page 14f.;
Franz Pfluegl – Fotolia.com, Miles Davies,
Gianluca Fabrizio, Valerie Loiseleux, Joe Cicak, page 14f.;
Judith Müller, page 16, 19, 21, 23, 27, 29, 32, 34;
plainpicture, page 21;
Michael Jay, page 23;
Jon Helgason, page 27;
Michał Krakowiak, page 29;
Modrow, page 30f.;
Romy Blümel, page 35;
Patrizia Tilly – Fotolia.com
Imprint
Publication: Vorwerk & Co. KG,
Mühlenweg 17 - 37, 42270 Wuppertal
+49 202 564-1247
www.vorwerk.com
[email protected]
Editorial staff: Michael Weber (responsibility),
Alexandra Stolpe,
Corporate Communications of the Vorwerk Group
Design: Orange Lab, Düsseldorf
Text: Vorwerk & Co. KG, Wuppertal,
Orange Lab, Düsseldorf
Translation: Alan Hall, Wuppertal,
Lynda Matschke, Hamburg
Production: Druckhaus Ley + Wiegandt, Wuppertal
© Vorwerk & Co. KG, 2011
Our annual report is published in German and
English with a total circulation of 9,500 copies.
Ident-No. 118295
Wood products originating from responsibly managed forests
are marked with the FSC trademark and are independently
certified in accordance with stringent Forest Stewardship
Council (FSC) criteria. Only FSC-approved paper was used in
the printing and preparation of this annual report. This annual
report was produced climate neutrally.
Management Report / Thermomix
Editorial //17
01
Management Report / Thermomix
Editorial //17
01

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