Financial Overview

(in million Euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	Rate of change (%)	Factors
Overall
Sales	6,159.5	6,002.2	2.6	-The sales growth reflected positive foreign currency exchange rate effects totaling EUR 175.2 million. Real sales remained at about the same level as the previous year.
Net profit	148.6	231.1	(35.7)	-
Sales by business unit
Engine Systems and Components	2,623.0	2,699.3	(2.8)	1)
Filtration and Engine Peripherals	1,925.5	1,700.4	13.2	2)

 

Factors
1) Engine Systems and Components
-In FY2012, the Engine Systems and Components business unit did not reach the previous year's level, predominantly due to the challenging market conditions in Europe and South America and significant sales shares in the globally shrinking commercial vehicle market. Sales increases in various product segments including power cell cylinder modules, light vehicles gasoline pistons, and valves were unable to fully offset declines in other product segments.

-In FY2012, the business unit recorded the highest share to Group sales with a figure of 42.6 percent (previous year: 45 percent). 

2) Filtration and Engine Peripherals
-In FY2012, sales in the Filtration and Engine Peripherals business unit grew significantly despite the economic downturn in several regions. All major product segments contributed toward the sales increase, with the air intake modules and components segment as well as air filter modules and components reporting substantially increased sales. Bolstered by MAHLE's strong technological expertise, the business unit thereby benefited from the increasing complexity of engine peripherals in downsizing engines.

-In FY2012, the business unit boosted its share of Group sales from 28.3 percent to 31.3 percent.

Acquisition

Share acquisition from Behr
-In 2013, the Company increased its holding in the Behr Group from 36.85 percent to approximately 51 percent with the acquisition of all shares in the BWK GmbH holding company (BWK). Furthermore, an integration agreement has been concluded with the family shareholders, who hold the remaining shares along with Mahle, enabling the full integration of the "Thermal Management" business unit into the Mahle Group. Mahle's acquisition of the majority share in Behr, which was originally planned for early 2013, was delayed as a result of investigation proceedings against manufacturers of thermal systems for automobiles, including Behr, in connection with suspected restrictive business practices. (From a press release on May 16, 2013)

Recent Developments Outside Germany

<China>
-In 2012, the Company announced that it is expanding its existing research and development center in Shanghai, China. The location, which comprises central functions such as sales, purchasing, human resources, IT, and finance in addition to research and development, will be expanded by adding three new buildings. Nearly 9,000 square meters of additional lab and office space will be added to the existing 7,000 square meters. The number of employees can be increased from currently 230 to as many as 450. The official opening will take place in November 2012. (From a press release on August 27, 2012)

<Japan>
-In 2012, the Company announced that it has begun to construct a new production plant for air intake and filtration systems in Kyushu, Japan, since one of its Japanese customers is going to move the majority of its vehicle manufacturing to the region. It is near the production plants of customers such as Nissan, Toyota, Mitsubishi, and others. The production area will be 7,500 square meters in the first stage of construction. Completion is scheduled for September 2012 and start of production for the end of the year. (From a press release on August 27, 2012)

<Thailand>
-In 2012, the Company announced that it is expanding the two existing Mahle plants in Thailand. Mahle Engine Components (Thailand) is enlarging its plant at the Bangkok location, which mainly produces pistons. Construction work on the new 45 by 90 meter building should be completed by September 2012. The new building will house an assembly line as well as measurement and testing equipment. It will also provide space for future machining and coating lines. In Samutprakarn, Mahle Siam Filter Systems is adding considerably to the existing location. The new buildings measuring 5,000 square meters will primarily house storage areas and offices. The previous areas that will be cleared will then have space for two new production lines for oil coolers and greater capacity for the production of air intake systems and valve covers. (From a press release on August 27, 2012)

R&D Expense

(in million Euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Overall	289	323	310

 

R&D Structure

-The Company operates seven R&D centers in six countries:

•     Stuttgart, Germany
•     Northampton, UK
•     Farmington Hills/Detroit, USA
•     Jundiai/Sao Paulo, Brazil
•     Shanghai, China
•     Kawagoe/Saitama, Japan
•     Okegawa/Saitama, Japan

Capital Expenditure

(in million Euros)

Business Units	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Overall	324	319	199
Engine Systems and Components	144	159	89
Filtration and Engine Peripherals	99	104	79

 
<Filtration and Engine Peripherals>
-In 2012, a plant was opened on the island of Kyushu in the south of Japan, and the existing plant in Thailand was extended.

-In 2012, the Company invested in the Auengrund location in Thuringia / Germany, where the local competence center for pump technology underwent expansion. Simultaneously, the production plant in Wustermark / Germany received investments for the start-up of large-scale production of controlled oil pumps.