Hella KGaA Hueck & Co. Business Report FY2007-08

Business Highlights

Highlights in FY2007-08 (ended May 2008)

Financial Overview

(in million euros) FY2007-08 FY2006-07 Rate of
Sales 3,940 3,662 7.6%
Gross profit 556 514 8.2%
Operating result 238 81 193.8%
Result before tax on earnings 202 55 267.3%
Profit 143 27 429.6%

-The Company's sales grew in fiscal year 2007-08 by 7.6% from 3,662 to 3,940 million euros. As in previous years, growth was borne evenly by all three Business Divisions - Lighting, Electronics and Aftermarket.

Sales by Segment

(in million euros)

FY2007-08 FY2006-07 Rate of
Lighting 1,669 1,535 8.7%
Electronics 1,167 1,025 13.9%
Aftermarket & Special OE 1,104 1,094 0.9%


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3,940 3,667 7.6%


-With a growth in sales of 8.7% to 1,669 million euros, the result was able to be significantly improved. A full year ahead of the improvement plan, the business division Lighting achieved the turnaround and posted a positibve result again. This was thanks mainly to the "Lion" improvement program launched two years ago.


-Sales increased by 13.9% to 1,167 million euros. All product segments contributed this positive development. In particular, the Company was able to strengthen its market position through new orders in the new business fields of energy management and driver assistance systems.

-From early 2009, the Company's front camera with the functions of lane recognition and trafic-sign recognition will be used for the first time in a series production at General Motors. The worldwide launch of the traffic-sign recognition function will thus be in the Opel Insignia.

Aftermarket & Special OE

-The lighting product range developed positively in the past fiscal year. One factor that contributed to this positive development was the exclusive sales partnership for lighting service parts with Visteon in Europe began in January 2008. Initially the range covers about 250 headlamps and front fog lamps as well as rear combinaiton lamps and direct indicators.

Sales by Geographic Area

(in million euros) FY2007-08 FY2006-07 Rate of
Germany 1,418 1,352 4.9%
Central and Eastern Europe 235 199 18.1%
Rest of Europe 1,319 1,243 6.1%
NAFTA region 523 510 2.5%
Asia-Pacific and other regions 445 358 24.3%
Total 3,940 3,662 7.6%


Sales in Central and Eastern Europe rose disproportionately, with a plus of 18.1% in comparison with the previous year.

A considerable increase in sales was also recorded in Germany and the other Western European markets.


Due to the generally difficult market environment, business growth was in comparison more muted, with partly declining vehicle sales. However, with a share of 13.3% of consolidated sales, the Company is still significantly represented in this region.


The share of consolidated sales according to sales regions has shifted further in the direction of the Asia-Pacific region primarily China and India. Sales in this region grew by 24.3%, such that the share of consolidated sales in fiscal year 2007-08 amounted to as much as 11.3%.


The Company is supplying its 24-GHz radar-based lane-change warning system for the new Audi A4, marking the sixth vehicle worldwide to feature the driver assistance system. The lane-change warning system, also known as the "Audi Side Assist", is designed to alert drivers of vehicles in their rear blind spots when changing lanes. (From a press release on Apr. 15, 2008)

The Cadillac Escalade Platinum is the first sports utility vehicle (SUV) in the world to offer LED headlights as standard equipment. The Escalade Platinum, Cadillac's luxurious sport utility vehicle will be launched in 2008. OSRAM LEDs power all functions in the headlights supplied by the Company, including low beam, high-beam, daytime running lights, position lights and side marker lights. (From a press release on Jan. 16, 2008)

Driver assistance systems from the Company are now available on three North American vehicles. The three optional driver assistance systems now available in North America, adaptive cruise control (ACC), lane-change assistant and rear-view camera, are featured on the Chrysler 300, Audi Q7 and JeepR Commander, respectively. The rear camera is also available on seven other Chrysler, JeepR and Dodge vehicles. (From a press release on Nov. 8, 2007)

Hella comfirms that the current BMW 5 Series is now also available with variable light distribution. Innovative driver assistance systems offer the possibility of highly intelligent control of the optionally available Bi-Xenon headlamps.(From a press release on Oct. 22, 2007)

Together with Audi, the Company has developed a lane change assistant for the new Audi A4.

>>> See R&D for more details

The upscale 2007 Audi Q7 is the first vehicle sold in North America to offer a new radar-based lane-change warning system developed by the Company. The lane-change assistant system, known as the Audi Side Assist, determines objects in the vehicle's blind spot. (From a press release on Jul. 30, 2007)


R&D Structure

More than 3,000 engineers and technicians work in research and development throughout the Company group.

The Company's worldwide development network was strengthened further in FY2007-08. The main focus of these expansion activities was on the growth regions of China, India and Eastern Europe, where numerous new R&D employees have been recruited for the Company in the fields of both lighting and electronics.

The main focus of R&D activities has been on LED technology for headlamps, light-based driver assistance systems, energy management and selected electronics components.

In the fiscal year 2007-08, the number of employees in R&D rose by 13.2% to 3,528 (previous year 3,117 employees). This corresponds to a quota of 14.3% of total staff.

R&D expenditure

(in million euros) FY2007-08 FY2006-07 Rate of
Employees 3,528 3,117 13.2%
R&D Expenditure
-Lighting technology 125.9 119.3 5.5%
-Electronics 169.5 145.3 16.7%
-Aftermarket products 14.6 20.2 (27.7%)
Total 310.0 284.8 8.8%
as a % of sales 7.9% 7.8% -
In the fiscal year 2007-08, 310 million euros, or 7.9% of the Company's sales, were invested in R&D.

R&D Developments in FY2007-08

-The Company concluded the development of the first full-LED headlamp in the world for a high-end SUV and started large-scale series produciton of this headlamp in summer 2008.

-Together with Audi, the Company has developed a lane change assistant for the new Audi A4. When changing lanes, it considerably reduces the danger of overlooking vehicles approaching from the rear. The system assists the driver via permanent monitoring of the adjacent lanes from a speed of 30 km/h, and warns in the event of passing and lane-change procedures if a vehicle has been detected in the adjacent lane. Critical situations are indicated via an optical warning in the side mirror. Two 24-GHz radar sensors on both sides, which have a range of fifty meters, detect other road-users in the rear and side area of one''s own vehicle, as well as objects located in the blind spot. They work largely irrespectively of weather conditions. Various European and Asian vehicle makers now use the lane change assistant from Hella in series production. It can already be found in six different series, more will follow. (From a press release on Mar. 28, 2008)

Investment Activities

Investments in FY2007-08


-The Company pushed ahead the expansion of its international development and production network, culminating in the opening of a new plant in Mexico and the expansion of development capabilities in China, India and Romania.

-The Company has set up corresponding produciton capacities for headlamp power wash system in Shanghai, China and will be supplying the Asian market from there from mid-2009 onward.