Financial Overview

(in millions EUR)

	FY ended May. 31, 2013	FY ended May. 31, 2012	Rate of change (%)	Factor
Overall
Sales	4,999	4,810	3.9	-Sales increases in Asia, especially China and North and South America contributed the Company's highest sales record.
EBITDA	576	615	(6.3)	-
Sales by Segment
Lighting	1,846	1,865	(1.0)	-
Electronics	1,700	1,581	7.5	-

Business Partnership

-The Company and Great Wall Motors signed a strategic partnership agreement. The both sides agreed to focus current cooperation on body electronic modules, body control modules and lamps and will cooperate in simultaneous design and development of products and carry out technical exchanges. The Company has already cooperated with Great Wall Motors supplying products, including lamps used in "Wingle 3", electronic gas pedals used in "Florid" and Great Wall "C10" and electronic vacuum pumps and rain & light sensors used in Great Wall "C50C". Moreover, its remote keyless entry systems and headlight cleaning systems used in high-end products have been already planned to be applied to saloon cars, pickups and SUV of Great Wall Motors in future. (From a press release on July 6, 2012)

Joint Venture

-The Company announced that it reached a cooperation agreement for a planned joint venture with BAIC. Both partners aim to realize the joint venture by the end of 2012. As an essential component of this cooperation, Hella plans to involve its Chinese partner BAIC, via BAIC's subsidiary BHAP, as an equal partner in the future in the local subsidiary Hella Beifang Automotive Lighting Co. Ltd. (HBL) in Beijing. Up to this point, the Hella subsidiary HBL has concentrated primarily on lighting and electronics applications for commercial vehicles in the area of Special OE. The goal of the partnership is to use Hella's available production and development capacities and to expand the location into a full service provider for passenger car illumination. (From a press release on June 1, 2012)

<Hella Behr Plastic Omnium GmbH (HBPO)>
-In 2012, HBPO, a joint venture with Behr and Plastic Omnium, entered into the ASEAN via a joint venture with DRB Hicom in Malaysia. The new joint venture will manufacture front-end modules for a local customers.

Major Contract

-The Company announced that it supplies Xenon headlights, tail lights, interior lighting and fog lights for the BMW "X6", which is available as from June 2012. (From a press release on July 16, 2012)

-For the "lifestyle of cabriolet" of a German auto manufacturer, the Company devised an LED-based rear lamp that is fully integrated in the trunk lid and which features semi-opaque lenses.

-The Company supplies an ambient interior lighting solution for the SUV of a British automobile manufacturer, where the driver can choose from as many as ten different colors.

-The Company was awarded 2.7 million body control modules with a major Indian customers.

Awards

-In April 2013, the Company's production plant for headlamps and rear lamps in Guadalajara, Mexico was awarded a quality award from BMW.

-The Company has been awarded the "Volkswagen Group Award 2012." The Company was praised particularly for the development and production of the Dynamic Light Assist function, which increases road safety by providing optimum road lighting. Having been deployed in the Volkswagen "Touareg", the system is now also being used in the new "Tiguan". (From a press release on July 30, 2012)

R&D Expenditure

(in millions EUR)

	FY ended May 31, 2013	FY ended May 31, 2012	FY ended May 31, 2011
-Lighting	176	142	128
-Electronics	257	224	204
-Aftermarket and Special OE	35	22	14
Total	468	388	346
as a % of sales	9.4%	8.1%	7.9%
R&D Employees	5,612	4,832	3,882

 

R&D Facilities

-The Company conducts R&D activities in 15 locations around the world.

-During FY ended May 2013, the Company commenced building a brand-new development center at the Lippstadt, Germany where its headquarters located.

R&D Activities

-Major R&D activities conducting during FY ended May 2013 are as follows:

• Alternative light sources, including the use of lasers in headlamps
• Self adjusting and fully adaptive headlamps
• Rear lamps with animated light
• The use of new materials

Product Development

Wear-free LED-array headlamp (Matrix LED headlight)
-The Company has developed wear-free LED-array headlamps. These are LED-based, high and low-beam lamps arranged in a matrix that can be dimmed up or down as required. The first vehicle which is equipped with this technology is set to enter the market in autumn 2013.

Identification light
-The Company will launch the new identification light K-LED 2.0 at the beginning of April. The new K-LED 2.0 is the first beacon from the Company that allows the driver to choose between a rotating or flashing warning signal, either via a switch or through programming, depending on the situation. The integrated light sensor determines the ambient light and uses this data to adapt the brightness of the beacon automatically (day and night mode). (From a press release on March 28, 2013)

Modular optical warning system with LED light module
-The Company is offering the modular optical warning system OWS7 with the newly developed LM 2 and LM 4 LED light modules. A saving of more than 30 percent energy can be achieved in comparison to the halogen variant. The OWS7 can be equipped with flashing (LM 2) or rotating (LM 4) LED warning lights. Both modules are suitable for 12-Volt and 24-Volt operation. In addition, widths from 900 millimeters to 2,000 millimeters as well as different warning light colors can be realized. (From a press release on June 5, 2012)

Capital Expenditure

(in millions EUR)

	FY ended May 31, 2013	FY ended May 31, 2012	FY ended May 31, 2011
Total	541	422	356

Investment Outside Germany

<China>
-Hella Electronic Device Co., Ltd. (HED) is opening a production facility in Xiamen, Fujian Province, China. The subsidiary HED will develop and produce automotive relays and other electronic products, which are used in numerous electronic applications in modern vehicles, for instance vehicle control systems, door locking systems, electronic windows, seat controllers, as well as lighting systems, air-conditioners and ABS systems. The Company supplies these products to numerous regional automotive manufacturers and parts manufacturers, including Shanghai Volkswagen, FAW-Volkswagen, Shanghai General Motors, Hyundai Motors and Delphi Automotive. (From a press release on August 16, 2012)

<Mexico>
-The Company established a new plant in Irapuato, western Mexico, investing more than EUR 100 million. The Company has commenced operations at the 24,000 square meter production facility. 1.2 million headlamps and 2.4 million rear lamps will leave the new plant annually.

<Romania>
-The Company has substantially expanded its existing production facility for electronic components in Timisoara.