Financial Overview

(in million EUR)

	FY ended May 31, 2014	FY ended May 31, 2013	Rate of change (%)	Factor
Overall
Sales	5,343	4,835	10.5	-
EBITDA	650	551	18.0	-
Sales by Segment
Lighting	2,180	1,846*	-	-Greater demand in LED products particularly in Europe, North America and China
Electronics	1,744	1,700*	-	-High customer demand mainly in China, NAFTA and Europe

*Figures labeled with an asterisk are pre-adjustment figures that have not been changed in accordance with IFRS 11 and IAS 19R implemented in 2013.

Joint Venture

To product lighting system tailored to suit Chinese market
-The Company announced that it has signed a contract with BAIC to form a joint venture in China. The operative start-up of the joint venture, Beijing Hella BHAP Automotive Lighting Co., Ltd., is scheduled for the beginning of September 2014. Capitalized at approximately EUR 30 million, the joint venture will develop and produce lighting systems there, which are specially tailored to suit the Chinese market. (From a press release on April 30, 2014)

Expanding capabilities for radar sensors
-In 2013, the Company commenced cooperation with InnoSenT GmbH, a leading manufacture of radar sensor based in Germany. The Company aims to expand its radar technology for safety-enhancing driver assistance systems in cars, such as the Lana Change or Lane Tracking Assistant.

Contract

-Major contracts in the FY ended May 2014 are as follows:

Model	Product	Remark
BMW "X5"	-Ambient lamps -Rear combination lamps -Battery sensors -DC/DC converters -Rain/light sensors -Lane-change warning systems (Option)	-
BMW "5 Series"	-Adaptive LED headlamps -Tail lamps -Ambient interior lamps -Battery sensors -Voltage transformer	-
Audi "A8"	Matrix LED headlamps	-A glare-free high beam allows the driver to travel in his vehicle with a permanent high beam without risk of dazzling oncoming traffic or any preceding vehicles. Such a function is technically possible thanks to the splitting up of the high beam into five reflectors, each one having a chip containing five LEDs.
Land Rover "Range Rover"	Interior lamps	-
Land Rover "Range Rover Sport"	Interior lamps	-
Opel "Adam"	Interior lamps	-
Seat "Leon"	Interior lamps	-
Volkswagen "Golf", "Golf R", "Golf GTI"	Interior lamps	-
Citroen "C4 Picasso"	Tail lamps	-The tail lights' brake light/lamp functions, available as an optional feature, take the form of two 3D modules, each with 15 light-emitting diodes (LEDs). -A basic version is also available with filament bulbs only.

Awards

-The Company won the 2014 Automotive News PACE Award for its adaptive LED Matrix Beam technology. (From a press release on April 8, 2014)

R&D Expenditure

(in million EUR)

	FY ended May 31, 2014	FY ended May 31, 2013	FY ended May 31, 2012
Overall	514	444	366
-Automotive	478	408	346
Overall R&D Expenditure as a % of overall sales	9.6%	9.2%	7.9%
R&D Employees	5,880	5,414	4,640

 

R&D Facilities

-In November 2013, the Company opened a new electronics development center in Lippstadt, Germany. Approximately 700 employees will focus on the areas of driver assistance systems and energy management, steering and body electronics development.

-During FY ended May 2014, the Company established two new development centers in Guadalajara, Mexico and Ho Chi Minh City, Vietnam.

Technological Alliance

-On May 22, 2014, the Company announced a technical partnership with both Beijing Automobile and Beijing Hainachuan Automotive Parts Co., Ltd. Hella expects the new collaboration will lead to increased business with Beijing Automobile in the area of advanced technologies. According to the announcement, Hella will offer technological support for Beijing Motor's lamp development project from the initial stage of product planning. It will do so by using its extensive expertise in lighting technologies.

R&D Activities

Participate in joint development project in Germany
-The Company will participate in joint research project "VoLiFa2020" which is sponsored by the German Federal Ministry of Research and Education (BMBF). With the goal of improving traffic safety at dusk and in low-light conditions, this joint effort is working to develop a fully adaptive automobile headlight system. Project partners include Hella, heading the effort, Elmos Semiconductor AG, Merck, the Porsche Engineering Group, Schweizer Electronic AG and the University of Paderborn. The Company is responsible for developing the optical systems as well as integrating the various components into an overall system.

Patents
-In the fiscal year ended May 2014, 194 patents were registered.

Product Development

Rear combination lamps using bent organic light emitting diodes (OLED) module
-The Company is significantly extending the use of organic light emitting diodes (OLEDs) with its integration of bent OLED modules in a prototype for rear combination lamps. A total of 28 of these differently shaped OLED modules is thus able to produce three-dimensional, illuminated structures. This design sample, which has come into being as a result of collaboration with BMW and LG Chem, can be seen for the first time at the Light + Building, the world's biggest trade fair for lighting and building technology. (From a press release on April 1, 2014)

48V-DC/DC converters
-The Company is developing 48V-DC/DC converters and energy storage modules for the next vehicle electric system generation for vehicles with a conventional drive. There current developments support functions including "coasting". This function switches the engine off as soon as the driver releases the gas pedal. The vehicle then continues to "coast" with the engine switched off. This allows vehicles to save up to 0.5 liters of fuel every 100 kilometers.

Matrix LED headlamp systems
-The Matrix LED is an electronically controlled adaptive headlamp system. The matrix of LEDs can be electrically switched on, off or dimmed individually within milliseconds so that the light adjusts to the environment. The headlamp system allows the driver to travel in his vehicle with a permanent high beam without the risk of dazzling other vehicles. Vehicles or pedestrians moving ahead are detected in a distance of 300 to 400 meters by an onboard camera, while the LEDs light up obstacles or pedestrians without dazzling other vehicles. Unlike mechanically controlled adaptive headlamp system with actuators, the Matrix LED is fully controlled by electronic systems. The Matrix LED headlamp is installed on the Audi A8, and won the 2014 Automotive News PACE Award.

Capital Expenditure

(in million EUR)

	FY ended May 31, 2014	FY ended May 31, 2013	FY ended May 31, 2012
Total	368	427	297

Investment Outside Germany

<Mexico>
-In January 2014, the Company inaugurated a new production facility in Irapuato, 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.

<China>
-In 2013, the Company has extended its presence on the Chinese market by investing EUR 70 million in a new production location in Jiaxing, Zhejiang Province. With a total surface area of approximately 87,000 square meters, the plant will commence operations in March 2014 and will turn out products designed for automotive lighting. With a workforce of approximately 1000, the plant is set to achieve, in the medium term, an annual capacity of three million headlamps and 1.8 million combination rear lights. In addition, it is planned that this location will also be manufacturing other products for the purpose of automotive lighting, such as fog lights, daytime running lights and center high mounted stop lamps. (From a press release on December 11, 2013)