DGAP-News

SHW AG: Strategy 'SHW 2020': Returning to the path of profitable growth - Seite 2

majority of light vehicles, in the coming years. The increasing
importance of hybrid drives - a combination of combustion and electric
engines - will be accompanied by a rise in the number of pumps per
vehicle.

- The push for a reduction in CO2-emissions will continue in all
strategic markets and will include ambitious targets. For the
automotive manufacturers, this means that by 2020, the CO2 output per
kilometre in both Europe and China must be cut by roughly 27 per cent
and by approximately 21 per cent in North America. Achieving this will
continue to entail a thorough optimisation of the engine and
transmission - a task for which SHW possesses the suitable product
portfolio.

"Our products largely reflect the key trends in the automotive industry. By
expanding our international presence and strengthening our technological
and innovative leadership, we are laying the groundwork for the next growth
phase", added Dr. Boshoff.

Improving operational excellence

In the period 2010 to 2015, SHW managed to more than double the EBITDA
margin in the Brake Discs business segment from 4.4 per cent to just over
10 per cent. This business segment is already well positioned and will
continue to consistently optimise its operating processes. To increase the
competitiveness of the Pumps and Engine Components business segment, the
focus in the next two years will be on making the organisation more
flexible and more efficient, raising capacity and optimising the production
network.

A key factor in this respect is the elimination of the operational and
logistical bottlenecks in the Powder Metallurgy at SHW's location in
Aalen-Wasseralfingen and the pump assembly in Bad Schussenried. Smooth
production processes in SHW's pump assembly operations will be ensured with
the scheduled completion of capacity increases at the location in
Aalen-Wasseralfingen at the end of the first quarter of 2016 (2014 - 2016
investment volume of roughly EUR 20 million). Beyond this, the machinery
output and the automation of individual production steps in will be
improved in the Powder Metallurgy. The continued development of the process
and matrix organisation in the Pumps and Engine Components business
segments is another priority. Subordinate areas such as purchasing, sales,
and research and development will be more tightly integrated into the
production network in Aalen-Wasseralfingen and Bad Schussenried. A
reorganisation of the purchasing and supplier management should also bring
higher efficiency.

Another important element is the optimisation of the production network