ANNUAL REPORT 2017 STIHL ANNUAL REPORT 2017 Connect 17 ... Annual Report 12794n.pdf · Wages and salaries, social security, pension contributions million euros 837.4 769.3 776.0 Employees

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ANNUAL REPORT 2017

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CONSOLIDATED GROUP OF STIHL HOLDING AG & CO. KG 2017 2016 2015

Revenue million euros 3,791.8 3,458.4 3,245.7

Proportion of revenue outside Germany % 89.8 89.7 90.1

Wages and salaries, social security, pension contributions million euros 837.4 769.3 776.0

Employees December 31 15,875 14,920 14,245

Capital expenditure million euros 248.3 209.3 234.7

Depreciation and amortization million euros 155.5 151.1 149.4

Total assets million euros 5,439.1 5,287.8 4,776.6

Equity ratio % 70.2 70.5 69.7

ANDREAS STIHL AG & CO. KG 2017 2016 2015

Revenue million euros 1,146.9 1,012.4 988.8







Equity ratio % 44.4 44.4 44.5

Family line DR. RÜDIGER STIHL

Family line EVA MAYR-STIHL

Family line HANS PETER STIHL

Family line GERHILD SCHETTER

(née Stihl)

Key Figures

Ownership Structure of STIHL HOLDING AG & Co. KG

25 % 25 % 25 % 25 %

CONSOLIDATED GROUP OF STIHL HOLDING AG & CO. KG 2017 2016 2015

Revenue million euros 3,791.8 3,458.4 3,245.7







Equity ratio % 70.2 70.5 69.7

ANDREAS STIHL AG & CO. KG 2017 2016 2015

Revenue million euros 1,146.9 1,012.4 988.8







Equity ratio % 44.4 44.4 44.5

Family line DR. RÜDIGER STIHL

Family line EVA MAYR-STIHL

Family line HANS PETER STIHL

Family line GERHILD SCHETTER

(née Stihl)

Key Figures

Ownership Structure of STIHL HOLDING AG & Co. KG

25 % 25 % 25 % 25 %

STIHL Kettenwerk GmbH & Co. KG Waiblingen

Wil branch

STIHL AG STIHL Vertriebszentrale AG & Co. KG Dieburg

¹ STIHL production and sales companies

ANDREAS STIHL AG & Co. KG Founding company Waiblingen

STIHL Worldwide

160 Countries

STIHL HOLDING AG & Co. KG(The General Partners: Hans Peter Stihl and STIHL AG)

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The STIHL Group develops, manufactures and distributes outdoor power tools for forestry, agriculture, landscape maintenance, the construction industry and discerning consumers. The products are sold to end users through STIHL-authorized servicing dealers. The STIHL Group’s sales network consists of 38 STIHL-owned sales and marketing companies, approximately 120 importers and more than 45,000 independent, STIHL-authorized dealers in over 160 countries. STIHL has been the world’s best-selling chain saw brand since 1971.

Globally positioned on fi ve continents and represented in more than

STIHL International GmbH, Waiblingen

Companies of STIHL International GmbH

EUROPE Austria ¹ | Belgium | Bulgaria | Czech Republic | Denmark | Finland France | Greece | Hungary | Italy | Montenegro | Netherlands | Norway Poland | Portugal | Romania | Russia | Russia Southwest | Serbia | Spain Sweden | Switzerland ¹ | Ukraine | United Kingdom THE AMERICAS Argentina | Brazil¹ | Canada | Colombia | Mexico | United States¹ASIA China¹ | India | Japan | MalaysiaOCEANIA Australia | New Zealand AFRICA Kenya | South Africa

ZAMA companies of STIHL International GmbH

ASIA China | Hong Kong | Japan | Philippines THE AMERICAS United States

STIHL Kettenwerk GmbH & Co. KG Waiblingen

Wil branch

STIHL AG STIHL Vertriebszentrale AG & Co. KG Dieburg

¹ STIHL production and sales companies

ANDREAS STIHL AG & Co. KG Founding company Waiblingen

STIHL Worldwide

160 Countries

STIHL HOLDING AG & Co. KG(The General Partners: Hans Peter Stihl and STIHL AG)

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The STIHL Group develops, manufactures and distributes outdoor power tools for forestry, agriculture, landscape maintenance, the construction industry and discerning consumers. The products are sold to end users through STIHL-authorized servicing dealers. The STIHL Group’s sales network consists of 38 STIHL-owned sales and marketing companies, approximately 120 importers and more than 45,000 independent, STIHL-authorized dealers in over 160 countries. STIHL has been the world’s best-selling chain saw brand since 1971.

Globally positioned on fi ve continents and represented in more than

STIHL International GmbH, Waiblingen

Companies of STIHL International GmbH

EUROPE Austria ¹ | Belgium | Bulgaria | Czech Republic | Denmark | Finland France | Greece | Hungary | Italy | Montenegro | Netherlands | Norway Poland | Portugal | Romania | Russia | Russia Southwest | Serbia | Spain Sweden | Switzerland ¹ | Ukraine | United Kingdom THE AMERICAS Argentina | Brazil¹ | Canada | Colombia | Mexico | United States¹ASIA China¹ | India | Japan | MalaysiaOCEANIA Australia | New Zealand AFRICA Kenya | South Africa

ZAMA companies of STIHL International GmbH

ASIA China | Hong Kong | Japan | Philippines THE AMERICAS United States

Connected products, collaborative robotics, innovative careers: Digitaliza-tion at STIHL is multifaceted – get to know some of the people making it happen, like Clemens Klatt, right here in our magazine or online:

AR2017.STIHL .COM

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For many years, STIHL has stood for top-quality, highly functional products. As an international leader in technology, our market position gives us the strength for substantial growth.

The foundation is a worldwide network of em-ployees and customers, skills and products, part-ners and locations, data and information – a net-work that STIHL continues to strengthen through digitalization › p. 4 and other innovative approaches. Using new technologies, we optimize production processes › p. 18, 22 and develop both smart prod-ucts and innovative solutions › p. 10, 28 for our custom-ers. In doing so, we successfully maintain the balance between tra dition and change. Our mission is and remains to make it easier for people to work in nature.

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Management Report Financial Statements

44 Management Report –

The STIHL Group

46 Management Report –

The STIHL Founding Company

48 Our Employees

50 Development

53 Quality, Occupational Safety and

Environmental Protection

56 Markets

58 Production

62 Purchasing

70 Publishing Information, The Year 2017 in Review

64 Balance Sheet Structure

64 Balance Sheet

66 Supplement to the

Financial Statements

67 Notes

68 Companies of

STIHL Holding AG & Co. KG

69 Boards of the Group

ANNUAL RE VIE W

Contents

04 Spirit of Optimism Digitalization at STIHL. Interview with CEO Dr. Bertram Kandziora

and CDO Dr. Christian Vogt.

10 In the Garden of the Future Connected products set new standards.

Meet the developers of the Smart Garden Hub.

18 Hand in Hand Collaborative robotics as a success factor.

When humans and robots become colleagues.

22 Innovative Thinkers Understand, question, optimize.

Philipp Kappich is training to be a production engineer.

28 Powerful Symbiosis Showpiece chain saws.

How we connect old and new know-how.

JOURNAL

36 Report of the Executive Board

38 The Executive Board of STIHL AG

40 Letter from the Chairman of the Advisory Board

E XECUTIVE AND ADVISORY BOARD

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3STIHL ANNUAL REPORT 2017 › JOURNAL › CONTENTS

Spirit of Optimism

What challenges does digitalization bring

with it? How will work environments and

job descriptions change? What new partner-

ships and business models are possible?

And which products will benefit the STIHL

portfolio over the next few years? CEO

Dr. Bertram Kandziora and CDO Dr. Christian

Vogt make clear: Digitalization is not a

project, but a core mission for the entire

company.

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DR. BERTRAM KANDZIORA Digitalization is certainly one of the most important topics for us in the coming years. It has what it takes to become the next growth engine for STIHL. The deci-sion to focus on battery products over ten years ago has yielded enormous growth in that area and shows that future strategies must be tackled at an early stage. That’s why we’ve been work-ing on digitalization for some time now – but in 2017 things really got going. When dealing with new technologies, digital ser-vices and intelligent networking, our ultimate goal is to increase customer value. Above all, it is about creating added value through innovative digital functionality. Digitalization helps us to get even closer to the market, customers and employees – to better under-stand their wishes and needs and to serve them individually.

DR. CHRISTIAN VOGT Under the title “STIHL Connected,” a series of digital development projects currently are in motion. These aim to further improve the user-friendliness of our products with the help of smart functionality: For example, users of STIHL devices will be able to retrieve information about usage time and power consumption. Tips to improve the user’s working tech-nique can be displayed directly on a smartphone. We also see great potential in areas such as fleet management, theft protec-tion and optimization of maintenance intervals. We want to make systematic use of all the possibilities of digitalization and develop new business models for STIHL and its customers at the point where the analog and the digital worlds intersect. This also fits in with something new for our servicing dealers. “Virtual reality” complements the classical STIHL product training and introduces employees, retailers and customers to our products in a whole new way. New tools and functionality can be experienced in a virtual environment and interactive approaches to complex ser-vices can be discovered.

KANDZIORA In all future strategies, we must not forget where we came from. STIHL has grown as a classic mechanical engi-neering company and we are proud of these roots. They have made STIHL the world’s best-selling chain saw brand and the technological leader in our industry. They allow us to go in new directions, to change ways of thinking, to adapt processes and take calculated risks. In the future, we want to bring innovations to market faster, use resources more efficiently, increase our productivity and optimize our processes.

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5STIHL ANNUAL REPORT 2017 › JOURNAL › SPIRIT OF OPTIMISM

VOGT For a long-time global market leader such as STIHL, it is important not only to keep pace with the ever-faster develop-ment of new technologies, but also to actively shape them. This is only possible if we consistently improve ourselves and our processes to be positioned to act even faster and more dynam-ically. One example of this is the promotion of interdisciplinary project work in small, powerful teams within the framework of so-called “innovation labs.” Moving forward in small, iterative steps and being able to respond quickly to customer requests has already been implemented in an exemplary way in these labs.

KANDZIORA It is important that we understand digitalization not as a revolution, but as a continuous evolution. It goes without saying that our values also apply to digital projects and measures. Robust and reliable products are still at the center of all our ac-tivities. We make these even more attractive with software and smart services. With this in mind, we ask: What does the cus-tomer need, what does the customer really want and which solution creates the maximum added value?

“We understand the potential that further digitalization brings, but we will always set clear priorities and act carefully to truly seize all opportunities.”DR. BERTRAM KANDZIORA

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KANDZIORA An important building block in these projects is the willingness to experiment. STIHL has always been brave – change has been part of our DNA for 90 years. This includes the cour-age to make decisions for completely new approaches and direc-tions. There will be experiments in the future too, the outcome of which may not be clear at first. What matters is that we do not label things that do not go as planned as failures. We need to see them as experiences that we are motivated to learn from – in short, as something positive.

In addition, with the advent of new technologies, the nature of collaboration will change. For example, the production cycles for electronic and battery-powered products are already significantly shorter and require more agility. Faster, however, does not simply mean to increase the speed of work, but to use intelligent tools, to set clear priorities and to collaborate more effectively.

VOGT The new business division Digitalization is a good example of this. A diverse and interdisciplinary team works both on visions for the future and on concrete implementation projects. We see ourselves as an ideas engine, developing a digital strategy and driving its implementation throughout the company. We provide expertise in all relevant technologies – such as big data analytics, artificial intelligence and robotics. In addition, through the afore-mentioned innovation labs, we are also contributing to innovative ways of working and digital, networked thinking in as many areas as possible, thus promoting the further development of digital leadership at STIHL.

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KANDZIORA And we founded STIHL Digital GmbH, which in-vests in young companies that are developing digital businesses and helps make them market-ready. The new Digitalization divi-sion acts as an internal innovation laboratory for ideas that come from the company. Externally, STIHL participates in innovative start-ups and supports spin-offs. For example, the start-up “Frei-raum” offers landscapers, gardeners and tradespeople an app with which they can record, document and invoice their jobs.

Another initiative, “Logbuch,” is developing an innovative assis-tance system for voice-based forest mapping and data collection that will help forest rangers and foresters at work. In addition, STIHL has acquired a stake in “High-Tech Gründerfonds” (HTGF), and at the beginning of 2017 it also acquired a stake in the Israeli start-up “GreenIQ,” which develops networked products for smart garden applications. We are very close to the market and the start-up world. We sift and evaluate new ideas, and prepare in-vestment decisions. Even if much is still open and needs to be continually reassessed, I see STIHL on the right path to becoming a pacesetter for digitalization within our industry – and possibly beyond.

“We are very close to the market and the start- up world. We sift and evaluate new ideas, and prepare investment decisions.” DR. CHRISTIAN VOGT

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ACTIVATR AND HIGH-TECH GRÜNDERFONDS II I

ACTIVATR is a project that, so far, is unique in Baden-Württemberg: The program brings together talents from the start-up scene and employees from established companies. In three phases of the program, and over a period of about nine months, the teams develop ideas and business models within previously defined areas. Accompanied by experienced mentors from both worlds, the interdisciplinary teams develop innovative business models and create a start-up. At the end of the program, the busi-ness ideas generated will ideally be spun off as independent businesses.

STIHL is also participating in this project, initiat-ed by Pioniergeist GmbH. So far, four teams have been established with STIHL employees. Some of the ideas that emerge from this very intensive process will remain with the STIHL founding company, while others will be spun off as an independent company, or as an asso-ciated company of the STIHL Group. So far, one start-up has successfully mastered this step: “Freiraum.”

In addition, the STIHL Group has acquired a stake in High-Tech Gründerfonds (HTGF), the largest seed fund for the financing of young technology companies in Germany. This invest-ment aims to promote the development of in-novative companies and to further strengthen research and development activities. The col-laboration also provides an overview of devel-opments and trends in the start-up scene. Thematically the fund is broadly positioned. In-vestors in the public-private partnership in-clude the Federal Ministry for Economic Affairs and Energy (BMWi), KfW Group and well-known commercial enterprises – now including STIHL.

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W W W. HIGH-TECH-GRUENDERFONDS.DE

8 STIHL EMPLOYEES AND 10 FOUNDERS HAVE WORKED ON 4 PROJECTS SINCE THE FALL OF 2016.

SO FAR ONE IDEA HAS BEEN SUCCESSFUL: “FREIRAUM.”

“FREIRAUM” WITH ITS MESSAGING AND DOCUMENT MANAGEMENT APPLICATION “MEMOMEISTER” AIMS TO MAKE WORK IN THE OFFICE AND IN THE FIELD EASIER.

W W W.FREIR AUM.X Y Z

MEMOMEISTER.COM

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In the Garden of the FutureThe Smart Garden Hub – STIHL

GCI 100 – shows the potential for

connected products. It not only

sets new standards for the network-

ing of products and online services,

but also brings together the know-

how of the Waiblingen- based found-

ing company with that of garden ing

equipment experts at VIKING in

Austria.

Dr. Konrad Christ and Harald Aschaber know the way from Waiblingen to Langkampfen and back again – almost by heart. While 350 kilometers and more than three hours drive normally separate them, these two colleagues have been drawn much closer togeth-er for a project that previously had never been at-tempted either at STIHL, where Christ leads a soft-ware development group, or at VIKING, where Aschaber works in product management. Under their leadership, the STIHL GCI 100 – also known as the Smart Garden Hub – was developed. This product not only makes garden irrigation more efficient and intel-ligent, it also represents the STIHL Group’s vision for the smart garden of the future.

EXPLORING NEW DIRECTIONS “At STIHL and VIKING, new products normally follow a relatively simple principle: higher power with less weight.” As Christ says that, he has to smile because the Smart Garden Hub is not a “normal” project. Through this collaboration, bright minds from Baden- Württemberg and Tyrol reached out in new direc-tions. Not only is this innovative product the first com-pletely digital offering from the Waiblingen-based company, even the area of application is new territory. It is all about automatic and resource-saving use of water in the garden.

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11STIHL ANNUAL REPORT 2017 › JOURNAL › IN THE GARDEN OF THE FUTURE

In summer we often see a familiar scene: Get the hose out of the shed, first unroll it, then roll it up again, drag the watering cans around the garden and then carefully water one flower bed at a time. Today those who prefer a more convenient solution might already use an automatic irrigation system. That means no more hard work or asking your neighbor to water while you are on vacation, but, according to Aschaber, “these systems are usually outdated and have a very big disadvantage. They are not ‘smart.’” They water at fixed times and at specific intervals. Weather conditions or current soil moisture level are not taken into account – not to mention other vari-ables, such as the type of plant or the amount of ex-pected evaporation.

And that is exactly where the STIHL GCI 100 comes in. Connected to the home Wi-Fi network, the device can identify the garden’s exact location and record the irrigation require-ments. Not only can it retrieve weather re-ports and use mois-ture sensors, it can create an entire digital ecosystem. “Our de-vice can fully connect with the digital world,” explains Christ. “In that way, irrigation is precise – cost-effective and resource-efficient.”

“With the STIHL GCI 100, we are setting out in a whole new, very exciting direction. Our goal is for the device to become the central access point in the garden.”DR. KONRAD CHRIST

Harald Aschaber (right) and Dr. Konrad Christ are the leading figures in the STIHL GCI 100 project. Within the space of a few months, they developed the Smart Garden Hub, which, among other things, makes intelli-gent irrigation possible.

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MOWING AREA COVERED BY A SINGLE MI 632 P.

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The STIHL GCI 100 is the first fully digital product jointly devel-oped by STIHL and VIKING. The basis is an app from the Israeli start-up GreenIQ.

A NETWORKED TEAMThe idea of networking products and making the entire garden “smart” has existed in Waiblingen and Langkampfen for quite some time. At VIKING, ro-botic lawnmowers will soon no longer work on their own, but will buzz over the grass as a team. “The team will be controlled with an app via smartphone or tablet,” explains Aschaber. Intelligent software connects the robotic lawnmowers via a cloud system. Once the mowing plan has been created, the server automatically transfers the data to the entire team. The result: In the future, large areas will be managed simultaneously. The STIHL iMow robotic mower is a flagship project and shows the future potential of connected products. In addition, they are the first products that can connect via the internet to the STIHL GCI 100 – ensuring that mowing and irrigation intervals are perfectly coordinated.

INTERNATIONAL BRAINSTORMINGIn parallel to this ongoing effort in Austria and Ger-many, the Israeli start-up GreenIQ developed a net-work-based platform for efficient irrigation. The sys-tem controls irrigation using online weather data. “This will enable us to conserve water by reducing waste,” says company founder Odi Dahan proudly. His innovative work did not go unnoticed. In January 2017, STIHL acquired a 35 percent stake in GreenIQ, a development that is a perfect fit for both sides. “My team and I are proud to be part of STIHL’s vision for a smart garden,” says Dahan. And on the other side, the much-praised start-up mentality is catching on. After all, it’s about thinking and acting outside of ex-isting structures and sometimes pushing existing limits in order to succeed. “It’s about speed and prag-matic approaches,” agree both Christ and Aschaber. The outstanding dynamism of the start-up partner has more than once rubbed off on them.

“Through the collaboration with GreenIQ we have learned a lot. The special way of thinking and working has shaped the entire development process a great deal.” HARALD ASCHABER

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At VIKING in Langkampfen, ground-supported garden equipment – and also the STIHL GCI 100 – are inten-sively tested.

Behind Christ (left) and Aschaber is an intensive, inter-national and interdisciplinary collaboration. The success of this is now manifest in the STIHL GCI 100.

CONTROL FROM ANY LOCATIONThis international collaboration has resulted in an app that allows the Smart Garden Hub to be controlled and programmed from anywhere in the world. All that’s required is an internet connection. The application primarily is still based on the GreenIQ software. “Based on this, we have de-veloped some specifications for our de-vice, but do not want to get in the way of the original idea of the app – because it is good,” emphasizes Christ. The de-sign of the hub is very much an in-house project, which reveals its origin through the typical orange and gray coloring. Specifically, the hub has a built-in transformer in addition to the central control board, cable ducts on three sides with the appropriate seals, and plenty of storage space for valve cable lines. The IP 55 pro-tection class makes the hub outdoor-ready. It requires no additional surface-mounted boxes and, with only two screws, can be easily wall- mounted.

NEW PRODUCT – NEW TARGET CUSTOMERSThe innovation from STIHL is intended to appeal to a whole range of target customers. “Thanks to the success of the iMow, we know that

“Thanks to digitalization, we can not only make de vices smart, but also the entire garden.”DR. KONRAD CHRIST

16 WATERING ZONES CAN BE CONTROLLED BY THE STIHL GCI 100.

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READY, SET, GO

With an audible “click” the sprinklers in Odi Dahan’s garden turned on. In the middle of the night, as was sched-uled – but with the rain pouring down. This waste of water annoyed the elec-trical engineer and at the same time marked the birth of his own start-up company. A search for apps that would allow irrigation systems to be controlled intelligently and efficiently did not yield any results. So Dahan himself worked on a solution to connect his garden to the internet. The result: GreenIQ Ltd. – a global company based in Tel Aviv. GreenIQ connects the gar-den via the app, controls and manages irrigation intervals with the help of weather and soil data, and provides in-formation about possible cable dam-age. “This will enable us to conserve water by reducing waste,” says Dahan proudly.

The desire for resource conservation is no coincidence: “Our country is mostly desert and yet today it is very green. Israel knows its stuff when it comes to the efficient use of water.” Dahan’s commitment did not go un-noticed: STIHL became a partner of the successful start-up in 2017 and now owns around 35 percent of GreenIQ Ltd.

there is not just one smart target group,” explains Aschaber. Rather, it’s about different approaches, ranging from the merely curious to the digital-savvy hobbyists, and more cautious “optimizers.”

They should all feel drawn to the STIHL GCI 100. “How they ultimately make use of the possibilities offered by the product is very much up to them,” says Aschaber.

Interest in the Smart Garden Hub is particularly strong in southern Europe. Many STIHL dealers in that re-gion already possess expertise in irrigation systems, and many routinely advise their customers regarding efficient and responsible water management, some-times in areas where water is a scarce resource. “We are convinced that the STIHL GCI 100 will be successful. There are plenty of advantages. The in-telligent control system and considerable savings po-tential offer added value to our customers,” empha-sizes Christ.

VIKING-GARDEN.COM

W W W.GREENIQ.COM

Odi Dahan (49) founded GreenIQ Ltd. in 2013. Today, it employs 16 people and dis-tributes products worldwide.

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STIHL GCI 100 The STIHL GCI 100, the Smart Garden Hub, has everything it needs to become the central access point in the garden of the future.

ONLINE WEATHER DATA

SERVICE & ORDER List of run times and service intervals.

ANALYSIS

SOFTWARE / APPS Connection with the STIHL app, which can be used, among other things, to control the irrigation and iMow mowing intervals.

In the Garden of the FutureIt’s all about the right mix. The garden of tomor-row is controlled digitally, but managed in an analog way. True to the principle of “making it easier for people to work with and in nature,” connected products and services create real customer value.

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GROUND SENSOR / IRRIGATION Measurement of relevant values for optimal and efficient irrigation.

BATTERY STATUS / CHARGINGTimely information on cur-rent battery charge levels and required charging times.

CONNECTED PRODUCTS For better fleet manage-ment: Devices can be tracked.

LOCATION / GPS IMOW / “SWARM INTELLIGENCE”For large areas up to ten net-worked iMow robotic mowers can take care of the lawn together.

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HandHandin

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At Plant 2 in Waiblingen-Neustadt, people and robots literally work hand in hand. The assembly staff rely on the skills of their new green col-leagues and vice versa. But how does the use of such robots change day-to-day work? What is made easier, what abilities does CR-35iA have? And who is CR-35iA anyway?

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19STIHL ANNUAL REPORT 2017 › JOURNAL › HAND IN HAND

RELIEF IS AT HAND The installation of CR-35iA was not an ad hoc initia-tive. Rather, it required a preparation time of just over a year. During this time, STIHL’s own production equipment team set up the green robot’s workstation. Since then, the automated helper has become in-dispensable on the cut-off machine packaging line. It certainly lightens the load for the on-site workers. In concrete terms, the day-to-day work of CR-35iA looks like this: Taking the cut-off machine from the overhead conveyor, it performs the shaking test to check for the correct position of the fuel pickup body – and it holds the device for the last quality inspection by its human colleague. Finally, the robot takes the finished device for packaging.

The Fanuc robot is the first collaborative robot at the STIHL founding company. Previously, the assembly staff took care of the corresponding production steps. Particularly the shaking test – a purely acoustic test, for which the cut-off machine really has to be shak en – demanded a lot from those responsible: A cut-off machine weighs around 10 kilograms. That means ev-

ery shift deals with around 8 tons. “The relief the robots provide is enormous, especially for your back,” says assembly employee Waldemar Eirich.

DO-IT-YOURSELF BRANDEirich and his colleagues were involved in the proj-ect right from the beginning, evaluating the test set-up and influencing the general design of the new workstation. Michael Hoger, Group Leader, Assembly, is enthusiastic about the cooperation: “Based on practical experience, the employees gave good and meaningful ideas.” Through this approach, the new workstation was accepted right from the start.

It is not only the CR-35iA workstation that is person-alized for both robots and humans. Even the gripper with which the machine works is STIHL’s own de-sign, and it incorporates a great deal of engineering skill. This simple gripper became a real interactive element. With LED lights, it indicates the mode in which the robot is working. The employee commu-nicates with the robot via illuminated keys on the grip-

“The relief the robots provide is enormous, espe-cially for your back. Plus, the whole process has be-come faster and more effective.”

WALDEMAR EIRICH, ASSEMBLY

20

STRONG HELPERS MR. HERMANN, WHAT MAKES

COLLABORATIVE ROBOTS SO SPECIAL?

A collaborative robot is able to work di-rectly with humans. The robot detects the person through special sensors and prevents them from being injured. In addition, the robot cannot run at full speed when working directly with a human colleague. This in turn affects the cycle time of the entire system.

WHAT CHALLENGES ARE THERE IN

ROBOT DEVELOPMENT?

There are two main points. Keyword “Industry 4.0”: The robot system must provide production-relevant data. This allows for timely feedback about main-tenance intervals. Keyword “Easy to use”: Operation and programming are intuitive.

WHAT ROLE DO ROBOTS PLAY IN THE

INDUSTRIAL LANDSCAPE?

The number of collaborative robots in the industry is increasing. They usually perform tasks that present a high physical strain for the worker. Consis-tent quality also can be achieved with a robot.

NICO HERMANN, Technical Manager for Robotics at the Tec Center of FANUC Deutschland GmbH

per: The green button means that the cut-off machine is working fine, while the red indicates an issue and resets the device.

ROBOTS AS COLLEAGUESThe use of robots in production is nothing new for the STIHL Group. Back in the 1990s, the company took up the then quite new technology – now there are several hundred robots at STIHL locations world-wide. “We even expect that in the future we will have more and more robots in the manufacturing process-es,” explains André Lange, Group Leader, Technology Development, Service and Hardware. Previously, the automatic helpers worked in cages, clearly separated from the people who operate them. With collabora-tive robotics, a new level is reached, which offers many possibilities. “Now colleagues can actually work hand in hand with the robots. For us, this means that we can gain new experience in this field, which, in the end, will help us maintain our market position,” explains Lange.

Overall, the degree of automation in the production process at STIHL is already relatively high. Never-theless, there is still further potential. “New concepts in robotics open up new scope for plant design,” says Hoger.

W W W.FANUC.EU

8,000 kgAMOUNT OF LIFTING RE-LIEVED BY THE COLLABORA-TIVE ROBOT PER PACKAG-ING LINE WORKER DURING ONE DAY SHIFT.

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21STIHL ANNUAL REPORT 2017 › JOURNAL › HAND IN HAND

PHILIPP KAPPICH

BORN

In Stuttgart on January 30, 1997.

EDUCATION High school diploma 2013, advanced

high school diploma at the school of nutritional science in Waiblingen

2016.

Since September 2016, training as production engineer at STIHL.

MOTIVATION I get to work with nice people, get in-sights into different departments and can later help to ease the workload of

my colleagues.

22

1STATION

Innovative Thinkers

The working world is changing –

it’s getting faster, more digital and

more diverse. The ability to con-

tinually optimize and improve linked

business processes is therefore a

very important matter for ANDREAS

STIHL AG & Co. KG. By training

production engineers, the company

is taking a step forward and play-

ing a pioneering role in the Rems-

Murr region. Trainee Philipp

Kappich’s experience shows what

this new profession is all about.

IN-HOUSE TRAINING The in-house STIHL training workshop in the Waiblingen Plant 6 is the starting point for all new apprentices. The production engineers spend the first few months there and learn the fundamentals of manual and mechanical metalworking and electrical en-gineering and electronics. In the adjoining junior center, they are then responsible, to-gether with other apprentices, for the pre-paration and implementation of their own projects – such as a special demonstrative model of the new MS 500i saw, which will be made available to STIHL dealers for training purposes.

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23STIHL ANNUAL REPORT 2017 › JOURNAL › INNOVATIVE THINKERS

2STATION

QUALITY ASSURANCEJust arrived and already on a project. That is the scene at almost every station Kappich goes through during his training. Being respon-sible for one’s own work and having an inter-est in new top-ics and fields of technology – without losing sight of the en-tire process – are prerequi-sites for Kappich’s future career. “Our job is not just to find an answer. Rather, it is about providing reliable information, which can be

“It’s not just about optimiz-ing new projects, but also continually improving exist-ing processes.” PHILIPP KAPPICH

the basis for simplified and improved process-es,” explains Kappich. Quality assurance focus-es on a comparison of means of measuring: Which machines are suitable for which jobs, which measurements provide fast and reliable results?

187YOUNG PEOPLE ARE CURRENTLY TAKING PART IN STIHL’S TRAINING OR A DUAL STUDY TRAINING CURRICULUM.

24

3STATION

4STATION

VOCATIONAL SCHOOL IN AALENPaperless lessons – completely normal for Kappich and his classmates. The classes of the Technical School (TS) Aalen are very modern – each production engineer in the test class receives a tablet computer. The digital office is part of the lesson. There are hardly any paper worksheets. The TS in Aalen is one of only four schools in Germany that offer the academic support in this field. The major subject is “Vo-cational Theory: Metals Technology.” His teachers come from the field, almost all having worked in the industry, reports Kappich. The school’s laboratory area also has a modern pro-duction line, a smart factory where trainees are shown Industry 4.0 firsthand.

W W W.TS-A ALEN.DE

PLASTIC PRODUCTIONA new product, a new challenge. At the plastic production facility – also based in Waiblingen – production for a new order is being planned. Sounds easy, but Kappich has many things to consider: “Which machine is suitable for the desired component? Where do we have space for it? Are additional personnel required to complete the production?” As he answers these ques-tions, he gath-ers real insight into what is in-volved in pro-duction plan-ning. To make sure things run smoothly, he stores all the important information in SAP. Incidentally, the production engineers are the only trainees who have their own access to this system.

“Due to current develop-ments, planning and produc-tion are changing extremely fast. That means that we too need to be more flexible.” GÜNTHER KAHN,

STIHL TRAINING MANAGER

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GUIDE BARS WERE MADE IN WAIBLINGEN IN 2017.

5STATION

ASSEMBLYIn Waiblingen, mostly professional machines are manufactured. And from there they are ex-ported around the world. A steadily grow-ing product portfolio brings with it changes to assembly. The budding production engineers are also involved in plan-ning a new production structure.

“Many have recognized that we are a necessary link between different disciplines and they strongly support our work.” PHILIPP KAPPICH

In his work, Kappich links knowledge from the areas of development and assembly, tests that knowledge and, with the aid of specialized techniques, develops new findings that are then incorporated into the planning. “It is an optimal combination of everyday work and academic content,” says the 21-year-old.

5,000,000

26

6STATION

GUIDE BAR PRODUCTION Kappich’s workday involves a great deal of dili-gence. In order to work in a sustainable way and be able to implement improvements, he must have access to all sorts of information, sometimes found in many different places. Re-trieving that information sometimes requires creativity, as, for example, when pulling data about guide bar manufacturing in order to opti-mize a maintenance plan for production machin-ery. “With this information, the system can remind us to replace parts in a timely manner so that we can avoid unnecessary breakdowns.”

In the course of his training, Kappich will be in-volved in production planning. There, processes and technologies are developed, improved and later used in production. It is also in this area that the production engineers do their final exams.

APPRENTICESHIP PRODUCTION ENGINEER

IN THE THICK OF ITApprenticeships as production engi-neers have been available in Germany since 2008. In 2016, STIHL was the first company in the Rems-Murr district to open the door to this special career path. During the three-year program, the trainees gain expert knowledge in development, maintenance and tech-nical support – and are deployed in all areas of production.

The aim is to use their holistic view to identify and help optimize weak points in the production process, thus ensur-ing a smooth process. The insight into all areas of production opens up a va-riety of opportunities: “After the train-ing, the production engineers can be deployed at every stage of the produc-tion process,” says Günther Kahn, Training Manager in Waiblingen. A tech-nical college certificate or advanced high school diploma is the prerequisite to enter the program, and ideally can-didates will have started their university studies. “Applicants need excellent communication skills, interpersonal skills, personal maturity and a great deal of self-responsibility,” explains Kahn.

CAREER.STIHL .COM

7PRODUCTION ENGINEERS WILL BE TRAINED AT STIHL IN 2018.

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28

Mechanical engineering is the flagship dis-

cipline of the STIHL Group. The company’s

growth was based on it. Digitalization, how-

ever, means that electronics and software en-

gineering are becoming increasingly important.

The STIHL innovations that result when a

perfect connection of old and new knowledge

is made possible can be seen in the STIHL

MS 500i – the world’s first gasoline-powered

chain saw with electronic fuel injection.

Powerful Symbiosis

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29STIHL ANNUAL REPORT 2017 › JOURNAL › POWERFUL SYMBIOSIS

Easy and reliable starting in all operating conditions and automatic elevation adjust-ment when first starting the saw are the distinguishing features of the MS 500i.

THE INITIAL IDEAThe year is 1957. Konrad Adenauer is starting his third term as Chancellor, and Germany’s economic miracle, or “Wirtschaftswunder,” is in full bloom. Televisions are appearing in more and more households. Borussia Dortmund is German soccer champion for the second season in a row. And at this time a new idea started forming at STIHL. Hans Peter Stihl, still a university student, was preparing his final thesis. He was tinker-ing around with a BLK engine, wanting to give it fuel injection. “Of course, my work then was not ready for production – it was more of a general investigation,” recalls the oldest son of company founder Andreas Stihl. At the same time, a smile comes across his face – as he remembers how back then he had shown it to all the doubters and even amazed professors.

TRIED AND TESTED INNOVATIVE THINKINGAlthough this prototype has not survived the 60 years since it was creat-ed, the idea of launching a hand-held fuel injection power tool has en-dured. The newly introduced STIHL MS 500i is the first chain saw with electron-ic fuel injection. Everything began at the start of the 2000s with special tests at the Karlsruhe Institute of Technology, which resulted in the STIHL TS 500i project – the world’s first cut-off machine equipped with electronic fuel injection. Based on the success of this project, the development of the MS 500i was started.

“The machine we see today is unbeatable.” ARNO KINNEN

30

The saw has been put through its paces in the forest. It is suitable for felling and process-ing timber, including the harvesting of hardwoods.

Project Leader Arno Kinnen and Functional Coordinator Clemens Klatt lead a large team that focuses on a new way of working, fusing classical mechanical engineering and modern electronics and software.

The expectations placed on the new saw were high – to reach a milestone in high performance and lightweight construction while retaining STIHL’s core values of dura-bility and quality. It wasn’t only the injection system that needed to be specially adapted to accomplish these lofty goals. High RPMs were required, as well as light-weight, robust design, strong acceleration and other mark-ers of STIHL performance – even at temperatures down to minus 40 degrees Celsius. “We designed the saw on paper from the ground up to get the most out of it,” recalls Kinnen. In many respects, the team was in un-charted territory. The saw incorporates new compo-nents and new functionality associated with fuel injection, while also relying on classical mechanical engineering principles to achieve a lightweight design. Especially in this area, a fuel injection system offers many advantages. Conventional control units get their energy from rotating magnets in the fan wheel. In contrast, the fuel injection control unit is powered by a generator and can thus be positioned freely in the machine. The resulting freedom leads to a much smaller fan and thus a more compact engine.

3,500 mTHE MS 500i CAN BE USED FROM + 40 ° C TO –40 ° C AND AT ELEVATIONS OF UP TO 3,500 METERS.

– 40 °C

+ 40 °C

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“The MS 500i is a brand-new type of saw. And it represents a whole new kind of collabo-ration at STIHL.” CLEMENS KLATT, FUNCTIONAL COORDINATOR

32

DUET OF DISCIPLINESSTIHL is well versed in the design and development of carbureted saws. “The additional know-how we have generated in recent years, for ex-ample in the fields of measurement technology and software develop-ment, is enormous,” says Klatt, referring to the special coordination with software engineering. “We are highly integrated in this area, and the interaction of the departments is crucial.” What now takes a few

days in software development, used to take several weeks. If the hardware is running, it is possible today to advance development within a very short time by adapting the software.

The result of this collaborative integration of disciplines is a uniquely intu-itive product with unprecedented performance and the best power-to- weight ratio of any professional chain saw, delivered with proven STIHL quality. And yet it is also a battery-less power tool with a “less is more” motto. As a result, it has fewer cable connections and no carburetor. The focus on essential hardware components and intelligent software makes the machine robust and low-maintenance. Also, for the first time ever in a chain saw, there is an error registry in the control unit, which helps the servicing dealer with diagnostics and other maintenance. “In almost all respects, we have pushed the limits of what’s possible with this machine,” says Klatt.

Even the composition of the core project team shows how many disciplines are united by the MS 500i: (from left) Arno Kinnen, Project Leader, Michael Unterkircher, Coordinator of Software, Electronics and Mecha-tronics, Marcel Förster, Design Coordinator, Ulrich Kapinsky, Test-ing Coordinator, and Clemens Klatt, Functional Coordinator.

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6.2 kgDRY WEIGHT

79.2 cm3

CUBIC CAPACITY

5.0 kWPERFORMANCE

13,700/minENGINE RPM

03

08 07

02

01

04

05 06

MS 500i in detail A true powerhouse, a machine for profession-als. And yet the STIHL MS 500i is even more. It is the first chain saw with an elect-ronic fuel in jection, the result of years of ex perience in classic mechanical engineering and the latest STIHL developments in software and electronics.

34

THE COMPONENTS AND FUNCTIONS AT A GLANCE

01 PURGER AND INJECTION PUMP › Eases the start-up process considerably. Purge, pull – done. The injection pump keeps the fuel pressure constant and ensures that the fuel injector will have the right amount of fuel and run at optimum pres-sure at any given time during use.

02 STOP BUTTON AND TEMPERATURE SENSOR › At the push of a button, the machine can be switched off and can be restarted immediately without any further action. The inte-grated sensor measures the ambient temperature.

03 THROTTLE › The MS 500i has no carburetor. The operator has complete control of the speed and power of the machine with the throttle.

04 LOCKING SHROUD › The shroud is locked in place with a quarter-turn closure. With just one turn, the machine can be opened for cleaning.

05 GENERATOR › Generates the electricity needed for operation of the saw. In addition, it continuously updates the control unit with the crankshaft position and engine speed.

06 SENSOR UNIT › Measures the temperature and pressure in the crank case and transmits the information to the control unit.

07 INJECTION VALVE › With each revolution, it injects the ideal amount of fuel – up to 230 times per second.

08 CONTROL UNIT › The centerpiece of the STIHL injection system continuously analyzes the information from the gen-erator and sensors as it controls fuel injection and ignition: The control unit determines the load on the machine and the power demand of the user. From this, the required fuel quantity, injection duration and appropriate ignition timing are calculated. Based on this data, the injection valve is controlled with precision and ignition is initiated.

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2017 was another record year for the STIHL Group. In numbers: Sales grew by

333 million euros – 9.7 percent – to 3.8 billion euros. Strong growth is also reflected

in the number of new employees added in 2017. Group-wide, the workforce ex-

panded by more than 6 percent, meaning that more than 15,800 people now work

for the STIHL Group across the globe.

2017 was also a challenging year. But we took advantage of the opportunities and,

together, turned them into achievements. For example, we have more than doubled

our battery unit sales. This success is based, in part, on an expanded product range,

which now covers all segments of the market – from homeowners with small gardens

to professional landscapers. Battery products in each segment are available at very

attractive prices. In our core gasoline-powered products business, we also posted

above-average growth and gained market share, meaning that in many departments

we were working at full capacity. Our innovation-driven product strategy is generating

sustainable market success. More information about the building blocks that made

this another record year can be found on the following pages of this report.

In general, the business climate during the past twelve months was not easy – con-

ditions were turbulent. Politics and economics remain in a state of upheaval, due in

large measure to changes in transatlantic and global relations, with consequences for

the future of free trade, global value chains and transformation through digitalization.

STIHL is also concerned about this transition, and we cannot escape global changes.

However, we benefit from our position in global markets through the distribution and

production companies within the Group. We do not see the current megatrend of

digitalization as a threat. Rather, we see it as a great opportunity for further growth

Dear Business Partners, Dear Staff, Dear Friends of the STIHL Group,

36

and as an important factor in further strengthening our competitive position. Change

has been a part of our DNA for more than 90 years. From the beginning, our company

has always ventured into new territory.

Growth and success bring responsibility – for people, nature and resources. For many

years, the topics of environmental protection, energy efficiency and sustainability

have been given a very high priority at all STIHL Group locations. Both locally and

globally, there are a number of activities aimed at sustainably combining ecological

and economic success. This commitment has been recognized by independent groups

– for example STIHL Inc. in the U.S. received the “Excellence in Reusable Packaging

Award.”

Our employees are the foundation for our continuing success. Their commitment,

knowl edge and inventiveness are invaluable assets. On behalf of the entire Board,

I thank you very much for the outstanding work that you have done. I thank the own-

ers for the trust they have placed in me, and the members of the Employee Council

for their constructive cooperation.

DR. BERTRAM K ANDZIORA Chairman of the Executive Board

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37STIHL ANNUAL REPORT 2017 › E XECUTIVE AND ADVISORY BOARD › REPORT OF THE E XECUTIVE BOARD

The Executive Board of STIHL AG

38

DR. MICHAEL PROCHASK AHuman Resources and

Legal Affairs

DIPL.-ING. WOLFGANG ZAHNDevelopment

DR. BERTRAM K ANDZIORA Chairman of the Executive Board

Production and Materials

DIPL.-ING. (FH) NORBERT PICKMarketing and Sales

DIPL.-BETRIEBSW. (FH) K ARL ANGLERFinance, Controlling,

Information Systems and Service

(from left to right)

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39STIHL ANNUAL REPORT 2017 › E XECUTIVE AND ADVISORY BOARD › THE E XECUTIVE BOARD OF STIHL AG

Letter from the Chairman of the Advisory Board

DR. NIKOL AS STIHL Chairman of the Advisory Board

2017 was an eventful year for the STIHL Group. After looking to the past in 2016 and celebrating our 90th anniversary, 2017 was all about the future: New technologies and new approaches. Digitalization in particular requires a rethinking in many areas. For some time, new digital applica-tions and services have been finding their way into almost all areas of life – and of course this includes the working environment, where they simplify and change many processes.

We are open-minded about the developments that come with this change, and we are working hard to implement new technologies on both a small and large scale throughout our value chain. It is not only about promoting digitalization, but about living it in all areas of the company, just as we already do in our everyday lives. Our focus is therefore on the optimization of digital processes and on the development of new products and business models. These include, for example, connected products, software-defined products and robotics in the fields of forestry, gardening and landscaping.

We are currently at a very exciting point in our company history. Due to a solid foundation, we are poised to face the current challenges. After all, since the company was founded by my grandfather Andreas Stihl, we have always gone in new directions: Due to the global economic crisis in the late 1920s, he opened up new markets abroad. Today, STIHL is still profiting from his courage and is now represented in more than 160 countries. Other chapters of this story include the constant expansion of our product portfolio, the development of the global manu-facturing network, the adaptation of new technologies, and the demand from our customers to always make their work in and around nature easier.

We will continue on this course – with the tailwind of the past successful years – unwaveringly and yet with sound judgment. On behalf of the Advisory Board, I would like to thank the Supervisory Board, the Executive Board, the employee representatives and the entire workforce worldwide for their commitment and for their positive and constructive cooperation.

40

Letter from the Chairman of the Advisory Board

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41STIHL ANNUAL REPORT 2017 › E XECUTIVE AND ADVISORY BOARD › LE T TER FROM THE CHAIRMAN OF THE ADVISORY BOARD

42

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Annual Review

Financial Statements

Management Report

44 Management Report – The STIHL Group

46 Management Report – The STIHL Founding Company

48 Our Employees

50 Development

53 Quality, Occupational Safety and Environmental Protection

56 Markets

58 Production

62 Purchasing

64 Balance Sheet Structure

64 Balance Sheet

66 Supplement to the Financial Statements

67 Notes

68 Companies of STIHL Holding AG & Co. KG

69 Boards of the Group

43STIHL ANNUAL REPORT 2017 › ANNUAL RE VIE W

REVENUE REACHES ALMOST 3.8 BILLION EUROSIn fiscal 2017, the STIHL Group generated consolidated sales of 3,792 million euros. The revenue increase was 9.7 per-cent compared to the previous year (2016: 6.6 percent). The proportion of revenue generated outside Germany was 89.8 percent, compared with 89.7 percent in the previous year. The European Union accounted for 37.6 percent of total revenue.

Currency exchange rates negatively impacted revenue by 0.5 percent. Calculated at the average exchange rates of 2016, revenue grew by 10.2 percent. The US dollar was trading at an annual average of 1.13 against the euro and was above the previous year’s level.

INVESTMENT IN GERMANY AND ABROADIn 2017, the investment volume (property, plant and equip-ment and intangible assets) in the STIHL Group amounted to 248.3 million euros (2016: 209.3 million euros).

28 percent of that amount was invested at ANDREAS STIHL AG & Co. KG, while 72 percent was invested in the other companies of the Group, both in Germany and abroad. Depreciation amounted to 155.5 million euros. 88.2 percent of the total investment was at the pro-duction companies within the STIHL Group.

Management Report – The STIHL Group

In the last fiscal year, the STIHL Group once

again achieved record revenue. The Group’s

total capital investment in facilities and new

technologies was also very strong, amounting

to 248.3 million euros. Much of this invest-

ment has been directed to construction proj-

ects at international locations across the

Group.

44

As in the previous year, construction activity in the Group was at a high level in 2017. Thus, further investments were made in the production and logistics facilities of the production companies. At STIHL Kettenwerk in Switzer-land, the expansion of the plant in Bronschhofen was com-pleted. In Huizhou, China, the new location of the ZAMA Group was put into operation.

At VIKING GmbH in Austria, a groundbreaking ceremony took place for the production and development expansion. The new research and development center in Brazil is un-der construction, and the Qingdao plant in China is being expanded by 23,000 square meters.

SATISFACTORY EARNINGSFrom a Group perspective, the earnings situation was once again satisfactory in 2017.

STRONG FINANCIAL STRUCTUREThe capital structure remains positive. The equity ratio at the end of the reporting period amounted to 70.2 percent. Equity therefore covers all noncurrent assets and invento-ries, as well as a part of the receivables and other assets.

Liquidity remains at a high level. In general, the Group’s capital expenditures are funded without the need for bor-rowing.

NUMBER OF EMPLOYEES 31.12.2017 – STIHL GROUP

ANDREAS STIHL AG & Co. KG 4,658

Waiblingen 3,622 Prüm 693 Ludwigsburg 278 Wiechs am Randen 65

288

STIHL Vertriebszentrale AG & Co. KG, Dieburg

9,361

Production companies (including VIKING) Thereof ZAMA 2,440

1,568

Sales companies

Other countries

10,929Germany

4,946

TOTAL NUMBER OF EMPLOYEES

15,875

STIHL ANNUAL REPORT 2017 › ANNUAL RE VIE W › MANAGEMENT REPORT 45

RECORD REVENUE ONCE AGAIN AT ANDREAS STIHL AG & CO. KGIn fiscal year 2017, the revenue of the founding company in-creased by 13.3 percent to 1.15 billion euros (previous year’s increase: 2.4 percent). The export ratio of 88.9 percent was at the prior-year level (88.9 percent). Sales growth was recorded in all regions.

HIGH INVESTMENTThe investment volume (property, plant and equipment and intangible assets) amounted to 69.6 million euros in fiscal year 2017 (previous year: 70.0 million euros). Much of this investment was directed to the expansion of the development center, the new logistics center in Waiblingen and the expansion of the logistics center in Ludwigsburg. In addition, significant investments were made in research and development at the Waiblingen location, in new production facilities and in IT infrastructure. As in previous years, investments in 2017 exceeded depreciation.

Management Report – The STIHL Founding Company

ANDREAS STIHL AG & Co. KG, the founding

company of the Group, recorded an impres-

sive jump in sales in the past reporting year:

1.15 billion euros in revenue was generated

by the seven production sites in Germany, an

increase of 13.3 percent over the previous

year. Large investments – above all in facili-

ties, research and development, new pro-

duction equipment and IT infrastructure – fur-

ther strengthened the competitiveness of

the German locations, both for today’s market

and for the future.

46

STABLE EQUITY RATIO OF 44.4 PERCENT AND CONTINUED HIGH LIQUIDITYThe equity ratio stands at 44.4 percent and therefore matches the level of the previous year. Equity therefore covers most non current assets. Total liquidity, including securities held as current and non current assets, account-ed for 41.9 percent of the balance sheet total. However, it should be noted that these positions are offset by high long-term obligations from the company pension plan.

SELF-FINANCED PENSION OBLIGATIONS INCREASEDThe actuarial reports led to an increase in pension provisions and other liabilities from outstanding capital payments of 6.5 percent compared to 2016 (increase in the previous year: + 1.9 percent). The calculations are based on the Heubeck 2005 G mortality tables.

SALES DISTRIBUTION 2017 – ANDREAS STIHL AG & CO. KG

REVENUE GROWTH IN 2017 – ANDREAS STIHL AG & CO. KG

Germany

88.9 % Other countries

11.1% 1,012.4

1,146.9

In millions of eurosin %

2016 2017

+ 13.3%


RECRUITINGDespite the enormous growth course and the successful business development, STIHL competes with other well-known companies for the best and brightest. There-fore, it is important to go about recruitment in inno vative ways.

One example is the recruiting poster campaign, which was specifically aimed at experienced electronics engineers. Colleagues from the STIHL Personnel Marketing Depart-ment launched this campaign at the founding company together with engineers from the Electronics Development Department. The campaign posters, which contained messages in technical jargon, were prominently placed across the region. The result: STIHL received numerous applications and several top candidates were offered per-manent positions. In addition, the campaign was honored with the gold “Employer Branding Award” and nominated for an “HR Excellence Award.”

VIKING is recruiting new employees with a very special program: In 2017, the employee referral program was

introduced. If an employee recommends a job candidate who is actually hired, the person making the referral will receive a day’s leave as thanks.

STIHL Brazil focuses on recruiting internally. More than 75 percent of the vacant positions were filled by its own employees last year.

At STIHL Inc. in Virginia Beach, the “Talent Acquisition Team” continued the work begun in 2016 to be well posi-tioned for the largest launch of new products in the com-pany’s history. In 2017, numerous additional positions were filled in various areas – including additional posts in six sales offices in the USA.

HR GOES DIGITALHuman resources management at STIHL took a step forward with the introduction of the “SuccessFactors” HR software. The cloud-based application is to be used throughout the entire STIHL Group. The workflows are already globally defined and coordinated for the first two

Our Employees

The STIHL Group is on a growth course –

this can be seen not only in the sales figures,

but also in the many employees who are

now working for STIHL companies world-

wide: In January, the 15,000-employee

mark was overtaken. In 2017, at the found-

ing company in Germany alone, around

130 vacancies had to be filled. Globally speak-

ing, the STIHL Group will grow by more

than 800 employees in fiscal year 2018.

48

modules, “Recruiting” and “Talent & Succession.” “Suc-cessFactors” is attractive because it has the flexibility to meet global and local needs in equal measure. In addition, the advantages of using a cloud-based standard software are obvious: The maintenance of the application is much easier and STIHL benefits from regular updates, similar to those of a smartphone application. The new digital work-flows also replace paper processes and provide real-time data.

APPRENTICESHIPS AND FURTHER TRAININGSTIHL Kettenwerk in Switzerland is increasing its number of apprentices. With this step and the focus on the area of automation, the Swiss company wants to be prepared for the increased demand for skilled workers. The “STEM” project has also been successfully launched in Switzerland. This project aims to get young women interested in tech-nical education as well as in science and technology. In Wil, there has been a partnership with the girls’ secondary school since 2017 – and initial projects, such as the con-struction of a 3D printer, have already been implemented.

At VIKING in Langkampfen, a new skilled position – electrical engineer – was added to the training program last year.

NUMEROUS DEVELOPMENT OPPORTUNITIESGreater transparency in career advancement is the buzz-word for manufacturing operations at STIHL Inc. Therefore, the program has been enhanced with opportunities for ongoing individual training. The same applies to active suc-cession planning when filling key positions. With both activities, STIHL Inc. wants to increase awareness of in-ternal opportunities and support employee development.

The consistent development of the already-active work-force also plays a major role in the STIHL founding company. For example, since 2017, the “Cockpit Leadership” semi-nar series has offered new training opportunities for exec-utives, based on the guidelines for cooperation at STIHL, “With Each Other – For Each Other.”

Another example from last year was the first interactive forum on the topic of digitalization. Christoph Keese, Executive Vice President of Axel Springer SE, was a guest. Keese spoke about his six-month stay in Silicon Valley and took the approximately 200 guests on a short tour behind the scenes of the Californian ideas factory. The response to the forum was so positive that the series will continue in 2018. The aim of the event is to receive external stimuli and to support cross-departmental cooperation.

At STIHL China, the HR Department is improving training of new employees and the interdisciplinary exchange between departments. The “Communication Salon,” for example, brings together new colleagues and the man-agement team. There are discussions regarding individual development plans and a so-called VIP lunch in the can-teen. Via the online service WeChat, a STIHL online com-munity was also launched that shares corporate news, events and general service information.

AWARDSIn 2016, STIHL was awarded the Human Resources Excel-lence Award for an interactive, 360-degree recruiting film. The film, in which viewers can find out more about STIHL as an employer in an animated 360-degree world, also impressed a European jury in 2017. And so the “European HR Excellence Award” went to Waiblingen. With this award, Quadriga University of Applied Sciences Berlin and the trade magazine Human Resources Manager honor companies throughout Europe for innovative flagship proj-ects in human resources management.

VIKING was excited to receive two employer awards in 2017. The company was named “State-approved training company.” A team from Langkampfen also won the “Best Recruiters Award 2017/18” in Austria in the “Industry” category.

South America also had reason to celebrate in 2017. STIHL Brazil is now on the list of best employers in the state of Rio Grande do Sul. The research and consulting institute Great Place to Work (GPTW) collects annual data from employee surveys, highlighting the most successful HR strategies implemented by HR departments and corpo-rate executives. STIHL finished fifth in the “Large company” category (companies with 1,000 employees or more).


INNOVATION OF THE YEARIn 2017, STIHL introduced the TS 440 cut-off machine, de-signed with expanded guard adjustability, higher torque and a sensor-activated wheel brake. The expanded guard adjustment range provides greater utility in cutting cir-cumstances where the guard on traditional machines would limit access, such as at the bottom portions of walls, in corners and on the underside of in-ground pipes. This ex-panded guard adjustability is made possible by the sen-sor-activated STIHL QuickStop™ wheel brake technology, designed to stop the rotation of the cutting wheel in frac-tions of a second in the event of kickback when the guard is in the open position. The TS 440 is the world’s first cut-off machine equipped with this technology. Versatile enough for general construction applications but well suited for limited access cuts, the TS 440 represents the latest in professional cutting solutions from STIHL.

NEW PRODUCT FAMILY IN THE BATTERY SEGMENTSTIHL has been expanding its battery-powered product portfolio for almost ten years. The popularity of easy-to-use,

powerful devices keeps on growing. With the introduction of a new product family, STIHL is specifically targeting homeowners in the consumer segment. Thanks to an inte-grated rechargeable battery, the STIHL FSA 45 grass trim-mer, the STIHL HSA 45 battery-powered hedge trimmer and the STIHL BGA 45 blower are lightweight and easy to use. The new devices are positioned in the market at a low-er price point than the STIHL PRO or STIHL COMPACT battery systems, making STIHL quality available to a broad-er customer base.

POWERFUL AND LIGHTWEIGHT“We are accelerating in both segments.” This phrase was often heard at STIHL in 2017 – and is reflected in the sales volume and revenue growth in both battery and gas-oline-powered products. At the same time, STIHL will never lose sight of its technological leadership. With the STIHL MS 462 C-M, the company launched a true all-round workhorse last year and with it takes a bold step forward: The MS 462 is the lightest high-performance chain saw in its displacement class. It has a weight advan-

Development

STIHL continues to grow. In 2017, the de-

mand for battery-powered products was

especially strong, and new products attract-

ed new customers. Despite the battery

boom, gasoline-powered chain saws and

outdoor power equipment remain the

foundation of our success. “Made by STIHL”

is synonymous worldwide with top quality

in products and processes. Unsurpassed

know-how helps preserve this international

technical leadership.

50

tage of around 600 grams over its rivals. Provided with the latest generation of the STIHL M-Tronic, it offers premium performance under all conditions. Equipped with a high-torque motor, the STIHL MS 462 has sufficient power for felling large stands of timber and when cutting with longer guide bars.

During development there was a special focus on ergo-nomics. Along with experience from previous projects, the results of a special development study and tests with forestry workers were incorporated into the design of the STIHL MS 462. The design includes narrow handle guides, good balance and optimized grip positions relative to the machine’s center of gravity, which all help make the saw easier to use. The effort required from the operator is reduced, and the tree can be processed more efficiently and with reduced operator fatigue.

The saw is also available with a wrap-around handle and other features often preferred by first responders and res-cue workers.

In addition to the gasoline-powered MS 462, two electric products were added to complement the current STIHL product range. The STIHL MSE 141 is a cost-effective, en-try-level electric saw that extends our product line. Also added was the STIHL MSA 140 C, a new battery-powered chain saw in the consumer class. It joins a more powerful version of the MSA 120 C and an updated STIHL AK 30 battery, which enables longer running times.

LAWN MOWING MADE EASY Green turns orange – that is the title for the complete in-tegration of VIKING products into the STIHL brand. The change got off to a good start in 2017, as the first ground- supported products – the flagship discipline of VIKING – became available in orange: STIHL RMA 339 and 339 C, RMA 443, 443 C, 443 TC, 448 TC and 2 RT, RMA 510 and RMA 235.

The STIHL RMA 339 and 339 C switched to the AK battery line. In addition, these mowers now utilize a direct drive system and a flow-optimized blade for mowing larger areas.

STIHL MS 462

The STIHL MS 462 is an all-round workhorse. It’s suitable for demanding felling work in the forest, but also as a pruning saw. It is the lightest high- performance chain saw in the 70 cubic centimeter displacement class.

IS THE MAXIMUM CIRCUM-FERENTIAL CHAIN SPEED.

72 SECONDS ARE NEEDED TO CALIBRATE FROM STARTING THE MACHINE.

106 km/h


The RMA 443, 443 C, 443 TC, 448 TC and 2 RT models all offer a new battery-powered motor, AP batteries and direct drive. The STIHL RMA 510 was specially designed for the USA, Canada, Australia and New Zealand markets and is noteworthy for its wider cutting deck and attractive price point. Series 2 of the STIHL MA 235 is supplement-ed by a variation with a rechargeable battery based on the ME 235. This mower also features the innovative direct drive, higher efficiency and longer runtime.

Lawnmower innovations in 2017 were not limited to battery- powered products. STIHL gasoline-powered lawn-mowers also caused a stir. The STIHL MB 650 VE now has a redesigned electronic start system, which makes starting the engine even easier. It comes alive at the push of a button, and, thanks to variable speed settings, the speed of the mower can be adjusted to match the indi-vidual preferences of the user and the terrain.

The STIHL MB 655 RS has a special feature – a metal rear roller in the rear axle to provide an attractive striped de-sign on your lawn. A metal inner ring built into the housing protects the chassis against foreign objects. And the knife-brake coupling (BBC) developed by VIKING decouples the crankshaft from the blade so that impact with foreign objects will not transfer damaging energy to the engine.

BRUSHCUTTER FROM QINGDAOSTIHL brushcutters are perfect tools for landscaping and forest management. They mow stubborn grass and scrub, and really impress when put to work in thick forest brush. They are easy to use, have low vibration levels and exhibit extreme ruggedness and reliability to complement preci-sion performance. The new STIHL FS 230 and STIHL FR 230 brushcutters were launched in 2017, and were espe-cially designed for farmers in emerging markets in Asia. That is also why they were produced at STIHL China in Qingdao. They are among the first STIHL-branded products manufactured in Asia especially for the Asian market. They also incorporate a very high proportion of locally pro-cured components and meet Chinese emission regulations.

USEFUL ACCESSORIESThe STIHL AR 1000 lithium-ion backpack battery with 626 watt-hours of stored energy is a new addition to the STIHL PRO Battery System line. The robust housing with integrated carrying handle and base plate has a comfortable, ergonomic backpack system with waist harness. It also features an adjustable chest strap, a connecting cord with plug, and an AP adapter with Battery Bag – along with a handy USB charging port. The AR 1000 is suitable for every-

day work in noise-sensitive areas. It can even be used in the rain thanks to an attachable rain cover.

The STIHL AP Battery Bag offers a practical accessory for STIHL battery-powered products designed for use with the battery connecting cord. This accessory makes it possible to power any STIHL device with an integrated socket – us-ing an AP battery carried at the operator’s waist. The inte-grated electronics are equipped with overload cut-off and audible alert signals.

Working long hours with STIHL brushcutters is made easier with the STIHL FS belt X-TREEm. The new high-end brushcutter belt is intended primarily for professionals who work in the forest. The adjustable length of the back sec-tion makes the device customizable to shorter and taller operators alike. An additional joint in the back section in-creases freedom of movement – especially ideal for oper-ators working long hours in the forest.

52

Quality, Occupational Safety and Environ-mental Protection

In light of the growing challenges posed by

digitalization, globalization and product

diversification, the STIHL Group is continu-

ally pursuing the preservation of internation-

al and internal company standards in the

areas of quality, occupational safety, environ-

mental protection and energy conservation.

Prevention rather than reaction is the motto

for the entire STIHL Group.

GERMANY – ANDREAS STIHL AG & CO. KGA global quality offensive to ensure long-term product and process quality should not only reinforce STIHL’s leader-ship in this area, but also encourage further reflection. Nu-merous individual projects are taken on with the goal of securing lasting product quality systems, exceeding cus-tomer expectations and achieving improvements for the entire product portfolio. For this purpose, processes are being evaluated with new tools, and the results are be-ing tracked in a specially developed customer satisfaction model.

HEALTHIER WORKFewer workplace accidents and more ergonomic work-stations – the integration of occupational health care and safety is a high priority at STIHL. Having an internal com-pany doctor and other social services on-site are just two examples of this. Together, prevention measures are de-veloped. There are regular ergonomic consultations for all

employees, both for those working in production and assembly as well as those at office workstations.

CERTIFIEDSTIHL’s established quality, safety, environmental and energy management systems (ISO 50001) once again met expectations. The existing group certificates were all confirmed in 2017. Tests have already been conducted in several production plants according to the revised ISO quality (ISO 9001: 2015) and environmental standards (ISO 14001: 2015). The external certification of management systems makes it easier for STIHL to have new products approved for sale in certain markets.

VOLUNTEER RESCUE WORKERSIn a physical sense, STIHL and the Waiblingen volunteer fire department are already close. Now they are coming even closer together at an operational level. A change in


the law now allows volunteer firefighters to work at more than one brigade. This means volunteer firefighters em-ployed at Plants 1 and 2 in Waiblingen-Neustadt can now work with the Neustadt fire department. The first depart-ment training exercises with STIHL employees – most of which take place during working hours – have already been completed successfully. Among other things, they practiced rescue operations at extended heights in the new high-bay warehouse in the production logistics facility. Going forward on a monthly basis, STIHL volunteer fire-fighter employees and local firefighters will spend two hours together in a training session.

BRAZIL – STIHL FERRAMENTAS MOTORIZADAS LTDA.The quality strategy at STIHL Brazil emphasizes a greater responsibility towards the environment in the ongoing pro-duction process, and it pays special attention to preventing quality issues under the motto: “Produce quality, don’t test it.” In addition to the high standards for their own work, there is also a big commitment to the environment at the site in the state of Rio Grande do Sul.

LESS IS MORE The efficient and responsible use of resources – especially water – is of particular importance at all STIHL locations, including in Brazil. By November 2017, more than 20,000 cubic meters of recycled water had been used instead of fresh water, a significant reduction. Among other things, improvements in cylinder production contributed to re-ducing water consumption per manufactured product by more than one liter.

In addition, STIHL Brazil has set the internal goal of reduc-ing power consumption in production. In 2016, around 9 kilowatt-hours were still needed per powerhead, com-pared to 8.6 kilowatt-hours in 2017. The reasons for the savings include energy recovery from blowers, reduction of energy demand at the manufacturing cells, optimization of the honing machines and innovations in the injection molding machines. All in all, these efforts have lowered STIHL Brazil’s total energy requirements by more than 28 percent since 2014.

CONSTRUCTION MEASURES AT VIKING

788 m2

ADDITIONAL SPACE WILL BE AVAIL ABLE THROUGH THE EXPAN - SION IN L ANGKAMPFEN. 100 NEW JOBS WILL BE CREATED.

ROOF AREA WILL BE EQUIPPED WITH PHOTO-VOLTAIC SYSTEMS AND THE SOLAR ENERGY PRO-DUCTION WILL COVER 4% OF THE ENTIRE ENERGY CONSUMPTION.

20,000 m2 INVESTMENT VOLUME

22.8 million euros

54

SWITZERLAND – STIHL KETTENWERK GMBH & CO. KGIn addition to powerheads, the STIHL Group also manufac-tures the saw chains and guide bars for its machines. STIHL saw chains are “Swiss high-precision work.” They are manufactured on special machines developed and produced in-house.

REDUCED CONSUMPTIONFor years, STIHL Kettenwerk has been committed to skill-fully combining environmental concern and economic suc-cess. In the past year, ambitious environmental protection goals were again achieved: Electricity and gas consumption fell by more than 2,400 megawatt-hours. Likewise, the volume of water, metal sludge and waste paper was re-duced. In addition, the company has successfully imple-mented various measures to reduce CO2 emissions. This environmental success also led to the exemption from CO2 tax.

CHINA – ANDREAS STIHL POWER TOOLS (QINGDAO) CO., LTD. Growth was the buzzword for the STIHL plant in Qingdao in 2017. The number of employees increased to more than 1,000, and the number of powerheads produced in-creased by more than 30 percent. With a self-initiated offensive for quality assurance, STIHL China once again succeeded in maintaining its top position in the global manufacturing network.

NEW LAB AND NEW PLASTIC INJECTION SHOPIn order to produce in a sustainable way and at a high level, there have been some innovations in Qingdao: A test lab-oratory with increased capacity and an in-house plastic injection molding shop are now ready. In addition, the network of suppliers for the development of new parts has been expanded significantly, and through the linking of the Supplier Quality Promotion Department with the De-velopment service, synergies are used in the process of advanced quality planning.

USA – STIHL INCORPORATEDTo meet its own high standards, last year STIHL Inc. tire-lessly promoted product quality and process improve-ments. An integral part of this effort is a “Business Excel-lence Team,” which examines audit topics. Under the motto “The Power of Quality,” employees at all levels were approached and asked to focus on excellence in every

step of the production process to exceed customer expec-tations for all products and services.

OUTSTANDING COMMITMENTThe ongoing commitment of STIHL Inc. to environmental protection and sustainable management underpins certifi-cation to the new ISO 14001: 2015 standard. In addition, Virginia Beach received the “Excellence in Reusable Pack-aging Award” for its efforts to replace disposable packag-ing with reusable packaging.

AUSTRIA – VIKING GMBHSeptember saw the groundbreaking ceremony for an expan-sion, which will provide additional space for production. It will also house the development, prototyping, electrical laboratories, durability test cells and a modern training workshop. There was also a preliminary study on the instal-lation of a photovoltaic system. The system will be in-stalled in 2018, and will cover the full base load needed to operate the units in the building outside of working hours.

SAFER THAN EVERNew record in occupational safety: In 2017, VIKING achieved its lowest-ever accident rate with only 4.5 work-related accidents per million hours worked. Despite the steadily increasing volume of work, increased plant traffic and increased production volume, the prudent behavior of the workforce in particular contributed to this good result. Concrete measures and training also reduced the risks as-sociated with well-known sources of potential workplace accidents.

ZAMA CORPORATION LTD.The construction of the new plant in Huizhou, China, dominated the year 2017 at ZAMA. For the new location, a special investment was made for a closed system for reprocessing water used in production. 80 percent is recy-cled and returned to production for reuse. The remaining 20 percent is brought up to drinking water quality by distil-lation and reverse osmosis and used for cooling purposes. In addition, ZAMA reduced overall water consumption by 70 percent with various water treatment measures.


10 MILLION UNIT MARK SURPASSED With sales growth in the double-digit range on all conti-nents, STIHL exceeded the 10 million unit mark for the first time in a single year. Almost all significant sales markets contributed to the positive growth. The newly introduced battery-powered products for consumers are popular in industrialized countries and are proving to be strong growth drivers. In addition, with the extended line of battery- powered products, new customer groups are being won for the STIHL brand and servicing dealers.

BATTERY-POWERED POPULAR IN EUROPEFollowing an already very successful year in 2016 with ideal weather conditions in the spring and a correspondingly strong demand for engine-powered gardening tools, STIHL battery-powered products were once again the main con-tributors to sales growth in Western Europe. As a result, there have been strong market share gains for the STIHL brand within this segment.

In Eastern Europe, battery-powered devices also enjoy in-creasing popularity, starting however from a comparatively low level. Growth drivers in this region are therefore still

the classic gasoline-powered products, especially gasoline- powered chain saws and gasoline-powered grass trim-mers. The ongoing recovery of the Russian market likewise played a significant role in this growth.

In January 1967, STIHL Austria was officially registered as STIHL GmbH & Co. KG – at the time, the first independent STIHL affiliate outside of Germany. What began as a small business has become a real success story today and a template for the many sales companies worldwide.

The 50th anniversary was celebrated in Vienna by the entire workforce, together with representatives of the STIHL AG Executive Board and the Stihl family. Last year the STIHL sales companies in Norway and Sweden both celebrated a 30-year history. The anniversary was crowned by the Stihl TIMBERSPORTS® World Championship, which took place at the beginning of November in Lillehammer, Norway. In 2017, STIHL Romania also celebrated the 20th anniversary of its founding.

Markets

With further significant increases in sales

and the associated gains in market share, the

STIHL brand has further expanded its lead-

ing position in world markets. In addition to

our core gasoline-powered products busi-

ness, battery products make up a growing

part of the firm’s success.

56

GROWTH IN NORTH AMERICAThe introduction of the new battery-powered consumer products has also caused quite a buzz in North America and triggered a strong surge in demand. But the gasoline- powered products business continues to trend favorably in North America. Gasoline-powered chain saws benefited recently from additional demand, mainly from the south-ern United States. Both in classic gasoline-powered prod-ucts and in battery-powered products, market share has continued to increase.

POSITIVE RESULTS IN SOUTH AMERICAThe severe economic crisis in Brazil made itself felt, partic-ularly in the first half of 2017, and led to noticeable cus-tomer restraint. The sales trend later in the year, however, gives reason to hope that the low point is in the past. Despite the recession in Brazil, other key markets in Latin America have contributed double-digit growth rates. This applies in particular to Argentina, Colombia and Mexico, where STIHL is represented by its own sales companies.

ASIA AND OCEANIA GROW Favorable economic conditions positively influenced sales growth in Asia. The STIHL sales companies in China, India and Japan each posted above-average growth, enabling them to further expand their market position.

The positive sales development in Oceania from the previ-ous year continued unabated in 2017. Gasoline and battery- powered products contributed almost equally to this growth.

EXTREME DROUGHT IN AFRICA Large parts of Africa, especially in the southern part of the continent, are suffering from the worst drought in decades. The impact on agriculture is serious, and has led to crop failures and lost earnings. Accordingly, conditions for the sale of power tools were difficult in these markets in 2017.

CURRENCY EXCHANGE RATES AGAINST THE EURO IN 2016 / 2017

01/2016 07/2016 07/201701/2017 12/2017

Changes in percent / Monthly rates / Source: www.oanda.com

The graph shows the development against the euro of the following currencies in the years 2016–2017.

British pound (GBP)

US dollar (USD)

Brazilian real (BRL)

Argentinian peso (ARS)

The figures are based on the re-spective monthly average exchange rates in the period January 2016 to December 2017 and are indexed against the starting point, January 2016 (= index 100).

140

130

120

110

100

90

80

[INDEX / STARTING POINT JANUARY 2016 = 100]

70


GERMANY – ANDREAS STIHL AG & CO. KGAround 175 million euros have been committed to the con-struction of new buildings that will expand and modernize the founding company’s Waiblingen and Ludwigsburg loca-tions. These measures signal a clear commitment to opera-tions in Germany and will be necessary due to the expected growth in production volume and sales – and to accom-modate a growing workforce. At Plant 1 in Waiblingen, the “Brand World of STIHL” and company museum are under construction. In addition, the high-rise is being modernized, and a neighboring building has been dismantled and re-built as an administrative building with a company restau-rant. At Plant 2 in Waiblingen-Neustadt, the production logistics center, built in 2016, will receive two additional floors that can accommodate a total of 250 new office workstations. Further construction is being contemplated to create additional space at all Waiblingen locations.

CHALLENGES METThe production logistics center, which was completed in 2016 at Plant 2 in Waiblingen-Neustadt, started operations in May 2017. By the end of the year, around 80 percent of

production logistics was being handled from the new ware-house. The project posed several challenges – a very high level of automation, interaction of three warehouse environ-ments, and use of complex IT systems – all of which were managed successfully.

The FTS implementation in assembly and logistics was completed in 2017. “FTS” is an in-house, floor-bound con-veyor system with autonomous vehicles, tasked primarily with material handling. As if powered by magic, the vehi-cles move autonomously through the assembly facility. They utilize an integrated laser triangulation technology to safely and efficiently navigate a prearranged and clearly defined area. During operation, the vehicles interact with each other and, thanks to a special radar system, detect other obstacles – and their human co-workers.

Rising production quantities require each individual pro-duction process to run smoothly. For that reason, STIHL has been using a manufacturing execution system, for more than 20 years. An MES is a process-oriented, multi-layered manufacturing management system and a classic component of Industry 4.0. It is directly connected to the

Production

Innovative products for a growing variety of

applications – that is how the STIHL Group’s

2017 production year can be summed up.

In numbers: STIHL recorded an increase in

sales of 9.7 percent and also posted a

strong increase in the quantity of products

produced. Sales of STIHL battery- powered

products more than doubled in 2017, accom-

panied by double-digit growth in the gaso-

line-powered products segment.

58

various process automation systems and enables real- time management, control and production monitoring. STIHL uses a new, standardized MES.

AWARD-WINNING WORK FROM THE EIFEL REGION In 2017, production capacities at the magnesium die- casting plant in Prüm-Weinsheim were further expanded with the addition of a fully automated caster and two high-speed chipping machines.

The STIHL plant in Germany’s Eifel region counts many external companies among its customers – including Audi AG. Last year this collaboration with Audi culminated in a first-place award in the “Automotive” category of the “Component Competition,” hosted by the European Research Association for Magnesium. The award recog-nized the “suspension strut” component that was devel-oped in cooperation with the Audi lightweight construction center and readied for series production. A key factor for success is the unique hot chamber technology used at the Eifel plant and the ability to simulate the component with a central gating system to optimize its design.

USA – STIHL INCORPORATEDLast year, Virginia Beach demonstrated its speed and flexibility: It took just eight months to implement and commission a new manufacturing line for the STIHL BGA 56 battery-powered blower.

STIHL Inc. continues to invest in its infrastructure and is planning to start construction of a new administration build-ing at the beginning of next year. Due to unprecedented growth, building and resource expansion was also neces-sary at several branches in the distribution network.

BRAZIL – STIHL FERRAMENTAS MOTORIZADAS LTDA.The new research and development center in Brazil is under construction, with completion and commissioning sched-uled for the end of 2018. This investment expands the avail-able space for product development and testing. Covering three floors and two mezzanines, the new building will have a total area of over 3,200 square meters and include 33 individual test rooms, a room for engine preparation and additional administrative space. The total investment is 38.5 million Brazilian real (10.7 million euros). The new development center in Waiblingen-Neustadt was the bench-mark for the project. The new facility in Brazil, for example, will also have underground fuel tanks that supply the test

and inspection facilities via pipeline. This eliminates the need to manually transport fuel from the warehouse to the factory. This new infrastructure will also supply fuel to the test cells on the assembly lines in the neighboring Produc-tion Department.

SWITZERLAND – STIHL KETTENWERK GMBH & CO. KGThe growth of the entire STIHL Group is also reflected at STIHL Kettenwerk in Switzerland. In 2017, the expansion of the CH 2 chain plant in Bronschhofen was finally completed and the new space was outfitted with machinery and equipment. The focus of this effort was on relocating depart-ments and groups of machines in a way that helps improve production processes and makes them more efficient.

At the CH 1 location in Wil, the excavators are on the move again – this time for a new parking garage. It will have a capacity for 400 vehicles and free up existing parking areas for other purposes. For example, a new entrance building with a cafeteria and training room will be built on part of this area.

ONGOING AUTOMATION AND TECHNOLOGY DEVELOPMENTThe demand for STIHL chains is, and will continue to be, unwavering. They embody “Swiss-made precision” and are manufactured using machines specially developed and pro-duced by STIHL itself. STIHL saw chains are characterized by technical innovations and high production quality. In or-der to live up to STIHL’s own high standards and customer expectations, automation in the production of chains and innovative stamping technologies are being advanced con-tinuously. Thanks to a new hardening furnace, the capacity of the hardening operation will increase immediately.

CHINA – ANDREAS STIHL POWER TOOLS (QINGDAO) CO., LTD.In 2017, the Qingdao plant took an important step forward in the global STIHL manufacturing network. In October, a spraying area consisting of nine injection molding machines was put into operation. As a result, the plant diversified from pure assembly of products to production. The STIHL Group has a long tradition of manufacturing power tools and has successfully exported this tradition to various lo-cations, including China. STIHL is responding to the antici-pated volume of orders with another construction project: The plant will be expanded by about 23,000 square meters.


6,400AROUND

EMPLOYEES WORLDWIDE WORK IN PRODUCTION.

PRODUCTION SITES WORLDWIDE

01 GERMANY (FOUNDING COMPANY) › Company founded: 1926

› WAIBLINGEN (PLANTS 1, 2, 6) Crankshaft production,

equipment manufacturing, plastic production, parts production, guide bar pro-duction, subgroup assembly

› WIECHS AM RANDEN (PLANT 3) Handle bar production,

brush knife production

› PRÜM (PLANT 4) Magnesium die casting (ma-

nufacturing and processing), tooling design and construc-tion

› LUDWIGSBURG (PLANTS 5, 7) Warehousing, packaging and

shipping

06 CHINA QINGDAO

› Founded: 2006

› Production focus: Assembly, production of injection-molded parts

07 ASIA AND OCEANIA (ZAMA) › HUIZHOU, CHINA › SHENZHEN, CHINA › SANTO TOMAS, PHILIPPINES

› Founded: 1995 in Japan

› Part of the STIHL Group since 2008

› Production focus: Carburetors for hand-held power tools, diaphragm carburetors

05 USA (STIHL INC.) VIRGINIA BEACH

› Founded: 1974

› Production focus: Crankshaft production, plas-tic production, parts produc-tion, guide bar manufacturing

04 BRAZIL SÃO LEOPOLDO

› Founded: 1973

› Production focus: Crankshaft production, plas-tic production, parts produc-tion, guide bar production, cylinder production, magne-sium die casting / gravity casting

03 SWITZERLAND WIL, BRONSCHHOFEN

› Founded: 1974

› Production focus: Saw chain and hedge trimmer production

02 AUSTRIA (VIKING) LANGKAMPFEN

› Founded: 1981

› Part of the STIHL Group since 1992

› Production focus: Production of ground- supported garden tools

Product development is centralized, production is decentralized. This prin-ciple has been behind the STIHL Group’s global net-work since the beginning of the 1970s. Internation-ality gives the STIHL Group many advantages – es-pecially against the back-ground of globalization.

05

04

07

06

07

0203

CHINA

GERM AN Y

AUS T RIAUSA

BR A ZIL

SWIT ZERL AND

PHIL IPPINES

01

7COUNTRIES THE STIHL GROUP HAS PRODUCTION LOCATIONS.

IN

60

MADE IN ASIA FOR ASIA Qingdao has long focused on the production of entry-level products for the STIHL Group – making valuable contribu-tions to our growth. New for the location is production of the STIHL FS 230 and STIHL FR 230 clearing saws, the first STIHL products specially designed for the Asian market also to be produced in Asia. Based on the STIHL FS 230, other devices are also being manufactured in China, includ-ing a version for the European market. In addition, a culti-vator, a boring machine and a water pump for Asia will be manufactured in Qingdao. With the start of MSE 141 production, Qingdao is also manufacturing its first electric chain saw.

AUSTRIA – VIKING GMBHIn 2017, the brand change from VIKING to STIHL was an important issue in Langkampfen. Starting in 2019, the STIHL Group will sell the entire VIKING product range ex-clusively under the STIHL brand name. This change allows all sales and marketing activities to be consolidated under one brand. Thus, sales potential of the existing VIKING product range can be realized on a global scale.

NEW CONSTRUCTION FOR 22.8 MILLION EUROS 2017 saw the start of VIKING’s largest construction proj-ect to date: An investment of 22.8 million euros to create 20,000 square meters of additional floor space and capac-ity for 100 new positions. These figures highlight the magnitude of the project in Langkampfen. By the end of 2018, the new space will be ready for occupancy. In addi-tion to production, the third expansion will house develop-ment, prototyping, electrical laboratories, permanent testing rooms and a training workshop. And in the future, iMow robotic mowers will be buzzing across the roof.

ZAMA CORPORATION LTD.In December 2017, 42 types of carburetors for STIHL and third-party customers were cleared for production at ZAMA in the Philippines. The start-up volume was successfully completed in October 2017 and since November produc-tion has been stable at the specified target volume. The certification by TÜV Nord in accordance with ISO 9001: 2015 shows that the STIHL Group’s high expectations regard-ing production and quality are being met.

NEW CONSTRUCTION IN HUIZHOUThe new ZAMA site in Huizhou, China, was also put into operation. The entire property covers 20,000 square meters. The factory itself has 32,000 square meters of floor space – 1,600 of which are used for office workspace and the cafeteria. The factory has been built with the latest envi-ronmental considerations in mind and is completely free of industrial wastewater.

The relocation of production from the existing site in Shenzhen-Xili to Huizhou, which started in August 2017, went smoothly. By the end of the year, 14 different car-buretors and all oil pumps were being manufactured ex-clusively at the new site. The complete relocation of all departments is scheduled for completion in spring 2018.


Purchasing

Digitalization is changing purchasing. Increas-

ing volume, shorter development timelines

and shorter product life cycles demand con-

tinuous optimization of purchasing activi-

ties. The purchasing organizations within the

STIHL Group provide a reliable partner for

manufacturing and, with their global reach,

make invaluable contributions to the suc-

cess of each company within the Group.

PURCHASING STRATEGY AS A GUIDEA revised purchasing strategy, geared to the challenges of the coming years, forms the basis for a wide range of initiatives for further development. In addition, the global purchasing network of the STIHL Group’s production plants provides an ideal organizational platform. Key factors for success include a global network of external and inter-nal partners as well as qualified and motivated employees.

STRAINED RAW MATERIAL MARKETSThe shortage of essential raw materials such as steel, plas-tic, copper, lithium and cobalt is a challenge for industries worldwide. Over the course of 2017, many commodities became more expensive, despite currency fluctuations and expectations to the contrary. Even where raw material prices stagnated or slightly decreased, as was the case with steel, strong market demand contributed to higher end- user prices.

Due to severe cost increases for important primary ma-terials that make up the most important types of plastic granules, proportional price increases had to be accepted from the middle of 2017 onwards. Since the fourth quar-ter of 2017, strong international demand has been driving up market prices for plastic granulates worldwide.

With the help of alternative purchasing models, for example the purchase of tranches, the Group was able to react to the rising electricity prices on the spot market early and partially offset them. Heating oil prices also rose in 2017, but are still well below the level of 2011.

The formation of new shipping alliances worldwide in April 2017 and the decommissioning of ships resulted in a short-age of cargo space. At the same time, global economic de-mand led to an increase in sea freight prices.

Due to the upward trend of the German economy, the volume of transport increased in the third quarter of 2017,

62

producing a massive shortage of cargo space, including in overland freight. A simultaneous shortage of skilled work-ers and drivers also led to price increases in the market for this segment.

RELIABLE PARTNERSHIPSIndividual purchasing markets are becoming increasingly diverse, and the STIHL Group’s purchasing involves a va-riety of focal points. For example, product-related digitaliza-tion demands new approaches and partners in purchas-ing. Israel, California and Singapore are technology centers where sourcing of services and know-how takes place. The US and Mexico continue to offer benefits of near- production purchasing for the North American market. Asia remains an important focus for purchasing. Sourcing on the East Coast is especially affected by regulatory interven-tion by the government in China. Europe continues to be a strategically important market, showing competitive tendencies in various industries, especially in the East.

In volatile markets, STIHL Group members strengthen partnerships with suppliers through long-term relation-ships. Planning security and forward-looking activities pro-vide collateral for both market- and commodity-related fluctuations. Proactive risk management and digital net-working form further important foundations.

Part of this relationship maintenance is the “Supplier of the Year” award. Since 1990, the STIHL Group has award-ed this title to a total of 100 suppliers. 22 suppliers have been honored twice, eight suppliers three times, two suppliers have received the award four times and two sup-pliers five times. The criteria for the award include out-standing attributes in terms of quality, technology, inno-vation, service and overall value. The “Supplier of the Year” highlights those STIHL suppliers who have made a particular contribution to achieving the goals of high quality, on-time delivery, flexibility, cooperation and know-how.

INNOVATIONS AND DIGITALIZATIONAs a result of the increasing digitalization of products and the entire value chain, purchasing is being integrated much earlier into the development phase. The selection of stra-tegic partners with relevant know-how and long-term busi-ness orientation is crucial to ensuring that all products meet the quality requirements of both STIHL and its cus-tomers in the long term. Creative solutions, the identifica-tion of new technologies and cross-functional collaboration are essential factors for success. Apps, cloud solutions, connectivity and associated support concepts are just as

important as the identification of alternative materials and optimized production concepts.

SUPPLIER MANAGEMENT: MORE PROFESSIONALIZATION AND NETWORKINGThe consistent expansion and professionalization of supplier management within the STIHL Group is an essential ele-ment for continuous development. Different requirements require concepts to be adapted for digital networking, process optimization and the targeted control of purchasing activities. It is important to manage the entire life cycle of a product. This begins with choosing the right suppliers and ranges from their evaluation to the corresponding de-velopment of the partnerships. The classification of suppli-ers and the identification of relevant requirements are the logical next steps for STIHL purchasing.

MANAGEMENT AND TRANSPARENCY WORLDWIDEMore complex structures in global purchasing networks require targeted management of purchasing activities. Management techniques include the increase in transparen-cy through uniform processes, efficient systems, modern analytical methods and consistent master data. Essential instruments to achieve this goal are the use of global in-dicators and the continuous development of commodity management. Both serve as the basis for decision-making. The opportunities offered by increasing digitalization are be-ing consistently used to further increase efficiency and effectiveness in purchasing.


Balance Sheet at December 31, 2017 (Condensed version)

ASSETS CONSOLIDATED GROUP OF STIHL HOLDING AG & CO. KG ANDREAS STIHL AG & CO. KG

In thousands of euros Notes Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2016 Noncurrent assetsIntangible assets 37,312 36,115 25,503 22,433

Property, plant and equipment 1,127,810 1,109,309 310,590 298,704

Financial assets (1) 1,745,618 1,513,412 337,368 285,856

2,910,740 2,658,836 673,461 606,993

Current assetsInventories 1,041,539 944,501 192,432 178,674

Receivables and other assets

Trade receivables 472,132 462,400 33,645 29,532

Receivables from related companies 21,331 34,581 143,303 118,001

Other assets 98,113 74,045 21,601 14,511

591,576 571,026 198,549 162,044

Securities (2) 51,711 81,102 5,000 5,000

Cash and bank balances 753,954 946,367 218,892 293,043

2,438,780 2,542,996 614,873 638,761

Deferred expenses and accrued income 22,021 20,283 2,990 2,574

Deferred tax assets 67,590 65,709 13,834 11,905

Total 5,439,131 5,287,824 1,305,158 1,260,233

BALANCE SHEET STRUCTURE OF STIHL HOLDING AG & CO. KG (CONSOLIDATED GROUP)

EQUITY & LIABILITIES

ASSETS

Noncurrent assets Inventories Other assets

In millions of euros

Other liabilitiesProvisionsEquity

1,4872,911 1,041

5,439

5,439

970 6523,817

64

EQUITY AND LIABILITIES CONSOLIDATED GROUP OF STIHL HOLDING AG & CO. KG ANDREAS STIHL AG & CO. KG

In thousands of euros Notes Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2016 Equity (3) 3,817,032 3,730,389 580,000 560,000

Provisions (4)

Provisions for pensions and similar obligations 407,989 387,822 370,865 348,354

Provisions for taxes 19,016 21,438 1,438 2,375

Other provisions 224,887 216,455 60,687 57,240

651,892 625,715 432,990 407,969

LiabilitiesLiabilities to banks 9,986 21,429 0 0

Loan from the Eva Mayr-Stihl Foundation (5) 150,000 150,000 150,000 150,000

Participating capital (6) 32,181 30,933 32,181 30,933

Advance payments received 220 454 0 0

Trade payables 203,784 173,471 30,366 26,133

Liabilities to related companies 42 12 25,887 29,632Liabilities to companies in which an equity interest is held 2,904 0 0 0

Liabilities to owners 482,198 464,348 20,218 23,179

Other liabilities 84,627 86,983 32,683 31,462

965,942 927,630 291,335 291,339

Deferred income and accrued expenses 0 200 832 844

Deferred tax liabilities 4,265 3,890 1 81

Total 5,439,131 5,287,824 1,305,158 1,260,233

EQUITY & LIABILITIES

ASSETS

Noncurrent assets Inventories Other assets

In millions of euros

Other liabilitiesProvisionsEquity

BALANCE SHEET STRUCTURE OF ANDREAS STIHL AG & CO. KG

440673 192

292433580 1,305

1,305

65STIHL ANNUAL REPORT 2017 › ANNUAL RE VIE W › F INANCIAL STATEMENTS

Supplement to the Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

OF STIHL HOLDING AG & CO. KG

Information required by Section 13 Subsection 3 in conjunction with Section 5 Subsection 5 Sentence 3 of the German Companies Disclosure Act (Publizitäts-gesetz):

1. Revenue In thousands of euros 3,791,7702. Income from equity investments In thousands of euros 33. Wages, salaries, social security con-

tributions and expenses for pensions and other employee benefits In thousands of euros 837,357

4. Average number of employees in the twelve months ending on the balance sheet date 15,312

Waiblingen, March 2018

STIHL Holding AG & Co. KG The General Partners Dipl.-Ing. Hans Peter Stihl STIHL AG

The annual financial statements of the STIHL Holding AG & Co. KG group and ANDREAS STIHL AG & Co. KG are disclosed in the German Federal Gazette, in accordance with the German Companies Disclosure Act.

ANDREAS STIHL AG & CO. KG

Information required by Section 5 Subsection 5 Sentence 3 of the German Companies Disclosure Act (Publizitätsgesetz):

1. Revenue In thousands of euros 1,146,8772. Income from equity investments In thousands of euros 03. Wages, salaries, social security con-

tributions and expenses for pensions and other employee benefits In thousands of euros 350,227

4. Average number of employees in the twelve months ending on the balance sheet date 4,510

Waiblingen, March 2018

ANDREAS STIHL AG & Co. KG The General Partners Dipl.-Ing. Hans Peter Stihl STIHL AG

66

Notes Notes to the Balance Sheets of the consolidated group of

STIHL Holding AG & Co. KG and of

ANDREAS STIHL AG & Co. KG

ACCOUNTING AND VALUATION METHODS

Cost of production includes direct material, direct labor and an appropriate proportion of material and production overheads. Assets with a limited useful life are subject to systematic depreciation. Wherever deemed necessary, impairments are recognized to reflect assets’ lower fair values.

Inventories are valued at cost of acquisition or production, or at fair value if this is lower. General sales risks are reflected by appropriate range deduc-tions.

Receivables and other assets are measured at their nominal values. Allowanc-es are made for recognizable individual risks and general default risk.

Provisions for pensions are measured in accordance with the projected unit credit method on the basis of the Heubeck 2005 G mortality tables. In the measurement of other provisions, all recognizable risks and contingent liabilities are taken into consideration.

Liabilities are recognized at the amounts payable.

SCOPE OF CONSOLIDATION

The consolidated financial statements include STIHL Holding AG & Co. KG and all domestic and foreign affiliated companies (see list).

Due to their lesser importance, Carl Benz Center GmbH & Co. KG, Stuttgart, and Carl Benz Center Neckarpark GmbH, Stuttgart, are not included in the consolidated financial statements.

The company STIHL MARKETING EAST AFRICA LIMITED, Nairobi, Kenya, was consolidated for the first time in 2017.

CAPITAL CONSOLIDATION

Capital consolidation takes place in accordance with Section 301 Subsection 1 to Subsection 3 of the German Commercial Code (HGB). Differences arising from first-time consolidation before January 1, 2010 were offset against retained earnings.

OTHER CONSOLIDATION METHODS

The Group’s internal receivables, payables, revenue, profits and expenses are eliminated. Intercompany profits are eliminated pursuant to Section 304 Sub-section 1 of the German Commercial Code (HGB). Deferred taxes are recognized on intercompany profits as well as on debt consolidation affecting profit and loss.

CURRENCY CONVERSION

The conversion of the balance sheet value of the foreign companies for the capital and the reserves was made at the respective average historical ex-change rates of the respective year. Other assets and liabilities were converted at the average spot exchange rate on the balance sheet date.

ASSETS

(1) Financial assets The reported financial assets in the consolidated financial statements mainly relate to equity investments, securities held as fixed assets and other loans.

(2) Securities These are predominantly other securities used for short-term investments.

LIABILITIES

(3) Equity In the two balance sheets, the equity capital is shown in a total amount in accordance with Section 9 Subsection 3 of the German Companies Disclosure Act (Publizitätsgesetz).

(4) Provisions The pension provisions cover preexisting pension entitlements and future benefits.

Other provisions relate to possible outstanding employee benefits, tax payments and other contingencies.

(5) Loan from the Eva Mayr-Stihl Foundation The loan is available to ANDREAS STIHL AG & Co. KG.

(6) Profit participation capital The offer to the employees of ANDREAS STIHL AG & Co. KG to continue to participate in the capital of the company in the form of participation rights was increased in the 2017 fisical year.

(7) Average number of employees of the Group

Europe 7,136America 4,527Asia / Oceania / Africa 3,649

Total 15,312


Companies of STIHL Holding AG & Co. KG

NAME OF THE COMPANY EQUITY INTEREST IN %

Consolidated companiesGermanySTIHL Holding AG & Co. KG, Waiblingen 100.0STIHL AG, Waiblingen 100.0ANDREAS STIHL AG & Co. KG, Waiblingen 100.0STIHL International Gesellschaft mit beschränkter Haftung, Waiblingen 100.0STIHL Vertriebszentrale AG & Co. KG, Dieburg 100.0ANDREAS STIHL Verwaltungs-GmbH, Waiblingen 100.0STIHL-Verwaltungsgesellschaft mbH, Waiblingen 100.0STIHL Kettenwerk Verwaltungs-GmbH, Waiblingen 100.0STIHL Beteiligungsgesellschaft GmbH & Co. KG, Waiblingen 100.0STIHL Kettenwerk GmbH & Co. KG, Waiblingen 100.0Zama Holding GmbH, Waiblingen 100.0STIHL Digital GmbH, Waiblingen 100.0

Other countriesSTIHL Incorporated, Virginia Beach, Virginia, USA 100.0

STIHL Ferramentas Motorizadas Ltda., São Leopoldo, Rio Grande do Sul, Brazil 100.0ANDREAS STIHL Power Tools (Qingdao) Co., Ltd., Qingdao, China 100.0VIKING GmbH, Langkampfen, Austria 100.0STIHL Gesellschaft m.b.H., Vösendorf, Austria 100.0STIHL Vertriebs AG, Mönchaltorf, Switzerland 100.0ANDREAS STIHL Ltd., Camberley, Surrey, United Kingdom 100.0ANDREAS STIHL N.V., Puurs, Belgium 100.0ANDREAS STIHL SAS, Torcy, Marne-la-Vallée, France 100.0ANDREAS STIHL S.A., Torres de la Alameda, Spain 100.0ANDREAS STIHL S.A., Sintra, Portugal 100.0ANDREAS STIHL S.p.A., Cambiago, Italy 100.0ANDREAS STIHL S.A., Acharnes, Attica, Greece 100.0ANDREAS STIHL A/S, Sandefjord, Norway 100.0ANDREAS STIHL Norden AB, Stenkullen, Sweden 100.0ANDREAS STIHL Oy, Vantaa, Finland 100.0ANDREAS STIHL Sp. z o.o., Tarnowo Podgórne, Poland 100.0ANDREAS STIHL, spol. s r.o., Modrice, Czech Republic 100.0ANDREAS STIHL Kereskedelmi Kft., Biatorbágy-Budapark, Hungary 100.0ANDREAS STIHL Motounelte S.R.L., Otopeni, Romania 100.0TOV ANDREAS STIHL, Kiev, Ukraine 100.0TOV ANDREAS STIHL Zemelna Kompanija, Kiev, Ukraine 100.0ANDREAS STIHL EOOD, Sofia, Bulgaria 100.0

NAME OF THE COMPANY EQUITY INTEREST IN %

Other countries (continued)STIHL d.o.o. Beograd, Belgrade, Serbia 100.0OOO ANDREAS STIHL Marketing, St. Petersburg, Russia 100.0OOO STIHL SUEDWEST, Krasnodar, Russia 100.0STIHL Limited, London, Ontario, Canada 100.0ANDREAS STIHL S.A. de C.V., Cuautlancingo, Puebla, Mexico 100.0STIHL SAS, Rionegro, Antioquia, Colombia 100.0STIHL Motoimplementos S.A., El Talar, Buenos Aires, Argentina 100.0ANDREAS STIHL (PTY.) Ltd., Pietermaritzburg, South Africa 100.0Kabushiki Kaisha STIHL, Kaminokawa-machi, Tochigi, Japan 100.0

Taicang ANDREAS STIHL Power Tools Co., Ltd., Taicang City, Jiangsu, China 100.0ANDREAS STIHL Pvt. Ltd., Kuruli, Tal-Khed, Dist. Pune, India 100.0STIHL SERVICE CENTRE SOUTHEAST ASIA SDN. BHD., Petaling Jaya, Malaysia 100.0STIHL MARKETING EAST AFRICA LIMITED, Nairobi, Kenya 100.0Zama Corporation Ltd., Tai Po, NT, Hong Kong 100.0Zama Japan Kabushiki Kaisha, Hachimantai-shi, Iwate-Ken, Japan 100.0Guang Dong Zama Precision Industry Co., Ltd., Guangdong, China 100.0U.S.A. Zama, Inc., Franklin, Tennessee, USA 100.0Zama Precision Industry Manufacturing Philippines, Inc., Sto. Tomas, Philippines 100.0Zama Precision Industry (Huizhou) Co., Ltd., Huizhou City, China 100.0STIHL PTY. Ltd., Knoxfield, Victoria, Australia 100.0STIHL Limited, Auckland, New Zealand 100.0

Nonconsolidated companiesCarl Benz Center Objekt GmbH & Co. KG, Stuttgart, Germany 100.0Carl Benz Center Neckarpark GmbH, Stuttgart, Germany 100.0

Other holdingsBMZ Holding GmbH, Karlstein am Main, Germany 20.0Globe Holdings (Hong Kong) Co., Ltd., Hong Kong 35.0GreenIQ Ltd., Petah-Tikva, Israel 34.4High-Tech Gründerfonds III GmbH & Co. KG, Bonn, Germany 1.0

68

Boards of the Group

MEMBERS OF THE SUPERVISORY BOARD OF STIHL AG

Dipl.-Ing. Hans Peter Stihl, Remseck Honorary Chairman of the Supervisory Board

Representing the owners

Dr. Nikolas Stihl1, Stuttgart Chairman of the Supervisory Board

Dipl.-Wirt.-Ing. Franz Fehrenbach1, Stuttgart Additional Deputy Chairman of the Supervisory Board Chairman of the Supervisory Board of Robert Bosch GmbH and Managing Partner of Robert Bosch Industrietreuhand KG

Prof. Dr. h. c. Ludwig Georg Braun, Melsungen Chairman of the Supervisory Board of B. Braun Melsungen AG

Prof. Dr. Michael Hoffmann-Becking, Düsseldorf Partner at the law firm Hengeler Mueller

Eva Mayr-Stihl, Remseck

Selina Stihl (MSC, MBA, ACA), Stuttgart

Representing the employees

Marcus Retter1, Ingersheim Deputy Chairman of the Supervisory Board Chairman of the General Employee Council of ANDREAS STIHL AG & Co. KG Chairman of the Employee Councils of the Waiblingen and Ludwigsburg plants (until October 24, 2017)

Dipl.-Kfm. Thomas Bamesberger1, Stuttgart Head of Production and Logistics at ANDREAS STIHL AG & Co. KG

Matthias Fuchs, Ludwigsburg First authorized representative of the Waiblingen office of the trade union IG Metall

Günter Meyer, Weinsheim Chairman of the Employee Council of the Weinsheim plant of ANDREAS STIHL AG & Co. KG

Dipl.-Ing. (FH) Hardy Völler, Winnenden Head of Department, Plastic Parts Production Center, ANDREAS STIHL AG & Co. KG

Gerhard Wick, Geislingen an der Steige First authorized representative of the Esslingen office of the trade union IG Metall

MEMBERS OF THE EXECUTIVE BOARD OF STIHL AG

Dr. Bertram Kandziora Chairman of the Board Production and Materials Management

Dipl.-Betriebsw. (FH) Karl Angler Chief Financial Officer, Controlling, Information Systems and Service

Dipl.-Ing. (FH) Norbert Pick Marketing and Sales

Dr. Michael Prochaska Human Resources and Legal Affairs

Dipl.-Ing. Wolfgang Zahn Development

MEMBERS OF THE ADVISORY BOARD OF STIHL HOLDING AG & CO. KG

Dipl.-Ing. Hans Peter Stihl, Remseck Honorary Chairman of the Advisory Board

Dr. Nikolas Stihl, Stuttgart Chairman of the Advisory Board

Eva Mayr-Stihl, Remseck Deputy Chair of the Advisory Board

Prof. Dr. h. c. Ludwig Georg Braun, Melsungen

Dipl.-Wirt.-Ing. Franz Fehrenbach, Stuttgart

Prof. Dr. Michael Hoffmann-Becking, Düsseldorf

Friedrich Merz, Düsseldorf and Arnsberg Attorney at Law

Selina Stihl (MSC, MBA, ACA), Stuttgart

Dipl.-Ök. Karen Tebar, Waiblingen

¹ At the same time member of the committee in accordance with Section 27 Subsection 3 of the German Co-Determination Act (Mitbestimmungsgesetz).


In April 2017, Hans Peter Stihl celebrated his 85th birthday. No reason for a big party, but likewise no reason for the full- blooded entrepreneur to slow down. The oldest son of com-pany founder Andreas Stihl is a partner of STIHL Holding AG & Co. KG and honorary chairman of the STIHL Advisory

and Supervisory Boards. Under his leadership, STIHL de-veloped into a globally successful group of companies.

Born in Stuttgart in 1932, he joined his father’s business in 1960 after studying mechanical engineering at Stuttgart University. He was quickly given more responsibility in the company and soon assumed management of the Manu-facturing and Design Department. In 1966, he became a member of the Executive Board and in 1971, along with his father, a general partner in the firm.

In the 1970s, together with his sister Eva, Hans Peter Stihl laid the foundation for the international manufacturing network and the worldwide sales organization of the STIHL Group.

On July 1, 2002, Stihl along with his siblings withdrew from the firm’s operational management. The family moved to the Advisory and Supervisory Boards. On June 30, 2012, he stepped down as Chairman of both boards and was succeeded by his son, Dr. Nikolas Stihl.

In addition to his entrepreneurial activities, Stihl has also been engaged in volunteer work. For example, he was President of the Association of German Chambers of Indus-try and Commerce (DIHT) from 1988 to 2001. Since 2002, he has represented the Republic of Singapore as Honorary Consul. In addition, he has served on the supervisory and advisory boards of numerous companies.

Stihl has received numerous awards for his entrepreneurial and voluntary services. These include the Grand Cross for Distinguished Service of the Federal Republic of Germany with Star (2002), the Gold Staufer Medal of the state of Baden-Württemberg (2007), the “Social Market Economy” prize of the Konrad Adenauer Foundation (2009), which he received jointly with his sister Eva Mayr-Stihl, and the Diesel Medal in the category “Best Innovative Achieve-ment” (2012).

Paper phoenixmotion XENON Papierfabrik Scheufelen, Lenningen,Germany

This Annual Report is a translation of the original German version and is provided for your convenience. European products are shown throughout this Annual Report. Product features may vary by market.

PUBLISHING INFORMATION

Published by STIHL Holding AG & Co. KG

Badstraße 9871336 WaiblingenGermanywww.stihl.com

Concept and design 3st kommunikation GmbH, Mainz, Germany

Printer Drake Media GmbH, Bad Oeynhausen, Germany

Photography Günther Bayerl, Ulm [ Outer cover, p. 2, 4–8, 10–14, 18–20, 22–33 ]

STIHL internal [ p. 34–35, p. 70, inside cover ]

Yanai Ron (Portrait Odi Dahan) [ p. 15 ]Fanuc Deutschland GmbH [ p. 21 ]

Thomas Kettner, Hamburg [ p. 38–39, 41 ]

“I am and always will be an engineer”

SEPTEMBER Commitment to

LANGKAMPFEN: Here, the largest construction project of the STIHL Group will be completed at the VIKING GmbH site for 22.8 million euros.

MAYThe STIHL Group participates in the

HIGH-TECH GRÜNDER-FONDS (HTGF),

the largest seed fund focused on high-tech start-up

companies in Germany.

JANUARY

STIHL integrates the VIKING brand and from 2019 will only use one brand name: STIHL.

FEBRUARY “STIHL Training goes Virtual Reality” becomes the fi rst VR training session for practical use and is recognized with the

“eLEARNING AWARD.”

AUGUST The General Assembly of Diakonie Stetten unanimously elects

SELINA STIHL, member of the STIHL Advisory Board and Supervisory Board, to the Board of Directors of Diakonie Stetten.

JUNEThe STIHL distribution center

in Dieburg starts its involvement with the aid organization

SOS-KINDERDORF E. V. by donating a VIKING MB 448

lawn mower in Bavaria.

DECEMBER Effective immediately, more than

100 million euros will fl ow into the expansion and modernization of the STIHL Group’s Waiblingen

HEADQUARTERS.

NOVEMBER

STIHL Qingdao dedicates its

INJECTION MOLDING FACILITY.

With this, the location takes a further step beyond assembly – to production.

APRIL Hans Peter Stihl celebrates his

85TH BIRTHDAY.Under his leadership and that of his

sister Eva Mayr-Stihl, STIHL has developed into a fl ourishing company.

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JULYThe “Forestry Week for

Biodiversity” of the

BERGWALD-PROJEKTES E. V.

takes place in Triberg. STIHL has been supporting the association

for more than ten years.

SEPTEMBER 50 years ago, the fi rst STIHL sales com-pany outside of Germany was founded in

AUSTRIA. Under the motto “Mission Future,” the success story is celebrated in Salzburg.







MARCH STIHL Personnel Marketing wins the

“EUROPEAN EXCELLENCE AWARD” in Human Resources for the Best Employer Video 2017 for an interactive 360-degree recruiting fi lm.

MARCH Groundbreaking ceremony in Ludwigsburg: 55 million euros are being invested to expand the

SALES LOGISTICS operations.

NOVEMBER New Zealand’s

JASON WYNYARD clinched his ninth title at the Stihl TIMBERSPORTS® World Championship in Lillehammer, Norway.

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Documents

ANNUAL REPORT 2017 STIHL ANNUAL REPORT 2017 Connect 17 ... Annual Report 12794n.pdf · Wages and salaries, social security, pension contributions million euros 837.4 769.3 776.0 Employees