Group Sustainability Report 2012

Delivering Benefit. Aiming for Sustainability.

B S H B O S C H U N D S I E M E N S H A U S G E R Ä T E G M B H

Main Brands Special Brands Regional Brands

For more informationabout BSH and its brands,see BSH’s 2012 GroupAnnual Report or visit its website at:www.bsh-group.com

Brands

BSH Bosch und Siemens Hausgeräte GmbH has issued a report forstakeholders every year since 1992 detailing the progress made onrealizing its strategy based on sustainable development. This reportcovers all BSH sites around the world. It presents events, developmentand the environmental and staff-related indicators for fiscal year 2012.The final deadline for contributions to this report was Tuesday, April30, 2013. This report follows the Global Reporting Initiative guidelines(GRI G3). It also serves as BSH’s progress report in relation to the UN Global Compact. A more detailed GRI balance sheet containingadditional information not presented here may be found on the Inter-net, together with a clear summary of our progress in implementingthe Global Compact principles, at:

www.bsh-group.com > What we stand for > Responsibility > Global Compact>

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About this report

1993Use of CFCsand HFCs discontinuedin Europe

1995First EMASvalidation

Environmentalmanagement handbook

1996ProductEnvironmentAnalysis(PEA)

1997Environ-mental controllingat sitesoutsideEuropecom-menced

1999China’s firstCFC and HFC-free refrigera-tors manufac-tured

Global occupationalhealth andsafety guidelines

2002Best-practicepresentationat UN Summitin Johannes-burg

2000Appren-ticeshipscommencein Turkey

1994Implementa-tion of a bind-ing environ-mental policythroughoutthe Group

Take-back ofend-of-lifeappliances

1967BSHfounded

Milestones 1967-2012

1998PEA awardedenvironmentalprize by Federation of German Industry (BDI)

1991–1992CorporateDepartment forEnvironmentalProtection set up(1991)

First Environmen-tal Report (1992)

K E N N Z A H L E N I M Ü B E R B L I C K | Z U M B E R I C H T

Selected awards in 2012 and 2013

“Energy Star® SustainedExcellence Award”,United States

Bavarian Government’s“JobErfolg 2012” Integration Prize, Germany

“Madrid Excelente” for Sustainability andCustomer Satisfaction,Spain

Which? Awards“Best Home ApplianceBrand”, United Kingdom

“Emirates QualityMark”, United Arab Emirates

Turkish Quality Assurance Association’s Sustainability Award,Turkey

Indicators at a glance

Financial in millions of euros

Sales revenue

Earnings before interest and taxes (EBIT)

Capital expenditure on fixed assets*

Expenditure for research and development

Environmental

CO2

emissions (Scope 1 & 2) per metric ton of product in kg

Energy consumption per metric ton of product in kWh

Water usage per metric ton of product in m3

Environmental costs and investments in millions of euros

Social

Number of employees

Percentage of women

Personnel expenses in millions of euros

Expenditure for training and personnel development in millions of euros

2010

9,073

754

403

277

250

650

1.23

18.3

42,841

28.8

1,807

18.2

2011

9,654

647

453

298

241

593

1.10

19.7

46,228**

29.1

1,893

19.7

2012

9,800

683

421

326

243

599

1.15

19.6

46,925

29.4

2,043

20.2

2004BSH wins Federation ofGerman Indus-try prize fortransfer of environmentalprotectiontechnology

BSH signs up to UN GlobalCompact

Corporate Prin-ciples updated

2003BSH named“Best Innovator”

2006InternationalB.A.U.M. special prizeawarded to Dr. Kurt-LudwigGutberlet

BSH supportsEurope-wide“SustainableEnergy Europe”campaign

2008BSH winsGerman Sus-tainabilityAward

BSH introduces Compliance Management

2009BSH’s Nauenplant “Factoryof the Year”

Occupationalhealth andsafety manage-ment systemaccording toOHSAS 18001

BSH one of“Top EmployersGermany” byCRF Institute

2010BSH wins Ger-man InnovationPrize for Climateand Environ-ment (IKU)

Materialityanalysis forSustainabilityManagement

Utopia Awardfor the Zeolite dishwasher

2005BSH signs theCode of Conductof the EuropeanCommittee ofDomestic Equip-ment Manufac-turers (CECED)

2011CorporateResponsibilitydepartmentestablished

BSH named“Climate Protection Company” inGermany

2012BSH recognized as one of“Top Employers Europe” byCRF Institute

Traunreut receives “JobEr-folg 2012” integration prizefor integrating personswith disabilities

* Excluding goodwill** Number of employees adjusted in line with a change in the HR policy

A consistent customer orientation is what has made BSH Bosch und SiemensHausgeräte GmbH a success. Whether our customers are gourmets or designenthusiasts, whether they love technology or are passionate about the environ-ment – we offer them sophisticated solutions based on forward-looking technol-ogy, outstanding design, excellent service and super-efficient home appliances.Many of our customers opt for our products because they want to help protectthe climate and contribute to a viable future. Environmentally compatible,responsible operation has become an integral part of our business success. OurAnnual Report and Sustainability Report show how we create benefit for ourcustomers, the environment and society in general, and thereby ensure our ownsuccess.

Both reports are available on our website as PDF files, and the Annual Reportalso as an e-paper document: publications.bsh-group.com

Focusing on the Customer. 

Delivering Benefit. 

Aiming for Sustainability.

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1| C O N T E N T

Foreword — The world in which we live and work is becoming increasinglycomplex and interconnected. And this presents tremendous challenges to usas a company in the process of developing our products, serving our customers,selling our portfolio, managing our people and protecting the environment.

The company — BSH. Values are the basis of our daily work, effiency andquality are the results.

Sustainable corporate governance — Our business practices are based on a business model accepted by society. We develop and produce high quality home appliances that make life easier, while helping to protect the environment.

Products and customers — Our customers around the world are won over byquality, design and convenience. The proof of this can also be seen in thetests regularly won by our appliances.

Employees — The best way of achieving optimum results is to have the mostsuitable employees. A good work-life balance and attractive internationaldevelopment opportunities go a long way to help ensure this.

Environment — Going easy on resources says it all for BSH. This applies notonly to appliances but also to their entire life-cycle, from production throughlogistics to disposal.

Society — We create benefit for society in a variety of ways, especially withour energy-efficient home appliances. As a company, we aim to make ourinnovative technologies available in a growing number of products.

Indicators — Facts and figures provide evidence of our progress. This year,too, BSH has set itself challenging targets on the basis of Group-wide keyperformance indicators.

BSH worldwide — Sites at a glance, and the status of our environmentalmanagement certification

Contacts — at the Group’s Munich headquarters

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Back flap

Back flap

Content

2

The world in which we live and work is becomingincreasingly complex and interconnected. Andthis presents tremendous challenges to us as acompany in the process of developing our prod-ucts, serving our customers, selling our portfolio,managing our people and protecting the environ-ment. So we have even greater reason to beproud of the fact that we managed to meet manyof our ambitious targets in 2012 and furtherincrease sales revenue.

Our business success is the result of a clear strate-gic focus on sustainable business practices, coregrowth markets and above all our innovationsespecially in energy-efficient home appliances. Noother home appliance manufacturer managed tosell as many high-efficiency appliances as BSH lastyear. As a result we are promoting climate protec-tion, while moving towards a sustainable energypolicy in Germany. And we could go even further ifmore consumers opted for a super-efficient modelwhen buying an appliance. So we are doing ourutmost to make our innovative technologies avail-able in an ever growing number of home appli-ances. At the same time, we’re continuing to lobbypolicy-makers and sector organizations to intro-duce smart incentive systems so that we can movetowards a sustainable future in energy policy.

We practice what we preach when it comes to climate protection and resource efficiency. Ourambitious program which aims to reduce the spe-cific consumption of energy and water by 25 per-cent each by 2015 and cut waste by 10 percentcompared with 2010, is already proving an excel-lent source of inspiration for new ideas, improve-ments and measurable savings. In logistics, wecontinue to work on innovative solutions with theaim of systematically cutting CO

2emissions. And

to achieve this, we need motivated employeeswho see sustainability and environmental protec-tion not simply as a task, but as a mission.

So last year also saw a wealth of activities initi-ated by our sustainability team with the aim ofinstilling the idea of economic, ecological andsocial objectives as a basic component of thework of all employees in all departments in allcountries. These activities include workshops,training and presentations, as well as projects topilot new approaches. For example, last year wethoroughly analyzed our supplier relationships toensure that ecological and social standards aremet across the supply chain.

Dear Reader,

“Our long-term success depends on sustainable business

practices. We will therefore actively shape the transforma-

tion into a society with greater energy efficiency and lower

CO2

emissions.” Dr. Kurt-Ludwig Gutberlet

“Our customer requirements set the benchmark for innova-

tive and high quality products backed up by reliable service.

The more we focus on their needs and wishes, the more

competitive and successful we will be.” Matthias Ginthum

3| F O R E W O R D

To be successful in business while ensuring thatwe act sustainably, we have to recruit, retain andfurther develop the most suitable employeeswherever in the world we are active. Our underly-ing value-oriented corporate culture nurtured inevery country will guide us in the process. Thisincludes understanding diversity as a corporatebenefit and focusing on supporting and develop-ing our employees throughout the world – ideasthat are firmly embedded in our sustainabilitystrategy.

This report is our 21st sustainability report – itprovides information on targets we have alreadymet and those we are working on.

It follows the international guidelines set out inthe Global Reporting Initiative (GRI), and alsoserves as our progress report in relation to theUnited Nations Global Compact. By signing theGlobal Compact, we committed ourselves back in2004 to promoting responsible and sustainablebusiness around the world.

We hope you will find this report interesting andinformative and would welcome any suggestionsyou might have after reading it, viacorporate.communications@bshg.com

Dr. Kurt-Ludwig Gutberlet

Chairman and CEO of BSH

Matthias Ginthum

Brand Management,

Sales and Logistics

Johannes Närger

Finance, Corporate Development

and Labor Relations Director

Winfried Seitz

Product Development,

Corporate Technology, Factories

and Environmental Protection

“Diversity creates benefit and is a key success factor for us

as an internationally active company. Because we live and

breathe our values, we’re seen around the world as an

attractive and valued employer.” Johannes Närger

“Using resources efficiently also helps to drive innovation.

By adjusting today to scarcer resources, we’re developing

successful solutions and creating added value for tomor-

row.” Winfried Seitz

4

BSH Bosch und Siemens Hausgeräte GmbH wasfounded in 1967 as a joint venture betweenRobert Bosch GmbH, Stuttgart, and Siemens AG,Berlin/Munich. Today it ranks as the third-largesthome appliance manufacturer in the world andnumber one in Europe. The Group, which is head-quartered in Munich, boasts a portfolio spanningthe entire spectrum of modern home appliancesfrom cookers, dishwashers, washing machines,dryers, refrigerators and freezers to floor careand small home appliances. As of December 31,2012, BSH operated 41 factories in Europe, Asiaand the Americas, as well as a worldwide net-work of sales and customer service companies inalmost 50 countries. In 2012, BSH employedmore than 46,000 people worldwide, around 70percent of them in Europe.

International growthBSH generated 9.8 billion euros in sales revenuein 2012, setting a new record. Yet the compara-tively low growth of 1.5 percent reflects the diffi-cult economic climate in some of the Europeancountries in which the company is active. How-

ever, earnings before interest and taxes (EBIT)rose by 5.6 percent to 683 million euros (previ-ous year: 647 million euros). BSH’s internationalgrowth continued unabated in 2012: In Taipei(Taiwan), we opened a sales company with 70 employees and its own showroom for theregional market. In Jakarta (Indonesia), weformed a new subsidiary. In St. Petersburg (Russia), a new washing machine factory startedoperations, which aims to manufacture 350,000appliances a year with 250 employees. 20 yearsafter the start of our activities in Poland, we inau-gurated the new headquarters of BSH’s Polishsubsidiary in Warsaw in October 2012. We alsoopened an administrative center for Procurementand IT in Lodz, from where 200 specialists willprovide BSH offices in 20 countries with support.The BSH factory in Bad Neustadt, Germany’slargest vacuum cleaner plant, produced its 55 millionth vacuum cleaner in June 2012. At thesite in Dillingen (also in Germany), the 50 mil-lionth dishwasher rolled off the production line atthe start of 2012. We also started constructionwork here on a new development center. 60 addi-

BSH. Values are the basis of our daily work,

effiency and quality are the results.

tional engineers will start working there in thenext three years. As part of the process ofrestructuring from a production site to a develop-ment site, the washing machine factory in Berlinwas closed in July 2012. Some 700 employeeswork in the new home laundry technology center.

Based on BSH’s excellent creditworthiness, rat-ing agency Standard & Poor’s confirmed theGroup’s long-term A rating. Based on the stableoperating result and moderate debt ratio, its out-look was again rated “stable”.

Strong brand portfolioOur products reach the broadest consumergroups thanks to our clearly structured brandportfolio: While Bosch stands for “reliable prod-ucts tailored to meet people’s needs”, Siemensappeals to customers with its “innovative tech-nology and high-end design”. Special brandssuch as Neff and Gaggenau and various regionalbrands in individual countries all have their owndistinctive brand profile. In 2012, our high-qualityand energy-efficient appliances received variousawards. With our main brands Bosch and Siemenswinning tests for washing machines and tumble

dryers, the Logixx washer-dryer was awarded topmarks by German consumer goods testing foun-dation Stiftung Warentest in September 2012. Inthe United Kingdom, Bosch was awarded theprestigious Which? Award in “Best Home Appli-ance Brand” category for the second time in arow. It rewards in particular the performance andreliability of home appliances.

Regional commitmentIt is not only in Germany that innovations, aresponsible attitude towards employees andsocial commitment shape our actions. BSH haswon numerous awards in the international arena:The BSH subsidiary in the United Arab Emirateswas awarded the EQM quality seal of the Emi-rates Authority for Standardization and Metrol-ogy for its reliable products. In Turkey, we wereawarded the gold prize by the Turkish Society forQuality Assurance for our achievements in thearea of sustainability, for the third year running.BSH’s Greek subsidiary was awarded the silverprize and special award for particularly friendlyworking environment by the Greek CorporateResponsibility Institute.

Sales revenue by region 2012

In percent

As at December 31, 2012

5| T H E C O M P A N Y

30.7

Sales Region III (incl. Asia, NorthAmerica, Turkey)

3.7

Others32.6

Sales Region I(incl. Germany,Austria, EasternEurope)

33.0

Sales Region II (incl. Western andNorthern Europe,Baltic states, SouthAfrica)

Employees by region 2012

In percent

As at December 31, 2012

3 North America

1 Latin America

23 Eastern Europe(incl. Turkey)

25 Asia 31 Germany

17 Western Europe(excl. Germany)

6

» Our success depends on our customers’ trust. We make them apromise with our renowned brandsand high-quality appliances. Andwe do our very best to fulfill thispromise. «

Michael Gerber, Head of BSH Customer Service

Our business practices are based on a

business model accepted by society.

We develop and produce high quality

home appliances that make life easier,

while helping to protect the environment.

7| S U S T A I N A B L E C O R P O R A T E G O V E R N A N C E

BSH has always ensured that responsibility forthe environment, its employees and society isfirmly rooted in its corporate culture, and hasmade this responsibility an integral part of itsguiding principles. The sustainability strategyapproved in 2011 pools the Group’s business intosix areas of activity and focuses on further devel-oping them. Attention is currently aimed atexpanding customer service activities around theworld. Confidence is inspired among people, inthe market and in society, on the basis of reliablecustomer service and durable appliances.

Direct link to the customerIn 2012, BSH’s Customer Service grew to 7,000employees worldwide. This network of well-trained service engineers is a big selling point forBSH, because it is particularly important for cus-tomers in many countries. According to MichaelGerber, Head of BSH Customer Service, serviceand presence are key quality indicators: “In ourcore markets, which make up 90 percent of ourbusiness volume, we are available around the

clock: 24 hours a day, 7 days a week. We haveadditionally invested in terms of employeecapacity and training to ensure this presence.And our customers appreciate this.” Consumersin the United States and Asia also like the factthat BSH can be contacted directly, that special-ist engineers come right to the door and thatreplacement parts are kept for at least ten years.In China, for example, each new appliance can beinstalled by BSH Customer Service if so required.

In the best hands – throughout the world“At the same time, our extended online servicesare particularly beneficial for those customerswho want to sort things out themselves,”explains Gerber. BSH offers easy-to-understandinformation via its website, sometimes illustratedby short videos showing for example the rightway to descale a washing machine or clean apump. Some of these videos received 150,000hits last year alone. A welcome side-effect ofthese online services is that unnecessary cus-tomer service visits and the corresponding CO

2

emissions can be avoided, which in turn benefitsthe environment. For BSH, the digital revolutionhas led to an even greater focus on consumers.As more and more appliances are being boughtover the Internet, further services can be inte-grated with these online activities. For example,extended warranties, appliance accessories ordetergents and cleaning agents that can beordered at the click of a button. This is oftenappreciated by dealers, as they know their cus-tomers will be in the best “service hands”.

8

Foundations underlying our actionsThe BSH Corporate Principles form the founda-tions of our sustainable corporate governance.Guidelines for long-term corporate success aredefined in the following six areas: Customers,Products, Employees, Company, Environment andSociety. These guidelines also align with our sus-tainability strategy and breathe life into this phi-losophy. The overriding aim is to enhance thecore competences of BSH at all levels in the valuechain around the world, and further develop themin line with ecological and social requirements, inturn benefiting the company. After all, we seesustainable business practices as a competitiveadvantage and we want to position ourselvespermanently as a pioneer in the field.

Proof that BSH adopts such a pioneering role inthe sector can be seen from the German Sustain-ability Award which was awarded to us back in2008 as the first company, after an extensiveevaluation process. However, since then theexpectations of our stakeholders – from cus-tomers, employees and society to policy-makers– have continued to rise, in terms of climate pro-tection as well as responsibility in the supplychain. In Germany, where we produce 21 percentof our appliances and generate about 22 percentof our sales revenue, the move towards a sus-tainable energy policy places high demands onthe efficiency of products as well as production.

Responsibility and respect areour daily watchwords. Ouractions are based on the BSH Coporate Principles andsustainability strategy.

Current focal issues of the BSH sustainability strategy

Customers

Consumer

interests

Products

Super-efficient

appliances

Employees

Talent management

and qualification

Diversity and equal

opportunities

Environment

Resource-efficient

production

Environmentally

friendly logistics

9| S U S T A I N A B L E C O R P O R A T E G O V E R N A N C E

Focal sustainability issues 2012Our strategic sustainability activities in 2012focused on the topics of customer service, supplychain, energy efficiency, diversity and substancesand materials. With respect to the environment,our efforts continue to be geared towards imple-menting the ambitious “Resource Efficiency2015” program for factories and buildings. Inlogistics, we are still working on reducing CO

2

emissions with a target of achieving a 20 percentdrop in emissions by 2020. To instill the very ideaof sustainability in the minds of employees andintegrate it into their everyday work, we haveprepared a clear and concise presentation in Ger-man and English which can be viewed via theintranet. Workshops to introduce and discuss thestrategy have been run by the sustainability teamat subsidiaries in Belgium, Spain and Turkey. Themain aim of these workshops was to ascertainhow sustainability issues can be approached andimplemented in each specific country. Workshopswere also carried out with corporate departmentsProcurement and Sales under the banner of“Sustainability@Functions”, to work out howeach employee in BSH can contribute to achiev-ing the sustainability targets.

Using our own “Sustainability Index” from theresults of the 2011 employee survey, we deter-mined the extent to which BSH’s sustainability

activities are discerned and contributed to byemployees in the various sites and countries. The highest scores (over 70 out of a possible 100 points) were obtained in Israel, Portugal andTurkey, followed by Germany, Greece and Switzerland. The lowest although still perfectlyrespectable scores (over 60 points) wereobtained in Australia, Russia, Spain and theUnited Kingdom. We want to keep improving onthese results.

Structures for responsibilityThe Board of Management is accountable at thehighest level for sustainability and corporateresponsibility (CR) at BSH and, at the start of2011, set up a new department dedicated tothese issues: The Chief Corporate ResponsibilityOfficer leads a team of experts, and reportsdirectly to the Chairman of the Board of Manage-ment. He is supported by the CR Committee, withrepresentatives from 14 corporate departments,including Human Resources, Environmental Pro-tection, Corporate Technology, Product Areas,Sales and Customer Service.

Corporate Responsibility (CR) at all levels of the BSH Group

Decision-makingIncluding:

Management

Measures

Board ofManage-

ment

CR Depart-

ment

CR Committee

Depart-ments

Projects Experts

Customer Service

Sales

LogisticsCorporate Strategy

Corporate Technology

Product Areas

HumanResources

EnvironmentalProtection

10

This committee meets every two months to dis-cuss CR-related topics and decide on specificmeasures. Working groups are appointed acrossthe company to implement projects. They meetas and when required. Similar structures havesince been set up at BSH in Spain.

In dialog with our stakeholdersBSH maintains contact around the world withconsumer and environmental organizations, pol-icy-makers and researchers, as well as customersand residents – by encouraging direct discus-sions with them, holding open-day events at oursites, attending trade fairs and joining nationaland international industry associations as well asthe German Global Compact network. BSH joinedthe Deutsche Unternehmensinitiative Energieef-fizienz e.V. (DENEFF) back in 2011, a network ofpioneering companies. In view of the innovativestrength of our energy efficiency measures, wehave been a member of the climate protectionand energy efficiency initiative, a joint venture

between the Federal Ministry for EnvironmentalProtection, Federal Ministry for the Economy andGerman Chambers of Commerce and Industry,since the end of 2011. In fall 2012, we joined theEEBus Initiative e.V. This is where home appli-ance manufacturers, technology companies andpower utilities engage with each other in effortsto develop tomorrow’s electricity network, knownas the Smart Grid, into a marketable concept,thus contributing to the energy revolution. Wemaintain particularly close contact with con-sumer groups and organizations, from which BSHreceives regular requests and enquiries. At thesame time, we are involved in standardizationcommittees at national and international leveland regularly exchange views with non-govern-mental organizations (NGO).

Sustainability reporting and social mediaThe BSH Sustainability Report, which has beenpublished each year since 1992, forms a keybasis and component of our dialog with stake-holders. The report follows the guidelines set outin the internationally recognized Global Report-ing Initiative (GRI) and ensures that our actionsare verifiable and comparable using performanceindicators and other data. We also actively pur-sue an online dialog with customers, potentialemployees, organizations and the media, so wehave established a global social media strategy.In the process of implementing this strategy, thetwo social media managers at headquarters levelare supported by 50 social media officers in thevarious subsidiaries throughout the world, whorespond to requests and enquiries. By maintain-ing dialog with stakeholders, we obtain valuable

BSH’s Corporate Responsibility roadmap

Corporate Responsibilitydepartment established

Diversity Managementestablished

Performance indicatorsdefined

Group-wide communication on CR

Percentage of sales of super-efficient appliances increased to 31%

Company

Products and customers

Employees

Environment

Society

Increase percentage of sales of super-efficient appliances to 35%

Roll out talent management internationally, Increase emphasis in development pools and programs

on internationality and diversity

Reduce specific resource consumption in production and administration by 25%

Social commitment and responsibility in the regionsImprove contribution of energy-efficient home appliances to national energy saving targets

Implement sustainability strategyInclude sustainability targets in business planning

2011 2012 2013 2014 2015

11| S U S T A I N A B L E C O R P O R A T E G O V E R N A N C E

Organizing responsibility

We will not truly manage to achieve sustainability until we haveincorporated the content of our CR strategy around the world in alldepartments and processes. Because responsibility and sustain-ability form the building blocks and targets guiding all corporatedepartments, BSH has established a systematic structure to handlethe various topics. The BSH Board of Management is accountable atthe highest level. This demonstrates that for us these topics are nomere „nice-to-have“ issues, but are important factors for sustain-able success in the competitive arena.

Cultural change across all departmentsCorporate Responsibility and Sustainability (CRS) guides the vari-ous sustainability topics. The BSH CR Committee, with managersrepresenting all corporate departments, ensures that the topics areprocessed and decided on across all units and departments. Forinstance, at BSH, the decision to launch a pilot project on responsi-bility within the supply chain was not taken by Procurement on itsown. As the entire CR Committee was involved in the discussion, thevarious stages in the value chain were transparently identified aswell as the reciprocal effect that the various decisions may have.The same applies for projects such as the substitution of criticalsubstances launched by Product Development and EnvironmentalProtection, or the topic of Diversity which plays such a key role inother areas apart from HR work.

Internationalization as a challengeCR topics are cascaded throughout the entire international organi-zation of BSH, as a company that does business throughout theworld. After all, sustainability and responsibility are just as impor-tant in other regions of the world as they are in Germany or Europe.The ecological and social requirements on companies for examplein Asia, Australia and the United States have risen sharply. BSHcommunicates values via direct contact with the regions. It takes acertain amount of time and the face-to-face exchange of views, toconvey and embed the various values and organizational structuresin all the regions.

views and opinions about our sustainability top-ics. And we use these ideas to further developour objectives and activities.

Complying with values and lawsThe environmental policy, occupational healthand safety guidelines and Business ConductGuidelines are binding for all employees at BSHand at all levels in the value chain. In 2004, BSHcommitted itself to implementing the ten princi-ples of the United Nations Global Compact, pub-lishing a progress report each year on the Inter-net. A year later, we also signed the Code of Con-duct of the European Committee of DomesticEquipment Manufacturers (CECED), which weplayed a major role in compiling.

Integrity is a core strand of corporate culture atBSH. The BSH Business Conduct Guidelines,which came into force in 2006 and were revisedin 2011, set out our values and principles in deal-ing with each other as well as with business part-ners. They are mandatory for all employeesworldwide and provide them with guidance intheir daily activities. The existence of a common,binding framework is particularly important for acompany like BSH that operates across many dif-ferent countries, cultures and legal systems. Theimplementation of the guidelines is supported byour Compliance Management team, composed ofsome 50 compliance officers at our sites aroundthe world. Employees who wish to report abreach can contact the compliance officers or anindependent ombudsman. We take immediateaction in response to all reports, initiating appro-priate measures to deal with any non-compliantconduct.

To instill a strong awareness in all our employeesof the importance of values and integrity, we runa wide-ranging Internet-based training programin up to eleven languages. The program ismandatory for senior and middle management,authorized agents and customer- and supplier-facing employees, although all employees areentitled to make use of it. In 2012, over 25,000employees around the world completed web-based compliance training courses. Since 2009,Compliance has been a mandatory component ofthe management training offered by the BSHAcademy.

12

» We want our guests to feel at home and have fun. Sonot only does our kitchen have to look good and beconvenient for users, it also has to withstand a lot ofwear and tear. And thanks to Gaggenau appliances,we’ve managed to achieve this.«

Graciela Cucchiara,Owner of Kochgarage Munich

13| P R O D U C T S A N D C U S T O M E R S

In 2012, BSH sold around 47 million appliancesworlwide. We can attribute this success to our ability to identify what customers really want – irrespective of whether they are in Germany,France, the United States or China or whether theyshare an apartment, live on their own or have alarge family. Depending on the region or customergroup, we offer a variety of appliances supportedby the corresponding services. That’s why GracielaCucchiara, owner of Kochgarage in Munich, optedfor appliances from BSH.

The fun of cooking in high-tech surroundingsThe Kochgarage was established in 2009 in anold dairy in the middle of Munich. It is a trainingroom, lounge and kitchen all in one. It is a venuefor corporate events, birthdays and weddingsalike. Owner Cucchiara describes it as a “hybridconcept of cozy surroundings with high-techappliances from Gaggenau, lending the space anair of luxury”. Her passion for communal cookingin an unconventional setting has proven to be a

recipe for success: The Kochgarage is fullybooked six days a week, with up to 35 guests. “A robust refrigerator and reliable inductioncooktop are essential,” explains Cucchiara. It’salso important for the appliances to be easy tooperate, after all, guests want to have fun at theKochgarage trying out new recipes, chatting toeach other over the pans or preparing a weddingmeal together.

If you offer service, you need serviceFor events at the Kochgarage, there is thereforeno strict recipe to follow, but rather a directionfor the shared culinary journey is offered. “Wecook eight, nine, ten meals, combining ingredi-ents at will and in the end everyone tries a bit ofeverything,” explains Cucchiara. With largeevents in particular, there are often ingredientsleft over, so recipes are based on whatever inspi-ration Cucchiara and her team get from these sur-plus provisions. She calls this concept “Restlosglücklich” (tasty and waste-free), to encouragepeople not to waste food. When making a deci-sion about which appliances to buy, service wasa particularly important factor for Cucchiara, as“it’s vital for me that cooker and fridge workwithout any problems each and every day. If anyproblems do arise, I have a contact at BSH so Ican count on the fault being quickly repaired.” Allshe has to do is send a quick e-mail to CustomerService and she will be back up and runningagain after a few hours.

Our customers around the world are won

over by quality, design and convenience.

The proof of this can also be seen in the

tests regularly won by our appliances.

14

Spotlight on the usage phaseAround the world, our customers expect us tounderstand their needs and offer them innovativeand reliable products geared to what they want.In the process of developing products, our engi-neers therefore have to place the spotlight onconserving resources while ensuring the qualityand longevity of appliances.

Our customers are supposed to be able to usethe products for as long as possible, so over 80percent of environmental impact occurring over aproduct’s lifetime is attributable to the consump-tion of energy, water and detergents in house-holds. The systematic Product EnvironmentAnalysis (PEA) developed by BSH is used as aguideline for continually improving resource effi-

Our products stand out on account oftheir quality, resource efficiency andease of use. For even greater cus-tomer satisfaction, BSH engineerskeep developing internal standardsand working on improvements to ourappliances.

Recycling

Energy consumption

Home appliances withenergy efficiency class A

Energy consumption

Super-efficient appliances

Up to 95 percent of theenvironmental impactoccurring over a homeappliance’s lifetime isattributable to the usagephase. Super-efficientappliances enable thispercentage to be signifi-cantly reduced, which iswhy the development ofresource-conserving prod-ucts is BSH’s most sus-tainable contribution toenvironmental and climateprotection.

Environmental protection throughout the entire product lifecycle

90 – 95%*

Usage phase80 – 89%*

Usage phase

Distribution

Usage

Production

Disposal

* Depending on the appliance category Source: BSH

15| P R O D U C T S A N D C U S T O M E R S

ciency in the manufacturing process as well as inthe usage phase. It is compulsory to perform aPEA for all development projects.

Innovations and qualityMany departments work together at BSH toensure further developments in home appliancetechnology on an ongoing basis: from TrendResearch through Development to Marketing,Sales and Customer Service. They provide infor-mation and identify potential areas for improve-ment. They are supported in their work aroundthe world by 60 employees in the patent organi-zation. Before a new model comes onto the mar-ket, it will have undergone a large number ofinternal tests. The wealth of product tests andawards provide ample proof that this extensiveinnovation management is worth the effort andthat our products are appealing for their quality,efficiency and ease of operation: In 2012, 170 ofthe 395 awards in Europe for „Best Buy“ or „TestWinner“ went to BSH appliances. So once again,we produced the biggest number of winners inGermany and in the international competitivearena. In 2012, our heat-pump dryer received thetop rating, “very good”, in the environmental per-formance category from consumer goods testingfoundation Stiftung Warentest. In the UnitedStates, we received the “Energy Star® SustainedExcellence Award” – among other things for thedishwasher with the lowest energy and waterconsumption in the country.

Consistently super-efficientWe have been able to reduce the consumptionfigures of our home appliances significantly overthe last 15 years by continuously working oninnovative technology: In 2012, a washingmachine used up to 53 percent less electricitythan a comparable appliance 15 years ago, andwe have cut water consumption by 35 percent.

BSH innovations at IFA

For the fifth time in a row, BSH took part in the IFA (interna-tional consumer electronics trade fair in Berlin) in September2012, exhibiting its main brands Bosch and Siemens. Overrecent years, the event has grown into one of the leadingtrade fairs in the home appliances sector. Our exhibitionstands offered technology for people to experience up close,attracting more prospects than ever before. Visitors to thetrade fair were given an overview of the future of the net-worked household and shown the most efficient products intheir class. A perfect example was a new washing machinewith a power consumption rating of 40 percent below thelimit value for the best energy efficiency class A+++. A furtherhighlight was a new fridge, which only uses half as muchenergy as an 18-watt energy-saving light bulb, with an energyconsumption of 75 kilowatt hours.

With 31%, the share of

BSH’s Super Efficiency Portfolio in

its overall sales doubled in 2012

compared to 2009.

2009

Sales of our super-efficient appliances

Sales in the countries under review in thousands of units*

**2011

**2010

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

*** EU-27, Croatia, Norway, Switzerland (2012 incl. Turkey)*** Limited comparability with 2010 due to more stringent selection criteria

(new EU energy label in 2010)*** Limited comparability with 2010 and 2011 as selection criteria changed

(product category „electric ovens“ added)

3,500

Share of total sales of theproduct groups under review

Super EfficiencyPortfolio

28%

***2012

***

3,975

31%3,117

26%

1,804

15%

16

For the fourth time in a row, we grouped our mostefficient appliances together into one Super Efficiency Portfolio in 2012. For this, the bestenergy efficiency class for each category avail-able on the market is considered, with the next-best class also included where appropriate. Inthis case, the structural market share made up ofthe best energy efficiency classes must notexceed 15 percent. We raise the benchmark eachyear with our Super Efficiency Portfolio and haveall our figures reviewed by auditors. This seg-ment of the most economical appliances on themarket bought by customers to be environmen-tally friendly and save money has been goingfrom strength to strength since 2009: In 2012alone, the share of this segment rose from 28 to31 percent of our total sales. In private house-holds, the purchase of a super-efficient appliancewill have paid for itself after just a few years.

Reliable customer serviceThe promise of quality and reliability inherent inour products also extends to the support serviceswe provide. Reliable customer service is of theutmost importance, particularly with appliancesdesigned to last a long time. Our customers

expect professional and personalized support,and we deliver this with our 7,000 or so employ-ees around the world. Wherever we sell BSHappliances, we have set up a service network inline with market conditions, either via our owncustomer service engineers or via selected part-ners. All our service specialists are trained throughclassroom and web-based training on the latesttechnologies and customer relations. In China,South Africa and since 2012 the Philippines too,we have been working in cooperation with localtraining institutes to provide on-site training forfuture engineering talents. Our customers cancontact us at any time. In our core markets, whichmake up 90 percent of our business volume, weare available by phone around the clock. And toensure that our customers are satisfied with theirappliances for years to come, we hold a stock ofessential spare parts for at least ten years.

Aiming for satisfied customersTo find out more about how satisfied our cus-tomers are with BSH’s products and service, wecarry out annual customer surveys in nearly all thecountries in which we operate. We use the resultsto improve our customer services as well as fur-

Customers as a compass

Our appliances are meant to be easy for consumers tooperate. So if we want to innovate, it is now more thanever essential to take customer needs and wishes intoaccount as early as possible. BSH adopts a number of different instruments to do this. For example, we examinehousehold usage in the various countries to ascertain cus-tomers’ needs as well as culturally-specific differences –for instance in washing clothes or storing foodstuffs. Cus-tomer online responses also provide key pointers aboutareas for improvement and are systematically collated andanalyzed to feed back into product development.

150,000 hits

from consumers in 2012 for

our online videos showing

useful tips on how to use and

maintain our home appliances.

17| P R O D U C T S A N D C U S T O M E R S

ther develop our appliances. Over recent years, wehave managed to continuously improve our satis-faction scores, from 1.95 in 2008 to 1.87 in 2012.What’s more, various independent studies havesubstantiated our claims of service quality. Forinstance, in 2012 we were awarded the prestigious“KVD Service Management Award” for our Serv-ice24Plus customer service concept in Germanyfor automatic coffee makers. We received highscores from the Kundendienstverband e.V. for therapid processing of service requests and the highquality of our service and repair work in particular.In Spain, we were the first company in the sectorto win the “Madrid Excelente” award for our highquality customer service and our contribution toregional development.

We want to keep improving our service activitieson an ongoing basis, so we involve customers inthis process in various ways. All suggestions orconcerns are systematically collated and ana-lyzed, and form an integral part of the process ofoptimizing our products and services, whetherthey are received by engineers on site, call centeragents via the telephone or online.

Training for retailEven though consumers increasingly find outabout our products via the Internet, retail storesprovide an essential link with customers and pro-fessional consulting is key for the success of ourappliances. BSH plays its part by providingextensive information and free training for spe-cialist dealers. In April 2012, we opened newtraining and conference centers in the Germancities of Hamburg and Essen. The buildings arecovering an area of around 2,000 square meters.In addition to workshops and coaching sessions,web-based training was extended to the interna-tional arena in the year under review to qualifydealers. For instance, our recently extendedtraining tool “netTrainment 2.6” can now be usedin China and the United States. Up to now, a totalof around 21,000 dealers completed these onlinetraining courses.

Digitization as an opportunity

The Internet has developed into a core hub for providing informa-tion and doing business. Up to 80 percent of all consumers doresearch online before they decide on which home appliance to buy.In other words, information on products and service now has to beeven more extensive, while remaining easy to access on the WorldWide Web. Companies have the option of entering into direct dialogwith consumers and finding out what they think of their productsand processes. The opportunities and challenges presented by thedigital age and networking are consistently incorporated into ourstrategic business decisions.

Spotlight on customer requirementsNever before have consumers been able to find out about productsor services so quickly and easily. BSH sees this new transparency asan opportunity for serving customers’ needs with even greater pre-cision. We continuously update our brands, offers on services oraccessories on our websites. As part of corporate project “DigitalTransition”, BSH is making sure that its Customer Service, Sales orMarketing are fit to take advantage of new requirements and fea-tures in the online world. Clear and understandable information onour brands and products is provided via easy-to-understand videos,texts, photos and graphics, referred to as “digital assets”. If, despitethis wealth of information, customers require professional assis-tance, they can telephone our Customer Service or book anappointment online.

Social media as a success factorThe presence of our brands on Facebook, YouTube, Twitter or otheronline platforms is vital for our success. We make use of socialmedia in caring for our customers, making contact with them whenwe can be of assistance: How do I top up the salt in my dishwasher?How often do I have to descale my automatic coffee maker? Wherecan I order a baking tray that matches my cooker? The topics con-cerned vary considerably and need a rapid response. We train ourCustomer Service employees so that they can respond effectively tothese new trends in the social web.

18

» In Russia we appreciate the reliability of BSH – as employees and ascustomers. My team works to help get an even better understandingof the needs and wishes of Russian consumers, so we can offer themthe right products.«

Elena Polontchouk, Head of Marketing Major Domestic Appliances,BSH Russia

19| E M P L O Y E E S

International growth requires that BSH recruitsqualified employees in every country, retains themwithin the company and further develops them.This also applies to Russia, where BSH set up asales company back in 1996, with operations atits first factory starting in 2007. This huge coun-try is now one of the most dynamic and impor-tant markets for BSH. At the sites in Moscow andSt. Petersburg, there are now over 1,300 employ-ees working in production and administration.Elena Polontchouk is one of these employees.She joined the company via BSH’s internationaltrainee program in Germany and is now responsi-ble for the marketing of BSH Major DomesticAppliances in Russia from her Moscow office.

Fierce competition“In Russia too, qualified experts are becomingincreasingly scarce,” acknowledges the 35-year-old: “There is fierce competition, so it is impor-tant for us to stand out from the field as an inter-national company.” Competitive advantagesinclude the company’s fair and transparent con-

tractual conditions, voluntary social benefits pro-vided by BSH and its open communication cul-ture. The native Russian, who has already workedin a number of different international locationsfor BSH and recently joined the InternationalExecutive Pool, a talent management program forinternational executive functions, is very familiarwith the company and the challenges it faces.And this stands her in good stead in her dailyactivities: “Over the last ten years, as a traineeand member of the Junior Executive Pool, I’vemade invaluable contacts internationally andacross departments. I regularly exchange viewswith my colleagues about marketing strategiesand activities in regional markets.”

International yet regionalWhen buying home appliances, Russian con-sumers look out for quality, performance anddesign. Yet Polontchouk is also very aware of theimportance of regional differences: “BecauseRussian kitchens and bathrooms are relativelysmall, customers usually opt for slimline washingmachines and dishwashers. The Russian variantsof our appliances have a specially adapted inte-rior arrangement to make room for instance forthe typical three-liter jars you get here and thelarge pans big enough to feed the whole family,not to mention the economy-size packs of food inthe fridge.” A further key factor for customer sat-isfaction is maintaining dialog with consumers.“Since this year, customers can now not only con-tact us via the info line, but also via the popularRussian online networks,”, explains the market-ing expert.

The best way of achieving optimum results

is to have the most suitable employees.

A good work-life balance and attractive

international development opportunities

go a long way to help ensure this.

20

BSH as an attractive employerOne of BSH’s ongoing challenges is to recruitqualified young talents and develop the mostsuitable employees. “Employer branding” at BSHstands for a large number of measures with theaim of being an attractive employer worldwide.Proof that we are managing to meet this aimcame at the start of 2013 when the CRF Institutecertified BSH as best employer for engineers inGermany. In the categories of innovation man-agement, primary and secondary benefits andwork-life balance, BSH was declared the overallwinner. At the same time, BSH was rated for theseventh time in a row as one of the “Top Employ-ers in Germany”. We are also ranked among thetop employers in Belgium, the Netherlands,Poland and Spain, and have received the “TopEmployers Europe” award for the first time.

Ensuring effective diversity management is anincreasingly important criterion for our attractive-ness as an employer: Promoting diversity in staffis firmly embedded in BSH’s corporate strategyand plays a key role in its sustainability strategy.With our own Diversity Management department,we have been positioning ourselves as an inter-national company for some years now, and havealready formulated targets in eleven countries fortheir share of international employees and pro-portion of women in overall headcount figures. In2012, increasing emphasis was also placed oninternationality and diversity in our developmentpools and programs.

International personnel developmentThe more international our activities, the moreimportant it is to ensure strategic talent manage-ment, so that employees with potential for inter-national careers can be identified and offeredattractive development opportunities. To thisend, we focused in 2012 on continuing to interna-tionally expand our talent management. At allsites, the annual employee dialog forms the basisfor identifying potential and individually develop-ing competencies. Our Junior Executive Pool (JEP)and International Executive Pool (IEP) are sys-tems we have set up to offer development oppor-tunities tailored to selected talents around theworld. In 2012, 44 percent of members came frominternational BSH companies. Approximately 600BSH employees belonged to the JEP, 30 percent ofthese being women. The IEP had 85 members, 19 percent of them women. The Senior Executive

BSH stands for diversity, contin-uing qualification and learning,and international developmentopportunities. In 2013, we wereawarded the „Top EmployersEurope“ prize for the first time.

20112009

Apprentices and trainees*

Number

20122010

500

400

300

200

100

0

452446451

26

447

302830

Apprentices Trainees* Germany only

20112009

Expenditure for training and personnel development*

In millions of euros

20122010

15

12

9

6

3

0

7.06.76.4

13.2

6.6

13.1

11.511.0

Training Personnel development* Germany only

21| E M P L O Y E E S

Program (SEP) for members of senior manage-ment had 27 members, of whom 33 percent camefrom international subsidiaries and 19 percentwere female. We have successfully introduced across-department platform for succession plan-ning in senior management and filling vacanciesin key roles that are difficult to recruit for. At theend of 2012, 321 BSH members were sent oninternational delegations. After increasing by 50percent last year, the number of those coming toGermany or moving between subsidiaries outsideGermany rose again by nearly 15 percent.

In 2012, we extended our Project Managementcareer path in China, France, Spain, Turkey andthe United States to also include Poland and Rus-sia. Employees can further develop as ProjectManagers, Senior Project Managers or ProjectDirectors in product and factory projects and ITsupport projects. For employees with significantstrategic know-how, we have internationally re-aligned development perspectives of experts.The Group’s own BSH Academy runs systematicand demand-oriented qualification courses for allemployees. It offers classroom training as well asan online portal for web-based training. To guar-antee high quality personnel development at allsites, seven subsidiaries have their own BSHAcademies, in addition to Germany.

Building on the foundations of talent managementThroughout the world, we trained 838 young tal-ents for a future career with BSH. An essentialcomponent of this development are dual studiesin a total of 17 different professions from mechan-ical engineer to industrial business administratorin Germany. But we also successfully run localvocational training for example in China, Turkey,Slovakia and soon in Spain as well, offeringyoung people the option of acquiring profes-sional qualifications locally. For example, inChina, we have trained 649 young people sincethe program started in 1997. We are thereforeconsidered as a pioneer in the region. BSH offersa course for motivated high school graduates at acooperative university. Our trainees gain experi-ence working at sites inside and outside Ger-many in a 12- to 15-month international program,

2013

Compliance training

(web-based)

Classroom

training

BSH Academy 2012*

Number of participants

Web-based

training

60,000

48,000

36,000

24,000

12,000

0

26,603**

50,800

22,539

* As of 2011, the indicators for all BSH Academies at German locationswill be included in the total figures. As a result, the 2011 figures arenot directly comparable with the figures from previous years.

** In up to eleven different languages

Our success is based on excellent HR work. This is illustrated bythe many awards we have won: In 2012, we received the “HRExcellence Award” from the specialist periodical “HumanResources Manager” for our systematic executive developmentactivities. For its outstanding professional learning and qualifica-tion management, BSH was honored with the German EducationAward as “Company of Excellence”. The BSH site in Traunreut(Germany) was awarded the Bavarian government’s “JobErfolg2012” integration prize for the extensive facilities to integrate per-

sons with disabilities. Thejury were impressed by theadapted workplace layout,seven percent proportion ofpersons with a severe dis-ability and integration ofworkshops for persons withdisabilities.

Excellent Human Resources management

2013

2011

45.4

1.8

4.8

1.0

2.1

22

which attracted 26 students from ten differentcountries last year. Our various alliances withselected universities support us in the process ofrecruiting talented individuals at an early stageas well as retaining them. The students@BSHprogram provides us with a means of maintainingcontact with students who used to work for BSH.To encourage girls to consider a course in a tech-nical discipline, BSH takes part in the annual“Girls’ Day” event, opening the doors of some ofits sites in Germany.

Promoting equal opportunitiesAround 30 percent of BSH’s workforce – and 19 percent of its managers around the world – arewomen. To keep increasing this share, we haveset clear targets for example for the internationaltrainee program and our development pools.Also various mentoring programs for womenhave been set up, to increase the number ofwomen in managerial positions. When selectingpersonnel, we ensure that consideration is givento women who have the same ability and thatremuneration is calculated on the same perform-ance scales as men.

In dialog with employeesThe employee survey introduced in 2007 is a keyinstrument for measuring the commitment andsatisfaction of our employees every two years. Inthe year under review, BSH focused on the fol-low-up activities of the 2011 survey and targetedmeasures for improvement. In 2012, we rolledout the BSH monitoring tool required for theseactivities at international level. The tool is nowused in 30 countries. In 2013, employees will besurveyed simultaneously for the first time in all47 countries. Tools such as the Human Relationsbarometer for employees in the Production function, or the Feedback for managers are fur-ther means of encouraging an open exchange ofviews. After international rollout in the Nether-

lands, Slovenia and Poland, the Feedback toolwas also extended to subsidiaries in France andRussia in 2012, and preparations have also beenmade for rollout in China and Turkey. We havecontinued to develop the “In Dialog” online plat-form giving people the opportunity to ask man-agement questions.

Employees or their employee representative bod-ies are also given the chance to exchange viewswith the BSH Board of Management via the Euro-pean Committee set up in 1996 covering all coun-tries. Over 100 employee representatives ofregional companies in Europe sit on this informa-tion-sharing and consultation forum.

Health and safety at workAccident figures recorded at BSH worldwide havebeen going down steadily for years now. In 2012,we recorded a rate of just seven accidents permillion working hours for the first time. The topicof occupational safety has been firmly embeddedin our processes and procedures for over 20 years.Other factors in helping us achieve this includecompany doctors at nearly every site, workscouncils and ongoing awareness campaigns forsafe working processes by safety engineers.Every two years, work economists and plannersaround the world carry out an ERGO check to

2012

38.4

1.7

4.8

1.4

3.3

* Because of changes made in how data is collated, particularly inChina and the United States, a comparison with values from 2011 isnot possible.

International work-life balance models*

Percentage of employees taking up this offer

Flexible working hours

Teleworking/home office

Part-time work

Parental leave

Trust-based flextime

23| E M P L O Y E E S

ensure that workplaces at our production facilitiesare ergonomically set up. The average age ofstaff has been going up in most industrial coun-tries. To help integrate older employees withhealth restrictions in the work processes, wehave now set up new assembly lines at four pro-duction sites in Germany. In future, we will imple-ment the lessons learned at international level.

Social benefits and fairnessBSH generally provides its employees with socialbenefits calculated on a country-specific basis,which go beyond legal requirements. They arevoluntary and are issued taking specific regionalconditions into account. In Germany, BSH offersretirement benefits to employees via its own pen-sion fund. In 2012, BSH made payments totalingaround 45 million euros from this fund to formeremployees. In Germany, the employer contribu-tion for lower and middle income groups paid byBSH went up by 22 percent compared with 2011within the scope of the employee-financed pen-sion fund (Rente-Plus).

The employment of temporary workers enablesBSH to cope with peaks in production and offersa certain level of flexibility. In this respect, weonly engage temporary workers from companieswhich employ their workers according to theapplicable collective agreement. Otherwise, weoffer the working conditions applicable for com-parable BSH employees, including the correspon-ding remuneration. As a member of the “FairCompany” initiative, we also guarantee reason-able levels of pay for interns.

Ensuring a balance between work and life

At BSH, ensuring a work-life balance means achieving an equilib-rium between work, leisure time and family. BSH attaches impor-tance to ensuring that employees have sufficient time for their pri-vate activities and goals in addition to fulfilling their professionaltasks. After all, our success is based on having balanced and moti-vated employees.

Part-time models as a basisThe reasons for part-time employment may be varied and differdepending on the employee’s stage of life. BSH offers part-timework models tailored to meet individual requirements, whether it isto support children, look after a dependent or pursue a goal in one’spersonal or professional development. For example, our employeeswere able to take advantage of flexible working models, such aspart-time working in 60 percent and working from home in 37 per-cent of our companies worldwide. In Germany, the share of employ-ees working part time in 2012 was 10.5 percent. We also offer theoption of taking a sabbatical of up to one year, for example to carefor a dependent or fulfill private projects.

Active family supportWe developed a number of measures in 2012 to help our employeescombine work with family life. For example, the option for employ-ees to take parental leave in addition to maternity leave is offered in72 percent of all subsidiaries. 86 percent of employees taking upthis option in 2012 were women. But men are also increasingly tak-ing advantage of this option. At the Munich site, we generally offereach of the around 2,000 employees a childcare place, in coopera-tion with several day-care facilities. Compared with 2011, we haveincreased the number of childcare places by 75 percent and plansto increase this further still are under way. And for the first time in2012, BSH offered employees at the Munich site the option of careduring school holidays for primary school children. We also providesupport in combining international careers with family life: At thestart of 2013, we introduced support for accompanying partners ofexpatriates as well as financial assistance for childcare in the for-eign country.

In 72% of our

subsidiaries around the world,

employees have the option of

taking parental leave in addi-

tion to maternity leave.

24

» With our environmentally-friendly transportationsystems, we’ve been very successful in reducingCO2 emissions and costs in the logistics chain.And if trains could also cross the bridge over theBosphorus, we’d be even further forward. «

Torsten Genehr,Head of Logistics, BSH Turkey

25| E N V I R O N M E N T

BSH has been striving consistently to conserveresources and reduce environmental impactsince the early 1990s. Innovative logistics con-cepts boost these efforts considerably. An excel-lent example can be seen with our two containertrains. Since spring 2013 they have been runningtwice a week between the BSH sites of Cerkezköy(Turkey) and Giengen (Germany). The concept isunique in the sector: A train conveys appliancesto the cargo-handling terminal at Giengen, whereit is loaded with production materials for thereturn journey. A single train therefore replacesaround 60 trucks.

Consistently ensuring low emissionsWhen Torsten Genehr, Head of Logistics at BSHTurkey, talks about the various measures taken,it sounds as inspired as it is carefully thoughtout. The underlying concept is ambitious, utiliz-ing all possible options of reducing CO

2besides

switching to container trains: “We have checked,

tried and tested everything, and are now puttingall that we’ve learned into practice, step by step.In the end, the savings generated will be in thesix-digit region.” As Head of Logistics, he isresponsible for transporting merchandise fromthe six factories at the BSH site in Cerkezköy inTurkey, which produces over four million largeand small home appliances each year. But hiswork does not just involve exporting and import-ing appliances – the provision and storage of pro-duction materials fall within the overall scope oflogistics and supply chain management at BSH.So the integrated concept in Turkey includes anew warehouse in Cerkezköy, which was com-pleted in 2012. It is built to the highest standardsin terms of heat insulation, with plans to installsolar panels on the 47,000 square meters of roofspace.

New transport routesThe two goods and materials warehouses inCerkezköy cover a total area of over 100,000square meters. “We serve all markets from here.By ship or rail. A maximum of five percent ofappliances leave by truck,” explains Genehr. In his opinion, there is still a need for furtheroptimizing the way goods are transported withinTurkey. This is still primarily done by truck.“There is not yet any bridge or tunnel for freighttrains to cross the Bosphorus. If this infrastruc-ture was available, we would also handle a lot of our national freight transport operations byrail,” says Genehr with conviction.

Going easy on resources says it all

for BSH. This applies not only to

appliances but also to their entire

life-cycle, from production through

logistics to disposal.

26

Environmentally friendly productionExtensive environmental protection has been anintegral component of our value chain for over 20 years now – it is also an important source forinnovations. We meet the challenges presentedby climate protection by using resources intelli-gently in production and in our products. BSH’s“Resource Efficiency 2015” project launched in2010 provides an excellent guide in this respect:The aim of the project is to reduce the specificconsumption of energy and water resources by25 percent by 2015 at all production and adminis-trative sites. The project is focusing on the pro-duction processes that are similar across all BSHfactories, such as injection molding plastics,enameling and pressing. BSH has drawn up tech-nical guidelines on how to work in an energy-effi-cient way when operating environmentally rele-vant machinery and equipment, such as pumps,drives, compressed air devices, conveyors, heat-ing and lighting. But savings are also achieved inadministrative operations: For example, by dis-connecting an old telephone system at the com-pany headquarters in Munich, around 62,000kilowatt hours of electricity are saved each year.

And by virtualizing servers at the BSH site inCerkezköy (Turkey), it was possible to reduce theamount of energy consumed by the IT infrastruc-ture by 68 percent.

International management systemsTo achieve our challenging targets, we haveestablished clear structures and workflowsaround the world: Every BSH site has its ownenvironmental protection officer and occupa-tional health and safety expert, who report to the Environmental Protection and OccupationalSafety department at Group headquarters. Thisdepartment draws up mandatory corporateguidelines and conducts internal audits to moni-tor their compliance. All BSH production sites arecertified to ISO 9001 (quality) and have an envi-ronmental management system. At the start of2013, the factories in LaFollette (United States)and Callao (Peru) were certified to ISO 14001(environmental management), thus completingthe BSH-wide certification of all sites. Since early2009, BSH’s rules and regulations governingoccupational health and safety management havebeen carefully based on international standardOHSAS 18001.

Our entire value chain is focused on usingresources intelligently, from developmentthrough production to the finished product.Our engineers therefore always take intoaccount the substances and materials used,and the amount of energy and water con-sumed.

27| E N V I R O N M E N T

Product-related environmental protectionOur home appliances are designed to last a longtime. So the usage phase has the biggest shareof impact on the environment throughout theproduct lifecycle. As a result, BSH engineersalways aim for the lowest possible consumptionvalues when they are developing the products.Back in 1998, we were awarded the environmen-tal prize by the Federation of German Industry forthe Product Environment Analysis system (PEA)we developed. In the process of developing newproducts or further developing existing products,the system aims to improve the environmentalaspects and performance indicators of the prede-cessor model, especially in terms of energy effi-ciency. We are working on integrating the PEA inthe future with the recovery of resources at theend of the product lifecycle, in addition toresource efficiency concepts. One aim is to recir-culate materials in production cycles. The Euro-

pean resource efficiency strategy “Reuse-Recover-Recycle” (RRR) also serves the same purpose.This represents an approach that opens up newperspectives in relation to the materials used.

It is important for us to pay great considerationto the use of substances and materials, espe-cially in view of the scarcity of raw materials. Ourdevelopment engineers are stepping up theirefforts to research the use of alternative materi-als. For example, for our washing machinemotors, we only use permanent magnets whichno longer come from rare earths but are pro-duced from ferrites.

In October 2012, the BSH cooker factory inTraunreut (Germany) was awarded theBavarian Energy Prize for its “Energy Effi-ciency Initiative”. The aim of the initiativeis to reduce specific energy consumptionby 25 percent in five years. By optimizingthe factories and buildings and increasingemployees’ awareness, it has been possi-ble for the site to save almost ten millionkilowatt hours of energy since 2009 –enough to supply a community of 2,500inhabitants for a year. Over 170 measureshave been implemented so far. The newenameling oven alone saves around100,000 cubic meters of natural gas a year.

Bavarian Energy Prize

Many of the suggestions and ideas put forward byemployees have already resulted in improvementsand cost savings. Asking employees for ideas, put-ting them to specific use and pooling the feedbackworldwide is the aim of the company suggestionsinitiative, which has been operated at BSH rightfrom its foundation. In 2012, BSH launched itsfourth annual innovation prize for its employees.The quietest bagless vacuum cleaner was named asthe most innovative product. Induction cooktopswith an intelligent energy controller for all cookingzones were awarded the prize of Technology of theYear. Every three years, we reward our employees’innovations in the category of environmental andsocial responsibility with a special prize within thescope of the BSH Best Practice Award.

Suggestions from employees

28

Transport and logisticsFor many years, BSH has been focusing on envi-ronmentally friendly concepts and has set itselfthe goal of reducing CO

2emissions in its goods

transport activities by 20 percent by 2020 com-pared with 2006. In 2012, as a key factor in theprocess, we were able to increase the share oftransport by rail or ship by 40 percent comparedwith 2006. This achievement was helped by thenew container terminals at Giengen, Nauen,Traunreut (Germany) and Cerkezköy (Turkey).

While growing numbers of railway operators arestopping single wagon-load traffic, BSH is work-ing on coordinating the transport of goods andmaterials so that block trains can be loaded withfreight. Since 2012, four such trains have beentravelling each month from Giengen to Moscowcarrying around 165 containers. By switchingover to intermodal transport, CO

2emissions on

this route have been reduced by 27 percent. Inaddition, several times a week, block trains travelto the ports of Hamburg, Bremerhaven, Triesteand back again, as well as to France, to and fromTurkey, and from Poland to Germany. There areplans to extend these routes to Spain and Scan-dinavia. Goods are also transported by ship toChina from the ports of Hamburg and Bremer-haven. BSH has also been exploring new avenues

in road freight traffic and, in fall 2012, begantransporting its appliances in extra-long trucks inGermany: Each day, the new 25-meter multipletrailer trucks transport 280 large appliances tovarious sites in Germany from the BSH logisticscenter in Giengen. The extra-long truck provides40 percent more transport volume while saving20 percent in CO

2per transported appliance com-

pared with conventional trucks. The project formspart of a five-year field test initiated by the Ger-man Federal Ministry of Transport.

Environmental aspects in customer serviceMany of the 7,000 or so people we employ aroundthe world in the field of customer service are onthe road each and every day, generating traffic-related CO

2emissions. Here too, our target is to

reduce emissions. For example, by planning routesto optimize journeys or using low-consumptionvehicles. In congested urban areas, where shorterdistances have to be covered to visit customers,we are currently piloting electric cars, and in Chinaand India we are using electric scooters. Since2011, the international BSH spare part warehousein Fürth (Germany) has also been using theGoGreen service run by Deutsche Post DHL to dis-patch spare parts throughout the world: 35 per-cent of our shipments were dispatched with neu-tral climate impact in 2012.

Sales packaging

2011 2012 2011 2012

Transport packaging

Proportions of packaging materials

In percent (basis kg, Germany)

100

80

60

40

20

0

Wood Polyethylene film

Paper and cardboard Polystyrene

12

92

3

5

92

3

5

20122011

Export transport volume

As a percentage of the total transport volume (from Germany)

100

80

60

40

20

0

Rail Truck Short sea shipping (Europe)

Sea (general)

38

13

36

7

42

13

38

13

5

32

51

12

6

33

49

29| E N V I R O N M E N T

Disposal and recyclingAs the largest home appliance manufacturer inEurope, BSH is a member of over 20 nationaltakeback schemes. We take our responsibilityvery seriously, for example in 2008, we set up acertified quality assurance system to inspect theprocess of recycling fridges adopted by our dis-posal service providers in Germany. Spurred onby positive feedback from this system, we arecommitted to introducing a standard Europe-wide audit system to ensure recycling quality.

In 2012, new European legislation was intro-duced for taking back and recycling electric homeappliances in the EU. Member states can now setminimum quality standards for how electrical andelectronic equipment waste is handled. In trans-posing the directive into national legislation inthe member states, BSH is committed to ensur-ing that these future standards are mandatorilyincorporated into the respective national legis-lation, so that standard Europe-wide qualityrequirements are guaranteed for taking back andrecycling waste equipment.

Environmentally friendly goods logistics

The area of transporting goods is growing throughout the world. InGermany alone, the overall volume has doubled since 1990. AndBSH has played its role in contributing to these figures. As a pioneerin the sector, it continues to reduce the resultant environmentalimpact – and be as environmentally friendly and resource-efficientas possible in all areas of the value chain in accordance with its ownobligations. We have set ourselves the ambitious target of reducingCO

2emissions in goods transport activities by 20 percent by 2020

compared with 2006.

CO2 emissions from transporting finished appliancesSince 2006, we have been calculating our CO

2emissions from the

transportation of finished appliances in accordance with Europeanstandard EN 16258. The new calculation reflects all transport fromGerman warehouse locations to recipients around the world. Itincludes the delivery of goods to retailers in Germany, as well asinternational transport to the regional warehouses (Scope 3). Essen-tially by reducing the number of transported goods, the absolute CO

2

emissions in 2012 dropped to 89,048 metric tons compared with theprevious year. However, with respect to the base year 2006, feweremissions were saved than in 2011, which is mainly due to a changein product structure, the temporary stoppage of the train to Russiaand a higher share of domestic transport, i.e. by truck, in 2012.Although we were not able to fully offset these negative factors bymeans of our measures to reduce CO

2emissions, such as combining

the transportation of production materials with finished appliancesor using extra-long trucks, we still expect to meet our emissionreduction targets for 2020, in particular by systematically optimizingthe utilization of transport capacity.

Since summer 2011, BSH’s company carguideline has been setting clear incentives:Each employee receives a monthly financialallowance if they opt for a vehicle with emis-sions that fall below the limit of 130 gramsof CO

2per kilometer. This limit is applicable

in the European Union as a target value forcompany cars for 2015. By means of thisguideline, BSH aims to promote a shift inawareness throughout the company andcontribute to environmental protection atall levels.

Economical company cars

20122011

125

100

75

50

25

0

20

16

12

8

4

0

98.2

CO2

emissions – absolute CO2

savings in percent compared with base year 2006

CO2

emissions without savings according to comparative calculation (base year 2006)

All data has gone up compared to 2011 as an adjustment was made to meet new requirementsfor tank-to-wheel and well-to-wheel emission factors.CO

2emissions according to Scope 1 and Scope 2 (carbon footprint) are reported on page 37. 

CO2 emissions – transport of finished appliances

In thousands of metric tons Savings in percent

2010

101.992.6

82.3

94.7

105.2

89.0

4 million spare parts were

dispatched around the world

by BSH in 2012 with neutral

climate impact.

2006 (base year)

30

» Energy-efficient home appliancesplay an important role in the processof moving over to sustainable ener-gies. As a federation, we focus onpresenting a whole package of proposals for the government to promote via a specific energy efficiency policy. «

Frauke Rogalla, Policy Officer Energy Economics, Federation of German Consumer Organisations

31| S O C I E T Y

The number of people on our planet is growingrelentlessly. And as their standard of living rises,so too does global energy consumption. Societyis faced with the challenge of meeting the demandfor energy while advancing the cause of climateprotection. Super-efficient home appliances arejust one example of how significant potential forsaving energy can be realized if manufacturersand consumers join forces. Clear information andsupport from policy-makers are essential forachieving this – and these are the objectivessought by the Federation of German ConsumerOrganisations.

Political support neededAs an energy expert for the federation, FraukeRogalla works to promote a comprehensive pol-icy: “Although the government sets minimumstandards, it is lagging behind the exponentialtechnical development of appliance manufactur-ers. By setting clearer and more dynamic regula-

tions, policy-makers could achieve a far greaterdegree of energy efficiency, in turn saving costsfor consumers.” The consumer organizations offerinformation and consulting concepts for savingenergy in households throughout Germany. ButRogalla knows that this is not enough to leveragethe available potential of saving energy. She istherefore campaigning on behalf of the federa-tion for programs to encourage the purchase ofnew efficient appliances – to benefit the environ-ment as well as consumers: “We know from othercountries that incentive systems also have a long-term impact. In particular those households thatare especially affected by the rise in energy costsshould receive financial support to purchase moreefficient appliances.”

Using every possible means60 percent of all possible energy savings within a household can be achieved by purchasing newhome appliances. Although obviously, there areother ways as well that should not be overlooked:“Consumers often do their washing at tempera-tures that are far too high, which gobbles up an unnecessary amount of energy”, explainsRogalla. This places the onus on manufacturersto provide extensive and comprehensible infor-mation on consumption and how to use productsproperly. This means looking at the bigger pic-ture: “Manufacturers and policy-makers shouldtake an overall look at each phase in the productlifecycle in everything that they do: This meanslooking at the materials they use, the time forwhich the appliance is used and its environmen-tally-friendly disposal”, believes Rogalla.

We create benefit for society in a variety

of ways, especially with our energy-

efficient home appliances. As a company,

we aim to make our innovative technolo-

gies available in a growing number of

products.

32

Achieving the energy transitionIf the German government intends to meet itsambitious targets to reduce CO

2emissions by

30 percent by 2020, we all have to pull together:policy-makers, business and consumers alike.BSH calls for systems to identify energy savingrates combined with premiums for exchangingold and inefficient appliances: The energy sav-ings generated as a result can then be recordedas standard and attributed to the energyprovider. If the energy provider manages toexceed their savings target, they could sell theextra kilowatt hours saved for a profit to competi-tors. What may just sound like an interesting ideato some could very well become a necessity. Atthe end of 2012, the European Union approved anenergy efficiency directive that now has to betransposed into national law by the memberstates. As a result, it will soon be a requirementto save 1.5 percent of energy a year – measuredon the basis of average energy consumption fig-ures from 2010 to 2012.

This would be quite easy to achieve with BSH’ssuper-efficient appliances. Their savings poten-tial is huge. But each year, out of the 41 millionfridges and freezers in German householdsalone, only 1.5 percent are replaced with newhigh-efficiency products. The price of electricityin Germany has doubled since 2000, yet too fewconsumers are seeking consistent solutions. Toincrease consumer awareness, BSH carried outan electricity savings study in 17 German house-holds in summer 2012. The findings were clear: A new energy-efficient fridge, dryer or washingmachine consumes up to one third less electricitythan an old model that is at least ten years old.By purchasing a new appliance, households canreduce their overall electricity consumption by aquarter all in all. To make it feasible for as manypeople as possible to enjoy these energy sav-

ings, BSH needs policy-makers to introduce intel-ligent incentive schemes to encourage people tobuy super-efficient appliances.

Increasing awarenessWe will continue to pursue our various measuresaimed at increasing society’s awareness ofenergy efficiency: In Spain, young people arelearning more about energy saving through BSH-supported projects in schools. In Dubai, we sup-port the authorities there in increasing publicawareness about energy efficiency. In Germany,we have been involved in the “Focus machtSchule” project for many years and produce thecorresponding teaching materials for pupils. Wealso lobby for greater energy efficiency in Ger-many via sector organization ZVEI, holding inten-sive discussions with policy-makers and environ-mental associations alike. BSH joined theDeutsche Unternehmensinitiative Energieef-fizienz e.V. (DENEFF) back in 2011, a network ofpioneering companies. Since fall 2012, we havebeen a member of the EEBUs e.V. initiative, work-ing together with technology companies andenergy providers to turn tomorrow’s electricitynetwork, known as the Smart Grid, into a mar-ketable concept and actively contribute to theenergy revolution.

Procurement of production materials by region 2012

In percent

24 Asia and Oceania

28 Eastern Europe(incl. Turkey)

3 North andSouth America

45 WesternEurope

BSH received 300 million euros

from the European Investment Bank in

2012 as a loan for developing energy-

efficient home appliances.

33| S O C I E T Y

Responsible Value CreationIn all regions in which we operate, we make animportant contribution to society by providingapprenticeships and jobs and awarding contractsto the local economy. A current example is thedevelopment of our customer service business inthe Philippines: To ensure qualification of ouremployees, we work in conjunction with the col-lege in Manila to offer three-week trainingcourses to become home appliance engineers,

and in turn create new development opportuni-ties. We sponsor young people from less well-offfamilies who cannot afford to attend any courses,by providing a grant.

We pay taxes and duties in line with the valueadded operated at the site. At our 26 procure-ment locations worldwide, we favor domesticsuppliers in order to avoid currency risks andcustoms duties, and to keep the transport routesshort. In new markets, we encourage suppliers toset up base at our sites and support them in theirenvironmental management and occupationalhealth and safety processes. Since 2007, BSHhas obliged its suppliers to commit to the com-pany’s own Code of Conduct which sets specificsocial and ecological standards. The Code is builton the principles of the UN Global Compact andconventions of the International Labour Organi-zation (ILO). All suppliers are obliged to acceptour Code of Conduct. In future, they will also beobliged to present a certificate to show that theyhave successfully completed a social audit cover-ing all criteria of the Code of Conduct.

Helping through donationsBSH Katastrophenhilfe e.V., the company’s disas-ter relief fund, was founded in 1999. Since then,BSH employees and the company have donatedover 1.5 million euros. In addition, BSH Russiadonated 12,500 euros for the victims of the flashfloods in the Russian region of Krasnador as wellas 500 kettles and 130 washing machines to helpequip the new homes. Other BSH sites and sub-sidiaries are also involved in numerous local proj-ects and provide support including product dona-tions for good causes in society. A benefit con-cert was held at the site in Nauen (Germany),raising funds of 4,500 euros for SOS Children’sVillages.

In the Philippines, BSH has been supporting a vocational training center for engineers since 2012. As a result we are securing locally qualified talents for our customer service, while enabling young people to obtain a training qualification.

To make sure that suppliers comply withsocial and environmental standards, BSHhas set up structures to coordinate CR-related activities at suppliers’ sites in addi-tion to the mandatory Code of Conduct.Risk analyses have been carried out toassess the various procurement marketsand supplier sectors based on CR aspects,and have identified the correspondingareas requiring action. External auditors inthe main procurement regions for BSHthen began to check the suppliers of plas-tic, metal and synthetic parts, whether therequirements of the BSH Code of Conductare being implemented in terms of environ-mental protection, child labor, forced laborand health and safety of workers. In future,all existing BSH suppliers of productionmaterials will be audited. They will only beengaged on presentation of a correspon-ding certificate. A newly set up BSH teamcoordinates the audits at supplier sitesand monitors whether the corrective meas-ures are being duly carried out.

Corporate Responsibility in thesupply chain

34

FinancialSales trendDuring the year under review, the BSH Groupposted sales of 9.8 billion euros – 1.5 percent upon last year’s figure. In Germany, the Group’ssales revenue stood at 2.2 billion euros, anincrease of 4.3 percent. The proportion of Groupsales revenue generated outside Germany (7.6 billion euros) was 78 percent (previous year:79 percent).

Earnings, taxes and subsidiesIn 2012, earnings before interest and taxes (EBIT)amounted to 683 million euros (previous year:647 million euros), equivalent to 7.0 percent ofsales (previous year: 6.7 percent). The 2012 taxrate for the Group as a whole was 24.5 percent.The Group’s total income tax expense amountedto 151 million euros, 76 percent of which isattributable to Western Europe and 12 percentthereof to Germany. Outside Germany, BSHincurred 19 percent of its tax expense in EasternEurope and five percent in Asia and the Americas.BSH companies in Germany paid 50 million eurosin tax in the year under review. In 2012, weclaimed around 17 million euros in subsidies forinvestments from governments around the world.

Employees and personnel expensesAs of 31.12.2012, the Group’s total global head-count, including apprentices, stood at 46,925(14,642 in Germany and 32,283 elsewhere), some1.5 percent more than at the end of December2011. Most new employees were hired in Russia,Turkey, Poland and the United States. There wereslight decreases in China, Spain and Greece.Total personnel costs amounted to a total of 2.0billion euros.201220102008

Sales trend

In billions of euros

20112009

10

8

6

4

2

0

EBIT

In millions of euros

1,000

800

600

400

200

0

2012

Employees and personnel expenses

Employees in thousands Personnel costs in billions of euros

20112010

2.5

2.0

1.5

1.0

0.5

0

Employees Personnel costs

* Number of employees adjusted in line with a change in the HR policy

50

40

30

20

10

0

5.6 percentmore earningsbefore interest andtaxes (EBIT) weregenerated by BSHin 2012.

201220102008 20112009

34

9.79.1

8.48.8

647683

754

585568

46.2*

1.9

46.9

2.042.8

1.8

Facts and figures provide evidence of our progress. Measurable

indicators enable us to control and improve our sustainability per-

formance consistently. This year, too, BSH has set itself challenging

targets on the basis of Group-wide key performance indicators. For

more detailed information on all indicators of the Global Reporting

Initiative (GRI), please refer to the GRI balance sheet on our website.

9.8

35F I N A N C I A L | I N D I C A T O R S

Research and development expensesThe Group increased its expenditure for researchand development by 9.4 percent to 326 millioneuros in the year under review. This figure repre-sents 3.3 percent of sales, enabling BSH to main-tain its favorable position in the internationalcompetitive arena. In 2012, the number ofemployees in R&D increased by 9.2 percent to2,999. Of this number, 1,641 worked in Germany.

Environmental costsOngoing operational expenditure throughout theGroup for environmental protection (operatingexpenses, capital costs, personnel expenses andcharges) dropped by 7 percent to 13.9 millioneuros in 2012. Most of this was spent on wastemanagement (40 percent) and soil and water pro-tection (26 percent), while the costs of air purifi-cation, climate protection and noise abatementamounted to 13 percent. 93 percent of BSH’senvironmental costs were incurred at the Euro-pean factories, 77 percent thereof in Germany.Investments relating to environmental protectionrose by 21 percent to a total of 5.7 million eurosin 2012. 91 percent of these investments weremade at European locations, 37 percent thereofin Germany. Water and soil protection, air purifi-cation and climate protection projects accountedfor the major share of 70 percent.

Resource-efficient productsBy developing low-consumption home appli-ances, BSH is making a decisive contribution toprotecting the climate and helping customers cuttheir electricity bills. In recent years, we havesubstantially reduced the consumption figures ofour home appliances. Today a tumble dryer usesaround 70 percent less electricity than a compa-rable model from 15 years ago. 38 percent of allwashing machines sold by us in Europe in 2012are classified as energy efficiency class A+++ inaccordance with the EU energy label introducedin December 2010. We have a range of appliancesin this class that consume less than half theamount of electricity of comparable models from1997. By using state-of-the-art technology, wehave cut the electricity consumption of our mostefficient fridge-freezers by 73 percent over thelast 15 years. Nearly two-thirds of our electricovens qualify for our Super Efficiency Portfolio,being at least 20 percent more frugal than thecriteria for energy efficiency class A. We havealso reduced the water consumption of our appli-ances substantially over the last 15 years: themost economical washing machines consumeover a third less. Our most efficient dishwashersnow use just six liters of water for each cycle.

2008 20122009

Research and development expenses

In millions of euros (excluding investments)

20112010

500

400

300

200

100

0

20102009 2012

Environmental costs

In millions of euros

2011

25

20

15

10

5

0

* Comparison between the consumption values (standard program)for our best 2012 models (Bosch and Siemens) and comparable1997 models (Bosch and Siemens) (electric cookers: 1999)

Reduction in resource consumption, 1997 through 2012

In percent*

DishwashersFridge-

freezersTumble dryers

Washingmachines

0

-20

-40

-60

-80

-100

-50

-60

-53

-35

-69-73

4 million home appliances from BSH’s Super Efficiency Portfolio were sold in 2012.

35

298326

277261258

15.0

4.7

13.9

5.7

14.8

3.5

13.7

4.3

Ongoing costs Investments

Energy Water

Energy consumptionTotal energy consumption during the year underreview was 775 gigawatt hours (GWh), 6 percentdown on the previous year’s figure of 824 GWh.The proportion of electrical energy was 58 per-cent, a year-on-year increase of 2 percent. Theconsumption of natural gas, used primarily toprovide building and process heating, fell by 4 percent in 2012. Gas accounted for 31 percentof total energy consumption. 11 percent of energyrequirements were covered by district heating,27 percent of which came from renewable bio-mass. The specific energy consumption went upslightly compared with 2011 by 599 kilowatthours (kWh) per metric ton of product due tolower product tonnage and change in productportfolio.

Water usageWater demand fell by 3 percent in 2012 to 1.49million cubic meters (m3). As in the previous year,the factories drew two thirds of their fresh waterfrom the public network and one third from theirown drinking water supplies. The wastewaterfrom production processes, which makes up

36

42 percent of the total wastewater produced bythe factories, undergoes physicochemical pre-treatment. 15 percent of the total wastewater vol-ume was discharged directly into surface water-courses in purified form, while the larger propor-tion of 85 percent was sent to public treatmentplants. The specific water consumption went upcompared with the previous year by 4.5 percentto 1.15 m3 per metric ton of product due to lowerproduct tonnage and change in product portfolio.

WasteThe total volume of waste generated by the BSHGroup fell by 5 percent to 108,000 metric tons.Separate collection of paper and cardboard, plas-tics and films, glass, wood and metal waste isstandard practice in all factories. The proportionof total waste that can be reused went up in 2012 to 93 percent. Hazardous waste slightlydecreased to 1.6 percent of the total waste vol-ume. The specific indicator went up comparedwith 2011 by 2.4 percent to 84 kg per metric tonof product due to lower product tonnage andchange in product portfolio.

EmissionsEmissions of volatile organic compounds (VOCs)are low due to the use of powder coatings, aque-ous coating systems and precoated metal sheetsfor most applications. VOC emissions in 2012were 77 metric tons. Sulfur dioxide emissionsresult from the sulfur content of fossil fuels and,in view of the predominant use of low-sulfur gasand heating oil, are not reported separately.Emissions of nitrous oxides can be influenced byheating technology and, at 31 metric tons, wereextremely low in 2012 due to the use of opti-mized furnaces. The figures for production-related emissions of CO

2at BSH sites (Scope 1)

are shown on page 37.

93 percent ofBSH’s total wastewas reusable in2012.

Environmental

2012 201520102008

Energy consumption

Per metric ton of product in kWh

20112009

750

600

450

300

150

0

Target 488

*

650

599593

673690

* 25 percent reduction in specific energy consumption from 2010 to 2015

2012 201520102008

Waste

Per metric ton of product in kg

20112009

100

80

60

40

20

0

Target72

*

80848283

90

* 10 percent reduction in specific waste volume from 2010 to 2015

2012 201520102008

Water usage

Per metric ton of product in m3

20112009

1.5

1.2

0.9

0.6

0.3

0

Target 0.92

*

1.231.15

1.10

1.321.37

* 25 percent reduction in specific water consumption from 2010 to 2015

37E N V I R O N M E N T A L | I N D I C A T O R S

Vehicle fleetTo reduce noise levels and harmful substanceemissions during the transportation of its prod-ucts by truck, BSH made “Euronorm II or better”its target standard as early as 2001. For thefourth consecutive year, every truck in the fleetsoperated by BSH’s shipping agents exceeded therequirements of Euronorm II. In 2012, the propor-tion of vehicles meeting Euronorm IV or higherrose to 94 percent, exceeding the average figurefor Germany as a whole by 14 percentage points.Our logistics function at BSH began managingthe delivery of direct material to our factories aswell as the transport of products in 2009 to facili-tate the optimum coordination of incoming andoutgoing consignments.

Carbon FootprintSince 2006, BSH has been measuring its carbonfootprint for the Group’s operating activitiesaccording to the international standard of theGreenhouse Gas Protocol, developed by theWorld Business Council for Sustainable Develop-ment and the World Resources Institute. In 2012,the carbon footprint at BSH amounted to 314,000 metric tons of CO

2, 6.4 percent lower

than in 2011 (334,000 metric tons). Around 14percent of this total comes from direct emissionslinked to oil and gas consumption at the BSH factories (Scope 1). As indirect emissions,requested from the energy provider, the electric-ity consumption of the production sites and theirdistrict heating supply accounts for 79 percent ofCO

2emissions and that of office sites for 7 per-

cent (Scope 2). This gives a specific indicator –CO

2emissions in relation to production volume –

of 243 kilograms per metric ton of product (previ-ous year: 241 kg). For instance a home appliance

weighing 60 kg can account for an average ofaround 15 kg of CO

2emissions from BSH produc-

tion (Scope 1 and 2).

Travel-related CO2 emissionsFrom the Corporate Value Chain Standard (Scope3), only the emissions resulting from activitieswithin BSH’s immediate sphere of influence areconsidered. CO

2emissions from travel and cus-

tomer service trips amounted to 51,000 metrictons in 2012. 20 percent of these emissions wereattributable to air travel, 79 percent to car jour-neys and 1 percent to rail travel. The data for thisScope 3 reporting was extrapolated to the Groupas a whole from verified regional reports (Ger-many and Europe). Rental cars and leased carsare used for most business travel undertaken forcustomer service, sales and other business pur-poses. Travel-related CO

2emissions from the

transport of finished goods (Scope 3) are shownon page 29.

BSH agents 2011

BSH agents2010

Germanaverage

2012

Vehicles meeting Euronorm II through V

As a percentage of the trucks in operation

BSH agents 2012

100

80

60

40

20

0

Euronorm V Euronorm IV

Euronorm III Euronorm II and below

68

20

12

80

8

12

Travel-related CO2 emissions in 2012

In percent

13 Business trips by car

39 Customer service trips

1 Rail travel

6.4 percentof CO2 emissionswere saved by BSHin 2012 comparedto 2011.

82

7

6 416

73

12

20112009

CO2 emissions

In thousands of metric tons

20122010

500

400

300

200

100

0

Scope 1 (oil and gas consumption at BSH plants)

Scope 2 (electricity and district heating)

445146

290

44

270276267

20 Air travel

27 Sales trips

38

Input-output balance sheetThe data presented for the input and output flowscovers all sites and factories at which BSH carriedout production activities during the year underreview (ending December 31, 2012), including devel-opment sites and headquarters in Munich. Thewashing machine factory in Berlin (Germany) is nolonger included, as it was closed in July 2012. On thebasis of the input-output balance sheet, we recordall the environmentally relevant material and energyflows past our factory gates. All the significant envi-

ronmental aspects of activities at BSH’s sites aretherefore presented in the form of figures. The con-tinuous and structured recording of environmen-tally relevant data is an important prerequisite foridentifying potential improvements. From the totalamounts, BSH derives specific indicators by cal-culating consumption and emissions in relation tothe tonnage of appliances produced. BSH there-fore records its data in accordance with the guide-lines for recording environmental assessmentdata set out in international standard ISO 14031.

Output flows

C Products

C 1 Products (number)

C 2 Products (tonnage)

C 3 Packaging

C 4 Waste

C 4.1 Waste for disposal

C 4.1.1 of which hazardous waste

C 4.2 Waste for recycling

Percentage recycled

C 5 Waste water

C 5.1 of which directly discharged

C 5.2 of which indirectly discharged

C 5.3 of which treated in neutralization plants

C 6 Vaporous or gaseous emissions

Organic substances

C 6.1 Volatile organic compounds (VOCs)

Inorganic substances

C 6.2 Nitrous oxides

C 6.3 Carbon dioxide (Scope 1)

C 6.4 Carbon dioxide (Scope 2)

Input flows

A Fixed assets

A 1 Land

A 1.1 Developed

A 1.2 Undeveloped

A 2 Percentage developed

B Current assets

Environmentally relevant substances

B 1 Raw materials1

B 2 Auxiliary materials2

B 3 Process materials3

B 4 Energy

B 4.1 Electrical energy

B 4.2 Light heating oil

B 4.3 Gas

B 4.4 Others (district heating, wood, etc.)

B 5 Water

B 5.1 From public supply

B 5.2 From own supply

44,746

1,307

86,671

104,963

8,086

2,227

96,877

92

1,426,287

402,251

1,024,036

494,877

68

68

50,574

42

50,532

276,488

2010

4,431,365

1,928,949

2,502,416

44

786,177

16,000

3,012

849,770

455,801

3,754

273,397

116,818

1,605,636

1,083,464

522,172

48,182

1,390

89,053

114,046

8,534

2,012

105,512

93

1,344,615

354,057

990,558

474,738

68

68

44,290

38

44,252

290,215

2011

4,507,297

2,083,330

2,423,967

46

817,642

15,981

2,828

824,148

463,601

481

248,915

111,151

1,527,665

1,002,760

524,905

47,018

1,294

85,531

108,464

7,819

1,721

100,645

93

1,186,203

179,324

1,006,879

495,956

77

77

44,256

31

44,225

269,906

2012

4,278,568

2,096,897

2,181,671

49

756,644

84,639

5,589

774,816

450,465

2,887

239,178

82,286

1,489,619

973,870

515,749

Thousands of items

Thousands of t

t

t

t

t

t

%

m3

m3

m3

m3

t

t

t

t

t

t

Unit

m2

m2

m2

%

t

t

t

MWh

MWh

MWh

MWh

MWh

m3

m3

m3

1 Metals (steel, copper) and plastic granulates 2 Paints, enamels 3 Oils, emulsions, solvents, acids and caustic solutions

39E N V I R O N M E N T A L | S O C I A L | I N D I C A T O R S

Occupational health and safetySince 2000, BSH has been reporting the inci-dence of accidents on the basis of standard crite-ria defined centrally. Accidents are reported thatoccur at work in the factories and result in atleast one day’s absence. The rate of accidentsper million hours worked – as an indicator ofaccident frequency – fell again compared to theprevious year to 6.7, its lowest ever level. Since2009, the occupational health and safety man-agement systems adopted by our factories havebeen closely aligned with international standardOHSAS 18001. The recording and evaluation ofnear misses and hazardous situations is becom-ing increasingly important as a way of preventingaccidents and instilling a sustainable culture ofsafety. Since 2007, BSH’s occupational healthand safety statistics have also included a sepa-rate section for accidents involving employees ofexternal companies. In the year under review,there was a fatal accident at a construction siteof a future BSH property under the responsibilityof the contracted construction firm.

Employee structure and employmentThe average age of our workforce around theworld rose slightly to 38.4 years in 2012. Theaverage period of employment decreased slightlyto 10.3 years compared with the previous year. Ataround 16 years, the figure is particularly high inGermany, whereas the European average hasgone down 2 years to 12 years. In total, BSH cre-ated some 700 new jobs in 2012. BSH employed838 apprentices and trainees around the world in2012 (previous year: 836). The proportion ofseverely disabled people employed at BSH’s Ger-man locations stood at 5.2 percent, thus higherthan the legal minimum of 5 percent.

Social benefitsIn the countries in which BSH operates, it setsthe pay levels of its employees in line with thelocal market income and legal framework condi-tions. Voluntary social benefits are not standardacross the entire Group, but vary according toregional requirements and regulations. In 2012,BSH recorded data on the provision of additionalsocial benefits in 59 companies based in 47 coun-tries. In 85 percent of our companies, we providesocial benefits primarily through contributions tothe state social insurance system. BSH alsooffers additional benefits on a voluntary basis,such as the additional health insurance availableto our employees in nearly two thirds of our com-panies. Apart from our German companies, weoffer a company pension scheme in a further 37companies. Our employees in about 50 percentof the companies have access to a company med-ical service as well as health promotion programsincluding sporting activities or nutritional advice.

Company suggestions initiativeBSH’s company suggestions initiative (“top idea”)is an important feedback tool. It was establishedin 17 countries in 2012, 13 of which used the samesoftware “idea-channel”. 12,350 employees con-tributed a total of 85,352 creative ideas underthe scheme in 2012. This means that 31 percentof the total workforce of 39,877 with access to“top idea” participated in the initiative, submit-ting an average of 2.14 ideas. The proportion ofimplementable suggestions for improvement was nearly at 60 percent. From all the ideas sub-mitted over the past decade, BSH has accrued anet benefit in excess of 215 million euros. Over 11 million euros of these savings were generatedin 2012 alone.

838apprentices andtrainees wereemployeed by BSH in 2012.

20102009 2012

Incidence of accidents at BSH around the world

Accidents resulting in at least one day’s incapacity

2011

20

16

12

8

4

0

6.7

19.9

7.1

16.0

7.5

15.6

7.8

16.7

Accident rate per 1 million working hours

Days of absence per accident

20102009 2012

Company suggestions initiative

Contributors and ideas submitted in thousands

2011

100

80

60

40

20

0 13.5

60.0

12.4

85.5

11.8

46.5

12.6

57.9

Contributors Ideas submitted

Social

40

Objectives for 2012*

Sustainable corporate governance

Communicate the sustainability strategy throughout

the Group and hold workshops to implement it in the

different departments (Sales, Procurement, etc.)

Environmental management

Conduct corporate audits at nine sites

Complete ISO 14001 certification of the

St. Petersburg site

Improve the data quality for BSH warehouses

Site-related environmental protection

Ongoing process of reducing specific energy and

resource consumption in line with the Resource

Efficiency Program 2015

– Energy target: 586 kWh/t

(-5% annual reduction based on 2010 figures)

– Water target: 1.10 m3/t

(-5% annual reduction based on 2010 figures)

– Waste target: 77 kg/t

(-2% annual reduction based on 2010 figures)

Implement site-specific environmental objectives and

programs in air pollution control and climate protec-

tion, soil and water conservation, waste management

and communications

Product-related environmental protection

Support the implementation of the new WEEE

Directive in the EU member states

Continue to improve the consumption values of

home appliances

Introduce database for monitoring RoHS compliance

(use of hazardous materials)

Employees

Roll out corporate talent management in all countries;

implement BSH leadership qualification program at

key BSH subsidiaries, focusing on Asia

Support strategically relevant Group initiatives by

implementing standardized qualification concepts

and processes worldwide

Incorporate the issue of demographic change into the

leadership qualification program

Use the monitoring tool in 29 countries to document

the measures relating to the employee survey

Gain additional recognition by winning the interna-

tional Top Employers awards (CRF Institute) in Poland,

the Netherlands and Spain; expand university relations

activities; pilot the university relations marketing con-

cept in selected departments; redesign the career

pages on the website

Implement extended diversity activities and roll them

out internationally

Objectives achieved in 2012

CR presentation posted on the intranet for all employ-

ees around the world; workshops on CR strategy held in

Belgium, Spain and Turkey; “Sustainability@Functions”

workshops in the Sales area

Achieved: Eleven sites were audited.

St. Petersburg (Russia), LaFollette (United States) and

Callao (Peru) certified: so all BSH sites are now certified

to ISO 14001.

Energy consumption data at office sites around the

world collated

Development achieved in specific energy and resource

consumption in line with targets set in 2012:

– Energy: +2% (599 kWh/t)

– Water: +5% (1.15 m3/t)

– Waste: +9% (82 kg/t)

46% of factories exceeded the energy targets,

56% exceeded the water targets, and 44% exceeded

the waste targets.

Implementation of the new WEEE Directive in the EU

member states successfully supported

Achieved (see page 35)

Project to introduce database for monitoring RoHS

compliance was carried out.

Corporate talent management processes and tools rolled

out for a target group in all countries; BSH leadership

qualification program rolled out in eight of the main sub-

sidiaries, including China and Asia-Pacific region

Implementation continued, e.g. in Sales, Key Account

Management and Compliance for Managing Directors

around the world

Management qualification program extended to include

health management

Monitoring tool used in 30 countries; around 75 percent

of measures already implemented

Certified as Top Employer (CRF Institute) in Germany,

Spain, the Netherlands and Poland; intensified coopera-

tion with universities with systematic integration of par-

ticular specialist areas; eight Germany Scholarships

awarded; relaunch prepared for career pages on web-

site

Diversity embedded in business plan: targets set with

respect to the proportion of international employees and

women in eleven countries and for the Product Areas;

proportion of female managers in pools increased; propor-

tion of employees exchanged internationally increased by

15%; stage of life working models extended

Objectives for 2013

Integration of customer satisfaction KPIs into Busi-

ness Planning; assessment of sustainability risks in

the corporate risk management process;

“Sustainability@Functions” workshop in the Procure-

ment area

Conduct corporate audits at nine sites

ISO 50001 certification (energy management)

at two sites

Collate data from factory sites each quarter (compare

with respective quarters in the previous year)

Ongoing process of reducing specific energy and

resource consumption in line with the Resource

Efficiency Program 2015

– Energy target: 553 kWh/t (-5% per annum)

– Water target: 1.04 m3/t (-5% per annum)

– Waste target: 76 kg/t (-2% per annum)

Ongoing; greater resource efficiency in energy

consumption based on the guidelines developed

by BSH

Ongoing

Ongoing

Develop and roll out database for monitoring RoHS

compliance

Redesign the Junior Executive Pool (JEP), focusing on

internationality; redesign the qualification measures

of the International Executive Pool (IEP) in line with

current trends

Extend courses and training offered by BSH Academy

in area of Change Management Consulting

Conduct employee survey in 47 countries (around

47,000 employees), further roll out monitoring tool

Certification as Top Employer in Belgium and win

„Top Employers Europe“ award; establish a standard-

ized system of exchanging experience around the

world on the topic of university relations marketing

(with Poland, Spain, China, Turkey); expansion of

national university relations marketing concept

Roll out diversity activities internationally and step

up communication on diversity; publish brochure

on part-time trends; expansion of support for accom-

panying partners of expatriates; increase number of

childcare places in Munich

Develop an international Human Resources (HR)

indicator system to support and guide HR strategies,

focusing on standard definitions of indicators and

standard methods for collating data* As published in the 2011 Sustainability Report

O B J E C T I V E S | I N D I C A T O R S | C O N T A C T S

BSH Bosch und Siemens Hausgeräte GmbHCarl-Wery-Straße 3481739 Munich, GermanyTel.: +49 89 4590-01Fax: +49 89 4590-2347www.bsh-group.com

Media contact: Corporate CommunicationsTel.: +49 89 4590-2809Fax: +49 89 4590-2128corporate.communications@bshg.com

Head of Corporate Responsibility and Sustainability Dr. Peter BöhmTel.: +49 89 4590-2206Fax: +49 89 4590-4490peter.boehm@bshg.com

Corporate TechnologyEnvironmental Protection, Occupational SafetyVolker KortenTel.: +49 89 4590-2447Fax: +49 89 4590-2148volker.korten@bshg.com

The Sustainability Report and the publicationslisted below are available in German and English:• Group Annual Report 2012• BSH at a Glance 2013

This report was printed climate-neutrally on FSC®-certified Hello Silk paper.

Right of amendment reserved, errors excepted.Printed in Germany. June 2013.

© BSH Bosch und Siemens Hausgeräte GmbH.

Reproduction and use in all media, whether complete or in part, is subject to approval.

Factories:

� Cooking

� Refrigeration/Freezing

� Dishwashing

� Washing/Drying

� Consumer Products

� Motors/Pumps

Group Headquarters

• Subsidiaries/Sites

• Johannesburg

• Jeddah• Dubai

• Tel AvivCasablanca •

Buenos Aires •

� Kabinburi

� Wuxi

Chuzhou �

• Mumbai

• Bangkok

• TaipeiHong Kong •

• Seoul

• Kuala Lumpur• Singapore

• Jakarta

Melbourne • Auckland •

•���� NanjingIrvine•

• Toronto

�� New Bern LaFollette �

�� Lima

42

BSH worldwide

•�� St. Petersburg

Çerkezköy �����• Istanbul

• Moscow

• Helsinki

• Stockholm

• Lisbon

Milton Keynes •

Oslo •

Paris •

• Amsterdam

Brussels •

Luxembourg •

Milan •

Zaragoza •

Lipsheim �Giengen �

• Ballerup

Geroldswil •

• Regensburg Munich

• ZagrebNazarje •�

•� Michalovce

•�� Athens

Nauen � • Berlin

� La Cartuja�� Montañana

� Esquiroz

Bad Neustadt �� Bretten

Dillingen ��� Traunreut • Budapest

• Bucharest• Belgrade

• Sofi a

��� Lodz

Santander �

Estella �• HuarteVitoria �

• Warsaw

• Prague• Kiev

• Vienna

Sites certified according to ISO 14001

China

Germany

Wuxi

Chuzhou

Nanjing

Bad Neustadt

Bretten

Dillingen

Giengen

Nauen

Traunreut

France

Greece

Peru

Poland

Russia

Slovakia

Slovenia

Lipsheim

Athens

Callao (Lima)

Lodz (2)

St. Petersburg

Michalovce

Nazarje

Spain

Thailand

Turkey

USA

Esquiroz

Estella

La Cartuja

Montañana

Santander

Vitoria

Kabinburi

Çerkezköy

New Bern

LaFollette

Status: May 2013