SUSTAINABILITY REPORT ZKW GROUP 2015 · Headquartered in Wieselburg, the ZKW Group is represented in Austria, Slovakia, and the Czech Republic as well in as growing markets in the

LIGHT & ELECTRONICS for automotive industry

SUSTAINABILITY REPORT ZKW GROUP 2015


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We can’t turn the night into day – but we can make sure that you hardly

notice the difference.


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— CONTENT —

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04 ZKW GROUP AT A GLANCE

02

08 PREFACE FROM THE THE GENERAL MAN-AGEMENT

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09 ABOUT THIS REPORT

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10 OUR PRODUCTS

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12 PURCHASING AND SUPPLY CHAIN MANAGEMENT

5.1 Purchasing management 5.2 Transport

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14 CREATING THE HEADLAMP 6.1 Using resources efficiently 6.2 Using energy efficiently 6.3 Waste management

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19 MANAGEMENT SYSTEMS

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20 PACKAGING

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19 OUR COMMITMENT TO OUR EMPLOYEES 9.1 Social Engagement and Compli-

ance

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32 OUR CUSTOMERS

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34 OUR SUPPLIERS

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35 INTO THE FUTURE WITH INNOVATION

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38 LEGAL NOTICE


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From Austria, through Europe, to the world – we export traffic safety worldwide

1.ZKW GROUP AT A GLANCE

Headquartered in Wieselburg, the ZKW Group is represented in Austria, Slovakia, and the Czech Republic as well in as growing markets in the USA, Mexico, China, and India.

The ZKW Group GmbH is recognized on the international markets as a provider of premium lighting systems, electrical equipment, and electronic modules for vehicles. ZKW maintains innovative, skilled development centers and flexible, high-per-forming production sites close to our customers.

ZKW products include headlamps, fog lamps, and daytime running lamps in LED, xenon, and halogen.

— ZKW GROUP AT A GLANCE —

VIII

Silao, MX

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New Delhi, IN IV

Krušovce, SK

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Wiener Neustadt, AT

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Wieselburg, AT

III

Vratimov, CZ

VII

Michigan, US

VI

Dalian, CN


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AUSTRIA

ZKW Group GmbHRottenhauser Straße 8

3250 Wieselburg, Austria

ZKW Lichtsysteme GmbHScheibbser Straße 17

3250 Wieselburg, Austriawww.zkw-group.com

SLOVAKIA

ZKW Slovakia s.r.o. Bedzianska cesta 679/375 956 31 Krušovce, Slovakia

www.zkw.sk

CHINA

ZKW Lighting Systems (Dalian) Co., Ltd.Dalian Development Area,

Tie Shan Dong San Road No. 51, 116600 Dalian, China

www.zkwchina.cn

ZKW Elektronik GmbH Samuel-Morse-Straße 18

2700 Wiener Neustadt, Austria www.zkw-elektronik.at

USA

ZKW Lighting Systems USA, Inc. 100 West Big Beaver Rd., Suite 300

Troy, MI 48084, USAwww.zkw-group.com

CZECH REPUBLIC

KES – kabelové a elektrické systémy spol. s.r.o. Popinecká 983/30

739 32 Vratimov, Czech Republic www.kes.cz

MEXICO

ZKW México, S.A. de C.V. Avenida Mineral de Peñafiel No.1 del Parque Industrial Santa Fe IV

C.P. 36275 Silao, Gto., Méxicowww.zkw-group.com

INDIA

Neolite ZKW Lightings Pvt. Ltd. 26% 36, Sector-4B, HSIDC, Industrial Area

124 057 Bahadurgarh District Jhajjar (Haryana), India

www.neolitezkw.com

ZKW Locations



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Sales Performance ZKW 2015


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IN MILLION EUR

700

2010 2011 2012 2013 2014 2015 2016*

0

100

200

300

400

500

600

800

Image: Annual revenues in millions of EUR

* forecast


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ZKW can look back on another successful fiscal year. Since 2010 the corporate group's revenues have almost tripled, from 280 million euros to around 728 million euros in 2015. The lighting system specialist continues to expand in the current year as well. The new lens production plant at the main location in Wieselburg was opened in September. The company's total investment in the plant is around 35 million euros. The next expansion at ZKW's electronics plant in Wiener Neustadt also began in the fall. The office building will be expanded by 2,800 square meters, offering space for 175 additional employees. The investment costs for that project total 3.5 million euros. Our factory in China was also ex-panded.


ATWIESELBURG

2,168

HEADQUARTERSAT

WIESELBURG

180

MXSILAO

44

ATWR. NEUSTADT

136

SKKRUŠOVCE

1,710

CNDALIAN

268

CZVRATIMOV

1,182

INNEW DELHI

224

USTROY

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TOTAL WORKFORCE EMPLOYEES

2015TOTAL TOTAL5,920

Image: Number of employees in the ZKW Group


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Preface by the General Management

2.PREFACE

Dear readers, esteemed customers, employees, and partners,

Sustainable action has always been important to our compa-ny; at the same time, we have noticed increased interest and de-mand from our customers on this topic.

That is why we would like to illustrate our “actions” in our first sustainability report and let everyone know about it.

Over the last few years, the ZKW Group has been able to achieve great things. We are recognized on the international mar-kets as a provider of premium lighting systems, electrical equip-ment, and electronic modules for vehicles.

Multiple awards serve as proof of our good acceptance and the respect we enjoy as a reliable partner of the automotive industry.

Nevertheless, we are aware that we still have work to do and we are working continuously to expand and improve our respon-sible conduct. When tapping into new markets, our goal first and foremost is sustainable growth.

For instance in the scope of building up our new production factory in Mexico, right from the start our ZKW-wide, effective in-tegrated management system is being established, for example to be able to responsibly manage environmental effects and to pro-vide a safe working environment for our employees.

One goal for the future sustainability reporting is the creation of group-wide reporting specifications to ensure that uniform data is available for all sites. The expansion of the transport control and the optimization of the container management – forcing return-able containers and reduction of the volume of packaging –- will also be given top priority in the coming years; this is where we see great leverage to reduce CO2.

We hope you gain new insights on these and other matters as

you enjoy reading our first ZKW sustainability report.

Sincerely, the General Management

CEO Oliver Schubert – CTO Henri Kirchhof – CFO Thomas Eberl

— PREFACE —


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3.ABOUT THIS REPORT

This is the first sustainability report from the ZKW Group. We would like to illustrate our activities in the area of sustainability, while at the same time indicating areas where we still see room for improvement and where we are planning to take measures. We would like to give our stake-holders some insight into the ZKW Group and its business activities, and present where we stand and what we’re working on in a transparent way.

The report includes information and data to illustrate the key activities of the ZKW Group and its locations in Wi-eselburg, Wr. Neustadt, Slovakia, and China. The new loca-tion in Haag (AT) is seen as Wieselburg’s remote support site, and is not considered separately in the report.

Our Mexico location is currently under construction, so most of the data currently available is employee data. Our location in the USA (Troy, MI) currently has 8 employ-ees and serves to provide better communication in the NAFTA region. It is not included in this report. The location in India is part of a joint venture, and is also not included.

The key performance indicators for the ZKW sustain-ability report are presented separately for each location whenever possible. For reasons of confidentiality, sales per-formance figures for the Group are only presented in aggre-gate. The reporting period for the performance indicators and descriptions provided is the 2015 fiscal year.

The performance indicators in the Environment sec-tion were drawn from our environmental management sys-tem, and are reported separately for each operating com-pany. The data in the Employee chapter was contributed by the HR Department, and was calculated for all locations based on staffing levels as of 12/31/2015.

All topics and aspects which are dealt with in this re-port, and for which the company is publishing its perfor-mance, goals, and key performance indicators, were devel-oped jointly within a team and assessed as significant. The content and performance indicators published here were

developed through two workshops with the responsible ar-eas of Environmental Management, Purchasing, Human Resources, Logistics, and Transportation, and established in coordination with the management.

Since this is the first sustainability report from the ZKW Group, the report was created following the interna-tional standard of the Global Reporting Initiative (GRI G4). We plan to update this sustainability report every two years.

To ensure better readability, this report refrains from using both masculine and feminine forms of speech; in-stead, only masculine pronouns are used. However, all per-sonal designations apply equally to both sexes.

— ABOUT —


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We put customer requirements in the right light

4.OUR PRODUCTS

CAR HEADLAMPSXENON / HALOGEN HEADLAMPS CAR

XENON / HALOGEN

CAR HEADLAMPSLASER / FULL-LED

CAR HEADLAMPSLASER / FULL LED

AUXILIARY LAMPS AUXILIARY LAMPS

— PRODUCTS —


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Tailored to vehicles and drivers

ZKW develops and manufactures lighting systems for the ex-ternal and interior lighting of cars, trucks, and motorcycles – fields of expertise that require a broad base of knowledge and offer out-standing opportunities for further growth. Our production activi-ties primarily concern front lighting, with a focus on solutions for the premium segment.

TRUCK HEADLAMPSXENON / HALOGEN HEADLAMPS TRUCKXENON / HALOGEN

MOTORCYCLE HEADLAMPSLED / XENON / HALOGEN

HEADLAMPS MOTORCYCLELED / XENON / HALOGEN

ELECTRONIC PARTS ELECTRONIC PARTS

Image: ZKW Group product range

— PRODUCTS —


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No product without raw materials: Regional purchasing is our priority

5.PURCHASING AND

SUPPLY CHAIN MANAGEMENT

SUPPLIER NETWORKThere is a specific type of supplier system which is

characteristic of the automotive industry, often illustrated in the form of a pyramid. The focal company, the automo-bile producer, stands at the top of that pyramid. This com-pany's suppliers are divided into tier 1, tier 2 suppliers, etc. depending on their distance from the focal company. Tier 1 suppliers are system suppliers for automotive producers, and in turn purchase materials from tier 2 suppliers, also called module suppliers. The lower levels of the pyramid, then, are component suppliers and part suppliers. Suppli-er on lower levels, however, can also deliver products di-rectly to suppliers on a higher level or to the automotive producer itself.

TRANSPARENCY IN OUR SUPPLY CHAINThe IMDS (International Material Data System) is a

standardized global exchange and management system for material data in the automotive industry. The goal is to ful-fill national and international legislation to which automo-tive manufacturers and their suppliers are subject under standards and legal provisions, particularly in the environ-mental area.

Each vehicle manufacturer and supplier is responsible for all aspects of its products and for the entire life cycle of manufacturing, use, and recycling, through to disposal. Furthermore, manufacturers are obligated to provide data on material compositions for the products used in its au-tomobiles, so that it is possible to reconstruct original ma-terial compositions and arrange materials into hazard classes. Automotive manufacturers, therefore, must pro-vide information on the composition of the components used in their products.

ZKW can trace its purchased products up to tier 2 us-ing the IMDS. Furthermore, we are able to trace the mate-rials in the various parts and components using the IMDS.

Purchasing managementPURCHASING ON LOCAL MARKETS

Central purchasing builds on regional sales offices (RSOs) to implement the goals of our purchasing strategy on a local basis in the respective purchasing markets, and ensure a stable supplier base in all markets. The regional purchasing organization is responsible for all commercial purchasing activities in their local assigned purchasing market – according to our motto of “In the region and for the region.” The goal of this definition is to strengthen re-gional supply chains and shorten transportation paths.

TransportationMAKING TRANSPORTATION SUSTAINABLE

Transportation between production and use is primar-ily controlled by our customers. Most of our products are delivered locally, i.e. within Europe, China for China, Mex-ico for NAFTA. Quick reaction times are important in trans-portation. ZKW has made it our declared goal to achieve short transportation paths with full transported loads to protect our resources and the environment. We have not yet exhausted the full potential for optimizations in this area, and plan to make significant improvements by rede-signing our transportation controlling system.

— PURCHASING & SCM —


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Future topics and actions in the area of transporta-tion:

► Environmentally-friend-ly E-vehicles for short trips: Electro-mobility represents forward-thinking and sus-tainable technology, which is why it is so important to ZKW. In September 2016, we commissioned four Re-nault Kangoo Z.E.'s, which are used specifically for short trips and primarily for drives from ZKW group headquarters in Wieselburg to the new Haag location. These environmental-ly-friendly vehicles can be charged at two charging stations installed in our Wi-eselburg and Haag plants. The cars each cover around 550 kilometers per month. ► Expanding our transpor-tation controlling and transportation manage-ment systems: Optimizing transportation flows by ex-panding transportation re-sponsibilities, resulting in options to consolidate de-liveries through route plan-ning, etc. Our goals in this area are to reduce CO2 pro-duction and costs. ► Systematic support to expand internal transpor-tation controlling: Strategic transportation planning, transport commissioning, visualization, tracking, cal-culating and mapping our CO2 footprint.

— PURCHASING & SCM —


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Bringing production into harmony with the environment

6.CREATING THE HEADLAMP

At ZKW, most components are produced using ful-ly-automated manufacturing and injection molding tech-nology. Optically critical components like reflectors and lenses are manufactured under specialized conditions.

Recently, ZKW also began manufacturing electronic components such as circuit boards with highly precise LED placement and complete light engines in house.

Proprietary production processes are the only way we

can fulfill the high requirements placed on the light tech-nology in our high-end products. Highly modern SMT equipment and highly automated assembly lines for light engines at the ZKW Elektronik GmbH location in Wiener Neustadt, and our overall expertise in the areas of elec-tronics, light technology, and mechanics make the differ-ence here.

— CREATING THE HEADLAMP —

Image: Process description from raw material to headlamp

End productWaste

AssemblySurface treatment

of plastic parts(Technology powder coating)

Purchased parts

Surface treatment of plastic parts

(Technology: - metallization by evaporation - metallization by sputtering)

Surface treatment of von plastic parts

(Technology hardcoating)

Predrying of material

only to a very small extent

Injection moldingPre-parts production

Metal workshop Pre-parts production

(Technology pressing)


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Table: Material consumption Wieselburg 2015

Table: Total energy consumption in kWh

Efficient use of resourcesOFFICE AND PRODUCTION – NO OUTPUT WITHOUT IN-PUT

For a site to be kept in operation, we have to use a wide variety of different materials. Production isn’t the only area that depends on raw materials: so do administration and research. The following table displays a selection of the most important raw materials we use, based on the exam-ple of the Wieselburg location in 2015.

Using these raw materials represents a consumption of resources and leads to costs. We are working continu-ously to optimize our consumption and keep it as low as possible.

Efficient use of energy

ZKW produces our products at locations in Wieselburg, Slovakia, China, and Mexico. Our employees work in one to four-shift operation, depending on demand. Since we uti-lize a shift model, and since our production is so energy-in-tensive, a seamless energy supply is one of the most im-portant requirements for our company.

ZKW purchases electricity from an electricity ex-change on an as needed basis. In addition, we also operate a hydroelectric power plant on the factory premises in Wi-eselburg. We want to use available resources wisely; that’s why we always update this power plant to keep pace with state of the art technology.

Our responsibility in the area of climate protection was honored in March of 2015 as part of the climate change re-porting of the Carbon Disclosure Project. Zizala Lichtsys-teme received Best New Supplier Award for 2014. Extensive information on the issue of climate protection, for instance on our strategy and approach, facts and figures on CO2 emissions in the company, and our performance in envi-ronmental management were key factors in winning the award.

Wieselburg locationConsumed

quantities in 2015 in kg

Synthetics – in synthetic injection molding pro-cesses

8,565,551

Silicone glue – Assembly depart-ment (gluing headlamp compo-nents)

87,995.17

Copy paper – office 1,916,500

Varnishes, dilution, hardener, wet varnish 146,954.77

Dilution – WB, prototypes, surface 11,655

Oil 10,343.08

Acids – QEL 116.00

Lyes – QEL 128.00

Tungsten – surface 1340.33

Gas discharge lamps 1474 pieces

Locations Power

Gas (WN: Dis-trict heat-

ing)

Share from ZKW

hydroelec-tric power

plants

Wieselburg 43,060,626 3,125,549 1,200,504

Wr. Neustadt 1,676,484 278,495

Slovakia 40,028,188 2,353,792

China 9,391,381 1,149,408

Mexico: no data currently available


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2 DESIGN 3 DEVELOPMENT

9 SURFACE10 SPUTTERING

11

PRO

TEC

TIVE

CO

ATIN

G12

ASS

EMBL

Y


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4 TESTING 5 TOOL SHOP

8 INJECTION MOLDING LENS9 SURFACE

6 RA

W M

ATE

RIA

LS7

IN

JEC

TION

MO

LDIN

G C

OM

PON

ENTS

1PUTTING PEOPLE

FIRST


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Table: Total waste in tons

LocationsWaste

materials in to

Non- hazardous

waste in to

Hazardous waste in to

Wieselburg 1,057.4 1,690.3 117.9

Wr. Neustadt 24.1 26.9 2.4

Slovakia 1,987.3 413.1 114.0

China No infor-mation 244.5 7.7

Total 3,068.8 2,374.7 242.0

Waste management

ZKW produces products with the highest level of qual-ity. To do so, we must sort out components that do not ful-fill our high quality demands. We separate this scrap as cleanly as possible into different types, then hand it over to a recycling company.

Our entire waste management system for the Wiesel-burg location was overhauled in 2015. Our goal was to make waste separation easier and clearer for all our em-ployees, seek out areas where we could optimize the pro-cess, and save both resources and costs.

Many materials are sorted by the disposal companies in China, which means we often do not need to collect these materials separately. In comparison to Europe, collec-tion systems are not as well developed. Only hazardous waste is collected separately. The rest of the non-hazardous waste is divided into groups of manufacturing waste and office waste.

Several projects were started in Slovakia in 2015.

Project launches and the start of series production re-sult in added synthetic material waste, since more scrap is created at the start of series production due to fine tuning over the first few months.

Future topics and actions in the area of waste and re-sources:► Simpler construction: To make it easier to recycle our

scrap material, we work with plug-in connections, re-duce glue and screw connections, and avoid these when-ever possible.

► Reduction of material diversity: In order to reduce our consumption of resources and increase the share of re-cyclable materials, we reduce material diversity when-ever quality requirements allow.

► Reduction of scrap in production► Accelerating clean separation of waste and returning

scrap to the economic cycle ► Restructuring waste management at our Wieselburg lo-

cation


EXCESS MATERIALS54 %

3,068.8 to

NON-HAZARDOUS WASTE42 %

2,374.7 to

HAZARDOUS WASTE4 %

242 to

SHARE OF WASTE GROUP-WIDE


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No compromises

7.MANAGEMENT SYSTEMS

Customers, suppliers, and ZKW employees can trust in ZKWs commitment to quality. We work in a highly compet-itive and technical field. We are conscientious of this, which is why we consider it our obligation to adhere to the high-est possible quality standards. As a development supplier, ZKW has been certified under ISO 9001 since 1993, and un-der ISO/TS 16949 based on ISO 9001 since 2003..

Process instructions and specifications are document-ed in an integrated management system. The management system is continuously expanded, and periodically moni-tored through internal and external audits. ZKW imple-mented an environmental management system certified under ISO 14001 for the first time in 2000.

Furthermore, we have implemented a continuous im-provement process (CI), which ensures appropriate, opti-mized processes on the process level, and mature, robust technologies on the product level.You can find our certificates here: zkw-group.com/unternehmen/qualitat/

FUTURE TOPICS AND MEASURES IN THE AREA OF MAN-AGEMENT SYSTEMS FOR THE COMING YEARS:

► ZKW Mexico: Introduction of management sys-tems ISO 14001 (environment), ISO 9001 (quality) and OHSAS 18001 (safety)

► Initial certification of the Mexico location at the end of the first quarter of 2017

► Improving EHS profile and specifications for all ZKW Group locations

► Continuing to develop NH data management for further reporting.

► 2018: Conversion to ISO revisions 2015 and ISO/TS16949 2016 (affects UMS, QMS)

AWARD 2015 Best New Supplier 2014 - Award for CO2 transparency 2015: zkw-group.com/news-presse/presse-archiv/ zkw-fuer-co2-transparenz-ausgezeichnet/?page=2

— MANAGEMENT SYSTEMS —


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Efficient and resource-saving

8.PACKAGING

One of ZKW's key goals is to design our packaging to be as environmentally friendly as possible.

Internally, circulating containers and reusable packag-ing are used for all packaging needs. We strive to design and develop our packaging so that it can be used for mul-tiple models.

A new, internal packaging concept at ZKW involves textile packaging: The material makes this packaging uni-versal, and allows it to be used for many different products. A long service life and simple cleaning using compressed air protects resources and the environment.

Images: Examples from our factory in Mexico

— PACKAGING —


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Improvements in overseas module pack-aging have allowed us to save cardboard compartments, air bag inserts, outer packag-ing, and wooden pallets. Instead, ZKW takes advantage of leased reusable packaging spe-cially designed for overseas transport. This allows us to achieve a utilization rate of 89% of the ocean freight container, in comparison to 60% with cardboard-based packaging. This reduces deliveries, saving CO2 emissions. Converted into pieces, this means that we can now deliver 6,048 pieces in just one de-livery (20 m³ ocean freight containers) in comparison to a previous 2,750 pieces.

FUTURE TOPICS AND ACTIONS IN THE AREA OF PACKAGING:

Resource-saving modular packaging: By developing and improving the design of our module packaging, we can use the packaging for more products and avoid the need to pro-duce new packaging types.

Left image: Former solution

Bottom image:New solution

— PACKAGING —


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Anyone who shares our passion will find many opportunities to use their talents and for further development within the ZKW Group

9.OUR COMMITMENT TO OUR

EMPLOYEES

CREATING JOBSThe ZKW Group is an attractive employer with a wide

variety of opportunities for development in an internation-al environment. We are an important and secure employer in the locations and regions where we work. Our employ-ees are our capital, and they make a key contribution to the success of ZKW. ZKW invests in continued training for our employees, also providing secondary school and university students and recent graduates insight into the everyday working world of an automotive supplier. This allows them to gain initial experience in the industry.

WORKING CONDITIONS AND HEALTH FOR OUR EMPLOY-EES

The Environmental, Health, & Safety Management System (EHS) is a key pillar helping us guarantee the safe-ty of our employees. We use this system to support and en-sure a safe work environment and a safe workplace.

Our standards and goals in the EHS and quality (QM) areas guarantee stable processes, and are continuously im-proved. All processes, products, equipment, and systems in our operating facilities are evaluated on an ongoing basis. Measures are then developed and prioritized, and improve-ments are carried out. We attempt to maintain our safety standards above the legal requirements.

NEW: FIRST AID CONCEPTSince 2015, at the behest of ZKW employees who vol-

unteer part-time as paramedics in rescue organization, we have been making additional improvements to develop our “first aid” concept at the Wieselburg location. In the future, we intend to use the skills of our committed employees to ensure the quickest and best possible care in some cases.

ZKW is working to reduce occupational accidents through ongoing measures.

Table 1: Employees divided by location, sex, and employment relationship

Locations Employees Office staff Part time Parental leave External personnel

Wieselburg 740 M / 1028 F 724 M / 235 F 122 105 762

Wr. Neustadt 37 M / 14 F 74 M / 11 F 4 0 19

Slovakia 246 M / 1776 F 199 M / 149 F 6 101 30

China 133 M / F 134 M / F 0 5 5

Mexico 64 M / 38 F 0 0 9

— OUR COMMITMENT TO OUR EMPLOYEES —


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Table: Number of work accidents by category

2015 Commuting accidents Work accidents Deaths

Locations Near acci-dents

Apparent work accidents² < 3 days

Registered work acci-

dents³> 3 days

Apparent work accidents² < 3 days

Registered work acci-

dents³ > 3 days

Wieselburg & Wr. Neustadt 11e 1 3 29 33 0

Slovakia No infor-mation No information No information 17 21 0

China No infor-mation No information No information 3 5 0

Total 11 1 3 49 59 0

HEALTH AND HEALTH CARE: ZKW FITPromoting and maintaining the health of our employ-

ees is a major concern for ZKW, and one that must be com-bined with the diverse demands facing our production and shift operations. In Wieselburg and Wr. Neustadt, company physicians are available to our workforces. Workplace au-dits and material evaluations are completed.

A first aid room and trained personnel are available to employees in Slovakia. In addition, employees receive a to-tal of 8 sick days. Tickets for swimming, gymnastics, and massage are offered to employees from the social fund.

Annual health checks are offered to employees in Chi-na. In Mexico, a trained nurse is on site permanently to pro-vide support, and a doctor comes to the facility 1-2x per week. These doctors complete health exams and workplace audits.

All employees at our Wieselburg and Wr. Neustadt lo-cations can receive a preventative examination. Vision tests, vaccination campaigns, and consulting on ergonom-ic design of work stations are part of our standards.

Cafeterias at ZKW locations (Wieselburg, Slovakia, Chi-na, Mexico) take care of our employees‘ physical wellbeing by offering a varied menu for every taste. The ZKW cafete-rias cook fresh food each day, focusing especially on sup-pliers and foods from our region. In Wr. Neustadt, we cur-rently distribute meal coupons for nearby restaurants to employees.

ZKW MOVESWe support athletic activity at all of our locations. Employees who enjoy running frequently have the op-

portunity to take part in company team races, for instance at the 15th Vienna Business Run 2015, where 84 employees were gathered at the starting line. The traditional soccer games between shop floor workers and office staff at the Wieselburg location are also legendary. In China, for in-stance, there are a soccer team, a badminton team, and a ping pong team. In Slovakia tickets are provided for swim-ming, gymnastics, and massage from the social fund.


Wr. Neustadt

Krušovce

Wieselburg

Vienna Business Run graphic:Runners representing the ZKW

FIT running team at the run-ning spectacle. The number

of participants has increased fivefold since 2010. 84 em-

ployees went to the starting line for ZKW in 2015.


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Table: Total training and education hours

Locations TotalIn hours

Wieselburg & HQ

Office staff 29,507.00

Employees 9,374.79

Total workout hours 38,881.79

Wr. Neustadt


Employees 656.00


China


Employees 2,060.00


Slovakia Currently, no information on training and education in Slovakia is available.

Mexico The Mexico factory is currently under construction, and no data is available.

Family DaysFamily Days take place annually at most ZKW loca-

tions (Mexico, Slovakia, Wiener Neustadt). The goal is to give family members some insight into the ZKW work-place, including a company tour. Games and fun are on the menu: a varied program of events mark the day with a raf-fle and music for all.

Ride sharing to the workplaceEmployees at our Wieselburg plant have the option of

signing up to be a driver or rider on the intranet, so they can build car pools that make it easier for them to get to work and share driving duties, while making an active con-tribution to climate protection. The principle is very sim-ple: employees simply state what they're looking for or what they have to offer.

Company buses to the workplaceBesides the ride sharing exchange for Wieselburg em-

ployees, we also offer company buses to our employees in Mexico, China, and Slovakia to make it easier for them to get to work. The buses run on set schedules and routes, and are available to all employees.

LEARNING AND CONTINUED TRAININGOngoing training is a must in an industry with high

quality demands. We support our employees with a variety of offers.

Mentors make starting a career easierTo make it easier for new employees in Wieselburg to

start their careers with us, in almost all departments they receive support from an experience employee called a mentor. The mentor helps them get settled and helps with their training in their field of duties, and serves as an ini-tial contact person for any questions.

Education and TrainingZKW promotes education and training among our em-

ployees. Above all among our production workers, ZKW starts with on-the-job training and sharing of expertise be-tween experienced and new employees. This on-site train-ing at the workplace is scheduled just like external train-ing, and must also be documented. The training hours listed below only include external training and education-al hours.



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COMMUNICATION WITH EMPLOYEESCommunication is an important factor for successful-

ly handling our everyday business. ZKW places great em-phasis on short reporting and decision-making pathways and on continuously transmitting knowledge within the company. Clearly formulated and regular communication across all hierarchical levels and functional areas serves as the basis of our corporate communications.

Every 2 years, we have an independent partner com-plete an employee survey at all of our locations to gauge satisfaction among all of our employees and identify im-portant areas where we need to take action. Our partner handles the entire evaluation and prepares the results. We then develop and implement measures based on these re-sults.

One key method of communication is “Lichtblick” (Bright Spot”, the ZKW employee newspaper. It comes out twice a year in Wieselburg, for instance, and multiple times a year in Slovakia depending on the circumstances. The management reports on news and events from the facto-ries, as well as developments, structural changes, and im-portant information on new strategies. Large sections of the newspaper are dedicated to the employees. It also re-ports all the news on employee key data, training opportu-nities, birthdays, weddings, anniversaries with the compa-ny, new employees and trainees, and retirements. There are also “moving” reports on athletic events, like the ZKW ski day, a joint bowling game, or soccer.

The GEC sends out information to all employees re-garding strategic changes and the current business situa-tion on a quarterly basis.

SUPPORTING THE YOUNGER GENERATIONWell-trained specialists will continue to be in demwell

into the future. ZKW is 100% focused on trainee education – at ZKW Lichtsysteme GmbH, this is one of the key factors in the success of the company. ZKW offers trainees, recent graduates, young professionals and experienced specialists alike outstanding prospects for personal development and custom-tailored career opportunities in Austria and around the world.

The following are focal points at the ZKW Group in our training and education of young people:

Trainees at ZKW: In 2015, 39 trainees received education at our main Wi-

eselburg plant in a variety of apprenticeship professions. The trainees were involved early on in the complex and di-verse processes taking place within the worldwide compa-ny. After passing their final apprenticeship examination, they will have access to the ZKW world in Austria, and be-yond. A trainee excursion to meet our customers takes place each year; in 2015 the trip was to BMW.

Since 2014, ZKW Slovakia has been officially enrolled in an apprenticeship program called “Dual education,” which is sponsored by the Slovak government. One inter-

nal person coordinates all apprenticeship-related activities. In this program, students spend 50% of their time at our site doing practical exercises and additional 50% at school. This program is hosted under the umbrella of Austrian Em-bassy.

Apprenticeship with graduation at ZKW: Apprenticeship with graduation is one unique option

for our younger trainees. We offer a unique combination of practical skill and theoretical knowledge. The result - an outstanding qualification. Young people who choose this path have a variety of career opportunities open to them at ZKW itself, and access to all fields of study. In 2015, 17 ap-prentices took part in the graduation course.

Competence Training Center Youngsters: CTC Youngsters is a continued training option for all

trainees at ZKW. From their first day of work until they've finished their training with us, this option reinforces and deepens the skills of the young employees. Modular semi-nars with focal topics build knowledge and personal abili-ties. The Action Day is a reward for everyone to close out their apprenticeship training. Everyone celebrates and closes out their time with refreshing rafting tours and ex-citing climbing and ropes courses.

ZKW is always looking for qualified employees and specialists in all areas of the company. In 2015, ZKW was awarded the silver seal for our excellent recruiting work as the CAREER‘S BEST RECRUITER 2015/2016.

We will steadily maintain our commitment to our em-ployees and to the environment in the future as well, with a focus on sustainability. Step by step, we are implement-ing measures and reviewing their effectiveness.

Future topics and actions in the area of employees:► Continuation of apprentice training at ZKW, and

continuation of our apprenticeship with graduation option and supporting the young generation in Austria.

► Slovakia: Our focus is on employee safety, reducing the number of work-related accidents, and imple-menting further measures focused on promoting health

► China: we had competence appraisal program in 2016 and will have an apprenticeship program, which will involve cooperation between ZKW and a technical school. We will also enlarge our plant this year and next year, and will have over 700 employ-ees by next year.

► Mexico: As part of introducing management sys-tems, we are expanding data documentation in the employee area, establishing various measures.



27

Table: Employee structure: Employee category in relation to sex and age group

Location Age group Total number Women Men

Wieselburg & HQ

15 – 20 140 70 70

21 – 30 1087 617 470

31 - 40 793 447 346

41 - 50 468 216 252

51 - 60 207 85 122

≥ 61 6 4 2


Wr. Neustadt

15 - 20 2 2 0

21 - 30 58 49 9

31 - 40 49 42 7

41 - 50 24 17 7

51 - 60 3 1 2

≥ 61 0 0 0


Slovakia

15 - 20 56

21 - 30 730

31 - 40 767 1247 1123

41 - 50 572

51 - 60 242

≥ 61 3


China

15 - 20 0

21 - 30 94

31 - 40 152 128 139

41 - 50 18

51 - 60 3

≥ 61 0


Mexico

15 - 20 7 5 2

21 - 30 45 15 30

31 - 40 40 14 26

41 - 50 9 4 5

51 - 60 0 0 0

≥ 61 1 0 1



28

At ZKW we live out diversity — 31 nationalities are represented at our Wieselburg location alone.

1

1

1

11

1

1

1

1

11

3 58 3

2

4

USA

Wiener Neustadt

Mexico

Slovakia

Czech Republic

China

LEGENDLOCATIONS

> 1000

101-1000

6-100

1-5

LEGENDNUMBER OF PERSONS

IN WIESELBURG

REPRESENTED NATIONALITIES IN WIESELBURG REPRESENTED NATIONALITIES IN OUR OTHER LOCATIONSWIENER NEUSTADT, USA, MEXICO, SLOVAKIA, CZECH REPUBLIC & CHINA

1

3 58

13

1

11

11

20

1

1

1

396

3

8

60

17

17

2

2 135102

2309

1

1

2

5

141

2 252

1

1

11

1

5

2 1169

1

61955

103

116 8 4

2

143

WIE

NER

NEU

STA

DTA

ust

ria

143

Ger

man

y 5

Hu

nga

ry

4Tu

rkey

2

Bulg

aria

1

Swed

en

1Sw

itze

rlan

d

1Se

rbia

1

USA

USA

5

Indi

a

2A

ust

ria

1

Mex

ico

1

MEX

ICO

Mex

ico

41A

ust

ria

8

SLO

VAKI

ASl

ovak

ia

1955

Rom

ania

2

Net

her

lan

ds

1R

uss

ia

1

CZE

CH

REPU

BLIC

Cze

ch R

epu

blic

11

69Po

lan

d

103

Slov

akia

6

Kaz

akh

stan

1

Ukr

ain

e

1

CHI

NA

Ch

ina

252

Au

stri

a 6

Ger

man

y 2

Net

her

lan

ds

1

WIE

SELB

URG

A

ust

ria

23

09H

un

gary

13

5R

oman

ia

102

Slov

akia

60

Turk

ey

58G

erm

any

39

Kos

ovo

20

Bosn

ia H

erze

govi

na

17

Pola

nd

17

Serb

ia

13Bu

lgar

ia

8C

zech

Rep

ubl

ic

6A

rmen

ia

4C

hin

a

3Po

rtu

gal

3Sl

oven

ia

3D

omin

ican

Rep

ubl

ic

2Sw

itze

rlan

d

2M

onte

neg

ro

2T

hai

lan

d

2U

SA

1A

ngo

la

1Fi

nla

nd

1

Fran

ce

1In

dia

1

Iran

1

Ital

y

1K

enya

1

Cro

atia

1

Latv

ia

1M

aced

onia

1

Mex

ico

1

Mol

dova

1

Mon

golia

1

Net

her

lan

ds

1Ph

ilipp

ines

1

Ru

ssia

1

Swed

en

1



29

1

1

1

11

1

1

1

1

11

3 58 3

2

4

USA

Wiener Neustadt

Mexico

Slovakia

Czech Republic

China

LEGENDLOCATIONS

> 1000

101-1000

6-100

1-5

LEGENDNUMBER OF PERSONS

IN WIESELBURG

REPRESENTED NATIONALITIES IN WIESELBURG REPRESENTED NATIONALITIES IN OUR OTHER LOCATIONSWIENER NEUSTADT, USA, MEXICO, SLOVAKIA, CZECH REPUBLIC & CHINA

1

3 58

13

1

11

11

20

1

1

1

396

3

8

60

17

17

2

2 135102

2309

1

1

2

5

141

2 252

1

1

11

1

5

2 1169

1

61955

103

116 8 4

2

143

WIE

NER

NEU

STA

DTA

ust

ria

143

Ger

man

y 5

Hu

nga

ry

4Tu

rkey

2

Bulg

aria

1

Swed

en

1Sw

itze

rlan

d

1Se

rbia

1

USA

USA

5

Indi

a

2A

ust

ria

1

Mex

ico

1

MEX

ICO

Mex

ico

41A

ust

ria

8

SLO

VAKI

ASl

ovak

ia

1955

Rom

ania

2

Net

her

lan

ds

1R

uss

ia

1

CZE

CH

REPU

BLIC

Cze

ch R

epu

blic

11

69Po

lan

d

103

Slov

akia

6

Kaz

akh

stan

1

Ukr

ain

e

1

CHI

NA

Ch

ina

252

Au

stri

a 6

Ger

man

y 2

Net

her

lan

ds

1

WIE

SELB

URG

A

ust

ria

23

09H

un

gary

13

5R

oman

ia

102

Slov

akia

60

Turk

ey

58G

erm

any

39

Kos

ovo

20

Bosn

ia H

erze

govi

na

17

Pola

nd

17

Serb

ia

13Bu

lgar

ia

8C

zech

Rep

ubl

ic

6A

rmen

ia

4C

hin

a

3Po

rtu

gal

3Sl

oven

ia

3D

omin

ican

Rep

ubl

ic

2Sw

itze

rlan

d

2M

onte

neg

ro

2T

hai

lan

d

2U

SA

1A

ngo

la

1Fi

nla

nd

1

Fran

ce

1In

dia

1

Iran

1

Ital

y

1K

enya

1

Cro

atia

1

Latv

ia

1M

aced

onia

1

Mex

ico

1

Mol

dova

1

Mon

golia

1

Net

her

lan

ds

1Ph

ilipp

ines

1

Ru

ssia

1

Swed

en

1



30

Social engagement and compliance

“IN THE REGION AND FOR THE REGION”Creating benefits for the regions we work in is import-

ant to ZKW, as is strengthening our regional focus and gen-erating added value. This approach makes a contribution to sustainable development. ZKW's motto is “In the region and for the region.” Regional purchasing organizations han-dle all purchases in the regional and assigned purchasing market. This helps ZKW create a stable base of suppliers in our markets, while securing even more jobs.

Our regions (areas) are divided into western Europe (WE), eastern Europe (EE), Europe (for electronics), NAFTA (North America), and Asia Pacific (Asia, Australia, and Oce-ania).

ZKW ENGAGEMENT IN THE EDUCATIONAL MARKETOur local engagement especially benefits the younger

generation. That’s why we always keep an open ear for var-ious inquiries we receive from universities, technical col-leges, or technical secondary schools. This focus includes sponsorships and mentorships, company tours, student days, internships, and supporting theses, including by awarding stipends. Furthermore, the lighting system spe-cialist is represented at numerous careers fairs and educa-

tional institutions. Specialist cooperations in particular fields, like internships and thesis support, are another fo-cal area and take place regularly alongside technical col-leges and universities. Select students receive financial support from ZKW during their studies, and can hold hol-iday jobs while they are on break or develop their theses. The stipend includes financial support of 1,000 euros per student per year, a fixed holiday job after their second se-mester, and the option of completing a thesis in collabora-tion with ZKW.

5 students received support from ZKW in 2015 in com-pleting their Bachelor, Doctoral, or Master's thesis, com-bined with practical experience, from one of our qualified advisors.

In addition, we completed 12 company tours for 374 secondary school and university students.

AM

AM

SB

ME

GD

ZT

WT

FR

PEL

LL

UU

RO

EF

WE

WL

SE

KIGM

VB

GR

SD

RI

BR

WY

SR

Deutschland 2Persone n

Kärn

ten

1Perso n

Portu

gal

1Perso n

Salzb

urg

3Persone n



31

Table: Employee regional origin

Locations % of employees who come from the region

Wieselburg 84.5% of employees from the region (100 km radius)

Wr. Neustadt 80% of employees from the region (50 km radius)

Slovakia 95 % of employees from the region (100 km radius)

China 100% of employees from the region (City of Dalian)

Mexico No data currently available

ETHICS AND COMPLIANCEThe ZKW Group acts according to the principles of re-

sponsible and sustainable corporate management. Adher-ing to sustainability criteria and respecting human rights along our entire supply chain is a major concern for ZKW. We are continuously developing our sustainability activi-ties within the organization, both in our corporate culture and in our processes. Our activities improve the satisfac-tion of our customers and employees, securing the long-term competitive position of the ZKW Group.

No legal proceedings, processes, or any other claims or penalties were brought or levied against the ZKW Group in 2015 within the framework of our normal business activi-ties.

LEGENDEPERSONENVERTEILUNG

GENAUE ZAHLEN

Bezirk - Personen

P

KR

KS

PL

TU

KO

MI

GF

HL

WT

HO

LF

WB

WB

WN

BN

MD BL

NK

WU

WU

WUWU

W

5 - 10

1 - 4

11 - 50

51 - 100

101 - 500

501 - 900

Slowakei2Personen

Ungarn7Personen

Stei

erm

ark

11Personen

ME - 877

SB - 703

AM - 225

PL - 57

P - 31

PE - 25

KR - 19

W - 16

WY - 10

ZT - 8SE - 8

TU - 6

L - 5

KS - 4SR - 4

MD - 3GF - 3LF - 3

HO - 2GM - 2LL - 2

HL - 1WT - 1GD - 1KI - 1

VB - 1

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

12.

13.

14.

16.

19.

22.



32

Whether they choose a car, truck, or motorcycle: Our customers demand innovative lighting systems

10.OUR CUSTOMERS

The following vehicle manufacturers trust products by the ZKW Group:

OTHERS AND AFTERMARKET

AUDI BMW MAN

OPELVW

PORSCHE

SCANIA

GENERAL MOTORS

ROLLS ROYCE

FORD ŠKODA

MERCEDES BENZ

VOLVO CARS VOLVO TRUCKS

JAGUAR LAND ROVER

KTM

— OUR CUSTOMERS —


33

Partnership with our customers

Good collaboration with our customers is important to handle the challenges we face in our everyday business. One example of this was our project with BMW. In August 2015, project managers for the BMW (7) completed the route from Dingolfing to Wieselburg by bike.

This unusual event was in response to a promise made, if series production for a highly complex project was able to be started on time. The BMW project team for the BMW 7 (772) kept its promise, and visited ZKW by bike on 08/04/2015. They pedaled a total of over 260 km.

ZKW Group cooperations

We underscore our commitment to the area of sus-tainability by serving as a reporting member of the NQC – the joint technical platform for sustainability in the auto-motive supply chain. A survey and use of the joint platform are just part of the long-term goal formulated in the indus-try to improve the sustainability performance of the auto-motive industry's supply chain together. You can find more information at: auto.nqc.com/auto

ZKW is a reporting member of the Carbon Disclosure Project (CDP), a non-profit organization with the goal of en-couraging companies and communities to publish their en-vironmental data.

This data includes information on climate-damaging greenhouse gases or water consumption. The CDP collects data and information on CO2 emissions, climate risks, re-duction targets, and corporate strategies once annually on a voluntary basis. You can find more information at: cdp.net/en

— OUR CUSTOMERS —


34

Transparent cooperation

11.OUR SUPPLIERS

With competition growing and product cycles becom-ing shorter, we all need to work together. Only a company that can count on an established and effective partner net-work will be and remain successful. The ZKW Group is ob-ligated to uphold a zero tolerance principle: We offer our customers error-free products in the best possible quality at competitive prices. This demands open, honest, and trustworthy communication with our suppliers.

Quality is our utmost goal: that’s why our 825 suppli-ers for the overall group are subject to a large number of specifications and requirements. To become a ZKW suppli-er, companies need to complete a set qualification process. Our supplier specifications are distributed along with or-ders and commissions, and have to be accepted before any contract can be concluded. Each new supplier is audited before the relationship begins.

GUIDELINESThe purchasing strategy of the ZKW Group is a key

building block in our corporate planning. We see the best possible supplier management as a central challenge, and a reliable supply chain as essential to the current and fu-ture success of our company.

We maintain long-term business relationships built on

trust with our existing suppliers, relationships that include close cooperation with an eye toward product develop-ment. We are actively engaged in supplier development in certain segments – particularly in areas where ZKW is opening up new markets.

Further information is available here:zkw-group.com/lieferanten/lieferantenportal

We complete supplier assessments at regular inter-vals, and conduct supplier visits based on an annual sched-ule. On-site audits review adherence to our quality and en-vironmental requirements. ZKW only completes supplier assessments for suppliers of direct materials.

Further information is available here:zkw-group.com/lieferanten/lieferantenbewertung/

Table: Suppliers with environmental or quality management systems 2015 in %

— OUR SUPPLIERS —

Locations Suppliers with EM Suppliers with QM

Austria (Wieselburg, Wr. Neustadt) 53 % 100 %

Wr. Neustadt 77 % 100 %

Slovakia 33 % 100 %

China 57 % 100 %

Mexico Currently no own or-ders

Currently no own or-ders


35

Only a company that continuously develops can permanently deliver top quality.Our development projects show where we stand today: right out front

12.INTO THE FUTURE WITH INNO-

VATION

MAKING THE GOOD EVEN BETTEROne of ZKW's primary goals is recognizing and devel-

oping technologies early on that will be used in the next generation of vehicles. Lighting up the street to increase safety for users.

The complexity of light technology systems used in modern vehicle headlamps is growing. The same is true of customer demands. A headlamp is much more than just a light source – it is a key part of the car, truck, or motorcy-cle’s systems, and must integrate harmoniously into the manufacturer's branded design.

We are capable of unifying new functions with innova-tive design concepts – for instance by increasing our use of LEDs.

LEDs are a light source suitable for everyday life, and are used in applications from keyboard to street lighting and, increasingly, in cars as well. In contrast to convention-al halogen or xenon light sources, LEDs require highly pre-cise current regulation. In addition, modulation stages are required to ensure an even light color. Our highly qualified employees provide the knowledge we need to handle these challenges in the areas of electronics, software, and quali-ty.

To do so, the ZKW Group has one of the largest light-ing channels in the world, and works with highly modern measurement technologies that assesseprototypes and se-ries production headlamps alike for their light output, light color, and homogeneity. We are working intensively to de-velop solutions that help us keep our technological edge for ourselves and our customers. At ZKW, innovation also means developing the knowledge we need to ensure the uniform applicability of new technologies across our entire product portfolio.

ADVANTAGES FOR CUSTOMERS AND USERSImproved light quality makes it easier to see and be

seen, and lighting distribution adapted to the specific driv-ing situation creates safety. In addition,new types of opti-cal modules facilitate exclusive design, their long service lives save time and costs, and reduced energy consumption protects the environment.

FUTURE TOPICS AND DEVELOPMENT PROJECTS► Further development of simulation methods and virtu-

al night driving to simulate customer-specific lighting distribution.

► Measures to ensure project quality through a FEM sim-ulation program for temperature, structural stability, condensation and de-icing, injection molding, and vibra-tion testing taking pedestrian protection into account.

► Static and dynamic front LED light applications, includ-ing cooling and electronic implementation

► Testing and measurement laboratory to verify develop-ment results incl. light channel for legally conforming measurements and assessment of the light distribution of individual headlamps up to testing of complete vehi-cles and trucks.

To drive our projects and developments forward, around 450 employees work across our Group in research & development.

— INNOVATIONS —


36

COOPERATIONS WITH RESEARCH INSTITUTIONSThe synthetic materials we currently collect and recy-

cle can be used by other industries, but unfortunately can-not yet be used by the automotive supplier industry.

Since 2015, ZKW has been working for the Fraunhofer Institute for Process Technology and Packaging, supporting a project from the “ForCYCLE” project network.

The focus of this research project is to find answers for how to sort out waste materials into recyclable compo-nents without pre-sorting. The goal of the project is to sep-arate materials for shredding from a system automatically and without pre-sorting, then send it for recycling. Anoth-er goal of this project is to develop recycling processes tai-lored specifically for headlamp waste from the automotive industry. ZKW provides sample materials for research test-ing.

— INNOVATIONS —

Image: Shredding the headlamps

Image: The results of the introduced shredder function


37

Image: Complexity in a single image The BMW 7 headlamp in pieces

— INNOVATIONS —


38

OWNER, EDITOR, AND PUBLISHER:ZKW Group, 3250 Wieselburg, Austria – T +43 7416

505 0, F +43 7416 505 2099, [email protected], www.zkw-group.com COPYRIGHT CONDITIONS: The work and all its parts are protected by copyright. Any use of this document beyond the scope of the Copy-right Act is not permitted without the consent of the publisher and may be punishable under the law. This applies in particular to duplications, translations, mi-crofilming as well as storage and processing in elec-tronic systems. This document has been compiled with all care. However, no liability can be accepted for the correctness of the information provided. Copies, wheth-er in full or in part, are only permitted with the express consent of the publisher.

CONTACT: If you have any questions, suggestions, or feedback

on the report, your contact at the ZKW Group is the De-partment of Environmental Management, available at the e-mail address [email protected]

[email protected]: +43 7416 505 0

DESIGN & PRODUCTION:ZKW Group

13.LEGAL NOTICE

— LEGAL NOTICE —


39

—CONTACT T +43 7416 505 0F +43 7416 505 [email protected]

Documents

SUSTAINABILITY REPORT ZKW GROUP 2015 · Headquartered in Wieselburg, the ZKW Group is represented in Austria, Slovakia, and the Czech Republic as well in as growing markets in the