Sustainability Report 2010
This Voith Sustainability Report isavailable in English and German.
Both versions and further information
can be downloaded from the Internet.
www.voith.com

Resources Are Limited
Ideas Are Not
Sustainability Report 2010

The Report
Voith’s first Sustainability Report
Voith GmbH presents its first Sustainability Report, whichis intended to provide unique insights into its Group-wide
activities in terms of ecological and social responsibility.
Here, our goals and aspirations are to make our sustainability
strategies transparent for our stakeholders and to offer information about how they are implemented in our various fieldsof activity.
The Voith Sustainability Report focuses on our current andfuture challenges in areas such as management, economics,
environmental protection, product responsibility, employees
and society. We report on both the status quo as wellas our future strategies, approaches to finding solutions andconcrete measures aimed at increasing the sustainable performance of the company.

The figures, facts and information published in this reportrefer to Voith GmbH as a whole with its Group Divisions ofVoith Hydro, Voith Industrial Services, Voith Paper and Voith
Turbo, covering approximately 85 % of the Group’s sales
and/or 87 % of the Group’s created value. Exceptions, suchas location-related figures or division-specific activities, aremarked accordingly.

Data collection
Since fiscal 2008/09, relevant key data on occupational safety,
environmental and health protection have been recorded
via a database at site level and validated in accordancewith the two sets of four-eyes principle. This process covers
all production and administrative sites operatively controlled
by Voith.

Reporting method

Forward-looking statements

Our reporting method is oriented on the internationally recognized GR 3 Guidelines of the Global Reporting Initiative (GRI).
Based on our own assessment, we estimate that Voith hasreached the application level C.

It was important to us that our first report provides not only areview of past events, but also an outlook for the future. The
report therefore contains a number of forward-looking statements. We would like to point out that these statements are
based on current assumptions. Due to unknown risks, uncertainties and other factors, the actual results, developments
or services of our company may deviate from our prognoses,
evaluations and statements.

To determine the sustainability issues for this report, we conducted extensive analyses in 2009 and 2010. In addition,
special internal workshops were conducted to identify ourrelevant stakeholders and sustainability themes in the areas of
economics, environment and social affairs. The relevance ofthe selected subjects for the identified stakeholders and Voith
was checked in a weighted ranking system. The result of thisevaluation was then used to identify specific fields of action
and to define goals.

Reporting period and report scope
The reporting period covers the fiscal years 2008/09 and2009/10. Our fiscal year starts on 1 October and ends on 30
September. In addition, we have also included other information accumulated up to the editorial deadline of February 28,
2011 when it improved the report’s overall understanding.

Further information
This printed report cannot cover the entire spectrum of information on the services and activities of the Voith Group. Further and more comprehensive information can be found on our
Web site www.voith.com, as well as our Voith Annual Report.
This Voith Sustainability Report is published in German andEnglish. To provide easier readability, gender-specific double
entries have been avoided. This does not represent a valuation and all entries are to be understood as gender-neutral.

Publication of the next Voith Sustainability Report isscheduled for 2012.

Imprint

Contact

Published byVoith GmbH
Corporate Communications
P. O. Box 20 00
89510 Heidenheim
Germany
Phone: +49 7321 37-0
Fax:
+49 7321 37-7000
E-mail: info@voith.com
www.voith.com

Contact
Voith GmbH
Andrea Linke
Head of Corporate Sustainability
E-mail: sustainability@voith.com

Eco-Friendly
Production
During the production of this Voith
Sustainability Report, all CO2 emissions
for printing and processing were calculated. By investing in an environmental
project based on the gold standard, inthe future the same amount of CO2 will
be recycled – thereby creating a neutral
CO2 footprint for this Voith Sustainability
Report.

The recycled paper RecySatin used forthis Voith Sustainability Report 2010 is
produced in compliance with the inter­national FSC standard. It consists of
80 % recycled fiber and was produced ona Voith paper machine.

Printed in Germany, ©Voith GmbH, 2011-05

“We do not inherit the world from ourparents, we borrow it from our children.
As a family-owned company we believein this principle and we act accordingly.”
Corporate Board of Management

Contents

The Voith Sustainability Report, Contents,
Foreword

The Report

3

6

2

Voith Sustainability Report 2010

CoverContents2

Foreword

4

3 Sustainable Profitable Growth16

3.1 Megatrends, Opportunities
and Risks

18

3.2 Risk Management20

3.3 Compliance21

6 Responsibility for Our Employees

46

6.1 Long-Term Employment –Lifelong Learning48

6.2 Employee and Management
Development50

6.3 Diversity and Equal
Opportunities50

6.4 Demographic Change:
Challenge and Opportunity

52

6.5 Occupational Health and Safety

52

1

4

7

1 Group Portrait and Philosophy

6

2 Sustainable Business Management 12

1.1 Organizational Structure

813

1.2 Tradition and History10

2.1 Sustainability Inside
the Company

1.3 Values, Guidelines
and Compliance11

2.2 Organization of Sustainability
Management13

2.3 Stakeholder Dialogue

14

4 Responsibility for the Environment 24

5 Product Responsibility

34

4.1 Ecological Business
Management26

5.1 Future-Oriented Portfolio

36

5.2 Supply Chain

39

4.2 Material Efficiency andResource Protection

28

5.3 Product Safety43

4.3 Energy Efficiency, Climate
Protection, Emissions

31

7 Corporate Citizenship

56

Miscellaneous61

7.1 Social Commitment

57

Glossary62

7.2 Commitment to Culture,
Education and Sport

58

Facts & Figures

64

Goals

68

GRI Index

70

2

5

Contact/Imprint

Cover

Contents3Foreword

Ladies and Gentlemen,
Business Partners and Friends of Voith,
Many of you have known Voith for a long time, having worked closely together withus as good partners for years, sometimes even decades. I’m sure that with this, thefirst Voith Sustainability Report, our many long-standing friends and customers will
discover a wide range of new as well as interesting aspects of our company.
Today, Voith is a family-owned company that has become a global player. Sustainablethinking has been a significant part of our history. For example, Voith was investingin education and health care long before these activities fell under the term sustainability, because they were seen as a natural part of our entrepreneurial responsibility.
At Voith, we have preserved this mentality and sense of responsibility. Today, our pursuit of sustainability characterizes our methods and activities in three different ways:
1. Sustainable management is a significant component of our commercial success.
Our growth, even in times of crisis, shows that we are on the right track: Voith is oneof the very few companies that managed to overcome the most serious economic
downturn since the Second World War without a decline in sales or profit fromoperations. For example, with €5.2 billion, our sales in fiscal 2009/10 were 2%
higher than in the previous fiscal year. The foundation for this sustainable growth
was laid over many decades, thanks to: long-term strategies, a balanced and innovative product portfolio, global positioning, continuous investment in research anddevelopment as well as the competence and experience of our employees.
2. Our product portfolio is also characterized by sustainability. For decades, ourproducts have helped our customers in many different industries to set up sustainable infrastructures and processes as well as to preserve resources. There are
numerous examples: Today, Voith is the technology leader in wastepaper recycling
for papermaking. And Voith’s hydro power stations reliably supply millions of people
and industries all over the world with power, light and heating.

4

Voith Sustainability Report 2010

In Shanghai, São Paulo or Berlin, Voith transmissions make public transport safe
and comfortable. All these successes are an obligation for us to continue our efforts
to make our products, plants and systems more eco-friendly.
3. Sustainability is a key feature of our entrepreneurial processes. We aim for economically, ecologically and socially balanced business methods, in which sustainability is rooted as the major principle of all our processes and procedures acrossthe entire added-value chain: in purchasing, production, the interaction with our
employees and in our commitment as corporate citizens at our locations in over 50
countries.
We know that we have already achieved a great deal. Yet there are still some areas
where there is room for improvement or where we simply have to become better.
This Voith Sustainability Report shows where we currently stand. We would like to
use it to inform all our stakeholders, openly and clearly, about our current rangeof activities. It is our declared goal to take Voith to the top in the field of corporate
sustainability and make Voith a benchmark for other industries.
With this report and its underlying analyses we are entering a new frontier. At thesame time we are carrying on the tradition and style of Voith, a family-owned company, which includes the obligation to conduct environmentally compatible, clean
and fair business with long-term success. This triad is our foundation. We intend tooperate sustainably in every respect – and to discover fresh opportunities for future
generations rather than spoiling them.

I hope that you will accompany us on this journey.

Dr. Hubert Lienhard, President and CEO

Foreword5

It is our aspiration to offer reliable,
high-class solutions as well as
always treating our partners withintegrity and fairness.
6

Voith Sustainability Report 2010

Group Portrait and Philosophy
Voith sets standards in the energy, oil & gas, paper, raw materials,
and transportation & automotive markets. Founded in 1867,
Voith employs almost 40 000 people, generates €5.2 billion in sales,
operates in around 50 countries around the world and is today oneof the biggest family-owned companies in Europe.
Voith GmbHA pillar of strength: our employees

Innovative capacity, engineering expertise, reliability and quality
have governed our activities since the birth of Voith in 1867,
and these are still the guarantee of our ongoing success.
Today, the Voith Group employs 40 000 people in around 50
countries. With its headquarters in Heidenheim/Brenz in theGerman state of Baden-Württemberg and other major locations in Brazil, China, India, Austria and in the USA, the company is based in Germany, but at home all over the world.

Our employees are a vital factor of our success. They havemade us what we are today: one of the largest family-owned
companies in Europe. In the past fiscal year, Voith has recruited
new staff, leading to a moderate and selective increase of its
workforce. But a company that is looking for highly qualified
employees also has to invest in training and further education. That’s why we offer apprenticeships and traineeships ina wide variety of jobs and pay close attention to the quality ofour training programs.

Always one step ahead
A pioneering spirit and consistency are not a contradiction
for us. Both principles enable us to continuously expand ourcompetitiveness and our strength in the market. Ever since
the company was founded, our engineers have been writing
technical history with their inventions. Today, Voith holds over
11 000 active patents worldwide, and every year about 400
new ones are added.
Our operative business is organized into four Group Divisions:
Voith Hydro, Voith Industrial Services, Voith Paper and Voith
Turbo. One quarter of the energy generated worldwide fromhydro power is produced with turbines and generators from
Voith Hydro. A large proportion of the world’s paper production originates from paper machines made by Voith Paper.
Drive components from Voith Turbo are used all over the globe
both in industrial plants and on railways, road and the water.
Major companies in key industries trust in the technical ser­vices of Voith Industrial Services.

Financial independence as a family-owned company –the path to sustainable growth
Voith’s economic foundation is its financial independence asa family-owned company. Otherwise we would not be able togenerate the means for securing our future and financing our
growth. And it is the best way for us to continue to develop
the technologies that our customers need. Only on this basis
will our shareholders continue to enjoy being a part of Voithand being proud of their company. Ultimately, we are also
convinced that there is no other way of sustainably maintaining our economic strength, securing jobs and generating newones – in Germany and around the world.

Group Portrait and Philosophy

71.1 Organizational Structure
Everything owned by one family
The Voith GmbH is 100% owned by the Voith family. It is anoperative management holding, whose Board of Management
is directly responsible for the business strategies in the Voith
Group and thus controls the company. The Shareholders’Committee and the Supervisory Board act as advisory andsupervisory bodies. At the same time they are also there tocontrol the Board of Management. Each of the four Group
Divisions has its own holding company that governs the activities of their independent subsidiaries.
Voith Hydro

tors. This applies not only to traditional hydro power, but also
to harnessing energy from the oceans.
Voith Hydro consists of the Large Hydro, Small Hydro,
Automation and After-Market Business divisions. The product portfolio of this systems supplier ranges from generatorsand turbines to pumps as well as control technology. Be it
research and development, consultation, engineering, production and assembly or commissioning – Voith accompanieshydro power projects all over the world throughout their entire life cycle. And it also offers services for the maintenance,
operation and modernization of existing hydroelectric plants.
Voith Industrial Services

Generating clean energy from water
Against the background of the double challenge of effective
climate protection and the globally rising demand for energy –hydro power will in the future play an even more importantrole in the energy mix. It is the only form of renewable energythat can generate power in industrial quantities at competitive
prices, at any time and without subsidies.
As a complete supplier of hydro power plants, Voith Hydro is
one of the leading industrial partners of power station opera-

Technical services and service concepts
Voith Industrial Services is a leading provider of services for key
industries. The Group Division serves four market segments:
the automotive and tier 1 industry, the petrochemical and energy industry, the manufacturing industry and engineering services. This new organization has been set up to comply withspecific customer requirements. Here, customers benefit fromour streamlined organization, higher industrial competence
and worldwide quality standards. The Automotive and Energy-

A Company …
Voith GmbH
Corporate Central Functions

Voith Hydro

Voith Industrial Services

Voith Paper

Voith Turbo

Sales €1 158 million

Sales €962 million

Sales €1 723 million

Sales €1 349 million

Orders Received €972 million

Orders Received €962 million

Orders Received €2 009 million

Orders Received €1 351 million

Employees 5 238

Employees 19 119

Employees 9 353

Employees 5 422

Share of Group Sales 22%

Share of Group Sales 19%

Share of Group Sales 33%

Share of Group Sales 26%

8Voith Sustainability Report 2010

Petro-Chemicals divisions offer customized solutions forthe automobile and processing industries. Under the name
Deutsche Industriewartung (DIW) this Division, has for morethan 40 years provided industrial services and solutions for thethe manufacturing industry – mainly for customers in Central
and Eastern Europe. The Engineering Services division offers
contract engineering for the aeronautics industry and for rail
vehicle manufacturers.
Voith Paper
From stock preparation to finished paper
As a partner and systems supplier for the paper industry,
Voith Paper develops and produces technologies and products for the entire papermaking process. The Group Division
is divided into divisions for: Fiber & Environmental Solutions,
Paper Machines, Fabric & Roll Systems and Automation.
The product portfolio covers plants for processing virgin andrecycled fibers including water treatment, complete paper
machines from headbox to packaging systems, automation
technology and also consumables, such as fabrics and rollcovers. In addition, Voith Paper offers services for the entire
manufacturing process.

Due to continuous innovations, Voith Paper continually
improves the papermaking process. The emphasis lies on
the development of resource-saving products, which ensure
the most efficient utilization of energy, water and fibers.
Voith Turbo
Drive systems for vehicles and industrial applications
Voith Turbo is a leading supplier of drive, coupling and braking systems for industrial, rail, road and marine applications.
The Group Division develops drive components and systems
to increase the efficiency and the economy of end-products
which generate sustainable, long-term benefits. To achievethis, our core competence in hydrodynamics, mechanics andelectrical engineering/electronics are intelligently combined.
The key developments of Voith Turbo focus on improved energy consumption, higher efficiency and energy recovery. The
most important products are transmissions and retarders forcommercial vehicles, diesel-hydraulic locomotives, couplersystems for rail vehicles, start-up and control components
for industrial plants, universal joint shafts, marine propulsion
systems, as well as components for power generation fromrenewable energies.

… at Home in the World
North America

EuropeAsia /Australia /Oceania

Sales €719 million

Sales €2 554 million

Sales €1 340 million

Employees 5 157

Employees 24 163

Employees 3 979

Central /South America

AfricaSales €512 million

Sales €73 million

Employees 6 343

Employees 112

Group Portrait and Philosophy

91.2 Tradition and History
Growth and responsibility

Becoming a global player

January 1, 1867 was the official founding date of the Voith
Group. It was the day when Johann Matthäus Voith handed over
the reins of the company to his son Friedrich, who registered
the company as the Maschinenfabrik J. M. Voith based in
Heidenheim. The first Voith patent was a “Raffineur” (refiner), a
wood-grinding machine. With this product, Voith entered thetechnical history books for the first time: the Raffineur allowed
paper production from wood on an industrial scale.

In the 1970s and 1980s, Voith consistently pursued its glob­
alization drive with the establishment of subsidiaries in North
America and Asia. Between 1986 and 2000, sales quadrupled.
Acquisitions and mergers increased the portfolio. In 1994, Voith
Paper was founded as a result of Voith acquiring the majority
share of a joint venture with the Swiss Sulzer Group. In 2000,
Voith and Siemens formed a joint venture for hydro power technology: Voith Siemens Hydro Power Generation.

Soon after, Voith started to produce its own turbines. In 1870,
the first 100 hp turbine left the factory in Heidenheim and at
the same time the company also developed complete paper
machines. The first one was delivered and commissioned in
1881. In 1903, Friedrich Voith opened the first subsidiary in
St. Pölten, Austria, to expand into markets in Austria-Hungary
and Russia. In 1908, Friedrich Voith again demonstrated hisengineering ambitions and inaugurated the first turbine test
laboratory in Heidenheim, known as the “Brunnenmühle.”

During the 1990s, the company continued its expansion towards the east. New locations in China, Russia and India were
set up. Through a shareholding in DIW Deutsche Industrie­
wartung AG, the cornerstone was laid for the Group Division:
Voith Industrial Services. On October 1, 2010, Voith AGchanged its name to Voith GmbH.

After the death of Friedrich Voith, the company was run jointly by his sons Walther, Hermann and Hanns. In the 1920s,
the Drive Technology division was added. After the Second
World War and the death of Walther and Hermann, it was up
to Hanns Voith to rebuild the business. With the arrival of the
1950s, Voith grew at a breathtaking pace: 1956 saw the founding of Voith Turbo KG. In 1958, Voith built the world’s fastest
newsprint machine. And the founding of Voith S. A. in São Pauloin 1964 kicked off the internationalization of the Group.

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Voith Sustainability Report 2010

Over the years, the number of employees has grown to nearly
40 000. Today, Voith is prepared to continue the successstory, which started with a small locksmith’s workshop, wellinto the future.

1.3 Values, Guidelines and Compliance
Voith – Engineered reliability.

Business relations are grown over generations

Trust is the maxim for our business relations and our activities.
This maxim is supported and complemented by our values:
reliability, fairness and innovative power. This canon of values
is also summarized in our slogan “Voith – Engineered reliability.” It reflects our aspiration to offer reliable and high-quality
technology and, at the same time, to always treat our partners
with fairness, respect and honesty. The guidelines for our activities are derived from these values. In this way we can ensure that Voith employs the same business principles and applies the same philosophy everywhere in the world. We havebeen a family-owned company from day one. Our values andguidelines are the basis upon which we combine the culture ofa family-owned company with that of an international group.

Our values not only apply internally, but also to our business
relations. The cultivation of long-term partnerships with ourcustomers rates high in our organization. Here, too, we bankon trust, reliability and fairness. We are proud that many of ourbusiness partners have been with us for generations, in fact,some of them have been doing business with us for more than
100 years. Our long-standing customer relationships provethat we are taking the right approach.

“Climate change anddwindling resources
are a challenge. At thesame time they present
opportunities for growthwith new solutions.”
Dr. Hubert Lienhard, President and CEO

Trust as a bond with our employees
Trust, fairness and reliability are also the foundation of
the relationship between a company and its workforce. The
success and the innovative power of Voith are based on theirwork. Only motivated and contented employees perform well,or even very well. Voith therefore attaches great importance tooffering its employees exciting tasks and career perspectives.
To us, “Working a lifetime at Voith” is not just a slogan – anddefinitely not a rarity. This will never change, even in times ofongoing globalization, as Voith sees itself as a genuine community of interest based on accomplishment and mutual respect.
Compliance – our values are binding
Voith’s values characterize the attitude of the Group towards
our business partners, customers and suppliers, as well as
our owners, the Voith family. The Voith Code of Conduct summarizes the most important rules that are derived from ourvalues. The purpose of the Code of Conduct is to provide our
employees with guidelines for their activities and, at the sametime, to meet our high expectations of honesty and decency.
These rules and procedures are continuously updated andadapted to existing requirements.

Group Portrait and Philosophy

11We are not only aiming fortechnological leadership, we
also want to be the number
one in sustainability.
12

Voith Sustainability Report 2010

Sustainable Business Management
Entrepreneurial responsibility: to us, sustainability is an essential part of ourcorporate strategy. In line with the Brundtland definition, Voith considers
economic, ecological and social factors to be equally important. This holistic
view has been adopted by the Voith family since the foundation of thecompany. One of the family’s concerns is to keep the company in family
ownership across generations and to remain financially independent.
Operational excellence – resource optimization
Voith endeavors to continuously optimize the utilization of resources. In the long term we can hold our ground against thecompetition only if we manage to minimize the negative economic, ecological and social impact of our production processes and products – or eliminate it altogether. And our reputation,
too, can only be preserved by consistent sustainability efforts.

“Our sustainability
drive covers the entire
added-value chain of
our company.”Dr. Hermann Jung,
Member of the Corporate Board of Management
Employees in focus
Voith stands out with its responsible and employee-oriented
corporate culture. This includes the responsible treatment of
our worldwide employees, as well as their involvement in theimplementation of our sustainability issues.

2.1 Sustainability Inside the Company
Voith started with the establishment of a systematic, integrated
sustainability management drive in 2008. It is our aim to embed the idea of sustainable business practices within the entire
Group. For this purpose we are developing suitable strategies,
processes, methods and tools across the entire added-value
chain and the life cycle of our products and services.

2.2 Organization of
Sustainability Management
An efficient sustainability management calls for a businessorganization with clear structures. Following a resolution by the
Board of Management, we launched the Corporate Sustainability central function in the first quarter of 2009, to systemize
and promote sustainability-relevant issues. The head of theteam reports directly to the Chairman of the Corporate Boardof Management. In autumn 2009, we added the Corporate
Sustainability Council as a steering committee.

Sustainable Business Management

13Organization of sustainability management

BoM Voith Ind. Services

BoM Voith Hydro

President and CEO
Voith GmbHBoM Voith Paper

BoM Voith Turbo

DS Voith Paper

DS Voith Turbo

Corporate Sustainability Council
DS Voith Ind. Services

DS Voith Hydro

Head of CS

Central Function
Corporate Sustainability

BoM = Board of Management

CS = Corporate Sustainability

DS = Divisional Sustainability

Central function: Corporate Sustainability
The Corporate Sustainability executive department develops
strategies and concepts as well as supporting the operating
units by their implementation. It cooperates closely with othercentral functions of the Group and their steering committees.
Sustainability Council
The Sustainability Council is made up of the management of
the Corporate Sustainability executive department and the individual sustainability managers in the Voith Group Divisions.
The committee reports directly to the President and CEO. On
his behalf, the Council prepares white papers and proposals
on special topics, targets and values for the upcoming periods. It carries out regular assessments of the sustainability
performance of the company.
Sustainability in the Group Divisions
The sustainability organizations of the Group Divisions are
responsible for the operative implementation of set targets
and adopted measures.

Ind. = Industrial

2.3 Stakeholder Dialogue
Voith engages in a regular exchange with its interest and target
groups. Apart from involving the owner family, the company
also communicates with financial service providers, investors,
customers, suppliers, universities, research institutes and nongovernmental organizations, as well as the interested public.
The customer as a stakeholder – an important barometer
The satisfaction of our customers is one of our major concerns. To objectively assess and improve our performance forour customers, we carry out regular surveys. During a survey
in 2010, we managed to contact over 500 customers, representing 60% of the sales in one Group Division. The evaluation
confirmed that sustainability issues also play an important rolefor our customers.

“With our products, we are responsible for safety,
reliability and sustainability throughout their service
life, which can often last for decades.”Peter Edelmann, Member of the Corporate Board of Management

14

Voith Sustainability Report 2010

Our goals
Over the next few months we will continue to expand oursustainability management. We will define key indicators andmeasurements for the implementation of sustainability.

Through special training we intend to involve our employees
in this process and make them more sensitive to sustainability
issues. Our goals also include the further systemization of our
stakeholder dialogue.

Sustainability Can Be Measured
Hydro power is the oldest form of renewable energy generation. Comparedto power generation from other energy
sources, both renewable and conventional, hydro power stations have a very
high efficiency with very low emissions
across their entire life cycle.
When a hydro power station is built,
the impact on humans, animals andthe environment has to be assessedon a number of sustainability criteria– a process that starts as soon as the
project is planned. The International
Hydro power Association has created aplanning and decision-making tool, theso-called Hydro power Sustainability
Assessment Protocol (HSAP). Amongothers, the contributors to this initiative also included Voith and the WWF(Worldwide Fund for Nature). This new
tool is now being tested for practicality.
Voith has been cooperating with the
WWF for several years. From day one,
representatives of both parties discovered common beliefs and moral concepts. Therefore, it was only natural for
Voith and the WWF to join efforts in examining a pilot project with the help of
the new HSAP. Voith succeeded in winning one of its customers for the project,a power station operator in North India.
The project was carried out in 2008. Its

result was largely positive for the power
station operator. The project manager
enjoyed excellent relations with theaffected residents and negotiated thefinancial settlement. In talks with thevillagers, the project team also learned
that he had handled the social and cultural effects of the power station in an
exemplary manner. The power stationis relatively small, so that the ecological impact on the mountain valley was

not too drastic. The examination merely
highlighted a few weak points on theprocess side – findings which provided
the operator with valuable input on how
to improve his procedures. A year later,a second joint project in Brazil eventually convinced the Voith-WWF teamthat the sustainability protocol of theInternational Hydro power Association
is excellently suited for the assessmentof hydro power projects.

Sustainable
Kapitel-/bzw.
Business
Themenangabe
Management

15

We want to operate sustainably
in every respect, to open up
opportunities for future generations
rather than spoiling them.
16

Voith Sustainability Report 2010

Sustainable Profitable Growth
Economic stability and profitability: the world economy has recoveredfrom the worst recession since the Second World War. The mood of themarkets is optimistic and there are positive signs that the upturn willremain stable, even if it varies somewhat in individual countries. Despite
the slump of the world economy in recent years, Voith has continued todevelop steadily and was able to record significant growth in fiscal 2009/10.
The company is therefore well positioned to maintain the strong growth
it has shown over the previous years.
Growth in a challenging environment
Sustainable profitability – our company statistics for theperiod under review are very impressive: sales, operational
results and net income showed a clear upward trend. In fiscal
2009/10 Voith increased its sales by 2% to €5.2 billion. The
order books are full, and orders received rose by 7% to€5.3 billion. The operational result was up, too; compared tothe successful previous year, it grew by 9% to €353 million.
The net income amounts to €121 million, representing an
increase of 58%.
All four Group Divisions have contributed to this excellent result. The share of the individual Divisions ranged from 19% for
Voith Industrial Services to 33% for Voith Paper.
This upbeat development is certainly remarkable in view of the
difficult business conditions: quite a few of our markets were
hit by the impact of the financial and economic crisis. The
fact that Voith still managed to grow on a Group level demonstrates that we are a reliable partner and securely positioned
for years to come.

fluctuations: in the USA and in Europe, which were both
affected much more severely by the financial crisis than Asia
and South America, the economies are recovering only slowly.
Economic data is pointing upwards, but the gap between
the pre- and post-crisis values is still quite large. In emerging
markets such as Brazil, China, India, as well as Asia there was
hardly any decline, and pre-crisis levels have already been
exceeded.
Being proactive to master the challenges also in the future –this is the declared goal of the Corporate Board of Management. The company recognizes changing markets and actswith foresight. As a result, Voith started a recruitment drivein the growth regions of Asia and Brazil and established new
subsidiaries. The company also continues to invest heavily
in the research and development of its products. Special attention is paid to solving global challenges, such as resource
scarcity, climate change and the specific requirements ofgrowth regions.
Voith has emerged from the economic crisis even stronger
than before. The anticipated upturn opens up new opportunities for ongoing positive business developments.

Good prospects
The situation has bottomed out and the economy as a whole
has recovered. However, there are still some strong regional

For further information on our company results, please see
our Annual Report 2009/10, which can be downloaded fromwww.voith.com/media/voith_gb_0910_en.pdf.

Sustainable Profitable Growth173.1 Megatrends, Opportunities and Risks
Megatrends point the way
Climate change as well as dwindling resources, globalizationand mobility, urbanization and demographic change are today’s
megatrends. To a degree, these developments can be regarded
as risks for economic activities, but they also open up opportunities. It is therefore essential to be aware of social and ecologicalchanges and make room for new ideas and developments. In
this way, solutions for future challenges can be identified early.
And this is exactly what Voith does. Our success, especially intimes of crisis, is based on positioning ourselves prudently ingrowth markets and developing an innovative product portfolio. “Our products provide answers to the urgent questions ofour time: CO2 -free energy generation, mobility in megacities,
resource-saving production methods. This enables us to make asustainable contribution to the establishment and expansion ofnational economies,” says Dr Hubert Lienhard, Chairman of the
Corporate Board of Management.
The Three Pillars of Sustainable Growth at Voith
Voith’s successful sustainable growth, its economic stability
and its financial independence are supported by three pillars:
our diversified product portfolio, our international presence aswell as our investment in research and development.
1. A balanced product portfolio
Starting with its core business – machine and plant engineering – Voith has systematically expanded its product and ser­vice portfolio, thereby firmly establishing itself in its core markets of paper, energy, oil and gas, raw materials, as well as
the transport and automotive markets.
Our broad strategic positioning buffers a great deal of
economical risks. Since the individual markets are subject
to different business cycles, declines in sales in late-cycle
markets such as oil and gas, as well as energy, can becompensated by growth in the early-cycle markets of paper,transport and automotive.

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Voith Sustainability Report 2010

But this is only one of the reasons why Voith enjoys solid
growth, even in economically turbulent times. Another reason
is that Voith offers investment goods and services that areneeded for the commercial development of emerging markets. With our turbines and plants, we equip hydro power stations to cover the rising energy requirements of these newmarkets. To a large degree, the growing demand for paper
is met by Voith’s paper machines. Booming cities need wellfunctioning public transport and rail systems, for which Voith
supplies components.
2. Global presence
Voith’s history of international activities goes back a longway. At a time, when most German companies only lookedat their domestic market, Voith exported its products all over
the world. At the beginning of the 20th century, we built
turbines for projects in China and in the USA, and sold paper
machines to Austria-Hungary, Russia and Sweden. Voith istherefore one of the pioneers of German foreign trade.
The early internationalization of our business has grownconsistently. In 1964, Voith opened its first non-European
production site in Brazil, and further international locations
followed. Today, Voith is represented in nearly 50 countries
including the booming emerging markets. Since the 1960s
Voith has been in Brazil, since the 1980s in India and since the1990s in China. The long-standing foothold of the company intoday’s growth markets is one of the reasons why Voith is now
participating in the dynamic development of these countries
and, as a result, has weathered the current economic crisis
unscathed.
Voith’s goal is to become just as rooted in its international
markets as it is in Germany. A glance at our regional sales
distribution confirms that we are on the right track to reachthis goal: 25% of our sales are now achieved in Asia, 24% in
America, 29% in Europe (excluding Germany), 20% are wonin Germany, and 2% in the rest of the world.

3. Technical innovation throughresearch and development
Voith’s position in the world market islargely due to its innovative strength.
Especially in economically difficult
times, we invest in the research anddevelopment of new products – inrecent years with over €200 million
per year which is 5% of our sales. Examples of such development projects
are the tidal power stations of Voith
Hydro, the chemical technologies ofVoith Paper, the service and mainte­
nance of Voith Industrial Services windfarms, and the components for boosting engine efficiency such as the
SteamTrac or the TurboCompound of
Voith Turbo.
Research and development

Turning Dams into Power Stations
Generating energy with hydro power creates growth based on renewable
resources – this alone is a positive thing within the scope of our sustainable
operations. But when it is also possible to install new power stations on
existing dams and locks, it becomes a plus for both the environment andeconomy on several levels.

in million €
250

254

266

2007/08

2008/09

2009/10Here, the US power station operator American Municipal Power Ohiois taking a new approach and is currently building four new hydro power
stations on existing waterways andlocks. As a result, the power suppliermanages to generate growth fromrenewable energies without any additional impact on the environment.
Voith Hydro in York, Pennsylvania,
supplies the technical equipment
for these power plants and has also
grown thanks to these projects. To
implement the four projects, Voith
acquired an empty industrial building on the banks of the Ohio River inMonroe County, thereby creating 40
new jobs.
The new hydro power stations
are located in the states of West
Virginia, Indiana, Kentucky and Ohio.
Voith Hydro supplies the technicalequipment with an overall output

of 313 megawatts. The contract includes generators, turbines, automation technology and electronics. The
first three projects at Willow Islands,
Cannelton and Smithland have been
fitted with eight turbines, producing
a total of 208 megawatts. The fourthand largest of the power stations,at Mehldahl, can generate as muchas 105 megawatts. In the meantime,
Voith has already completed 85%of the engineering and 30% of the
production for this contract. The Cannelton power station is expected tostart service in 2014, and the Smithland and Mehldahl power stations areto follow a year later. Commissioningof the Willow Island power station isplanned for 2016. These four power
stations have already set a precedentand another five low-dam power
station projects on the Ohio River are
being planned, using existing basins
and locks.

Sustainable
Kapitel-/bzw.
Profitable
Themenangabe
Growth19

Profitable growth – now and in the future

The Voith Risk Management System

Voith expects positive developments in all of its five key markets, driven primarily by increasing urbanization and mobility,
as well as by a rising demand for renewable energies and ecofriendly as well as resource-saving production pro­cesses.
With its plants, products and services, Voith is ready for themegatrends. Due to its product mix and its continuously rising
efficiency, Voith expects to significantly improve its operational
results and net income over the upcoming fiscal years. It is
the declared aim of the Corporate Board of Management, theSupervisory Board and the shareholders, to hand Voith overto the next generation as a leading engineering company thatis both strong and fit for the future.

The Voith Risk Management System is decentralized. The responsibilities regarding differentiated risk profiles are clearly
defined for all company levels. At the Group level, there is,for example, a performance risk officer, and Group-wide, we
employ contractual risk officers and technical risk and quality
officers. Contractual risk officers and technical risk and quality
officers are embedded in all Group Divisions, companies andoperating units.
Risk management is divided into four stages, consisting of:risk identification, risk analysis and assessment, risk control,
as well as risk monitoring and reporting. Voith differentiates
between two risk groups:
1. Corporate risk: this covers external risks, corporate
controlling risks, financial risks and infrastructure risks

3.2 Risk Management

2. Performance risk: this includes contract risks and technicalrisks.

Technical innovations, internationalization and growth – oursuccess factors are also our risk areas. We define risk as apossible negative impact on an activity or an event. But if weknow the probability and the consequences of these risks, we
can guard ourselves against them and ideally turn risks into
opportunities. As a protection and a measure of control, Voith
has therefore set up a Group-wide risk management plan theelements of which are summarized in our risk management
system.

Within the scope of this Sustainability Report, risks that are
directly linked to sustainability will be looked at more closely.

“The modification of energy systems is a worldwide
necessity due to changing climate policies.
Alongside its traditional forms of large and smallhydro, hydro power, including ocean energies, canmake a significant contribution to this field.”
Dr. Roland Münch, Member of the Corporate Board of Management

20

Voith Sustainability Report 2010

Sustainability-relevant risks at Voith
1. Corporate risk
Lack of qualified personnel
Highly qualified specialists and senior personnel are the basisof Voith’s success, its products, its growth and its image. To
retain our highly skilled employees, we proceed with foresight.
With a broad spectrum of measures, such as training andeducation programs, international development plans,performance-related remuneration systems, family-friendly
personnel politics and flexible working hours we offer an
attractive working environment. Our traditionally low fluctuation rate confirms that we are taking the right approach(see Chapter 6).
Corruption
Trust and integrity are the basis of all activities at Voith. Any
occurrence of corruption must be prevented. Voith directives
strictly forbid corruption when dealing with third parties. To
secure this goal, as well as to support and train our employees on the adherence to the Voith Code of Conduct, we have
set up a compliance committee, as well as standardized procedures. In addition, we promote efforts to reduce and stop
corruption worldwide, by encouraging integrity in international
competition.
Environment
To avoid environmental risks, the production processes atVoith are subject to stringent corporate directives in terms of
quality, risk, health and safety, as well as environmental protection. An integrated management system monitors the adherence to specified rules. Since fiscal 2009/10, eco-relevant
data are systematically collected and evaluated. As a result,environmental risks can be identified at an early stage andrelevant measures can be introduced (see Chapter 4).
2. Performance risk
Innovations
The innovative strength of Voith is also demonstrated by thenearly 400 patents registered by us every year. Innovations
make us strong, but they are also a risk factor. To counteract

these risks, we rely on our research and development departments. Voith invests generously in the development of newtechnologies, systems and services. In this process, we also
aim to minimize innovation risks in the first place whenever a
product is introduced in the market.
Procurement
Our dealings with suppliers on the world’s procurement markets carry risks on two fronts: supply shortfalls and the nonobservation of environmental and social standards. We secure
our deliveries with a number of measures: through a Groupwide risk management process which identifies delivery andinsolvency risks early. For suppliers from whom we purchaseintegral parts for our business processes, we have also developed special fail-safe strategies. The system of “Dual Sourcing” for the supply of basic materials therefore eliminates ourdependency on single suppliers.
The adherence to environmental and social standards by our
suppliers is controlled by audits (see Chapter 5.2).

3.3 ComplianceActing responsibly
Our business relations are founded on trust, reliability and fairness. This is only possible if the values and guidelines of theVoith Group are consistently respected and lived. In order tocreate a basis for value-oriented and responsible operations
as well as to structure the cooperation between employees,
customers, suppliers and business partners, Voith has specified a set of rules. These maxims were communicated as abusiness principle at Voith as early as 1927: “In the businessworld, one must be ethical, decent and honest. If a contracting
party or a competitor behaves unfairly, this does not give us
the right to deviate from this principle.” What was expressed
here in a few sentences, is now specified in a Group-wide
applicable set of rules: the Voith Code of Conduct.

Sustainable Profitable Growth21

The Voith Code of Conduct
Building on our earlier Group directives and our culture of honesty and decency, Voith issued its own Code of Conduct in
October 2009. This code governs our dealings with customers and business partners, and also our internal interactions.
The Voith Code of Conduct is meant to put correctness, honesty and transparency at the center of our communications
and all contractual relations. Its basis is the adherence to law
and order, as well as all internal company regulations (compliance). The Voith Code of Conduct also offers clear orientationand is binding for all our employees as a worldwide applicablenorm. Infringements are liable to sanctions.
The key elements of the Voith Code of Conduct are:
Fair competition
Voith adheres to the rules of fair competition. We do not
accept any contracts that would force us to violate German
or national law. At the same time Voith supports all efforts
aimed at promoting and implementing a free market with open
competition.
Agreements, cartels and waivers of competition
We do not enter into agreements with competitors that would
represent an obstruction of competition. This includes the formation of cartels and waivers of competition.
Corruption and bribery
Voith does not tolerate corruption and bribery. Our internalrisk management ensures that corruption and bribery do notstand a chance at Voith.
Offering and granting benefits
Voith makes sure that neither persons nor organizations
receive favors. Offering and granting benefits, be it for economic or interpersonal reasons, is strictly prohibited at Voith.
Demanding and accepting benefits
Voith forbids its employees to demand personal benefits forthemselves or closely associated persons or institutions. Thisapplies to both material benefits and services.

22

Voith Sustainability Report 2010

Donations and sponsoring
Any donation must be transparent, and the recipient or theintended use must be known. Payments to private bank accounts are not permitted. Donations to political parties require
the approval of the Board of Management.
Patents and intellectual property rights
The trade and patent secrets of the Voith Group must be observed. Voith also expects its employees to respect trade andpatent secrets of third parties.
Selection of suppliers and service providers
It is not permitted to give undue preference to a supplier or
impede a supplier’s efforts to win a contract. Voith selects its
suppliers and service providers on the basis of factual and transparent criteria.

The Voith Code of Conduct is available on the Internet
in 18 languages and can be downloaded in PDF format:
http://www.voith.com/compliance.htm.
The Compliance Committee
The Compliance Committee is the official body for introducing, coordinating and regularly reviewing the Voith Code of
Conduct, as well as providing relevant training. The committee was founded in fiscal 2007/08 within the organization of
the Voith Risk Management System and has been embedded
in our corporate structure since then.
The Compliance Committee consists of the Corporate Officewith the following members: Head of Corporate Office, Headof Corporate Law, Head of Corporate HR Management andHead of Company Audits. The Corporate Office reports
directly to the Chairman of the Voith Corporate Board ofManagement. In addition to the organization of the Voith
Risk Management, the chief financial officers (CFOs) are therespective compliance representatives in their units. As directcontacts, the CFOs or specifically appointed members of their
Boards of Management are in charge of the implementation of
the Code of Conduct in their respective area of responsibility.
The compliance representatives are prepared for their tasks in
two-day training courses.

Creating awarenessFirst results

Each and every Voith employee is bound to act in compliancewith the company values. To create a higher level of awareness for the significance of compliance and to integrate Voith
values into our business procedures, Voith relies on the senior
executives to act as role models. It is up to them to prevent
infringements against the Code of Conduct.

The response to the introduction of the Voith Code of Conduct has been positive. We can confirm that the awarenessfor compliance has risen. In the last fiscal year there were
only a few infringements of the Voith Code of Conduct. Theseviolations were immediately dealt with, rigorously prosecutedand adequately sanctioned. In the last fiscal year, there wereno lawsuits due to anti-competitive conduct, cartel formation
or monopolies.

“Our customer relations are based ontrust, reliability and fairness.”
Martin Hennerici, Member of the Corporate Board of Management

To ensure that our senior executives and employees receive
optimal support, we provide them with information and train
them on important issues such as corruption, competitiveness and export control. We encourage our employees toreport any violation against the Code of Conduct immediately.
Contacts are senior managers, HR personnel and the members of the Compliance Committee. Once again, the mostimportant prerequisite is trust. For this reason, Voith ensuresthat reporting employees do not have to fear repercussions
because of their disclosure.

Our goals
Compliance and the prevention of corruption will always be
a key concern for Voith. The successfully launched compliance initiative will be implemented further. It is intended thatthe personal training programs will be completed and that an
e-Learning platform will be set up by September 2011.
In addition to the Group-wide implementation, Voith also
aims at the certification of the Voith Compliance Management
System. The certification procedure has already been initiatedand will be continued in fiscal 2010/11.

Sustainable Profitable Growth23

Acting ecologically is synonymous withacting economically. With resource-efficient
production processes we also reduce
environmental pollution.
24

Voith Sustainability Report 2010

Responsibility for the Environment
Protecting the environment is a fundamental necessity. At the moment,
Voith needs natural and sometimes also non-renewable raw materials
to manufacture its products. Securing the future of the company andsimultaneously protecting the environment is a central challenge for Voith.
It represents the core of the company’s sustainability strategies.

Eco-management integrated in the company
In the Voith Group, all production processes are performedon the basis of official Group directives for quality, risk, healthand safety. The observation of these directives is monitoredby our integrated management systems to ensure uniform,high-quality environmental standards for our production
and products. The application and the effectiveness of the
management systems are checked by internal and external
audits for compliance with international standards.
The individual senior managers are responsible for regularly
identifying direct and indirect environmental aspects andassessing their impact on our ecosystem. They are supported
by our environment officers. Their key task is to investigate
emissions on the basis of country-specific regulations andlaws, to assess our energy and water consumption underefficiency aspects and to monitor our wastewater system, as
well as our waste management.

Anyone who wants to improve, must makea personal effort
To reduce Voith’s ecological footprint, we have identified three
key improvement areas: CO2 emissions, waste volumes andfreshwater consumption.
The Corporate Board of Management has set concrete targets (basis fiscal year 2008/09):
CO2 emissions
CO2 emissions in relation to annual sales (t/€ million) will be
reduced by 10% by fiscal 2015/16.
Waste
Waste in relation to annual sales (t/€ million) will be reduced by
10% by fiscal 2015/16.
Water
Freshwater consumption in relation to annual sales (m3/€thousand) will be reduced by 5% by fiscal 2012/13.

The first Group Division to introduce the Ecological Business
Management principle as a pilot project was Voith Paper.
Inspired by the vision of a self-sufficient facility, specific technologies are applied, in order to utilize resources and energy
as efficiently as possible and consequently generate added
ecological and economic value (see Chapter 4.1).

Responsibility for the Environment25

4.1 Ecological Business Management
Acting ecologically is synonymous with acting
economically
Saving resources rather than wasting them makes ecologicaland economic sense. To complement its certified eco-management, Voith has therefore developed and implemented theEcological Business Management (EBM) program.
While certified eco-management focuses primarily on the adherence to norms and legislation, our Ecological Business
Management aims to add economic value by considering
eco­logical aspects in the areas of energy and resources. The
main idea is to merge economy and ecology into one unit.
Strategic goal of Ecological Business Management
The overriding goal of EBM is to create a plant that can satisfy its own energy needs and constantly reuses resources.
In short: a self-contained facility. To put this into practice, theproduction and the services of Voith are analyzed on the basisof sustainability criteria, new technologies are evaluated andpilot projects are initiated.
A vital factor here is to ensure a continuous internal transfer
of knowledge, to optimally utilize special know-how throughimprovement and identification of savings potentials. Via communication tools such as intranet forums, current data onenergy and resource consumption, best-practice examples,checklists, input from experts as well as new findings, ideas
and developments are provided on a company-wide level. In
addition, there are regular workshops for EBM managers. Ourdevelopment efforts also make sure that our products saveresources and provide the best possible results once they
have entered their utilization phase (see Chapter 5.1).
What are the individual practical steps?
EBM is involved in all phases of the product life cycle. Practically, this means:
In the procurement process, standards have been or are being developed, according to which the raw material and energy suppliers are chosen. Our purchasing staff receives special
training on energy and resource efficiency issues. Checklists
also support the procurement process.
In the production phase, economy, energy and resource consumption are continuously examined and compared to ourdefined goals. In this process, new approaches and methods, for example sustainable balanced scorecards, are being
tested and assessed.
We also perform life cycle assessments over the entire life
span of important products. In this way, we are able to identify

Ecological Business Management
Eco-efficiency
Life cycle management

Recycling

EnergyEmissions

Material

Products/waste

Water

Wastewater

Production site

26

Voith Sustainability Report 2010

optimization potentials. In addition wealso advise our customers on how toprevent wasting resources and energy
in their plants.
The energy balance of a product does
not end with the production cycle.
Waste disposal is another essential
part of the ecological package. Voith isdetermined to increase its recycling statistics and to close material cycles.
In all phases, the EBM team carries out
supplementary input-output analyses.
In fiscal 2009/10 alone, 15 such analyses were performed at Voith Paper
production sites.
Where does our Ecological Business
Management currently stand?
At a number of locations, our EBM
activities have already shown concrete results. In Kunshan, China, effective measures were taken: instead ofoperating heating and air-conditioning
systems separately with oil and natural gas, both systems are now runwith natural gas. This saves nearly 800
tonnes of CO2 every year.
Another example: in Düren, Germany,press felts are produced. The energy forthis process is now generated by heatcoupling in our on-site power station.
As a result, the consumption of natural
gas was reduced by 30%. Additionally,
770 MWh of electricity were fed into
the company’s own power grid andtotal annual CO2 emissions were cut by
620 tonnes.
In fiscal 2009/10, a project was started to improve waste recycling throughsorting. In local analyses, the individualtypes of waste were examined by theirmaterial composition. Single-variety
waste can generally be used for highergrade recycling, which at the same time
generates higher income.

Managing Energy Successfully
Voith Turbo in Crailsheim has drastically cut its CO2 emissions. Last year,
the savings equaled 1 200 tonnes of coal. This success was achieved by
the local energy management team.
Voith Turbo in Crailsheim manufactures high-tech components for industrial plants. Test stands, paint shops
and industrial washing machines are,of course, severe energy guzzlers. As
early as 15 years ago, the existing
electrical grid had reached its limits.
At the same time, energy prices roseand made the industry aware of environmental issues. In Crailsheim, theengineer Eckard Beer was asked to
examine the local energy supplies
and to improve them. And not only
the power grid was in need of modernization, the heating systems in
the individual buildings were also nolonger up to standard.
In 1996, through a modern power andheat generation system, the company
took its first step into a new era. Fromthen on, a gas-operated heating plant
has supplied the factory and offices
with heat. At the same time, energy
from the power plant ran a generator
to supply electricity for the air compressors. The next modernization

phase followed with the constructionof five new production halls. Now, theventilation systems of the new halls
have integrated heat exchangers forheat recovery. In addition, the previously decentralized cooling units inthe production plant were replaced
by a central cooling unit. Today, theCO2 emissions at Voith Crailsheim
are 225 g/kWh – which is significantly
lower than Germany’s average of 518
g/kWh. Last year alone, Voith Turboin Crailsheim was therefore able toreduce its CO2 emissions by 40% or
3 216 tonnes.
The success of the company’s energy management is not only basedon the application of modern technology. Controlling is equally important.
For this purpose, Eckard Beer, Headof Environmental and Energy Management, provides senior executives
with a database highlighting the consumption and savings potentials. But
Beer also gives personal advice to hiscolleagues – another success factor.

Responsibility
Kapitel-/bzw.
for the
Themenangabe
Environment27

Our goals

Less waste with rising production

In fiscal 2010/11, the Ecological Business Management program will be successively adopted by all Group Divisions.

To assess our waste volume, we have introduced the core
indicator waste/sales – measured in t/€ million – as a comparable unit. In line with our motto “preventing waste comes
before utilizing waste” our efforts start at the beginning of theadded-value chain, and not the end.

4.2 Material Efficiency andResource Protection

In fiscal 2009/10, our waste volume has dropped slightly
compared to the previous year, while sales rose. For the core
indicator waste/sales, this amounts to a reduction of 4.3%.

Steel and plastics – these are the materials Voith needs inlarge quantities to manufacture its products: steel for machining and plant engineering, and plastics for consumer goods.
As a manufacturing company, Voith is dependent on limited
resources. And therefore resource protection and material
efficiency have the highest priority.

Waste volume
In t
50 41749 2892008/09

2009/10

We continuously examine all eco-relevant processes and develop strategies that allow us to minimize resource consumption as well as environmental impacts within the Voith Group.
Innovative ways to reduce waste and water
Voith is constantly looking for innovations to utilize resources
more efficiently – in purchasing as well as our design andproduction departments. Our approach is: Preventing waste
has priority over material recycling. Material recycling has
priority over energy use, and energy use has priority overwaste disposal.
Eco-management and Ecological Business Management are
jointly working on concepts and solutions to improve our material and water efficiency, as well as the recycling and energy
utilization statistics in production and administration. For thispurpose, we are continuously monitoring technological developments and market trends. Once a technology is regarded
as suitable, it is evaluated, tested in pilot projects at various
locations and, if necessary, optimized, before we recommend
it for general application at Voith.

28

Voith Sustainability Report 2010

In t/€ million sales
9.91

2008/09

9.48

2009/10The largest amounts of waste are generated at our production
sites in Europe and South America. This is where our production locations are; in São Paulo we also operate a foundry.
Machine production and especially foundry work inevitably
produce high levels of heavy waste. Our plants in Asia andNorth America, on the other hand, manufacture consumer
goods from plastics, thereby generating waste with a relatively low weight.

Waste volume – 2009/10 total 49 289 t
By region
Asia
4%South America
35%
North America
8%

Africa< 1%
Europe53%

Practical examples: how we reduce waste
Machine production sites are the most waste-intensive locations at Voith. To make realistic comparisons and deduce asystematic approach for improving the situation, Voith performs regular waste comparisons at selected sites. During
these comparisons, quantities, classes, grades of sorting andprices are calculated and compared.
Haaksbergen, the Netherlands
Since 2008, the waste generated by individual processing steps
has been continuously monitored and evaluated. The plant differentiates between single-grade and mixed plastic waste. A
side effect of this clear separation is an improved position in theexternal recycling market. The primary goal is to reduce waste.
And due to a simple measure, it was significantly reduced: thesize of the yarn rolls was doubled and unavoidable filament
wastes on the spools were halved.
Laakirchen, Austria
In Laakirchen, motor oil is processed via a bypass filter
system. Dirt particles in the oil are filtered out, improving its
purity. As a result, the service life of the motor oil is extended
and the amount of waste oil is reduced.
Kunshan, China
All environmentally harmful materials needed for the production of consumer goods were systematically assessed and replaced wherever possible. The defined measures are thereby
consistent with the motto “preventing waste comes before
utilizing waste.”
Summerville, USA
The filaments produced in Summerville for paper machine
clothing are nearly always shipped on reusable spools andspecial pallets, when they are sent to other Voith locations forprocessing. Once the filaments have been used, the empty
rolls are repacked on the pallets and returned to Summerville for reuse. This is a system which makes economical andecological sense. Every year, the CO2 footprint is reduced byabout 700 tonnes.
Every drop counts
Apart from reducing its waste volumes, Voith also intends toreduce its freshwater consumption and its wastewater output. The core indicator for the freshwater consumption/sales
is measured in m3/€ thousand sales. In this context, freshwater
is defined as the sum of water directly extracted from the
supply network or from wells. Rain and geothermal water are
not considered.
In fiscal 2009/10, the freshwater consumption dropped byabout 182 000 m3 to approximately 1 600 000 m3, while salesrose and production capacities increased. The core indicator
freshwater/sales fell by 8.8% and was 0.31 m3/€ thousandin 2009/10.

Water consumption
In thousand m3
1 782

1 600

2008/09

2009/10

In m³/€ thousand sales
0.34

0.31

2008/09

2009/10

Responsibility for the Environment

29

Europe is the region with the highest freshwater consumption. It accounts for nearly 60% of the freshwater used by
the Voith Group, worldwide. This is due to the large numberof European production sites and three test paper machines
in Heidenheim, Ravensburg and St. Pölten. Asia accounts forjust under 20%. The reasons for this are, among others, anumber of open water circuits in production plants. Measures for closing these circuits have been introduced. SouthAmerica is responsible for about 15% of the freshwater consumption of Voith. A key factor is the foundry at São Paulo.
All other regions only play a minor role in terms of freshwater
consumption.

Water consumption – 2009/10 total 1 599 970 m3
By region
Asia
18%
South America
14%
North America
8%

Africa< 1%
Europe60%

Practical examples: how we save water
Heidenheim, Germany
The cooling system of the IT center in Heidenheim wasconverted to an air-cooled water circuit. The project wascompleted in December 2009. Compared to the start ofthe project, about 240 000 m 3 of freshwater can now besaved every year. During the last two fiscal years, threewater-cooled compressors for pressurized air generation
were replaced by air-cooled units. Due to these measures,the freshwater consumption could be reduced by another90 000 m3 per year.

Krefeld, Germany
In Krefeld, the wet coating process has been changed to dry
coating. The dry filtration reduces the waste volume by 20
tonnes of paint sludge every year. Nearly 2 200 liters of water
treatment chemicals can now be saved. At the same time, thepower consumption could be dropped by 120 MWh, and thewater consumption by 20 m3 – another economic advantage.
São Paulo, Brazil
In São Paulo, Voith operates a water processing plant witha monthly capacity of about 11 000 m3. With this plant, thefreshwater consumption can be significantly reduced, andindustrial water can be used in other processes.
Hyderabad, India
In Hyderabad, Voith has been running a water processing
plant since the end of 2008. Here, 12 000 liters of water areprocessed in a multistage filter system. The water is initiallytreated by air, filtered and finally chlorinated to kill germs.
Our goals
The Corporate Board of Management has set concrete,
Group-wide goals to reduce the consumption of resources(base: fiscal year 2008/09):
Waste
Waste in relation to annual sales (t/€ million) will be reducedby 10% by fiscal 2015/16.
Water
Freshwater consumption in relation to annual sales (m3/€thousand) will be reduced by 5% by fiscal 2012/13.

“Our technological aspirations are not
only reflected in our products, but alsoin our resource-saving production.”
Bertram Staudenmaier, Member of the Corporate Board of Management

30

Voith Sustainability Report 2010

4.3 Energy Efficiency, Climate
Protection, Emissions
Responsibility for the climate

Energy consumption

Voith actively promotes climate protection and wants to makea contribution to combating climate change. It is our goal toreduce the CO2 emissions of the Group, of our products andservices, while simultaneously increasing the energy efficiency
within the company. For this purpose we are constantly
developing more efficient processes and technologies. Our
goal is that every new or improved Voith product must
be more energy-efficient than its predecessor. We are also
looking for ways to integrate renewable energies even morethan in the past.

In MWhOn the way to the CO2-free facility
Voith has a concept to get closer to the vision of an energyindependent and CO2-free facility. On the production side,
energy consumption and associated CO2 emissions arerecorded at their source. On this basis, potentials for increasing the energy efficiency and applying renewable energies
are identified.

613 674

647 019

2008/09

2009/10

Despite the expansion of our production capacities and growing sales, the absolute energy consumption rose by only
6.4% compared to the previous year. Due to increasing sales,
the effective CO2 emissions over the same period therefore
dropped by 2.3%.

CO2 emissions
Database and definition

In tVoith regularly records both its direct and indirect energy consumption. The measured quantities are converted into their
CO2 equivalents and afterwards depicted as CO2 emissions.
Direct greenhouse gas emissions from welding, protective
or other process gases are not included. In order to makeCO2 emissions comparable, a core indicator CO2 emissions
in tonnes per million euros sales (t/€ sales) has been created.
More energy, fewer emissions
In fiscal 2009/10, Voith consumed 647 GWh of energy
worldwide. 239 GWh originated from direct energy, while
408 GWh stemmed from indirect energy. This resulted in CO2emissions of nearly 181 000 tonnes. This figure represents
48 500 tonnes of CO2-direct emissions and 132 500 tonnes of
CO2-indirect emissions.

181 370

181 054

2008/09

2009/10In t/€ million sales
35.65

2008/0934.83

2009/10

Responsibility for the Environment

31

tion of machines as a general factor. On the production side,machine tools, paper machines for special technical papers,
looms and test stands are particularly power-intensive.

Energy consumption – 2009/10 total 647 019 MWh
By region
Asia
8%South America
14%
North America
18%

Africa< 1%
Europe60%

The example of the São Paulo foundry shows the impact of
the real net output ratio on CO2 emissions. Due to in-houseproduction, the CO2 emissions and their associated output ratios at Voith are disproportionately higher than with purchased
parts. At the same time, the company saves on transport andrelated emissions by direct on-site recycling.
Concrete measures and first milestones

The regional distribution of CO2 emissions shows that nearly
half of them were released in Europe. This is due to the highnumber of Voith locations in Europe, which also have a broad
range of manufacturing. North America accounted for a quarterof all emissions, closely followed by Asia with a share of 19%.
South America generated 10%.

CO2 emissions – 2009/10 total 181 054 t
By region
Asia
19%South America
10%North America
25%

Africa< 1%
Europe45%

Challenges
The main culprits of energy consumption are heating systems
in Europe and the northern part of the USA. Another factor
is the demand for heat processing, for example for melting
steel in the São Paulo foundry or for thermal fixation during the
production of press felts.
In terms of electricity consumption, Voith has defined lighting,ventilation and air-conditioning, as well as the standby func-

32

Voith Sustainability Report 2010

Based on eight selected locations in Europe and Asia, the following examples show which individual projects have alreadybeen successfully implemented:
Heidenheim, Düren, Crailsheim and Kiel, Germany
Electricity and heat are generated with high efficiency and low
emissions through electricity and heat couplings. In Heiden­heim, this is done on a large scale in a gas and steam power
station. In Düren, Crailsheim and Kiel, Voith uses combined
power plants on a smaller scale.
Krefeld, Germany
To reduce energy consumption for factory heating, Krefeld
has installed new high-speed roller doors. The result is lessheat loss. Additionally, fans were fitted below the roofs in highproduction halls to return rising heat back to the ground level.
Garching, Germany
In Garching, the lighting systems were converted to T5lamp
technology with electronic timers. As a result, the energy consumption for light has halved. In two buildings, the heating
systems were modernized. Industrial water is largely heatedby waste heat from compressors. Ceramic inserts in boilers achieve energy savings of 10 to 15%. Modern insulation
concepts were also applied during the modernization of theroof. The old wired glass panes were changed to modern, fully
insulated glass.
Kunshan, China
The production facilities in Kunshan are heated and cooledby geothermal energy. Voith Paper Rolls has operated a geo-

thermal plant here for two years. Current expansion measures
also plan to use geothermal energy for heating and cooling ofother buildings.
St. Pölten, Austria
By changing the oil filters for the deep-drilling machines,
St. Pölten succeeded in reducing the output from 24 kW to10.8 kW. This led to annual savings of 80 000 kWh.

Our goals
The Corporate Board of Management has set concrete targets for the reduction of CO2 emissions (base: fiscal 2008/09):
CO2 emissions based on annual sales (t/€ million) will be
reduced by 10% by fiscal 2015/16.

Eco-Check for Hydro power Stations
In a case study, Voith has for the first time examined the greenhouse gas emissions of a hydropower station across its entire service life cycle – from construction to decommissioning.

With the help of a life cycle assessment (LCA), Voith wanted to know
more about the emissions balance ofgreenhouse gases from hydro power
stations – an increasingly important
issue in the industry. Additionally,
the company wanted to find out how
its hydro power components could
be produced in a more eco-friendly
manner in the future. The study was
to be carried out by the environmental
engineer Dr. Jürgen Schuol.
The job turned out to be a truly Sisyphean task. “It was sometimes extremely difficult to get reliable data,”
explains Schuol. While there was sufficient information about the Voith
components, getting data about partsor production processes from othercompanies proved to be quite difficult.
“Whoever wants to set up such a life
cycle analysis for an entire hydro power
station, should ideally work with apartner company right from the start,”
recommends the environmental expert.
But Schuol still managed to prepare aconclusive case study. As it turned out,
the buildings were the source of thehighest emissions of greenhouse gases. “This is understandable,” states thehydro power specialist, “because their
key materials, concrete and steel, constitute the largest masses.” As a matterof fact, the masses and the clear categorization of the materials are decisive
for the best possible result.
In comparison, the classic Voith components only leave a relatively small
CO2 footprint. “There is not much thatcan be improved,” says Schuol. Another fact is that our components arelargely made from excellently reusable
materials. “This reduces the life cycle
emissions of a turbine or a generator bymore than 50%,” added the engineer.
The exemplary analysis has been converted into a modular generic modelthat can be used for analyzing and evaluating similar cases – but much fasterand with less complexity in the future.
Schuol states: “We are now ready, andcan tell interested parties, with highprecision, how high the greenhouse gas
emissions of hydro power stations are.”Responsibility
Kapitel-/bzw.
for the
Themenangabe
Environment

33
33

We believe that product development
also includes responsibility for safety,
reliability and sustainability.
34

Voith Sustainability Report 2010

Product Responsibility
Thinking about tomorrow – today: Voith products offer high quality, innovation
and reliability as well as safety. And this self-concept is also our motivationto act responsibly and with foresight. For Voith, product development has
always gone hand in hand with product responsibility. Here, our three key
considerations are: pursuing a product strategy that takes future market
trends into account; establishing a supply chain that is transparent and basedon good partnerships with the suppliers; as well as ensuring consistent, highproduct quality that simultaneously guarantees maximum safety.

Many Voith products are designed for decades of trouble-freeservice. This is one of the reasons why our customers regard
us as a dependable partner, with whom they can cooperate
closely for many years. We have earned this trust by continuity
and reliability, coupled with a high degree of innovation.
Long-lasting products with a futureLong-term product strategies will ensure that our portfolio
meets the demands of the markets, also in years to come.
Taking responsibility therefore means: thinking about tomorrow – today. This is why we are intensively looking at future
developments which are geared towards the requirements ofmegatrends. Voith therefore develops solutions that make avital contribution to the reduction of resource utilization. We
campaign for the use of alternative and regenerative energy.
Special emphasis is given to products that exploit previously
underused ocean energies (wave and tidal current energies).
Against the background of the megatrend urbanization andthe increasing demand for mobility, Voith also concentrates
on products which support new transportation concepts.
With a diversified and attractive product portfolio, Voith iswell-positioned for the future.

Sustainability in our supply chain
Our sustainability drive also ensures that our social andenvironmental standards are adhered to – not only by us asa Group but also by our suppliers. The Voith General Delivery
Conditions therefore have a special clause on sustainability.
At the same time we are in the process of introducing a supplier management system, which takes sustainability criteria
in the supply chain into account – at both the Group Divisionand local level.
Reliable and safe
Our core promise to our customers is: Engineered reliability.
The Voith safety concept is the basis of our reliability guarantee. Competent and experienced employees, clear-cut goals,
processes and development methods, specified criteria whencommissioning a plant or a product and maximum customer
support – these are the main factors for guaranteeing constant, high product quality and safety in light of our global
product presence and strong diversification.

Product Responsibility

35

5.1 Future-Oriented Portfolio
Changing markets need products that evolve
The megatrends of urbanization, mobility, resource scarcity
and climate change pose enormous challenges for the global
economy. Companies are therefore adapting to these changes
and paying increased attention to eco-friendly approaches
and products, as well as changing market requirements.
Strategic product development
Voith relies on a diversified and sustainable product portfolio. We develop technologies and services to make wind andwater suitable for generating electricity and thus contribute to
the utilization of CO2-free energy. We work continuously on
improving the efficiency of our products and on a more effective use of resources in our production processes. Voith’s goal
is to include the criterion “Product Energy Efficiency” into its
development processes and into a technical risk assessment
checklist by 2011/12. This means that in the future each andevery newly developed product is expected to make a contribution towards higher efficiency, either by itself or as part ofthe customer’s system.
Voith performs life cycle analyses for selected products togain a comprehensive picture of their entire service life. As
a result we are able to detect environmental risks at an earlystage and obtain data, on the basis of which we can develop

innovations. At the same time, these findings support our
eco-management system to control national and international
limits and standards.
New concepts for the protection of resources
The Integrated EcoMill
To maximize the recycling of raw materials in paper production, Voith has developed the Integrated EcoMill concept. In
this concept, most raw material and energy cycles are closed.
The graphic shows how this works. Used water is repro­
cessed, production heat is converted into steam and energy,
and the collected wastepaper is used as raw material forthe production of new paper. The production cycle therefore
hardly needs any new resources.
Closing material cycles not only saves raw materials but alsoutilizes synergetic effects. An example is the increased utilization of recycled paper, which simultaneously reduces energy
consumption, because processing virgin fiber is much moreenergy-intensive than preparing stock from wastepaper.
This concept presumes that paper mills can be built nearurban areas which is why the plant concept is called an“urban mill.” Here, paper is produced where it is needed most,saving transportation, energy and overhead. At the sametime, the wastepaper accumulated in cities no longer needs

The urban mill cycles
An intelligent concept for ecology and economy

Energy cycle
Paper

Virgin fiber

Fiber cycle

Urban area
Waste paper

Water cycle

Paper mill

36

Voith Sustainability Report 2010

to be transported across long distances. It is more or lesscollected at the doorstep of the paper mill. These plant concepts
not only protect the environment but also dramatically reduceinvestment and operating and logistics costs.

hydro power stations – which is particularly important for large
facilities, where even the tiniest improvement can represent anenormous power generation potential. Today, the output ofsuch large hydro power plants is just under 1 000 megawatts.

Voith – a pioneer in hydro power
The Voith portfolio for conventional hydro power stations
ranges from small machines to equipping the world’s largest
plants. Voith continually improves even the high efficiency of

Our product portfolio also includes purely eco-solutions: fishfriendly turbine designs, ventilators that improve the oxygen
levels of water, as well as oil-free bearings. For energy generation from oceans, Voith even developed a special bearing
lubricated by seawater – an absolutely unique product.

New Focus in Research and Development
Worldwide paper consumption has doubled in recent years and is currently at 400 million tonnes per year. In the industrial
nation of Germany, per-capita paper consumption is at just under 250 kilograms per year, while in the emerging market
of China, it is still only 70 kilograms. This comparison shows the high growth potential of the paper industry.

Experts have dealt intensively with thequestion of how the growing raw material demand can be satisfied through theincreased use of recycled fiber – whichis also familiar territory for Voith Paper.
Voith has developed and continuously
improved paper mills for decades: “Wehave the technology for making highquality paper from wastepaper,” explains
Dr. Thomas Wurster, Vice President
New Technologies. In 2009, Voith Paper
redefined its goals for technical innovations. Until then, the maxim was that
paper machines must always be fasterand wider than previous models. However, today research and development
are governed by sustainability criteria.
More efficient utilization of fiber, noticeable reductions in energy consumption
from fossil fuels, for example oil andcoal, as well as closed water cycles, are
the goals of our current development
projects. This new strategy is backed
by hard facts: if the paper industry suc-

ceeds in increasing the share of recycled fiber worldwide from its current
50% to 70% – a level that has alreadybeen reached in Germany – then therising demand over the next decadecan be met without additional virginfiber. Plus, recycled fibers even offer
added benefits. Although they have tobe processed, they are much cheaper than virgin fiber. This is a powerfulargument in the paper industry, because fiber represents the lion’s shareof a paper mill’s production costs. Theenergy balance of recycled fibers is
also impressive. If the share of recycled
fiber rises from 50% to 70%, the energy
consumption actually drops by 25%. In
this way, Voith is on the right track toachieving its second development goal:
reducing energy costs by a half.

Kapitel-/bzw.
ProductThemenangabe
Responsibility

37

Technologies for harnessing ocean energies
1. Wave power plants
With the Limpet wave power plant on the coast of the Scottish Isle of Islay, Voith to date operates the only wave power
plant that has been feeding electricity into the grid for morethan ten years. In cooperation with the Stuttgart and Siegenuniversities, the efficiency of the equipment was significantly
increased. In 2010, the availability of the Limpet power plant
was at 98%. Further wave energy projects are now underconstruction or in the planning stage. For Mutriku, the first
Spanish wave power plant, which will be connected to thegrid in 2011, Voith supplied all technical equipment. Together
with a partner, Voith also developed today’s largest wave
power plant just off the Scottish coast, on the Isle of Lewis,
with an output of four megawatts.
2. Tidal current power plants
Similar to wave power plants, tidal current power plants area relatively new technology. The World Energy Council anticipates that in the future the energy of high and low tides cancover up to 15% of the worldwide electricity demand. For theworld’s largest tidal current power plant, the Seaturtle Tidal
Park near Jeollanan-do in Korea, Voith developed a tidal current turbine with an output of 110 kilowatts. In spring 2011,
this pilot turbine entered service and is now being thoroughly
tested. This will be followed by developments for a large commercial tidal current power station. The power plant has been
designed for a nominal output of 200 mega­watts. In parallel,
Voith is developing a one megawatt tidal current power plant.
It is to be tested at the European Marine Energy Center (EMEC)
on the Orkney Islands in 2012.
Voith – world market leader for efficient drive technology
Voith supplies drive components to the industry, marine,
rail and road markets. The development activities for Voith
drive technology focus on improved energy utilization, higher
efficiency and the expanded use of regenerative energy. It is
our goal to create sustainable benefits by continuously improving the economy and performance of our technologies.
1. Energy generation: WinDrive
Wind power stations rotate according to the prevailing windspeed, i.e. they have no constant speed. For power grid
operations, this variable rotor speed therefore has to be converted to a constant grid frequency. With WinDrive, Voith has

38

Voith Sustainability Report 2010

created a dynamically variable system as an alternative tofrequency inverters. Depending on the wind speed, WinDrive
adjusts the rotor to reach its highest efficiency. At the sametime, it converts the variable rotor speed into a constantgenerator speed for power grid operation. WinDrive achieves
high efficiencies, is relatively light and saves space. Bothaspects reduce costs for wind farm operators.
2. Fuel savings: SteamTrac
SteamTrac is a system with a piston expander as its centralcomponent. It increases the efficiency of combustion enginesby 4 to 12%. Via heat exchangers, superheated steam fromthe exhaust of a combustion engine is directed to SteamTrac.
SteamTrac then generates additional mechanical energy,
which is fed directly into the driveline.
With the application of SteamTrac in three power stations,
it has now been proven that this product is also suitablefor continuous operation. The output of the gas engines inthese combined-cycle power stations rose by approximately
20 kilowatts without burning extra biogas. This corresponds
to an efficiency increase of nearly 8%. SteamTrac was also
installed in a pusher barge for iron ore and coal. Projected
over a year, the fuel consumption of the engine was reduced by 40 000 liters of diesel which amounts to a drop in
CO2 emissions of 106 tonnes. Since March 2010, another
SteamTrac has undergone testing in a rail vehicle, creating
an additional output power of 20 kilowatts. A more compact,
lighter piston expander with a fuel reduction of approximately
6% for trucks is also under development.
Safe and eco-friendly:
Voith Retarder and Voith Aquatarder
Voith Retarders are hydrodynamic braking systems for use inbuses and trucks. They make a vital safety contribution bykeeping the temperatures of a vehicle’s main brakes down
and protect them from wear. This reduces operating costs.
At the same time, brake dust emissions are also considerably reduced – an argument for the environment. The classic retarder runs with special oils, but Voith Turbo has now
launched a new retarder type that can be operated with thecooling fluid of the vehicle: the Voith Aquatarder. The Aquatarder not only works without oil, it also does not need thestainless steel heat exchanger for dissipating heat from the oilto the cooling water. Although initially only a requirement for
cars, Voith has gradually tested and introduced replacement5.2 Supply Chainmaterials for the chrome VI-coated parts of the retarder since2003. By 2008, chrome VI-coated parts were no longer usedin Voith Retarders, and future developments will also be produced without chrome VI.
Voith – into the future with a stronger service portfolio
Voith is also gearing up its service portfolio to be well-positioned for the future. The Services Division has been reorganized and will consist of four divisions: Automotive, EnergyPetro-Chemicals, Industries and Engineering Services. Thisnew organization reflects the specific requirements of ourcustomers, who will benefit from fewer interfaces, higher
industrial expertise and worldwide quality standards.
The Automotive and Energy-Petro-Chemicals divisions offer
customized solutions for the automobile and processing industries. With our subsidiary DIW, our Industries division provides comprehensive regional services for the operation andadministration of industrial sites in Germany and Austria, as
well as Central and Eastern Europe. Finally, the Engineering
Services division offers contract engineering for the aeronautics industry and for rail vehicle manufacturers.

Cooperating as Partners
As a supplier of production plants, products and services,
Voith purchases goods and services from all continents. We
have set up a worldwide network of suppliers, and our business relations with these companies are characterized bytrust, fairness and reliability.
Purchasing at Voith is divided into Corporate Strategic Purchasing (CSP) and Divisional Strategic Purchasing (DSP).
These purchasing units determine the strategic approach. Inorder to homogenize services, set standards and allow our
suppliers to access all Group Divisions, we operate with centrally controlled Corporate Framework Agreements.
Procurement policy
Purchasing at Voith is based on three principles:
1. We cooperate with qualified and motivated suppliers on a basis of mutual trust as a fair, reliable and innovative partner.
2. We ensure the adherence to our Compliance Regulations
through cross-functional awareness and transparent purchasing decisions.

“Our focus in research and development
is on new products and systems withecological improvements and clear-cut
economic advantages.”
Dr. Hans-Peter Sollinger, Member of the Corporate Board of Management

Product Responsibility39

3. As managers of external value creation we constantly aim
for operational excellence.
Social, ecological and economical aspects are all equallyimportant when we select a supplier. A purchasing decisionmust take into account that resource-saving processes andsupply chains are ensured. Voith cooperates exclusively with
suppliers that adhere to our environmental and social standards as well as orienting themselves on our Voith values.

Current developments show that Asia and especially China
are becoming increasingly important market partners. Voith
must therefore ensure early enough that our existing networkof Chinese suppliers is expanded further. Worldwide purchasing presents opportunities, but also inherent risks. Throughthe globalization of the procurement markets, the addedvalue chain becomes more complex. In order to ensure thequality and the origin of a product, transparency must be
created and the observation of environmental as well as social
standards must be assured. This requires regular audits.

Purchasing in a Global WorldIn fiscal 2009/10, Voith purchased goods and services worth€2.9 billion from nearly 30 000 suppliers. Although we categorically aim at building and maintaining long-term relationships with our suppliers, our strong project business cannot
prevent a certain degree of fluctuation. Voith buys two-thirdsof its products from Germany and other European countries.
With 19% of the purchasing volume, South America is thesecond most important purchasing region.

Sales and purchasing volumes by region – 2009/10
Sales
Europe (except
Germany)
30%
South America
10%North America
14%

South America
19%
North America
8%40Voith Sustainability Report 2010

The requirements on our suppliers to observe our environmental and social standards are specified in our “General
Conditions of Purchase” (AEB) and the Voith Code of Conduct(see Chapter 3). As an integral part of any contract they represent the standards to be followed by our suppliers. Regarding
compliance, environmental protection and social standards,
the Voith AEB’s conditions explicitly state that Voith suppliersmust observe all legal regulations on environmental protection
and labor laws. It is also stipulated that bribery and corruption
are not tolerated, and neither are child or forced labor.
The Voith supplier management system

Germany
13%
Asia andRest of the World
33%

Purchasing volume
Europe (except
Germany)
24%

Environmental and social standards

Germany
36%
Asia andRest of the World13%

In fiscal 2009/10, Voith has made significant improvements to
its supplier management system. This optimization is meant
to facilitate the selection of new suppliers – also in terms ofsocial and environmental standards. Another goal is to better
control the implementation of Voith regulations and to support
our suppliers where necessary. The supplier management
system operates at Voith under the project name “SupplierManagement@Voith” and is based on an integrated software
solution allowing our buyers a 360° view of their suppliers. In
a database, buyers can obtain online information on existing and potential suppliers. Within the Voith Group, this portal
ensures high data quality as well the global availability of business, product and capacity data from our suppliers.

Registration of new suppliers
Since fiscal 2009/10, companies applying to become suppliers for Voith have to register via a supplier portal. Through aquestionnaire, essential basic data on issues such as sustainability and compliance are collected. On the basis of thisself-assessment Voith examines whether the minimum requirements regarding environmental and social standards arebeing fulfilled. The certificates uploaded into the portal by the
suppliers are then verified by our environmental and quality
management systems. Applications from suppliers that are
unable to present the required certificates are declined. If
there is a recognizable willingness to improve their environmental performance, Voith supports the respective supplier inthis process (see Supplier Development).
The final approval of a supplier is subject to a quality audit. In
addition, the company must also complete a corporate sustainability questionnaire with standardized questions.
Assessment of active suppliers
A central building block of SupplierManagement@Voith is theregular monitoring of active suppliers. All Voith suppliers areassessed by several criteria. In this way, the quality of the business relationship and the performance of a partner is evaluated on the basis of clearly defined assessments.

These assessments are carried out with an established setof standards that are adapted to the requirements of theindividual Group Divisions. A set of criteria consists of four
factors: quality, logistics, commercial and technology. Ourassessments do not just focused on price, quality anddelivery reliability, but they also concentrate on financial stability, quality of cooperation and reliability. The effectiveness anddepth of the quality, environmental and occupational healthand safety system is also of great importance. Information is
supplied through various internationally recognized certificatessuch as ISO 9001, OHSAS 18001 and ISO 14001, and also bysite inspections. We differentiate between supplier visits andon-site inspections, as well as incoming goods inspection as
well as audits by our quality and safety department.
Our markets and the requirements of our customers are highly
diverse. For this reason, the individual Group Divisions havesovereignty over the type and the extent of these audits.
Standardized audit forms are used to simplify this process. In
2010, a process for uniform audits was started with the objective of setting up a permanent supplier classification including the exclusion of suppliers that do not conform with our
corporate sustainability directives (blacklisting). This processapplies to all Group Divisions.

Supplier management
Supplier portal and database allow a 360° view and control of suppliers

Supplier portal

Potential
suppliers

Self-assessment
Basic business data
Minimum requirements (e.g. 		
minimum social standards)
Product-specific information

Supplier management

Purchasing
information system
Data verification

Supplier database
Contract database
Assessment

ERP

Archive

Reports

Product Responsibility

41

In the end, the results of the supplier assessment are analyzed
to identify their potential and weaknesses. The assessment
ends with the rating of each individual supplier in six categories.
Supplier development:
identifying and promoting potentials
We would like to encourage our suppliers to think outside thebox. At Voith, cooperating as partners also means supporting our suppliers in their further development. Our supplierassessment system offers an ideal basis for this. By directknow-how transfers we provide our suppliers with an opportunity to learn new production methods and qualify for further
tasks (see graphic). Our experiences with this system havebeen quite positive, especially in Asia. Voith employees fromour quality, safety and monitoring departments are regularly
on site and look after the Asian suppliers during the productmanufacturing phase. In this way, we can also ensure thatenvironmental and social standards are met.

Non-compliance:
what happens if Voith regulations are not observed?
Despite all efforts it can occasionally happen that individual
suppliers do not comply with our standards. In this case it
is important to understand the reasons for this non-compliance and then jointly look for ways of achieving the required
minimum standards step by step. Our supplier development
system applies here, too. The business relationship ceases
only if there is no improvement within a certain period, despite
several notifications and warnings. In this case, the supplieris blacklisted.
Dialogue and training
Voith promotes the direct dialogue with its suppliers. We
hold special suppliers’ seminars to inform our partners aboutorganizational changes and new requirements. These seminars have the purpose of training our suppliers and increasing their awareness for the observation of environmental andsocial standards.
In April 2011 Voith held a suppliers’ seminar under the heading “Going to China with Voith” where business partners were
informed about the future plans of the company. The event

Supplier development
Phases of supplier development

Analysis ofcompletedassessments

Recognize
strengths andweaknesses

Developactivities andmeasures

Implementation

Measurepotentials
and results

Impact on
next
assessment• Identification• Identify strengths• Identify fields• Communication• Measure• Identification ofof relevant
suppliers• Analysis of
supplier
assessment

and weaknessesof suppliers• Compare to ourown strategy

of action,
define goals• Develop andstructuremeasures andactivitiesof measures• Schedules,
milestones• Responsibilities

success via
project
controlling andevaluations• Define current
stage ofdevelopment• Monitor
improvement ofevaluation results

42

Voith Sustainability Report 2010

relevant suppliers• Analysis of

supplier
assessment

showcased opportunities for suppliers to accompany Voith to
China and consequently capitalize on the Voith strategy.
We also count on the dialogue with other companies. We aremembers of the Registered Association for Materials Management, Purchasing and Logistics (BME/AMMPL) and advocate
the cross-sector development of corporate sustainability andcompliance aspects for supplier management.
Product category concept
Since fiscal 2008/09 we have applied specific productcategories. In doing so, we specify the minimum corporate
sustainability standards for all important product categories
and define our preferred suppliers – on corporate and on
Group Division levels. Especially when large orders are about
to be placed, sustainability criteria are explicitly applied andused as vital decision factors.

annual report, the assessment results are discussed by thesteering committee “Purchasing” at the Group level, and new
goals are defined for future business years.
AuditsLast December we started a new process for uniform supplieraudits, applicable to all Group Divisions. Audits and on-site
inspections are to be carried out more frequently.
Voith Supplier Award
Five years ago, Voith Hydro in São Paulo presented its first“Voith Supplier Award.” This initiative will now be introduced
across the entire Voith Group. From 2012 on, all Voith suppliers will be included and may receive the “Voith SupplierAward” for outstanding services.

5.3 Product Safety
Our goals
Supplier evaluation/supply chain management
During the evaluation of suppliers, sustainability aspects become an integral part of the process. By fiscal 2011/12, a
concept for the incorporation of social and ecological questions will have been developed and implemented. Two years
later (in fiscal 2014/15), the implementation will have progressed so far that 80% of all Voith suppliers will be registeredand evaluated by fiscal 2015/16. The evaluation of half of all
Voith suppliers will be completed by fiscal 2012/13.
Data acquisition
Voith is working on a qualitative increase of its purchasing data. To obtain a better overview of the most importantmaterials to be procured, a material score has been set up
for plastics and coating materials, semi-finished products
and electronics. By 2015 a 95% degree of coverage will havebeen achieved. An improvement of our database is expected
as early as 2012/13. The ultimate goal is a coverage of 80%.
Supplier assessment
To ensure maximum supplier quality, the number of assessed
suppliers will rise steadily. For fiscal 2010/11 we intend topurchase 80% of our goods and services from assessed suppliers. In fiscal 2009/10, the percentage was 60%. In a semi-

Our promise: Engineered reliability.
Companies that buy technology from Voith trust in the reliability and long service life of our products. Be it power stations,refineries, paper machines, mines or transport, delivery of an
entire plant or just a partial system: Voith customers expectthat our technology is precise, durable, robust and absolutely
safe. This promise to our customers is expressed in our slogan: “Voith – Engineered reliability.”
The basis for our reliability is provided by our safety concept.
The safety concept for engineering products is supported byfour pillars:
1. Competent and experienced employees
The competence and experience of the workforce, both atVoith and also at our customers, is one of the four factors thatmake a vital contribution to the safety of our products. Our
main concern is the continuous training of all those involved.
How can we make the knowledge about various product areas accessible to everyone? And how can we promote an
exchange among our employees? These are questions that
constantly face us. Voith Turbo has, for example, set up a uniform document release and administration system for stand-

Product Responsibility

43ards, norms, process descriptions, operating instructions andwork sheets on a joint platform. This database now contains
11 000 active documents.
Voith Industrial Services, too, utilizes Web-based systems
for know-how sharing and transfer. The internal systems“HelloWiki” and “Imaginatics” turned out to be very useful for
the workforce and have high user numbers.
Voith also relies on training and further education. In the lastbusiness year, Voith Paper held its first International Experts
Seminar. Representatives from all locations were invited toa seminar on the Russian GOST norms. Owing to the longstanding internationality of its business, Voith Hydro has routinely conducted a staff exchange program for many years,
especially for engineers. Young and capable engineers canimprove their qualifications in half- and full-year courses at
the Brunnenmühle test laboratory in Heidenheim. There arealso trainee programs that can be completed at two or threedifferent locations and of course overseas.
2. Clear-cut development processes
Integrated management systems ensure the observationof general and industrial or business-specific standards inareas such as process organization, quality, risk management, occupational health and safety as well as environmental protection. This applies to all Group Divisions. The adherence to these standards is monitored and certified by internaland external audits. The management systems are subject
to regular updates and relevant optimization. In the business division “Rail”, Voith Turbo has, for example, introduced
the quality management system IRIS Revision 2 during theperiod under review. At Voith Industrial Services, the Automotive division introduced a transition from the VDA6.1 norm to
the ISO-TS 16949 standard, and the first product areas havealready been certified. Not too long ago, Voith Hydro obtained
combined certification for the three norms ISO 9001 (quality),
ISO 14001 (environmental protection) and OHSAS (health andsafety) for all locations on the basis of uniform directives andregulations via so-called matrix certifications.
Process-oriented handbooks exist in all Group Divisions. In
so-called “loops,” the Blue Book at Voith Hydro describes allprocesses from engineering and procurement, through manufacturing and project management to commissioning, which

44

Voith Sustainability Report 2010

have to be correctly completed to ensure maximum quality for
products and customer relations.
As part of the new risk management, a comprehensive
system was introduced across the entire Group. The risk
management system prescribes the processes for high-risk
decisions. Detailed checklists ensure the uniform handlingand observation of all regulations. The system is directly
coupled with the order processing program.
The development process also contains various methods for
ensuring product safety. These are largely based on the principles of the Failure Mode and Effects Analysis (FMEA), used forsystematically recording, evaluating and documenting failurerisks. Its implementation is an integral part of the development
process. Individual measures are defined via calculations andapplication-oriented simulations, and they are validated by relevant test programs. In this context, experiences and norms
are employed in equal measures. Voith Hydro has, for example, defined special engineering rules for product safety in its
own safety policy across the entire life cycle of a product. In
training courses, employees and sometimes also customers
are continuously updated on the latest developments.
If it cannot be avoided altogether, the use of harmful substances is to be reduced to a minimum. This applies bothto the production process and the product. The handlingof hazardous substances is regulated, among others, by
REACH, the EU regulation on chemicals, and also in country
and customer-specific hazardous substances lists.
Voith has stopped using chrome VI for all retarders. Inhydrodynamic couplings and in the Aquatarder, cooling water
is used instead of oil. Should this not be possible – for example in the Voith Schneider Propeller – biodegradable lubricantsand grease are chosen. Voith Industrial Services must ensure
at all times that Voith products operate only with substancesthat do not interfere with the customer processes.
3. Criteria for commissioning
Voith products are subject to stringent inspection criteria.
International and regional norms must be observed, sometimes also industrial or customer-specific norms. Regional and/or international norms apply, for example, for paper machinessince CE conformity prescribes a CE responsibility manage-

ment system with CE representatives at every location. For
our applications in Chinese high-speed trains, ISO 17025
type tests are carried out. Industrial or customer-specificnorms also apply to the Gravita locomotive, which received its
official approval from the Federal Railway Authority (EBA) during the period under review. It is not unusual that installation
inspections or commissioning procedures are carried out
jointly by Voith and the customer.
The inspection requires comprehensive documentation
including detailed information on machine safety, and thecommissioning is accompanied by staff training programsfor the customer. Voith Paper provides, for example, relevant
information in technical documents on the basis of the ma-chine regulations 2006/42/EG. Voith Hydro does the sameand hands out operating and assembly instructions as well as
detailed manuals for its plants.
4. Product-specific utilization
We also develop innovative technical components for retrofits of older plants to achieve improved energy and resource
efficiency. In this way, rising demands can be met without
the need for a completely new plant. The modernized plant
can then be operated safely for many years or decades withconsiderably increased output and performance levels.
“Never let a customer down” – this is both our motto andthe guiding principle for our employees when dealing withour customers.

ATMOS: Economical and Eco-Friendly
Who can imagine life without them? Strong and absorbent, soft and gentle, printed with patterns,
fashionably designed or kept in pristine white – they accompany us throughout the day: tissue
papers such as cosmetic wipes, toilet paper and napkins.

Tissue is part of our everyday life. The
USA was the first country where it
obtained mass product status. Here, inthe 1960s, numerous processes weredeveloped for making a wide range oftissue qualities – often coupled withthe use of large quantities of natural resources. At that time nobody was interested in environmental issues such asfiber or energy consumption. But now,
living standards have increased worldwide. More and more people buy more
and more tissue products. In 2008, 28
million tonnes were used; twenty years
ago it was just 13 million tonnes.
In 2004, engineers at Voith Paper inSão Paulo set out to develop technological improvements. Their goal was toproduce various tissue qualities withless energy and a higher share of recycled fiber, and they succeeded. In
2007, Voith launched ATMOS – a new
drying and compression process. Even
premium tissue paper can now be produced with recycled fiber using lessenergy and at lower investment costs.
The development was a success, because the engineers were able to build
on decades of experience in plant engineering and also on the in-house
knowledge of their colleagues from thepress felt and drying wire production
teams. With ATMOS, Voith has createdan integrated solution that is not only
resource-saving but also more economical than conventional processes: atrue win-win situation.

Product
ProduktverantwortungResponsibility

45

Occupational health and safety
is our number one priority. This is
why we have embedded it in our
corporate objectives.
46

Voith Sustainability Report 2010

Responsibility for Our Employees
Voith is a fair and attractive employer with high-performance
expectations. Qualified, motivated and loyal employees are thebasis for ongoing innovation and competitiveness. It is our goal
to preserve the productivity of our workforce and simultaneously
remain a valued employer for new, highly-skilled applicants.

Challenges of a global market

Cultural differences and market-specific requirements

Voith can stand up to the competition on international markets
and still continue to grow. To do this, we need highly qualified
and productive employees. To meet our growth targets, weneed more employees than ever before. Our focus is therefore
on high-quality training for our young talents within Voith, aswell as on the continuous education of the workforce and therecruitment of new staff. To achieve our goals, its is vital that
we create a passion for Voith among our employees to assure
their loyalty for many years. This applies in good as well as
difficult times. Especially in periods of economic decline it isessential to keep our employees and their know-how. In recent
years, this is an area where we have been very successful.

We are active in our core markets all over the world. A factor
for our commercial success is the ability to incorporate cultural differences and meet the highly diverse demands that are
made on us from a wide range of cultures.
Experience and know-how
Our technologies and projects are sophisticated as well ascomplex. Handling them requires comprehensive knowledge
and long-standing experience. For this reason, older employees who have been worked for Voith for a long time and haveoften obtained their qualifications and training with us, areparticularly valuable.

Challenges as a global player
As a globally active company we are faced with three major
challenges: markets, products and demography.

Demographic change
Demographic trends are the framework of our personnel
policies. But these trends can vary significantly in the foreigncountries where many of our operations are based. We therefore develop specific concepts that are adapted to individual
national situations.

Responsibility for Our Employees

476.1 Long-Term Employment –Lifelong Learning
Voith pays great attention to having a balanced mix in our
workforce. Long-term employees and newcomers inspire one
another and provide an impulse that is enriching and neededby the company. And we are proud of our long-term employ­ees. Complex processes, which occur in all Group Divisions,can only be mastered reliably and with our high quality standards, because employees in senior positions with years ofexperience are involved in these projects. Throughout ourlong company history we have always succeeded in retaining
our key personnel over long periods. Employees who haveworked for Voith all their lives are not unusual. Our staff’s average period of employment in the product sector is 15.4 years
in Europe, and 14.2 years in North America. In third place lies
South America with an average period of 8.2 years, in Asia
we have meanwhile reached 7.1 years. At certain locations
in Europe, the time some of our employees have spent with
us is even longer. At our head office in Heidenheim and in
nearby Crailsheim, the average period is 20 years. As might
be expected, employment periods in the service sector are
somewhat shorter. The average time in Europe is 4.0, in North
America 3.2, in South America 0.9 and in Asia 1.9 years.
In fiscal 2009/10, the Group-wide fluctuation rate was 1.8%.
We are particularly proud of the fact that fluctuation in Shanghai amounts to only 4.2%.
Competent and competitive
At the end of its 144th year of business, Voith employed
40 986 people. Despite the severe economic crisis in 2008
and 2009, Voith managed to retain many highly skilled anddedicated employees, thereby alleviating the impact of thecrisis for many individuals. Our employee representatives,with whom the management has been working on a basis offairness and partnership for many years, made a vital contribution to this achievement. Inevitable adjustment measures insome core areas were largely implemented by lateral transfers
to other Group Divisions.

48

Voith Sustainability Report 2010

Number of employees

Annual average

Industrial
workers
Commercial
staff

Apprentices
and interns

Key date

2009/10

2008/092010-09-30

2009-09-30

23 26824 981

23 781

23 85015 93415 311

15 97315 47939 20240 29239 75439 329

1 232

1 196

1 232

1 196

40 43441 48840 98640 525

Number of employees by region

Annual average

Key date

2009/10

2008/092010-09-30

2009-09-30

Germany

16 64317 62816 776

16 790

Other EU
countries

7 270

8 070

7 387

7 691

America

11 361

10 861

11 500

11 004

Asia

3 738

3 542

3 901

3 647

Others

190

191

190

197

39 20240 29239 75439 329

“Giving young people sound vocational training has
always been a commitment and responsibility for Voith.”
Dr. Hubert Lienhard, President and CEO

Over 1 000 apprentices and trainees

Continuous education – learning for life

A company like Voith knows that commercial successdepends on the qualifications of its skilled personnel. In 2010,
Voith was able to celebrate a centennial: 100 years of organized vocational training in Heidenheim. During the recent
recession, Voith maintained the number and the quality of its
apprenticeships as well as trainee programs at exactly thesame level. By the end of fiscal 2009/10, a total of 1 232 apprentices and students (previous year: 1 196) were employedat Voith’s German locations. Once again, the number of trainees significantly exceeded the company’s own needs.

Employee development is an integral part of our personnel
policy. Being well trained not only means having a solid vocational education, but also seizing opportunities to contin­
uously refresh and expand our existing knowledge. Equallyimportant is the systematic improvement of social skills andso-called key qualifications.

We are convinced that sound vocational training is a must, but
it should never mean the end of professional learning. This is
why we expect all of our employees to engage in continuing
education programs. Here, Voith offers a choice of internal
training programs, for example the Project Management Institute, a facility for the development of specialized careers. For
the further training of senior executives, we also founded theVoith Academy as early as 1999. And, of course, we cooperate
closely with external educational institutions.

Voith expects and promotes advanced vocational training andlifelong learning in various forms within the Group, the Group
Divisions and at its other locations. This includes training
plans for all employees, targeted development as part of succession planning, as well as technical seminars and training
for the improvement of key qualifications.

On our Web site www.voith.com you can download ourGerman-language brochure “100 Jahre Ausbildung – Investi­
tionen in die Zukunft” in PDF format.

The quality of training and further education at Voith has beenverified by two German quality management standards. In
October 2009, Voith was certified to DIN EN ISO 9001:2008,
and also to AZWV (Recognition and Authorization Regulationof the German Ministry of Economy and Technology/BMWi)standards.

Responsibility for Our Employees496.2 Employee and Management
Development

6.3 Diversity and Equal Opportunities

The Voith Leadership Concept

We attach great importance to equal rights and equal treatment of all employees: men and women, people of all nationalities, young and old. We consider the interaction of peopleof all ages to be an enrichment of our corporate culture. And
this also applies to the cultural diversity of our workforce.
We regard the ethnic diversity of our employees on all hierarchical levels to be an advantage in international competition. Our “Senior Management Circle” currently includes ten
nationalities.

The relationship between managers and employees is theheart of our leadership philosophy. We expect our managers to ensure a humane and fair working atmosphere in
their teams. The significance of this leadership philosophy
is laid down in competence guidelines that apply to theGroup level. A suitable structure for the implementation ofthis philosophy has been created in the Voith LeadershipConcept. This concept is essentially based on two instruments: Goal Agreements and Employee Dialogues. We arecontinuously working on the improvement of our leadership
quality through worldwide, uniform training programs andquality assurance measures.

“Our company needs
employees who areprepared to assume
responsibility.”Dr. Hanns Voith (1885 – 1971)

Our goals
Our goal is to implement the Voith Leadership Concept by
2015. From then on, all senior managers and HR executives
will be obliged to complete annual Employee Dialogues andGoal Agreements with their staff.

50

Voith Sustainability Report 2010

Diversity as a competitive advantage
To fully utilize our potential in growth markets such as China
and India, we must offer more local products, i.e. tailor-madesolutions for local needs and specific requirements in individual countries. Such products can only be developed andproduced on-site, with local managers and experts. In 10 to
15 years, we would like to feel just at home in these countries
as we feel in Germany. We also hope to use this approach inother countries.
Our goals
Voith wants to promote employee diversity further. On the one
hand, we aim to achieve this by sensitizing our senior managers in a continuous process to issues such as ethnic diversity
and equal opportunities. And on the other hand, by providing intercultural training programs. The number of local senior
managers is to be increased in all cultural groups.

Voith and women“The engineering industry is traditionally a male domain” –although this statement has now become a cliché, it used
to be true for many years. Voith welcomes this development,
because the company has set itself ambitious goals. In comparison with its peers, Voith wants to be a leading employer
of women in management positions. This is also the declared
goal of the Voith Corporate Board of Management.
More than a fifth of all employees at Voith are women andtheir share in the overall workforce is currently at 22.1%. On
the key date of September 30, 2010, Voith had 9 815 female
employees. In the Voith Management Circle, this percentage

is significantly lower. Only four of our 88 top executives were
women in fiscal 2009/10. This corresponds to 4.5%.
Our goals
Increasing the number of women employees is a core strategy. Voith is starting a project to define the key indicators forgender distribution. For this purpose, current processes in our
personnel work are being analyzed, evaluated and modified.
The target range for the percentages of women employees
will be defined by areas and integrated into the Goal Agreements of our HR executives. By autumn 2015, the number ofwomen in our senior management is to be increased to 10%.

From Ball Boy to General Manager“I used to stand on the sidelines of the soccer field with just one goal: I wanted to becomea soccer player! And now I am a trainer in the Champions League,” is how the passionate
football fan Dogan Keles describes his career at Voith industrial Services.

Twenty-five years ago, the 46-year-old
General Manager and Branch Manager
started out as a member of the temporary staff at DIW Instandhaltung in
Heidenheim. Under his management,
the branch office enjoyed rapid growthand developed into an independent
subsidiary with record sales. In the lastbusiness year, Keles and his workforceof 530 achieved an outstanding sales
result of over €8 million.
Dogan Keles moved from Turkey toGermany with his parents at the age ofseven. As a young man, he completed
an apprenticeship as a retailer. But
he soon realized that this profession
offered few real prospects. Moving
on to the engineering industry, he additionally started working in the temporary staff of DIW: every Saturday,
Keles cleaned equipment in the Voith

foundry on behalf of DIW – a job thatis not exactly a stepping stone for amanagement career. So, how does he
explain his professional success? “Twofactors were decisive: my ambition
and the backing of my superiors,” says
Keles. The company supported him
and sent him on training and management courses: business administration,
law, communications, rhetoric and language studies in England were all partof the program.

on future investments. In 2009, Dogan
Keles and his family returned to Heidenheim, where he was able to return to his
previous position as Branch Manager.
His former employees and customers
welcomed him back with open arms.

His professional turning point was anoffer to establish the first subsidiary ofVoith Industrial Services in Turkey. In
2005, Keles went to Istanbul as the General Manager, set up networks for overthree years, recruited 280 employees
and acquired renowned industrial customers. But the financial and economiccrisis in 2008 placed a temporary hold

VerantwortungResponsibility for
für Ourdie Mitarbeiter
Employees

51
51

6.4 Demographic Change:
Challenge and Opportunity
Demographic change takes on a different shape in eachindividual country. Voith reacts to this with individual action
programs and initiatives. In countries such as India and Brazil,
the emphasis is mainly on winning young talents for theorganization and to train them for future tasks at Voith. In
countries like Germany, where the demographic change
is clear, the establishment and expansion of measures forhealth care, promotion and knowledge management are in theforeground. At the same time, the company concentrates on
recruiting highly qualified employees.
In order to analyze the situation and create suitable corrective measures, the Voith Group has launched a worldwide
demography project: as a first step, detailed age structure
analyses are prepared in all Group companies. With the helpof a so-called “Demogra-Fit” test, which can be accessed on
the Internet by HR and senior executives, all locations assess
their demographic stability and introduce concrete personnel
measures.

Work-life balance
Many young people would like to find a healthy balance
between their job and family. In Heidenheim, Voith has been
supporting working mothers since 2002 with its own daycare program, the “Kindervilla.“ To offer daycare facilities tomore young families, we will more than double the number of
spaces available to children. Together with Paul Hartmann
AG and the town of Heidenheim, Voith will also support theestablishment of a nursery. By 2012, we will be able to offer
our employees and their families 110 spaces for children between the ages of one to ten.
We also employ a wide variety of flexible work options for allof our employees. For example, combinations of working fromhome and working in the office are possible.

6.5 Occupational Health and Safety
Our goals
Through its analytical approach, Voith is able to react appropriately to the challenges of demographic change. Each unit
is fully informed about the age structure of its workforce andtargeted measures can be defined on this basis. Today, Voith
is in the process of further developing this field.
Cooperation with universities and colleges
Numerous collaborations and international personnel recruitment activities at universities all over the world ensure thatstudents get to know Voith early on, and choose Voith as theiremployer. The recruitment of management trainees at Voith
is a matter for our senior executives: each member of the
Corporate Board of Management and the Executive Team, thefirst hierarchical level directly below this Board of Management, has assumed a sponsorship for at least one university
or technical college in Germany, in order to promote Voith as
an attractive employer.

52

Voith Sustainability Report 2010

A priority: occupational health and safety
Occupational health and safety is firmly embedded in our
corporate objectives, because it is a key priority worldwide.
To optimize our health and safety plans we have developed
and launched a comprehensive management system. We set
targets for our board members, which are passed on to senior
executives in their local units.
Launching an awareness campaign
Most accidents are caused by risky behavior. To sustainably
reduce the number of work accidents over the long run, allemployees must be trained to act safely. Therefore, Voith hasdeveloped guidelines and launched a campaign to make our
employees aware of the importance of occupational safety.

Occupational safety is a management task
How can work accidents be prevented? This is a simple yetcentral question, which was dealt with in great detail by theVoith Board of Management and senior executives when
they developed a new management system in the summer of2009. One thing was clear from the outset: the senior managers are ultimately responsible for safety in the workplace.
The Board of Management therefore declared the reduction of
accidents to be a target issue for its senior executives. Thistask has to be performed and implemented by the senior
managers. All Voith employees who are in charge of personnel are comprehensively informed, sensitized and trained. In
return, they pass on their knowledge to their employees andinstruct them on being more safety-conscious.
The seven principles for safety-conscious behavior
at Voith are:1	All accidents can be prevented2	The senior executives are responsible for the preventionof accidents3	Working safely is a requirement in the workplace4	The senior executives must involve all employees
5	All work must be safe
6	Management will monitor occupational safety
through audits
7	All employees will receive occupational health andsafety training

Corporate Safety Management at Voith
In the summer of 2009, the Voith Board of Management launcheda uniform occupational health and safety system. It will be implemented at all production sites of the Voith Group by 2011.
Implementation, roll-out and controlling are the responsibilityof our Corporate Safety Management. The two major cornerstones of the management system are the establishment ofaccident investigations and the development of an internal
audit system to recognize and eliminate potential risks at an
early stage, before accidents can happen.

Active accident prevention through systematic
procedures
Every accident is to be recorded and immediately reported to
the responsible senior manager. Serious incidents must also
be reported to the Board of Management within 24 hours.
The accident is then systematically investigated by a teamconsisting of those affected, the senior manager and safety
experts. This is followed by a detailed incident report. The
results and any ensuing rules or measures are to be clearlycommunicated to all employees.
In addition to location-based audits, a Group-wide Corporate
Health, Safety and Environment Audit System has been introduced, to be performed by the Group. The system is used tosee if the introduced measures are taking effect at selected
locations and how they can be improved. The audits focus ona detailed analysis of the following points:– Safety Organization– Objectives and Programs– Safety Training– Standards– Incident Investigation– Safety Audits– Management Commitment– Management Accountability– Communication– Contractor Management
Implementation
Achieving better safety through improved communication isa focal point for implementing our safety management system. Studies have shown that impersonal announcements, forexample postings on notice boards, are not powerful enoughto raise the awareness of risks and on-the-job safety. Voith
strongly encourages daily dialogue between HR executives
and employees, especially those in the workshops, about
safety issues. This exchange should provide guidance, information and total involvement in safety management.
Since the roll-out of our occupational health and safety
management system, the Boards of Management and senior
managers have received relevant training. One year after the
introductory phase, all employees will also have attended
seminars on occupational safety and been actively involved in
the communication of accidents and safety measures.

Responsibility for Our Employees

53Our long-term goal is that the Voith Group will not only set
targets, but also communicate them and control their observance. An important step in this direction is the validation ofdata. For this purpose, we generate accident statistics fromall locations and identify relevant key figures. The results arereported to management and, in abbreviated form, to ouremployees. In addition we also hold symposiums on occupational health and safety, where best-practice examples fromrecent Health, Safety and Environment Audits are presented
and discussed.

even further to 6.7 per 1 million working hours. The numberof work accidents has therefore been cut by more than a half
within one year. This demonstrates that the new measures
are paying off. Yet we are still not satisfied: in fiscal 2010/11,
the number of accidents per 1 million working hours is to be
reduced to below 5 and, in the midterm, to less than 2.

Work accidents

First results: significant drop in accident frequency

921

Over the last four years, the number of industrial accidents
at Voith showed a significant drop. While there were still 22.8
work accidents per 1 million working hours in fiscal 2006/07,
this figure was reduced to 13.8 two years later. In fiscal
2009/10, the roll-out year of our new occupational healthand safety management system, accident frequency declined

480

2008/09

2009/10

Safety Starts in the HeadWork accidents should never happen! But the fact is: employees do get injured. This is a situation, however, that
Voith refuses to accept. As a result, we launched a campaign for safety in the workplace five years ago, whose
impact can be clearly seen: the number of accidents has dropped.

Responsibility for occupational safety
cannot be delegated. It simply does
not work. Mauro Pires, Manager Occupational Health and Safety at Voith São
Paulo, explains why: “Brazilian legislation dictates that we employ safetyengineers and safety technicians.
While our politicians meant well, they
achieved just the opposite. Many senior
executives no longer felt responsible forhealth and safety. They thought it was
somebody else’s job.” Thankfully, the54Voith Sustainability Report 2010
Voith-Nachhaltigkeitsbericht
2010

management in São Paulo recognized
this dilemma and, three years ago, they
conducted the first staff survey on thesafety attitude of senior executives.
Afterwards, a Voith-specific awarenesstraining program was developed andthe results of the survey were incorporated in the program.
Employees become involved In Brazil,
the campaign for improved safety started in the foundry, a notoriously roughAs a global player we are faced by the task of defining a stan­
dard that is adequate and workable in all countries. We regard
it as vital to develop an integrated approach and not reactwith isolated or one-sided measures. A long-term, sustainable
impact can only be achieved by an integrated approach. We
therefore aim at devising an initial concept that can be applied
to Voith as a whole. On this basis, we will develop a holistic
strategy that takes individual requirements into account andis then gradually implemented throughout the Group. In order
to assess the ensuing added value we will set up a specificrating system. The implementation will be completed by 2015.

Frequency rate
Accidents per 1 million working hours
13.9

6.7

2008/09

2009/10

Health promotion
Voith has set itself the goal of promoting the health and wellbeing of its employees. The relevant steps taken by our individual locations may vary greatly, however, due to differencesin legal and social conditions which are often inevitable.

and hazardous environment. The training sessions were accompanied bymodifications inside the facility: the lighting was improved and traffic lanes aswell as walkways were clearly marked,
because a clearly marked work area
promotes greater safety. The secretof the campaign’s success was thedeliberate involvement of all employees. Because they are the ones who
know from experience where dangers
are lurking and how unsafe behavior
starts. In numerous training courses
and workshops, the employees wereasked to express their ideas and suggestions. Since then, they have been
keenly interested in improving theirworking environment. In daily meetings
with the senior managers they examine working processes by asking: How

can flammable substances be storedsafely? Would it be helpful to have warning signs for shut-off valves? What must
be observed when ladders are set up?
These may seem to be minor concerns,
but seen as a whole their total results
produce dramatic effects. “What reallycounts,” says Corporate Safety Engineer
Ulrich Weiße, “is that safety is now adaily issue. Over the last six years, we’ve
only had one accident per year, on average. Today, safety information and communications are an ongoing process.”
Families join in The campaign was
also accompanied by organized events:
São Paulo has, for example, an entire
week dedicated to safety. The program
includes informative presentations, accompanied by entertainment elements

such as music and theatre performances. In this way, all senses are addressed, with long-lasting effects on
everyone’s attitude. A special featureis the involvement of the employees’
families. It started three years ago witha painting competition for the staff’s
children. The theme was: My parent's
workplace is safe! In their paintings,
children of all ages showed what theyknew about risks and safety measuresat the workplace of their fathers ormothers. The idea behind the competition was to help families talk about accident risks and prevention. If the children
are worried, so the ulterior motive, parents become extra safety-conscious. In
the meantime, the painting competition
has become a regular part of the annual
calendar of events at Voith São Paulo.

Responsibility
Kapitel-/bzw.
for Themenangabe
Our Employees

55

In the tradition of Hanns Voith, we aim
to improve the life of people in oursociety and opportunities for individuals
at the same time.
56

Voith Sustainability Report 2010

Corporate Citizenship
Entrepreneurial success includes a social responsibility. This has been thecredo of the Voith family from day one. Apart from looking after their customers,
the Voith family has always cared deeply about the well-being of their employees
and takes its responsibility towards society very seriously. A vital contribution
to the social commitment of the company was made by Dr. Hanns Voith(1885 – 1971), who headed the company for nearly 60 years.
Establishing a large-scale company with humanistic values
was the declared goal of Dr. Hanns Voith. In order to institutionalize a social commitment at Voith, he set up the nonprofit and independent Hanns Voith Foundation in 1953. Voith
GmbH is still bound by the humanistic tradition of its founding family. Together with the Hanns Voith Foundation andFundação Voith established in Brazil in 2004, the company
sponsors educational, scientific and training projects, as well
as sports, arts, cultural and social events.

7.1 Social Commitment
In the course of its global expansion, Voith has carried its
humanistic approach throughout the world. When Voith’s first
non-European location was founded in São Paulo in 1964,
social commitment was one of the natural elements of the
new company.

Depending on the amount of the financial donation, the payments must be approved by a senior management unit. Thismight be the management of the respective subsidiary, themanagement of a Group Division or, as a final instance, theShareholders’ Committee. These senior management units
report to the head of the Corporate Office semi-annually.

“As a company, weregard ourselves as a
responsible memberof society. This applies
wherever Voith is athome – worldwide.”
Dr. Hubert Lienhard, President and CEO

Organized commitment
To achieve a healthy balance, corporate financial criteria wereset for the funding and selection of aid as well as sponsorship projects: the guiding value for allocating our sponsorshipbudget is: 30 to 40% is for schools, training and science,about 20 to 25% is for social projects and 15 to 20% each isfor sport and culture.

Voith’s nonprofit foundations are financed by income fromtheir foundation capital. Fundação Voith also receives moneyfrom financial contributions from local Voith subsidiaries. The
foundation’s Board of management and the foundation council
decide on the use of allocations to the Hanns Voith Foundation.

Corporate Citizenship

57

Sponsorship criteria
Sponsorship suitability is examined on the basis of various
criteria. On the one hand, a project must focus on schools,
education, social affairs, sport or culture. On the other hand,a project must also benefit the local community or increase
the attractiveness of the Voith location to the local population.
There should also be an association with Voith as a company.
Irrespective of these rules, Voith also helps in urgent humanitarian emergencies, for example after the serious earthquake
in Haiti in 2009 and India’s flooding disaster in 2010. A final
and overriding criterion for all projects and aid is that Voith
must be convinced of the recipient’s integrity.

The graphic shows that the allocation of sponsorship aid in fiscal
2009/10 complied almost perfectly with our target criteria.

Sponsorship aid – 2009/10 total €1 905 million
By projects
Culture
14%
Sport
21%

Schools, educationand science43%
Social affairs
22%

7.2 Commitment to Culture,
Education and Sport

Examples of current projects

In the tradition of Dr. Hanns Voith, the ultimate goal of Voith
GmbH, the Hanns Voith Foundation and Fundação Voith is toimprove the life of people in society, as well as opportunities
for individuals.

Over the past decades, Voith has supported a number ofprojects for schools, education and science, as well associal undertakings, sports or cultural events. Here is a selection from the last two fiscal years that characterizes the social
commitment at Voith:

Higher sponsorship funding in fiscal 2009/10
In the last fiscal year, approximately €1 905 million was spenton sponsorship projects. Voith GmbH contributed €1 059
million, the Hanns Voith Foundation €0.535 million andFundação Voith €0.321 million. This corresponds to an increase of 16% compared to fiscal 2008/09.

1. Schools, education and science
Promoting the education and training of young people wasalways a special concern of Dr. Hanns Voith. And it is a commitment that we share. So far, Voith has endowed threeprofessorships at German universities. One for engineeringand materials technology at Aalen University (2003), one forhydro power at Stuttgart University in cooperation with EnBW
Baden Württemberg AG (2008), and one for automationin module process technologies for paper and plastics at
Munich University (2009).
At Vienna University, Voith has also donated a pump turbine
model for the hydrodynamic laboratory and finances two positions for scientific assistants. In the USA, Voith is a memberof the Industry Advisory Council (EIAC) of York College in
Pennsylvania. And in Asia, Voith is a cooperation partner ofNanjing Forestry University, where Voith has provided a grant,
sponsors lecturers and cooperates in joint projects. The Voith
foundations also offer grants in Germany and Brazil.

58

Voith Sustainability Report 2010

Offering Young People a Start and Opening Perspectives
Not all young people are prepared for a thorough vocational education. For such cases, Voith has
established a special college, where they have an opportunity to gain practical work experience andimprove their general knowledge.

Special vocational colleges are usually
supported by charities. But there are
exceptions. Voith is one of these exceptions and the only industrial company
in Baden-Württemberg that sponsors
such a facility: the Hanns Voith Sonderfachschule (special vocational college).
About 40 young women and men attend
the school every year, where they are
instructed by ten trainers and teachers.
Since 1972, 1 233 young people havecompleted these preparatory classes
at Voith.

work and improve their key qualifications, which are a must in the working
world – just like discipline, tidiness andpunctuality. “Quite a few people regard
us as a rather strict college,” remarks
Voith trainer Manfred Rupp, which isexactly where the college’s successlies. It operates by the same set of rules
as the company. The students receive
Voith working clothes, they have to observe safety regulations and working

hours. Unexcused absences are nottolerated, so nobody gets away withtruancy in the Voith college. “Our trainees learn to assume responsibility for
their actions and develop their skills in
the community,” which is social education trainer Tilman Walter’s explanationof the high success rate. Over 80% of
all participants are offered an apprenticeship after one year. A result that is
unparalleled in the industry.

These teenagers can choose from four
different fields: woodworking, metalworking, retail services and construction technology. A typical feature of theHanns Voith College is the close combination of theory and practice. A classic component is the “Assembly Box
project.” It starts with the calculation ofmaterial requirements. These figures arethen sent to the workshop and students
work out what materials are needed,
e.g. wooden panels, hinges, handles
and paint. The assembly box is thenproduced on behalf of the HR Department for Voith employees’ anniversaries, and it is a joint project for students
from all fields: wooden parts have to
be sawn out and glued together, metal
handles and hinges must be mounted.
And afterwards the box is painted blueand filled with goodies. Through thisproject, young people get to know
working processes and production sequences, plus they can practice team-

Kapitel-/bzw.
Corporate
Themenangabe
Citizenship59Together with eight other companies, Voith founded the“Knowledge Factory” in 2005 – an initiative that now includes
70 companies supporting school education at German industrial locations. In addition, Voith sponsors worldwide school
partnerships: in Austria as part of the TopTechnik program, in
the USA within the “Adopt-a-School” program (for example atWest Monroe High School) and in São Paulo through a cooperation with the Escola Estadual Conjunto Habitacional Voith
and the Friedrich von Voith School.
Providing all young people with a good start in professional
life – this is the goal that we pursue through our vocational
training plans. Since 1972, Voith has prepared up to fifty
youths with learning difficulties and no proper school qualifications every year and enables them to get their official graduation certificates. Fundação Voith in Brazil is equally committed through its Formare program. We also collaborate with
the AHK-Chien Shiung Vocational Training Center just northwest of Shanghai, where 50 mechanical/electronic engineers
and 50 toolmakers are trained every year, and Voith offers its
workshops for practical training.
2. Social commitment
In 2009 and 2010, Voith provided emergency aid for the victims of the earthquake in Haiti, the typhoon in the Philippines,
the flood disaster in India and the earthquakes in Sumatra andIndonesia.
Voith also regularly contributes to social projects in Africa,
South America and Asia. The company supports, for example, the African Putco Foundation in fighting poverty in South
Africa. We have also repeatedly sponsored the “Dis-Chem
Ride for Sight,” a bicycle race which supports research on
the eye disease retinitis pigmentosa. Here, Voith employees
supported the organizers with a catering station during therace. Every year, Fundação Voith holds an “Environment
Week.” The target group are pupils whose eco-awareness is
to be raised and strengthened.
In order to promote the exchange between cultures, since2003 we have offered two grants in Asia and South America
for the school exchange program “AFS Interkulturelle Begegnungen e.V.”

60

Voith Sustainability Report 2010

3. Sport
Voith sponsors the Heidenheim fencing center and the
Heidenheim baseball team “Heidenheim Heideköpfe.” The
Heidenheim fencing team is among the world’s best, and thebaseball players can look back on successful German championships in the 2009 season. We also support a number of
local sports clubs and competitions worldwide, in order topromote sport for all.
4. Culture
Voith sponsors classical music at the highest level. Apart fromour worldwide commitments, we support the Heidenheim
Opera Festival, the Voith Orchestra, the Bach Academy aswell as the Kapfenburg Castle Music Academy and Cultural
Center. The company also champions the active contact ofyoung people through music. Voith has been supporting theyouth department of the Crailsheim Municipal Orchestra formany years. In 2009, Voith founded a music school for children and young people, the Bach Orchestra in São Paulo.
In the world of art, Voith is involved in the Sculptors’ Symposium in Heidenheim. Apart from making financial donations
we offer the artists our workshop facilities for creating theirsculptures. During the Special Olympics in St. Pölten, Voith
made a similar contribution. The sculptures for the campaign“Merk.Male” were also created in Voith workshops. In addition, we donate money to the Austrian Papermaking Museum
and the Heidenheim Art Museum.
Our goals
For fiscal 2010/11 we plan to raise the awareness for theactivities of the Hanns Voith Foundation through increased
publicity. As demonstrated in recent projects, we are keenlyinterested in introducing children to technology and naturalsciences at an early age. In fiscal 2010/11 we plan to integrate
our sponsorship of kindergartens and schools in Heidenheim
into a so-called “Zukunftsakademie” (Academy of the Future).
This facility was established by the town of Heidenheim. The
Voith Foundation in Brazil is working on a concept to find out
how sport sponsorships can be integrated in its activities. And
in the future, the Voith Group, the Hanns Voith Foundation andthe Fundação Voith will continue to honor their active social
commitments.

Miscellaneous

Glossary

62

Facts & Figures

64

Goals

68

GRI Index

70

Contact/Imprint

Cover

Miscellaneous61Glossary
A
Audit
Procedure to monitor the management
system. The audit is performed by a specially trained internal or external auditor.

Compliance
Term for the adherence to laws andregulations, but also to voluntary behavioral codes within a company.
CS
Corporate Sustainability

B
Benchmark(ing)
A comparison with a reference value foranalytic purposes.
BRIC States
Acronym of the initial letters of thestates Brazil, Russia, India and China.

D
Demographic Change
Term describing how changing age
structures in a society can impact otherareas of life.

E
C
CFO
Chief Financial Officer. Term for commercial executive vice president or
financial director.
CO2
Carbon dioxide is an important greenhouse gas and a natural ingredient of air.
Code of Conduct		International term for behavioral rulesthat can or must be observed in various
situations or contexts.
Cogeneration
Term for the generation of electricity
and usable heat energy.
Combined-Cycle Power Plant
A combined-cycle power plant (CCPP) isa plant for generating electricity and heat,
employing the cogeneration principle.

62

Voith Sustainability Report 2010

EBM
EcologicalBusiness
Management(EBM). Describes the efforts of Voith tocreate added ecological value by looking at the ecological aspects of how we
use energy and resources.
Eco-Balance
See Life Cycle Assessment
Eco-Footprint
An eco-footprint is the amount of earth
surface required to maintain a certain
lifestyle or activity. An ecological footprint can be calculated for the world
population as a whole, but is also used
for measuring the ecological impact ofindividual countries or organizations.
Efficiency
Term for the relationship between power
input and output.

Emissions
General term for the release of pollutants into the environment. These may
be solid, liquid or gaseous sub­stances,including heat, noise or vibrations
escaping from factories or technicalprocesses.
End-of-Pipe
Term for additional environmental measures. Damage to the environment is alleviated by additional measures, while
the actual production processes remainunchanged.
Energy Efficiency
Describes how well energy is used.
Achieving a result with the lowest possible amount of energy produces thehighest energy efficiency.
Energy Flow Analysis
Examines the ecological and economic
impact of how and where energy isused.

G
Geothermal Water
Refers to water which is heated by underground springs.
GRI
An acronym for the Global Reporting
Initiative which is an institution for thedevelopment of sustainability reporting
guidelines.

H

M

HR
Human Resources (HR). Term refers to
employees or personnel, their skills andknowledge.

Material Efficiency
Describes the degree of utilization of
applied materials. Achieving a target
with the lowest possible consumptionof materials equals maximum material
efficiency.

ILO
International Labor Organization (ILO)
is a special organization of the United
Nations, which works on conventions
and recommendations for UN member
states.
Input-Output Analysis
Compares the use of natural resources,
energy and other materials in production processes with the resulting levelsof emissions (waste, wastewater, airborne pollutants).
ISOInternational organization for standardization, working on worldwide applicable norms (9001, 14001, etc.).

K
Key Performance Indicators (KPI)
Refers to important, measurable values
which indicate progress toward specificgoals.

L
Life Cycle Assessment
Also called an eco-balance. A systematic analysis of the total environmental
impact of products during their entire
life span (production, utilization anddisposal, as well as preparatory andsubsequent processes).

Materiality Analysis
Term for a procedure by which thestakeholder groups and subject areas
relevant to an organization are identified
and categorized in order of relevance.
Matrix Certification
During a certification audit, individual
locations of a company are inspected
and considered to be representative of
the entire company.

O
OECD Guidelines
The OECD guidelines for multinationalgroups are a code of conduct for companies.
OHSAS 18001
Occupational Health and Safety Assessment Systems is a worldwide applicable norm for industrial health andsafety management.

R
REACH
The EU regulation for Registration, Evaluation, Authorization and Restriction ofChemicals (REACH) dated June 1, 2007
which controls approval of chemicals.

R&D
Research and Development. Covers all
aspects of basic scientific and application-oriented research.

S
Stakeholders
Affected groups with which a company has a direct or indirect relationshipthrough its business activities. Covers
customers, employees, suppliers, politics, science and the social environment.
Sustainable Balanced Scorecard
Term for a management tool with which
a company can integrate the three sustainability dimensions (economy, ecology, social affairs) for the implementationof its strategies. The ultimate goal is an
improvement of all three dimensions.

V
Vertical Range of Manufacture
Within the added-value chain, this term
describes the share of in-house production for the manufacture of an end
product.
Added-Value Chain
A management concept describing acompany as a chain of processes andactivities. Through these activities, value is added and resources are utilized.

Miscellaneous63Facts & Figures
Environmental Data

Energy consumption

Energy consumption – 2009/10

In MWhBy region
613 674

647 019

Asia
8%South America
14%
North America
18%

2008/09

Europe60%

2009/10

Direct energy consumption

Direct energy consumption – 2009/10

Non-renewable energy in MWh

Non-renewable energy

223 952

Africa< 1%

238 131
Others9%

Natural gas
66%

Diesel16%
Gasoline2%
2008/09

2009/10

Renewable energy in MWh

Renewable energy

Others3%612

2008/09472

2009/10

The facts and data published in this report refer to Voith GmbH as a whole with its Group Divisions Voith Hydro,
Voith Industrial Services, Voith Paper and Voith Turbo. This information covers approximately 85% of all sales and/or 87% of the added value generated by the Group. Exceptions, such as location-related figures or sector-specificactivities, are marked accordingly.

64

Voith Sustainability Report 2010

Heating oil
7%

Ethanol
97%

Indirect energy consumption

Indirect energy consumption – 2009/10

Non-renewable energy in MWh

Non-renewable energy

310 042319 966

Others8%
Heating oil
6%
Nuclear energy
17%

2008/09

2008/09

Renewable energy

88 449Others
20%
Wind
3%

Water
77%

2009/10

CO2 emissions
In t

Coal
19%

2009/10

Renewable energy in MWh

73 330Natural gas
50%

CO2 emissions – 2009/10
181 370

181 054

By region

Asia
19%
2008/09

2009/10South America
10%North America
25%

In t/€ million sales
35.65

34.83

2008/09

2009/10Africa< 1%
Europe45%

Miscellaneous

65

Water consumption

Water consumption – 2009/10

In thousand m3

By region
1 782

1 600

Asia
18%
South America
14%
North America
8%

2008/09

Africa< 1%
Europe60%

2009/10

By source

In m3 /€ thousand sales
0.34

0.31

Surface water
8%

Ground water
50%

Water supply systems
42%

2008/09

2009/10

Wastewater discharge

Wastewater – 2009/10

Treated wastewater in thousand m3

By discharge from193

2008/09266

2009/10

Untreated wastewater in thousand m3
1 492
1 218

2008/09

66

Voith Sustainability Report 20102009/10

Rivers, lakes, land
41%

Public sewers
59%Waste volume

Waste volume – 2009/10

In t

50 41749 289By region

Asia
4%
2008/09

2009/10In t/€ million sales
9.91

9.48

2008/09

2009/10South America
35%
North America
8%

Waste

Waste by disposal from – 2009/10

Hazardous waste in t

Hazardous waste

16 53314 898

2008/09

2009/10

Disposed82%

Africa< 1%
Europe53%

Recycled18%

Non-hazardous waste

Non-hazardous waste in t
33 88434 391

2008/09

2009/10

Disposed
15%

Recycled
85%

Miscellaneous

67

GoalsSummary

Action Areas and Strategic Goals

Measures

Deadlines

Sustainable Business Management
Expansion of sustainability management

Definition of additional key indicators

FY 2010/11

Definition of measures for implementing sustainability
Involving employees in the process through training
Systematic integration of stakeholder dialogues
Extending the scope of the sustainability database
Establishing Group-wide eco-standards
Developing Group Directives (sustainability management)
Including “Sustainability” in the agenda of the Voith Advisory Committee (“Beirat”)
Sustainable Profitable Growth
Ensuring and improving compliance andanti-corruption measures
Responsibility for the Environment
Waste in relation to annual sales (t/€ million) will be
reduced by 10%* by fiscal 2015/16

By fiscal 2012/13, freshwater consumption in relation toannual sales (m3/€ thousand) will be reduced by 5%.
CO2 emissions in relation to annual sales (t/€ million)
will be reduced by 10% by fiscal 2015/16

Implementation of current training program

09/2011

Implementation of eLearning platform
Certification of Voith Compliance Management System

FY 2010/11

Utilization of recyclable materials

FY 2015/16

Direct recycling within Voith
Developing additional measures
Closing water cycles (via reuse and recycling)
Developing additional measures
Develop a Group Directive for the modification and construction ofenergy-efficient buildings

FY 2012/13
FY 2015/16

Utilization of renewable energies
Conversion to low-emission energy carriers (e.g. natural gas and power mixes
which generate lower emissions)
Promoting ecological business management in
all Group Divisions
Product Responsibility
Increasing “product energy efficiency”

FY 2010/2011

Improving data quality

Including product energy efficiency as a separate criterion in the development
process and technical risk checklist
Developing a concept for integrating social and ecological issues whenassessing suppliers
Assessing 50% of our suppliers with respect to social and ecological criteria
Assessing 80% of our suppliers with respect to social and ecological criteria
Increasing the share of goods and services supplied by assessed suppliersto 80%Creating a material rating for 80% to 95% of our purchased materials

Awarding outstanding suppliers by using the Voith SupplierAward throughout the entire Voith Group

Including all suppliers (previously, the Voith Supplier Award was only presented byVoith Hydro in São Paulo)

Ensuring the observance of environmental and social
standards in Voith supply chains* Base FY 2008/09

68

Voith Sustainability Report 20102011/12FY 2011/12
FY 2012/13
FY 2014/15
FY 2010/11
80% by FY 2012/13
95% by 2015
2012

Action Areas and Strategic Goals
Responsibility for the Employees
Promoting staff diversity within the company

Measures

Deadlines

Improving the awareness of senior executives (through interculturaltraining programs)

Ongoing

Increasing the number of foreign senior executives from all cultural groups
Increasing the number of women in senior management
positions from the current 4.5% to 10%

Developing additional measures
Defining key indicators for gender distribution

Autumn 2015

Analysis, assessment and modification of HR processes
Setting quotas for women by divisions
Creating goal agreements with HR executives

Implementing the Voith Leadership Concept
Promoting a work-life balance
Reducing work accidents per 1 million working hours
to less than 5 (in the medium term to less than 2)

Developing additional measures
Completing annual Employee Dialogues and and Goal Agreement Dialogues
for each employee with his/her senior manager
Doubling the number of children in Heidenheim’s daycare facility to 110

2012

Developing additional measures
Implementing a uniform occupational health and safety management system

Ongoing
2011

2015

Setting up an accident investigation program
Developing an internal audit system for early recognition and elimination of risks
Generating accident statistics for all locations and defining key statistics

Establishing a worldwide health management system

Conducting symposiums on occupational health and safety
Continuous monitoring of age structure development within the Group2015

Setting up a statistical system for occupational health management
Developing a holistic concept for occupational health management
Corporate Citizenship
Increasing PR activities for Hanns Voith Foundation
Integrating sponsorships of kindergartens and schools
in Heidenheim within the “Zukunftsakademie” (Academyof the Future)
Promoting sport in Brazil

Intensifying public relations

FY 2010/11
FY 2010/11

Developing a Fundação Voith concept for including sports in its activities

FY 2010/11

Miscellaneous69

GRI Index
Organization and Reporting Profile

Comments

1. Strategy and Analysis
1.1Statement of the Corporate Board of Management
1.2
Impact of business operations, as well as risks andopportunities
2. Organization Profile
2.1
Name of organization
2.2
Major brands, products and services
2.3
Operational structure
2.4
Headquarters location
2.5
Countries of operation
2.6
2.7
2.8

3.3
3.4
3.5
3.6
3.7
3.8
3.9

4.3
4.4
4.5

No significant changes

This is the first Sustainability Report of Voith GmbH (there were also no
Sustainability Reports while the company traded as Voith AG)

Reporting cycle
Contact for questions regarding this report
Process for defining report contents
Report scope
Limitation on report scope
Reporting basis
Methods of data collection and basis of calculations

3.10 New descriptions and information
3.11 Changed reporting parameters compared to previous years
3.12 GRI Index
3.13 External verification of report
4. Corporate Governance, Responsibilities and Commitment
4.1
Governance structure of the organization

4.2

SR see p. 4-5
SR see p. 20-21;
AR see p. 96-101

Ownership structure and legal form
Markets served
Scale of the organization

2.9
Significant changes regarding size, structure or ownership2.10 Awards received
3. Report parameters
3.1
Reporting period
3.2
Date of most recent report

Independence of chairman of the most senior
management body
Number of independent members in most senior
management body
Codetermination of employees and shareholders

Reference

Irrelevant indicator, as this is the first Sustainability Report of Voith GmbH
Irrelevant indicator, as this is the first Sustainability Report of Voith GmbHAn external verification is not intended

SR see p. 7
SR see p. 8-9
SR see p. 8-9
SR see p. 7
SR see p. 7, 9;
AR see p. 65
SR see p. 8
SR see p. 8-9
SR see p. 8-9; AR see
p. 72-73, 69, 88, 110-114
See comment
AR see p. 83
SR chapter “The Report”
SR chapter “The Report”
and comment
SR chapter “The Report”
See imprint
SR chapter “The Report”
SR chapter “The Report”
SR chapter “The Report”
SR chapter “The Report”
SR chapter “The Report”,
p. 31
See comment
See comment
SR see p. 70-72
See comment

Voith is 100 % owned by the Voith family and therefore not obliged toprovide comprehensive reports

SR see p. 8, 13-14;
AR see p. 58-61, 62-63,
comment
SR see p. 8

Irrelevant indicator, as Voith has a Supervisory Board

AR see p. 62-63,
comment
AR see p. 62-63,
comment

Voith has a labor council and is family-owned

4.11

Relationship between remuneration of Management Boardand sustainability performance of the organization
Mechanisms for avoiding conflict of interests
Expertise of members of most senior managing body ineconomics, environmental and social affairs
Corporate philosophy, code of conduct and sustainability
principles
Examination of sustainability performance by most senior
managing body
Assessment of performance of most senior managing body
regarding sustainability
Consideration of precautionary principle

4.12

Support of external economic, ecological and social activities

SR see p. 5, 13, 26, 36,comment
SR see p. 15, 43, 60

4.13
4.14
4.15
4.16

Memberships in associations and lobby groups
Involved stakeholder groups
Basis for selection of stakeholders
Approach towards stakeholder engagement

SR see p. 15, 43
SR see p. 14
SR chapter “The Report”
SR see p. 14, 15

4.17

Key topics of stakeholders

SR chapter “The Report”

70

Voith Sustainability Report 2010

4.6
4.7
4.8
4.9
4.10

SR see p. 21-23
SR see p. 13-14
SR see p. 11, 13-15,
21-23
SR see p. 14
SR see p. 13-14
By monitoring the product life cycle and the entire added value chain,risks are identified early and can be eliminatedManagement Approach and Performance Indicators

Comment

EconomyManagement approach

Reference

EC1
EC2

Directly generated and distributed commercial value
Financial impact of climate change

SR see p. 17-23;
AR see p. 108
AR see p. 108-114
SR see p. 18

EC3
EC4

Company’s benefit plan obligations
Financial assistance received from government

AR see p. 138
AR see p. 128

EC5Relation of standard starting salary and local minimum wage

EC6

EC8

Business policies and practices, proportion of expenditure for
local suppliers
Recruitment of local employees and share in management
positions
Development and impact of investments for public welfare

EC9Indirect economic impact

EC7

SR see p. 40
SR see p. 50
SR see p. 57-60

Environmental Protection
Management approach
EN1 Materials applied

SR see p. 25-33
SR see p. 28

EN2

Share of recycled materials

EN3
EN4
EN5

Direct energy consumption
Indirect energy consumption
Energy savings

SR see p. 31, 64
SR see p. 31, 65
SR see p. 27, 32-33

EN6
EN7
EN8
EN9

Energy-efficient products and services
Initiatives towards reduction of energy consumption
Water consumption
Water sources affected by water consumption

SR see p. 36-39
SR see p. 32-33
SR see p. 29-30, 66

EN10 Recovered and recycled wastewater

SR see p. 30

EN11 Land use in protected areas
EN12 Impact of products and services on protected areas or
areas with high biodiversity
EN13 Protected and restored natural habitats
EN14 Strategies and management of impact on biodiversity
EN15 Endangered species at business locations
EN16 Direct and indirect greenhouse gas emissions

SR see p. 31

EN17 Other relevant greenhouse gas emissions
EN18 Initiatives towards reduction of greenhouse gases andactual results
EN19 Emissions of ozone-depleting substances

SR see p. 27, 32-33

EN20 NOx, SO2 and other significant emissions
EN21 Total wastewater discharge
EN22 Volume of waste by type and removal method
EN23 Significant release of harmful emissions

SR see p. 66
SR see p. 28, 67
During the fiscal year there were no accidents in production, warehousingor transport, where harmful emissions were actively released or might havebeen released

See comment

EN24 Transported, imported, exported and treated hazardous waste
EN25 Impact of wastewater discharge on biodiversity
EN26 Measures towards reduction of environmental impact
of products
EN27 Share of products for which packaging materials are taken back Indicator not relevant for Voith, as products require only very little
packagingEN28 Significant fines and sanctions for non-compliance withenvironmental laws
EN29 Environmental impact due to transport of products, materials
and employees
EN30 Expenditure and investments for environmental protection

SR see p. 36-39
See comment

Employees
Management approach

SR see p. 47-55

LA1
LA2

SR see p. 48
SR see p. 48

Entire workforce by employment status and region
Staff fluctuation

LA3

Benefits that are only granted to full-time employees

LA4

Number of employees governed by collective agreements

LA5

Reporting deadline regarding significant operational changes

Miscellaneous71Management Approach and Performance Indicators

Comment

Reference

LA6

Number of employees represented in industrial safetycommittees

50-75 % of the worldwide workforce are actively involved in industrial
health and safety via committees consisting of equal numbers of
employees and safety experts

See comment

LA7
LA8

Injuries, occupational diseases, absenteeism and number ofwork-related fatalities
Health care, advice and training

LA9

Industrial health and safety agreements with unions

SR see p. 54-55
SR see p. 55

LA10 Training and further education programs

SR see p. 49-50, 59

LA11 Knowledge management and lifelong learning

SR see p. 43, 48, 52

LA12 Performance assessment and development planning

SR see p. 50
SR see p. 50-51

LA13 Diversity of employees and managing bodies
LA14 Relationship between salaries of men and women
Human Rights
Management approach

See comment

The basic salary for men and women is the same

SR see p. 39-43

HR1

Human rights aspects of investment contracts

SR see p. 39-43

HR2
HR3

Review of key suppliers for possible violation of human rights
Staff training on human rights issues

SR see p. 39-42

HR4
HR5

Incidents of discrimination and measures taken
Business activities that endanger freedom of association andcollective bargaining
Business activities involving the risk of child labor

HR6

HR7

Business activities involving the risk of forced labor

HR8

Training of security personnel for human rights issues that are
relevant for business activities
Incidents of violation involving rights of indigenous people

HR9

Incidents not published to protect employees
Voith disapproves of any restriction of legal interest representation. This isa binding rule for all employees in the Voith Code of Conduct
During the reporting period there were no cases of child labor at Voith orits suppliers. Voith does see risks in production areas. However, due tothe required high levels of qualification, child labor can nevertheless be
excluded. The Voith Code of Conduct categorically forbids any form ofchild or forced labor

Society
Management approach
Impact of business activities on communities or regions

SO2

Business divisions investigated for corruption risks

SO3

Employee training regarding anti-corruption

SO4

Incidents of corruption and measures taken

SO5
SO6

Political position and participation in public opinion-forming
and lobbying
Donations to parties and politicians

SO7

Complaints due to anti-competitive behavior

SO8

Fines due to infringement of legal provisions

The correct implementation of the compliance structures is part of theroutine corporate audit
In fiscal 2009/10, 200 senior executives and 208 compliance
representative were trained. Through these trainers, a total of 10,859
additional people were trained worldwide

PR4
PR5
PR6
PR7
PR8
PR9

During the reporting period there were no complaints due to anticompetitive behavior

SR see p. 23;
see comment

SR see p. 35-45
SR see p. 26, 33, 36

Incidents of non-compliance with regulations concerning healthand safety of products
Legal obligation to provide information on products and services
Non-compliance with legal and voluntary obligations to provide
information on products and services
Survey of customer satisfaction

SR see p. 14

Adherence to laws, standards and voluntary codes of conduct
regarding advertising
Non-compliance with legal and voluntary obligations regarding
advertising
Justified data protection complaints
Significant fines due to non-compliance with laws andregulations regarding acquisition and use of products= fulfilled72

SR see p. 57-60;
AR see p. 52
SR see p. 21-22;
see comment
SR see p. 23;
see comment
SR see p. 23

Product Responsibility
Management approach
PR1 Examined life cycle stages regarding health and product safety

PR3

See comment

SR see p. 57-60

SO1

PR2

See comment
See comment= partly fulfilled= not fulfilled

Voith Sustainability Report 2010

Not reported due to internal regulations

Light gray = additional indicators

SR = Sustainability Report 2010

AR = Annual Report 2009/2010

The Report
Voith’s first Sustainability Report
Voith GmbH presents its first Sustainability Report, whichis intended to provide unique insights into its Group-wide
activities in terms of ecological and social responsibility.
Here, our goals and aspirations are to make our sustainability
strategies transparent for our stakeholders and to offer information about how they are implemented in our various fieldsof activity.
The Voith Sustainability Report focuses on our current andfuture challenges in areas such as management, economics,
environmental protection, product responsibility, employees
and society. We report on both the status quo as wellas our future strategies, approaches to finding solutions andconcrete measures aimed at increasing the sustainable performance of the company.

The figures, facts and information published in this reportrefer to Voith GmbH as a whole with its Group Divisions ofVoith Hydro, Voith Industrial Services, Voith Paper and Voith
Turbo, covering approximately 85 % of the Group’s sales
and/or 87 % of the Group’s created value. Exceptions, suchas location-related figures or division-specific activities, aremarked accordingly.

Data collection
Since fiscal 2008/09, relevant key data on occupational safety,
environmental and health protection have been recorded
via a database at site level and validated in accordancewith the two sets of four-eyes principle. This process covers
all production and administrative sites operatively controlled
by Voith.

Reporting method

Forward-looking statements

Our reporting method is oriented on the internationally recognized GR 3 Guidelines of the Global Reporting Initiative (GRI).
Based on our own assessment, we estimate that Voith hasreached the application level C.

It was important to us that our first report provides not only areview of past events, but also an outlook for the future. The
report therefore contains a number of forward-looking statements. We would like to point out that these statements are
based on current assumptions. Due to unknown risks, uncertainties and other factors, the actual results, developments
or services of our company may deviate from our prognoses,
evaluations and statements.

To determine the sustainability issues for this report, we conducted extensive analyses in 2009 and 2010. In addition,
special internal workshops were conducted to identify ourrelevant stakeholders and sustainability themes in the areas of
economics, environment and social affairs. The relevance ofthe selected subjects for the identified stakeholders and Voith
was checked in a weighted ranking system. The result of thisevaluation was then used to identify specific fields of action
and to define goals.

Reporting period and report scope
The reporting period covers the fiscal years 2008/09 and2009/10. Our fiscal year starts on 1 October and ends on 30
September. In addition, we have also included other information accumulated up to the editorial deadline of February 28,
2011 when it improved the report’s overall understanding.

Further information
This printed report cannot cover the entire spectrum of information on the services and activities of the Voith Group. Further and more comprehensive information can be found on our
Web site www.voith.com, as well as our Voith Annual Report.
This Voith Sustainability Report is published in German andEnglish. To provide easier readability, gender-specific double
entries have been avoided. This does not represent a valuation and all entries are to be understood as gender-neutral.

Publication of the next Voith Sustainability Report isscheduled for 2012.

Imprint

Contact

Published byVoith GmbH
Corporate Communications
P. O. Box 20 00
89510 Heidenheim
Germany
Phone: +49 7321 37-0
Fax:
+49 7321 37-7000
E-mail: info@voith.com
www.voith.com

Contact
Voith GmbH
Andrea Linke
Head of Corporate Sustainability
E-mail: sustainability@voith.com

Eco-Friendly
Production
During the production of this Voith
Sustainability Report, all CO2 emissions
for printing and processing were calculated. By investing in an environmental
project based on the gold standard, inthe future the same amount of CO2 will
be recycled – thereby creating a neutral
CO2 footprint for this Voith Sustainability
Report.

The recycled paper RecySatin used forthis Voith Sustainability Report 2010 is
produced in compliance with the inter­national FSC standard. It consists of
80 % recycled fiber and was produced ona Voith paper machine.

Printed in Germany, ©Voith GmbH, 2011-05

Sustainability Report 2010
This Voith Sustainability Report isavailable in English and German.
Both versions and further information
can be downloaded from the Internet.
www.voith.com

Resources Are Limited
Ideas Are Not
Sustainability Report 2010