Sustainability Report2018Contents_Foreword

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1_Strategy and Integrity
Our Profile
Strategy and Organization
Values and Compliance
Responsibility for Society

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2_Environment
Environmental Management Approach
Performance in the Reporting Period

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3_Employees
Employees – Our Aspiration, Our Responsibility
Highly Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

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4_Products and Supply Chain
Product Responsibility
Responsibility in the Supply Chain

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52_GRI Index_Fact base
_The Report_Imprint and Contacts

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Back_Foreword
Dear Readers,Companies that do business sustainably keep thepresent and the future equally in view, and attach
greater value to long-term success than to shortterm profits. Voith acts according to this fundamental
principle. As one of Europe’s longest-standing family
companies we have proved this time and again inover 150 years of company history.
We have been successful as a company for so many years precisely because weachieve our successes in an environmentally and socially sustainable way. In today’s
age of digital transformation, what might sound almost old-fashioned is in fact the key
to success – especially when it concerns the multifaceted challenges that we face asa technology company in the digital age.
Doing business sustainably means keeping risks firmly in view while at the same time
identifying and harnessing the many and varied opportunities that the future offers.
On the strategic level Voith has acted coherently in this regard for many years. We
structure our company consistently for the future, also through applying a systematicsustainability management approach that we have pursued for many years now.
We set ourselves clear targets in order to reduce our energy and water consumption
by sales revenue and to avoid waste wherever possible. We were not able to reach
all of these targets, although we have made good overall progress in recent years.
However, at the end of the target-achievement period it became clear we had set
the bar too high as exchange-rate effects, among other external factors, impacted
our revenue development. Nevertheless, with our activities over the last few years
we achieved annual savings potentials of over € 12 million euros for Voith. We havethus made Voith significantly more competitive and have moved closer to our goal of
making Voith the industry benchmark for sustainability.

Today we already number amongst the leading companies in terms of sustainability.
The rating we received last year from oekom research AG confirmed this, awarding
Voith Prime status. Furthermore, we have just heard that we have been awarded Goldstatus in the rankings compiled by the sustainability assessment platform EcoVadis.
These awards confirm the positive impact of our work, and additionally demonstratethat doing business sustainably can quite literally pay off. Awards and rankings suchas these are playing an increasingly important role for banks when it comes to setting conditions for corporate loans and credit facilities. For a company like Voith
that manufactures major plant assets requiring considerable financing, a sustainableapproach delivers tangible economic advantages.
The environment, our employees and society as a whole all benefit from Voith’ssustainability effort – and naturally so does our company itself. I can assure youthat we will continue to work in future to raise our competitiveness this way. Thisis fully aligned with the philosophy of our Company Founder Hanns Voith, and isadvantageous for the environment and society, and for the future of Voith. We willcontinue to travel this path and I will be delighted if you continue to accompany us
as partners in sustainability!

Sincerely yours,

Dr. Toralf Haag
President and CEO

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1_Strategy and Integrity
1.1 Our Profile
The Voith Group is a global technology group. With our broad portfolio of production
plants, products, industrial services, and digital applications, we set standards in fivemarkets: Energy, Oil & Gas, Paper, Raw Materials, and Transport & Automotive. As oneof Europe’s major family companies, the way we conduct business has always been
geared towards sustainable, profitable growth, with clearly defined values serving as
our compass. In view of this, our shareholders, the Supervisory Board, and the Voith
Corporate Board of Management work together under a joint commitment to develop
the company in an economically, environmentally, and socially sustainable way.
Our economic strength is based on the following four strategic principles which wehave carefully established over the decades:• A diversified product portfolio based on megatrends• An international footprint and strong local roots• Our innovative capabilities, and• Our financial independence as a family-owned company.
Overview of The Group
Voith has a global presence, with a comprehensive network of production, service,and sales units in over 60 countries on every continent.
http://voith.com/corp-en/about-us/markets-locations.html

Voith GmbH & Co. KGaA, headquartered in Heidenheim an der Brenz, Germany, isthe management holding company and parent company of the Group. The Group’s
core functions are also concentrated within it. The Corporate Board of Management ofVoith Management GmbH is responsible for the strategic and operational managementof the Voith Group. Voith Management GmbH, which is 100 percent family-owned justlike Voith GmbH & Co. KGaA, manages the businesses of Voith GmbH & Co. KGaA

as the personally liable shareholder. The General Managers of Voith Management
GmbH are appointed by the Shareholders’ Committee of Voith Management GmbH.
The supervisory body of Voith GmbH & Co. KGaA is the Supervisory Board.
We are currently working to simplify the Voith Group’s legal structures. In a first step,
the material operating companies in Germany from the Group Divisions Paper, Turbo,
and Digital Ventures were merged into J.M. Voith SE & Co (formerly J.M. Voith GmbH& Co. Beteiligungen KG) – a process we had completed by October 1, 2018. The
Group Division Voith Hydro is not part of this legal structure as it is a joint venturewith Siemens.
Annual Report 2018, p. 62 et seq.

Simplifying our legal structures cuts bureaucracy and enables us to act faster and withgreater impact. Among other things, this relates to the number of financial statements
to be prepared, agreements between individual Voith corporate entities as well as
fees, contributions, and registrations. In a second step, we plan to further reduce thenumber of operating entities globally.
The changes to our legal structure do not have any effect on the organizational
structure within the Group. The operating business remains concentrated in fourGroup Divisions:• The Group Division Voith Hydro is a leading full-line supplier for equipping large
and small hydropower plants, and providing customized, long-term solutions andservices covering the entire plant lifecycle and all major components.
• The Group Division Voith Paper is a leading full-line supplier in the paper industry,and offers its customers technologies, products, and services for all sections of
the production process.
• The Group Division Voith Turbo is a specialist in intelligent drive solutions, systems,
and leading-edge services. It works with customers from highly diverse industries

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4_Products and Supply Chainsuch as oil & gas, energy, mining and mechanical engineering, ship technology,
and rail and commercial vehicles.
• The Group Division Voith Digital Ventures (known until September 30, 2018 as
Voith Digital Solutions) brings Voith’s long-standing automation and IT expertise
together with extensive hydropower, paper machine, and drive technology knowhow. Founded in 2016, this Group Division plays a central role in the development of new digital products and applications for new markets. Furthermore, it
is responsible for advancing the development of new and existing digital venture
activities.
Annual Report 2018, p. 67 et seq., Group Strategy

Business Development 2017/18
Voith performed well in the 2017/18 fiscal year. While we did not meet all our targets
in an often challenging environment, our operating business developed solidly once
again. Net income – adjusted for the effect in the previous year from the sale ofshares in KUKA Aktiengesellschaft – increased significantly. In addition, we further
strengthened our equity ratio and advanced our digital agenda.
On a currency adjusted basis, sales (€ 4,209 million, previous year: € 4,224 million;−0.4 %) and orders received (€ 4,285 million, previous year: € 4,367 million; −1.9 %)fell slightly. Orders on hand remained at a high level (€ 5,172 million, previous year:€ 5,193 million). The broad-based positioning of the Voith Group has once again
paid off. While the Group Division Voith Hydro suffered unexpected deterioration ina challenging environment, the Group Division Voith Paper stood out positively withvery good figures, particularly in orders on hand. The Group Division Voith Turbo
also performed well. The fledgling Group Division Voith Digital Ventures showed the
expected strong percentage growth in sales.

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We were unable to reach the previous year’s level in the Group’s operating profit(€ 211 million; −17 %), primarily due to the Group Division Voith Hydro performing
below expectations. Profits were also impacted by currency effects as well as bya negative non-recurring effect in Voith Turbo. As announced, the profitable corebusiness was able to shoulder the build-up costs for the fledgling Group Division
Voith Digital Ventures.
Annual Report 2018 p. 72 et seq., Business Development

Investments
Voith continues to invest consistently in the future, both in the fledgling Group Division
Voith Digital Ventures as well as in the expansion of our core business. In the 2017/18
fiscal year we invested € 94 million in property, plant and equipment, and intangible
assets (previous year: € 96 million; −2 %). As a percentage of the Group’s sales, ourinvestment ratio amounts to 2.2 % in the reporting year (previous year: 2.3 %).
Management System: EBIT to Be the Central Performance Indicator
The key financial performance indicators for the Voith Group were previously thedevelopment of sales and orders received as well as profit from operations and returnon capital employed (ROCE). In future, EBIT will replace profit from operations as ourcentral performance indicator for operating results and we will consistently base ourforecasts on the new EBIT performance indicator.
Annual Report 2018 p. 64 et seq., Management System
Fact base Economic Indicators
Fact base International Focus

Central Principles Defined to Achieve Profitable Growth
In the reporting year the Corporate Board of Management worked together with top
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company. The objective is to enter a phase of sustained profitable growth on thebasis of the key strategic decisions taken in previous years.
Five core growth drivers were identified in the process:1. Simple and fast-acting structures as a basis
2. Reinforcing the excellence initiatives
3. Innovations and organic growth
4. Strong market orientation of our digitalization activities
5. Targeted M&A activities.
Guided by these central principles, further action will be taken in the 2018/19 fiscal
year to specify the details of the Group strategy.
Expansion in Strategic Partnerships
While there were no fundamental changes to our Group Divisions’ portfolios in thereporting year, we also created key prerequisites in this area to pave the way forfurther positive business development.
These include the Group Division Voith Turbo agreeing to form a joint venture with
the Chinese company CRRC Corporation Limited, the world’s largest manufacturer ofrail vehicles. This joint venture will decisively strengthen our business in the important
Chinese rail market, although the joint venture remains subject to approval by thesupervisory bodies of both partners.
In addition, Voith has entered into a strategic partnership with the robotics company Franka Emika. As part of this, Voith has taken a 10 % financial stake in thiscompany. The recently founded joint venture Voith Robotics – A Voith and Franka
Emika Company is to be expanded to become a global systems provider for robotic
automation and an expert in the process integration of robots.

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Excellence Initiatives Reinforced
The pursuit of excellence remains one of our core principles, which is why we arecontinuing, expanding, and reinforcing the initiatives of our Group-wide excellence
program. In the reporting year we added a sixth module – Digitalization – to our existing five modules: Operations Excellence (OPEX), Administration Excellence (ADEX),
Product Improvement & Engineering Excellence (PEEX), Sales Excellence (SALEX),
and Quality@Voith. Since the end of the 2017/18 fiscal year the six modules have eachbeen managed directly by a Member of the Corporate Board of Management, which
reinforces their importance. In addition, cooperation within the Group is being intensified across Group Division boundaries, and synergies within interdisciplinary topics
such as production, quality, and distribution are being put to better use. The primaryobjective of our activities is to achieve a sustainable rise in quality and productivity.
Further Developing Our Digital Agenda
Voith intends to play a major role in shaping the digitalization of industry – and webelieve we have an excellent starting position to achieve this. Within the frameworkof our digital agenda, we are pursuing three strategic directions: Firstly, refining
the existing product portfolio to include digital capabilities that offer customers additional functions and added value; secondly, developing new digital solutions for our
traditional core markets; and thirdly, developing new applications for markets not yet
covered by Voith.
We have reinforced Voith’s digital competence substantially over the past two years
and reached an important milestone by establishing the organizational structures of
the Group Division Voith Digital Ventures (known until September 30, 2018 as Voith
Digital Solutions). In 2018 we further developed and improved collaboration and the
distribution of responsibilities between the Group Division Voith Digital Ventures andthe three Group Divisions that make up the core business.
Starting in the 2018/19 fiscal year, the three Group Divisions – Voith Hydro, Voith
Paper, and Voith Turbo – are responsible for marketing of the digital product portfolio

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for our traditional markets. This means they are being given significantly more responsibility for the further expansion of the digital business in their markets. The sales
generated will continue to be attributed in full to the respective Group Divisions of
the core business. This will enable us to align our digital offerings even more closely
to customer requirements and market them in a more targeted way.
Voith Digital Ventures will also steer the development and management of new digital
venture activities and act as an incubator to drive forward new digital business models
for the entire Group. This extends to responsibility for investments in businesses
that originate from incubation projects (e.g. merQbiz), or come into being throughcollaborations with other companies (e.g. Voith Robotics), or are purchased (e.g. RaySono). For organizational purposes, these participations were brought together under
the umbrella of this Group Division as of October 1, 2018.

1.2 Strategy and Organization
Sustainability Is a Core Objective
As a family-owned company we are committed to environmentally friendly, fair, andlong-term business practices. Furthermore, we intend to create measurable added
value for the sustainable development of our company, society, and the environment.
The goal we set ourselves regarding the way we conduct business is also correspondingly high: We want to make Voith the benchmark in sustainability issues globally andin all markets and sectors in which we are active. With clearly structured processes
and an effective sustainability organization, we see ourselves as well positioned tomeet this objective.
Indeed, our efforts in this area are also viewed positively by external parties. As an
example, we achieved Prime status from ISS-oekom, which enables Voith to obtain
more favorable terms on the capital market.

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Efficient Sustainability Organization
At Voith, sustainability is seen as a cross-functional responsibility shared by our
Corporate Board of Management, Group Divisions, and Corporate Departments.
The central function Corporate Sustainability & HSE sets the framework for our
strategic focus and the way we organize sustainability. Furthermore it advises theGroup companies and Corporate Departments. It is responsible for the strategic
development of the topic and reports directly to the President and CEO. It takes
decisions on the necessary tools and methods, such as our sustainability databaseand associated reporting tools, used within our Group to measure and steer oursustainability activities. Furthermore, this central function is responsible directly forthe global specialist organization Health, Safety, and Environment (HSE) as well as
the Sustainability Office (see also the sections 2_Environment and 3_Employees).
To further develop our Sustainability Strategy and derive corresponding objectives,
the Sustainability Office is currently working on determining the position of Voith in thearea of sustainability. The results of the ongoing stakeholder dialog activities, externalratings of the company’s sustainability performance, and trends in the competitiveenvironment are incorporated into this assessment.
The Corporate Sustainability Council (CSC) – our central steering committee for all
sustainability activities – reports directly to our Corporate Board of Management.
The Council draws up decision-making principles, and as a steering and monitoring
body it also supervises the operational implementation of strategies, objectives, andmeasures in the Group Divisions.
The CSC plans to refocus itself to become even more efficient in fulfilling its responsibilities. To achieve this, it has developed an organizational strategy; however, until
the Corporate Board of Management approves this initiative, sustainability activities
will continue on departmental and operational levels.

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4_Products and Supply ChainGroup-wide Approach to Sustainability
We have embedded the topic of sustainability in our Group through five fields ofaction. Practicing sustainable corporate governance and our pursuit of profitable
growth are just as much a part of these fields of action as our responsibility towards
our products, the environment, and our employees. We routinely bring transparency
to these topics, publish our objectives and activities, and document our progress.

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Our key dialog partners include shareholders, supervisory committees, employees,
the Works Council, our customers, suppliers and investors, as well as neighboring
communities, trade associations, academia, government agencies, and policy makers.
We also focus on NGOs, such as the World Wide Fund for Nature, as well as thebroader interested public.
Fact base Memberships and Association

We take a systematic approach to implementing our Sustainability Strategy. As an
example of this, our quarterly report contains a detailed list of measures outlining
the tasks, responsibilities, and deadlines for each operational level – with top priority
given to informing and raising the awareness of our employees.
Targeted Reporting Increases Transparency
Since 2009 we have kept our stakeholders updated about our progress through ourannual Sustainability Report and via additional online information. In 2016 we devised
a complementary reporting resource geared even more closely to our audiences’
requirements and which we have used consistently ever since.
In our traditional Sustainability Report, we focus on the fields of action that mattermost to our company and stakeholders. We have supplemented this with an extensive
online fact base that includes detailed information intended mainly for sustainability
experts and specialists. To make even greater use of the possibilities offered by online
communication, we will continue to develop the reporting resource during this current
fiscal year. In addition to the above, we have explained our sustainability activities formany years now in our annual reports.
Comprehensive Stakeholder Dialog
Maintaining ongoing dialog with stakeholders is vital for a global group such as Voith
and we have done this for many years.

A regular stakeholder survey provides the basis for analyzing feedback from various stakeholders and then incorporating this into our company’s decisions. In thereporting year we began to revise the survey model, as we intend to better reflect
our stakeholders’ varying expectations and also consider the often highly differing
requirements of the regions. We also plan to increase the frequency of surveys toallow us to respond even more promptly to our stakeholders’ proposals.
Materiality Analysis Underpins Our Sustainability Activities
We use a detailed materiality matrix to prioritize our sustainability activities and define
the crucial aspects for our company. At present, we still use the results of the 2016
stakeholder survey as the basis of our analyses.
In the reporting year we once again held a stakeholder survey, in which we conducted
detailed interviews. We will incorporate the results into our existing materiality analysis
and they will be included in our sustainability activities from the 2018/19 fiscal year
onwards. Details on the methodology and results will then be included in the upcoming Sustainability Report.

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Materiality Analysis

Very important

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Importance to external stakeholders

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ImportantManagement
1 Anti-corruption
2 Data Protection
3 Economic Stability
4 Good Governance
5 Human Rights

Importance to internal stakeholders

Supply Chain
Employees
6 Supply Chain Anti-corruption 10 Occupational Safety
7 Supplier Relations
11 Education
8 Environmental Standards
12 Health Benefits
9 Social Standards
13 Training
14 Work-life Balance
15 Remuneration
16 Diversity

Environment
17 Material Efficiency
18 Emissions Reduction
19 Energy Efficiency
20 Water Efficiency
21 Renewable Energies

Very importantSociety
22 Social Engagement

Products
23 Customer Collaboration
24 Innovation Management
25 Reliability
26 Value for Money
27 Energy-efficient Products
28 Product Safety
29 Resource-efficient Products
30 Water-efficient Products

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1.3 Values and Compliance
How We See Ourselves
Voith unites the tradition of a family-owned company with the needs and culture ofa global group. Clear values define the way we conduct business: We are respectful
and reliable, open, and ambitious. Our values, and the guidelines we derive fromthem, ensure that Voith acts according to a unified set of business principles and aconsistent philosophy worldwide. We have summarized this mission statement in ourclaim: Inspiring Technology for Generations.
Code of Conduct Binding on All Employees
Voith’s main business principles have remained unchanged for almost 100 years.
Back in 1927 Hanns Voith stipulated that: “In the business world one must be ethical,
decent, and honest. If a contracting party or competitor behaves unfairly, this does notgive us the right to deviate from this principle.” These principles still govern the way
we conduct business today. Our Code of Conduct defines the way we act towards
customers and business partners, as well as how employees behave towards one
another within the company. It can be viewed online and provides information on
points of contact and the Voith Compliance Committee.
http://voith.com/corp-en/about-us/compliance.html

We require every single one of our employees to comply with prevailing legislationand our company’s internal regulations across our Group and all hierarchical levels.
On signing the employment contract this obligation is formally established in writing,and any breaches are met with disciplinary measures. We constantly update ourrules and procedures, and adapt them to meet current requirements. In addition,
our values play a central role in the Voith Academy training programs, such as ourStart-up Leadership Program for prospective executives.

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The Voith Code of Conduct sets out clear standards that are aligned with establishedexternal charters and principles. The key principles include:• Observance of the rules of fair competition.
• No anti-competitive agreements.
• No corruption or bribery: No offering and granting, or demanding and acceptingof unfair advantages.
• Transparency on donations and sponsorship.
• Safeguarding our own trade secrets and patents, and respecting those ofthird parties.
• No undue preferential treatment of suppliers and service providers.
• Respect for human rights, fair working conditions, and rejection of child andforced labor.
• Tolerance and equal opportunity.
Fact base External Charters and Principles

Clear Responsibilities: The Voith Compliance Organization
The Voith Compliance Organization establishes, develops, and coordinates ourCompliance Program, revises compliance regulations, and coordinates training. This
organization meets monthly and comprises the Head of the Group Legal Affairs
Department (Chairman) as well as the respective Heads of the Group Human
Resources Management and the Group Audit Departments. Its Chairman reports directly to the Corporate Board of Management of Voith GmbH & Co. KGaA. The CFOsof the Group Divisions and the individual Group companies serve as the Compliance
Officers in their units. Within their area of responsibility, our Compliance Officers are
responsible for implementing our Code of Conduct and also serve as Group-wide
points of contact. This is also in keeping with our other Risk Management organization.
Keeping Knowledge Up to Date Is Mandatory
All of our employees are required to keep themselves regularly updated on compliance issues and on our Code of Conduct via our e-learning programs. Through their10

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successful participation, employees also explicitly document that they are fully awareof our Code of Conduct and have understood the appropriate regulations. Around
98 % of our employees with a computer workstation completed our programs on
Anti-Corruption and Antitrust Law, as well as on Leadership and Employees. A higher
degree cannot be achieved owing to customary headcount fluctuation in a company,
so we assume the programs cover all employees. Employees who do not have acomputer workstation are trained by their line manager to ensure their knowledge
is up to date.
In the reporting year we continued to hold face-to-face courses, which are assigned
automatically to employees. 949 employees, comprising mainly managers and employees from Sales and Purchasing, took part in 34 events. Separate, highly detailed
training courses were offered to Compliance Officers from our Group Divisions.
Fact base Compliance Training
Fact base External Security Personnel

Group-wide Information and Complaints Reporting System
In principle, any stakeholder, including our own employees, can report complaints to
Voith or notify us about abuses or breaches of the Voith Code of Conduct. They are
free to report these instances to a variety of points of contact: the direct line manager,competent HR representative, the Group company’s or Division’s Compliance Officer,
or any member of the Compliance Committee. Details on how to get in touch withthese points of contact are provided to employees in an appropriate way throughout
the Group, including via the Compliance intranet page.
An employee who reports a suspected breach of the Code of Conduct on the basisof firm evidence will not suffer any detriment. If necessary, Voith will take measuresin each individual case to protect the employee who reported the suspected breachagainst such detriment. To the extent possible and permissible under law, Voith will
maintain confidentiality regarding the identity of employees reporting a breach of the

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Code of Conduct or a suspected breach of its guidelines. The same applies to theidentity of employees involved in the investigation of breaches of the Code of Conduct
or a suspected breach thereof.
We also follow up on complaints that have been submitted anonymously via ourGroup-wide whistleblower system, with the number and type of breaches documented
centrally.
This whistleblower system can also be accessed by external parties at any time via ourcompany website, so it is open to all business partners and suppliers too. Any type ofcomplaint on any subject can be reported. And to ensure the strictest confidentiality
is maintained, as a matter of principle information about the number, type, and natureof the complaints is not disclosed to external parties.
Reports relating to environmental protection can also be submitted to the local
Environmental Officer. The exact complaints process and escalation paths are set
out in our HSE Group Directive and its annex Environmental Incidents. Complaints
are communicated based on their severity along disciplinary and functional reportinglines. We are pleased to report that Voith was not notified of any such instances in
the reporting period.
Fact base Breaches of Compliance Regulations
Fact base Escalation Paths

Compliance Reviews Guarantee Effectiveness
The Internal Audit Department examines observance of all compliance regulations ina routine risk assessment involving around 35 operating units annually. We ensurethat our business partners comply with our regulations by means of a Supplier SelfAssessment (SSA). Compliance also forms part of our General Purchasing Conditions(GPCs).

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As in virtually all companies, in the reporting year we also had isolated cases wherecompliance regulations had been breached at Voith. Appropriate action was taken
in all instances.
Continuous Optimization of Compliance Organization
We work tirelessly to optimize our Compliance organization and adapt it to meet new
standards and requirements. As an example of this, in January 2017 we implemented
the principles of the UK Modern Slavery Act declaration in our company. In light of
this, among other things we also published our Management Board Declaration on
Human Trafficking, Forced Labor and Child Labor.
http://voith.com/corp-en/about-us/compliance.html?undefined %5B %5D=4

Furthermore, we reviewed our compliance system against the requirements of theGerman federal government’s National Action Plan on Business and Human Rights.
We are pleased to report that no modifications were necessary.
Never Letting Up Against Corruption
For Voith, taking rigorous action against corruption goes without saying. This is why
all Compliance Officers are required to keep a Risk Control Matrix, which also includes
potential corruption risks for their specific Group Division, and to name and assess
the identified risks. This structured process covers all Voith locations worldwide. The
results of all Group Divisions are aggregated and, among other things, form the basisof internal compliance audits.
Our risk assessment is based on many factors including the Corruption Perception
Index (CPI) published annually by Transparency International. The index ranks virtually all countries by their perceived levels of corruption on a scale of 1 to 100. As
our company maintains business relationships the world over, special precautionary
measures apply to high-risk countries, whereby the risk manager responsible decides
on the measures.

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Human Rights
As a global group, Voith observes human rights as a matter of course. Our Code of
Conduct as well as relevant Group directives set out the framework for this. Throughour General Purchasing Conditions we also ensure that our suppliers and business
partners are involved in upholding human rights. As part of this, we also incorporate
the assessments of our internal management systems, such as the Risk Country List,
into our action-planning activities.
Confidential Treatment of Information
Information security and the protection of confidential data take top priority at Voith.
Every employee is expected to show appropriate awareness of security and a senseof responsibility. Our information technology and security management system iscertified according to the international standard ISO/IEC 27001. Appropriate handlingof company, business-partner, and personal data is also governed by our Group
Directive on Information Security and Data Protection. We are pleased to announce
that there were no notifiable breaches of data security in the reporting period.
Taxation Compliance
It goes without saying that Voith complies with all statutory taxation requirements andfulfills its tax obligations. Our Group’s taxation strategy follows our company’s values
and we are committed to dealing with tax authorities in a fair and transparent manner.
Transfer prices within the company are always based on the “arm’s length” principle
and are always lawful. In addition, Voith avoids implementing artificial structures
purely for tax purposes.
To further improve compliance in the area of taxation, Voith is currently further developing its internal taxation auditing system to become a tax compliance management
system that is almost completely integrated within the Group’s compliance management system.

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1.4 Responsibility for Society
We see ourselves as a company that plays an active social role – something that has
been part of our DNA ever since we were founded. In Heidenheim, where we have
our headquarters, as a good neighbor we are actively involved in various initiatives
including as sponsor of a training program run by the Sonderberufsfachschule Hanns
Voith (Special Vocational College Hanns Voith). We focus on the areas of sports,
education, social affairs, and culture, which we support either through direct financial
contributions or in-kind benefits.
Group Directive Sets out the FrameworkEver since 2008 our Group directive on Donations and Sponsorship has set out
the type and scope of our commitment. It also outlines the financial frameworksof our donations. The budget is based on the previous year’s Earnings Before Tax(EBT), limited to a maximum of 1 % of EBT or at least two-thirds of the volume offunding in the year before last. This ensures that we can provide consistent support,
irrespective of any volatility in our company’s development. We record our donationand sponsorship activities once every six months, covering all our global activities
and across all business units using our internal management systems. The Head of
the Legal Affairs Department updates the Corporate Board of Management once a
year on how funds have been allocated across the entire Voith Group.
We use clear criteria to select projects. To qualify for assistance, above all we must
be convinced of the recipient’s integrity and that their project is a worthy one. We
also take into consideration the regional relevance and the appropriateness to ourbusiness segments, values, and corporate culture. Furthermore, we consider thefrequency and volume of previous contributions, ensuring these are distributed as
widely as possible. Irrespective of this, in humanitarian emergencies where urgent
action is demanded we provide help quickly and directly.
By contrast, our sponsorship activities always focus on the appropriateness of thecontribution and the benefit we receive in return. This is because we follow additional,
mainly communicative goals besides providing sponsorship. Irrespective of this, it isBackalso highly important to us that our sponsorship partnerships are engaged in worthy
and reputable causes.
Social Engagement Activities Follow Set Guidelines
Our social engagement activities are managed by Voith GmbH & Co. KGaA, headquartered in Heidenheim. In terms of organization, within our company we have also
taken into account our activities’ differing objectives. The Corporate Office coordinates
our donation activities, while Corporate Communications controls our sponsorship
activities. Individual Group Divisions and local Group companies can also launchand run their own assistance and sponsorship projects, provided they comply with
our Group Directive.
Many of our employees volunteer their spare time to assist people in need. We
support them by granting temporary paid release from work and providing materials
or equipment that is no longer required.
We also support numerous initiatives and projects in coordination with the Hanns Voith
Foundation. Through its activities, this independent foundation regularly engages innumerous local and cross-regional initiatives, and also provides financial support in
the form of annual donations to various projects.
Our Engagement Activities in the Reporting Period
In the reporting year we invested around € 1.64 million in social engagement activities(previous year: € 2.96 million). We provided € 0.71 million in the form of donations,while € 0.93 million was used for sponsorship measures. We spent the greatest shareon sports (52 %), followed by education (28 %), social projects (12 %), and culturalprojects (7 %).
In the reporting year no political parties or political organizations received any financial
contributions from Voith.
Fact base Donations and Sponsorship

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Involvement in Sports with a Local Focus
Voith sponsors professional as well as amateur sports and supports sports clubs
and events around the world, albeit with a focus on Heidenheim. In the reporting
year we invested € 0.86 million in this area. Voith is a long-standing supporter of theprofessional soccer club 1. FC Heidenheim 1864 e.V., based in the same city as
our headquarters. This involvement includes sponsoring the naming rights to theVoith Arena and supporting the club as the principal sponsor of the soccer shirts
and perimeter boards. Through this, we intend to increase the attractiveness of thelocation for our employees and make it a more appealing place for them to spend
their free time.

15 years have passed since we began supporting the Germany-wide business@school education initiative of The Boston Consulting Group. It gives senior high-school
students a closer look at business, including hands-on experience, over the courseof a full academic year.

In addition, we sponsor the fencing center of the Heidenheimer Sportbund 1846 e.V.
(HSB – Heidenheim Sports Association) as well as the local HSB baseball team andthe HSB Athletics Department, whose training site bears the name Voith-Sportzentrum(Voith Sports Center). We believe supporting local initiatives is an investment in theattractiveness of the region, and one that benefits both the regional citizens and our
employees. Furthermore, in the 2017/18 fiscal year we provided financial assistanceto the cycling club sunpor St. Pölten and the Crailsheim Merlins basketball team.

Promoting Culture at our Heidenheim Location
We want to give as many people as possible access to culture. As an example, in thereporting period we provided financial support to various institutions in Heidenheim,
including a € 94,000 donation to the Opera Festival.

Many Levels of Educational Involvement
We support kindergartens, schools, and universities around the world, as we believe
firmly that a good education and training provide the basis for the best development opportunities in life. In this sense we are continuing the tradition of Hanns
Voith. Starting way back in 1946, Voith has dedicated itself in the German state of
Baden-Württemberg to preparing disadvantaged young people for vocational training
schemes and the world of work. What initially started as a vocational preparation andtraining course has since become an institution, and has been recognized since 2004
as the Sonderberufsfachschule Hanns Voith (Special Vocational College Hanns Voith).

At university level we support young talent through the German Deutschlandstipendien
scholarship initiative. Furthermore, we provide endowments for professorships at theGerman universities of Stuttgart, Ulm, and Aalen. By doing so, we aim to contribute – without influencing the research content or teaching practices – to training newacademic talent and promoting research in scientific areas relevant to Voith.

Integration AssistanceFor many years, Voith has actively pursued its global social engagement, aimed
at improving people’s living conditions and promoting intercultural exchange. For
instance, Voith is one of the initiators of the German industry integration initiative Wir
Zusammen (We Together) that helps refugees integrate in Germany. We are involvedin providing an introductory vocational training course for young refugees to facilitate
their start into professional life or vocational training.

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2_Environment
2.1 Environmental Management Approach
Regarding the environment, as an industrial company Voith is required to comply withnumerous national, regional, and industry-specific laws, regulations, and guidelines.
In addition, we see ourselves as responsible towards our employees and neighbors
for avoiding environmental risks and using resources responsibly. As a manufacturer,
our main focus therefore lies on energy and resource management. This is why we arecommitted to continually reducing our energy consumption and related greenhousegas emissions, making efficient and safe use of direct materials and raw materials,
and minimizing waste. We also aim to continually reduce our water withdrawal andwastewater volumes.
We have taken a consistent approach to organizing our environmental protection
activities – combined with our occupational health and safety activities – in a uniform
business partner structure aligned with the Group’s Shared Services system. The
Center of Competence HSE provides methods, tools, and standards from a single
source for our Group Divisions. Furthermore, each Group Division is assigned one
employee from the Center of Competence HSE as a business partner. As the central
point of contact, this business partner advises the Management Board of the Group
Division on all HSE matters.
Our operating units are responsible for implementing health, safety, and environment activities locally. Seasoned experts accompany the process via the Center ofCompetence HSE, helping to continuously improve HSE, leverage synergy potentials,
and in doing so optimize service costs. Furthermore, as skilled partners they canbe called upon to identify risks and systematically reduce them through a continual
improvement process. Our hse+ software solution provides support that all colleagues
can access anywhere in the world.
The HSE Steering Team comprises the Heads of the regional HSE service organizations and the members of the Center of Competence HSE. It meets biannually andis chaired by the Head of the central function Corporate Sustainability & HSE. The
HSE Steering Team also conducts regional HSE audits.
Our HSE organization oversees and coordinates activities for over 97 % of Voith
employees worldwide. The remaining 3 % of the Voith workforce is covered by qualified external service providers coordinated and integrated by the respective regional
HSE service organization. This mainly concerns countries where we only have a few
local employees.
Our activities can be divided into two subject areas, irrespective of how they areembedded organizationally:• Operational Environmental Protection – Eco Standards provides strategic andoperational support to our divisions and locations in complying with and implementing environmental regulations as well as internal environmental protection
policies. In the reporting year we optimized our internal management process bysystematically recording all requirements and obligations arising from approvals.
All relevant data is now available in our central hse+ database, enabling us towork faster and more effectively.
• Resource Protection – Ecological Business Management (EBM) improves energy
and resource efficiency at our locations. We are making progress in this area too:In the reporting year we optimized the energy consumption of a large production
site right from the start-up phase, among other achievements. We report on
examples of our Group Divisions’ progress in terms of resource conservation in
the Products section from page 41 of this report.
2.1.1 Operational Environmental Protection
The overarching aim of Voith’s operational environmental protection is to minimize allenvironmental impacts of our operating activities. We attach particular importanceto strategic and operational control, with the objective of ensuring environmental
regulations are implemented and upheld. This includes the analysis and internal communication of potential environmental risks, categorized into risk classes according

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4_Products and Supply Chainto their probability and impact. This also allows us to assess the increasing weatherrelated risks posed by climate change.
Our HSE Steering Team coordinates and standardizes our operational environmental
protection activities. Through this, we ensure that our environmental protection pro­
cesses and procedures are organized in a way that is as unified and standardized as
possible. In addition, we work tirelessly to continually reduce the amount and numberof materials used at Voith. To help us achieve this, hazardous materials management
supports our efforts to replace particularly harmful materials with harm­less substitutes.
In the reporting year we began to categorize hazardous materials and consolidatethem into application groups both to prevent an increase in the number of hazardous
materials we use and to support the phasing out of redundant materials from ourorganization.
Our HSE Group Directive sets out specific requirements on how environmental protection is to be organized at a local level, with every Voith location required to appoint an
Environmental Officer. Their tasks cover a wide range of topics including immission
control and water protection, waste management, hazardous materials and goods,
and preventing environmental incidents. They also advise operations managers on
new plant constructions, modifications, and approval processes, and conduct regularsite inspections and audits.
In line with our Shared Services system, full-time environmental experts at the regional
HSE service organizations ensure our Group companies are provided with high-quality,
organized support. Regular on-site visits as well as the documentation and trackingof measures in our hse+ system have proved effective, as evidenced by the positive
feedback from both the sites and the authorities. They reported that the biggest
advantages of the software – which is in use globally – are the ability to store andmanage all relevant documents centrally as well as manage appointments reliably,and program reminders.

Back

Field Service employees were also increasingly involved in activities, with dialog
further strengthened recently through workshops with colleagues. As part of theseworkshops, construction sites were visited to allow relevant topics to be compared
as realistically as possible. A range of projects were carried out successfully in theregions through our HSE platform, including one to assess hazards in Brazil and one
run within the scope of hazardous materials management in Germany.
Our Central Information Resource hse+
Our Group-wide hse+ IT system supports the work of our environmental experts.
With its ability to store and manage all relevant processes, documents, and analyses
centrally, as well as its reminder function for safety-related appointment managementof inspection intervals, thresholds, and restrictions, the system forms the basis for
efficient operational environmental protection and matrix certification.
Fact base Certifications

The powerful scheduling and reminder function allows all necessary steps to beplanned reliably in advance of inspections and audits. In addition, this increasedtransparency has improved proactive communication with authorities. And because
all Voith colleagues can access the software, it has also improved backup support if
a colleague is ill or on vacation, for instance.
In the reporting year we successfully completed development work on our extensive
environmental risk assessment tool. This data will be provided globally via hse+ during
the current fiscal year.
hse+ also allows experts to access a central legal database. It contains all the relevant
HSE regulations and standards that apply to us in each region. Current legislative
texts are available there, including summaries and comments in the respective national
languages. The legal requirements are assigned via the system to the relevant officer,

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who then becomes responsible for ensuring the requirements are met. The same
applies to Voith standards, approvals, and requirements. hse+ is also used to perform
location-related environmental risk analyses, with the measures derived from themassigned implementation responsibilities and deadlines which are documented andcontrolled in hse+.
ISO 14001 environmental certification requirements changed in the reporting year.
Furthermore, the OHSAS 18001 standard was superseded by ISO 45001, giving riseto new requirements. However, we see the changes as an opportunity to integrate
health, safety, and environment aspects even better into our daily processes. The
process of adapting to the new requirements posed by ISO 14001 went to plan andwas completed successfully. Besides this we launched our plans to transition to
the new ISO 45001 standard and are investing a great deal of effort in driving themforward. Through our active participation in the committees we are informed early on
about upcoming changes and can thus implement them progressively.
Group-wide Reporting System to Record and Analyze Environmental Incidents
All environmental incidents at Voith are recorded and analyzed centrally each monthusing a Group-wide reporting system based on standardized criteria. The Corporate
Board of Management is informed about the results of the analysis on a quarterly
basis. We use existing occupational health and safety categories to evaluate andrate incidents across topics according to the same standards. We established thatas awareness of our Group-wide standardized process increases, so too does its
use – with the positive result being that a constantly growing database also increases
the quality and conclusiveness of the analyses. We are also raising our employees’
awareness through targeted internal communication measures.
We are pleased to announce that no incidents requiring public reporting were registered in the reporting period.
Fact base Noise Complaints

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Our Own Dedicated Occupational Health and Safety App
Our eVAP occupational health and safety app covers occupational health and safety
as well as environmental aspects. Our employees can use it not only to report actual
incidents quickly and easily, but also to report potential risks. We have seen a steadyrise in the number of reports since the app was launched, with 2,700 observations
reported in the reporting year – five times as many as in the same period the previous
year. This is a sure sign that our employees have actively adopted the tool.
Targeted Hazardous Materials Management Increases Safety
Voith uses hazardous materials in its production processes, such as paints, l­acquers,
thinners and solvents, adhesives, resins and hardeners, lubricants, cleaning agents,
and industrial chemicals. To ensure these materials are handled as safely and ­securely
as possible, we have established a Group-wide hazardous materials approval
process. A central hazardous materials database allows us to perform a uniform
global analysis of the environmental, health, and safety risks of work materials andhazardous ­materials, providing us with a valuable decision-making basis. We havebeen working hard for many years now to consolidate the wide range of hazardous
materials we use to eliminate particularly harmful materials and further encourage theuse of low-risk substitutes as well as advance the harmonization of safety standards
across the Group.
Fact base Work Materials and Hazardous Materials Approval Process

We are also reducing hazard potentials as well as costs by cutting the wide rangeof redundant materials we use. By adhering strictly to the “polluter pays” principle,
we aim to ensure that approved materials in our hazardous materials database areused in preference to all others. Doing so means we meet environmental protection,
occupational health and safety, and compliance requirements while achieving thegreatest possible degree of standardization.
We have been using our Materials Navigator tool since 2016. This allows us tounderstand quickly and reliably at any time which hazardous materials are used in our

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4_Products and Supply Chain

products and which hazardous materials are contained in certain product groups. We
update the tool regularly, and it also allows us to check quickly if and to what extent a(sub)product contains certain hazardous materials. It also allows banned or restrictedmaterials to be checked against current standards, so Purchasing does not buy
problematic materials in the first place or we can stop their use as soon as possible.

Production-related Energy Consumption
specific value in MWh/€  million in revenues
126.2
113.8
106.4

Since 2014 around 6,800 materials have been recorded centrally – 850 of which have
either not been approved or have been blocked for future use. In the reporting year
1,326 applications were processed, of which around 5 % were rejected: Over half
(60 %) of these were rejected because they contained banned or critical materials.
The other rejected applications were returned with the request to select a suitable
substitute from the list of approved materials.

Target value
for 2018/19
Target value
for 2021/22

107.3

102.8
98.8
88.1

2013/142014/15

2015/162016/172017/18

Waste
specific value in t/€  million in revenues

While we continue to progressively reduce the number of hazardous materials weuse, the sheer volume of materials to be recorded in the database and the inclusionof additional sites presents us with challenges that mean the consolidation is taking
longer than was expected at the start of the project in 2011. Currently, we expect thatthe consolidation process for the German-speaking region and the overall European
region will be completed in the 2019/20 fiscal year. In the 2018/19 fiscal year we will
begin recording existing materials in the Americas and Asia in the database. Basedon our previous experience, we expect the consolidation process to have been
completed to a high degree (up to 80 %) by the end of the 2019/20 fiscal year at theearliest.

10.9
9.9
8.7
Target value
for 2018/19
Target value
for 2021/22

8.1
7.3

2013/142014/15

7.8
6.9

2015/162016/172017/18

0.25

0.25

0.25

Freshwater Consumption
specific value in m3/€  thousand in revenues

Fact base Nanotechnology
0.32

2.1.2 Efficient Use of Resources
Through Ecological Business Management (EBM) we aim to identify ecological andeconomic potentials for improvement in our production processes and leverage theseby performing analyses at process, system, and component level.

Target value
for 2018/19
Target value
for 2021/22

0.32

0.24
0.22
2013/142014/15

2015/162016/172017/18

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Among other activities, in the reporting year we improved how we record selfgenerated indirect energy sources to account for our new grid mix target. We alsobegan to put into operation our new resource-efficiency targets in the divisions andsimplify quarterly reporting. Going forward, detailed information on the developmentof resource efficiency will be communicated in an internal sustainability report, which
will be supplemented by benchmarks on resource costs and consumption at our
locations around the world.
Our activities focus on the areas of energy, waste, and freshwater, for which our
Corporate Board of Management set specific targets taking the 2011/12 fiscal year
as the benchmark: Based on sales, we aimed to reduce our energy consumption
by 20 %, our waste by 25 %, and our freshwater withdrawal by 10 % by the 2017/18
fiscal year. The sales situation at two divisions made achieving our relative targets
especially challenging, as we were unable to achieve economies of scale in terms ofour consumption. Detailed information on our progress can be found in the respective
sub-sections of this report.
Fact base Environmental Goals

Start of New Target Period
The 2018/19 fiscal year marks the start of our next target period. Our targets will be
carried over based on the 2011/12 fiscal year, with the three main drivers – energy,
waste, and water withdrawal – remaining the focus of our attention going forward.
By the end of the 2021/22 fiscal year we aim to reduce our energy consumption by
30 %, our water withdrawal by 40 %, and our waste volumes by 35 %.
We also intend to make an additional contribution to climate protection through specific CO2 targets by taking the values from the 2016/17 fiscal year as the benchmark
and following a scientific approach in accordance with the Paris Climate Agreement.
To set our targets we employ a forecasting method that considers both our internalchanges, such as the development of Industry 4.0, and external factors, such as thechange in the energy mix in different regions.

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In a first step, by the end of the 2021/22 fiscal year we aim to achieve a 25 % reductionin our CO2 emissions from our electricity consumption by optimizing our grid mix. By
the end of 2024/25 we aim to reduce the total CO2 emissions of our value-adding
activities by 35 %. The target is to achieve a 90 % cut by the end of 2049/50. We will
set additional interim targets and milestones for our CO2 targets from 2024/25, taking
into account our business development.
To achieve our grid mix target for 2021/22 and the interim target for 2024/25,
Purchasing is developing an electricity procurement strategy that reflects the very
different conditions for the procurement of eco-friendly electricity. The focus will
initially be on the German and US markets, as the Chinese eco-electricity market isstill in a very early stage of development.
Green Controlling Process Delivers Maximum Transparency
To ensure that our resource management activities deliver both economic andenvironmental added value, we employ a four-stage Green Controlling process. It
enables us to be transparent about the pipeline of measures, shows our progress
towards implementing the measures mapped out in it, and depicts their impact on thedevelopment of indicators. This enables us to actively manage the target-achievement
process. Our approach to environmental management has already received numerous
awards, and thanks to regular controlling in the reporting year we succeeded in
optimizing the energy consumption of a large production site right from the start-up
phase.
Hot-spot Analyses Leverage Further Potential
Hot-spot analyses serve to address both specific and cross-location topics. For
example, they bring transparency to the energy consumption of a specific process
step, making targeted intervention possible where needed. For efficiency reasons,
we focus on the greatest drivers of consumptions in each case. At Voith Hydro thisis the foundry; at Voith Turbo these are the buildings, machine tools, and test stands;
and at Voith Paper this is the heat-setting process.

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In the reporting year we conducted five hot-spot analyses in Asia and South America
which to some extent were cross-divisional. The analyses focused on waste management, water recycling, lighting, and load management. In addition, findings wereincorporated from cross-location benchmark analyses conducted the year before
on coolant lubrication management. A need for updating was identified, particularly
in regard to organizational and conduct-based topics.
The recent analyses also confirm the findings from the previous year. These showthat we are increasingly moving away from facility infrastructure topics (lighting,compressed air, heating, ventilation, and air conditioning) towards process-specifictopics (such as the use of steel grit for sandblasting, and the heat-setting process
for felt production). In doing so we are gradually leveraging the greatest value potentials; at the same time, the expense involved in implementing the measures is rising.
Furthermore, it became clear that organizational and conduct-based solutions need
to be validated on a regular basis.
Fact base Hot-spot Analysis Methodology

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2.2 Performance in the Reporting Period
2.2.1 Energy Efficiency and Greenhouse Gas Emissions
Energy Consumption Falls Slightly
In the reporting year Voith consumed 437,134 MWh of energy (previous year: 453,012
MWh). 104 MWh of energy was needed per €  million in sales, a fall of 3.2 % versus
the previous year (107 MWh per €  million in sales).
The year-on-year decrease in energy consumption is due to several factors. These
include a considerable increase in the volume of measures implemented to reduceenergy consumption. These were very successful, particularly at our new production
facility in Shanghai. Furthermore, the closure of our felt plant in Wilson, North Carolina,also contributed to the reduction. In the coming months we expect to achieve evenmore significant energy savings from a range of different contracting projects in
Heidenheim, which were only fully completed at the start of the 2018/19 fiscal year.
In the reporting period the identified potential for action in the pipeline rose from
123.7 GWh to 130.8 GWh (+5.8 % versus the previous year). Measures with a volumeof 23 GWh (previous year: 9.8 GWh; +135 %) were implemented in the reporting
period; as a result, the total amount of measures implemented corresponds to106.3 GWh. Taking the figures of the 2011/12 fiscal year as our benchmark, while weachieved a 17.6 % improvement we narrowly missed our target of 20 %.
On the one hand, sales and energy consumption did not develop completely in­ arallel. This is because energy is used at sites, such as for heating and air con­pditioning, regardless of the main operational purpose. On the other hand, currency
effects also impacted on sales and thus distorted the picture. Last but not least, inthe 2011/12 benchmark year various production facilities, including the VT plant inShanghai, were not yet operational with their current production structures.
Fact base Energy Consumption by Scope
Fact base Energy Saving Measures and Further Potentials

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Regular exchange between EBM (Ecological Business Management) experts serves
to identify further potentials, compare processes, set benchmarks, and implement
the best solutions in each case at Voith through the sharing of best practices. In
the reporting year the meetings focused on optimizing reporting on CO2 emissions
and improving the projection of absolute savings requirements in terms of relative
KPI targets. A cross-divisional analysis in São Paulo focused on topics includingsite-wide load management as well as optimization of the compressed air supply andair conditioning systems. As a result, consumption visualizations implemented there
were also used to perform analyses in Heidenheim.
Another Slight Improvement in Our Energy Mix
19.2 % of the energy we consumed came from renewables, with 80.8 % from nonrenewable resources. This means we achieved another improvement over the previous
year’s figures (18.2 % from renewables; 81.8 % from non-renewable resources). This
calculation includes all energy sources associated with our production-related energy
consumption. Given our newly defined CO 2 targets and the associated ramping up of
our CO2 management activities, we expect to continue to optimize our energy mix inthe coming years. A range of projects on regenerative power generation have alreadybeen implemented or are at an advanced planning stage.
Besides heating and cooling, which account for around 31 % of our energy consumption, the production of paper-machine clothing remains the key driver of our
production-related energy use – accounting for 25 % of our global consumption. Apartfrom weaving processes, heat-setting is especially energy-intensive – particularly infelt production. The operation of machine tools consumes 4 % of the energy used
at Voith, with 6 % of production-related energy consumption accounted for by our
foundry in São Paulo, Brazil.
Fact base Production-related Energy Consumption

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4_Products and Supply Chain

Main Sources of Energy Consumption
in %

34 %

31 %

Heating and cooling energy
Paper-machine clothing
Machine tools

6%

Foundry in São Paulo
4%

25 %

Other

Main Source of Energy Consumption 2017/18
In the reporting period there was no real change in the proportion of direct (29 %) andindirect (71 %) energy consumption. With a share of 82 %, natural gas remains the key
energy source for our direct production-related energy consumption, followed by LPG(liquefied petroleum gas), diesel, and heating oil with percentage shares in single digits.
Among other purposes, we use these fuels for heating and heat-intensive thermal
processes. Diesel is used primarily to operate backup generators and generate steam
at our locations in Karawang, Indonesia, and Shanghai, China, as well as for thermal
processes in São Paulo, Brazil.
Fact base Proportion of Direct and Indirect Energy

New Production Plants Bring Further Savings
In the reporting period Voith consumed 240,417 MWh of electricity (previous year:
242,735 MWh) – a drop that is thanks once again to the improved efficiency ofour production plants and processes. In terms of our electricity mix, the share ofenergy sources supplied by external providers was 64.6 % (previous year: 66.4 %)from non-renewable and 35.4 % (previous year: 33.6 %) from renewable resources.

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Newly formulated CO2 targets provide an additional incentive to increase the shareof renewables further. In addition, the commissioning of new facilities, such as ahydropower turbine which has been connected to the grid since November 2018,
will enable us to further improve our electricity mix.

formulated environmental targets, particularly our firm CO 2 target. We are deliberately
starting at this point as our energy consumption is the main driver of greenhousegas (GHG) emissions.
Fact base GHG Emissions: Recording Methodology

Among non-renewable resources, once again there was a decline in nuclear powerin favor of electricity generated from coal. At Group level, this is resulting in a slightincrease in the emission factor as well as greenhouse gas emissions, despite anincrease in renewables.

In the 2017/18 fiscal year our facilities’ GHG emissions fell by 3.4 % to 153,408 t CO2e
(previous year: 158,876 t CO2e). The share of direct GHG emissions fell by 3.5 % to27,380 t CO 2e (previous year: 28,370 t CO 2e), while indirect GHG emissions also
decreased to 126,028 t CO2e (previous year: 130,506 t CO2e).

Fact base Renewable Energies
Fact base Electricity Mix

Fact base GHG Emissions by Scope

Fact base Environmental Impact of Buildings

Progress on Cutting Greenhouse Gas Emissions
We aim to minimize the environmental impact of our business activities by continuously
improving our energy efficiency. This is a commitment that is reflected in our newly

Since the 2011/12 fiscal year we have reduced our absolute energy consumption
by 24.9 %, with absolute GHG emissions also falling in the same period by 17.5 %.
Our energy-saving measures alone achieve annual GHG savings of around 7,300 t.
Differences in national electricity mixes as well as shifts in the mix of direct energy

Electricity Mix Consumption by Resource Type

Production-related Greenhouse Gas (GHG) Emissionsin %total GHG emissions in t CO2eElectricity from renewable
resources

153,168

158,876

153,408

2015/162016/172017/18

35 %Electricity from
non-renewable resources

65 %2015/162016/172017/18

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sources are causing the energy and GHG emissions indicators to diverge. This meansthat energy savings at individual locations or even production relocations vary in theirimpact on GHG emissions.
Fact base GHG Emissions: Location-based vs. Market-based

We also consider the challenges of climate change when developing products (seealso the section Products). Through our products’ lifecycle analyses we know thatcompared to the production stage their environmental footprint is far greater when
they are actually in use. This is why we pay special attention to the way we develop
our products. As a fundamental principle we aim to be the technology leader in allof our markets – where Voith products feature regularly in the highest efficiency
class. This way we support our customers in delivering their services in a moreenergy- and resource-efficient way. Through this, we live up to our responsibility not
only towards our customers, but also towards society by helping to tackle climatechange through our product portfolio. Furthermore, our hydropower solutions arecontributing to climate-neutral power generation around the world. By gearing ourtechnology roadmaps at Voith Turbo towards electric drives, we are driving forward
climate-friendly mobility. And with our solutions from Voith Paper, we have helped
the overall paper industry achieve significant cuts in its CO2 emissions in recent years.
Fact base GHG Emissions: Specific (Scope 1 and 2)
Fact base GHG Emission Reduction Measures
Fact base Transport Emissions

Back

2.2.2 Material Efficiency and Waste
At Voith, we intend to make our processes as resource-efficient as possible. To
do so, we manage the use of direct materials and raw materials across the Group.
However, the breadth of our product portfolio and the correspondingly diverse
process landscape present us with special challenges. We are also faced with arange of requirements in the project business at Voith Hydro and Voith Paper as wellas in mass production at Voith Turbo.
Material Efficiency Further Optimized
In the reporting period we purchased approximately 215,000 t of materials fromsuppliers, a drop of around 2 % versus the previous year (220,000 t). The distribution
in terms of the materials we purchased is as follows: 62 % semifinished products(previous year: 65 %), 28 % raw materials (previous year: 26 %), 8 % packaging(previous year: 7 %), and 2 % auxiliaries (previous year: 2 %). Since more wood wasused for packaging, especially at Voith Turbo and Voith Paper owing to an increasein their business activities, the share of renewable materials increased year-on-year
to 8 % (previous year: 6 %).
Fact base Materials Used

In the reporting period, once again around 38 % of the materials we used wererecycled. The proportion was 60 % (previous year: 55 %) for auxiliaries, 45 % (previous
year: 46 %) for raw materials, 29 % (previous year: 30 %) for semifinished products,
and 80 % (previous year: 80 %) for packaging.

Fact base Emissions Trading
Fact base Air Pollutants

The use of hot-spot or Ishikawa analyses allows us to further optimize our material
efficiency. We utilize these in line with our Voith 150+ Next Level success and growthprogram, which provides us with key starting points to identify potentials for improvement in product development and engineering.

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Focus Remains on Waste Volume
In the reporting period Voith generated 34,261 t of waste (previous year: 30,786 t), a
year-on-year increase of 3,475 t or 11.3 %. The main reason for this rise is an increasein transport packaging and scrap steel, due to higher utilization of the production
facilities. However, this is not yet fully reflected in the sales trend, which means that
there was an increase in the volume of waste relative to sales in the reporting period.
The corresponding indicator rose to 8.1 t (previous year: 7.3 t). As at the end of thetarget period we succeeded in reducing our waste volume by 23.7 %; while this meansthat we narrowly missed our target of a 25 % reduction, if 2017/18 sales are adjusted
for currency effects then we would have achieved our target.
Fact base Volume of Waste

In the reporting period the gains from measures already implemented from the pipelineincreased from 4,423 t to 8,596 t (+94 %), in particular thanks to improvements in thefoundry in São Paulo. The identified potential for action in the pipeline increased by
49.3 % to 9,021 t in the reporting period. While more significant saving measures remain almost only achievable as part of complicated product re-qualification measures,the effort that is typically involved in the changeover must always be balanced against
the resulting benefits. The measures covered relate mainly to material efficiency; theeffects of make-or-buy decisions or sales shifting to less waste-intensive processes
are generally not reflected.
Wood, paper, and cardboard waste generally accounts for a high proportion of ourwaste. This is due mainly to packaging and making one-off production components
safe and secure for transportation. Owing to the size of components, it is not economically viable to transport back empty packaging for reuse – and even from an environmental perspective this is questionable, in view of the transport emissions involved.
In addition, owing to the high proportion of one-off and custom-made products at
Voith, it is often not economically viable to use separate types of material-optimized
packaging; nevertheless, in the reporting period we succeeded in increasing the share

Backof recycled packaging. At our Heidenheim location, for instance, we switched over
our supply of polymer raw materials and fan impellers to reusable systems.
Fact base Waste-saving Measures and Further Potentials

Share of Hazardous Waste Virtually Unchanged
In the 2017/18 fiscal year we generated 3,180 t more non-hazardous waste and 295 t
more hazardous waste than in the previous year. Our waste classifications remain
virtually unchanged versus the previous year, with around 82 % of our waste deemed
non-hazardous and the remaining 18 % classified as hazardous.
Fact base Hazardous Waste

The increase in hazardous waste is due to increased production utilization, particularly
at our foundry in São Paulo, Brazil, which produces almost one-third of our hazardous
waste.
The collection of hazardous waste at Voith is regulated by internal guidelines, withdisposal performed by external disposal and recycling companies – Voith does nottransport any waste itself. We are pleased to announce that in the reporting period
we were not notified of any violations of the law in relation to the disposal of waste
by our external disposal and recycling companies.
Fact base Waste Disposal

2.2.3 Water
Freshwater Withdrawal Falls Again
In the reporting period our freshwater withdrawal fell by 7,125 m³ or 0.7 % to1,033,843 m³. Of this, we use around a third for cooling purposes only, which do
not contaminate it. As a ratio to sales, our freshwater withdrawal fell year-on-year by
0.4 % to 0.25 m³ per € thousand in sales.
Fact base Water Consumption

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Nevertheless, we again increased the volume of identified measures in the pipeline
by 9.9 % to 816,573 m³ of freshwater in the reporting period. In the same period,
the gains from measures already implemented from the pipeline rose by 12 % to789,000 m³ of freshwater.
With a total reduction achieved so far of 31.1 % since the benchmark year, we havesurpassed our target of 10 %; with sales adjusted for currency effects, we would haveachieved a 33.8 % reduction.
Fact base Freshwater Savings Measures and Further Potentials

We intend to continue improving upon the high level we have already achieved.
Following many years of continuous improvement, our efforts to reduce water withdrawal are increasingly declining in marginal utility.
By the end of the current fiscal year we also intend to update our 2011 studies
on water scarcity and biodiversity. We will then incorporate the findings into ouraction planning for our newly defined environmental targets. We base our analysis
on freely accessible databases such as the WBCSD’s Global Water Tool and the
WRI’s AQUEDUCT.
We are paying particular attention to the development of water withdrawal at facilities
located in regions faced with water shortages. This concerns our water conservation
measures especially at our facility in São Paulo, which has been increasingly affectedby droughts and water shortages in recent years. We are pleased to announce
that the local situation eased somewhat in the reporting period. Furthermore, themanagement team at our location is striving within technical and economic limits toreuse as much water as possible with the help of our reprocessing plant. We also
focused on South Africa in the reporting period; however, our local unit there is verysmall and does not have any water-intensive processes.

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Essentially, water and, as a result, wastewater play a lesser role in our manufacturing
processes compared to other industries. Consequently, our minimum standards
meet respective legal requirements. Nevertheless, we analyze and manage our water
withdrawal in the same way as our energy and material consumption. This is because
water is an elementary and precious resource, and in this respect we are committed
to using it carefully. Water is also a key resource for our customers’ processes andwe aim to support them with efficient solutions.
We distinguish between boiler feedwater, groundwater, and surface water. Primarily,
we try to reduce boiler feedwater consumption to also relieve the local supply.
Currently, we are pleased to report that our local withdrawal activities have no impact
on the environment or on our stakeholders. If there were to be any, these would be
responded to by our environmental incident reporting process resulting in a thoroughroot-cause analysis and resolution.
Continued Reduction in Wastewater
In parallel to our lower freshwater consumption, we also generated less wastewaterin the reporting period. At 837,656 m³ the volume of wastewater we generated in thereporting period was 2.6 % lower than in the previous reporting period (860,395 m³).
Around 38 % (previous year: 37 %) was discharged into rivers, lakes, or the soil, while
62 % (previous year: 63 %) was discharged into the sewage system.
Fact base Wastewater: By Method of Discharge and Quality

We use recycled water in our processes wherever it is worthwhile in terms of economic, environmental, and social aspects. This includes cooling processes (São Paulo)and processes in closed cooling water circuits (Garching, Summerville, Kunshan).
We also operate our own wastewater treatment plants at our locations in São Paulo,
Garching, and West Monroe.

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We work tirelessly to close water cycles. In the reporting period our achievements inthis area include savings realized through the use of quench baths at our Summervillelocation in the USA as well as in Kunshan, China, where sealing water for vacuum
pumps now circulates in a closed system. And by modernizing a test stand, we also
closed the local water cycle in Heidenheim.
In direct comparison to other industrial companies our manufacturing processes only
have a minor impact on water. Therefore, we are rarely required to measure water
quality, with only a small number of locations required to take continuous or repeatedmonitoring measurements. However, the overall burden of BOD, COD, TSS, heavy
metals, nitrogen, and phosphorus cannot be derived owing to the low sampling
requirements. We are pleased to announce that no reports of limit violations wereregistered in the reporting period.
Fact base Water and Neighboring Habitat Protection
Fact base Sealing of Soil Surfaces
Fact base Environmental Incidents

Outlook
We intend to continue creating both environmental and economic added value throughour activities. With our sustainable development targets up to the 2021/22 fiscal year
and beyond, we will continue on our successful path – for the equal benefit of thecompany and the environment.

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3_Employees
3.1 Employees – Our Aspiration, Our Responsibility
Voith’s success depends fully on the success of our employees. Qualified, motivated,and committed employees are our guarantee of future success, which is why weoffer them a challenging role, personal development opportunities, and an attractive
working environment. We aim to promote the talents in each individual employee, andto deploy our people according to their strengths. Our newly formulated HR visionsummarizes this claim: “Voith – People at their best”. In doing so, we are creating
the prerequisite for us to continue our successful tradition that stretches back overmore than 150 years.
Voith as an Employer
At the end of the 2017/18 fiscal year the Voith Group’s workforce stood at 19,535(previous year: 19,267 employees), representing a year-on-year increase of 1.4 %.
Around 57 % of our employees work in EMEA, 22 % in the Americas, and 21 % in the
APAC region.

Workforce Changes
The Group Division Voith Hydro shed 736 (−15.6 %) jobs globally in the reporting year
in workforce adjustments due to the market situation. Most of these redundancies
were attributable to the very challenging economic situation in Brazil. However, someof those affected found a new role in other areas of the company or regions. We alsoutilized every option available, such as deliberate hiring freezes for certain businessareas or countries, the targeted use of working-hours accounts, and early retirement
offers, to prevent our employees having to face hardship.
The ongoing expansion of our Group Division Voith Digital Ventures led to an increase
to 2,344 FTE positions (previous year: 1,211 FTE positions) in the reporting year. The
increase in headcount is attributable mainly to the acquisitions of Ray Sono (Germany,
196 employees) and Flow Link (India, 964 employees).
Fact base Workforce by Employment Type

Challenges and Focus Topics
Through our company’s current transformation process, we plan to set the course
for our continued success in the future – something that has also given rise to newchallenges for our HR area.

Fact base Workforce Structure

Number of Employees
in individual people

19,494

19,26719,027

Our employees and their skills profiles are facing new requirements, particularly asa result of increasing digitalization in business and society. This is why our HR area
set itself the task of supporting employees in this process. At the same time, we are
scrutinizing our HR processes and programs with the aim of identifying activities thatcan be performed better digitally or through automation.
As part of this, we are currently devising a new HR strategy that takes these challenges into account and provides the best support for our transformation process.

2015/162016/172017/18

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Shared Services Pass Internal Audit
At Voith much of our HR administration is distributed across four regional Shared
Services Centers. Centralizing and bundling activities has enabled us to achievesignificant savings already, while also improving process quality in many areas. The
reporting year was dominated by process stabilization as well as the first of our majorinternal audits, which we are pleased to report we passed successfully. Furthermore,
we made further self-service options available on mobile platforms.

qualifications and performance. Remuneration schemes and other benefits are in linewith the prevailing market situation in each region. The analyses currently available tous, especially for the core countries of Germany, the USA, China, and Brazil, confirm
this assessment.

In Germany, we expanded Recruiting Services to meet the increased demand for new
capabilities and skills in the areas of robotics and digitalization.

Our Global Job Grading project, which aims to establish a uniform job-evaluation
system at Voith, is now in its final phase. In the 2017/18 fiscal year we assessed all
non-tariff positions worldwide. In relation to this, in the current fiscal year we will now
inform the respective job holders in writing and notify all employees via our internal
communication channels, such as the intranet and the employee magazine.

3.2 Highly Attractive Employer

At our German locations we routinely follow collective bargaining laws when deciding
wages and salaries.

Fact base Expenditures for Employees

Voith enjoys an excellent reputation as an employer brand, as we combine the stabilityof a 150-year-old family company with the opportunities of a truly global player – one
which is having a considerable impact on shaping the digital transformation process in
our industry. This is also repeatedly confirmed by external institutes, on ratings portals,
and in employer rankings. In this regard, the reporting year was no exception, with
Voith featuring highly in DEUTSCHLAND TEST, Trendence, and Potentialpark rankings.
Our fledgling Group Division Voith Digital Ventures allows us to offer exciting digitalization opportunities to employees in the fields of computer science, electronics, andautomation technology.
Fact base Rankings and Ratings

Performance-based Market-competitive Remuneration
Voith always aims to remunerate its employees in line with the market. We calculate remuneration in a gender-neutral way and based exclusively on professional

Fact base Collective Bargaining Agreements
Fact base Details on Upholding Employee Rights

Voith provides its employees with fair working conditions that comply with all statutory requirements. We reject all forms of forced labor and child labor, and we do
not obstruct lawful employee representation. Our Compliance Committee monitors
the implementation and enforcement of our Code of Conduct, ensures rights andlaws are always complied with, and that workers’ rights are upheld globally. In the2017/18 fiscal year 81 % of all Voith employees worldwide were covered by a collective
bargaining agreement.
Diversity and Equal Opportunity
Our company’s international nature is also reflected in the composition of our workforce, with employees from 91 nations working at Voith. The Voith Senior Management
Circle also has an international composition, with 74 members from eleven countries.

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We promote cultural diversity in management through job rotation and inpat programs,
where we bring talent from other regions to our head office for a specific period. The
objective behind this is to prepare managers from different regions and of different
nationalities to assume top management positions.

responsible for each focus area and implementation of the measures, while the central
HR area coordinates the program. This ensures that we take a uniform approachacross the Group, share best practice approaches, and also take into account thehighly varied challenges we face worldwide.

To encourage international collaboration at all levels of our company and increase
mutual understanding, tolerance, and communication skills, we offer our employeesintercultural training and language courses.

Our mandatory awareness workshops for the upper four management levels havebeen raising our employees’ awareness for many years now. In the reporting period
we continued these workshops, especially for new executives, and to some extent
also expanded training to the fifth management level. We placed a special focus once
again on the Asia Pacific region, which was established in the previous year, while
in Europe we offered optional awareness workshops for all employees. In November
2018 we also held an internal D&I conference for our Senior Management Circle.
The aforementioned events help to continuously raise awareness among managers
throughout the Group regarding D&I issues as well as draw attention to specific,
practice-related topics such as unconscious bias. This ensures that our managers
assign great importance to D&I topics. A corresponding toolkit, available to managers
in our D&I SharePoint, also contributes to this. It provides specific ideas, descriptions, and suggestions on D&I measures for working in teams. We also keep our
employees updated through our global communication initiatives, which also include
some interactive D&I campaigns.

Fact base Employment Ratio of People with Disabilities
Fact base Diversity in the Management Team and in the Workforce

Our Diversity&Inclusion (D&I) program, which we introduced across our Group as
early as 2012/13, additionally supports our aspiration to promote diversity and equal
opportunity in our Group. We understand diversity as recognizing and embracing theuniqueness of our employees in terms of the five aspects of gender, age, nationality or
ethnic origin, education and professional experience, as well as personal differencessuch as beliefs, physical abilities or sexual orientation. We understand inclusion as theaforementioned culture of appreciation in which everyone is respectful towards one
other – as a result, everyone can develop their potential freely and contribute different
perspectives, ways of thinking, and approaches. We see respect as a prerequisite inenabling us to offer solutions, even to more complex requirements, to our customers
around the world on the basis of our employees’ rich and varied experience.
Equal Opportunity Officers at our various locations, typically the local Head of HR,
review detailed information on violations of our general equal treatment principles
and take appropriate action.
Our D&I program requires all locations to introduce suitable measures in addition
to taking a systematic approach to raising employee awareness. The regions are

Our corporate HR areas D&I, Compensation, Recruiting, and HR Development are in
regular discussion to ensure that our HR processes also do justice to our employees’
diverse skills and talents. Thanks to this, since 2018 a D&I workshop has beena mandatory module of our Start-up Leadership program for aspiring managers.
Likewise, our trainees will in future be advised on and made aware of the topic of
D&I through our Global Graduate program. With regard to our recruitment processes,
we have examined whether applicant diversity is taken into account and whichmeasures can be taken to improve this. To learn together with other companies andto share experiences and best practices on the topic of D&I, we organized a Diversity

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Round Table Talk in China. In addition, we take part regularly in D&I network meetingsand conferences.
As women are still underrepresented in technical apprenticeship occupations
and higher education courses, we are also focusing on this area and striving toincrease the proportion of female employees further in our overall workforce. As
at September 30, 2018 the proportion of women in the workforce stood at 18.3 %(previous year: 17.7 %) – a proportion we intend to continue to increase. To get girls
and young women more interested in technical professions, we have participated formany years now in Girls’ Day, when girls get to learn about the range of opportunities
open to them in technical professions and receive information about professional
career options at Voith.
Increasing the proportion of female managers in the company is particularly important
to us. In the Voith Senior Management Circle, the proportion of women currently
stands at 6.8 % (previous year: 5.2 %). In our middle management circle, the proportion

Percentage of Women by Management Levelin %Management Level 0–2
Management Level 3–4
Management Level 5
All employees
Only new recruits

4.8

6.3

2017/18
2016/17
8.2
7.6
11.8
10.6
18.3
17.8
19.0
17.7

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of female employees has increased by two percent to 12.4 % since the introduction of
the D&I program. We are well aware of the need to take further action in this respect.
This is why we have initiated a range of measures which, alongside our D&I program
activities, will in future serve to attract more women to management positions.
Balancing Work and Private LifeAt Voith we see ourselves as a family-friendly company – an understanding that isembedded in our Group-wide guidelines to offer a flexible and family-conscious work
culture. Through ongoing communication measures, we work to increase openness
to this issue among our managers; after all, our stated goal is to offer our employees
an attractive working environment. This also includes flexible working models thatmeet ever-changing personal circumstances. In consultation with their supervisors
our employees can also agree personal working time models, ranging from the useof a home office through to part-time work and job sharing.
To realize this, in the reporting year we introduced a new form of working time arrangement through our Mobile Working works agreement. As part of this, the employee
and supervisor agree whether and to what degree work can be performed outsideof the usual workplace. The only prerequisite is that the work area in question mustbe suitable in principle for mobile working. An employee can work up to 40 % of theregular working hours through this model, which is based on a voluntary arrangement
and a significant degree of trust between the company and the employee. Throughthis, we aim to make workplaces even more flexible and attractive, while putting
ourselves in the best position as an employer to meet the changing demands placedon jobs and the future of work.
In connection with this, in 2018 an agreement was also reached with the Works
Council to introduce part-time training leave in the company. In an “active” phase,
this allows employees to work for reduced remuneration. In a following “passive”

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phase, employees can utilize the time available for vocational training and continue
to be remunerated.
Through our semi-retirement models, occupational pension schemes, and a solidarity
fund, we also take care of employees and support relevant groups of individuals
who are about to retire, have become incapacitated for work, or whose employment
has been terminated for other reasons. Last but not least, Voith is also a member ofthe familyNET 4.0 pilot project whose main focus is on the opportunities offered bydigitalization to balance work and family life.
Fact base Flexible Working Time Models
Fact base Parental Leave

Employee Satisfaction
We always keep a close eye on our employees’ satisfaction, which is why we engage
in a range of measures including the regular analysis of illness and employee turnoverdata.
Our employee turnover rate fell in the reporting period to 10.3 % (previous year:
11 %). 4.3 % of this rate (previous year: 3.7 %) is due to employees terminating theemployment relationship. As part of exit interviews we ask them why they are leaving
Voith, and evaluate this feedback to identify potentials for improvement.
Fact base Employment Length

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3.3 Attracting and Promoting Talent
The competition for suitably qualified employees is getting tougher in many areas, andwe continually face the challenge of attracting qualified employees at all our locations.
Our new detailed plan for HR marketing campaigns is intended to make our efforts
in this area even more successful.
In the reporting year we began to define Voith’s employer brand to position ourselvesglobally as an attractive employer. In addition, we are also working on Voith’s value
proposition as an employer with the aim of further emphasizing Voith’s unique characteristics so that they can then be used to specifically target potential employees.
In a first step we held high-level management interviews and employee workshops.
In conjunction with this we relaunched our careers homepage, which now offers astate-of-the-art user experience that is suited to its audience and can be viewed ona variety of devices. Last but not least, in the 2017/18 fiscal year we further increased
the efficiency of our Group-wide Global Graduate program through the use of an
online assessment.
http://voith.com/corp-en/careers.html

One of the focus areas of our HR marketing activities was continuing support for
the recruitment of qualified employees for our Group Division Voith Digital Ventures.
However, the need for additional personnel dropped significantly compared to theprevious year.

Fact base Employee Turnover

We are currently facing particular recruiting challenges in the field service area owing
to demographic changes, particularly in Europe, as well as the changing requirementsof potential applicants in relation to their work activities. To meet these challenges, inthe reporting year we developed new solutions and measures which we will implement

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4_Products and Supply Chainin the coming fiscal year. These include specific employee retention, acquisition, anddevelopment measures aimed at providing specific career prospects for the individual.
Fact base New Hirings

High Aspiration – High Level of Training
By tradition we are committed to providing world-class vocational training. Our commitment has remained steadfast for over 100 years. Voith apprentices repeatedly
complete their vocational training with outstanding results in state and nationwide
comparisons. We are currently offering apprenticeships in over 13 commercial, technical, and trade occupations, with interdisciplinary learning and the integrated provisionof social and specialist expertise high on the agenda. Furthermore, we typically takeon our apprentices on completion of their vocational training, and offer them theopportunity to get their foot on the career ladder in our company.
Last year saw the launch of our Social Internship, something we continued in thecurrent fiscal year. As part of this, all apprentices in their second year of vocational
training spend one week at a sheltered workshop for the disabled. In addition, in thereporting year several of our apprentices completed an Energy Scout training course
at the Chamber of Industry and Commerce IHK Ostwürttemberg – an opportunity wehave continued to offer our apprentices since last year.
Advancing digitalization is also bringing with it changes to vocational training requirements. As a pacesetter and pioneer of vocational training in Germany we are meeting
this challenge at various levels. Among them, in the 2017/18 fiscal year we integrated
new digital activities into the apprenticeships for technical occupations. This involves
interdisciplinary competencies such as additive manufacturing processes using 3D
printers, operating manufacturing execution systems (MESs), or the use of augmented
reality (AR). Alongside this, we put a great deal of effort into supporting the institutional
adaptation of metalworking and electrical trades in Germany through our expert
witness work. From the apprenticeship year 2018/19, our companies will train their
up-and-coming generation of skilled workers in eleven updated industrial metalworking

Backand electrical trades whose training regulations have been enriched with greater IT
content and adapted to integrate state-of-the-art technology.
As at the end of the 2017/18 fiscal year, Voith employed 801 apprentices and students(previous year: 959). 519 (previous year: 599) of our apprentices work in Germany,
over half of whom work in Heidenheim (302; previous year: 360). While we expect
the number of apprentices to remain at a similarly high level in Germany, we forecast
a shift towards dual-study programs.
Voith trains employees around the world. To do so, we utilize our own Training Centers
in Heidenheim and Kunshan (China). Our international locations also deliver vocational
training that, while based on the German dual-study system, also incorporates culturaland country-specific considerations. The success of this approach is illustrated byour experiences at our São Paulo (Brazil) location, where we have been training
young people for many years. In collaboration with local training institutes, we havedeveloped a training model for a typical four-year apprenticeship aimed at young
people over the age of 15. This approach regularly produces exceptionally well qualified new technical talent.
Fact base Apprenticeships and Opportunities

Lifelong Learning – Both a Right and a Commitment
In times of dynamic change driven by technological progress, we expect our employees to be committed to lifelong learning. This is why we support them with acomprehensive range of training and education measures. Our leadership concept
sets out the framework for this, with numerous management tools. A performance
objective meeting is held at the start of the fiscal year between every employee
and their supervisor to discuss and set the person’s contribution to achieving ourcorporate goals. The additional employee appraisal focuses on work activities and theworking environment, the relationship between the employee and supervisor, and theemployee’s own personal development perspectives. The outcome of these meetings
is entered in our pep. HR IT system together with findings of the Management Review

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process. This approach means we are always aware of our employees’ training
requirements, and can tailor our offerings and initiate personal development measuresaccordingly.
In the reporting period 91.4 % (previous year: 82.7 %) of Voith employees took part inan employee-supervisor appraisal. In doing so we reached all employees who were notprevented by sickness, on parental leave, or who were exempted from the appraisals
as they were about to take on new functions. Over the course of the next few years
we plan to further stabilize the high level we have already achieved.
Fact base Training and Education & Career Development

The Voith Management School is of great significance within the overall strategy of ourtraining and education measures. Here we provide special training to employees from
specific departments such as Sales and Purchasing. Special development programsfor executives establish a uniform understanding of management within the company
across Group Divisions and regions. These programs are mandatory for all executives
with supervisory roles.

Hours of Further Education
320,324

266,959

2016/172017/18

244,604

2015/16

The difference to previous years is due to a variety of factors, including extended data-gathering.

Back

Since 2015 we have been working towards establishing a further component in ourleadership development program within our divisions. We call it our Business Forum,and following the successful pilot at Voith Paper we will now roll out the tool at Voith
Hydro and Voith Turbo. The two-day event format focuses on topics arising fromdaily leadership practice as well as key aspects of the personal work-life balance for
executives. This also underscores our aspiration for our top management level toshow commitment to lifelong learning and a readiness to take active steps to prepare
for future tasks and challenges.
Since 2018 our DRIVE platform has given all our employees the opportunity to gain anunderstanding of digitalization in a hands-on, playful way. This allows them to acquirebasic digital skills, enabling them to develop a digital mindset that they can put touse in the organization. We are also promoting topics such as agile working at Voith,especially in project management where we are introducing agile approaches suchas scrum where appropriate. All these measures are progressively increasing digital
expertise within our organization and making Voith fit for the future.
Various programs in our individual divisions are also intended to improve our employees’ professional and methodological skills in association with our corporate objective
to achieve excellence. A range of measures enables executives from all regions toshare their views. Among them, executives from all regions meet annually at the Voith
Academy to learn more about each other’s different experiences. To encourage andpromote this exchange, we deliberately invite executives from around the world toattend our executive training programs. In addition, we introduced the PaperSchoolin the reporting year, where customers and employees familiarize themselves withcurrent topics as well as ones relevant to Voith Paper. Last but not least, in thereporting year our various Group Divisions held train-the-trainer programs to further
improve product training for customers. Voith Hydro also introduced e-learning
product training courses for employees.

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In the 2017/18 fiscal year our employees completed an average of 13.7 hours of
training and further education (previous year: 16.6). We aim to always offer our
employ-ees training and further education measures where required inindividual cases. Furthermore, we are working tirelessly to improve our training
program, which is why we ask participants about their experiences after eachtraining course, and provide the findings to the trainers and the HR area. In addition,
the supervisor’s assessment is obtained as an appropriate means to assess the
success of a measure.
Leadership at Voith – Utilizing the Opportunities Offered byDigitalization Through New Skills
The standards we set our executives are high. We expect them to lead their staff
in a way that enables them to carry out jointly agreed tasks largely on their own
responsibility. In addition to this, the ability for employees to work under their own
initiative is coming more and more to the fore: This is because working at Voith isbeing increasingly shaped by greater team self-management. As such, we intend
to encourage freedom for employees to act on their self-initiative and strengthen
their engagement. The restructuring and focusing of our values in 2017 created a
key foundation for this. We also support employees through job rotation schemes,
offering them special orientation discussions if they are posted abroad, for example,
or when finding their feet in a new management position.
Outlook
Always attracting the right number of well-qualified employees and retaining themin the company will remain the key challenge for our HR work at Voith. At the sametime, employees still need to be prepared for the increasingly digital world of workand supported in their development. As familiar qualification measures alone are
no longer enough, our goal now is to create a culture of agility and a willingness toembrace change through a systematic approach to change management. This is
why we will offer an increasing number of training courses to enable our employees
to easily find their footing in the digital world. This is how we are already laying thebasis today for our future success.

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3.4 Occupational Health and Safety
Occupational health and safety take top priority at Voith. By taking a responsible
approach when designing workplaces and processes, we work to prevent accidents
and work-related illnesses as far as we can. The best basis for this is our established
HSE (Health, Safety, Environment) organization. In addition, our systematic approachto implementing our Shared Services structure ensures that individual locations andregions receive the most comprehensive support possible.
We have implemented corresponding processes to identify hazards and risks in
occupational health and safety. These are transparent to everyone involved, allinformation can be accessed in one system, and lessons learned can be shared
among business areas.
Factbase Approach to Preventing or Dealing With Negative Health and Safety Impacts
A Group Directive sets out the requirements and responsibilities for occupational
health and safety, and lays down binding minimum requirements and standards
for the Group. It also includes all standard operating procedures (SOPs) on HSE atVoith. In principle, while all locations are covered by this directive, the more stringent
provision in each case always applies when reconciling the regulations with regional
requirements. As a third step, customer agreements are binding if they impose stricter
or more specific requirements.
All occupational health and safety policies are accessible globally via our Group-wide
hse+ IT system, just like our environmental protection regulations. Moreover, themajority of countries can enter relevant laws and regulations directly in the system
and assign the resulting responsibilities to those accountable.
We are also well prepared for the upcoming transition from OHSAS 18001 to ISO
45001. For example, thanks to ongoing improvements in the reporting year the number

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4_Products and Supply Chainof identified nonconformities further increased, laying a key basis for a successful
migration.
Joining Forces with Employee Representatives
Company agreements on occupational health and safety, as well as on preventing addiction, complement the regulations embedded in our HSE Group Directive.
A monthly Safety Committee Meeting brings together all employee and employer
representatives at each production location to develop the annual occupational safety
program and implement it in monthly actions. In addition, we attach great importanceto the early involvement of Data Protection Officers in all issues relating to HSEreporting, controlling, and communication.
Fact base Employee Representation in Committees

3.4.1 Occupational Safety
In 2009 we anchored accident frequency and severity reduction in our corporate
goals. Over the past few years we have made continual improvements in this area,
making Voith one of the world’s leading companies – across all industrial sectors – in
occupational safety.
This is confirmed by the Accident Frequency Rate (the number of notifiable accidents
per 1 million working hours), which we calculate based on the international standard. Itshows that we reduced our AFR very significantly from 12.6 in the 2008/09 fiscal year
to 1.5 in the reporting year. This corresponds to 54 notifiable accidents (previous year:50) – still a particularly low figure compared to other industries. By comparison, theaverage AFR of companies in the Professional Association of Plant and MechanicalEngineering is 22. However, in the reporting year we suffered an increase in the
Accident Severity Rate (ASR): With 341 working hours lost per million in the reporting
year (previous year: 271), the previous year’s value was exceeded significantly.

We deeply regret that the 2017/18 fiscal year was overshadowed by two fatal occupational accidents. One happened in February 2018 at Voith Hydro plant in China,
and another in April 2018 at a Voith Paper plant in the USA. These were the first fatal
work-related accidents at any of our plants in a decade. We are all deeply affectedby the incidents that caused the deaths of two of our employees.
We worked together with the relevant local government agencies in thorough detail
and with absolute transparency to examine the circumstances that led to bothFrequency Rate

Severity Rate

specific figure in accidents
per 1 million working hours

specific figure in lost hours
per 1 million working hours
342

1.6
1.4

1.5

absolute figures

276

282

absolute figures
12,16957
50

2015/162016/1754

10,3302017/18

2015/16

9,509

2016/172017/18

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unfortunate events, placing particular emphasis on identifying the root causes andfurther optimizing our processes. Besides specific measures at both sites, in June2018 we launched additional activities throughout the Group to improve occupationalsafety. Among them, all production sites were put through an additional security audit
to identify cross-site weak spots. In addition, we restarted Group-wide information andeducational campaigns on the topics of occupational safety and accident prevention.
Even though we have achieved a great deal in the past in terms of occupationalsafety at Voith, the two accidents underscore once again how important it is that we
continue to take a consistent and uncompromising approach to occupational safety.
Fact base Occupational Accidents

Extensive Occupational Safety Program
Our occupational safety program fundamentally includes every employee. We also
involve service providers in occupational safety activities through our “Coordinationof Visitors and Contractors” Occupational Safety Directive.
Executives with supervisory roles have a particular responsibility in this regard: They
are responsible for risk assessments, as nobody else knows the technical requirements or the level of education and experience of their staff better than they do.
Furthermore, executives have a clear duty to ensure that information and targets arecascaded as prescribed, right from the Board of Management, through the respective
executives, and down to employee level. Employee training and the active communication of key developments also fall within their area of responsibility. Employees
must be given documented instruction at least once a year, with centrally prescribedtraining documents supporting this process. To lend a helping hand, our health andsafety specialists provide assistance with queries on using our hse+ software as wellas on other HSE-specific questions.
Besides annual instruction, brief summaries are published regularly, sometimes evendaily, on HSE issues and information sheets are made available on selected topics. In

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the reporting year we continued to put significant effort into using our HSE software
for online instruction, even though we in no way see this additional medium as areplacement for supervisor-led face-to-face instruction. Individual business areas
are also increasingly switching over to the online delivery of training courses tailoredspecifically to their needs, some of which they have developed themselves.
We intend to raise our production employees’ awareness through short, high-impact
presentations. Beyond the annual instruction we provide, these five- to ten-minutepresentations on current topics keep the aspect of occupational safety firmly in
employees’ minds as they carry out their daily work. In some cases, employees are
involved directly in these presentations, for instance if they are involved in a private
or voluntary capacity in the Fire Service, meaning they are highly credible whenpresenting fire safety topics.
We document instruction sessions that are required by law. Here too, we are increasingly providing them as online tutorials – especially since pilot projects have been
greeted so positively in recent years. We will therefore progressively start offering
online tutorials on various topics via our hse+ software, with our initial focus areas
being decentralized organizations such as site construction, service and sales employees, and administration.
We place particular emphasis on the training of our experts in the regional HSE
organization. They have already been rigorously trained on the use of hse+: We haveused this online system at Voith since the 2015/16 fiscal year to display information
globally, uniformly, and transparently on audit planning and audit results as well as
key information on hazardous materials, compliance, and risk assessments. Overthe next two years we plan to make sure our people worldwide use as many hse+
modules as possible equally intensively. Furthermore, we intend to further expand
the documentation and follow-up of measures derived.
Fact base Occupational Safety Training

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Special Responsibility with Field Service
When on construction sites or service calls, Voith field service employees takeresponsibility for occupational safety and environmental protection in a wide variety
of ways – whether as supervisors without authority over other service providers,
right through to taking full construction-site responsibility that includes authority oversubcontractors.
A cross-divisional working group, “HSE in Field Service,” is responsible for analyzing
the related challenges we face and has the long-term goal of standardizing existing
regulations. The working group meets every six months with the objective of developing specific solutions in the field of occupational health and safety and environmental
protection on construction sites, based on examples and best-practice solutions fromvarious countries. Topics such as customer enquiries and supplier evaluations arealso approached jointly and in a coordinated manner. Ultimately, these activities will
result in the creation of a uniform cross-divisional standard.
Documenting, Analyzing, and Preventing Accidents
At Voith we record all accidents centrally to ensure that the direct supervisor is reliably
informed and that the notifications can be published on the intranet. This also ensuresthat the Corporate Board of Management is informed within 24 hours in the eventof serious incidents. Investigation teams, comprising stakeholders, supervisors, andsafety experts, review and document the accidents. Especially serious accidents
are examined separately once again at our Center of Competence HSE. A detailed
description of accident definitions is given in our Group Manual, and these are presented in a way that makes them comparable internationally with other companies.
In the reporting period we began to take a more systematic approach to analyzing thenotifiable occupational accidents resulting in downtime. We investigated every incident
in detail, following the Ishikawa methodology to further improve our understanding,recording the root causes, and deriving fundamental preventative measures alongside
taking specific action based on the incident.

BackVoith’s own eVAP app involves employees actively in accident prevention. It enables
them to log potential accident causes quickly and easily on the spot, and then sends
this information to a central database. Clear icons facilitate the entire user interaction
within the app. The data is analyzed automatically and then published in target
group-specific media along with corresponding instructions. This allows us to raise
our employees’ awareness of unsafe actions and situations before accidents occur.
In addition, increased data quality across sectors and countries makes even moretargeted prevention work possible.
Our HSE experts currently receive an average of 350 reports each month. Following
the Group-wide roll-out of eVAP we are now in the process of adding further smaller
app modules. Our aim is to achieve further improvements in the number of audits
performed, as well as in terms of the quality of the content.
Using accident analyses, audits, and other measures we make sure we are always
up to date in terms of HSE, and can take immediate action in response to serious accidents, or if specific accident types occur frequently. Our global HSE FlashNews (information on the accident/incident focus areas in occupational health andsafety, and environmental protection) enables us to inform the affected employees
immediately and directly.
In the reporting year we produced and sent specific information on the operationof work equipment such as cranes. We also addressed other topics such as hand
injuries, and approached these by means of a poster campaign.
Routine Communication of Security Issues
We employ several communication channels to keep every single employee within ourGroup updated on changes and developments. Besides fortnightly conference calls,
the Safety Steering Team also meets annually in two regions, ensuring a rigorous
internal and external information exchange and discussion.
Following this, meetings are held at a regional level to communicate the points
discussed. In turn, this information is then shared with the individual locations in the37

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4_Products and Supply Chainmonthly occupational safety working groups. The local experts are also responsible
for translating the guidelines and standards into their respective languages. Centrally
produced publications, such as the regular HSE and EBM Newsletters, complement
our information offering.
Outlook
We intend to maintain this high level of occupational safety going forward, with ourhse+ IT platform playing a key role in this regard. It enables us to further improve
the transparency of our actions and derive measures in an even more targeted way.
In the current fiscal year, we will continue working towards establishing a uniform
quality level throughout the Group. To achieve this, we will roll out the same modules
globally and, in conjunction with employee motivation measures, make rigorous use of
these modules. Once again, our activities will focus on crane operation, as accident
statistics show a clear need for a major information drive in this area.
3.4.2 Occupational Health
Regardless of where our employees work, we want them to stay fit for work and retire
healthy at the end of their professional lives. From our analyses we know that thestatutory frameworks and cultural differences in the respective countries also requiredifferent emphases within occupational health management. This is why we pursue
a consistent, region-specific approach to occupational health protection in which our
fledgling Group Division Voith Digital Ventures is fully integrated.
In the reporting year we continued to work on focus areas. To assist with these
activities, with the help of an external consulting firm we launched a pilot projectat our Group Division Voith Turbo on the topic of health management. The project
covered sick-leave analysis, company inspections, structural analyses, and employee
surveys as part of one-to-one interviews and group workshops. The objective inthe first step was to work out the factors that have a positive or negative impact on
motivation. Based on these, location-specific and additionally Group-wide guidelines

Backwere developed in parallel in seven specific fields of action. We are now focusing on
developing and establishing an overarching health management organization prior todefining specific activities for each of these fields of action.
Illness and Stress Support
For the reporting period we are pleased to announce that we achieved further improvements in occupational medical care at our German locations. As planned, we
completed the roll-out of our standardized occupational reintegration management
system. Thanks to our cooperation with an external service provider, our employees
in Germany can obtain information and support relating to the care of family members
and childcare. We are currently continuing to work on establishing robust illness- andstress-support processes at our locations. Once this is done we will – as far as
permissible under data-protection legislation – roll out a central reporting systemon this topic.

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4_Products and Supply Chain
4.1 Product Responsibility
4.1.1 Management Approach
Voith products and industrial services serve five major markets around the world:
Energy, Oil & Gas, Paper, Raw Materials, and Transport & Automotive. As thesemarkets impose wide-ranging requirements on our company, we ensure our solutions
are just as varied to meet them.
The Group Division Voith Hydro develops customized, long-term solutions andservices for hydropower plants across the globe. Its broad portfolio of products
and services covers the entire lifecycle and all essential components for hydropower
plants of any size – from generators, turbines, pumps, and automation systems tospare parts, maintenance and training services, and digital solutions for intelligent
hydropower plants.
As a pioneer in the paper industry, the Group Division Voith Paper continuously
optimizes the paper production process through its innovations and enables theefficient use of resources in paper production. Through Servolution, as a dependable
partner Voith Paper offers its customers customized service solutions for all stagesof the production process. Thanks to Papermaking 4.0, paper manufacturers can
optimally interconnect their equipment and raise their competitiveness through theeffective and secure use of the data generated.
The Group Division Voith Turbo is a specialist in intelligent drive solutions, systems,
and pioneering service solutions. Customers from numerous sectors such as oil &gas, energy, mining and mechanical engineering, marine technology as well as rail andcommercial vehicles rely on Voith’s cutting-edge technologies and comprehensive
expertise.
Through Voith Digital Ventures (known as Voith Digital Solutions until September 30,2018) we combine our long-standing automation and IT expertise with hydropower,
paper machine, and drive technology know-how. This Group Division was foundedin 2016 and is a key driving force behind our Group’s digital transformation.

Our Responsibility – Our Fields of Action
Given the diversity of our product portfolio and the very different market requirements
we face, regarding product responsibility our Group Divisions are confronted with abroad spectrum of challenges. To identify these demands systematically and evaluate
them in terms of their materiality, we draw on the results of our stakeholder surveyof early 2016. As part of a Master’s thesis we also evaluated external benchmarks,
including those of the IÖW (German Institute for Ecological Economy Research) andISS-oekom. In conjunction with our Group Divisions’ evaluations and assessments,
we defined the material fields of action for our company with regard to productresponsibility:• Quality and reliability of our products and services• Guarantee of maximum product safety• Long service life of products• Technological expertise and innovation• Customer dialog and cooperation• Product resource efficiency• Minimizing products’ environmental impacts.
Systematic Identification of Trends and Challenges
In 2017 we launched a Technology Foresight project, so we are always prepared tomeet long-term challenges. Led by the Chief Technology Officers (CTOs) of each of
our Group Divisions we developed future scenarios for water, paper, mobility, andthe environment extending right through to 2040. The project is now in its final phase,with initial results already available for some Group Divisions.
Among these, future scenarios for energy and water were formulated at Voith Hydro.
Alongside the large hydro sector, the focus is also on the growth areas of small hydro,
services, and digitalization. From the 2018/19 fiscal year onward the findings will be
discussed with our customers and business partners, and compared with their own
assessments.

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At Voith Paper the Technology Foresight project is now also in its final phase. With thesupport of the Fraunhofer Institute for Industrial Engineering IAO and further partners,
three future scenarios were formulated.
Strategic objectives for 2025 as well as through to 2040 were derived from thesescenarios. Fields of action for these objectives were then defined based on a gap
analysis, which in turn were used to develop a technology roadmap. This will soon
be completed, so that implementation can start.
In the reporting year Voith Turbo worked out scenarios for mobility, water, andenvironmental technologies; strategic search fields for innovations and technologies
are now being derived from these. Building on the results, a range of design-thinking
projects are also planned for the 2018/19 fiscal year. A technology roadmap willthen be produced during the current fiscal year, similar to the other Group Divisions.
In its Foresight project, Voith Digital Ventures highlights the opportunities presented
by the use of digital technologies in the markets Voith serves. These primarily concern
solutions that deliver demonstrable added value to our customers, such as costsavings, quality and production increases, process stabilization, and improved
maintenance management.
Trends and Current Challenges
Each Group Division is faced with very different challenges, as they are active globallywith a diverse product portfolio and a wide range of customers.
Among them, hydropower competes with other forms of renewable energy. Here,alongside specific cost drivers, implementation periods and technology-related
subsidies are increasingly playing a role. We are also continually monitoring global
developments relating to climate change, such as increasing reservoir sedimentation,
urbanization, and electrification.

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When forecasting and evaluating trends, Voith Hydro always needs to keep an eye
on special regional aspects and their specific requirements regarding quality, safety,
and product responsibility. In China, for instance, there is a clear trend towards thestrong expansion of pumped storage power plants and thus highly efficient machinerythat is optimized for both pumping and turbine operation.
In addition, there is increasing competition in the area of storage technologies, bothfor short-term requirements (Li-ion) and long-term storage needs (flow batteries,
power-to-x). The topic of offering fish easier passage will also gain further importance.
The same applies to decarbonization efforts, where the aspects of sector coupling
and power-to-x, i.e. the conversion of electricity into forms of energy that offer better
storage characteristics, are attracting special attention. Voith Hydro sees a potential
growth market here, which can also lead to a much more sustainable, decarbonizedenergy system thanks to renewables – especially hydropower.
Since 2016 Voith Paper has been using a comprehensive methodology to identify
trends. This is based on five pillars: Trend Analysis, Technology Outlook, Customer
Perspective, Consumer Perspective, and Radical Technologies – technologicalchanges that are radically altering the paper production process and can affect theentire value chain.
The trends already identified such as digitalization, sustainable consumer behavior,
population growth, and increasing urbanization remain intact and are decisive for
consumer behavior and the development of markets. The foresight and trend analysis
methods have since been steadily expanded and adapted to define fields of action
driven by overarching trends. Among them, the aspect of sustainability is determinedin particular by consumers’ purchasing and consumption patterns, for instance in thearea of sustainable packaging solutions based on paper instead of plastic.

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Thanks to this methodology, Voith Paper identified the trend of water scarcity just as
early as the trend to the use of alternative plant-based raw materials in the paper­making process. This is enabling the Group Division to support its customers in using
these new raw materials, and to align production processes and plant accordingly.

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Furthermore, Voith Turbo is predominantly active in high-security industries, such asrail transport and refineries. As a result, the Group Division is essentially faced withvery high demands on the quality and reliability of its products.

Voith addresses a number of challenges in the growth market of tissue paper. In themedium term, Voith Paper needs to offer compelling solutions to its customers, particularly through specialized and affordable product systems on the paper machines.
An excellent basis for this is the expertise and customer focus of the Business Line
Fabric & Roll Systems.

Voith Turbo continues to focus on the digitalization of its product portfolio in the areasof status monitoring, optimization, and modularization to enable resources to be usedeven more efficiently. As an example, the DIWA NXT with CRU (Central Recuperation
Unit) was developed in collaboration with Voith Digital Ventures. The initial results are
positive, with bench trials and test drives meeting efficiency and emissions-reduction
expectations. The new transmission has an optional 48V mild-hybrid system andoffers an optimal gear ratio for intercity bus and coach applications.

It is important that Voith Digital Ventures exploits the huge growth opportunities in
the area of the Industrial Internet of Things (IIoT) while at the same time meetingcustomers’ exacting demands for safety and reliability. Cybersecurity in particular
is one area in which it can differentiate itself significantly from the competition. In
connection with this, in the reporting year Voith entered into a strategic partnershipwith the Kudelski Group, a Swiss company specializing in digital security systems. The
collaboration aims to develop cybersecurity products and services for industrial
customers that increase the security of networked technologies.

Megatrend Digitalization
We intend to capitalize on digitalization as an opportunity, and combine our longstanding automation and IT expertise with hydropower, paper machine, and drive
technology know-how. Collaboration between individual divisions, especially with Voith
Digital Ventures which was founded in 2016, is enabling numerous new products andservice approaches – some of which are already being implemented.

For Voith Turbo, decarbonization and e-mobility are still the main trends. The trend
towards e-mobility combined with significantly more demanding emissions targets(CO2 certification) has further accelerated. The Voith Turbo Division Mobility is addressing this challenge by developing hybrid transmissions and a pure electric drive.
In addition, extensive e-mobility projects have already been set in motion together
with Voith Digital Ventures. Among other achievements, in the reporting year thiscollaboration led to the presentation of a demonstration electric bus that entered into
service in Heidenheim at the end of 2017.

Voith Hydro considers the development of sensor technology a prerequisite for further
interconnectivity on the road to making the interconnected digital power plant a reality.
This will provide customers with specific advantages such as even safer operation
within a broader operating range, as well as condition-independent maintenanceresulting in higher electricity-generation availability.
Voith Hydro is also moving forward in the area of the Industrial Internet of Things(IIoT), in collaboration with Voith Digital Ventures. Collaboration with other companies
and customers is essential for this. For example, in collaboration with the Swissenergy group Axpo, Voith Hydro is currently testing several new digital applications

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Backfor hydropower plants at Axpo’s Sarelli plant in the Swiss canton of St. Gallen. The
project aims to optimize plant productivity, minimize downtime, and increase production reliability with solutions such as OnCare.Acoustic, OnCall, OnCare.Asset, andAR (augmented reality) applications. Underlying this smart combination is Voith’s
recently founded OnPerformance.Lab. The high level of interconnectivity offered by
the individual systems is unique in this form, transforming the system into an intelligent
hydropower plant.

Research and Development
Our success largely hinges on our technological expertise and ability to constantly
apply our know-how in innovations that generate added value for our customers.
This is why research and development (R&D) has traditionally been a top priority atVoith. In the reporting year we invested € 225 million (previous year: € 217 million) in
R&D activities. At 5.4 %, the share of our Group’s sales dedicated to R&D was slightly
above the previous year’s level (5.3 %).

However, for Voith Hydro this increased digitalization poses an additional challenge
regarding plant security. This is because large-scale hydropower plants countas critical infrastructure in many countries, so they need to meet more stringent
requirements – particularly in the area of cybersecurity.

Our engineers have been writing history with their technological inventions ever since
our company was founded. This is reflected in our strong patent portfolio, with several
thousand active patents to our name around the world and hundreds of new ones
added to our portfolio in the reporting year.

Voith Paper and Voith Digital Ventures are also working together on developing predictive maintenance techniques as an additional service for customers. One example
is the Talking Roll, a sensorized functional roll, which learns by itself, predicting
remaining roll run time and actively communicating service requirements; the safe
operating window regarding predictive maintenance is calculated using cloud-based
data analysis techniques.

Our Group Divisions perform the majority of our R&D activities. While these activities
have a global focus, they are centered on Germany. Our R&D centers in the Americas,
Asia, and the rest of Europe deliver valuable specialized research and development
contributions in the relevant Group Divisions.
Annual Report 2018, p. 99 et seq, Research and Development
Fact base Research & Development Expenditure

In contrast, Voith Paper has withdrawn from the Kopernikus project on the use offlexible energy supplies in the paper industry. Prior to the project exit at the end of
2018 energy consumption data from several pilot plants was analyzed to assess
potential savings.
In the reporting period Voith Turbo worked together with Voith Digital Ventures on
the BeltGenius project. This digital project optimizes the operation of mining belt
conveyors, which are typically subject to heavy variations in load. BeltGenius monitors
the conveying systems continuously, enabling the comparison of their performanceand the optimization of their energy consumption.

Current Developments in the Group Divisions
Voith Paper continues to develop sensor-based systems to forecast the service lifeof products. This approach improves operational reliability, making sudden system
failures virtually a thing of the past. Several products are currently under development,with some approaching the pilot phase.
In the area of digitalization, Voith Paper is focusing R&D on the field of simulations. It is
putting a great deal of effort into developing a digital twin of machines and production
processes. To achieve this, various purely physical as well as empirical, data-based
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various products and services for Voith Paper customers.
In the reporting period Voith Turbo continued to drive forward the collaboration with
its partner FSubsea to develop variable-speed drives for the operation of single-phaseand eventually multi-phase pumps on the sea floor. The torque converter has beentested successfully in Crailsheim and will now be integrated into the customer machinefor overall system testing.
Voith Turbo sees good growth opportunities in coming years in the heavy trucks sector – the main market for Voith retarders. While the switchover to electric powertrains
is not currently expected to cause a significant change in the retarder business, a
new generation of retarders will still be necessary.
A significant proportion of city buses will be battery-powered from 2025, so Voith
Turbo is progressively expanding its R&D activities in the direction of electromobility. Here, bridging technologies such as DIWA NXT with a CRU will be essential.
Diesel engines will continue to play a significant role, in conjunction with alternative
fuels and downsizing. In this regard, with its new generation of transmissions andmild hybridization Voith is well equipped to face upcoming combustion engine
developments. Various customer requests confirm the growth expectations in theabove-mentioned areas.
VT section

Voith Hydro’s R&D activities continue to center on making the interconnected digital
power plant a reality. To establish a fundamental prerequisite for this, it is focusing
on using sensors to communicate information on system operations. In the reporting
period the spotlight was on the prediction of fatigue for various components depending on the plant’s mode of operation.

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The interconnected digital power plant of the future will lead to a further reduction
in electricity generation costs through higher availability, also thanks to predictive
maintenance of critical plant components.
In the course of digitalization, many companies have established pilot projects toprove and measure the benefits of Industrial Internet of Things (IIoT) solutions. In
terms of IIoT technologies, this is why Voith Digital Ventures continues to develop
tailored customer solutions to maximize each customer’s return on investment (ROI).
At the start of these processes, workshops are held with customers to identify priority
challenges and potential solutions.
For many customers, dealing with vast amounts of data is a challenge. In manycases, extensive data is collected which needs to be made usable. Voith Digital
Ventures develops solutions together with the customer as part of 4.0 pilot projects
and supports them with their company-wide roll-out.
In addition, knowledge of optimal, location-independent information processes andmigrating from reactive to predictive (prescriptive) maintenance are challenges formany customers. Besides digital solutions, we also provide support with our expertisein this area – that is, our deeper understanding of industrial processes.
Collaboration Projects with External Partners Deliver Important Insights
Voith’s Group Divisions are market and technology leaders in many business segments. For this reason they are also in constant dialog with research institutes,
universities, associations, and other companies along the supply chain.
Among them, Voith Paper collaborates with a range of institutes and universities withclearly defined fields of action. To achieve the targeted 80 % CO2 reduction by 2050,
Voith Paper is already working actively on bringing the technology to market-readinesswithin the next decade. As part of this, in the reporting year the EU-wide Provides

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project was concluded, which aims to achieve a drastic reduction in the CO 2 footprintof pulp production.
Together with the Hamm-Lippstadt University of Applied Sciences, in 2018 Voith
Paper initiated a forming-section research project. The project aims to reduce overall
drive load to significantly cut energy costs and optimize the paper machine start-up
process following downtime.
In collaboration with the Leibniz University of Hannover (LUH), Voith Hydro conducted
experimental and theoretical studies on loss mechanisms in a separately excitedhydropower generator. For research purposes, Voith Hydro has provided the university
with a realistic model of a hydropower generator. The findings from these studies
enable the efficiency, service life, and material use to be optimized in the design ofsuch machines. In addition to industry-funded doctoral theses, Voith funds a junior
Professorship in Hydropower Generators. The Hydropower Generators lecture series
ensures that young students will continue to be inspired by hydropower technology.
Fact base Voith Hydro Collaboration Projects

Voith Turbo is currently working on a research project funded by the German
Federal Ministry for Economic Affairs and Energy that also involves DLR (the German
Aerospace Center). In this project, composite-structure sensors are being developedfor use in mobile applications such as for rail vehicles. Its aim is to detect component
damage at an early stage before this results in critical structural failure. Furthermore,
optimized utilization of material-specific load limits based on constant monitoringof the material allows a lighter construction to be achieved. Based on the tests,
significant component weight reductions were achieved (over 25 %) while maintaining
the same performance. The corresponding component will be tested extensively
during the course of 2019.

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Customer Dialog
Maintaining close customer relationships and a deep understanding of customers’
needs has always been one of Voith’s strengths. All divisions are in constant contact
with their customers, and they are also included in Foresight-related activities andtrend analyses. This contact also includes targeted surveys such as on customer
satisfaction or future requirements on our products’ capabilities. At the same time,
digitalization is playing an increasingly important role in our Group Divisions’ customer
communication activities. In this regard, we aim to improve both our own and ourcustomers’ understanding of digitalization in equal measure, and in doing so give ourcustomers the edge through increased interconnectivity and the intelligent combination of industry know-how with analysis and IT expertise.
Resource savings, whether in terms of fibers and other raw materials, water, wastewater, or energy, remain central topics within Voith Paper’s customer dialog activities.
In addition, an ever-increasing number of customers ask us for detailed informationsuch as on individual materials used in the product manufacturing process. And froma consumer perspective, environmentally friendly packaging, in which more paper
is used than plastic, matters a great deal and thus influences the requirements on
paper production.
It became clear from customer feedback in the reporting period that the market
success of the BlueLine stock preparation family is mainly based on the robust
machinery design, the stock preparation systems’ low specific energy consumption, and their high fiber-yield efficiency. In addition, the feedback confirmed thehigh level of energy efficiency of Voith tissue machines. Involving customers in thedesign-thinking processes results in shorter development times and more targeted
product solutions, allowing Voith’s sustainable solutions to be utilized more rapidly.
Fact base Customer Dialog Voith Paper

In the reporting year, as part of the Sales Excellence program Voith Hydro establisheda uniform, global customer analysis process and also made it more comprehensive;44

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Backinitial findings are expected in the next fiscal year. The increasing internationalization of
our customers requires a supplier management structure that allows comprehensive
acquisition across all product areas and globally consistent project support. With our
newly introduced global Key Account Management organization, we now also offer
selected customers enhanced support.

As part of product development, Voith Turbo customers are involved early on in thedevelopment process to gather their feedback – in some cases even on a prototype
or MVP (Minimum Viable Product) basis. Examples of this approach include the
BeltGenius product for the mining sector as well as various development projects inthe area of mobility.

Voith is receiving an increasing number of enquiries from customers asking how
digitalization can help extend maintenance cycles and reduce costs in hydropower
plants. To meet this need, today Voith Hydro is able to provide appropriate solutions
and products that add significant value for its customers.

Our customers are increasingly requesting condition-monitoring systems, and work isalready underway on realizing these together with those requiring them. The systems
monitor critical processes in the oil and gas sector. In addition, together with customers we have developed the market-ready Smart Accelerate product: This allows fuelsavings to be achieved in city bus operations and is already proving its worth in trials.

With the opening of additional regional HyService centers, Voith Hydro continues to
put its service activities on a regional footing, thus enabling it to respond even more
quickly to customer requirements. Among its new centers, Voith opened a Hydro
office in Sydney, Australia in March 2018. It supports hydropower projects acrossAustralia and New Zealand, and as a HyService center it also makes it easy for
manufacturers and customers in the region to request and receive direct assistance.
In May 2018 a new head office for hydropower projects in East Africa was establishedin the Ethiopian capital Addis Ababa. From our new location, we plan and coordinate
projects in nine countries in the east of the African continent.
In Brazil, Voith Hydro continued its long-standing cooperation with EDP Brasil – aleading company in the Brazilian power industry – with highly successful results.
Over the last few years, Voith Hydro has been able to extend the intervals between
planned downtime at EDP Brasil plants by 50 %. This has led to a 30 % reduction in
overall downtime and significantly improved the availability of the hydropower plants.
Fact base Customer Dialog Voith Hydro

Voith Turbo identified close customer contact, a strong regional market presence,
and world-class service as business success factors. In the customer satisfaction
surveys conducted in 2018, e-mobility and smart services emerged as the main topics.

Fact base Customer Dialog Voith Turbo

It is essential to Voith Digital Ventures that the widely differing customer interestsand experiences are understood. To achieve this, a system for performing structured
customer satisfaction surveys is currently being worked on. As part of the Group-wide
initiative on customer satisfaction surveys, a dedicated system is being developed tocater for Voith Digital Ventures’ frameworks and objectives. In addition, a customer
satisfaction survey was conducted in the reporting year at offices in regular contact
with customers. This Group Division also maintains regular contact with its customers
through training sessions, which are usually an integral part of projects.
Fact base Responsible Marketing

4.1.2 Reliable and Safe Products
Voith is renowned the world over for the safety, quality, and reliability of its products.
We are fully aware of the value of this important competitive advantage, so we haveset out the principles of our quality and technical risk management processes in aGroup Directive. Our Group Divisions and their companies then expand on theseprinciples and supplement them accordingly.

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We document and certify our activities according to the international ISO 9001,
IATF 16949, and ISO/TS 22163 quality management standards; we also supplement
these with many of our own QM methods. Virtually all Voith locations are certified to
one of these standards. With the help of clearly defined project scopes, a Group-wide
Operational Excellence initiative places an even stronger focus on the quality of our
products and processes. The aim in this regard is to continuously improve quality
while reducing associated costs. To achieve this we focus on four core projects:
Quality-cost Transparency, Problem-solving Methods, Continuous Improvement
Processes, and Quality in Engineering.

A key quality of Voith machines and systems is their long service life, which is why
Voith Turbo gear systems and Voith Hydro turbines have been in reliable operation for decades. The same applies to our paper machines. Because of this, ourGroup Divisions are committed to supplying spare parts even after many decadesof operation. This means that the key requirement of ensuring our products can be
repaired is factored in right from the development stage. Furthermore, Voith engineers
are constantly tasked with supplying spare parts for third-party components – suchas for transmission units produced by competitors that are no longer active in themarket – to enable customers to continue operating a system.

As part of the Voith 150+ Next Level program in the reporting year we set uniform
KPIs to enable the various Group Divisions to be benchmarked against each otheras well as within their respective industrial sectors. In doing so, quality costs are now
recorded uniformly across the Group, making them comparable.

Product Impacts by Group Division
By further developing our products, we work to make them more environmentallyand resource-friendly throughout their lifecycle. In doing so, we meet our customers’
demands, statutory requirements, and ultimately our own aspiration. The primary
aim of all our Group Divisions is therefore to conserve resources and to minimize
the environmental impact of our products. To achieve this we follow a decentralized
management approach.

Voith products always meet the statutory and regulatory requirements of the countries
we supply. Our Group Divisions are responsible for implementation, while the relevant
Quality Assurance Departments ensure process compliance. To achieve this, they
rely on our Group-wide TRQM (Technical Risk and Quality Management) system anddivision-specific regulations.
Fact base TRQM

We train employees regularly on how to handle regulations, and make these available
to them via our Group-wide database and internal communication channels. In addition, we provide our customers with the relevant know-how through training courses
held either at our training center or directly at our customer’s location.
We evaluate the effectiveness of our quality assurance measures in our respective
Group Divisions using division-specific KPIs as well as internal and external audits;
our suppliers are also involved closely in these activities.
Fact base Quality Management in Our Group Divisions
Fact base Voith HydroSchool

We predominantly supply components that, as part of an overall system, have differing
energy and material footprints. We employ a range of tools to gain an even moredetailed picture of our products’ energy and raw-material efficiency. Among these,
for many years now we have conducted product Life Cycle Assessments (LCAs) inaccordance with ISO 14040 and 14044.
With our broad product portfolio and our active role in a variety of markets, weconstantly face the challenge of producing a balanced account of our activities in a
uniform, standardized report that covers all Group Divisions. By way of an example, inthe following we have outlined the lifecycle of a main product of each Group Divisionthat also shows its environment and social impact.

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1_Strategy and Integrity

Voith Hydro
Hydropower Plant
Sustainability aspects

2_Environment

3_Employees

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4_Products and Supply Chain

Upstream/Supply Chain(Hydropower Plant Planning Phase)· E nvironmental & social acceptability
checks·  S takeholder engagement

Creation (Hydropower Plant
Construction Phase)· M anagement of social andenvironmental aspects· S afe working conditions

Utilization Phase(Electricity Generation)· E lectricity generation· Inexpensive, low-carbon multipurpose benefit of the plant (e.g.
flood protection, irrigation)· Plant safety· E nvironmental impact

End-of-Life· R eduction in supply chain risks
through GPTs, CoC· ISO 9001, ISO 14001, and OSHAS
18001 matrix certification for
production locations·H igh global safety and quality
standards·T echnical customer training courses
on optimal environmental andeconomic operation (HydroSchool)

VH products offer:· A high level of efficiency and durability· E xtension of the utilization
phase through the renewalof components· H igh proportion of reused products· M odernization allows continual
extension of a plant’s operating life

Voith component lifecycle
Complete Equipment from Voith
Contribution to greater sustainability

Voith Hydro
Voith technologies play a decisive role in minimizing the environmental impact ofhydropower plants – from improving water quality through aerating turbines andoil-free hubs that prevent water contamination, through to innovative runners that
improve fish passage through rotors.
Voith Hydro works tirelessly also to minimize the remaining environmental impacts.
As part of this, our engineers receive systematic training right from when they receive
their internal vocational training.
Our customers focus on their own energy requirements and material use during theutilization phase to optimize their operating costs, especially in the case of large
systems and equipment. This is because hydropower plants have a long service life;
indeed, 70 years is not uncommon.

VH products/services can:· Improve operation andcost-effectiveness· M itigate environmental impacts andfacilitate the integration of renewableenergy sources into the gridTo further limit our environmental impacts we aim to switch over our production tousing environmentally friendly materials wherever this is technically possible. Voith
Hydro also aims to install new hydropower plants at existing dams and weirs togenerate renewable energy growth without having a further environmental impact on
the surroundings. Using our StreamDiver solution, small-scale hydropower plants canbe installed at existing irrigation dams even where strict environmental regulations
apply. In the reporting year we sold 14 StreamDivers as part of three projects. In
addition, as part of a Master’s thesis Voith Hydro has developed a lifecycle analysis
for scalable StreamDiver hydropower applications. It focused on the CO2 footprint of
the hydropower applications, with all phases included in the product lifecycle. One of
the findings shows that with values between 2 and 10 g CO2e/kWh the greenhousegas emissions of the StreamDiver applications are very low.

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1_Strategy and Integrity

Voith Paper
Paper Facility
Sustainability aspects

2_Environment

3_Employees

Upstream/Supply Chain(Procurement of Materials andServices)
Potential risks:· S ocial & environmental impacts inthe supply chain

4_Products and Supply Chain

Creation(Paper Facility Construction Phase)
Potential risks:· L and use· Loss of biodiversity· E missions (air, wastewater, noise,
goods transportation)·  O ccupational accidents

Utilization Phase(Paper Production)
Potential risks:· U nsustainable virgin fibers andfiber loss
· Increased resource requirements· U se of chemicals and processresiduals

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End-of-Life (Decommissioningof the Paper Facility)
Potential risks:· Process residuals, hydraulic oil
Potential opportunities:· R ecyclable materials such as metal,
structural/civil engineering materials,
plastics, oil

Potential opportunities:· U se of fibers from waste paper· C losing of cycles
Voith component lifecycle
Voith Paper Machine
Contribution to greater sustainability· R eduction in supply chain risks
through GPTs, CoC, and LSA· ISO 14001 and OSHAS 18001
matrix certification for production
locations· Planning services for entire paper
facility· E nsuring the occupational healthand safety of our employees whenat the customer’s location

Protecting the environment is also increasing public acceptance of hydropower,
resulting in reduced implementation times for new plants and modernization projects.
The modernization of the small-scale Mucomir hydropower plant in Scotland in thereporting year demonstrated how increased efficiency and improved environmental
standards can go hand in hand. Voith Hydro rebuilt, installed, and commissioned theturbine unit, installed a control system, circuit breaker, and hydraulic power unit, andrehabilitated the generator. The plant was then reconnected to the grid in autumn 2017
following its successful commissioning. Thanks to state-of-the-art developments insystem hydraulics, a higher degree of efficiency has been achieved; at the same time,
the hydropower plant now meets the highest environmental standards.

Efficient paper machine technology
helps reduce:· E nergy, water, and fiber
consumption· E missions· U se of chemicals

Extension of the utilization phasethrough:· R enewal of components
· Modular design· Service offering

The special design of the new runner improves fish passage, allowing them to passthrough the turbine without significant restrictions. This also allows local fishery interests to be widely considered. In addition, oil- and grease-free bearings were installed
as part of the modernization activities to minimize environmental impacts. Moreover,the hydropower plant is now equipped with a remote control system ensuring safeand efficient unmanned operation that also allows fast fault analysis when necessary.
The largest variable-speed pumped storage power plant in Europe, Frades II in
Portugal, entered into service in the previous reporting year. In autumn 2018 it won
the prestigious VGB Quality Award from VGB PowerTech e.V. – the international
technical association for generation and storage of power and heat. The award went
to the operator EDP and the consortium comprising Voith Hydro and Siemens that

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1_Strategy and Integrity

Voith TurboBus
Sustainability aspects

2_Environment

3_Employees

Upstream/Supply Chain(Procurement of Materials andServices)
Potential risks:· S ocial & environmental impacts
in the supply chain

Back

4_Products and Supply Chain

Creation(System Construction Phase)· E missions (air, wastewater, noise,
goods transportation)·  O ccupational accidents

Utilization Phase(City and Overland Transportation)
Potential risks:· O il loss (30 liters of transmission oil)
· C O2 emissions and transportationnoise· Noise emissions (transportation noise)
Potential opportunities:· E missions reduction in local public
transport

End-of-Life
Potential risks:·O perating fluids and interior fittings,
etc.
Potential opportunities:·O perating fluids and interior fittings,
etc. Recyclable materials such asaluminum, copper, steel, less plastic

Voith component lifecycle
Voith Components
Contribution to greater sustainability· R eduction in supply chain risks
through GPTs, Code of Conduct,and LSA· ISO 14001 and OSHAS 18001
matrix certification for production
locations· E nsuring the occupational healthand safety of our employees when
integrating the transmission unit at
the customer’s location

supplied the plant. The hydropower plant is considered an international flagshipproject and is making a significant contribution to grid stabilization and to further
expansion of renewable energy generation in Portugal.
Fact base: Progress on Social and Environmental Impacts – Voith Hydro

Models for the predictive maintenance as well as repair and overhaul of products
throughout their lifecycle help to conserve resources while increasing efficiency.
Residual life calculations are also used, which allow the degree of wear and theresidual service life to be determined by analyzing the mode of operation and performing specific system measurements. This allows customers to perform their own
maintenance and repair work on the basis of the degree of wear instead of fixedintervals – saving them both material and personnel costs.

· R educing emissions throughacceleration and topography-based
gear shifting and Smart Assist· O ptimization of operating costs
through Smart Maintenance andservice-friendliness· Transmission Exchange Program(reconditioning of transmission
units)· C orrect handling and disposal

Voith Paper
As the average operating lifetime of a paper machine is around 40 years, even minor
improvements in equipment efficiency can have a major impact. However, while theactual process of manufacturing a machine has a negligible environmental impact, theamount of energy required to operate a paper facility exceeds that which is required to
manufacture the machine by a factor of 300. Steel, as well as materials for structuraland civil engineering, account for the largest share of material types in the supply
chain. For the reporting period we are pleased to announce that we reduced the useof iron significantly through the use of steel drying cylinders.
Voith Paper aligns its product strategies with growth markets and meets their different
requirements on paper types and regional aspects to the greatest extent possible.
One area is tissue, where demand is linked directly to the development of the world
population and to economic growth in emerging countries.

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2_Environment

3_Employees

4_Products and Supply Chain

Digitalization of the highly complex paper production processes will determine competitiveness in the future. First and foremost the decisive factors will be the efficiencyof the machines used, followed by optimization of the paper production processes.
Voith Paper aims to produce the greatest added value for its customers throughmaximum resource-friendliness in operation and efficiency in design. To Voith Paper,
resource conservation means above all reducing the specific consumption of freshwater as well as electrical and thermal energy per tonne of paper produced. Moreover, italso means reducing fiber loss and wastewater, and achieving time savings in paper
production for customers through the use of machines that offer maximum efficiency.
Voith Paper is increasingly using renewable raw materials, and working tirelessly toclose material, water, and auxiliary cycles.
Today, Voith already has so many HydroSeal components in circulation worldwide thatin terms of numbers, over 20.6 million m³ of water are being saved annually compared
to conventional technology. This is equivalent to the annual German consumption
level of 460,000 people – roughly equivalent to the population of Duisburg. On topof this, significant energy savings are being achieved. In the reporting period Voith
Paper also developed a new disc filter drainage element, which offers a significantly
larger filter surface and thus increases the filter’s effectiveness. Through targeted
retrofitting, this means an existing machine can continue to be used when production
is expanded.
We intend to continue further reducing the environmental impacts of paper production while increasing the cost-effectiveness of plants. Moreover, Voith Paper isalways looking for opportunities to increase the recycling rate of its own production
processes.
Fact base Social and Environmental Impacts – Voith Paper
Fact base Recycling in Detail Voith Paper

Back

Voith Turbo
Voith Turbo plans to offer its customers increasingly energy-efficient and eco-friendly
product generations, and makes ongoing efforts as part of a continual improvement
process in which customers are also involved. As part of this, it always focuses on
the impact of using Voith components on the total cost of ownership (TCO). Energy
costs account by far for the largest share, so reducing them takes top priority for all
business areas at Voith Turbo. Products such as VoreconNX, VECO-Drive, DIWA NXT
with its recuperation unit which is currently in development, and the developmentof our e-drive for city buses all demonstrate the success of these activities. Smartsolutions are increasingly complementing the Voith offering, enabling operators to
cut energy costs when operating their facilities.
Voith Turbo also aims to reduce its use of those materials with a negative impact onhuman health or the environment to an absolute minimum. The product development
process already incorporates these aspects right from its early stages, with harmful
materials replaced by other materials as early as the engineering phase, wherevertechnically and economically feasible.
In the reporting period Voith Turbo achieved the following progress in terms of its
energy efficiency and in reducing the environmental impacts of its products andservices:
In the reporting year the VECO-Drive, the new variable-speed drive for compressors
and pumps, was sold for the first time. Thanks to this, the coal-fired power plant
operator Nansha will achieve significant energy savings in the operation of its boiler
feed pumps by retrofitting its old drive solutions.
Voith Turbo is also driving forward the development of Voith RailPacks to meet
the tighter rail emission regulations that enter into force in 2021 for railcars andlocomotives. In a joint project with the Liebherr Group, rail vehicle diesel engines are
currently being developed that meet the latest emissions standards, offer 23 % more

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4_Products and Supply Chain

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power in the same installation space, and deliver fuel savings of around 8 % versus
the competition. Furthermore, Voith Turbo is also responding to the trend towards
bi-mode rail vehicles that can be operated on non-electrified track sections using
ultra-low emission diesel engines or batteries.

Voith Digital Ventures
Voith Digital Ventures plays a pivotal role in our Group’s digital transformation. With
its process know-how and human resources, it will continue to support the Hydro,
Paper, and Turbo divisions in developing their respective digital product portfolios.

Our AeroMaXX product for gear units in power generation plants reduces power loss
and oil consumption by 30 %. The solution uses the latest bearing technology andseparates the oil needed for lubrication and cooling, resulting in significant reductions
in ventilation losses. The technology has been tried and tested, and is already being
used successfully by major providers.

A major part of Voith Digital Ventures’ product portfolio is aimed at increasing theefficiency of plants and systems – and thus also reducing negative environmental
impacts. Essentially, the products are divided into two areas: Asset Performance
Management (OnCare) and Process & Operation Controls (OnQuality, OnEfficiency,
OnControl).

To minimize material costs and noise emissions in gear drives, the Voith Turbo Division
Powertrain Technology developed bionic toothing, which is already in mass production
and in use in rail-vehicle gear units.

OnCare products focus on technical availability. Here, Voith aims to accompany
customers on the journey from the current reactive system maintenance towards
prescriptive maintenance, where machines and plants try largely themselves toautonomously correct problems or adjust settings for optimal operation. This meansthat resources are better utilized and material efficiency increases. At the same time,
the risk of unforeseen and therefore often more dangerous failures, which could put
people at risk, is reduced. However, such a fundamental change cannot be achievedat the touch of a button, which means Voith Digital Ventures offers not onlyo thesolution, but also appropriate training and comprehensive process support.

Voith Turbo is one of only a handful of suppliers that can provide a complete powertrain for city buses from a single supplier. The presentation of the Voith E-Drive
System for city buses and the e-bus demonstrator in Heidenheim marked a continuation of our decades of activities in the field of hybrid and electric drive technology. In
addition, in the reporting year Voith Turbo and its partner Transdev GmbH placed anorder for six additional e-buses for use in Schwäbisch Hall and Heidenheim. We arealso currently dealing with enquiries from further bus OEMs for an electric drivetrain.
Fact base Progress on Social and Environmental Impacts – Voith Turbo
Fact base Challenge: Long Service Life

OnQuality, OnEfficiency, and OnControl products focus on quality and runability,
i.e. the proportion of operating time in which the maximum production output isavailable. In this regard, Voith Digital Ventures works particularly closely with other
Voith divisions.
Specific examples from Voith Paper include:
OnEfficiency.Strength enables customers to migrate from offline paper-strength
testing to real-time machine control. By stabilizing quality, the customer can work
closer to the target specification, reducing raw material consumption and out-ofspec production.

•

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1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

OnEfficiency.Dewatering first stabilizes and optimizes the dryness of the paper
web in real time by controlling the vacuum, based on the water content. This
leads to lower energy consumption, more consistent quality, and a smoothermachine run at better runability.
• OnEfficiency.DIP optimizes a paper machine’s deinking system by increasing
the yield and reducing the consumption of bleaching chemicals. This is achievedby optimizing the mechanical and chemical treatment process when removing
ink from waste paper.
•

Together with Voith Hydro, the joint agenda includes automation solutions rightthrough to the digital power plant. This has produced solutions such as HyCon
automation for pumped storage power plants required for grid stabilization. The
increase in wind farms and solar parks means significantly more starts and stops
than originally planned, placing greater strain on turbines and generators. This makes
condition-based maintenance (with OnCare.Asset & OnCare.Health) increasingly
important. Voith solutions can also help regulate river water volumes, which is anadditional task of run-of-the-river power plants.
Completing our list, in the area of mobility our solutions such as OnEfficiency.
DriverAssist and OnEfficiency.SmartAccelerate are helping to reduce the fuel consumption of city buses. The central challenge in this regard is to motivate people toadopt a specific driving style.
Product Responsibility Outlook
We expect a further tightening of environmental protection legislation as well asa continual rise in customer demands regarding the environmental and resource
efficiency of our products – something that affects all our Group Divisions.
We continue to see great potential for all Group Divisions through Industry 4.0. As
part of this, one of the main emphases for Voith Digital Ventures is on the interoperability of various systems, as customers increasingly want to use the opportunity to

Backconnect different systems together seamlessly to form complex systems. Above all,potentials lie in solutions for producing the digital twin of facilities and systems as wellas in the use of artificial intelligence. From an environmental perspective, solutions
that reduce energy and waste are a key issue for customers, as they also positively
impact financial results.
For Voith Hydro, the digitalization of assets for the long-term operation of hydropower
plants will become increasingly important. In this regard, the use of (static) engineering
data from facility planning in conjunction with (dynamic) information from subsequent
operation of the facility will allow customers to fully exploit the potential offered bydigitalization.
Over the coming years Voith Paper expects new emissions legislation, which tookeffect from mid-2018 in the EU and in all signatory countries to the Kyoto Protocol,
to provide considerable stimuli. As a consequence our customers are giving greater
consideration to energy-saving projects. Our machines, products, and modification
projects strongly support this focus. As part of this, Voith Paper is concentrating on
the topic of wastewater treatment and the further closure of water cycles in particular.
In general, Voith Turbo also sees a considerable increase in demand for energy-saving
solutions in the power plant and raw materials segment, driven by various government
incentives. There are also an increasing number of approaches to rolling out systems
and services that monitor and increase the efficiency of entire plants – an area inwhich Voith Turbo works closely with Voith Digital Ventures.
In China, expansion of the high-speed rail vehicle network shows no signs ofstopping. To meet this demand, Voith Turbo is developing reliable final-drive units
and investing in the development of new smart couplings and complete front ends.
The benefits of these include enhanced functionality, ease of use, and low energy
consumption. In doing so we are meeting the need for the modularization andstandardization of functions and interfaces.

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2_Environment

3_Employees

4_Products and Supply Chain

In Europe in particular, Voith Turbo expects a further tightening of rail and commercial
vehicle emission regulations as well as growing customer demands for greater vehicle
energy efficiency.

4.2 Responsibility in the Supply Chain
Purchasing naturally focuses on price, quality, and delivery reliability as well as on
full compliance with all applicable statutory provisions: These include employment,
occupational health and safety, and environmental protection laws, as well as the banson child and forced labor. Differing legal requirements and the constantly growing
demands for documentation of all the above-mentioned aspects continually place highrequirements on our company. The conservation of resources and social responsibility
are firmly anchored in all our supply chains, and are also established in the strategy
and process description in the Voith Purchasing Manual.
Continued High Purchasing Volumes with a Highly Diverse Spectrum of Goods
In the 2017/18 fiscal year we once again purchased goods and services worth over € 2billion from our external suppliers and service providers. The spectrum of the goods
we purchased was, as always, highly diverse. Measured by overall invoicing volume
the purchase of complete plant systems represented the largest item of expenditure,
as in the previous year.

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this regard, fairness is the core element in establishing and maintaining a long-term,
trust-based business relationship. To ensure this we regularly engage in strategic
dialogs with our key business partners.
Clear Conditions: Code of Conduct Sets the Framework
Our Code of Conduct (CoC) is the core guiding principle for our purchasing activities. Together with our General Purchasing Conditions (GPCs), the CoC defines ourunderstanding of partnership-based collaboration and sets out guidelines on dealing
with issues regarding compliance as well as environmental and social standards.
Amongst other stipulations, it requires full compliance with our ban on all forms of
discrimination. In addition, the GPCs contain a directive governing the declarationof hazardous materials.
Our CoC and GPCs are freely accessible on our corporate webpage. They provide thebasis for sustainable agreements with our suppliers, and also require them to place theirown subcontractors and upstream providers under equally strict (or stricter) obligations.
By drawing up country-specific versions of our GPCs we ensure that our Purchasingorganization takes national particularities into account, for instance with regard to payment conditions, environmental requirements, and customs regulations. In the reporting
period we produced country-specific versions for three further national markets.
Fact base Country-specific GPTs
GPCs http://www.voith.com/corp-en/about-us/supplier-ecosystem.html

Fact base Procurement Markets

Fair Business Relationships around the WorldAs an internationally active company Voith currently does business with suppliers
from 90 different countries, above all in the Europe, Americas, and Asia Regions. We
place 80 % of our purchasing volume with around 2,300 suppliers. As a fundamental
principle we work to build long-term relationships with our business partners, andtherefore closely monitor the economic sustainability of our requirements on them. In

CoC www.voith.com/cn/coc-english.pdf

Anchored in Our Organization
Our Corporate Strategic Purchasing (CSP) Department is responsible for sustainability
topics within Voith’s purchasing activities. Besides reporting, the department also
focuses on supplier-specific compliance aspects. Current topics are discussed andagreed in the Purchasing committees on a cross-Group divisional level, together withrepresentatives from each division.

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3_Employees

4_Products and Supply Chain

Employee Development and Training
The Voith Purchasing Training Program was specially developed for our Purchasingorganization. We actively encourage our employees to take part in Voith’s global
further education offer to ensure that our people are always fully up to date on legal
compliance requirements, on using our IT systems, and on supplier negotiations.
The further education measures include a compulsory one-day, onsite training unit
on Compliance, and the regular New Buyer Academy for Purchasing employees. In
the onsite courses, local trainers also present key elements of the respective market
culture and characteristics. Webinars and e-learning offers additionally ensure training
content is globally available and constantly up to date. Seminars and webinars are
now delivered in all Voith regions around the world.
The regular ongoing Compliance training courses mean that in the reporting year
almost all Purchasing employees took part in an onsite course, or in e-learning
sessions. Overall, Purchasing employees received 10,832 training hours in the year
under review, 1,514 of these as part of the Purchasing Training Program.
Fact base Scope of Training

Active Supplier Management
The switchover to “Voith SLM & eSourcing” (Supplier Lifecycle Management), theSupplier Management System we introduced in the 2016/17 fiscal year, is now complete. The roll-out process was also used to correct and eliminate redundant andobsolete datasets. The new solution is not only more stable and a major technicalimprovement, it also covers more Voith locations and its clearer layout makes it moreuser-friendly. Suppliers can log into Voith SLM & eSourcing as users directly via theVoith homepage, update their details themselves, complete survey questionnaires,
upload certificates, and respond to calls for tender.

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The system also comprises further supplier management aspects, in addition to theCompliance and Sustainability Checks as well as the Supplier Evaluations as detailed
below: These aspects include a document database for contracts and contractuallyrelated documents such as Non-disclosure Agreements (NDAs), as well as a certificate
database that includes quality certifications. Beyond this we are working to implement a uniform supplier classification within the system. In the medium term a risk
management database and an audit report file are also planned.
A further core function of Voith SLM & eSourcing is eSourcing itself, aimed at raisingtransparency in purchasing processes. This makes it possible for suppliers to process
requests online via a unified platform that additionally interfaces with the Voith SAP
system. Price negotiations on individual tenders can also be carried out online.
To minimize risks in the overall purchasing process we continue to require regularself-assessment documentation from our suppliers. The Group-wide standardized
Supplier Questionnaires ensure that the data from these Supplier Self-assessments
are collated and processed in a logical and optimally coordinated way. As at theend of the reporting period the system already contained a valid Compliance andSustainability Check for over 3,000 Voith suppliers. The suppliers assessed in thisway represented 68 % (previous year: 55 %) of our overall supplier expenditure.
Alongside material-specific questionnaires, the Supplier Self-assessment on HSE(occupational safety, health, and environmental protection) complements our SupplierSelf-assessment initiatives.
Fact base Supplier Self-assessment

In addition to the Supplier Self-assessment, working together with our buyers our
employees in the specialist departments also assess our active suppliers. A standardized procedure with transparent criteria ensures cross-Group comparability of theresults. While in previous years we worked mainly to achieve a high supplier-coverage

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1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

to supplier-expenditure ratio in our assessments, we are now increasingly switching
to case- and classification-based assessment: This new approach allows us to focus
more closely on the content of our supplier interactions and business relationships.
Although we once again achieved a higher Supplier Evaluation rate (49 %) in thereporting period versus the preceding year (36 %), the fact that current assessments
for almost 1,000 individually identified suppliers worldwide are visible in the systemis far more important.
These Supplier Self-assessments continue to include sustainability criteria, from which
we derive the Sustainability Ratio: This shows our specialists’ subjective assessmentof our suppliers regarding compliance with environmental and social standards. The
business partners we assessed in the reporting period reached an average ratio of
87.4 %, which broadly matches the ratio achieved in the previous year.
Fact base Evaluations of Suppliers

The new reporting system was also rolled out in Purchasing within the period underreview. This creates higher transparency and provides additional opportunities foranalysis, together with a clear improvement in user-friendliness. The tool interfaces
with all relevant Enterprise Resource Planning (ERP) systems, thus making the latest
data constantly available.

before entering into a business relationship with them. For instance, as part of the
new creditor screening process our Critical Country Check establishes whether the
specific supplier is based in a risk country, or is even blacklisted (Blocked List Check).
Supplier-data consistency, including their banking records, is double-checked by atleast two Voith specialists.
Consistent Response to Violations
If a supplier violates applicable laws or the Voith Code of Conduct, or loses their
creditworthiness, our Purchasing organization is required to terminate the business
relationship and to place the respective supplier on the Group’s central blacklist.
Violations of Voith’s occupational safety, health, and environmental protection standards can also trigger Group-wide blacklisting.
Voith Master Data Management is responsible for the effective blocking of a supplierin our systems. This department is being progressively expanded and is to oversee
Group-wide, cross-Functional master data management.
Suppliers can also report violations of sustainability standards in the supply chain on
their own initiative: The Voith Compliance Helpdesk is available to them, just as it is
to our own employees, and will handle their report anonymously.
Fact base Supplier Compliance

Process Enables Checks Prior to Business RelationshipThe newly established (supplier) creditor process comprises a set of differing
Compliance and Sustainability Checks that enable Voith to screen a potential supplier

Back

GRI Index

2018

56

1_Strategy and Integrity

2_Environment

3_Employees

Back

4_Products and Supply Chain

General Disclosures
Disclosures

Comment

Reference

Organizational profile
102-1

Name of the organization

3

102-2

Activities, brands, products, and services

3–4

102-3

Location of headquarters

3

102-4

Location of operations

3
AR 2018: 144–145

102-5

Ownership and legal form

3

102-6

Markets served

Fact base: International Focus (67)102-7

Scale of the organization

4
Fact base: Economic Indicators (66)Fact base: Workforce Structure (81)AR 2018: 136–137

102-8

Information on employees and other workers

26
Fact base: Workforce Structure (81)Fact base: Workforce by Employment Type (81–82)

102-9

Supply chain

52
Fact base: Procurement Markets (98)102-10Significant changes to the organization and its
supply chain

102-11

Precautionary Principle or approach

As a family-owned company with a long-term
focus, Voith is committed to a precautionary
approach. This is anchored in our management
and Group Directives, for example in the
Health, Safety & Environmental Protection(HSE) Group Directive.

102-12External initiatives

Voith implements the principle of sustainability
in its core processes

102-13

4–6

9–11
Fact base: External Charters and Principles (67)

Membership of associations

Fact base: Memberships and Association (67)Statement from senior decision-maker2

102-16

Values, principles, standards, and norms of behavior

9–11; 52

102-17

Mechanisms for advice and concerns about ethics

10

Strategy102-14
Ethics and integrity

Fact base: Escalation Paths (68)57

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures

Back

4_Products and Supply Chain

Comment

Reference

Governance102-18Governance structure

3, 4–5AR 2018: 54–59

Stakeholder engagement102-40

List of stakeholder groups

7–8

102-41

Collective bargaining agreements

27

102-42

Identifying and selecting stakeholders

6–7

102-43

Approach to stakeholder engagement

6–7, 38

102-44

Key topics and concerns raised

7, 43–44

Fact base: Collective Bargaining Agreements (83)Fact base: Customer Dialogue (93)
Reporting practice102-45

Entities included in the consolidated financial statements

89
AR 2018: 144–145

102-46

Defining report content and topic Boundaries

7–8

102-47

List of material topics

7–8

102-48

Restatements of information

99

102-49Changes in reporting

99

102-50

Reporting period

99102-51

Date of most recent report99102-52

Reporting cycle

99102-53

Contact point for questions regarding the report

100

102-54Claims of reporting in accordance with the GRI Standards

99102-55

GRI content index

99102-56External assurance

99

58

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures

Back

4_Products and Supply Chain

Comment

Reference

Topic-specific Standards
Economic Performance
103/201

Management Approach

4–6

201-1

Direct economic value generated and distributed

4
Fact base: Economic Indicators (66)Fact base: Donations and Sponsorship (68)
Fact base: Expenditures for Employees (83)201-3

Defined benefit plan obligations and other retirement plans

201-4

Financial assistance received from government

AR 2017: 163
No significant financial assistance in thereporting period.

Anti-corruption
103/205

Management Approach

9–11, 52–53
Fact base: Escalation Paths (68)http://www.voith.com/corp-en/coc-english.pdf

205-2

Communication and training about anti-corruption policies
and procedures

9–10
Fact base: Compliance Training (67)

Anti-competitive Behavior
103/206

Management Approach

9–11, 52–53
Fact base: Escalation Paths (68)http://www.voith.com/corp-en/coc-english.pdf

206-1

Legal actions for anti-competitive behavior, anti-trust, andmonopoly practices

For reasons of confidentiality, the number
and type of complaints is not communicatedexternally.

10, 54
Fact base: Breaches of Compliance Regulations (68)
Fact base: Supplier Compliance (98)

Environmental
Materials
103/301

Management Approach

14–19

301-1

Materials used by weight or volume

22
Fact base: Materials Used (76)301-2

Recycled input materials used

22
Fact base: Materials Used (76)59

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures

Back

4_Products and Supply Chain

Comment

Reference

Energy103/302

Management Approach

14–19

302-1

Energy consumption within the organization

19–21
Fact base: Energy Consumption by Scope (70–71)
Fact base: Production-related Energy Consumption (72)Fact base: Proportion of Direct and Indirect Energy (72)Fact base: Renewable Energies (72)Fact base: Electricity Mix (72)302-2Energy consumption outside of the organization

19–21
Fact base: Energy Consumption: Total (70)
Fact base: Indirect Energy Consumption (Scope 3) (71)Fact base: Proportion of Direct and Indirect Energy (72)302-3Energy intensity

17, 20Fact base: Production-related Energy Consumption (72)302-4Reduction of energy consumption

19–21
Fact base: Energy Saving Measures and Further Potentials
(71)

302-5

Reductions in energy requirements of products andservices

45–51

103/303

Management Approach

14–19

303-1

Interactions with water as a shared resource

23–24

303-2

Management of water discharge-related impacts

24–25

303-3

Water withdrawal

17, 23–24

303-4

Water discharge

Fact base: Progress on Social and Environmental Impacts –Voith Hydro (96–97)

Water

Fact base: Water Consumption (78)24Fact base: Wastewater: By Method of Discharge (79)Fact base: Wastewater: Quality (80)
Emissions
103/305

Management Approach

14–19

305-1

Direct (Scope 1) GHG emissions

21–22
Fact base: GHG Emissions: Recording Methodology (73)Fact base: GHG Emissions: Scope 1 (74)60

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures
305-2

Back

4_Products and Supply Chain

Comment
Energy indirect (Scope 2) GHG emissions

Reference
21–22
Fact base: GHG Emissions: Recording Methodology (73)Fact base: GHG Emissions: Scope 2 (74)305-3

Other indirect (Scope 3) GHG emissions

21–22
Fact base: GHG Emissions: Recording Methodology (73)Fact base: GHG Emissions: Scope 3 (74)Fact base: Transport Emissions (75)305-4

GHG emissions intensity

21–22
Fact base: GHG Emissions: Specific (Scope 1 and 2) (75)305-5Reduction of GHG emissions

21–22
Fact base: GHG Emission Reduction Measures (75)305-6Emissions of ozone-depleting substances (ODS)

Fact base: Air Pollutants (76)305-7

Nitrogen oxides (NOX ), sulfur oxides (SOX ), and othersignificant air emissions

Fact base: Air Pollutants (76)103/306

Management Approach

14–19

306-2

Waste by type and disposal method

23

Effluents and Waste

Fact base: Volume of Waste (77)Fact base: Waste-saving Measures and Further
Potentials (77)Fact base: Waste Disposal (78)306-3Significant spills

306-4

Transport of hazardous waste

Voith is not aware of any significant incidents.
23
Fact base: Hazardous Waste (78)306-5Water bodies affected by water discharges and/or runoff

24–25
Fact base: Water and Neighboring Habitat Protection (80)Environmental Compliance
103/307

Management Approach

307-1

Non-compliance with environmental laws and regulations

9–11, 15–16
Voith is not aware of any significant incidents

16
Fact base: Breaches of Compliance Regulations (68)61

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures

Back

4_Products and Supply Chain

Comment

Reference

Supplier Environmental Assessment
103/308

Management Approach

52–54

308-1

New suppliers that were screened using environmental
criteria

52–54
Fact base: Supplier Self-assessment (98)Fact base: Evaluations of Suppliers (98)SocialEmployment
103/401

Management Approach

26–27

401-1

New employee hires and employee turnover

30
Fact base: Employment Length (86)Fact base: Employee Turnover (87)Fact base: New Hirings (88)401-3

Parental leave

Fact base: Parental Leave (85)Labor/Management Relations
103/402

Management Approach

26–27

402-1

Minimum notice periods regarding operational changes

Fact base: Details on Upholding Employee Rights (83)

Occupational Health and Safety
103/403

Management Approach

33–37

403-1

Occupational health and safety management system

33–35

403-2

Hazard identification, risk assessment, and incident
investigation

33–34

403-3

Occupational health services

35–37

403-4

Worker participation, consultation, and communication on
occupational health and safety

34

403-5

Worker training on occupational health and safety

35–37

403-6

Promotion of worker health

37

403-7

Prevention and mitigation of occupational health andsafety impacts directly linked by business relationships

36

Fact base: Approach to Preventing or Dealing With Negative
Health and Safety Impacts (90)Fact base: Employee Representation in Committees (90)Fact base: Occupational Safety Training (92)62

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures

Back

4_Products and Supply Chain

Comment

Reference

403-8

Workers covered by an occupational health and safety
management system

33

403-9

Work-related injuries

34
Fact base: Occupational Accidents (90–92)

Training and Education
103/404

Management Approach

26–27, 30–33

404-1

Average hours of training per year per employee

32–33
Fact base: Training and Education & Career Development
(89)

404-2

Programs for upgrading employee skills and transition
assistance programs

30–33

404-3

Percentage of employees receiving regular performanceand career development reviews

32
Fact base: Training and Education & Career Development(89)

Diversity and Equal Opportunity
103/405

Management Approach

26–30

405-1

Diversity of governance bodies and employees

27–30
Fact base: Employment Ratio of People with Disabilities (83)Fact base: Diversity in the Management Team and in the
Workforce (84)
AR 2018: 60
http://voith.com/corp-en/about-us/company/corporateboard-of-management.html

Non-discrimination
103/406

Management Approach

26–30

406-1

Incidents of discrimination and corrective actions taken

27–28

Freedom of Association and Collective Bargaining
103/407

Management Approach

26–27, 52–54
Fact base: Details on Upholding Employee Rights (83)http://www.voith.com/corp-en/coc-english.pdf

407-1

Operations and suppliers in which the right to freedom of
association and collective bargaining may be at risk

Voith is not aware of any significant incidents

54
Fact base: Details on Upholding Employee Rights (83)63

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures

Back

4_Products and Supply Chain

Comment

Reference

Child Labor
103/408

Management Approach

9–11, 27, 52
http://www.voith.com/corp-en/coc-english.pdf
http://voith.com/de/brochures_modern_slavery_en.pdf

408-1

Operations and suppliers at significant risk for incidents ofchild labor

Voith is not aware of any significant incidents

54

Forced or Compulsory Labor
103/409

Management Approach

9–11, 27, 52
http://www.voith.com/corp-en/coc-english.pdf
http://voith.com/de/brochures_modern_slavery_en.pdf

409-1

Operations and suppliers at significant risk for incidents offorced or compulsory labor

Voith is not aware of any significant incidents

54

103/410

Management Approach

We ensure our employees are protected mainly http://www.voith.com/corp-en/coc-english.pdf
by working together with external service
http://voith.com/de/brochures_modern_slavery_en.pdf
providers. Like all our service providers, they
are subject to Voith’s General Purchasing
Conditions. Like Voith’s own security
personnel, they are likewise obligated tocomply with the Code of Conduct.

410-1

Security personnel trained in human rights policies orprocedures

Security service providers are obligated tosupport compliance with the Code of Conduct
by suitable means. Voith does not currently
have any data on training held by our service
providers.

Security Practices

Fact base: External Security Personnel (68)

Human Rights Assessment
103/412

Management Approach

412-2

Employee training on human rights policies or procedures

9–11, 27, 52
http://www.voith.com/corp-en/coc-english.pdf
9–10, 52–53
Fact base: Compliance Training (67)Fact base: Scope of Training (98)412-3

Significant investment agreements and contracts that
include human rights clauses or that underwent humanrights screening

Global respect for basic human rights isenshrined in our Code of Conduct. All
investment decisions are subject to this code.

64

1_Strategy and Integrity

2_Environment

3_Employees

Disclosures

Back

4_Products and Supply Chain

Comment

Reference

Supplier Social Assessment
103/414

Management Approach414-1

New suppliers that were screened using social criteria

9–11, 52–54
When reviewing existing and new
suppliers,Voith always takes their working
practices into consideration. A separate
evaluation of the percentage of new suppliers
that have been reviewed is not available.

52–54
Fact base: Supplier Self-assessment (98)Fact base: Evaluations of Suppliers (98)

Public Policy
103/415

Management Approach

9–11

415-1

Political contributions

12

Customer Health Safety
103/416

Management Approach

44–45
Fact base: TRQM (93)Fact base: Quality Management in Our Group Divisions(94–95)

416-1

416-2

Assessment of the health and safety impacts of productand service categories
Incidents of non-compliance concerning the health andsafety impacts of products and services

44–45
Fact base: Quality Management in Our Group Divisions(94–95)Voith did not receive reports of any significant
incidents in the reporting period.

Customer Privacy
103/418

Management Approach

418-1

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

11
Voith did not receive reports of any significant
incidents in the reporting period.

Socioeconomic Compliance
103/419

Management Approach

419-1

Non-compliance with laws and regulations in the socialand economic area

9–11
Voith did not receive reports of any significant
incidents in the reporting period.

Fact base2018

n.s. = not significant; n.a. = not available
n.d. = no data; n.r. = not recorded

66

1_Strategy and Integrity

2_Environment

3_Employees

Back

4_Products and Supply Chain

1. Bases for Our Actions
1.1 Our Profile
Economic Indicators

FY 2017/18

FY 2016/171)

FY 2015/16

4,209

4,224

4,252

Key Economic Figures in € millions
Revenues
Operating result before non-recurring items

170

225

275

Income before taxes

152

694

140

4,209

4,224

4,252

Operating costs

2,905

2,880

2,863

Employee wages and benefits

1,447

1,408

1,401

Payments to providers of capital

25

76

89

Payments to government

–

82

51

Community investments

n.d.

n.d.

n.d.

Economic value retained

53

596

29

1,194

1,159

1,155

Direct Economic Value Generated and Distributed in € millions
Direct economic value generated (= revenues)
Economic value distributed

Expenditures for Employees in € millions
Wages and salaries
Social security contributions, retirement pensions, and assistance

253

240

247

FY 2017/18

FY 2016/17

FY 2015/16

Voith Hydro

1,103

1,381

1,388

Voith Turbo

1,302

1,283

1,397

Voith Paper

1,746

1,527

1,456

Business Area Portraits in € millions
Revenues

Voith Digital Ventures2)

40

13

–

Germany

563

558

n.d.

Europe

1,185

1,096

n.d.

Americas

1,067

1,195

n.d.

Asia

1,253

1,111

n.d.

Other

141

264

n.d.

77

106

105

Profit from operations
Voith Hydro
Voith Turbo

76

91

144

Voith Paper

114

107

76

−46

−43

–

Voith Digital Ventures
1)
2)

2)

Data provided for the 2016/17 fiscal year were corrected retrospectively.
Independent segment only since 2016/17; previously in process of being established67

1_Strategy and Integrity

International Focus

2_Environment

3_Employees

Back

4_Products and Supply Chain

Locations by Regional Distribution

FY 2017/18

FY 2016/17

FY 2015/16

13

13

12

http://voith.com/corp-en/about-us/markets-locations.html

Sales Markets in %Germany
Europe excluding Germany

28

26

28

Americas

26

28

27

Asia

30

27

27

Other

3

6

6

1.2 Strategy and Organization
Memberships and Association

Voith and its Group companies represent their interests through approx. 570 different association memberships, on which we spend around € 2.2 million
annually on membership fees.
Voith association activities by substantial membership contributions:
VDMA – Verband Deutscher Maschinen- und Anlagenbauer e.V.
(German Engineering Federation)• SWM – Südwestmetall Verband der Metall- und Elektroindustrie Baden-Württemberg
e.V. (Baden-Württemberg Employers’ Association of the Metal and Electrical Industry)• FVA – Forschungsvereinigung Antriebstechnik e.V.
(Research Association for Power Transmission Engineering)• DIN – Deutsches Institut für Normung e.V. (German Standards Institute)•

VDB – Verband der Bahnindustrie in Germany e.V.
(German Railway Industry Association)• Förderkreis der Deutschen Industrie e.V.
(Society for the Advancement of German Industry)• IHA – International Hydropower Association• Paper Machine Clothing Association• ATC – Austrian Technology Corporation GmbH
• NIFE – Union des Industries Ferroviaires Européennes(Union of the European Railway Industries)•

1.3 Values and Compliance
External Charters and Principles

The Voith Group’s Code of Conduct sets out clear standards, which are aligned with established external charters and principles.

Compliance Training

Number of Employees who Underwent Further Training
Management from the upper four levels, new managers at the Voith Academy,
Sales, Sourcing (1 day)

949

542

241

Decentralized training by compliance officer (1.5 hours)

1,095

1,479

904

Instruction by supervisor (0.5 hours)

1,659

2,699

2,710

17

34

30

Management from the upper four levels, new managers at the Voith Academy,
Sales, Sourcing (1 day)

34

23

12

Decentralized training by compliance officer (1.5 hours)

n.r.

n.r.

n.r.

Compliance officers (2 days)
Number of Training Sessions

2

2

2

Employees trained in compliance in %Compliance officers (2.5 days)

100

100

100

Compliance officers trained in %

100

100

100

68

1_Strategy and Integrity

External Security Personnel
Breaches of Compliance
Regulations

2_Environment

3_Employees

Back

4_Products and Supply Chain

For cost reasons, Voith appoints external safety personnel at the majority of its locations and construction sites. Voith does not train these external safety
personnel on the Voith Code of Conduct.
Compliance Helpdesk Number

FY 2017/18

FY 2016/17

FY 2015/16

0

0

0

of which reported violations against environmental standards

0

0

0

of which reported violations against social standards

0

0

0

1.64

2.95

1.99

Reports via the Compliance Helpdesk (no complaints regarding suppliers)

Comment: The Voith Code of Conduct is an integral part of our compliance training.
Escalation Paths

Compliance Officer
GD Compliance Officer• Compliance Committee• Corporate Board of Management• Supervisory Board••

1.4 Responsibility for Society
Donations and Sponsorship

Donations and Sponsorship in € millions
Voith Groupof which donations

0.71

1.91

0.80

of which sponsorships

0.93

1.04

1.19

28

54

29

Sponsorship Aid by Project in %Education
Social affairs

12

9

8

Sport

52

32

57

Culture7

37

Germany

83.6

85.7

86.1

Europe excluding Germany

1.5

5.9

1.7

Sponsorship Aid by Region in %Americas

3.8

3.1

6.6

Asia

8.3

3.8

4.3

Other

2.8

1.5

1.3

69

1_Strategy and Integrity

2_Environment

3_Employees

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4_Products and Supply Chain

2. Environment
2.1 Environmental Management Approach
2.1.1 Operational Environmental Protection
Certifications

FY 2017/18

FY 2016/17

FY 2015/16

9

n.d.

n.d.

Existing Voith-location Certifications
ISO 50001
ISO 14001

55

56

58

ISO 9001

63

64

69

OHSAS 18001

59

57

60

ISO 50001

21

n.d.

n.d.

ISO 14001

84

77

70

Degree of Coverage based on Employees in %ISO 9001

85

81

76

OHSAS 18001

84

78

71

Noise Complaints

We work tirelessly to minimize noise pollution at our locations and rigorously follow up on any information or complaints. In the reporting period we received nocomplaints concerning noise.

Work Materials and Hazardous
Materials Approval Process

In principle, before we introduce any new work materials or hazardous materials they first undergo a central and a local approval process.
First, specific material-related information and a safety data sheet for the material to be approved are drawn up and logged. The material-related information is thenchecked to see whether the material has already been recorded in the central hazardous materials database. If not, it is entered into the database.
This is followed by the central approval process, in which a systematic and automated check is made against applicable legal regulations (e.g. the ECHA Candidate
List or REACH annexes).
With prior central approval, downstream local approval can focus on workplace and site-specific topics (e.g. water protection area, local regulatory requirements,
storage location, on-site transportation, disposal). This means that the use of centrally approved materials can still be blocked at a local level for location-specificreasons.

Nanotechnology

Nanoparticles are embedded in the following products:
Voith Turbo: Cooling systems for monorails, locomotives, railcars, special vehicles and high-speed trains. The particular coating process is performed bya service provider, and currently less than 10 kg of material is in field use.
• Voith Paper: Calendar and roll covers in the area of finishings. The NanoPearl coatings represent the latest in calendar cover technology thanks to an
improved nanoparticle filler system. According to the manufacturer’s statement, the quartz particles are produced in situ with the resin and are not released
at any stage of the manufacturing process. When rubbed during use, the particles are still surrounded by plastic, so pose no hazard. No particles are
released in thermal processing either.
•

2.1.2 Efficient Use of Resources
Environmental Goals

Environmental Goals in %Reduction in specific energy consumption compared to 2011/12

−17.6

−14.8

−15.6

Reduction in specific freshwater consumption compared to 2011/12

−34.3

−34.1

−31.7

Reduction in specific waste volume compared to 2011/12

−23.7

−31.6

−18.4

70

1_Strategy and Integrity

Hot-spot Analysis Methodology

2_Environment

3_Employees

Back

4_Products and Supply Chain

When conducting a hot-spot analysis, the consumption of each control and analysis level (i.e. region, Group Division, location, system, process) is determinedand displayed graphically. Data is prepared both according to physical consumption and by associated cost, bringing transparency to “hot-spots” with highconsumption levels and costs. Based on this, we develop and approximately evaluate project ideas before gradually developing them further using a stagegate process through to implementation. As part of this, we employ economic and environmental evaluation criteria, in accordance with our Green Controlling
cycle. We regularly review the distribution of consumption based on changing patterns and general conditions (location activities, economic activity, changes
to the fleet of machines and plant, etc.).

2.2 Performance in the Reporting Period
2.2.1 Energy Efficiency and Greenhouse Gas Emissions
Energy Consumption:
Total

FY 2017/18

FY 2016/17

FY 2015/16

628,788641,736

635,647

Production-related energy consumption

437,134

453,012452,294

Business travel

52,64853,06659,581

Logistics

139,006

135,658

123,772

Scope 112

13

5

Scope 24

4

0

Scope 30

26

25

Total Energy Consumption in MWh

Total Energy Consumption in %Data-gathering: The required unit of data is gathered, validated, and evidenced centrally each month by means of a data-gathering process at the locations.
The units are converted in the database.
Energy use (total, renewable, non-renewable); total biomass + renewable energy sources; total energy use for own fleet from non-renewable energy sources
was 2,263,635 GJ.
Direct Energy Consumption:
Scope 1

Direct Energy Consumption (Scope 1) in MWh
Direct energy consumption in production

127,557

137,286

143,687

Direct energy consumption of the Voith vehicle fleet

22,491

22,492

24,435

5,005

5,295

5,432

17,485

17,19719,003Natural gas in %

82

83

82

Company cars

1)

Logistics
Heating oil in %

4

4

4

Diesel in %

6

6

6

LPG in %77

7

Biomass/biogenic energy sources in %

–

–

–

<1

<1

<1

Other renewable energy sources and captive generation of renewable energy in %Data-gathering: The required unit of data is gathered, validated, and evidenced centrally each month by means of a data-gathering process at the locations.
The units are converted in the database.

1)

Company cars do not include: Taxis, employees’ personal cars, rental cars.

71

1_Strategy and Integrity

Indirect Energy Consumption:
Scope 2

Indirect Energy Consumption:
Scope 3

2_Environment

3_Employees

Back

4_Products and Supply Chain

Indirect Energy Consumption (Scope 2) in MWh

FY 2017/18

FY 2016/17

FY 2015/16

309,577

315,726

308,606

Electricity

240,417

242,735

249,206

Long-distance heating

61,33863,77458,305

Steam

7,822

9,216

1,096

Energy sold

346

125

242

Indirect energy consumption (purchased and captive, only if the fuels are notincluded above)

Indirect Energy Consumption (Scope 3)
Business travel in MWh

47,642

47,771

54,149

Rail in %

1

<1

<1

Car (not belonging to the Voith fleet, e.g. rental cars) in %

7

7

6

Flight (short-distance) in %

4

2

3

Flight (long-distance) in %

88

90

91

Logistics (upstream and downstream) in MWh

121,520

118,461

104,769

Rail in %

<1

<1

<1

Truck in %

14

14

11

Ship in %6

6

4

Flight in %

81

80

85

Comment: Only the stated uses of energy and greenhouse gas emissions have as yet been able to be recorded with reference to Scope 3.
We are working to include other significant uses of energy and sources of emissions in our calculations.
Energy Saving Measures andFurther Potentials

Reduction of Energy Consumption as a Direct Consequence of Conservation and Efficiency Drives in MWh
Reduction in energy consumption

22,964

9,789

23,634

Among other achievements, we realized the following savings in the reporting year:
1.1 GWh/a (360 t CO2e/a) through lighting projects at 13 locations, especially in Garching and Düren (Germany), York (USA), and Haaksbergen(Netherlands) (870 MWh/a / 240 t CO2e/a)• 1.0 GWh/a (730 t CO e/a) through optimization of compressed air supplies and consumers at locations in Kunshan and Shanghai (China), St. Pölten
2(Austria), and Garching (Germany)• 330 MWh/a (100 t CO e/a) through improved stand-by controls at our location in Crailsheim (Germany)2• 170 MWh/a (40 t CO e/a) through improved insulation of tempering furnaces at our location in Heidenheim (Germany).
2•

Energy saving potential since FY 2011/12 in GWh

130.8

123.7

107.0

of which achieved in the FY

23.0

9.8

23.6

savings already achieved since FY 2011/12

106.3

83.4

73.6

Method: The relevant Ecological Business Manager checks the effectiveness of measures recorded at location level. A special tool is used tocheck measures centrally.

72

1_Strategy and Integrity

Production-related Energy
Consumption

2_Environment

3_Employees

Back

4_Products and Supply Chain

Specific Production-related Energy Consumption (Scope 1 and 2)
in MWh/€ millions revenues
Specific energy consumption/greenhouse gas emissions (Scope 1 and 2)

FY 2017/18

FY 2016/17

FY 2015/16

103.9

107.3

106.4

Production-related Energy Consumption (Scope 1 and 2) by Region
Total energy consumption in MWh

437,134

453,012452,294

Germany in %

36.7

35.8

35.1

Europe excluding Germany in %

12.5

13.2

14.2

Americas in %

31.1

32.1

34.5

Asia in %

19.6

18.7

16.1

Other in %

<1

<1

<1

Reduction of Production-related Energy Consumption in %Reduction of production-related energy consumption versus previous year

−3.5

0.2

−7.6

Reduction of direct energy consumption

−7.1

−4.5

−6.5

Reduction of indirect energy consumption

−1.9

2.3

−8.1

Key Drivers of Energy Consumption in %Proportion of Direct andIndirect Energy

Heating and cooling energy

30.5

31.1

31.9

Paper machine clothing production

25.2

26.2

26.6

Machine tool operation

4.2

3.8

5.8

São Paulo foundry

6.0

5.8

5.0

Proportion of direct energy

29.2

30.3

31.8

Proportion of indirect energy

70.8

69.7

68.2

Proportion of direct energy

19.2

17.8

14.8

Proportion of indirect energy

80.8

82.2

85.2

Direct and Indirect Energy in %Energy Mix Largely Unchanged
Renewable Energies

Electricity Mix

Energy from Renewable and Non-renewable Resources in %Electricity Mix in %Renewable resources

35.4

33.6

26.7

Non-renewable resources

64.6

66.4

73.3

73

1_Strategy and Integrity

Environmental Impact of Buildings

2_Environment

3_Employees

Back

4_Products and Supply Chain

Voith takes environmental aspects fully into consideration when we construct new plants or modify existing ones. In doing so, we involve environmental
experts from the regional HSE service organization in the project right from the planning phase. They provide expert advice on minimizing environmental
impacts and ensuring compliance with applicable legislative requirements, and also assist with approval processes. When it comes to new plant constructions
and modifications, our experts focus particularly on measures to improve the energy and water efficiency of the building. The procedure they follow is set
out in an Environmental Group Directive, which is part of our HSE Group Directive. This also lays down energy and resource efficiency standards for the
procurement of new or replacement production systems and their components.
Our actions also receive external recognition. At our production facility in Kunshan, China, one production building and the new Training Center are certified to
the LEED Gold Standard.

GHG Emissions:
Recording Methodology

We calculate our greenhouse gas emissions by energy source and based on specific CO2e factors. We derive these from a database as CO2 equivalents.
Since the 2016/17 fiscal year our global locations have reported on and evidenced their location-specific CO2 factor for power, replacing country- or regionspecific factors. This allows us to achieve even greater accuracy. As part of this change, we also adjusted the factors for district heating and steam, whichgave rise to retroactive changes in previous years of approx. 6,000 tonnes. We now also gather data on the GHG effect of refrigerant emissions. Other GHG
factors are now taken from DEFRA or the GaBi database.
Recording emissions as CO2 equivalents based on conversion factors also allows us to factor in the emission of other greenhouse gases such as CH4, N2O,
HCF, PFC, and SF6.

GHG Emissions:
Total

Greenhouse Gas Emissions in t CO2e

FY 2017/18

FY 2016/17

FY 2015/16

204,866

210,752

203,637

Production-related energy consumption

153,408

158,876

153,168

Business travel

14,324

14,397

16,308Logistics

37,13437,48034,161of which Scope 1

15

16

18

of which Scope 2

62

62

60

of which Scope 3

23

22

21

153,408

158,876

153,168
26

Total energy consumption

Greenhouse Gas Emissions Total in %Production-related Greenhouse Gas Emissions (Scope 1 and 2) by Region
Total energy consumption in t CO2e
Germany in %29

28

Europe excluding Germany in %

4

5

7

Americas in %

26

28

35

Asia in %

41

39

33

Other in %

<1

<1

<1

74

1_Strategy and Integrity

GHG Emissions:
Scope 1

2_Environment

3_Employees

Back

4_Products and Supply Chain

Direct Greenhouse Gas Emissions (Scope 1)
Direct energy consumption in production in CO2e
Direct energy consumption of the Voith vehicle fleet in CO2e

FY 2017/18

FY 2016/17

FY 2015/16

24,67526,44230,554

6,149

6,095

6,869

Company cars1)

1,267

1,312

1,463

Logistics

4,882

4,783

5,406

2,706

1,928

n.a.

Natural gas in %

78

79

79

Heating oil in %

6

6

5

Diesel in %

8

7

8

LPG in %878Volatile greenhouse gas emissions in CO2e

Biomass/biogenic energy sources in %

–

–

–

<1

<1

<1

0

0

0

126,028

130,506

122,614

Electricity

105,854

108,541

107,228

Long-distance heating

15,795

16,46914,989

Steam

4,379

5,495

397

Energy sold

194

70

118

13,057

13,084

14,845

<1

<1

<1

8

6

6

Other renewable energy sources and captive generation of renewable energy in %Other in %Comment: In FY 2016/17 volatile GHG emissions were recorded for the first time as production-related emissions.
GHG Emissions:
Scope 2GHG Emissions:
Scope 3

Indirect Greenhouse Gas Emissions (Scope 2) in t CO2e
Indirect energy consumption (purchased and captive only if the fuels are notincluded above)

Indirect Greenhouse Gas Emissions (Scope 3)
Business travel in CO2e
Rail in %Car (not belonging to the Voith fleet, e.g. rental cars) in %Flight (short-distance in %

4

2

3

Flight (long-distance) in %

89

92

91

Logistics (upstream and downstream) in t CO2e

33,512

32,69728,755

Rail in %

<1

<1

<1

Truck in %

15

16

13

Ship in %6

6

4

Flight in %

79

78

83

Comment: Only the stated uses of energy and greenhouse gas emissions have as yet been able to be recorded with reference to Scope 3. We are working toinclude other significant uses of energy and sources of emissions in our calculations.
1)Company cars do not include: Taxis, employees’ personal cars, rental cars.

75

1_Strategy and Integrity

2_Environment

3_Employees

Back

4_Products and Supply Chain

GHG Emissions:
Location-based vs. Market-based

We calculate both location-based and market-based emissions. By considering market-based factors, we can additionally check the location-based factors.
In the reporting year the difference between our location-based factors and the IEA [International Energy Agency] market-based factors was 3,396 t CO2e. The
GHG factors for electricity determined by our locations are, on average, slightly higher than the market-based factors (IEA 2016). The biggest difference is in
China, where our locations are registering significantly worse emission factors than the IEA factors owing to the high proportion of hard coal. The difference inthe reporting year is 10,942 t CO2e. By contrast, the electricity factor at our main facility in Heidenheim is much better than the German average thanks to thehigh proportion of natural gas and renewable energies. The difference in the reporting year was 7,367 t CO2e.

GHG Emissions:
Specific (Scope 1 and 2)

Specific Production-related Greenhouse Gas Emissions (Scope 1 and 2)
in t CO2e/€ millions revenues

FY 2017/18

FY 2016/17

FY 2015/16

36.4

37.6

36.0

7,367

7,456

10,238Reduction in production-related CO2e emissions versus previous year in %

−3.4

1.9

−4.1

Reduction in direct CO2e emissions in %

−6.7

−13.5

−6.6

Reduction in indirect CO2e emissions in %

−3.4

5.7

−3.5

Specific greenhouse gas emissions (Scope 1 and 2)
GHG Emission Reduction
Measures

Reduction in Energy Consumption as a Direct Consequence of Conservationand Efficiency Drives
Reduction in GHG emissions in t CO2e
Reduction in Production-related CO2e-Emissions

See energy consumption reduction measures
Transport Emissions

Business trips
Wherever possible we avoid taking unnecessary business trips, which is why we are increasingly using video and telephone conferencing in our globalorganization to save on travel expenses and allow speedy coordination.
Furthermore, every quote provided by our travel agency partner automatically shows the CO2e emissions generated by a particular means of transport,
providing transparency to Voith travelers when choosing their means of transport in terms of CO2e emissions.
In addition we predominantly lease the vehicles in our vehicle fleet, and we replace them every three years with the next generation of lower-emission vehicles.
In the reporting period we reduced long-haul flights by 14.5 % to 77.2 million km (previous year: 90.2 million km). There was no significant year-on-yearchange in the volume of business travel by rail and road.
Logistics
Our transport-related CO2e emissions – caused mainly by our external logistics service providers – rose year on year by 2.5 % to 33,512 t (previous year:
32,697 t). This increase was due mainly to the significantly higher transport volumes, especially by ship; however, we reduced the share of emissions fromair freight. This means that the share in terms of sea freight increased from 54 % in the previous year to 64 % in the reporting year. In terms of air freight, weachieved huge CO2 savings in the reporting year by reducing its share from 17 % in the previous year to 12 % in the reporting year.
As part of our Group-wide program to improve operational excellence, we are also working on shortening delivery times and optimizing delivery costs.

Emissions Trading

Voith does not participate in the European emissions trading scheme.

76

1_Strategy and Integrity

Air Pollutants

2_Environment

3_Employees

Air Pollutants1) A384 in t
Chlorofluorocarbons (CFCs)2)
Hydrochlorofluorocarbons (HCFCs)

Back

4_Products and Supply Chain

2)

Halon2)

FY 2017/18

FY 2016/17

FY 2015/16

<1

<1

<1

<1

<1

<1

n.s.

n.s.

n.s.

Methyl bromide2) (CH3Br)

n.s.

n.s.

n.s.

Volatile organic compounds (VOC)

730

689

671

162

135

149

n.s.

n.s.

n.s.

Non-methane volatile organic compounds (NMVOCs)
Persistent organic pollutants (POPs)
Hazardous air pollutants (HAPs)

26

27

26

Dust emissions

200

197

171

154

151

128

3

3

2

Respirable fraction
Heavy metals
Nitrogen oxides (NOx)

640

592

551

Sulfur oxides (SOx)

521

490

449

Sulfur hexafluoride (SF6)

<1

<1

<1

The indicators of other air pollutants are calculated using LCI-based conversion factors from the reported energy consumption, logistics, and business travel data.
In addition, we also measure emissions of refrigerants, solvents, heavy metals, and dust from non-energy based manufacturing processes.
In principle, other air pollutants from energy consumption are the dominant factor.
Regarding VOCs, significant contributors include the transport of goods at 117 t (previous year: 85 t) and business travel at 89 t (previous year: 99 t). In terms of
NMVOCs, significant contributors include production-related VOC emissions of 70 t (previous year: 50 t). For the latter, coating processes (resins for generator production and roll coating), lacquering processes, and cleaning processes (particularly surface cleaning) account for around a third each. The increase in VOC emissions
can be explained by the improved order book at Voith Paper and Voith Turbo, which also resulted in an increase in the use of solvents for lacquering and cleaning.
Regarding dust emissions, our foundry in São Paulo, Brazil, is a significant individual emitter, generating 19 t (previous year: 19 t). Dust emissions originate mainly
from steel reconversion, which is unaffected by declines in local production.
2.2.2 Material Efficiency and Waste
Materials Used

Materials Used by Weight in t
215,003

220,001

186,000

Raw material

60,89257,30555,256

Semifinished products

133,020

143,147

109,647

Packaging

16,521

14,437

16,155

Auxiliaries

Total materials/raw materials used

4,570

5,111

4,941

Renewable materials in %

8

6

9

Secondary Raw Materials in %

38

38

41

Voith employs country-specific recycling factors to calculate the proportion of secondary raw materials in terms of the overall amount of materials used. The
lower share compared to the previous year of secondary raw materials in terms of the overall amount of materials used is due to regional changes in materials
procurement, whereby the recycling factors used have changed.
1)2)

 roduction-related and product-related energy consumption was recorded as well as air pollutants from the transport of goods and business travel.
P
Ozone-degradable substances in t CFC-11e.

77

1_Strategy and Integrity

Volume of Waste

2_Environment

3_Employees

Waste by Region in %Back

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

38

39

37

Germany
Europe excluding Germany

7

7

7

Americas

31

32

35

Asia

24

23

20

Other

<1

<1

<1

22,12020,81924,951

Reclaimed and Removed Waste by Method in t
Reclaimed waste
Reused

227

122

213

Recycled

17,31015,761

18,824Composted

207

185

176

Recovered

3,980

4,230

4,927

396

521

810

10,947

9,896

12,038

3,347

2,885

2,467

7,601

7,011

9,571

0

0

0

Other reclamation1)
Removed waste
Incinerated
Dumped at an external site

1)

Dumped at a company site
Other removal
Total waste

0

0

0

33,06830,71536,989

11.6

−16.2

−12.2

8.1

7.3

8.7

Comment: Alongside the type of waste, the locations also enter the manner of disposal in our database.
Waste-saving Measures andFurther Potentials

Reduction in Specific Waste Quantities
Reduction in specific waste quantities in %Specific Waste Weight
Specific waste weight in t/€ millions revenues

Individual locations are constantly developing specific solutions to meet local waste challenges. Among them, in some countries pallet pooling solutions
are unattractive owing to low order volumes, so reusable or repairable pallets are returned, where possible, to local processors for high-grade use of thematerials. At other locations cardboard boxes are processed into packaging materials on site for the safe and secure transportation of their own products
to customers.
The most significant achievements made by individual locations in the reporting period included the reduction of 1,920 t of waste through the optimizationof the casting molds in São Paulo, Brazil; a reduction in hazardous waste of 180 t through improved coolant lubricant management in Wimpassing, Austria,
and Crailsheim, Germany; and a 90 t drop in waste at our location in Heidenheim, Germany, by avoiding the use of cleaning sprays.
Material Efficiency Potential in t
9,021

6,044

5,975

of which achieved in the FY

4,174

640

2,383

savings already achieved since FY 2011/12

8,596

4,423

3,782

Efficiency potential since FY 2011/12

1)

Data provided for the 2016/17 fiscal year were corrected retrospectively.

78

1_Strategy and Integrity

Hazardous Waste

2_Environment

3_Employees

Hazardous and Non-hazardous Waste in t
Hazardous wastetransported hazardous waste

Waste Disposal

Back

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

6,111

5,816

6,898

6,111

5,816

6,898

imported hazardous waste

–

–

–

exported hazardous waste

–

–

–

waste transported nationally and internationally between Voith locations

–

–

–

Non-hazardous waste

28,151

24,97030,091

Total waste

34,26130,78636,989The collection of hazardous waste at Voith is governed by internal regulations. Only qualified specialist waste disposal companies that adhere strictly to ourregulations are permitted to dispose of our waste. Any violations are rigorously pursued and lead to termination of the business relationship. To check this,we regularly audit the waste disposal companies we use. The scope of these audits includes inspections of the waste disposal companies’ sites and related
plants, as well as the collection and documentation of proof of disposal.

2.2.3 Water
Water Consumption

Water Consumption by Source in m³
Total water withdrawal

1,033,843

1,040,967

1,086,912

1,033,843

1,040,967

1,086,912

Surface water

64,54467,50779,932Groundwater

470,508

442,722527,675

498,791

530,738

479,306–––

FY 2017/18

FY 2016/17

FY 2015/16 2)

Germany

43

40

44

Europe excluding Germany

10

11

12

Americas

16

20

21

Asia

30

29

23

Other

1

<1

<1

Reused water in m³

44.5

104.2

116.1

Reused water in % of total water withdrawal

<1

<1

<1

Freshwater (≤ 1,000 mg/L total dissolved solids)1)

1)

of which public as well as private water treatment plants
other water (> 1,000 mg/L total dissolved solids)

Data-gathering: Categories are gathered centrally each quarter by means of a data-gathering process at the locations.
Water Consumption by Region in %Percentage and Total Volume of Reused Water

Data-gathering: Categories are gathered centrally by means of a data-gathering process at the locations.

In contrast to the procedure applied in compiling the Annual Report, in the Sustainability Report workforce figures are stated as headcount instead of FTEs. For FY 2017/18 consolidated companies are in the scopeof reporting, just as they are for the Annual Report; however, employee-level figures in the workforce master data for the FlowLink and Ray Sono participations will only be available from FY 2018/19 onward.
2)
Data provided for the 2015/16 fiscal year were corrected retrospectively.
1)

79

1_Strategy and Integrity

Freshwater Savings Measures
and Further Potentials

2_Environment

3_Employees

Back

4_Products and Supply Chain

Specific Freshwater Consumption in m³/€1,000 revenues
Specific freshwater consumption

FY 2017/18

FY 2016/17

FY 2015/16

0.25

0.25

0.25

Among other achievements, the following savings were realized in the reporting year:
Around 22,000 m³ less freshwater withdrawn each year by closing the water cycles of monofilament production quench baths in Summerville, USA.
Around 6,000 m³ less freshwater withdrawn by closing the water cycles of sealing water for vacuum pumps in Kunshan, China.
• Around 1,500 m³ less freshwater withdrawn each year by optimizing washing processes in Appleton, USA.
• Around 400 m³ less freshwater withdrawn each year by using rainwater at test stands and fields in Crailsheim as well as through the introduction of aclosed water cycle at Heidenheim, Germany.
••Freshwater Efficiency Potential in 1,000 m³
Efficiency potential in planning since FY 2011/12

815

817

743

of which additionally achieved in the FY

<1

83

78

savings already achieved since FY 2011/12

789

789

706

Comment: The savings achieved so far since FY 2011/12 are already above the volume of savings which Voith anticipates it needs to make to achieve its
reduction goal in FY 2017/18.
Wastewater: By Methodof Discharge

Wastewater by Method of Discharge
Total wastewater in m³

837,656

860,395

985,881

Discharged into the public sewage system in %

62

63

48.7

Discharged into surface water in %

25

27

38.6

Discharged into groundwater in %

13

10

12.7

Reused at another company in %

<1

<1

<1

160,957

156,192

116,342

Discharged into the public sewage system in %

68

69

59

Discharged into surface water in %

31

29.7

37

Discharged into groundwater in %

1

1.3

4

Total treated wastewater in m³

1)

Reused at another company in %

0

0

0

Total untreated wastewater1) in m³

676,699704,203869,539

Discharged into the public sewage system1) in %

61

62

47

Discharged into surface water in %

23

26

39

Discharged into groundwater in %

16

12

14

Reused at another company in %

<1

<1

0

Data provided for the 2016/17 fiscal year were corrected retrospectively.

80

1_Strategy and Integrity

Wastewater: Quality

2_Environment

3_Employees

Back

4_Products and Supply Chain

Wastewater Quality1) in t

FY 2017/18

FY 2016/172)

FY 2015/16

Biological oxygen demand (BOD)

7.9

9.3

25.0

Chemical oxygen demand (COD)

27.9

27.7

37.0

Total suspended matter content

8.1

8.0

6.0

Heavy metals

<1

<1

<1

Nitrogen

1.0

2.0

<1

Phosphorus

<1

<1

<1

Comment: Due in part to very long measurement intervals, there are significant fluctuations in the total footprint over the years. There were no notifiable limit
violations in the reporting year.
Water and Neighboring Habitat
Protection

Significant3) Direct Wastewater Discharge in 2017/18 in %Destination

Protection Status

Heidenheim

River Brenz

Water protection
area acc. to WRRL.
WHG (§§ 50–53).
Zone III/IIIA (Zone II/
IIA TB Mergelstetten.
not yet final)

9 % of wastewater is returned to the natural water cycle.

Garching

Groundwater–

93 % of wastewater is returned to the natural water cycle. The water was previously
used for cooling purposes.

Högsjö
(Sweden)Lake Högsjö

–

Noida
(India)Yamuna River–São Paulo(Brazil)

Perus River

Permanent Protection
Area (APP). nationallaw (Brazil)

Wimpassing(Austria)

River Schwarza

31 % of wastewater is returned to the natural water cycle. The water was previously
used for cooling purposes. The discharged water is subject to strict observation, as
the location is in a water protection zone.

100 % of wastewater is returned to the natural water cycle.
100 % of wastewater is returned to the natural water cycle. We have purificationequipment locally with which the water is treated for discharge. The location is
adjacent to a water protection zone.
51 % of cooling water is returned to the Schwarza.
Sealing of Soil Surfaces

Location–

To counter the progressive sealing of soil surfaces we pay particular attention to this development in our sphere of influence.
Annual reporting from location through to Group level on sealed soil surfaces vs. overall surface area showed no change in the reporting year at approximately
50 % (based on the total area of Voith locations).

Environmental Incidents

Environmental Incidents (Pollution of Soil, Water, etc.) Number

FY 2017/18

FY 2016/17

FY 2015/16

Product and warehousing incidents

45

38

40

Transport accidents: road, rail, inland waterway, sea

n.s.

n.s.

n.s.

The emissions in wastewater are based on the volume of wastewater streams from Voith locations subject to monitoring and the respective average of the measured concentrations
Data provided for the 2016/17 fiscal year were corrected retrospectively
3)“Significant” is considered to be wastewater discharged to surface water and to groundwater that exceeds 5 % of the total wastewater volume of the observed unit.
1)

2)

81

1_Strategy and Integrity

2_Environment

3_Employees

Back

4_Products and Supply Chain

3 Employees
FY 2017/181)

FY 2016/17

FY 2015/16

Employees Group-wide in FTE

19,53519,04519,098

Employees Group-wide as a headcount19,027

19,267

19,494

3.1 Employees – Our Aspiration, Our Responsibility
Workforce Structure

Consolidation Scope for Employee Numbers1) Number

Employees included in data analysis
Employees by Gender, Age Group, and Region2) Number
Voith Group

19,027

19,267

19,494

FY 2017/18

FY 2016/17

FY 2015/16

19,027

19,267

19,494

Gender
Women

3,477

3,415

3,388

Men

15,55015,852

16,106< 30 years

2,435

2,517

2,689

30–50 years

10,45010,714

10,948> 50 years

6,142

6,036

5,857

German

7,539

7,306

7,240

non-German

11,488

11,961

12,254Germany

7,950

7,669

7,563

Europe excluding Germany

2,858

2,879

2,921

Americas

4,133

4,748

5,050

Asia

3,380

3,286

3,269

Other

706

685

691

18,00718,323

18,330Age

OriginRegions

Workforce by Employment Type

Full-time and Part-time Employees by Age and Gender Number
Full-time
Women

2,766

2,748

2,686

Men

15,241

15,575

15,644< 30 years

2,325

2,456

2,580

30–50 years

9,953

10,19910,279> 50 years

5,729

5,668

5,471

In contrast to the procedure applied in compiling the Annual Report, in the Sustainability Report workforce figures are stated as headcount instead of FTEs. For FY 2017/18 consolidated companies are in the scope of reporting,just as they are for the Annual Report; however, employee-level figures in the workforce master data for the FlowLink and Ray Sono participations will only be available from FY 2018/19 onward.
2)
Due to part-time work the regional distribution in headcount and FTE (full time equivalents) is different to that shown in the Annual Report.
1)82

1_Strategy and Integrity

Workforce by Employment Type(cont.)

2_Environment

3_Employees

Back

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

1,020

944

1,164

Women

711

667

702

Men

309

277

462

Part-time< 30 years

110

61

109

30–50 years

497

515

669

> 50 years

413

368

386

Employees with Temporary and Permanent Employment Contracts by Gender Number
17,032

17,36017,507

Women

3,033

2,977

2,963

Men

13,99914,383

14,544

1,995

1,907

1,987

Permanent employment contract

Temporary employment contract
Women
Men
Temporary employees

444

438

425

1,551

1,469

1,562

1,239

949

847

Women

250

176

157

Men

989

773

690

19,027

19,267

19,494

Total Workforce by Employees and Supervised Workers by Gender Number
Employees/workers
Women

3,477

3,415

3,388

Men

15,55015,852

16,106

1,239

949

847

Women

250

176

157

Men

989

773

690

Supervised workers

To respond quickly and flexibly in markets that can be very volatile, we also utilize fixed-term or temporary employment contracts. In the reporting year
we employed 1,249 staff (previous year: 949) through recruitment agencies. The number of fixed-term employment contracts increased by 5 % to 1,999(previous year: 1,907) in the reporting year.
Temporary employment is a standard market instrument that gives us flexibility to meet temporary order peaks. Our increased use of temporary employment
compared to the previous year is thus due to challenging economic conditions in the reporting period.

83

1_Strategy and Integrity

2_Environment

3_Employees

3.2 Highly Attractive Employer
Rankings and Ratings

Back

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

In the reporting period Voith performed impressively in the DEUTSCHLAND TEST, Trendence, and Potentialpark studies as an employer that offers
outstanding career opportunities.
DEUTSCHLAND TEST (2018): In its study of around 10,000 of the largest companies by headcount based in Germany, we received the Top Career
Opportunities award in the Mechanical Engineering category. With a score of 94.5 out of 100, Voith takes the third-highest place in the industry ranking.
• Trendence Institute (2018): In the Trendence Graduate Barometer 2018 study, engineering students ranked us among the top 100 most popular andattractive employers. Thanks to this, we received the Most Attractive Employer for Graduates 2018 (Engineering) seal. 55,000 students of Economics,
Engineering, Computer Science, Natural Sciences, and Law were surveyed.
• Potentialpark (2018): As part of the Talent Communication Strategy, which examines the extent to which employers meet applicants’ needs in terms of
the online application process, we secured two top positions in an international comparison: 46th in the Benchmark ranking and 76th in the Potentialpark
ranking over the past 4 years. 415 representative employers from 30 countries were evaluated as part of the study on the basis of 317 criteria. This involved
a survey of 37,722 applicants and a data analysis of 4,242 career portals.
•

Expenditures for Employees

Employee Wages and Benefits in € millions
Wages and salaries
Social security contributions, retirement pensions, and benefits
Remuneration of the Corporate Board of Management

1,194.0

1,165.0

1,154.0

253.1

250.6

246.8

n.d.

n.d.

n.d.

Comment: Please see the chapter “Remuneration of governing bodies” in our latest Annual Report for information on the compensation of our Corporate
Board of Management.
Collective Bargaining AgreementsCollective Bargaining Agreements in %Number of employees covered by collective bargaining agreements
In Germany

Details on Upholding Employee
Rights

81

77

77

100

100

100

Close involvement of employee representatives
We view trusting collaboration with employee representatives as a central prerequisite for our company’s long-term success. As such, we always involve employee
representatives in discussions between the Group management, local HR departments, and employees. Within the individual countries, labor relationships are
structured in accordance with national laws, collective wage agreements, and company agreements. Our compliance processes ensure that agreements arealso upheld (see the section Strategy and Integrity). Our Corporate Board of Management or the local management team communicate fundamental changes to
employees at all our sites in a timely manner and as early as possible. To do this, we employ a range of communication channels, particularly our intranet, video
and telephone conferencing facilities, as well as our employee magazines.
In Germany, the decision-making process is subject to co-determination if fundamental changes are made in respect to the company. Implementation of themeasures that have been taken is supported by the respective locations’ Works Councils.

Employment Ratio of People with
Disabilities

Employment Ratio of People with Disabilities in %Employment ratio of people with disabilities

3.4

3.4

3.3

84

1_Strategy and Integrity

Diversity in the Management Teamand in the Workforce

2_Environment

3_Employees

Back

4_Products and Supply Chain

Diversity in Senior Management Circle Number
Senior Management Circle1)

FY 2017/18

FY 2016/17

FY 2015/16

74

77

76

Proportion of women in %

6.8

5.2

6.6

Non-German members in %

31.1

35.1

35.5

80

84

82

Distribution of Women and Men at Management Levels Number
Corporate Board of Management, Executive Team, Senior Management Circle1)

Flexible Working Time Models

Proportion of women in %

6.3

4.8

6.1

Non-German members in %

30.0

33.3

34.1

Regional directors/chairpersons, Management Board of operating units, heads ofproduct groups, managers in Group management functions2)

379

367

361

Proportion of women in %

8.2

7.6

8.9

Non-German members in %

49.1

50.7

51.8

Mid- and lower-level management3)

688

715

711

Proportion of women in %

11.8

10.6

10.1

Non-German members in %

61.5

60.1

60.1

Total (across all management levels)

1,147

1,166

1,154

Proportion of women in %

10.2

9.3

9.4

Non-German members in %

55.2

55.2

55.6

Various nationalities Number

91

88

91

Availability of Flexible Working Time Models Number
Definition/Explanation: Share of employees to whom variable working time models are available (e.g. flextime, accrued overtime, sabbatical)
Voith Group

7,950

7,669

7,563

Women

1,510

1,383

1,326

Men

6,440

6,286

6,237

< 30 years

1,027

916

888

30–50 years

3,910

3,909

3,918

> 50 years

3,013

2,844

2,757

Data relates to Germany; generally, at Voith personal working time models can be agreed in consultation with the supervisor. This also applies to sabbaticals.

Management level 1 + 2Management level 3 + 4
3)Management level 5
1)

2)

85

1_Strategy and Integrity

Parental Leave

2_Environment

3_Employees

Back

4_Products and Supply Chain

Parental Leave Number

FY 2017/18

FY 2016/17

FY 2015/16

Voith Group

18,867

19,074

19,184

Women

3,452

3,390

3,312

Men

15,415

15,684

15,872

Voith Group

461

668

731

Women

186

139

151

Employees Entitled to Parental Leave

Total Parental Leave Take-up

Men

275

529

580

Germany

384

436

429

Europe excluding Germany

53

39

52

Americas1)

21

190

247

Asia

3

3

1

Other

0

0

2

Employees Who Returned to Voith After Parental Leave
366

578

565

of which women

83

112

91

of which men

283

466

474

Voith Group

Employees Who Returned to Voith After Parental Leave Who Are Still at Voith 12 Months After Returning
345

351

396

of which women

43

63

77

of which men

302

288

319

Voith Group

Return-to-work Rate in %Voith Group

79.4

79.1

77.3

Women

44.6

74.2

60.3

Men

82.9

80.3

81.7

Retention Rate Among Employees Who Took Parental Leave in %Voith Group

94.3

62.1

70.1

Women

51.8

69.2

84.6

Men

100.0

60.8

67.3

1)
Until FY 2017/18, besides parental leave other inactive employment contracts were also included. The change versus previous years is due to our inclusion ofparental leave exclusively since FY 2017/18 also for the Americas region.

86

1_Strategy and Integrity

Employment Length

2_Environment

3_Employees

Average Employment Length by Region in years
Voith GroupBack

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

12.61

12.39

12.18

Germany

16.12

16.19

16.22

Europe excluding Germany

12.62

12.41

11.96

Americas

10.73

10.35

10.15

Asia

7.57

7.27

6.93

Other

8.31

8.33

8.58

New Employee Hires Who Left Voith within Twelve Months by Gender, Age Group, and Region Number
Voith Group

356

305

326

Women

73

57

72

Men

283

248

254

< 30 years

144

120

132

30–50 years

153

147

152

> 50 years

59

38

42

Germany

83

36

71

Europe excluding Germany

26

36

43

Americas

161

165

142

Asia

73

61

66

Other

13

7

4

87

1_Strategy and Integrity

Employee Turnover

2_Environment

3_Employees

Back

4_Products and Supply Chain

Employees Who Left the Company by Gender, Age Group, and Region(Workforce Fluctuation) Number

FY 2017/18

FY 2016/17

FY 2015/16

Voith Group

1,983

2,127

2,665

Women

341

324

524

1,642

1,803

2,141

433

454

504

30–50 years

981

1,051

1,233

> 50 years

569

622

928

Germany

359

393

933

Europe excluding Germany

268

250

433

Americas

979

1,079

784

Asia

309

328

446

Other

68

77

69

Voith Group

10.3

11.0

13.2

Women

9.8

9.5

14.9

Men

10.4

11.4

12.9

< 30 years

17.4

17.7

17.3

30–50 years

9.3

9.7

11.0

> 50 years

9.3

10.5

15.4

Germany

4.6

5.2

11.9

Europe excluding Germany

9.3

8.6

14.3

Americas

21.8

22.4

15.0

Asia

9.3

10.0

13.3

Other

9.7

11.3

9.9

10.3

11.0

13.2

4.3

3.7

3.5

At the employer’s initiative

5.1

6.3

7.2

Other

1.0

1.1

2.5

Men
< 30 years

Employees Who Left the Company by Gender, Age Group, and Region(Workforce Fluctuation) in %Employees who Left the Company on Own Initiative in %Voith GroupAt the employee’s initiative

88

1_Strategy and Integrity

2_Environment

3_Employees

3.3 Attracting and Promoting Talent
New Hirings

Back

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

Voith Group

2,151

1,603

1,287

Women

408

283

264

Men

1,743

1,320

1,023

918

537

481

New Employee Hires by Gender, Age Group, and Region Number< 30 years
30–50 years

970

813

650

> 50 years

263

253

156

Germany

675

283

166

Europe excluding Germany

264

174

175

Americas

704

758

657

Asia

409

324

226

Other

99

64

63

11.3

8.3

6.6

Women

11.7

8.3

7.8

Men

11.2

8.3

6.4

< 30 years

37.7

21.3

17.9

30–50 years

9.3

7.6

5.9

> 50 years

4.3

4.2

2.7

Germany

8.5

3.7

2.2

New Employee Hires by Gender, Age Group, and Region in %Voith Group

Apprenticeships andOpportunities

Europe excluding Germany

9.2

6.0

6.0

Americas

17.0

16.0

13.0

Asia

12.1

9.9

6.9

Other

14.0

9.3

9.1

801

959

1,012

519

599

606

302

360

358

Vocational Training Number
Apprentices and students at cooperative universitiesin Germany
at our Heidenheim location

89

1_Strategy and Integrity

Training and Education &Career Development

2_Environment

3_Employees

Back

4_Products and Supply Chain

Training and Education Expenditure Number
Training and Further Education Hours

FY 2017/18

FY 2016/17

FY 2015/16

266,959

320,324

244,604

Women

52,261

63,15041,243

Men

214,697

257,174

203,361< 30 years

36,76948,296

61,11830–50 years

164,251

206,913

154,598> 50 years

65,93965,11528,888The Corporate Board of Management, Executive Team, Senior Management Circle;
Regional Directors/Chairpersons, Board of Management of operating units, heads ofproduct groups, managers in Group management functions

14,467

14,335

11,326Mid- and lower-level management

19,893

34,107

18,720All other employees

232,599

271,882

214,557

Hours of Further Education by employee
Voith Group

14.0

16.6

12.5

Women

15.0

18.5

12.2

Men

13.8

16.2

12.6

< 30 years

15.1

19.7

23.7

30–50 years

15.7

20.3

15.0

> 50 years

10.7

11.5

5.3

Corporate Board of Management, Executive Team, Senior Management Circle; Regional
Directors/Chairpersons, Board of Management of operating units, heads of productgroups, managers in Group management functions

31.5

31.8

25.6

Mid- and lower-level management

28.9

47.7

26.3

All other employees

12.9

15.0

11.7

16,594

15,645

15,8293,680,130

5,723,508

4,413,721

Voith Group

91.4

82.7

86.9

Women

88.8

83.1

83.9

Men

92.0

82.6

87.6

The Corporate Board of Management, Executive Team, Senior Management Circle;
Regional Directors/Chairpersons, Board of Management of operating units, heads ofproduct groups, managers in Group management functions

86.3

84.5

83.5

Mid- and lower-level management

93.9

87.7

86.2

All other employees

91.4

82.4

87.2

Number of Employees Who Underwent Further Training Number
Voith Group
Total Expenditure in €Voith Group
Employees Who Received Performance and Career Development Reviews in %

90

1_Strategy and Integrity

2_Environment

3_Employees

3.4 Occupational Health and Safety
Approach to Preventing or
Dealing With Negative Healthand Safety Impacts

Back

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

Voith’s business activities can have a negative impact on the health and safety of employees, customers, and business partners: We always avoid
this wherever possible as a matter of course. However, if health or safety are impacted negatively, this must be met with an adequate response. Our
approach to preventing and dealing with negative health and safety impacts can be categorized by our own locations, construction sites, and products:
1. At our own locations, we employ our existing and proven system of regional support on an ongoing basis, and are expanding it progressively tocontinuously improve the quality and effectiveness of the system.
2. At our construction sites and during on-site activities with our customers, we perform risk assessments in advance. These are updated on a regularbasis and involve a careful examination of many aspects, including how the various industrial technicians are coordinated in relation to safety
aspects.
3. F
 or our products and their use, we focus right from the product development stage on achieving strict compliance with regulatory requirements. In
addition, our products undergo a range of test and inspection stages. We incorporate the findings from these processes, together with informationfrom market and product monitoring, systematically into the development and enhancement of our products.
To identify and analyze work-related hazards and risks in connection with occupational safety, we have implemented a comprehensive audit system in
addition to our overarching risk management process.
As part of this, a measure is created in hse+ for all identified work-related hazards or risks. The fact that the implementation status can be verified
centrally via the system ensures timely implementation by the manager responsible.
In the 2017/18 fiscal year we identified crane operation and heavy-load handling as the greatest HSE risk. In response to this we launched a central
campaign involving a series of posters to raise awareness. In addition, we are currently preparing a training initiative that we will offer for the first time in
the 2018/19 fiscal year. The aim of this initiative, which will focus on executives and employees alike, is to further strengthen the embedding of the topic
of occupational safety in the safety culture we practice.

Employee Representation in
Committees
Occupational Accidents

Total Number of Employees1) Represented on Health and Safety Management Worker Committees in %Voith Group

80

75

75

Occupational Accidents – Employees Number
54

50

57

of which fatal

2

0

0

of which severe

5

n.s.

n.s.

Total Occupational Accidents

Definition: Data on all accidents subject to compulsory reporting were gathered. One occupational accident led to an employee being unfit for work over thetransition from FY 2016/17 to FY 2017/18. The accident was included in reporting for FY 2017/18.
Frequency Rates – Employees Number
Definition/Explanation: Number of occupational accidents resulting in downtime (1 day or more) per 1 million working hours.
Occupational accidents per million hours worked

1)

Based on headcount.

1.5

1.4

1.8

of which fatal

0.06

0

0

of which severe

0.14

n.s.

n.s.

91

1_Strategy and Integrity

Occupational Accidents(cont.)

2_Environment

3_Employees

Back

4_Products and Supply Chain

Occupational accidents – Personnel Working for Voith but Who Are Not Voith
Employees Number
Total occupational accidents

FY 2017/18

FY 2016/17

FY 2015/16

48

n.s.

n.s.

Comment: Since October 2017 Voith has gathered third-party occupational accident data centrally. Each incident is documented in an Incident Reportand followed up. For these incidents Voith’s Reporting Organization does not currently distinguish between degrees of accident severity, or working hours
lost. Due to the differing data-gathering methods these values are not comparable with the data provided on Voith’s own employees.
Occupational Accidents by Region Number
Voith Group

54

50

57

Germany

30

37

37

Europe excluding Germany

10

6

12

Americas

10

7

1

Asia

4

0

6

Other

0

0

1

Severity Rate
Definition/Explanation: Hours lost per 1 million working hours
Voith Group

342.2

271.2

282.4

Germany

303.4

306.3

349.1

Europe excluding Germany

535.5

217.0

479.2

Americas

286.3

159.5

0.8

Asia

364.7

391.9

396.7

Other

0

0

42.1

Absence Rate in %Definition/Explanation: Refers to the actual days of employee absence, expressed as a percentage of the overall scheduled working days for the workforce
over the same period.
Voith Group

2.6

2.5

3.1
4.9

Germany

3.7

3.8

Europe excluding Germany

3.4

3.2

3.1

Americas

1.7

1.6

2.2

Asia

1.0

1.1

1.2

Other

1.2

1.2

1.6

92

1_Strategy and Integrity

Occupational Accidents(cont.)

2_Environment

3_Employees

Lost Day Rate in %Back

4_Products and Supply Chain

FY 2017/18

FY 2016/17

FY 2015/16

Definition/Explanation:
LDR: The impact of occupational accidents, which can be measured against the time the affected employee failed to appear for work. The rate is calculated
by comparing the total number of lost days with the total number of hours which the workforce ought to have worked in the reporting period.
Working Days Lost: Working days which could not be worked on (and so are “lost”) as one or more employees was/were unable to perform his/her/theirusual work owing to an occupational accident. These days do not count as working days lost if an employee returns for a limited number of hours or for adifferent activity.

Occupational Safety Training

Voith Group

8.4

7.7

7.1

Germany

8.1

8.2

9.3

Europe excluding Germany

13.4

5.4

12.0

Americas

6.7

3.7

0.0

Asia

8.2

8.8

9.0

Other

0.0

0.0

1.1

approx. 100

approx. 100

approx. 100

Training Courses in Occupational Safety in %Operations managers
Administrative managers

80

80

80

Trained service providers

n.s.

n.s.

n.s.

R&D Expenditure

225

217

210

Percentage of Revenues Dedicated to R&D in %

5.4

5.1

4.9

4 Products and Supply Chain
4.1 Product Responsibility
4.1.1 Management Approach
Research and Development
Research & Development
Expenditure

Research and Development in € millions

Voith Hydro
Collaboration Projects

In the previous fiscal year Voith Hydro continued its numerous activities with university research facilities.
As part of the long-standing successful collaboration with the University of Stuttgart, a highly precise, scale-adaptive simulation of the transient flow of acomplete Kaplan turbine was set up.
• In addition, highly advanced methods to detect cavitation type, location, and intensity in hydropower machinery were further developed.
• In collaboration with Technische Universität Dresden, in the 2017/18 fiscal year studies were conducted on a model test stand to determine heat-transfer
coefficients in generator cooling ducts.
•

93

1_Strategy and Integrity

Customer Dialog
Voith Paper

2_Environment

3_Employees

4_Products and Supply Chain

Back

Voith Paper employs the Net Promoter Score (NPS) methodology to measure customer satisfaction. Customer feedback is gathered at various times during thecourse of project implementation, whereby specific questions are asked about the phases of development; these take into account both emotive and rational
evaluation criteria. Measures to improve internal procedures are then derived from this customer feedback.
Voith Paper continues to work on VR applications for customer training and support. In the reporting year three customer-training modules were developed are
currently being trialed. The first phase of the project is scheduled for completion in January 2019.

Customer Dialog
Voith Hydro

To ensure our customers enjoy a maximum level of safety, all safety information on Voith Hydro products is documented in the respective operating manual.
If previously unknown safety risks occur, customers are of course informed immediately and always in full compliance with legal requirements.
In addition, we offer our customers the following safety training courses through the Voith HydroSchool:
Safety-by-design Principles and Case Studies: In this one-day seminar we train customers on the fundamental safety requirements of hydropower plants anddiscuss combined case studies on damage and accidents.
• Application and Fulfillment of EU Directives on Machine and Plant Safety: In this seminar, we share our expertise and provide practical examples to prepare
our customers for the complex process of CE marking.
•Customer Dialog
Voith Turbo

Voith Turbo offers its customers a wealth of information and training courses to additionally and especially optimize safety in the use and operation of our
products:
Voith Turbo product documentation (operating instructions) includes all the product safety information required for operators of our products. If required, ourproducts are additionally labeled. In the event of safety incidents or changes to the safety information, these are communicated proactively to the vehicle
manufacturers concerned and the relevant manuals are updated.
• Voith Turbo offers customers product training as well as full support with commissioning. Even if courses do not focus specifically on safety training, thecourses aim to instruct customers on all relevant safety aspects. In product and maintenance training courses, customers are informed about possible
dangers, for instance if products are operated incorrectly.
•

Responsible Marketing

Corporate Marketing and our Code of Conduct, which every Voith employee abides by, ensure Voith products are presented to customers truthfully andtransparently. The actions of each and every Voith employee are bound by the unwavering principle that information should be presented fairly andtruthfully. We provide regular instruction on the scope of our Code of Conduct through online training sessions (including compliance training sessions)and in employee appraisals.
Moreover, Voith Paper’s marketing approach ensures that technically complex solutions are presented by selected experts from our technology centers,
and discussed with customers. If necessary, the marketing activity is supported by the Group Division’s or even the holding’s top management team.
Internal coordination meetings ensure that global knowledge is bundled in relevant projects.

4.1.2 Reliable and Safe Products
TRQM

Our TRQM system also defines how to fulfill the respective statutory product documentation requirements, and how products are to be labeled. Besides
internal technical documentation, operating instructions provide information on the intended use of our products as well as on how to handle them in atechnically and environmentally safe way. Our TRQM system also outlines procedures for decisions that entail risks.

94

1_Strategy and Integrity

Quality Managementin Our Group Divisions

2_Environment

3_Employees

4_Products and Supply Chain

Back

As part of Voith 150+ Next Level, Voith is in the process of setting Group-wide KPIs to enable the various Group Divisions to be benchmarked against eachother as well as within their respective industrial sectors. As part of the Sales Excellence initiative, uniform Group-wide sales benchmarks have alreadybeen approved and integrated into existing systems.
In the reporting year we made the following progress in defining Group-wide quality management KPIs:
Quality costs are now recorded in all Group Divisions according to Group-wide rules and regularly reported on, allowing a cross-Group comparison to be
made.
• Production quality is now recorded and measured in accordance with the first pass yield KPI. The KPI is defined by the OPEX team and also allows a crossGroup comparison to be made.
• Planning accuracy is now recorded and measured in accordance with the delivery punctuality KPI. This KPI is also defined by the OPEX team, meaning it
also allows a cross-Group comparison to be made.
•Voith Hydro
Voith Hydro ensures that quality standards and certificates are uniform for all units globally through its internal management system. All of Voith Hydro’s
locations are certified according to the ISO 9001 international quality management standard. Regardless of the operating location, European standards,
such as the Machinery Directive, apply at all times as the minimum standard for machine and plant safety – globally and independently of the market area.
Through active product monitoring of the installed machines, Voith Hydro also ensures that new findings gained from operation are incorporated intomachine optimization.
With its EPEX (Excellence in Project Execution) project, since the 2014/15 fiscal year Voith Hydro has aimed to achieve excellence in executing projects.
EPEX focuses on process and product standardization as well as on strengthening customer focus.
The Connect program, through which Voith Hydro aims to reduce project times and improve project execution stability, is a major milestone. In the reporting
period the program concept was developed and its effectiveness was demonstrated in a test project. The program, including the methodology used, hasalready been approved by the Chief Operating Officers (COOs) of all Operating Units (OUs) with medium to very large-scale hydropower projects.
For many years now we have been working on the development of extremely powerful turbines and generators. Suitable stator bars are essential in thedevelopment of powerful 1,000 MVA-class generators. In the reporting year we completed the development of a new end-winding corona protection design
for stator bars. The new design has increased the robustness of the bars in operation, leading to much higher product reliability.
Voith Paper
Voith Paper sees quality as a key differentiator that distinguishes it from the competition, and has anchored the subject at the top management level. The
bases of the Voith Paper quality management system are set out in Group Directives, process descriptions, and work instructions. Necessary reviews andcorresponding documentation are controlled mainly via the internal ERP (enterprise resource planning) systems. Potential health, safety, and environment
impacts are taken fully into consideration. To continuously improve the processes, Voith Paper uses various tools such as Ishikawa, FMEA (failure mode
effect analysis), and 8D reports.
To continuously improve product quality, Voith Paper considers the experiences to be applied and actively incorporates them into projects right from theproduct development phase. The Concept Freeze Report documents the corresponding decisions and findings, and is a binding guideline for everyone
regarding which products and solutions we offer.
Furthermore, Voith Paper is working to establish a uniform level of quality where the same third-party components are sourced from different suppliers to
fully leverage a flexible dual or even multi-sourcing approach. This is the only way to ensure the purchased parts can be further processed in a standardized,
problem-free way.
In addition, in the reporting period Voith Paper installed an intelligent quality-monitoring system to increase process reliability in the production of holescreen baskets. The implemented process combines a tactile measuring head and a video scan. Instead of checking laser-cut profile gaps using theprevious manual procedure that relied on experience, and a process of comparing them with good parts based on comparatively small sets of samples,
an automated physical scan is now carried out on the profile bars and a video check is performed on the profile contours. The increased process reliability
is having a positive impact on manufacturing costs and production lead times.

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Voith Turbo
Voith Turbo also operates a uniform, integrated quality management system which is ISO 9001-certified, and where required is also certified to IATF 16949
and ISO/TS 22163. All employees are trained on quality issues and rigorously enforce the topic. Currently, several quality programs are running at Voith
Turbo to increase product and service reliability even further throughout the lifecycle. At the same time, Voith Turbo seeks a close relationship withcustomers to allow experiences from daily system operation to be incorporated into its product development activities.
One of these quality programs is the Voith Turbo Quality Excellence program. With this program, we aim to further reduce quality costs while increasing
product quality and raising customer satisfaction in the process. In the reporting period, goal achievement was further advanced by the successful
conclusion of sub-projects. We will implement the results successively, and review and improve their effectiveness continuously.
September 2018 was the global deadline for transitioning all quality management systems to the new ISO 9001:2015, IATF 16949:2016, and ISO/TS 22163:
2017 (IRIS Certification 3.0) standards. In the reporting year Voith Turbo therefore brought together all quality management systems globally, and migrated
and certified them to meet the new standards. As a result, Voith Turbo processes and quality management systems are now even better networked witheach other and standardized. Thanks to the transition, standard analyses can be used to better address our stakeholders’ and customers’ requirements.
One of these is the responsible handling of risks: We are meeting this requirement by analyzing risks systematically and across all business processes andprojects. Where necessary we take appropriate action.
Voith Turbo products meet all applicable technological regulations as well as statutory and regulatory standards and requirements relating to health andsafety. Where necessary, our products’ safety is also certified, and employees who perform work on safety-related components also receive special training.
Voith Turbo inspects all products with regard to health and safety considerations. We consider a large number of criteria and topics in our safety tests andevaluations, including:
Functional safety
Reliability, availability, maintainability, and product safety• Special characteristics• Safety requirements (e.g. performance data)• Special processes (welding, gluing, screwing, crimping, etc.)• Material testing• Labeling• Indicative safety• Covers

Surfaces
Fire protection• Explosion protection• Electrical safety• Electromagnetic compatibility• Soundproofing• Hazardous materials (e.g. REACH)• Product certification (only where required, e.g. EBA, KBA, TSI, etc.)• Health, safety, and environmental protection.

•

•

•

•

To embed our own quality standards in our value chain, our Supplier Quality Development and Supplier Quality Assurance Departments both support our
suppliers in complying with our quality and safety standards, and investigate any deviations. If deliveries are faulty, these are documented so we can thenwork with the supplier towards achieving a lasting improvement. In the reporting year our comprehensive quality assurance measures once again proved
successful. We are pleased to report that following the significant decline in the year before, customer complaints fell again slightly.

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Voith Digital Ventures
At Voith Digital Ventures, managers are responsible for quality assurance with the support of the Quality organization. Our ISO 9001-certified quality
management systems ensure that all relevant laws, standards, and regulations – including our own product requirements – are implemented effectively
and reviewed continuously.
Our Quality organization focuses on ensuring product quality through the use of efficient and effective prevention and improvement methods. Anothercritical consideration is to minimize quality costs for our customers to safeguard our competitiveness.
Safety information is part of every product manual and a requirement for product approval. Service and commissioning employees receive regular safety
training, such as on the handling of radioactive materials and substances; all relevant employees are trained on this every two years. In addition, customer
training – with safety as a central topic – is part of every commissioning process.
Voith Digital Ventures delivers training on the topic of supplier quality based on the regulations stipulated by Central Purchasing. When procuring safety
or function-related components, those accountable perform a detailed inspection of the initial sample batch and issue special supplier approval in theearly stages of product development.

Voith HydroSchool

Voith Hydro offers training courses on all hydropower topics and products. In the reporting year Voith Hydro was particularly active in Africa and Asiawith the aim of training local employees and providing them with professional training in their specialist field within the hydropower industry. Various
projects bear out the success of these measures:
In 2016 Voith was commissioned by the South African state energy company Eskom to provide operation and maintenance training to the employees at
its Ingula pumped storage power plant. Around 70 employees have so far been trained by Voith since training began in 2017.
• In October 2017 Voith took part in the German Hydro Development Days in Tanzania, where Voith trained attendees on planning and constructing smallscale hydropower plants.
• In July 2018 Voith began training ten trainers in Heidenheim for the Mangla Hydropower Training Institute in Pakistan. In addition, the company isdeveloping training modules that will later be offered in Mangla for the on-site training of over 500 participants annually.
•

Progress on Social andEnvironmental Impacts –Voith Hydro

One of Voith Hydro’s main focus areas is the material efficiency of our products. This is essential in order for us to maintain our competitiveness andis therefore also set as a material objective in line with Voith’s sustainability goals. The same applies to energy efficiency: Our objective is to offer ourcustomers increasingly more energy-efficient systems. This is because our systems’ efficiency is the dominant criterion in our customers’ evaluation
process. By contrast, recycling is not a material topic at Voith Hydro due to our products’ extremely long service life. In addition, a comparatively low
number of different materials are used in our systems, a high percentage of which are very easy to recycle as they comprise mainly steel and copper.
We use Life Cycle Assessments (LCAs) to analyze and optimize our products’ environmental impacts. To produce LCAs, Voith Hydro uses the GaBi
database and software that in principle allows us to factor in water consumption, waste volume and hazardous materials, alongside energy consumption
and CO2 emissions. As water consumption is not a material topic for Voith Hydro, it is currently not assessed.
In addition to our activities in this field, we published our study entitled “Li-Ion Battery versus Pumped Storage – A Comparison of Raw Material andInvestment Costs including CO2 Footprints” in the reporting period.
Back in the 2016/17 fiscal year Voith Hydro began the development, planning, and construction work to modernize the pumped storage power plant inFfestiniog, North Wales. Once completed at the start of 2020, the complex will be able to respond more quickly to power grid demands and operate
across a greater range. In addition, as the initial machine units are being refurbished mid-life this will extend their operational lifespan for at least a further
20 years. Ffestiniog’s four generating units will achieve a combined output of 360 MWh of electricity – enough to cover all of North Wales’ electricity needs
for several hours. In the reporting year a runner was manufactured successfully as part of this project.

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Progress on Social andEnvironmental Impacts –Voith Hydro(cont.)

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Another example of modernization work performed by Voith Hydro is the expansion of the Tarbela IV hydropower plant in northern Pakistan, built in 1974.
This project involves equipping the power plant with three new generators, high-voltage power lines, and a state-of-the-art automation system, which
will increase the plant’s capacity by around 40 % to around 4,888 MW once the project is completed. In the reporting year the Voith Asset Management
solution OnCare was integrated as part of power-plant automation. The system will be used to plan all maintenance processes at the plant by comparing
performance indicator readouts with stored data and responding automatically to deviations. This will enable the customer to identify optimization potentials
and plan preventative maintenance measures that can significantly reduce downtime and greatly increase plant availability.
In Sweden too, Voith Hydro set an example in environmental protection in the reporting period. Following the successful modernization of two 100-year-old
power plants, Semla 3 and Graninge, their efficiency and electricity output increased significantly. At the same time, the plants have also been upgradedconsiderably in terms of their environmental performance and now meet the latest environmental standards.
To further advance noise emission reductions, Voith Hydro included these emissions in the projects’ risk analysis. Furthermore, project-specific KPIs arebeing set to allow noise emissions to be controlled efficiently. Intelligent Voith OnCare.Acoustic technology is also being used to cut noise by detecting
fluctuations in turbine noise emissions, enabling appropriate action to be taken. Currently, Voith Hydro is working on a further noise-emissions reduction
project.

Fact base Socialand Environmental
Impacts – Voith Paper

In the reporting year an integrated asset management system for screen baskets was developed as part of Papermaking 4.0. This was the first time alifecycle tracking tool had been introduced at the level of a performance-enhancing component. The new RFID-based technology allows customers to
identify, maintain, or replace critical wearing parts effectively and reliably. An app displays pending maintenance work or the end of a product’s service life
automatically to the customer – they can then also purchase a new screen basket directly and easily via the Voith online shop integrated into the app.
In addition, Voith Paper is working tirelessly to make its products more resource-efficient – on the one hand to minimize its products’ environmental impact,and on the other hand to fulfill our customers’ demands for efficient and therefore cost-effective products.
This duality is illustrated perfectly by the example of its FlowJec dosing system. Conventionally, large amounts of freshwater and energy are used to heat
the water for chemical dilution. FlowJec eliminates the need for freshwater in the dilution stages, saving freshwater and reducing energy consumption.
Furthermore, less wastewater is generated that requires after-treatment. The system’s eco-friendly features also bring business advantages, as the reduced
consumption levels automatically have a positive impact on the customer’s cost structures.
Significant effort, particularly in China, is going into improving the cleaning of wastewater from paper factories. Together with the Voith subsidiary MeriEnvironmental Solutions, Voith has won multiple orders for water treatment plants in China, enabling it to successfully provide Smart Loop technology totreat water and considerably increase its overall market share in that country.

Recycling in Detail
Voith Paper

The loss of large amounts of graphic paper such as newspapers and magazines means that fewer fibers that are often only used once are introduced into
the recycling loop. In turn, this reduces the strength potential of the used-paper mix. This relationship represents a specific challenge for Voith Paper, so it isworking on new solutions to improve the strength potential of fibers before further processing. This is an important contribution to maintaining the recycling
loop.

Progress on Socialand Environmental
Impacts – Voith Turbo

Energy represents the main operating cost of Voith Turbo products, which is why continually increasing our products’ energy efficiency is our top priority inalmost every area. Furthermore, we work tirelessly to optimize our products’ material efficiency. Among our activities in this field, as part of our Voith TurboEngineering Excellence project we are currently investing a great deal of effort in the topic of material costs, and thus also in cutting the quantities we use.
In addition, we are measuring and optimizing waste volumes by working to reduce the use of materials where they are not required for product functionality.
Besides our products’ material efficiency, their ability to be recycled is also taken into account right from the early stages of development as part of our
updated product development process.
Voith Turbo also works continuously to reduce our products’ noise emissions. An example of this is a new railcar transmission test stand that allows Voith
Turbo to conduct detailed noise measurements for the first time, advancing the optimization of railcar-transmission noise emissions. It also developed an
approach to reduce the noise generated by railcar transmissions.

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In the reporting period Voith Turbo developed an obsolescence management system, which identifies, manages, and controls the natural and artificial aging
or non-availability of a product, not least from an innovation viewpoint. To give an example, Voith Turbo offers a system for use in buses that allows driveline
monitoring over the entire lifecycle. The bus operator is informed automatically of any impending malfunctions, which in turn improves operational reliability
and almost completely rules out spontaneous vehicle failures.

4.2 Responsibility in the Supply Chain
Procurement Markets

Country-specific GPTs

FY 2017/18

FY 2016/17

Europe56

56

61

Americas

27

23

23

Asia

16

20

15

Other

1

1

1

29

26

21

3

5

none

none

all

none

Country-specific GPTs in %of which newof which updated
Training of Purchasing employees globally Number
Hours of training of Purchasing employees (Purchasing Training Program)
Hours of training of Purchasing employees

Supplier Self-assessment

Suppliers Who Have Filled Out a Self-assessment Number
1)Compliance & Sustainability Check of initial self-assessment

Evaluations of Suppliers

Supplier Compliance

1,514

3,629

10,832

12,022

FY 2017/18

1)

n.d.
2)

FY 2015/16

3,584

2,547

n.d.

Initial self-assessment

n.d.

n.d.

2,430

68.0

55.0

n.d.

Supplier Self-assessment ratio (share of the invoice volume obtained from suppliers
for whom there is a valid self-assessment) in %

n.d.

n.d.

59.2

FY 2017/181)

FY 2016/173)

FY 2015/16

Evaluations of Existing Suppliers
Evaluations (individual processes) Number

1,115

710

2,441

Suppliers evaluated Number

916

566

1,956

Sustainability ratio in %

87.4

89.7

85.4

Share of invoice volume placed with evaluated suppliers in %

49.0

36.0

68.0

Volume of invoices with suppliers for whom an up-to-date, approved supplierevaluation was available in € millions

928

705

1,274

FY 2017/18

FY 2016/174)

FY 2015/16

13

13

10

Supplier Compliance Number

Data-gathering status November 2018
Owing to the system migration, in FY 2016/17 no new assessments were able to be gathered for 6 months. In addition, questions regarding compliance and sustainability were removed fromthe initial Supplier Self-assessment and incorporated into a Compliance & Sustainability Check, which can now be requested from and confirmed by suppliers as an individual questionnnaire.
3)
Due to a system migration, systematic Supplier Self-assessments and supplier evaluations were suspended for six months during the reporting period.
4)
Only includes blocks due to violations of compliance and/or sustainability guidelines; excludes blocks owing to bankruptcy or technical quality issues.
2)

FY 2016/17

5,128

Share of the invoice volume obtained from suppliers for whom there is a valid
Compliance & Sustainability Check of the initial self-assessment in %Blocked suppliers
1)

FY 2015/16

Procurement Markets in %Country-specific GPTs

Scope of Training

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The Report
Voith has published a Sustainability Report every year since 2009. This report describes the progress we made in the 2017/18 fiscal year, i.e. from October 1, 2017 to
September 30, 2018. This report is supplemented by an online Fact base.
In producing our report we followed the internationally recognized guidelines of the
Global Reporting Initiative (GRI). Our report was not audited externally. In our assessment, the scope of our report meets the requirements of the Core option of the GRI
Standards. In 2018 we held an exhaustive stakeholder survey to identify the material
sustainability issues and enhance our materiality analysis. We are currently evaluating
the results and will incorporate them in our Sustainability Report 2019. This reportcontinues to refer to the results of our 2016 materiality analysis.
There were two far-reaching changes in the reporting period. First, our Group Division
Voith Digital Solutions was renamed and has operated since October 2018 as Voith
Digital Ventures. Second, the scope of consolidation was expanded due to theincrease from 50 % to 80 % in April 2018 in our participation in FlowLink Systems
Private Ltd.
Unless stated otherwise, the facts, figures and information provided in this report
apply to the global Voith Group Divisions: Voith Hydro, Voith Paper, Voith Turbo, andVoith Digital Ventures. Please refer to the Voith Annual Report for details of the Group
companies involved. The degree of consolidation comprises at least 80 % of the Voith
Group by revenue and headcount, and includes all of our Group’s major locations.
While we report the number of employees in terms of headcount in this report, in our
Annual Report we report this figure mainly in terms of FTEs (full-time equivalents);
this may lead to discrepancies between the figures. Furthermore, whereas the scopeof consolidation in our Annual Report regarding the number of employees includes
our holdings in Ray Sono AG and FlowLink Systems Private Ltd., they have notbeen consolidated in this Sustainability Report 2018. However, the total headcountindicator is an exception as it forms the basis for the scope of consolidation of theAnnual Report.
The information was requested electronically in writing, and the data was gatheredusing mainly division-specific software. In individual cases it is not currently possible
to derive a three-year trend; however, this is our objective for future reports. In a
few cases, certain facts already reported and affecting previous periods have beencorrected. We have marked this in the report at the appropriate points. Rounding
differences may occur owing to the addition of data.
All forward-looking statements in this report are based on reasonable assumptionsas at the deadline for content submission. Due to unknown risks, uncertainties, andother factors, the actual results, developments or performance of our company may
deviate from our forecasts, estimations, and statements. For further information pleasesee our Annual Report.
For improved readability we refrain from referring specifically to both genders inthis report. This is not a value judgment, and all forms are to be understood as
gender-neutral.
Further and more extensive information is provided at www.voith.com and in our
Annual Report. We currently expect to publish our next Sustainability Report inearly 2020.

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Imprint and Contacts

Project Management and Point of Contact forContent-related Questions
Corporate Sustainability
Ulrich Weiße
E-mail: ulrich.weisse@voith.com
Markus Schönberger
E-mail: markus.schoenberger@voith.com
Further Information
The Sustainability Report is also available in German.
The German and English editions are available online at:
http://voith.com/corp-de/ueber-voith/nachhaltigkeit.html
http://voith.com/corp-en/about-us/sustainability.html
In addition to the Sustainability Report, Voith also publishes
a comprehensive Annual Report at the end of the fiscal year.
It is available online at:www.voith.com
Consulting
Schlange & Co. GmbH
Text
Carlsberg & Richter GmbH & Co. KG
DesignCorporate Communication und
G2 Printmedienmanufaktur GmbHEnglish translation
World2World, Hamburg –Mark Elliott & Jim Blake

3_Employees

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