Change of Perspective 40 Group Management Report

CONTENTS

1 A CHANGE OF PERSPECTIVE 40 GROUP MANAGEMENT REPORT

40 Economic environment 10 BULLETIN 41 Management reorganization 41 Business development 10 Report of the Advisory Board 42 Sales by region 14 Report of the Central Managing Board 46 The operational units of the Würth Group

16 THE BOARDS Würth Line: 48 The Würth Line divisions 16 Legal and organizational structure CHANGE OF PERSPECTIVE of the Würth Group Allied Companies: 2013 Annual Report of the Würth Group 2013 17 Advisory Board 50 Electrical Wholesale unit 18 Central Managing Board 51 Trade unit 20 Customer Advisory Board 52 Production unit 53 Electronics unit 54 RECA Group unit 21 COMPANY PROFILE 55 Tools unit 56 Screws and Standard Parts unit 57 Financial Services unit 22 COMMITMENT 58 Results of operations, net assets Annual Report of the Würth Group 22 Quo vadis Europe? and ﬁ nancial position 26 Experiencing art and culture 64 Research and development 32 Sharing commitment 67 Risk and opportunities report 36 Shaping education 71 Employees 73 Corporate responsibility 74 Corporate governance report 75 Subsequent events 75 Outlook

79 CONSOLIDATED FINANCIAL STATEMENTS

80 Consolidated income statement 81 Consolidated statement of comprehensive income 82 Consolidated statement of fi nancial position 84 Consolidated statement of cash fl ows 86 Consolidated statement of changes in equity 87 Consolidated value added statement 88 Notes to the consolidated fi nancial statements

AT A GLANCE » www.wuerth.com

CONTENTS

1 A CHANGE OF PERSPECTIVE 40 GROUP MANAGEMENT REPORT

79 CONSOLIDATED FINANCIAL STATEMENTS

AT A GLANCE » www.wuerth.com THE WÜRTH GROUP AT A GLANCE OPERATIONAL UNITS

SHARE IN SALES WÜRTH GROUP Würth Line divisions

2009 2010 2011 2012 2013 2013 2013 2012 Change Sales in millions of EUR 7,522 8,633 9,699 9,985 9,745 in % in millions in millions in % of EUR of EUR Employees 57,882 62,433 66,113 65,169 63,571 Pre-tax operating result * in millions of EUR 235 385 395 415 445 Metal 16.4 1,603 1,658 – 3.3 Return on sales in % 3.1 4.5 4.1 4.2 4.6 EBIT in millions of EUR 267 398 450 448 495 Auto 14.6 1,421 1,451 – 2.1 EBITDA in millions of EUR 549 690 736 762 798 Wood 10.0 971 966 + 0.5 Net income for the year in millions of EUR 111 268 271 279 309 Cash ﬂ ow from operating activities in millions of EUR 800 216 540 618 599 Industry 8.8 858 869 – 1.3 Investments in millions of EUR 263 283 455 465 433 Equity in millions of EUR 2,600 2,867 3,042 3,204 3,399 Construction 6.2 601 598 + 0.5 Total assets in millions of EUR 6,292 6,826 7,771 7,649 7,978 Allied Companies Rating by Standard & Poor’s A/neg.** A/stable A/stable A/stable A/stable Total 56.0 5,454 5,542 – 1.6

The consolidated fi nancial statements of the Würth Group are prepared in accordance with the International Financial Reporting Standards (IFRSs). * Earnings before taxes, impairment of goodwill and fi nancial assets, and changes recognized in profi t or loss of non-controlling interests disclosed as liabilities ** Negative outlook SHARE IN SALES Allied Companies’ units

2013 2013 2012 Change in % in millions in millions in % of EUR of EUR SALES OPERATING RESULT WÜRTH GROUP in millions of EUR WÜRTH GROUP in millions of EUR Electrical Wholesale 10.0 976 988 – 1.2

Trade 8.9 872 849 + 2.7 Operating result in millions of EUR Return on sales as a percentage Production 6.7 656 591 + 11.0 9,985 9,745 10,000 9,699 600 8,633 Electronics 5.2 504 691 – 27.1

7,522 445 RECA Group 4.9 473 483 – 2.1 7,500 450 415 385 395 Tools 3.5 342 355 – 3.7 Würth Line 5,000 300 6.0 Screws and Standard Parts 2.5 243 265 – 8.3 235 Financial Services 1.1 109 104 + 4.8 2,500 150 3.0 Other 1.2 116 117 – 0.9

Total 44.0 4,291 4,443 – 3.4

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 THE WÜRTH GROUP AT A GLANCE OPERATIONAL UNITS

SHARE IN SALES WÜRTH GROUP Würth Line divisions

2013 2013 2012 Change in % in millions in millions in % of EUR of EUR SALES OPERATING RESULT WÜRTH GROUP in millions of EUR WÜRTH GROUP in millions of EUR Electrical Wholesale 10.0 976 988 – 1.2

Trade 8.9 872 849 + 2.7 Operating result in millions of EUR Return on sales as a percentage Production 6.7 656 591 + 11.0 9,985 9,745 10,000 9,699 600 8,633 Electronics 5.2 504 691 – 27.1

Total 44.0 4,291 4,443 – 3.4

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

DO YOU LIKE TO CHANGE PERSPECTIVE ?

PEOPLE WHO WALK IS IT NICER TO DREAM ON THEIR HANDS ALWAYS HAVE WITH YOUR HEAD AT THE TIP OF A VIEW OF THE BLUE SKY. YOUR TOES? EVER EATEN SPAGHETTI IF YOU’RE IN THE SOUTH AND LOOKING NORTH, OFF THE CEILING? YOU’RE BOUND TO SEE THE SUN.

SHOULD YOU BUTTER YOUR BREAD FALLING IN LOVE IS A SURE THING WHEN OR BREAD YOUR BUTTER? YOU’RE HEAD OVER HEELS. CAN YOU THINK LATERALLY WHEN YOU’RE STANDING UP?

1 WÜRTH VISIONS

PEOPLE WITH FLEXIBLE MINDS CAN ALWAYS FIND THE RIGHT PLACE TO WORK.

2 3 WÜRTH VISIONS

NOT EVERY COMPANY CAN SAY THAT THE SKY’S THE LIMIT.

4 5 WÜRTH VISIONS

THE POSSIBILITIES ARE ENDLESS FOR PEOPLE WHO ALLOW THEMSELVES TO BE INSPIRED.

6 7 WÜRTH VISIONS

8 WITH A HEAD FULL OF IDEAS, YOU CAN LITERALLY TURN THE WORLD UPSIDE DOWN FOR YOUR CUSTOMERS.

9 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF THE ADVISORY BOARD

Bettina Würth, Chairwoman of the Advisory Board of the Würth Group

Ladies and Gentlemen,

“We want to venture towards more democracy”. When the German Chancellor Willy Brandt used this phrase as the guiding principle behind his government statement on 28 October 1969, the German economy was in full bloom. There was a real sense of a new beginning among society at large, and technological progress was fuelling hopes for the future – everything was possible, it seemed.

So what remains of this confidence and unbridled optimism? Not much! Dramatic events like the terrorist attacks of 11 September 2001 and the financial and economic crisis of 2008 have done too good a job of exposing just how vulnerable our globalized society is. So it comes as no surprise that the World Bank’s recent “Risk and Opportunity” report focuses on economic risks, devoting only a few lines to the opportunities. If nothing else, this fixation on risk is casting a shadow over day-to-day business life. Our customers are also feeling the heat, for example when they seek to secure external financing for their investments.

The main thing that an environment that is hostile towards investment does is to hinder progress. The consequences are fatal. The American economist Robert J. Gordon, for example, believes that in the long run, economic growth is an impossibility without innovation. As a company that sees itself as one of the driving forces of innovation on the market and that owes its market leadership to this focus on innovation, we have to respond to these trends by “venturing towards more change”. Or rather: by venturing towards even more change.

WHICHEVER WAY YOU LOOK AT IT: WE HAVE OUR FUTURE IN OUR OWN HANDS.

Every reorientation process starts with a change of perspective The last two years have encouraged us not only to look at how we work, but also to put our entire business organization under the microscope. With total sales of EUR 9.75 billion, we were, sadly, unable to meet our targets for the 2013 fiscal year. This is something we really need to work on. On the other hand, we are encouraged by the fact that we achieved an operating result of EUR 445 million. This is testimony to the unwavering motivation of our employees and to healthy levels of productivity. I would like to express my most sincere thanks to the members of the management and to all of our employees for this hard work.

Anyone who wants to develop is well advised to start by taking a critical look at his or her own perceptions. To enable us to do this, we called on the advice of external experts. Having someone look at the company through an outsider’s eyes helped us to take a good look at established structures at all levels, simplify our processes and focus even more on what the market needs. Looking back, we left virtually no stone unturned and made the necessary adjustments within the space of only a few months. The sales activities of the Würth Line are a good example of just how much of an impact this process of change has had on our company. Ever since our company was established, we have focused primarily on direct sales in this area. We have also set up an efficient sales branch network and have continually stepped up our e-commerce activities over the past few years.

11 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

We are changing at all levels Given that we are now generating a growing proportion of our sales via these additional sales channels, the next logical step was to move from our previous focus on the sales force towards a contemporary multi-channel strategy. Coordinated interaction between the different customer contact points allows us to offer tailor-made sales solutions for every sector and company size – true to our motto: “To each customer their own Würth”. As far as our sales staff are concerned, this means, for example, that they can focus more on their role as their customers’ problem-solver in the future. This expertise where the customer needs it remains indispensable for us, which is why we will be continuing to strengthen our sales force. Our quest to achieve more clout and speed in our concentrated marketing efforts also involves looking at our management structures. We have whittled the Central Managing Board – our most important strategic body – down from seven to four members. Robert Friedmann, Peter Zürn, Uwe Hohlfeld and Joachim Kaltmaier share responsibility for the Würth Line and our Allied Companies. Thanks to the reorganization measures, far-reaching changes have been initiated within the entire company within the space of only a few months. This would have been a virtually impossible feat without motivated employees. Sales development over the past few months has confirmed that these changes were the right move, with signs of real success already starting to emerge. I would like to take this opportunity, on behalf of the Advisory Board, to express my thanks again.

We will be pinpointing and exploiting new market opportunities In summary, we have initiated all of the necessary changes to get the Würth Group on the path to growth. Our optimism is also based on macroeconomic developments. The eurozone is past the worst. The current growth forecast for the German economy comes in at 1.9 percent, which will also lay a good foundation for strong growth. In North and South America, the forecasts are pointing to stable growth rates around the three percent mark. On the high-growth markets in the east – India with economic growth of 5.0 percent and China with 7.2 percent – we are also on the cusp of setting new sales records. By way of conclusion, we do not see too many risks lurking behind trends. Instead, we believe that they offer good opportunities for achieving solid growth again this year and allowing us to surpass the EUR 10 billion mark for consolidated sales. With more than 400 companies in over 80 countries, Würth has a presence in all of the world’s major regions. What is more, our Allied Companies allow us to cover a broad spectrum of different services, allowing us to stimulate growth in many different areas of our Group.

As a result, we are looking ahead with a sense of optimism and drive. After all, “Change begets change. Nothing prop- agates so fast”. Charles Dickens’ words continue to ring true to this day. We have already taken the first steps with the far-reaching changes implemented over the past few months. And the current developments show that our resolve will pay off.

Work of the Advisory Board

In 2013, the Advisory Board of the Würth Group held four extensive meetings, with the second joint strategy meeting of the Advisory Board and the Central Managing Board being held as an extraordinary session in June 2013. These meetings were based on the reports of the Central Managing Board members on the business situation, projections and opportunity and risk management. All transactions subject to approval pursuant to the company statutes were submitted to the Advisory Board for decision in good time and considered in detail; in urgent cases, resolutions were passed by circularization.

The activities of the Advisory Board in 2013 were characterized by a strong focus on providing strategic support to the Central Managing Board. Key aspects of these activities include the new management structure of the Würth Group and

12 the associated decision to reduce the size of the Central Managing Board and reorganize the Würth Group’s second-level management. The strategic work of the Advisory Board also focused on the enhancement of the traditional Würth business model to create a multi-channel sales company, and the definition of criteria allowing a refined assessment of the different business models within the Allied Companies.

The three Advisory Board committees, the Audit Committee, the Investment Committee and the Personnel Committee, met three times each in 2013. The committees serve to increase the efficiency of the Advisory Board and carry out preparatory work on complex issues. The Personnel Committee also has the power to pass resolutions regarding management employment contracts. The committee chairs each report regularly to the Advisory Board on the work of the committees.

On 8 April 2014, the Advisory Board’s Audit Committee took an in-depth look at the 2013 consolidated financial statements, including the Group management report, as well as the audit report prepared by Ernst & Young. Ernst & Young audited the consolidated financial statements and the Group management report and issued an unqualified opinion thereon. The Audit Committee examined these documents and approved them. The Audit Committee also focused on risk management, the corporate governance structure and internal audit.

The Advisory Board’s Investment Committee assessed the investment projects that are subject to approval and classified them according to urgency and significance. The Würth Group will remain true to its investment culture, exercising the necessary degree of caution, as a prerequisite for the company’s growth, meaning that the investments approved for the 2014 fiscal year will be on a similar level to previous years, taking sales growth into account. The Advisory Board approved the investment and financial plan of the Würth Group for the fiscal year 2014 at its meeting on 13 December 2013 based on the proposal made by the Investment Committee.

The Advisory Board’s Personnel Committee dealt, at its meetings, with all personnel measures falling within the Advisory Board’s area of competence, in particular also with the personnel measures associated with the reorganization of the Group’s first and second-level management tiers. The Committee’s work also focused on the personnel development Group function, which was reorganized with the establishment of the Würth Business Academy in Rorschach. The Committee also looked at succession planning and the structure of the incentive and remuneration systems.

The Advisory Board of the Würth Group would like to thank the Central Managing Board and the Supervisory Board of the Würth Group’s Family Trusts for the good working relationship, especially Prof. Dr. h. c. mult. Reinhold Würth, Chairman of the Supervisory Board of the Würth Group’s Family Trusts, who took part in all meetings of the Advisory Board. We would also once again like to thank all employees for their strong commitment and their decisive action, as well as all our customers and business partners for their loyalty to the Würth Group.

Sincerely,

Bettina Würth Chairwoman of the Advisory Board of the Würth Group

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REPORT OF THE CENTRAL MANAGING BOARD

Robert Friedmann, Chairman of the Central Managing Board of the Würth Group

Ladies and Gentlemen,

Stagnating sales – increased earnings: this is the situation that Würth was confronted with in 2013. Naturally, we would like to have seen an upward trend for both figures. But 2013 was not an easy year for Würth. Varied overall economic conditions resulted in different sales trends in the individual regions, with sales down in many places. This explains why our sales in fiscal year 2013 were down year-on-year to EUR 9.75 billion (2012: EUR 9.98 billion), which corresponds to a drop of 2.4 percent. If we adjust the figures to reflect the solar activities, which were abandoned in 2012, the decline comes in at 0.1 percent, as the solar sales amounted to around a quarter of a billion euros in 2012. We are still feeling the impact of the economic crisis in southern Europe. After all, we generate 70 percent of our sales in the euro zone. Our broad global standing helps us to counteract these trends. Our business on the US market, for example, showed stable development, continuing on the upward trajectory plotted in recent years. This is also due to demand among private households and the associated revival in the construction sector.

We are delighted to report an increase in our operating result for 2013, based on continuing operations, to EUR 445 million despite the stagnating sales (2012: EUR 415 million). The most profitable region within the Group was Germany, which generated an operating result of EUR 226 million (2012: EUR 210 million), underlining its role as the largest and most important individual market for the Würth Group. The entities outside Germany, too, generated a higher result than in 2012 despite the developments in southern Europe. The improvement in the operating result shows us that Würth not only boasts strong earnings power, but also that our measures to boost productivity and reduce fixed costs have borne fruit.

14 The Würth Group enjoys a solid standing in its traditional business areas and enjoys an excellent market position. Our corporate culture is a special one that is put into practice day after day by each and every employee and demonstrated by our managers: the foundation that supports the structure of our company. Nevertheless, the title of our Annual Report is “A change of perspective”? Do we need a change of perspective?

It is becoming more difficult to achieve high growth rates. But that doesn’t mean it is impossible. Because we are constantly taking a critical look at ourselves and are open to change. This also means that we have to have the courage to grow, expand, reorganize and also make decisions. This flexibility has always been part of how we see ourselves. Our actions were never characterized by a wish to rigidly follow a straight onward path without looking to the left or to the right, but rather to keep our company’s structure flexible enough to cushion any shocks and fluctuations. One of our key measures has been the focus on new e-commerce activities, but these measures also include massive investment in innovative logistics, the expansion of the sales force on young markets, the constant additions to the sales branch network and moves to position Würth as an employer in the manner that is best suited to the target group. On established markets, we are refining our sales activities by way of regionalization, customer segmentation, the expansion of the customer base and a policy of seeking out potential. But we are also asking ourselves fundamental questions: what, for example, will the workplace of the future look like at Würth? What options are open to us in order to systematically incorporate ecological, economic and social sustainability into our day-to-day business? How can we grow in line with the wishes of our customers?

The thing that makes Würth special are its employees. Their enthusiasm, their passion, their systematic approach. We would like to thank them for their professionalism and commitment, especially in times when this isn’t easy. We would like to thank our customers, whose trust forms the basis for our work. And we would also like to thank the Councils of Confidence and Works Councils in the Würth Group, as well as the Customer Advisory Board, for their work. Their critical appraisal allows us to move forward and opens the door to new perspectives. The cooperation with the members of the Advisory Board and the Supervisory Board of the Würth Group’s Family Trusts is also consistently constructive. Even in the difficult 2013 fiscal year, we enjoyed the full support of the Würth family. We would like to thank Prof. Dr. h. c. mult. Reinhold Würth, his wife Carmen and Bettina Würth for their support, which has played a key role in ensuring that we can enhance our business models in a strategically sustainable manner.

If you want to achieve something, you don’t always have to turn the world upside down, but it sometimes helps to change perspective and challenge long-held ideas.

We are optimistic as far as 2014 is concerned.

For the Central Managing Board of the Würth Group

Robert Friedmann Chairman of the Central Managing Board of the Würth Group

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WÜRTH GROUP: LEGAL STRUCTURE (SIMPLIFIED CHART)

WÜRTH FAMILY TRUSTS

Adolf Würth GmbH & Co. KG Würth Promotion Ges.m.b.H. Germany Austria

German Reinhold Würth Holding GmbH subsidiaries Germany

Würth International AG Würth Finance International B.V. Switzerland Netherlands

Subsidiaries Subsidiaries Subsidiaries outside Germany outside Germany outside Germany

ORGANIZATIONAL STRUCTURE

Advisory Board 9 members

Central Managing Board 4 members

Executive Vice Presidents 20 members manage the strategic business units (functions, divisions, regions)

Managing Directors of over 400 separate entities

16 ADVISORY BOARD

The Advisory Board is the supreme supervisory and controlling body of the Würth Group. It advises on strategy, approves corporate planning as well as the use of funds. It appoints the members of the Central Managing Board, the Executive Vice Presidents as well as the managing directors of the companies generating high sales.

(as of 1 January 2014)

Bettina Würth Dr. Bernd-Albrecht von Maltzan Honorary Chairman of the Chairwoman of the Advisory Board Member of the Advisory Board, Advisory Board of the Würth Group former Divisional Board Member and Senior Advisor at Private Wealth Prof. Dr. h. c. mult. Reinhold Würth Management Deutsche Bank AG, Chairman of the Supervisory Board of Dr. Frank Heinricht Frankfurt/Main the Würth Group’s Family Trusts Deputy Chairman of the Advisory Board of the Würth Group (since 1 January 2014), Chairman of the Jürg Michel Honorary members of the Management Board of Schott AG, Member of the Advisory Board Advisory Board Mainz (since 1 January 2014), former Member of the Central Managing Rolf Bauer Board of the Würth Group Honorary member (since 1 January Peter Edelmann 2014), former Member of the Central Member of the Advisory Board, Managing Board of the Würth Group Managing Partner of Ina Schlie Edelmann & Company, Ulm Member of the Advisory Board (since 1 January 2014), Head of Dr. Michael Rogowski Group Tax at SAP AG, Walldorf Honorary member, Chairman of the Wolfgang Kirsch Foundation Board of Member of the Advisory Board Hanns-Voith-Stiftung, Heidenheim (since 1 January 2014), Chairman Dr. Martin H. Sorg of the Board of Management of DZ Member of the Advisory Board, Bank AG, Frankfurt/Main Certified Public Accountant, Partner of Dr. Bernd Thiemann the law firm Binz & Partner, Stuttgart Honorary member (since 1 January 2014), former Chairman of the Management Axel C. A. Krauss Board of Deutsche Genossenschafts- Member of the Advisory Board, bank AG, Frankfurt/Main Member of the Supervisory Board of Unilever Deutschland, Hamburg

17 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

CENTRAL MANAGING BOARD

From left to right: Peter Zürn, Joachim Kaltmaier, Robert Friedmann, Uwe Hohlfeld

18 The Central Managing Board is the most senior decision-making board of the Würth Group. It has four members and is comparable to the management board of a group holding company. Its most important duties include corporate strategy planning, the selection of executives as well as the management of strategic business units and functions.

Robert Friedmann Chairman of the Central Managing Board of the Würth Group

Peter Zürn Deputy Chairman of the Central Managing Board of the Würth Group

Uwe Hohlfeld Member of the Central Managing Board of the Würth Group

Joachim Kaltmaier Member of the Central Managing Board of the Würth Group

19 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

CUSTOMER ADVISORY BOARD

The Customer Advisory Board brings together Würth customers from the worlds of trade and industry. The members report on developments in their sector and support Würth in aligning its activities with customer requirements. The board’s meetings, which are held twice a year, also look at new products and services.

Joachim Wohlfeil Roland Schuler Rudolf Wohlfarth Chairman of the Customer Advisory Member of the Board of Manage- Member of the management of the Board, managing director of Ernst ment of BayWa AG, Munich Emil Frey Group, Chairman of the Wohlfeil GmbH, Sanitärtechnik, Management Board of the Emil Frey Karlsruhe, President of Handwerks Group Germany, Stuttgart kammer Karlsruhe (Chamber of Burkhard Weller Trade Karlsruhe) Managing Partner of Wellergruppe GmbH & Co. KG, Berlin Honorary Chairman of the Johannes Moser Customer Advisory Board Former Director and now freelance Frank Westermann consultant of the company Imtech Managing Director of Karl Wester- Gerhard Irmscher Deutschland GmbH & Co. KG, mann GmbH & Co. KG, Denkendorf, Stuttgart Chairman of the Technology Com- mittee of Landesverband Holz und Kunststoff, Baden-Württemberg Dr. Thomas Peukert Managing Director of Stahl CraneSystems GmbH, Künzelsau

20 COMPANY PROFILE

Würth Group: world market leader for trading in assembly and fastening materials The foundation stone for the Würth Group was laid in 1945 by Adolf Würth: he sets up Adolf Würth GmbH & Co. KG, a simple company selling screws and consisting of two men, the parent company of the Würth Group, in Künzelsau.

After his father’s early death, Reinhold Würth takes over at the helm of the family business aged 19. Back then, annual sales came in at EUR 80,000. Today, 60 years later, the Group generates sales of EUR 9.75 billion and has a workforce of more than 63,000. The Group’s international focus started with the formation of the first foreign company in the Netherlands in 1962. Today, the Group has more than 400 companies and operates in more than 80 countries.

The Würth Group is split into two operational units: Würth Line and Allied Companies. The Würth Line companies are responsible for the Group’s conventional core business, the sale of assembly and fastening materials. More than 100,000 products have to meet our exacting quality standards: screws, screw accessories, dowels, chemical technical products, furniture and iron fittings, tools, stocking and picking systems and occupational safety equipment for professional users. Allied Companies operate in related areas as sales or manufacturing companies, and as financial services providers.

With more than 400 sales branches, Adolf Würth GmbH & Co. KG is closer to its customers than any of its competitors. The company boasts around 1,500 sales branches across the globe. A sales organization that includes 30,000 sales representatives worldwide guarantees the provision of competent advice to three million customers from trade and industry. Online shop, e-Procurement, apps: the Würth Group is proficient in the e-commerce sector, too. Our objective is clear: to offer customized services, practical system solutions and a broad range of products in order to make our customers’ work easier.

SALES DEVELOPMENT WÜRTH GROUP in millions of EUR

9,745 10,000 8,633

7, 50 0 CAGR: 22.0 % (Compound Annual Growth Rate) 5,136 5,000

2,500 1,234

282 0.08 1.0 33

1954 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2013

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QUO VADIS EUROPE?

Ladies and Gentlemen,

If we look at the history of the European Union since those first hesitant attempts to bring Europe together after the Second World War, the period from the establishment of European Coal and Steel Community in 1951 to today, at the end of 2013, then we can only say that astound- ing progress has been made over these 62 years. Border controls have been abolished for most European citizens; from Helsinki to Lisbon, and from Athens to Dublin, people use the same currency to pay; but the creation of a single European jurisdiction is much more important. A lawyer I know, who is licenced to practice both in the US and in Germany, recently explained to me: “As far as the legal system is concerned, the European Union is already streets Prof. Dr. h. c. mult. Reinhold Würth, ahead of the United States of America.” Chairman of the Supervisory Board of the Würth Group’s Family Trusts The resulting latent changes in opinion among EU citizens, which are more of a subconscious nature, should not be underestimated either. Although people in all member states never seem to tire of bashing the EU and its excessive Brussels-based bureaucracy, the vast majority of citizens would be loathed to see the abolition of the EU.

This ambivalent “love-hate” relationship can certainly be compared to the feelings of many citizens from the former East Germany – as time passes, memories of life in the former East Germany become embellished, but I don’t know anyone who would like to have the old East Germany back.

If we look at which forces are putting the brakes on the further development of the European Union, we can identify two main sources. First, obviously, our friends in the UK and second, the opponents of the euro. Due to their island location, the British are born seafarers and trav- elled the world for centuries with the British Empire. So we have to understand that integration into a well-oiled European Union is perhaps time times harder, mentally and ideologically, for our British friends than it is for all continental Europeans. If the referendum that is planned in the UK for 2017 results in the majority of citizens voting against further membership of the European Union, then we should not exert any pressure and should accept, in the spirit of peace and friendship, an independent, isolated United Kingdom. This would also, to be hon- est, remove one of the main obstacles to further EU integration.

The other obstacle comes from the opponents of the euro. The question that has reared its head in Germany is that of a return to the German mark. If we look at the euro as a currency from its introduction in 2002 to date, then the euro has certainly more than survived its bap- tism of fire: the US would have liked to have seen the euro disintegrate in the course of the real estate and mortgage crisis of 2008/2009, removing any competition to the dollar as a reserve currency.

22 This did not happen. The economic power behind the euro zone, with its 318 millions citizens, provides a steady foundation for the stability of our currency – provided that the governments involved pursue a sensible currency policy.

One particularly strong argument in Germany is that we have to cough up to cover the debts of the southern European countries, Greece, Italy, Spain and Portugal, as taxpayers, which is why the German mark should be reintroduced, as is one of the main aims of the recently established political party, Alternative für Deutschland (AfD).

Whether we like it or not, the truth of the matter is that Germany has to assume some liability for the debt of the southern European countries as part of the ESM and EFSF rescue funds. And this is not a bad thing if we can summon only a tiny spark of European solidarity: within the Federal Republic of Germany, a system known as Länderfinanzausgleich (federal state fiscal equalization scheme) has been in place for decades. Traditionally, Baden-Württemberg, Bavaria and Hesse have been paying billions into this pot every year in order to ensure more or less equal living conditions within Germany. So why shouldn’t this principle apply within the European Union? Germany, in particular, reaps manifold benefits from the euro: if we were to abandon the single currency, a new German mark would soon appreciate so much against all of the world’s other currencies that the German export industry would very quickly become uncompetitive and would suffer bitterly. So we are currently benefitting massively from the euro.

Secondly, there is the “return on investment”, namely the fact that we can live in peaceful times. Is there anything more precious in life? Not really.

I make no secret of the fact that I’m a passionate European and would like to see less power given to nation states and, at the same time, more moves to strengthen the underlying regions. We need the sense of a spiritual home, familiarity and security that we can find as South Tyroleans, Bavarians, Flemish or Basques more than those that we can find as Germans, Ital- ians, Belgians or Spaniards.

My conclusion: Vivat Europa!

Yours,

Reinhold Würth

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24 COMMITMENT: IT’S A QUESTION OF HONOR.

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EXPERIENCING ART AND CULTURE

Würth House in Rorschach The inseverable links between art, story building has a total volume of around 150,000 cubic meters, culture and Würth are evident from Würth House in Rorschach. The with a glass shell covering the entire building. This outer layer of new building on the Swiss bank of Lake Constance, which was offi- glass features an offset arrangement of panes of glass with a green cially opened on 20 April 2013, is home to more than just six Würth hue and fine, metallic textile reinforcements. This produces a rhythmic companies – Würth Finance, Würth Financial Services AG, Würth glass curtain. ITensis, Würth Logistics, Würth Management AG and the event agency marbet. The building is also home to a craftsman shop and the Würth Forum Würth Rorschach is the 15th museum housing the Würth Col- Group training center. The Forum Würth Rorschach also presents lection. The building, on the banks of lake, is also the third Swiss loca- Würth’s extensive collection of artwork, which now comprises more tion, after Chur and Arlesheim, in which Würth is making its corporate than 16,000 works of art, in an area measuring around 600 square culture truly visible for miles around in a high-quality design format. meters. Entitled “Première”, the opening exhibition puts the main focal Würth House Rorschach is surrounded by a “Jardin extraordinaire” points of the collection, classical modernism and contemporary art, in that is open to the public, an exceptional garden that is brought to the spotlight. There is a particular focus on Swiss art. A presentation life by the charming, mosaic sculptures – some of which can be used in the bright foyer of Forum Würth Rorschach is dedicated to the Danish for play – like the “Dragon” or the “Bear” designed by Niki de sculptor Robert Jacobsen, one of the key artists represented in the Saint Phalle. A revolving Nana, one of her best-known figures, also Würth Collection from day one. welcomes visitors to the part, symbolizing the world in the sculpture named “Le Monde”. Anyone wandering along the edge of the lake When it came to the realization of the new building, the renowned can encounter other highlights of modern sculpture, like the sun dial Zurich-based architects Gigon / Guyer emerged as the winners in a sculpture or the monumental bronze figure “Large Interior Form” by competition that attracted high-profile entries. Their plans are entitled Henry Moore. “play of light” (Lichtspiel) and pay tribute to the building’s unique location on the lake. Würth House Rorschach beckons to passers-by The extremely positive response to the building in eastern Switzer- with its green glass exterior that alternates between transparency land can be seen not only from the rush of visitors keen to attend its and reflection, and holds a mirror to the special flair and beauty of open day. Forum Würth Rorschach has also proven extremely popu- the surrounding area. The relief formation of the building complex re- lar, with more than 50,000 visitors since it was opened. acts to the station building opposite with low-rise cubes, and to the vast expanse of the park and lake with a higher element. The five-

26 RORSCHACH Located directly on the Swiss bank of Lake Constance, the green-tinged crystalline structure complements the surrounding area harmoniously. Würth House Rorschach is home to six Würth Group companies, a craftsman shop, a training center and 600 square meters of exhibition space.

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KUNSTHALLE WÜRTH Around 200 works from the late middle ages to the present day were on display in the “Menagerie – An Animal Show from the Würth Col- lection” exhibition in Kunsthalle Würth in Schwäbisch Hall. In addition to paintings, graphics and over-sized sculptures, the exhibition also features curious exotic objects including antler furnishings, containers or historical jewelry in the form of animals. The exhibition was accompanied by an extensive educational program for all age groups.

Kunsthalle Würth, Schwäbisch Hall The “Menagerie – An Animal Museum Würth, Künzelsau Art from Austria has always been a Show from the Würth Collection” exhibition in Kunsthalle Würth in particular focal point of the Würth Collection. These varied, quite Schwäbisch Hall rounded off a trilogy that invited visitors to wander contrary works make up one of the largest private collections of Aus- through nature in “Forest Fascination”, then showed the diversity of trian art outside of Austria. With the “A.E.I.O.U.” exhibition, Museum the human species in “From Head to Toe” before turning its attention Würth in Künzelsau presented a varied selection from this collection to the human race’s closest relatives, animals. The fascinating aspects spanning the period from the late 19th century to the present day. of the animal world were illustrated with various works spanning all More than 100 paintings, drawings, graphics and sculptures by more eras of art history. The exhibition started with works by the famous than 70 artists were on display. Starting with Gustav Klimt, the exhibi- renaissance painter Lucas Cranach d.J., showed animal sculptures by tion led visitors to contemporary works by artists like Herbert Brandl, Leonhard Kern and presented oil paintings by Giovanni Segantini Xenia Hausner or Markus Redl. The title of the exhibition, “A.E.I.O.U.” and Carl Spitzweg, as well as works by Pablo Picasso, Andy Warhol, is a reference to the motto used by the Duke of Austria, who later be- David Hockney and Marc Quinn. The varied exhibition showed the came Emperor, Friedrich III., in the 15th century to adorn his crests, constantly changing relationship between humans and animals. Paint- documents, inventory lists and buildings, the meaning of which has not ings, sculptures, drawings, handicrafts, jewelry and furniture created been definitively clarified to this day. by more than 100 artists were on display to take visitors on a journey into a world of bestial surprises.

28 New presentation of the Falkenstein Altarpiece The Master of entire stock of 17 panels by him at Johanniterkirche in Schwäbisch Messkirch is not only one of the most important artists of pre-Renais- Hall. Two additional panels are on loan from the Stuttgart State sance German painting in Upper Swabia, he is also one of the most Gallery (Staatsgalerie Stuttgart). The high point of the exhibition is mysterious. Possibly born in about 1490-95, he was most likely active the reunion of the “Falkenstein Altar Retable”, which the artist created in the period between 1515 and 1540. In art history terms, the oeuvre for Falkenstein Castle (near Messkirch) of the Barons von Zimmern of this artist was obviously influenced by Albrecht Dürer, Hans Baldung and which was divided into its separate parts and dispersed in the Grien, Hans Schäufelein and Hans von Kulmbach. He is considered 19th century. A further accent is provided by the Zimmern Chronicle, a precise observer of the human physiognomy, an excellent portrayer now in the manuscript collection of the Württemberg State Library in of river and mountain landscapes and a true master of color. To mark Stuttgart. The Johanniterkirche itself received an award in 2013: the the acquisition of the corpus of the Falkenstein Altarpiece, one of Baden-Württemberg Chamber of Architects singled the renovated the master’s major works, the Würth Collection is now presenting its church out as an exemplary architectural structure.

FULL PRESENTATION OF THE FALKENSTEIN ALTARPIECE The Master of Messkirch’s Falkenstein Altarpiece was handed over to the public in a ceremony held at Johanniterkirche in Schwäbisch Hall.

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WALK OF MODERN ART The Würth Collection now enjoys a presence in the very heart of Salzburg with sculptures by internationally renowned sculptors. The “Sphaera” sculpture by German sculptor Stephan Balkenhol, displayed on Kapitel platz square, is more than nine meters high and holds its own as a self-sufficient work of art.

Walk of Modern Art, Salzburg The Walk of Modern Art, created International violin competition Since the early days of the Inter- in the heart of Salzburg, a World Heritage Site, over the course of ten national Violin Competition, Würth has been supporting this event years has been entrusted to the Würth Collection. For ten years, the organized by the Kulturstiftung Hohenlohe cultural foundation by Salzburg Foundation had invited internationally renowned artists to donating prizes. The competition was held for the 15th time in August visit Salzburg every year and spend some time really engaging with 2013 in Schöntal Monastery, Baden Württemberg. More than 50 vi- the city before creating a work of art for public display. The result is olinists up to age 21 were invited to show off their musical skills in the a high-quality collection of sculptures leading to the most beautiful competition. parts of Salzburg, but also to places that are less obvious or where you would not expect to find art. The works of art, which are freely One of the top prizes awarded as part of the competition is the Rein- accessible and can be reached on foot, are the creations of Anselm hold Würth Promotion Prize, established by Adolf Würth GmbH & Kiefer, Mario Merz, Marina Abramović, Markus Lüpertz, James Tur- Co. KG in 2007 and worth EUR 5,000. In 2013, the prize went to the rell, Stephan Balkenhol, Anthony Cragg, Christian Boltanski, Jaume young violinist Rennosuke Fukuda from Japan, who won over the jury Plensa, Brigitte Kowanz, Manfred Wakolbinger and Erwin Wurm, with his expressive interpretation and excellent technique. The Rein- and focus on an interpretation of the individually selected locations. hold Würth Promotion Prize must be used for specific purposes and An extension of the Walk of Modern Art can be found in the Würth is designed to give young musicians an opportunity to continue with Sculpture Garden at Schloss Arenberg. their training and develop their exceptional talent further over the next few years.

30 Würth Prize of Jeunesses Musicales Deutschland Conductor Würth Literature Prize “Beauty queen Sarah Rotblatt drives up to Bruno Weil is the winner of the EUR 10,000 2013 Würth Prize of a petrol station” (Die Schönheitskönigin Sarah Rotblatt fährt an einer Jeunesses Musicales Deutschland (JMD). The jury spoke of how Tankstelle vor) was the motto of the 24th Würth Literature Prize. Adolf Bruno Weil managed to make music tangible as a profound human Würth GmbH & Co. KG has been awarding the literature prize, worth statement, as the language of the soul. The specialist in Viennese EUR 7,500, in cooperation with the University of Tübingen every year classicism and historically informed performances was said to stand since 1996. The award goes to short stories featuring a convincing for “high-quality interpretations that remain faithful to the truth and and unique use of language. impact of the music”. The prize was handed over by Harald Unkel- bach, Chairman of the Management Board of the Würth Foundation, More than 600 authors had submitted their stories for the 2013 Würth and JMD President Daniela Stork. The laudatory speech was held by Literature Prize. Norbert Müller from Berlin took first place with his former German government minister Theo Waigel. The awards cere- story entitled “Zigaretten holen” (Buying cigarettes). The silver award mony was held as part of a concert given by the university symphony went to Kai Metzger from Düsseldorf for his text “Morningside Drive”. orchestra of the University of Music and Performing Arts in Munich, conducted by the prize-winner. The author Christoph Ransmayr set the topic for the literature prize during his Tübingen poetry professorship in 2012. The professorship The Würth Prize of Jeunesses Musicales Deutschland is a coveted is also a project organized by Adolf Würth GmbH & Co. KG and is accolade in the German music world. It is awarded to artists, ensem- hosted at the German Seminar (Deutsches Seminar) of Tübingen Uni- bles and projects that bring the values and goals of JMD to life in versity. Once a year, two authors are invited to hold public lectures and an exemplary manner. Since 1991, personalities such as conductor offer seminars and workshops for students. Over the past few years, Gustavo Dudamel, cellist Sol Gabetta, ensembles such as the Federal the guest authors included not only Christoph Ransmayr, but also Youth Orchestra or projects like the Education Program of the Berlin Raoul Schrott, Jonathan Franzen, Daniel Kehlmann, Juli Zeh, Feridun Philharmonic Orchestra have received the prize. The prize is donated Zaimoğlu, Ilija Trojanow, Péter Esterházy, Terézia Mora, Brigitte by the Würth Foundation. Kronauer, Lars Gustafsson, Ruth Klüger, Amos Oz and Herta Müller.

REINHOLD WÜRTH PROMOTION PRIZE Rennosuke Fukuda from Japan is the winner of the 2013 Reinhold Würth Promotion Prize. Würth awards this prize as part of the International Violin Competition.

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SHARING COMMITMENT

Würth Foundation Set up in 1987 by Reinhold and Carmen Würth, Hotel Restaurant Anne-Sophie In 1999, Carmen Würth’s aim was the Würth Foundation promotes projects in the fields of science and to create an establishment in Künzelsau that would foster the integra- research, art and culture, and education. The Foundation currently tion and personal development of people with disabilities. The Hotel has total capital of EUR 7.6 million. In addition to its own activities, Restaurant Anne-Sophie opened its doors in 2003 on her initiative, the Foundation also supports third-party projects and initiatives – featuring a special concept: people with and without disabilities work mainly in the Hohenlohe region where the Group has its head office. together hand in hand. Disabled employees are trained by specialists so that they can work independently in the kitchen, as wait staff, in The Foundation’s own activities in 2013 included the music festival housekeeping or in building services. This makes it easier for them to for people with disabilities. The motto of the music festival held in participate in social life and allows them to earn a living. October was “Live with your heart”, and it featured twelve musical bands on two stages in Museum Würth in Künzelsau. The special In the spring of 2013, the Hotel Restaurant Anne-Sophie celebrated thing about the festival was that the people playing in the bands all its tenth birthday. It currently employs a workforce of 50, around one have disabilities. The idea for the event came from Carmen Würth, third of whom have disabilities. Ever since it was opened, the estab- who has been an advocate for people with disabilities for many years. lishment has made a name for itself as a meeting place for gourmets and an example of stylish hotel culture, with the warm and friendly Major third-party projects that have received regular support in the atmosphere as one of its trademarks. post include the Hohenloher Kultursommer (Summer of Arts in Hohen- lohe), as well as the international violin competition organized every To mark its tenth anniversary, the new main building opened in the other year by Kulturstiftung Hohenlohe (Hohenlohe Cultural Founda- heart of Künzelsau in May 2013. It adds another 18 guest rooms, as tion), the Junge Oper Schloss Weikersheim (Young Opera Schloss well as a gym and spa area for hotel guests and a conference build- Weikersheim) and the work of Historischer Verein Württemberg- ing to the hotel complex. The new restaurant handi ap. offers guests Franken (Historical Association Württemberg-Franconia). ambitious cuisine using high-quality produce. The lindele shop is also part of the hotel. The Hotel Restaurant Anne-Sophie uses the shop to The Würth Foundation also supports the Freie Schule Anne-Sophie sell products made by people with physical or mental disabilities, as schools in Künzelsau and Berlin and the Competence Center for well as people from socially deprived backgrounds. Customers can Economic Education. Moreover, it administers the foundation for the choose from a range of 250 gift and gourmet items. promotion of the Reinhold Würth University of Heilbronn University in Künzelsau.

32 NEW BUILDING FOR HOTEL RESTAURANT ANNE-SOPHIE The new representative main building of the Hotel Restaurant Anne-Sophie is located in the heart of Künzelsau’s old town. The extension has been awarded a four-star rating by the German Hotel & Catering Association. The hotel now has a total of 49 guest rooms, 18 of which are located in the new wing. People with and without disabilities work here hand in hand.

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INTERNATIONAL FOLKWANG PRIZE Prof. Dr. h. c. mult. Reinhold Würth (second from the right) has been awarded the Folkwang Prize in only its second year. The following individuals attended the ceremony to offer their congratulations (from the left): Dr. Tobia Bezzola, Director of Museum Folkwang, Essen, Dr. E. h. Achim Middelschulte, Chairman of the Board of Management of the Folkwang Museum Association, and Prof. Dr. Martin Roth, Director of the Victoria and Albert Museum, London.

Folkwang Prize The Folkwang Prize, endowed with 25,000 euros, French medals for Würth and Weber France bestowed hon- was handed over to Reinhold Würth in Essen. Since 2010, the Folk- ours upon Reinhold Würth and the Director of the Würth Collection wang Museum Association has been using the prize as a way of rec- C. Sylvia Weber with the “Knight of the Legion of Honour” and the ognizing individuals and institutions who have made a particular con- “Order of Chivalry in Art and Literature”. The awards were presented tribution to promoting art and making it accessible to broad sections by Ambassador Maurice Gourdault-Montagne in Kunsthalle Würth of the population in the spirit of the museum’s founding father, Karl in Schwäbisch Hall. This is France’s way of recognizing the exem- Ernst Osthaus (1874 –1921). The jury emphasized Reinhold Würth’s plary cross-border commitment to culture and art shown by Reinhold lifelong passionate commitment to art and cultural education. As a Würth and C. Sylvia Weber in Germany and France. By way of exam- collector and art lover, they said, his conviction that art would stimu- ple, Würth has consistently promoted the work of the Institut français late the working environment of his employees across the globe, serv- in Stuttgart and the Centre Culturel Franco-Allemand in Karlsruhe. In ing to motivate them, was his guiding force. His impressive collection 2008, Würth also opened a museum in Erstein, Alsace, in immediate and also the numerous associated galleries set up with a direct link to proximity to Würth France. C. Sylvia Weber has been at the helm of administrative buildings is testimony to this. the Würth museums since 1991 and has been the curator behind numerous exhibitions.

34 Sports sponsorship The international sports sponsorship activities also attracts global attention to the brand on the television, the Inter- of the Würth Group are characterized by continuity and success. net and in newspapers. Brand values like team spirit, momentum and With its commitments in China (national basketball team), the US passion are transported perfectly by the sports sponsorship activities. (NASCAR racing series) and South America (referee advertising at the Copa Libertadores), Würth is focusing primarily on growth markets Representative offices In Berlin since 2003 and in Brussels since and is positioning itself in sports that are popular on these markets. 2005. Würth attaches a great deal of importance to critical dialog The NASCAR sponsorship in the US, in particular, was crowned with with social groups and institutions. Würth House Berlin and Würth success in 2013: Sam Hornish Jr. came in second in the Nationwide Office Brussels have established themselves as key dialog forums Series. for German and international politics. Listening and understanding, but also articulating and commenting – this is how Würth believes In addition to these sponsorship activities, Würth remains a major debate should take place with business and industry, at discussion sponsor of European football and winter sports. Würth’s advertising rounds, conferences and receptions. Both representative offices also boards could be seen at a total of 169 European World Cup qualify- offer a platform for cultural events in order to transport our under- ing matches and in four Bundesliga stadiums. The brand’s presence standing of commitment in a hands-on manner. Our aim is to be open on the racing and thermal wear of the German Ski Association (DSV) so that others can be open with us.

SPORTS SPONSORSHIP The NASCAR sponsorship was crowned with success in 2013: Sam Hornish Jr., driver of the Würth racing car, came in 2nd.

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SHAPING EDUCATION

Freie Schule Anne-Sophie in Künzelsau and Berlin The inde “Realschule” (senior secondary school) certificate and assesses the pendent school Freie Schule Anne-Sophie was opened in 2006 performance of pupils in Grade 10 of the German school system. The in Künzelsau as a private all-day school on the initiative of Bettina 2014/15 academic year will see learning partners in Berlin enter the Würth. The bilingual sister school in Berlin, which offers classes in upper grammar school level. German and English, opened in time for the 2011/12 academic year. The unique educational concept is the same in both schools: target Another highlight in the school calendar of Freie Schule Anne-Sophie and performance-oriented learning in a stimulated environment. “You in Künzelsau was its recognition as a MINT-friendly school by the can independently achieve what you put your mind to. And where educational initiative “MINT Zukunft schaffen”, an initiative launched you can’t, I’ll gladly support and help you”. This is the fundamental to promote natural science and engineering subjects in schools. This thinking behind day-to-day educational life at both schools. award is considered a seal of the teaching quality in the MINT subjects: mathematics, information technology, natural sciences and Freie Schule Anne-Sophie in Künzelsau saw its first class of graduates technology. “MINT Zukunft schaffen” aims to combat the lack of spe- obtaining the Abitur, Germany’s university entrance qualification, in cialist employees in professions in the fields of natural sciences and 2013. The 16 learning partners obtained an average grade of 2.2 technology. Talent promotion measures and moves to break down (on a scale of 1 (best) to 6 (worst)). In September 2010, Freie Schule educational barriers are designed to inspire pupils to study MINT Anne-Sophie had started with the upper grammar school level, known subjects. 600 schools in Germany have already been singled out as the “College”. The grammar school obtained state recognition as as being MINT-friendly. The patron behind the initative is the German an alternative school on 1 August 2011 and has had the same rights Chancellor, Dr. Angela Merkel. and obligations as any state-run grammar school ever since. Learning partners at Freie Schule Anne-Sophie undergo the same Abitur exam- Freie Schule Anne-Sophie is funded by the Würth Foundation and is inations as pupils attending state schools in Baden-Württemberg. promoted by the Würth Group, in particular by Adolf Würth GmbH & Co. KG. In Berlin, the first set of learning partners passed their intermediate secondary graduation certificate. This certificate is a substitute for the

36 FREIE SCHULE ANNE-SOPHIE Designated a MINT-friendly school, one area that Freie Schule Anne-Sophie focuses on is natural sciences. In the chemistry lab, learning partners examine the phe- nomenon of osmosis together with the head of secondary levels I and II, Dr. Vito Susca.

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Lifelong learning One key aspect of corporate and working culture Fern-Hochschule (Distance Learning University). Admission is also at Würth is lifelong learning, both for people just embarking on their open to students without university entry qualifications. The three- careers and for specialist employees and managers. Würth is currently and-a-half-year course provides fundamental knowledge of business training more than 1,300 up-and-coming professionals in Germany, administration and leads to the degree of Bachelor of Arts (B.A.). In where there is a long tradition of dual training concepts. These in- the latter part of their studies, students can choose to major in one of clude commercial, logistics and IT training programs, courses at the a wide range of topics on offer. Students study using study letters and Baden-Württemberg Cooperative State University leading to Bache- e-learning modules. The self-study is supplemented by classroom ses- lors’ degrees and technical and catering professions at the German sions at Akademie Würth. Group companies. An MBA course was designed in collaboration with the University The learning process does not end when individuals complete their of Louisville in Kentucky (USA). The one-year course is aimed at high initial training. Especially given the impact of the constantly changing potentials who have at least three years’ professional experience demands placed on today’s working world, ongoing training is a key and wish to enhance their management expertise. As the MBA is success factor. Akademie Würth Business School, for example, there- awarded by the College of Business at the University of Louisville, fore offers Würth Group employees and interested external parties half of the course is held on the campus in the USA. The College of academic training programs for working professionals. These include Business is accredited by the American Association to Advance the Business Administration B.A. in cooperation with Hamburger Collegiate Schools of Business (AACSB).

AKADEMIE WÜRTH BUSINESS SCHOOL The MBA class of 2013 cele- brates the completion of their course at the University of Louisville in the US. The traditional throwing of the Masters’ caps forms a key part of the graduation ceremony.

38 TRAINING Learning away from the office desk: team training sessions are a key component of the training program at Adolf Würth GmbH & Co. KG. They allow career entrants not only to acquire specialist knowledge, but also to develop as individuals.

University promotion A separate foundation under the umbrella of Competence Center for Economic Education The Competence the Würth Foundation has been dedicated to promoting Reinhold Center for Economic Education, which forms part of the Würth Foun- Würth University in Künzelsau since 2005. The campus, where dation, aims to ensure that economic issues are addressed more in 1,500 students are enrolled for Bachelors’ and Masters’ degrees is school education and that knowledge of economic processes and one of three campuses belonging to Hochschule Heilbronn (Univer- entrepreneurial spirit is improved among pupils and teachers alike. sity of Applied Sciences). The center’s main activities include the Würth Education Prize for forward-looking school projects in the field of economics and the The Würth Group contributed an endowment of EUR 10 million to the annual Management Symposium. foundation for the promotion of Reinhold Würth University. The broad range of promotional activities includes investments in additional Since 2009, the Competence Center for Economic Education has equipment for research purposes, start-up financing for courses and been offering the Business Practice Program for teachers at general scholarships for students. schools: the further training gives teachers an insight into basic business administration principles and structures that they can then imple- Thanks to its activities, the foundation is helping to strengthen Künzelsau ment at their schools in measures and projects relating to economic as a university location and boost research and teaching in the region. education. Reinhold Würth University celebrated its 25th anniversary in 2013. As part of the anniversary celebrations, Prof. Dr. h. c. mult. Reinhold Furthermore, a prize for the ten best pupils studying the elective “busi- Würth was awarded the title of honorary senator of Hochschule Heil- ness and IT” at secondary technical schools was awarded for the first bronn in recognition of his many years of support for the university. time in the summer of 2013.

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GROUP MANAGEMENT REPORT OF THE WÜRTH GROUP

Economic environment percent). The weak demand from abroad and ongoing uncertainty regarding economic policy and government debt in key export coun- The Würth Group was faced with a continued difficult economic tries kept a muzzle on growth. environment in 2013. Global economic growth only managed to pick up minimal momentum year-on-year on average. The damper on eco- In the trades, the main sales market for the Würth Group, the neg- nomic momentum stems largely from the fact that the consequences ative trend that started a year earlier continued. 2013 saw sales at of the financial crisis have yet to be fully overcome in many countries trades businesses slip by 0.8 percent, after already dropping by 2.0 and regions. In the second half of the year, however, the global econ- percent in the previous year. In the metal and electrical industry, omy picked up speed. All in all, global gross domestic product in- another key sector for the Würth Group, production rose by 0.2 per- creased by just 3.0 percent (2012: + 3.1 percent). cent (2012: – 0.1 percent). This means that the sector started to move towards the forecasts for 2013, which assumed a slight increase to • Global economy recovers in the second half the tune of 0.5 percent. • Ongoing recession in the euro zone • Growth slowdown in Germany The German automotive industry stagnated again in 2013. The number of vehicles produced rose slightly to around 5.5 million pas- In Germany, the largest single market for the Würth Group, the trend senger cars (2012: 5.4 million). The German mechanical engineer- towards slower economic development continued, with gross domes- ing sector, on the other hand, was hit by production losses of 1.5 tic product up by only 0.4 percent. This means that growth was down percent (2012: + 2.0 percent). A drop in exports to Asian growth mar- by 0.3 percentage points in a year-on-year comparison (2012: + 0.7 kets played a key role in this trend. The construction sector showed

SALES WÜRTH GROUP in millions of EUR

9,985 10,000 9,699 9,745 8,816 8,489 8,633

7, 748 7, 522 7, 50 0 6,914 6,203

5,000

2,500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

40 positive development in 2013, despite the long winter at the start of a low of USD 100 per metric ton and had then bounced back to USD the year, with sales up by 3.0 percent in 2013. This means that the 295 by the end of the year. On average, steel cost USD 195 per met- growth rate almost quadrupled as against 2012 (+ 0.8 percent). Con- ric ton in 2013. struction companies benefitted from considerable investments in resi- dential construction, in particular. The prices for the industrial metals nickel, copper and aluminum were also well down in a year-on-year comparison at the end of 2013. On The euro zone has gradually been throwing off the shackles of the average, the price of nickel dropped to USD 15,000 per metric ton recession since the second half of 2013 thanks to the structural ad- (2012: USD 17,520 per metric ton). The price of copper stood at USD justments that have been made. The modest growth at the end of the 7,321 per metric ton as against USD 7,949 per metric ton in 2012. year, however, was not quite able to compensate for the renewed One metric ton of aluminum was trading at an average of USD 1,841 drop in economic output over the year as a whole: gross domestic (2012: USD 2,018 per metric ton). product was down by 0.4 percent 2012: – 0.4 percent). Especially in the southern European countries that were hit particularly hard by the Major price fluctuations affected the cost of a barrel of Brent crude sovereign debt crisis, the recession continued to linger: in Portugal, oil in 2013. The average price per barrel in 2013 was USD 105, also gross domestic product fell by 1.4 percent (2012: – 3.2 percent), down on the previous year (2012: USD 111). while GDP fell by 1.2 percent in Spain (2012: – 1.4 percent) and by 2.0 percent in Italy (2012: – 2.1 percent). By contrast, economic growth in France, Europe’s second largest economy, increased by Management reorganization 0.2 percent as in the previous year (2012: + 0.2 percent). Ireland was unable to hold its slight upward trend steady: compared with The Würth Group streamlined its management structure effective 0.9 percent in 2012, growth in 2013 came in at only 0.1 percent. 1 July 2013. Shorter decision-making processes and focused responsibility will give the company more clout. The Board was cut from Against the backdrop of an uncertain overall fiscal policy environ- seven members to four. Robert Friedmann remains the Chairman of ment, growth on the US economy in 2013 was down on the previ- the Central Managing Board, with Peter Zürn still his deputy. Joachim ous year: after GDP rose by 2.2 percent in 2012, economic output Kaltmaier will remain in charge of Finance. The new member of the in 2013 came in at only 1.9 percent. Growth slowed slightly in Latin Board is Uwe Hohlfeld, who was appointed to assume responsibility America as well. The region’s GDP rose by 2.7 percent in 2013 com- for strategic planning and controlling and has been a management pared with 2.9 percent in 2012. In the markets of China and India, member of Adolf Würth GmbH & Co. KG since 2003. which are strategically important for the Würth Group, economic growth was down slightly. Economic output in China grew by 7.7 percent (2012: + 7.8 percent). In India, the pace of growth slowed from Business development 4.5 percent in 2012 to 3.9 percent in 2013. • Southern European markets continue to put pressure on Falling commodities prices business developments at the Würth Group Prices on the commodity markets dropped considerably in some • Operating result up to EUR 445 million cases in 2013. In particular, the commodities that are of considerable • 63,571 employees worldwide importance to the Würth Group, namely steel, nickel, aluminum and copper were cheaper in 2013 than they were one year previously. It The Würth Group’s sales in fiscal year 2013 were down year-on-year was possible to cut purchase prices. to EUR 9.75 billion (2012: EUR 9.98 billion), which translates into a drop of 2.4 percent. If we adjust the figures to reflect the solar activi- Although steel was trading at a much lower price than a year earlier ties, which were abandoned in 2012, the decline in sales comes in at in 2013 on average, it was subject to considerable fluctuation. Be- 0.1 percent, as the solar sales amounted to around a quarter of a bil- tween the start and the middle of the year, the price fell continually to lion euros in 2012.

41 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

Sales of the Würth Group ing the impact of the economic crises in Spain, Portugal, Italy and in millions of EUR 2013 2012 % Greece. Nevertheless, our more than 400 companies in more than Würth Line Germany 1,491 1,478 + 0.9 80 countries give us the opportunity, thanks to our geographical di- Allied Companies Germany 2,912 2,969 – 1.9 versification, to participate in regional growth markets and at least Würth Group Germany 4,403 4,447 – 1.0 partly compensate for stagnating/falling sales in individual coun- Würth Group International 5,342 5,538 – 3.5 tries. Depending on the maturity of the individual markets, the strate- Würth Group total 9,745 9,985 – 2.4 gic approaches to market penetration vary from region to region. In fledgling markets, the focus is on developing the sales force. The established entities concentrate on refining their sales channels through Whereas the companies in Germany saw their adjusted sales rise by a regional approach, customer-specific segments and a policy of 1.6 percent as against 2012, the adjusted sales abroad were down seeking out potential. For seven years, we have also been working by 1.4 percent on the prior year. This is due primarily to the ongoing intensively on setting up new sales branches to help broaden our cus- difficult economic situation on the southern European markets, which tomer base and expand the services we offer. In addition, we are fo- are important for Würth. cusing on expanding our e-commerce activities in order to accelerate our transformation into a multi-channel sales company. At EUR 445 million, the operating result of the global market leader in selling assembly and fastening materials was up on the prior year (2012: EUR 415 million). The excellent earnings power of individual Germany established companies, such as Adolf Würth GmbH & Co. KG and 2013 2012 % Würth Finland, made a particular contribution to this operating result, Sales in millions of EUR 4,403 4,447 – 1.0 which was up by 7.2 percent year-on-year. Share % 45.2 44.5 Employees 19,415 19,605 – 1.0 Despite stagnating sales, the Group invested heavily in the growth of Sales representatives 5,467 5,757 – 5.0 its various divisions, units and markets. At EUR 433 million, capital expenditures were on a par with the level seen in recent years and are Germany is the largest and most important individual market for the the basis for the Würth Group’s future growth. Würth Group. 45.2 percent of consolidated sales were generated on the domestic market. Since the drop in sales in Germany was less In response to the drop in sales, headcount in the individual divisions pronounced than abroad, it was actually possible to slightly increase and units was adjusted in the past fiscal year. This resulted in a drop Germany’s share of total sales. Germany also occupies first place as to 63,571 employees worldwide, with most of the staff cuts being made regards headcount, with 19,415 employees. abroad, in line with sales development, with a focus on sales staff. The establishment of Adolf Würth GmbH & Co. KG in 1945 was the start of a success story, starting in post-war Germany, that continues Sales by region to this day. The parent company of the Würth Group makes the biggest contribution to sales and earnings and is also the largest single • Germany remains most important single market entity in the Group with more than 6,000 sales representatives and • Most pronounced drop in sales in southern Europe in-house staff. • Focus remains on regional diversification 2013 was a challenging year for Adolf Würth GmbH & Co. KG, too. Varied overall economic conditions resulted in different sales trends First of all, the commissioning of the distribution center in May 2013 in the individual regions in 2013, with most regions hit by dwindling significantly improved our logistics capabilities. The parent company sales. Southern Europe was hardest hit with a drop in sales stretch- also invested considerable amounts in e-commerce to allow it to react ing almost into the double digits. On these markets, we are still feel- on the market even faster and with greater customer friendliness and

42 flexibility. Furthermore, 17 new branches were set up. All in all, Adolf slid by 4.9 percent (2012: + 4.6 percent). There are a whole number Würth GmbH & Co. KG has more than 400 shops, bringing it even of reasons behind the unsatisfactory sales situation, but due to the ab- closer to its customers. This ultimately resulted in new records being set solute volume of sales, the French companies have a major impact on for sales and the operating result, highlighting the importance of the the region as a whole, as they generated around 40 percent of total Group’s flagship. sales. Growth was also unsatisfactory in the UK, Belgium and Swit- zerland, where sales figures decreased. Some of the established en- Overall, Germany generated an operating result of EUR 226 million tities are still in a consolidation phase, and a realignment is required (2012: EUR 210 million), making it the most profitable region. to reflect the changed market situation. The strategic focus of these entities is on creating customer segments and thus on potential-based In addition to Adolf Würth GmbH & Co. KG, other entities in Ger- marketing and distribution. many reported successful development in the 2013 fiscal year. One example is Arnold Umformtechnik GmbH & Co. KG, a leading manufacturer of sophisticated connecting technology for the automotive The Americas segment and other industrial sectors, which achieved above-average 2013 2012 % sales growth and set a new record in the process: for the first time, Sales in millions of EUR 1,130 1,131 – 0.1 more than EUR 100 million in sales were achieved in the space of one Share % 11.6 11. 3 fiscal year. The companies in the Würth Elektronik Group also contin- Employees 7,020 7,115 – 1.3 ued on their success path, boosting their earnings considerably. Sales representatives 3,772 3,916 –3.7

Although individual companies achieved outstanding performance, The US economy continued to show stable development, continuing growth in Germany still fell far short of our expectations overall. In the on the upward trajectory plotted in recent years unperturbed. De- second half of the year, we saw an increasing number of signs emerge mand among private households rose considerably, helping to revive pointing to a revival in business, which were ultimately also reflected the construction sector even further. This allowed our wood compa- in sales growth and allow us to be confident as far as this fiscal year nies in the US to achieve satisfactory results, with sales growth almost is concerned. in the double digits. It was a different story at the companies in the Würth Industrial Network (WINWORK®), where sales were down by 3.0 percent. Waning demand for equipment used in the mining indus- Western Europe try, for example, had a marked impact on sales. The closure of large 2013 2012 % parts of the US public administration to take pressure off the budget Sales in millions of EUR 1,650 1,735 – 4.9 also affected the development of the industrial companies. The mea- Share % 16.9 17. 4 sures taken by the US government meant that public-sector orders were Employees 10,685 10,932 – 2.3 either not granted to industry at all, or were granted subject to delays. Sales representatives 5,610 5,890 – 4.8 All in all, the US companies achieved sales to the tune of EUR 806 Western Europe is the Group’s second largest sales region after Ger- million, up by 0.9 percent. The low growth rate expressed in euros is many. It was the geographic point of departure for the international- mainly due to changes in the exchange rate. Measured in US dollars, ization of the Würth Group. In 1962, Reinhold Würth set up Würth the increase was much higher at 4.3 percent. Due to its huge market Nederland B.V., the first company outside of Germany, laying one of volume, the US remains one of the focal markets for the Würth Group. the foundation stones for the success of the Würth Group. We want to continue to exploit this potential in the future by pursuing sales strategies that are systematically focused on the US market. Growth momentum in this region, which includes companies in countries like France, the UK, the Benelux states and Switzerland, tailed The negative impact of exchange rate developments in South America off considerably compared with the prior year. On aggregate, sales was even more pronounced than in the US. Whereas sales, in euro

43 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

THE WÜRTH GROUP AROUND THE WORLD Countries in which Würth is represented

terms, were down by 3.2 percent, the growth rate after exchange rate The situation at our Italian companies, in particular, had a consider- adjustments came in at 8.8 percent. This means that South America is able impact on results in southern Europe, with sales down by almost the fastest growing sub-region in the Würth Group. EUR 100 million compared with the previous year at these companies. In Spain, on the other hand, the worst would appear to be over and after five years of declining sales, 2013 saw this market close the Southern Europe year just ahead of the prior-year value. 2013 2012 % Sales in millions of EUR 916 1,015 – 9.8 The economic forecasts do not show any signs of a turnaround on Share % 9.4 10.2 the horizon. Italy and Spain are grappling with record unemploy- Employees 8,264 8,847 – 6.6 ment, the brakes have been slammed on private consumption due to Sales representatives 5,963 6,430 – 7. 3 the considerable uncertainty and construction activity remains on the wane in large parts of southern Europe. We do not expect the eco- The economic and business environment in southern Europe remains nomic situation to show any real improvement in 2014, particularly unfavorable and is having a marked negative impact on the business in Italy. As a result of this, there is a need to continue restructuring the performance of the Würth Group in this region. Sales fell by 9.8 per- Würth Group’s Italian entities in 2014 in order to adapt them to the cent. This makes southern Europe the region with the biggest drop in current sales level. sales within the Group.

44 Scandinavia sales contribution of around 40 percent, remained on a par with the 2013 2012 % prior year with sales growth of 0.2 percent. Sales in millions of EUR 747 761 – 1.8 Share % 7. 7 7. 6 The Würth Group has 24 Würth Line companies and 49 Allied Com- Employees 3,203 3,268 –2.0 panies in eastern Europe. We continued to forge ahead with the ex- Sales representatives 1,310 1,354 –3.2 pansion of the sales branch network in 2013. A total of 57 pick-up shops were added, 13 in the Baltic states alone. Our strategic focus In Scandinavia, too, the Würth Group was hit by a drop in sales in in this region remains on sales channel segmentation and increasing 2013, although this was not very severe at 1.8 percent. The Finnish productivity. companies have traditionally been the strongest, with Group companies in Finland growing by 4.0 percent. Despite the poor sales growth in 2013, Scandinavia remains one of the Würth Group’s Asia, Africa, Oceania exemplary regions. The operating result showed above-average 2013 2012 % growth of 13.8 percent, with returns well above the Group average at Sales in millions of EUR 439 443 – 0.9 7.3 percent. Share % 4.5 4.5 Employees 9, 311 9,513 – 2.1 Würth Finland is the shining star. With almost four decades of opera- Sales representatives 3,957 4,236 –6.6 tions behind it, the company impresses with its excellent market penetration and high profitability. The sales branch concept is the deci- Accounting for 4.5 percent of sales, the companies in Asia, Africa and sive success factor here. Würth Finland now has more than 160 sales Oceania currently only play a minor role within the Würth Group. In branches. This corresponds to almost 10 percent of all the Group’s principle, however, Asia is considered to be “the” market of the future sales branches. in the east, and we were able to achieve adjusted growth to the tune of 7.3 percent here in 2013. Alongside the Würth Line’s business with the trades, Würth also has industrial and trading activities in Scandinavia. There are still compa- We believe that China, in particular, offers considerable untapped nies focusing on the production of fastening technology for wind tur- market potential. We are represented by a total of 28 entities in China, bines and offshore steel structures. All in all, sales in these areas slid which are responsible for one-third of sales in the Asia, Africa, Oce- by 8.3 percent in 2013. The results for fastening technology for wind ania region. turbines, in particular, fell well short of our expectations. In addition to direct sales serving the trades, we also provide system solutions for industrial customers in China and have now set up three Eastern Europe production sites. In addition to the manufacture of screws, these pro- 2013 2012 % duction sites also develop formulations for the chemical unit and pro- Sales in millions of EUR 460 453 + 1.5 duce coils for the electronics area. Share % 4.7 4.5 Employees 5,673 5,889 – 3.7 The average growth rate seen at our Chinese companies over the past Sales representatives 3,078 3,207 – 4.0 ten years is 24.4 percent, well ahead of the growth rate achieved by the Group as a whole. We want to continue achieving strong growth Sales in eastern Europe improved by 1.5 percent to EUR 460 million. on this market in the future. This growth is attributable primarily to the exceptionally positive developments in the Baltic states. Estonia, Latvia and Lithuania achieved total growth of 7.4 percent. Poland and the Czech Republic, which are our strongest markets in eastern Europe in absolute terms, with a

45 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

THE OPERATIONAL UNITS OF THE WÜRTH GROUP

WÜRTH LINE

THE WÜRTH LINE DIVISIONS

METAL Metal subdivision Cargo subdivision This subdivision directly serves customers in the metalworking and metal The customers of the Cargo subdivision are authorized dealers and processing industries, such as metal and steel fabricators, fitters, machine independent workshops, freight forwarders and transportation com- and vehicle manufacturers. The Metal subdivision focuses on the provi- panies, public-sector, municipal and waste disposal companies, as sion of anchor and dowel systems, tools and electrical machines as well well as agricultural technology businesses. We mainly sell fastening, as DIN and standard parts for working and processing various metals. assembly and cleaning products required especially for the maintenance, repair and servicing of commercial vehicles, as well as hand Installations subdivision tools and machinery, in these segments. This subdivision concentrates on electricians, gas, heating and water installation firms, plumbers as well as air-conditioning and ventilation WOOD system firms. The products offered here range from rapid assembly The Wood Division serves customers in the entire woodworking and systems, insulating materials for plumbing and cable laying-out sys- wood processing trade, typically joiners/carpenters and window mak- tems to installation materials in the electrical area. ers (wood and vinyl). The product spectrum covers furniture fittings, the entire range of fastening materials and sealing technology as well Maintenance subdivision as hand tools, machines, abrasives and chemical-technical products. This subdivision addresses an extremely wide range of customers: in- house repair shops of industrial enterprises, mainly in the chemical, INDUSTRY pharmaceutical and food industry, facility and installation maintenance The entities of the Industry Division are specialized companies with a of hotels, shopping centers, airports, sewage plants, recycling com- complete range of assembly and connecting materials for industrial panies as well as clinics and hospitals. The focal point is a complete production, as well as maintenance and repair. In addition to the com- product range for minor repairs and products for servicing, mainte- prehensive standard range offered by these companies, their strength nance and care. lies in customized logistics concepts for supply and service.

AUTO CONSTRUCTION Car subdivision The Construction Division encompasses all sales units responsible for Our customers are car garages, vehicle fleets, automotive refurbish- serving customers in the building and civil engineering industry and ers and car dealers. They include authorized dealerships of car man- finishing trades. Marketing activity focuses on construction compa- ufacturers and independent workshops as well as special shops and nies, roofers, plasterers, stucco masons, dry construction firms and di- service providers. The products sold in this customer segment range rect supplies to building sites. Customized logistics solutions are also from consumables for repairs to chemical-technical products for main- provided, such as material stores filled with products directly on the tenance, servicing and bodywork, and tools and pneumatic and elec- building site. trical machines.

46 ALLIED COMPANIES

THE UNITS OF THE ALLIED COMPANIES

ELECTRICAL WHOLESALE TOOLS The companies in this unit specialize in trade with electrical installation The majority of the Würth tools companies are located in central Eu- materials, installation systems, communication technology, cables and rope but are now also represented by subsidiaries in the key global lines, tools, data and network technology, lighting and illumination, industrial markets. With more than 60,000 products covering metal household appliances and a wide range of multimedia products, as cutting, clamping, measuring, hand tools, works equipment, industrial well as with electric domestic heating technology and regenerative safety and machines, these companies not only offer a broad portfo- power generation. lio, but also outstanding technical expertise and high-quality consulting services in the individual application areas. TRADE The companies belonging to this unit sell assembly and fastening ma- SCREWS AND STANDARD PARTS terials, gardening equipment, electrical tools and furniture fittings, These companies are product specialists with concepts for supplying mainly to specialist dealers, DIY and hardware stores and discounters. industry. The unit’s main business activity is the sale of DIN and standard parts. Most of the companies specialize in the sale of stainless ELECTRONICS steel parts. The Würth Elektronik Group manufactures and sells electronic and electro-mechanical components, printed circuit boards and intelligent FINANCIAL SERVICES systems. The companies in this unit offer products and services in the financial services sector both within the Würth Group and for external customers. PRODUCTION This unit comprises the manufacturing companies of the Würth Group. DIVERSIFICATION The product portfolio ranges from connecting elements for wood This category includes companies that operate primarily in business and metal applications as well as for the automobile and electrical segments other than those relating to Würth’s actual business. They in- industry, to punch and press fasteners, stamped and bent parts, right clude hotels, catering businesses and logistics service providers. through to dowels, iron and furniture fittings, and tools.

RECA GROUP The RECA Group companies supply assembly and fastening materials direct to industrial, metal and car business customers as well as to customers of the Cargo subdivision. Specialists in professional clothing, advertising materials and vehicle outfitting complement and add to the RECA Group.

47 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

THE DIVISIONS

METAL THE BUSINESS MODEL OF THE WÜRTH LINE COMPANIES IS BASED ON INDUSTRY-SPECIFIC MARKETING AIMED AT THE TARGET GROUPS IN THE TRADES AND INDUSTRY.

The industry-specific focus within Würth Line is ensured by the strategic work of the Metal, AUTO Auto, Wood, Industry and Construction Divisions in the areas of product range, consulting, pricing, systems, and by coordinated customer support via sales staff, telephone sales, sales branches and e-commerce. With its broad portfolio comprising products, systems and services, Würth is the right partner for procurement, storage and requirement-driven delivery of C-parts and consumables.

In the Metal Division, a product range strategy tailored precisely to the market has proven to be the key to success. In the future, the division will increasingly focus on managing products, systems and customers. WOOD

The strategic focus of the Auto Division is on expanding the Cargo subdivision internationally through the establishment of additional sales organizations and through special- ization of the product range and sales staff. A further strategic cornerstone in the Auto Division is rolling out the service acceptance concept, which primarily helps independent workshops successfully sell services based on Würth products.

Another focal point of the Wood Division is on expanding sales of fittings and enhancing planning aids and online ordering services to enable customers to plan furniture and directly INDUSTRY order furniture elements and assembly items in an efficient and effective manner.

In the Industry Division, the innovative further development of procurement and logistics systems, including the intelligent iBin® system or the ORSY®mat dispensing system, is increasing the role of systems and full automation in stocking and replenishing Würth products for manufacturing customers. The strategic focus remains personal customer service on location thanks to a global network and, as a result, the same high standards of quality, products and processes across the globe. CONSTRUCTION In Europe, refurbishment and renovation offer considerable growth potential for the Construction Division. In particular, energy-efficient and sustainable construction and renovation are rapidly gaining significance. For applications in these areas, Würth offers a steadily growing selection of products that are labeled according to the corresponding requirements.

SHARE OF THE DIVISIONS IN TOTAL SALES

AUTO WOOD 14.6% 10.0%

METAL INDUSTRY 8.8 % 16.4% CONSTRUCTION 6.2%

SALES BY DIVISION in millions of EUR

2000 1800 1,638 1,658 1,603 16001,600 METAL 1,452 1,451 1,421 AUTO 1400 1,413 1,317 1,305 12001,200 1,172

1000 932 966 971 WOOD 853 895 869 858 INDUSTRY 800800 774 637 586 598 601 CONSTRUCTION 600 506 526 473 400400 200 0 2009 2010 2011 2012 2013

SALES REPRESENTATIVES BY DIVISION

11000 10,856 10,000 10,183 10,329 10000 9,592 9,628 AUTO 9000 8,487 8000 8,019 7,87 7 7, 50 0 7, 581 7, 435 METAL 7000 6000 50005,000 4000 3,439 3,536 3,330 3,200 3,031 WOOD 3000 2,746 2,500 2,391 2,535 2,621 2,458 CONSTRUCTION 2000

1000 524 587 687 712 735 INDUSTRY 0 2009 2010 2011 2012 2013

49 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

ELECTRICAL WHOLESALE UNIT

WITH THE CONSTRUCTION OF A NEW CENTRAL WAREHOUSE, THE UNIT IS LAYING THE FOUN- DATION STONE FOR FURTHER GROWTH. ACTIVI- TIES IN 2014 WILL FOCUS ON THE GREATER USE OF E-COMMERCE AND THE ESTABLISHMENT OF THE RENEWABLE ENERGIES AREA AS A CENTRAL COMPETENCY.

With sales down by 1.2 percent to EUR 976 million, the Electrical largest single investments made on the German electrical wholesale Wholesale unit was unable to continue the successful trend started market, at just shy of EUR 40 million. In central and eastern Europe, in fiscal year 2012 but was nonetheless able to expand its position the companies also reported a slight drop in sales of 1.5 percent on the on key markets and achieve acceptance development. In Germany, whole. The extraordinary growth in the Baltic states was unable to com- the ongoing decline in the photovoltaic business and the multimedia pensate for the difficult market situation, particularly in Poland, in full. slump caused by positive one-off effects in 2012 (move from analog to digital) shaved 1.0 percent off sales. The companies in the Electrical Wholesale unit are confident in their outlook for 2014. One reason for this confidence is the establishment In order to boost productivity and lay the foundation for increasing of the renewable energies area as a central competency. All com- market share, UNI ELEKTRO Fachgroßhandel GmbH & Co. KG panies are also stepping up their investments in IT to exploit the new started to build a new central warehouse in Eschborn. The new logis- opportunities offered by e-commerce. The company in Austria is tics building, as well as alterations to existing buildings, is one of the already generating 20 percent of its sales via the online shop.

SALES SHARE IN TOTAL SALES ELECTRICAL WHOLESALE UNIT EMPLOYEES ELECTRICAL WHOLESALE UNIT in millions of EUR ELECTRICAL WHOLESALE UNIT

988 957 976 1,000 3,000 2,767 890 2,614 2,648 2,421 789 2,314 750 2,250

500 1,500 10.0 % 250 750

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

50 TRADE UNIT

INTENSE PRICE WARS AND A LONG WINTER HAD A NEGATIVE IMPACT ON STATIONARY SALES IN PARTICULAR. A FOCUS ON CORE RANGES, THE PLACEMENT OF NEW AND INNO- VATIVE PRODUCTS AND THE FURTHER EXPAN- SION OF E-COMMERCE ARE DESIGNED TO COMBAT THE FORECAST OF A VOLATILE SECTOR SITUATION.

2013 was characterized by intense price wars and dwindling sales in The unit is also focusing on its core ranges, as well as different ways of the entire sector. The first quarter was sluggish as a result of the long targeting different target groups, like stationary sales and online traders. winter, although sales continued to pick up in the second half of the year. All in all, the unit achieved sales of EUR 872 million, 2.7 percent As well as launching innovative new products in 2014 (cordless screw- more than in the year before. driver with sensor brackets, revised range of garden shears, relaunch of the stainless steel range), the unit also plans to set up new distri- The stationary sales area (DIY superstores, discounters and consumer bution channels, and expand its existing channels, in 2014. The em- markets) was hit by what were, in some cases, drastic slumps in sales, phasis will be on supporting the e-commerce activities of the various losing sales shares to Internet dealers, whose sales increased consider- traders given that the trend towards online sales is likely to become ably in 2013. The Internet is also creating greater transparency with re- more pronounced. The unit will also be further exploiting the potential gard to quality and prices. Experts believe that major changes lie on the offered by the various procurement associations by means of coun- horizon over the next few years, for dealers and manufacturers alike. try-specific program expansions.

SHARE IN TOTAL SALES SALES EMPLOYEES TRADE UNIT TRADE UNIT in millions of EUR TRADE UNIT

3,117 2,956 2,939 1,000 3,000 2,784 849 872 2,597 817 728 750 678 2,250

500 1,500 8.9 % 250 750

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

51 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

PRODUCTION UNIT

SUBSTANTIAL SALES GROWTH RESULTS IN MORE EMPLOYEES. ACQUISITIONS ALSO HAVE AN IMPACT ON DEVELOPMENTS. INVESTMENTS IN CORE COMPETENCIES AND GROWTH POTENTIAL, AS WELL AS INCREASED EFFICIENCY IN VALUE-ADDING PROCESSES WILL PROVIDE IMPETUS FOR 2014.

The companies in the Production unit benefited from the ongoing posi- plating, hardening), suppliers demanded price increases due to higher tive developments among its customers in the automotive, mechanical energy costs. Innovation was promoted further as a core competency engineering and electronics industries in 2013. There was a positive of the Production unit. Development and project work for system solu- effect due to the expansion of existing markets and the development tions (e.g. timber engineering and roof and facade construction) and of new ones, plus measures designed to increase gross profit and processing technology were stepped up, in particular. productivity and cut costs. At EUR 656 million, sales were up by 11.0 percent on the prior year. The unit expanded further with the two ac- In 2014, the unit aims to use its high quality, the huge customer benefit quired companies Chemofast Anchoring GmbH, Germany, and Ke- that its products offer and product innovations to break on to new macos Full Filling Service GmbH, Austria. Organic growth came in at markets and generate further sales growth. More sales represen- 6.4 percent in 2013. Business in fittings was unable to escape devel- tatives will also be recruited to focus on application advice, system opments on the global furniture market and reported sales on a par solutions and processing technology. The unit’s competitive position with the prior-year level. On the procurement side of things, the price will be strengthened in the long term thanks to the optimization of level for production materials was stable. In the service area (electro production processes and productivity increases.

SHARE IN TOTAL SALES SALES EMPLOYEES PRODUCTION UNIT PRODUCTION UNIT in millions of EUR PRODUCTION UNIT

800 6,000 5,104 656 4,636 4,673 591 4,439 600 534 4,500 495 3,839 414 400 3,000 6.7% 200 1,500

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

52 ELECTRONICS UNIT

THE WÜRTH ELEKTRONIK GROUP TACKLED THE CHALLENGING MARKET ENVIRONMENT IN 2013 BY BOOSTING PRODUCTIVITY AND DEVELOPING NEW PRODUCTS. INVESTMENTS IN RESEARCH AND DEVELOPMENT ARE LAYING THE FOUNDA- TION STONE FOR FURTHER GROWTH.

The electronic and electro-mechanical components area is the market resulted in the creation of the SKEDD® profit center. Substantial busi- leader and is now represented in 50 countries via direct selling and ness areas of Würth Solar were bought over by the BayWa Group. In distribution partners. The development of the power inductor series the future, only the customer service and services areas will operate used in mobile end devices provided new impetus. The companies that within the Würth Group under the name E 3 Energie Effizienz Experten produce printed circuit boards now range among Europe’s largest. In GmbH. The Würth Elektronik Group enjoys an excellent position for particular, the Starrflex (rigid-flex) technology, a combination of flexible 2014, with forecasts pointing towards further profitable growth in the and rigid printed circuit boards that can help save space in difficult core business area. room designs, and the WEdirekt Internet shop, reported huge growth in sales. This year, the focus will remain on research and development. By way of example, the electronic and electro-mechanical components area The very positive development in the intelligent systems area called opened a Design and Application Center for around 80 engineers for investments in a new production and administration building. In and technicians. In the printed circuit board area, the objectives in- addition to the new iBin (cooperation with Würth Industrie) and touch clude further development to help transform this area from a contract screen panel, the innovative SKEDD® product, direct plug-in connec- manufacturer into a system provider, as well as investments in auto- tion technology for printed circuit boards, offers massive potential and mation and delivery speed.

SHARE IN TOTAL SALES SALES EMPLOYEES ELECTRONICS UNIT ELECTRONICS UNIT in millions of EUR ELECTRONICS UNIT

800 8,000 712 691 6,499 6,255 6,219 6,286 572 5,801 600 6,000 504

400 351 4,000 5.2% 200 2,000

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

53 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

RECA GROUP UNIT

A FOCUS ON ATTRACTING NEW CUSTOMERS, EXTENDING AND EXPANDING CUSTOMER CON- TACT POINTS AND TRANSFORMING THE DISTRI- BUTION STRUCTURE TO ESTABLISH MULTI-CHAN- NEL DISTRIBUTION WILL PROVIDE THE BASIS FOR POSITIVE BUSINESS DEVELOPMENT.

The market environment of the RECA Group is characterized by in- provided with new resources such as iPads, for example, shortening tense competition and is fiercely contested. Market shares are still low. the ordering process considerably. Sales growth slowed against the backdrop of the ongoing tense economic situation in Europe, particularly in Spain, Italy, the Netherlands The e-business area will have a real impact on the future development and Turkey. The unit’s sales, for example, lagged slightly behind the of the unit. In addition to forging ahead with electronic marketing ef- prior year at EUR 473 million. forts, there are plans to harmonize infrastructure and bundle capacities in order to make even more use of synergy effects in 2014. By way A focus on attracting new customers and expanding customer contact of example, marketing efforts will be stepped up via various distribu- points will help support the positive development of the RECA Group. tion channels and customer contact points. Depending on the financial The implementation of the multi-channel distribution approach will development of the RECA Group companies, the sales force will be in- allow customers to receive support that is even more tailored to their creased moderately. There are also plans to tap into new markets via needs. The distribution tools were optimized further. Sales staff were cooperation partners.

SHARE IN TOTAL SALES SALES EMPLOYEES RECA GROUP UNIT RECA GROUP UNIT in millions of EUR RECA GROUP UNIT

600 4,000 3,769 3,547 3,562 3,461 3,341 483 483 473 428 450 399 3,000

300 2,000 4.9 % 150 1,000

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

54 TOOLS UNIT

SUBDUED DEMAND FOR CAPITAL GOODS SLAMS THE BRAKES ON SALES DEVELOPMENT IN THE TOOLS UNIT. HAHN+KOLB WERKZEUGE GMBH MOVES INTO A NEW, STATE-OF-THE- ART LOGISTICS CENTER WITH 540,000 BIN LOCATIONS.

After 2012, the market environment of the Tools unit was once again One highlight was the relocation of HAHN+KOLB Werkzeuge GmbH characterized by the fall in demand for capital goods and the strained to its new headquarters in Ludwigsburg in September 2013. The new economic situation in 2013. Productivity improvements in many areas site offers 48,000 square meters of space for an innovative distribu- and the further professionalization of the sales force were unable to tion center and a modern logistics center with a fully automated pick- compensate for this negative effect, with sales dropping by 3.7 percent. ing system and 540,000 storage bins. Innovative pick-by-light displays support order pickers with global dispatch. The e-commerce share of sales again rose. HAHN+KOLB Werkzeuge GmbH worked on making its range of products and services in the on- The Tools unit aims to return to the growth path in 2014. This will be line shop more professional, enabling its customers to easily place or- based on the impressive product range, a focus on product areas that ders anytime, anywhere via smart phone or tablet PC. The oil and gas customers can use to add value, and the investments already made in industry, as well as the aerospace sector, are showing positive devel- sales structures. opment in line with our expectations. We believe that these areas offer significant growth potential for the next few years.

SHARE IN TOTAL SALES SALES EMPLOYEES TOOLS UNIT TOOLS UNIT in millions of EUR TOOLS UNIT

400 2,000 355 352 342 1,573 1,540 291 1,491 300 1,500 1,370 259 1,343

200 1,000 3.5 % 100 500

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

55 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

SCREWS AND STANDARD PARTS UNIT

THE HYDRAULICS MARKET SHOWED POSITIVE DEVELOPMENT, WITH ONGOING DEMAND FOR HIGH-QUALITY HYDRAULIC COMPONENTS AND HOSES. AT THE SAME TIME, SALES IN THE STAIN- LESS STEEL SEGMENT ARE DOWN DUE TO THE LOWER DEMAND FOR SOLAR FIXING EQUIPMENT AND A GENERALLY DIFFICULT MARKET ENVIRON- MENT.

The unit’s stainless steel business was faced with difficult market con- to be conducted in a verifiable manner. Due to the slump in stainless ditions due to the low price of nickel and an aggressive price war. steel sales, the sales achieved by the unit as a whole lagged behind The demand for solar fixing equipment continued to fall dramatically the prior year at EUR 243 million. as state subsidies were reduced or scrapped completely in many countries. After a difficult first half of the year, the hydraulics market In 2014, the unit expects to see growth in the major economic regions achieved stable single-digit growth towards the end of 2013. based on the economic forecasts. The stainless steel companies aim to expand their range in the fields of metal dowels, adhesive technology The product innovations of INDUNORM Hydraulik GmbH and HSR and height-adjustable elements in order to tap into additional sales po- GmbH Hochdruck Schlauch + Rohr Verbindungen have been very tential. Moves to step up cooperation between the individual stainless well received on the market and had a positive impact on the annual steel companies are also designed to give rise to growth-promoting result. These include the new super power hoses (high-quality hydraulic synergies. The hydraulic companies will be focusing on expanding hoses with better product features than standard hoses) or the joint-fit their group of system customers further, among other things using the quality system, a safety system that allows the pressure pulse tests that joint-fit quality system and the super power hoses. have to be performed in accordance with the applicable standards

SALES SHARE IN TOTAL SALES SCREWS AND STANDARD PARTS UNIT EMPLOYEES SCREWS AND STANDARD PARTS UNIT in millions of EUR SCREWS AND STANDARD PARTS UNIT

400 1,200 1,116 1,110 1,057 1,066

910 281 300 265 900 243 235

200 169 600 2.5% 100 300

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

56 FINANCIAL SERVICES UNIT

THE SALES ACHIEVED BY THE WÜRTH GROUP’S FINANCIAL SERVICES PROVIDERS ARE SHOWING SUSTAINABLE GROWTH. THE MOOD ON THE FINANCIAL MARKETS IS POSITIVE AS A RESULT OF THE ONGOING INTEREST RATE CUTS.

The results of the Würth Group’s financial services companies de- it did not escape the natural catastrophic damage caused by the veloped satisfactorily on the whole last year. The result achieved by floods and storms unscathed. Würth Versicherungsdienst GmbH Internationales Bankhaus Bodensee AG private bank, however, was & Co. KG focuses on car fleet insurance and claims processing for down on the record value seen in 2012. Although the investment vol- the entire Würth Group. The non-life segment was again the growth ume and returns were up considerably on the prior year, the result driver at insurance broker and financial services provider Würth was hit by specific allowances in the lending business. Financial Services AG. Würth operates with companies specializing in leases in three countries. The leasing business showed extremely Waldenburger Versicherung AG achieved a significant increase in positive development. All companies made a profit. premium volumes in a fiercely contested market environment in 2013. Waldenburger Versicherung AG has successfully focused its organi- The moderately positive economic signals from the euro zone mean zation on the insurance broker distribution channel with corresponding that the companies in the Financial Services unit are optimistic with products and services. It has a streamlined structure and is character- regards 2014. This will be supported by the solid position that the ized by fast processes and quick decision-making. Nevertheless, individual companies enjoy on the market.

SHARE IN TOTAL SALES SALES EMPLOYEES FINANCIAL SERVICES UNIT FINANCIAL SERVICES UNIT in million of EUR FINANCIAL SERVICES UNIT

120 400 109 353 104 339 300 90 85 300 281 262 71 71

60 200 1.1% 30 100

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

57 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

Results of operations, net assets and results. Sales in this region slid by 9.8 percent, with a correspondingly financial position negative effect on earnings. Although there will be further need for restructuring in this region in 2014, we expect sales and earnings de- • Operating result of EUR 445 million up considerably velopment to largely stabilize. year-on-year • Cash flow at a high level Our German entities also increased their operating result year on year. • High delivery service level maintained at 98 percent With an operating result of EUR 226 million, they were 7.6 percent up on the 2012 figure, putting them ahead of the 2008 pre-crisis Last year, the Würth Group achieved an operating result of EUR 445 level again for the first time. million, an improvement on the prior year level (2012: EUR 415 million). Given the decline in sales, this is a satisfactory result for us. The Out of the German entities, Adolf Würth GmbH & Co. KG makes by return on sales therefore increased to 4.6 percent. We have calcu- far the biggest contribution to the result. At EUR 120 million, the em- lated the operating result as earnings before taxes, impairment of ployees of the parent company achieved the highest operating result goodwill and financial assets, and changes recognized in profit or in the company’s history. But entities from the Trade and Electronic loss of non-controlling interests disclosed as liabilities. unit, for example, also made a contribution, thanks to their positive development, to the improvement in the return of the German entities The companies outside of Germany boosted their result by 6.8 per- to 5.1 percent (2012: 4.7 percent). cent to EUR 219 million. This represents 49.2 percent of the Group’s overall result (2012: 49.4 percent). Despite this increased result, the However, impairment losses that we had to record in the business with companies in southern Europe put pressure on the Würth Group’s fittings, wind power and electrical wholesale, as well as regarding

PRE-TAX OPERATING RESULT AND RETURN ON SALES WÜRTH GROUP

640 Operating result in millions of EUR

600 Return on sales as a percentage 545 515

455 445 450 415 395 385 395

300 10.0 235 7. 5 6.6 6.7 6.4 6.2 4.6 150 4.5 4.1 4.2 5.0 3.1

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

58 trade in stainless steel products, had a negative effect. In these areas, The tax rate decreased in the fiscal year 2013 to 25.2 percent (2012: the result fell short of our expectations. In order to increase profit- 27.9 percent). This is largely due to restructuring. For a detailed analy- ability, appropriate measures were introduced at the entities affected. sis, we refer to the consolidated financial statements: G. Notes to the consolidated income statement, [8] “Income taxes”. The cost of materials fell to a greater extent than sales did, bringing the ratio of cost of materials to sales down to 47.7 percent (2012: At EUR 309 million, the Würth Group’s net income for the year is up 48.3 percent). This is mainly due to the abandonment of the Group’s considerably on the prior year (2012: EUR 279 million). Although solar activities, which generated low margins compared with its core our sales slid by 2.4 percent, we managed to boost our net income business. The drop in some commodities prices in the Würth Group’s for the year by EUR 30 million, namely due to the improvement in the main material categories also had a positive impact. ratio of cost of materials to sales, lower depreciation and amortization and the fact that other operating expenses fell slightly in relation The Würth Group had 63,571 employees at the end of December to sales. 2013. This represents a decrease of 2.5 percent. This fall was due to adjustments to the workforce in the entire Würth Group in order to Although the sales and operating result targets could not be reached, adapt headcount to reflect the decline in sales. Face-to-face contact the Central Managing Board is satisfied with the results achieved in between individuals is vital to our business and is also our strength in fiscal year 2013 within the context of the economic development. The direct selling. The sales force is supported by our highly effective in- main control parameters, such as return on operating result, gross house staff, which provide the necessary support for the specific sales profit, staff turnover, stock turnover and collection days, are at an ac- strategy. As larger customers start to account for a larger proportion ceptable level and almost all of them have improved compared with of sales, this need for support increases. Together with the expansion the previous year. of our branch network, this is the reason why the number of in-house staff has remained stable. At 28.1 percent, the ratio of personnel ex- Capital expenditures and cash flow penses to sales was up slightly in comparison to the prior year (2012: Over the past ten years, the Group has invested well in excess of EUR 27.6 percent). 3.5 billion in property, plant and equipment, financial assets and intangible assets. In the last fiscal year alone, the Group invested EUR Amortization and depreciation in 2013 was down by 3.4 percent 433 million (2012: EUR 465 million). The focus of these investments year-on-year to EUR 303 million (2012: EUR 314 million), primarily was on expanding warehouse capacity for our sales companies, as because the impairment losses recognized were lower than a year well as on production buildings and technical equipment and ma- ago, mainly for entities responsible for production, trading in stainless chinery for our manufacturing companies. For example, Adolf Würth steel products, wind power and electrical wholesale. The remaining GmbH & Co. KG opened its new distribution center at its headquar- depreciation and amortization remained virtually constant. ters in Künzelsau in May 2013. The additional capacity of 60,000 order items a day allows the company to react especially quickly to At 2.9 percent, the drop in other operating expenses was consistent customer wishes. The new building, which features storage space of with the drop in sales. 17,000 square meters, features a route linking it to the existing distribution center for transportation purposes. This allows a total of The net interest cost was up in a year-on-year comparison. One of the 40,000 orders to be picked per day. A total of EUR 77 million was reasons for this lies in the increase in financial liabilities. May 2013 invested in this project over a period of several years. We had al- saw the Würth Group issue a bond worth EUR 500 million, only part ready moved into a new office building in Rorschach, Switzerland, of which was used to finance bonds that had reached maturity. The in April 2013. In the fall of 2013, Würth Russia opened the Würth increase in financial liabilities is also due to the market valuation of Group’s first logistics complex on Russian territory. It consists of a the interest rate derivatives taken out in connection with the bond. It is three-story building covering a total area of 9,100 square meters, the Würth Group’s strategy to always have sufficient liquidity, keep- three areas for goods storage and ten loading and unloading areas. ing its reliance on banks as low as possible. The facility can store a total of 12,500 pallets. The total investment

59 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

INVESTMENTS CASH FLOW FROM OPERATING ACTIVITIES WÜRTH GROUP in millions of EUR WÜRTH GROUP in millions of EUR

800 455 465 433 450 750 618 599 540 283 300 263 500

150 250 216

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

volume comes in at around EUR 14 million. In addition to the logis- pany with a long tradition behind it, opened its new headquarters in tics complex, there are also plans to build a new office building. The Ludwigsburg, Germany, last September. The new site offers 48,000 company purchased a plot of land in Taiwan in order to secure future square meters of space for an innovative distribution center and a expansion opportunities. The Allied Companies are also expanding modern logistics center with a fully automated picking system and their storage and production space. The production building of our 540,000 storage bins. Dutch company Diffutherm B.V., for example, is nearing completion, and Arnold Umformtechnik GmbH & Co. KG in Ernsbach, Germany, In addition to investments in production and storage space, we have launched the large-scale series production of thread-forming screws also, as in past years, invested in our ORSY® storage management for metal and plastics, which are used primarily in the automotive system, which offers our customers storage and provision of various industry, in the summer of 2013 on a site covering around 7,000 consumables and supplies in line with their needs. Above and be- square meters. AP Winner (Changzhou) Chemical Technology Co., yond this, the Würth Group’s sales branch network was further ex- Ltd. opened a new production site in Changzhou, China. The com- tended. Around 90 new branches were opened worldwide. In order pany bottles chemical products for the automotive aftermarket. A to forge ahead with our transformation into a multi-channel sales or- total of just under EUR 20 million was invested in this project over a ganization, EUR 60 million was invested in IT systems. period of several years. HAHN+KOLB Werkzeuge GmbH, a com-

60 Overall EUR 201 million, just under half of the investment volume, was Economic growth will give rise to increased production capacity utili- attributable to Germany, reflecting to the continued high significance zation levels and higher demand for commodities. Both have a direct of the home market for the Würth Group. impact on future negotiations with suppliers. Consequently, purchasing expects these negotiations to prove more difficult in 2014. The In 2014, we plan to keep our investments on a similar scale to 2013. Group’s purchases will be persistent in their response to possible price Our investment obligations on the cut-off date for the annual financial demands in order to achieve the best possible prices. What is more, statements come in at EUR 14.5 million. the inventories of the individual Würth Group companies must be kept as flexible as possible in order to ensure that they can be adapted to Thanks to our moves to optimize our investment controlling processes suit the prevailing sales and market situation. using sophisticated recording and analysis tools in recent years, the Central Managing Board was always in a position to react quickly Inventories and receivables to changes in the overall environment. This is another reason why we Inventories and receivables are a focal point of Würth as a company once again met our objective of financing investments from our cash that largely operates in the trade sector. Both of these items allow li- flow from operating activities in full in 2013. Our cash flow from oper- quidity and the amount of capital tied up within the Group to be man- ating activities came in at EUR 599 million (2012: EUR 618 million). aged at relatively short notice. The key is always to strike the right balance between ensuring high levels of customer satisfaction on the We consider this level of cash flow from operating activities to be one hand – by providing an optimum delivery service and adequate appropriate for us. The ratio of capital expenditures on property, payment terms – and optimizing liquidity and minimizing default plant and equipment, financial investments and intangible assets to rates on the other. All in all, the drop in sales in fiscal year 2013 re- cash flow from operating activities was 72.3 percent and was there- sulted in a drop in receivables. Inventories increased slightly. fore down on the prior-year level (2012: 75.2 percent). For years, sophisticated controlling systems, which enable rapid re- Purchasing sponses in the event of any indications of negative developments, At the end of 2012, we had forecasted substantial growth for fiscal and optimum collaboration between sales and accounts receivable year 2013, which failed to materialize. This gave rise to considerable management have enabled the Würth Group to achieve a low level uncertainty and a tense “wait-and-see” strategy across the globe. of receivables in relation to sales. The corresponding key figure, col- At the end of 2013, experts were only able to announce much lower lection days (based on a 12-month calculation), increased slightly in growth for most economies compared with the prior year. comparison to the prior year to 52.7 days (2012: 52.3). In view of the difficult economic conditions, particularly in Europe, we rate this This global “wait-and-see” attitude was something that purchasing was only slight deterioration in the key figure as positive. This applies all able to benefit from. A downward trend in the prices of some com- the more so given that the entities outside of Germany were able to modities, a relatively strong euro and only moderate capacity utiliza- keep the number of collection days virtually at the prior-year level. tion levels at suppliers worldwide due to the economic situation gave The German companies traditionally report a lower level. Following purchasing staff at the Würth Group good arguments for price nego- 42.2 collection days at the end of 2012, they achieved a figure of tiations. The systematic use of the opportunities that arose allowed 43.1 days, slightly up on the prior-year level, also due to longer pay- purchasing to achieve corresponding price cuts on the procurement ment terms for a larger number of customers. All in all, receivables markets, which ultimately had a positive impact on competitiveness fell, in line with the decline in sales, by 1.9 percent to EUR 1,210 mil- and earnings. lion (2012: EUR 1,233 million).

Looking ahead to 2014, economic experts predict slight economic We will continue to optimize accounts receivable by means of effec- growth worldwide, with most economic indicators also pointing to- tive cooperation between sales and accounts receivable manage- wards an upswing. If these positive forecasts materialize, this will ramp ment, as well as through refinements to the analytic tools. We see the up the pressure on purchasing at the Würth Group again in 2014. payment patterns of debtor payments in southern Europe, China and

61 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

EQUITY counter to sales development because of the company’s efforts to WÜRTH GROUP in millions of EUR forge ahead with the expansion of the branch network. 2013 saw 87 new pick-up shops being opened worldwide. What is more, there 3,399 were long delivery periods for some product groups, prompting us to 3,204 3,042 accumulate higher inventory levels from a service perspective. This 2,867 3,000 2,600 ultimately meant that stock turnover calculated on a 12-month basis fell slightly from 5.3 times at the end of 2012 to 5.2 times.

2,000 Financing The equity of the Würth Group climbed by EUR 195 million to EUR 3.4 1,000 billion in fiscal year 2013. This gives the Group a very good equity ratio – for a trading company – of 42.6 percent (2012: 41.9 percent). A comfortable equity ratio has been the basis of our healthy financing 2009 2010 2011 2012 2013 for years now, and boosts customers’ and suppliers’ trust in the Würth Group. This positive equity ratio development is due to the typical family business approach of reinvesting a large portion of profits in the company. This sound financing, coupled with the long-term bond portfolio, enables the Würth Group to continue to grow relatively independently of the short and medium-term development of the capital markets. Total assets grew by EUR 329 million to EUR 7,978 million (2012: EUR 7,649 million). This is mainly due to the new cash generated from a bond and investments in property, plant and equipment. Unlike in previous years, financial services activities only made a small contribution to the growth in total assets in 2013. Refinancing in the India, which on the one hand slows growth and on the other reduces area of banking was mainly performed through financial intermediar- earnings, due to an increasing need to recognize impairment losses, ies and refinancing programs of the European Central Bank. as critical. The financial situation of the Würth Group was again appraised by At 0.8 percent, defaulting receivables and expenses for additions the leading rating agency Standard & Poor’s in 2013. The Würth to the allowance for impairment as a percentage of sales were up Group has undergone this annual rating process for almost 20 years slightly (2012: 0.6 percent). This is largely due to the continuing effects now. Standard & Poor’s again rated the Würth Group “A/outlook sta- of the euro crisis. ble”. The rating of the outlook as “stable” reflects the confidence that business and the financial KPIs will continue to develop successfully. We aim not just to satisfy our customers, but to inspire them. As a re- The opportunities and potential of the Würth Group are viewed in a sult, the Würth Group is continually working on keeping its delivery positive light. Our long history of good ratings not only documents service level close to the one hundred percent mark. To achieve this the positive credit rating; at the same time, it is proof of the continuous we are prepared to stock individual products, even where this runs and successful development of our corporate group and the stability contrary to all our business optimization efforts, in order to be able to of our business model. deliver the goods to the customer one day after the order is placed at the latest. In 2013, we achieved this in 98 out of 100 cases. The good credit rating allows Würth Finance International B.V. to obtain favorable financing conditions on the international financial The inventories of the Würth Group rose slightly in 2013 to EUR markets. In May 2013, the Würth Group made use of this, and of the 1,310 million (2012: EUR 1,300 million). The rise in inventories runs attractive conditions on the capital markets, and successfully placed

62 a second benchmark bond worth EUR 500 million. This bond, which deliver assembly and fastening materials to customers in more than has a maturity of seven years, has an interest coupon of 1.75 percent 80 countries. Within the Würth Line, the focus is therefore on growth p.a. and is secured by an unconditional, irrevocable guarantee issued by expanding the customer base and establishing additional divi- by Adolf Würth GmbH & Co. KG, Künzelsau, Germany. The trans- sions and branches in the respective countries. action generated keen interest among investors and was oversub- scribed eight times within the space of only two hours, with subscrip- In addition to setting up new companies, the Würth Group’s growth tion offers worth more than four billion euros. The issue served, by strategy also involves using targeted acquisitions to add companies way of example, to refinance the bonds and promissory note loans to the Group where they prove a good match, allowing the Group to – worth a total of EUR 525 million – that reached, or will reach, ma- obtain further market shares. Last year, we exploited the favorable turity in 2013 and 2014 and will boost the Würth Group’s long-term conditions for us on the M&A market and bought the chemicals com- financing and liquidity base, laying a foundation for future growth pany Chemofast Anchoring GmbH, based in Willich, Germany, with opportunities in sales and investments in logistics and infrastructure. effect from 1 January 2013. At the end of 2013, the company had almost 80 employees and generated sales of more than EUR 20 million. At the end of the fiscal year 2013, the Würth Group thus has four Chemofast develops and produces chemical mortars, known as “chem- bonds issued on the capital market and one private placement. All ical anchors”, and markets these very successfully to its private-label covenants in this context have been complied with. Between EUR 170 customers in the construction and retail industries. The acquisition of million and EUR 300 million will fall due in the period between 2014 Chemofast supports the Group’s strategy in the growing chemicals and 2015, EUR 500 million in 2018 and 2020, and some EUR 150 market and complements our activities in the area of anchors. million in 2021. The maturity profile is thus well balanced. For further information on maturity and interest structure, we refer to the com- On 22 February 2013, Würth signed the purchase agreement for the ments in the consolidated financial statements: H. Notes to the con- takeover of an 100 percent stake in Ares Oy Nikotips. The company, solidated statement of financial position, [24] “Financial liabilities”. which has its registered office in Espoo, Finland, is involved in the wholesale business for rubber, plastic and polyurethane products, As of 31 December 2013, the Würth Group has cash and cash equiv- mainly hydraulic and technical hoses and accessories. alents of EUR 749 million (2012: EUR 572 million). In addition, the Group has a fixed line of credit of EUR 200 million, which remains un- On 1 September 2013, the companies YOUR OWN BRAND GmbH, drawn to date, provided by a syndicate of banks until February 2018. based in Neutraubling near Regensburg, YOUR OWN BRAND UK Ltd., based in Cheddar, UK, Your Own Brand S.R.L, based in Milan, Italy, Start-ups and acquisitions and Kemacos Full Filling Service GmbH, based in Kematen, Austria, The Würth Group establishes subsidiaries to spread successful busi- were acquired. YOUR OWN BRAND specializes in the distribution of ness models and sales concepts in new markets. This strategy is own-brand cosmetics products to drugstores, discounters and food re- supported by the fact that the organization of the Würth Group is tailers. The company Kemacos Full Filling Service GmbH largely sup- decentralized. In recent years, this has increasingly applied to our es- plies brand name companies with its own cosmetics production based tablished and profitable Allied Companies. In 2013, however, signs on GMP standards (good manufacturing practice). The purchase of pointing towards difficult sales development in many business areas these companies means that we have production facilities that work meant that the focus was on the stabilization and consolidation of the based on GMP standards within the Group, resulting in correspond- individual areas. The only company that was set up was Grass Iberia ing investment savings. The companies are an ideal match for comple- S.A. The company will strengthen our sales activities on the Spanish menting our current cosmetics manufacturing activities. and Portuguese markets in the fittings business after companies were set up in Australia, the UK and Italy in 2011 and 2012. On 23 December 2013, the new company SVH Handels-GmbH took over some of the assets of SVH24.de GmbH. SVH24.de GmbH was The regional expansion of the Würth Line companies has been more a trading company focusing on tools that specialized in e-commerce. or less fully exploited. The Würth direct sales companies already

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Research and development Adolf Würth GmbH & Co. KG: Würth App The order behavior of our customers has changed drastically in recent Research and development plays a key role in the Würth Group. We years. They are calling for, and indeed using, the various opportuni- use successful distribution, excellent logistics and cost-focused action ties offered by the Internet. This has prompted Würth to focus more on to secure our competitive standing. At the same time, we create market e-commerce. But this means more than merely offering an online shop. advantages by offering needs-based and, most importantly, innovative The measures also include e-procurement or scan-supported ordering products and services. systems like ORSY®scan, which uses a barcode reader to make it easier to capture item data. The Würth App, in particular, makes it easier In fiscal year 2013, for example, Adolf Würth GmbH & Co. KG gen- for customers to place orders while on the move. It is designed espe- erated one-fifth of its sales from products that are less than three years cially for mobile customers and has been subject to constant enhance- old. This is a very high proportion for a company that specializes in ments since it was launched in 2010. In addition to the latest offers, it sales. The rate of innovation is high across the Group as a whole, too: provides functions for downloads, a list of favorites and contact data the Group currently has 694 active patents, 24 utility models, 343 for personal points of contact at Würth, as well as the following: designs and 5,424 active trademarks. This means that, compared with the prior year, 196 brands and 47 designs were added in 2013. › Mobile ordering using the barcode scanner As well as manually entering the item number, the app can also be Würth Line: To each customer their own Würth used to scan product barcodes and then order the desired products Every customer is different. This is why every Würth customer bene- directly from the app. fits from an advisory and supply concept that is tailored to suit their › Branch locator needs. Our distribution center in Künzelsau, which was opened in The branch locator shows all 400 branches in Germany, together 2013, creates additional capacity of more than 60,000 order items with their addresses and contact details. Customers can have the a day. This allows Würth to react particularly quickly to customer app calculate the route to their chosen branch if they wish. wishes. As well as incorporating state-of-the-art technology and ergo- › Click & Collect nomically designed workstations throughout, the construction plans Order in 60 seconds, collect in 60 minutes! The app allows cus- for the new distribution center also took environmentally-friendly as- tomers to order items with only a few clicks and then collect them pects into account. from their chosen branch in Germany in the 60 minutes’ time.

Würth Industrie: W-KLT®CLIP: saves time and costs New ASSY®plus: extreme precision from tip to toe The new W-KLT® and W-KLT®2.0 Kanban containers developed by Developers at Adolf Würth GmbH & Co. KG have significantly im- Würth Industrie Service GmbH & Co. KG in-house can now be fit- proved the latest generation of the ASSY®plus. The new pyramid- ted with the innovative W-KLT®CLIP. It is attached to the back of the shaped tip, which allows the screw to be exactly positioned without container and can be mounted to workstations in a flexible manner moving, makes it easier to fit chipboards: as soon as the screw thread thanks to the mounting rail. With a maximum load of 20 kilograms has penetrated the material, the newly developed soft thread run-in and various angular positions, the W-KLT®CLIP can be shifted and ensures that the thread engages immediately. This reduces the “gripping moved horizontally or vertically. This creates a structured and ergo- time” of the ASSY®plus by 50 percent. As the screw moves further into nomically friendly workstation and productive working methods in a the material, the single-start progressive thread means that less force manufacturing environment. The product removes the need to walk has to be applied to get the screw into the material and guarantees a far to get operating materials or C parts and takes the lack of floor high overtorque. In addition, the new ASSY®plus can be placed up to and storage space in production lines into account without affecting three times the screw diameter from the material edge, helping users existing processes. with furniture and interior design work, with the assembly of wooden façades, terraces, window connections and rafter and frame screw fittings.

64 W-UR SymCon® frame dowel: the only dowel for three for 35 years. The satin chrome 3K screwdriver with its consistent hex- anchorage depths in concrete agonal blade won the test team over with its flexible 3-component The patented in-house W-UR frame dowel development featuring grip, which ensures perfect ergonomic features, ideal application of the SymCon® special screw allows Würth to offer a system solution force and convenience at work. The innovative 5-sided drip featur- for a broad range of applications. The dowel, combined with the ing gel cushions adapts ergonomically to the hand, meaning that less screw, is used, by way of example, to fit façade substructures made force has to be applied and transmitting higher torques as a result. of wood or steel. It can also be used to securely fix wooden slats, Users can work for longer without getting tired and also benefit from metal rails, suspended ceilings, cable runs, brackets and treads. high grip stability. An impact cap and continuous blade allow even The system is rounded off by special versions, e.g. to fix building or the tightest of screws to be easily loosened. The highly durable spe- façade scaffolding. The W-UR 14 SymCon® GS scaffold anchoring cial steel blade quality ensures durability and torque values exceed- product is currently the only product on the market that has been ing the DIN ISO standards by up to 100 percent. Würth’s 2K screw- awarded a test certificate from the construction industry trade associ- driver came in second: the test team recognized the product for its ation BG Bau – Berufsgenossenschaft der Bauwirtschaft. It stands out, extreme robustness and it also won in the “force” category. in particular, due to its load: the highest load that can be achieved in concrete at the moment. Together with the SymCon® special screw, the In the comparison test conducted in August 2013 by TÜV SÜD on W-UR is the only dowel on the market that supports three different an- Würth’s behalf, three products from the “pliers” range came first in chorage depths in concrete. It can be used in masonry in two setting their respective categories. Side-cutting pliers, heavy-duty side-cut- depths. The plastic dowel, made of high-quality polyamide, was com- ting pliers and needle nose pliers emerged as the winners compared pletely revised for the new product. The much improved, secure ex- with the products of 14 renowned manufacturers. All three sets of pansion pattern, which supports the maximum application of force to pliers are part of Würth’s ZEBRA® product line. They were tested the subsurface, is one of its defining characteristics. SymCon® stands using calibrated equipment over a period of several weeks and had for a symmetrical conical thread that helps ensure that the load is to meet test criteria relating to cutting force, robustness, ability to cut spread evenly across the entire expansion area of the frame dowel. At different materials, handling and accessibility, retention force of the the same time, the plastic in the dowel is optimally compressed when pliers’ tips and haptics. it is screwed in. In addition to its high-performance technical features, users can also rely on the highest-quality safety testing thanks to the Würth International: Fire protection insulation system European technical approval of this dowel system. Würth’s newly developed fire protection insulation system with Euro- pean classification for solid ceilings combines innovative technology Two-time test winner at TÜV SÜD with practical application. The system consists of a cement-bonded In-house product development, stringent test criteria and ongoing polystyrene block that is installed as slab formwork instead of board testing the company’s own quality assurance labs ensure the quality formwork when the ceiling is installed. The block is embedded in con- of Würth’s products. In order to have its compliance with national crete and securely encloses the ceiling space. Other system compo- and international norms confirmed, Würth works with external in- nents include Würth’s various fire protection sealing products – all of spection bodies such as TÜV SÜD (Southern German Association for which meet the very highest European fire-resistant classification stan- Technical Inspection). dards. This allows almost all installations used in Europe, such as electrical cables, combustible and non-combustible pipes, to be isolated TÜV SÜD tested the screwdriver range of 15 premium manufacturers individuals, or in combination, for fire protection purposes for up to in a direct comparison. The 3K screwdriver PH2, an in-house Würth 120 minutes. This meets the requirements for construction products in development, took first place. Seven product features were defined: terms of physical barriers and insulation (thermal insulation in a fire) fracture torque, traction factor, torque that can be achieved by hand, in line with the valid European norms and testing procedures for fire ergonomics, weight, durability and fracture rotation angle. The 3K resistance classification. screwdriver is produced in ZEBRA® quality within the Würth Group in Germany. ZEBRA® has been the hallmark of Würth premium quality

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Allied Companies offers massive economic potential and resulted in the creation of the The Allied Companies of the Würth Group also invested in the devel- SKEDD® profit center. SKEDD® is a form of direct plug-in connection opment of products and services to offer their customers the best pos- technology on the printed circuit board. It means that cables and con- sible solutions in 2013. nectors are no longer soldered with adapter components on the PCB, but are simply plugged in. This removes an entire connection level, al- TUNAP: Chemistry with drive lowing material cost savings of 50 percent and process cost savings TUNAP develops, produces and sells chemical products in the areas of up to 30 percent. The SKEDD® technology is already being used in of special lubricants, cleaning products, chemical/technical problem- the first set of series projects. solvers and aerosols for the automotive aftermarket and industry. In 2013, the product portfolio was expanded significantly to include Grass GmbH: Vionaro drawer system problem solution products for the automotive aftermarket. The focus The new Vionaro drawer system developed by Grass GmbH in was on professional systems consisting of an application tool and Austria allows the use of conventional wooden drawers and steel chemical active agents suited to the tool. These allow even stubborn or aluminum drawers on one and the same slide system. It is based stains and deposits on valves, as well as air supply and injection sys- on the tried-and-tested Dynapro undermount slide system on which, tems, to be removed. The highlight is a powder jet cleaning system with Vionaro, narrow and seamless aluminum or steel frames are that can be used on drive systems gently and without leaving any residue. mounted. Thanks to the synchronized undermount system with its Problems resulting from the different fuel qualities and climatic con- high lifting capacity and extremely low withdrawal forces and with ditions across the globe can therefore be eliminated or prevented the 3D adjustability that is incorporated into the frame, Vionaro is a during the normal vehicle maintenance cycle. The development of multi-functional system solution that can be ideally incorporated into additional special lubricants was another focal point. These activities the purist design of modern kitchens and living rooms. were focused mainly on high-quality synthetic grease and oils that can be used for lifetime unit lubrication. The expansion of the global InovaChem: in-house formulations for chemical technical production capacities for chemical technical products within the products Würth Group also allowed the company to forge ahead with its over- InovaChem Engineering AG, based in Wetzikon, Switzerland, is a re- seas concentrates business. In the area of research and development, search lab for the development and distribution of chemical technical the focus is on the formulation of additive combinations (active agent products. The company’s strategy is to develop innovative new prod- packages) that are mixed and with the base oils and solvents that are ucts and expand its own formulation expertise for the Würth Group in available in the country in question on site and then bottled. order to optimize procurement. The product portfolio mainly includes cleaning products on a water and solvent-borne base, lubricants, Würth Elektronik: new direct plug-in connection technology, care products and ecological products. One focal point is the anal- SKEDD® ysis of holistic solutions, in particular aerosol products with suitable Research and development work has already been extremely im- packaging. Since only recently, InovaChem has also been develop- portant to the Würth Elektronik Group. These activities focus on new ing structural adhesives based on epoxy, PU and acrylate systems on fields of technology, such as printed electronics. With novel printing niche markets. It also focuses on equipping chemical technical prod- procedures for functional materials, the Würth Elektronik Group is ucts with copy protection techniques. All in all, the company has 141 pursuing new solution approaches for the development of miniatur- marketable formulations for finished products and 70 formulations ized electronic components. The ORFUS (organic multi-functional for intermediate concentrates. sensor systems) project developed printable magnet-sensitive pastes. Thanks to modern printing technology and progressive PCB technology, this allows miniaturized ferrite core-based toroidal cores to be built. These sensor coins can be used, for example, as inductive magnetic field sensors in control technology applications. In particular, the innovative SKEDD® product in the “intelligent systems” area

66 Risk and opportunities report is used for consolidation. Changes in the system settings are logged centrally. The monthly and annual financial statements of Group com- The Würth Group has a system which enables us to identify, record, panies are regularly checked for plausibility internally, as are the con- consistently assess and communicate entrepreneurial opportunities solidated financial statements. Moreover, Würth’s policy and proce- and risks, and to weigh them up against each other. Our conscious dure (PAP) manual contains internal procedural instructions. Internal and systematic approach to addressing opportunities and risks is in- publications and training include detailed rules on financial report- extricably linked to our entrepreneurial activities. ing. Compliance with these rules is regularly reviewed by the internal audit function. External specialists are consulted to clarify the impli- How the risk management system works cations of legal and tax issues on accounting. External actuaries cal- The Würth Group has a three-tier risk management system (RMS), culate pension and similar obligations. Central and local training for comprising the cyclical monitoring system of the internal audit func- those in charge of finance departments also ensures that all employ- tion, Group controlling and the early warning system. The Central ees involved in the financial reporting process are up to date on the Managing Board of the Würth Group holds overall responsibility for latest legislation and information of relevance to them. the Group-wide risk management process and defines the principles of our risk policy and risk strategy. Responsibility for the installation The opportunity and risk management process is updated within of a functioning and efficient RMS in the Group companies is the task the Würth Group on an ongoing basis and adapted to changes in of the management of each entity within the Group. They are sup- the Group or in its economic and legal environment. In 2013, the IT- ported by the risk manager, who reports directly to the Central Man- based risk reporting system was again rolled out to additional Group aging Board of the Würth Group and coordinates risk management entities and was further improved from a content perspective. at Group level. The risk manager is in close contact with the risk con- troller of the Advisory Board, who reports directly to the Chairwoman of the Advisory Board. Risks

How the financial reporting internal control system works The Central Managing Board identifies, analyzes and assesses the The aim of the financial reporting internal control system is to ensure Group’s opportunities and risks at a dedicated annual workshop. This that all business transactions are completely recorded and correctly workshop determines focus risks which could pose a threat to the net evaluated with regard to the financial reporting requirements. assets, financial position and results of operations of individual entities of the Würth Group as a whole in the short, medium or long term. The Würth information system is a significant component of the inter- Furthermore, with the support of the risk manager, all major Group nal control and risk management system of the Würth Group. With entities carried out a risk inventory and recorded and assessed focus the help of this reporting system, all key performance indicators re- risks and other risks in the reporting system. The processes already in quired to steer the Würth Group are presented ready for analysis by place were continued in 2013, undergoing rolling improvements and the Central Managing Board and Executive Vice Presidents in addition adjustments in line with changing internal and external requirements. to standardized monthly reporting. System-based control mechanisms Potential risks are seen by the Central Managing Board in the follow- such as plausibility testing and cross-checks optimize the quality of ing risk areas, sorted by descending relevance. With the exception the information as a basis for decision-making. A Group-wide online of IT and solar risks, which were reduced in fiscal year 2013 due to record of the financial statements of the Group entities is not only effi- the measures referred to above, the assessment of all other risks is un- cient; it also avoids carry-over errors, safeguards uniform provision of changed. information and also includes numerous plausibility checks, without which the information cannot be forwarded. The uniform platform also ensures that financial reporting changes are implemented in a uniform way across the Group. Data is protected from changes by using control numbers and a system of IT access rights. Standard software

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Overall economic risk and training programs and combat these effects using targeted mea- Through our global purchasing and sales activities, we have a high sures. The lack of specialist employees is another challenge for HR natural diversification of risk and a decreased dependence on neg- management. In Germany, it is becoming increasingly difficult to find ative economic developments in individual countries, with approxi- university graduates and skilled trainees. This prompted us to further mately 85 percent of our sales being generated in Europe. To this ex- expand the measures offered by the Würth Business Academy when tent, we were particularly affected by the weak euro zone economy. it comes to managing young talent and training management employ- A greater risk is borne by our entities in southern Europe, particularly ees in 2013. Up-and-coming management talents undergo devel- in Italy, Portugal, Greece and Turkey, where a need for further re- opment measures to prepare them for various levels of management structuring will again arise in some areas in 2014 if sales continue to within the Würth Group via the MC Würth, High Potential and Top Po- fall. In addition, we will have to adjust our business model to reflect tential management training programs. These programs give employ- the relevant changes in line with the momentum on the global mar- ees targeted training that is tailored to suit their own individual ambi- kets, particularly as far as our distribution systems and channels are tions and skills in order to prepare them for further management duties concerned. within the Group. The international management seminars, as well as international specialist seminars on issues such as product manage- The financial risks faced by the Würth Group are largely assessed, ment or procurement and finance, are organized and coordinated by managed and monitored centrally by Würth Finance International B.V. the Würth Business Academy. In order to ensure that the Würth Group is solvent at all times without restriction, the Würth Group has sufficient cash and cash equivalents Würth is an attractive employer, not least due to its worldwide pres- at its disposal and, thanks to its “A rating” from Standard & Poor’s, has ence. Nevertheless, we take care to ensure that sales and gross profit excellent access to the public and private capital markets to procure grow faster than personnel expenses in principle – one of the Würth further financial resources. There are therefore no liquidity risks for the Group’s fundamental principles. Würth Group at present. In addition to the existing liquidity, the Würth Group had a contractually agreed, unused credit line of EUR 200 mil- IT strategy lion at the end of 2013, which expires in February 2018. According Due to the decentralized organizational structure of the Würth Group, to recent liquidity forecasts, the Würth Group will not need to draw with a large number of small start-ups in emerging countries, IT risks on this credit line in 2014. Any risks arising from derivative financial are a particular challenge. Thanks to the increasing introduction of instruments are accounted for. At the time this management report SAP and standard solutions (Würth System 1, online shop, Customer was prepared, there was no indication of any specific counterparty Relationship Management), this challenge is turning into an opportu- risks, which are automatically monitored on a daily basis. In 2011, a nity to make existing processes more standardized, efficient, transpar- CSA (credit support annex) was concluded with the main counterpar- ent and faster. In this way, we want to synchronize our goal of sup- ties to derivatives, further reducing counterparty risk. Cluster risks are plying all customers in line with their specific needs (“To each customer avoided by internal deposit limits for individual banks. For information their own Würth”) with increased efficiency in our IT systems. We aim on derivatives and the risks associated with them, we refer to the notes to use the consolidation of the Würth company data centers in the Ho- to the consolidated financial statements: I. Other notes, [4] “Financial henlohe region as a means of achieving greater efficiency increases, instruments”. medium-term cost savings and increased process security.

Staff The security of the IT systems is reviewed by means of IT checks at the Staff turnover, particularly among our sales force employees, remains Group entities in accordance with a plan coordinated with the Central a focal point. It is documented and analyzed for every entity in the Managing Board of the Würth Group. We are currently analyzing the Würth Group at all hierarchical levels. Regular employee surveys con- potential threat that cyber risks pose. We combat the resulting risks by ducted by independent institutions and the monitoring of staff turnover taking organizational or technical measures and are currently looking are key instruments allowing us to identify unfavorable developments, into transferring the risk to external risk carriers (insurers). analyze their impact on staff recruitment processes, customer loyalty

68 Default been transferred to the new company E 3 Energie Effizienz Experten On the sales market we employ active customer management to GmbH, which also offers advice and service on photovoltaic issues. counter risks arising from a lack of customer loyalty or rising customer attrition. Due to our very extensive core range of over 100,000 prod- In the field of wind power, business development is also heavily de- ucts, the comparatively low average order values and our broad cus- pendent on the willingness of individual countries to provide subsi- tomer base, we are well positioned to keep these risks at a minimum. dies and on increasing attention to environmental factors in the con- Customer insolvencies are therefore a manageable risk for the Würth struction of large-scale installations. This will heavily impact demand Group. Where economically feasible, we work with credit insurers. for our fastening systems. In the past fiscal year, this area fell far short In addition, receivables from customers are monitored by an exten- of our expectations. Where necessary, a provision was made in the sive receivable management system, also at Group level. Individual accounts. financial service providers are associated with a heightened risk of default. We counter this risk through a strict credit verification proce- Major risks that can be insured on an economically reasonable scale dure and appropriate insurance for our investment. In 2013, collec- are covered by master programs for all Group entities wherever possi- tion days increased slightly in comparison to 2011, for example due ble. Overall insurance cover is managed centrally. Risks from the reg- to economic conditions in Italy and France, but stabilized at a very ulatory environment are becoming more and more important for us good low level overall. This highlights that our risk in this area is rela- as a global player. In particular, they arise from the increasing com- tively low and that the existing processes and systems are effective. plexity of tax law, for which we have experts in-house and recourse to renowned external consultants on a case-by-case basis. Suppliers Regarding the procurement market, the Würth Group minimizes risks through efficient risk management. A defined code of conduct is ap- Opportunities plied to all suppliers, which includes as social standards aspects of human rights, children’s rights and core labor standards, as ecologi- The opportunities set out below could have a positive impact on net cal standards aspects of environmental protection, and from a legal assets, financial position and results of operations perspective compliance with national and international laws and regulations. The risk of supplier insolvency is countered by Würth with Decentralized structure a general policy of choosing at least two suppliers for every major Würth’s decentralized structure is a great advantage for the Group, product group who satisfy the Würth Group’s high quality standards especially in light of the fact that the individual countries in which we as well as those of our customers. Owing to this rule, no major supply operate display such variation in their economic development. We bottlenecks have been caused to date by the insolvency of a supplier. believe that this structure presents an opportunity for future growth. It allows a quick local response to circumstances and changes in any For crucial products, we also have increased buffer stocks. Cost bur- given market environment, meaning that we can implement efficient dens resulting from punitive duties for the import of certain products measures. We will continue to push the development of the Würth from China and Malaysia affect the market as a whole. Where pos- Group while maintaining our decentralized structure. sible, we aim to protect the interests of the company, both in terms of public policy and by engaging legal experts in China and Europe. Direct selling The business model of direct selling still offers considerable opportu- Renewable energies nities for the Würth Group in that it places us very close to the market Extensive internal evaluations on the future prospects for the Würth and ensures customer loyalty. Our sales force receives direct feedback Group’s solar activities led us to the decision, following the sale of on customer acceptance of our products and services thanks to the the solar production area in 2012, to withdraw from trading in solar high level of customer contact each day. We can therefore analyze modules as well. The customer service area for existing systems has the results of our work very quickly and make changes as necessary.

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Market penetration For us, ensuring reliable compliance with standards as well as product Our global share of the market is estimated at just five percent due requirements and approval criteria is a fundamental quality manage- to a low share of the market in most countries, with a few exceptions. ment task to enable us to be a dependable partner for our customers. What would appear to be a disadvantage actually signals huge growth This is important, but we do not consider it enough in itself. This is why potential that we can still tap into by further expanding our customer we strive to surpass customer expectations wherever possible through base and intensifying our customer relationships, for example by con- services that go beyond standards and inspire our customers. Efficient tinually enhancing intelligent distribution systems that offer real bene- business processes, which were continually enhanced again in 2013 fits to our customers. to meet our customers’ needs, lay the foundation in this respect: “To each customer their own Würth.” Multi-channel sales and customer management Besides the traditional direct sales, the Würth Group has also set up In the fiscal year 2013, the Würth Group’s central quality team con- and expanded additional sales channels in recent years. We continued its activities. Quality manager networks were facilitated within sider the sales branches and e-commerce to be key opportunities. the units and divisions, and quality policy and strategy were communi- Coupled with the consulting services appreciated by our customers, cated and discussed at regional quality conferences in Europe, China, we will continue to pursue these sales channels in the future to offer South and North America. Würth Quality Risk Company Assessments our customers various ways to purchase goods and services from us. (QRCA), which identify strengths and scope for improvement and de- rive measures for the future, had already been conducted 216 times Expanding and maintaining our customer base are key components by the end of 2013. The management of the respective entity directly of our long-term success. As a result, we will continue to focus on very implements the findings in specific process enhancements that sharpen intensive customer management at all Group companies. Grouping quality consciousness. The measures prioritize customer interfaces our customers based on their individual needs is a key steering mech- (contract review), complaints management, warehouse batch manage- anism for strategic management. The relationship between customer ment, quality assurance and supplier management. wins and sales growth as well as the service degree are important indicators of business success for us. An important component remains the validation of future products by Adolf Würth GmbH & Co. KG and Würth International AG and the Liquidity systematic testing of incoming goods. The Würth Group has its own The financial strength and independence of the Würth Group present testing labs worldwide, three of which now have ISO 17025 accred- important opportunities for the Group. The long-term reliability, which is itation. The training initiative in quality management was designed important for major customers in particular when it comes to security in and launched in 2012 and expanded further in 2013. Employees from the supply relationship, is a clear competitive advantage. The potential quality assurance are the main target group. The basic seminars also, disappearance of some competitors from the market improves our op- however, target employees from other relevant functional areas, e.g. portunities, and at the same time opens up possibilities for acquisitions, Purchasing. A total of 88 employees received training on the topic of which we can respond to quickly thanks to our good liquidity level. quality at 560 seminar days in 2013.

Quality It is the declared aim of the Würth Group to meet, or where possible Overall assessment exceed, the highest quality standards. For this reason, the guiding principle “Würth stands for quality – anywhere, anytime” was anchored The risks for the Würth Group are limited by the functioning risk in the Würth Group’s quality management in 2010 and consistently management system that is in place. Existing risks are consistently mon- developed further in the period from 2011 to 2013. The brand prom- itored and assigned measures to ensure that they do not jeopardize ise made by this principle applies for all of our markets, and its imple- the Würth Group’s ability to continue as a going concern. We are cur- mentation opens up important additional market opportunities. This is rently not aware of any such risks. The existing opportunities enable us true both of customers in the professional trades and those in industry. to continue to grow profitably in 2014 and in the subsequent years.

70 Employees operative State University. Technical occupations and catering traineeships form other training focal points within the German companies. • 63,571 employees worldwide We make systematic decisions on the number of traineeships to offer, • Dual training launched in India and the number of trainees to employ after their training, based on • Comprehensive health management launched our needs and the company’s future development. in Künzelsau In India, Würth launched the post-graduate program in Business Ad- Workforce development ministration at Reinhold Wuerth India Pvt. Ltd. in Chennai in the fall of As of 31 December 2013, the number of employees working for 2013, a dual commercial vocational training program based on the the Würth Group fell by 2.5 percent to 63,571 worldwide (2012: German system. 15 Indian trainees in Chennai will pass 24 months of 65,169). This is due primarily to the ongoing difficult economic sit- training after having obtained their Bachelors’ degree. The students uation on the southern European markets, which are important for alternate between three months of in-house practical training and Würth. The headcount in Germany came in at 19,415 (2012: 19,605), three-month blocks of theoretical training at the Indo-German Train- with 44,156 employees (2012: 45,564) outside of Germany. Sales ing Centre (IGTC) in Chennai. The program was initiated by Würth has traditionally been a very important area for the Würth Group. and developed together with the German-Indian Chamber of Com- Worldwide, there were 29,157 employees working as permanent merce and its training center, the IGTC. The program is also recog- sales representatives in the Group companies in fiscal year 2013 nized by the German Chamber of Industry and Commerce (DIHK). (2012: 30,790). The trainees who complete their training successfully will therefore receive a qualification from the German-Indian Chamber of Commerce The lack of specialist employees is another challenge for HR manage- (IGTC Business Administration certificate) and one from the DIHK ment. In Germany, it is becoming increasingly difficult to find univer- (Management Assistant in Wholesales and Foreign Trade certificate). sity graduates and skilled trainees. This prompted the Würth Group This means that their training is recognized not only in India, but in the to recruit more than 20 IT specialists from Spain, Italy, Greece, Rus- whole of Europe. sia and Belarus in 2013. These employees work for the subsidiary Comgroup GmbH in Germany and are working on international Employee training projects for the Würth Group, mainly in the SAP environment and in The Würth Group promotes ongoing training for employees through- the web and e-commerce areas. The aim is to give these employees, out their entire working life – from trainees to managers. We see life- who have emigrated from other countries, permanent employment long learning as a specific duty in order to ensure the future of our Group. contracts and, as a result, the chance to live in Germany in the long term. By offering German classes, support in dealing with local author- In Germany, the established Akademie Würth offers employees of ities or finding an apartment, the company is taking active measures the Group management training, staff leadership seminars and fur- to help integrate these employees. ther commercial and technical training. Various training programs on personal and social skills, working methods, IT applications and for- Promoting the talents of the future eign languages are also on offer. As a family business, Würth is committed to long-term corporate development. This also applies when it comes to promoting the talents of Training programs for working professionals at the Akademie Würth the future. In Germany, where there is a long tradition of dual training Business School, which are open both to employees of the Group and concepts, Würth has been committed to providing people just em- to interested individuals from outside of the Group, allow people to barking on their careers with extensive initial training for more than study for academic degrees after completing their initial vocational 60 years now. The Würth Group currently employs more than 1,300 training. These include the Business Administration B.A. in coopera- trainees training for more than 50 occupations, including commercial tion with Hamburger Fern-Hochschule (Distance Learning University), traineeships as well as traineeships in logistics and IT. Career entrants a three-and-a-half year program. In collaboration with the University can also study for Bachelors’ degrees at the Baden-Württemberg Co- of Louisville in Kentucky (USA), Würth has been offering the Master’s

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course in Global Business since 2002. The one-year program, which The Würth Group offers the following programs: is conducted in the English language, awards graduates a Master of › The MC Würth program prepares employees for middle manage- Business Administration (MBA). ment positions. 437 talents participated in this program in 2013. › The High Potential program supports managers on their way to In the fall of 2013, representatives of the Akademie Würth Business upper management levels. 64 managers took part in 2013. School signed a new cooperation agreement with Lawrence Tech- › The Top Potential program was launched by the Würth Group in nological University in Michigan, USA, for two technical courses of 2012. The three-year program prepares selected managers for study. These programs allow interested individuals to study for their positions in the highest echelons of corporate management. 49 Master of Science in Industrial Engineering and Doctor of Engineer- managers were on the program in 2013. ing in Manufacturing Systems. In addition to the business degrees for working professionals, this will also allow the Business School to offer Health management further academic qualifications for engineers. As an employer, we take the health of our employees very seriously. This applies, in particular, given the challenges posed by demo- Career programs graphic change and the higher average age of our employees. The The Würth Group recruits most of its managers from within the com- “Fit mit Würth” in-house health program in Künzelsau has been a key pany. We have established various development programs within the component of our efforts in this area for almost 20 years now. Start- Group to ensure holistic management training processes and the sys- ing in 1994 with ten exercise classes and three presentations, the tematic development of up-and-coming talents. program has been continually expanded over the years: more than

EMPLOYEES IN THE WÜRTH GROUP as of 31 December

Employees, thereof

80,000 sales representatives 66,113 65,169 63,699 62,811 63,571 62,433 32,449 30,790 30,650 30,831 57,882 30,410 29,157 54,906 60,000 28,613 50,767 29,020 46,973 27, 488 26,085

40,000

20,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

72 1,000 Group employees and their relatives attended one of the 300 Corporate Responsibility fitness, nutrition or relaxation courses on offer in 2013. Entrepreneurial activity requires responsible action. As a family busi- As the next step in this process, a holistic health management pro- ness, Würth has been committed to this principle since its early years. gram has been under development at Adolf Würth GmbH & Co. Our business activities are based on profit-oriented corporate gover- KG since 2013. Within this context, we created the new position of nance, always hand-in-hand with responsible behavior towards all “health manager” within the company. The aim is to help employees stakeholders. with healthy living and working. By way of example, regular health days have been organized for employees in Künzelsau since 2013. Beyond the realms of our core business, we also want to use our role as a corporate citizen to generate added value for society in the Our efforts to establish health management follow a broad-based places where we are based, helping to tackle social challenges. approach. Panorama Catering, for example, offers premium quality, balanced meals in Würth’s company canteens in Künzelsau and Bad Ecological awareness Mergentheim. The in-house caterer has enjoyed JOB & FIT certifica- At Würth, ecological awareness and environmental management are tion from Deutsche Gesellschaft für Ernährung e.V. (German Nutri- lived and practiced in many different ways. These include ongoing tional Society), in these locations since 2013. development of environmentally friendly new products as well as our commitment to energy efficiency. In addition to Adolf Würth GmbH & Co. KG, other Group entities are also taking active health promotion measures. In Switzerland, for By way of example, the environmental management system of our example, Würth International AG was awarded the Friendly Work parent company, Adolf Würth GmbH & Co. KG, has been DIN EN Space label in 2013. The label is a seal of quality for companies with ISO 14001 certified since 1996. For the manufacture of the ECO systematic health management programs that use these to create op- LINE products, which were launched in 2012 and include cleaning timum conditions for the health of their employees. and care products for the automotive aftermarket, we do not use any substances and solvents that are environmentally hazardous or harm- Thanks to our employees ful to the climate. The Central Managing Board of the Würth Group would like to take this opportunity to say a big thank you to all of our employees this We are constantly working on optimizing energy management in our year, too. Their commitment, expertise and sense of identification with own buildings and logistics centers. By way of example, the new Dis- the company play a key role in explaining why the Würth Group has tribution Center West building, which started operations in 2013 at managed to be such a profitable and successful family business for the Group’s headquarters in Künzelsau, is equipped with a biomass more than 60 years now. heating system and a heat recovery plant. We also take ecological aspects into account when planning new buildings for the international We also wish to express our thanks to the employee representatives Würth companies. The new Würth House Rorschach, Switzerland, in the individual Würth entities. The constructive cooperation between uses water from Lake Constance to cool and heat the building, allow- these bodies and the management of the Group entities led to import- ing us to do without fossil fuels entirely. The roof of the building is also ant measures being implemented. equipped with photovoltaic systems.

The new headquarters of HAHN+KOLB Werkzeuge GmbH, a company belonging to the Würth Group in Germany, a building which was opened in 2013, features two south-facing facades at 45-degree angles. These offer considerable space for photovoltaic elements,

allowing sustainable energy generation and reduced CO2 emissions. Around 1,400 square meters of green space on the roof also ensure

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that the building blends into the environment in an ecological and vi- of art and ordinary business. Accompanying cultural events and sually attractive manner. Heat and air conditioning are supplied by a active art instruction, aimed chiefly at children and teenagers, com- geothermal heat pump. This covers around 70 percent of the distribu- plete the picture. tion center’s annual heating energy needs. In summer, the system fa- cilitates virtually energy-free cooling and air conditioning. At the Group headquarters in Künzelsau, the in-house Akademie Würth has been offering the public a cultural program featuring classi- Social commitment cal, cabaret and jazz artists for more than 20 years now. This extraor- Assuming social responsibility is something that is very important dinary concept has proven very successful and has been applied by to the Würth Group. This attitude can be felt throughout the entire other companies in the Würth Group: Switzerland now has the Forum Group. The Würth Foundation, set up in 1987 by Carmen and Rein- Würth Chur and Forum Würth Arlesheim – both incorporated into the hold Würth, promotes the Foundation’s own projects and third-party respective office buildings. In addition to an art area that is home to initiatives in the fields of art and culture, science and research, and temporary exhibitions, cultural events are also held here. education in Germany. The Foundation has total capital of EUR 7.6 million. At international level, the Würth companies are active in The spring of 2013 saw the new Forum Würth Rorschach open its many local social projects in the countries in question. doors to the public. Here, on the banks of Lake Constance, the building is now the third Swiss location in which the Würth Group has One particular focal point of our corporate citizenship activities has opened an art gallery to the public. A varied cultural program is also been our support for people with disabilities in recent years. The Hotel offered to the public with events from various genres and a program Restaurant Anne-Sophie, which belongs to the Würth Group, allows accompanying the art exhibitions. We want to make an active effort disabled people to be part of day-to-day working life at the hotel. This to be a good neighbor in Rorschach and the surrounding area, as initiative was started by Carmen Würth. You can find detailed infor- well as remaining true to our own cultural commitment. mation on the Hotel Restaurant Anne-Sophie and the activities of the Würth Foundation in the chapter entitled “Commitment”. Corporate governance report The Würth Group companies are also committed to the Special Olympics, the world’s largest sporting organization for people with Corporate governance provides rules and standards for good and mental and multiple disabilities, in a large number of countries. As responsible management and monitoring of companies. Rules, codes well as the financial support offered by the Würth Group, many of conduct and standards for management and monitoring functions Group employees work as volunteers at the various sporting events. within the Würth Group are shaped by the corporate philosophy and In Germany alone, 50 Würth Group employees, including a large culture. number of trainees, worked as voluntary helpers at the Special Olympics in Garmisch-Partenkirchen in 2013. The corporate philosophy shaped and defined by Prof. Dr. h. c. mult. Reinhold Würth determines the credo and self-image of the Würth Art and culture Group. Together with corporate ethics, the corporate culture deals Art and culture are part of the Würth company. Their strong pres- with the values and standards that should underlie entrepreneurial ence and the diverse activities are a product of a corporate culture actions and decisions as well as the behavior of people working filled with life. The museums at the headquarters of Adolf Würth together. Würth’s corporate culture is shaped by concepts such as GmbH & Co. KG in Künzelsau, Kunsthalle Würth and Johanniter- dynamism, performance-orientation, openness, honesty, reliability kirche in Schwäbisch Hall are expressions of this special commit- and responsibility. ment, as are the eleven associated galleries in the European Würth companies. The exhibitions, which are integrated into the context of Corporate governance in the Würth Group is ensured by the follow- the company hosting them, form an inspiring juxtaposition and blend ing rules and systems:

74 › A written corporate constitution laying down all the rules of We need to set out binding standards and rules of conduct without interaction between the company and its owners, the Würth Family infringing the laws and values prevailing in various countries and cul- Trusts tures. On the basis of the corporate philosophy and corporate culture › A dual management system, i.e., segregation of functions for described, Würth’s policy and procedure (PAP) manual sets out a code operating management and supervisory bodies, with the Central of conduct to guide executives and employees with respect to the be- Managing Board and Advisory Board comparable to the havior and actions expected of them within the company and in rela- management board and supervisory board, respectively, of a tion to its environment. stock corporation › Internal audit department › Audit of significant separate financial statements and the Subsequent events consolidated financial statements by independent auditors › Risk management and risk controlling There were no major events after the balance sheet cut-off date. In all › Refined controlling methods to create transparency in operating units other respects, we refer to the comments in the consolidated financial › Rating of the Würth Group by an international rating agency statements: I. Other notes, [10] “Events after the reporting period”.

In addition to these regulations and measures, the Central Managing Board of the Würth Group follows the current development of the Outlook German Corporate Governance Code (GCGC) and the German Code for Family Businesses. It adheres to these codes wherever the Overall economic environment regulations are applicable to the Würth Group. Below are some The forecast for global economic development is cautiously optimistic further examples of corporate governance measures besides those thanks to positive economic data in major countries in Europe and the set out above: US, and the recent trend towards more dynamic development on the emerging markets. The structural adjustments in the euro zone in the › Examination of efficiency at the Advisory Board of the Würth aftermath of the sovereign debt crisis should start to bear fruit, with a Group pursuant to No. 5.6 GCGC long-term effect, in 2014 and contribute to further global economic › Establishment of committees within the Advisory Board of the growth. We expect global GDP to increase by 3.7 percent in 2014 Würth Group, e.g., the audit committee pursuant to No. 5.3.2 (2013: + 3.0 percent). GCGC › Clear division of authorities between the bodies of the Würth In the euro zone, gross domestic product is likely to grow again in Group by way of a binding approval catalog for management 2014 for the first time since 2011. It is likely to benefit from stronger measures domestic demand thanks to a slight increase in real wages and from a › Performance-related payment of top management with variable revival on the global economy. With growth to the tune of 1.2 percent, and fixed salary components pursuant to No. 4.2.3 GCGC; however, the euro zone countries will emerge from the recession with appropriateness of total remuneration is borne in mind and a cap only little momentum (2013: – 0.4 percent). The economic situation is on severance packages has been arranged. also expected to ease in the southern European countries at the center of the crisis. We expect to see growth of 0.8 percent in Spain and A further component of corporate governance is compliance on the 0.5 percent in Italy (2013: Spain – 1.2 percent, Italy – 2.0 percent). part of employees. With more than 63,000 employees, the Würth Economic output in Portugal is expected to rise by 1.3 percent, with Group needs clear rules to determine its conduct or the framework for output in France likely to rise by 1.0 percent (2013: Portugal – 1.4 per- entrepreneurial decisions. This is particularly relevant in light of the cent, France + 0.2 percent). As far as Ireland is concerned, we expect fact that the Würth Group’s activities span more than 80 countries. growth of 2.8 percent (2013: + 0.1 percent). This means that Irish GDP growth is expected to outperform the euro zone average.

75 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

In Germany, the most important sales market for the Würth Group, 2014, for example, we had generated sales of EUR 1,636 million, up economic momentum is expected to pick up slightly. This development by 3.7 percent on the prior year (2013: EUR 1,577 million). Strategic will be driven by falling unemployment rates, increasing domestic con- optimization processes, the planned additions to the sales force and sumption and rising corporate investment levels fuelled by low interest the expansion of our e-commerce activities will also bear fruit. After rates. We therefore expect to see economic growth of 1.9 percent in the first two months, earnings development is now also on schedule 2014, 1.5 percentage points more than in the previous year (2013: and is ahead of the levels seen in January and February 2013. + 0.4 percent). Our geographical diversification allows us to benefit from regional The forecast for the German Würth Group’s individual key industries growth markets and at least partially compensate for downward in 2014 is also positive. Sales in the trades are expected to grow by trends or stagnation on other markets. The strategic approaches to 2.0 percent (2013: – 0.8 percent). A 3.5 percent increase in sales market penetration depend on the maturity of the individual markets. is expected for the building industry (2013: + 3.0 percent). In the me- In market environments that are still in the early days of their devel- chanical engineering sector, the improvement in exports will fuel con- opment, the focus is on setting up a sales force. Established subsid- siderable productivity growth of 4.0 percent after recent negative iaries concentrate on refining their sales network through a regional developments (2013: – 1.5 percent). The economic situation is also approach, customer-specific segments, acquiring new customers and looking much more favorable in the metal and electrical industry. a policy of seeking out potential. For seven years now, we have been We forecast production growth of 3.0 percent (2013: + 0.2 percent). working hard on establishing our branch network in order to contin- The German automotive industry also expects production to rise ually expand our customer base and offer long-standing customers slightly in 2014 to around 5.55 million cars (2013: 5.45 million). new, improved services on an ongoing basis. We are also focusing on ramping up our e-business activities on a massive scale, underlin- 2014 will see the US economy grow slightly faster than last year at ing our aim to be seen as a pioneer among multi-channel sales com- an estimated 2.5 percent (2013: + 1.9 percent). The Latin American panies. economy is also looking up: after 2.7 percent in 2013, output will rise to an estimated 3.4 percent in 2014. The markets of China and India, The Würth Group has a wealth of promising business ideas and in- which are important to the Würth Group, are expected to continue novations, as well as solid market success, at its fingertips. This also to achieve a relatively high level of growth. Growth of 7.2 percent is means, however, that we sometimes have to take difficult business expected for China (2013: + 7.7 percent). In India, the economy is decisions and work systematically on our costs, processes and struc- likely to grow by 5.0 percent (2013: + 3.9 percent). tures. We want to constantly improve our profitability. The measures taken in recent years will have a positive impact in 2014, too. In order Development of the Würth Group to progress further, we have to cut our fixed costs and boost our productivity. With this in mind, we will remain focused on our vision of • Aim to lift earnings to over EUR 500 million ensuring that the Würth Group remains competitive and fit for the • Actively shape networked worlds future. Our strategic guidelines are our long-standing strengths: inno- • Strategically optimize companies’ market positions vative strength, excellent quality, broad international structure, tar- depending on maturity level geted focus on customers and our unique, sophisticated corporate culture. In terms of content, we are focusing on three areas: earnings The macroeconomic development forms the basis for optimism for power, agility in new business models – and, as a result, exploiting 2014, when we aim to achieve further growth and exceed the EUR potential in a world that is moving closer and closer together – and, 10 billion sales threshold. The overall economic environment provides naturally, growth. This means boosting our market share and becom- us with guidelines in this respect, but does not create barriers that we ing more competitive in each and every area of activity. cannot overcome. Our optimism is based on the positive sales development in the fourth quarter of 2013, which has evidently continued We want to tap into new markets and, at the same time, exploit the in the first few months of fiscal year 2014. By the end of February opportunities offered by our conventional business. This increasing

76 networking will open up huge opportunities for the Würth Group. We want to play an active role in shaping this world. In sales, our strategic objective is to offer solutions for our customers’ networked lives. At the same time, we are aware that our networked world is not only dynamic, but can also be volatile. Awareness and the ability to react are a must. We are moving fast, collaborating closely across company boundaries and, in doing so, boosting process efficiency.

In addition to all other measures, ensuring liquidity is a top priority. In general, our solid financing leaves us in a very good position and we have a high level of liquidity that allows us to react quickly to market opportunities.

The investments planned for 2014 will be on a par with those made in fiscal year 2013.

One major success factor in Würth’s culture is entrepreneurial thinking, which is put into practice by Reinhold Würth and his family. This also means that occasional setbacks are part of the learning process. Both aspects have to occur together if we want to be successful in the long term. Würth aims to be a global market leader with its services and products, in order to make our customers’ work a little bit easier every single day thanks to products that motivate and offer real benefits. This motivates customers and employees alike, opening up new perspectives for each individual.

Overall statement on the future development of the Würth Group We aim to achieve sales in excess of EUR 10 billion and report a result of more than EUR 500 million in 2014. This is subject to the proviso that the global economy shows positive development and that we are spared any major slumps.

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78 CONSOLIDATED FINANCIAL STATEMENTS

80 CONSOLIDATED 88 NOTES TO THE CONSOLIDATED INCOME STATEMENT FINANCIAL STATEMENTS

81 CONSOLIDATED STATEMENT 88 A. General information OF COMPREHENSIVE INCOME 88 B. Adoption of International Financial Reporting Standards 82 CONSOLIDATED STATEMENT OF 95 C. Consolidated group FINANCIAL POSITION 98 D. Consolidation principles 99 E. Foreign currency translation 84 CONSOLIDATED STATEMENT 100 F. Accounting policies OF CASH FLOWS 108 G. Notes to the consolidated income statement 86 CONSOLIDATED STATEMENT 112 H. Notes to the consolidated OF CHANGES IN EQUITY statement of financial position 140 I. Other notes 87 CONSOLIDATED VALUE ADDED 151 J. Notes to the consolidated STATEMENT statement of cash flows 152 K. List of shareholdings 167 L. The boards

170 AUDIT OPINION OF THE INDEPENDENT AUDITOR

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CONSOLIDATED INCOME STATEMENT

Share Share Change in millions of EUR 2013 % 2012 % % Sales [1] 9,745.1 100.0 9,984.7 100.0 – 2.4 Changes in inventories – 0.7 0.0 – 36.7 – 0.4 – 98.1 Own work capitalized 9.3 0.1 8.4 0.1 10.7 Cost of materials [2] 4,650.0 47.7 4,820.8 48.3 – 3.5 Cost of financial services [3] 35.3 0.4 37.9 0.4 – 6.9 5,068.4 52.0 5,097.7 51.0 – 0.6

Other operating income [4] 86.1 0.9 91.8 0.9 – 6.2 Personnel expenses [5] 2,733.7 28.1 2,756.1 27.6 – 0.8 Amortization and depreciation 303.2 3.1 314.0 3.1 – 3.4 Other operating expenses [6] 1,623.0 16.7 1,671.0 16.7 – 2.9 Finance revenue [7] 45.8 0.5 44.2 0.5 3.6 Finance costs [7] 126.5 1.3 105.9 1.1 19.5 Earnings before taxes 413.9 4.2 386.7 3.9 7.0 Income taxes [8] 104.5 1.0 107.8 1.1 – 3.1 Net income for the year 309.4 3.2 278.9 2.8 10.9

Attributable to: Owners of parent companies in the Group 295.3 3.0 267.3 2.7 10.5 Non-controlling interests 14.1 0.2 11.6 0.1 21.6 309.4 3.2 278.9 2.8 10.9

80 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Share Share Change in millions of EUR 2013 % 2012 % %

Net income for the year 309.4 100.0 278.9 100.0 10.9 Items that are not reclassified to profit or loss Remeasurement of defined benefit plans [25] – 9.5 – 3.1 45.8 16.4 <– 100.0 Taxes attributable to other comprehensive income – 2.9 – 0.9 11.5 4.1 <– 100.0 Items that may be reclassified to profit or loss in certain circumstances Foreign currency translation – 58,4 – 18.9 1.5 0.5 <– 100.0 Other comprehensive income 51.8 16.7 32.8 11.8 57.9 Total comprehensive income 257.6 83.3 246.1 88.2 4.7

Attributable to: Owners of parent companies in the Group 244.0 78.9 235.0 84.3 3.8 Non-controlling interests 13.6 4.4 11.1 3.9 22.5 257.6 83.3 246.1 88.2 4.7

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Assets Share Share Change in millions of EUR 2013 % 2012 % %

Non-current assets Intangible assets including goodwill [9] 203.4 2.6 166.7 2.2 22.0 Property, plant and equipment [10] 2,411.9 30.2 2,313.9 30.3 4.2 Financial assets [11] 50.3 0.6 53.4 0.7 – 5.8 Receivables from financial services [12] 735.6 9.2 731.1 9.6 0.6 Other financial assets [17] 20.5 0.3 26.4 0.3 – 22.3 Other assets [18] 26.9 0.3 22.4 0.3 20.1 Deferred taxes [13] 124.1 1.6 140.4 1.8 – 11.6 3,572.7 44.8 3,454.3 45.2 3.4

Current assets Inventories [14] 1,310.0 16.4 1,299.7 17.0 0.8 Trade receivables [15] 1,210.1 15.2 1,233.1 16.1 – 1.9 Receivables from financial services [12] 682.2 8.5 606.6 7.9 12.5 Income tax assets [16] 42.5 0.5 30.8 0.4 38.0 Other financial assets [17] 157.4 2.0 141.2 1.8 11.5 Other assets [18] 131.7 1.6 132.6 1.7 – 0.7 Securities [19] 117.2 1.5 105.2 1.4 11.4 Cash and cash equivalents [20] 749.2 9.4 571.5 7.5 31.1 4,400.3 55.1 4,120.7 53.8 6.8

Assets classified as held for sale [21] 5.3 0.1 74.1 1.0 – 92.8 4,405.6 55.2 4,194.8 54.8 5.0

7,978.3 100.0 7,649.1 100.0 4.3

82 Equity and liabilities Share Share Change in millions of EUR 2013 % 2012 % %

Equity Equity attributable to parent companies in the Group [22] Share capital 372.4 4.7 476.4 6.2 – 21.8 Reserves 1,370.5 17.2 1,249.6 16.3 9.7 Retained earnings 1,592.2 19.9 1,425.1 18.7 11.7 3,335.1 41.8 3,151.1 41.2 5.8 Non-controlling interests 63.4 0.8 53.0 0.7 19.6 3,398.5 42.6 3,204.1 41.9 6.1

Non-current liabilities Liabilities from financial services [23] 343.6 4.3 447.3 5.8 – 23.2 Financial liabilities [24] 1,432.9 18.0 1,168.8 15.3 22.6 Obligations from post-employment benefits [25] 186.1 2.3 194.4 2.5 – 4.3 Provisions [26] 79.3 1.0 73.1 1.0 8.5 Other financial liabilities [27] 5.7 0.1 5.1 0.1 11.8 Other liabilities [28] 4.4 0.1 2.8 0.0 57.1 Deferred taxes [13] 98.3 1.2 93.2 1.2 5.5 2,150.3 27.0 1,984.7 25.9 8.3

Current liabilities Trade payables 426.4 5.3 404.6 5.3 5.4 Liabilities from financial services [23] 808.0 10.1 700.5 9.2 15.3 Financial liabilities [24] 374.2 4.7 449.4 5.9 – 16.7 Income tax liabilities 30.2 0.4 46.8 0.6 – 35.5 Provisions [26] 146.9 1.8 140.3 1.8 4.7 Other financial liabilities [27] 301.2 3.8 338.4 4.4 – 11.0 Other liabilities [28] 342.6 4.3 350.2 4.6 – 2.2 2,429.5 30.4 2,430.2 31.8 0.0 Liabilities associated with assets classified as held for sale [21] 0.0 0.0 30.1 0.4 – 100.0 2,429.5 30.4 2,460.3 32.2 – 1.3

7,978.3 100.0 7,649.1 100.0 4.3

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CONSOLIDATED STATEMENT OF CASH FLOWS*

Cash flow from operating activities in millions of EUR 2013 2012 Earnings before taxes 413.9 386.7

Income taxes paid – 120.0 – 142.9 Finance costs 131.0 112.6 Finance revenue – 50.3 – 50.9 Interest income from operating activities 30.3 26.5 Interest payments from operating activities – 12.7 – 14.9 Changes in obligations from post-employment benefits – 8.4 4.8 Amortization, depreciation and impairment losses / reversals of impairment losses 299.0 313.4 Losses on the disposal of non-current assets 5.8 2.2 Gains on the disposal of non-current assets – 19.3 – 6.3 Other non-cash income and expenses 68.4 56.0 Gross cash flow 737.7 687.2

Changes in inventories 1.7 17.6 Changes in trade receivables – 30.8 – 24.4 Changes in receivables from financial services – 97.7 – 45.1 Changes in trade payables 18.7 – 21.6 Changes in liabilities from financial services 3.8 51.6 Change in short-term securities – 11.9 – 21.4 Changes in other net working capital – 22.8 – 26.4 Cash flow from operating activities 598.7 617.5

Investments in intangible assets – 39.7 – 26.4 Investments in property, plant and equipment – 374.0 – 410.5 Investments in financial assets – 8.5 – 26.7 Investments in newly acquired subsidiaries less cash** – 43.7 – 39.8 Cash received from the disposal of assets 58.6 26.4 Cash flow from investing activities – 407.3 – 477.0

84 Cash flows in millions of EUR 2013 2012 Distributions – 217.2 – 185.5 Changes in receivables from / liabilities to family trusts and the Würth family including interest income – 84.7 – 5.6 Capital contribution 152.2 111.0 Increase in financial liabilities 580.5 174.1 Decrease in financial liabilities – 394.5 – 451.4 Interest payments / income from financing activities – 57.7 – 73.4 Increase in majority shareholdings – 1.6 0.0 Cash flow from financing activities – 23.0 – 430.8 Changes due to consolidation (mainly due to exchange differences) 8.3 – 5.4 Changes in cash and cash equivalents 176.7 – 295.7

Composition of cash and cash equivalents Change in millions of EUR 2013 2012 in millions of EUR Short-term investments 68.1 0.4 67.7 Other cash equivalents 3.1 2.8 0.3 Cash on hand 1.9 2.4 – 0.5 Bank balances 676.1 565.9 110.2 Cash from assets classified as held for sale 0.0 1.0 – 1.0 Cash and cash equivalents 749.2 572.5 176.7

* Reference to “J. Notes to the consolidated statement of cash flows” ** Reference to “C. Consolidated group”

85 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to parent companies in the Group Reserves Differences from Non- Share currency Other Retained controlling Total in millions of EUR capital translation reserves earnings Total interests Equity 1 January 2012 474.5 – 39.6 1,189.7 1,371.8 2,996.4 45.2 3,041.6 Net income for the year 0.0 0.0 0.0 267.3 267.3 11.6 278.9 Other comprehensive income 0.0 1.5 – 33.8 0.0 – 32.3 – 0.5 – 32.8 Total comprehensive income 0.0 1.5 – 33.8 267.3 235.0 11.1 246.1 Capital increase / reduction 2.0 0.0 108.3 0.0 110.3 0.7 111.0 Transfer to / drawings from reserves 0.0 0.0 30.2 – 30.2 0.0 0.0 0.0 Distributions 0.0 0.0 0.0 – 180.7 – 180.7 – 4.8 – 185.5 Acquisition of shares in parent companies – 0.1 0.0 – 5.4 – 4.0 – 9.5 0.0 – 9.5 Other income and expense recognized in equity 0.0 – 0.9 – 0.4 0.9 – 0.4 0.8 0.4 31 December 2012 476.4 – 39.0 1,288.6 1,425.1 3,151.1 53.0 3,204.1 Net income for the year 0.0 0.0 0.0 295.3 295.3 14.1 309.4 Other comprehensive income 0.0 – 58.4 7.1 0.0 – 51.3 – 0.5 – 51.8 Total comprehensive income 0.0 – 58.4 7.1 295.3 244.0 13.6 257.6 Capital increase / reduction – 104.0 0.0 128.7 127.3 152.0 0.2 152.2 Transfer to / drawings from reserves 0.0 0.0 44.5 – 44.5 0.0 0.0 0.0 Distributions 0.0 0.0 0.0 – 210.3 – 210.3 – 6.9 – 217.2 Acquisition of majority shareholdings 0.0 0.0 – 1.7 0.0 – 1.7 3.5 1.8 Other income and expense recognized in equity 0.0 0.8 – 0.1 – 0.7 0.0 0.0 0.0 31 December 2013 372.4 – 96.6 1,467.1 1,592.2 3,335.1 63.4 3,398.5

86 CONSOLIDATED VALUE ADDED STATEMENT*

Origin of value added Change in millions of EUR 2013 2012 % Sales 9,745.1 9,984.7 –2.4 Changes in inventories and own work capitalized for capital expenditure 8.6 – 28.3 <– 100.0 Other operating income 86.1 91.8 – 6.2 Finance revenue 50.3 50.9 – 1.2 9,890.1 10,099.1 – 2.1

Less advance payments Cost of materials and cost of financial services 4,685.3 4,858.7 – 3.6 Other operating expenses 1,623.0 1,671.0 – 2.9 Amortization and depreciation 303.2 314.0 – 3.4 6,611.5 6,843.7 – 3.4

Value added 3,278.6 3,255.4 0.7

Utilization Change in millions of EUR 2013 2012 % Employees (personnel expenses) 2,733.7 2,756.1 – 0.8 Public sector (tax expenses) 104.5 107.8 – 3.1 Entities 244.4 204.4 19.6 Equity holders** 65.0 74.5 – 12.8 Lenders 131.0 112.6 16.3 Value added 3,278.6 3,255.4 0.7

* Not part of the consolidated financial statements in accordance with IFRSs (unaudited) ** Distributions net of contribution to capital

87 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A. General information

The headquarters of the Würth Group are located in 74650 Künzelsau, Germany.

The core business of the Würth Group involves trade in fastening and assembly materials worldwide. The companies that make up the Würth Group’s active sales operations are divided into two operational units: Würth Line and Allied Companies.

Würth Line operations focus on fastening and assembly materials, supplying customers in the trades, the construction sector, and industry. The sales portfolio of the Würth Line comprises products sold under its own brand name and by its own sales organization. Its main business activity is the sale of screws, screw accessories, standard / DIN parts, chemical-technical products, furniture and iron fittings, dowels, insulation, hand tools, power tools, cutting and pneumatic tools, service and care products, connecting and fastening materials, stocking and picking systems as well as the direct mailing of workwear.

The Allied Companies, which either operate in business areas adjacent to the core business or in diversified business areas, round off the Würth Group’s portfolio. They are divided into nine strategic business units.With the exception of a small number of manufacturing companies, the majority are sales companies operating in related areas. The Diversifica- tion unit within the Allied Companies comprises service companies, such as hotels, restaurants and logistics operators.

B. Adoption of International Financial Reporting Standards

Statement of compliance The consolidated financial statements of the Würth Group were prepared according to the International Financial Report- ing Standards (IFRSs) issued by the International Accounting Standards Board (IASB), London, as adopted by the EU, the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB [“Handelsgesetzbuch”: German Commercial Code] and full IFRS. The consolidated financial statements consist of the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and notes to the consolidated financial statements. The Group management report has been prepared in accordance with Sec. 315 HGB.

Basis of preparation All IFRSs whose adoption is mandatory as of 31 December 2013 have been applied. This also includes the International Accounting Standards (IASs) as well as the interpretations issued by the IFRS Interpretations Committee (formerly: IFRIC) and the Standing Interpretations Committee (SIC).

The financial statements have been prepared on the basis of historical cost, with the exception of financial assets at fair value through profit or loss and available-for-sale financial assets, which are measured at fair value without effect on profit or loss.

88 The consolidated financial statements have been prepared in euro. All figures are reported in millions of euro (EUR) unless otherwise indicated.

The items in the statement of financial position have been classified into current and non-current assets and liabilities in accordance with IFRSs. Items not due within a year are disclosed as non-current assets or non-current liabilities. In addition, deferred taxes are disclosed as non-current assets or liabilities.

The consolidated income statement has been prepared using the nature of expense method.

The consolidated financial statements were authorized by the Central Managing Board of the Würth Group on 14 March 2014 for issue to the audit committee of the Würth Group’s Advisory Board.

Use of estimates and judgments The preparation of the consolidated financial statements pursuant to IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities and other financial obligations as of the reporting date and the reported amounts of income and expenses during the reporting period. The assumptions and estimates are based primarily on Group-wide regulations governing useful lives, accounting policies for capitalized development costs and provisions, the probability of future tax relief being realized from deferred tax assets and on the assumptions regarding the future earnings power of cash-generating units. Actual amounts in future periods may differ from the estimates. Changes are recognized in income as and when better information is available.

The key assumptions concerning the future and other key sources of estimation uncertainty as of the reporting date which entail a risk of causing a material adjustment to the carrying amounts of assets and liabilities in the following fiscal year are discussed below. a) Impairment of goodwill The Würth Group tests goodwill for impairment at least once a year. This involves an estimate of the net selling price of the cash-generating units to which the goodwill is allocated. The cash-generating units are determined on the basis of the lowest level used to monitor goodwill for internal purposes by management making decisions on business combinations. In the Würth Group this is the legal entity, with the exception of Dinol and Diffutherm, which are considered to be a reporting unit. As of 31 December 2013 the carrying amount of goodwill totaled EUR 58.4 million (2012: EUR 70.5 million). Further details are presented in the notes to the consolidated statement of financial position under [9] “Intangible assets including goodwill”. b) Impairment of intangible assets and property, plant and equipment The Würth Group tests intangible assets and property, plant and equipment for impairment if events or changes in circumstances suggest that it may not be possible to recover the carrying amount of an asset. The intrinsic value is calculated by comparing the carrying amount of the individual assets with their recoverable amount. The recoverable amount is either the value in use or the fair value, whichever is higher, less the cost of sale. The value in use is the amount calculated by

89 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

discounting the estimated future cash flows. If an asset does not generate any cash inflows that are largely independent of the cash inflows generated by other asset groups, the impairment test is not carried out at the level of an individual asset, but at the level of the cash-generating unit. c) Unused tax losses and temporary differences Deferred tax assets are recognized for all unused tax losses and temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Unused tax losses and temporary differences are considered recoverable only if they are likely to be used within the next five years. Deferred tax assets recognized on unused tax losses amount to EUR 37.9 million as of 31 December 2013 (2012: EUR 57.1 million). d) Obligations from post-employment benefits The cost of defined benefit pension plans and other post-employment medical benefits and the present value of the pension obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of corporate bonds in their respective currencies with at least an AA rating or above, and extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The underlying bonds are further reviewed for quality. Those having excessive credit spreads are excluded from the analysis of bonds from which the discount rate is derived, on the basis that they do not represent high quality bonds. The mortality rate is based on publicly available mortality tables for the specific country. Future salary increases and pension increases are based on expected future inflation rates for the respective country. The net carrying amounts of the obligations from post-employment benefits amount to EUR 186.1 million as of 31 December 2013 (2012: EUR 194.4 million). Further details are presented in the notes to the consolidated statement of financial position under [25] “Obligations from post-employment benefits”. All parameters are reviewed annually. e) Securities Financial assets for which there is no active market were measured on the basis of the expected cash flows discounted at a rate that reflects the terms and risks involved. This measurement is subject to estimation uncertainty because it is most sensitive to the discount rates used in the discounted cash flow method as well as the expected future cash inflows. The fair value of these financial assets totaled EUR 66.0 million as of 31 December 2013 (2012: EUR 53.8 million). f) Development costs Development costs are capitalized in accordance with the accounting policies presented in section F. Initial recognition of development costs is based on an assessment by management that the development is both technically and economically feasible. Generally, this is the case if a product development project has reached a certain milestone within an existing project management model. In determining the amounts to be capitalized management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits. As of 31 December 2013, the carrying amount of capitalized development costs was EUR 22.4 million (2012: EUR 4.5 million).

90 g) Receivables To determine specific allowances, receivables that could potentially be impaired are assessed for impairment and valuation allowances applied where appropriate. The calculation of valuation allowances on receivables is based primarily on assessments and analyses performed by the local management. In addition to the creditworthiness of, and default on payment by, the customer in question, historical default rates are also taken into account.

Effects of new accounting standards The accounting policies adopted are consistent with those of the prior fiscal year, except that the Group has adopted the new / revised standards and interpretations set out below that are mandatory for fiscal years beginning on or after 1 January 2013. The changes in accounting policies and in the disclosures in the notes are due primarily to adoption of: • IFRS 1 “First-Time Adoption of International Financial Reporting Standards – Government Loans (amended)” • IFRS 7 “Offsetting of Financial Assets and Financial Liabilities” • IFRS 10 “Consolidated Financial Statements”, IAS 27 “Separate Financial Statements” • IFRS 11 “Joint Arrangements”, IAS 28 “Investments in Associates and Joint Ventures” • IFRS 12 “Disclosure of Interests in Other Entities” • IFRS 13 “Fair Value Measurement” • IAS 1 “Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income“ • IAS 19 “Employee Benefits (revised 2011)” • IAS 19 “Employee Contributions“ • Improvements to IFRSs 2009-2011 - IFRS 1 – Repeated application of IFRS 1 - IFRS 1 – Borrowing costs - IAS 1 – Clarification of requirements for comparative information - IAS 16 – Classification of servicing equipment - IAS 32 – Tax effect of distribution to holders of equity instruments - IAS 34 – Interim financial reporting and segment information for total segment assets

The adoption of these standards or interpretations is described below: IFRS 1 “First-Time Adoption of International Financial Reporting Standards”: This improvement clarifies that an entity that stopped applying IFRS in the past and chooses, or is required, to apply IFRS, has the option to re-apply IFRS 1. If IFRS 1 is not re-applied, an entity must retrospectively restate its financial statements as if it had never stopped applying IFRS.

This amendment to IFRS 7 “Offsetting of Financial Assets and Financial Liabilities” requires entities to disclose information about rights to set off and related arrangements (e.g. collateral arrangements). The disclosures are intended to provide users of an entity’s financial statements with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognized financial instruments that are set off in accordance with IAS 32 “Financial Instruments: Presentation”. The disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irre- spective of whether they are set off in accordance with IAS 32. These amendments will not have any effect on the Würth Group’s net assets, financial position and results of operations, and become effective for fiscal years beginning on or after 1 January 2013.

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IFRS 10 “Consolidated Financial Statements” and IAS 27 “Separate Financial Statements” replace the portion of the previous IAS 27 “Consolidated and Separate Financial Statements” that addressed accounting for consolidated financial statements. It also includes the issues previously regulated in SIC-12 “Consolidation – Special Purpose Entities”. IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled, and therefore, are required to be consolidated by a parent. This did not, however, have any significant effect on the Würth Group. The standard is mandatory, for the first time, for fiscal years beginning on or after 1 January 2013.

As a consequence of the new IFRS 11 “Joint Arrangements” and IFRS 12, IAS 28 has been renamed “Invest- ments in Associates and Joint Ventures (revised 2011)”, and extends the scope of application of the equity method, which was previously limited to associates, to cover investments in joint ventures. The amendment was issued in May 2011 and becomes effective for fiscal years beginning on or after 1 January 2013. First-time adoption did not have any significant effects on the consolidated financial statements of the Würth Group.

IFRS 12 “Disclosure of Interests in Other Entities” includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required, but have no effect on the Würth Group’s consolidated financial statements. The standard is mandatory for fiscal years beginning on or after 1 January 2013.

IFRS 13 “Fair Value Measurement” establishes a single source of guidance for fair value measurements. The standard does not specify when an entity is required to use fair value for its assets and liabilities, but rather only provides guidance on how to properly measure fair value under IFRS. IFRS 13 defines the fair value as the exit price. IFRS 13 also defines further disclosure requirements. The application of IFRS 13 does not have any major impact on fair value measurement within the Würth Group. The required disclosures can be found in the disclosures in the notes for the individual assets and liabilities whose fair value has been calculated. The standard is mandatory for fiscal years beginning on or after 1 January 2013.

The amendment to IAS 1 “Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income” requires the regrouping of items belonging to other comprehensive income. Items to be reclassified to the income statement in subsequent reporting periods (known as “recycling“) (including losses or gains from the disposal of available-for-sale financial assets) are to be reported separately from items that are not to be reclassified. The amendments only relate to presentation and have no impact on the net assets, financial position or results of operations of the Würth Group.

The IASB published IAS 19 “Employee Benefits (revised 2011)” in June 2011. The amendments are effective for the first time for fiscal years beginning on or after 1 January 2013. The Würth Group has, however, adopted this standard early for fiscal year 2012.

92 The amendment to IAS 19 “Employee Contributions” was published in November 2013 and is to be applied, for the first time, to fiscal years starting on or after 1 July 2014. The amendment relates to the statement of contributions made by employees or third party to the pension plan as a reduction of the service cost, insofar as they reflect the payments made in the reporting period. The amendment is to be applied retroactively and does not have any impact on the net assets, financial position or results of operations of the Würth Group.

Improvements to IFRSs 2009-2011 In May 2012, the IASB issued an omnibus of amendments to its standards, primarily with a view to removing inconsisten- cies and clarifying wording. There are separate transitional provisions for each amended standard. The adoption of the following amendments resulted in changes to accounting policies but did not have any effect on the net assets, financial position and results of operations of the Würth Group, as the amendments apply to scenarios that do not apply in the Würth Group. IFRS 1 “Borrowing costs”; Entities adopting the IFRSs for the first time can opt to apply the provisions governing borrowing costs set out in IAS 23, in particular the obligation to capitalize borrowing costs on qualifying assets, either from the time of transition to the IFRSs or at an earlier point in time. The provision set out in IAS 23 must, however, be adhered to at the time the IFRSs are adopted at the latest. IAS 1 “Presentation of Financial Statements”: This clarifies the distinction between the additional comparative information that may be presented and the minimum comparative information that is required, generally covering the prior reporting period. IAS 16 “Property, Plant and Equipment”: This clarifies which spare parts and servicing equipment qualify as property, plant and equipment and are not treated as inventories. IAS 32 “Financial Instruments: Presentation”: This clarifies that income taxes on distributions to bearers of equity instruments fall under the scope of IAS 12 “Income Taxes”. IAS 34 “Interim Financial Reporting”: Contains a provision reconciling the disclosures on segment assets with the disclosures on segment liabilities in interim financial statements and the reconciliation of disclosures in the interim reporting with the disclosures in the annual financial statements.

The amendments from this project are effective for fiscal years beginning on or after 1 January 2013.

Published standards endorsed by the EU in the comitology procedure that are not yet effective.

Standards issued but not yet effective by the date of issuance of the consolidated financial statements of the Würth Group are listed below. This listing of standards and interpretations issued are those that the Würth Group reasonably expects to have an effect on disclosures, net assets, financial position and results of operations when applied at a future date. The Würth Group intends to adopt those standards when they become effective.

IFRS 9 “Financial Instruments: Classification and Measurement” as issued reflects the first phase of the IASB’s work on the replacement of IAS 39 “Financial Instruments: Recognition and Measurement” and applies to the classification and measurement of financial assets and financial liabilities as defined in IAS 39. This standard is mandatory, for the first time, for fiscal years beginning on or after 1 January 2013. Amendments to IFRS 9 “Mandatory Effective Date of IFRS 9 and Transition Disclosures”, issued in December 2011, moved the mandatory effective date to 1 January 2015. In subsequent phases, the IASB will address hedge accounting and the impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of the Würth Group’s financial assets, but will not have

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an effect on classification and measurement of financial liabilities. The Würth Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

The amendment for investment companies (amendment to IFRS 10, IFRS 12 und IAS 27) applies to fiscal years beginning on or after 1 January 2014 and exempt companies that meet the definition criteria of an investment company set out in IFRS 10 from the consolidation requirement. Instead, the investment companies have to state the interests in their subsidiaries at fair value through profit or loss in the future. This amendment is irrelevant to the Würth Group, as none of the Würth Group companies fulfils the criteria for definition as an investment company pursuant to IFRS 10.

The amendments to IAS 32 “Offsetting Financial Assets and Financial Liabilities” clarify the meaning of “currently has a legally enforceable right to set off” and the application of offsetting criteria to gross settlement systems at clearing houses. The amendment is effective for the first time for fiscal years beginning on or after 1 January 2014. This amendment is not expected to have any effects on the consolidated financial statements of the Würth Group.

The amendment to IAS 36 “Recoverable Amount Disclosures for Non-Financial Assets” resolves the unplanned implications of IFRS 13 for the disclosure requirements pursuant to IAS 36. Furthermore, the amendment requires the disclosure of a recoverable amount for assets or cash-generating units for which impairments or reversals of impairment losses were stated during the year. The amendment applies with retroactive effect to fiscal years beginning on or after 1 January 2013 and will not have any effect on the consolidated financial statements of the Würth Group.

The amendment to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” allows, under certain circumstances, the continuation of hedge accounting in cases in which derivatives designed as hedging instruments are transferred to a central clearing house on the basis of statutory and supervisory law provisions (novation). The amendment is effective for the first time for fiscal years beginning on or after 1 January 2014. The Würth Group did not perform any novation of its derivatives in the period under review and generally recognizes derivatives not as hedging instruments, but at fair value through profit or loss. This amendment will, however, be applied to future novation.

The interpretation IFRIC 21 “Levies” states that companies operating on particular markets have to state a liability for the levies to be paid to the authorities responsible for this market if the business activities causing the levy in question are performed. In the case of levies that depend on a minimum volume being reached, for example, the interpretation makes it clear that a debt can only be carried as a liability once this minimum volume has been reached. The interpretation is effective for the first time for fiscal years beginning on or after 1 January 2014. The Würth Group does not expect the application of IFRIC 21 to have any significant effect on the consolidated financial statements.

Improvements 2010-2012 • IFRS 2 “Share-based Payment”; definition of “exercise conditions” • IFRS 3 “Business Combinations”; reporting of conditional consideration in connection with a business combination • IFRS 8 “Operating Segments”; transfer of all of the reportable assets of the operating segment to the company assets • IFRS 13 “Fair Value Measurement”; current receivables and liabilities • IAS 16 “Property, Plant and Equipment”; revaluation method – proportionate restatement of accumulated depreciation • IAS 24 “Related Party Disclosures”; members of the company management. • IAS 38 “Intangible assets”; revaluation method – proportionate restatement of accumulated depreciation

94 Improvements 2011-2013 • IFRS 1 “First-Time Adoption of International Financial Reporting Standards (amending only the Basis for Conclusions)”; meaning of “effective” in respect of the IFRSs • IFRS 3 “Business Combinations”; scope of application of the exceptions for joint ventures • IFRS 13 “Fair Value Measurement”; scope of paragraph 52 (exception for portfolios) • IAS 40 “Investment Property”; clarifying the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property

The IASB published the final amendments resulting from the issues discussed in this cycle in December 2013. The Würth Group is currently assessing the effect on the consolidated financial statements.

C. Consolidated group

The consolidated financial statements of the Würth Group include parent companies at the same organizational level as well as all domestic and foreign entities in which the parent companies at the same organizational level hold a majority of the voting rights, either directly or indirectly, and thus have the possibility to exercise control over these entities. The parent companies – and hence the entire Würth Group – are subject to common control by the Central Managing Board. The consolidated group is therefore based on the Würth Group’s uniform ownership, organizational and management structure, as only this presentation gives a true and fair view of the Würth Group. Determining the consolidated group in accordance with IAS 27 / IFRS 10 would not give a true and fair value of the net assets, financial position and results of operations because transactions between the subgroups thereby created would not be presented fairly. In this case, the subgroups would provide an incomplete and misleading presentation of the economic and financial conditions of the Würth Group regarding practically every item of the consolidated financial statements.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Würth Group obtains control, and continue to be consolidated until the date that such control by the parent ceases.

The cost of subsidiaries and business operations acquired comprises the consideration transferred plus any non-controlling interests.

The major changes to the consolidated group in comparison to the prior year on account of acquisitions are as follows:

As of 1 January 2013, the Würth Group acquired 100% of the shares and the voting rights in Chemofast Anchoring GmbH, Willich, Germany. The company develops and produces chemical mortars, known as “chemical anchors”, and markets these very successfully to its private-label customers in the construction and retail industries.

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Chemofast Anchoring GmbH, Willich, Germany:

Acquisition-date Previous carrying in millions of EUR fair value amount Assets Customer relationships 11.9 – Recipes 6.9 – Land 3.0 2.8 Technical equipment and machines 1.9 1.9 Other non-current assets 0.3 0.3 Inventories 3.6 3.6 Trade receivables 4.3 4.3 Other assets 0.3 0.3 Cash and cash equivalents 3.6 3.6 35.8 16.8

Liabilities Financial liabilities 2.9 2.9 Trade payables 1.7 1.7 Provisions 0.9 0.9 Income tax liabilities 0.8 0.8 Deferred tax liabilities 3.9 0.2 Other liabilities 0.7 0.7 10.9 7.2 Total identifiable net assets 24.9 9.6

Goodwill arising from the business combination 8.8 Consideration transferred 33.7

Transaction costs 0.7 Cash acquired with the subsidiary 3.6 Net cash outflow 30.8

Since the acquisition date, the entity has contributed EUR 22.3 million to sales. Net income for the year came in at EUR 1.6 million.

The following acquisitions were also made: As of 1 September 2013, the Würth Group acquired 90% of the shares and voting rights in YOUR OWN BRAND GmbH, Neutraubling, Germany, including the latter’s subsidiaries YOUR OWN BRAND UK Ltd., Cheddar, UK and Your Own Brand S.R.L, Milan, Italy. The company specializes in body and hair care products and designs and distributes brands and branded goods for customers from the discount, chemist and food retail sectors.

96 Also with effect from 1 September 2013, the Würth Group acquired 75% of the shares and voting rights in Kemacos Full Filling Service GmbH, Kematen in Tyrol, Austria, as well as 75% of the shares and voting rights in CC-Czech Liegen- schaftsverwaltungs GmbH, Kematen in Tyrol, Austria. As a result of a subsequent unilateral capital increase, the interest was increased to 100% in accordance with the contractual provisions. Kemacos Full Filling Service GmbH is responsible for the development and manufacture of cosmetics products for body and hair care and for oral hygiene.

The Würth Group acquired 100% of the shares and voting rights in Ares Oy Nikotips, Espoo, Finland, as of 22 February 2013. Ares Oy is involved in the wholesale business for rubber, plastic and polyurethane products.

On 11 July 2013, the Würth Group acquired 100% of the shares and voting rights in the property company Bontilat Oy, Imatra, Finland. The company was then merged with Würth Oy, Riihimäki, Finland.

Your Own Kemacos Full Brand Filling Service Ares Oy in millions of EUR Group GmbH Nikotips Other Total Assets Intangible assets 6.0 1.6 6.8 0.5 14.9 Other non-current assets 0.3 4.3 0.2 6.0 10.8 Inventories 6.5 2.5 2.5 1.8 13.3 Receivables and other assets 3.1 3.4 1.4 0.1 8.0 Cash and cash equivalents 0.2 0.1 0.3 0.0 0.6 16.1 11.9 11.2 8.4 47.6

Equity and liabilities Shares held by other shareholders – 0.3 0.0 0.0 0.0 – 0.3 Non-current liabilities 3.0 7.9 3.6 4.8 19.3 Current liabilities 6.6 4.0 1.1 2.2 13.9 9.3 11.9 4.7 7.0 32.9 Purchase prices 6.8 0.0 6.5 1.4 14.7 Pro rata sales 12.3 5.0 9.1 5.6 32.0 Share of profit / loss – 0.1 – 0.4 0.6 – 0.5 – 0.4 Pro forma sales in 2013 41.8 15.8 10.9 5.6 74.1 Pro forma profit / loss in 2013 0.2 – 4.0 0.9 – 0.5 – 3.4

The other acquisitions relate mainly to the Alufer Group, Elgeta, Spain and SVH24-de GmbH, Dortmund, Germany.

In the past fiscal year, an amount of EUR 21.6 million (2012: EUR 27.7 million) was recognized as expenses from the amortization, depreciation and impairment of assets identified in the course of purchase price allocation for business combinations from prior years.

After the Würth Solar Group ceased operations, Creotec GmbH, Freiburg, Germany and SolarMarkt GmbH, Aarau, Swit- zerland were sold in fiscal year 2013. The business operations of SolarMarkt Freiburg, Germany and Session Solar, USA were also sold.

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D. Consolidation principles

The consolidated financial statements are based on the financial statements of the parent companies and subsidiaries included in the Group as of 31 December 2013, which have been prepared according to uniform standards.

Acquisition accounting is performed using the acquisition method in accordance with IFRS 3 (revised).Accordingly, the consideration transferred to the seller plus any non-controlling interests and the fair value of the previously held equity interests in the acquiree are offset against the fair value of the acquired assets and liabilities on the acquisition date. Any remaining debit differences are accounted for as goodwill. Any remaining credit differences are posted to profit or loss. Any contingent consideration is recognized at acquisition-date fair value. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognized in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured and its subsequent settlement is accounted for within equity. Business combinations achieved in stages where the Group already has control or disposals of shares without a loss of control are recognized directly in equity from fiscal year 2010 onwards.

In the case of business combinations achieved in stages that give rise to control over an entity, or in the case of disposals of shares which result in a loss of control, the previously held or remaining equity interests are remeasured at fair value through profit or loss.

A change in the ownership interest of a subsidiary without involving the loss of control is accounted for as an equity transaction. Transactions under common control are recognized using the pooling-of-interest method. Under this method, any gains or losses on disposal lacking commercial substance are offset directly in equity in the reserves. The same accounting policies are used to determine the Group’s share in equity of all companies accounted for using the equity method. Receivables and liabilities between the consolidated entities are netted. Intercompany profits in inventories and non-current assets are eliminated in the consolidated income statement. Intercompany sales and other intercompany income are netted against the corresponding expense. Deferred tax is recognized for consolidation transactions that are recognized in profit or loss.

Non-controlling interests represent the portion of profit or loss and net assets not attributable to the equity holders of the parent companies in the Group. Non-controlling interests are presented separately in the consolidated income statement and the consolidated statement of financial position. In the consolidated statement of financial position, non-controlling interests are disclosed in equity, separately from the equity attributable to the parent companies in the Group.

98 E. Foreign currency translation

In the separate financial statements of the entities, non-monetary and monetary items denominated in foreign currency are recognized at the rate prevailing when they were first recorded. Monetary items are translated at the exchange rate on the reporting date. Any exchange rate gains generated and losses incurred as of the reporting date from the measurement of monetary assets and monetary liabilities denominated in foreign currency are recognized through profit or loss in finance revenue and finance costs respectively.

The functional currency method is used to translate the financial statements of foreign entities. In the consolidated financial statements, except for equity, the items of the statement of financial position of all foreign entities are translated to the euro at closing rates, as the significant Group entities included in the consolidated financial statements conduct their business independently in their local currency, which is the functional currency. Differences compared to the prior-year translation are offset against reserves directly in equity (other comprehensive income). Goodwill is translated at the closing rate as an asset of foreign entities.

Income and expense items are translated using average rates. Differences compared to the closing rate are also recognized directly in equity.

The financial statements of the major subsidiaries in countries outside the European Monetary Union were translated to the euro using the following exchange rates:

Average exchange rates Closing rates for the fiscal year on the reporting date 2013 2012 2013 2012 1 US dollar 0.75382 0.77891 0.72632 0.75855 1 pound sterling 1.17770 1.23243 1.20149 1.22639 1 Canadian dollar 0.73133 0.77887 0.68222 0.76254 1 Australian dollar 0.73016 0.80667 0.64775 0.78666 1 Brazilian real 0.35210 0.39892 0.30711 0.37102 1 Chinese renminbi yuan 0.12250 0.12300 0.11989 0.12178 1 Danish krone 0.13409 0.13434 0.13406 0.13405 1 Norwegian krone 0.12824 0.13377 0.11943 0.13581 1 Polish zloty 0.23818 0.23886 0.24105 0.24433 1 Russian rouble 0.02361 0.02504 0.02205 0.02488 1 Swedish krona 0.11566 0.11485 0.11318 0.11649 1 Swiss franc 0.81230 0.82970 0.81539 0.82836 1 Czech koruna 0.03843 0.03979 0.03649 0.03981 1 Hungarian forint 0.00337 0.00346 0.00337 0.00341

99 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

F. Accounting policies

The Würth Group uses transaction date accounting. The financial statements of all consolidated companies have been prepared in line with uniform accounting policies for the Group (IFRSs).

Goodwill arising from a business combination is initially measured at cost, which is the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Recognized goodwill is tested for impairment on an annual basis and when there is any indication that it may be impaired. The impairment test for goodwill is effected at the level of the cash-generating unit. The cash-generating unit is defined as the legal entity, with the exception of Diffutherm and Dinol.

The impairment loss is determined by calculating the recoverable amount of the cash-generating unit to which goodwill relates. If the recoverable amount of the cash-generating unit is lower than its carrying amount, an impairment loss is recorded.

Intangible assets acquired separately are initially measured at cost. The cost of an intangible asset acquired in a business combination is its acquisition-date fair value. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with finite lives are amortized over their useful life using the straight-line method and tested for impairment whenever there is any indication that the intangible asset may be impaired. The useful life and the amortization method for an intangible asset with a finite useful life are reviewed at least at each fiscal year end. The necessary changes in the amortization method and the useful life are treated as changes to estimates. Amortization of intangible assets with a finite useful life is reported in the consolidated income statement under amortization and depreciation. Capitalized customer relationships, software, franchises and other licenses are amortized over a useful life of three to fifteen years.

Intangible assets with an indefinite useful life and intangible assets that are not ready for use are tested for impairment individually at least once a year. Such intangibles are not amortized. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether the indefinite life assessment continues to be supportable.

100 If all prerequisites of IAS 38.57 are met, internally generated intangible assets are reported at the amount of the directly attributable development costs incurred. Capitalization ceases when the asset is finished and released. Pursuant to IAS 38.57 development costs may only be capitalized if an entity can demonstrate that all of the following six requirements are satisfied:

1. The technical feasibility of completing the asset so that it will be available for use or sale 2. The intention to complete the intangible asset and use or sell it 3. The ability to use or to sell the intangible asset 4. How the intangible asset will generate probable future economic benefits 5. The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset 6. The ability to measure reliably the expenditure attributable to the intangible asset during its development

The Würth Group estimated the customary useful life of the recognized internally generated intangible assets to be three years.

Costs of research and general development are immediately recorded as an expense in accordance with IAS 38.54.

Property, plant and equipment are stated at amortized cost. Repair costs are expensed immediately. Costs of conversion contain directly allocable costs (such as direct materials and labor) and fixed and variable production overheads (such as materials and production overheads) including appropriate depreciation of the production plant based on ordinary capacity utilization. Borrowing costs are capitalized provided the requirements for a qualifying asset are met. Except for land and land rights, property, plant and equipment are generally depreciated using the straight-line method unless a different depreciation method better reflects the pattern of consumption.

Depreciation is computed according to the following uniform Group useful lives:

Buildings 25 – 40 years Furniture and fixtures 3 – 10 years Technical equipment and machines 5 – 15 years

An item of property, plant and equipment leased under a finance lease is recognized at fair value or the lower present value of the minimum lease payments and depreciated over the expected useful life or the contractual term, whichever is shorter. Payment obligations resulting from the lease payments are recorded as a liability at their present value.

101 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

The residual values of the assets, useful lives and depreciation methods are reviewed at the end of each fiscal year and adjusted if necessary.

An item of property, plant and equipment or an intangible asset is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement in the year the asset is derecognized.

An impairment test is performed at the end of the fiscal year for all intangible assets and property, plant and equipment if events or changes in circumstances indicate that the carrying amount of the assets exceeds their recoverable amount or if an annual impairment test is required. If the recoverable amount of the asset falls short of the carrying amount, an impairment loss is recognized. The recoverable amount is the higher of an asset’s net selling price and its value in use. The net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction less the costs necessary to make the sale. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. The recoverable amount is determined for each asset individually or, if that is not possible, for the cash-generating unit.

Impairment losses recognized for an asset in profit or loss in prior years are reversed when there is any indication that the impairment no longer exists or has decreased. Any reversal is posted to profit or loss. A reinstatement or reversal of the impairment loss recorded on an asset cannot, however, exceed the amortized cost that would have been recognized without the impairment. Impairment losses recognized on goodwill are not reversed.

Financial assets are divided into the following categories: (a) held-to-maturity financial assets, (b) financial assets at fair value through profit or loss, (c) available-for-sale financial assets, and (d) loans and receivables originated by the entity.

Financial assets with fixed or determinable payments and fixed maturity that the entity has the positive intention and ability to hold to maturity, other than loans and receivables originated by the entity, are classified as held-to-maturity investments. Financial assets classified as “at fair value through profit or loss” are (i) financial assets that are acquired principally for the purpose of generating a profit from short-term fluctuations in price or exchange rates or (ii) financial assets designated upon initial recognition as of fair value through profit or loss. All other financial assets apart from loans and receivables originated by the entity are classified as available-for-sale financial assets.

Held-to-maturity investments are disclosed under non-current assets unless they are due within twelve months of the reporting date. Financial assets held for trading are disclosed under current assets. This does not apply to derivatives that lead to payments in more than twelve months after the reporting date. They are disclosed under non-current financial assets or liabilities. Financial assets designated upon initial recognition as of fair value through profit or loss and available-for-sale financial assets are disclosed as current assets if management intends to sell them within twelve months of the end of the reporting period. They are recognized at the date when the Würth Group enters into a contract.

102 The initial recognition of a financial asset is at cost, which corresponds to the fair value of the consideration given. Transaction costs are included, except for financial assets designated upon initial recognition as of fair value through profit or loss or classified as held-for-trading.

Held-to-maturity investments are measured at amortized cost using the effective interest method. If it is likely that financial assets measured at amortized cost are impaired, the impairment loss is recognized in profit or loss. If an impairment loss recorded in a prior period decreases and the reversal of the impairment loss (or decrease in the impairment loss) can be reversed, an asset may not be carried at an amount exceeding the carrying amount that would have been recognized without the impairment.

Available-for-sale financial assets, financial assets that are classified as held for trading, and financial assets at fair value through profit or loss are subsequently measured at fair value on the basis of market prices as of the reporting date without deducting any transaction costs. For financial instruments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, discounted cash flow analysis or other valuation models.

Gains and losses from measurement of an available-for-sale financial asset at fair value are recognized directly in equity. Changes in the fair value of financial assets held for trading and financial assets at fair value through profit or loss are recognized in the net income or loss for the period.

Loans and receivables originated by the entity and not held for trading are recognized at amortized cost.

Any necessary impairment losses are recognized by deducting the amounts directly from the underlying receivables.

Derivative financial instruments are classified as held-for-trading financial assets / financial liabilities, unless they are included in hedge accounting as hedging instruments. The change in the fair value of the derivative financial instruments is recognized in the consolidated income statement. The fair value of open derivative financial instruments is disclosed under other assets / liabilities.

Receivables and liabilities from financial services contain all receivables and liabilities arising from the financial services business. Bank receivables and loans as well as receivables or loans due from customers are financial investments with fixed or determinable payments and fixed maturity that are not quoted in an active market. After initial recognition, receivables and liabilities from financial services are carried at amortized cost using the effective interest method less any allowance for impairment. Loans in the banking business are tested for impairment. The Würth Group sells receivables from financial services to factors in asset-backed commercial papers (ABCP) transactions. Notwithstanding the transfer of title to the receivables from financial services, these must continue to be recognized by the Würth Group where Group entities retain significant risks and rewards on a contractual basis.

Interest-free and low-interest loans are stated at present value.

103 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

Deferred taxes result from temporary differences between the IFRS carrying amounts and the tax accounts of the individual entities (except for differences from goodwill arising on the acquisition of shares) and from consolidation entries. Deferred tax assets also include tax credits that result from the expected utilization of existing loss carryforwards in subsequent years. Deferred tax assets for recognition and measurement differences and for unused tax losses are only taken into account if they are expected to be realized. Deferred taxes are measured on the basis of the respective local income tax rates. Deferred tax assets and deferred tax liabilities are offset if a Group entity has a legally enforceable right to offset current tax assets and current tax liabilities and these relate to income taxes levied by the same taxation authority on the same taxable entity. Deferred taxes relating to items recognized directly in equity are also posted directly to equity. Other deferred taxes are posted to the consolidated income statement.

Inventories are stated at costs of purchase or costs of conversion. Costs of conversion contain directly allocable costs (such as direct materials and labor) and fixed and variable production overheads (such as materials and production overheads) including appropriate depreciation of the production plant based on ordinary capacity utilization and, in the case of qualifying assets, borrowing costs.

The carrying amounts are calculated using the weighted average cost method.

Risks inherent in inventories from reduced salability are accounted for by recognizing appropriate write-downs to the lower of cost or net realizable value.

Payments on account received from customers are recorded as liabilities.

Receivables and other assets are measured at amortized cost. Allowances for impairment are provided for based on individual risk estimates and past experience of recoverability. To determine specific allowances, financial assets that could potentially be impaired are grouped together by similar credit risk characteristics and collectively assessed for impairment. Impairment losses on trade receivables are recognized via a provision for impairment in some cases. The decision of whether to account for a credit risk by using a provision for impairment or by recognizing a loss directly on the receivable depends upon the ability to accurately assess the risk involved. On account of the different business fields and regional conditions, this assessment is at the discretion of the individuals in charge of the respective portfolios.

As a lessor, the Würth Group recognizes finance lease assets as receivables in the statement of financial position equal to the unsold net investment in the lease. Financial income is recognized to reflect a constant periodic rate of return on the lessor’s net investment outstanding. Initial direct costs are immediately expensed. Income on unsold contracts is recognized over the term of the lease.

Securities are classified as financial assets held for trading or designated upon acquisition as financial assets at fair value through profit or loss and marked to market on the reporting date. Highly liquid securities classified as current assets are securities due within three months from the date of acquisition. They are reported as short-term investments under cash and cash equivalents.

Cash and cash equivalents include cash, demand deposits and short-term investments (e.g. money market funds).

104 Non-current assets classified as held for sale and discontinued operations are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets or disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. In the consolidated income statement of the reporting period, and of the comparable period of the prior year, income and expenses from discontinued operations are recognized separately from income and expenses from continuing operations and presented as profit / loss after taxes from discontinued operations. Income and expenses from liabilities classified as held for sale that do not constitute discontinued operations are recognized under profit / loss from continuing operations. This presentation also applies when the Würth Group retains a non-controlling interest in the former subsidiary after the sale. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.

Non-controlling interests include non-controlling interests in share capital, in reserves and in retained earnings unless they qualify as liabilities within the meaning of IAS 32. If the latter is the case, they are disclosed under financial liabilities and changes in the fair value are recognized within the financial result.

Post-employment benefit obligationsfor defined benefit plans are calculated using the projected unit credit method. Future obligations are measured using actuarial methods. Taking account of dynamic components, the future benefit obligations are spread over the entire period of service. Actuarial calculations and estimates must be obtained for all benefit plans. Actuarial gains and losses for the defined benefit plan are recognized in full in the period in which they occur in other comprehensive income. Such actuarial gains and losses are also immediately recognized in revenue reserves and are not reclassified to profit or loss in subsequent periods.

The defined benefit asset or liability comprises the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds, as explained in note 3) and the fair value of plan assets out of which the obligations are to be settled. Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the creditors of the Group, nor can they be paid directly to the Group. Fair value is based on market price information and, in the case of quoted securities, it is the published bid price. The value of any defined benefit asset recognized is restricted to the sum of any unrecognized past service costs and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.

In the case of defined contribution plans, the respective entity pays contributions to state or private pension companies either as required by law or on a voluntary basis. No further payment obligations arise for the company from the payment of contributions. The amounts are recognized in profit or loss in full.

Provisions are created for all legal or constructive obligations to third parties as of the reporting date which relate to past events, will probably lead to an outflow of resources in future, and whose amount can be reliably estimated. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Where the effect of the time value of the money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. In the discounting process, the increase in the provision reflecting the passage of time is recognized as finance costs. Reversals of provisions are posted against the expense items for which the provisions were set up.

105 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

When measuring financial liabilities, a distinction is made between a) financial liabilities held for trading, and b) other financial liabilities.

Derivative financial instruments are classified as held-for-trading financial liabilities and measured at fair value. However, an exception is made for derivatives related to non-listed equity instruments whose fair value cannot be reliably determined and that can only be settled through their delivery. These are measured at cost.

Other financial liabilities are measured at amortized cost using the effective interest method, which usually corresponds to the repayment or settlement value or, in the case of obligations similar to pension obligations, to present value. If non-controlling interests are classified as liabilities within the meaning of IAS 32, they are measured at fair value.

The Würth Group measures financial instruments and non-financial assets at fair value on every reporting date. The fair value is the price that would be paid, in the event of a due and proper transaction, between market participants on the calculation cut-off date for the sale of an asset / transfer of a liability. All assets and liabilities for which the fair value is calculated or is reported in the financial statements are allocated to the fair value hierarchy described below. Level 1 – Quoted market prices in active markets for identical assets and liabilities. Level 2 – Valuation techniques for which the lowest level input parameter that is significant to valuation at fair value measurement is directly or indirectly observable. Level 3 – Valuation techniques for which the lowest level input parameter that is significant to the fair value measurement is unobservable.

Financial guarantee contracts issued by the Würth Group are those contracts that require a payment to be made to re- imburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. These financial guarantee contracts are treated as insurance contracts as defined by IFRS 4, i.e. the financial guarantee contracts are presented as contingent liabilities until utilization becomes probable. When this is the case, the corresponding obligation is recognized.

Sales are recognized when it is probable that the economic benefits associated with the transaction will flow to the entity and the level of sales can be measured reliably. Sales are recorded net of general VAT and any price reductions and quantity discounts when delivery has taken place and the risks and rewards incidental to ownership have been transferred in full.

Revenue from financial services is recognized when it is realized or realizable and earned. Interest from interest-bearing assets and liabilities is recognized proportionately over the term of the assets or liabilities concerned using the effective interest method and taking into account any deferred charges and fees as well as premiums or discounts. Commission is recognized when there is sufficient evidence that an agreement exists, the performance has been rendered, the fee or commission has been fixed, and collectability is sufficiently certain.

106 Lease payments under an operating lease are recognized as an expense in the consolidated income statement on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern of the benefit for the entity as lessee. A lease is classified as an operating lease if the lease does not transfer substantially all risks and rewards incidental to ownership to the entity.

Finance leases with the Würth Group as lessee, which transfer to the Würth Group substantially all the risks and rewards incidental to ownership of the leased asset, are capitalized at the commencement of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and a reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance costs are recognized in the income statement. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Würth Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date and an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional provisions of IFRIC 4.

Government grants are not recognized until there is reasonable assurance that the entity will comply with the conditions attached to the grant and that the entity will in fact receive it. Government grants are recognized in profit or loss as scheduled in line with the related expenses which are subsidized by the grants. If grants are issued for the purchase of property, plant or equipment, the grants are treated as a reduction of the cost of those assets.

Contingent liabilities are possible or present obligations arising from past events which are not likely to result in an outflow of resources and are thus not recorded in the statement of financial position. The amounts stated correspond to the potential liability as of the reporting date.

Subsequent events that provide additional information about the situation before the reporting date are reflected in the statement of financial position, while those which do not lead to adjustments are mentioned in the notes where material.

107 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

G. Notes to the consolidated income statement

[1] Sales in millions of EUR 2013 2012 Revenue from the sale of goods and services 9,640.3 9,885.7 Revenue from financial services 104.8 99.0 Total 9,745.1 9,984.7

Revenue from financial services primarily contains interest income of EUR 42.9 million (2012: EUR 46.5 million), similar income of EUR 14.2 million (2012: EUR 10.5 million) and commission income of EUR 11.4 million (2012: EUR 10.6 million) of Internationales Bankhaus Bodensee AG, Friedrichshafen, Germany. It also includes income from the leasing business.

Revenue from the sale of goods and services contains revenue from services of EUR 87.4 million (2012: EUR 87.3 million).

The drop in revenue from the sale of goods and services is attributable to the sale / discontinuation of activities of the Würth Solar Group in the amount of EUR 263.4 million.

[2] Cost of materials in millions of EUR 2013 2012 Cost of materials and supplies and of purchased merchandise 4,470.8 4,643.3 Expenses for purchased services 179.2 177.5 Total 4,650.0 4,820.8

[3] Cost of financial services

Cost of financial services primarily contains interest expenses of EUR 15.6 million (2012: EUR 21.5 million) and commission of EUR 5.3 million (2012: EUR 4.1 million) paid by Internationales Bankhaus Bodensee AG, Friedrichshafen, Germany. This item also contains EUR 2.3 million (2012: EUR 2.7 million) from the external business of the companies specializing in leases.

[4] Other operating income

Other operating income principally includes income from the sale of other goods and services as well as income from the disposal of assets.

108 [5] Personnel expenses and number of employees

Personnel expenses in millions of EUR 2013 2012 Wages and salaries 2,221.8 2,250.5 Social security 299.3 296.6 Pension and other benefit costs 212.6 209.0 Total 2,733.7 2,756.1

Number of employees as of the reporting date

2013 2012 Würth Line Germany 7,085 7,140 Allied Companies Germany 12,330 12,465 Würth Group Germany 19,415 19,605 Würth Group International 44,156 45,564 Würth Group total 63,571 65,169 thereof Sales staff 29,157 30,790 In-house staff 34,414 34,379

The average headcount of the Würth Group totaled 64,217 in the fiscal year under review (2012: 66,050). In Germany, the average headcount of the Würth Group totaled 19,992 (2012: 20,000) and in other countries 44,225 (2012: 46,050).

[6] Other operating expenses

Other operating expenses mainly include selling, administration and operating expenses, bad debts and other taxes.

Other operating expenses also include impairment of receivables from the banking business of EUR 21.1 million (2012: EUR 7.8 million).

109 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[7] Finance revenue / finance costs in millions of EUR 2013 2012 Other interest and similar income 45.8 44.2 Interest and similar expenses 120.2 100.5 Net interest cost from pension plans 6.3 5.4 Total financial result 80.7 61.7 thereof from financial instruments under the IAS 39 measurement categories: Held-to-maturity investments (HtM) 0.3 0.4 Financial assets held for trading (FAHfT) 34.8 27.1 Financial assets (designated as) at fair value through profit or loss (FAFVtpl) 1.4 1.2 Loans and receivables (LaR) 9.4 12.4 Financial liabilities held for trading (FLHfT) – 35.5 –16.7 Financial liabilities at amortized cost (FLAC) – 84.7 – 80.7

Income from the translation of foreign currency items amounted to EUR 4.6 million (2012: EUR 1.6 million).

The net gains or losses from financial assets / liabilities held for trading include the net gains or losses from changes in fair value as well as interest income and expenses from these financial instruments. The net gains or losses from loans and receivables chiefly include the effects of impairments and reversals of impairment losses.

[8] Income taxes in millions of EUR 2013 2012 Current taxes 93.4 92.8 Deferred tax income Deferred tax income from unused tax losses 61.3 61.4 Other deferred tax income 48.9 33.6 Deferred tax expense Deferred tax expense from unused tax losses 79.7 72.4 Other deferred tax expenses 41.6 37.3 Total 104.5 107.8

Income taxes include corporate income tax (including solidarity surcharge) and trade tax of German entities and comparable income taxes of foreign entities.

110 A reconciliation from the theoretical to the current tax rate for the Würth Group is shown below: in millions of EUR 2013 2012 Earnings before taxes 413.9 386.7 Theoretical tax rate as a % 18.8 20.6 Theoretical tax expense 78.0 79.6 Changes in theoretical tax expense due to: Unrecognized tax losses of the current fiscal year 18.2 23.6 Recognition of unused tax losses from prior periods – 4.5 – 10.7 Write-down on recognized unused tax losses from prior years 4.0 17.9 Write-down on temporary differences 1.1 3.1 Different tax rates 0.9 0.8 Tax reductions due to tax-free items -2.0 -3.1 Tax increases due to non-deductible expenses 6.8 9.6 Tax increases due to add-back taxation 4.2 8.6 Income tax expense that cannot be derived from earnings before taxes 3.4 4.7 Non-deductible impairment of goodwill 2.7 4.5 Taxes relating to other periods – 8.4 – 31.4 Other 0.1 0.6 Income taxes 104.5 107.8 Effective tax rate as a % 25.2 27.9

The theoretical tax rate is based on the weighted average tax rate of all consolidated entities. Changes in income taxes were mostly attributable to tax losses of the current fiscal year and write-downs of deferred taxes recognized in prior years on unused tax losses if it was not reasonably certain that they can be used in subsequent periods. Deferred tax assets were not recognized in such cases. In addition, the merger of Würth Beteiligungs GmbH & Co. KG with Adolf Würth GmbH & Co. KG allowed unused tax losses written down to be capitalized / used in fiscal year 2013.

The recognition of unused tax losses from prior years includes EUR 1.5 million (2012: EUR 5.0 million) from the use of deferred tax assets written down in prior years.

111 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

H. Notes to the consolidated statement of financial position

[9] Intangible assets including goodwill

Franchises, industrial Internally Customer rights, generated relationships licenses and intangible and similar Payments in millions of EUR similar rights assets assets Goodwill on account Total Cost 1 January 2013 216.8 54.0 155.7 234.3 11.6 672.4 Exchange differences – 2.8 – 0.3 – 0.5 – 6.2 – 0.2 – 10.0 Changes in the consolidated group 7.6 0.0 24.2 10.7 0.0 42.5 Additions 27.6 7.2 0.1 0.0 4.8 39.7 Disposals 13.7 1.8 0.0 0.0 0.0 15.5 Reclassifications – 2.4 11.3 0.0 0.0 – 3.4 5.5 31 December 2013 233.1 70.4 179.5 238.8 12.8 734.6 Accumulated depreciation and impairment 1 January 2013 166.7 49.5 125.6 163.8 0.1 505.7 Exchange differences – 2.2 – 0.2 – 0.4 – 5.0 0.0 – 7.8 Amortization and depreciation 20.6 2.7 5.6 0.0 0.0 28.9 Impairment losses 0.0 0.0 0.0 21.6 0.0 21.6 Disposals 12.0 1.5 0.0 0.0 0.0 13.5 Reversal of impairment losses 1.1 2.5 0.1 0.0 0.0 3.7 Reclassifications 0.0 0.0 0.0 0.0 0.0 0.0 31 December 2013 172.0 48.0 130.7 180.4 0.1 531.2

Net carrying amount 31 December 2013 61.1 22.4 48.8 58.4 12.7 203.4

112 Franchises, industrial Internally Customer rights, generated relationships licenses and intangible and similar Payments in millions of EUR similar rights assets assets Goodwill on account Total Cost 1 January 2012 195.9 48.8 136.6 234.4 8.9 624.6 Exchange differences 0.2 4.3 0.0 0.5 0.0 5.0 Changes in the consolidated group 7.5 0.0 25.6 6.6 0.0 39.7 Additions 19.4 1.5 0.4 0.0 5.1 26.4 Disposals 5.2 0.0 0.0 0.3 0.6 6.1 Reclassifications to “Assets classified as held for sale” 3.7 0.2 6.9 7.0 0.0 17.8 Reclassifications 2.7 – 0.4 0.0 0.1 – 1.8 0.6 31 December 2012 216.8 54.0 155.7 234.3 11.6 672.4 Accumulated depreciation and impairment 1 January 2012 149.8 42.4 121.0 148.8 0.0 462.0 Exchange differences 0.0 4.3 0.0 0.5 0.0 4.8 Amortization and depreciation 20.1 3.2 9.5 0.0 0.0 32.8 Impairment losses 5.1 0.0 1.9 21.7 0.1 28.8 Disposals 5.0 0.3 0.0 0.3 0.0 5.6 Reclassifications to “Assets classified as held for sale” 3.3 0.1 6.8 7.0 0.0 17.2 Reclassifications 0.0 0.0 0.0 0.1 0.0 0.1 31 December 2012 166.7 49.5 125.6 163.8 0.1 505.7

Net carrying amount 31 December 2012 50.1 4.5 30.1 70.5 11.5 166.7

Research and development costs (including amortization of capitalized development costs) recognized as expenses totaled EUR 12.0 million (2012: EUR 10.7 million).

Goodwill contains amounts from asset deals as well as from share deals.

Goodwill is tested for impairment annually. The test is based on estimated future cash flows derived from the business plan.

The impairment losses recorded on goodwill amounted to EUR 21.6 million in the fiscal year 2013 (2012: EUR 21.7 million). Goodwill was regularly tested for impairment in accordance with IAS 36 in the fiscal year 2013. With the exception of Diffutherm / Dinol, these impairment tests were based on net selling price and conducted at the level of the smallest cash-generating unit.

113 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

The impairment losses were recognized under amortization and depreciation. The table below provides a summary of the tested goodwill and the assumptions underlying the impairment tests:

AP UNI ELEKTRO Chemofast 2013 Winner Lichtzentrale Fachgroßhandel Anchoring Diffutherm / in millions of EUR LTDA Thurner GmbH GmbH & Co.KG Tunap GmbH Dinol Other Total Goodwill before impairment test 2.4 6.8 20.9 9.2 8.8 6.2 26.9 81.2 Exchange difference – 0.4 0.0 0.0 0.0 0.0 0.0 – 0.8 – 1.2 Impairment losses 0.0 0.0 20.9 0.0 0.0 0.0 0.7 21.6 Goodwill 2.0 6.8 0.0 9.2 8.8 6.2 25.4 58.4 Average sales growth in the planning period (%) 14.2 4.9 4.8 1.2 8.4 7.3 2.1-25.5 EBIT margin in the planning period (%) 5.6-8.0 2.1-3.1 0.2-2.5 6.7-8.0 9.8-10.3 5.0-6.9 1.8-18.3 Length of the planning period 4 years 4 years 4 years 4 years 4 years 4 years 4 years Sales growth p. a. after the end of the planning period (%) 1.0 1.0 1.0 1.0 1.0 1.0 1.0 EBIT margin after the end of the planning period (%) 6.6 3.1 2.5 7.2 10.3 6.9 4.0-18,3 Discount rate 19.9 11.4 11.0 9.5 11.1 9.3 9.4 -23.6 Additional impairment losses assuming a 10% lower cash flow 0.2 0.0 0.0 0.0 0.0 0.0 0.1 assuming a 1% higher discount rate 0.0 0.0 0.0 0.0 0.0 0.0 0.1

114 AP UNI ELEKTRO Solar- Diffu- 2012 Winner Lichtzentrale Fachgroßhandel Dokka Markt therm in millions of EUR LTDA Thurner GmbH GmbH & Co.KG Tunap Fasteners AG B.V. Other Total Goodwill before impairment test 4.9 6.8 23.1 9.2 9.7 6.8 6.2 25.5 92.2 Exchange difference – 0.5 0.0 0.0 0.0 0.5 0.0 0.0 0.0 0.0 Impairment losses 2.0 0.0 2.2 0.0 10.2 6.8 0.0 0.5 21.7 Goodwill 2.4 6.8 20.9 9.2 0.0 0.0 6.2 25.0 70.5 Average sales growth in the planning period (%) 10.3 7.2 9.9 10.4 6.2 8.4 5.0 2.8-31.2 EBIT margin in the planning period (%) 6.5 - 9.2 1.9 - 2.8 1.1 - 2.3 6.7 - 9.0 – 2.4 - 8.4 1.1 -1.5 9.3 -11.4 –1.9 -20.3 Length of the planning period 4 years 4 years 4 years 4 years 4 years 4 years 4 years 4 years Sales growth p. a. after the end of the planning period (%) 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 EBIT margin after the end of the planning period (%) 9.1 2.8 2.3 9.0 8.4 1.5 11.4 0.6 - 20.3 Discount rate 23.0 12.7 10.4 7.4 10.4 11.3 9.1 9.1- 20.4 Impairment losses assuming a 10% lower cash flow 2.8 0.0 15.3 0.0 10.2 6.8 0.0 1.7 assuming a 1% higher discount rate 2.5 0.0 19.0 0.0 10.2 6.8 0.0 1.7

Impairment losses were recognized mostly on entities that are exposed to a sharp fall in demand on account of the present economic situation. The assumptions underlying the calculation of net selling price are most sensitive to estimation uncertain- ties regarding sales growth, EBIT margins and the discount rates used.

The assumptions concerning sales growth and EBIT margins used for the impairment tests in the planning period are based on internal records of past experience and assumptions by management used in the business plans valid as of the reporting date.

Discount rates reflect the current market assessment of the risks specific to each cash-generating unit. The discount rate was estimated based on the weighted average cost of capital for the industry. This rate was further adjusted to reflect the market assessments of any risks specific to the cash-generating units for which future estimates of cash flows have not been adjusted.

With regard to the assessment of value in use of the cash-generating units, management believes that – with the exception of those cash-generating units where impairment losses were recognized – no reasonably possible change in any of the above key assumptions made to determine net selling price would cause the carrying amount of the cash-generating unit to materially exceed its recoverable amount.

115 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[10] Property, plant and equipment

Land, land rights Payments on and buildings Technical Other equip- account and incl. buildings on equipment and ment, furniture assets under in millions of EUR third-party land machines and fixtures construction Total Cost 1 January 2013 1,923.7 673.3 1,485.2 255.0 4,337.2 Exchange differences – 16.5 – 8.3 – 15.3 – 3.4 – 43.5 Changes in the consolidated group 8.1 6.4 1.1 0.3 15.9 Additions 51.9 58.3 137.9 135.9 384.0 Disposals 23.8 23.6 78.8 1.5 127.7 Reclassifications 200.5 38.9 21.7 – 266.6 – 5.5 31 December 2013 2,143.9 745.0 1,551.8 119.7 4,560.4

Accumulated depreciation and impairment 1 January 2013 723.1 459.6 838.5 2.1 2,023.3 Exchange differences – 5.1 – 5.0 – 10.2 0.1 – 20.2 Amortization and depreciation 59.6 49.9 101.8 0.0 211.3 Impairment losses 9.7 28.2 1.9 1.6 41.4 Disposals 14.4 22.5 70.4 0.0 107.3 Reclassifications – 0.6 1.4 0.3 – 1.1 0.0 31 December 2013 772.3 511.6 861.9 2.7 2,148.5

Net carrying amount 31 December 2013 1,371.6 233.4 689.9 117.0 2,411.9

116 Land, land rights Payments on and buildings Technical Other equip- account and incl. buildings on equipment and ment, furniture assets under in millions of EUR third-party land machines and fixtures construction Total Cost 1 January 2012 1,844.5 698.4 1,383.8 186.3 4,113.0 Exchange differences 1.9 1.5 1.7 0.1 5.2 Changes in the consolidated group 2.5 2.9 0.4 0.1 5.9 Additions 52.3 50.7 117.1 190.9 411.0 Disposals 10.4 27.1 43.6 0.7 81.8 Reclassifications to “Assets classified as held for sale” 21.7 87.8 4.6 1.4 115.5 Reclassifications 54.6 34.7 30.4 – 120.3 – 0.6 31 December 2012 1,923.7 673.3 1,485.2 255.0 4,337.2

Accumulated depreciation and impairment 1 January 2012 680.3 494.6 768.5 0.0 1,943.4 Exchange differences 0.6 – 0.1 1.0 0.0 1.7 Amortization and depreciation 59.6 50.2 98.6 0.0 208.4 Impairment losses 3.8 26.1 10.8 3.3 44.0 Disposals 6.9 24.0 36.1 0.0 67.0 Reclassifications to “Assets classified as held for sale” 14.2 87.3 4.1 1.2 106.8 Reclassifications – 0.1 – 0.1 0.1 0.0 – 0.1 Reversal of impairment losses 0.0 0.0 0.3 0.0 0.3 31 December 2012 723.1 459.6 838.5 2.1 2,023.3

Net carrying amount 31 December 2012 1,200.6 213.7 646.7 252.9 2,313.9

The impairment losses amounted to EUR 41.4 million in the fiscal year 2013 (2012: EUR 44.0 million). These were mostly required on account of a decrease in expected capitalized earnings value relating to the fittings manufacturers, wind power and in the trade area. Calculations were based on fair value less costs of disposal. Discount rates of 9.5% and 9.75% were applied to fittings manufacturers and the trade area respectively. Regarding the reclassification to “Assets classified as held for sale” in fiscal year 2012, please refer to [21] “Assets classified as held for sale and associated liabilities”; measurement was performed at the expected realizable values in each case.

117 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

There are restrictions on the rights of disposal of property, plant and equipment and assets assigned as collateral. in millions of EUR 2013 2012 Land charges 124.8 124.8 Collateral assignment 7.1 6.6 Total 131.9 131.4

There are payment obligations of EUR 23.4 million (2012: EUR 12.4 million) for capital expenditures on non-current assets.

Payments on account and assets under construction contain assets under construction of EUR 95.7 million (2012: EUR 222.4 million) which relate to technical equipment and machines as well as buildings.

[11] Financial assets

The investments disclosed under financial assets belong to the available-for-sale category. They are generally measured at fair value without effect on profit or loss. There were no adjustments to fair value in the fiscal year 2013 which would require unrealized gains and losses to be recognized in equity. Where fair value could not be determined because there was no active market or suitable valuation technique, the investment was measured at amortized cost. In addition, this item includes held-to-maturity investments, which are accounted for at amortized cost.

Internationales Bankhaus Bodensee AG, Friedrichshafen, Germany, has provided securities with a carrying amount of EUR 11.0 million (2012: EUR 11.0 million) as collateral for loans granted by Kreditanstalt für Wiederaufbau, Frankfurt am Main, Germany and EUR 15.0 million (2012: EUR 15.0 million) as collateral for loans granted by L-Bank, Karlsruhe, Ger- many. The maximum credit risk is the amount carried in the statement of financial position. Fair values that could not be determined on the basis of observable market data of EUR 19.4 million (2012: EUR 17.8 million) relate to long-term interests in non-listed corporations and partnerships.

[12] Receivables from financial services

thereof due thereof due in millions of EUR 2013 within one year 2012 within one year Receivables from the leasing business 265.0 102.2 231.9 90.8 Receivables from the insurance business 2.5 2.5 2.4 2.4 Receivables from the banking business Receivables from customers 1,103.1 530.3 1,054.6 464.7 Receivables from banks 44.5 44.5 46.9 46.8 Other asset items 2.7 2.7 1.9 1.9 Total 1,417.8 682.2 1,337.7 606.6

Receivables from financial services include receivables from related parties of EUR 7.9 million (2012: EUR 2.8 million).

118 The Würth Group regularly sells receivables from financial services arising from the external leasing business in the form of ABCP transactions. As of 31 December 2013, factored receivables from financial services of EUR 76.8 million (2012: EUR 75.5 million) were not derecognized from the consolidated statement of financial position because all the risks and rewards incidental to ownership were retained by the Würth Group. The corresponding liability is disclosed under “[23] Liabilities from financial services”.

Of the receivables from financial services, an amount of EUR 12.4 million (2012: EUR 16.2 million) has been pledged as collateral for refinancing at Deutsche Bundesbank, Frankfurt am Main, Germany, and EUR 37.7 million (2012: EUR 28.4 million) as collateral for a global loan at L-Bank, Karlsruhe, Germany.

The following table provides information on the extent of the credit risk included in receivables from financial services. in millions of EUR 2013 2012 Receivables from financial services that are neither past due nor impaired 1,266.3 1,216.4 Receivables not impaired but past due by less than 120 days 132.2 93.0 between 120 and 179 days 1.2 1.6 between 180 and 359 days 0.4 0.5 more than 360 days 1.2 0.9 Total 1,401.3 1,312.4 Impaired receivables from financial services (gross) 52.1 50.1 Impairment loss recognized on receivables from financial services 35.6 24.8 Net carrying amount 1,417.8 1,337.7

With respect to the receivables from financial services that were neither impaired nor past due, there was no indication as of the reporting date that the debtors would not meet their payment obligations.

Most of the receivables that are past due but not impaired are secured.

Movements in the provision for impairment of receivables from financial services were as follows: in millions of EUR 2013 2012 Provision for impairment as of 1 January 2013 24.8 25.1 Amounts recognized as income (–) or expense (+) in the reporting period 21.4 9.0 Derecognition of receivables – 10.5 – 9.3 Payments received and recoveries of amounts previously written off – 0.1 0.0 Provision for impairment as of 31 December 2013 35.6 24.8

The income or expense from impairment losses and the derecognition of receivables from financial services is disclosed under other operating expenses.

119 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[13] Deferred taxes

Deferred tax assets and liabilities can be allocated as follows:

Deferred Deferred Deferred Deferred tax assets tax liabilities tax assets tax liabilities Change Change in millions of EUR 2013 2013 2012 2012 2013 2012 Non-current assets 51.6 51.1 44.5 48.9 4.9 – 2.1 Inventories 32.7 26.3 33.6 27.0 – 0.2 – 3.2 Receivables 22.6 4.5 22.6 4.0 – 0.5 – 0.6 Other assets 16.2 40.1 10.9 34.3 – 0.5 – 9.7 Provisions 42.6 19.3 41.9 15.0 –3.6 12.3 Liabilities 10.2 3.5 9.6 4.0 1.1 0.2 Other liabilities 6.3 49.5 6.5 46.3 – 3.4 0.8 182.2 194.3 169.6 179.5 – 2.2 – 2.3 Unused tax losses 37.9 57.1 – – 19.2 –11.3 Netting – 96.0 – 96.0 – 86.3 – 86.3 – Total 124.1 98.3 140.4 93.2 – 21.4 – 13.6

With the exception of the exchange differences of EUR –0.9 million (2012: EUR 1.5 million), which were recognized directly in equity, and additions of deferred taxes of EUR 6.0 million (2012: EUR 8.6 million) arising from new acquisitions as well as deferred taxes of EUR –2.4 million (2012: EUR 11.5 million) recognized in other comprehensive income on items like- wise recognized in other comprehensive income, the development of timing differences is reflected in full in income taxes.

There are deferred tax assets totaling EUR 26.7 million (2012: EUR 43.7 million) at entities that have a history of losses.

Deferred tax assets of EUR 38.9 million (2012: EUR 65.9 million) were recorded subsequently in fiscal 2013 on unused tax losses of EUR 4.5 million (2012: EUR 10.7 million), as it is considered probable that they will be used in the Würth Group in the future.

Deferred tax assets of EUR 220.7 million in total (2012: EUR 327.0 million) were recognized on unused tax losses. No deferred tax assets were recognized for unused tax losses of EUR 466.5 million (2012: EUR 604.9 million) as it is not sufficiently probable that they will be realized. The drop in these unused tax losses is mainly due to the sale of a non-core area of the Electronics unit (solar sales function) in fiscal year 2013.

120 These unused tax losses are classified by expiration period as follows: in millions of EUR 2013 2012 Expiration of unused tax losses Non-forfeitable 301.1 459.6 Expiration within the next five to ten years 36.6 35.7 Expiration within the next one to five years 95.2 102.4 Expiration within the next year 33.6 7.2 Total unused tax losses net of deferred tax assets recognized 466.5 604.9

The unused tax losses include unused tax losses of EUR 0.2 million (2012: EUR 0.2 million) that originated prior to creation of the consolidated tax group and that cannot be used until the existing profit and loss transfer agreements have been terminated.

No deferred taxes were recognized for accumulated profits and losses of foreign subsidiaries of EUR 491.1 million (2012: EUR 422.3 million). If deferred taxes had been recognized for these timing differences, they would have had to be calculated exclusively using the withholding tax rate applicable in each case, possibly including the German tax rate of 5% on distributed dividends. The calculation of these unrecognized deferred tax liabilities would have been unreasonably time-consuming.

Future distributions to the owners do not otherwise have any income tax implications for the Würth Group.

[14] Inventories in millions of EUR 2013 2012 Materials and supplies 78.4 70.7 Work in process and finished goods 146.4 131.7 Merchandise 1,076.1 1,090.9 Payments on account 9.1 6.4 Total 1,310.0 1,299.7

The write-down recorded on inventories, which was recognized under cost of materials in the consolidated income statement, amounts to EUR 2.0 million (2012: EUR 2.9 million).

121 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[15] Trade receivables

This item exclusively comprises receivables from third parties. in millions of EUR 2013 2012 Trade receivables that are neither past due nor impaired 299.4 331.7 Receivables not impaired but past due by less than 120 days 403.2 452.2 between 120 and 179 days 2.1 9.4 between 180 and 359 days 0.5 1.2 more than 360 days 0.1 0.2 Total receivables not impaired 705.3 794.7 Impaired trade receivables (gross) 640.4 572.9 Provision for impairment of trade receivables 135.6 134.5 Net carrying amount 1,210.1 1,233.1

With respect to the trade receivables that were neither impaired nor past due, there was no indication as of the reporting date that the debtors would not meet their payment obligations.

Where possible and feasible, we take out credit insurance.

Movements in the provision for impairment of trade receivables were as follows: in millions of EUR 2013 2012 Provision for impairment as of 1 January 2013 134.5 130.8 Changes in the consolidated group 1.1 0.4 Amounts recognized as income (–) or expense (+) in the reporting period 50.1 45.1 Derecognition of receivables – 47.2 – 39.0 Payments received and recoveries of amounts previously written off – 1.7 – 1.2 Currency translation effects – 2.4 0.0 Plus / less impairment losses recognized on assets classified as held for sale 1.2 – 1.6 Provision for impairment as of 31 December 2013 135.6 134.5

The following table presents the expenses from the derecognition of trade receivables and income from recoveries of amounts previously written off: in millions of EUR 2013 2012 Expenses from the derecognition of receivables 47.2 39.0 Income from recoveries of amounts previously written off 3.0 3.1

The income or expense from impairment losses and the derecognition of trade receivables is disclosed under other operating expenses.

122 [16] Income tax receivables

This item records income tax receivables from tax authorities.

[17] Other financial assets

thereof due thereof due in millions of EUR 2013 within one year 2012 within one year Receivables from related parties 85.6 65.1 48.8 22.4 Derivative financial assets 20.6 20.6 47.5 47.5 Sundry financial assets 71.7 71.7 71.3 71.3 Total 177.9 157.4 167.6 141.2

Sundry financial assets mainly include supplier discounts and bonuses.

All other past due financial assets are directly written off against the underlying other financial assets.

Sundry non-current financial assets include the purchase price receivable of EUR 23.5 million (2012: EUR 26.4 million) from the sale of Freie Schule Anne-Sophie to the Würth Foundation, Künzelsau, Germany. The receivable is subject to customary market interest rates.

[18] Other assets

thereof due thereof due in millions of EUR 2013 within one year 2012 within one year Sundry assets 115.1 88.2 109.4 87.0 Prepaid expenses 43.5 43.5 45.6 45.6 Total 158.6 131.7 155.0 132.6

Sundry assets mainly include VAT receivables and customs duties paid in advance. Prepaid expenses mainly relate to prepaid insurance premiums and prepaid lease and rent payments.

Impairment losses were recognized on all other assets that were past due.

123 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[19] Securities

On the one hand, the securities are investments in shares and bonds that are not actively traded, but managed at fair value on account of internal management and performance evaluations as well as in accordance with a documented risk management and investment strategy. Changes in value are determined by reference to comparable market values (level 2). Income from changes in value amounted to EUR 0.0 million in the fiscal year (2012: EUR 1.1 million). A total amount of EUR 8.3 million has been recognized in profit or loss since the instruments were designated as financial assets at fair value through profit or loss (2012: EUR 10.3 million). On the other hand, securities include actively traded shares and bonds that are grouped as available-for-sale financial assets. There were no changes in value in fiscal year 2013. Of the securities, an amount of EUR 51.2 million (2012: EUR 51.2 million) was pledged as collateral for the credit line granted for refinancing purposes by Deutsche Bundesbank, Frankfurt am Main, Germany. The maximum credit risk corresponds to the fair value recognized.

[20] Cash and cash equivalents

Balances denominated in foreign currency are measured at the closing rate. The composition and development of cash and cash equivalents is presented in the consolidated statement of cash flows. The money market funds were valued at the current money market rate.

[21] Assets and liabilities classified as held for sale

The statement of financial position of the Würth Group as of 31 December 2012 reports assets and liabilities classified as held for sale pursuant to IFRS 5, as the Würth Group was negotiating the sale of a non-core area of the Electronics unit (solar sales function) and of a subarea of the Production unit on the reporting date. In fiscal year 2013, most of the Würth Solar Group was sold / operations discontinued; the remaining EUR 5.3 million relates to inventories from this business area in respect of which the negotiations have not yet been concluded. The current values, derivated from the current market values, are stated. Furthermore, a solar project was reallocated to the portfolio of the Würth Group. Plans to sell part of the Production unit were abandoned in fiscal year 2013. The assets and liabilities reported under this item at the end of 2012 were moved back to the statement of financial position.

124 The major classes of assets and liabilities classified as held for sale breaks down as follows:

Assets in millions of EUR 2013 2012 Non-current assets Intangible assets including goodwill 0.0 0.6 Property, plant and equipment 0.0 8.7 Deferred taxes 0.0 1.5 Current assets Inventories 5.3 36.1 Trade receivables 0.0 19.3 Income tax assets 0.0 0.2 Other assets 0.0 6.7 Cash and cash equivalents 0.0 1.0 Assets classified as held for sale 5.3 74.1

Liabilities in millions of EUR 2013 2012 Non-current liabilities Financial liabilities 0.0 1.9 Obligations from post-employment benefits 0.0 0.9 Provisions 0.0 1.0 Other liabilities 0.0 1.0 Deferred taxes 0.0 0.2 Current liabilities Trade payables 0.0 7.2 Financial liabilities 0.0 0.6 Income tax liabilities 0.0 0.1 Provisions 0.0 7.0 Other liabilities 0.0 10.2 Liabilities associated with assets classified as held for sale 0.0 30.1

Net assets directly associated with the disposal group 5.3 44.0

125 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[22] Equity

Share capital comprises the share capital of following parent companies within the Group:

Share capital Parent companies within the Group Registered office in millions of EUR Shareholders Adolf Würth GmbH & Co. KG Germany 300.0 Würth Family Trusts Würth Finanz-Beteiligungs-GmbH Germany 37.0 Würth Family Trusts Würth Elektrogroßhandel GmbH & Co. KG Germany 19.5 Würth Family Trusts Waldenburger Beteiligungen GmbH & Co. KG Germany 15.0 Würth Family Trusts Würth Promotion Ges.m.b.H. Austria 0.04 Würth Private Trust Würth Beteiligungen GmbH Germany 0.03 Würth Family Trusts Other (incl. 25 general partner companies) Germany 0.83 Adolf Würth Trust Total 372.4

The limited partners’ capital in the partnerships corresponds to the share capital. In the 2013 fiscal year, Würth Beteiligungs GmbH & Co. KG, Künzelsau, Germany was merged with Adolf Würth GmbH & Co. KG, Künzelsau, Germany, resulting in a drop in the share capital.

Other reserves include the profits earned in prior years and not yet distributed as well as capital contributions at the parent companies in the Group and consolidated subsidiaries. Differences from foreign currency translation are also disclosed here, as is the revaluation of defined benefit plans.

The individual components of equity and their development in 2013 and 2012 are shown in the consolidated statement of changes in equity.

Non-controlling interests mainly relate to shares held by third parties in subsidiaries as well as direct shareholdings of members of the Würth family.

Distributions of EUR 60 million are planned for 2014.

[23] Liabilities from financial services

2013 Due in Due in Due in in millions of EUR Total < 1 year 1–5 years > 5 years Liabilities from the leasing business 78.0 30.3 46.9 0.8 Liabilities from the insurance business 2.2 2.2 0.0 0.0 Liabilities from the banking business 1,071.4 775.5 284.5 11.4 Total 1,151.6 808.0 331.4 12.2

126 2012 Due in Due in Due in in millions of EUR Total < 1 year 1–5 years > 5 years Liabilities from the leasing business 77.6 31.6 45.2 0.8 Liabilities from the insurance business 2.5 2.5 0.0 0.0 Liabilities from the banking business 1,067.7 666.4 325.9 75.4 Total 1,147.8 700.5 371.1 76.2

Liabilities from financial services include liabilities from related parties of EUR 2.2 million (2012: EUR 1.5 million).

Liabilities from the leasing business include liabilities from an ABCP transaction of EUR 76.8 million (2012: EUR 75.5 million). The nominal amount of this ABCP transaction comes to EUR 82.6 million (2012: EUR 81.9 million). Any risk items relating to it are hedged by interest swaps of the same amount as soon as they become apparent. As of the end of the reporting period, the contrasting changes in value and cash flows from hedged transactions and hedging instruments had balanced each other out.

The table below shows the contractually agreed remaining terms to maturity.

Cash flow Carrying amounts in millions of EUR 31 December 2013 < 1 year 1–5 years > 5 years Liabilities from the leasing business 78.0 34.4 50.0 1.0 Liabilities from the insurance business 2.2 2.2 0.0 0.0 Liabilities from the banking business 1,071.4 847.1 299.9 19.9

[24] Financial liabilities

thereof due thereof due in millions of EUR 2013 within one year 2012 within one year Bonds 1,570.2 275.4 1,356.4 248.9 Liabilities to banks 188.6 59.8 206.0 155.2 Liabilities to non-controlling interests 37.0 37.0 46.9 43.7 Liabilities from leases 11.3 2.0 8.9 1.6 Total 1,807.1 374.2 1,618.2 449.4

The Group has financial liabilities due in more than five years of EUR 710.5 million (2012: EUR 649.9 million).

127 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

The maturities and terms of the bonds repayable and their fair values are as follows:

Treasury stock Carrying Fair value Effective in millions amount in mil- in millions Type Amount Interest interest Maturity of EUR lions of EUR of EUR Bearer bond EUR 300 million 4.75 % 4.79 % 12/6/2014 24.5 275.4 298.7 Bond CHF 225 million 3.88 % 3.97 % 3/8/2015 28.9 154.4 169.0 Bond EUR 500 million 3.75 % 3.86 % 25/5/2018 0.0 497.0 545.5 Bond EUR 500 million 1.75 % 1.76 % 21/5/2020 0.0 498.1 488.5 US private placement USD 200 million 4.48 % 4.53 % 22/9/2021 0.0 145.3 167.5 As of 31 December 2013 53.4 1,570.2 1,669.2

Treasury stock Carrying Fair value Effective in millions amount in mil- in millions of Type Amount Interest interest Maturity of EUR lions of EUR EUR Promissory note loan EUR 50 million 4.61 % 4.67 % 2/4/2013 0.0 50.0 50.6 Promissory note loan EUR 100 million floating* 2/4/2013 0.0 100.0 100.1 Bearer bond EUR 100 million 4.25 % 4.31 % 31/5/2013 1.0 99.0 101.6 Bearer bond EUR 300 million 4.75 % 4.79 % 12/6/2014 17.8 278.8 315.7 Bond CHF 225 million 3.88 % 3.97 % 3/8/2015 0.0 186.0 204.6 Bond EUR 500 million 3.75 % 3.86 % 25/5/2018 5.4 490.9 576.8 US private placement USD 200 million 4.48 % 4.53 % 22/9/2021 0.0 151.7 183.0 As of 31 December 2012 24.2 1,356.4 1,532.4

*3-months Euribor + 55 base points

Treasury stock of EUR 1,623.6 million (2012: EUR 1,380.6 million) that was treated as corporate repurchase was offset against the bonds that were issued with an original value of EUR 53.4 million (2012: EUR 24.2 million).

The capital borrowed though the US private placement of USD 200 million is contingent on certain covenants being met. The Würth Group is required to meet certain debt service ratios such as the ratio of net financial debt to EBITDA and senior liabilities to equity. They also include restrictions on the disposal of assets.

The maturities and conditions of liabilities due to banks are as follows:

Interest Remaining Carrying Currency terms fixed interest Interest rate < 1 year 1–5 years > 5 years amount EUR floating / fixed < 1 year 0.01 % – 17.09 % 52.5 8.9 64.1 125.5 USD floating / fixed < 1 year 0.01 % – 5.81 % 0.1 0.0 0.0 0.1 Other floating / fixed < 1 year 1.00 % – 20.00 % 7.2 0.0 0.0 7.2 EUR fixed 1–5 years 0.4 % – 6.69 % 0.0 44.8 0.3 45.1 Other fixed 1–5 years 1.00 % – 20.00 % 0.0 10.3 0.0 10.3 EUR fixed > 5 years 0.4 % – 6.00 % 0.0 0.0 0.4 0.4 As of 31 December 2013 59.8 64.0 64.8 188.6

128 Interest Remaining Carrying Currency terms fixed interest Interest rate < 1 year 1–5 years > 5 years amount EUR floating / fixed < 1 year 0.01 % – 11.25 % 130.8 0.0 0.0 130.8 USD floating / fixed < 1 year 0.01 % – 5.39 % 0.3 0.0 0.0 0.3 Other floating / fixed < 1 year 0.78 % – 20.00 % 24.0 0.0 0.0 24.0 EUR fixed 1–5 years 0.01 % – 8.12 % 0.0 50.4 0.0 50.4 Other fixed 1–5 years 4.30 % – 9.50 % 0.1 0.0 0.0 0.1 EUR fixed > 5 years 0.01 % – 6.00 % 0.0 0.0 0.4 0.4 As of 31 December 2012 155.2 50.4 0.4 206.0

The carrying amounts of liabilities to banks reported in the statement of financial position approximate fair value.

Non-current liabilities from leases are subject to customary market interest rates.

The table below shows the contractually agreed remaining terms to maturity.

Cash flow Carrying amounts in millions of EUR 31 December 2013 < 1 year 1–5 years > 5 years Financial liabilities Bonds, liabilities to banks 1,758.8 415.1 897.1 738.9 Liabilities from leases 11.3 2.6 8.2 2.5 Trade payables 426.4 426.4 0.0 0.0 Derivative financial liabilities Inflows from currency derivatives – 217.3 22.6 0.0 Outflows from currency derivatives 0.8 219.9 22.6 0.0 Outflows from interest derivatives 27.4 13.0 13.1 10.8

[25] Obligations from post-employment benefits

A pension plan is in place for employees of the Würth Group for the period after they retire. The benefits vary according to local legal, tax and economic conditions. The obligations include vested future pension benefits as well as current pensions paid. The company pension scheme includes defined contribution plans and defined benefit plans.

In the case of defined contribution plans, the respective entity pays contributions to state or private pension companies either on a voluntary basis or based on legal provisions. The contributions are recognized as a personnel expense when they fall due. No further payment obligations arise for the Würth Group from the payment of contributions. Current contributions (without contributions to the statutory pension insurance) totaled EUR 11.9 million (2012: EUR 13.2 million). Payments of EUR 156.2 million were made to the statutory pension insurance (2012: EUR 158.3 million).

The largest defined benefit plans are in Germany, Austria, Italy, the Netherlands and Switzerland. The defined benefit plans in Germany, Austria and Italy constitute direct obligations, whereas the Swiss and Dutch plans are indirect benefit obligations. The amount of the entitlements depends on the length of service, frequently on the salary development and for indirect benefit obligations also on the employee contributions paid in.

129 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

The Würth Group’s benefit obligations in Germany guarantee the beneficiaries a life-long monthly old-age pension, provided that a vesting period of ten years of service can be demonstrated. The amount of the benefit is usually determined by fixed amounts arranged. Employees receive such voluntary pensions in addition to the statutory pension once they reach the statutory retirement age. Employees are also offered another defined benefit plan in the form of a deferred compensation arrangement under which gross cash compensation is converted to a company pension plan based on individual contracts. This voluntary conversion of monthly compensation is generally limited to the higher of either 10% of one twelfth of the yearly income before commencement of the conversion or 4% of the respective maximum monthly contribution to the German pension system (western German states). In total, obligations in Germany amount to EUR 107.4 million (2012: EUR 101.4 million).

In Austria, a severance payment is guaranteed by law, subject to the provisions of the BMVG [“Betriebliche Mitarbeiter versorgungsgesetz”: Austrian Act governing Company Pensions]. This is paid out when the employment relationship ends. For employment relationships that began before the end of 2002, the employee has a right to such payment from the employer. The amount depends on the length of service and salary development. If the employment relationship is terminated by the employee, the right to a severance payment from the employer is forfeited. For employment relationships started as of the beginning of 2003, the employer pays 1.53% of the gross monthly salary into a selected company pension scheme, which then pays out any severance payment entitlement when the employment ends. The entitlement is now retained even if the employee terminates the employment relationship. For employment relationships that began before the end of 2002, total obligations of EUR 22.6 million (2012: EUR 22.2 million) were recognized in Austria.

In Italy, employees are entitled by law to a severance payment when the employment relationship ends (trattamento di fine rapporto, TFR). The amount of the TFR is determined by the number of years of service and is capped at one month’s salary per year of service. Since 2007, the legislature has provided for a capital option, i.e., the employees can choose whether provision should continue to be made for their future entitlements in the company or be paid into a pension fund instead. Obligations totaling EUR 21.6 million were recognized in the statement of financial position of the Würth Group in Italy (2012: EUR 23.5 million).

In the Würth Group in Switzerland, retirement benefits are handled via external insurance companies. They are subject to regulatory supervision and are governed by the BVG [“Bundesgesetz über die berufliche Alters-, Hinterlassenen- und Invalidenvorsorge”: Swiss Federal Act on Occupational Retirement, Survivors’ and Disability Pension Plans]. The top management body of these insurance companies, the trust board, is comprised of an equal number of employee and employer representatives. The various benefits are set forth in regulations, with minimum benefits stipulated by the BVG. The contributions to the insurance company are settled by employers and employees. In the event of a deficit, measures can be agreed, such as adjusting the benefit obligation by changing conversion rates or increasing current contributions. In the case of almost all Swiss entities in the Würth Group Switzerland, the insurance company is a separate pension trust. The benefits comprise not only old age pensions, but also disability and surviving dependants’ pension benefits. The trust’s statutes define the pension scope and benefit amounts, minimum payment obligations and the investment strategy. All insurance-related risks are borne by the trust. The trust board reviews the investment strategy annually by means of an ALM (asset liability management) analysis as part of its responsibility for the investment of the assets. In total, obligations in Switzerland amounted to EUR 136.6 million (2012: EUR 134.8 million). Plan assets came to EUR 118.1 million (2012: EUR 108.6 million). The associated net liability amounts to EUR 18.5 million (2012: EUR 26.2 million).

130 In the Würth Group Netherlands, the company pension plan is based on a consensus between the government and the parties to collective bargaining agreements. The BPF [“Wet verplichte deelneming in een bedrijfspensioenfonds”: Dutch Mandatory Participation in an Industry-wide Pension Fund Act] and the PSW [“Pensioen- en Spaarfondsenwet”: Dutch Pension and Savings Fund Act] provide for quasi-obligatory additional company insurance. The mandatory membership of a an industry-wide pension fund relates to the majority of all employees covered by additional pension insurance. The additional insurance comprises old age pension and in many cases also surviving dependants’ benefits. The PSW sets forth the legislator’s key framework conditions for company pension plans. These include a requirement to segregate funds accumulated for pension purposes from a company’s other assets (in an industry-wide pension fund, a company pension fund or master or individual insurance policies at an insurance company) and the obligation on the part of the employer to ensure that the premiums are paid. In the Netherlands, the Würth Group pays premiums to an insurance company. This is a qualified insurance policy. In total, obligations in the Netherlands amounted to EUR 39.1 million (2012: EUR 38.3 million). Plan assets came to EUR 40.7 million (2012: EUR 42.7 million).

The obligations from post-employment benefits were determined based on the following assumptions:

Discount rate Future salary increases Future pension increases % 2013 2012 2013 2012 2013 2012 Germany 3.50 3.50 3.00 3.00 2.25 2.25 Austria 3.50 – 3.75 3.50 – 4.00 2.00 – 4.00 2.00 – 4.00 – – Italy 4.00 4.00 0.00 – 5.00 3.00 1.50 1.50 Switzerland 2.00 1.75 1.00 1.00 – – Netherlands 3.50 3.20 1.30 1.30 2.00 2.00 Other countries 2.50 – 4.40 2.00 – 4.40 2.00 – 3.50 2.60 – 3.50 1.00 – 3.25 1.00 – 2.80

The 2005 G mortality tables from Dr. Klaus Heubeck are applied in Germany. The method for determining the discount rate is unchanged compared to the prior year.

The benefit obligations are derived as follows: in millions of EUR 2013 2012 2011 2010 2009 Present value of funded benefit obligations 238.6 242.5 203.6 183.2 149.8 Fair value of plan assets – 205.9 – 200.0 – 173.9 – 166.0 – 131.5 Adjustments on plan assets in accordance with IAS 19.64 b 1.6 4.4 5.1 4.1 0.2 Net carrying amount on funded benefit obligations 34.3 46.9 34.8 21.3 18.5

Present value of unfunded benefit obligations 151.8 147.5 116.0 111.0 103.6 Net benefit liability recognized in the statement of financial position 186.1 194.4 150.8 132.3 122.1

Experience adjustments Present value of the obligations 10.2 – 3.6 0.8 – 0.4 – 0.1

The average term to maturity of the obligations from post-employment benefits is 18 years.

131 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

The net benefit expense from defined benefit plans breaks down as follows: in millions of EUR 2013 2012 Service cost Current service cost 18.1 14.4 Past service cost – 1.6 – 2.1 Income from plan settlements – 0.5 0.0 Net interest cost 6.3 5.9 Other 0.0 0.2 Total expense recognized in the income statement 22.3 18.4

The service cost is recognized under personnel expenses, while the net interest cost is recorded in the financial result.

The remeasurement of defined benefit plans breaks down as follows: in millions of EUR 2013 2012 Actuarial gains (–) and losses (+) recognized on changes in actuarial assumptions – 17.7 59.8 on changes in demographic assumptions 10.2 – 3.6 Return on plan assets (less interest income) 0.7 – 9.7 Effects of the asset ceiling (IAS 19.64 b) – 2.7 – 0.7 Remeasurement of defined benefit plans – 9.5 45.8

With the exception of interest expenses and the expected expenses/income from plan assets, which are included in the financial result, all other expenses and income are included in personnel expenses.

The present value of the defined benefit obligations changed as follows: in millions of EUR 2013 2012 Defined benefit obligation at the beginning of the year 390.0 319.6 Increase due to deferred compensation 0.7 0.8 Service cost 16.0 12.3 Interest cost 10.8 12.1 Employee contributions 5.1 5.4 Benefits paid – 12.0 – 13.0 Actuarial gains (–) and losses (+) recognized – 7.5 56.2 Transfer of benefits – 6.9 – 6.6 Exchange difference on foreign plans – 5.8 2.5 Other 0.0 0.7 Defined benefit obligation at the end of the year 390.4 390.0

Future adjustments in pension developments are taken into account in accordance with legal provisions (e.g., in Germany Sec. 16 BetrAVG [“Gesetz zur Verbesserung der betrieblichen Altersversorge”: German Company Pensions Act]).

132 The fair value of the plan assets has developed as follows: in millions of EUR 2013 2012 Fair value of plan assets at the beginning of the year 200.0 173.9 Interest income 4.5 6.2 Return on plan assets (less interest income) – 0.7 9.7 Employer contributions 10.4 11.4 Employee contributions 5.2 5.3 Benefits paid – 3.2 – 3.2 Transfer of assets – 6.3 – 5.9 Exchange difference on foreign plans – 4.0 2.1 Other 0.0 0.5 Fair value of plan assets at the end of the year 205.9 200.0

The actual return came in at 1.9% (2012: 8.8%). The amount of employer’s contributions to funds is expected to be similar in the following year.

Breakdown of fair value of plan assets by asset category: in millions of EUR 2013 2012 2011 2010 2009 Fixed-income investment funds 79.6 82.1 68.7 67.0 53.0 Share-based investment funds 39.5 31.2 22.4 23.8 18.9 Real estate investment funds 32.1 25.9 20.7 20.7 16.4 Other funds 26.9 28.2 29.4 25.5 20.3 Fixed-interest securities 16.0 17.2 10.6 12.3 9.8 Equities 1.9 2.0 2.5 2.0 1.9 Real estate 2.6 2.9 3.1 2.7 1.8 Other 7.3 10.5 16.5 12.0 9.5 Total 205.9 200.0 173.9 166.0 131.6

As a rule, quoted prices are available on an active market for the equity and debt instruments. The ratings for funds and fixed-interest securities are usually not below A. The item “Other” primarily relates to cash and cash equivalents invested at banks with an A rating or higher.

With regard to sensitivities, the key actuarial assumptions determined for the Würth Group in Germany are the discount rate and for the Würth Group in Switzerland the discount rate and the rate of future salary increases. At the Würth Group in Germany, a 0.5% increase / decrease in the discount rate would lead to a decrease / increase in the DBO of –7. 7 % / + 9.9 % .

At the Würth Group in Switzerland, a 0.25% increase / decrease in the discount rate would lead to a decrease / increase in the DBO of –4.5% / +4.7%. A 0.5% increase / decrease in the rate of future salary increases would lead to an increase/decrease in the DBO of +1.3% / –0.8%.

133 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[26] Provisions Unwinding of Additions due the discount 1 Janu- to changes in and changes ary Exchange the consoli- in the 31 December in millions of EUR 2013 difference dated group Utilization Reversal Addition discount rate 2013 Credit notes 60.4 – 0.2 0.8 55.2 5.2 63.5 0.0 64.1 Long-service bonuses 55.8 – 0.3 0.0 0.2 0.6 2.3 3.0 60.0 Warranty obligations 33.5 – 0.2 0.3 31.4 0.5 25.4 0.1 27.2 Litigation and lawyers‘ fees 13.7 –0.2 0.0 1.8 2.1 14.5 0.2 24.3 Phased retirement scheme 6.6 0.0 0.0 0.7 1.7 3.0 0.3 7.5 Product liability 7.6 – 0.1 0.0 3.1 0.5 1.4 0.2 5.5 Sundry 35.8 – 0.3 0.2 11.6 21.5 34.8 0.2 37.6 Total 213.4 – 1.3 1.3 104.0 32.1 144.9 4.0 226.2 thereof: current 140.3 146.9 non-current 73.1 79.3

Reclassifica- Unwinding Additions tions to “Liabili- of the dis- due to ties associated count and 1 Janu- Exchange changes in with assets changes in ary differ- the consoli- classified as Utiliza- Rever- Addi- the dis- 31 December in millions of EUR 2012 ence dated group held for sale” tion sal tion count rate 2012 Credit notes 57.1 0.2 0.4 0.8 52.7 4.2 60.4 0.0 60.4 Long-service bonuses 47.8 0.0 0.0 0.2 0.2 0.7 6.6 2.5 55.8 Warranty obligations 39.2 0.1 0.0 1.1 37.0 0.8 33.0 0.1 33.5 Litigation and lawyers‘ fees 15.3 – 0.3 0.0 0.1 1.4 3.2 3.1 0.3 13.7 Phased retirement scheme 8.2 0.0 0.0 0.4 1.6 1.3 1.3 0.4 6.6 Product liability 6.7 0.0 0.0 1.5 0.7 0.4 3.3 0.2 7.6 Sundry 34.4 0.0 0.3 2.9 22.4 6.8 32.9 0.3 35.8 Total 208.7 0.0 0.7 7.0 116.0 17.4 140.6 3.8 213.4 thereof: current 140.4 140.3 non-current 68.3 73.1

The provision for credit notes is primarily attributable to obligations relating to discounts, bonuses, etc. granted that are allocable to the period after the reporting date, but caused by sales prior to the reporting date. The provision for long-service bonuses contains bonuses awarded to employees that have been with the company for many years. The provision for warranty obligations accounts for risks from legal or constructive obligations from trade with fastening and assembly materials involving trade customers, the building industry and industrial customers as well as from the manufacture of screws, fittings and solar modules. Other provisions relate to numerous identifiable specific risks and uncertain liabilities which were accounted for at the amount at which they are likely to be incurred.

The cash outflow for provisions for long-service bonuses and the German phased retirement scheme (‘Altersteilzeit’) is mainly of a medium (two to four years) to long-term (five to 50 years) nature. In most cases other provisions are expected to lead to a cash outflow in the next fiscal year.

134 [27] Other financial liabilities

thereof due thereof due in millions of EUR 2013 within one year 2012 within one year Liabilities to related parties 17.0 17.0 60.9 59.8 Derivative liabilities 20.0 20.0 31.1 31.1 Sundry financial liabilities 269.9 264.2 251.5 247.5 Total 306.9 301.2 343.5 338.4

Sundry financial liabilities essentially include liabilities to employees, outstanding purchase invoices and customers with credit balances.

[28] Other liabilities

thereof due thereof due in millions of EUR 2013 within one year 2012 within one year Prepaid expenses 44.7 44.7 37.8 37.8 Sundry liabilities 302.3 297.9 315.2 312.4 Total 347.0 342.6 353.0 350.2

Liabilities relating to social security amount to EUR 65.9 million (2012: EUR 65.9 million). In addition, sundry liabilities include liabilities from other taxes of EUR 91.7 million (2012: EUR 91.1 million).

135 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[29] Additional disclosures on financial instruments – carrying amounts, amounts recognized and fair values by measurement category

Amount recognized in the statement of financial position

Carrying Fair value Fair value Fair in millions of EUR Measurement amount (recognized through value category under 31 Dec. Amortized directly in profit IAS 31 Dec. Assets IAS 39 2013 cost equity) or loss 17 2013 Financial assets AfS / HtM 50.3 50.3 30.9 Receivables from financial services LaR / n. a. 1,417.8 1,152.7 265.1 1,417.8 Trade receivables LaR 1,210.1 1,210.1 1,210.1 Other financial assets Receivables from related parties LaR 85.6 85.6 85.6 Derivative financial assets FAHfT / LaR 20.6 – 23.2 43.8 20.6 Sundry financial assets LaR 71.7 71.7 71.7 Securities AfS / FAHfT / FAFVtpl 117.2 51.2 66.0 117.2 Cash and cash equivalents FAFVtpl / LaR 749.2 681.1 68.1 749.2 Equity and liabilities Liabilities from financial services FLAC 1,151.6 1,151.6 1,151.6 Trade payables FLAC 426.4 426.4 426.4 Financial liabilities FLAC / n. a. 1,807.1 1,795.8 11.3 1,854.9 Other financial liabilities Liabilities to related parties FLAC 17.0 17.0 17.0 Derivative liabilities FLAC / FLHfT 20.0 – 8.2 28.2 20.0 Sundry financial liabilities FLAC 269.9 269.9 269.9 thereof combined by measurement category in accordance with IAS 39: 1 Held-to-maturity investments (HtM) 30.9 30.9 30.9 2 Financial assets held for trading (FAHfT) 43.8 43.8 43.8 3 Financial assets (designated as) at fair value through profit or loss (FAFVtpl) 134.1 134.1 134.1 4 Available-for-sale financial assets (AfS) 70.6 19.4 51.2 51.2 5 Loans and receivables (LaR) 3,178.0 3,178.0 3,178.0 6 Receivables from the leasing business (n. a.) 265.1 265.1 265.1 7 Financial liabilities held for trading (FLHfT) 28.2 28.2 28.2 8 Financial liabilities at amortized cost (FLAC) 3,652.5 3,652.5 3,700.3 9 Lease obligations (n. a.) 11.3 11.3 11.3

136 Amount recognized in the statement of financial position

Carrying Fair value Fair value Fair in millions of EUR Measurement amount (recognized through value category under 31 Dec. Amortized directly in profit IAS 31 Dec. Assets IAS 39 2012 cost equity) or loss 17 2012 Financial assets AfS / HtM 53.4 53.4 35.6 Receivables from financial services LaR / n. a. 1,337.7 1,105.8 231.9 1,337.7 Trade receivables LaR 1,233.1 1,233.1 1,233.1 Other financial assets Receivables from related parties LaR 48.8 48.8 48.8 Derivative financial assets FAHfT / LaR 47.5 – 35.2 82.7 47.5 Sundry financial assets LaR 71.3 71.3 71.3 Securities AfS / FAHfT / FAFVtpl 105.2 51.4 53.8 105.2 Cash and cash equivalents LaR 571.5 571.5 571.5 Equity and liabilities Liabilities from financial services FLAC 1,147.8 1,147.8 1,147.8 Trade payables FLAC 404.6 404.6 404.6 Financial liabilities FLAC / n. a. 1,618.2 1,609.3 8.9 1,768.0 Other financial liabilities Liabilities to related parties FLAC 60.9 60.9 60.9 Derivative liabilities FLAC / FLHfT 31.1 – 6.5 37.6 31.1 Sundry financial liabilities FLAC 251.5 251.5 251.5 thereof combined by measurement category in accordance with IAS 39: 1 Held-to-maturity investments (HtM) 35.6 35.6 35.6 2 Financial assets held for trading (FAHfT) 82.7 82.7 82.7 3 Financial assets (designated as) at fair value through profit or loss (FAFVtpl) 53.8 53.8 53.8 4 Available-for-sale financial assets (AfS) 69.2 17.8 51.4 51.4 5 Loans and receivables (LaR) 2,995.3 2,995.3 2,995.3 6 Receivables from the leasing business (n. a.) 231.9 231.9 231.9 7 Financial liabilities held for trading (FLHfT) 37.6 37.6 37.6 8 Financial liabilities at amortized cost (FLAC) 3,467.6 3,467.6 3,617.4 9 Lease obligations (n. a.) 8.9 8.9 8.9

137 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

The following tables show the measurement of the fair value of the Würth Group’s assets and liabilities by hierarchical level

Assets and liabilities at fair value:

Quoted prices in Significant Total active markets observable inputs in millions of EUR 31 Dec. 2013 (level 1) (level 2) Derivative assets Currency instruments 2.9 0.0 2.9 Interest instruments 40.9 0.0 40.9 Securities 117.2 51.2 66.0 Cash and cash equivalents 68.1 68.1 0.0 Financial assets at fair value 229.1 119.3 109.8 Derivative liabilities Currency instruments 0.8 0.0 0.8 Interest instruments 27.4 0.0 27.4 Financial liabilities at fair value 28.2 0.0 28.2

Quoted prices in Significant Total active markets observable inputs in millions of EUR 31 Dec. 2012 (level 1) (level 2) Derivative assets Currency instruments 1.1 0.0 1.1 Interest instruments 81.6 0.0 81.6 Securities 105.2 51.4 53.8 Financial assets at fair value 187.9 51.4 136.5 Derivative liabilities Currency instruments 2.4 0.0 2.4 Interest instruments 35.2 0.0 35.2 Financial liabilities at fair value 37.6 0.0 37.6

138 Notes on the fair values of those financial assets and liabilities that were not stated at fair value in the consolidated statement of financial position:

Quoted prices in Significant Total active markets observable inputs in millions of EUR 31 Dec. 2013 (level 1) (level 2) Financial assets 30.9 0.0 30.9 Receivables from financial services 1,417.8 0.0 1,417.8 Trade receivables 1,210.1 0.0 1,210.1 Receivables from related parties 85.6 0.0 85.6 Sundry financial assets 71.7 0.0 71.7 Cash and cash equivalents 681.1 681.1 0.0 Financial assets not stated at fair value 3,497.2 681.1 2,816.1 Liabilities from financial services 1,151.6 0.0 1,151.6 Trade payables 426.4 0.0 426.4 Financial liabilities 1,854.9 0.0 1,854.9 Liabilities to related parties 17.0 0.0 17.0 Sundry financial liabilities 269.9 0.0 269.9 Financial liabilities not stated at fair value 3,719.8 0.0 3,719.8

Quoted prices in Significant Total active markets observable inputs in millions of EUR 31 Dec. 2012 (level 1) (level 2) Financial assets 35.6 0.0 35.6 Receivables from financial services 1,337.7 0.0 1,105.8 Trade receivables 1,233.1 0.0 1,233.1 Receivables from related parties 48.8 0.0 48.8 Sundry financial assets 71.3 0.0 71.3 Cash and cash equivalents 571.5 571.5 0.0 Financial assets not stated at fair value 3,298.0 571.5 2,494.6 Liabilities from financial services 1,147.8 0.0 1,147.8 Trade payables 404.6 0.0 404.6 Financial liabilities 1,768.0 0.0 1,768.0 Liabilities to related parties 60.9 0.0 60.9 Sundry financial liabilities 251.5 0.0 251.5 Financial liabilities not stated at fair value 3,632.8 0.0 3,632.9

139 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

I. Other notes

[1] Commitments and contingencies in millions of EUR 2013 2012 Guarantees, warranties and collateral for third-party liabilities 42.3 48.6

Guarantees, warranties and collateral are due on call.

[2] Other financial obligations in millions of EUR 2013 2012 Obligations from operating leases due within 12 months 215.3 223.5 due in 13 to 60 months 363.5 373.0 due in more than 60 months 72.6 58.7 651.4 655.2

Purchase obligations due within 12 months 314.2 313.8

Sundry financial obligations due within 12 months 40.7 45.8 due in 13 to 60 months 109.4 107.1 due in more than 60 months 0.1 1.2 150.2 154.1 Total 1,115.8 1,123.1

The operating leases mainly relate to rented buildings and leased vehicles. The interest rates stipulated in the lease agreements are customary market rates. There are no purchase options upon expiry of the lease either for the rented buildings or the leased vehicles.

The sundry financial obligations contain irrevocable lending commitments of Internationales Bankhaus Bodensee AG, Friedrichshafen, Germany in the amount of EUR 141.7 million (2012: EUR 142.7 million).

The table below shows the payments from operating leases recognized in profit or loss: in millions of EUR 2013 2012 Real estate 122.2 115.6 Machines, equipment, furniture and fixtures 13.4 12.8 Vehicles 129.7 138.9 Other 2.8 0.5 Total 268.1 267.8

140 [3] Contingent liabilities

As an international group with various areas of business, the Würth Group is exposed to many legal risks. This is especially true of risks for warranties, tax law and other legal disputes. However, according to the assessment by the Central Managing Board, no decisions are expected that would have a significant influence on the net assets of the Group. Tax field audits at Group entities have not been completed yet and the related audit findings have not been reported yet.

[4] Financial instruments

Financial risk management Through its financial activities, the Würth Group is subject to various risks that are assessed, managed and monitored by a systematic risk management system.

Details of the Group’s management of market risks (exchange rates, interest rates. securities risks), credit risks and liquidity exposures are presented below.

Exchange rate risks The Würth Group is exposed to currency risks from financing and operating activities. By exchange rate risks, the Würth Group means the exposure of the assets and income disclosed resulting from exchange rate fluctuations between the transaction currency and the functional currency in each case.

As far as operations are concerned, the individual Group entities mainly carry out their activities in their own functional currency. The currency risk for the Würth Group from current operating activities is therefore classified as low. Exchange rate risks are countered by forward exchange contracts and currency options. Derivative financial instruments are used to hedge future sales and goods purchases against exchange rate risks.

Regarding the presentation of market risks, IFRS 7 requires sensitivity analyses showing how profit or loss and equity would have been affected by hypothetical changes in the relevant risk variable.

If the euro had depreciated (appreciated) against the US dollar, the pound sterling and the Swiss franc by 10% as of 31 December 2013, the hypothetical effect on profit or loss would have been as follows:

Hypothetical effect on profit or loss Hypothetical effect on profit or loss in millions of EUR 2013 2012 Currency Depreciation Appreciation Depreciation Appreciation US dollar 0.2 – 0.2 0.2 – 0.2 Swiss franc – 5.7 5.7 – 8.4 8.4

There were no changes affecting other comprehensive income.

141 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

Interest rate risks By interest rate risk, the Würth Group means the negative effects on the net assets and results of operations resulting from changes in interest rates. One of the methods used to counter this risk is to ensure that a large part of external financing is in fixed-interest rate bonds. In addition, derivatives are used for risk management purposes (e.g., interest rate swaps).

The interest rate risk is mainly limited to the liabilities to banks with floating interest rates listed under [24] “Financial liabilities” and the items presented under [12] “Receivables from finance leases” and under [23] “Liabilities from financial services”.

Under IFRS 7, interest rate risks are presented using sensitivity analyses. These present the effects of changes in market interest rates on interest payments, interest income and expenses, other components of profit or loss and, if applicable, on equity.

If the market interest level had been 100 base points higher (lower) as of 31 December 2013, profit or loss would have been EUR 7.9 million lower (higher) (2012: EUR 4.2 million). The hypothetical effect on profit or loss is mainly attributable to overdraft facilities as well as receivables and liabilities from financial services. Equity would change accordingly.

There were no changes affecting other comprehensive income.

Securities risks The Würth Group is exposed to securities risks because of its investments. Specifically, there is a risk of financial loss due to changes in prices of (publicly traded) securities. One way of countering this risk is through diversification of the investment portfolio. When selecting bonds, a minimum rating of BBB (Standard & Poor’s) is generally required. The rating development is monitored on a daily basis. If the bonds are downgraded by the rating agency, they are sold immediately. In addition, derivatives are used for risk management purposes to hedge securities price risks.

Credit risk The credit risk is countered by limiting business relationships to first class banks with a minimum rating of A- (Stanard & Poor’s). Default risks from receivables are minimized by continuous monitoring of the creditworthiness of the counterparty and by limiting the aggregated individual risks from the counterparty. Standardized master agreements of the International Swaps and Derivatives Association (ISDA master agreements), including the Credit Support Annex (CSA), are in place with those external counterparties of the Würth Group with whom it enters into transactions as part of its financial risk management.

The maximum credit risk is the carrying amount of the financial assets recognized in the statement of financial position. The credit risk from operating activities is accounted for by recognizing a portfolio-based specific allowance on trade receivables.

Liquidity risks The Würth Group needs liquidity to meet its financial obligations. Group entities are obliged by Group guidelines to deposit any excess cash not needed to meet current obligations with Würth Finance International B.V., ‘s-Hertogenbosch, the Netherlands, or Adolf Würth GmbH & Co. KG, Künzelsau, Germany, to make it available to the Würth Group. The high

142 international credit rating received by the Würth Group (Standard & Poor’s issued an A rating on the Würth Group’s non-current liabilities) means that the Group can obtain favorable terms for procuring funds on international capital markets. In order to be in a position to meet its payment obligations at any time, even in extraordinary circumstances, the Würth Group also maintains lines of credit with various banks to cover potential liquidity bottlenecks.

Capital management The primary objective of the Würth Group’s capital management is to ensure that it maintains a strong credit rating and healthy equity ratio. The Group manages its capital structure in light of changes in economic conditions. In addition, the financial service providers within the Group comply with the applicable regulatory capital requirements. No changes were made to the objectives, policies and processes as of 31 December 2013 and 31 December 2012. The equity ratio, calculated as equity in accordance with IFRSs divided by total assets, is 42.6% (2012: 41.9%). This means that the equity ratio is higher than the industry average, and ensures the Würth Group an investment grade A rating at present. Regarding a US private placement, the Würth Group is also required to comply with a certain ratio of senior liabilities to equity.

Fair value of financial instruments The fair value of financial instruments that are included in the portfolio of available-for-sale financial assets and financial assets held for trading is estimated by comparing them with the market price on the reporting date.

The fair value of financial instruments designated as of fair value through profit or loss is determined using the valuation techniques presented under [19] “Securities”.

The loss resulting from adjusting the fair value of financial assets at fair value through profit or loss amounted to EUR 2.0 million in the fiscal year (2012: gain of EUR 1.1 million) and was recorded in full in profit or loss for the period. The fair value of forward exchange contracts is measured using the closing rates on the forward exchange markets. Interest rate swaps are measured at fair value on the basis of the present value of estimated future cash flows. The fair value of options is measured using option-pricing models. The Würth Group has a policy of obtaining confirmation of the fair value of all the above instruments by the banks that arranged the respective contracts for the Würth Group.

The financial instruments not recognized at fair value within the Würth Group primarily comprise certain cash equivalents, trade receivables, other current assets, other non-current assets, trade payables, and other liabilities, overdraft facilities, non-current loans and held-to-maturity investments.

The carrying amount of cash equivalents and overdraft facilities approximates fair value due to the high liquidity of the financial instruments.

The historical cost carrying amount of receivables and payables subject to normal trade credit terms also approximates fair value.

The fair value of non-current liabilities is based on the market price for these liabilities or similar financial instruments or on the current interest rates for borrowing at similar terms and conditions. The amounts reported in the statement of financial position approximate fair value and are presented separately in note [29] “Additional disclosures on financial instruments”.

143 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

Derivative financial instruments As of the reporting date, the fair value of derivate financial instruments was as follows:

Contract value or Positive replacement Negative replacement in millions of EUR nominal value value value Type 2013 2012 2013 2012 2013 2012 Currency instruments Foreign exchange forward contracts 664.4 642.3 2.9 0.5 0.8 1.8 Currency options (OTC) 0.0 33.2 0.0 0.6 0.0 0.6 Total currency instruments 664.4 675.5 2.9 1.1 0.8 2.4 Interest instruments Interest rate swaps 994.0 1,028.9 29.4 56.3 26.2 32.4 Cross-currency swaps 51.7 117.7 11.5 25.3 0.9 2.3 Swaptions (OTC) 25.0 20.0 0.0 0.0 0.3 0.5 Total interest instruments 1,070.7 1,166.6 40.9 81.6 27.4 35.2 Compensation of credit risk through CSA 23.2 35.2 8.2 6.5 Net replacement value 0.6 16.4

As part of financial risk management, a credit support annex (CSA) was entered into. For this reason, the positive and negative replacement values of the interest instruments were all presented net in the statement of financial position, i.e., after taking into account the cash settlement under the CSA.

[5] Leases

Lessee The net carrying amount of assets leased under finance leases breaks down as follows: in millions of EUR 2013 2012 Real estate 7.0 4.8 Machines, equipment, furniture and fixtures 1.5 0.8 Vehicles 2.3 2.7 Total 10.8 8.3

The vast majority of finance leases relate to real estate. These agreements are generally designed to include a purchase option and a renewal option. Furthermore, some contain price escalation clauses based on the Euribor. There are no significant restrictions imposed by lease agreements.

144 Minimum lease installments over the remaining terms of the finance lease agreements and their present value are as follows: in millions of EUR 2013 2012 due within 12 months 2.6 2.3 due in 13 to 60 months 8.2 6.3 due in more than 60 months 2.5 1.6 Minimum lease payments from finance leases less expected future interest payments 13.3 10.2 due within 12 months 0.6 0.5 due in 13 to 60 months 1.1 0.7 due in more than 60 months 0.3 0.1 Present value of minimum lease payments 11.3 8.9 thereof due within 12 months 1.9 1.8 due in 13 to 60 months 7.2 5.6 due in more than 60 months 2.2 1.5

Lessor The consolidated group also contains some entities that specialize in leases. These entities are responsible for intercompany lease transactions, among other things. They also have finance lease agreements with third parties, primarily for machines, equipment, furniture and fixtures, and vehicles.

Reconciliation of the total gross investment to the present value of finance leases – lessor:

due within due in due in more than 31 December 12 months 13 to 60 months 60 months in millions of EUR 2013 2012 2013 2012 2013 2012 2013 2012 Total lease installments (gross total investments in the lease) 585.0 557.6 Lease installments already received 255.1 250.6 Lease installments (future minimum lease payments) 329.9 307.0 112.6 108.7 201.9 192.3 15.4 6.0 thereof: lease payments already sold 247.2 231.2 86.0 80.5 150.5 147.3 10.7 3.4 Unearned finance income 29.3 26.0 9.8 11.0 17.4 14.0 2.1 1.0 Present value of the outstanding minimum lease payments 53.4 49.8 16.8 17.2 34.0 31.0 2.6 1.6

The finance leases are mainly hire-purchase arrangements or full payout lease agreements with a maximum term of over 90% of the leased assets’ estimated useful life. The contracts can only be terminated for due cause for which the counterparty is responsible.

Valuation allowances of EUR 0.5 million (2012: EUR 0.7 million) were recognized in the fiscal year for uncollectible outstanding minimum lease payments.

145 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[6] Related parties

Basically, related parties are members of the Würth family and entities controlled by them as well as key management personnel (members of the Würth Group’s Central Managing Board and Executive Vice Presidents), members of the Advisory Board of the Würth Group, the Management Board of the Würth Group’s Family Trusts, the Supervisory Board of the Würth Group’s Family Trusts and close family members of the aforementioned groups of persons. Related parties also include the family trusts. Related party transactions were all conducted at arm’s length.

Payments of EUR 210.3 million (2012: EUR 180.7 million) were made to members of the Würth family and the family trusts for distributions and usufructary rights. Of the payments made, an amount of EUR 152.2 million (2012: EUR 110.3 million) was paid back as a capital contribution.

The transactions and interest income and expenses listed below were effected between the Würth Group and the Würth family, members of the Central Managing Board, the Executive Vice Presidents, as well as the Management Board and the Supervisory Board of the Würth Group’s Family Trusts and the Advisory Board of the Würth Group: in millions of EUR 2013 2012 Purchased services 3.1 4.3 Services rendered 0.2 0.4 Interest cost 1.4 2.0 Interest income 1.0 1.3 Lease/rental expense 4.1 3.4 Remuneration of the Management Board and Supervisory Board of the Würth Group‘s Family Trusts, and the Advisory Board 4.7 3.3

The following receivables and liabilities arose from these transactions: in millions of EUR 2013 2012 Receivables from financial services 7.9 2.8 Loan receivable 23.5 26.4 Liabilities from financial services 2.0 1.4 Loan liabilities 17.0 51.4

In addition, close family members of key management personnel received wage and salary payments of EUR 0.3 million (2012: EUR 1.0 million). In addition, there are liabilities from financial services amounting to EUR 0.2 million (2012: EUR 0.1 million).

146 The interest income and expenses listed below were transacted between the Würth Group and the family trusts: in millions of EUR 2013 2012 Lease/rental expense 1.0 1.0 Interest cost 2.6 2.0 Interest income 0.7 0.7 Other operating expenses 0.0 0.2

These transactions gave rise to loan receivables of EUR 62.1 million (2012: EUR 22.4 million). As the result of the acquisition of shares in parent companies, there was also a purchase price liability of EUR 9.5 million in fiscal year 2012.

The receivables due from and liabilities due to related parties for financial services are subject to market interest rates. All other purchased services are also rendered at market terms and conditions.

[7] Compensation of key management personnel in millions of EUR 2013 2012 Short-term employee benefits 20.8 21.8 Post-employment benefits 0.1 0.6 Benefits due to the end of the employment relationship 0.3 0.0 Total 21.2 22.4

Individual members of the Central Managing Board and the Executive Vice Presidents have a right to pension benefits with a total present value of EUR 15.5. million (2012: EUR 20.0 million). Former members and their surviving dependants are also entitled to benefit payments. The present value of the resulting benefit obligations totaled EUR 13.9 million (2012: EUR 9.9 million).

[8] Government grants

The Würth Group received government grants of EUR 2.7 million in the form of investment subsidies for infrastructure projects (2012: EUR 2.1 million). Of this amount, EUR 1.3 million (2012: EUR 0.9 million) was deducted from the assets’ carrying amounts and EUR 1.4 million (2012: EUR 1.2 million) was immediately recognized in profit or loss.

147 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

[9] Auditor’s fees

The following table shows, on aggregate, the fees incurred for the services provided by the auditor Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, Germany in the fiscal year 2013: in millions of EUR 2013 Audit 2.0 Assurance services 0.1 Tax services 0.1 Other fees 0.1 Total 2.3

[10] Events after the reporting period

As of 18 February 2014, the Würth Group acquired a 100% of the shares in Korea Fasteners Ltd., Anseong-Si, South Korea. The purchase price amounted to EUR 1.5 million.

[11] Exemption from the duty of partnerships and stock corporations to prepare, audit and disclose financial statements

The following German group entities organized as partnerships made use of the exemption clause according to Sec. 264b HGB for the fiscal year 2013:

Entity Registered office Abraham Diederichs GmbH & Co. oHG Wuppertal Adolf Menschel Verbindungstechnik GmbH & Co. KG Plettenberg Adolf Würth GmbH & Co. KG Künzelsau Arnold & Shinjo GmbH & Co. KG Dörzbach Arnold Umformtechnik GmbH & Co. KG Forchtenberg Baier & Michels GmbH & Co. KG Ober-Ramstadt CONMETALL GmbH & Co. KG Celle Conpac GmbH & Co. KG Celle Enzinas Grundstücksverwaltungsgesellschaft mbH & Co. Vermietungs KG Mainz Gavia Grundstücksverwaltungsgesellschaft mbH & Co. Objekte Ratingen und Mainz Ingolstadt Vermietungs OHG Glessdox GmbH & Co. KG Neuenstein Grass GmbH & Co. KG Reinheim

148 Entity Registered office H. Sartorius Nachf. GmbH & Co. KG Ratingen Hetal-Werke Franz Hettich GmbH & Co. KG Alpirsbach Hommel Hercules-Werkzeughandel GmbH & Co. KG Viernheim IMS-Verbindungstechnik GmbH & Co. KG Neuenstein IVT Installations- und Verbindungstechnik GmbH & Co. KG Rohr LOGO Grundstücksgesellschaft mbH & Co. oHG Göppingen Marbet Marion & Bettina Würth GmbH & Co. KG Künzelsau Panoramahotel Grundstücksgesellschaft mbH & Co. Objekt Waldenburg oHG Göppingen PIRUS Grundstücksgesellschaft mbH & Co. oHG Göppingen Schössmetall GmbH & Co. KG Freilassing Siller & Laar Schrauben- Werkzeug- und Beschläge- Handel GmbH & Co. KG Augsburg Sonderschrauben Güldner GmbH & Co. KG Niederstetten SWG Schraubenwerk Gaisbach Besitz-GmbH & Co. KG Waldenburg Swiridoff Verlag GmbH & Co. KG Künzelsau Synfiber AS & Co. Beschränkt haftende KG Worms Teudeloff GmbH & Co. KG Waldenburg TUNAP Deutschland Vertriebs-GmbH & Co. Betriebs-KG Wolfratshausen TUNAP Industrie Chemie GmbH & Co.Produktions KG Wolfratshausen Uni Elektro Fachgroßhandel & Co. Grundstücksverwaltungsgesellschaft OHG Eschborn UNI ELEKTRO Fachgroßhandel GmbH & Co. KG Eschborn Wagener & Simon WASI GmbH & Co. KG Wuppertal Waldenburger Beteiligungen GmbH & Co. KG Künzelsau Werkzeugtechnik Niederstetten GmbH & Co.KG Niederstetten WLC Würth-Logistik GmbH & Co. KG Künzelsau Würth Elektrogroßhandel GmbH & Co. KG Künzelsau Würth - Elektronik GmbH & Co KG Niedernhall Würth Elektronik eiSos GmbH & Co. KG Waldenburg Würth Elektronik FLATcomp Systems GmbH & Co. KG Pforzheim Würth Elektronik ICS GmbH & Co. KG Öhringen Würth GmbH & Co. KG Grundstücksgesellschaft Künzelsau Würth Immobilien-Leasing GmbH & Co.KG Göppingen Würth Industrie Service GmbH & Co. KG Bad Mergentheim Würth IT International GmbH & Co. KG Bad Mergentheim Würth Leasing GmbH & Co. KG Göppingen Würth Modyf GmbH & Co. KG Künzelsau Würth TeleServices GmbH & Co. KG Künzelsau Würth Versicherungsdienst GmbH & Co. KG Künzelsau

149 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

The following German group entities organized as corporations made use of the exemption clause according to Sec. 264 (3) HGB for the fiscal year 2013:

Entity Registered office AHD Auto-Hifi & -Design GmbH Ingelfingen Comgroup GmbH Bad Mergentheim Dinol GmbH Lügde Dringenberg GmbH Betriebseinrichtungen Obersulm-Sülzbach E3 Energie Effizienz Experten GmbH Künzelsau Erbschloe Werkzeug Vertriebsgesellschaft mbH Wuppertal ESB Grundstücksverwaltungsgesellschaft mbH Eschborn FEGA & Schmitt Elektrogroßhandel GmbH Ansbach FFP Montageteileproduktion Vertriebs-GmbH Waldenburg Flugplatz Schwäbisch Hall GmbH Schwäbisch Hall HAHN+KOLB Werkzeuge GmbH Ludwigsburg HSR GmbH Hochdruck Schlauch + Rohr Verbindungen Duisburg INDUNORM Hydraulik GmbH Duisburg KERONA GmbH Ingelfingen Lichtzentrale Lichtgroßhandel GmbH Ansbach Meister Werkzeuge GmbH Wuppertal Meister-Werkzeuge, Werkzeugfabrik Vertriebsgesellschaft mbH Wuppertal „METAFRANC“ Möbel- u. Baubeschläge Vertriebsgesellschaft mbH Wuppertal Panorama Hotel- und Service GmbH Waldenburg Pronto-Werkzeuge GmbH Wuppertal Reca Norm GmbH Kupferzell REISSER Schraubentechnik GmbH Ingelfingen Reinhold Würth Holding GmbH Künzelsau Schmitt Elektrogroßhandel GmbH Fulda SWG Schraubenwerk Gaisbach GmbH Waldenburg UNI ELEKTRO Handels- und Beteiligungs-GmbH Eschborn WOW ! Würth Online World GmbH Künzelsau Würth Elektronik iBE GmbH Thyrnau

150 J. Notes to the consolidated statement of cash flows

In accordance with IAS 7, the consolidated statement of cash flows shows how the Würth Group’s cash has changed over the fiscal year as a result of cash received and paid. It is classified by cash flows from operating, investing or financing activities.

The cash flow from operating activities is derived indirectly from the earnings before taxes. Specifically, the figure for earnings before taxes is adjusted for income tax payments, finance costs and finance revenue, interest income from operating activities, changes in obligations from post-employment benefits, non-cash amortization, depreciation, impairment and reversals of impairment as well as losses and gains on the disposal of non-current assets and other non-cash expenses and income.

The effects of acquisitions and other changes in the consolidated group have been eliminated. When purchased subsidiaries are included for the first time, only the actual cash flows are shown in the consolidated statement of cash flows. Cash and cash equivalents in the consolidated statement of cash flows consist of cash on hand and bank balances as well as highly liquid short-term investments and other cash equivalents.

The effects of acquisitions and other changes in the consolidated group on the consolidated statement of cash flows have been considered separately. We refer to “C. Consolidated group”.

151 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

K. List of shareholdings

WÜRTH LINE CRAFT

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Albania China Würth Albania Ltd. Tirana 100 Wurth Hong Kong Co., Ltd. Hong Kong 100 Argentina Wuerth (Tianjin) International Trade Co., Ltd. Tianjin 100 Würth Argentina S.A. Canuelas 100 Colombia Wumet Argentina S.A. Canuelas 100 Würth Colombia SA Bogotá 100 Armenia Costa Rica Würth LLC Yerevan 100 Würth Costa Rica, S.A. La Uruca, San José 100 Australia Croatia Würth Australia Pty Ltd Dandenong South 100 Würth-Hrvatska d.o.o. Zagreb 100 Austria Czech Republic Würth Handelsgesellschaft m.b.H. Böheimkirchen 100 Würth, spol. s r.o. Mladá Boleslav 100 Azerbaijan Denmark Wurth Azerbaijan LLC Baku 100 Würth Danmark A/S Kolding 100 Belarus Dominican Republic FLLC “WurthBel” Minsk 100 Würth Dominicana S.A. Santo Domingo 100 Belgium Ecuador Würth België N.V. Turnhout 100 WURTH ECUADOR S.A. Quito 100 Bosnia and Herzegovina Estonia WURTH BH d.o.o. Sarajevo 100 Aktsiaselts Würth Tallinn 100 Brazil Finland Wurth do Brasil Peças de Fixação Ltda. Cotia 100 Würth Oy Riihimäki 100 Bulgaria France Würth Bulgarien EOOD Sofia 100 Würth France SA Erstein 95 Cambodia Würth Modyf France S.A.R.L. Erstein 100 Wuerth (Cambodia) Ltd. Phnom Penh 100 Georgia Canada Würth Georgia Ltd. Tiflis 100 McFadden‘s Hardwood & Hardware Inc. Oakville 100 Germany Würth Canada Ltd., Ltée Mississauga 100 Würth Modyf GmbH & Co. KG Künzelsau 100 Chile Greece Würth Chile Ltda. Santiago de Chile 100 Wurth Hellas S.A. Kryoneri, Attiki 100 China Hungary Wuerth (Shenyang) Hardware & Tools Co., Ltd. Shenyang 100 Würth Szereléstechnika KFT Budaörs 100 Würth (Chongqing) Hardware & Tools Co., Ltd. Chongqing 100 Iceland Würth (Guangzhou) International Würth á Íslandi ehf. Garðabær 100 Trading Co., Ltd. Guangzhou 100

152 WÜRTH LINE CRAFT

Würth Würth Group Group share share Entity Registered office % Entity Registered office % India Malaysia Bettina Wuerth Auto India Private Limited Mumbai 100 Wuerth (Malaysia) Sdn. Bhd. Petaling Jaya 100 Marion Wuerth India Pvt. Ltd. Delhi 100 Malta Reinhold Wuerth India Pvt. Ltd. Chennai 100 Würth Limited Zebbug 99 Wuerth India Pvt. Ltd. Mumbai 100 Würth Mediterranean Limited Zebbug 100 Indonesia Martinique P.T. Wuerth Indah Jakarta 100 Würth Caraïbes SARL Ducos 100 Wuerth Indonesia P.T. Jakarta 100 Mexico Ireland Würth México S.A. de C.V. Morelos 100 Würth (Ireland) Limited Limerick 100 Moldova Israel Wurth S.R.L. Chisinau 100 Würth Israel Ltd. Caesarea 100 Mongolia Italy Wuerth Mongolia LLC Ulan Bator 100 Modyf S.r.l. Termeno 100 Montenegro Würth S.r.l. Neumarkt 100 Wurth d.o.o. Podgorica Podgorica 100 Japan Namibia Würth Japan Co., Ltd. Yokohama 100 Wurth Namibia Windhoek 100 Jordan Netherlands Wurth - Jordan Co. Ltd. Amman 100 Würth Nederland B.V. ’s-Hertogenbosch 100 Kazakhstan New Zealand Wuerth Kazakhstan Ltd. Almaty 100 Wurth New Zealand Ltd. Auckland 100 Kenya Norway Wuerth Kenya Ltd. Nairobi 100 Würth Norge AS Hagan 100 Kosovo Panama Würth-Kosova Sh.p.k. Gračanica 100 Würth Centroamérica S.A. Panama Stadt 100 Kyrgyzstan Peru Würth Foreign Swiss Company Ltd. Bishkek 100 Würth Perú S.A.C. Lima 100 Latvia Philippines SIA Wurth Riga 100 Wuerth Philippines, Inc. Laguna 100 Lebanon Poland Wurth Lebanon SAL Beirut 100 Würth Polska Sp. z o.o. Warsaw 100 Lithuania Portugal Wurth Lietuva Vilnius 100 Würth Modyf Lda. Sintra 100 Macedonia Würth (Portugal) Técnica de Montagem Lda. Sintra 100 Wurth Makedonija DOOEL Skopje 100

153 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

WÜRTH LINE CRAFT

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Romania Switzerland Würth Romania S.R.L Otopeni 100 Würth AG Arlesheim 100 Russia Taiwan Wuerth North-West JSC St. Petersburg 100 Würth Taiwan Co. Ltd. Taipeh 100 Würth Russia Moscow 100 Thailand “Würth Eurasien” Aktiengesellschaft Yekaterinburg 100 Wuerth (Thailand) Company, Limited Bangkok 100 Serbia Turkey Wurth d.o.o. Belgrade 100 Würth Sanayi Ürünleri Tic. Ltd. Sti. Mimarsinan 100 Slovakia UK Hommel Hercules France, s.r.o. Bratislava 100 Wurth (Northern Ireland) Ltd. Belfast 100 Würth spol. s r.o. Bratislava 100 Würth U.K. Ltd. Erith 100 Slovenia Würth Ukraine Ltd. Vyshgorod 100 Würth d.o.o. Trzin 100 United Arab Emirates South Africa Würth Gulf FZE Dubai 100 Wuerth South Africa (Pty.) Ltd. Isando 100 Uruguay South Korea Wurth del Uruguay S.A. Barros Blancos 100 Wurth Korea Co., Ltd. Hanam 100 USA Spain Wurth Baer Supply Co. Vernon Hills, Illinois 100 WÜRTH CANARIAS, S.L. Las Palmas 100 Wurth Louis and Company Brea, California 100 Würth España, S.A. Palau-solità i Plegamans 100 Oliver H. Van Horn Co., LLC New Orleans, Louisiana 100 Würth Modyf S.A. Palau-solità i Plegamans 100 Wurth USA Inc. Ramsey, New Jersey 100 Sri Lanka Wurth Wood Group Inc. Charlotte, North Carolina 100 Wurth Lanka (Private) Limited Nugegoda 100 Vietnam Sweden Wurth Vietnam Company Limited Ho-Chi-Minh City 100 Würth Svenska AB Örebro 100

154 WÜRTH LINE INDUSTRY

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Australia Mexico Thomas Warburton Pty. Ltd. Mulgrave 100 Würth Service Supply de Mexico Indianapolis 100 Belgium New Zealand Würth Industry Belgium N.V. Grâce-Hollogne 100 EDL Fasteners Ltd. Manukau 100 Würth Industry Belux S.A. Grâce-Hollogne 100 Norway Brazil Arvid Nilsson Norge AS Dokka 100 SW Industry Peças de Fixação Ltda. São Bernardo do Campo 100 Romania Canada S.C. Wurth Industrie S.r.l. Otopeni 100 Wurth Industry of Canada Ltd. Indianapolis 100 South Africa China Action Bolt (Pty.) Ltd. Durban 100 Arvid Nilsson Logistics & Trade (Shanghai) Co., Ltd. Shanghai 100 Spain Wuerth (China) Co., Ltd. Shanghai 100 Würth Industria España, S.A. Barcelona 100 Denmark Sweden Arvid Nilsson A/S Kolding 100 Arvid Nilsson Sverige AB Kungälv 100 France Würth Industri Nordiska AB Askim 100 Würth Industrie France S.A.S. Erstein 100 Turkey Germany Würth Industrie Service Endüstriyel Würth Industrie Service GmbH & Co. KG Bad Mergentheim 100 Hizmetler Pazarlama Limited Sirketi Mimarsinan 100 India USA Wuerth Industrial Services India Pvt. Ltd. Pune 100 Marine Fasteners Inc. Sanford, Florida 100 Malaysia Würth Adams Nut & Bolt Company Maple Grove, Minnesota 100 Wuerth Industrial Services Malaysia Sdn. Bhd. Petaling Jaya 100 Wurth Action Bolt & Tool Co. Riviera Beach, Florida 100 Mexico Wurth RevCar Fasteners, Inc. Roanoke, Virginia 100 Würth McAllen Bolt de Mexico S de RL de CV Reynosa 100 Wurth/Service Supply Inc. Indianapolis, Indiana 100 Würth McAllen Maquila Services S de RL de CV Reynosa 100 Wurth Snider Bolt and Screw, Inc. Louisville, Kentucky 100

155 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

ELECTRICAL WHOLESALE

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Austria Germany Eichmann Elektrofachgroßhandel GmbH Linz 100 Walter Kluxen GmbH Hamburg 100 Czech Republic Latvia Elfetex spol. s r.o. Pilsen 100 SIA Baltjas Elektro Sabiedriba Riga 100 Estonia Lithuania Talger-Elektrotehnika Osaühing Tallinn 100 UAB ELEKTROBALT Vilnius 100 Germany Poland FEGA & Schmitt Elektrogroßhandel GmbH Ansbach 100 Fega Poland Sp. z o.o. Wrocław 100 Lichtzentrale Lichtgroßhandel GmbH Ansbach 100 Russia UNI ELEKTRO Fachgroßhandel GmbH & Co. KG Eschborn 100 OOO “Fega” Moscow 100

TRADE

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Austria Czech Republic TUNAP chemisch-technische Produktions- CONMETALL spol. s r.o. Opava 100 und Handelsgesellschaft m.b.H. Vienna 67 Finland Belgium Ares Oy Nikotips Espoo 100 CONMETALL N.V. Mechelen 100 France Duvimex Belgium BvbA Edegem 100 Meister France S.A.S. Strasbourg 100 Tunap Benelux nv Lokeren 100 SWG France SARL Forbach 100 Brazil Tunap France SAS Dachstein 67 TUNAP do Brasil Comércio de Produtos Germany Químicos Ltda. São Paulo 67 Arnold & Shinjo GmbH & Co. KG Dörzbach 100 China Baier & Michels GmbH & Co. KG Ober-Ramstadt 100 DIY Products Asia Ltd. Hong Kong 100 CONMETALL GmbH & Co. KG Celle 100 Meister Tools Trading (Shanghai) Co., Ltd. Shanghai 100 Conpac GmbH & Co. KG Celle 100 Tunap (Shanghai) International Trading Co., Ltd. Shanghai 67 Meister Werkzeuge GmbH Wuppertal 100 Wuerth Baier & Michels (Shanghai) Automotive Glessdox GmbH & Co. KG Neuenstein 100 Fastener Co., Ltd. Shanghai 100 IMS-Verbindungstechnik GmbH & Co. KG Neuenstein 100 Croatia IVT Installations- und Verbindungstechnik EXtraMont d.o.o. Zagreb 100 GmbH & Co. KG Rohr 75

156 TRADE

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Germany Romania KERONA GmbH Ingelfingen 100 Meister Romania Srl Otopeni 100 Kisling (Deutschland) GmbH Bad Mergentheim 100 Reisser Tehnic s.r.l. Cluj Napoca 100 Schössmetall GmbH & Co. KG Freilassing 100 Russia Teudeloff GmbH & Co. KG Waldenburg 100 IVT Ural, O.O.O. Bolshoj Istok 100 TUNAP Deutschland Vertriebs-GmbH TUNAP Russia OOO Moscow 67 & Co. Betriebs-KG Wolfratshausen 51 Serbia YOUR OWN BRAND GmbH Neutraubling 90 Extramont - limited responsibility company Belgrade Belgrade 100 Greece Singapore TUNAP Hellas EPE Thessaloniki 67 TUNAP Asia-Pacific Pte. Ltd. Singapore 67 Hungary Spain REISSER Csavar Kft Szár 100 Reisser Tornillería SLU Barcelona 100 Van Roij Fasteners Hungaria Kft. Dunaharaszti 100 RUC Holding Conmetall S.A. Barcelona 100 Indonesia SWG Schraubenwerk Gaisbach Espana, S.L.U. Barcelona 100 PT. TUNAP INDONESIA Jakarta 67 Tunap Productos Quimicos S.A. Barcelona 67 Italy Sweden Baier & Michels S.r.l. Padua 100 Tunap Sverige AB Sollentuna 67 Glessdox SRL Termeno 100 Switzerland Masidef S.r.l. Caronno Pertusella 100 Airproduct AG Oberwil-Lieli 100 Tunap Italia S.r.l. Terlano 67 Turkey Unifix SWG S.r.l. Terlano 100 Meister el Aletleri Teknolojik Urunler Ithalat Your Own Brand S.R.L Milan 100 Ihracat ve Ticaret Ltd. Sti. Mimarsinan 100 Netherlands Tunap Kimyasal Ürünler Pazarlama Ltd. Sti. Istanbul 67 Van Roij Fasteners Europe B.V. Deurne 100 UK Norway Tunap (UK) Limited Tonbridge 67 Synfiber AS Oslo 100 YOUR OWN BRAND UK Ltd. Cheddar 100 Tunap Norge AS Hagan 67 USA Poland Baier & Michels USA Inc. Greer, South Carolina 100 REISSER - POL Sp. z o.o. Chelmno 100 TUNAP Polska Sp. Z o.o. Warsaw 67

157 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

PRODUCTION

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Australia Germany Grass Australia/New Zealand Pty Ltd. Melbourne 100 REISSER Schraubentechnik GmbH (1) Ingelfingen-Criesbach 100 Austria SWG Schraubenwerk Gaisbach GmbH (1) Waldenburg 100 Grass GmbH Höchst 100 TUNAP Industrie Chemie GmbH & Co. Kemacos Full Filling Service GmbH Kematen in Tyrol 100 Produktions KG Wolfratshausen 100 Schmid Schrauben Hainfeld GmbH Hainfeld 100 Werkzeugtechnik Niederstetten GmbH & Co.KG Niederstetten 100 AP Winner Indústria e Comércio de Produtos Hungary Químicos Ltda. Ponta Grossa 100 Felo Szerszámgyár Kft. Eger 100 Canada Italy Grass Canada Inc. Toronto 100 Grass Italia SRL Pordenone 100 China Netherlands AP Winner (Changzhou) Chemical Diffutherm B.V. Bergeijk 100 Technology Co., Ltd. Changzhou 100 Norway Arnold Fasteners (Shenyang) Co., Ltd. Shenyang 100 Dokka Fasteners AS Dokka 100 Grass (Shanghai) International Trading Co., Ltd. Shanghai 100 Poland Czech Republic Dringenberg Polska Sp. z o.o. Zagan 100 GRASS CZECH s.r.o. Cesky Krumlov 100 South Africa Denmark Grass ZA (Pty.) Ltd. Montague Gardens 100 Dokka Fasteners A/S Kolding 100 Spain France Grass Iberia, S.A. Elgeta 100 Arnold Technique France Anneyron 100 Sweden Germany Grass Nordiska AB Jönköping 100 Adolf Menschel Verbindungstechnik GmbH & Switzerland Co. KG Plettenberg 100 InovaChem Engineering AG Wetzikon 100 Arnold Umformtechnik GmbH & Co. KG Forchtenberg 100 KMT Kunststoff- & Metallteile AG Hinwil 100 BB Stanz- und Umformtechnik GmbH Berga 100 Kisling AG Wetzikon 100 Chemofast Anchoring GmbH Willich-Münchheide 100 TUNAP AG Märstetten 51 Dinol GmbH Lügde 100 UK Dringenberg GmbH Betriebseinrichtungen Obersulm-Sülzbach 100 Grass Movement Systems Ltd Bromsgrove 100 FELO-Werkzeugfabrik Holland-Letz GmbH Neustadt 100 Tooling International Ltd. Solihull 100 Grass GmbH & Co. KG Reinheim 100 USA Grass Vertriebs GmbH Deutschland Ofterdingen 100 Arnold Fastening Systems, Inc. Auburn Hills, Michigan 100 Hetal BV GmbH Alpirsbach 100 Cardinal Fastener Inc. Bedford Heights, Ohio 100 Hetalco GmbH Alpirsbach 100 Dokka Fasteners Inc. Auburn Hills, Michigan 100 Hetal-Werke Franz Hettich GmbH & Co. KG Alpirsbach 100 Grass America, Inc. Kernersville, North Carolina 100 MKT Metall-Kunststoff-Technik GmbH & Co KG Weilerbach 100 MKT Fastening L.L.C. Lonoke, Arkansas 100

(1): These entities also operate in the Trade segment.

158 ELECTRONICS

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Austria Italy Würth Elektronik Österreich GmbH Schwechat 100 Würth Elektronik Italia s.r.l. Terlano 100 Bulgaria Mexico Würth Elektronik iBE BG EOOD Belozem 100 Wemsa S.A. de C.V. Irapuato 100 China Würth Elektronik Mexico S.A. de C.V. Irapuato 100 Wuerth Electronic Tianjin Co., Ltd. Tianjin 100 Netherlands Wurth Electronics (Chongqing) Co., Ltd. Chongqing 100 Würth Elektronik Nederland B.V. ’s-Hertogenbosch 100 Wurth Electronics (Shenyang) Co., Ltd. Shenyang 100 Singapore Wurth Electronics (Shenzen) Co., Ltd Shenzhen 100 Wurth Electronics Singapore Pte. Ltd. Singapore 100 Wurth Electronics (HK) Limited Hong Kong 100 Spain Czech Republic Würth Elektronik España, S.L. Molins de Rei 100 Würth Elektronik IBE CZ s.r.o. Budweis 100 Sweden Finland Würth Elektronik Sweden AB Enköping 100 Würth Elektronik Oy Nurmijärvi 100 Switzerland France Würth Elektronik (Schweiz) AG Zürich 100 Würth Elektronik France SARL Meyzieu 100 Taiwan Germany Würth Elektronik eiSos GmbH&Co KG Würth Elektronik eiSos GmbH & Co. KG Waldenburg 100 Taiwan Branch Taipeh 100 Würth - Elektronik GmbH & Co KG Niedernhall 94 Wurth Electronics Co., Ltd. Taipeh 100 Würth Elektronik iBE GmbH Thyrnau 100 UK Würth Elektronik ICS GmbH & Co. KG Öhringen 100 Würth Electronics UK Ltd. Manchester 100 India USA Wuerth Elektronik CBT India Private Limited Mysore 100 Wurth Electronics ICS, Inc. Dayton, Ohio 100 Wuerth Elektronik India Pvt Ltd Bangalore 100 Wurth Electronics Midcom Inc. Watertown, South Dakota 100 Wurth Electronics Services India Private Limited Bangalore 100

159 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

RECA GROUP

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Austria Italy Kellner & Kunz AG Vienna 100 FINK S.r.l. Termeno 100 Belgium SCAR S.r.l. Bussolengo 96 Reca Belux Ternat 100 SO.FIM S.r.l. Gazzolo 100 Bosnia and Herzegovina Netherlands RECA d.o.o., Sarajevo Sarajevo 100 A.J. Steenkist-Rooijmans B.V. Eindhoven 100 Bulgaria Poland Reca Bulgaria EOOD Sofia 100 Normfest Polska Sp. z o.o. Poznan 100 China reca Polska Sp. z o.o. Kraków 100 reca (Shanghai) Intern. Trading Co., Ltd. Shanghai 100 Romania Croatia Reca Bucuresti S.R.L. Bucharest 100 reca d.o.o. Varazdin 100 Serbia Czech Republic reca d.o.o. Beograd Belgrade 100 Normfest s.r.o. Prague 90 Slovakia reca spol. s r.o. Brünn 100 reca Slovensko s.r.o. Bratislava 100 France Slovenia Reca Union France Mundolsheim 75 Reca D.O.O. Maribor 100 Germany Spain Normfest GmbH Velbert 100 reca Hispania S.A.U. Aldaya 100 Reca Norm GmbH Kupferzell 100 Switzerland Siller & Laar Schrauben- Werkzeug- Reca AG Dietikon 100 und Beschläge- Handel GmbH & Co. KG Augsburg 100 Turkey Hungary Reca Vida Alet ve Makine Parc. Tic. Ltd. Sti. Izmir 100 Reca KFT Budapest 100 UK Italy reca-uk ltd West Bromwich 100 FIME S.r.l. Belfiore 100

160 TOOLS

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Austria Hungary Hommel & Seitz GmbH Vienna 100 HAHN + KOLB Hungaria Kft. Budapest 100 Metzler GmbH & Co. KG Rankweil 100 India Bulgaria HAHN+KOLB TOOLS Chennai Pvt Ltd Chennai 100 Hahn i Kolb Instrumenti EOOD Sofia 100 HAHN+KOLB Tools Pvt. Ltd. Pune 100 China Poland HAHN+KOLB (Chongqing) Tools Co., Ltd. Chongqing 100 HAHN + KOLB POLSKA Sp. z o.o. Poznan 100 HAHN+KOLB (Guangzhou) Tools Co., Ltd. Guangzhou 100 HHW Hommel Hercules PL Sp. z o.o. Katowice 100 HAHN + KOLB (Tianjin) International Trade Co., Ltd. Tianjin 100 Romania Czech Republic HAHN+KOLB ROMANIA SRL Otopeni 100 HHW-Hommel Hercules Werkzeughandel Russia CZ/SK s.r.o. Prague 100 OOO Hahn+Kolb Moscow 100 Germany Serbia H. Sartorius Nachf. GmbH & Co. KG Ratingen 100 Hahn + Kolb d.o.o. Beograd Belgrade 100 HAHN+KOLB Werkzeuge GmbH Ludwigsburg 100 UK Hommel Hercules-Werkzeughandel GmbH & Co. KG Viernheim 100 Monks & Crane Industrial Group Limited Wednesbury 100 SVH Handels-GmbH Ludwigsburg 100

161 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

SCREWS AND STANDARD PARTS

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Australia Germany James Glen Pty Ltd Lidcombe 100 HSR GmbH Hochdruck Schlauch + Rohr Austria Verbindungen Duisburg 100 WASI-Rostfrei Schraubenhandelsges. mbH Vienna 100 INDUNORM Hydraulik GmbH Duisburg 100 Belgium Sonderschrauben Güldner GmbH & Co. KG Niederstetten 100 FASTINOX N.V. Turnhout 100 Wagener & Simon WASI GmbH & Co. KG Wuppertal 100 HSR Belgium S.A./N.V. Turnhout 100 Greece Bulgaria Inox Mare Hellas SA Thessaloniki 100 Wasi Bulgarien EOOD Sofia 100 Italy China HSR Italia S.r.l. Verona 100 WASI (SHANGHAI) FASTENER TRADING CO., LTD. Shanghai 100 Inox Mare S.r.l. Rimini 100 WASI Tianjin Fastener Co., Ltd. Tianjin 100 Inox Tirrenica S.r.l. Fiumicino 100 Croatia Spinelli s.r.l Terlano 100 WASI d.o.o. Zagreb 100 Romania Denmark Wasi Romania S.R.L. Otopeni 100 WASI Inox Danmark ApS Kolding 100 Serbia Estonia WASI d.o.o. Belgrade 100 Ferrometal Baltic OÜ Tallinn 100 Spain Finland WASI Hispania, S.A. Palau-Solità i Plegamans 100 Ferrometal Oy Nurmijärvi 100 Switzerland France Modal Inox AG Arlesheim 100 INTER-INOX Sarl Meyzieu 100 Turkey Inox Ege Metal Ürünleri Dis Ticaret Limited Sirketi Beylikdüzü 100

162 FINANCIAL SERVICES

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Denmark Liechtenstein Würth Leasing Danmark A/S Kolding 100 Würth Financial Services AG Triesen 100 Germany Luxembourg Internationales Bankhaus Bodensee AG Friedrichshafen 90 Würth Reinsurance Company, S.A. Luxembourg 100 Waldenburger Versicherung AG Waldenburg 100 Netherlands Würth Immobilien-Leasing GmbH & Co.KG Göppingen 100 Würth Finance International B.V. ’s-Hertogenbosch 100 Würth Leasing GmbH & Co. KG Göppingen 100 Switzerland Würth Versicherungsdienst GmbH & Co. KG Künzelsau 100 Würth Financial Services AG Rorschach 100 Italy Würth Invest AG Chur 100 Würth Leasing Italia S.r.l. Neumarkt 100 Würth Leasing AG Dietikon 100

IT SERVICE AND HOLDING COMPANIES

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Austria Mauritius RuC Holding GmbH Böheimkirchen 100 Wurth Electronics Midcom International Holdings Würth Beteiligungen Ges.m.b.H. Böheimkirchen 100 Mauritius LTD Port Louis 100 Würth Leasing International Ges. m.b.H. Böheimkirchen 100 Sweden China Autocom Diagnostic Partner AB Trollhättan 100 Comgroup Information Technology (Shanghai) Switzerland Co., Ltd. Shanghai 100 Lagerhaus Landquart AG Landquart 100 Wuerth (China) Holding Co., Ltd. Shanghai 100 Würth Elektronik International AG Chur 100 Germany Würth International AG Chur 99 Comgroup GmbH Bad Mergentheim 100 Würth ITensis AG Chur 100 mind-IT GmbH Schorndorf 100 Würth Management AG Rorschach 100 Reinhold Würth Holding GmbH Künzelsau 100 UK UNI ELEKTRO Handels- und Beteiligungs-GmbH Eschborn 100 Monks & Crane (Holdings) Limited Wednesbury 100 WABCOWÜRTH Workshop Services GmbH Künzelsau 50 Reca Plc Kent 100 WOW ! Würth Online World GmbH Künzelsau 100 USA Würth IT International GmbH & Co. KG Bad Mergentheim 100 Wurth Electronics Inc. Ramsey, New Jersey 100 Hungary Wurth Group of North America Inc. Ramsey, New Jersey 100 Würth Phoenix KFT Budaörs 100 Wurth Industry North America LLC Ramsey, New Jersey 100 Italy Würth Wood-Division Holding LLC Ramsey, New Jersey 100 Würth Phoenix S.r.l. Bolzano 100

163 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

DIVERSIFICATION

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Austria Germany marbet GmbH Vienna 100 Würth TeleServices GmbH & Co. KG Künzelsau 100 China Italy marbet (Shanghai) events Co., Ltd. Shanghai 100 marbet Marion & Bettina Würth s.r.l. Leifers 100 munich one live communications Co., Ltd. Peking 100 Slovakia Wuerth International Trading (Shanghai) Co., Ltd. Shanghai 100 Würth International Trading s. r. o. Bratislava 100 Germany Spain EOS KSI Forderungsmanagement GmbH & Co. KG Künzelsau 50 FINCA INTERMINABLE, S.L. Maspalomas 100 Flugplatz Schwäbisch Hall GmbH Schwäbisch Hall 98 marbet Eventos S. A. Barcelona 100 Marbet Marion & Bettina Würth GmbH & Co. KG Künzelsau 100 marbet Viajes Espana S. A. Barcelona 100 OTD Originalteile-Direkt GmbH Erlenbach 100 Switzerland Panorama Hotel- und Service GmbH Waldenburg 100 Obersee Bilingual School AG Pfäffikon 94 PARAVAN GmbH Pfronstetten-Aichelau 25 Würth Logistics AG Chur 100 WLC Würth-Logistik GmbH & Co. KG Künzelsau 100 Würth Promotional Concepts AG Chur 100 Würth Aviation GmbH Künzelsau 100 USA Würth Inter Werbung GmbH Kissing 100 Wurth International Trading America, Inc. Ramsey, New Jersey 100 Würth Logistics Deutschland GmbH Bremen 100 Wurth Logistics USA Inc. Indianapolis, Indiana 100

164 OTHER ENTITIES

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Australia Germany EDL Fasteners Pty. Ltd. Eastern Creek 100 EOS KSI Verwaltungsgesellschaft für Austria Forderungsmanagement GmbH Künzelsau 49 CC-Czech Liegenschaftsverwaltungs GmbH Kematen in Tyrol 100 Erbschloe Werkzeug Vertriebsgesellschaft mbH Wuppertal 100 Metzler GmbH Feldkirch 100 ESB Grundstücksverwaltungsgesellschaft mbH Eschborn 100 Belgium EuroSun GmbH Freiburg im Breisgau 45 Normfest Benelux SA/NV Zaventem 100 FANDUS Grundstücks-Vermietungsgesellschaft Pullach im Isartal 94 Würth Belux N.V. Turnhout 100 mbH & Co. Objekt Willich KG Brazil FFP Montageteileproduktion Vertriebs-GmbH Waldenburg 100 Wurth Energia Solar do Brasil Ltda. Cotia 100 Gavia Grundstücksverwaltungsgesellschaft Bulgaria mbH & Co. Objekte Ratingen und Ingolstadt Meister Bulgaria Sofia 100 Vermietungs OHG Mainz 95 China Grass Verwaltungs GmbH Reinheim 100 HAHN+KOLB (Shenyang) Tools Co., Ltd. Shenyang 100 Grundstücksgesellschaft Berlin Chemnitz Erfurt GbR Künzelsau 49 Midcom Hong Kong LTD Hong Kong 100 Grundstücksgesellschaft Cottbus Magdeburg GbR Künzelsau 49 Würth Construction Tools Commercial (Beijing) Co., Ltd. Beijing 100 Hettich-Verwaltungsgesellschaft mbH Alpirsbach 100 Würth (Shanghai) Hardware & Tools Co., Ltd. Shanghai 100 IVT Installations- und Verbindungstechnik Cyprus Verwaltungs-GmbH Rohr 75 Wurth Cyprus Ltd. Nicosia 100 KOSY Gesellschaft zur Förderung des Czech Republic holzverarbeitenden Handwerks mbH Künzelsau 100 Schössmetall, spol. s r.o. Zelenec 100 LOGO Grundstücks-Verwaltungsgesellschaft mbH Göppingen 100 Finnland LOGO Grundstücksgesellschaft mbH & Co. oHG Göppingen 100 Recafinn Oy Riihimäki 95 Marbet Marion & Bettina Würth Verwaltungs-GmbH Künzelsau 100 France Meister-Werkzeuge, Werkzeugfabrik Vertriebs- Grass France S.A.R.L. Chaville 100 gesellschaft mbH Wuppertal 100 Würth Solar France SAS Volgelsheim 100 Menschel Verbindungstechnik Verwaltungs-GmbH Waldenburg 100 Germany “METAFRANC” Möbel- u. Baubeschläge Abraham Diederichs GmbH & Co. oHG Wuppertal 100 Vertriebsgesellschaft mbH Wuppertal 100 AHD Auto-Hifi & -Design GmbH Künzelsau 100 MKT Metall-Kunststoff-Technik Beteilungs- CHEMOFAST Beteiligungs-GmbH Künzelsau 100 gesellschaft mbH Weilerbach 100 CONMETALL Vermietungsgesellschaft mbH Celle 100 nordberliner Elektro-Großhandels-Gesellschaft mbH Eschborn 100 CONMETALL Verwaltungs-GmbH Celle 100 Panoramahotel Grundstücksgesellschaft mbH & E 3 Energie Effizienz Experten GmbH Künzelsau 100 Co. Objekt Waldenburg oHG Göppingen 100 Enzinas Grundstücksverwaltungsgesellschaft PIRUS Grundstücks-Verwaltungsgesellschaft mbH Göppingen 100 mbH & Co. Vermietungs KG Mainz 94 PIRUS Grundstücksgesellschaft mbH & Co. oHG Göppingen 100

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OTHER ENTITIES

Würth Würth Group Group share share Entity Registered office % Entity Registered office % Germany Morocco Pronto-Werkzeuge GmbH Wuppertal 100 Würth Maroc SARL Casablanca 100 Schmitt Elektrogroßhandel GmbH Fulda 100 Netherlands Sonderschrauben Hamburg GmbH Eiben & Co. Künzelsau 100 Normfest Nederland B.V. Well 100 SWG Schraubenwerk Gaisbach Besitz-GmbH & Pakistan Co. KG Waldenburg 90 Würth Pakistan (Private) Limited Karatschi 100 SYNFIBER AS & Co. beschränkt haftende KG Worms 100 Poland TUNAP Industrie Chemie GmbH Wolfratshausen 100 WASI Polska Sp. Z.o.o. Poznan 100 TUNAP Deutschland Vertriebs - GmbH Wolfratshausen 51 Portugal UNI ELEKTRO Fachgroßhandel GmbH Linden 100 Reca Portugal, S.A. Alhos Vedros 100 Uni Elektro Fachgroßhandel & Co. Grundstücks- Romania verwaltungsgesellschaft OHG Eschborn 100 Viterie Venete Balkan S.r.l. Cluj Napoca 100 Werkzeugtechnik Niederstetten Verwaltungs-GmbH Künzelsau 100 Spain WS Solarbeteiligungen Schwäbisch Hall GmbH Schwäbisch Hall 100 Isa Eolica S.L. Madrid 100 Würth Elektronik ICS Verwaltungs-GmbH Künzelsau 100 Lo Mejor para Ti S.L. Madrid 100 Würth Elektronik FLATcomp Systems Verwaltungs- marbet Servicios Creativos S.A. Barcelona 100 GmbH Pforzheim 100 Planta Fotovoltaica Cervatillos C. 100 SL Madrid 100 Würth GmbH & Co. KG Grundstücksgesellschaft Künzelsau 100 Rasgos Europeos S.L. Madrid 100 Würth Leasing Verwaltungsgesellschaft mbH Göppingen 100 WS Murcia Anbesol PM S.L. Madrid 100 Würth Logistic Center Europe GmbH Künzelsau 100 Würth Industrie Logistik Espana S.A. Vitoria 100 Würth Montagetechnik GmbH Dresden 100 Sweden Greece WASI Sverige AB Örebro 100 Würth Solar Hellas Anonimi Eteria of Services for Switzerland Production of Electric Energy from Solar Energy Kryoneri, Attiki 100 Comgroup (Schweiz) AG Biel 100 Hungary Lagerhaus Mezzovico SA Mezzovico 100 “Hommel Hercules Werkzeughandel” SMP Swiss Macro Polymers AG Wetzikon 100 Hungária Szerszám Kereskedelmi Kft Budapest 100 UK Schössmetall Hungària Kft. Budapest 100 Advanced Fastener Technology Ltd. Solihull 100 Italy Anchorfast Limited Wednesbury 100 Italian Padua Energy Roof Srl Padua 100 Winzer Würth Industrial Ltd. Erith 100 Viterie Venete S.r.l. Rubano 100 USA WS Power Plant 3 S.r.L. Seriate 100 R. W. Ramsey Realty Corporation Ramsey, New Jersey 100 Würth Solar Italia s.r.l. Terlano 100 SolarMarkt US Corp. dba Session Solar Scotts Valley, Kalifornien 100

166 L. The boards

Advisory Board The Advisory Board is the supreme supervisory and controlling body of the Würth Group. It advises on strategy, approves corporate planning as well as the use of funds. It appoints the members of the Central Managing Board, the Executive Vice Presidents as well as the managing directors of the companies generating high sales.

(as of 31 December 2013)

Bettina Würth Axel C. A. Krauss Honorary Chairman Chairwoman of the Advisory Board Member of the Advisory Board, of the Advisory Board of the Würth Group Member of the Supervisory Board of Unilever Deutschland, Hamburg Prof. Dr. h. c. mult. Reinhold Würth Chairman of the Supervisory Board of Dr. Bernd Thiemann the Würth Group’s Family Trusts Deputy Chairman of the Advisory Dr. Bernd-Albrecht von Maltzan Board of the Würth Group (up until Member of the Advisory Board, 31 December 2013), former Chair- former Divisional Board Member man of the Management Board of and Senior Advisor Private Wealth Honorary Member Deutsche Genossenschaftsbank AG, Management Deutsche Bank AG, of the Advisory Board Frankfurt/Main Frankfurt/Main Dr. Michael Rogowski Chairman of the Foundation Board of Rolf Bauer Dr. Martin H. Sorg Hanns-Voith-Stiftung, Heidenheim Member of the Advisory Board (up Member of the Advisory Board, until 31 December 2013), former Certified Public Accountant, Partner Member of the Central Managing of the law firm Binz & Partner, Board of the Würth Group Stuttgart

Peter Edelmann Dr. h. c. Uwe Zimpelmann Member of the Advisory Board, Member of the Advisory Board Managing Partner of (up until 31 December 2013), Edelmann & Company, Ulm former Spokesman of the Manage- ment Board of Landwirtschaftliche Rentenbank, Frankfurt/Main Dr. Frank Heinricht Member of the Advisory Board, Chairman of the Management Board of Schott AG, Mainz

167 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

Central Managing Board The Central Managing Board is the most senior decision-making board of the Würth Group. It has four members and is comparable to the management board of a group holding company. Its most important duties include corporate strategy planning, the selection of executives as well as the management of strategic business units and functions.

(as of 31 December 2013)

Robert Friedmann Uwe Hohlfeld Michel Kern Chairman of the Central Managing Member of the Central Managing Member of the Central Managing Board of the Würth Group Board of the Würth Group Board of the Würth Group (since 1 July 2013) (up until 30 June 2013)

Peter Zürn Deputy Chairman of the Central Ma- Joachim Kaltmaier Jürg Michel naging Board of the Würth Group Member of the Central Managing Member of the Central Managing Board of the Würth Group Board of the Würth Group (up until 30 June 2013)

Wolfgang Rampmaier Member of the Central Managing Board of the Würth Group (up until 30 June 2013)

Dr. Reiner Specht Member of the Central Managing Board of the Würth Group (up until 30 June 2013)

168 Executive Vice Presidents The Executive Vice Presidents constitute the operational management of the Würth Group. Each of the members is in charge of one strategic business unit or responsible for one functional area.

(as of 31 December 2013)

Joachim Breitfeld Michel Kern Dr. Reiner Specht Chemicals Group Würth Line Asia (excl. China), Würth Würth Line South America, Russia Line Oceania, Würth Switzerland, and sub-regions of southern and Würth International AG western Europe, Trade unit, Rainer Bürkert (since 1 July 2013) Deputy Member of the Central Würth Line Industry (excl. USA) Managing Board of the Würth Group (since 1 July 2013) Thomas Klenk Jürgen Graf Purchasing and Product, DIN/ Logistics Standard Stainless Steel Parts Robert Stolz (up until 30 June 2013) Würth Line Auto USA, Würth Line Wood USA and Canada Jürgen Klohe/Jörg Murawski Helmut Gschnell Würth Elektronik Group Würth Line Italy, Marc Strandquist Würth Albania, Würth Line Industry USA Specialists in Italy Jürg Michel (since 1 July 2013) (up until 30 June 2013) Würth Line China, Würth Finance Group (1 July 2013 – 31 December 2013) Zekeriya Uluca Norbert Heckmann Würth Line Turkey and Sub-region Asia Chairman of Adolf Würth (up until 30 June 2013) GmbH & Co. KG Svein Oftedal Würth Line UK, Ireland, Scandinavia (without C. Sylvia Weber Bernd Herrmann Finland), Würth South Africa Director of Museum Würth/Kunsthalle Electrical Wholesale, Information Würth, Curator of the Würth Collection Technology and Logistics, IT Group Juan Ramírez Würth Line Spain, France, Mario Weiss Ulrich Häfele/Ernst Wiesinger Central and South America Würth Line South-Eastern Europe, RECA Group (up until 30 June 2013) Balkan states

Uwe Hohlfeld Pentti Rantanen Alois Wimmer Head of Finance of Würth Group Finland and Production of Screws Adolf Würth GmbH & Co. KG, Baltic Countries and Anchors Deputy Member of the Central Managing Board of the Würth Group (up until 30 June 2013) Markus Würth Special projects

169 BULLETIN THE BOARDS COMMITMENT GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

AUDIT OPINION OF THE INDEPENDENT AUDITOR

The following audit opinion was issued by the Group auditor on the full consolidated financial statements including the list of shareholdings and the Group management report:

“We have audited the consolidated financial statements prepared by the Würth Group, Künzelsau, comprising the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the notes to the consolidated financial statements, together with the Group management report for the fiscal year from 1 January to 31 December 2013. The preparation of the consolidated financial statements and the Group management report in accordance with IFRSs as adopted by the EU, as well as the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB [“Handelsgesetzbuch”: German Commercial Code] is the responsibility of the Group management of the Würth Group. Our responsibility is to express an opinion on the consolidated financial statements and the Group management report based on our audit. In addition we have been instructed to express an opinion as to whether the consolidated financial statements comply with full IFRS.

We conducted our audit of the consolidated financial statements in accordance with Sec. 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the Group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the Group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB and the IFRSs as a whole and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The Group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future development.”

Stuttgart, 14 March 2014 Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Prof. Dr. Wollmert Blesch Wirtschaftsprüfer [German Public Auditor] Wirtschaftsprüfer [German Public Auditor]

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