Information Request Card Key Figures 2002 Andritz Group Key Figures I would like to receive information by 1999-2002 (IAS) Post E-Mail My E-Mail address is:

Sales by Business Area Order Intake by Business Area in MEUR 2002 2001 20001) 1999 Other information

100% 100% Order Intake 1,300 1,121 1,083 638 Please tick where applicable Order Backlog (Dec. 31) 904 740 939 514 Andritz AG Investor Relations Sales 1,110 1,319 937 656 Name: Stattegger Strasse 18 2) EBITDA 81 95 63 38 A-8045 Graz Pulp and Paper Pulp and Paper EBITDA Margin 7.3% 7.2% 6.7% 5.8% Address: Austria EBITA3) 59 68 44 23 EBITA Margin 5.3% 5.2% 4.7% 3.5% ✂ Earnings Before Interest Rolling Mills and Strip Processing Lines Rolling Mills and Strip Processing Rolling Mills and Strip Processing Lines Rolling Mills and Strip Processing and Tax (EBIT) 45 55 34 21 Environment and Process Technologies and Process Environment Technologies and Process Environment Feed Technology Feed Technology Others Others Earnings Before Tax (EBT) 46 60 34 32 Information Request Card 60% 16% 11% 10% 3% 65% 14% 11% 8% 2% Net Income for the Year 28 37 20 20 Cash Flow from I would like to receive information by Operating Activities 76 72 43 40 Post Capital Expenditure4) 23 24 21 17 E-Mail Employees by Business Area Employees by Region Employees at Year-End 4,601 4,545 4,241 3,021 My E-Mail address is: (excluding apprentices) 100% Other information Germany 8% France 5% Imprint

Netherlands 4% Extract from Balance Sheet Austria 25% Andritz AG Please tick where applicable Andritz AG United Kingdom 2% Stattegger Strasse 18 Pulp and Paper Investor Relations A-8045 Graz, Austria Name: Stattegger Straße 18 Others 8% in MEUR 2002 2001 20001) 1999 Phone: +43 316 6902-0 A-8045 Graz Austria Fax: +43 316 6902 415 Address: Fixed Assets 293 317 339 120 E-Mail: [email protected] Rolling Mills and Strip Processing Lines Rolling Mills and Strip Processing Feed Technology Environment and Process Technologies and Process Environment Others Current Assets 617 625 595 685 Internet: http://www.andritz.com ✂ 57% 14% 10% 13% 6% Total Assets 910 942 934 805 North America 23% Northern Europe 25% Shareholders’ Equity5) 223 230 161 358 For information please contact: Equity-to-Assets Ratio (%) 25 24 17 45 Michael Buchbauer Information Request Card Minority Interests 6 96010 Corporate Communications/Investor Relations E-mail: [email protected] I would like to receive information by Order Intake by Region Sales by Region Provisions 167 178 159 112 Liabilities 514 525 554 325 Phone: +43 316 6902 2979 Post Fax: +43 316 6902 465 Share Capital 95 95 73 73 E-Mail South America 6% North America 22% South America 11% North America 25% My E-Mail address is: Asia 15% Asia 17% Editor: Michael Buchbauer Other information Design: Notes: www.gruenberg4.at Please tick where applicable 1) Includes consolidation of Andritz-Ahlstrom Corporation from July 1, 2000 Andritz AG 2) EBITDA: Earnings before interest, tax, depreciation and amortization of goodwill Investor Relations 3) EBITA: Earnings before interest, tax and amortization of goodwill Printed by: Name: 4) Additions to tangible assets and intangible assets Stattegger Straße 18 Europe 56% Others 1% Europe 45% Others 2% 5) Shareholders’ equity w/o minority interests Print & Art Faksimile GmbH, Graz A-8045 Graz Address: Austria Contents 27.02.2003 Full Year Results of 2002

08.04.2003 ■ Company Profile 2 Annual General Meeting, Grazer Congress ■ 150th Anniversary of Andritz - The Milestones 4 11.04.2003 ■ The Year 2002 at Andritz 6 Ex-Dividend

■ Letter from the Managing Board 8 14.04.2003 Dividend Payment ■ Status Report 11 12.05.2003 General Economic Conditions 11 Results for the First Quarter of 2003

The 2002 Business Year 11

Financial Calendar 2003 07.08.2003 Research and Development 13 Results for the First Half of 2003 Annual Report 2002 Outlook 14 06.11.2003 Results for the First Three Quarters of 2003

■ The Business Areas at a Glance 16

■ The Business Areas

Pulp and Paper 18

Pulp Mill Technologies

- Wood Processing Division 24

- Kraft Mill Systems Division 26

- Pulp Mill Services Division 30

Paper Mill Technologies

- Mechanical Pulping Systems Division 33

- Fiber Preparation Systems Division 38

- Tissue Machines Division 41

- Paper Mill Services Division 45

Rolling Mills and Strip Processing Lines 48

Environment and Process Technologies 54

Feed Technology 60

Other Operations/Hydraulic Machines 66

■ Andritz Shares 70

■ Corporate Governance 73

■ Corporate Risks 74

■ Andritz Automation 77

■ Employees 79

■ eBusiness 81

■ Business Process Management 82

■ Quality 83

■ Environmental Protection 84

■ Consolidated Financial Statements 2002 87

■ Report of the Supervisory Board 123 Annual Report 2002 ■ Andritz Group Companies 124

■ Addresses of the Andritz Group 126

■ Product Range 131

Andritz Group Key ▲ ■ Glossary of Technical Terms 135 Figures 1999-2002 (IAS) We engineer the future We engineer the future upadPprRollingMillsand Pulp andPaper High-Tech ProductionSystemsand Services forPulpandPaper, Steel, and OtherSpecializedIndustries" Lines Strip Processing AGlobalMarketLeaderin "A Technologies and Process Environment provides solidbasisfor2003 complementary acquisitions We engineer thefuture edTcnlg OtherOperations/ Feed Technology reaches recordlevel below previousyear High OrderBacklog Sales andEarnings outperform ATX Continuation of Andritz Shares Order Intake Hydraulic Machines

Vision Highlights of the 2002 Business Year 2 / andritz 2002 Company Profile Solid growth Global presence space technology: (e.g. waterturbines,pumpsfor thepulpandpaperindustry)aswellcomponentsfor The company’s activitiesalsocomprisetheproduction ofdifferent hydraulicmachines all fourstrategicBusinessAreas. The AndritzGroup isaglobalmarketleaderineachofthedifferent marketsegmentsfor encompass thedevelopment,manufacture, andserviceforsystemsplants The activitiesoftheAndritzGroup are focusedwithinfourstrategicBusinessAreas, and Business Activities The Group’s financialgoalsare: the AndritzGroup. Thecompanyhasbeenprofitable forover15yearsinarow. 10% eachyear. TheOrder Intakenearing1.3billionEuros in2002wasarecord levelfor solutions, andcomplementaryacquisitions,theAndritzGroup hasgrown anaverageof Through advancementofexistingproducts, continuousdevelopmentofnewtechnical Business DevelopmentandFinancialGoals position andhelptoachieveimportantstrategicgoals. of Andritz,combinedwithtechnologyleadership,strengthen theGroup’s competitive technologies whichhelptheGroup maintainitsleadershipposition.Theglobalpresence processes andequipmentonanon-goingbasis.Theseemploypatentedproprietary With research centers inEurope andtheUSA,AndritzGroup developsinnovative the Group alsohasaworldwidepresence closetoitscustomers. over 60affiliates andoffices around theworld,employingapproximately 4,600employees, Germany, Finland,Denmark,theNetherlands,France,USA,Canada,andChina.With The Group isbasedinGraz,Austria,andproduction isconductedat16sitesinAustria, specialized industries(sewagesludgedewateringanddrying,feedtechnology). systems, andservicesforthepulppaperindustry, thesteelindustry, andother Publicly listedAndritzGroup isaglobalmarketleaderinthesupplyofcustomizedplants, Global Group producing animalfeed: Technologies BusinessArea processing andtreating wastewaterandsludge: processing steelstrip: tissue paper: producing alltypesofpulp(includingequipmentforrecovery ofchemicals),and A dividendpayoutratioofatleast30%NetIncome onCapitalEmployed(ROCE)ofover20% A Return EBITDA Margin (as%ofSales)over7% Long-term Salesgrowth of10%peryearonaverage Pulp andPaperBusinessArea Other Operations/Hydraulic Machines. Rolling MillsandStripProcessing LinesBusinessArea Feed Technology Business Area Environment andProcess the Group’s long-termprofitability. Comprehensive costmanagementandfuture-oriented capacityoptimizationhelpsecure documentation, toon-lineremote diagnosticsofacustomer'sequipment. andeBusinesssolutions–from on-linespareInternet partsordering, tocompleteplant optimization andcostsavings.More innovative,comprehensive serviceofferings include manufacture ofengineered wearparts,whichhelpcustomersachieveproduction Traditional serviceencompassesthesaleofreplacement partsandthe Group. Continuous growth oftheservicebusinessisaveryimportantstrategicobjectivefor galvanizing. worldwide tocovertheentire process lineforstainlesssteelstripfinishingandhot-dip kind ofpulp,includingtherecovery ofchemicals.Andritzisalsotheonlycompany the area ofpulpandpaper, theAndritzGroup offers allprocess stepsforproducing any which hassignificantlystrengthened theprocess competenceinallBusinessAreas. In manifested itselfintheacquisitionofanumbercompaniesoverpast12years, supplier ofcompleteprocess linesineachoftheBusinessAreas. Thisstrategyhas complementary products andtechnologies.Thegoalistobecomeacomprehensive capitalizing onthesynergies betweenBusinessAreas) combinedwiththeacquisitionof The strategyoftheAndritzGroup isorganic growth (through intensiveR&Dand Strategy Bernhard Rebernik Bernhard Friedrich Papst Franz Hofmann Markku Hänninen (President andCEO) Wolfgang Leitner Managing Board: The CompanyBoards Hellwig Torggler Anton Schneider Christian Nowotny Michael Hildisch (Deputy Chairman) Hans Albrecht (Chairman) Kurt Stiassny Appointed members: Supervisory Board: Andreas Martiner Brigitta Wasserbauer Johann Tschrischnig Delegated Members: acquisitions complementary R&D and Growth through

3 / andritz 2002 Company Profile 4 / andritz 2002 ■ Andritz CEOWolfgang Leitner)andothermembersoftheAndritzManagingBoard. AG,DeutscheBeteiligungsCustosPrivatstiftung (founded by Carlyle Group, GECapital,Unternehmensinvest ■ (1995). Jesma-Matador A/S(laterrenamed Sprout-Matador), whichstrengthened Andritz’positioninFeedTechnology Kone Wood ofFinlandaleadingsupplierequipmentforwoodprocessing inthepulpindustry(1994),andDanish Further complementaryacquisitionsincludeDurametalCorporationintheUSA,aproducer ofrefiner plates(1992), Andritz Group. mechanical pulpingsystems(refiners) andanimalfeed,marksthebeginningofsuccessfulexpansion supplierofhigh-techproduction systems. international ■ of AndritzAG. ■ ■ ■ is aleadingsupplierofcoldrolling steelindustry. millsandstripprocessing plantsfortheinternational ■ Finland, afewmonthslater. Immediately aftertheIPO, million newshares withinvestorsinAustriaandothercountries. Processing LinesBusiness Area). SELAS SAS,France to offer completedryingandbaling lines formarketpulp.Thepurchase ofthecontinuousstripannealing line from By acquiring growth. investors. Theproceeds ofthebondsaleenablecompany to create asolidfinancialbasisforfurtherGroup ■ leaders inFeedTechnology. With thepurchase of recovery. making theAndritzGroup oneoftheleadingsuppliersproduction systemsforallkindsofpulpingandchemical ■ ■ Andritz. iron worksinHungary. Atage25,Körösiestablisheshisowncompany, 150 1852 - 2002 - 1998 - 2000 - 1950 - 1900 - 1987 - 2001 - 1990-2000 - 1999 - th Andritz isfoundedby In May2002,Andritzsuccessfullyplacesa Andritz buys75%of Andritz buysthefirst50%stakeinFinnishAhlstrom MachineryGroup Creditanstalt-Bankverein Andritz istransformedintoa AGIV AG,aninvestmentcompanyheadquartered inFrankfurt In June,Andritzmakesits Ownership inAndritzchangesoncemore. Anniversary of Andritz - The Milestones ABB Drying In 1990,Andritzbeginstochangeitsstrategyfrom beingalicenseeforothermanufacturers toan , makesAndritzasupplier of completehot-dipgalvanizinglines(RollingMillsand Strip Universal MillingTechnology , Andritzcomplementsitsprocess competence inthepulpandpaperindustry, enablingit Andritz buystheremaining 50%inAndritz-Ahlstrom Sundwiger EisenhütteMaschinenfabrik Hungarian entrepreneur Josef Körösi , Vienna, buysthemajorityofAndritzshares. initial publicoffering joint stockcompany , Andritzfurtherestablishesitselfasoneoftheworldmarket 100 MEURcorporatebond AGIV AGsellsitsshares toaconsortium on theVienna StockExchange,successfullyplacingtwo The purchase ofSprout-Bauer intheUSA,specialists . , whostartedhiscareer asanapprentice inan GmbH &Co.,ofHemer, Germany. Sundwig a smalliron foundry , Germany, becomesmajorityshareholder with nationalinstitutionalandretail , whichismerged withAndritzOy, (later renamed Andritz-Ahlstrom), , intheGrazsuburbof consisting ofThe pump turbineforLimberg Austria, intheproduction Maschinenfabrik Andritz 1953: Machiningofthe workshops offormer hydropower station,

5 / andritz 2002 6 / andritz 2002 excellent quality. new AndritzPrimePickup™system, onemachinerunsconstantlyat2,020m/minfortwo daysinarow andproduces Two reference levelfortheprevious year ■ pulp bales. a completeequipmentsupplierforalltypesoffibersandcovers theentire process linefrom thewoodyard tomarket The acquisitionofABBDrying in hot-dipstripgalvanizing. Andritz acquires thecontinuousannealinglinesectionfrom Orders totalling170MEURare received forchemicalrecovery systems Award (PrizeforInvestorRelations Online). Relations. ItisalsothewinnerofPIROL ■ Videm KrskoProizvodnja PapirjainCeluloze,Slovenia. ■ Third Quarterinarow. ■ machine approach flow, andtreatment ofthepapersludgeandwastewater. the product andsystemknow-howofAndritztheformerAndritz-Ahlstrom inrecycling, stockpreparation, paper ■ manufacturing customizedtissuegrades. Andritz presents for Wisaforest pulpmill. ■ dewatering, ispurchased. The retail investors. ■ Slovenia. Thesystemcomprisesthickening,dewatering,anddrying–animportantreference order inSoutheastEurope. ■ Interest andTax (EBIT),increased profitability anddoubledNetIncomefortheyear. ■ Andritz foracompletewoodyard andchemicalrecovery systemsforagreenfield kraftmillinChile. ■ The Year 2002at Andritz May - March - August - February - June - July - September - April - November - October - Andritz tissuemachines remaining 50%stakeinFrench affiliate Guinard Centrifugation, Andritz successfullyplacesa The UPM-Kymmene, Finland,orders the Andritz receives anorder to supplyacomplete The results forBusinessYear 2001 Andritz reports declinesinSalesandEBITfortheFirstHalfof2002.However, Order Intakerisesforthe new FiberPreparation SystemsDivision Forest industrycompanyGroup CelulosaAraucoyConstitución,Chile,placesa50MEURorder with Andritz receives the Andritz FiberPreparation receives itsfirstorder forsupplyofa Andritz publishestheresults forthe FirstThree Quartersof2002. its newtissuemachineconcept-PrimeLine™ for ChinesetissuemakerGold HongYe enables Andritztooffer completedryingandbalinglinesformarket pulp.Andritzis Stock ExchangeAward for2002 , SalesandEBITare onthedeclinefrom previous year. 100 MEURcorporatebond largest chemicalrecovery island are published.Andritzannouncesrecord Before SalesandEarnings commences worldwideoperations.TheDivisioncombines sewage sludgetreatment plantforthecityofLjubljana, French SELASSAS, (coupon: 6%;term:6years)withinstitutionaland . Theconceptfeatures thehighestflexibilityin achieve speedrecords , honoringitsprofessionalism inInvestor in Germany, Portugal,andAustria. a specialistforcentrifugessludge complementing itsproduct offering in theworldworthover100MEUR turnkey deinkingsystem turnkey Order Intakeisabovethe . Afterintegratingthe to Vipap 2002: Successful start-up of the new fiberline constructed for Aracruz Celulose, Brazil. Andritz was the main supplier for the project. 8 / andritz 2002 Letter fromtheManagingBoard systems production of complete Andritz: supplier Intake Record Order 2003 important goalfor integration -an organizational Further system solutions(AndritzPrimeLine customers around theworld.Inpulpandpaper, anumberofinnovativeproduct and The developmentofseveralnewproducts hasmetwithexcellentacceptancefrom regions withanabove-average growth rate. competitiveness, andallowustotakeadvantageofmarketopportunitiesthatarisein network andmanyreference installationsinvariouspartsoftheworldcontributetoour our globalreach enablesustooffer comprehensive andrapidservice.Ourinternational required closenesstoourcustomers.Mostcustomersalsoworkonaglobalbasis,and Another competitiveadvantageliesintheGroup’s globalpresence. Thisensures the Business Area andtheRollingMillsStripProcessing LinesBusinessArea. steps. Thishasclearlystrengthened ourprocess competenceinthePulpandPaper SELAS technologiesforcontinuousstripannealinginOctober2002were twoimportant supplier ofcompleteproduction lines.TheacquisitionsofABBDryingtechnologyand competence ineachBusinessArea, andourstrategytodevelopthecompanyasa the complementaryacquisitionswehavemadeinorder toextendourprocess The favorabledevelopmentofOrder Intakecanbeattributedtothefollowingfactors: Intake, creating asolidbasisforbusinessdevelopmentin2003. economy. However, thiswasoffset somewhatbyachievingarecord levelofOrder had tomanagedeclinesinSalesandNetIncome,stepwiththegeneralindustrial development duringthepastbusinessyear. Compared totherecord year2001,Andritz Despite difficult globaleconomicconditions,theAndritzGroup experiencedsatisfactory Dear Shareholders, Ladies andGentlemen, Andritz Group. formed toactivelydesignand optimizeourbusinessmodelsandprocesses withinthe on-time executionofprojects withminimal interfaces.Aspecialproject teamhasbeen even more uniformlyonthemarket,and wewanttoguaranteeourcustomerscomplete, in thesalesphaseofprojects. Thisisjustthebeginning.In future we wanttoact come muchclosertothisgoal.We haveseenpositiveresults overtheyear, especially to optimizetheorganization BusinessProcesses through Program aninternal and have synergies, particularlywhenexecutinglarge orders andprojects. We havetakensteps Group atthestrategicBusinessArea level.Thisshouldenableusto capitalizeon A priorityforthecurrent yearisfurtherintegrationofourorganization withintheAndritz prerequisites forsuccess. them attractiveprices,andexecutingtheorders received withinbudgetare absolute and competenttechnologicalpartnerbyourcustomersinallBusinessAreas, offering customers, whilekeepingourcoststructure aslowpossible.Beingseenareliable Our goalistobecomethetechnologicallypreferred suppliertoawidespectrumof system forrecovery boilers)were verysuccessfullylaunched. TM concept fortissuemachinesandtheVertical Air TM Letter from the Managing Board Letter from

Friedrich Papst Bernhard Rebernik

Wolfgang Leitner (President and CEO)

Markku Hänninen Franz Hofmann 2002 andritz / 9 10 / andritz 2002 Letter from the Managing Board outperform ATX Shares bond, Andritz of corporate Successful issue Andritz AGManagingBoard requirements fullyduringtheyeartocome. confidence theyhaveplacedinus,andassure themthatwewillperformtotheir in theworldwideGroup. We thankourcustomersandbusinesspartnersforthe difficult economicenvironment duetothecontributionanddiligenceofeachemployee performance duringtheyearunderreview. We havebeenabletoholdourowninavery The ManagingBoard wishestothankallemployeesintheGroup fortheirinputand financialmarketspermit. international comparatively smallfree float(approx. 16%ofourshares) assoonconditionson outperfoming theATX index.Aswehavepreviously stated,itisourgoaltoincrease our Exchange wasverysatisfactory. Andritzshares gained7.9%overtheyear, clearly The developmentofAndritzShares duringtheirfirstfullyearontheVienna Stock Group has asolidfinancialbasisforfurthergrowth. financing structure onasustainedbasis.Together withitshighnetliquidity, theAndritz allowed ustoredeem ourexistinginterest-bearing borrowings andtooptimizeour the successfulissueof100millionEuro corporatebondinMay2002.Theproceeds Of specialimportancefortheAndritzGroup’s medium-to-long-termdevelopmentwas auctions. We havethepotentialhere toimprove ourefficiencies andcostsfurther. (eProcurement) toautomatesomepurchasing transactionsandtakeadvantageofonline proposals. Inthearea ofprocurement, wehaveimplementedweb-basedsolutions customer requests. Itwillalsohelpusstandardize andstreamline ourworkstreams and deliver ourproducts andservicesinacoordinated andpersonalizedmannertoindividual System, whichhasbeenimplementedGroup-wide, willmakeitpossibleinthefuture to replacement andwearparts.TheextensionofourCustomerRelationshipManagement Paper ServiceClub.Oneofthefeatures oftheServiceClubisonlineordering of orientation. Today, platformssuchasthePulpand weoffer customersinternet-based technology inorder tooptimizeourownbusinessprocesses andourcustomer In thecomingyears,wewillcontinuetoincrease ourinvestmentsininformation Honolulu intheUSA,andParis, France. Major orders includedsewagesludgedewateringanddryingplants inSacramentoand Technologies alsosecured the largest Order Intakesince itsformation(147.7MEUR). for theTissueMachinesDivisionalsoincreased significantly. Environment andProcess world wasordered from AndritzforUPM-KymmeneinFinland.InadditionOrder Intake chemical recovery systems.Forinstance,thelargest chemicalrecovery islandinthe Kraft MillSystemsDivision(PulpandPaperBusinessArea) wonvery importantorders for Particularly pronounced increase forthePulpandPaperBusinessArea isnotable. The of 1,299.7MEURfortheyearwas16.0%higherthanprevious year(1,120.9MEUR). global markets,Andritzsecured thelargest Order Intakeinitshistory. Total Order Intake Order Intake bytheAndritzGroup progressed quitesatisfactorily. Despiteweaknessin Order Intake andOrder Backlog projects were onlyintheirinitialstages,sotheytranslatedpartlyintoSales. many projects were nearingfinalacceptanceinthecourseof2002andsomenew the prevailing economicsituationandaffected Saleswithacertaintimelag.Inaddition, during theSecondHalfof2001andFirstQuarter2002thatcameinwake achieved in2001(1,318.7MEUR).Thereason forthisdeclinewasthelowOrder Intake Andritz Group Salesforyear2002were 1,110.1MEUR,15.8%belowtherecord level Sales The 2002BusinessYear Sources: OECD,WIFO building investmentsandretail sales,signalledonlyaverymoderateeconomicrecovery. prospects resulting from continuedweaknessoftheglobaleconomy, aswelllower The developmentinEuroland mirrored thatintheUS.Thedeteriorationexport November, bringingittoitslowestratein41years. to this,theFederalReserveBoard lowered theUSprimerateanother50basispointsin economic growth hadoncemore sloweddownslightlysincelastsummer. Inresponse Third Quarterof2002.Inits“BeigeBook,”theUSFederalReserveBoard statedthat early indicationswere notsustained.TheUSeconomycontinuedtoweakenduringthe pointed toward acontinuationofthemoderateeconomicupswinginUSA.These economic indicators(purchasing managers'index,consumerconfidence,etc.)which acceleration ofeconomicgrowth. Theseassumptionswere supportedbypublished Quarter of2002,whichcontinuedintoSecondQuarter, gavereason toexpectagradual researchers hadpredicted atthebeginningofyear. Theslightrecovery duringFirst The globaleconomydevelopedmuchlessfavorablyin2002thantheleadingeconomic General EconomicConditions Status Report 100% level in2002 reaches record Order Intake Business Area Sales by economy Weak global 0 6 1 0 3% 10% 11% 16% 60%

Pulp and Paper

Rolling Mills and Strip Processing Lines

Environment and Process Technologies

Feed Technology 11 / andritz 2002 Others Status Report 12 / andritz 2002 Status Report record 2001 compared to Earnings Decline in Andritz Group KeyFigures (IAS) MEUR). Income fortheyear, before deductingMinorityInterests, was27.6MEUR(2001:37.5 Before TaxEarnings amountedto45.7MEURin2002(2001:60.1MEUR).TheNet project-related currency risks. Assets atyear-end andthefinancialinstrumentsthatare maintainedassecurityfor Andritz corporatebond.Theresults are alsoburdened bythevaluationofFinancial expenses inconjunctionwiththehedgingofinterest risksrelated tothe100MEUR MEUR). Thisismainlyattributedtolowerinterest levels-especiallyintheUSA–and The FinancialResultfor2002declinedfrom theprevious yearto0.5MEUR(2001:5.5 45.3 MEUR(2001:54.6MEUR). 2001 to7.3%intheyearunderreview. Before Interest Earnings andTax (EBIT)totalled high (94.5MEUR).Profitability expressed asEBITDAmargin increased from 7.2%in (EBITDA) was80.9MEURfor2002,adeclineof14.4%from theprevious year’s all-time before Interest,In total,Earnings Tax, Depreciation andAmortizationofGoodwill Depreciation andAmortizationofGoodwill)increased markedly. beforeRolling MillsandStripProcessing Interest, Lines,whoseEBITDA(Earnings Tax, TheotherBusinessAreas oftheGroupEarnings. developedveryfavorably, forinstance (Environment andProcess Technologies) were additionallyresponsible forthedeclinein American servicebusiness(PulpandPaper)costoverrunsoncertainprojects and Environment andProcess Technologies BusinessAreas. TheweaknessintheNorth year, inthePulpandPaper essentiallyduetodecreased SalesandcurtailedEarnings wereAndritz Group lowerthantherecord Earnings levelachievedduringtheprevious Earnings an increase of22.0%,givingAndritzasolidbacklogorders for2003. MEUR atyear'send.Compared totheprevious year(31.12.2001:740.4MEUR)thisis The Order BacklogoftheAndritzGroup alsodevelopedveryfavorably, reaching 903.6 BT 58.7 45.7 5.3% 80.9 1,110.1 7.3% 45.3 (including minorities) Net IncomefortheYear before Tax Earnings before InterestEarnings and Tax (EBIT) EBITA Margin EBITA EBITDA Margin EBITDA Sales MEUR 2002 27.6 ,1. -15.8% 1,318.7 01%change 2001 .%– – 5.2% 7.2% 01-24.0% -17.0% 60.1 54.6 -13.7% 68.0 -14.4% 94.5 75-26.4% 37.5 dispergers, Papillon operation. launched. Theworld'slargest cross-cutter formarketpulpwassuccessfullyplaced in products andtechnologies,mostnotablySelectaFlot chemicals andwater, etc.).Anumberofnewservice products were developed.New aimed atreducing wasteintheproduction process (energy conservation,re-use of processes forfiberqualityimprovement. Considerabledevelopment work wasalso The DivisionsofthePulpandPaperBusinessArea continuedthe development of reporting period. expenditure fornewprocesses andproducts amountedtoover3%ofSalesduringthe 2002. Includingtheexpenditure forcontract-related development,thetotalR&D The AndritzGroup investedatotalof30.1MEURforResearch andDevelopmentin addition, pilotplantsare operatedincooperationwithcustomers. technological leadistobesecured forallproduct rangesonalong-termbasis.In and Francetofindnewprocesses andproducts withwhichtheAndritzGroup’s than 160peopleworkinthecompany’s research centersintheUSA,Austria,Finland, Research andDevelopmentisanimportantstrategicactivityintheAndritzGroup. More Research andDevelopment previous year),theAndritzGroup hasasolidandbalancedfinancialstructure. With anequityratioof24.5%asDecember31,2002(compared to24.5%forthe reserve according toIAS39(valuationoffinancinginstrumentsatthecurrent value). to conversioneffects. Thisexchangerateeffect waspartlycompensatedbythehedging caused theequitycapitalofAndritzholdingsinarea oftheUSDollartodecrease due reason istheincrease intheexchange rateoftheEuro againsttheUSDollar, which therefore decreased 7.4MEURcompared toDecember31,2001(230.3MEUR).The The AndritzGroup’s equitycapitalasofDecember31,2002was222.9MEURandhas liquidity was102.6MEURasof31.12.2002(31.12.2001:77.3MEUR). MEUR asofDecember31,2002(31.12.2001:117.8MEUR).TheAndritzGroup’s net MEUR). Theremaining proceeds were assignedtocashassets,whichrose to188.1 were usedtoredeem interest-bearing short-termfinancialobligations(2001:47.5 100.6 MEUR(31.12.2001:1.0MEUR).Approximately halftheproceeds ofthebond The 100MEURcorporatebondissuedinMay2002increased long-termLiabilitiesto balance sheetasofDecember31,2001: The balancesheetasofDecember31,2002showsthefollowingchangesover Net Worth PositionandCapitalStructure TM refiners, andLemaxX ® -Spiral refiner plates,were successfully TM flotation technology, CompaDis TM MEUR increases to102.6 Net liquidity 13 / andritz 2002 Status Report 14 / andritz 2002 Status Report expected, whichwillincrease overtheyear. month ofFebruary. From today’s pointofview, generallygoodproject activitycanbe Annual Report,anumberofpulpproducers hadannouncedpriceincreases forthe markets, butalsothrough risingdemandintheUS.Bytime ofpublicationthis increases mightmaterialize.Theessentialimpetusforthiswill likely comefrom Asian pulpmarketmightimproveThird andprice Quarterof2003thattheinternational According toforecasts, itwillnotbeuntiltheSecondQuarterorbeginning ofthe relevant fortheAndritzGroup (i.e.pulp,paper, andsteel)in2003. Pöyry, HeinzH.Pariser)expectamoderaterecovery fortheprincipalmarketsthatare Based onthesemacro-economic assessments,leadingresearch institutes(RISI,Jaakko economy’s recovery. financial marketswouldbecapableoffurtherdelayingorevenshatteringtheglobal 2004. ThepossibilityofwaragainstIraqandafurtherdownward trend ininternational tolong-termgrowth2003. Theglobaleconomyisnotexpectedtoreturn untilatleast leave theeconomictrough onlytemporarilyanditsGDPislikelytogrow byjust0.8%in States, whoseGDPispredicted toriseby2.2%.According totheforecasts, Japanwill expected togrow byamere 1.4%.Researchers are more optimisticabouttheUnited weakness oftheGermaneconomy, Euroland’s gross domesticproduct (GDP)in2003is their forecasts ofeconomicgrowth fortheyear2003.Dueparticularlytocontinued In thecourseof2002,leadingeconomicresearch institutes(OECD,WIFO)havereduced Outlook control concepts) were successfullybrought tomarket. products (newgenerationofpelletpresses, hammermills,extruderlines,andoptimized product developmentswhichhadbeeninitiatedoverthepastthree years.Manynew Feed Technology’s research activitiesconcentratedonthesuccessfulconclusionof hot water, low-pressure steam,oroff-gas. developed beltdryercanoperatewithlowtemperature wasteenergy sources, suchas dryers) anddownwards (startingat500kg/hforbeltdryingequipment).Thenewly equipment wasextendedbothupwards (upto20t/hevaporationrateforfluidizedbed In Environment andProcess Technologies, theperformancerangeofstandard drying separation unitforhigh-siliconwasteacidwasalsosuccessfullylaunched. using theadvancedPyromars process wasstartedup.Thenewlydevelopedsilicon being conductedinorder toachievebetterplantintegration.Thefirstregeneration system were madeonlevellinglinesandcoatinglines.Computersimulationofprocess runsis In theRollingMillsandStripProcessing LinesBusinessArea, furtherprocess optimizations and, therefore, improve theAndritzGroup’s competitiveposition. synergies inGroup-wide business processes. Thisshouldfurtherreduce fixedcosts uniform presence oftheGroup inglobalmarkets,andisexpectedtogenerateadditional newly acquired companiesintotheBusinessArea organizations shouldbringamore 2002 andsuccessfullyimplemented.Increased consolidationandintegrationofthe In 2003,theAndritzGroup willcontinueitsGroup-wide integrationthatwasbegunin adversely affected. 2003 shouldlagfurther, thentheAndritzGroup’s developmentwilllikelybe Earnings If, however, theglobaleconomicupswingthatforecasters predict fortheSecondHalfof (stainless) steelproduction plants. plants, majorprojects shouldbeawarded forpulpandpapermakingequipment and Europe, where Andritzenjoysagoodmarketpositionandhasnumberofreference project activityforallfourstrategicBusinessAreas. EspeciallyinSouthAmerica,Asia, visibilityfor2003.Asmattersare today,Earnings theAndritzGroup expectsgood which, togetherwiththeshort-termservicebusiness,results inagoodSalesand backed bytheGroup’s highOrder BacklogasofDecember31,2002(903.6MEUR), increases overtheprevious yearforSalesandNetIncome.Thisexpectationismainly The AndritzGroup expectsitsbusinesstodevelopfavorablyin2003,withslight China. coming yearthanthegeneralsteelmarket.Higherproject activityisexpectedparticularlyin market are slightlymore optimistic,anditisexpectedtoseehighergrowth ratesduringthe is nottobeexpectedbefore theSecondHalfof2003.Expectationsforstainlesssteel influence onthedevelopmentduringFirstHalfof2003.Asustainedupward development and themoderatetotaldemandthatisduetoeconomicsituationwillhaveamarked The globalsteelmarketisexpectedtodevelopsimilarly. Somelarge inventoriesofend-users 2003 and NetIncomein increase inSales Andritz expects 15 / andritz 2002 Status Report The Business Areas of the Andritz Group at a Glance

Pulp and Paper Rolling Mills and Strip Processing Lines

Profile Profile The Pulp and Paper Business Area is a global leader in The Rolling Mills and Strip Processing Lines Business the supply of complete lines, systems, processes, and Area designs and constructs complete lines for the services for production of all types of pulp, kraft mill production of cold-rolled carbon steel, stainless steel, chemical recovery, fiber preparation in papermaking, and non-ferrous metal strip. The Andritz Group is the tissue production, and engineered, customized, and only supplier to provide all processes involved in the technologically advanced wear and spare parts. manufacture of stainless steel (rolling, annealing, and Extensive services complete the large product portfolio. pickling) on a comprehensive basis and can supply all the production systems through a single source. For Products steel strip coating, Andritz offers the two common Production lines, systems and processes processes for steel strip galvanization: electrolytic and for all production steps in the woodyard hot-dip galvanizing. for production of chemical pulp, including chemical recovery Products for production of mechanical pulp in the paper Equipment for the steel, stainless steel, non-ferrous and board industry metal, and aluminium industry: for production of mechanical fibers for MDF Cold rolling mills fiberboards Strip processing lines for processing recycled paper, preparing stock for Surface treatment systems all paper/board/tissue making processes, and for Finishing systems paper machine approach flow systems Regeneration plants for pulp drying, cutting, and baling Continuous heat treatment systems for production of tissue paper: CrescentFormer machines, through-air drying machines and tissue machines with the TissueFlexTM*) shoe press for sludge dewatering and in-mill recycling of water as well as services: original replacement parts, engineered, customized and technologically advanced wear parts, equipment rebuilds, and modernizations pumps for the pulp and paper industry dynamic simulation of all mill processes

*) Trade mark of Voith Paper, cooperation partner of Andritz 2002 andritz / 16 Plants, systems,machinesandprocesses for Products in-house. and fluidizedbeddryers)are developedandproduced thickeners, beltfilterpresses, centrifuges,belt,drum Critical machinesandcomponents(drumbelt systems, includingautomationandsafetyengineering. manufacture, erection, andstart-upofcomplete plants. TheBusinessArea handlestheplanning, sludge from municipalandindustrialsewagesludge technologies formechanicalandthermaltreatment of Its product rangecoverstheentire spectrumof Area focusesonsewagesludgedewateringanddrying. The Environment andProcess Technologies Business Profile Process Technologies Environment and Industrial solid/liquidseparation Thermal sludgeutilization Sludge drying Sludge dewatering Sludge thickening Mechanical wastewatertreatment Process watertreatment Products biofuel pellets. supplies plantsandsystemsforindustrialproduction of vacuum coating,anddrying.TheBusinessArea also and mixing,expanding,pressing, extruding,cooling, feed milllinesaswellunitequipmentforgrinding production ofanimalfeed.Thiscomprisescomplete systems, machines,andprocesses fortheindustrial global marketleadersindevelopingandmanufacturing The FeedTechnology BusinessArea isoneofthe Profile Feed Technology Products components. and paperindustry, aswellspace technology nuclear powerstations,centrifugalpumpsforthepulp cations, pumpsfortheprimaryandsecondaryloopin water turbines,large-scale pumpsforselectedappli- such astheplanning,development,andmanufacture of Other OperationsencompassAndritzGroup activities Profile Hydraulic Machines Other Operations/ Spare andwearparts Pellet coatingsystems Dryers andcoolingequipment Extruders Pellet mills Conditioners andexpanders Size reduction systems Space technologycomponents Reactor pumps Centrifugal pumps Large-scale pumps Water turbines 17 / andritz 2002 The Business Areas of the Andritz Group at a Glance New fiberline constructed for Aracruz Celulose, Brazil. Andritz supplied a complete woodyard, fiberline (washing, screening, bleaching), chemical recovery systems, the world’s largest sheet drying system and baling lines. andritz 2002 / 18 Pulp and Paper

Pulp Mill Technologies Wood Processing Division 24 Kraft Mill Systems Division 26 Pulp Mill Services Division 30

Paper Mill Technologies Mechanical Pulping Systems Division 33 Fiber Preparation Systems Division 38 Tissue Machines Division 41 Paper Mill Services Division 45 2002 andritz / 19 20 / andritz 2002 Pulp and Paper Technologies) (Paper Mill Rebernik Bernhard Technologies) (Pulp Mill Markku Hänninen Managers: Business Area considerably withexcellentreference deliveries. sales locations.InAsiaandLatinAmerica,Andritzhas improved its strong foothold In eachmajormarket,thePulpandPaperBusinessArea hasanumberofserviceand Fiber Preparation Systems,TissueMachinesandPaperMillServicesDivisions. Divisions, and"PaperMillTechnologies” comprisestheMechanicalPulpingSystems, subdivided intotheWood Processing, KraftMillSystems,andPulpServices organization whichcameintoeffect onJanuary1,2002."PulpMillTechnologies” is The marketandcustomer-oriented strategyoftheBusinessArea isreflected inits former Andritz-Ahlstrom forstockpreparation andrecycled fiberpreparation. has operatedworldwidesinceJuly1,2002,combiningtheactivitiesofAndritzand stock preparation, theglobalFiberPreparation SystemsDivisionwasestablished.It Following theexpirationofcooperationagreement withVoith Paperinthearea of dryer andthecutting/balingequipmentdownstream ofthedryer. acquisition, Andritzsuppliedthepulpdewateringequipmentupstream ofthepulp know-how insheetandflashdryingdryerhoodsfortissue.Priortothe 2002, theBusinessArea hasaddedprocess andsystemcompetencetoitsexisting With theacquisitionofABB’s DryingBusiness(nowAndritzFiberDrying)inOctober the woodroom topulpfiberlinesthefinishedbale. enables thePulpandPaperBusinessArea tosupplycompleteprocessing linesfrom The successfulacquisitionofcomplementaryproduct areas overthepastfewyears baskets, aswellafullarrayoftechnicalservices. technologically advancedwearpartssuchasrefiner plates,chipperknives,screen The BusinessArea's products are supplementedbycustomized,engineered, and making paper, board, andtissue,sheetdrying/balingsystemsformarketpulp. Business Area alsosuppliesstockpreparation andmachineapproach systemsfor pulp, mechanicalandrecycled fibers)includingchemicalrecovery systems.The systems, equipment,andservicesfortheproduction ofalltypesfiber(chemical The PulpandPaperBusinessArea isoneofthegloballeadersinsupply Profile expressed asEBITDAmargin wasincreased to8.0%(2001:7.9%). decreased 23.4%from theprevious year, to53.5 MEUR(2001:69.8MEUR).Profitability America –whichwasespeciallypronounced duringtheFirstHalf oftheyear-EBITDA Due tothedecliningSalesandweakdevelopmentof servicesbusinessinNorth Services recorded declinesinSales. achieved in2001(364.3MEUR),thismarksa20.6%decline. AllDivisionsofPaperMill Paper MillTechnologies Sales amountedto289.4MEUR;compared totheamount only slightlybelowthoseoftheprevious year. service business,represented bythePulpMillServicesDivision,hadSalesthatwere a lowOrder Intakein2001andconsequentSalesdeclines.Ontheotherhand, MEUR). TheWood Processing andKraftMillSystemsDivisionssuffered aboveallfrom Pulp MillTechnologies hadadeclineinSalesof26.2%to382.8MEUR(2001:518.7 service businessduringthefirstsixmonthsof2002,especiallyinNorthAmerica. low Order Intakeoftheprevious year’s SecondHalf,andtheweakdevelopmentof 23.9% compared totheprevious year(2001:883.0MEUR).Themainreason wasthe The SalesofthePulpandPaperBusinessArea were 672.2MEURin2002,adeclineof Business Developmentin2002 American marketremained ataverylowlevel. existing production lines.InChina,project activitywasparticularlybrisk,buttheNorth Half, project activitywassatisfactory. Mostprojects were forupgradingandmodernizing Despite thedifficult situationonthepulpandpapermarket,especiallyduringSecond had increased toover1.6milliontons. an on-goingdeclineinpulppricing.BytheendofDecember2002,Norscaninventories pulp salesandledtoahigheroutputofdespitetheweakdemand.Theresult was Many papermillswere notproducing tocapacitydueweakdemand.Thisaffected price forNSBK. especially favorably, increasing toasmuchUSDollar520pertonandexceedingthe the NBSKpricetoaboutUSDollar470perton.Theofeucalyptuspulpdeveloped consider asthelimitforabalancedmarket.Slightpriceincreases inMayandJunetook reached 1.3milliontons,lowerthanthelandmarkof1.5tonsthatmarketobservers markedly inthecourseofSecondQuarter. Toward theendofJune,inventories pulp producers andaslightlyrisingdemandcausedNorscaninventoriestogodown approx. USDollar430perton.Production curtailmentsonthepartoflarge global moderate onaccountoftheadverseeconomicdevelopment,andpricedecreased to First Quarter, BleachedSoftwoodKraftpulp)wasquite thedemandforNBSK(Northern pulpmarketvariedwidelyover2002.Duringthe The developmentoftheinternational Market Development factory activity satis- overall project ment in2002, market develop- Wide variationsin Decline inSales 21 / andritz 2002 Pulp and Paper 22 / andritz 2002 Pulp and Paper Intake Increase inOrder mlye 2,634 39.2 5.8% 11.5 53.5 8.0% Employees 672.2 Capital investments 843.3 EBITA margin 582.0 EBITA EBITDA margin EBITDA Order Backlog31.12. Order Intake Sales MEUR Key Figures forthePulpandPaperBusinessArea (IAS) declines. the FiberPreparation SystemsandPaperMillServicesDivisionsrecorded Order Intake Machines Divisionsincreased theirOrder Intakesconsiderablyfrom theprevious year, previous year(318.0MEUR).WhiletheMechanicalPulpingSystemsandTissue The Order IntakeforPaperMillTechnologies was339.6MEUR,or6.8%abovethe order bookingsrose 55.0%to503.7MEUR(2001:324.9MEUR). doubled theOrder Intakeversus2001,thePulpMillTechnologies businesssegment’s Based ontheexcellentdevelopmentofKraftMillSystemsDivision,whichalmost It isfurthermore reflected intheoverviewofOrder Intakebybusinesssegments. due tolarge orders bookedforchemicalrecovery systems. This exceededtheprevious yearby31.2%(2001:642.8MEUR).Theupswingismainly Order Intakedevelopedsatisfactorily, reaching 843.3MEURduringtheyearinreview. 2002 ,2 ,5 1,426 2,656 2,626 195.3 298.2 328.5 666.5 886.6 718.6 431.5 642.8 883.0 .%4.3%5.5% 6.2%7.6% 6.1% 7.9% 0120 1999 2000 2001 081. 8.6 18.2 15.0 25.0 30.8 10.8 44.6 53.9 69.8 This millwillbethelargest chemical recovery plantintheworld. system foritsWisaforest pulpmillinPietarsaari.Total contractvalueisover100MEUR. technology SelectaFlot operations onJuly1,2002,theDivisionrecorded salessuccesseswithitsnewflotation Major Orders forPaperMillTechnologies: mill inValdivia, Chile. chemical recovery systems,includingtheevaporationplantforagreenfield kraftpulp Andritz withthesupplyofacompletewoodandchipprocessing plantandextensive and recausticizing plant. became effective. Andritzwillsupplytheevaporationplant,chemicalrecovery boiler, construct anewkraftmillforZellstoff StendalGmbHinSaxony-Anhalt,Germany, in Jakarta,Indonesia. improved inSoutheastAsiabyintroducing apartnershipwithlocalhigh-quality workshop New servicecenterswere establishedinChinaandChile.Local rebuild capabilities were Industries forthelargest fiberproduction lineeverinstalledinChina. systems forfiberboard production. Orders includedamajorcontractfrom Dare Wood securing orders forthedeliveryofTMPsystemspapermaking andpressurized refiner machine. machine willbeinstalledatagreenfield tissuemillinAlabama,USA. Voith AndritzTissueLLC,the50:50jointventure betweenAndritzandVoith Paper. Thenew Shandong BohuiIndustrialCo.Ltd.andTralin PaperLtd. United Kingdom,PTAspexPaper, Indonesia,andwell-knownChinesepapercompanies, Papiers Stadacona,Canada,Vipap Videm Krsko,Slovenia,UPM-KymmeneShottonPaper, Major Orders forPulpMillTechnologies: The contractwithRWE Industrie-LösungenGmbH,whichhasbeencommissionedto UPM-Kymmene ofFinlandselectedAndritztosupplyacompletechemicalrecovery German tissueproducer WEPA wasthefirsttoselectanewAndritzPrimeLine™tissue SCA TissueNorthAmericaLLC,USA,ordered awet-crepe tissueprocessing linefrom The MechanicalPulpingSystemsDivisionextendeditsmarket leadershipinChinaby Just afewweeksaftertheFiberPreparation SystemsDivisioncommenceditsglobal Chilean forest products companyCelulosaAraucoyConstituciónS.A.entrusted TM and disperging unitCompaDis TM . Completesystemswere soldto in China market leadership Division extends Pulping Systems Mechanical North America for SCATissue Tissue machine 23 / andritz 2002 Pulp and Paper 24 / andritz 2002 Pulp and Paper Arauco woodroom for Complete Debarker concept: Rotary debarking New Andritz Hollola, Finland Jarmo Viiala Division Manager: condition monitoring. optimization andtosupport operating/maintenancedecisionssuchaschipperknife sampling device,theon-line chipsizeinformationcanbeutilizedforcooking Automation department.When combinedwithanexistingAndritzautomaticchip A 3Dchipmeasurement prototype wastestedincooperationwith theAndritz throughput anddebarkingdegree tomeetcustomerneedswithoutsacrificing fiber. evens outvariationsinwoodflow. Thedebarkerallowsforaccurately controlled minimizing woodlosses.Itreduces therequired loadingheight,dampensnoise,and effectively debarkinglogsofvaryingqualityandevenwhilefrozen withoutdeicing, while woodroom, by The RotaryDebarkerwasdevelopedtomeettheneedsof themodern 2002 inCanada. installation ofanewdebarkingconcept,theRotaryDebarker, wasstartedupinOctober A majorR&Dfocuswasthefurtherdevelopmentofdebarkingprocess. Thefirst Research andDevelopment project. wood modernization order from StoraEnsoBaienfurtGmbH&Co.inGermanyforawoodyard andground- a LogPorter™portalcrane. The systemwillconsistoftwocompletedebarkinglines.Eachlinewilbeequippedwith ling systemforanewOrientedStrandBoard (OSB)facilitytobebuiltinOklahoma,USA. from Celulosa AraucoyConstituciónS.A.inValdivia, Chile. Major Orders previous quarters,theOrder Intakein2002waswellabovelastyear’s level. Sales were atalowerlevelthanintheprevious year, duetoalowerOrder Intakein andCentralEurope, SouthAmericaandtheUSA.While major marketsofNorthern Processing Divisionsucceededinkeepingandevenextendingitsgoodpositionthe Despite thelowerlevelofcapitalinvestmentsinpulpandpaperindustry, theWood Business Developmentin2002 Sweden, USA,Canada,BrazilandAustria. The Wood Processing Divisionisheadquartered inHollola,Finland,andhassites mechanical pulps. to theirsubsequentpreparation intowoodchips–fortheproduction ofchemicaland equipment andprocesses forallstepsrequired inawoodyard –from thearrivaloflogs The Wood Processing Divisionisoneoftheworld’s leadingsuppliersofsystems, Profile Wood ProcessingDivision Pulp MillTechnologies The DivisionwasselectedbyJ.M.HuberCorporation,USA,tosupplyawoodhand- The Divisionbookedanorder foracompletewoodandchipprocessing installation The Division’s groundwood processing expertisewasimpressively confirmedbyan delivered toAracruzCelulose Woodyard andchiphandling S.A., Brazil.Thecapacityof the twochippinglinesis plant foreucalyptuswood, largest inSouthAmerica. 25 / andritz 2002 Pulp and Paper 26 / andritz 2002 Pulp and Paper almost doubled Order Intake Aracruz up offiberlinefor Successful start- Helsinki, Finland Markku Hänninen Division Manager: featuring thefirstTurboFeed for Weyerhaeuser inOregon are ofparticularimportance-theWeyerhaeuser installation in China.IntheUSA,fiberlineequipmentforMeadWestvaco andacompletefiberline Värö MillinSweden,andnewfiberline/recovery systemsforRizhao'sgreenfield kraftmill Other start-upsofnoteduringtheyearincludeSödraCell'snewrecovery boileratthe bleached eucalyptuspulpproduction. Celulose's Jacarei Milloccurred in2002.Thisproject isasignificantexpansionof Also inBrazil,thestart-upofevaporationandwhiteliquorplantsforVotorantim key itemsforthewhiteliquorplantandlimekiln. washers forwashingandbleachingoftheeucalyptuspulp.TheDivisionalsosupplied highest single-linekraftpulpcapacityandutilizesAndritzDrumDisplacer™(DD) the newFiberlineCforAracruzCeluloseS.A.,Brazil.Thisfiberlinehasworld’s Some verysignificantprojects were completedsuccessfullyin2002.Amongthemwas nearly doubledfrom theprevious year. in 2002duetolowerOrder Intakein2001.Ontheotherhand,Order Intakein2002 Compared totheprevious year, KraftMillSystemsDivisionSaleswere significantlylower Business Developmentin2002 York, USA. The Divisionmaintainsresearch laboratoriesinKotka,Finland;andGlensFalls,New in Alpharetta, Georgia,USA;Tokyo, Japan;Stockholm,Sweden;andCuritiba,Brazil. The KraftMillSystemsDivisionisbasedinKotka,Finland,withsignificantoperations lime kilns,andeffluent evaporators. bleaching systems,recovery boilers,evaporationplants,recausticizing equipment, The products oftheDivisionincludecontinuouscookingsystems,washers,screens, recovery ofchemicalsusedinthepulpingprocess. systems, equipment,andprocesses fortheproduction ofchemicalpulp,andinthe The KraftMillSystemsDivisionisoneoftheworld’s marketleadersinthesupplyof Profile Kraft MillSystemsDivision Pulp MillTechnologies for ChuetsuNomachiandNipponPaperYufutsu millsinJapan. Lo-Solids® Cookingconversionswere alsocarriedoutonexisting continuousdigesters Paper inIwakuni,Japan.Theunitisdesignedtocookboth softwoodandhardwood. The year2002alsosawthestart-upofanewLo-Solids®continuous digesterforNippon operating costsare reduced. mechanical equipmentusedinconventionalfeedingsystems. Asaresult, capitaland TM chip feedingsystem.TurboFeed eliminatessomeof the to AracruzCelulose,Brazil, aspart of Andritz’EPCdelivery ofa2,205 Bleaching towerssupplied adt/d fiberline. 27 / andritz 2002 Pulp and Paper 28 / andritz 2002 Pulp and Paper emissions nitrous oxide dioxide and minimal sulphur Air™ Systemfor Andritz Vertical worldwide recovery island largest chemical Andritz tosupply - toincrease overallenergy efficiency through betterutilizationofliquidandsolid fuels: - toimprove product qualityandstrength ofpulpthrough minimalfiberdamageand tolowerinvestmentcostspertonofproduction through process simplification, - are the following: The maindriversforthecurrent technologydevelopmentprograms inchemicalpulping Research and Development Andritz, whichsignificantlyreduces sulphurdioxideandnitrous oxideemissions. day andutilizescombustiontechnologybasedontheVertical Air™system,developedby Portugal. TheboilerintheSetubalmillhasacapacityof2,400tonnesdrysolidsper to useofthemostup-to-datetechnologiesdevelopedbyAndritzGroup. 2002. Thesystemsensure thatthetightestenvironmental regulations canbemet,thanks recausticizing, and lime kiln)forZellstoff StendalGmbHinGermanybecameeffective in kiln, andacompleterecausticizing system. supply includesablackliquorandsulphiteevaporationplant,thelimereburning which willbebuiltbyCelulosaAraucoyConstituciónS.A.inValdivia/Chile. Thescopeof resources. produce approx. 600MWofsteamand140electricityfrom renewable natural energy efficiency. Whenthechemicalrecovery plantofthemilliscompleted,itwill kiln.Thechemicalrecoverylime reburning systemutilizesthelatesttechnologiesfor Andritz’ scopewillcomprise:evaporationplant,recovery boiler, recausticizing plantand Wisaforest pulpmillinPietarsaari,Finland,thelargest intheworldtermsofcapacity. Major Orders Cooking reduces consumptionofcookingchemicals. strength ofthepulpandimpairbleachingresponse. Atthesametime,Lo-Solids® effects oforganic substancesdissolvedincookingliquor, whichtypicallyaffect the possible toreach optimumpulpproperties forbleaching.Iteliminatesthenegative Lo-Solids® CookingemployedinanAndritzcontinuouscookingsystemmakesit the specificenergy consumptionofequipment. producing more electricityandhigh-valueprocess steam,simultaneouslydecreasing optimized solutionsforend-userapplications. chemicals andwood. optimization, standardization ormodularization,andbyreducing consumption of The contractforsupplyofanewchemicalrecovery island(evaporation,recovery boiler, Andritz wasselectedtosupplyanewchemicalrecovery islandtoUPM-Kymmene's Andritz waschosentosupplychemicalrecovery systemsforagreenfield pulpmill, Andritz wasalsoselectedtodeliveranewchemicalrecovery boilertoSoporcel, to utilizesolidbio-fuels(bark,woodresidues, etc.)inthechemicalpulpmill. Besides more efficient blackliquorprocessing, theDivisionisalsostudyingbetterways recrystallization (ARC)is under deliveryandwillbestartedupin2003. steam temperatures andpressures. Thefirstchlorideremoval systembasedonash processes,improved andadvancedmaterialstoaccommodatethehigher furnace Other essentialelementsare thefurtherdevelopmentofVertical Air™system, technologies forevenbetterenergy production are currently being developed. Finland. Itwillworkatelevatedtemperature andhighersteampressure levels.Other of electricity. ThefirstHERBboilerdesignisunderdeliverytoWisapower, Pietarsaari, Recovery Boiler(HERB).Theultimategoalisaconsiderableincrease ofthegeneration In therecovery block,themaindevelopmentshavebeenaround theHighEfficiency and incooperationwithresearch institutionsandothersuppliers. stages. Manyoftheseprograms are conductedinclosecooperationwithcustomers includes thedevelopmentofsulphur-free pulpingandnewbleachingchemicals installed baseaswellingreenfield applications.Longer-term process research purposesofthe Many ofthesolutionsdevelopedcanbeusedformodernization equipment toperformmultipletasks. of bleachingsequencesbycombiningseveralstagesintoonereactor anddesigning Lo-Solids® Cooking).Intheremaining fiberline,efforts are focusingontheshortening digester feedsystems(TurboFeed™) andsimplifiedcookingconfigurations(DownFlow In thefiberlinearea, themaindevelopmentshavebeenfurtherstreamlining of - tointegrateprocess controls andoptimizationtoolsintotheproduction machineryand - toimprove environmental performance:loweremissionsandreduction ofeffluents. processes. 29 / andritz 2002 Pulp and Paper 30 / andritz 2002 Pulp and Paper Asia ship inSoutheast in Chile,partner- New serviceoffice Savonlinna, Finland Risto Hämäläinen Division Manager: satellite coolerreplacement foralimekiln for Cenibra,bothinBrazil. recovery boiler, improving operationalefficiency oftheboilerandreducing emissions. patented Vertical Air™systemcreates optimumtemperature andvelocityprofiles inthe technology: CarterHoltHarveyLtd,SiamPulp&Paper, andUPM-Kymmene.The Major Orders high-quality workshopinJakarta. capabilities were improved inSoutheastAsiawiththeintroduction ofapartnershipwith In November, theDivisionestablishedanewserviceoffice inChile.Localrebuild Europe andintheUSA. last Quarteroftheyearthatservicebusinessshowedsignsimprovement inNorthern programs enactedbyallmajorpulpandpaperproducers intheregion. Itwasn’t untilthe closure ofmanyoldermillsintheUSAandCanada,aswellextreme cost-cutting Nordic countries, itfellsignificantlyinNorthAmerica.Thiswasduetoconsolidation/ Central Europe, SouthAmericaandtheAsia-Pacificregion, andkeptnearlystablein especially where Whilethelatterwassignificantlyincreased Order in Intakeisconcerned. year were approximately thesameasin2001, butshoweddifferent regional developments development ofpulpandpapermarketsin2002.SalesOrder Intakeinthereporting The businessprogress oftheServicesDivisionwasmainlyinfluencedbyweak Business Developmentin2002 partner workshopsinNewZealand,Indonesia,SouthAfrica,Brazil,andPortugal. in FinlandandtheUSA.Additionally, theDivisionoffers rebuild servicesthrough responsive services tolocalcustomers.Production facilitiesforrebuilds are located is managedthrough salesandservicelocationsworldwide,providing fastand Headquarters forthePulpMillServicesDivisionisSavonlinna,Finland.The of entire production processes. (Overall Production Efficiency) program forcontinuousimprovement andoptimization Apart from traditionalservices,theDivisionalsoservescustomerswithitsOPE and woodyards suppliedbyAndritzorotherequipmentsuppliers. equipment rebuilds, technicalservices,andequipmentupgradesforkraftpulpmills Primary emphasisisonservicessuchasengineered wearparts,replacement parts, sales beingobtainedfrom NorthAmericaandEurope. for Wood Processing andKraftMillSystemsallovertheworld,withcore ofthe The PulpMillServicesDivisionsupportsthelargeinstalledbaseofAndritzequipment Profile Pulp MillServicesDivision Pulp MillTechnologies Several chemicalrecovery boilerswere upgradedwiththenewAndritz Vertical Air™ South Americanorders included rebuilding adebarkingdrumforAracruzand TM clients atanyplace,time. consultation –are availableto people, proper toolsandspecialist that therightresources –skilled Andritz PulpMillServicesensure 31 / andritz 2002 Pulp and Paper 32 / andritz 2002 Pulp and Paper installed successfully Diagnostics OPE™ Online information foroperationspersonnelpreventive maintenance. OPE™ OnlineDiagnosticsimproves equipmentreliability byproducing valuable connection withaJetScreen™ testrunfortheMetsä-Botnia,JoutsenoMillinFinland. The OPE™OnlineDiagnosticssystemwasfurtherdevelopedandsuccessfullyusedin the reliability andtoaddmore valueforcustomers. upgrades, andfurtherimprovements totheHQ method ofrebuilding debarkingdrums,animproved belt-pulleydesignforbeltconveyor Some newserviceproducts were developedtominimizedowntimeinamill:faster can trackinformationrelated tothebusinessbetweenAndritzanduser’s company. Division asaninformationplatformforcustomers.Registered usersoftheServiceClub The web-basedServiceClubwaslaunchedtogetherwiththePaperMillServices interface inorder torespond tocustomers'needsmore efficiently. In 2002,theDivisionconcentrateditsdevelopmentefforts onimproving thecustomer Research andDevelopment were signed. term contractforrecausticizing servicewithMetsä-Botnia’s JoutsenoMillinFinland Riceboro Millwere booked. cooking process wasordered byGeorgia-Pacific, CamasMill,USA. Mexico ordered adigestershellreplacement. Theconversionofadigesterforthekraft Mill. Metsä-Botnia’s RaumaMill,UPM-Kymmene’s KuusanniemiMillandDomtar’s Ashdown Drum upgradesandrebuilds Paper’s were performedforInternational SvetogorskMill, An OPE Orders forlimekilnrebuilds atGeorgia-Pacific’s BrunswickMillandInterstatePaper’s Digester upgradeswere ordered inNorthAmericaandFinland.CrisobeIndustrial TM contract fordigesterservicewithP.T. Tel’s MusiMillinIndonesiaandalong- + Knife systemforchipperstoimprove pulp contentintheirnewsprint aswelltominimizeenergy consumption. based onAndritzRTS-TMP technology. Thiswillenablethemilltoreduce thechemical towers foritsAlmaMillinCanada. four 4.2mtwin-wire presses, ahighconsistencymixerandhigh-consistency bleaching the highestthroughput ofmechanicalpulpforimproved publicationgradesinthe world. capacity ofexistingRTS refining lines.Withtheexpansion,PortHawkesbury willhave Mechanical Pulping Major Orders increased compared tolastyear. Order Intake, however, developedfavorably. Despitethedifficult marketconditions,it sheet dryingsystemwasawarded. to thelowerOrder Intakebookedduringtheprevious year, duringwhichnotasinglelarge The Division’s businessdevelopedsatisfactorily. Salesin2002were slightlyreduced due Business Developmentin2002 work isperformedinGrazondifferent pulps. certified process research facility. Inaddition,dewateringandsheetdryingpilotplant laboratory inSpringfield,Ohio,USAisacompletelyequippedandindependently Växjö, Sweden;Kotka,Finland;andMontreal, Canada.TheDivision’s research Alpharetta, Georgia,USA.TheacquisitionofABB’s dryingbusinessaddslocationsin well asitsaffiliates inMontreal, Quebec,Canada;Muncy, Pennsylvania,USA;and The Divisionoperatesmainlythrough andGraz,Austria,as itsheadquartersinVienna with capacitiesofupto3,000t/d. Complete dewateringandbalingsystemsare offered forproduction ofmarketpulp, comprehensive equipmentsupplierformechanicalpulping. dewatering, washing,drying,andhigh-consistencybleachingmakestheDivisiona Preconditioning RefinerChemicalTreatment) technologies.Equipmentforpulp Temperature, Speed)andAPMP/P-RC(AlkalinePeroxide MechanicalPulping/ The pulpingtechnologyisbasedontheproven RTS/TMP (Retentiontime, Particleboard (PB)producers. makers andhigh-qualityfibersforMediumDensityFiberboard (MDF)and complete systemsforproducing high-qualitymechanicalpulpsforpaperandboard The MechanicalPulpingSystemsDivisionisoneoftheleadingglobalsuppliers Profile Mechanical PulpingSystems Paper MillTechnologies Solikamsk OAO,Russia,placed afollow-uporder forasecondTMPline,thistime Stora Enso,PortHawkesbury, Canada, placedanorder toexpandtheproduction Abitibi-Consolidated ordered ahigh-consistencyperoxide bleachplantcomprising Intake Increase inOrder Vienna, Austria Humbert Köfler Division Manager: 33 / andritz 2002 Pulp and Paper 34 / andritz 2002 Pulp and Paper equipment, chipwashing,andapressurized refining system. Industries. Thescopeisacomplete"Front-End Package,"consisting ofwoodyard to supplythelargest fiberproduction lineeverinstalledinChina,forDare Wood Panelboard cutter) foritsBromptonville mill. successfully. machine atthecompany’s KaukasMill. shoe press willbesuppliedtotheWisaforest millandtheDivisionwillrebuild apulp Sheet Drying increase. supply atwin-wire washpress foritsbrownstock washingexpansionandquality bleach plants. mill intheUSA,investednewpost-bleachwashingstagesfortheirexistingperoxide a capacityincrease ofthehigh-consistencybleachplantsuppliedbyAndritzin2000. for 180admt/dayoffinepaper. the supplyofitsfirstmechanicalpulpingsystemusingAndritzAPMP/PR-Cprocess, wet lapsystem. board makingcapacity. Theorder alsoincludedahigh-consistencybleachplantand up to350admtofLWC paperperday. Chilean board manufacturer CMPCordered anadditionalRTS-TMP linetoincrease its Kruger ofCanadaordered awetlapsystem(consistingoftwin-wire press andcross Two majororders were received from UPM-KymmeneinFinland.Apulpmachinewith UPM-Kymmene’s Voikkaa PaperMillinFinlandandStoraEnsoNorthAmerica’s Biron The Divisionalsoreceived itsfirstorder from Turkey forapressurized refining system. Shandong Chenming,afast-growing papercompanyinChina,entrustedAndritzwith A dewateringsystemforflashdryingwassuppliedtoZubialde,Spain,andstartedup UPM-Kymmene’s RaumaMillinFinlandordered additionaldewateringequipmentfor Due toitsexcellentreputation intheChineseMDFmarket,Division wasselected Yueyang PaperMill,China,ordered acompletewoodyard andAPMP/P-RCplantfor Lenzing AG,anAustriandissolvingsulphitepulpproducer, selectedtheDivisionto reduce energy consumption. each) increase production capacityand Sweden. Two primarylines(17MW papers atHolmenPaper inHallstavik, the production ofimproved newsprint refiner installationfor S3068-RTS/TMP 35 / andritz 2002 Pulp and Paper 36 / andritz 2002 Pulp and Paper records sets newworld dewatering line Aracruz pulp t/d singleline. daily production (approximately 2,500tons).Thenewtarget forR&Defforts isa3,000 The newpulpdewateringlineforAracruzCeluloseinBrazilsetworldrecords for of thissizewilllikelystartupinlate2003. new screw press sizecapableofhandlingover1000t/dinasingleline.Thefirstpress production capacityfrom proven technologies.Thishasledtothedevelopmentofa Another majordrivertoachieveproductivity improvements istheneedforincreased waterloopstoreduce theeffluentinternal load. chemicals oronusingwithlessenvironmental impactandtheclosure of processes. Here, theDivision’s R&Defforts are concentratedonreducing theuseof Many customersare seekingtoreduce theenvironmental impactoftheirbleaching material andenergy input. Europe, isunderway. Thegoalistoobtainthehighestqualityoffibersatminimizedraw for increased useofsawdust,responding totherequirements offiberboard producers in In thearea ofMDFproduction, developmentworkonnewtechnologiesandprocesses from rawmaterials. fiber properties, reduce energy andchemicalconsumption,obtainmaximumyield reducing refining energy consumption).Theseprocesses are being applied toimprove temperature andspeed),APMP/P-RC(process tooptimizefiberqualitywhile controlled longerretention timesforchipsinthepretreatment stage,elevated to reduce refining energy consumption,andtoimprove fiberqualitiesduetoprecisely processes include:RT Pretreatment (aprocess toprepare woodchips),RTS (aprocess Development ofpatentedbasicprocesses continuedjointlywithcustomers.These environmental impact. to enterbroader marketswithmechanicalpulps,minimizeoperatingcosts,and The Divisioniscontinuouslyfocusingonprocess-oriented solutionstoenablecustomers Research andDevelopment Celulose, Brazil,at8m approx. 2,500admt/d. trim andacapacity of machine atAracruz The world'slargest twin-wire pulp 37 / andritz 2002 Pulp and Paper 38 / andritz 2002 Pulp and Paper launched successfully New products Graz, Austria Christian Pedratscher Kotka, Finland Jarmo Häkkinen Division Managers: technologies, e.g.theSelectaFlot Papirja inCelulozed.d.,Slovenia.Thisorder features severalnewlydeveloped The Divisionwasawarded severalmajorreference orders shortlyafteritsmarketentry: Major Orders year. difficult marketconditions,withSalesandOrder Intakedecreased from theprevious The businessdevelopmentoftheDivisionin2002wassatisfactorylight Business Developmentin2002 significant operationsinGlensFalls,NewYork, USA. The Divisionworksmainlythrough itssitesinKotka,Finland;andGraz,Austria;with waterloophandling,andsludgerejectsystems, broke handling. handling,internal all papermakingprocesses suchasrecycled fiberprocessing, papermachineapproach Fiber Preparation Systemsisaglobalsupplierofsystems,equipment,andservicesfor of July1,2002. Andritz-Ahlstrom (nowAndritzOy)inthestockandrecycled fiberpreparation areas as of thePulpandPaperBusinessArea thatcombinestheactivitiesofAndritzandformer Fiber Preparation SystemsisanewDivisioncreated inthecourseofreorganization Profile Fiber PreparationSystemsDivision Paper MillTechnologies equipment. and HolmenPeninsular, Spain,placedan order for dewateringandthickening screening system. to beinstalledinNorthAmericaaswellforaFibreFlow® drum pulperandfine single-line DIPinstallationwithdisperging intheworldwhenitisstartedup2003. and aCompaDis™disperging system.ThenewlineatShottonPaperwillbethelargest deinking line,encompassingaFibreFlow® drumpulper, theworld’s largest screw press integrated watertreatment. disc filters,cleanerplants,HCperoxide andMCdithionitebleachingstages, FibreFlow® drumpulper, coarseandfinescreening, thickeningwithscrew presses and will contributetothequalityofcompleteline.Inaddition,Andritzsupplyits Shandong BohuiPaper, China,selectedtheDivision forthesupplyofadeinkingplant Papiers Stadacona,Canada,placedanorder forthefirstSelectaFlot™ deinkingcell The first turnkey deinkedpulp(DIP)linewassoldtoVipap VidemThe firstturnkey KrskoProizvodnja UPM-Kymmene ShottonPaper, UnitedKingdom,ordered keypackagesforitsnew TM flotation cell,andtheCompaDis TM disperger, which and thelargestscrew press forpulp UPM-Kymmene ShottonPaper(UK) dewatering everbuilt(shown),with system, twosludgescrew presses is constructingtheworld'slargest Andritz willsupplythedisperging a screw diameterof1.9manda single-line deinkingplant,witha capacity ofcloseto1,000t/d. length of10m. 39 / andritz 2002 Pulp and Paper 40 / andritz 2002 Pulp and Paper will beintroduced tothemarketshortly. efficiency, andreduce energy inputinapplicationsforpulping,screening, anddeflaking Development ofproducts andprocesses toincrease pulpquality, improve operating TurboMix agitator. the launchofSelectaFlot™flotationcell,CompaDis™disperger, Papillon™refiner and Intensive efforts inthedevelopmentofflotation,disperging, refining, andagitationledto Research andDevelopment Paper IndustryCo.Ltd.,China. the UnitedKingdomandinFinland,Vipap Videm Krsko,Slovenia,andDongyingHuatai inGermanyandSCAPrudhoe theUnitedKingdom. from WEPA Co. Ltd.ordered completeapproach flowsystemsfortheirpapermachines. flotation technology, CompaDis™disperging, discfilter, andDAFmicro-flotation. new FibreFlow® drumpulper(thesecondFibreFlow® soldtoPTAspex),SelectaFlot™ engineering, andsiteservicesforamajorrebuild ofitsDIPline.Thesupplyincludesa installed atSepoongCorporationinKunsan,SouthKorea. supply aFibreFlow® drumpulperandcoarsescreening systemforanewDIPlinetobe Significant orders forsludgedewateringscrew presses camefrom UPM-Kymmenein Hansol EME,aleadingengineeringcompanyinSouthKorea, selectedtheDivisionto The Divisionreceived orders fornewstockpreparation systemsfortissueproduction Chinese customersShandongBohuiIndustrialCo.Ltd.,andTralin Paper PT AspexPaper, Indonesia,selectedAndritztoprovide thetechnology, detailed Canada, andJanesville,Wisconsin,USA(Voith AndritzTissueLLC). The TissueMachinesDivisionisbasedinGraz,Austria,andhassitesMontreal, market. area ofhigh-efficiency hoodsfortissuemachines,particularlyintheNorthAmerican The acquisitionofABBDryingstrengthens theDivision’s competitivepositioninthe supplies technologyandrelated servicestotheNAFTA markets. Africa. Voith AndritzTissueLLC,a50:50jointventure ofAndritzandVoith Paper, responsible fortheproduction andsaleoftissuemachinesinAsia,Europe, and The partiesshare know-howandconductjointresearch anddevelopment.Andritzis Andritz andVoith Paperare partiesinacooperationagreement fortissuemachines. for tissueandotherpaper/board gradescomplementtheproduct portfolio. TissueFlex CrescentFormers, Through-Air Dryingmachinesandwiththepatented The TissueMachinesDivisionprovides alltypesoftissuemachines,including Profile Tissue MachinesDivision Paper MillTechnologies 2,000 m/min(TM1withtoilet paper). both machinesranatrecord speedsof2,020 m/min(TM2producing facialtissue)and by anAndritzServiceTeam. AfterinstallationofPrimePickup™ intheCrescentFormers, Suzhou millinChina1998achievednewspeedrecords asaresult oftheoptimization Two CrescentFormer tissuemachines installedbyAndritzatAPP/GoldHongYe's answers thetrend toward hightissueproduct quality. performance requirements. Itisspeciallydevelopedformakingextra-soft paperand producing custom-tailored tissuegradesandresponds tothemoststringentquality and machine concepttoitscustomers.PrimeLine During theFirstHalfof2002,Divisionintroduced thenewAndritzPrimeLine™ tissue complement totheexistingactivitiesofDivision. in NorthAmericaenjoyanexcellentmarketposition,andtherefore thisarea isagood product rangewithregard tolarge tissueandpaperdryers.Itsdryersforpulp andrecirculationThe ABBcompacthoodwithintegratedburner fanextendstheAndritz C. high-efficiency Yankee dryerhoodsforimpingementtemperatures from 300-700° Acquisition ofABB’s Dryingbusinessstrengthens theDivision’s positioninthefieldof from theprevious year. Intake in2001, buttheDivisionsucceededinboostingOrder Intakeconsiderably The Divisionperformedwellduring2002.Salesdecreased asaresult ofthelowerOrder Business Developmentin2002 *) Trademark ofVoith Paper, cooperationpartnerofAndritz TM*) shoe press. Ventilation anddryingsystemswithhigh-efficiency hoods TM provides enormousflexibilityin Graz, Austria Rudolf Greimel Division Manager: introduced successfully concept tissue machine PrimeLine™ 41 / andritz 2002 Pulp and Paper 42 / andritz 2002 Pulp and Paper North America for SCATissue Tissue machine PrimeDry Saxony, Germany. ThePM9isequippedwithaTissueFlex™shoepress anda following thePM8installedin1996.Itwillbeerected atWEPA’s millinKriebethal, isthesecondcompletelineordered from Andritz, machine. ThenewmachineforWEPA scheduled tostart-upinearly2004. produced inGraz.ThenewmachinewillbeinstalledAlabama,USA.lineis Voith AndritzTissueLLC.Mostofthecomponentsfornewmachinewillbe Major Orders equipment foraboard machinewasalsostartedupsuccessfully. Papierfabrik RiegerGmbH,Trostberg, Germany, themachineandhallventilation Germany wasstartedupandachievedtheguaranteedvaluesfrom theveryfirstday. At A dustremoval systemforthetissuemachineatWerrapapier Wernshausen GmbH, tissue paperrightfrom thestart. maximum operatingspeedof1,800m/minafteronlyafewweeks,producing marketable second tissuemachinefrom Andritz,wassuccessfullystarted-up.Itreached its A newtissuemachineforHenganChangdePaperProducts, HunanProvince, China,the paper machinesinEurope. efficiency. willmakethemachineoneofhighest-performingMG- Thismodernization Grünewald’s maingoalistoachievenoticeable improvements inproduction andenergy EquiDry Fhood,whichwillreplace thesteam-heatedhoodsuppliedby Andritzin1976. facturer ofmachine-glazedbakingandpackingpapers,ordered ahigh-temperature complete AndritzCrescentFormer tissuemachinesuppliedtoGomà-Camps in1998. Andritz control systemforthecompletetissueline.Thisorder isafollow-up toa F hoodwithrecirculation systemandaPrimeControl™ system-thenewly-developed willincrease machinespeedandconsistsofanEquiDry Riba, Spain.Themodernization improve product quality, andreduce gasconsumption. ofitsPM5attheTorresmajor modernization NovasMilltoincrease production capacity, broke treatment. system forthenewtwo-linepulppreparation, withapproach system,fiberrecovery, and primary andsecondaryarm.Andritzwillalsosupplytheproven stockpreparation Andritz 700°CEquiDryShigh-efficiency hoodandthenewPrimeReel™withlinear SCA TissueNorthAmericaLLC,USA,ordered awet-crepe tissueproduction linefrom Another tissue machine modernization order wasplacedbyGomà-CampsS.A.,ofLa Another tissuemachinemodernization emntsu ae rdcrWP selectedthenewAndritzPrimeLine™tissue German tissuepaperproducer WEPA Renova S.A.,thelargest tissuemanufacturer andconverterinPortugal,ordered a German companyGebr. GrünewaldPapierbased inKirchhundem-Hofolpe, manu- TM T-rib Yankee dryerforthehighestproduction flexibility. Italsofeatures an Tissue machinedelivered toHengan In 1998,Henganpurchased itsfirst Changde PaperProducts inChina. tissue linefrom Andritz. 43 / andritz 2002 Pulp and Paper 44 / andritz 2002 Pulp and Paper technology Air Drying Andritz Through- Advancement of Yankee dryerconditionanalyses. CrescentFormers toimprove themachinerunnabilityespeciallyathighspeeds,and new servicebusinessproducts, suchasthePrimePickup™suctionboxfor In addition,theTissueMachinesDivisionhasbeenintensivelyworkingondeveloping especially bulkytissuepapersuniformlyandcarefully hasbeenfinalized. components. ThedevelopmentofthenewAndritzCenterwindreel forwindingup improvement ofPrimeLine™tissuemachine Other focusedR&Dactivitiesconcerned the airtechnologyknowledgeofAndritzandrecently purchased ABBDrying. completing theAndritzThrough-Air Dryingtechnology(AndritzPrimeTAD Research andDevelopmentefforts intheTissueMachinesDivisionwere aimedat Research andDevelopment TM ) combining screening system.AndritzFiberSentry headbox screening system.Three singlescreen lineswillbeconvertedintoafour-stage Kymi), StoraEnso’s millatKotka,FinlandandforAustralianUScustomers. several rebuild orders fordiscfiltersinUPM-Kymmenemills(Kajaani,Voikkaa, and complete serviceorder fortherefiners atHallstavik’s millinHolmen,Sweden,and several orders, amongwhichwasalarge APMPrebuild forMillarWestern inCanada,a Major Orders Europe. for newsprint,especiallyinNorthern Refiner platesalesshowedamoderateincrease over2001duetotheimproved market declines from theprevious yearcamefrom theNorthAmericanregion. different regions affected uniquely. Europe, Somegrowth but wasachievedinNorthern Both theSalesandOrder IntakebytheDivisionexperiencedadecrease in2002,with Business Developmentin2002 production ofscreen basketsisperformedinBrantford, Ontario,Canada. Production ofrefiner platesisperformedinMuncy, PennsylvaniaintheUSA,while Service Centerequippedtoprovide fastandresponsive servicestolocalcustomers. Division ismanagedthrough majorgeographicregions, eachwithatleastoneAndritz Headquarters forthePaperMillServicesDivisionisMuncy, Pennsylvania,USA.The upgrades provided bytheDivision. Process andmechanicalauditsoftotaloperatingplantsare thebasisoffuture efficiency, andavailabilityofmachinessystemsusedinthepaperindustry. Additionally, theDivisionisoffering innovativesolutionsforincreasing thereliability, baskets, whichare manufactured inAndritz’ownplantstoproprietary designs. customers. Thetwomajorwearpartsare refiner platesandwedgewire screen mill service(engineered wearparts,equipmentrebuilds, andupgrades)toexisting Systems andFiberPreparation SystemsDivisions.Primaryemphasisisontraditional Paper MillServicesencompassestheserviceactivitiesforMechanicalPulping Profile Paper MillServicesDivision Paper MillTechnologies installed toincrease screening performance. Cartiere diCadividad,Italy, contractfora entrustedtheDivision withamodernization The stringofinnovationsintroduced tothemarketenabledDivisionsecure TM screen basketsandspecialrotors willbe USA Muncy, Pennsylvania, Sergio Torza Division Manager: 45 / andritz 2002 Pulp and Paper 46 / andritz 2002 Pulp and Paper launched plate successfully Spiral® refiner New LemaxX- LemaxX-Spiral In 2002,Andritz-Durametalintroduced severalnewproprietary products suchasthe Research andDevelopment equipment canbeevaluatedinthismanner. processes andthecontrol systemsaccordingly. Anyimprovements totheprocess documentation onthebestmodetooperateaplantandadjustproduction customer neednotmakeanyadditionalinvestment.Theobjectiveistoattaincomplete technology tosimulateacompleteTMPsystemonthebasisofinstalledsensors.The large papercompany wasinitiated.Thisproject features useofneuralnetwork techniques forsystemoptimizationwere investigated,andajointpilotproject witha With thegoalofachievingfurtherproduction process improvements, severalnew refining zone. angle ofincidencebetweenthewoodfiberandrefining barstaysconstantacross the of refining actionisveryimportant.Theseplateshavespiralbars,whichassures thatthe ® refiner plateforlow-consistencyrefining applicationswhere uniformity basket strength withhighslotprecision, and FiberSentry™ screen basketsoffer superior in combinationwithAndritzrotors provide unmatched screening performance. 47 / andritz 2002 Pulp and Paper 48 / andritz 2002 complete chemicaltreatment section. equipment forinletandoutlet,the comprises coiltransport,mechanical Eisenhüttenstadt, Germany. Theplant silicon separation,suppliedtoEKO Push picklinglineforcarbonsteelwith Lines Strip Processing Rolling Mills and 49 / andritz 2002 50 / andritz 2002 Rolling Mills and Strip Processing Lines development Varied market Vienna, Austria Peter Gravert Manager: Business Area increases were onlyminor. in Asia,therisewasabout3%. InEurope (+0.4%)andtheNAFTA region (+1.4%)the during thecomingyears,this trend can beexpectedtocontinue.Fortheothercountries previous year. Chinanowaccounts foralmost25%ofglobalsteelconsumption,and to thedynamicgrowth inChina,where demandsoared by nearly15%compared tothe consumption increased between4%and5%in2002,to802million tonnes,mostlydue In spiteofthegenerallymoderatemarketandoveralleconomic development,steel noticeable onlyinChina,where Andritzhasanexcellentmarketposition. part ofglobalsteelproducers tomakecapitalinvestments.Increased project activity was economic recovery coolingoff allovertheworld.Thisledtoageneralreluctance onthe to predictions byeconomicresearch institutes,pricesbegantoerode onaccountofthe the SecondHalf,however, steelmarketweakenedagain,and,contrary theinternational producers were abletopushpricesduestrong demandinChinaandtheUSA.Over categories duringtheFirstHalfofyear. Especiallyinthestainlesssteelsector, came inthewakeofeconomicrecovery, priceswere seentoriseinnearlyallproduct As aresult ofimportrestrictions imposedbytheUSAandaslightriseindemandthat steel) wasquitevariedover2002. marketforflatsteelproducts (steelandstainless The developmentoftheinternational Market development Technologies Pvt.Ltd.,India;andAndritzGmbH,Germany. Netherlands; SundwigGmbH,Germany;AndritzSelasSAS,France; following companies:AndritzAG,Austria;Andritz-RuthnerInc.,USA;Thermtec, The RollingMillsandStripProcessing LinesBusinessArea operatesthrough the electrolytic galvanizing. two commonprocesses forcontinuousgalvanizingofsteelstrip:hot-dipand to theAndritzportfolio.ThisenablesCompanyoffer completesystemsforthe October 2002,hasaddedcontinuoushot-dipgalvanizingandstripannealingsystems technologysectionfrom SELASSAS,France,in The acquisitionofthefurnace overall process intoaccount. source. Thisensures minimizedinterfacesandtakestheinterdependencies ofthe a comprehensive basisandcansupplyalltheproduction systemsthrough asingle involved inthemanufacture ofstainlesssteelstrip(rolling, annealingandpickling)on The AndritzGroup istheonlysuppliertoprovide alltechnologiesandprocesses manufacturing shops. equipment isdevelopedin-houseandmanufactured atthecompany’s own processing, stripfinishing,andacidregeneration. Theknow-howandproprietary ferrous metalstrip.Theselinesconsistofequipmentforcold-rolling, surface complete linesfortheproduction ofcold-rolled carbonsteel,stainlesssteelandnon- The RollingMillsandStripProcessing LinesBusinessArea designsandbuilds Profile BT 8.5 11.1 Employees Capital investments EBITDA margin EBITA EBITDA margin EBITDA Order Backlog31.12. Order Intake Sales MEUR Business Area according toIAS Key figures fortheRollingMillsandStripProcessing Lines customers. (push picklinglinewithsiliconseparation),were alsosuccessfullyhandedovertothe mill), CSSSC,alsoinTaiwan (20-highrolling mill),andEKOEisenhüttenstadt,Germany dip galvanizing),Harada,Japan(4/S6rolling mill),FirstCopper, Taiwan (20-highrolling (hot-dip galvanizing,slittingandpushpicklingline),NLMK,Russia(equipmentforhot- The plantssuppliedtoBaosteel,China(ELOgalvanization),ThyssenKrupp,Germany and passedacceptancetests. bright annealing,slitting,cutting,andgrindingline-were successfullycommissioned Production systemsdelivered toSKSShanghaiKruppStainless,China-consistingofa MEUR, itwasjust10.5%belowtherecord valueoftheyearbefore, 196.3MEUR. The BusinessArea achievedasatisfactoryOrder Intakefor2002.Atanamountof175.7 11.1 MEUR(2001:8.7MEUR),theEBITDAmargin to6.3%(2001:5.2%). andprofitability alsodevelopedexceptionallywell.EBITDAroseEarnings by27.6%to corresponds toanincrease of6.0%over theprevious year(167.4MEUR). during theyearunderreview. Salesreached arecord level(177.4MEUR),which The RollingMillsandStripProcessing LinesBusinessArea developedveryfavorably Business Developmentin2002 steel, thedemandrose againquitedynamically. average developmentin2002.EspeciallyChina,thelargest buyermarketforstainless years, exceedingthegrowth ratesofthegeneralsteelmarket,andcontinueditsabove- The stainlesssteelmarkethadseengrowth ofbetween5%and7%overthepastfew 154.0 175.7 177.4 4.8% 6.3% 2002 642 1.6 5. 4. 180.2 141.9 140.8 141.2 130.2 169.1 159.2 196.3 167.4 0120 1999 2000 2001 .%38 4.0% 5.3% 3.7% 3.8% 5.2% 5.1% 6 2 551 522 562 . . 5.7 7.5 6.4 8.7 6.1 8.7 . . 2.9 1.9 3.4 improved profitability and Earnings record level, Sales reach market stainless steel development of Satisfactory 51 / andritz 2002 Rolling Mills and Strip Processing Lines 52 / andritz 2002 Rolling Mills and Strip Processing Lines in order toimprove systemintegration. systems, inwhichfieldcomputersimulationsofprocess runsequences are conducted Process optimizationswere carriedoutforAndritzlevellinglinesand stripcoating contour invariousrolling mills(four-high, six-high,20-high). Other R&Dprojects related tooptimizationofactuatorsusedcontrol theroll gap unit, anewdevelopment,whichisusedforhigh-siliconwastepicklingacid. operation. EKOEisenhüttenstadt,Germany, successfullystartedasiliconseparation regeneration systembased onadvancementofthePyromars process wasplacedin Research andDevelopmentprograms received ahighpriorityin2002.Thefirst Research andDevelopment (Pyromars) plant,thesecondinarow inthiscase. Maanshan, alloftheminChina.POSCO,Korea, ordered amixed-acidregeneration included: anorder from Baosteel,thefourthinarow, Handan,thesecondinarow, and in theUnitedStates2002. line andreconstruction ofarepair line). slitting line),VAW Grevenbroich, Germany(levellingline),andNLMK,Russia(trimming Germany (reconstruction ofastripcoatingline),Corus,Netherlands(reconstruction ofa lines. Business Area wasalsoabletounderlineitsmarketpositioninheavy-dutycolorcoating annealing andpicklingline). and NorthAmericanStainless,USA(chemicalstriptreatment sectionforastainlesssteel rolling mill,levellinglineandreconstruction ofaskin-passmill),Tisco,China(slittingline) was successfullyunderlinedwithorders received from BaoxininNingbo,China(20-high Major Orders Hydrochloric acidregeneration plantorders withintegratedpicklingbathcleaning Rome Strip,USA,ordered atwo-highrolling mill,oneofthefeworders thatwere placed The BusinessArea´s Order Intakefurthermore includedbookingsfrom Thyssen, With theorder bookingsfrom NLMKNovolipezk,Russia,andvoestalpine,Austria,the Andritz’ worldwidereputation asanequipmentsuppliertothestainlesssteelindustry to 1,650mm. from 0.3to1.5mmandwidthfrom 800 450,000 t/year. Stripthicknessranges Dortmund, Germany. Production is supplied toThyssenKrupp StahlAGin Hot-dip galvanizingplantFBA8, 53 / andritz 2002 Rolling Mills and Strip Processing Lines 54 / andritz 2002 and 6dryinglines. comprises 12dewateringcentrifuges Solution Project inScotland.Theplant supplied fortheGreater Glasgow Plant forsewagesludgedrying, Technologies Process Environment and 55 / andritz 2002 56 / andritz 2002 Environment and Process Technologies Europe andAsia USA, Southern activity inthe Good project Graz, Austria Johannes Kappel Olaf Jansen Managers: Business Area remained subdued. particularly intheminingindustry. The demandforequipmentinthepaperindustry The project activityinindustrialprocess engineeringwasseentoincrease slightly, this Business. sewage sludgeandthus,havebrought aboutaheighteneddemand forproducts from have causedplantoperatorstomakecapitalinvestments intreatment systemsfor In Western Europe, themore stringentlegalrequirements fordepositingsewage sludge candidates, butalsofrom RussiaandotherCIScountries. Europe,demand isalsonotedfrom notonlyamongtheEUmembership Eastern activity. Themarketforlarge systemsintheUnitedStateshasrecovered. Increasing Technologies. Europe, andAsia,there EspeciallyintheUSA,Southern wasbrisk project treatment underwentadynamicdevelopmentforAndritzEnvironment andProcess In 2002,themarketforequipmentandsystemsmunicipalsewagesludge Market development and Foshan,China. components are locatedinGraz,Austria;Châteaur Singapore; andAndritz3SysAG,Switzerland.Production facilitiesformachinesand Andritz Ltd.,Great Britain;AndritzPtyLtd.,Australia;Singapore PteLtd., Guinard S.A.S.,France;AndritzIngenieríaS.A.,Spain;Technologies Ltd.,China; following affiliates: Andritz-RuthnerInc.,USA;AndritzGmbH,Germany;Andritz- The BusinessArea operatesthrough itsheadquarters,AndritzAG,Austria,andthe offering Andritz´customerstechnicalsolutionsfornearlyallapplications. separation issupplementedbyalargerangeofscreens, sieves,andsandfilters, The BusinessArea’s extensiveproduct portfolioinindustrialandmunicipalsolid/liquid industry withitsheavy-dutycentrifugesandbeltpresses. suspensions. Inaddition,Andritzaddresses applicationsinthepigmentandfiller filters, anddifferent typesofvacuumfilters),especiallyforcoalandmineral Andritz suppliesfiltrationsystems(beltpresses, centrifuges,hyperbaricdrumanddisc Industrial process technologyisanotherimportantsectorfortheBusinessArea. automation andsafetyengineering. components; erection, andstart-upofcompletesludgetreatment plants,including in thisfieldandoffers comprehensive supportfrom designtomanufacture ofkey municipal andindustrialsewagetreatment plants.Andritzisoneofthegloballeaders entire rangeoftechnologiesformechanicalandthermaltreatment ofsludgefrom The products oftheEnvironment andProcess Technologies BusinessArea coverthe Profile oux, France;Pittsburg,Texas, USA; 140.6 MEUR). Order Intake bytheBusinessArea reached 147.7MEURin2002,arecord level(2001: in thecourseof2003. contractors fortheprojects maymake,andthematterisexpectedtobefinallyconcluded reserves forclaims–whichare offset byclaimsonthepartofAndritz–thatgeneral were successfullyacceptedbythecustomers.TheBusinessArea hasmadesufficient With regard to thecostoverruns,itshouldbenotedthatprojects handledin2002 MEUR). Profitability expressed asEBITDAmargin was2.3%,compared to6.7%in2001. overruns onsomelarge projects, EBITDAdeclinedmarkedlyto2.8MEUR(2001:9.0 developmentwasnotsatisfactory.Earnings DuetotheslightdeclineinSalesandcost have aneffect onSalesuntillater. the manyprojects thatwere onlyintheirstartingphasethebusinessyearandwillnot year by9.2%to122.8MEUR(2001:135.3MEUR).Thisdeclineismainlyattributable Environment andProcess Technologies Salesdecreased incomparisontotheprevious Business Developmentin2002 Business Area according toIAS Key figures fortheEnvironment andProcess Technologies mlye 439 1.0 1.9 0.8% 2.8 2.3% Employees 122.8 Capital investments 147.7 EBITA margin 122.6 EBITA EBITDA margin EBITDA Order Backlog31.12. Order Intake Sales MEUR 2002 4. 1. 123.6 97.3 118.6 133.2 140.6 135.3 .%30 n.sp. 1.5% 5.3% 3.0% 6.7% 4.4% 0120 1999 2000 2001 979. 110.8 96.3 99.7 3 2 396 421 435 . . 2.0 -0.5 3.1 1.5 4.0 1.9 5.9 7.2 9.0 level reaches record Order Intake 57 / andritz 2002 Environment and Process Technologies 58 / andritz 2002 Environment and Process Technologies Paris drying linesto dewatering and Andritz tosupply USA Success inthe of Andritz3Sys Successful start successful side-by-sidetrials onsite. centrifuges). Theorders forthenew, large-decanter seriescameasaconsequenceof D7LL machines),RomeandFlorence withatotalofnineunits, andLyons (four Plant, Renton,Washington. Othermajor bookingscamefrom SantiagodeChile(five Andritz willsupply13Aqua-Screens forthefinescreening ofrawsewage. at PapeteriedeVoiron, UsinedeVoreppe, France. successfully takenintooperationandacceptedafteradeliveryperiodofonly10months belt dryer(BDS)series. successful start,buildingandcommissioninganindustrialsizepilotunitfrom thenew plant inLjubljana. sludge dewateringandaDDSdrumdryingsystemforthenewwastewatertreatment PowerDrain systemforsewagesludgethickening,twoAndritz-Guinard centrifugesfor Andritz inFrance. installed baseoflarge sludgedryingplantsaswellthestrong localpresence of five large D7LLcentrifuges.ThemajorfactorsinselectingAndritzwere theimpressive Andritz DDS70drumdryinglines,whichwillevaporate7,000litersofwaterperhour, and (SIAPP), Valenton, thewatercompanyforGreater ParisArea, willreceive three Syndicat Interdépartemental pourl’Assainissementdel’AgglomérationParisienne order awarded in2002forseveraldewateringanddryinglineswasawarded toAndritz: USA. Sacramento RegionalCountySanitationDistrict,California, a high-valuefertilizer, whichSynagro willmarket. drying thesewagesludge,Honoluluwantstosavevaluablelandfillspaceandproduce system willcomprisetwoAndritz–Guinard centrifugesandaDDSdrumdryingline.By comes aspartoftheimplementationitsnewwastemanagementconcept.The Technologies Inc.,ordered sludgetreatment systemfrom aturnkey Andritz,which affiliate Andritz-RuthnerInc.TheCityofHonolulu,Hawaii,USA,viaSynagro Major Orders The BusinessArea hasbeensuccessfulintheFrench marketaswell.Theonlylarge Three large D7LLcentrifugeswere soldtoKingCountySouthWastewater Treatment For theBluePlainsWastewater Treatment PlantintheUS capital,Washington, DC, In dryingapplicationsforindustrialsludges,afibersludgeinstallationwas Andritz 3SysAG,anewlyestablishedaffiliate inSwitzerland,hadaparticularly Andritz wasfurthermore abletobookanimportantorder from Slovenia,includinga Andritz willalsosupplytwoD7LLcentrifugesandaDDSdrumdryingsystemfor In theyear2002BusinessArea wasextremely successfulwithits100%US- and thenewrequirements were met. units inmid-2003,thesafetyengineeringaspectsofthermalplantswere revised in2002, Given thecomingintoforce oftheATEX guidelineforsafetystandards ofnon-electric waste energy sources, suchashotwater, low-pressure steam,oroff-gas. kg/h forbeltdryers).Thenewlydevelopeddryercanoperatewithlow-temperature (up to20t/hevaporationrateforfluidizedbeddryers)anddownwards (startingwith500 The performancerangeofthestandard dryingequipmentwasextendedbothupwards Research andDevelopment the amountofrecycled, sellablecoalandreduces thefiltrateload. because ofthefilter, andinaddition,oldlagoonsludgescanbetreated. Thisincreases reason fortheorder wasthatthe expensivethermaldryingsystemcanbeshutdown Kuzbass, region inSiberia.Itwillworkonfinest-graincoalconcentrate.Adecisive the newlarge sewagetreatment plantbythecityofGuangshou,China. orders forseveralbeltpresses andthickeners.Three D6Lcentrifugeswere ordered for ZOF Kuzbasskaja,Russia,ordered aHyperbaricFilterwith120m Andritz Technologies Ltd.,anewlyestablishedaffiliate inFoshan,China,received 2 filter area forthe New beltdryer 59 / andritz 2002 Environment and Process Technologies 60 / andritz 2002 companies. member oftheProvimi group of lines atDanaFeedA/S,Denmark,a Two Sprout-Matador fishfeedextrusion Feed Technology 61 / andritz 2002 62 / andritz 2002 Feed Technology pelleting plants for biofuel Growing demand growth Moderate market (UMT) David Billingsley (Sprout-Matador) Finn N.Jensen Managers: Business Area America. Europe andNorth andEastern equipment, withrisingdemand through theyearinNorthern In thearea ofbiofuelproduction, themarket activityhasbeenhighforwoodpelleting capacities. 2003. However, there isageneraltrend formanufacturinglinesfeaturing especiallylarge during theSecondHalfofyear. Asaconsequence, manyprojects were postponedinto There continuedtobeanovercapacity situationintheproduction ofsalmonfeed, especially Rarely were there investmentstoincrease thecapacityofexistingequipment. The conventionalfeedindustryinvestedinefficiency andflexibility ofsystemtechnology. but CentralEurope andSouthAmericawere relatively weakindevelopment. vast regional variations.Severalprojects Europe, were andEastern awarded inNorthern feed (pet,fishandaquaticfeed)there wassatisfactoryproject activityoverall,althoughwith underwent moderategrowth in2002.Intheareas ofconventional(mixed)feedandspecial In conjunctionwiththeslightimprovement inglobaleconomy, theglobalfeedmarket Market Development many othercountriesoftheworld. number ofserviceoffices. Inaddition,ithasanetworkofdistributorsandagentsin In total,theBusinessArea isestablishedwith14proprietary salesoffices anda Denmark, theUSA,andNetherlands. Denmark; AndritzInc.,USA;andUMT, Netherlands.Ithasproduction facilitiesin The FeedTechnology BusinessArea operatesprimarilythrough Sprout-Matador, the BusinessArea istheclearglobalmarketleader. portion oftheactivitiesBusinessArea. Inthefieldofpelletmilldiesandrolls, The aftermarketbusiness–spare andwearpartsservice–formsanimportant manufacturing, aswellwoodandwastepelletproduction. offers customizedsystemsolutions,includingautomation,forallaspectsoffeed Due toextensiveinnovationsandcontinuousinvestmentsinR&D,theBusinessArea biofuel pellets,aswellpelletingsystemsforrecycling industries. The BusinessArea alsosuppliesequipmentandplantsforindustrialproduction of production, expanding,pressing, extruding,cooling,vacuumcoating,anddrying. lines aswellunitequipmentforgrindingandmixingofrawmaterialfeed animal feed(mixedfeed,petfood,andfishfeed).Thiscomprisescompletemill and buildingsystems,machines,processes fortheindustrialproduction of The FeedTechnology BusinessArea isoneoftheworldmarketleadersindeveloping Profile Provimi's newfishfeedfactoryinAlitec,Chile. dryer, andtheVAC vacuumcoater, which wassuccessfullyplacedinoperation Ex1250 extruderincludingtheECS™expansioncontrol system,theCZDMultizone mentioning: acompleteextrusionlinecomprisingtheMultimill1400finegrinder, the plants were handedoverandsuccessfullycommissioned,ofwhichthefollowingisworth During theyearunderreview, severalprocess linesfornewpetfoodandaquaticfeed and beyond. production capacity. Thisshouldleadtoincreased competitivenessthroughout 2003 Comprehensive restructuring willcontinueinto2003,withthegoalofoptimizing increase wasachievedbytheUMTGroupmarked Earnings purchased in2000. 4.7 MEUR),profitability expressed asEBITDAmargin reached 5.6%(4.4%).Themost improved compared totheprevious year. EBITDAincreased 29.8%to6.1MEUR(2001: successful integrationofUMT, andprofitability (EBITDAmargin) Earnings clearly been implementedatproduction sitesinNorthAmericaandEngland,aswellthe progressedEarnings atanabove-averagerate.Duetorestructuring measures thathad previous year(108.4MEUR,+1.3%compared to107.0MEURin2001). America, theBusinessArea succeededinincreasing itsSalesslightlyversusthe satisfactory. Despitethedifficult marketconditions,especiallyinNorthandSouth developmentoftheFeedTechnologyThe SalesandEarnings BusinessArea was Business Developmentin2002 mlye 609 4.2 5.4 3.9% 6.1 5.6% Employees 108.4 Capital investments 104.7 EBITA margin 23.5 EBITA EBITDA margin EBITDA Order Backlog31.12. Order Intake Sales MEUR Key figures fortheFeedTechnology BusinessArea according toIAS 2002 1. 0753.5 59.6 70.7 67.8 112.6 107.0 .%35 n.sp. 1.0% 0.9% 3.5% 4.4% 6.8% 0120 1999 2000 2001 761. 11.5 14.3 27.6 7 1 408 412 676 . . 1.7 -1.4 0.8 0.6 2.4 6.7 4.6 0.9 4.7 restructuring successful favorably dueto progressed Earnings 63 / andritz 2002 Feed Technology 64 / andritz 2002 Feed Technology pelleting plants Orders forwood international petfoodandaquaticfeedproducers. international The extrusiontestcenter, whichopenedlastyear, hasbeenusedbyseverallarge and communicationwere initiatedforcompletionduringtheFirstHalfof2003. Smaller R&Dprojects targeting increased process flexibilityandprocess dataevaluation successfully beenplacedinoperationseveralinstallationsduringtheyear. hammermills, andextrusionlineequipment,includingadvancedcontrol systems–have over thepastthree years.Allproducts andprocesses –anewgenerationofpelletmills, completion oftheintensivenewproduct developmentprograms whichhadbeenstarted The research anddevelopmentactivitiesoftheBusinessArea in2002were focusedon Research and Development Feed Technology BusinessArea inthismarketsegment. Skellefteå KraftinSwedenhelpedtoconsolidatetheverystrong positionoftheAndritz Europe. Alarge andEastern Northern order forsixwoodpelletinglinesreceived from booked. addition units,andcontrols foranewfeedplantproject inDenmark. deliver twofullprocess linesforhighestcapacitiesincludingallkeyequipment,theliquid Europe.expansion projects InadditionAndritzwill intheUK,Scandinavia,andEastern Major Orders The mostsignificantorders fortheBusinessArea were fourlarge feedmillrebuild and Orders forseveralmedium-capacityextrusionlineswere received from Asia. From theaquaticfeedsector, alarge order foraNorwegiansalmonfeedproject was Several large orders were wonfrom thewoodpelletingsectorinNorthAmericaand control. quality aswelloptimizedmachine superior pelletingperformanceand Sprout-Matador pelletmillsoffer 65 / andritz 2002 Feed Technology 66 / andritz 2002 and themaximum output44,480kW. Donaukraftwerke; itsdiameter is5.6meters to Edlingpowerstationof Österreichische workshop assembly. Therunnerwasdelivered Runner ofaverticalKaplan turbineduring Hydraulic Machines Other Operations/ 67 / andritz 2002 68 / andritz 2002 Other Operations / Hydraulic Machines development business Favorable Graz, Austria Manfred Wörgötter Manager: Business Area Key figures forOtherOperationsaccording toIAS mlye 277 5.8 2.6 19.8% 7.4 25.3% 29.3 Employees 28.3 Capital investments EBITA margin 21.5 EBITA EBITDA margin EBITDA Order Backlog31.12. Order Intake Sales MEUR as EBITDAmargin rose to25.3% (2001:8.9%). compared to2.3MEURfor2001).Alongwiththisdevelopment,profitability expressed 12.7% to29.3MEUR(2001:26.0MEUR).EBITDAwasmore thantrippled(7.4MEUR Other Operationsunderwentafavorabledevelopmentin2002.Salesincreased by Business Developmentin2002 new project awards, wascontrastedbyhighproject activityinChina. the pulpandpaperindustry. TheEuropean markets’moderateprogress, withhardly any Geographically varieddevelopmentwascharacteristicofthestockpumpsbusinessfor area was fairlybrisk,withsometurbineprojects lookingquitepromising. Chinese customerswere quiteprepared tomakeinvestments,soproject activityinthis revival, butthepricepressure inthissectorremained quiteconsiderable. power sector, involvingprojects foramaximumcapacityof10megawatts,sawminor single larger repair orders andserviceprojects. Innewinvestments,theso-calledmini- remained unchangedin2002.There projects, were andsome onlyafewmodernization The difficult marketconditionsfortheBusinessArea’s mainproduct, waterturbines, Market Development The mainmarketsare Europe, ChinaandcertaincountriesinSoutheastAsia. components. centrifugal pumpsforthepulpandpaperindustry, aswellspacetechnology applications, pumpsfortheprimaryandsecondaryloopsinnuclearpowerstations, planning, andmanufacture ofwaterturbines,large-scalepumpsforselected Other OperationsencompassAndritzGroup activitiessuchasthedevelopment, Profile 2002 .%2.%12.2% 8.9% 23.3% 0120 1999 2000 2001 .p 72 2.7% n.sp. 17.2% 262. 16.2 21.2 29.5 20.3 26.8 22.7 22.6 28.6 26.0 01390.8 3.9 -0.1 4 3 240 230 246 . . 1.5 1.3 3.6 0.9 5.3 2.3 services businessfornuclearpowerstations. Major furtherdevelopmentsfocusedonshaftseals,in the effort tostrengthen the corroborated byseveralcontractsreceived from variouscustomersinChina. achieved thankstointensifiedresearch anddevelopmentwork,their successwas Product improvements inthearea ofthehydraulicsKaplanbulbturbines were Further intensiveworkonotherproduct innovationsiscurrently underway. a large numberoforders for the newlydevelopedheadboxpumpshortlyafterlaunching. hydraulics withefficiencies higherthanincompetitiveproducts, itwaspossibletoreap resumed andintensified in thefieldofhydraulicsdevelopment.Bydevelopingpeak Together withASTRÖ(AnstaltfürStrömungsmaschinen),research activitieswere Research andDevelopment Major Orders in furtherextendingitsleadingpositionChina. in increasing thenumberofstockpumpssoldsignificantlycompared to2001andthus, activity in2002.The60:40JointVenture, Andritz-KenfloinFoshan,China,succeeded Stock pumpsforthepulpandpaperindustrywere againaverysuccessfulAndritz Andritz’ contractpartnerinShenyang,China;theyare currently beinginstalled. The axial-flowpumpsforHongKongdrinkingwatersupplypassedthetestrunsat as scheduled. hydropower stationontheriverEnns,Austria,wasplacedinoperationsuccessfullyand At theendofMarch 2002,thefirstturbineset(verticalKaplanturbines)forGroßraming paper industry. well asspare partssuppliesfornuclearpowerstationsandstockpumpsthepulp jobsforwaterturbinesandturbinecontrolsconsists ofrebuilds as andmodernization MEUR). MuchoftheOrder Intakewasduetotheservicebusinesswhichprimarily Order Intakeat28.3MEURwasaboutequaltothegoodlevelachievedin2001(28.6 Six furtherDAARringunitswere suppliedforAriane5launcherrockets. penstock ofMaiskogelpowerstation. Austrian Hydro Powerplacedanorder fortheconstructionofabutterflyvalve Jin Yin Tai andMengLi)were received from variouscustomersinChina. Orders for keycomponentsturbineequipmentindifferent installations(Shapotou, Chinese market extends itsleadin Andritz-Kenflo development hydraulics Focus on 69 / andritz 2002 Other Operations / Hydraulic Machines 70 / andritz 2002 Andritz Shares outperform ATX Andritz Shares Free float Certus ~ ~ UIAG, Univest The 95 Share Buy-Back Program January 21,2002. Vienna StockExchange, thePrimeMarket,andhavebeenpartofATX since Since January1,2002,AndritzShares havebeenquotedinthetopsegmentof Inclusion inthePrimeMarketandATX closing priceatyearend(December30,2002:22.99EUR)was298.9MEUR. stocks ontheVienna StockExchange.ThemarketcapitalizationofAndritzbasedonthe (December 31,2002) Andritz OwnershipStructure 10% oftheshare capitaloveraperiodof18months. authorized AndritzAG’s ManagingBoard tobuybackshares toamaximumvalueof Andritz Shares rank21 shares or308,806Euros. The averagedailytradingvolumeduringthebusinessyear2002was13,255Andritz Trading Volume was 19.40Euros (February4and5,2002). The highestclosingpricein2002was28.00Euros (April24and25,2002),thelowest over thesameperiod. considerably outperformingtheATX oftheVienna StockExchange,whichgained0.85% financialmarkets.ThepriceofAndritzshares increased oninternational 7.9%, downturn The AndritzShare pricedevelopedsatisfactorilyduring2002,despitethegeneral Share PriceDevelopment 13% ~ 16% 25% th General MeetingofShareholders ofAndritzAGheldonApril17,2002, GE Capital~ Beteiligungs AG~ Deutsche st place in the 2002 turnover statisticsofthemostactivelytraded place inthe2002turnover Carlyle ~ Others ~ 6% 31% 6% 3% Switzerland ~ (Estimate byAndritz) Ownership Structure byRegion Others ~ UK ~ Italy ~ 8% 3% 10% 16% Austria ~ France ~ Germany ~ 50% 5% 8% vis-à-vis itsshareholders andthefinancial community. Both awards gofartoward affirming Andritz’open andtransparent informationpolicy technical viewpoint,andserviceoffer from theperspectiveofinvestors. The websitesofpubliclylistedcompaniesinAustriaare assessed intermsofcontent, Andritz wasalsothewinnerofPIROLAward (PrizeforInvestorRelations Online). strategy. forecasts, competenceandavailabilityoftheInvestorRelationscontact, andcorporate and transparency ofAnnualandQuarterlyReports,theaccuracy oftheEarnings of publiclylistedcompanies.Theassessmentcriteriainclude thedepthofinformation Management (ÖVFA) andisbasedonanassessmentoftheInvestor Relationsactivities conferred annuallybythe AustrianAssociationforFinancialAnalysisandAsset In October2002Andritzreceived theStockExchangeAward for2002.Thisaward is Stock ExchangeAward 2002andPIROL website (www.andritz.com). The transactionsmadeundertheshare buy-backprogram are publishedontheAndritz for AndritzGroup management. the Vienna StockExchangeandthepotentialuseforcurrent stockoptionprogram The share buy-backprogram istoimprove thesupplyanddemandforAndritzShares on Euros per share. 2003, corresponding toa maximumof650,000shares withinapricerangeof10and35 share capital ofAndritzAGisopenforbuy-backbetweenMay16,2002andJune27, Andritz AGManagingBoard decidedtomakeuseofthisauthorization.Up5%the 18 20 22 24 26 28 30 € € € € € € € 06/01

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12/02 IPO Andritz since development of Share price Award Stock Exchange Andritz receives 71 / andritz 2002 Andritz Shares 72 / andritz 2002 Andritz Shares Club Shareholders’ Contact Andritz Shares Key Figures for Free FloatFactor ATX Weighting Stock ExchangeIndices Ticker-Symbols Stock Exchange Free Float Number ofShares Types ofShares First ListingDay ISIN-Code Security IdentificationNumber (www.andritz.com). phone (+4331669022722),e-mail([email protected])orviaourwebsite If youwishtojointheShareholders’ Club,pleasecontactAndritzInvestorRelationsby obligation. Membersare sentallnewpress releases andinformationondifferent events. Shareholders’ Clubwasfounded.Membershipisfree ofcharge andwithoutany For retail investorsofAndritzandotherinterested shareholders, theAndritz which wasattendedbyabout100retail investors. A publicpresentation wasorganized inLinz,Austria,togetherwithalarge Austrianbank, with goodresponse. representatives ofrenowned investmentbanksinattendance.Thesepresentations met Finland, andLondon,UK,toincrease future research coverage,withmany institutional investorswere organized. Analystpresentations were madeinHelsinki, were heldinAustriaandothercountries,one-on-onemeetingswithlarge the publicationofresults foryear2001andthequarterlyreports for2002,roadshows Andritz InvestorRelationsactivitieswere furtherintensifiedin2002.Ontheoccasionof Investor Relations E-Mail: [email protected] www.andritz.com Internet: Phone: +4331669022979,Fax: +433166902465 Stattegger Strasse18,A-8045 Graz Head ofInvestorRelations Michael Buchbauer Andritz InvestorRelations 0.25 approx. 0.65% ATX; ATXPrime; WBI Bloomberg: ANDR,AV Reuters: ANDR.VI Vienna (Prime Market) approx. 16% 13 million bearer shares no-par valueshares, June 25,2001 073000 AT 0000730007 Corporate Governance the meetingof theCodewithexplanations to thedeviations. Andritz websiteunderwww.andritz.com. Thewebsitealsocontainsthestatementon Codecanbeaccessedanddownloaded from the The completeCorporateGovernance as theentire staff ofAndritzare committedtomeeting theCode. stakeholders inthecompany. TheManagingBoard andtheSupervisoryBoard as well investors, customers,employeesandsuppliers,representatives ofthemedia andother compliance withtheCodewillpromote andintensifytheconfidenceof shareholders and Andritz AGwhichisdirected toward creating addedvalue.Implementation ofand the Codeasanessentialmeanstoimplementresponsible management andcontrol of Code.ItregardsAndritz endorsescompliancewiththeAustrianCorporate Governance more attractiveforfinancialinvestors. Code asanimportantcontributiontoward makingtheVienna Stock Exchange even suggestions andremarks duringtheconceptionphaseanditconsidersfinished Codebymaking Andritz AGcooperatedinthedraftingofCorporateGovernance of CorporateGovernance. Companies voluntarilyundertaketoadhere totheprinciplessetoutinAustrianCode on theprinciplessetoutinOECDPrinciplesofCorporateGovernance. provisions ofAustriancorporationlaw, securitieslawandcapitalmarketsaswell This CodeprimarilyappliestoAustrianstocklistedcompanies.Itisbasedonthe with thisrulerequires neitherdisclosure norexplanation. 3. Recommendation(R): and thereasons statedinorder tobeincompliancewiththeCode. 2. ComplyorExplain(C): 1. LegalRequirement (L): rules: encompassesthefollowingcategoriesof The AustrianCodeofCorporateGovernance contains rulesexceedingtheserequirements, andwhichshouldbeusedvoluntarily. compliance withtheseregulations mustbeexplainedandjustified.TheCodealso Code containsregulations level;non- thatare commonlyusedonaninternational companies maysubmitattheirowndiscretion. Besideimportantlegalrequirements, the practice. Itisnotintheformofastatutelaw, butintheformofasetrulestowhich business the standards ofgoodcorporatemanagementcommonininternational Governance on1 Governance investors ontheVienna StockExchange,presented theAustrianCodeofCorporate Vereinigung fürFinanzanalyseundAnlageberatung),oflistedcompaniesandinstitutional Association forFinancialAnalysisandAssetManagement(ÖVFA –Österreichische representatives oftheAustrianInstitute ofCertifiedPublicAccountants,theAustrian The AustrianWorking whichconsistsof Group forCorporateGovernance, st October 2002.Thisisakindofcodeforcorporationswhichcovers the nature ofthisruleisarecommendation; non-compliance this rulerefers tomandatorylegalrequirements. this ruleistobefollowed;anydeviationmustexplained 73 / andritz 2002 Corporate Governance 74 / andritz 2002 Corporate Risks have direct consequencesontheGroup’s businessactivities. with greater purchasing power. Customerdependencemightincrease, which could of thenumbercustomersinfuture andintheGroup havingtofacecorporations especially inthepulpandpapersteelindustry. Thismightresult inareduction There is atrend toward companymergers inthebuyerindustriesofAndritzGroup, Customer concentration causes substantialand/orsustainedimpairmentofthefinancialsuccesscompany. is stillnotimpossiblethatoneorseveraloftheserisksbecomeimminentandthis cyclicality onthebusinessdevelopment,astrategythatitwillmaintaininfuture. It capacity management,theAndritzGroup hasbeenabletoreduce theeffects of the targeted expansionofthestableservicesbusinessandcontinued,pre-emptive subsequent influencesonSalesandthenalsocoveringtheGroup’s fixedcost.With direct influence oncapitalinvestmentdecisionsofAndritzGroup customers,with between supplyanddemand.Possiblepricefluctuationsare therefore apttohavea price levelfortheseproducts isinpartdirectly dependentontheprevailing relationship and thenotinfrequent fluctuationsindemandfortheirproducts thatcomewithit.The to thefactthattheseindustriesare directly dependentontheeconomicdevelopment Areas, and, tosomeextentalsooftheFeedTechnology BusinessArea. Thisgoesback true ofthePulpandPaperRollingMillsStripProcessing LinesBusiness The AndritzGroup hasactivitiesinindustrieswhosenature iscyclical.Thisespecially Cyclicality - Risksrelated totheindustry The risksthattheAndritzGroup incursincludebutare notlimitedtothefollowing: not giverisetoanyconcerns. medium-to-long-term corporateplanning,usingvariousscenarios.Atpresent, thesedo development oftheAndritzGroup havebeentakenintoaccountintheAndritzGroup’s The risksdescribedinthefollowingandeffects thatthesemayhaveonthebusiness to beanessentialfactorofpro-active companymanagementwithintheAndritzGroup. counter-measures. Thissystemhasproved verysuccessfultodate,anditwillcontinue management committeewhosemaintaskistoidentifynascentrisksearlyonandtake stage, AndritzhassincelongestablishedaGroup-wide control andsteering to certaincorporateandindustry-specificrisks.To determinetheserisksatanearly The AndritzGroup actsgloballyandindifferent BusinessAreas andistherefore subject With persistentandintensiveresearch and The AndritzGroup worksinaverycompetitivemarketforeachoftheBusinessAreas. Competition the AndritzGroup issusceptibleofbeingaffected bychangesintheexchangerate. resultsinto Euros oftheGroup. andontheEarnings Also,theShareholders’ Equityof exchange ratesmaystillhavenegativeeffects ontheSales,whosevalueisconverted received from outsidetheEuro region are hedgedbyfutures. Developmentsof in exchangerates.Allappreciable exchangeraterisksinconnectionwiththeorders the world.Thecurrencies inthesecountriesmaybesubjecttosubstantialfluctuations AndritzGroup hasanumberofaffiliatesInternational outsidetheEuro region throughout Currencies - Risksrelated totheGroup´s business the purchase pricecanberecovered. Even intheeventofanexportcredit insurancebeingconcluded, nomore than 85%of these risksbysecuringpaymentguaranteesfrom banksforthe majorityofprojects. on thenetworthandliquiditysituationofGroup. TheAndritz Group has triedtolimit obligations forthesemajorprojects, itisnotunlikelythatthiswill havenegativeeffects projects) ineachoftheBusinessAreas. Ifcustomersfailtomeet theirpayment The Group´s businessinvolveshandlingofprojects withalarge contractvolume(major Payment risks - Risksrelated tomajororders unexpected delaysorsetbacks. Ahlstrom Machineryare stillintheprocess ofbeingintegratedandmayexperience economic developmentoftheGroup. Similarly, recently acquired companiessuchas objectives andsynergies cannotbereached whollyorpartlyandthatthisaffects the newly acquired companies,itcannotbeexcludedforfuture acquisitionsthattheplanned opinion ofthecompany. AlthoughAndritzcanshowagoodtrackrecord inintegrating world-wide operationswere purchased since1990,andsuccessfullyintegratedinthe acquisitions. Inthecourseofimplementingthisstrategy, anumberofcompanieswith equipment inallitsBusinessAreas through organic growth andcomplementary It isastrategicgoaloftheAndritzGroup tobecomeacomprehensive supplierof Integration ofnewlyacquired companies clients thelatestintoptechnologiesalsofuture. Research andDevelopmentisconfidentthatitwillcontinuetoseekoffer its leadership alsointhefuture. TheAndritzGroup investsapprox. 3%ofitstotalSalesin however, nowayofguaranteeingthattheGroup canmaintainanddefendthiscurrent Thereis, in updatingthetechnologiesoffered tocustomersthelateststate-of-the -art. development work, the Group has succeeded 75 / andritz 2002 Corporate Risks 76 / andritz 2002 Corporate Risks also leadtoconsiderableprice fluctuations. float oftheAndritzShares andthe resulting lowliquidityontheStockExchangemay considerable pricefluctuations forAndritzShares. Inadditiontherelatively smallfree covered byfinancialanalysts.Analysts’ sellingorbuyingrecommendations mayleadto affect thepriceofAndritzShares. Asapubliclylistedcompany, Andritzisregularly Possible pricevariationsandhighvolatilityonthemajorstock marketsmightadversely analysts, smallfree float financial markets,recommendations byresearchDevelopment ofinternational - Risksrelated tothecapitalmarkets could leadtonegativeeffects ontheGroups profitability andfinancialstanding. investigate thoroughly existingpatentsandotherIPrightsitmayoverlooksome.This Group’s equipmentforproducing theirproducts. AlthoughtheGroup endeavoursto customers againstpatentinfringementsbyinstallingand,incertaincases,usingthe In connectionwiththesupplyofproduction systemstheGroup typicallyhastoindemnify Intellectual property infringement substantially. agreed oftheGroup performances are notfulfilledbyhim,thenthismayimpairEarnings partner orsubcontractor. IfsuchanEPCsupplierfailstodeliver, orifthecontractually non-performance becausetypically, thesecontractsare handledwithaconsortium buildings andproject infrastrucure insomecases,there mayalsobecostoverrunsor On EPC(engineered, procured and constructed) contracts,whichmightinvolve Group’s Earnings. suppliers, butvariationsoftheexchangerateandotherrisksmayadverselyaffect the purchased partswillcost.Certainlythere are empiricdataandquotationsfrom potential may becompelledtoquotethecustomerwithoutknowingexactlyhowmuch Since certainpartsofthemanufacture ofGroup’s suppliesare outsourced, theGroup Cost overruns business activity. a caseofcompensationpaymentmighthavenegativeeffects onthecompany’s outtobeimpossibleagreeenforceable. onlimitationsofliability, Shoulditturn such accept liabilityforconsequentialdamage,andinsistsonlimitationsofif affecting theGroup’s financialdevelopment.Asabasicprinciple,theGroup declinesto thecontractualobjecttoAndritz.Suchacaseissusceptibleofadversely and return performances are byfarnotreached, thecustomerhasrighttorescind thecontract have tobemadeonthedeliveriesatGroup’s expenses.Ifthewarranted various gradationsofliquidateddamagesorpenaltiesare appliedand/ormodifications deadlines. Iftheperformancesstatedare notachievedorthedeadlinesare exceeded, cases underanobligationtograntperformancewarrantiesandguaranteecertain In conjunctionwiththeperformanceofplantssuppliedbyAndritz,Group isinmany Liabilities andperformanceofprojects who willimplementtheplant. for hands-ontrainingoffuture operatingpersonnel aswellfortheAndritzpersonnel and theplantcanbeoptimizedbefore itisactuallybuilt.Inaddition, itisanidealtool variations oftheplanttobesupplied.Basedonresults, boththeproduction process during theplanninganddesignphases,allowssimulation ofproduction phasesand the actualproduction process. Thesoftware tool,incollaborationwiththecustomer and start-up byidentifyingandcontainingriskspossiblebottlenecks thatmayoccurin production systemsactuallygoonline.Thegoalistominimize thetimerequired for Dynamic process simulationismainlyusedforsimulatingproduction processes before as theleadingplatformfordynamicprocess simulationinthepulpandpaperindustry. leaders world-wideinthissectorandhassuccessfullyestablishedtheIDEASsoftware sector forthepulpandpaperindustry. IDEASSimulationInc.isoneofthemarket 2003 hassubstantiallystrengthened know-howinthedynamicprocess simulation Acquisition ofIDEASSimulationInc.,previously AMECTechnologies Inc.,inJanuary the dynamicprocess simulationsector. Over thepastfewyears,AndritzAutomationhasexpandeditsactivitiesconsiderablyin Dynamic Process Simulation from amuch shorter commissioningperiodandtheresulting lowercosts. tested software modulesinwell-establishedplantsub-assemblies.Thecustomerbenefits adjustment, andvisualdisplaysystemsfortissuemachineshasmadeitpossibletouse A modularautomationconceptforservicesspecifictoAndritzanddealingwithcontrol, PrimeControl™ Activities inResearch andDevelopment to improve theprocesses andplantsbothtechnicallyeconomically. disciplines. In2002,automationsolutionswere developedinallBusinessAreas inorder new products. Here, Andritzmakesuseoftheknowledgeinarangedifferent special for automationinorder tokeepupwiththeevershorterintervalsbetweenintroducing Innovations are implementedinajoint,coordinated research anddevelopmentprogram throughout theGroup canbeappliedtoobtaincustomer-oriented solutions. business unitswithinAndritzAutomationensures thattheprocess know-howavailable sales serviceforplantsplannedandmanufactured byAndritz.Cooperationbetweenall Andritz Automation'score competencesincludestart-up,plantoptimization,andafter- necessary customerproximity. equipment forAndritzmachinesandplants.Thisdecentralizedstructure guaranteesthe Group. At16Andritzsitesworldwide,over200engineersplantheautomation Automation equipmentisanintegralpartofproducts inallBusinessAreas oftheAndritz Andritz Automation simulation dynamic process know-how in Inc. strengthens IDEAS Simulation Aquisition of

Andritz Automation 77 / andritz 2002 78 / andritz 2002 Andritz Automation standby mode. for 3000I/O.Thisplantisoperated withagraphicvisualdisplaysystemandrunsin(hot) proven intheUK.Aplanttreating municipal sludgewasequippedwith7PLCsystems Andritz’ competenceinautomation systemsforenvironmental engineeringplantswas andpicklinglineinorder toboostplantefficiencyfurnace andproduct quality. Krefeld, Germany, anintegratedmathematical modelwasinstalledfortheannealing For thestainlesssteelannealingandpicklinglinesupplied toThyssenKruppNirosta of complete woodyard systemsinAustria,Brazil,Finland,Canada, and Germany. Service, OPE The well-establishedautomationproducts LogScan dynamic simulationmodel. process simulationunit,thenoptimizedandtheoperatingpersonneltrainedon of thepulpbales.Thecross-cutter andbalepackinglineswere simulatedinaplantand completion ofactualcommissioninginjust42hours–from chipproduction topacking software andtheconsistent,comprehensive "soft"commissioningoftheplantallowed In constructingandcommissioningtheAracruzPulpMillinBrazil,modularplant contribution toincreased customerbenefit. conclusion. Theautomationsolutionsandproducts developedmakeasubstantial In 2002,AndritzAutomationagainwasabletobringanumberofprojects toasuccessful Andritz Automationin2002 created abasisfortheuseofgenericprocesses inprocess optimization. In 2002,closecooperationwithrenowned specialistsinadvancedcontrol strategies debarking processes. assisted, advancedcontrol algorithmsare alsoappliedindigestercontrol andin schedules forcold-rolling mills,ortoincrease theefficiency ofpicklinglines.Model- "Advanced Control Strategies".Theseproprietary processes are usedtooptimizepass Many AndritzGroup technologiesare controlled veryefficiently bymeansofso-called Advanced Control competent specialistsatanytime,regardless ofwhere theymaybe. optimization potentialidentified.Ifproblems arise,itispossibletoconsultthe data acquisitionandanalysis,weakpointscanbedetectedatanearlystage vibration analysespreventive maintenancebecomesreality. Byapplyingwell-directed operations, service,andmaintenancematters,withcompleteserviceconcepts.With The latestinformationtechnologiesprovide themeanstoassistplantoperatorswith maintenance teams. and software specialistsintheAndritzGroup toprovide assistancetocustomers' Over thepast15years,remote diagnosisandteleservicehaveallowedtechnologists TM Online (OverallProduction Efficiency) TM and WoodScan TM were installedat Employees institutes were alsoattendedbymanycolleagues. requirements ofAndritzGroup employees. Coursesandprograms offered byexternal training moduleswillbeplannedaftermakinganintensiveanalysisonthejob Many employeeshavetakenpartintrainingmodulesoffered internally. Future additional personnel canbemetquicklyinthefuture. universities andcolleges.Thisistoensure thattherequirement forqualifiedyoung part inanumberofcareer informationfairsandhasstrengthened cooperationwith In thecourseofcontinuouspersonnelmanagementactivities,AndritzGroup took acquired companies,were filledwithhighlyqualifiedrecruits induetime. Additional manpowerrequirements formanagementpositions,instanceinnewly and havebeenabletoassumecompleteresponsibility forthevariousbusinessunits. introduced totheirnewmanagementassignmentsbyexperiencedstaff had itscounterpartinHumanResources. Newlyappointedmanagerswere carefully Implementation oftheneworganizational structure forthePulpandPaperBusinessArea Major goalsin2002 (Germany andFrance)Asia. and NorthAmerica,theremainder issplitoverthecountriesincontinentalEurope Europe,personnel, ofwhichapproximately onequartereachworkinAustria,Northern The globalpresence oftheAndritzGroup isalsoreflected inthedistributionofits of AndritzGroup employeesamountsto4,403people. the acquisitionsofABBDryingandSELASSAS.Excludingnumber 1.2% overthesamedatein2001(December31,2001:4,545).Thisisessentiallydueto As ofDecember31,2002,theAndritzGroup had4,601employees,aslightincrease of Austria 25% Germany North America 8% 23% Northern Europe Northern Others United Kingdom France Netherlands 25% 8% 5% 4% 2% employees of AndritzGroup Regional distribution 79 / andritz 2002 Employees 80 / andritz 2002 Employees offered attractivecareer opportunitiesthroughout theGroup. With thegreatest possiblecontinuity, committedandhighlyqualifiedemployeeswillbe candidates. comparable training.Thiswillassistinfillingpositionvacancieswithinternal assessment. Inthismanner, Andritzemployeesaround theglobewillreceive similarand procedures intheareas ofrecruiting, training,personneldevelopment,andperformance Central goalsofglobalpersonnelmanagementare tostandardize guidelinesand various AndritzGroup affiliates hasbeenanobjective. harmonization ofsystemsandprocesses appliedinHumanResources workinthe during theyearunderreview. Inthelightofglobalcoordination ofcentralfunctions, Efforts to"globalize"theGroup’s HumanResources managementwere clearlypushed Global HumanResources Management turnover. application ofasufficient numberofqualifiedcandidatesforvacanciesandthelowlabor The AndritzGroup appearsasanattractiveemployer, whichisexpressed bythe employees singlyoringroups. specialistswerecompany were alsohired continued.External inorder tocoachour Activities beguninthepastforemployeecoachingbyexperiencedmanagersinside salary models,basedonsuccess-related criteria,were introduced onamajorscale. Other elementsofHumanResources workwere alsofurtherdeepened.Forinstance, eBusiness procurement. eProcurement activitiesplannedfor2003willfocusparticularlyonstrategic automating purchase order transactionsandutilizingonlineauctiontools.The Andritz hasgeneratedfurthercost-savingpotentialsintheeProcurement sectorby an onlineordering serviceforspare parts. users registered from over 240customers.Asfrom thestartof2003,Andritzalsohas and PaperBusinessArea –wasfurtherextendedin2002.There are nowsome800 portalforAndritz'customersinthePulp The PulpandPaperServiceClub-theInternet provide betterinteractionbetweencompanysites. focusing largely oneService,eProcurement, andonIntranet-basedapplicationsto A totalofeightneweBusinesssolutionswere completedintheyearunderreview, businessprocesses.on boostingtheefficiency ofinternal Here, theemphasislayonimplementingcustomer-oriented webapplications,aswell In 2002,theactivitieslaunchedunderAndritzeBusinessproject were continued. Group. to individualneeds,aswellgeneratingbenefitsforallstakeholdersoftheAndritz solutions.Thisallowsaprompteffective andpersonalizedreaction withInternet-based business processes alongthevalue-addedchainwillbecomemore efficient and and partnersnewmore comprehensive services.Atthesametime,Andritz The primaryapproach ofAndritzeBusinessinitiativesistooffer customers,suppliers, customerandsystemsolutionsmore extensively.applying Internet-based of theAndritzGroup's foremost strategicgoalstointensifyitsuseofthenewmediaby Itisone technologiesinaprofitableavailable from wayforallthoseconcerned. Internet Model. Thisproject isdesignedtomakeuseofthepossibilitiesandopportunities In November2000,AndritzlauncheditsGroup-wide AndritzeBusinessConnectivity 81 / andritz 2002 eBusiness 82 / andritz 2002 Business ProcessManagement services forthepulpandpaperindustry. actions. Thiswillstrengthen Andritz'positionasasupplierofcomplete systemsand The target istobeacompetentpartnerofourcustomersthrough jointandconcerted exchangeofinformationabout acustomer'sspecificneedsandrequirements.internal motto, "Speakingwithonevoicetothecustomer." TheCRM Systemenablesimproved first stepwasforalltheDivisionsofPulpandPaperBusiness Area, working withthe Andritz hasimplementedaCustomerRelationshipManagement (CRM)System.The strategy, totheAndritzGroup staff, andtocustomerrequirements are needed forthis. each customerovertime.Efficient processes whichare tunedbothtothecompany to allitsBusinessAreas, andtobuildalastingrelationship oftrustandsatisfactionwith It isadefinedgoaloftheAndritzGroup tobeapreferred technicalsupplierwithregard Customer RelationshipManagement(CRM) process oforder handlingtocreate inter-Group collaborationandsynergies. with separateindividualactivities.Andritzhasplacedconsiderableemphasisonthe and dividingtasks.Theaimistoachieveahigherbenefitoverallthanwouldbepossible cooperation betweenbusinessunitstoperformadefinedservicebysharingknowledge partners).TheessenceofcollaborationiscoordinatedGroup and alsowithexternal Andritz definesCollaborationasaconcertedactiontocreate benefit(bothwithinthe Collaboration Andritz BusinessProcess Managementhasthefollowingfocuses: throughout theentire Group andinsidetheBusinessAreas asfaruseful. Business Process organization. Thegoalistostandardize importantprocesses function wasestablishedwhichwillfollowupontheintegrationofGroup intermsof Andritz Group in2003.DuringtheFourthQuarterofreporting yearanewcentral Business Process Managementwill,therefore, beoneofthemajorfocusesfor in theGroup mustbechecked. new entrepreneurial framework.Finally, theinterfacesbetweendifferent companies is anobjective,asadaptationofprocesses tothenewtechnologiesusedand requires professional businessprocess management.Newdefinitionofresponsibilities today. Developmentofadequatestructures toimplementthesenewapproaches New waysofthinkingandapproaches callforacriticalreview oftheprocesses used Business Areas andtheutilizationofsynergies ratherdifficult. systems andITsolutionswhichmakethetargeted Group-wide integrationofAndritz´ added companieshaveinsomecasesimplementeddifferent organizational process products, theAndritzGroup hasseenmajorgrowth overthepastyears.Thenewly growth,Through butalsobyacquiringcompanieswithcomplementary internal Quality will beimplementedin2003. work onmanagementsystemsinthemeaningof systematic causeanalysisandconsequentimprovements are giventoppriorityinthe Consistent orientationtoprocess approaches andutilizationofexperiencefeedbackby assurance contracts,supplier/buyerrelationship wasimproved withmutualbenefits. in theaimtostreamline process sequencesandtocutleadtimes.Withsuitablequality In procurement /outsourcing, higherqualificationofsupplierswastargeted andrealized reduce riskstoaminimum. components. Greater emphasisonendangermentanalyseshasmadeitpossibleto led toafurtherincrease inthequalityandoperatingreliability ofmajorplant Successful implementationofthenewEuropean standards forpressurized vesselshas identification andutlizationof"BestPractices"inallsections. role inQualityManagement. Process analysisthatcovered severalsitespermittedthe During theyearunderreview, aspectsofintegrationintheAndritzGroup playedamajor Focus 2002 are akeyfactorinthecostleadershipofAndritzGroup. monitors. Thesesuppliershavelong-termexperienceincooperatingwithAndritzand components are madebysub-suppliersthatAndritzselectsandwhosequalityit knowledge are produced atoneoftheproduction sitesrunbytheAndritzGroup. Other Key componentsandequipmentwhosedesignmanufacture needsspecial with whichwarrantyvaluescanbemetandsurpassed. essential forcustomersisaprerequisite fordevelopingmachines,plants,andprocesses manufacture, andinstallation.Thorough knowledgeofthetechnologiesthatare and systematicorganization ofthesequencesthatare necessaryforplanning, complexity ofAndritz’systemsrequires manufacturingstandards ofthehighestlevel Apart from well-trainedemployeeswhoare prepared totakeresponsibility, the new ISO9001:2000standard, which 83 / andritz 2002 Quality 84 / andritz 2002 Environmental Protection from renewable energy forms. able togenerateup600megawattsofsteamand 140megawattsofelectricity Kymmene’s Wisaforest millinPietarsaari,Finland. Afteritsstart-up,thisplantwillbe conjunction withtheconstructionofworld’s largest recovery plant atUPM- energy tothepublicpowernetwork.Suchabiomassproject willberealized in electricity totheentire millcomplexandalsototransferacertain amountofexcess success onthemarket.Thebiomass-derivedenergy inapulpmillissufficient tosupply to increase electricpowerproduction. Andritzoffers thesetechnologieswith great Up-to-date technologieshavealsobeendevelopedforgeneratingenergy from biomass long experience,withaninstalledbaseofover800reference plants. economy andtotheoptimizationofproduction processes. Here, Andritzhasvery recycling ofthematerials usedinkraftproduction. Theproducts contributebothtothe systems, aswelllimekilnsandwastewaterevaporators,ensures near-complete product rangeencompassesevaporationplants,recovery boilers,andrecausticizing especially inrecovery ofthechemicalsandliquidsusedinkraftpulpproduction. The The PulpandPaperBusinessArea offers itscustomerscomprehensive solutions to aminimumandofcurtailingoperatingcostsforourcustomersatthesametime. materials usedinproduction processes are capableofreducing environmental pollution with theproducts thatAndritzdevelops.Optimumutilizationandrecycling ofthe Environmental protection isanimportantsubjectnotonlywithinouroperationsbutalso receipt oftheGraz Ökoprofit award. These measures andtheresults attainedatthesiteinGrazhavebeenconfirmedby achieved. year underreview andfarbetterutilizationofthematerialsresources employedwas residual wastequantityfrom our production processes wasagainreduced duringthe materials andresources, especiallyinwatersupplyanddisposalofwastewater. The placed onoptimizationoftheexistingwastemanagementsystemandmeasures tosave During theyear2002,mainfocusofenvironmental protection program was utilization ofthematerialsandresources usedinmanufacture. been implementedespeciallyattheproduction level,withtheaddedresult ofoptimized Environmental Protection Assignees.Stringentenvironmental protection standards have implemented atthedifferent sites.Compliancewiththeseguidelinesisobservedby protection. Therefore, uniformenvironmental protection guidelineshavebeen company, theAndritzGroup iscommittedtotheconceptofglobalenvironmental place intheAndritzGroup’s corporatephilosophyformanyyearsnow. Asaglobal Protecting theenvironment andconservationofnaturalresources havehadaprominent Environmental Protection Environmental

Andritz drying plants turn sewage sludge to dry granulate that can be re-used in agriculture and industry.

This helps to save raw materials. 2002 Photo: Drying plant in Cardiff, GB. andritz / 85 86 / andritz 2002 Environmental Protection soil improver, orasaggregate materialinthebrickandcementindustry. effluents isdriedandconvertedintogranulatewhichcanbereused asfuel,fertilizeror plants, thesewagesludgethatisaby-product ofcleaningmunicipalandindustrial Process Technologies alsohelptosaverawmaterialsandreuse waste.Withthese The dryingsystemsforsewagesludgedevelopedandconstructedbyEnvironment and the wastewater. the so-calledno-rinseprocess. Thisisaclosedsystem,hencenochromate goesinto The Chemcoaterisusedinstripcoatingsystemsforapplyingthechromate solutionin also reduces plantoperatingcost. recovery oftheacidsused. Thisnotonlygiveslargely wastewater-free operationsbut Rolling MillsandStripProcessing LinesBusinessArea are designedforalmostcomplete The regeneration systemsforpicklingacidthatwere developedforapplicationinthe steam forheatingtheYankee cylinder. Distinctenergy savingsare achieved. Our EquiDryShigh-temperature hoodutilizesexhaustheatfrom thedryertoproduce many applications,thesesavingsmaybeashigh200kWh/t. depending onthecharacteristicsofrawmaterialsandfinalproduct quality. In In Fiberboard applications,Andritzrefiner platesallowenergy savingsofupto3050% the qualityofendproducts isalsoimproved. the energy consumption ofupto450kWh/tinmanyapplications,butatthesametime optimize yieldfrom therawmaterialemployed.Andritzrefiner platesgiveareduction of were patentedbyAndritztoreduce bothenergy andchemicalconsumption.Theyalso The RT Pretreatment process forchipsandtheRTS process forimproving fiberqualities osldtdCs lwSaeet91 90 93 89 92 88 Notes totheConsolidatedFinancialStatements Consolidated StatementofShareholders’ Equity Consolidated CashFlowStatement Consolidated IncomeStatement Consolidated BalanceSheet Independent Auditors’Report of the Andritz GroupaccordingtoIFRS Consolidated FinancialStatements2002 87 / andritz 2002 88 / andritz 2002 needn uios Report Independent Auditors’ Touche & Deloitte Auditor Treuhand GmbHisamemberof Wirtschaftsprüfungs- undSteuerberatungsgesellschaft AUDITOR TREUHANDGMBH Vienna, 18February 2003 report according withAustrianlaw. legal requirements are metfortheexemptionofobligationpreparing group financialstatementsandastatus We confirm,thattheaccompanying statusreport isincompliancewiththegroup financialstatementsandthatthe AccountingStandardsflows fortheyearthenendedinaccordance ("IFRS”). withInternational Andritz Group asat31December2002andoftheconsolidatedresults ofitsoperationsandconsolidatedcash In ouropinion,thegroup financialstatementsgiveatrueandfairviewoftheconsolidatedposition opinion. evaluating theoverallfinancialstatementpresentation. We believethatourauditprovides areasonable basisforour also includesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswell examining, onatestbasis,evidencesupportingtheamountsanddisclosures inthefinancialstatements.Anaudit reasonable assuranceaboutwhetherthefinancialstatementsare free ofmaterialmisstatements.Anauditincludes national FederationofAccountants("IFAC”). ThoseStandards require thatweplanandperformtheaudittoobtain We Standards conductedourauditinaccordance onAuditing("ISA”)aspublishedbytheInter- withInternational statements basedonouraudit. responsibility oftheCompany’s management.Ourresponsibility istoexpress anopiniononthesegroup financial consolidated statementofshareholders’ equityfortheyearthenended.Thesegroup financialstatementsare the December 2002,andtherelated consolidatedstatementofincome,cashflowand We haveauditedtheaccompanyingconsolidatedgroup balancesheetofAndritzAG("AndritzGroup”) asat31 The followingnotestotheconsolidated financialstatementsformanintegralpartofthisconsolidated balancesheet. Shareholders' EquityandLiabilities as ofDecember31,2002and2001 Consolidated BalanceSheet Assets aktbescrte 9417,908 9,393 19,401 3,411 Marketable securities Prepayments anddeferred charges Other receivables ofprojectsCost andearnings under Trade accountsreceivable netet 17811,572 21,114 Provisions forpensions 295,513 11,748 17,696 18. 275,149 1. Advance paymentsmade Inventories Deferred taxassets Fixed andfinancialassets Investments iblte 1 6,5 484,001 467,453 11. 941,725 142,379 47,494 178,444 909,865 84,129 976 140,552 4,292 39,605 9,345 167,434 121,968 9. 89,854 610 45,966 94,510 45,803 230,330 6,238 18. Total 941,725 Shareholders’ EquityandLiabilities 82,461 45,966 Liabilities 94,510 222,937 625,098 Other liabilities 909,865 Billings inexcessofcostandearnings 117,835 Trade accountspayable 617,020 Interest bearingborrowings Bonds Non-current interest bearingborrowings 188,129 Liabilities fordeferred taxes Provisions Other provisions Provisions forseverancepayments Minority interests Shareholders' equity Retained earnings Capital reserves Share capital Total Assets Current Assets Cash andcashequivalents iblte o urn ae ,9 3,540 73,618 8,298 30,931 Liabilities forcurrent taxes Advance paymentsreceived nagbeast ,5 5,908 3,276 126,775 5,651 3,384 120,679 Shares inassociatedcompanies Property, plantandequipment Goodwill Intangible assets construction inexcessofbillings of projects underconstruction oe i ER (inTEUR) (inTEUR) Notes 10. 12. 10. 6. 4. 5. 3. 2. 5. 8,4 212,945 188,244 1,0 118,134 113,206 2,0 121,171 0 125,700 100,000 1,9 94,823 113,493 3,8 147,982 133,687 99334,204 39,993 86114,424 18,621 99,392 61,411 68523,468 26,845 ,2 25,287 3,225 022001 2002 89 / andritz 2002 90 / andritz 2002 iaca eut 7 6 5,523 469 17. 54,588 45,266 Net Income Financial results before interestEarnings andtaxes(EBIT) before interest,Earnings taxesand before interest,Earnings taxes, ae 3 ,1,1 1,318,701 1,110,110 13. Sales for theyearsendedDecember31,2002and2001 Consolidated IncomeStatement egtdaeaenme fnnprvlesae 2966411,916,667 0.90 33,594 60,111 12,976,624 26,458 0.90 45,735 The followingnotestotheconsolidatedfinancialstatementsform anintegralpartofthisconsolidatedincomestatement. Weighted average numberofnonparvalueshares Proposed orpaiddividendpernonparvalueshare (inEUR) pernonparvalueshare (inEUR) Earnings Net Incomeexcludingminorityinterests before taxes(EBT) Earnings hr fpoi u omnrt neet 119 (3,882) (1,189) 2,105 (13,404) 325 194 67,992 (13,467) (46) (802,435) 58,733 Share ofprofit duetominorityinterests 94,531 Income taxes (618,703) (26,539) 80,874 1,225 Other incomefrom financingactivities Interest results Income/expense from associatedcompanies (22,141) Amortization ofgoodwill 244 amortization ofgoodwill(EBITA) Depreciation andamortization(without ofgoodwill) depreciation andamortization(EBITDA) Other operatingexpenses Personnel expenses Cost ofmaterials Other operatingincome Capitalized costofself-constructedassets Changes ininventoriesoffinishedgoods n oki rges1018,669 1,011 and workinprogress oe i ER (inTEUR) (inTEUR) Notes 18. 16. 15. 14. 19. ,1,6 1,328,595 1,111,365 1065 (160,715) (289,932) (140,645) (287,316) 1,8)(22,635) (18,088) 76737,476 27,647 19,018 16,173 022001 2002 .42.82 2.04 2 3,093 321 ahfo rmfnnigatvte 327(5,910) 43,207 71,890 75,836 Cash flowfrom financingactivities Cash flowfrom operatingactivities ahfo rmivsigatvte 2,8)(75,088) (27,584) Cash flowfrom investingactivities ahadcs qiaet tteedo h eid2750125,743 (9,108) 135,308 207,530 91,459 125,743 The followingnotestotheconsolidated financialstatementsformanintegralpartofthisconsolidated cashflowstatement. Cash andcashequivalentsattheendofperiod Cash andcashequivalentsatthebeginningofperiod Changes incashandequivalentsresulting from Change incashandequivalents annsbfr ae ET 57560,111 45,735 before taxes(EBT) Earnings Gross cashflow for theyearsendedDecember31,2002and2001 Consolidated CashFlowStatement amnsrcie o se ipsl ,4 9,197 (1,778) 2,440 (1,338) (24,058) (21,657) Cash flowduetopurchase ofminorityinterests Payments madeforinvestmentsinfinancialassets Payments madeforinvestmentsinfixedtangibleandintangibleassets Payments received forassetdisposals amnsmd yascae opne 0 184 409 (10,962) (31,713) 41,618 (1,912) 19,104 Payments madebyassociatedcompanies 2,287 (29,821) (36,874) 19,362 (21,476) Changes inliabilitiesanddeferred income Changes inadvancepaymentsreceived Changes inshort-termprovisions andaccruals Changes inreceivables, prepayments and Changes inadvancepaymentsmade Changes ininventories Interest paid custo fonsae 163 0 39,745 (3,000) (962) 0 (1,663) (41,877) (11,700) (321) 56,482 Amounts duetocapitalincrease Acquisition ofownshares Dividends paidtominorityshareholders Dividends paidbyAndritzAG Changes ininterest bearingborrowings hro aktbescrte 9417,908 (457) 19,401 (9,672) 117,835 188,129 thereof cash-in-hand,cheques,bankdepositsandcashequivalents thereof marketablesecurities exchange ratefluctuations hne nacudepne ,4 (420) (1,482) 7,846 39,811 (393) (323) 35,723 46 Interest received Taxes paid Results from thesaleoffixedandfinancialassets Changes inaccruedexpenses Income/Expenses from investmentsinassociatedcompanies Depreciation andamortisationoffixedassets Interest result eerdcags6,1 (21,264) 63,517 deferred charges n uiesaqiiin 709 (58,449) (7,029) and businessacquisitions i ER (inTEUR) (in TEUR) 1,1)(19,244) (10,017) 88177,019 78,841 645 (10,941) (6,495) ,4 12,670 6,647 022001 2002 31 (3,093) (321) 91 / andritz 2002 92 / andritz 2002 custo fonsae 163 (1,663) (1,663) Changes toIAS39reserve Acquisition ofownshares ot fiiilpbi feig(,5)(3,155) 42,000 0 (3,000) 230,330 20,678 (1,870) 71,046 230,330 (372) 20,678 0 (3,000) (1,870) 71,046 45,966 (372) 0 94,510 Currency translationadjustments (27,000) Dividend payments 19,730 (3,155) 45,966 27,460 Net incomeexcluding 160,658 7,270 94,510 14,540 18,768 Status asat1January2002 0 Status asat31December2001 Total Other changes adjustments 40,259 reserve Changes toIAS39reserve earnings Costs ofinitialpublicoffering 27,000 increase Initial publicoffering Capital increase 1,931 reserves Currency translationadjustments capital 72,700 Dividend payments Notes Net incomeexcluding Adjustment 1.1.2001duetoIAS39 Status asat1January2001 (in TEUR) Equity Consolidated StatementofShareholders’ ttsa t3 eebr20 450 596 8,1 ,0 1,5) 222,937 (10,057) 8,601 83,917 0 45,966 equity. 94,510 The followingnotestotheconsolidatedfinancialstatementsformanintegralpartofthisstatementshareholde Status asat31December2002 Other changes ioiyitrss 648 26,458 26,458 33,594 33,594 minority interests minority interests 8. 8. hr Cptl aia Rtie A 9 translation IAS39 Retained capital Capital Share Amounts due oare Currency to agreed 1,0)(11,700) (11,700) 24 (224) (224) 9 193 193 04110,471 10,471 148 (1,498) (1,498) (30,735) ,1 1,910 1,910 rs’ of disposal.JointVentures withequalvotingrightsare consolidatedonaproportionate basis. are includedorexcluded,accordingly, inthe consolidatedfinancialstatementsfrom thedateofacquisitionorfrom thedate The purchase methodofaccountingisusedforacquired businesses.Companies acquired ordisposedofduring theyear income statements,respectively. equity andnetincomeattributabletominorityshareholders’ interests are shownseparatelyinthebalancesheetsand thefinancialandoperatingpoliciesofanenterprisesoastobenefit fromcapital andisabletogovern itsactivities.The normally evidencedwhenAndritzowns,eitherdirectly orindirectly, more than50%ofthevotingrightsacompany’s share The consolidatedfinancialstatementsoftheGroup includeAndritzandthecompanies thatitcontrols. Thiscontrol is c. PrinciplesofConsolidation The Group financialstatementsare prepared inEURO. b. ReportingCurrency of theobligationpreparing group financialstatements. in accordance withIFRSbasedon§245aofAustrianCommercial Codethelegalrequirements are metfortheexemption convention, exceptformarketablesecuritieswhichare statedattheirfairvalues.Forthese financialstatementsprepared Accounting Standards Board (IASB).Theaccompanyingfinancialstatementshavebeenprepared underthehistoricalcost The accompanyingfinancialstatementsare prepared inaccordance withthestandards formulatedbytheInternational a. General The principalaccountingpoliciesadoptedinpreparing thefinancialstatementsofAndritzare asfollows: B. Summaryofsignificant Accounting Policies may nottotal. Various amountsandpercentages setoutintheseconsolidatedfinancialstatementshavebeenrounded andaccordingly Supervisory Board. The consolidatedfinancialstatementsare theresponsibility ofthemanagementandwillbeacknowledgedby Group islocatedatStatteggerStrasse18,8045Graz,Austria. The averagenumberofemployeesintheGroup was4,497in2002and4,4982001.Theregistered office address ofthe Process Technologies andFeedTechnology. operates infourmainstrategicbusinessareas: PulpandPaper, RollingMillsandStripProcessing Lines,Environment and since June2001.TheAndritzGroup (the"Group”) isaleadingproducer ofhightechnologyindustrialmachineryand Andritz AG("Andritz”)isincorporatedunderthelawsofRepublicAustriaandlistedonVienna StockExchange A. General Financial Statements Notes totheConsolidated as atDecember31,2002and2001 93 / andritz 2002 Notes to the Consolidated Financial Statements 94 / andritz 2002 Notes to the Consolidated Financial Statements valuation ofhedgingcontractsatfairvalueasthebalancesheet date. are recognised directly inthehedgingreserve inshareholders' equity. TheAustrianCommercial Codedoesnotrequire a carries thematfairvalue.Changesinthevalueofahedging instrumentthatqualifiesasahighlyeffective cash-flowhe Hedging: acquisition costsoralowermarketvalueifthere isasustainabledecrease ofmonetaryitems. and are valuedattheirquotedmarketpricethebalancesheetdate.TheAustrianCommercial Coderequires avaluationat Non-current securities: recorded, whereas IFRSalsorequires therecognition ofunrealized profits ofmonetaryitems. the valuationofforeign exchangeitemsasofthebalancesheetdate.According toAustrianlaw, onlyunrealized lossesare Foreign currency transactions: treatment ofchangesinthefairvalue. market value.UnderIFRSmarketablesecuritiesavailableforsaleare tobevaluedatfairvalues,andthere isachoiceforth Marketable securities: determined byreference tomarketyieldsonhighqualitycorporatebondsandanexpectedcompensationincrease. actuary. UnderIFRS,provisions forpensionsare calculatedusingtheprojected unitcredit method,basedonadiscountrate Provisions forpensions: would benormallyshownasprovisions. the amountofprovisions. According toAustrianCommercial Codecertainamountsreported asliabilitiesunderIFRS respect toprovisions. IFRStendstoplacestricterrequirements ontheprobability ofaneventoccurringandonestimating Other provisions: unused taxcredits whichare expectedtobeoffset againsttaxableprofits inthefuture. measured atactualorenactedtaxrates.Deferred taxassetsmustalsoberecorded forunusedlosscarryforwards and temporary differences whicharisebetweenfinancialstatementsprepared fortaxpurposesandIFRSfinancialstatements, a taxliabilityisexpectedtoarisewhenthesedifferences are reversed. IFRSrequire thecreation ofdeferred taxesforall Deferred taxes: the ratioofaccumulatedcoststoestimatedtotalcompleteeachcontract(cost-to-costmethod). method inaccordance withprogress andpro rataprofit realisation. Theextentofcompletionisestablishedbyconsidering the customer(completedcontractmethod).UnderIAS11,order completionisaccountedusingthepercentage ofcompletion Construction contracts: Austrian Commercial Codeallowsacredit toreserves, withnoeffect ontheincomestatement. Goodwill: d. MajorDifferences betweenAustrianandIFRSAccountingPrinciples With theadoptionofIAS39,Group hasdesignateditsforward exchangecontractsascashflowhedgesand In accordance withIAS22,goodwillfrom capitalconsolidationiscapitalisedandamortisedovertheusefullife.The The AustrianCommercial Coderequires thecreation ofdeferred taxprovisions fortemporarydifferences if In contrasttotheAustrianCommercial Code,IFRSinterprets theprincipleofprudencedifferently with Austrian accountingprinciplesrequire securitiestoberecorded atthelowerofacquisitioncostsor In accordance withIFRSnon-current securitiesoftheGroup are classifiedas"availableforsale" According toAustrianaccountingregulations, salesandprofits are firstrealised upontakeoverby In keepingwiththeAustrianCommercial Code,provisions forpensionsare calculatedbyan These twoaccountingsystemsrequire different treatments forunrealized profits arisingfrom dge e were written off againstreserves. impairment lossisrecognised. Goodwillandnegativegoodwill arisingfrom business combinationsbefore 1 January1995 the cash-generatingunittowhich thegoodwillbelongs.Ifcarryingamountishigherthan therecoverable amount, an continuing future benefits.Ifthere isanindicationthatgoodwillmaybeimpaired, therecoverable amountisdeterminedfor from 7to15years.Theunamortisedbalancesare reviewed ateachbalancesheetdatebyassessingthe probability of The amortisationperiodisdeterminedatthetimeofacquisition basedupontheparticularcircumstances andranges amortised onastraight-linebasisoveritsusefullife. balance sheet.Goodwilliscarriedatcostlessaccumulatedamortisation andaccumulatedimpairmentlosses.Goodwillis liabilities acquired asatthedateofexchangetransactionisrecorded asgoodwillandrecognised asanassetinthe The excessofthecostanacquisitionoverCompany’s interest inthefairvalueofnetidentifiableassetsand Goodwill straight-line basisovertheexpectedperiodsofbenefit.The usefullivesvaryfrom 3to15years. Amounts paidforconcessions,industrialrightsandsimilar rights andvaluesare capitalisedandthenamortisedona Concessions, industrialrightsandsimilarvalues at eachfinancialyear-end. basis overthebestestimateoftheirusefullives.Theamortisationperiodandmethodare reviewed annually less accumulatedamortizationandanyimpairmentlosses.Intangibleassetsare amortisedonastraight-line Intangible assetsare accountedforatacquisitioncost.Afterinitialrecognition, intangibleassetsare accountedforatcost a. IntangibleAssets D. Accounting andValuation Principles statements ofassociatedcompanies. transactions andothereventsinsimilarcircumstances. Theseuniformaccountingpolicies are notusedforthe financial eliminated. Theconsolidatedfinancialstatementshavebeenprepared usinguniformaccountingpoliciesforlike Inter-company balancesandtransactions,includinginter-company profits andunrealized profits andlosseshavebeen material changesinthebusinesspositionofGroup. In addition,otherminorbusinessacquisitionsandchangesinscopeofconsolidationtookplace,whichdidnotleadto sheet itemsarisingfrom thesetransactionsandtheeffects ontheincomestatementare alsonegligible. galvanizing andEUR4,700thousandare related tothepulpandpaperdrying.There isnomaterialimpactonotherbalance goodwill ofthesetransactionsamountedtoEUR6,300thousandwhich1,600are related tothehotdip acquisitions apurchase priceofEUR1,602thousandhasbeenpaid.Mainlyasaresult ofreserves forrestructuring the have beenacquired andare includedintheconsolidatedfinancialstatementsofAndritzGroup for2002.Forboth hot-dip galvanizingfrom theFrench companySelasSAS.Certainassetsandliabilitiesrelated tothedescribedbusiness In December2002theAndritzGroup acquired thepulpandpaperdryingbusinessfrom ABBaswellthetechnologyfor goodwill. reduced byEUR4,546thousandandthedifference tothepurchase priceofEUR628thousandhasbeenshownas 5,175 thousand.Guinard hasalready beenfullyconsolidatedinthelastyears.Therefore theminorityinterests havebeen The remaining 50%ofshares ofGuinard CentrifugationSA,Francewere acquired inJune2002forapurchase priceofEUR C. Acquisitions andOtherChangesinScopeofConsolidation 95 / andritz 2002 Notes to the Consolidated Financial Statements 96 / andritz 2002 Notes to the Consolidated Financial Statements value. Changesofthesefairvaluesare recognised asgainsorlossesintheincomestatement. Other non-current securitiesheldonalong-termbasisare classifiedasavailable-for-sale investmentsandvalued at fair in prioryearsnolongerexist. associates isperformedwhenthere isanindicationthattheassethasbeenimpaired ortheimpairmentlossesrecognised influence isexercised bytheGroup are accountedforbyusingtheequitymethod.Anassessmentofinvestmentsin in associatedcompanies(generallyinvestmentsofbetween20%to50%acompany’s equity)where asignificant These long-terminvestmentsconsistprimarilyofshares inassociatedcompaniesandnon-current securities.Investments c. Financialassetsandinvestmentsinassociatedcompanies are completedandputintooperationaluse. construction, plantandequipmentotherdirect costs.Theyare notdepreciated untilsuchtimeastherelevant assets of constructionrepresent plantandproperties underconstructionandare statedatcost.Theseincludecostsof ofeconomicbenefitsfromconsistent withtheexpectedpattern itemsofproperty, plantandequipment.Assetsinthecourse The usefullifeanddepreciation methodsare reviewed periodicallytoensure thatthemethodandperiodof depreciation are a straight-linebasisoverthefollowingestimatedusefullives: overhaul costs,are normallycharged toincomeintheperiodwhichcostsare incurred. Depreciation iscalculatedon use. Expenditures incurred afterthefixedassetshavebeenputintooperation,suchasrepairs andmaintenance purchase taxesandanydirectly attributablecostsofbringingtheassettoitsworkingconditionandlocationforintended The initialcostofproperty, plantandequipmentcomprisesitspurchase price,includingimportdutiesandnon-refundable resulting from theirdisposalisincludedintheincomestatement. assets are soldorretired, theircostandaccumulateddepreciation are eliminatedfrom theaccountsandanygainorloss Property, plantandequipmentare statedatcostlessaccumulateddepreciation andaccumulatedimpairmentlosses.When is recognised whentheownershipofgoodsistransferred ("completedcontractmethod”). fully writtenoff. Contractsotherthanconstructioncontractsare valuedatproduction costs.Forthesecontractstherevenue inventories, costincludestheapplicableallocationoffixedand variableoverheadcosts.Unrealisable inventoryhasbeen completion, marketinganddistribution.Costisdetermined primarily onthebasisofFIFOmethod.Forprocessed and slowmovingitems.Netrealisable valueisthesellingpriceinordinary courseofbusiness,lessthecosts Inventories, includingworkinprogress, are valuedatthelowerofcostandnetrealisable value,afterprovision forobsolete d. FinishedGoods,Work inProgress, RawMaterials b. Property, PlantandEquipment ulig 20–50years 3–10years 4–10years Tools, office equipmentand vehicles Machinery andtechnicalequipment Buildings e. ConstructionContracts kind, sothatauthorizedcapital wasincreased toEUR39,985,000 or5,500,000shares respectively. amount ofuptoEUR10,905,000 through theissueofup to1,500,000shares inbearer formandforcontribution incashor Board toincrease the nominalvalueoftheCompany’s share capital with priorapproval oftheSupervisory Board byafurther At the94thordinary shareholders’ meetingheldon19March 2001theshareholders resolved to authorizetheManaging was registered inthecommercial register on26January2001. amount ofEUR27.0millionwaspaidbytheshareholders (thereof EUR24.8millionbefore 31December2000).Thisincrease 19 September2000.OutofthisauthorizationAndritzissued 1,000,000shares atthe endof2000.Fortheseshares an the registration oftheamendmenttoArticlesAssociationincommercial register whichtookplaceon registered formandforacontributionincashorkind. Thisincrease hasbeenauthorizedforamaximumoffiveyearsfrom Supervisory Board byanamountofuptoEUR36,350,000through theissueofupto5,000,000shares inbearer or authorize theManagingBoard toincrease thenominal valueoftheCompany’s share capitalwithpriorapproval ofthe At theextraordinary shareholders’ meetingoftheCompanyheldon6September2000shareholders resolved to Only ordinary shares existandallshares are issuedandhavethesamerights. i. Share Capital original maturitiesofthree monthsorlessandthatare notsubjecttoanyriskofchangeinvalue. Cash includescashinhandandwithbanks.equivalentsmightincludeshort-termdepositsnon-banks h. CashandEquivalents net disposalproceeds andthecarryingamountisincludedinincomestatement. received ontradingsecuritiesisreported asinterest income.Onadisposal ofaninvestment,thedifference betweenthe Marketable securitiesare statedatthemarketvalue.Adjustmentsinvaluationare includedintheincomestatement.Interest are heldforthepurposeofinvestinginliquidfundsandare notgenerallyintendedtoberetained onalong-termbasis. bondsandoffirst-classbanksthatareMarketable securitiesconsistofgovernmental tradedinliquidmarkets.They g. MarketableSecurities Receivables are statedatfacevalue,afterallowancesfordoubtfulaccounts. f. Trade AccountsReceivable according totheprofit realisation. Atthecompletionofacontractremaining warrantyriskisreassessed. contract costswillexceedtherevenues. Forpossiblecustomerwarrantyclaimsprovisions are accountedfor contracts are recognised atthetimeofoccurrence. Impendinglossesare recognised whenitisprobable thatthetotal assessed amountisincludedintheestimatedcontractcosts.Impendinglossesoutofvaluationconstruction remaining technologicalandfinancialriskswhichmightoccurduringtheremaining constructionperiod,anindividually contract costsandlosses,ifany, are recognised intheincomestatementofperiodwhichtheyare determined.For considering theratioofaccumulatedcoststoestimatedtotalcompleteeachcontract.Changes profits are recorded inproportion inearnings ofrecorded sales.Incost-to-costmethodsalesandprofits are recorded after costs andsalespricestheactualfigures oftheaccumulatedcostsare availableonamonthlybasis.Estimatedcontract The extentofcompletion("stagecompletion”)isestablishedbythecost-to-costmethod.Reliableestimatestotal method. Theconstructioncontractsare determinedbythetermsofindividualcontract,whichare agreed atfixedprices. Receivables from constructioncontractsandtherelated salesare accountedforusingthepercentage ofcompletion 97 / andritz 2002 Notes to the Consolidated Financial Statements 98 / andritz 2002 Notes to the Consolidated Financial Statements obligation. money ismaterial,theamountofaprovision isthepresent valueoftheexpenditures expectedtoberequired tosettlethe reviewed ateachbalance sheetdateandadjustedtoreflect thecurrent bestestimate.Where theeffect ofthetimevalue required tosettletheobligation,andareliable estimatecanbemadeof theamountofobligation.Provisions are a pasteventanditisprobable (i.e.more likelythannot)thatanoutflowofresources embodyingeconomicbenefitswillbe A provision isrecognised when,andonlyanenterprisehasapresent obligation(legalorconstructive)asaresult of k. Provisions Capital Reservesare created inaccordance withAustrianrequirements andincludeshare premium amounts. j. CapitalReserves Management Share OptionPlan.Thebookvalueoftheownshares equalsapproximately thefairvalue. at anaveragepriceof21.62pershare. Itisplannedtousetheseshares fordeliveryofshares withintheframeworkof a pricerangeof10to35Euro pershare. Until31December200276,897ownshares havebeenacquired in severalsteps has decidedaprogram foracquisitionofownshares up to650,000shares between16May2002and27June2003within Based ontheauthorizationofshareholders’ meetingandwithapproval from theSupervisoryBoard theManagingBoard Consequently theshare capitalamountstoEUR94,510,000dividedinto13,000,000shares ofnonparvalue. was fixedatEUR21pershare. Thisincrease wasregistered inthecommercial register on23June2001. In thecourseofCompany’s IPOoutofthisauthorizationAndritzissued2,000,000shares inJune2001,theissueprice and intendstosettleeitheronanetbasisorrealise theassetandsettleliabilitysimultaneously. reported asexpenseorincome.Financialinstrumentsare offset whentheGroup hasalegallyenforceable righttooffset Therefore interest, dividends,gainsandlossesrelating tothesefinancialinstrumentsclassifiedasanasset oraliability Financial instrumentsare classifiedasassetsorliabilitiesinaccordance withthesubstanceofcontractualarrangement. found inthesenotes. accounting policiesonrecognition andmeasurement oftheseitemsare disclosedintherespective accountingpolicies securities, tradeandotheraccountsreceivable andpayable,long-termreceivables, borrowings andinvestments.The Financial assetsandfinancialliabilitiescarriedonthebalancesheetincludecashequivalents,marketable Financial Instruments l. OtherAccountingandValuation Principles re for thecash-generatingunit. equipment andintangiblescarriedatcost.Recoverableamounts are estimatedforindividualassetsor, ifitisnotpossible, asset exceedsitsrecoverable amount,animpairmentlossisrecognised inincomeforitemsofproperty, plantand circumstances indicatethatthecarryingamountofanassetmaynotberecoverable. Wheneverthecarryingamountofan Property, plantandequipmentintangible assetsare reviewed forimpairmentwhenever events orchangesin Impairment ofassets Borrowing costsare generallyexpensedasincurred. Borrowing costs recognised whentheshareholders’ righttoreceive paymentisestablished. Interest isrecognised onatimeproportion basisthatreflects theeffective interest rateoftheasset.Dividendsare when deliveryhastakenplaceandtransferofrisksrewards hasbeencompleted. enterprise andtheamountofrevenue canbemeasured reliably. Salesare recognised netofsalestaxesanddiscounts Revenue isrecognised whenitisprobable thattheeconomicbenefitsassociatedwithtransactionwillflowto Revenue recognition (exceptforconstructioncontracts) as anexpense. capitalisation (IAS38)are notmet.In2002EUR30,135thousandandin200118,425havebeenrecognised Expenditures forresearch anddevelopmentare charged againstincomeintheperiodincurred becausethecriteriafor Research anddevelopmentcosts for hedgingofcurrency risksandinterest swapsare usedforhedgingofinterest risk. All derivativefinancialinstrumentsare designatedashedginginstruments.Fixedforward exchangeratecontractsare used Derivative financialinstruments currencies. occur intheforeseeable future. According totheGroup’s hedging policythere are nohedgesofnetinvestments in foreign All investmentsinaforeign entityare long-terminvestmentsandpresently asaleofsuchinvestmentsisnotexpectedto reported inequityistransferred totheincomestatement. When thecommittedorforecast transactionisnolongerexpectedtooccur, anynetcumulativegainorlosspreviously commitment orforecast transactionaffects theincomestatement. equity are transferred from hedgingreserve tonetprofit orlossinthesameperiodperiodsduringwhichhedgedfirm carrying valueoftheassetorliability. Otherwise,forallothercash-flowhedges,gainsandlossesinitiallyrecognised in previously recognised directly inequityare transferred from equityandincludedintheinitialmeasurement ofthecostor reserve inshareholders’ equity. Ifthehedgedcashflowresults intherecognition ofanassetoraliability, allgainsorlo fair valueofahedginginstrumentthatqualifiesashighlyeffective cash-flowhedgeare recognised directly inthehedging future Cashflowsfortheseprojects orregularly salesandcantherefore beclassifiedascashflowhedges.Changesinthe business inforeign currency. According totheGroup’s hedgingpolicyallforward contractsare usedforhighlyprobable The Group usesforward exchangecontractstomitigateexposure toforeign currency riskoutofprojects andregularly Hedging sses 99 / andritz 2002 Notes to the Consolidated Financial Statements 100 / andritz 2002 Notes to the Consolidated Financial Statements m. Foreign currency related toterminationindemnitiesare accrued. employment. Noterminationindemnitiesare payableforvoluntaryterminationatthe request oftheemployee. Expenses In certaincountriestheGroup isalsoobligedbylawtopayterminationindemnities insomecasesoftermination Severance payments plans forcertainemployees.Therelated costsare expensedastheyoccur. as theinitialfundingseemstobesufficient tocoverfuture deficits.OtherGroup companiesprovide definedcontribution deficit intheplanwillaffect thefuture contributionsoftheGroup. Nomaterialamountsare expectedoutoffuture deficits, accounted asadefinedcontributionplan,althoughtheobligationsmetcriteriaofbenefitplan.Allsurplusor In 1999partofthepensionobligationswere transferred toamulti-employerpensionfund.Theseobligationswere countries. obligation ismeasured atthepresent valueofestimatedfuture Cashflowsusingdifferent discountratesfordifferent gains orlossesare amortisedbasedontheexpectedaverageremaining workinglivesoftheemployees.Thepension on thecurtailmentorsettlementofpensionbenefitsare recognised whenthecurtailmentorsettlementoccurs.Actuarial are recognised onastraight-linebasisovertheaverageperioduntilamendedbenefitsbecomevested.Gainsorlosses additional unitofbenefitentitlementandmeasures eachunitseparatelytobuildupthefinalobligation.Pastservicecosts projected unitcredit method.Theprojected unitcredit methodconsiderseachperiodofserviceasgivingrisetoan professionally qualifiedindependentactuaries.Theobligationandcostsofpensionbenefitsare determinedusinga Some Group companiesprovide definedbenefitpensionplansforcertainemployees.Thefundsare valuedeveryyearby Defined benefitplans(provisions forpensions) n. EmployeeBenefits in aforeign entityare classifiedasequityintheconsolidatedfinancialstatementsuntildisposalofnetinvestment. transaction. Exchangedifferences arisingonamonetaryitemthat,insubstance,formspartoftheGroup’s netinvestment Any goodwillarisingontheacquisitionofaforeign entityisrecorded usingtheexchangerateateffective dateofthe in acurrency translationreserve inequity. revenue itemsare translatedusingtheaverageexchangeratesforyear. Allresulting translationdifferences are included consolidated subsidiariesare translatedatyear-end exchangerateswithrespect tothebalancesheet.Expenseand nisationally autonomous.Theirreporting currencies are theirrespective localcurrencies. Financialstatementsofforeign Foreign consolidatedsubsidiariesare regarded asforeign entitiessincetheyare financially, economicallyandorga- Foreign entities recognised intheincomestatementperiodwhichtheyarise. the settlementofmonetaryitemsatratesdifferent from thoseatwhichtheywere initiallyrecorded duringtheperiodsare rate betweenthereporting currency andtheforeign currency atthedateoftransaction.Exchangeratedifferences arising Foreign currency transactionsare recorded inthereporting currency byapplyingtotheforeign currency amounttheexchange Foreign currency transactions those temporary differences are expected toberecovered orsettled,basedontaxrates (andtaxlaws)thathave been Deferred taxassetsandliabilitiesare measured using thetaxratesexpectedtoapplytaxableincomein years inwhich carrying amountsofassetsand liabilitiesforfinancialreporting purposesandtheamountsusedforincometaxpurposes. the balancesheetliabilitymethod. Deferred incometaxes reflect thenettaxeffects oftemporarydifferences betweenthe The incometaxcharge isbased onprofit fortheyearand considersdeferred taxation. Deferred taxesare calculatedusing o. Incometaxes on probable. A contingentassetisnotrecognised inthefinancialstatementsbutdisclosedwhenaninflowofeconomicbenefitsis of resources embodyingeconomicbenefitsisremote. Contingent liabilitiesare notrecognised inthefinancialstatements.Theyare disclosedunlessthepossibilityofanoutflow F. Contingencies Net segmentalassetsconsistof: (including overheadandadministrativecosts)are allocatedtobusinesssegments. reporting scheme,whichisthebasisforprimarysegmentinformation,allsalesanddirect andindirect expenses inter-segment transactions.Allconsolidationentriesare includedintherelevant segment.According tothemonthly on businessandgeographicalsegmentsispresented insectionI(see"segmentinformation”below).There are nomaterial strategic businessunitsare thebasisuponwhichGroup reports itsprimarysegmentinformation.Financialinformation For managementpurposestheGroup isorganised onaworldwidebasisintofourmajoroperatingbusinesses.The Business segments E. Segments a different period,directly toequity, includingexchangedifferences arisingonthetranslationofinter-company loans. Deferred taxischarged orcredited directly toequityifthetaxrelates toitemsthatare credited orcharged, inthesameor taxable profit willbeavailabletoallowthebenefitofpartorallthatdeferred taxassettobeutilised. conversely reduces thecarryingamountofadeferred taxassettotheextentthatitisnolongerprobable thatsufficient the extentthatithasbecomeprobable thatfuture taxableprofit willallowthedeferred taxassettoberecovered. TheGroup and thecarryingamountofdeferred taxassets.Theenterpriserecognises apreviously unrecognised deferred taxassetto deferred taxassetscanbeutilised.Ateachbalancesheetdate,theGroup reassesses unrecognised deferred taxassets Deferred taxassetsare recognised whenitisprobable thatsufficient taxableprofits willbeavailableagainstwhichthe Deferred taxassetsandliabilitiesare recognised regardless ofwhenthetimingdifference islikelytoreverse. sheet date,torecover orsettlethecarryingamountofitsassetsandliabilities. assets reflects thetaxconsequencesthatwouldfollowfrom themannerinwhichenterpriseexpects,atbalance enacted orsubstantivelybythebalancesheetdate.Themeasurement ofdeferred taxliabilitiesanddeferred tax liabilities notincludinginterest bearingborrowings of eachsegment. current assetsnotincludingcashandequivalentsmarketablesecurities; intangible fixedassets,property, plantandequipment; 101 / andritz 2002 Notes to the Consolidated Financial Statements 102 / andritz 2002 Notes to the Consolidated Financial Statements Advance paymentson Concessions, industrialrightsand sesi oreo osrcin 46 3) ,4 7 0 18 2,632 (128) 132,359 0 1,041 244,215 177 0 0 2,544 1,013 26,995 140,453 (33) 4,621 0 36 9,850 426 (5,897) 0 381 133,607 0 6,440 7,514 Advance paymentson 5,001 1,341 Assets incourseofconstruction (23,475) 2,469 (8,617) 260,176 140,278 Other equipment,factoryandoffice (1,395) 27,226 Technical equipmentandmachinery Land andbuildings Goodwill Total intangibleassets Acquisition orProduction Costs 1. Changesinfixedandfinancialassets G. NotestotheBalanceSheet oa iaca ses 541 (3) ,0 5 0 122 15,831 (1,212) 0 448 164 629,235 0 458 (413) 11,285 0 381 0 2,301 332 (1,239) 16,017 0 0 3,384 38 (231) 32,802 0 214 0 15,431 2 0 16 (44,165) 656,647 0 27 164 0 (4) 1,639 0 (240) 1 Total fixedandfinancialassets 0 403 488 11,141 0 496 Total financialassets 0 0 0 15 342,194 Advance paymentsonfinancial 0 Non-current securities 763 (1) 3,276 Other loans 333 188 381 Loans toassociatedcompanies 14,218 Shares inassociatedcompanies 20,518 Other investments(participations) Shares inaffiliated companies (19,064) 353,814 Total property, plantandequipment i ER 02dfeecsAdtosDsoasaqiiin rnfr 2002 Transfers acquisitions Disposals Additions differences 2002 (in TEUR) iia ihsadvle 2,2 135 249131 3 26,995 36 0 1,341 2,469 (1,395) 27,226 similar rightsandvalues qimn 7,9 (,1) 817 658 0 (,8) 66,515 (9,889) 0 6,588 8,117 (4,516) 79,391 equipment ses 4 0 0 4 0 0 0 0 0 4 235 (111) 0 0 235 assets (1) 112 0 0 0 0 tangible assets 0 0 0 intangible assets aur rnlto uies31 business translation 1 January aac hne Balance Changes Balance sa urny det asat dueto Currency as at December oa ie n iaca ses 3113 (982 3,2 365 0 77 354,086 757 0 13,695 35,723 *) Impairmentlosses (29,832) 0 361,133 Total fixedandfinancialassets 0 Total financialassets 0 0 61,640 0 1,039 0 110,528 0 812 0 0 3,406 0 21,344 (3,460) 0 37 61,467 Advance paymentsontangible 13,467 Assets incourseofconstruction 0 (15,133) Other equipment,factory 112,194 1,297 2,548 Technical equipment (1,261) Land andBuildings 21,317 Goodwill Total intangibleassets Depreciation andAmortisation Advance paymentsonintangible Concessions, industrialrights on oascae opne 0 366 0 0 0 0 0 0 7 (24) 0 0 307 0 1 50 0 0 0 0 358 0 0 0 0 108 0 0 0 0 0 0 0 0 0 (132) 0 0 Advance payments 0 0 Non-current securities 307 50 Other loans Loans toassociatedcompanies Shares inassociatedcompanies Other investments(participations) Shares inaffiliated companies Total property, plant i ER 02dfeecsteya ipsl custosTases2002 Transfers acquisitions Disposals theyear differences 2002 (in TEUR) n ahnr 1444 633 803 ,2 952 110,400 9,552 49,475 0 (9,871) 5,326 8,063 0 6,260 (6,323) 8,124 104,434 (3,655) 61,137 and office equipment and machinery n iia ihsadvle 2,1 121 258127 3 21,344 37 0 1,297 2,548 (1,261) 21,317 and similarrightsvalues nfnnilast 0 0 0 0 0 0 0 0 0 0 0 0 221,515 720 0 0 0 12,398 on financialassets 19,593 0 (13,438) 0 227,038 0 0 0 and equipment 0 assets 0 0 assets *) aur tasainsto o business sationfor translation 1 January aac ercainCagsBalance Changes Depreciation Balance sa urny adaot-det asat dueto andamorti- Currency as at 8 15 0 699 0 0 0 115 1 583 31 December 103 / andritz 2002 Notes to the Consolidated Financial Statements 104 / andritz 2002 Notes to the Consolidated Financial Statements o-urn euiis 1,8 (4 1,0 11,273 130 0 11,309 82 138 26 164 3,276 (24) 164 366 3,384 25 11,285 0 448 50 0 164 112 426 307 126,776 3,384 214 235 332 120,679 2,632 72,140 35,844 Non-current securities 18,254 147,982 0 Other loans 221,515 0 70,719 Loans toassociatedcompanies 30,053 17,040 342,194 133,687 5,909 ber2001 Shares inassociatedcompanies 235 2,632 61,640 Other investments(participations) 0 110,400 49,475 110,528 ber2002 5,651 Shares inaffiliated companies 132,359 depreciation 140,453 244,215 66,515 0 Total property, plantandequipment 2002 21,344 Advance paymentsontangibleassets Assets incourseofconstruction 26,995 0 Other equipment,factoryandoffice equipment Technical equipmentandmachinery Land andbuildings 0 Goodwill Total intangibleassets Advance paymentsonintangibleassets Concessions, industrialrightsand (in TEUR) Net bookvalue oa ie n iaca ses 2,3 3406 7,4 295,514 14,848 unchanged. 4 In 2002noadditionalwrite-offs duetoimpairmentofassetshavebeenconsidered buttheexistingwrite-offs remained 275,149 production processes andchangedmarketoutlook. 15,132 addition, impairmentlosshasbeenrecognised in2001forintangibleassets(patentsand industrialrights)duetochanged 4 estimate availableforthedisposaloftheseassetsonanarm's lengthbasisbetweenknowledgeablewillingparties.In 354,086 699 written downtotheirrecoverable valuewhichistheirnetsellingprice.Netpricewasdeterminedusingthebest In 2001certainunitsincludingbuildings,machineryandequipment metthetestsforimpairmentandtheseassetswere 629,235 0 15,831 Impairment Loss 4 Total fixedandfinancialassets Total financialassets Advance paymentsonfinancialassets iia ihsadvle 2,9 134 561 5,909 5,651 21,344 26,995 similar rightsandvalues 1Dcme cuuae sa 1Dcm asat31Decem- asat31Decem- Accumulated 31 December ot sa Ntbo au Netbookvalue Netbookvalue Costs asat loac o obflacut 286 (3,468) (2,886) Allowance fordoubtfulaccounts Accounts receivable (in TEUR) 4. Trade AccountsReceivable The advancepaymentsmadeandpresented inthe balancesheetrelate toopenpurchase orders forcontracts. 3. Advancepaymentsmade The showninventoriesare valuedatcost. Raw materials Work inprogress Finished goods (in TEUR) 2. Inventories Other Acquisition ofAndritzAG Andritz Ahlstrom (in TEUR) Goodwill 9,3 216,413 191,130 113,206 118,134 133,687 147,982 188,244 212,945 988 22,300 58,019 37,815 19,848 57,255 36,103 10,334 77,474 60,174 14,563 71,515 47,609 2002 2001 2002 2001 2002 2001 105 / andritz 2002 Notes to the Consolidated Financial Statements 106 / andritz 2002 Notes to the Consolidated Financial Statements eevbe rmascae opne 2 17 122 806,560 954,853 858,147 Other Receivables from associatedcompanies 675,097 (in TEUR) 6. OtherReceivables for work,whichisnotperformedyet. ofprojectsThe billingsinexcessofcostsandearnings underconstructionrepresent, primarily, paymentsfrom customers Amount ofretentions Advances received andprogress billings Contract costsincurred andrecognised profits Contract revenue recognised assalesintheperiod (in TEUR) 5. Constructioncontracts te eevbe 3,0 402 121 34,082 34,204 7,041 205,904 212,945 57 Other receivables 39,936 170 39,993 ofprojects underconstruction Cost andearnings Trade accountsreceivable 188,074 (in TEUR) 188,244 2001 Other receivables ofprojects underconstruction Cost andearnings Trade accountsreceivable (in TEUR) 2002 7. StatementofReceivables necs fblig 141 631 5,060 56,351 61,411 in excessofbillings necs fblig 9,9 899 453 98,939 99,392 in excessofbillings ls eonsdlse)t ae9272 1,023,539 902,772 (less recognised losses)todate 8,4 2431 5,287 284,361 289,648 4,4 3895 7,616 338,925 346,541 oa udr1ya over1year under1year Total oa ne erover1year under1year Total eann emremaining term remaining term eann emremaining term remaining term hro Thereof Thereof Thereof Thereof 981 34,187 39,871 99334,204 39,993 2002 2001 ,1 860 1,118 2002 2001 oa 1843 (,1) ,0 565 598 4,0 167,434 45,007 15,998 35,615 2,309 2002 (6,712) 121,968 Addition 178,443 38,853 45,466 Reversal 18,621 6,154 15,837 2,759 151 be incurred withinthenextthree financialyears. 35,140 161 Use The provisions fororder related costsconsistprimarilyofprovisions forwarrantiesandcontingencies are expectedto (195) 442 fication Other provisions consistprimarilyoforder related provisions (2002:EUR101,746thousand;2001: 119,592thousand). 475 (6,265) 2,472 140,552 differences 2,504 (441) (447) Total 2002 14,424 37,891 Other provisions Longterm provisions Provisions forpensions Provisions forseverance (in TEUR) 9. Provisions recognized inequitywithoutincomeeffect. exchange ratebetweenEuro andDollarcompared toprevious year. Thiscurrency translationadjustmenthasbeendirectly arose from investmentsinforeign currency amountingtoEUR30,735thousandmainlyduethechangeofcurrency disposal ofinvestmentsorplannedrepayments ofshareholder loans.In2002anegativecurrency translationadjustment considered tobepermanentandtheconversionreporting currency isnotplanned.Exceptionsare madeforplanned Equity andshareholder loansinforeign currency are nothedgedagainstcurrency risksbecausetheinvestmentsare Currency translationadjustment The SupervisoryBoard andthemeetingofshareholders acknowledgedtheconsolidatedfinancialstatements. for informationpurposesonlytotheSupervisoryBoard andsubsequentlyacknowledgedbythemeetingofshareholders. solely ofnonexecutivesandincludesrepresentatives ofemployees.Theconsolidatedfinancialstatementswere presented year ended31December2001according toIFRSbeissueditsSupervisoryBoard. TheSupervisoryBoard ismadeup 2002 according toIFRS.On25February2002themanagementauthorisedconsolidatedfinancialstatementsfor On 17February2003theManagingBoard authorisedtheconsolidatedfinancialstatementsforyearended31December 95th ordinary shareholders’ meetingon17April2002.Thedividendhasbeenpaidtotheshareholders on24April2002. 11,700 thousandwhichisequaltoEUR0,90pershare wasproposed bytheManagingBoard andhasbeenresolved atthe For 2002adividendofEUR0.90peroutstandingshare isproposed bytheManagingBoard. Thedividendfor2001ofEUR Dividends 8. RetainedEarnings amns 2,6 6 3 3 1 ,9 26,845 3,395 10 33 32 (6) 23,467 payments t1JnaytasainRcas-31December Reclassi- translation at 1January aac sCrec Balanceasat Currency Balance as 107 / andritz 2002 Notes to the Consolidated Financial Statements 108 / andritz 2002 Notes to the Consolidated Financial Statements neonsdatailgislse 168 (740) (1,668) 16 14,424 18,621 7 (2,904) 1,613 (398) 4,118 16,437 16,562 Net liabilityinbalancesheet Unrecognised pastservicecosts Unrecognised actuarialgains/losses Present valueofunfundeddefinedbenefitobligations Fair valueofplanassets Present valueoffundeddefinedbenefitobligations (in TEUR) The followingtablereconciles thefundedstatusofdefinedbenefitplanstoamountsrecognised inthebalancesheet: country. Benefitsare dependentonyearsofserviceandinsomecasestherespective employee’s compensation. surviving dependantpensions.Thebenefitsoffered varyaccording tothelegal,fiscalandeconomicconditionsofeach employees. Provisions forpensionobligationsare establishedforbenefitspayableintheformofretirement, disabilityand Some Group companiesinAustria,USA,GermanyandSwedenprovide definedbenefitpensionplansforsomeclassesof Defined benefitplanforpensions 10. EmployeeBenefitObligations atsriecss 6 182 (344) 12,813 0 26 (90) 12,843 858 861 278 126 (7) 902 1,251 Payments todefinedcontributionplans Effect ofanycurtailmentorsettlement Past servicecosts Net actuarialgains/lossesrecognised onplanassets Expected return Interest expenseonobligations Current servicecosts (in TEUR) Pension expenseiscomprisedofthefollowing: 599 13,702 15,999 614 13,534 16,164 ,5 889 3,156 02 2001 2002 02 2001 2002 amnst eie otiuinpas 397 0 (141) 0 1,335 1,263 0 2,784 1,433 1,105 23,468 pension obligations. Principal actuarialassumptionsusedtodetermineseveranceobligationsasof31Decemberwere thesameasusedfor 26,845 23,468 Payments todefinedcontributionplans 26,845 Effect ofanycurtailmentorsettlement Net actuarialgains/lossesrecognised Interest expenseonobligations Current servicecosts (in TEUR) Severance expenseiscomprisedofthefollowing: 3.0% 8.5% Net liabilityinbalancesheet 3.0% Present valueofunfundeddefinedbenefitobligations 2.5% 6.0% (in TEUR) 2.5% Severance Payments full-time employeesandprovides forcontributionrangingfrom 3%to5%ofsalary. as adefinedcontributionplanalthoughtheobligationsmeetcriteriaforbenefitplan.Thecoverssome In 1999Andritztransferred someofthepensionliabilitiestoamulti-employerfund.Thisplanisaccounted Retirement benefitincreases Wage andsalaryincreases onplanassets Expected return Discount rate (in percent) Principal actuarialassumptionsusedtodeterminepensionobligationsasof31Decemberwere asfollows: .5 6.5% 5.75% ,2 2,458 5,322 ,2 2,855 5,322 02 2001 2002 2001 2002 2001 2002 109 / andritz 2002 Notes to the Consolidated Financial Statements 110 / andritz 2002 Notes to the Consolidated Financial Statements of authorisedshare capitalorbyrepurchase ofownshares. exercise optionsforthepurchase of113,000shares. Andritzmayeitherprovide theseshares byissueofnewshares out granted optionrights.35executivesare participatingintheManagementShare OptionPlan,togethertheyare eligibleto Due tolegalrequirements, executivesintheUnitedStateswillnotbeallowedtomakeaPrivateInvestmentbut set outinthenoticeonexercise oftheoption. payment oftheremaining subscriptionprice,therelevant participantcansubscribeuptotheremaining 25%oftheshares set outinthenoticeonexercise oftheoption.Atendasix-monthtermfrom theexercise oftheoptionand and paymentofthepro-rata subscriptionprice,therelevant participantcansubscribeuptotheremaining 25%oftheshares subscribe upto50%ofthenumbershares statedintheAverage PriceNoticeimmediatelyafterexercise oftheoption 15%, makingtheexercise ofOption1impossible.Theoptionscanonlybeexercised atgiventimes.Eachparticipantmay exercised ifduringthefirstassessmentperiodaveragemarketvalueofshares doesnotexceedtheOffer Priceby the endofassessmentperiod.Theoptionscanbeexercised onlyonceandare nottransferable.Option2canonlybe relevant executive,provided thattherelevant executivecanprove uninterruptedownershipofhisPrivateInvestmentuntil 1,500, 2,500and5,000shares withrespect toOption1or2attheOffer Pricedependingontheseniorityof 20% inthesecondassessmentperiod(Option2),eligibleexecutivewillbeentitledtopurchase uptoamaximumof If theaveragemarketvalueofshares exceedstheOffer Priceby15%inthefirstassessmentperiod(Option1)or for aperiodofthree monthspreceding thethird anniversaryoftheinitiallistingshares ontheVienna StockExchange. anniversary oftheinitiallistingshares ontheVienna StockExchange,whereas thesecondassessmentperiodwillrun percentage oftheOffer Price.Thefirstassessmentperiodwillrunforaofthree monthspreceding thesecond can beexercised provided thattheaveragepriceofshares duringtwoseparate assessmentperiodsexceedsacertain subscription a"PrivateInvestment”)iseligibleforspecialremuneration intheformofoptionrights.Theserights an aggregate subscriptionvaluecalculatedattheOffer Price(21EURpershare) ofatleast20,000EUR(eachsuch Share OptionPlaninconnectionwiththeInitialPublicOffering. Eacheligibleexecutivewhohassubscribedshares having A selectedgroup ofexecutivesemployedbytheGroup asat1June2001were eligibletoparticipateinaManagement Management Share OptionPlan te 6,7 55,063 60,772 3,200 31,985 875 30,436 51 436 32,473 31,538 42 0 Other 0 Deferred income 274 Other order related costs Other personnelrelated costs 5years 0 0 Payable toassociatedcompanies 0 Payables toaffiliated companies 1,121 1and5years 1,499 (in TEUR) 1year 3,540 119,776 16 0 140,880 12. OtherLiabilities 0 121,171 Total 3,540 142,379 960 73,618 respectively, hasbeenpledgedassecurityforlong-termdebt. 0 Property, plantandequipmentamountingtoEUR 375thousandandEUR419asat31December20022001, 73,618 0 The interest bearingborrowings consistprimarilyof current 47,494 bankloansatfloatinginterest ratesandfixedrates. 47,494 976 Other liabilities Liabilities forcurrent taxes 357 0 0 Advance paymentsreceived 100,000 5years 0 ofprojects Billings inexcessofcostsandearnings 1,846 0 2,956 0 1and5years Trade accountpayable Interest bearingborrowings 0 0 Non-current interest bearingborrowings 81,173 1year 123,497 0 0 8,298 (in TEUR) 125,700 84,129 Total 30,931 0 8,298 610 100,000 30,931 0 2001 4,292 610 4,292 Other liabilities Liabilities forcurrent taxes Advance paymentsreceived ofprojects Billings inexcessofcostsandearnings Trade accountspayable Interest bearingborrowings Bond Non-current interest bearingborrowings (in TEUR) 2002 11. StatementofLiabilities ne osrcin9,2 440 33 0 383 94,440 94,823 0 under construction 15,528 97,965 113,493 under construction 6,5 3616 090 100,357 20,940 346,156 467,453 8,0 4978 ,6 290 3,963 479,748 484,001 emudrtr ewe termover termbetween term under eann eann remaining remaining remaining emudrtr ewe termover termbetween term under hro Teef Thereof Thereof Thereof eann eann remaining remaining remaining hro Teef Thereof Thereof Thereof 2,0 121,171 125,700 2002 2001 111 / andritz 2002 Notes to the Consolidated Financial Statements 112 / andritz 2002 Notes to the Consolidated Financial Statements te 597 13,514 1,268 5,957 2,487 1,303 8,411 1,749 502 460,554 435,013 858,147 Other Rental income Exchange rategains 675,097 Profit ondisposaloffixedassetsexcludingfinancial (in TEUR) 14. OtherOperatingIncome Other Contract revenue recognised assalesintheperiod (in TEUR) 13. Sales H. NotestotheConsolidatedIncomeStatement te 110 58,175 22,455 41,120 4,899 75,186 19,996 71,823 7,706 6,953 30,247 13,702 9,753 167,084 6,627 65,320 31,549 Other 15,999 Administration expenses 173,478 Sales expenses 51,215 5,322 Exchange ratelosses (in TEUR) 16. OtherOperatingExpenses Other socialpayments Social securityandpayroll related duties Severance andterminationexpenses Pension expenses Salaries Wages (in TEUR) 15. PersonnelExpenses 1,110,110 1,318,701 4,4 160,715 140,645 287,316 289,932 613 19,018 16,173 02 2001 2002 2001 2002 02 2001 2002 2001 2002 thereof elsiiainwtoticm fet(7)0 (572) (572) (37,011) 2,298 1,399 (39,605) (14,880) 0 (18,491) Reclassification withoutincomeeffect Tax effect offoreign exchangetranslationdifferences Tax effect onIAS39reserve Deferred taxexpenserelating totheoriginationand Deferred taxesfrom changesinconsolidationrange Balance asat31December, aspreviously stated Tax provision fordeferred taxes Tax 2.105 assets 163 7 (30) (in TEUR) (218) 194 2.184 Changes inthedeferred incometaxaccountconsistofthefollowing: 79 (195) 138 10,495 172 0 6,996 Deferred taxincomerelating totheoriginationand Current taxexpense 325 (in TEUR) (46) 18. IncomeTax Other income/expensesfrom financingactivities Adjustment tomarketsalesofshort-termsecurities Profit anddisposalonofshort-termsecurities Income from write-upsoffinancialassets Impairment lossesoffinancialassets Income /expensesfrom investments Interest result Interest andsimilarexpenses Other interest andsimilarincome Income /expensesfrom associatedcompanies (in TEUR) 17. FinancialResults eeslo eprr ifrne 300 (5,650) (3,010) reversal oftemporarydifferences rvsosfrdfre ae 4,0)(39,605) (45,803) Provisions fordeferred taxes Deferred taxassets reversal oftemporarydifferences oeg xhnedfeecs(,3) 274 (5,650) (3,010) (2,938) foreign exchangedifferences income statementcharge 1,8)(22,635) (18,088) 1,7)(16,985) (15,078) 665 (7,401) (6,675) 2,0)(18.491) (28,107) 17,696 21,114 21,114 22,131 022001 2002 2001 2002 2001 2002 (5,394) 938 6 5,523 469 2 3,093 321 113 / andritz 2002 Notes to the Consolidated Financial Statements 114 / andritz 2002 Notes to the Consolidated Financial Statements a tteapial a ae(4 n20 n 01 (550 (20,437) relevant taxbases: temporary valuationandaccountingdifferences betweenbookvaluesintheIFRSconsolidatedfinancialstatements andthe Deferred taxassetsandprovisions fordeferred taxesasat31December2002and2001are theresult ofthefollowing (15,550) Income taxeffects related totaxdeductibleIPOcosts are directly recognised incapitalreserve inequity. Changes indeferred taxes Tax charge perstatutory book Tax effect of Tax effect ofincomenottaxableindeterminingprofit Tax attheapplicabletaxrate(34%in2002and2001) before taxes(EBT) Earnings (in TEUR) The reconciliation oftheeffective taxratetothestatutoryisasfollows: A 9rsre 446 3 0 (2,607) 938 0 (39,605) 0 0 155,622 (4,456) (687) 21,114 0 (192,620) (22) (155,622) (152,649) 8,429 (6,502) 0 (5,804) (45,803) 182,300 138,680 1 4,876 0 1,562 0 17,696 695 (180,027) 18,250 provision (537) (138,680) (363) (137,314) (387) (22,239) (3) (150) (13,813) 6,793 169,297 asset 0 (13,616) 4,542 (9,702) 140,946 (467) 2,993 8,015 16,129 249 provision Net deferred taxassetsandprovisions 0 (348) Offset withinlegaltaxunitsandjurisdiction 2,797 (13,792) 2,197 (3,742) IAS 39reserve (92) Other deferred taxesfrom consolidation asset Valuation allowancefordeferred taxassets (10,034) 3,125 0 127,794 (502) Deferred taxassets/provisions Tax losscarry-forwards 13 1,455 1,431 Deferred income Liabilities Provisions Other assets Short-term securitiesandshares Receivables Inventories Financial assets Tangible assets Intangible assets (in TEUR) duteto sn e a ae 45 1,200 (415) adjustment ofusingnewtaxrates hne nvlainalwne335(2,421) 3,355 changes invaluationallowance (non-temporary differences) 3,1 (853 1074 (33,480) 150,744 (28,513) 133,818 866(5,1) 2,2 (159,140) 23,127 (151,514) 28,686 eerdtx Deferred tax Deferred tax 022001 2002 1,8)(22,635) (18,088) 300 (5,650) (3,010) 50816,985 15,078 45,735 60,110 548 (977) (5,478) 022001 2002 hr fntpoi oso soits(6 0 00(46) 0 0 22,986 0 2,621 5,342 173,269 0 17,136 1,913 37,071 1,110,110 1,613 29,354 (46) 48,654 108,409 11,497 (3,635) 122,774 74,043 177,397 672,176 Share ofnetprofit /lossofassociates Depreciation andamortisationoftangible Capital expenditure Net segmentalassets Segment result before amortisation Sales aia xedtr 843403471322,986 103 909,865 1,110,110 Total (488,506) 457 140,657 solidation 14,078 190,195 Asia 4,023 206,408 280,509 America 1,177,885 18,403 498,749 Europe 3,384 0 0 Capital expenditure Total assets sales External 0 (in TEUR) 0 3,384 Geographical SegmentData Investment inassociates (in TEUR) Business SegmentData 2002 The Group’s activitiesare conductedpredominantly inEurope, NorthAmericaandAsia. Geographical Segments All otherminorbusinessactivitiesare includedin"Other”. d. FeedTechnology (FT) c. Environment andProcess Technologies (EP) b. RollingMillsandStripProcessing Lines(WB) a. PulpandPaper(P+P) The AndritzGroup conductsthemajorityofitsbusinessactivitiesinfollowingareas: Business Segments Segment informationisprepared onthefollowingbasis: I. SegmentInformation attributable toordinary shareholders bytheweightedaveragenumberofordinary shares outstandingduring theperiod. pershareBasic earnings (seeConsolidatedIncomeStatement)are calculatedbydividingthenetprofit fortheperiod perShare 19. Earnings n nagbefxdast 1,1 ,3 ,8 196 ,8 22,141 1,684 58,733 1,916 5,735 1,789 4,228 2,536 984 14,216 8,538 39,248 and intangiblefixedassets of goodwill B E T Ohr Total Other FT EP WB P + ot andcon- North the world Rest of 115 / andritz 2002 Notes to the Consolidated Financial Statements 116 / andritz 2002 Notes to the Consolidated Financial Statements hr fntpoi oso soits 350000325 0 0 23,703 0 863 6,704 256,275 0 8,223 1,919 1,318,701 35,238 325 3,445 26,009 43,161 107,000 10,772 2,996 135,309 167,391 166,658 882,992 Share ofnetprofit /lossofassociates Depreciation andamortisationoftangible Capital expenditure Net segmentalassets Segment result before amortisation Sales oa ses111531851492(8,4)941,724 1,318,701 (383,342) Total 155,943 4,932 solidation 187,711 Asia 158,581 367,563 America 1,161,553 607,485 Europe 3,276 0 0 Total Assets 0 Sales External 0 (in TEUR) 3,276 Geographical SegmentData Investment inassociates (in TEUR) Business SegmentData 2001 e ahfo 709 (58,449) (2,807) (55,642) 0 (7,029) 0 (7,201) (4,546) 0 432 0 0 4,286 0 0 (4,363) 22,015 (11,290) (432) 23,703 (1,644) 347 Net cashflow Changes inminorityinterests Goodwill 78 Cash andcashequivalents Net assets/liabilitiesacquired Accounts payableandaccruedexpenses Property, plantandequipment 3,208 Inventories Receivables Cash andcashequivalents 20,070 (in TEUR) Cash flowsfrom AcquisitionofSubsidiaries J. NotestoCashFlowStatements Capital expenditure n nagbefxdast 593 250 ,2 ,7 ,3 26,539 67,992 2,439 (136) 3,773 920 1,825 2,560 7,225 15,943 6,131 53,852 and intangiblefixedassets of goodwill hro maretlse ,3 9 35 123 4,337 1,213 315 79 0 2,730 thereof impairmentlosses B E F te Total Other FT EP WB P + North and con- the world 02 2001 2002 Rest of Long-term loans Short-term loans Overdraft oncurrent accounts Securities, long-term Securities, short-term Short-term deposits Cash oncurrent accounts Bond The weightedaverageeffective interest ratesatthebalancesheetdatewere asfollows: Consequently, additional derivativeinstrumentsforhedgingoftheseinterest risksare notusedwithintheGroup. The ManagingBoard believesthattheexposure to interest rateriskofremaining financialassetsand liabilitiesisnegligible interest ratebasedon1month’s Euribor. of thebond.Bythisinterest swapthefixedinterest ratehasbeenchangedforthewholerepayment periodtoavariable nominal interest rateof6%p.a.Forthisbondaninterest swaphasbeenusedtohedgetheriskfrom thefixedinterest rate In June2002thecompanyhasissuedabondfornominalvalueof100MEURwithrepayment periodof6yearsand d. Interest risk Board believesthatnoothercredit riskwilloccur. amounts are onlyreported onanetbasis.Forallexistingrisks,valuationallowancesare included,sothattheManaging creditworthiness. ForsomefinancialassetsandliabilitiestheGroup hasalegallyenforceable righttosetoff. The funds andsecuritiesislimitedbythefactthatGroup worksonlywithfinancialpartnerswhocandemonstratesound similar privateinstitutionstoreduce theriskofacounterpartdefaulting.Credit riskassociatedwiththeinvestmentofliqu monitoring procedures. Where appropriate, thecorporationobtainsguaranteesfrom exportagenciesor governmental Credit risks,ortheriskofcounterpartiesdefaulting,are controlled bytheapplicationofcredit approvals, limitsand c. Credit risks of credit facilitiestomeetitscommitments.Anyexcesscashisinvestedmostlyinlistedsecuritieswhichare activelytraded The Group’s policyistomaintainsufficient cashandequivalentsorhaveavailablefundingthrough anadequateamount b. Liquidityrisks designated itsforward exchangecontractsascashflowhedgesandcarriesthematfairvalue. Group operatesandhasproduction andsalesindifferent countriesworldwide.WiththeadoptionofIAS39,Group has commitments andhighlyprobable purchases andsales.Thecurrency risksoftheGroup occurduetothefactthat denominated assetsandliabilitiescertainoff-balance sheetitemssuchashighlyprobable future Cashflowsforfirm Cash flowsfrom current businessactivities.Transaction riskiscalculatedineachforeign currency andincludescurrency The Group onlyentersintofixedforward foreign exchangecontractsinmanagingitsforeign exchangeriskresulting from a. Foreign exchangeriskmanagement K. FinancialInstruments .%2.5% 3.5% 5.1% 6.1% 3.7% 4.8% 1.0% 3.3% 4.7% 1.4% 5.2% 3.7% 3.0% 0.8% .%- 4.2% 022001 2002 se id . . 117 / andritz 2002 Notes to the Consolidated Financial Statements 118 / andritz 2002 Notes to the Consolidated Financial Statements owrsue ohdefr ucaecmimnsU olr 32 32368 (3,874) 322 9,595 0 889 322 Fair valuesofforward contractsdesignatedascashflowhedgesare classifiedascurrent assetsorliabilities. 8,706 USdollars Forwards usedtohedgefirmpurchase commitments USdollars Forwards usedtohedgeanticipatedsales (in TEUR) At thebalancesheetdate,fairvaluesofforward contractsdesignatedascashflowhedgeswere asfollows: sheet date.Thefairvaluesoftheforward contractsare confirmedtotheGroup byfinancialinstitutions. The fairvalueofforward foreign exchangecontractsisdeterminedusingforward exchangemarketratesatthebalance Fair Value Estimation e. FairValue ofFinancialInstruments approximate theirfairvalues. The historicalcostcarryingamounts ofreceivables and payableswhichare all subjecttonormaltradecredit terms Receivables andpayables for sale”andare valuedattheirquotedmarketpricethe balancesheetdate. flows ortheunderlyingnetassetbaseforeachinvestment.Non-current securitiesoftheGroup are classifiedas"available (5,508) there are noquotedmarketprices,areasonable estimateoffairvaluehasbeen calculatedbasedontheexpectedcash The fairvaluesofpubliclytradedinstrumentsare statedbasedonquotedmarketprices.For allotherinstrumentsforwhich 2,749 Non-current andcurrent securities (222) these financialinstruments. 13,328 The carryingamountofcashandotherfinancialassetsapproximates fairvaluedueto the relatively short-termmaturityof Cash andcashequivalents,current investmentsandothernon-current financialassets current assets,tradeandotherpayables,bankoverdrafts, long-termborrowings. The Group’s principalfinancialinstrumentsnotcarriedatfairvalueare tradereceivables, othercurrent assets,othernon Forward contractswithnegativefairvalues Forward contractswithpositivefairvalues (in TEUR) te urnis 2 9 (198) 29 0 1,361 9 27 3,144 2,959 0 20 185 27 Other currencies Singapore dollars Swedish crowns te urnis 1) 1) (416) (11) 0 (11) Other currencies o xedn mr hnTtl Total Total more than not exceeding er er20 2001 2002 1year 1 year ,4 ,5 13,106 (2,759) 9,249 3,857 Remaining period 316 (2,759) 13,106 02 2001 2002 aac sa 1Dcme ,5* (1,821)* 8,650* arises from thevaluationofavailable-for-sales investments. *) Inthehedgingreserve acc.totheConsolidatedStatementofShareholders’ Equity, anadditionalamountofEUR49thousandi Balance asat31December Movements intheperiod: Balance asat1January (in TEUR) designated ascashflowhedgesduringtheperiod. The tablebelowshowsthemovementsinhedgingreserve inequityrespect togainsandlossesonforward contracts IAS 39reserve assets andliabilitiesisnegligible. has beenhedgedbyaninterest swap.Managementbelievesthattheexposure tointerest rateriskoftheremaining financial The carryingamountisequaltotheestimatedfairvalueofGroup’s financialinstruments.Theinterest riskofthebond value ofnon-current borrowings andotherpayableswithvariableinterest ratesapproximates theircarryingamounts. The fairvalueofthelong-termdebtsisbasedoncurrent ratesavailablefordebtwiththesamematurityprofile. Thefair Long-term borrowings The carryingamountapproximates fairvaluebecauseoftheshortperiodtomaturitythoseinstruments. Short-term borrowings eerdicm ae hro (9) (150) (897) Deferred incometaxesthereon rnfr oicm ttmn 268 441 921 2,638 (4,497) (2,708) 13,227 Transfers toincomestatement Deferred incometaxesthereon Gains andlossesfrom changesinfairvalue 181 (325) (1,821) 02 2001 2002 s includedwhich 119 / andritz 2002 Notes to the Consolidated Financial Statements 120 / andritz 2002 Notes to the Consolidated Financial Statements fe er 5 160 6,969 2,892 7,739 157 3,651 business. For2002thesecommitmentsamounttoEUR862thousandandfor20011,523thousand. Commitments arisingfrom contractsforexpenditure onproperty, plantandequipmentare onlyinthenormalcourseof M. Commitments After 5years 1 yearto5years Next year (in TEUR) Future leasepaymentsundernon-cancelableoperatingare asfollows: or furtherleasing.RentexpenseamountstoEUR8,143thousandin2002and7,8502001respectively. facilities aslessees.Leasetermsdonotcontainrestrictions ontheGroup’s dividends,additionaldebt activitiesconcerning The Group anditssubsidiarieshaveentered intovariousoperatingleaseagreements formachinery, offices andother L. Leases obligations toAndritzfrom priorownersoftherelevant businessesandoneormore insurancepolicies. Directors furtherbelievethatanyliabilityofAndritzin connection withtheselawsuitsiswithinthetermsofindemnity There havebeennoverdicts orjudgmentsagainstAndritznorhasitpaidanyamounttosettleasbestoslawsuit. The suits againstAndritzwere voluntarilydismissed,andAndritzobtainedsummaryjudgmentagainstplaintiffs intwo others. taken inthependingcases,andactualfactswithrespect toindividualclaimsare notknown.Nineearliermulti-plaintiff was totallyencapsulatedthereby preventing therelease ofasbestosfibers.Nevertheless,littleornodiscoveryhasbeen asbestos thatmayhavebeencontainedincertaincomponents enclosedwithinproducts itsuppliedtopulpandpapermills asbestos atpulpandpapermills.TheDirectors donotbelievethattheselawsuitsagainst Andritzare meritorious in thatany exposure toanyproduct suppliedbyAndritz.However, theclaimsagainstAndritzappeartoinvolveallegedexposure to alleging personalinjury, wrongful deathandrelated claimsfrom exposure toasbestos.Noplaintiff allegesanyspecific Andritz Inc.isoneofmanydefendantsinthirtymulti-plaintiff lawsuitspendingincourts oftwostatestheUnitedStates to result. these matterscannotalwaysbeascertainedwithprecision theManagingBoard believesthatnomaterialliabilitiesare likely on intellectualproperty rights.Relatedriskshavebeenanalysedastolikelihoodofoccurrence. Althoughtheoutcomeof claims incidentaltotheordinary courseofbusiness.Thesemainlyincludemattersrelating towarrantiesandinfringement Various legalactionsandclaimsare pendingormaybeassertedinthefuture againstGroup companiesfrom litigationsand a. Litigation N. ContingentLiabilities 157 10,021 11,547 02 2001 2002 nenhesIvs GadUiet13% bonuses) andfor2001toEUR2,351thousand. Directors’ totalremuneration for2002amountedtoEUR3,772thousand(thereof EUR2,791thousandforprofit related thousand (EUR231in2001). members oftheManagingBoard andtheirdependants;thecurrent yearexpenseforthesepensionsamountedtoEUR504 A provision ofEUR4,165thousandin2002(EUR3,9482001)hasbeen recorded forpensionsofformer Emoluments oftheManagingBoard Free Float Management Deutsche BeteiligungsAG GE CapitalEquityHoldingsBV InvestAGandUnivest Unternehmens Certus Beteiligungs-GmbH Carlyle Europe PartnersLP Only minorbusinessrelations existwiththeshareholders. Theshareholders are: 15,505 O. RelatedParty Transactions 7,520 receives bankguaranteesfrom thesuppliers. expected. InsomecasesAndritzhassimilarretention agreements withsuppliers.Inorder tosettletheseretentions Andritz provisions forwarrantiesandtheshownliabilitiesare sufficient. Noadditionalfinancialoutflowsfrom theseguaranteesare 167,697 were issuedasguaranteesforadvanceandprogress paymentsfrom customers.Themanagementbelievesthatthe redeem theseretentions bankguaranteeswere submittedtothecustomer. Inaddition,otherbankandcompanyguarantees 108,532 According toseveralcontractsthecustomerisentitledholdretention untiltheendofwarrantyperiod.Inorder to Other contingentliabilities contractswithcustomers Outstanding bankguaranteesconcerning (in TEUR) b. Other 16% 25% 31% 02 2001 2002 3% 6% 6% 121 / andritz 2002 Notes to the Consolidated Financial Statements P. List of Consolidated Subsidiaries

Place of Incorporation Ownership interest direct indirect

Material Affiliated Companies Notes to the Consolidated Financial Statements

Andritz Denmark A/S Esbjerg/Denmark 100% Sprout-Matador A/S Esbjerg/Denmark 100% Andritz (USA), Inc. Arlington/Texas (USA) 100% Andritz Inc. Muncy/Pennsylvania (USA) 100% Andritz-Ruthner, Inc. Arlington/Texas (USA) 100% Durametal Corporation Tualatin/Oregon (USA) 100% Guinard Centrifugation S.A. Vélizy/France 100% Andritz S.A. Vélizy/France 100% Andritz Selas S. A. S. Gennevilliers/France 100% Andritz Ingeniería S.A. San Sebastian/Spain 100% Andritz GmbH Hemer/Germany 100% Sundwig GmbH Hemer/Germany 75% Andritz Ltda. Sao Paulo/Brazil 100% Andritz Oy Hollola/Finland 100% Andritz Ltd./Ltée. Montreal/Canada 100% Andritz Fiber Drying Ltd. Lasalle/Canada 100% Andritz AB Örnsköldsvik/Sweden 100% Andritz Fiber Drying AB Växjö/Sweden 100% Andritz Ltd. Chesterfield/UK 100% Andritz-Kenflo Foshan Pump Co. Ltd. Foshan/China 60% U.M.T. Limited Hull/UK 100% U.M.T. Deurne B.V. Deurne/Netherlands 100% U.M.T. Boxtel B.V. Boxtel/Netherlands 100% Andritz Brasil Ltda. Curitiba/Brazil 100%

Graz, 17 February 2003

Wolfgang Leitner Markku Hänninen Franz Hofmann Friedrich Papst Bernhard Rebernik 2002 andritz / 122 Chairman oftheSupervisoryBoard Kurt Stiassny Graz, February2003 125 para.2oftheCorporationAct. The SupervisoryBoard hasapproved theFinancialStatement,whichisherewith adoptedincompliancewithArticle appropriation ofprofit andthereport oftheManagingBoard andconcurswiththeresult oftheAudit. The SupervisoryBoard hasexaminedtheFinancialStatementscertifiedbyAuditorsaswellproposed who hadbeenappointedasauditorsbytheMeetingofShareholders andwhocertifiedtheFinancialStatements. as theStatusReportsfor2002were audited(alsoincludingtheaccounts)byAUDITORTREUHANDGMBH,Vienna, The FinancialStatementofAndritzAGandtheConsolidatedStatementsasDecember31,2002well to approval bytheSupervisoryBoard were investigatedandreviewed togetherwiththeManagingBoard. the companyandofitsdevelopmentaswellmajorbusinesstransactions.Thetransactionsthatwere subject The SupervisoryBoard wasregularly informedbytheManagingBoard bothverballyandinwritingofthesituation Report oftheSupervisoryBoard Andritz AG 123 / andritz 2002 124 / andritz 2002 Andritz GroupCompanies EUROPE ASIA AMERICAS AFRICA AUSTRALIA South Africa New Zealand Thailand Singapore Japan Indonesia India China USA Canada Chile Brazil Sweden Switzerland Spain Russia Poland Netherlands Germany France Finland England Denmark Austria nrt Py t. ubnS,SE SE S,SE S,SE S,SE S S,SE Andritz (Pty)Ltd.,Durban Andritz AustraliaPty. Ltd,Auckland Andritz Pty. Ltd.,Dandenong South Andritz Oy, Bangkok Andritz Singapore Pte.Ltd. S,M,SE Andritz K.K.,Tokyo S,M,SE S,SE PT. Andritz, Jakarta M,SE S Enmas AndritzPrivateLimited,Chennai Andritz OyIndiaLiaisonOffice, NewDelhi S,SE Andritz Technologies Pvt.Ltd.,Bangalore SE Andritz Technologies Ltd.,Foshan S,SE SE Andritz AGRepresentative Office Beijing SE,M S,M,SE S,M,SE,R S,SE Andritz-Kenflo FoshanPumpCo.,Ltd., Voith AndritzTissueLLC,Janesville,WI R S,M,SE Andritz Inc.,Tualatin, OR S,SE,R Andritz-Ruthner, Inc.,Canonsburg, PA Andritz-Ruthner, Inc.,Arlington,TX S,SE Andritz Inc.,Ventura, CA Andritz Inc.,Lenexa,KS Andritz Inc.,PellCity, AL Andritz Inc.,Springfield,OH SE S,M,SE,R SE Andritz Inc.,GlensFalls,NY S,SE SE Andritz Inc.,Muncy, PA S,SE Andritz Inc.,Alpharetta, GA Andritz FiberDryingLtd.,LaSalle,QC S Andritz Ltd./Ltée.,Edmonton,AB S,SE SE Andritz Ltd./Ltée.,Brantford, ON SE S, Andritz Ltd./Ltée.,Montreal, QC S,SE,R SE S, Sprout-Matador A/SChileLtda.,PuertoMontt SE S, Sprout-Matador doBrasilLtda.,PortoAlegre/RS SE S, Andritz Ltda.,Carapina S,SE,R Andritz Ltda.,Curitiba Andritz Ltda.,SãoPaulo S Andritz FiberDryingAB,Växjö Andritz AB,Stockholm S,SE S,SE S,SE Andritz AB,Karlstad Andritz AB,Hedemora S,SE,R S,M,SE,R SE S, Andritz AB,Örnsköldsvik S,M,SE,R Andritz 3SysAG,Wohlen M,SE,R S, Andritz IngenieríaS.A.,Barcelona Andritz IngenieríaS.A.,Madrid S,SE LLC Andritz,St.Petersburg SE S, Andritz AG,Warsaw S,SE Thermtec B.V., Rotterdam UMT BoxtelB.V., Boxtel B.V.,UMT Deurne Deurne S,SE Sundwig GmbH,Hemer SE S,M,SE,R UMT, Mettmann Andritz GmbH,Kirchheim/Teck S,M,SE,R S,M,SE,R S Andritz GmbH,Haan M,SE,R S,M,SE,R Andritz GmbH,Hemer S,SE S,SE Andritz SelasS.A.S.,Gennevilliers UMT S.A.,St.MartinLeBeau S,M,SE Andritz-Guinard S.A.S.,Châteauroux Andritz-Guinard S.A.S.,Schweighouse Andritz-Guinard S.A.S.,Vélizy Andritz Oy, Varkaus S,SE Andritz Oy, Savonlinna S,R,SE SE S,M,SE,R S,R Andritz Oy, Kotka S,M,SE Andritz Oy, Hollola M,SE,R S, Andritz Oy, Helsinki Andritz SelasEngineeringLtd.,Belper Frisby ExtrusionServicesLtd.,Corby UMT Ltd.,Hull Andritz Ltd.,Chesterfield Sprout-Matador A/S,Vejle Sprout-Matador A/S,Esbjerg Andritz AG,Vienna Andritz AG,Graz Activities *) odPoesn rf ilSsesServices KraftMillSystems Wood Processing ▲▲▲▲▲▲▲ ▲▲▲▲▲▲ ▲▲▲ ▲▲▲ ▲▲▲ ▲ ▲▲ ▲ ▲▲ ▲▲▲ ▲▲▲▲▲▲ ▲▲▲ ▲▲▲ ▲▲ ▲▲▲ Pulp Mill Technologies ▲ ▲▲ ▲▲ ▲▲ ▲▲ ▲▲ ▲▲ ▲▲ Pulp andPape ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Pulpin Mecha ng Systems er Business Area anical ▲▲▲▲ ▲ ▲ ▲▲ ▲▲ ▲▲▲ ▲▲ ▲ ▲ ▲▲ ▲ ▲▲ ▲▲ ▲ ▲▲ ▲▲ ▲ ▲▲ ▲▲▲▲ ▲▲▲▲ ▲▲▲▲ ▲▲ ▲ ▲ ▲▲▲ ▲▲ ▲▲ ▲▲▲▲▲ ▲ ▲▲▲▲ Systems Fiber Preparation Paper Mill Technologies ▲▲ ▲▲▲▲▲▲▲ ▲▲ ▲▲ ▲▲ ▲▲ ▲▲ iseMcie Services Tissue Machines ▲ ▲ ▲ ▲ ▲ Lines Strip Processing Rolling Millsand ▲ ▲ ▲ ▲ ▲ ▲▲ ▲ *) S= Technologies and Process Environment Sales , M= ▲ ▲▲▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Manufacture , SE= Technology Feed Service ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ , R= Research & Development Machines Hydraulic ▲ ▲ 125 / andritz 2002 126 / andritz 2002

Europe Addresses oftheAndritzGroup Finland 15860 Hollola Keskikankaantie 9 Andritz Oy E-Mail: [email protected] Fax: +358204505109 Phone: +358204505555 Finland 00180 Helsinki Tammasaarenkatu 1 Andritz Oy Finland England Hull, HU70XL Sutton Fields,IndustrialEstate Stockholm Road, UMT Ltd. E-Mail: [email protected] Fax: +441246260760 Phone: +441246260660 England Derbyshire, S419RX Sheepbridge Lane,Chesterfield Unit B,SheepbridgeCentre Andritz Ltd. England E-Mail: [email protected] Fax: +4572160301 Phone: +4572160300 Denmark 6705 Esbjerg Glentevej 5-7 Sprout-Matador A/S Denmark Austria 1120 Vienna Eibesbrunnergasse 20 Andritz AG E-Mail: [email protected] Fax: +433166902415 Phone: +4331669020 Austria 8045 Graz Stattegger Strasse18 Andritz AG Austria E-Mail: [email protected] Fax: +4572160390 Phone: +4572160300 Denmark 7100 Vejle Skomagervej 12 Sprout-Matador A/S MechanicalPulpingSystems - RollingMillsand - E-Mail: [email protected] Fax: +4318137645 Phone: +431811950 E-Mail: [email protected] Fax: +441536205184 Phone: +441536263545 England Corby, Northants,NN188AZ Weldon SouthInd.Est. Tyson Courtyard, Cronin Road Frisby ExtrusionServicesLtd. E-Mail: sales.equipment.hull@ Fax: +441482839806 Phone: +441482825119 E-Mail: [email protected] Fax: +358204505540 Phone: +358204505555 Finland 48600 Kotka Kyminlinnantie 6 Andritz Oy E-Mail: woodprocessing@ Fax: +358204506711 Phone: +358204505555 Fax: +4318155358 Phone: +431811950 Fax: +4318137645 Phone: +431811950 Strip Processing Lines umt-group.com andritz.com E-Mail: [email protected] Fax: +43316691575 Phone: +433166927280 Austria 8045 Graz Andritzer Reichsstrasse68B Gesellschaft mbH Anstalt fürStrömungsmaschinen KraftMillSystems - E-Mail: [email protected] Fax: +441773829985 Phone: +441773829954 England Belper, Derbyshire, DE561YD North Mill,Bridgefoot Suite 5L,BusinessCentre Andritz SelasEngineeringLtd. PulpandPaperMillServices - FiberPreparation Systems - KraftMillSystems - Fax: +431811956301 Phone: +431811956235 Fax: +358204505048 Address: Lasimestarintie5 Fax: +358204505422 Fax: +358204505190 E-Mail: sales.deurne@umt- E-Mail: sales.deurne@umt- Fax: +31493310030 Phone: +31493314344 Netherlands 5753 RJDeurne Indumastraat 9-13 B.V.UMT Deurne Netherlands E-Mail: [email protected] Fax: +4921293750-50 Phone: +4921293750-0 Germany 42781 Haan Pfalzstraße 1 Büro Haan Andritz GmbH E-Mail: [email protected] Fax: +4923729650 Phone: +492372960 Germany 58675 Hemer-Sundwig Stephanopeler Strasse22 Andritz GmbH Germany E-Mail: [email protected] Fax: +33388072732 Phone: +33388072730 France 67590 SchweighousesurModer Z.I. Zinsel Andritz-Guinard S.A.S. E-Mail: [email protected] Fax: +33139260560 Phone: +33139260550 France 78140 Vélizy-Villacoublay 2-4 Avenue del’Europe –Bât.A Andritz-Guinard S.A.S. France FiberPreparation Systems - KraftMillSystems - - Works E-Mail: [email protected] Fax: +358204506220 Phone: +358204505555 Finland 57200 Savonlinna Lypsyniemenkatu 5 Andritz Oy Finland Fax: +358204506384 Fax: +358204506336 Fax: +358204506239 group.com E-Mail: sales.equipment.boxtel@ Fax: +31411653505 Phone: +31411653500 Netherlands 5281 RNBoxtel Ladonkseweg 1b UMT BoxtelB.V. Germany 40822 Mettmann Industriestrasse 15a Andritz GmbH eine Zweigniederlassungder Universal MillingTechnology E-Mail: roswitha.ruckdaschel@ Fax: +497021507410 Phone: +49702150740 Germany 73230 Kirchheim/Teck Heinkelstrasse 19-21 Zweigniederlassung Kirchheim Andritz GmbH E-Mail: [email protected] Fax :+33247502066 Phone :+33247506364 France 37270 SaintMartinLeBeau Site d’ActivitésdesGrillonnières UMT S.A. E-Mail: [email protected] Fax: +33254613300 Phone: +33254613333 France 36000 Châteauroux Le Buxerioux Allée delaGarenne –Z.I. Andritz-Guinard S.A.S. KraftMillSystems - E-Mail: [email protected] Fax: +358204505974 Phone: +358204505555 Finland 78200 Varkaus Relanderinkatu 2 Andritz Oy PulpandPaperMillServices - Fax: +358204505974 Relanderinkatu 2 Fax: +358204506446 andritz.com umt-group.com E-Mail: [email protected] Fax: +31104047356 Phone: +31104137628/ Netherlands 3011 WTRotterdam Wijnhaven 76 Thermtec B.V. E-Mail: [email protected] Fax: +49237254200 Phone: +492372540 Germany 58675 Hemer-Sundwig Stephanopeler Strasse22 Sundwig GmbH E-Mail: sales.germany@umt- Fax: +49210412054 Phone: +49210491970 E-Mail: [email protected] Fax :+33140858433 Phone :+331461399 France 92632 Gennevilliers,Cedex 3/5, PlaceduVillage des Barbanniers Parc Technologique Andritz SelasS.A.S. HeatExchangerBusiness - - Päivärinne Works PulpandPaperMillServices - Fax: +358204505970 Kiertotie 21-23 Fax: +358204505977 Kiertotie 21-23 Fax: +358204505975 Relanderinkatu 2 group.com 10 2801660

Europe 127 / andritz 2002 Addresses of the Andritz Group 128 / andritz 2002 Addresses of the Andritz Group

Americas Europe E-Mail: [email protected] Fax: +5665434367 Phone: +5665434366 Chile Puerto Montt Seminaro 202 Sprout-Matador A/SChile Ltda. Chile 248 –10 Rua Presidente Faria, Andritz BrasilLtda. Fax: +551130785098 Phone: +551131686114 Brazil 04533-012 -SãoPauloSP Itaim Bibi Rua Tabapuã, 627-Cj.92 Andritz Ltda. Brazil E-Mail: [email protected] Fax: +4622563551 Phone: +4622563550 Sweden 776 33Hedemora Ivarshyttevägen 4 Andritz AB E-Mail: [email protected] Fax: +46660295399 Phone: +46660295300 Sweden 891 21Örnsköldsvik Artullsvägen 1 Andritz AB Sweden Spó Andritz AG Poland Fax: +55412240014 Phone: +55413047611 Brazil 80020-290 -Curitiba,PR Poland 02 -486Warsaw Aleje Jerozolimskie 214 Przedestawicielstwo wPolsce E-Mail: [email protected] Fax: +34916511931 Phone: +34916636409 Spain Madrid 28700 S.SebastiándelosReyes Agustin yAntonia,12 Andritz IngenieríaS.A. Spain l

ka Akcyjna - th Floor E-Mail: [email protected] Fax: +48228739939 Phone: +48228739940 E-Mail: [email protected] Fax: +4687362529 Phone: +4687362500 Sweden 100 31Stockholm Gävlegatan 22 Andritz AB E-Mail: [email protected] Fax: +46545559 Phone: +46545550 Sweden 653 43Karlstad Gräsdalsgatan 7 Andritz AB Fax: +34936749315 Phone: +34936749482 Spain Barcelona 08190 SantCugatdelVallés Calle Riera,11-bajos Andritz IngenieríaS.A. E-Mail: [email protected] Fax: +552733181761 Phone: +552799418107 Brazil Espirito Santo – CarapinaSerra Caixa Postal32–CEP29.160-970 1577, Sala203 Av. Presidente CasteloBranco, Andritz Ltda. E-Mail: [email protected] Fax: +41566184681 Phone: +41566184680 Switzerland 5610 Wohlen Oberdorfweg 9 Andritz 3SysAG Switzerland Fax: +78121101582 Phone: +78123160913 Russia 198005 St.Petersburg 4th KrasnoarmeiskayaStreet 4A LLC Andritz Russia E-Mail: [email protected] Fax :+4647087644 Phone :+4647087400 Sweden 351 87Växjö Kvarnvägen Andritz FiberDryingAB E-Mail: [email protected] Fax: +555132173307 Phone: +555132199281 Brazil CEP 90630-150,PortoAlegre/RS Rua DonaEugenia,811 Sprout-Matador doBrasilLtda. - Wood Processing MechanicalPulpingSystems - Canada Quebec H4T1W5 Ville St-Laurent, Montreal 3339 rueGriffith Street Andritz Ltd./Ltée. Canada Fax: +15187931917 Phone: +15187935111 USA Glens Falls,NY12804 101 RidgeStreet Andritz Inc. - Feed Technology - Engineered Wear Products / PulpandPaper - Fax: +15705461306 Phone: +15705468211 USA Muncy, PA 17756 35 ShermanStreet Andritz Inc. - Feed Technology - Wood Processing PulpandPaperMillServices - KraftMillSystems - E-Mail: welcome.atlanta@ Fax: +17706409454 Phone: +17706402500 USA Alpharetta, GA30004 10745 Westside Parkway Andritz Inc. USA E-Mail: bernard.oconnor@ E-Mail: bernard.oconnor@ Fax: +15147319422 Phone: +15147383707 E-Mail: maria.westaway@ Fax: +15147318558 Phone: +15147310404 E-Mail: [email protected] E-Mail: [email protected] Fax: +15705461312 Pulp andPaper E-Mail: [email protected] Fax: +17706675222 Fax: +17706402595 Fax: +17706402455 Fax: +17706402603 andritz.com andritz.com andritz.com Fax: +17804404354 Phone: +17804653344 Canada Alberta T6B2X9 Edmonton 3448-78 Avenue Service Center Andritz Ltd./Ltée. E-Mail: [email protected] Fax: +15197544594 Phone: +15197544590 Canada Ontario N3R7K1 Brantford 45 RoyBlvd. Service Center Andritz Ltd./Ltée. Fax: +18056427476 Phone: +18056427419 USA Ventura, CA93003 1565 CallensRoad Service Center Andritz Inc. Fax: +19135411631 Phone: +19135411703 USA Lenexa, KS66214 8259 Melrose Drive TS Division Andritz Inc. Fax: +12053383334 Phone: +12053383331 USA Pell City, AL35125 101 Bamberg Drive Service Center Andritz Inc. Fax: +19373906827 Phone: +19373903400 USA Springfield, OH45504 3200 UpperValley Pike R&D Facility Andritz Inc. FiberlineR&DFacility - PulpandPaperMillServices - FiberPreparation Systems - Fax: +15187452971 Fax: +15187457005 Fax: +15187452858 E-Mail: [email protected] Fax: +15143663608 Phone: +15143665160 Canada Quebec H8N2H1 La Salle 8300 St.Patrick Andritz FiberDryingLtd. E-Mail: brad.dolbey@ Fax: +16087585935 Phone: +16087585920 USA Janesville, WI53545 101 SouthMainStreet, Suite400 Voith AndritzTissueLLC E-Mail: [email protected] Fax: +15036921169 Phone: +15036920850 USA Tualatin, OR97062 9560 S.W. HermanRoad Pulp andPaper Engineered Wear Products / Andritz Inc. RollingMillsand - USA Canonsburg, PA 15317 Southpoint IndustrialPark 125 Technology Drive, Andritz-Ruthner, Inc. E-Mail: [email protected] Fax: +18174683961 Phone: +18174655611 USA Arlington, TX76001 1010 Commercial Blvd.South Andritz-Ruthner, Inc. E-Mail: [email protected] Fax: +17247459570 Phone: +17247457599 Strip Processing Lines voithandritz.com

Americas 129 / andritz 2002 Addresses of the Andritz Group 130 / andritz 2002 Addresses of the Andritz Group

Australia Asia E-Mail: [email protected] Fax: +91803465997 Phone: +91803465995 India Bangalore -560055 18 No. 63/1,3 Fax: +62215710896 Phone: +62217250137 Indonesia Senayan, Jakarta10270 JI. Jend.Sudirman1 6 c/o Ahlstrom Alcore Pulp MillServices Andritz Oy Thailand 3 Gedung BankPaninPusat, PT. Andritz Indonesia Makam Plaza,2 Andritz Technologies Pvt.Ltd. India E-Mail: [email protected] China 100004 Beijing 19 JianGuoMenWai Daije 2702-03 CITICBuilding Representative Office Beijing Andritz AG E-Mail: [email protected] Fax: +867572817010 Phone: +867572802050 China Foshan, Guangdong528000 14 HeBinRoad Andritz-Kenflo FoshanPumpCo.,Ltd. China Thailand Bangkok 10500 56 SilomRoad,Bangrak E-Mail: [email protected] Fax: +61397994899 Phone: +61387959800 Australia Dandenong South,Victoria 3175 56-58 GaineRoad Andritz Pty. Ltd. th rd th Floor, Yada Building Floor Cross, Malleswaram rd Main Road nd Floor PaperMillTechnologies, - PulpMillTechnologies - Fax: +6492662645 Phone: +6492662641 New Zealand Auckland 1750 Alfriston 1450 AlfristonRoad Andritz AustraliaPty. Ltd. New Zealand Fax: +911126081227 Phone: +911126083324 India New Delhi110062 Madangir Road Local ShoppingCentre, 7, M.G.Bhawan,FlatNo.202-206 India LiaisonOffice Andritz Oy Fax: +81356343460 Phone: +81356343450 135-0016 Japan Tokyo 4-chome 3-1Toyo, Koto-ku, Toyo-cho, ShineiBldg.,7F Andritz K. Japan E-Mail: [email protected] Fax: +6626326875 Phone: +6626326873 Fax: +861084970638 Phone: +861084970637 Hydraulic Machines Processing Lines, Rolling MillsandStrip Fax: +861065006415 Phone: +861065006413

Africa E-Mail: [email protected] Fax: +867572802047 Phone: +867572802046 China Foshan, Guangdong528000 14 HeBinRoad Andritz Technologies Ltd. E-Mail: [email protected] Fax: +914424322412 Phone: +914424338050/51 India Chennai 600018 443, AnnaSalai,Teynampet, lV Floor, GunaBuildingAnnexe Enmas AndritzPrivateLimited E-Mail: [email protected] Fax: +6565380940 Phone: +6565380093/94 Singapore 169877 #05-04 SanCentre 171 ChinSweeRoad Andritz Singapore Pte.Ltd. Singapore Fax: +27315628936 Phone: +27315628909 South Africa Durban Glenashley 4022 Aubrey Drive Suite 105A,York House, Andritz (Pty)Ltd. South Africa Product Range Refiner systems Mechanical PulpingSystems Fiberlines andfiberlineequipment Kraft MillSystems and equipment Wood processing plants Wood Processing and refiner systems systems foralltypesofrefiners Control, simulationandtraining low-consistency Refiners forhigh,medium,and dewatering andheatrecovery refining, screening, cleaning, impregnation, pretreatment, pulping: chipwashing,feeding, Complete systemsformechanical conveyors HHQ-Chipper Drum -chipperprocess lines Debarking drums Slasher decks De-icing conveyors Breakage chippers disc chippers Bleached pulpscreens Bleach plants Oxygen delignificationsystems Knot separationandscreens Washers Digesters screening andbleaching) EPC fiberlines(cooking,washing, LogPorter Turnkey woodyards PowerFeed TM TM portal cranes drum infeed TM and other and equipment Chip andbarkprocessing plants chip andbark reclaiming systemsfor Conveying, stackingand systems Pulp washingandbleaching panelboard industry Production systemsforthe equipment Chemical recovery plantsand ParaScrew JetScreen dischargers PowerScrew Screw reclaimers like Bark presses Bark shredders Rechippers chips Help HQ-Sizer Chip screens pulp andannual fibers bleach plantsformechanical Medium andhigh-consistency Laboratory refiner systems for theparticleboard industry for theproduction ofrawmaterial Atmospheric refiner systems MDF board production forHDFand pressurized refining forfiber systems incl.chipwashingand Complete mechanicalpulping NCG handlingsystems Chemical recovery boilers Heat recovery systems Condensate strippingsystems Effluent evaporators Black liquorevaporators EPC chemicalrecovery islands TM presteaming binsand TM TM TM for oversize , andCantiScrew TM , CenterScrew TM TM , plants andequipment Groundwood processing woodyards Automation systemsfor Dewatering systems preparation plantsandequipment Cooking liquorchemical WoodScan measurement BarkScan log sorting LogScan process optimization degree measurement LogScan charging systems Automatic grinder DrumMatic Disc filters Screw presses Twin-wire presses Medium-consistency pumps systems tower feedanddischarge Medium andhigh-consistency mixers Medium andhigh-consistency Wash presses dithionite peroxide, oxygen,ozoneand Bleaching stagesbasedon White liquoroxidationsystems kilns Lime reburning Recausticizing plants TM TM TM TM TM for automatic log sortingsystem for woodloss for debarking for debarking

Pulp and Paper 131 / andritz 2002 Product Range 132 / andritz 2002 Product Range

Pulp and Paper paper, board andtissuemachines Stock preparation systemsfor Ventilation andDryingEquipment Tissue Machines Fiber PreparationSystems drying marketpulp Systems fordewateringand Mechanical PulpingSystems Pulp &PaperMillServices management systems Savealls andwater Filler recovery systems Broke handlingsystems Headbox screens Deaeration systems Cleaners Refiners Deflakers Bale andUTMpulpers modernizations new components,machine Greenfield tissuemachines, and paperdryers Compact hoodsforlarger tissue dryer hoods(300°C-700°C) High-efficiency Yankee Wet lapsystems Screening systems Flash dryingplants Complete sheetdryingplants - Modernization ofexisting - Modernization Upgrades - Tools formeasuring,diagnosing Automation &controls - Equipmentservice - Overallproduction efficiency OPE reliability andefficiency equipment forimproved and optimizingprocesses outsourcing to millmaintenance paper mills programs forpulpand TM Services (in cooperationwithVoith Paper) and industrialgrades Recycled fibersystems,deinking Water managementsystems Bleaching systems Dispergers Twin-wire andscrew presses Disc filters,thickeners Cleaners Washing/Deashing systems Flotation systems Fine andcoarsescreens LC/HC pulpers,drumpulpers Cutters/Layboys forpulp Wet cross cuttersandlayboys shoe presses Heavy dutypresses, and flashdryingplants Dewatering machinesforsheet blow boxes Web stabilizersandsteam and board machines Impingement dryersforpaper formation single-ply ormulti-layersheet C-Wrap twin-wire formersfor Crescent formers,S-Wrap and - Durametal Engineered wearproducts - Spare parthotels - Inventoryoptimization - OEMspare andwearparts Parts andconsumables - Reconditioningofmachinery Rebuilds - FiberSentry shops certified partnerrebuild/service through Andritzfacilitiesor TM TM refiner plates screen baskets Pulp dryers paper industry Sludge handlingforpulpand Continuous pressure filters Sludge screw presses Gravity tables Dryers forflashdryingplants Dryers formarketpulp Bale transportandfinishinglines Hall ventilationsystems Dust extractionsystems ventilation systems Paper andboard machine Dynamic process simulation - Shutdownplanning, - Inspections,millandprocess - Operatorandmaintenance - Troubleshooting, optimization - 24-houremergency support Field services TissueFlex Through-Air Dryers, implementation coordination and improvement studies training TM shoe press Sludge dewatering Sludge thickening Waste watertreatment Water treatment Strip processing lines Rolling mills non-ferrous metalsandaluminiumindustry Equipment forthesteel,stainless steel strip for hotandcold-rolled stainless for cold-rolled stainlesssteelstrip for hot-rolled stainlesssteelstrip Annealing andpicklinglines carbon steel Continuous picklinglinesfor Push picklinglines adjustment systems Flatness measuringand thickness regulation systems Roll adjustmentandstrip Skin-pass mills 6, 12,20-highrolling mills mills andS-high Two-high, four-high, combined Turnkey coldrolling mills Electrolytic tinninglines (Gravitel) Electrolytic galvanizinglines Degreasing plants preparation system FlocSave flocculent centrifuges High-performance decanter Belt filterpresses Decanter centrifuges Drum thickeners Belt thickeners sieves Static androtary screens and screens Raked andperforatedplate Sand filtrationsystems - with horizontal furnaces - withhorizontalfurnaces - withelectrolytic oracid vertical design) pickling (horizontalor Regeneration andoxideplants Finishing systems Industrial solid/liquidseparation Thermal sludgeutilization Sludge drying acid process) stainless steel(Pyromars mixed acid andrinsewaterfrom pickling Plants forregeneration ofwaste fluidized bedtechnologies based onsprayroasting and carbon steel(hydrochloric acid) acid andrinsewaterfrom pickling Plants forregeneration ofwaste precision levellingmachines Large levellingmachinesand coils andforplates Packing linesfornarrow andwide Cut-to-length lines Slitting lines systems and customizedsurfacetreatment Grinding, sandblasting,polishing lines withverticalmuffle furnace Stainless steelbrightannealing and coatinglines Combined aluminiumannealing Carbon-steel coatinglines Hot-dip galvanizingsystems Screen centrifuges Decanter centrifuges Belt filterpresses Vacuum filters Hyperbaric pressure filters plants EcoDry granulateburning Belt dryingplants Fluidized beddryingplants Drum dryingplants Turnkey systemsforproducing Annealing furnaces Stainless steelstrip electronics industry Special materialforthe Razor bladestrip Thermostatic bimetals Foils forscreen masks Horizontal furnaces muffle furnaces) Vertical (including furnaces (WAPUR) Plants forwasteacidpurification Plants forore treatment (TiO metal oxideandmixed Plants forproducing high-purity 2 , Ni)

Environment and Process Technologies Rolling Mills and Strip Processing Lines 133 / andritz 2002 Product Range 134 / andritz 2002 Product Range

Other Operations / Hydraulic Machines Feed Technology Centrifugal pumps Large-scale pumps Water turbines Drying andcoolingofpellets Extrusion Pelleting Conditioning andexpanding Weighing andmetering Mixing offeedingredients Raw materialsizereduction desulphurization systems Pumps forflue-gas Fan pumps Medium-consistency pumps Stock pumps Pumping stations Volute casingpumps Mixed-flow pumps Axial-flow pumps Turbine governors Compact turbines Shut-off devices Storage pumps Pelton turbines Francis turbines Kaplan turbines Counter-flow coolers Horizontal beltcoolers Horizontal beltdryers Single-screw extruders Pellet mills,beltdriven Pellet mills,geardriven Thermal feedexpanders Twin-shaft conditioners Single-shaft conditioners Liquid dosingequipment Belt weighers Micro ingredients weighers Loss-in-weight weighingsystems Hopper scales Vertical mixers Horizontal paddlemixers Horizontal ribbonmixers Crumblers Roller mills Disc millrefiners Hammermills Space technology Reactor pumps Wear andspare parts Process controls Conveying equipment Material separationandcleaning Dust separationfilters Coating ofpellets Components forlauncherrockets elements Components forhandlingfuel Secondary-loop pumps Main-coolant pumps hammers Hammermill screens and Extruder diesandbarrels Expander andextruderscrews Pellet milldiesandrolls Weight controls Hammermill controls Dryer/Cooler controls Extruder controls Pellet mill/Feedexpandercontrols Rotary valves Screw conveyors Bucket elevators Chain conveyors Rotary feeddressers Roto-Shaker screeners Intake hopperfilters Cylindrical free standingfilters Modularly builtfilters Rectangular free standingfilters Filters forconveyoraspiration Micro fluidsystems Vacuum coaters Drum coaters Glossary of TechnicalGlossary Terms Mechanical pulp MDF Kraft mill Hammermill Galvanizing Extruder Disperging Deinking Debarking drum CTMP Calendering Bright annealing APMP/P-RC Annealing M Facility inwhichpulpisproduced usingthesulphatechemicalprocess. the sidesofametaldrumbysteelhammers. Plant forpulverizingrawmaterialsanimalfeed;the are hammered against by electrolysis orhotdipping(inmoltenzinc)toprovide protection againstcorrosion. Process inwhichasupportmetal,suchasiron orsteel,iscoatedwitha thinlayerofzinc feed, andcereals. convert itintofeedgranulate.Thisprocess isverycommoninproduction ofpetfood,fish combination offrictionalandsteamheatinorder toexpandtheresulting product and A continuousprocess inwhichanimalfeedcomponentsare cookedunderpressure ina such asmallsizethattheyare nolongerdetrimental. to eliminateallimpurities.Whatthedisperging process doesistoreduce theseparticlesto needed toremove theimpurities,e.g.glue,ink,from thefibers.Itisimpossible,however, Disperging isaprocess stage intreatment ofrecycled fibers.Severalprocess stagesare A core process inwastepapertreatment, usedtoremove printer'sinkfrom thefibers. Machine forremoving thebarkfrom logs. mechanical pulp. chemicals beingusedtosoftentheligninandreduce theenergy inputrequired toproduce C the paperaglazedfinish. Process inwhichuntreated paperispassedbetweentworolls atveryhighpressure togive in order toavoidoxidation. Annealing process, particularlyforstainlesssteel,carriedoutinanoxygen-free environment much cheaperforstandard brightnessdegrees thanconventionalCTMPprocesses. at thesametime.Thisprocess doesnotrequire asecondarybleachingstageandisthus gnation. Firstthechipsare pressed, thenthepressure isrelieved andthechemicalsadded refiner process inwhichthebleaching chemicalsare addedrightawayduringchipimpre- mainly usedtomakenewspaper andotherprintinggradescontainingwoodpulp. Pulp containinglignin,made by grindingwoodmechanicallyorrefining wood chips, A particularly incoldprocesses. stress.slowly toreduce Asaresult, internal themetalbecomessofterandmore workable, Process inwhichmetalisheated,retained atasuitabletemperature, thencooledrapidlyor lkaline hemo edium T D P hermo ensity eroxide M F iberboard (board madeofmechanicalpulpfrom the refiner process) echanical M echanical P ulping: Process basedontheTMPprocess, withadditional P ulping/ P reconditioning R efiner C hemical treatment: A 135 / andritz 2002 Glossary of Technical Terms 136 / andritz 2002 Glossary of Technical Terms Vacuum coater Wet end TMP Thickener Stock pump RTS Rolling mill Refiner Pulp Pickling OSB system Microfluid dosing O liquids, suchasenzymesandvitamins. System fortreating feedpellets,inwhichthepelletsare coatedwithmicro-amounts of T of aperforatedcylinder. Device forremoving waterfrom apulpsuspension.Thefibersare collectedonthesurface Special centrifugalpumpforwaterandfibersuspensions. the chipperbefore therefiner, whichisoperatedathighspeedsofupto2,300rpm. precisely controlled retention timeintherefiner, highertemperature, andhigherpressure at mechanical pulpatlowerenergy consumption.Betterfiberproperties are obtainedwitha R directions. Plant inwhichsteelstripisformedbetweentworolls rotating atthesamespeedinopposite production ofmechanicalpulp. Machine forbreaking downwoodchipsintofibersbetweentworotating surfaces,usedin used/recycled rags,bagasse,andstraw. the cellulosefibersfrom thestructure ofthewoodorfrom othermaterials,suchas The rawmaterialformakingpaper, produced eitherchemicallyormechanicallybyremoving Here, thesteelisdippedintoahotbathofdilutedsulphuricorhydrochloric acid. Process forchemicaltreatment ofoxidizedsteel,appliedtoobtainaclean,metallicsurface. liquid bymeansofvacuuminfusion. System usedinthefishfeedandpetfoodindustrytosoak core of thefeedparticlewith rolls inorder toobtainapaperwebthatcanbefedthrough adryingsection. enters themachineandbulkofwaterisremoved bydewatering,suction,andpress Section atthebeginningofapaperorpulpdewateringmachine.Atwetend, up thewoodstructure, thenrefined toproduce fiberpulp. hermo etention Time, riented M S echanical trand B T oard emperature, P ulping: Process inwhichchipsare steamedunderpressure tobreak S peed: Refinerprocess thatproduces abetterqualityof