The MAN Group is one of Europe’s leading players in the engine, commercial vehicle, and mechanical engineering industries. As a supplier of trucks, buses, vans, diesel engines, turbomachinery, and special gear units, we hold leading positions in all our markets. II MAN AT A GLANCE 2016 ORDER INTAKE ON A LEVEL WITH THE PREVIOUS YEAR 14.4 € billion [ 2015: €14.4 billion] SALES REVENUE SLIGHTLY BELOW THE PREVIOUS YEAR 13.6 € billion [ 2015: €13.7 billion] SIGNIFICANT IMPROVEMENT IN OPERATING PROFIT 204 € million [ 2015: €92 million] SIGNIFICANT IMPROVEMENT IN OPERATING RETURN ON SALES 1.5 percent [ 2015: 0.7%] BREAK-EVEN NET CASH FLOW 0 € billion [ 2015: €0.5 billion] III Group key figures (IFRSs) Change € million 2016 2015 in % Order intake 14,357 14,381 0 Germany 3,677 3,486 5 Other countries 10,680 10,895 – 2 Sales revenue 13,564 13,702 – 1 Germany 3,273 3,252 1 Other countries 10,290 10,449 – 2 Order backlog 1 5,641 6,037 – 7 Headcount 1 53,824 55,030 – 2 Change Income statement € million Operating profit before special items 2 417 277 140 Special items 2 – 213 – 185 – 28 Operating profit 204 92 112 Operating return on sales (%) 1.5 0.7 0.8 Earnings before tax from continuing operations (EBT) 49 95 – 46 Profit/loss after tax – 7 150 – 156 Balance sheet Total assets 1 19,438 18,110 1,327 Total equity 1 5,850 5,565 285 Equity ratio (%) 1 30.1 30.7 – 0.6 Net financial debt 1 – 1,875 – 1,311 – 564 Cash and cash equivalents 1 796 779 17 Cash flow Net cash provided by operating activities 833 1,162 – 329 Net cash used in investing activities attributable to operating activities – 831 – 667 – 164 Net cash flow 2 495 – 493 Change Shares in € Earnings per share from continuing operations in € – 0.12 1.02 – 1.14 Annual cash compensation payment/guaranteed dividend per share in € 3 3.07 3.07 – 1 As of December 31, 2016, vs. December 31, 2015. 2 Special items include restructuring expenses of €58 million at MAN Latin America and €155 million at MAN Diesel & Turbo (compared with €185 million at MAN Truck & Bus in the previous year). 3 MAN SE will not distribute any further dividends from fiscal 2014 onwards as a result of the DPLTA. Instead, Volkswagen Truck & Bus GmbH has agreed to make annual cash compensation payments of €3.07 per common or preferred share for the full fiscal year to MAN SE free float shareholders for the duration of the DPLTA, starting in fiscal 2014. IV THE MAN GROUP COMMERCIAL VEHICLES MAN Truck & Bus MAN Latin America is the largest MAN Group company and is a leading supplier is one of the largest truck manufacturers in Brazil and can of commercial vehicles and transportation solutions. The look back on a history spanning 35 years. Three of the five new TGE makes MAN a full-range provider of commercial best-selling truck models in Brazil are made by MAN Latin vehicles ranging from 3 through 250 t. America. The company is a supplier of commercial vehicles and bus chassis for growth markets, with one of the most Vans from 3.0 through 5.5 t advanced production facilities worldwide for trucks and bus Trucks with a gross vehicle weight of 7.5 to 44 t chassis that are marketed under both the Volkswagen and Heavy special-purpose vehicles with a gross train MAN brands. weight of up to 250 t MAN-branded city and intercity buses, coaches, and Trucks with a gross vehicle weight of 5 to 31 t bus chassis as well as NEOPLAN-branded luxury Tractor-trucks with a gross train weight of up to 74 t coaches Bus chassis from 5 to 26 t for all uses Industrial, marine, and on- and off-road engines Tailor-made special-purpose vehicles End-to-end passenger transportation and goods transportation services € million 2016 2015 € million 2016 2015 Order intake 10,342 10,059 Order intake 861 1,047 Sales revenue 9,243 8,997 Sales revenue 861 1,047 Operating profit 416 20 Operating loss – 190 – 120 Headcount (on December 31) 35,371 35,865 Headcount (on December 31) 1,406 1,734 Operating return on sales (%) 4.5 0.2 Operating return on sales (%) – 22.1 – 11.5 V POWER ENGINEERING MAN Diesel & Turbo Renk (76%) is one of the world’s leading providers of large-bore is a globally recognized manufacturer of high-quality diesel and gas engines and is also one of the leading suppli- special gear units, propulsion components, and testing ers of turbomachinery on the global market. systems. Two- and four-stroke engines with high fuel flexibility Vehicle transmissions for medium and heavy- for use in ships and power plants tracked vehicles On-board gensets, exhaust-gas turbochargers, and Special gear units for specialist marine and station- propulsion systems ary applications Diesel and gas power plants and power plant Standard gear units, primarily for merchant ship- components ping, industrial applications, and wind power Comprehensive range of compressors, gas turbines, Slide bearing housings for mechanical and electrical steam turbines, and chemical reactors engineering as well as special-purpose applications Complete turbomachinery trains for the oil and Turnkey testing systems for the automotive, rail, gas industry, the processing industry, and power and aviation industries as well as testing systems for generation wind power plants Global end-to-end after-sales services for the company’s entire product range under the MAN PrimeServ brand € million 2016 2015 € million 2016 2015 Order intake 2,808 2,949 Order intake 486 483 Sales revenue 3,113 3,305 Sales revenue 496 487 Operating profit/loss – 29 216 Operating profit 67 68 Headcount (on December 31) 14,603 14,935 Headcount (on December 31) 2,205 2,198 Operating return on sales (%) – 0.9 6.5 Operating return on sales (%) 13.5 14.0 VI THE WORLD OF MAN In 2016, there were around 53,800 people working for an MAN Group company. We have production sites in 14 countries. 1 5 2 4 3 7 8 12 11 9 14 1 GERMANY 2 DENMARK 3 FRANCE Employees 1: 31,444 Employees 1: 2,217 Employees 1: 1,396 Production sites: Production sites: Production site: Saint- Munich, Nuremberg, Salzgitter (MAN Truck & Bus); Frederikshavn, Copenhagen Nazaire Augsburg (MAN Diesel & Turbo, Renk); Ober hausen, (MAN Diesel & Turbo) (MAN Diesel & Turbo) Berlin, Hamburg, Deggendorf (MAN Diesel & Turbo); Hanover, Rheine (Renk) 7 SWITZERLAND 8 CZECH REPUBLIC 9 TURKEY 10 BRAZIL Employees 1: 1,071 Employees 1: 376 Employees 1: 2,458 Employees 1: 1,512 Production sites: Production site: Velká Bíteš Production site: Ankara Production site: Resende Zurich (MAN Diesel & Turbo) (MAN Truck & Bus) (MAN Latin America) (MAN Diesel & Turbo); Winterthur (Renk) 1 As of December 31, 2016; excluding subcontracted employees; all MAN companies nationwide VII 6 13 10 4 AUSTRIA 5 POLAND 6 RUSSIA Employees 1: 2,853 Employees 1: 3,346 Employees 1: 285 Production site: Production sites: Cracow, Production site: Steyr (MAN Truck & Bus) Posen, Staracho wice St. Petersburg (MAN Truck & Bus) (MAN Truck & Bus) 11 CHINA 12 INDIA 13 MEXICO 14 SOUTH AFRICA Employees 1: 671 Employees 1: 1,160 Employees 1: 168 Employees 1: 952 Production site: Changzou Production sites: Production site: Production sites: (MAN Diesel & Turbo) Pithampur Querétaro Olifantsfontein, Pinetown (MAN Truck & Bus); (MAN Latin America) (MAN Truck & Bus) Aurangabad, Bangalore (MAN Diesel & Turbo) VIII (ExpectedFINANCIAL dates)* DIARY 2017 Annual General Meeting MAY 24 for fiscal year 2016 2017 JULY 28 Half-Yearly Financial Report 2017 * The latest information can be found on the MAN Global Corporate Website at financialdates.man Publication date for the 2016 Annual Report March 16, 2017 CONTENTS II MAN at a Glance IV The MAN Group VI The World of MAN VIII Financial Calendar TO OUR SHAREHOLDERS PAGE1 5 Letter to Our Shareholders 3 8 Management Board 10 Report of the Supervisory Board 20 14 Corporate Governance COMBINED MANAGEMENT REPORT PAGE2 23 The MAN Group’s Business Activities 21 29 Course of Business and Economic Position of the MAN Group in 2016 39 The Divisions in Detail 44 Financial statements of MAN SE (HGB) 46 Report on Risks and Opportunities 54 Report on Expected Developments 58 Report on Post-Balance Sheet Date Events 59 Employees 60 Remuneration Report for Fiscal Year 2016 68 67 Takeover-Related Disclosures CONSOLIDATED FINANCIAL STATEMENTS PAGE3 71 MAN Consolidated Income Statement 69 72 MAN Consolidated Reconciliation of Comprehensive Income for the Period 73 MAN Consolidated Balance Sheet 75 MAN Consolidated Statement of Cash Flows 76 MAN Consolidated Statement of Changes in Equity 138 77 MAN Notes to the Consolidated Financial Statements FURTHER INFORMATION PAGE4 141 Responsibility Statement 139 142 Auditors’ Report 144 Glossary 146 Index 148 The MAN Group: Seven-Year Overview 150 150 Publication Details 2 MAN 2016 Annual Report THE ANNUAL REPORT ONLINE This 2016 Annual Report can also be downloaded as a PDF file from our website online at annualreport2016.man 3 1 TO OUR SHAREHOLDERSPAGES 3 — 20 MAN TGE VAN MAN TGX PERFORMANCELINE NEOPLAN TOURLINER The new van from MAN Truck & The exclusive, limited special edi- The new bus offers flexible applica- Bus impresses with a large cargo tion in the new MAN TGX truck tions in long-distance coach travel. space, a diverse range of securing generation is all about more power, The high level of travel comfort, possibilities, and customizable add- more design, and more perfor- sophisticated design and state- ons. It has a cargo volume of up to mance. An MAN D38 engine with of-the-art technology sets it apart 18.4 cubic meters depending on the a horsepower of 640 offers the from the rest.