Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 1 This report complies with the G4 Guidelines of the Global Reporting Initiative (GRI). The G4 standard labels in the margin reference the corresponding text to the relevant position in the GRI Content Index (pages 98 to 101). always Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 2 Overview of the activities of the Messer Group Messer Group GmbH (“the Company”), an industrial gases manufacturer, has its registered office in G4-3 Sulzbach/Taunus near Frankfurt am Main and its postal address in Bad Soden am Taunus. It acts as management holding company and, together with its subsidiaries and affiliated companies, forms the Messer Group (“the Group”). 1 From acetylene to xenon, the Messer Group offers a product portfolio that must surely count as one of the most diverse in the market – the Company produces industrial gases such as oxygen, nitrogen, argon, carbon dioxide, hydrogen, helium, shielding gases for welding, specialty gases, medical gases and a wide variety of mixed gases. G4-4 In state-of-the-art competence centres, the Messer Group develops application technologies for the use of gases in almost all branches of industry, in foodstuffs technology, medicine and research and science. The Group has its own operating facilities in 32 countries. Messer is therefore represented in each of the main European markets (with the exception of the United Kingdom and Scandinavia) as well as in China, Vietnam, Algeria and Peru. G4-6 In Germany, the Messer Group employs teams of experts that specialise in gas technologies, gas pro- duction and distribution. One highly specialised technical centre handles applications in areas such as cold grinding, recycling and cryogenics and another is responsible for developments in the area of wel- ding and cutting. The Group’s technical centre for application processes used in the manufacturing, metallurgy, heat treatment and burner engineering sectors is located in Austria. The technical centre in France specialises in the development of processes used in the food-processing, pharmaceutical and biotechnology sectors. In China, Messer runs a technical centre for shielding gas applications and ano- ther one for metallurgical processes and burner technology. 1 A full list of the subsidiaries included in the group reporting entity is provided in the list of shareholdings of the Notes to the Consolidated Financial Statements. 3 Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 always We make gases out of air G4-4 What are industrial gases? What is air? CO 2, Ne, He, CH4, Kr, H2, N2O, CO, Xe (all together 0.1 %) Ar Industrial operations require oxygen, nitrogen, argon, xenon, What we generally refer to as air is (0.9 %) neon and krypton, along with carbon dioxide, acetylene, hydro- a mixture of different gases which gen and helium, and a wide variety of gas mixtures. At Messer make up the atmosphere around O2 (21 %) we call these gases Gases for Life. They are produced in large- our planet. For the most part, air scale industrial plants and are just as important as water and consists of nitrogen and oxygen, N2 electric power for many manufacturing processes which make plus a small quantity of argon and (78 %) everyday products. traces of other gases. Where do they come from? How are gases produced from air? Oxygen, nitrogen, argon, xenon, neon and krypton are pro- In order to produce these gases, we use air separation units duced from the air. Carbon dioxide is primarily collected from which can reach 60 metres high or more. Inside them, a physi- the exhaust of industrial operations and cleaned. In some cases cal process takes place which separates the air into its compo- it is also produced from natural underground sources. Hydro- nents. That process, which is also known as low-temperature gen and acetylene are produced chemically. Helium is pro- rectification, basically works like this: duced from underground sources. Air is Air separation • filtered (dust is removed) and Chemical compressed to about six bars production • pre-chilled with cooling water • dried and stripped of all CO2 in Kr a molecular sieve C2H2 Ar • cooled below -175 degrees H2 O2 Xe Celsius and liquefied in the Ne N main heat exchanger Gases 2 • separated into liquid or gaseous for Life oxygen and nitrogen in a separation column • also separated into liquid argon He CO 2 The gases are stored in tanks in liquid form. Industrial exhaust Underground sources 4 Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 always How do Gases for Life reach the customer? Who needs Gases for Life? In smaller quantities, gases are stored in gas cylinders. When Industrial gases are used in a variety of purity grades and for a industrial gases are needed in large quantities, we install tanks wide range of purposes. Including as food gases and medical at our customer’s plant. Those tanks are used to store gases gases. such as oxygen, nitrogen, argon or CO 2 in liquid form. Road or rail tankers are used to transport the gas from the production Industrial gases can make production processes safer and more plants to the customer. cost-effective and improve product quality. They often con- tribute to environmental protection. Some processes and ap- Major industrial concerns such as steel works or chemical com- plications would even be inconceivable without the chemical panies need so much gas that they often have an air separation processes of gases. unit operating on their grounds. Sometimes pipelines also sup- ply gases to one or more major facilities, such as in industrial Typical user sectors include the automotive industry, the steel parks. industry, environmental engineering, food and beverages, con- struction, metallurgy, glass and ceramics, medicine and phar- The greater the quantity of gases a consumer needs, the short- maceuticals, the chemical industry, and research and develop- er the distance should be between the customer’s site and ment. the location where the gases are being produced. Generally speaking, gases are produced where they are needed: close to densely developed industrial areas. Gases for Life 5 Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 always Key figures of the Messer Group at a glance G4-8, G4-9 As of 31.12.2014 2011 2012 2013 2014 Net sales in million Euro 1,029 1,088 1,027 1,047 EBITDA in million Euro 241 237 231 241 EBITDA margin in per cent 23 22 23 23 Investments in million Euro** 191 184 197 205 Employees* 5,251 5,364 5,404 5,449 * contractual employments ** incl. IFRIC4 G4-10 Net sales (consolidated) Numbers of employees 370 by region 367 366 by region 2,255 360 360 2,216 in million Euro 341 Total: 5,449 Employees* 2,175 2,116 2,087 321 327 327 2,058 2,092 2,086 317 316 313 870 876 872 861 135 18 112 117 125 16 14 15 15 13 99 104 104 108 9 6 Corporate Asia Eastern- and We stern Europe Corporate Asia Eastern- and Western Europe Office Central Europe Office Central Europe 2011 2012 2013 2014 2011 2012 2013 2014 Net sales by product groups Net sales by industry segments in per cent in per cent Medical gases and equipment Gas, water, sewage & refuse services Competitors 5 % 2 % 5 % Electrical/electronic & instruments Hardware and others 5 % Basic metals, glass, ceramics 3 % Health services 32 % 5 % Gases in cylinders Food, beverages & Pipeline and on-site 27 % tobacco 30 % 7 % Engineering, metal goods, automotive 15 % (Petro-)Chemicals, Bulk Others rubber, plastics 35 % 17 % 12 % always Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 6 Contents Overview of the activities of the Messer Group 3 We make gases out of air 4 Key figures of the Messer Group at a glance 6 always. 9 Growth with vision 10 Foreword by Stefan Messer 13 Mission Statement 17 Management Board and Supervisory Board of the Messer Group 18 Supervisory Board Report 19 Corporate Responsibility Report of the Messer Group GmbH 21 Commitment to sustainability 23 Materiality matrix 27 Corporate responsibility 28 Values 30 Employees 40 Economy and company 50 Safety 60 Enviromental and climate protection 68 Customers and markets 78 Society 90 GRI Content Index 98 Group Management Report of the Messer Group GmbH 103 General Information on the Group 104 Report on economic position 114 Events after the end of the reporting period 124 Outlook 125 Report on opportunities 128 Risk report 129 Risk management 134 Consolidated Balance Sheet 137 Consolidated Income Statement 138 Consolidated Cash Flow Statement 139 Messer World 140 The Messer Group worldwide 148 Imprint 149 7 Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 always always Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 8 always. For Messer as a family enterprise, continuity, responsibility and sustainability constitute the basis of our actions rather than the latest trends to be followed, as is the case for many owner-run companies. Because a conscious and responsible approach to dealing with people, the environment and re- sources is an absolute necessity rather than a luxury for the future of our society. Besides our economic performance in the 2014 financial year, this report provides current and “historical” examples of sustainability being put into action, a constant component of our success as a company. And always has been. 9 Corporate Responsibility Report and Management Report of the Messer Group GmbH 2014 always Growth with vision A look at Messer’s business development shows a direct correspondence with the development of the size of the workforce.