sustainability report sustainability – key to success! 2014...skid steer loaders skid steer...

SUSTAINABILITY REPORT

2014Susstainability – keyy to ssucccesss! 2014Susstainability keyy to ssucccesss!

Wacker Neuson SEPreussenstrasse 41, 80809 Munich, GermanyPhone +49 - (0)89 - 354 02 - 0Fax +49 - (0)89 - 354 02 - 390www.wackerneusongroup.com

Wac

ker

Neu

son

Gro

up

Su

stai

nab

ility

Rep

ort

201

4

Making a mark towardssustainability. With the ECO solutions from Wacker Neuson.

EN_WN_BRO_Nachhaltigkeitsbericht_Umschlag_042015_1503533.indd 1-4 18.06.15 16:15

Gloobaal ppreeseencce

Germany (Kramer)Pfullendorf

GermanyMunich

GermanyReichertshofen

The NetherlandsAmersfoort

UKLondon

SpainMadrid

ItalyBologna

Headquarters of Wacker Neuson SE (holding company)Munich (Germany)

Affi liatesAssociated companies

Production sitesReichertshofen, Korbach, Pfullendorf (Germany), Linz/Hörsching (Austria), Kragujevac (Serbia), Menomonee Falls, Norton Shores (US), Manila (Philippines)

Affi liateHeadquarters

ProductionSite

Associated companies ChinaSiteNorway

Oslo

DenmarkKarlslunde

SwedenMalmö

AustraliaMelbourne

South AfricaJohannesburg

IndiaBangalore

RussiaMoscow

TurkeyIstanbul

Czech RepublicPrague

HungaryBudapest

PolandWarsaw

FranceParis

Germany (Weidemann)Korbach

CanadaToronto

USMenomonee Falls

USNorton Shores

USMenomonee Falls

MexicoMexico City

BrazilJuniai (near São Paulo)

ChileSantiago de Chile

ChinaHong Kong

ChinaShanghai

ChinaBeijing

ChinaShenzhen

PhilippinesManila

ThailandBangkok

European affi liates, sales and service stations

SerbiaKragujevac

AustriaLinz/Hörsching

Affi liates Sales and service

stations

AustriaVienna

SwitzerlandZurich

SingaporeSingapore

ColombiaBogotá

PeruLima

Foreword .............................................................................................. p. 4 Production and logistics sites ............................................................... p. 6 Product overview .................................................................................. p. 8I Introoductioon .............................................................................................. p. 100 Report structure .................................................................................. p. 12 Sustainability management and strategy at the Wacker Neuson Group p. 14 Materiality analysis ............................................................................... p. 20

II Inddicatorss ................................................................................................. p. 244 01. Business indicators ........................................................................ p. 26 02. Employees .................................................................................... p. 32 03. Procurement and quality ............................................................... p. 44 04. Product stewardship ...................................................................... p. 52 05. Energy and the environment ...........................................................p. 64 06. Compliance ................................................................................... p. 74 07. Donations and social responsibility .................................................p. 80 08. Involvement in associations and initiatives .......................................p. 90 09. Process innovation management ....................................................p. 94

III Apppendixx ............................................................................................... p. 1000 GRI Content Index ............................................................................. p. 102 Assurance statement ......................................................................... p. 106 Consolidation structure ...................................................................... p. 108 Contact and publishing details .......................................................... p. 110 Global presence

Coonteentts2


For us, sustainability means …

WACKER NEUSON GROUPSUSTAINABILITY REPORT 2014

… taking responsibility worldwide.

Active environmental protection

• Developing environmentally friendly products and solutions for our customers• Conserving energy and resources in production, sales and administration processes

Sustainable working conditions

• Ensuring rigorous occupational safety standards• Maintaining operator safety and protection for our customers• Guaranteeing quality across all

processes (ISO 9001, ISO 14001, ISO 50001)

Social responsibility

• Taking a responsible approach to our employees• Providing social benefits • Supporting emergency assistance and disaster relief programs

wackerneusongroup.com/csr

3

Sustainable business practices

• Driving sustainability throughout our value chain• Ensuring legal compliance and implementing anti-corruption measures• Reducing operating costs with energy-efficient products

Cem Peksaglam, CEO

Martin Lehner, CTO

Günther C. Binder, CFO

Dear readers, The Wacker Neuson Group is one of the world’s leading manufacturers of light and compact con-struction equipment. As a family business with a tradition stretching back over 167 years, we have always placed sustainability at the heart of everything we do. For us, sustainability means stepping up to our responsibilities – towards our employees and customers, to the end users of our pro-ducts, and to the environment and society as a whole.

Increasingly, our customers are demanding products that are manufactured in an energy-efficient, resource-friendly way – products that show the same qualities in daily operation. This is the aim of our day-to-day efforts, driven forward by the active participation and innovative strength of our employees.

Sustainable business practices have always shaped the way we think and act. Now, however, we are tackling this topic in a more structured, systematic and – as this report shows – documented way.

Our reporting is guided by the current international principles of the Global Reporting Initiative (GRI). Taking this as our basis, we have set ourselves concrete goals for realizing further improvements across the board in the coming years.

We would like to take this opportunity to thank our customers and business partners for their trust in our company and their loyalty over the years – or even decades. It is this belief in us that ins-pires us to continuously improve our products and deliver the best possible quality. Our particular thanks also go to our global workforce of around 4,500 employees, who play a key role in our continued success through their outstanding dedication. To master the daily challenges arising from our growth, we continue to depend on the exceptional drive, adaptability and commitment of our people.

We hope you have an interesting and enjoyable read.

Kind regards,

5Foreword

GRI G4-1: Statement from most senior decision-maker

FOREWORD4

Cem Peksaglam Martin Lehner Günther C. Binder CEO CTO CFO


Production and logistics sites SITES 76 SITES

Manila (PH)

Pfullendorf (DE)ISO certification: 9001

ISO certification: 50001 ISO certification: 14001

Hörsching (AT)ISO certification: 9001

Kragujevac (RS)

Reichertshofen (DE)ISO certification: 9001

Munich (DE)ISO certification: 9001

ISO certification: 50001 ISO certification: 14001

Karlsfeld (DE)ISO certification: 9001

The Wacker Neuson Group’s revenue grew 10.8 percent in 2014, reaching a new record high of around EUR 1,284 million. Group revenue has thus increased by almost 70 percent in just four years. This positive development confirms that the Group’s strategy is on the right path. With an EBITDA margin of 15.3 percent and an EBIT margin of 10.6 percent, the Group met its increased 2014 profit forecast as announced in November and achieved a marked increase in profitability relative to the previous year.

Revenue approx. € 1.3 bn

Over 50 affiliates

8 production

plantsEBIT

€ 136.2 m

Korbach (DE)ISO certification: 9001

HeadquartersLogistics

1 Differences attributable to rounding.

6%

17%

77%

Headcount by region1 as a % (2014)

3%

25%

72%

Revenue by region as a % (2014)

Development of revenue and profit margins 2010 – 2014

Revenue

EBIT margin as a % * Adjusted.

1,500

1,250

1,000

750

500

250

0

as a %

30

25

20

15

10

5

02010

758

2013

1,160+70%

2011

991

2014

1,284

2012

1,092

4.8

11.4*

7.8 8.210.6

in € million

Europe

Americas

Asia-Pacific

Europe

Americas

Asia-Pacific


Milwaukee (US)ISO certification: 9001

Norton Shores (US)ISO certification: 9001

Germantown (US)ISO certification: 9001

Logistics

GRI G4-4: Übersicht Produkte

GRI G4-4: Marken, Produkte, Dienstleistungen

Product overviewProcess know-how PRODUCT PORTFOLIO 98 PRODUCT PORTFOLIO

By combining concrete, compaction and worksite products with compact equipment and end-to-end services, the Wacker Neuson Group supports and optimizes its customers’ daily work. The Group is market leader in many product areas.

Light equipment Selection

Compact equipmentSelection

Concrete technology

Compaction Skid steer loaders

Dumpers

Excavators Used equipment

Parts exchange

Repair & maintenance1

Rental service1

Financing

Wheel loadersWorksite technology

Telescopic handlers

Internal vibrators

Rammers

Cut-off saws

Pumps

External vibrators

Vibratory plates

Gasoline breakers

Generators

Converters

Remote control compaction equipment

Floor saws

Lighting systems

Trowels Rebar technology

Electric breakers

Hydronic heaters

Rollers

Compact excavators Zero-tail excavators Mobile excavators

Track dumpers Four-wheel dumpers Four-wheel dumpers with cabs

Skid steer loaders Skid steer loaders Track skid steer loaders

All-wheel-drive wheel loaders

All-wheel-drive tele wheel loaders

Articulated wheel loaders

Hoftrac® models and wheel loaders for the agricultural industry

All-wheel-drive wheel loaders for the agricultural industry

Compact telescopic handlers1 In selected countries.

Telescopic handlersTelescopic handlers for the

agricultural industryTelescopic handlers for the

agricultural industry

GRI G4-4: Primary brands, products and services


• Report structure • Sustainability management and strategy at the Wacker Neuson Group • Materiality analysis

INTRODUCTION10 I Introduction

www.wackerneusongroup.com

• Overview of report contents • Compliance with GRI G4 • Reporting scope and profile

In this first Sustainability Report, the Wacker Neuson Group aims to provide its stakeholders with information about its sustainability strategy and how this is embedded within the Group’s organizational structures. We report our approaches to solving current and potential challenges in the fields of energy and the environment, product stewardship, economy, employees, and society, including concrete measures. These are intended to promote the sustainable development of our company and ensure our future success remains firmly rooted in a strong sense of corporate responsibility.

The first part of this report presents the findings of our materiality analysis. Here, we look at the importance of specific topics from stakeholder and company perspectives, reviewing the most significant challenges, successes and goals and discussing the main aspects of our sustainability strategy. The selection and weighting of topics for this Sustainability Report are the result of in-depth, structured stakeholder dialogues and workshops within the Group.

In the second part, we report on concrete measures and relevant indicators, including a transparent examination of challenges, achievements and goals in individual areas. We begin each chapter with an overview of the main topics covered.

Global Reporting Initiative (GRI) standardsThe Wacker Neuson Group’s Sustainability Report is based on the internationally applicable guidelines, reporting principles, standard disclosures and implementation manual developed by the Global Reporting Initiative for sustainability reporting (GRI G4 – Core).

We have included references to the applicable GRI G4 guidelines directly alongside relevant content in the various chapters of this report to ensure logical, transparent reporting. Where a single paragraph includes several values relating to an indicator, the GRI reference applies to the whole paragraph. In a few sub-categories of GRI G4 indicators defined as material for us, there are isolated omissions due to reporting processes not yet implemented in the period under review. The GRI content index is provided at the end of this report, containing the disclosures and indicators (or, where applicable, explanations of omissions) required under GRI G4 guidelines, as well as the relevant page references.

Whereas figures in this report add up precisely to the totals provided, percentages given as absolute values. This may lead to slight discrepancies relative to the unrounded figures.

Wacker Neuson Group disclosures for the reporting period from January 1 through December 31, 2014, marked GRI-G4 in the margin or followed by in the text were reviewed for fiscal 2014 by Ernst & Young Wirtschaftsprüfungsgesellschaft GmbH. An external assurance statement was duly issued (see p. 106).

Reporting scope and profileAll figures in this first Sustainability Report by the Wacker Neuson Group refer to 2014. In most cases, comparable values from 2013 are also provided to show development. We initially intend to publish a Sustainability Report every second year in the future. The reporting period corresponds to the calendar year (January 1 through December 31).

Wacker Neuson’s core sales markets are Central Europe and North America. Unless otherwise specified, this report applies to the whole Wacker Neuson Group; any restrictions are transparently stated. Environmental data relates to our production sites in Pfullendorf, Reichertshofen, Korbach (all Germany) and Linz (Austria), as well as to our Group headquarters and test area.* Around 75 percent of our total global production is thus covered in this area. We also manufacture goods for third parties at three of our production sites. The process, material and energy flows this entails are included in our key indicators.

Our workforce breakdowns by segment and region fully incorporate permanent staff members (full- and part-time) but do not include student trainees or temporary staff. The remaining employee data refers to the 83 percent of our global workforce currently covered by our standardized data evaluation processes. We will be increasing this percentage further in the future. Meanwhile, the relevant chapter is clearly identified with a statement about the reporting scope.

Over the coming years, our plan is to systematically expand the reporting scope to include all sites and we have already started taking steps to achieve this for 2015.

Contact pointThe Wacker Neuson Group’s Corporate Communication and Corporate Sustainability departments and Corporate Sustainability Officer will be pleased to answer any questions you may have about this report.

13I INTRODUCTION REPORT STRUCTUREReport structure

GRI G4-28, GRI G4-29, GRI G4-30: Reporting period Reporting cycle

GRI G4-6: Countries where the organization has significant operations

GRI G4-31: Contact point for questions

12 I INTRODUCTION REPORT STRUCTURE

Auditor’s report p. 106

GRI G4-32: GRI content index


*Test area: European R&D center for light equipment in Munich, Germany

CUSTOMERS

PERFORMANCE

INNOVATION QUALITY

CHARACTER

I INTRODUCTION MANAGEMENT ANDSTRATEGY

Sustainability management and strategy at the Wacker Neuson Group

Safety

Safety has several, equally important facets at Wacker Neuson: Safety for our employees in the workplace, safety in the form of reliable product quality, and safety for our customers when operating our equipment. In this dimension, too, we want to be perceived as a reliable and responsible partner.

• Our corporate responsibility towards the environment and society • Group philosophy and mission: sustainable business practices to ensure lasting success • International sales and service network backed by outstanding logistics

Wacker Neuson Group philosophyThe way each of our employees behaves, does business and interacts with stakeholders plays a major role in shaping our corporate image. Shared values form the basis of all of our daily activities, which are always geared towards acting sustainably and contributing to the future of our company. We ensure both our ongoing operations and our strategic planning are aligned with our Group philosophy.

We place our customers at the heart of our value system. As external stakeholders, they experience our innovation and quality directly through Group products and services. Internally, performance and character are the hallmarks of our staff and organization. These values steer our success and shape the way we go about our business – both within and beyond the company. We strive to observe all four values in all of our decisions and activities.

Anchored in the tradition of a family-run business and actively lived across generations, sustainability has always enjoyed a high priority at the Wacker Neuson Group. Our understanding of this involves actively addressing the current and potential future effects of our value creating processes on the environment, evaluating them and taking appropriate action to maximize resource conservation.

Developing the Group’s GIPI strategyOur GIPI strategy frames our ongoing alignment with our four pillars of:

• Growth • Internationalization • Professionalization • Integration

Professional sustainability management is part of this development strategy.

1514 I INTRODUCTION MANAGEMENT AND STRATEGY

Ecology

For us, ecological awareness involves being actively committed to environmental protection and avoiding negative impact on the environment as far as possible. Production efficiency, climate protection and resource conservation are important goals in this regard, as are avoiding pollutants, reducing waste and checking the end-of-life recycling potential of materials used in our products.

Society

As a globally successful organization, we have a strong sense of social responsibility – towards our employees, customers, shareholders, suppliers, financial partners, public bodies, NGOs* and, not least, the general public. As an employer, we seek to offer an attractive overall package to our staff. We also maintain continuous,

transparent dialog with our stakeholders, parti-cipate in committees to help shape a sus-

tainable future, and donate to selected projects and organizations assisting people in need.

Economy

Ensuring our operations are economically efficient means generating profit and growing as a company – to the benefit of all our stakeholders. For us, this is not about maximizing short-term gains, but rather about securing our long-term existence and sustainable business practices, especially during difficult economic times. We also seek to offer our customers the right solutions for their needs, increasing their productivity through our products. Their success is our success.

* Non-governmental organizations.

GrowthInternationalizationProfessionalizationIntegration

Our missionOur mission is as simple as it is ambitious. The Wacker Neuson Group aims to continue developing innovative, value-adding products and services worldwide, maintaining the same high standards of quality and reliability, all based on sustainable and environmentally sound workflows and production processes.

We are aiming for industry-leading ecological, economic and social performance. Equally, safety is of paramount importance to us as a manufacturer of light equipment and construction and agricultural machinery.


Our goalsOur overarching aim is to achieve growth for the Group that is sustainable in the best possible way.

This includes:

• Extending our pioneering role with ECO products • In-depth stakeholder/customer dialogue • Ensuring we are an attractive employer • Strengthening our social engagement as a corporate citizen • Realizing Group-wide synergies/process optimization • Protecting the environment across our sites • Saving energy and costs by reducing our heat and power requirements

(certification of further sites to ISO 14001 and 50001)

Organizational and legal structureWacker Neuson SE is an European company with its headquarters in Munich. It is registered in the German Register of Companies (Handelsregister) at the Munich Magistrate’s Court under HRB 177839. The company’s shares have been listed since May 2007. As a holding company with a central management structure, Wacker Neuson SE directly or indirectly holds the shares in its affiliates. It also houses various central Group functions.1

In fiscal 2014, the Group’s manufacturing activities were distributed across three sites in Germany, one in Austria, two sites in the US and one in the Philippines. Components are also manufactured in Serbia. Products are distributed globally via affiliates, Wacker Neuson sales and service stations and an international dealer network. The Consolidated Financial Statements of Wacker Neuson SE are prepared in accordance with the International Financial Reporting Standards (IFRS). Forty-nine companies, including the holding company, were fully consolidated in these statements as of December 31, 2014. An overview of this consolidation structure is appended to this Sustainability Report. Where key indicators refer to individual entities rather than the entire organization, this is indicated in the report.

The Executive Board of the holding company is responsible for managing the Group. Regional presidents each have full responsibility for sales and marketing within their designated sales region, and the sales affiliates within that region report to them. The presidents themselves report directly to the Group’s Executive Board – as do the executive bodies of the manufacturing affiliates.

The holding company is responsible for strategic functions of Group management. Important decisions on projects initiated by the company in response to changing market and customer requirements are made by management committees. These committees include members of the Executive Board, regional presidents, affiliate managers, other senior managers and central functions.

With the exception of Kramer-Werke GmbH and Weidemann GmbH, which operate under their own brands and names, all operating affiliates worldwide trade under the common name of Wacker Neuson.

PortfolioAs a manufacturer of light and compact equipment, we offer our customers a broad and deep portfolio of products, a wide range of services and an efficient, global spare parts service. Our products are aimed at professional users. The construction industry is our largest customer segment, and we also serve the gardening, landscaping and agricultural sectors, as well as municipal bodies and the recycling and energy industries.

17

GRI G4-8: Markets served

GRI G4-4: Primary brands, pro-ducts and services

GRI G4-3: Name of organization GRI G4-5: Organization’s headquarters GRI G4-6: Most significant countries of operation GRI G4-7: Nature of ownership and legal form GRI G4-9: Scale of organization

GRI G4-17: Consolidated entities


16 I INTRODUCTION MANAGEMENT ANDSTRATEGY

1 Group controlling, Group accounting, treasury, legal (including patent management), internal auditing, compliance, real estate, investor rela-tions, corporate social responsibility, corporate communication, corporate IT, corporate marketing, corporate aftermarket and corporate human resources.

See our product overview for more details (p.8/9).* Only in markets with Wacker Neuson sales and service stations.

Concrete technology Compaction

Worksite technology

Excavation technologyMaterial handling

Repairs and spare partsUsed equipment

FinancingTelematics

Rental*

Ligh

t equ

ipm

ent

Com

pact

equ

ipm

ent

Ser

vice

s


Managing our sustainability activities

CSR steering committeeJJ Executive Board, central divisions and other departments

(defining strategic goals, planning, controlling and budge-ting sustainability activities)

JJ Group HQ function (steering and coordinating sustainability activities)Sustainability team

Local CSR officers

JJ Human resources

JJ Research & development

JJ Procurement

JJ Investor relations

JJ Marketing

JJ Sales

JJ Real estate

JJ IT

Reichertshofen (DE) Korbach (DE)

Pfullendorf (DE) Hörsching (AT)

Production Headquarters & logistics

Munich (DE) Karlsfeld (DE)

Departments

JJ Technology

JJ Legal

JJ Internal auditing

JJ Compliance

JJ Data protection

JJ Accounting/controlling

JJ Lean management

JJ Other departments


The light equipment business segment comprises the strategic business fields of concrete technology, compaction and worksite technology.

The compact equipment business segment covers machinery targeted at the construction and agricultural industries, gardening, landscaping and industrial firms as well as recycling companies and municipal bodies. Our offering here includes excavators, wheel loaders, skid steer loaders, telescopic handlers, and wheel and track dumpers weighing up to 15 tons, as well as attachments.

Alongside new equipment, the Group also provides a comprehensive range of services. These encompass the business fields of repair and spare parts, used equipment, financing, telematics and rental in Central Europe.

The Group breaks down its revenue reporting into two categories: by region (Europe, Americas, Asia-Pacific) and by business segment (light equipment, compact equipment and services). Due to the breadth and depth of our portfolio, we do not consider reporting by unit sales to be as meaningful. Revenue trends in the business segments are reported in the chapter on business indicators.

Brand identityWacker Neuson Group is the organization’s umbrella brand, used in Group communications. Products and services are distributed under the three separate brands: Wacker Neuson, Kramer and Weidemann. The Wacker Neuson brand offers the broadest product portfolio, consisting of light and compact equipment, distributed through a global network. Under the Kramer brand, we distribute all-wheel drive wheel loaders, tele wheel loaders and telescopic handlers via an extensive dealer network. The Weidemann brand is a by-word for long-standing expertise and experience in the agricultural sector. The company uses a specialist dealer network to distribute its compact, articulated Hoftracs®, wheel loaders, tele wheel loaders and telescopic handlers internationally.

Corporate governance – executive bodiesWhen the company changed its legal form to become a European stock corporation (Societas Europaea or SE) in 2009, shareholders chose the dual management system common under German stock corporation law. This system vests an Executive Board and a Supervisory Board with different areas of responsibility. These two bodies work closely together in a relationship of mutual trust. The overarching aim is to continuously increase the company’s value, thus securing the long-term success of the Wacker Neuson Group. The shareholders exercise their rights, including voting rights, at the AGM. A more detailed description of our executive bodies can be found in the corporate governance report within the Wacker Neuson Group’s annual report.

Decision-making and steering committees for sustainability managementThe sustainability indicators as applied in this report are gathered by the Corporate Sustainability department in close collaboration with the relevant departments across the Group and subsequently also aggregated by Corporate Sustainability. The Executive Board is regularly updated on topics and progress in this area. The CEO is responsible for Sustainability and reports to the Supervisory Board in this regard.

The Corporate Sustainability Officer, who is also Energy and Environment Manager for the corresponding management systems across the Group, took up this role in Q4 2013. On energy and environmental issues, he works closely with the local officers initially appointed in 2014 at our German and Austrian production sites, as well as at the Group headquarters and test area.

Our activities relating to sustainability are overseen by a CSR steering committee, which comprises members of the Executive Board as well as managing directors from our production sites and staff from our central divisions and other departments. This committee meets annually to discuss the Group’s sustainability strategy and approve the associated strategic planning and budgeting for the coming year.

19I INTRODUCTION MANAGEMENT ANDSTRATEGY

18

GRI G4-34: Governance structure

GRI G4-9: Quantity of products or services provided

Umbrella brand

Product brands

Construction industry, gardening and landscaping firms, municipal services,

recycling, rail track construction, rescue services, energy sector, etc.

Agriculture, equine industry, municipal services, tree nurseries


• Engaging with our stakeholders • Identifying and analyzing material sustainability aspects

Stakeholder communication and materiality Continuous dialog is essential when it comes to aligning our sustainability management with the information requirements of our stakeholder groups, giving us an important source of new ideas and enabling critical review of the focus areas of our sustainability strategy.

At the end of 2013, the Corporate Sustainability department initiated a multi-phase process to identify the key sustainability topics for the Wacker Neuson Group, starting internally. Workshops were held to develop the most important sustainability action items with managing directors of the European production sites and with the relevant central functions.

In a second step, we conducted a comprehensive global survey of our remaining internal and external stakeholders.

This involved stakeholders with direct ties to our Group, our brands and our industry, who would thus be in a position to comment on the Wacker Neuson Group’s sustainability initiatives. We identified the following core stakeholder groups:

Our stakeholder groups

Finally, we compiled these internal and external perspectives into a materiality matrix.

We performed the survey between February and August 2014, maintaining close contact with all participating stakeholder groups during this time. In addition to our public survey online, we distributed questionnaires at several national and international trade fairs as well as at Wacker Neuson SE’s AGM. We also used e-mail and postal communications to actively engage our stakeholder groups. In this way, we were able to gain a representative cross-section of all the various perspectives and prioritize key topics. We will be conducting this survey every year from now on.

To evaluate the survey input, we weighted the responses from the groups above in line with their influence on the way we do business. We assigned the strongest weighting to feedback from our customers (end customers, dealers and rental firms).

Other key stakeholder groups included in the survey are investors, private shareholders and analysts, employees and suppliers, as well as NGOs, associations and journalists.

Defining report content – identifying material aspects Our materiality matrix shows the findings from the stakeholder surveys in relation to the outcomes of discussions with our central functions and the managing directors of our European production sites. The deciding factor for the central functions and managing directors involved identifying the topics which an impact on the assessment of the Wacker Neuson Group’s sustainability performance. The topics identified in this way influence our current and future business approach. At the same time, we are in the position to exert both direct and indirect influence on them.

21I INTRODUCTION MATERIALITY ANALYSISMateriality analysis

GRI G4-26: Approach to stakeholder engagement

GRI G4-25: Identification and selection of stakeholders

GRI G4-24: Stakeholder groups

20 I INTRODUCTION MATERIALITY ANALYSIS

Associations

Employees Analysts

InvestorsPrivate shareholders

End customers, dealers, rental firms

Journalists Financial and business partners

NGOs

Suppliers

GRI G4-18: Defining report content


very

rele

vant

very relevant

rele

vant

relevant

INTERNAL PERSPECTIVE

EXTE

RNA

L PE

RSPE

CTI

VE

A

B

Economy

1. Corporate Governance2. Compliance3. Economical development4. Communication/dialog with stakeholders5. Family business values/sustainability strategy6. Customer satisfaction and relations7. Protection of customer data

Product

8. Product stewardship/safety9. Product innovation and increasing e�ciency10. Product life cycle

Environmet

11. Climate and environmental protection12. Sustainable supplier management13. Resource consumption (Products)14. Resource consumption (Production)

Employees

15. Occupational health and safety16. Employee satisfaction17. Employee work/life balance18. Fostering diversity19. Training and education

Society

20. Donations (�nancial/material)21. Volunteering

Indication for readers:The most important topics are displayed in �eld A.Topic order in this list has no signi�cance.

11416

19

15

8

9

6

7

3

10211

1713

12

5

4

18

21

20

SCOPE TOPICS REPORT CHAPTER GRI ASPECTS

Wacker Neuson production (DE & AT) and HQ (DE)

Climate and environmental protection Energy and the environment Emissions, effluents and waste

Occupational health and safety Employees Occupational health and safety

Resource consumption (production) Energy and the environment Energy

Wacker Neuson worldwide Product lifecycle Product stewardship Products and services

Product stewardship/safety Product stewardship Customer health and safety

Product innovations and increasing efficiency Product stewardship Products and services

Resource consumption (products) Product stewardship Products and servicesEmployee satisfaction Employees EmploymentEmployee work/life balance Employees Employment

Fostering diversity Employees Diversity and equal opportunity

Training and education Employees Training and education

Donations (financial/material) Donations and social responsibility Economic performance

Volunteering Donations and social responsibility –

Protection of customer data Compliance Customer privacy

Corporate governance Management and strategy Governance

Compliance Compliance ComplianceEconomic development Business indicators Economic performance

Communication/dialog with stakeholders Materiality analysis Identified material aspects and boundaries;

stakeholder engagement

Family business values / sustainability strategy Management and strategy Governance

Customer satisfaction and relations Product stewardship Product and service labeling

Suppliers Sustainable supplier management Procurement and quality

Procurement practices; child labor; forced or compulsory labor; supplier assessment for labor practices; supplier environmental assessment

Materiality matrix

The materiality matrix displays the external evaluations (along the Y axis) in relation to evaluations within the Group (X axis). It includes all evaluated issues and shows their relevance to our business operations on a scale of 1.5 to 3 (relevant to very relevant). The position of individual issues within the matrix indicates where we will be focusing our future sustainability activities. The most important issues are in field A (gray background).

23I INTRODUCTION MATERIALITY ANALYSIS

I INTRODUCTION MATERIALITY ANALYSIS22

The materiality matrix shows that the following topics as shown in field A (top right) are evaluated as very relevant from both an internal and the external perspective:

• Customer satisfaction and relations • Product stewardship/safety • Product innovations and increasing efficiency • Occupational health and safety • Education and training

Immediately below them are the topics also identified as important (central area).

Material aspectsThe most important topics for the Wacker Neuson Group in the context of sustainability were identified within the materiality analysis and mapped to GRI aspects. Their scope extends to various different levels.

The topics identified through this survey flow into our sustainability strategy and thus determine our future business approach. Our primary focus here is on topics that are of equal importance to us and to our stakeholders.

MA

TE

RIA

L A

SP

EC

TS

Related aspects – scope/boundaries GRI G4-20: Material aspect boundaries within the organization; GRI G4-21: Material aspect boundaries outside the organization

GRI G4-27: Out-comes of stakeholder engagement

GRI G4-19: Material aspects


GRI G4-19: Material aspects

• Positive business performance • Revenue growth across all business segments • Strong share performance with increased dividends • Significant upturn in return on equity • Business development benefits stakeholders

INDICATORS24 01. Business indicators

www.wackerneusongroup.com/investor-relations

Future-oriented growth is the key to long-term success. The Wacker Neuson Group regularly evaluates key financial indicators. In line with the requirements applicable to companies listed on a stock exchange (SDAX), the Group publishes annual and quarterly reports to provide stakeholders with timely information on business developments. In 2014, the Group again proved that it can achieve dynamic and profitable growth.

We were able to post strong business results again in fiscal 2014. Revenue rose by 11 percent to EUR 1.28 billion (2013: EUR 1.16 billion), reaching a new record high. Adjusted to discount currency effects, this corresponds to an increase of 12 percent.

Revenue trends in the business segmentsLight equipment revenue2 for the period under review rose 4 percent to EUR 422.3 million (2013: EUR 407.2 million). The segment’s share of total revenue was 32.4 percent in 2014 (2013: 34.6 percent).

Compact equipment revenue2 increased to EUR 606.0 million in 2014, rising 17 percent relative to the previous year (2013: EUR 520.0 million). This segment’s share of total revenue thus climbed to 46.6 percent (2013: 44.2 percent).

The Wacker Neuson Group increased its revenue in the services business segment² by 10 percent to EUR 273.0 million in 2014 (2013: EUR 248.5 million). The segment’s share of total revenue was 21.0 percent (2013: 21.1 percent).

Profit developmentThe growth in revenue was also reflected in Group profit in 2014. Profit before interest, tax, depreciation and amortization (EBITDA) grew 28 percent to EUR 196.3 million, while the EBITDA margin reached 15.3 percent (2013: EUR 153.4 million; 13.2 percent).

Profit before interest and tax (EBIT) rose 43.8 percent to EUR 136.2 million in 2014. This resulted in an improved EBIT margin of 10.6 percent (2013: EUR 94.7 million; 8.2 percent), which ranges well within our projection.

Risk management systemThe Group-wide risk management system serves as an early-warning safety net that identifies, assesses and appropriately communicates risks and enables the Group to implement corresponding counteractive measures in good time.

The Wacker Neuson Group regularly holds internal audits at its sites. These are designed to improve business processes and add value. Sixty audits took place in 2014.

27II INDICATORS BUSINESS INDICATORS

Business indicators

GRI G4-9: Scale of the organization

26 II INDICATORS BUSINESS- INDICATORS

2 Before discounts.

See the Annual Report 2014 for more detail

See the Annual Report 2014 for more detail

Compact equipment

Light equipment

Services

21.0%

32.4%

Revenue by business segment 2014 (share of total revenue)

46.6%

Revenue trend 2013 – 2014in EUR billion

2013 revenue

2014 revenue

Revenue growth 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3

growth+11%*

1.28

1.16

* adjusted to discount currency effects


II INDICATORS BUSINESS INDICATORS


Healthy financials and assets – high return on equityThe Group’s financials and assets remain strong, with a high equity ratio (before minority interests) of around 70 percent and net financial debt of around EUR 180 million (2013: EUR 177 million). This corresponds to a gearing of 18 percent (2013: 19 percent).

Bolstered by the strong profit development for 2014 as a whole, return on equity (ROE) improved to 9.4 percent (2013: 6.6 percent).

Return on capital employedCapital employed, an indicator for invested capital, rose alongside revenue growth. The ratio of average capital employed to revenue decreased in 2014, amounting to around 70 percent (2013: 74 percent).

In 2014, the Group realized a return of 10.8 percent after tax (ROCE II)3 – a significant increase on the previous year. This ROCE II figure was higher than the weighted average cost of capital (WACC), which came to 7.1 percent. Overall, the Group thus produced economic value added (EVA) in the amount of EUR 32.4 million in 2014 (2013: EUR 5.1 million).

The Wacker Neuson shareEven though 2014 was a highly volatile year on global stock markets, the Wacker Neuson share performed well, recording a gain of 48 percent. It thus significantly outperformed both its German benchmark indexes and its peer group. It then went on to gain over 35 percent again from the beginning of the year to the start of May 2015.

The share price – quoted on an ongoing basis and fixed at close of trading – climbed from EUR 11.49 (at December 30, 2013) to EUR 16.96 (at December 30, 2014). The highest price was EUR 18.00, exceeding the previous peak from the year before (2013: EUR 12.75). The low in 2014 was EUR 11.73 (2013: EUR 9.24).

Family ownershipIn terms of ownership structure, 63.1 percent of the share capital was held by a consortium made up of the Wacker and Neunteufel families at the closing date of December 31, 2014. The remaining shares were held by private and institutional investors.

Annual general meeting and dividends

At the AGM on May 27, 2015, the Executive Board and Supervisory Board will propose a dividend per share of EUR 0.50 for 2014. This corresponds to a payout ratio of 38.3 percent based on Group profit for 2014 (EUR 91.5 million).

2928

GRI G4-9: Total capitalization

3 Return on capital employed (ROCE) is calculated by comparing the EBIT generated with the capital invested during a fiscal year.

UNIT 2013 2014

ROCE I (return on capital employed before tax) % 11.0 15.2

ROCE II (return on capital employed after tax) % 7.7 10.8

ROE % 6.6 9.4

EVA € m 5.1 32.4

WACC % 7.1 7.1PR

OFI

TAB

ILIT

Y

Return on capital employed

Ownership structure Shareholder structure

Consortium (Wacker family share)*

Consortium (Neunteufel family share)*

Private and institutional investors**

37%

30%

33%

Share

“The Wacker Neuson Group again achieved strong

revenue growth in fiscal 2014, setting a new record at

almost EUR 1.3 billion. With our share price doubling

between the start of 2014 and today and profit also

rising, everything points to a company that is healthy to

the core and continues to hold great potential.”

GÜNTHER C. BINDER, CFO

UNIT 2013 2014

Equity in million m 939.3 1,016.2

Borrowings in million m 383.0 431.3

of which current liabilities m 203.2 209.1

of which non-current liabilities m 179.8 222.2

Total capital in million m 1,322.3 1,447.5

Equity ratio (before minority interests) as a % % 70.7 69.9CA

PIT

ALI

ZA

TIO

N

Total capitalization

* For information regarding the consortium and pool agreement, see p. 88 of the Annual Report 2014.** Includes shares held by the Wacker and Neunteufel families outside of the consortium.


Wacker Neuson SE’s market capitalization at the close of 2014 amounted to around EUR 1,189.2 million (December 30, 2013: EUR 805.6 million). This corresponds to an increase of over EUR 380 million (+48%) during the year under review.

In 2014, 70.1 million ordinary shares were in circulation at all times. This resulted in earnings per share (diluted and undiluted) of EUR 1.30 (2013: EUR 0.87). The number of shares outstanding remained unchanged from the previous year at 70,140,000.

Flow of capital to stakeholders

Direct, distributed and retained economic valueMany stakeholders share in the revenue and other income that we generate as a company: employees, suppliers, public authorities, local communities and banks. Favorable business development for the Wacker Neuson Group thus has a positive impact for all our stakeholders.

Direct economic value generated This constitutes the entirety of a company’s income. Our sales revenues rose to EUR 1,284.3 million in 2014 (2013: EUR 1,159.5 million), while financial income4 increased to EUR 2.7 million (2013: EUR 1.9 million). Proceeds from the sale of property, plant and equipment amounted to EUR 2.2 million (2013: EUR 0.4 million), and other income5 totaled EUR 23.3 million (2013: EUR 13.9 million).

Direct economic value generated in 2014 thus came to EUR 1,312.5 million (previous year: EUR 1,175.7 million).

Economic value distributed Distributed economic value comprises operating costs, employee wages and other benefits, payments to providers of capital, payments to governments in the form of taxes, and community contributions (donations).

Operating costs6 amounted to EUR 911.5 million in 2014. This figure represents the sum of manufacturing costs (EUR 903.0 million), selling expenses (EUR 170.6 million), research and development outlay (EUR 28.8 million) without capitalized expenditure, and general administrative costs (EUR 63.6 million), less personnel expenses7 (EUR 254.3 million) and community contributions (donations: EUR K 91).

The Group made payments of EUR 36.8 million to providers of capital, of which EUR 8.8 million were investment expenses and EUR 28.1 million dividends.

In line with the Group’s strong business development, taxes on income8 rose to EUR 38.0 million in year under review (2013: EUR 26.4 million). A substantial portion of our tax is paid in Germany and Austria, where a major part of our value is also generated.

Altogether, distributed economic value rose by 11 percent in the year under review to EUR 1,240.8 million (2013: 1,122.5 million).

Economic value retained Economic value retained is the difference between direct economic value generated and the economic value distributed. This rose to EUR 71.7 million in 2014 (2013: EUR 53.3 million).

31II INDICATORS BUSINESS INDICATORS


30

4 Total interest and similar income, including income on disposals of financial assets, including unrealized gains.5 Total income from currency gains, rental income, investment properties, carry-forwards, recovery of receivables written off, insurance

reimbursements, exchange transactions, proceeds from the sale of scrap, and any other sources.

Direct, distributed and retained economic value in EUR K

2013* 2014 Difference

12%

11%

10%

6%

1%

33%

44%

35%

Direct economic value generated

Economic value retained

0 300,000 600,000 900,000 1,200,000

Personnel expenses

Investment expenses

Operating costs

Dividends

Taxes on income

Economic value distributed

GRI G4-EC1: Direct economic value generated and distributed

GRI G4-EC1: Direct economic value generated and distributed

Wacker Neuson share: 2010 to 2014

6 Sum of manufacturing costs, SG&A and R&D expenses minus personnel expenses and community contributions (donations).7 Sum of wages and salaries (including redundancy payments), social security contributions and expenses for pensions.8 Taxes on income taken from consolidated income statement, reported including deferred tax.

250

200

150

100

50

WACKER NEUSON SE SDAXPeer group

2011Jan. 1, 2010 2012 2013 Dec. 31, 2014

* Not reviewed.


• Our employees as a key success factor • Findings from our first global employee survey • Promoting lifelong learning • Maintaining and strengthening healthy working conditions • High recruitment levels due to positive business development

EMPLOYEES 32 02. Employees

www.wackerneusongroup.com/en/sustainability/ responsible-employer

42%

The Wacker Neuson Group rolled out a new human resources strategy worldwide in 2012, with global guidelines, standards and processes defined and developed in dialog between local HR officers and the central HR department. Local HR officers deal with topics arising at their sites and work closely with specialist and management staff on all HR-related issues. Works agreements are in place between Group management and the various bodies representing employee interests, covering all the main aspects of the employment relationship, such as training and development or work time models.

Our employees play a decisive role in the overall success of the company and are Wacker Neuson’s most valuable asset. Team spirit, flat hierarchies and employee empowerment have been an integral part of our corporate culture throughout the 167 years of our company history.

We reward personal initiative and strong performance with interesting and demanding new challenges and opportunities for further development. If we need to fill management vacancies, we first look for suitable candidates within our own ranks. Many of our top executives today started their careers at Wacker Neuson – and the extensive experience gathered over their years with us now enables them to take the lead in shaping the company’s success.

Maintaining an ongoing dialog with our employees is very important to us. We therefore foster a culture of open communication throughout our company, supported by annual employee appraisals and the Global Leader Summit held every year.

Professional and personal development is also an essential part of our corporate culture. We strive to match this to the needs of each individual. Our Group-wide HR strategy provides the framework for our development initiatives, which center on promoting health, professional capabilities and learning opportunities.

Expanding workforceThe Group’s business performance meant we were able to increase headcount during the reporting year, hiring additional staff across all our regions.

As of December 31, 2014, the Group employed 4,372 people (December 31, 2013: 4,157). Staff development costs were above average in 2014.

Part-time working arrangements applied to 3.4 percent of all employees (2013: 3.1 percent) at year-end, while 9.3 percent of all employment contracts were temporary.9

There were no significant variations in employment numbers during the reporting year.

In our German and Austrian affiliates, 83.2 percent of employees were covered by collective agreements in the period under review. We are looking to expand reporting on this indicator to encompass the whole of Wacker Neuson worldwide and have already started putting the appropriate evaluation processes in place for the coming years.

Alongside its permanent workforce, the Wacker Neuson Group also employs a much smaller contingent of temporary staff. They primarily work at our production facilities to cover peaks in demand.

Detailed information on workforce structureThe following reports employee numbers by various categories: region, segment and age ranges.

Within the Wacker Neuson Group, 3,357 (77 percent) of employees were based in Europe as of December 31, 2014 (2013: 3,215). 745 (17 percent) were employed in the Americas region (2013: 696), with 270 in the Asia-Pacific region (2013: 246).

At the closing date, 39.7 percent of the workforce was employed in production, 41.5 percent in sales and service, 10.8 percent in administration and 8.0 percent in R&D.

35II INDICATORS EMPLOYEESEmployees 34 II INDICATORS

EMPLOYEES

6%

17%

Workforce by regionas a % (2014)

77%

GRI G4-10: Employees by region

GRI G4-10: Employees by segment

Workforce by segmentas a % (2014)

11%

40%

8%

GRI G4-10: Variations in employment numbers

GRI G4-11: Employees covered by collective bargaining agreements

GRI G4-10: Total number of employees

GRI G4-10: Number of non-permanent employees

Production

Sales and service

Administration

Research and development

HR profile

Europe

America

Asia-Pacific

9 Based on data gathered for 83 percent of employees.


24%

II INDICATORS EMPLOYEES

II INDICATORS EMPLOYEES

The Executive Board aims for diversity when filling management positions within the company and particularly strives for an appropriate representation of women. The Board remains convinced that mixed teams benefit company culture in many different ways and will define targets for the proportion of women at the two management levels below the Executive Board in the context of the new legal regulations surrounding the appointment of women to executive positions.

People with disabilities The number of colleagues with disabilities is recorded to improve internal and external awareness surrounding the integration of disadvantaged groups. At 1.8 percent, the proportion of employees with serious disabilities stabilized around the same level as the previous year (2013: 1.9 percent).12

Appointment of local executivesWe see appointing local executives as the best way to sustain our successful development against the backdrop of our strong international growth. As of 2014, around 95 percent of Group executives in strategic leadership positions13 were recruited from the same country in which their role with the Wacker Neuson Group is based.

Hugo Franz Arce Sanchez, Regional President Latin America

Tenure and turnoverThe average duration of employment at the Wacker Neuson Group is around ten years, although we regularly celebrate thirty, forty and even fifty years of service with our colleagues. The rate of employee turnover was 10.1 percent in 2014, slightly up from the previous year (2013: 9.9 percent). This figure includes all departures (for instance resignations and retirements) proportional to the average total workforce.14

In future, we also intend to report in more detail about the total number and rate of new hires during the reporting period, broken down by age group, gender and region. The same applies to the total number of employees arriving/departing in the period under review, again by age group, gender and region.

Generations

At around 25 percent, 31-40 was the majority age group, while over 20 percent of the workforce was above the age of 51. The average age in 2014 was around 40 years old, just above the previous year’s average (2013: 39.2 years).

Gender distribution at the Wacker Neuson GroupBoth the Executive Board and the Supervisory Board of Wacker Neuson SE were composed solely of men during the period under review. When submitting its election proposals to the Annual General Meeting regarding both the election of shareholder representatives to the Supervisory Board and the composition of the Executive Board, the Supervisory Board also considers diversity. In the context of new legal regulations surrounding the appointment of women to executive positions, the Supervisory Board will define targets for the proportion of women on the Executive and Supervisory Boards.

In 2014, male employees made up 84 percent of the Wacker Neuson Group’s workforce. Female employees accounted for 16 percent10, which is in line with industry norms in the mechanical engineering sector. Around 7 percent11 of female staff hold managerial positions, representing 12 percent of all management staff.

3736

19%

4%

23%

5%

25%

GRI G4-LA12: Employees by age group

GRI G4-EC6: Senior management hired from local community

GRI G4-LA12: Employees with disabilities

12 See footnote 9.13 Strategic leadership: general managers, managing directors, regional presidents, corporate functions (direct reports).14 See footnote 9.

10 See footnote 9.11 See footnote 9.

GRI G4-LA1: New employee hires, employee turnover

GRI G4-LA12: Employees by gender

15-20 years

21-30 years

31-40 years

41-50 years

51-60 years

Over 60 years*Based on 83 percent of all employees.

Age structure*Proportion of workforce

as a % (2014)


Global employee survey Communication is one of the most important elements of good management. However, it should be a two-way street, not just top-down from management to employees. We are thus seeking to further strengthen our culture of dialog within the Group. In November 2014, we conducted our first global employee survey across the Group under the slogan: “Your opinion counts!”

Over 65 percent of all staff worldwide took part in the survey, which gives us a representative picture of the general mood among our workforce. Generally, our Group is perceived as an attractive employer and overall staff satisfaction levels are high. The survey also showed us some specific areas – such as work/life balance, general management style, and personal development and training – offering potential for improvement. We now aim to systematically realize this potential in order to achieve a successful and sustainable increase in employee satisfaction over the long term.

Staff development, training and learning The Wacker Neuson Group places great importance on all staff members feeling equipped to meet the growing challenges arising from changing technologies, procedures and organizational structures at work. We facilitate this by providing our staff with ongoing training and development focusing on specialist skills, personal development and new technologies.

The Wacker Neuson AcademyLocated in Reichertshofen (near the German city of Ingolstadt), the Wacker Neuson Academy is equipped with modern teaching rooms, a large auditorium and an extensive demonstration hall for both theoretical and practical learning. It is run by a team of experienced trainers. The Group also provides training centers for staff and customers in the US and China.

The Wacker Neuson Academy in Reichertshofen offers a wide variety of courses for both employees and stakeholders outside the company, such as customers and dealers. The portfolio extends from in-depth technical courses, covering sales and service-oriented factors, to training in IT applications and project management seminars led by external providers. During the reporting year, for instance, we held 122 product, sales and service training courses spanning one or more days that were open to both internal and external participants – an increase on the previous year (2013: 112 seminars).15 Employees of the Wacker Neuson Group took part in 116 courses and seminars (2013: 92). New hires, in particular, benefit from our internal starter program for light and compact equipment, designed to give them a successful start to their career with our company.

Staff educationOur employees can additionally complete selected degree programs or advanced training alongside their jobs. Where feasible, we support them in this process both financially and organizationally – for instance by arranging flexible working hours.16

Trainee program: TRAIN AND GROWAt the start of 2015, we launched a trainee program with both a business and a technical path designed to provide graduates with the optimum start at the Wacker Neuson Group. This international and modular TRAIN AND GROW (T.A.G.) program takes between 18 and 24 months and is set to become a cornerstone of our talent recruitment system.

Management programs2015 sees the start of a management development program focusing on leadership, general management, change management and strategy. We also began providing intensive change management training in the US during 2014, with other regions set to follow.

Additionally, the first two PerspACTIVE management courses were conducted successfully in 2014. The mixed participant groups proved particularly valuable, stemming from various different areas and sites across our German, Austrian and Swiss affiliates.

International exchange programLaunched in November 2014, our INTRAMove program promotes intercultural understanding and know-how-transfer by giving employees the opportunity to work in different areas and

regions. We actively support colleagues in spending up to four weeks at a different affiliate within the Group, allowing them to gather new experiences, perspectives and cultural insights and promoting their personal development. This initiative also helps to build up a global internal network between employees within the company.

39II INDICATORS EMPLOYEES038 II INDICATORS

EMPLOYEES38

GRI G4-LA10: Programs for skills management and lifelong learning

15 Number of professional seminars for service and sales staff offered by the Wacker Neuson Academy in Reichertshofen; data for training centers in China and US are to be included in this indicator in the future. The number of professional and general training measures is not cur-rently reported here, since these are delivered by external providers rather than our own facility. We aim to expand the limited data currently available in this regard over the coming years.

16 Available worldwide.

Our employee structure 2014*

*Based on data gathered for 83 percent of employees

84%Male employees

16%Female employees

5%Trainees (including

BA students)

3%Part-time

employees

2%People with disabilities


Accredited professional training for young people In 2014, we provided training for 181 young people in industrial, technical or business functions at our production sites and German sales and service stations (2013: 173). We also provided opportunities within the framework of practical training programs flanked by studies at technical or vocational colleges. The Group’s training philosophy centers on empowering trainees across a wide range of disciplines, assigning individual areas of responsibility and ensuring intensive, one-to-one mentoring. We also provide financial support for our trainees, for instance by subsidizing the cost of public transport. The number of young people trained by the Wacker Neuson Group significantly exceeds legal requirements. The training quota at our production sites over the last fiscal year was 5.0 percent (2013: 5.1 percent). In 2014, 35 trainees completed their training (2013: 37) and all of them then entered into employment with the Group (2013: 32) – a take-up rate of 100 percent (2013: 86.5 percent).17 In 2013, we received Austria’s INEO seal of approval for our vocational training as well as a further special award for encouraging young women to enter technical professions.

The promotion of young talent is also very important to us. Each year, we hold a Girls’ Day event at several of our sites. This gives schoolgirls the opportunity to explore career prospects in mechanical engineering.

We are also striving to give young people interesting first insights into Wacker Neuson Group by increasing the number of internships and student trainee positions across the entire Group. We again assigned challenging thesis topics in 2014 to support qualified graduates.

Lifelong learning initiative Refresher and upskilling courses are designed to support staff in keeping pace with technical, procedural and social developments in their own areas and equip them to meet changing requirements.

We also offer requalification measures to assist employees whose previous tasks are no longer required in transferring to another role within the Group that is at least equivalent in nature.

Development qualifications enable staff to take on other, more senior tasks if this seems appropriate for operational reasons. Additionally, the Group supports its staff with training in line with individual development goals.

Transition assistance programs Subject to certain prerequisites such as minimum age and length of service, we offer employees at our German sites the option of participating in a program to facilitate a flexible transition to retirement. Using the “block model”, an employee first continues working the same hours as previously (work phase) and is then exempted from their duties in the subsequent release phase, receiving a portion of their remuneration for the entire duration. This is also topped up by the employer. In this way, Wacker Neuson Group can offer an attractive phased retirement model.

This can also be combined with other work time models, such as the time account system we offer. Here, the employee can save up a reserve through gross salary conversion that can later be used to finance special leave from work, for instance for sabbaticals, education purposes or pre-retirement release from duties.

Occupational health and safety

Working conditionsOur corporate philosophy frames a clear, transparent code of conduct for all employees, emphasizing the importance of mutual respect and helping to ensure a positive working environment.

Joint activities, such as company and summer parties, Christmas events and ski trips, foster a sense of community among our employees and are therefore part of our company philosophy. We are also keen to promote a healthy work/life balance and offer a broad range of solutions to achieve this. Where feasible and beneficial, these include home office arrangements and attractive part-time working models. In addition, we offer free advice and sourcing assistance to employees looking for childcare placements or help in caring for dependent relatives. In order to facilitate a speedy return to work for employees with children, we have also introduced various site-specific benefits, such as a kindergarten allowance.


EMPLOYEES40

GRI G4-LA10: Transition assistance programs

”The internationalization of our company is opening

up new opportunities. Thanks to the new

INTRAMove program, I was able to spend four

weeks working at our affiliate in Spain. And soon I

am relocating to Shanghai, China, to spend a year in

regional marketing there.”

LUISA FRANK, MARKETING, EUROPE

Left to right: Luisa Frank, Jochen Plehn (Head of Training)

17 See footnote 9.


Health in the workplace Preventive healthcare is a particular priority at Wacker Neuson. In consultation with our company doctors and safety experts, we provide work areas that are ergonomically designed. In addition, we regularly measure noise and light levels as well as possible hazardous substances to ensure we can protect the health of our employees.

We take a holistic approach to promoting occupational health, providing a balanced mix of behavioral strategies and suitable working environments.

Behavioral strategies

• Health awareness days • Nutrition • Exercise • Relaxation techniques • Dealing with stress • Preventing burnout • Back exercises• Healthy leadership

• Company culture • Atmosphere • Optimizing workflows • Ergonomic work areas • New working hours models • Healthy canteen menus • Regular break arrangements• Social areas, etc.

Working environment

BALANCE

Our basic intention is to maintain and enhance our staff’s satisfaction and fitness for work. In summer 2014, we invited employees at the Munich and Reichertshofen sites to participate in a survey on psychological stress in the workplace. We then made direct use of the findings to tailor measures designed to protect and improve employee health. To this end, we entered into a partnership with Germany’s Techniker Krankenkasse health insurer, which now supports us in planning and conducting various health promotion initiatives.

On the health management front, we offer a wide range of sessions and courses at different sites to promote fitness for work, for instance by strengthening the back muscles, as well as guidance on preventing burnout and seminars on healthy leadership. We also regularly hold health awareness days at our German sites in collaboration with major health insurers. These events provide information on health risks and preventive measures.

Healthcare project at Wacker Neuson Austria In Austria, we have continued with the health panel scheme launched in 2013. This project addresses aspects ranging from safety at work through sport, diet and exercise to psychological stress. Measures have already been fully implemented as a result, while more are currently in progress or planned for the future. Employees are kept up to date on this project by means of staff bulletins and through panel facilitators and project team members acting as “health ambassadors” within the company.

AccidentsStaff safety is a top priority for the Wacker Neuson Group. Nevertheless, in 2014, there were 93 accidents at work or during work-related travel that resulted in an absence periods longer than one day. These affected 2 female and 91 male employees. The injury rate was 4.9 injuries per 200,000 hours worked, of which 0.8 involved female and 5.5 involved male employees.18

Fortunately, we have no work-related fatalities to report for 2014 (or 2013).19

The Wacker Neuson Group has defined process flows for recording and reporting accident statistics. Dedicated occupational safety officers20 are responsible for all safety factors in production, administration and other company areas at our German and Austrian sites. They report directly to management at the relevant site in this regard. We have also voluntarily appointed safety officers at other Group sites where this is not a legal requirement.

Safety officers at our sites meet several times a year to evaluate current accident statistics and initiate improvements aimed at reducing the accident rate.21 In 2014 (as in 2013), there were no suspected cases of occupational diseases that would require notifying a trade association.22 At 3.5 percent, the sickness rate in 2014 remained level with the previous year (2013: 3.5 percent).23


EMPLOYEES42

GRI G4-LA6: Work-related fatalities

GRI G4-LA6: Injury rate and types of injury

GRI G4-LA6: Lost day rate and absentee rate

GRI G4-LA6: Recording and reporting accident statistics

18 These figures relate to our German and Austrian production facilities, as well as to Group headquarters with test zone.19 See footnote 9.20 Legal requirement for German and Austrian sites.21 Refers to the Pfullendorf, Korbach/Diemelsee-Flechtdorf and Munich sites, German sales and service stations, and Karlsfeld and Hörsching.22 See footnote 9.23 See footnote 9.

• Expand occupational health and safety protection for employees

• Improve reporting processes as a basis for further development of our health and safety

management system

• Implement appropriate measuring procedures to extend reporting to contractors working

on site (for injury rate and types of injury, occupational diseases, lost day rate, absentee rate

and work-related fatalities)

• Systematically expand our reporting scope (from 83 percent currently to 100 percent)

• Extend reporting to include our academies in the US and China

• Expand the INTRAMove exchange program to make the best possible use of the various

skills and expertise of our staff

è For more information, see our sustainability strategy on p. 97.

Our goals for the future:


03. Procurement and quality

• New procurement organization for greater synergies • Improved supplier management and qualification • Code of conduct for suppliers • The lean approach: continuous improvements to production and logistics

processes

PROCUREMENT AND QUALITY44

www.wackerneusongroup.com/en/suppliers

New, globally networked structureIn 2013, the Wacker Neuson Group restructured its procurement and quality organization under uniform management. Our global Corporate Purchasing and Quality department operates worldwide from eleven sites and is subdivided into eight commodity groups. Our underlying aim is to make better use of synergies in procurement, involving all Group sites around the world. We are focusing here on selective supplier management, consolidation of purchasing volumes, consolidation of the supplier base, and increased internationalization.24

The Wacker Neuson Group is active in almost every part of the world. To supply our products, we rely on premanufactured parts that pass through their own complex supply chains before they reach us.

Globalization is still the predominant trend in procurement – boosted by the rapid improvement in quality of premanufactured parts sourced from countries beyond Central Europe and North America. Choosing the right procurement markets is thus gaining in importance when it comes to securing the Wacker Neuson Group’s competitive position. As such, global procurement is increasingly becoming the hub for all value creation activities.

Bought-in services have a substantial impact on the quality of Wacker Neuson Group products. The ability to make timely deliveries and the quality of a supplier’s goods are thus key criteria informing our purchase decisions.

Supplier managementThe Group has optimized manufacturing processes in recent years by working in close collaboration with key suppliers (qualification) and incorporating them into product development and production planning at an early stage. Dedicated employees accompany and develop suppliers along the entire pathway from initial nomination through to series production. We maintain a strong focus on prevention here, ensuring that supplier mistakes do not occur in the first place.

We conducted our first audits of potential suppliers through our new purchasing organization in 2013, going on to expand the scope and increase our focus on sustainability aspects in 2014. Our supplier selection is thus based not only on commercial considerations, but also on social, environmental and ethical criteria.

Supplier auditsAlongside many other criteria, our supplier audits focus on the elimination of forced and child labor and on health and safety, anti-corruption measures, environmental protection and energy efficiency. We expect our suppliers to actively engage with these topics, ideally implementing appropriate environmental or energy management systems themselves. Where weaknesses are identified, a binding action plan to rectify them is a prerequisite for a business relationship with our Group.

The Wacker Neuson Group does not tolerate child, youth, forced or compulsory labor, either at its own sites or as part of any business relationships it is involved in. Our screening of selected existing suppliers in Europe, North and South America, and Asia-Pacific in 2014 did not find any cases of child labor, young workers exposed to hazardous working conditions, or forced or compulsory labor. We paid particular attention to suppliers from the Asia-Pacific region in this regard.

In 2014, 92.7 percent of our audited potential suppliers were screened using environmental and labor practices criteria, corresponding to 38 suppliers. Additionally, 112 of our existing suppliers were assessed on environmental, labor practices and human rights grounds.

We will shortly be publishing a code of conduct for suppliers, enabling us to trace and monitor the majority of the supply chain on a long-term basis.

Exclusion of child and forced labor within the Group A direct request to all global Group affiliates resulted in written confirmation by their managing directors that there were no cases of child or forced labor at their sites during 2014.

We regularly hold compliance training across the Group to prevent child, youth, forced or compulsory labor and ensure this remains excluded wherever the Wacker Neuson Group is operating. Additionally, our code of conduct is binding for all employees (see chapter 6, Compliance).

International production networkThe Group currently runs eight production sites across the globe. We manufacture light equipment at Reichertshofen (Germany), Milwaukee and Norton Shores (both US) and Manila (Philippines). Compact equipment is manufactured at facilities in Pfullendorf and Korbach (both in Germany), Hörsching (Austria) and Milwaukee (US).

Our plant in Kragujevac, Serbia, supplies our internal compact equipment production with premanufactured structural steel components, further optimizing our manufacturing processes.

47II INDICATORS PROCUREMENT AND QUALITY

Procurement and quality46 II INDICATORS PROCUREMENT AND QUALITY

GRI G4-12: Supply chain

24 For some time now, the Group has been operating a lead buyer concept at its compact equipment production sites in Hörsching (Austria), Pfullendorf and Korbach (both Germany), consolidating purchasing volumes of identical or similar parts. This will be extended to all production sites worldwide in the future.

More information at: www.wackerneusongroup.com/en/suppliers

GRI G4-HR5, G4-HR6: Evaluating suppliers for the risk of child or forced labor

GRI G4-HR10, GRI G4-EN32, GRI G4-LA14: Screening suppliers using human rights, environmental and labor practices criteria

GRI G4-HR5, GRI G4-HR6: Evaluating operating locations for the risk of child or forced labor


“As a group with global operations, we are forging new and innovative paths to ensure sustainable,

reliable and efficient purchasing channels. At the end of 2013, we set up an internally led auditing system to maintain an ongoing supply of optimum-quality products under our global procurement strategy. Alongside quality of goods, this also allows us to

ensure that human rights are upheld, achieve strong environmental and energy-efficiency performance,

and condemn of child labor.”

DR. MAX PERNSTEINER HEAD OF CORPORATE PURCHASING AND QUALITY

Global purchasingOur procurement activities span the globe. Where appropriate, we purchase directly within the relevant manufacturing region (Europe, Americas or Asia-Pacific). In 2014, the Group purchased 93.3 percent of its goods and services locally at significant locations of operation.25 Our significant locations in Europe sourced 95 percent of their goods and services within Europe, while our American locations bought in 87.9 percent from the Americas region. In the Asia-Pacific region, 98.3 percent of our purchases also originated there. The overall aim is to increase the internationalization of our procurement even further.

Locally purchased goods and services for significant locations of operation

Goods and services for Europe purchased from the Europe region

Goods and services for the Americas purchased from the Americas region

Goods and services for Asia-Pacific purchased from the Asia-Pacific region

0 20 40 60 80 100

Changes in the supply chainIn 2014, we relocated skid steer loader production from Hörsching, Austria, to Menomonee Falls (Milwaukee) in the US. This is the first time the Group has manufactured compact equipment outside of Europe, continuing our systematic efforts to expand our international production network. The move aligns perfectly with our strategy of developing and manufacturing products “in the region for the region”. As a result of relocating production, the supply chain for skid steer loaders has also changed, with individual components now purchased locally.

Quality The Wacker Neuson Group strives for the highest standards of quality across all areas and processes, seeking to benefit its customers, staff and society at large. With this aim in sight, the Group has successfully operated a quality management system in line with the international ISO 9001 standard for several years now, and has it regularly recertified.

The lean approach: ongoing optimization across all business areas

Over the last two years, we have focused extensively on lean management in various areas of the Group. The objective is to dovetail all the activities that

are necessary to add value and to identify and avoid unnecessary process flows. We maintain a customer-centric perspective here, optimizing our response to requirements in terms of availability, individualized solutions, quality and pricing.

The PDCA cycle is a four-step model (plan-do-check-act) for continuous process improvement.

49048 II INDICATORS PROCUREMENT AND QUALITY

48

25 Significant location of operation refers to the country in which the ordering entity has its registered headquarters.

II INDICATORS PROCUREMENT AND QUALITY

GRI G4-EC9: Proportion of spending on local suppliers

GRI G4-13: Changes in the supply chain


PLAN DO

CHECKACT

Locally purchased goods and servicesas a % (2014)

5150 II INDICATORS PROCUREMENT AND QUALITY

II INDICATORS PROCUREMENT AND QUALITY

“The lean approach calls on every manager and

employee to play an active role in identifying

wastefulness and driving targeted improvements.

Optimizing quality, availability and productivity in all

our processes means we can maximize value to our

customers – and lean management gives us the right

tools for the job.”

ROLAND GMAINER, CORPORATE LEAN MANAGER

Improving and standardizing processes enables the Group to maintain and expand its competitive position, while also saving energy and materials. Against this backdrop, Wacker Neuson introduced the ZERO (minimiZe wastE eveRywhere tOgether) lean management system, implementing a wide range of process optimization and standardization measures in production and logistics during 2014. In addition to investing in powerful manufacturing equipment, we streamlined production structures, material flows and associated intralogistics across the Group. Process standardization will remain a priority for us in the coming years.

Fighting suboptimal process flows: all 200 participants received a mini boxing glove with the PDCA symbol at the 2015 Global Leader Summit.

“Continuous process improvement is extremely

important, which is why we take an active approach

to shaping the organization through its processes.

We also support overarching optimization and

standardization projects with systematic procedures

and process know-how.”

LUKAS ORTNER & JEANETTE VOSWINKEL, BUSINESS CONSULTING EMPLOYEES


• Develop leaner processes (Group standardization), consolidate purchasing volumes, consolidate our supplier base

• Increase the sustainability focus of our existing supply chain (supplier qualification, code of conduct for suppliers)

• Implement integrated management systems (quality, energy and environment)



• Group standards defined by cross-factory innovation team and expert committees

• Product development in line with regional legislation • Clear criteria for ECO seal• Environmental impact of products reduced • Long-term customer relationships built on close ties • Measuring customer satisfaction

PRODUCT STEWARDSHIP52 04. Product stewardship

www.wackerneusongroup.com/en/sustainability/ fair-economy/product- responsibility-environmen-tal-protection

Coordination through cross-factory innovation teamAt Wacker Neuson Group, we oversee our research and development activities centrally, setting Group-wide priorities for technical innovation. Expert committees at our various sites work with the coordinating central function, Corporate Technology, Standardization & Design, to define and implement uniform, cross-factory processes and overarching Group standards. The R&D departments at the individual production sites are responsible for developing new products and models. We develop light equipment products in Munich (Germany), Milwaukee and Norton Shores (both US) and Manila (Philippines), and compact equipment at our sites in Pfullendorf and Flechtdorf/Korbach (all Germany), Hörsching (Austria) and Milwaukee (US). In line with our corporate strategy, we are increasingly seeking to develop and manufacture our products in the regions in which they are primarily distributed. This is how we can best meet the requirements of our customers worldwide in terms of development, delivery capabilities and service.

Sustainability hardwired into product developmentWe use environmentally friendly materials wherever possible for our products and factor in prolonged lifecycles and end-of-life recyclability at the start-of-life development stage. Our products are designed for durability and low maintenance – despite being typically deployed under harsh conditions. We also seek to maintain our high standards in the delivery of environmentally sound, safe products. We will therefore continue to focus our R&D efforts on complying with – or even exceeding – more stringent environmental regulations governing combustion engine emissions. In 2014, we made environmental criteria a fixed element of our requirement specifications for new products, ensuring that these demands are incorporated early on in the development process.

Compliance with legal requirementsAs a manufacturer, it is our aim and obligation to meet the applicable national and international standards, legislation and guidelines for light and compact equipment. The requirements placed on products, for instance in terms of fittings and options, drive and emissions (noise, exhaust gas, etc.), vary hugely from region to region. In regulated markets like Central Europe and North America, emissions thresholds are governed by law. Our aim is not only to meet statutory requirements, but actually to exceed them in order to benefit our customers and the environment.

New emissions standards reduce environmental impactStatutory exhaust emissions regulations have a major impact on the sale of compact equipment. As of 2012, the TIER IV interim and TIER IV final emissions regulations are effective in the US (mandated by the Environmental Protection Agency, EPA). In Europe, stages 3b and 4 of Directive 97/68/EC are in force. These emission stages apply to diesel engines in non-road mobile machinery – in other words, construction equipment, forklifts and agricultural machines. The specific compliance dates vary depending on engine power and individual market requirements. The Group has already equipped many of its compact equipment models with compliant diesel engines. Components such as engines, cooling systems and exhaust gas treatment systems all require modification.

ECO sealInnovations are becoming increasingly important in the bid to achieve climate protection goals. The Wacker Neuson Group marks particularly economic and environmentally friendly products with its ECO seal (ECO = ECOlogy + ECOnomy).

The criteriaAn internal evaluation checklist was approved in 2013 for use by the committee deciding whether to award the ECO seal to a new product. The product development process already takes these factors into account. The criteria are as follows:

55II INDICATORS PRODUCT STEWARDSHIP

Product stewardship54 II INDICATORS PRODUCT STEWARDSHIP

ECO seal

“Sustainability is a growing priority for our customers

when it comes to selecting and investing in

equipment – and not just in established markets, but

increasingly also in countries such as China. Our ECO

products meet their highest expectations.”

STEFANIE WIELAND, HEAD OF CORPORATE MARKETING

ECO criteria


New ECO seal products During the last year, we brought various products to market that we evaluate as fulfilling our internal ECO seal criteria. Not only do these products comply with the stricter emissions standards applicable in the US and EU, they also include a range of new solutions that radically reduce or even completely eliminate emissions.


056 II INDICATORS PRODUCT STEWARDSHIP

56IMAGE

Launch

year/

location

PRODUCT DISTINGUISHING FEATURES AWARDS

Agritech-nica 2013

1160 eHoftrac®

- Powerful batteries - Zero emissions (CO2, soot particles)- Quiet operation, particularly suitable for use inside

buildings

1. Equitania Innovation Award 2015

2. AGRA 2015 3. Eima Technical Inno-

vation Mention 2014 4. demopark+demogolf

2015

GaLaBau 2014

WL20e wheel loader

- Emission-free operation up to 5 hours- Performance ratings, off-road capability and ease

of use on a par with conventional wheel loaders- Lower noise emissions- Up to 48% reduction in energy costs- Potential savings on maintenance and service

demopark+demogolf 2015

bauma 2013

EH 75 and EH 100 electric breakers

A real alternative to pneumatic breakers in compa-rable weight classes, saving:- Up to 1.2 tons of CO2

- Up to EUR 5,500 in fuel costs- Up to 50% in investment costs

GaLaBau 2014

AS 30 and AS 50 battery- driven rammers

- 100% emission-free compaction performance- Significantly reduced noise emissions- Low operating and energy costs- Healthy, environmentally friendly operation for

trench applications, in urban areas or outdoors

bi-GaLaBau Green Award, gold medal, European Rental Awards 2015

Series produc-tion 2014

803 dual power mini excavator

- Zero-emissions operation- Two drive options: diesel and electro-hydraulic- Plug & play: ready for use in just a few simple

steps- Consistent performance from both drive systems –

even in breaker mode- Unchanged operating weight and 360° freedom

of movement - Easy and cost-efficient to transport

Intermasz 2014 gold medal, Intermat 2015 Innovation Award in Gold, Plantworx 2015 Innovati-on Awards: gold in green category and bronze in Elite category

Long-standing availability

Vertical Digging System

Continous tilting of superstructure up to 15 degrees to compensate for gradients of up to 27% at the push of a button, delivering: - Shorter digging times; increased productivity,

comfort and efficiency - Up to 25% reduction in material, fuel and emis-

sions

2014EW100 mobile excavator

- 15% more engine power with up to 20% less fuel consumption

- Fastest mobile excavator in its class at 40 km/h- Cabin features modern jog dial system commonly

used in automotive designs – allows operator to maneuver the excavator with a single hand on the joystick

bauma2010

HP252 heater

- Lower operating costs thanks to high thermal efficiency

- Significant reduction of CO2 emissions by up to 95%

- Energy savings of 50% to 95%- Over 40% savings in labor costs and material

EC

O P

RO

DU

CT

S

ECO products

“When it comes to exhaust and noise emissions,

strict requirements are already in place. We are

committed to going a step further, offering solutions

for zero-emissions operations that set new

standards in user and environmental protection.

At the same time, companies also benefit from

significantly lower energy and operating costs.”

MARTIN LEHNER, CTO

Total cost of ownership: The aim here is to keep operating costs as low as possible throughout the entire product lifecycle, while delivering the highest productivity levels for customers. The ECO label thus requires demonstrably lower total product costs in comparison with competitor offerings, including:

• Acquisition costs • Maintenance costs • Repair costs • Energy costs • Transport costs • Labor and material costs

Emissions: Demonstrably lower emission levels in comparison with competitor offerings in terms of:

• Noise • Dust • Exhaust fumes


GRI G4-EN27: Environmental impacts of products and services



58

Precautionary principle – avoiding negative impact on operators and the environment

The Wacker Neuson Group is strongly committed to the precautionary approach.26 Our determination to avoid negative impact on operators and the environment means the precautionary principle is firmly anchored in every aspect of our operations – including product development, recycling, procurement, environmental performance (chapter 5), compliance management (chapter 6), responsible corporate governance including systematic risk management, and targeted accident prevention training for our staff and customers (chapter 2).

Lasting customer relations – comprehensive product and service offering Our brands are a guarantee of reliable quality. We place the customer at the heart of everything we do and align our offerings with their requirements. As far as we are concerned, a new product is only a market success if it adds value to customers (for instance by increasing efficiency), offers an attractive price/performance ratio and clearly stands out from other products. We therefore work closely with our customers to identify their requirements and deliver real process benefits with the right products.

Better together – partnership and cooperation with our customersOur customers are looking for new and innovative solutions for their daily processes and challenges. They require a flexible and cost-effective approach flanked by professional consulting and have high expectations of the quality and availability of our products and services. Our aim is to meet these demands as effectively as possible.

26 The precautionary approach was set out in principle 15 of the UN’s 1992 Rio Declaration on Environment and Development. Principle 15 sta-tes: “In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall be not used as a reason for postponing cost-effective measures to prevent environmental degradation.”

ECO trainingKnowing how to operate equipment properly is at least as important as the underlying technologies. Economic efficiency and environmental compatibility are thus an essential part of the product training provided by the Wacker Neuson Academy (chapter 2). These courses are open to dealers and their sales teams as well as to our own sales and service staff. In 2014, the Academy conducted dedicated ECO training modules for targeted communication of the benefits of light and compact equipment bearing the ECO seal.

Patents and utility models – protecting bright ideasWacker Neuson seeks appropriate protection for its innovative products and methods to prevent unauthorized imitation. We currently hold 365 patents and utility models around the world. During the last fiscal year, we filed 30 new patents and utility models (2013: 24) and all 30 were granted (2013: 22).

Research and development expensesThe Group’s research and development ratio, including capitalized expenditure, amounted to 3.2 percent in 2014 (2013: 3.1 percent). This healthy level is intended to secure our competitive position into the future and we will thus continue to make targeted R&D investments.

UNIT 2014 2013

New patents and utility models Number 30 24

R&D costs in EUR m m 28.8 25.7

Capitalized expenses in EUR m m 12.5 10

Total R&D costs including capitalized expenses in EUR m

m 41.3 35.7

R&D costs as percentage of revenue (including capitalized expenses)

% 3.2 3.1

“Operator safety, fuel consumption, emissions re-

duction and productivity all play a central role in our

Academy’s training. After all, our products offer clear

benefits in these areas – which all our sales staff and

partners need to know inside out to offer in-depth

advice to our end customers.”

JOCHEN PLEHN, HEAD OF TRAINING WACKER NEUSON ACADEMY

RE

SE

AR

CH

AN

D D

EV

ELO

PM

EN

T

Customers

Cost- effectiveness

Availability

Quality

Service offering

Professional approach / consulting

New solutions / product development

Flexibility

Research and development


GRI G4-14: Precautionary principle



60

We serve our customers through our affiliates at 140 locations worldwide, through our own network of sales and service stations and through more than 12,000 sales and service partners across the globe. An efficient logistics concept keeps our spare parts moving swiftly, with 24-hour service accelerating delivery within Europe, for instance. We also support our customers by offering comprehensive repair and maintenance services, as well as targeted training. Smart financing options, a sizable rental fleet in Central Europe and our own used equipment portfolio round out our extensive service provision.

Overview of our service offering*

Customer health and safety Protecting individual welfare is a top priority for us, encompassing both our employees and external stakeholders – especially our customers. The Wacker Neuson Group’s products undergo rigorous testing to determine their health and safety impact.

Active and passive safetyWacker Neuson takes an integrated approach to equipment safety. This entails making continuous improvements both to active safety to prevent accidents from occurring in the first place, and to passive safety to minimize their potential consequences.

GRI G4-PR1: Customer health and safety

*In selected countries.

*Some of the features/functions shown are optional extras (not fitted as standard).

Vertical Digging System (VDS):

Allows the superstructure to be continuously tilted by up to 15 degrees to increase stability

and enables the driver to work in an upright position on uneven terrain


PRODUCT SAFETY AND PERFORMANCE AT A GLANCEWacker Neuson excavators are equipped with a host of features that boost safety and performance levels. All safety and efficiency functions are designed to complement each other perfectly for the very best results.

Additional tail weight:

To increase stability and excavation performance

Easily removable cabin:

Enables the machine to be used for different tasks

even in areas with low clearance

Tiltable cabin:

Easy access to hydraulic components for efficient maintenance; ergonomic cabin and tilt-and-lock front windscreen

Lifting hooks on the cabin roof:

Enable the excavator to be easily and quickly lifted to a

different position

Protective roof (FOPS I+II/ROPS/TOPS-tested):

Protects the driver from falling objects

Overload warning system and cut-off valves (hose rupture):

For greater safety levels

Easy Lock:

Hydraulic quick-hitch system that enables the driver to change attach-ments without leaving the cabin

Protective screen and splinter shield:

Protects the driver from material in front

Reverse warning system:Alarm that sounds when the excavator is reversing

Leveling blade:

To flatten surfaces and provide support during excavation, improving stability

Financing

Insurance

Used equipment

Academy

Spare parts

Rental

Wacker Neuson Club

Repair & maintenanceTelematics-based fleet management

Zero-tail design:

No tail overhang for a tighter turning radius and

improved versatility



62


• Increase dialog with our customers, including discussion of sustainability aspects

• Develop new ECO products

• Produce a customer-friendly, transparent overview of total cost of ownership for our products


Measuring customer satisfaction Wacker Neuson Group specifically requests customer feedback to assess satisfaction with Group products and services. We attach great importance to our customers’ perception of our company both as outstanding in terms of quality, and as socially and environmentally responsible. With this in mind, we carried out a stakeholder survey in 2014, involving over 200 customers (chapter 3, Materiality analysis). We also conducted a second survey of 486 customers worldwide as part of a project focused on the positioning of our brands. The survey results enabled us to derive and define a unique profile for each of our three brands (Wacker Neuson, Kramer and Weidemann) for use in positioning our company both internally and externally. These findings helped us to identify both strengths and weaknesses within our brand. Additionally, we asked former customers for specific feedback about why they no longer work with Group products. These responses were also analyzed in detail and communicated internally to promote active and lasting improvement. A third customer survey in 2014 focused on information requirements for purchase decision-making in two major sales sectors – gardening/landscaping and railroad/track construction – with the findings flowing into our customer communication.

GRI G4-PR5: Results of customer satisfaction surveys

Overall, all findings were discussed with the Executive Board, communicated to the individual business segments and used to initiate further quality improvements. We intend to continue conducting regular and targeted customer surveys as we move forward.


• Group-wide energy and environmental policy defined • Environment and energy management systems introduced • Comparable energy and environment indicators compiled• Disposal management system introduced to reduce consumption of natural resources • Paper consumption per administrative employee reduced

ENERGY AND THE ENVIRONMENT64 05. Energy and the environment

www. wackerneusongroup.com/en/sustainability/sustainabi-lity-management/manage-ment-systems

Energy and environmental policy definedIn 2014, the Wacker Neuson Group made a commitment to implementing a Group-wide energy and environmental policy. The relevant guidelines can be viewed on our website.

New management systems introducedIn 2014, energy and environmental management officers were appointed at our development and production sites in Germany and Austria, and at the Group’s headquarters and test area. Their task is to continually identify areas offering scope for optimization and report their findings to local management as well as to the Group Energy and Environment Manager, who will summarize the results for the Executive Board. The position of Group Energy and Environment Manager was created to coordinate the feedback from the individual sites at Group level. The suggestions for improvement are collected centrally and passed on to all production sites as part of an ongoing learning and optimization process.

The Group has been gradually rolling out environment and energy management systems since 2014. At the Pfullendorf and Munich sites, for example, management systems for energy (ISO 50001) and the environment (ISO 14001) were successfully introduced last year. Also in 2014, the Group’s Executive Board and the managers of the Pfullendorf and Munich sites signed off on an energy and environmental management

manual for the entire Group. These management systems were successfully implemented at both sites and certified by the technical inspection association TÜV Rheinland. Corresponding systems are to be introduced at Hörsching, Korbach and Reichertshofen in 2015, followed by the international development and production sites in the US and Asia from 2016 onwards.

These systems will enable us to make our production activities more energy efficient and will give us even better control over the entire production process. The first systems that we have implemented have already enabled us to realize potential savings in the first year alone. And despite the high technical and process standards already in place, we expect to uncover further potential for improvement in the coming years.

In the medium to long term, our customers, the environment and the Wacker Neuson Group itself will benefit from the effects of more efficient energy use, closer monitoring of the (raw) material flows through our facilities and an optimized recycling strategy.

The introduction of an employee suggestion scheme at our certified sites will give all employees an opportunity to shape our sustainability strategy and provide input on what we could do better to help the environment and save energy.

Minimizing our impact on the environmentWe strive to incorporate environmental measures at every step of the value chain. For us, reducing our environmental footprint and improving energy efficiency are part of a continuous process. We deploy a range of innovative technologies to achieve these objectives, including:

• Water heating systems powered by renewable energy • Intelligent lighting • Heat recovery in spraying and ventilation facilities • Biological wastewater treatment • Flue gas recovery from boilers

RecyclingOur products are designed for durability and low maintenance, especially when deployed under very harsh conditions. We look at the entire lifecycle of our products, factoring end-of-life recycling capabilities into our start-of-life design phase.

67II INDICATORS ENERGY AND THE ENVIRONMENT

Energy and the environment66 II INDICATORS ENERGY AND THE ENVIRONMENT

Energy and environment policy www.wackerneusongroup.com/en/sustainability

ISO 14001 and ISO 50001


Avoiding waste and reducing fresh water consumptionAt all of our sites, we are committed to continuously reducing our consumption of fresh water. Measures here include internally treating running water and re-using process water in closed circuit systems. This approach to water and wastewater management has more than proven its worth at our sites.

We are also making serious efforts to improve our waste reduction and waste separation rates, not only for reasons of cost but also out of a sense of responsibility for the environment. Our carefully designed disposal management system is another measure that helps us conserve natural resources.

The handling of waste at all our sites in Germany and Austria is managed in line with Group guidelines. All waste is removed by certified local service providers, who also define how waste is disposed of (see GRI G4-EN23). The type and volume of waste produced is documented in a quarterly self-monitoring report. In addition, all sales and service stations in Germany are subject to strict internal standards that go above and beyond the specifications set down in waste legislation.

Many metal fabrication and machining processes require the use of cooling lubricants. These must meet specific purity requirements, otherwise any dirt they may contain could damage tools and cause product defects. Cooling lubricants are generally used for a set period of time and then disposed of as hazardous waste. The Wacker Neuson Group, however, uses a different approach. At our production site in Reichertshofen (Germany), we have found an innovative way of using oxygen to extend the useful life of cooling lubricants. This reduces the amount of waste we produce and helps us conserve resources and protect the environment, underlining our continued commitment to sustainability.

In 2014, 7,674 tons of waste were generated at our German and Austrian development and production sites, including Group headquarters and its test area. This figure represents an approximately 30-percent increase on the previous year (2013: 5,892 tons). The rise was due on the one hand to higher production output but also to a one-off effect resulting from the extensive rebuilding work carried out at our Reichertshofen production site. This work created an extra 1,033 tons of waste in 2014 – an increase of 60 percent on the previous year. Most of the waste consisted of structural steel elements and steel girders removed during the disassembly of a disused plant. Discounting this exceptional waste, the total weight of waste was around 13 percent higher than in the previous year, a figure which largely corresponds to the increase in production output.

In 2014, 94 percent of total waste – in other words 7,176 tons – was non-hazardous. Of this, 98 percent was recycled or sent for thermal recovery. The remaining 2 percent was disposed of by other methods (incineration and landfill).

Hazardous waste is unavoidable at the development and production sites and in the test area of the research and development facilities in Munich. It comprises paint sludge, oil and grease, emulsion mixtures and solvents from the spraying process. Hazardous waste accounted for 6 percent (498 tons) of the total volume of waste produced in 2014 (2013: 7 percent). Of this, 79 percent was recycled or sent for thermal recovery (2013: 90 percent) and 11 percent was disposed of by other methods. 8 percent of the hazardous waste was incinerated and the remaining 2 percent was sent to landfill.

Disposal methodsFor the Wacker Neuson Group, sustainable business practices include the responsible disposal of waste generated throughout the value chain. We entrust the selection of the best disposal method to our professional service providers, who are selected by Procurement on the basis of strict criteria.

06868 UNIT 2013 2014 Difference

Total weight of waste t 5,891.7 7,673.8 30%

Non-hazardous waste t 5,482.6 7,175.6 31%

of which recycled/sent for thermal recovery t 5,269.0 7,012.4 33%

of which incinerated t 119.7 98.1 -18%

of which sent to landfill t 94.0 64.5 -31%

of which disposed of using other methods t - - 0%

Hazardous waste t 409.1 498.4 22%

of which recycled/sent for thermal recovery t 367.8 391.9 7%

of which incinerated t 30.7 38.6 26%

of which sent to landfill t 10.6 12.4 17%

of which disposed of using other methods t - 56.0 n/a

WE

IGH

T O

F W

AS

TE

Total weight of waste*

* Refers to the production sites in Pfullendorf, Reichertshofen, Hörsching and Korbach, as well as Group headquarters and its test area.

69II INDICATORS ENERGY AND THE ENVIRONMENT

II INDICATORS ENERGY AND THE ENVIRONMENT

“Whether it be avoiding, separating, recycling or disposing,

Wacker Neuson employees are clearly very waste-

aware. We are promoting this awareness by organizing

staff training at our German sites, standardizing disposal

channels and defining central contact points. Thanks

to these measures, we have continued to improve

our recycling rate. We focus on responsible waste

management in all areas of our business.”

JOHANN SIMON, OCCUPATIONAL SAFETY SPECIALIST WASTE, WASTEWATER, HAZARDOUS MATERIALS

GRI G4-EN23: Waste


GRI G4-EN23: Waste

71

Waste management in action: the spraying processEnvironmental legislation is already very demanding in this area – and the requirements are getting stricter all the time. The safe disposal of solvents is also becoming more and more costly. As a result, we mainly use powder coating at our production sites in Austria and Germany (which account for most of our production capacity). Coating powders are not subject to specific safety requirements. They are solvent- and emission-free and therefore pose less harm to human health. The volume of solvent-based coatings used in our production processes is well below the legal limits at all sites. Product spraying accounts for the lion’s share of energy consumption in manufacturing. That is why we try to make this process as efficient

as possible and make every effort to conserve resources. When treating components, we use a variable speed blasting unit to optimize energy consumption. This means that we only use as much abrasive as is necessary and can frequently re-use it for the next operation. We use ventilation units with efficient rotary heat exchangers for heat recovery. Much of the heat for the spraying booths is sourced from exhaust air, which can be heated to the requisite temperature using less energy. In addition, the units do not use any energy when they are not in use.

Paper consumption per employee reducedOur commitment to sustainability also extends to paper consumption. In 2014, the Group consumed 40.2 tons of printing paper at its German and Austrian development and production sites, which includes Group headquarters and its test area (2013: 48.9 tons). We therefore reduced our paper consumption per head from 24.4 kg to 19.4 kg. This success is also down to the “Save & Win” initiative from 2013, when we asked all employees of the Wacker Neuson Group to reduce their printing and, wherever possible, store documents in electronic form. In 2014, we also switched to a “print-on-demand” system that saw us reduce the print runs for magazines, brochures and similar printed matter, only producing the actual number of copies required. As well as reducing paper consumption, this measure also saves storage and transport costs. From 2015, all of our spare parts catalogs will exclusively be available online. As these were available in printed form up to now, this step will reduce our paper consumption even further. We have also agreed with our printers on a switch to environmentally friendly paper (FSC).

Energy consumptionThe Wacker Neuson Group is part of the machine construction industry, which is not as energy-intensive as industries such as the chemicals, glass, non-ferrous metals, paper or steel. Our energy consumption indicators also refer to our German and Austrian production sites, as well as Group headquarters and its test area. Spraying plants, test areas and lighting account for most of our energy consumption.

In 2014, the Group consumed a total of 40,844,624 kWh of energy – a 4-percent rise on the previous year (2013: 39,146,512 kWh).27 If we disregard gas and diesel consumption, the figure stands at 33,835,098 kWh (2013: 32,877,864 kWh). This increase can be attributed to higher production output on the one hand and greater fuel consumption on the other.

07070

2013** 2014 Difference

Total consumption39,146,512 kWh

40,844,624 kWh4%

Total energy consumption in 2014 and 2013*in kWh

“We factor in sustainability right from the initial

building planning stage. Intelligent building

technology enables us to save energy and resources

in the long term. We regularly arrange audits to

identify areas within our company offering scope for

energy efficiency gains. We have already been able

to improve our environmental footprint by introducing

solar panel water heating, water treatment systems,

rainwater harvesting, heat recovery, component

temperature control and intelligent lighting.”

MICHAEL KOCH, HEAD OF FACILITY MANAGEMENT

Energy carriers The Wacker Neuson Group primarily utilizes energy from non-renewable sources, for example natural gas. At our Munich site, we also use district heating to cover around 30 percent of on-site energy requirements. We also use fuel oil at Korbach and other sites. However, this energy source has a minor impact as it only accounts for 1 percent of our total energy consumption across all sites.

FuelThe Group uses diesel and gas both for its vehicle fleet and for quality and field tests where products need to be kept running over long periods. In addition, we fill the tanks of certain products – especially compact equipment such as wheel loaders and excavators – with a minimum amount of diesel prior to delivery to customers. We have not included this use of diesel in the following figures as we do not regard it as consumption by the Wacker Neuson Group.



GRI G4-EN3: Energy consumption within the organization

27 Total energy consumption was calculated by adding all bought-in energy sources to the fuel consumed during the reporting period.


** Not reviewed.


In 2014, total fuel consumption amounted to 710,143 liters (previous year: 635,821 liters). This 12-percent rise is mainly attributable to the increase in production output. With regard to fossil fuels, we used 694,072 liters of diesel and 16,071 liters of gas. We currently do not use renewable fuels.

Energy carriers in 2014 and 2013*in kWh

2013**

2014

Difference

Fuel consumption

of which diesel

of which gas

Electricity consumption

Natural gas consumption

Fuel oil consumption

District heating consumption

0 5,000,000 10,000,000 15,000,000

Greenhouse gas emissions In 2014, the sites for which figures were reported emitted 12,617.3 tons of CO2. This corresponds to a 6.6-percent increase on the previous year (2013: 11,831.6 tons of CO2). Biogenic emissions resulting from the use of solvent-based coatings are reported separately as volatile organic compounds (VOCs)28 in tons. These totaled 32.1 tons in 2014 (2013: 34.7 tons).

7307272

28 Volatile organic compounds are organic substances (i.e. containing carbon) that readily evaporate (become volatile) or occur as gases at low temperatures (for example, room temperature).

Direct emissions The direct emissions calculation includes emissions from the production process, testing, the spraying facility, administration and our vehicle fleet, as well as fossil fuels consumed on site. In all, 5,108.1 tons of CO2 were emitted (40 percent of total emissions); this corresponds to a 7-percent increase on the previous year. This rise is attributable to our higher production output and to the increased use of cars from our vehicle fleet.

Indirect emissions The majority of our total emissions (60 percent) were indirect emissions. These include all emissions resulting from electricity and district heating that the Group purchased from external sources. Indirect emissions were calculated using an emission factor for the energy mix (Germany/Austria) and for district heating. Total indirect emissions amounted to 7,509.2 tons of CO2. This corresponds to a rise of 6.4 percent relative to the previous year due to increased demand for electricity at the production sites.



EMISSIONS EMISSION FACTOR 2013 2014 Difference

Natural gas t CO2 0.202 [kgCO2/kWh] 2,951.6 3,068.1 3.9%

Electricity (Germany) t CO2 0.511 [kgCO2/kWh] 6,077.4 6,459.0 6.2%

Electricity (Austria) t CO2 0.215 [kgCO2/kWh] 759.3 901.3 18.7%

Fuel oil t CO2 0.267 [kgCO2/kWh] 133.9 150.4 12.3%

District heating t CO2 0.122 [kgCO2/kWh] 219.6 148.9 -32.2%

Total fuel t CO2 0.003 [tCO2/liter] 1,689.7 1,889.5 11.8%

Total scope 1 (direct) t CO2 4,775.3 5,108.1 7.0%

Total scope 2 (indirect) t CO2 7,056.3 7,509.2 6.4%

Total emissions t CO2 11,831.6 12,617.3 6.6%

EM

ISS

ION

S

Emissions*



• Introduce environment and energy management systems at all of our production sites in Europe and the US

• Optimize our logistics processes across the world

• Reduce our energy costs as a proportion of total costs by efficiently controlling energy consumption at our sites

• Integrate Group-wide quality, energy and environment management systems with the aim of matrix certification


GRI G4-EN15: Direct greenhouse gas emissions

GRI G4-EN16: Indirect greenhouse gas emissions


** Not reviewed.

Greenhouse gas emissions*as a % (2014)

40%

60%

(7,509.2 tons of CO2)

(5,108.1 tons of CO2)



Indirect emissions

Direct emissions

• Comprehensive employee code of conduct communicated to entire Group • “Tell-it”: Wacker Neuson’s new reporting system for compliance violations • Anti-corruption training for management and employees

COMPLIANCE74 06. Compliance

www. wackerneuson group.com/en/the-group/compli ance

COMPLIANCENON-

COMPLIANCE

Code of conduct for employeesOur corporate values form the basis for the way we do business, ensuring legal, ethical conduct. We expect every employee to live our values responsibly, enabling us to work together to create the foundations for a successful future – for the company as a whole and the people who work here (for more information, see the “value wheel” in the management and strategy section of chapter I). Our managers and employees live by a clearly defined code of ethics – and have done for many decades now. These ethics bring us closer together as a Group and help us identify more strongly with the company as a whole. They have also proven an effective tool for preventing irregularities. Our principles are communicated on our website.

In 2014, we created a code of conduct for employees. This document sets out the code of ethics for our company, details guidelines governing conduct in the workplace and also addresses anti-corruption measures. The code of conduct was translated into eleven languages and distributed to all of our employees worldwide. Every new employee receives a copy and it is also available to everyone in the Group on our intranet site. Every employee is bound by the code of conduct and encouraged to live its values on a daily basis. Managers and members of the Executive Board are expected to lead by example here and have a particular responsibility to actively live by these principles.

Compliance is managed centrally and supported at local level by the regional presidents. In their capacity as regional compliance officers, they oversee compliance measures at the different sites, in particular compliance training for employees. They also ensure that all issues relating to compliance are communicated in their region and report any compliance-relevant information directly back to the Chief Compliance Officer, who in turn reports to the Executive Board on a regular basis and as the need arises.

The position of Chief Compliance Officer was created in 2013. The figures set out in this chapter refer to 2014. In this year, for example, we introduced a number of targeted measures such as training and information events to raise employee awareness of compliance issues. We take swift action in the event of any suspected compliance violations.

Wacker Neuson’s “Tell-it” reporting system for compliance violationsIn 2014, we set up an online reporting system “Tell-it” as a separate line of communication for reporting potential violations of guidelines or legislation relating to companies in the Wacker Neuson Group. “Tell-it” can be used by employees, business partners, customers and other third parties. We have publicized the system on our website, in our Annual Report, in internal newsletters, at events and during the course of training sessions. The Compliance department carefully investigates all reports to rule out any possibility of the system being abused. As such, the Group has created a central, trusted point of contact in the company for individuals to report compliance violations. Reports can also be made anonymously.

“Tell-it” can be accessed 24 hours a day from anywhere in the world on our website. All reports are treated in complete confidence.

77II INDICATORS COMPLIANCECompliance76 II INDICATORS

COMPLIANCE

“It all starts with a strong compliance culture that is

lived throughout the Group. My most important task

is to ensure that we have a modern understanding

and awareness of compliance and that all employees

across the globe are mindful of the associated risks.”

CHRISTOF RIEBEL, CHIEF COMPLIANCE OFFICER,

WACKER NEUSON GROUP

www.bkms-system.net/wackerneuson

GRI G4-56: Values, principles, standards and norms of behavior GRI G4-57: Internal and external

mechanisms for seeking advice on ethical behavior

GRI G4-58: Mechanisms for reporting unlawful behavior

Code of Conduct www.wackerneusongroup.com/compliance


Significant fines In 2014, no company reported significant fines to the Group Compliance department. Individual Group companies are required to report fines for compliance violations to the central Legal and Compliance departments if the value of the fine in question exceeds EUR 10,000 and is therefore regarded as significant.

In 2014, there were also no reports in the Group of non-monetary sanctions for non-compliance with laws or regulations; nor were any cases brought through dispute resolution channels.

Compliance with anti-trust legislation and fair competition In 2014, no legal action was taken against companies in the Wacker Neuson Group for anti-competitive practices or violations of anti-trust legislation.

No grievances regarding labor practices During the reporting year, the Group received no complaints regarding labor practices from employees of the Wacker Neuson Group or other third parties. As such, there was no need to follow up or resolve any violations.

Anti-corruption trainingIn addition to raising awareness of the code of conduct throughout the Group, we are also steadily providing our managers and employees around the world with training on compliance issues. During 2014, our training and information events covered a range of topics including anti-corruption policies and procedures.

The Chief Compliance Officer kept all six members of our Supervisory Board fully informed about anti-corruption policies and procedures in 2013. In 2014, the Supervisory Board was kept informed about compliance developments by the CEO.

In 2014, 835 employees (827 in Europe and 8 in Asia) attended training and information events which included briefings about anti-corruption. Across the Group therefore, 19.1 percent of employees received training over the course of the year (24.6 percent in Europe and 3 percent in the Asia-Pacific region). The Group plans to introduce training in the Americas region in the near future and to increase the numbers of employees receiving training in the Europe and Asia-Pacific regions.

We use a number of channels to communicate our business ethics to partners and suppliers, including our corporate website and publications. In addition, external partners can freely use our “Tell-it” reporting system.

Incidents of discriminationDiscrimination of any kind is not tolerated at the Wacker Neuson Group. Suspected cases are examined and steps are taken to ensure that discrimination does not occur. In 2014, one case of discrimination was reported and resolved after careful investigation. The employee responsible was disciplined under labor law and instructed to refer to the Wacker Neuson code of conduct, which prohibits all kinds of discrimination.

Handling confidential dataThe Chief Financial Officer is responsible for data protection within the Group. The central Corporate Audit department appointed a Group Data Protection Officer in 2014 with responsibility for organizing worldwide compliance with data protection regulations and ensuring the (ongoing) training of locally appointed data protection officers. This arrangement ensures that our data protection is of a consistent standard across the world.

As well as ensuring top security for our IT systems, we also take the protection of physical documents and data extremely seriously. To this end, the Group appointed an IT Security Officer in 2013 with the task of keeping track of the rapid developments in information technology and ensuring that our systems always have the highest level of protection.

In 2014, no complaints regarding breaches of customer privacy or losses of customer data were reported. We are not aware of any leaks, thefts or losses of data.

79II INDICATORS COMPLIANCE078 II INDICATORS

COMPLIANCE78

GRI G4-SO8: Significant fines

GRI G4-SO7: Anti-competitive behavior

GRI G4-LA16: Grievances about labor practices

GRI G4-SO4: Communication and training on anti-corruption policies and procedures

GRI G4-HR3: Incidents of discrimination

GRI G4-PR8: Breaches of customer privacy


• Hold regular employee training and information events in all regions to reinforce Group-wide policies and preventive measures

• Publish the new code of conduct for suppliers, which will include our compliance principles and information on the “Tell-it” reporting system



©Torsten Kollmer-SOS-Kinderdorf e. V.

• Group-wide Donations Policy • Wacker Neuson Group helping people in need • Active employee involvement• Targeted sponsorship for international aid projects

DONATIONS AND SOCIAL RESPONSIBILITY

80 07. Donations and social responsibility

www. wackerneusongroup.com/en/sustainability/ commitment

Investing in societyAt the Wacker Neuson Group, we regard donations as voluntary contributions to external organizations and social institutions. We neither ask for nor expect anything in return. We also encourage our employees to get involved in social and community projects (corporate volunteering). Targeted sponsorship is another form of social engagement for our company.

New Donations PolicyPublished in 2014, our Group-wide Donations Policy sets out uniform donation guidelines for all Group companies. It requires close monitoring of how funds are spent and defines the main areas we donate to.

We focus on social and humanitarian causes, especially healthcare and education for children, young people and disadvantaged groups. We also support the sciences by donating to external research institutes. Our commitment at national and international level is not just limited to targeted financial aid, however. We also respond quickly and unbureaucratically to emergencies and disasters (e.g. storms or flooding), providing our know-how and employee manpower or donating equipment for local relief efforts.

We do not provide any financial support in connection with business-related or public authority decision-making processes. We also do not make financial, product or manpower donations to political parties, related individuals or associated organizations.

Group donations As a rule, we make a long-term commitment to projects, usually over a period of three years.

Every year, we determine a target figure for our donations budget for the following year. This is based on how our business is performing at the time and the distribution of revenue across regions. Our primary goal is to support non-profit organizations in the regions where the Group operates. If the annual donations budget is not fully utilized by the end of the year, remaining funds are carried over to the following year.

In addition to the long-term projects selected at Group level, affiliates can also plan their own donations budget and send requests for planned donations to Group headquarters for approval. Decisions regarding donations are made in collaboration with the Executive Board.

Total donations budgetIn 2014, the total worldwide donations budget for the Group was EUR K 91.0 (2013: EUR K 99.7).

83II INDICATORS DONATIONS AND SOCIAL RESPONSIBILITY

Donations and social responsibility82 II INDICATORS DONATIONS AND SOCIAL RESPONSIBILITY

GRI G4-15: Social commitment

“We always vet projects thoroughly before approving

any donations. It is crucial for me that all of the

money or materials we donate reaches the intended

recipients. Wherever we focus our efforts, we are

passionate about the causes we support.”

KATRIN NEUFFER, HEAD OF CORPORATE COMMUNICATION

Amount donatedin €

2013

201420,000 40,000 60,000 80,000 100,0000


© Mathis Leicht/SOS-Kinderdorf e. V.

Social commitment

Partnerships and donations 2014 to 2016We are supporting the following organizations from 2014 to 2016:

German Bone Marrow Donation Center (DKMS) – research project and typing drives

Clinical Trials Unit (CTU) research institute of the DKMS in Leipzig:Around 36,000 people are diagnosed with leukemia in Germany each year. The study that we are supporting aims to improve post-treatment monitoring of patients who have received an allogeneic stem cell transplant. One key area here, for example, involves finding the most suitable intervals and methods for improving patient treatment after stem cell transplants.

Typing drives at our sites: In 2014, we encouraged our employees to support leukemia patients and register as potential donors at DKMS. Wacker Neuson covered the cost of typing, which came to EUR 50 per typing. Information events on the success rates of stem cell transplants struck a chord with employees at our sites in Munich, Reichertshofen, Karlsfeld, Pfullendorf and Hörsching. Over 250 of our people have registered to become potential donors on the DKMS database. Some had already registered previously in a private capacity.

SAHEP – Select Anwar Khawaja Industries Health and Education ProjectIn 2014, the year of the FIFA World Cup, we supported the “Select Anwar Khawaja Industries (AKI) Health and Education Project”, a Pakistani organization that provides free education and healthcare for employees of soccer ball factories and their families. The project makes it possible for children to visit state schools and for women to attend literacy classes.

85084 II INDICATORS DONATIONS AND SOCIAL RESPONSIBILITY


SOS Children’s Villages

St. Hyacinth’s Food Pantry

In 2014, the Wacker Neuson Group donated to the St. Hyacinth Food Pantry, a charity that first opened its doors in Milwaukee (USA) in 1905. St. Hyacinth’s provides food and clothing to around 23,000 disadvantaged, elderly, disabled and unemployed people, including over 10,000 children. The organization is entirely run by volunteers, among them many Wacker Neuson employees and their families.

In 2014, we also partnered with the SOS Children’s Villages Association. Our donation helped support a Children’s Village in Germany (Kinderdorf Ammersee-Lech) and the Comitán Children’s Village in Mexico, enabling the support workers on site to provide children with a safe, secure and caring environment. Most of our donation in 2014 went towards the

running costs of these two facilities. We pledged further financial support to SOS Children’s Villages within the framework of an internal survey that we carried out among employees in 2014 on the subject of health management and psychological stress in the workplace. For every completed, returned survey, Wacker Neuson made a donation to the charity. We were also able to use the results of the questionnaire to develop targeted measures aimed at improving occupational health (for more information, see the Employees chapter, “Health in the workplace” section).

The organization supplies the soccer ball stitchers and their families with medicine and gives them access to doctors and medical treatment. Our donation was used to provide treatment for patients with hepatitis B and C, for dental examinations and for the education and training of children and young people.


C treeKlimabäume

Eisenhower Center

One of our largest production facilities is based in Milwaukee, USA. The city is also home to the Eisenhower Center, which opened its doors back in 1962. The Eisenhower Center supports people with disabilities and helps them integrate into daily life, providing them with tasks that they can do despite their mental or physical disability, for example packing, sorting and labeling. Staff at the Eisenhower Center also offer advice and support for the families of people with disabilities. In 2014, we supported this institution with a targeted donation.

Other projects we supported

In addition to our long-term commitments at Group level, our affiliates support select local non-profit organizations. In 2014, our sales organization implemented a number of initiatives, including a tree-planting drive as part of a customer survey – for every completed survey received, trees were planted. We also took part in a planting campaign at the GaLaBau trade fair in Nuremberg, Germany, in September 2014. The trees were planted at the nearby Klimahain 99 project (C2tree Klimabäume). These initiatives were also carried out under the guidelines of the Group’s Donations Policy.

SponsorshipSponsorship involves providing support to a group of people, organization or event (or a company) in the form of money, products or services in return for a service which supports the Group’s communication and marketing goals. Most of these activities are organized at affiliate level. They are financed through the local marketing budget and subject to approval and oversight by Group marketing. We try to target our sponsorship activities at the areas in and around our sites.

In the following, we report on sponsorship projects with social and charitable aims:

Aid supplies for Gambia

In 2014, Wacker Neuson Group supported a team taking part in the “Dresden-Dakar-Banjul challenge” aid project, an initiative inspired by the Dakar Rally. On November 8, 2014, a number of teams set off from Dresden to bring aid supplies to Gambia in Africa. When they reached their destination, the rally cars were auctioned off to raise money for local charitable projects. The rally covered approximately 7,500 km in three and a half weeks, passing through seven countries in Europe and Africa before arriving at the Gambian capital of Banjul. The supplies and money raised are being used to help the people of Gambia. The “Dresden-Dakar-Banjul challenge” has been held twice a year – in spring and fall respectively – since 2006. The rally is organized by Breitengrad e. V., an association based in the state of Saxony which we supported financially.

Compact equipment for training at Wels vocational schoolOur future innovative drive and success will hinge on high-quality training for the next-generation workforce. To this end, Wacker Neuson Linz has been collaborating with Wels vocational school in Austria since 2007, providing it with compact equipment for training purposes. For example, instructors can demonstrate the functions and components of an excavator using the Wacker Neuson ET24 compact excavator. Budding construction equipment technicians can learn how to check the hydraulic pressure and see how a hydraulic circuit is put together. The collaboration aims to deliver high-quality training and technical know-how to young people while also raising the profile of Wacker Neuson’s brand and technologies among apprentices whilst they are still in training. We currently have 42 apprentices at our Hörsching site, including construction equipment technicians, technical drafters, designers and industrial clerks.


II INDICATORS DONATIONS AND SOCIAL RESPONSIBILITY


8908888


• Commit to fixed annual donations budget

• Provide rapid, unbureaucratic response to disasters (equipment and material donations)

• Commit long term to projects to ensure continuity and effective assistance over time


B2RUN 2014 fun run and RTL’s “Wir helfen Kindern” children’s charity

In July 2014, around 30,000 runners took part in the eleventh annual B2RUN company fun run in Munich, including approximately 50 managers and employees of the Wacker Neuson Group. The 6.5-kilometer course wound its way through Munich’s Olympiapark before reaching its traditional finish line inside the Olympic Stadium. Around 1,400 companies from Munich and the surrounding area took part in the fun run and ensured that every seat in the stadium was filled. Enjoying the relaxed atmosphere on the day, the participants from Wacker Neuson were treated to food and drink at the company stand before and after the run. In 2013, a charity partnership was set up between B2RUN and the “RTL – Wir helfen Kindern” social project for children. Everyone who took part in the run made a contribution as the participation fee paid by Wacker Neuson was donated to the children’s charity.

Employees involved in community projectsWe encourage our employees to get involved in community projects. Which is why we also included guidelines governing volunteer work undertaken by employees during working hours (corporate volunteering) in our Group Donations Policy in 2014. Every employee receives an annual allocation of hours which they can use to take leave for volunteering, subject to approval. Some of the areas where our employees volunteer their time include fire or ambulance services, disaster relief work and intercultural partnership programs. In 2014, employees at our Reichertshofen production site alone volunteered 294 hours of their working time. We aim to promote this level of commitment at other sites in the future.

Social commitment – corporate volunteering

“Volunteering is important to me, which is why I

joined the Reichertshofen fire service. I think it’s

great that my employer also supports my efforts

here. Thanks to the corporate volunteering system,

I can even take time out from work to go on call-outs

and help people in need.”

MARKUS SCHENK, PRODUCTION EMPLOYEE, REICHERTSHOFEN




• Active involvement in construction and agricultural equipment industry associations • Participation in sustainability awareness week in 2014 • Commitment to limiting climate change and protecting the environment

ASSOCIATIONS AND INITIATIVES90 08. Involvement in associations and

initiatives


The Wacker Neuson Group is a global player and a significant economic factor in the areas in which our Group companies operate. We therefore play an active role in industry associations and welcome policy initiatives aimed at limiting climate change and protecting the environment. As regulations governing noise emissions, the environment and user safety become increasingly strict, we believe it is in our best interest to play an active role in associations and working groups as these provide us with a platform to make constructive contributions to new legislation and/or changes to existing laws. They also allow us to steer our R&D activities in the right direction and adapt in good time to new challenges. As a construction equipment manufacturer with a global reach, we benefit greatly from the information shared in these industry committees.

Membership of the VDMA and CECEIncreasingly stringent legislation on noise emissions, environmental protection and user safety has the potential to harm the German construction equipment industry’s competitive position. Excessively strict regulations that are implemented too quickly pose a serious challenge to construction equipment manufacturers, tying up resources and causing costs to rise. The new emissions standards that manufacturers have to meet for the European Union, for example, do not align with the standards applicable in the US.

The Wacker Neuson Group raises these and other issues with the associations with which it engages. Through these organizations, we have the opportunity to strategically and constructively develop solutions and assert our interests vis-à-vis policy-makers as a company operating in a competitive international market. To this end, we are actively involved in the German Engineering Federation (VDMA) and its European equivalent, the Committee for European Construction Equipment (CECE).

The Group is also involved in a number of other national and international associations and committees.

Blue Competence: A sustainability initiative of the German Engineering Federation (VDMA) In 2013, Wacker Neuson became one of the first companies in the industry to join the VDMA’s “Blue Competence” sustainability initiative. The project focuses on saving energy and resources, also addresses issues such as compliance, corporate philosophy and the selection and management of suppliers. It also promotes sustainable

engineering as a means of achieving environmental, social and economic goals. The Wacker Neuson Group is an active member of the initiative and contributes to it in a number ways, for instance by providing examples of best practices. In September 2014, we also took part in the “Aktionswoche Nachhaltigkeit” sustainability awareness week. Under the banner of “voluntary commitment rather than further regulation”, over 70 member companies showcased their activities in the field of corporate social responsibility (CSR). During the awareness week, Wacker Neuson shined a spotlight on sustainability at its stand at GaLaBau in Nuremberg, the world’s largest gardening and landscaping trade fair, under the slogan “Gelbe Vielfalt – Grüne Zukunft” (Going yellow for a green future). The Group also highlighted its range of ECO products and focused on sustainability in general in its dialog with the press. In addition, we used the awareness week as an opportunity to engage in social projects, doing our bit to help children in need (see chapter 7: Donations and social responsibility).

93II INDICATORS ASSOCIATIONS AND INITIATIVES

Involvement in associations and initiatives92 II INDICATORS ASSOCIATIONS AND INITIATIVES

GRI G4-16: Memberships of associations

“Being actively involved in our industry associations

helps us bring about strategic solutions. These

organizations also provide an important platform for

sharing information. We enjoy this interaction and

find that it provides us with new input and ideas.”

HELMUT BAUER, MANAGER OF PRODUCTION GERMANY (LIGHT EQUIPMENT)

Bavarian Sustainability RoundtableAs a member of the Bavarian Sustainability Roundtable, the Wacker Neuson Group meets with companies from a wide range of industries to discuss current trends in corporate social responsibility.

German Agricultural Society (DLG) and German Association for Agricultural, Construction and Landscaping Equipment (Bundesverband LandBauTechnik)Both the DLG and the Bundesverband LandBauTechnik are points of contact for agricultural machinery dealers, providing them with information and services and enabling them to make contact with manufacturers. The DLG was founded with the aim of fostering scientific and technological progress and this core principle remains at the heart of the organization today. The DLG sets industry benchmarks with its projects and activities, and drives advances in the German agricultural machinery industry. In addition to being a source of expert knowledge, the DLG organizes trade shows and tests technology, equipment and foodstuffs. One of the conferences organized by the association focuses on biogas plant safety. Biogas plants are highly complex, high-tech facilities. The substrates used in the plants and the microbiological decomposition and conversion processes produce products that are harmful to human health and the environment. The DLG is committed to raising safety awareness here. We play an active role in the DLG, primarily through Group member Weidemann GmbH.


• Expand active collaboration in associations and initiatives

• Make sustainability and CSR more frequent topics of discussion

• Develop corporate sustainability initiatives further



• Process innovation management as a tool for promoting corporate sustainability • Creation of interdisciplinary think-tanks for Group-wide knowledge transfer • 2015/2016 sustainability strategy

PROCESS INNOVATION MANAGEMENT 09. Process innovation management94


Think-tanks focus on new solution concepts At the Wacker Neuson Group, process innovation management means initiating new projects and implementing new processes to promote sustainability across the Group. Our activities here are clearly differentiated from technical innovation at product level, which other departments have been successfully managing for many years now.

Within the framework of process innovation management, we created a Group-wide networking platform and three specialist think-tanks: “Employees”, “Products” and “Production”. These interdisciplinary think-tanks meet twice a year to discuss how individual areas of the business could become more sustainable and to develop appropriate solutions. Once a year, the CSR steering committee determines the sustainability strategy for the following year and defines (Group) goals (for details, see chapter 2). In 2014, each think-tank prioritized three action items.

97II INDICATORS 2015/2016 SUSTAINABILITY STRATEGY

Process innovation management96 II INDICATORS PROCESS INNOVATION MANAGEMENT

SUSTAINABILITY REPORT 2014

“I believe that process innovation management is

extremely important. It has given me insights beyond

my own discipline and is a great way of generating

new ideas – some of which I can use in my own

work. It also encourages departments and areas in

the company to share knowledge and communicate

with each other.”

SONJA ILONA ROLNICZAK, EQUAL OPPORTUNITIES OFFICER AND ATTORNEY


è The following pages contain details on our sustainability strategy.

SUSTAINABILITY GOALS – SUSTAINABILITY MANAGEMENT

SUSTAINABILITY TOPIC OUR GOALS ACTION ITEMS

PROCESSES; RESPONSIBILITIES, CREATION OF A SUSTAINABILITY MANAGEMENT SYSTEM

Sustainability in strategy deve-lopment

- Implementation of Group-wide environment and energy policy

- Innovation management / internal think-tanks dedicated to “Products”, “Production” and “Employees”

- CSR steering committee (deciding on sustainability strategy, defining goals)

Central reporting on sustai-nability

- Continuation of comprehensive system of indicators (as per GRI G4)

- Standardization of reporting process (uniform definitions, metrics and process descriptions)

- Regular review and verification by auditors

- Regular publication of a sustainability report

Direct stakeholder dialog - Verification and prioritization of material issues (materiality as per GRI G4)

- Regular internal/external surveys

Strengthening roles of local energy, environment and CSR officers

- Energy and environment officers appointed at respective sites, CSR officers to collect local data

- Group Energy and Environment Manager to set up reporting and control system

Engagement with selected associations

- Expansion of engagement with associations

Standardization across the Group

- Standardization across all areas of the Group (improved workflows, greater energy efficiency, optimized allocation of resources)

Lean management/Kaizen - Establishment of lean mindset in all areas

Matrix certification for quality, energy, environment

- Integrated management system (quality, energy, environment) including uniform, Group-wide documentation

SUSTAINABILITY GOALS – SOCIAL RESPONSIBILITY


SOCIAL COMMITMENT Fixed annual donations budget - Targeted support for selected projects based on Group guidelines on donations, sponsorship and volunteering

- Long-term commitment to donation and sponsorship partners

SUSTAINABILITY REPORT 2014

II INDICATORS 2015/2016 SUSTAINABILITY STRATEGY

098 II INDICATORS 2015/2016 SUSTAINABILITY STRATEGY

9998

SUSTAINABILITY GOALS – PRODUCTS


RESEARCH AND DEVELOPMENT, PRODUCT SAFETY, PRODUCT QUALITY

Expansion of ECO product portfolio and stronger focus in product communication

- Realignment of technology roadmap to focus on lower environmental impact and greater energy efficiency

- Hardwiring of environmental criteria into specifications (product development)

- ECO seal for all Group brands- Focus topic on the Wacker Neuson product

website, in customer communication and at trade fairs (USP)

- Further development of ECO seal

Continuous optimization of safety systems and user ergonomics

- Exceed standards required by law- Expansion of pioneering role

MARKETING, PRODUCT INFORMATION, CUSTOMER SATISFACTION

Training as a means of strengthening customer loyalty

- Targeted training highlighting the benefits of ECO products

- Energy efficiency training for users

Strategic engagement of customers in (sustainable) product development

- Involvement of customers at the development stage- Creation of “customer advisory councils”

Customer satisfaction surveys - Targeted, regular customer surveys

Improved service offering - Tailored aftermarket services for long-term customer loyalty

Web-to-print - Printing of product information/brochures on demand

- More publications available in digital format

SUSTAINABILITY GOALS – ENVIRONMENTALLY EFFICIENT PRODUCTION AND LOGISTICS


ENERGY AND ENVIRONMENT Introduction of energy and environment management systems

- Extension of scope of validity of energy and environment management manual to all production sites

- Certified energy and environment management systems (ISO 50001 and 14001) at all production sites worldwide

Development of standardized, uniform system to record energy consumption

- Creation of Group-wide function to monitor energy consumption

- Facility Management to identify potential energy improvements and savings

Eco-efficient logistics - Involvement of logistics in Group-wide optimization projects

Measuring company carbon footprint (CCF)

- Regular creation of company carbon footprint as per Scope 1 + 2

SUSTAINABILITY GOALS – EMPLOYEES


SOCIAL SECURITY, HEALTH, EDUCATION AND TRAINING, OCCUPATIONAL SAFETY

Local management - Greater focus on filling positions with managers from the target markets

Employee satisfaction - Regular, global employee survey

Promotion of health in the workplace

- Occupational health initiatives for a high-quality working environment

International and interdisciplinary exchanges within the Group

- INTRAMove employee program: giving employees the opportunity to work in different departments and regions

Training the next generation of managers

- PerspActive employee program for up-and-coming managers

Management training - Development of management skills in accordance with defined management guidelines

Incentivizing and fostering young talent

- T.A.G.: a multi-strand trainee program for technical and business management disciplines

Promotion of education and training

- Expansion of offering

- Tailoring of measures to individual needs

DIVERSITY AND EQUAL OPPORTUNITIES

Women in managerial positions - Monitoring of the proportion of women managers in the Group

- Central commitment across both management and non-management functions

Integration of employees with disabilities

- Aim to provide appropriate work assignments to employees with impaired abilities and severe disabilities in order to fully integrate them into working life

SUSTAINABILITY GOALS – SUSTAINABLE AND FAIR BUSINESS PRACTICES


COMPANY ETHICS AND ANTI-CORRUPTION

Code of conduct – hardwired throughout our corporate philosophy

- Regular training and information events for employees in all departments

Raising awareness of new reporting system for compliance violations

- Enabling third parties to report violations

SUSTAINABILITY IN THE SUPPLY CHAIN

Code of conduct for suppliers - Ensuring a sustainable supply chain

Sustainability audits and certification for suppliers

- Evaluation of potential suppliers before starting a business relationship using a strict set of rules (rapid plant assessment)

APPENDIX100 Appendix

0102 III APPENDIX GRI INDEX102


103III APPENDIX GRI INDEXGRI Content Index

GRI indicator Brief description

Page reference in the Sustainability Report

Boundaries and omissions

External assurance29

GENERAL STANDARD DISCLOSURES

STRATEGY AND ANALYSIS

G4-1 Statement from the most senior decision-maker

Introduction to sustainability management and strategy at the Wacker Neuson Group p. 4

-

ORGANIZATIONAL PROFILE

G4-3 Name of the organization Introduction to sustainability management and strategy at the Wacker Neuson Group p. 16

-

G4-4 Brands, products and services Introduction to sustainability management and strategy at the Wacker Neuson Group p. 9, p. 17

-

G4-5 Organization’s headquarters Introduction to sustainability management and strategy at the Wacker Neuson Group p. 16

-

G4-6 Countries where Wacker Neuson has significant operations

Introduction to sustainability management and strategy at the Wacker Neuson Group p. 13, p. 16

-

G4-7 Nature of ownership and legal form Introduction to sustainability management and strategy at the Wacker Neuson Group p. 16

-

G4-8 Markets served Introduction to sustainability management and strategy at the Wacker Neuson Group p. 17

-

G4-9 Scale of the organization, total number of employees, total number of operations, net sales, total capitalization, quantity of products and services provided

Introduction to sustainability management and strategy at the Wacker Neuson Group p. 16, p. 18For revenue figures by business segment, refer to the Business indicators chapter pp. 26, 29

Due to the diverse nature of Wacker Neuson’s product portfolio, we do not believe that disclosing actual unit sales provides meaningful information

-

G4-10 Total number of employees, variations in employment numbers, workforce by region, proportion of non-permanent employees

Chapter 2. Employees pp. 34–35

-

G4-11 Employees covered by collective bargaining agreements

Chapter 2. Employees p. 34 -

G4-12 Supply chain Chapter 3. Procurement and quality p. 47 -

G4-13 Changes in the supply chain Chapter 3. Procurement and quality p. 49 -

G4-14 Precautionary principle Chapter 4. Product stewardship p. 59 -

G4-15 Social commitment Chapter 7. Donations and social responsibility p. 83 -

G4-16 Memberships of associations Chapter 8. Involvement in associations and initiatives p. 92 -

GRI indicator Brief description

Page reference in the Sustainability Report

Boundaries and omissions

External assurance29

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

G4-17 Consolidation structure Introduction to management and strategy p. 16 Appendix p. 108 , p. 106

G4-18 Defining the report content Introduction to materiality analysis p. 21, p. 106

G4-19 Material aspects Introduction to materiality analysis pp. 22-23, p. 106

G4-20 Reporting of material aspects within the organization

Introduction to materiality analysis p. 23, p. 106

G4-21 Boundaries of material aspects outside the organization


G4-22 Restatements of information provided in previous reports

Not applicable as this is the first Sustainability Report -

G4-23 Changes in scope and aspect boundaries

Not applicable as this is the first Sustainability Report -

STAKEHOLDER ENGAGEMENT

G4-24 Stakeholder groups Introduction to materiality analysis p. 20, p. 106

G4-25 Identification and selection of stakeholders


G4-26 Approach to stakeholder enga-gement


G4-27 Results of stakeholder engagement Introduction to materiality analysis p. 22, p. 106

REPORT PROFILE

G4-28 Reporting period Introduction to reporting structure p. 13 -

G4-29 Date of previous report Introduction to reporting structure p. 13 -

G4-30 Reporting cycle Introduction to reporting structure p. 13 -

G4-31 Contact point for questions Introduction to reporting structure p. 13 -

G4-32 GRI Content Index Appendix: GRI Content Index p. 102 -

G4-33 External assurance Appendix p. 106 -

GOVERNANCE

G4-34 Governance structure Introduction to sustainability management and strategy at the Wacker Neuson Group p. 19

-

ETHICS AND INTEGRITY

G4-56 Values, principles, standards and norms

Chapter 6. Compliance p. 76 -

G4-57 Internal and external mechanisms for ensuring ethical behavior


G4-58 Mechanisms for reporting unlawful behavior


29 Disclosures marked with were subject to independent assurance for fiscal 2014 undertaken by the auditing company Ernst & Young. This includes passages marked with GRI-G4 in the margin as well as those disclosures made by Wacker Neuson SE in the text of the Sustaina-bility Report for the period from January 1 to December 31, 2014 that are marked with . Please refer to the external assurance statement on p. 106.


As per the requirements of the Global Reporting Initiative (“core”), this report describes the general and specific standard disclosures for the relevant G4 indicators identified as material aspects. The associated references are shown in the GRI Content Index and presented in the Sustainability Report in accordance with GRI G4-32: GRI Content Index. GRI G4-32: GRI index


III APPENDIX GRI INDEX0104 III APPENDIX

GRI INDEX

Material aspects

GRI indicator

Specific standard

disclosures and disclosure on management

approach (DMA)

Page reference in the Sustainability

Report Boundaries and omissionsExternal

assurance29

SPECIFIC STANDARD DISCLOSURES

ECONOMIC

Disclosure on management approach (DMA)

Chapter 1. Business indicators pp. 26–28 -

Economic performance

G4-EC 1 Direct economic value generated and distributed

Chapter 1. Business indicators pp. 30–31 , p. 106

EMPLOYEES


Chapter 2. Employees p. 34 -

Market presence G4-EC 6 Senior management hired from local communities

Chapter 2. Employees p. 37

In this context, significant location of operation relates to our affiliates around the world. , p. 106

Employment G4-LA 1 New employee hires and employee turnover


This information is not fully available at present. The indicator only refers to companies incorporated in the SAP system and therefore covers 83 percent of the total workforce. Employee turnover by region cannot be reported. It will only be possible to break down employee figures by gender and age once a new data collection procedure has been introduced in 2015.

, p. 106

Occupational health and safety

G4-LA 6 Type of injury and rates of injury, work-related fatalities, recording and reporting accident statistics, lost days and absenteeism


This information is not fully available at present. The rates and types of injury as well as work-related fatalities and the recording and reporting of accident statistics refer to the production sites in Germany and Austria as well as the Group headquarters and its test zone. The illness rate refers to companies incorporated in the SAP system and therefore covers 83 percent of the total workforce. Data relating to independent contractors working on-site and also to lost days, type of injuries and the absenteeism rate cannot be collected at present. We are currently planning processes to collect this data.

, p. 106

Training and education

G4-LA 10 Programs for skills management and lifelong learning, transition assistance programs

Chapter 2. Employees pp. 39, 41

The indicator only refers to the program offered by the Wacker Neuson Academy in Reichertshofen.

, p. 106

Diversity and equal opportunities

G4-LA 12 Breakdown of employees by division, age group, gender and disability.

Chapter 2. Employees pp. 36-37

This information is not fully available at present. The indicator only refers to companies incorporated in the SAP system and therefore covers 83 percent of the total workforce. The Group did not report on the composition of the Supervisory Board by age and minority group in the current reporting period.

, p. 106

PROCUREMENT AND QUALITY


Chapter 3. Procurement and quality p. 46 -

Procurement practices

G4-EC 9 Proportion of spending on local suppliers

Chapter 3. Procurement and quality p. 48 , p. 106

Screening of suppliers using environmental criteria

G4-EN 32 Suppliers screened using environmental criteria

Chapter 3. Procurement and quality p. 47

For reasons specific to the Group, we report on potential suppliers rather than new suppliers. , p. 106

Child labor G4-HR 5 Assessment of operations and suppliers to determine risk of children and young people working under hazardous conditions


We do not report on this risk. Instead, we provide information on 1. our survey of our operations around the world and 2. our audit of potential suppliers. We prioritized the Asia-Pacific region in our audit to cover the main risk markets.

, p. 106

Forced or compulsory labor

G4-HR 6 Assessment of operations and suppliers to determine risk for incidents of forced or compulsory labor.


We do not report on this risk. Instead, we provide information on 1. our survey of our operations around the world and 2. our audit of potential suppliers. We prioritized the Asia-Pacific region in our audit to cover the main risk markets.

, p. 106

105104

Material aspects

GRI indicator

Specific standard

disclosures and disclosure on management

approach (DMA)

Page reference in the Sustainability

Report Boundaries and omissionsExternal

assurance29

Supplier assessment with regard to human rights

G4-HR 10 Assessment of suppliers’ human rights track records



Supplier assessment with regard to labor practices

G4-LA 14 Assessment of suppliers’ labor practices



PRODUCT STEWARDSHIP


Chapter 4. Product stewardship p. 54 -

Products and services G4-EN 27 Environmental impacts of products and services

Chapter 4. Product stewardship p. 56

In the 2014 reporting period, the indicator is described in qualitative terms. There are gaps in the information currently available; we will gradually be rolling out data collection mechanisms from 2015.

, p. 106

Customer health and safety

G4-PR 1 Customer health and safety

Chapter 4. Product stewardship p. 60 , p. 106

Product and service labeling

G4-PR 5 Results of surveys measuring customer satisfaction

Chapter 4. Product stewardship p. 62 , p. 106

ENERGY AND THE ENVIRONMENT


Chapter 5. Energy and the environment p. 66 -

Energy consumption G4-EN 3 Energy consumption within the organization

Chapter 5. Energy and the environment p. 70

Note: G4-EN 3 is not relevant for our reporting since no energy is sold or supplied to the grid. The figures refer exclusively to our production sites in Germany and Austria as well as the Group headquarters and its test zone. We will include other global sites from 2015.

, p. 106

Direct emissions G4-EN 15 Direct GHG emissions (Scope 1)


The figures refer exclusively to our production sites in Germany and Austria as well as the Group headquarters and its test zone. We will include other global sites from 2015.

, p. 106

Indirect emissions G4-EN 16 Indirect GHG emissions (Scope 2)



, p. 106

Effluents and waste G4-EN 23 Waste Chapter 5. Energy and the environment p. 68-69


, p. 106

COMPLIANCE


Chapter 6. Compliance p. 76-77 -

Non-discrimination G4-HR 3 Incidents of discrimination Chapter 6. Compliance p. 79, p. 106

Labor practices grievance mechanisms

G4-LA 16 Grievances about labor practices

Chapter 6. Compliance p. 78

, p. 106

Protecting customer privacy

G4-PR 8 Breaches of customer privacy

Chapter 6. Compliance p. 79, p. 106

Anti-corruption G4-SO 4 Communication and training on anti-corruption policies and procedures

Chapter 6. Compliance p. 78 In the 2014 reporting period, the indicator is partly re-ported in qualitative terms. At present, we are unable to break down this information by employee category. We will gradually be rolling out data collection processes from 2015.

, p. 106

Anti-competitive behavior

G4-SO 7 Anti-competitive behavior Chapter 6. Compliance p. 78, p. 106

Compliance G4-SO 8 Significant fines Chapter 6. Compliance p. 78, p. 106




III APPENDIX ASSURANCE STATEMENT0106 III APPENDIX

ASSURANCE STATEMENT106

To the Executive Board of Wacker Neuson SE, Munich, Germany

Our engagement We have performed an assurance of the disclosures made by Wacker Neuson SE. The information subject to review is marked by in the margin and by in the text of the 2014 Sustainability Report (hereafter “the Report”). This information covers the reporting period from January 1, 2014 to December 31, 2014. The disclosures included in our assurance engagement are marked with in the GRI Content Index on pages 102–105 of the Report and relate to the following:

• GRI indicators G4-17 to G4-21 (identified material aspects)• GRI indicators G4-24 to G4-27 (stakeholder engagement)• Specific standard disclosures in accordance with GRI G4

Limitations of our engagementOur review is limited to the disclosures marked with in the margin and with in the text of the 2014 Sustainability Report for fiscal 2014, specifically the German printed version of the Report. Forward-looking statements and disclosures for previous years were not included in the scope of our engagement.

CriteriaWe based our assessment on the criteria set out in the G4 Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI). We believe that these criteria provide a suitable basis for our assurance.

Responsibility of managementThe management of Wacker Neuson SE, Munich, is responsible for preparing the Report and for its content in compliance with the aforementioned criteria. This responsibility includes the creation, implementation and maintenance of internal controls that will result in a report that is free from material errors, is prepared in compliance with the above criteria and is based on suitable methods for gathering data, including assumptions and estimates regarding individual sustainability disclosures that were reasonable under the given circumstances.

Our responsibilityOur responsibility is to provide an opinion, based on our assurance, of the disclosures indicated by in the margin and by in the text of the 2014 Sustainability Report covering the reporting period from January 1 to December 31, 2014. We performed our assurance in accordance with the International Standard on Assurance Engagements (ISAE) 3000. This standard requires that we comply with our professional duties and plan and perform the review in such a way that, following critical assessment, we can confirm with limited assurance that the disclosures indicated by in the margin and by in the text of the 2014 Sustainability Report were prepared in all material respects in accordance with the aforementioned reporting principles and criteria. An assurance is not as extensive as an audit, which is aimed at achieving reasonable assurance. As such, the review provides a lower level of assurance.

Assurance statement by independent auditor

We are independent of the company in compliance with the rules governing the profession and with the IESBA Code of Ethics for Professional Accountants (IESBA Code), which is based on the fundamental principles of integrity, objectivity, professional competence and diligence, confidentiality and professional conduct. We discharged our other professional duties in compliance with these requirements and the IESBA Code.

Key proceduresIn order to perform our engagement, we undertook the following tasks:

• Interviewing employees about the sustainability strategy, sustainability principles and sustainability management, including Wacker Neuson SE’s stakeholder dialog.

• Interviewing employees responsible for reporting the disclosures for fiscal 2014 marked with in the margin and with in the text of the 2014 Sustainability Report. We did this in order to assess the sustainability reporting system, the data collection and processing methods and the internal controls, insofar as these are relevant for the assurance statement relating to the disclosures marked with in the margin and with in the 2014 Sustainability Report for fiscal 2014.

• Inspecting relevant documentation relating to the systems and processes used to collect, analyze and aggregate the sustainability data in the reporting period, and sample-checking said documentation.

• Sample interviews and sample checks of documents relating to the collection and reporting of sustainability data both at the Group headquarters of Wacker Neuson SE in Munich and in the course of on-site visits to the Pfullendorf and Hörsching production sites.

• Analyzing the quality of the reported data.• Critical review of the draft report to determine whether the disclosures for fiscal 2014 marked with

in the margin and with in the text of the 2014 Sustainability Report are plausible and consistent.

Our conclusionBased on the work we carried out to obtain limited assurance, nothing has come to our attention that would cause us to believe that the disclosures marked with in the margin and with in the text of the 2014 Wacker Neuson Sustainability Report covering the reporting period from January 1, 2014 to December 31, 2014 were not prepared, in all material respects, in accordance with the criteria mentioned above.

Munich, May 21, 2015 Ernst & Young GmbH

Nicole Richter Nina Müller Auditor Auditor

107

GRI G4-33: External assurance

III APPENDIX CONSOLIDATION STRUCTURE

0108 III APPENDIX CONSOLIDATION STRUCTURE

109108In addition to the parent company, Wacker Neuson SE, the Consolidated Financial Statements as at De-cember 31, 2014 include the following affiliates controlled by the Group. The Group is deemed to control a company if it carries the risks associated with that company along with the rights to fluctuating returns on its shareholding in the company, and if it can use its power of control over the company to influence these returns. Control is exercised through the following shareholdings:

Company name City Country

Wacker Neuson SE shareholding as a % Segment

DIRECT INDIRECT GERMANY

1 Wacker Neuson Produktion GmbH & Co. KG Munich Germany 100 Europe2 Wacker Neuson PGM Verwaltungs GmbH Munich Germany 100 Europe3 Wacker Neuson Vertrieb Deutschland

GmbH & Co. KG

Munich Germany 100 Europe

4 Wacker Neuson SGM Verwaltungs GmbH Munich Germany 100 Europe5 Wacker Neuson Vertrieb Europa

GmbH & Co. KG

Munich Germany 100 Europe

6 Wacker Neuson SEM Verwaltungs GmbH Munich Germany 100 Europe7 Weidemann GmbH Diemelsee-

Flechtdorf

Germany 100 Europe

8 Kramer-Werke GmbH Pfullendorf Germany 95 Europe9 PADEM Grundstücks-Vermietungsgesellschaft

mbH & Co. Objekt Gutmadingen KG

Dusseldorf Germany 90 Europe

10 Wacker Neuson Grundbesitz GmbH & Co. KG Pfullendorf Germany 95 Europe11 Wacker Neuson Grundbesitz Verwaltungs

GmbH

Pfullendorf Germany 95 Europe

12 Wacker Neuson Immobilien GmbH Überlingen Germany 95 EuropeREST OF EUROPE

13 Wacker Neuson ApS Karlslunde Denmark 100 Europe14 Wacker Neuson S.A.S. Brie-Comte-

Robert

(near Paris)

France 100 Europe

15 Wacker Neuson Ltd. Stafford (near

Birmingham)

UK 100 Europe

16 Wacker Neuson srl con socio unico San Giorgio

di Piano

(near Bologna)

Italy 100 Europe

17 Wacker Neuson B.V. Amersfoort Netherlands 100 Europe18 Wacker Neuson AS Hagan

(near Oslo)

Norway 100 Europe

19 Wacker Neuson Beteiligungs GmbH Hörsching

(near Linz)

Austria 100 Europe

20 Wacker Neuson Linz GmbH Hörsching

(near Linz)

Austria 100 Europe

21 Wacker Neuson Rhymney Ltd. Tredegar UK 100 Europe22 Wacker Neuson Kragujevac d.o.o. Kragujevac Serbia 100 Europe23 Wacker Neuson Lapovo d.o.o. Lapovo Serbia 100 Europe24 Wacker Neuson GmbH Vienna Austria 100 Europe25 Wacker Neuson Sp. z.o.o. Jawczyce

(near Warsaw)

Poland 100 Europe

26 Wacker Neuson GmbH Moscow Russia 100 Europe27 Wacker Neuson AB Södra Sandby

(near Malmö)

Sweden 100 Europe

28 Drillfix AG Volketswil

(near Zurich)

Switzerland 100 Europe

Company name City Country

Wacker Neuson SE shareholding as a % Segment

DIRECT INDIRECT REST OF EUROPE

29 Wacker Neuson AG Volketswil

(near Zürich)

Switzerland 100 Europe

30 Wacker Neuson, S.A. Torrejón de

Ardoz (near

Madrid)

Spain 100 Europe

31 Wacker Neuson (Pty) Ltd. Florida (near

Johannesburg)

South Africa 100 Europe

32 Wacker Neuson s.r.o. Prague Czech Republic 100 Europe33 Wacker Neuson Makina Limited irketi Küçükbak-

kalköy (near

Istanbul)

Turkey 100 Europe

34 Wacker Neuson Kft. Törökbálint

(near Budapest)

Hungary 100 Europe

AMERICAS35 Wacker Neuson Máquinas Ltda. Jundiaí

(near São Paulo)

Brazil 100 Americas

36 Wacker Neuson Ltda. Huechuraba

(near Santiago)

Chile 100 Americas

37 Wacker Neuson Ltd. Mississauga

(near Toronto)

Canada 100 Americas

38 Wacker Neuson S.A. de C.V. Mexico City Mexico 100 Americas39 Wacker Neuson Corporation Menomonee

Falls1

USA 100 Americas

40 Wacker Neuson Logistics Americas LLC Menomonee

Falls1

USA 100 Americas

41 Wacker Neuson Production Americas LLC Menomonee

Falls1

USA 100 Americas

42 Wacker Neuson Sales Americas LLC Menomonee

Falls1

USA 100 Americas

ASIA-PACIFIC43 Wacker Neuson Pty Ltd. Springvale

(near Melbourne)

Australia 100 Asia-Pacific

44 Wacker Neuson Limited Hong Kong Hong Kong 100 Asia-Pacific45 Wacker Neuson Machinery Trading (Shenzhen)

Ltd. Co.

Shenzhen China 100 Asia-Pacific

46 Wacker Neuson Equipment Private Ltd. Bangalore India 100 Asia-Pacific47 Wacker Neuson Manila, Inc. Dasmariñas

(near Manila)

Philippines 100 Asia-Pacific

48 Wacker Neuson Limited Samutprakarn

(near Bangkok)

Thailand 100 Asia-Pacific

1 near Milwaukee

Dec. 31, 2014

GRI G4-17: Consolidation structure


0110 III APPENDIX PUBLISHING DETAILS110

ContactWacker Neuson SECorporate CommunicationPreussenstrasse 4180809 Munich, Germany

Phone +49 - (0) 89 - 354 02 - 0Fax +49 - (0) 89 - 354 02 - 300

[email protected]

Publishing detailsIssued by:Wacker Neuson SEMay 2015

DisclaimerThis Sustainability Report contains forward-looking statements which are based on current estimates and assumptions made by the corporate management of Wacker Neuson SE. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate and similar formulations. Such statements are not to be understood in any way as guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by Wacker Neuson SE and its affiliated companies depend on a number of risks and uncertainties and may therefore differ materially from the forward-looking statements. Many of these factors are outside the company’s control and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and other market players. The company neither plans nor undertakes to update any forward-looking statements.

Contact and publishing details Gloobaal ppreeseencce

Germany (Kramer)Pfullendorf

GermanyMunich

GermanyReichertshofen

The NetherlandsAmersfoort

UKLondon

SpainMadrid

ItalyBologna

Headquarters of Wacker Neuson SE (holding company)Munich (Germany)

Affi liatesAssociated companies

Production sitesReichertshofen, Korbach, Pfullendorf (Germany), Linz/Hörsching (Austria), Kragujevac (Serbia), Menomonee Falls, Norton Shores (US), Manila (Philippines)

Affi liateHeadquarters

ProductionSite

Associated companies ChinaSiteNorway

Oslo

DenmarkKarlslunde

SwedenMalmö

AustraliaMelbourne

South AfricaJohannesburg

IndiaBangalore

RussiaMoscow

TurkeyIstanbul

Czech RepublicPrague

HungaryBudapest

PolandWarsaw

FranceParis

Germany (Weidemann)Korbach

CanadaToronto

USMenomonee Falls

USNorton Shores

USMenomonee Falls

MexicoMexico City

BrazilJuniai (near São Paulo)

ChileSantiago de Chile

ChinaHong Kong

ChinaShanghai

ChinaBeijing

ChinaShenzhen

PhilippinesManila

ThailandBangkok

European affi liates, sales and service stations

SerbiaKragujevac

AustriaLinz/Hörsching

Affi liates Sales and service

stations

AustriaVienna

SwitzerlandZurich

SingaporeSingapore

ColombiaBogotá

PeruLima

Foreword .............................................................................................. p. 4 Production and logistics sites ............................................................... p. 6 Product overview .................................................................................. p. 8I Introoductioon .............................................................................................. p. 100 Report structure .................................................................................. p. 12 Sustainability management and strategy at the Wacker Neuson Group p. 14 Materiality analysis ............................................................................... p. 20

II Inddicatorss ................................................................................................. p. 244 01. Business indicators ........................................................................ p. 26 02. Employees .................................................................................... p. 32 03. Procurement and quality ............................................................... p. 44 04. Product stewardship ...................................................................... p. 52 05. Energy and the environment ...........................................................p. 64 06. Compliance ................................................................................... p. 74 07. Donations and social responsibility .................................................p. 80 08. Involvement in associations and initiatives .......................................p. 90 09. Process innovation management ....................................................p. 94

III Apppendixx ............................................................................................... p. 1000 GRI Content Index ............................................................................. p. 102 Assurance statement ......................................................................... p. 106 Consolidation structure ...................................................................... p. 108 Contact and publishing details .......................................................... p. 110 Global presence

Coonteentts2


SUSTAINABILITY REPORT

2014Susstainability – keyy to ssucccesss! 2014Susstainability keyy to ssucccesss!

Wacker Neuson SEPreussenstrasse 41, 80809 Munich, GermanyPhone +49 - (0)89 - 354 02 - 0Fax +49 - (0)89 - 354 02 - 390www.wackerneusongroup.com

Wac

ker

Neu

son

Gro

up

Su

stai

nab

ility

Rep

ort

201

4

Making a mark towardssustainability. With the ECO solutions from Wacker Neuson.


sustainability report sustainability – key to success! 2014...skid steer loaders skid steer...

Documents