the vorwerk annual report 2oo8 - vorwerk-thermomix… · contents a review of vorwerk 4 management...

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The Vorwerk Annual Report 2OO8

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The Vorwerk Annual Report2 O O 8

R E P O R T O N T H E 1 2 5 T H F I N A N C I A L Y E A R

Hands up...

C O N T E N T S

A Review of Vorwerk 4

Management Report 2008 8

125 Years of Vorwerk 11

Implications of the Global Financial Market Crisis 12

Thanks and Outlook 14

Direct Sales, Vorwerk Kobold 17

Direct Sales, JAFRA Cosmetics 20

Direct Sales, Vorwerk Thermomix 22

Direct Sales, Lux Asia Pacific 26

Direct Sales, Vorwerk Feelina 27

Vorwerk Engineering 27

akf group 28

HECTAS Facility Services 30

Vorwerk Carpets 33

Human Resources 33

Assets and Financial Situation 35

Opportunities and Risks 36

Consolidated Financial Statements 2008 39

The Main Companies in the Vorwerk Group 50

Sources / Imprint 52

… and don’t move! There are situations in which this

virtually goes without saying. In business, movement is

expressly required. At least as long as the movement heads

in the right direction. The Vorwerk Annual Report 2008

takes a look at movement in its own inimitable way –

making it a thoroughly entertaining subject.

4

H e a d O f f i c e o f t h e Vo r w e r k G r o u p ( H o l d i n g C o m p a n y )

Vorwerk & Co. KG

Mühlenweg 17–37

42270 Wuppertal, Germany

Telephone +49 202 564-0, Telefax -1301

www.vorwerk.de / www.vorwerk.com

Dr. Jörg Mittelsten Scheid, Wuppertal (Chairman)

Prof. Dr. Pius Baschera, Schaan/Liechtenstein

Günther Busch, Mülheim/Ruhr

Dr. Axel Epe, Düsseldorf

Dipl.-Ing. Rainer Christian Genes, Stuttgart

Verena Klüser, Munich

Jens Mittelsten Scheid, Munich

Karen Schmidt-Paas, Neuss

E x e c u t i v e B o a r d

Peter Oberegger (Managing Partner)

Achim Schwanitz (Managing Partner until 30 June 2008)

Walter Muyres (Executive Board since 1 July 2008,

Managing Partner since 1 January 2009)

Wolfgang Bahlmann (until 30 November 2008)

Eberhard Pothmann (until 28 February 2009)

Jochen Sarrazin (until 30 April 2009)

Reiner Strecker (since 1 March 2009)

S u p e r v i s o r y B o a r d

Subsidiarie s :Austria, Belgium, Brazil, China, Czech Republic, Dominican Republic, France, Germany, Hungary, Indonesia, Italy, Japan, Mexico, Netherlands, Philippines, Poland, Portugal, Russia, Singapore, Spain, Switzerland, Taiwan, Thailand, United States of AmericaDistributors: Argentina, Australia, Brunei, Bulgaria, Canada, Columbia, Croatia, Cyprus, Estonia, Finland, Greece, Hong Kong, Ireland, Israel, Kazakhstan, Latvia, Lebanon, Lithuania, Luxembourg, Malaysia, Morocco, New Zealand, Norway, Peru, Slovakian Republic, Slovenia, South Africa, South Korea, Turkey, Ukraine, United Arab Emirates, United Kingdom, Vietnam

A R E V I E W O F V O R W E R K

5 5

Key Figures for the Vorwerk Group (not including the akf group)

in million 1 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Balance sheet Total 964 1,028 1,062 1,150 1,204 1,756 1,693 1,725 1,643 1,648

Partners’ Equity 519 548 547 568 607 686 750 796 809 856

Partners’ Equity in % 54 53 52 49 50 39 44 46 49 52

Financial Assets 68 144 146 147 144 144 47 52 27 53

Other Fixed Assets 86 78 73 81 69 465 461 438 418 422

Current Assets 808 804 841 922 985 1,136 1,162 1,218 1,183 1,164

Liquid Resources 553 542 525 609 666 688 710 723 640 600

Capital Investments* 34 25 27 37 20 33 38 26 27 48

Depreciation* 28 29 26 27 25 35 47 41 39 38

Personnel Costs 349 351 370 405 401 434 448 455 436 452

Number of Employees 15,311 15,031 19,458 19,516 20,039 23,011 23,163 22,628 22,570 22,255

Self-employed Advisers 23,015 22,904 25,864 26,695 26,986 463,136 464,342 510,857 543,415 555,718

Group Sales (incl. sales tax) 1,268 1,243 1,218 1,231 1,287 1,594 1,772 1,836 1,777 1,832

New Business, akf group** 249 289 303 339 348 480 409 507 546 605

Total Business Volume 1,517 1,532 1,521 1,570 1,635 2,074 2,181 2,343 2,323 2,437

The Vorwerk Group comprised the following business segments in the year 2008:

Direct Sales, Vorwerk Kobold, including Fitted Kitchens (Fitted Kitchens until 30 June 2008) Direct Sales, Vorwerk

Thermomix Direct Sales, Vorwerk Feelina Direct Sales, JAFRA Cosmetics Direct Sales, Lux Asia Pacific in Asia

HECTAS Facility Services akf Financial Services Vorwerk Carpets

A R E V I E W O F V O R W E R K

6

* Without financial investments ** Included in the consolidated statements at equity, 2004 with a 15-month business period

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Business Volume 2008 in million 1

Vorwerk Group: Business Volume 2008

7

akf group 25% (1 605 m)

Carpets 3% (1 79 m)

Lux Asia Pacific 1% (1 36 m)

Kobold incl. Fitted Kitchens

29% (1 696 m)

Thermomix 16% (1 386 m)

HECTAS Facility Services 8% (1 201 m)

Other (1 21 m)

JAFRA Cosmetics 17% (1 409 m)

Feelina (1 3.3 m)

In its 125th anniversary year, the family-owned company Vorwerk was once again able

to maintain the growth levels attained in previous years. The business volume, which comprises

turnovers arising from products and services as well as the new business transacted at akf group,

achieved a best-ever high level of 2.437 billion euros. The larger divisions contributed particularly

to this 5 per cent increase. Sales of the versatile kitchen appliance Thermomix took first place,

again with double-digit growth rates. The international activities in the Kobold vacuum cleaner

business as well as the level of new business transacted at akf group also made a considerable

contribution to growth. The increase would have been even greater had it not been for the affects

of the strong euro. Sales at JAFRA Cosmetics in Mexico and the USA appear lower when the

business volume of the company is stated in euros, lower than the good performance of the staff

and consultants there would justify. Thanks to the overall pleasing development, profit at the

Vorwerk Group could be upheld. The proportion of partners' equity had increased to 52 per cent

by the end of 2008 despite the implications of the global financial market crisis. Vorwerk has,

therefore, great scope for entrepreneurial manoeuvre.

578,000 persons were working for Vorwerk worldwide in 2008, 2.1 per cent more than in

previous year. 556,000 of these people were self-employed direct sales advisers. This means that

as one of the largest direct selling companies in the world, the Vorwerk Group is participating

in the dynamic development of this segment. In this respect Vorwerk is the company where all

reputable forms of direct sales are to be found.

Vorwerk was able to successfully implement its strategy of continued growth and

of providing additional impulses across many areas, particularly in its core direct selling business.

Growth drivers at the Vorwerk Group are the deeper penetration of existing and the opening-up

of new markets, the targeted development of management staff, quality and innovation in terms

of products, services and sales channels as well as the adaptation of the company to the necessities

of the global economy. The diversified structure in terms of products, sales channels and regions

has proved itself time and again. Vorwerk is divided into nine divisions with subsidiaries in 24

countries on four continents. Vorwerk products are available in another 33 countries around the

world through distributors. The dynamic degree of growth was not only accomplished abroad:

the German Thermomix sales organisation achieved a high level of expansion as did the

M A N A G E M E N T R E P O R T

8

When the continents drifted apart during the Mesozoic Era, there are said to have been some heart-rending farewell scenes.

1 0

akf group with its volume of new business transacted within Germany. The evident decline

over recent years in the Kobold vacuum cleaner business in Germany has slowed consider-

ably and sales have almost stabilised. The overall proportion achieved abroad in 2008 was

two percentage points above previous year with 59 per cent. In terms only of direct selling,

it accounts for over 80 per cent and is at the level as previous year.

Vorwerk continues to see a large growth potential for the direct sales business and its

direct approach towards customers through highly motivated advisers. Customers, not exactly

‘spoiled’ in many parts of the world in terms of service quality, appreciate the possibilities offered

by direct selling i.e. the opportunity to test the products directly at home without any commit-

ment and to satisfy oneself of their quality and performance. Further, there is a great appeal

– particularly in developing and emerging countries – in the opportunities offered for earnings

and independence as well as for personal and career development through being a direct sales

adviser. Also in the other divisions – whether it be at akf group, HECTAS Facility Services or

Vorwerk Carpets – the direct approach towards customers has proved a reliable guarantee for

sustained commercial success with a high degree of satisfaction on both sides.

Vorwerk attaches great importance to fairness in relationships with customers and

advisers and supports sensible efforts to protect consumers and advisers. In this respect there

are no initial investments necessary at Vorwerk for training or demonstration materials. Sales

representatives working in companies of the Vorwerk Group do not have to attempt to resell prod-

ucts at their own risk, either. Also, for many years previously, Vorwerk had already contractually

ensured the customers' no-risk right of withdrawal from a direct sales purchase contract which has

in the meantime been regulated by law. Sustained success in direct selling presupposes long-term

satisfaction among both customers and advisers. This necessitates products of high quality and

sales systems that are of good standing. To ensure standards in direct selling, Vorwerk together

with other companies in the business that place similarly high demands on their workforce are

organised in the Federal Direct Selling Association of Germany (BDD) and in Direct Selling

Europe (DSE). Member companies undertake to comply with the voluntary code of conduct

from the associations, a code that goes beyond the statutory provisions.

Vorwerk was able to further extend its competence as one of the largest and most versatile

direct sales companies in the world with the deeper penetration of existing and the opening-up

of new markets. Awareness for the Vorwerk umbrella brand as well as for the respective product

trademarks again increased. Anyone wishing to make a successful career in direct selling will

experience Vorwerk as one of the prime addresses.

M A N A G E M E N T R E P O R T

1 1

Customers know and appreciate the Vorwerk brand as one that stands for high quality

and durability. The confidence and trust of consumers that has been acquired over decades will

have to be maintained and further developed. Therefore, in 2008 Vowerk approached the issues

of customer satisfaction and service even more systematically than previously. The measures

aimed at linking the Vorwerk brand with the concerns of families were continued. The initiatives

“Family Manager of the Year” and “Vorwerk Family Study” represent a contribution to the socio-

political debate regarding the recognition of work in the family and give the Vorwerk brand an

additional, positive image.

1 2 5 Ye a r s o f Vo r w e r k

125 years of Vorwerk – this anniversary in the year 2008 provided an opportunity to grate-

fully look back and to learn for the future from the successes and deficiencies of the past. Throughout

the history of the company many timelessly valid success factors can be identified. Firstly, the inde-

pendence of the family-owned company with its roots in Germany and an owner family, Mittelsten

Scheid, which fully supports the business model and the executive staff, which places the wellbeing

of the company above individual interests and which is interested in the sustained success of the com-

pany. Secondly, the resolute nearness to people – whether they be customers, advisers or staff – rep-

resents a structural advantage for Vorwerk. Thirdly, the constant will to change that made transition

possible from the “Barmer Teppichfabrik” to an international, much diversified group of companies

with a focus on direct selling. Fourthly and not least of all, the entrepreneurial courage needed to go

unconventional ways and to venture into new terrain. Even although success could not be achieved

in everything that was planned and tackled in the 125 years of business history, more was achieved

than would have been the case by persisting to pursue conventional approaches. Vorwerk has every

reason to look back with satisfaction and to be self-assured when looking forward.

This anniversary was celebrated with staff in each individual company to a modest yet

dignified extent. A decision was taken against having one large event for all, mindful of the

restructuring process that had been implemented at the same time in certain parts of the com-

pany. Change also typified the year 2008 for Vorwerk far more than other years and was thus

a significant one. The generation change in the Executive Board as well as changes at the top

1 2

Der Grad der Internationalisierung der Vorwerk Gruppe hat weiter zugenommen. Der

Anteil des außerhalb Deutschlands erzielten Geschäftsvolumens liegt bei 56 Prozent an. Bezogen

auf das Kerngeschäft Direktvertrieb beträgt der Auslandsanteil sogar 77 Prozent.

Vorwerk gelang es, die weltweite Marktführerschaft bei hochwertigen Direktvertriebs-

produkten (‚High Ticket’) auszubauen und seine starke Positionen im gesamten Direktvertrieb

zu festigen.

Wesentlichen Anteil am Erfolg hat die gelungene

Diversifizierung in verschiedene Produkte und Märkte. Der Einstieg von Vorwerk in den

Direktvertrieb von Kosmetik, Gesichts- und Körperpflege durch den Kauf von Jafra Cosmetics

in den USA im Jahr 2004 hat die Vertriebslücke auf dem amerikanischen Kontinent geschlossen.

Vorwerk ist damit ein global operierendes Unternehmen. Dieser jüngste Geschäftsbereich in der

Vorwerk Gruppe ist inzwischen in der Unternehmenskultur und in den Strukturen des Vorwerk

Konzerns fest verankert.

Herausragende Wachstumsquellen waren im Jahr 2006 bei Jafra Cosmetics das Geschäft

in Mexiko mit einem Umsatzplus von 15 Prozent. Im Raumpflegebereich ‚Kobold’ wuchsen

besonders die Geschäfte in China und in Italien sowie bei Lux Asia Pacific in Indonesien. Beim

Küchengerätegeschäft trugen die Wachstumsergebnisse in Italien, in Deutschland und in Spanien

besonders zum Erfolg bei. Die nach der Equity-Methode in das Geschäftsvolumen einbezogene

akf Bankengruppe mit ihren Finanzdienstleistungen ragte mit einem Zuwachs beim Neugeschäft

heraus. Größte Herausforderung blieb der Raumpflegebereich in Deutschland mit einer nicht

zufriedenstellenden Entwicklung. Auch Lux Asia Pacific konnte seine Wachstumspotenziale nicht

in vollem Umfang ausschöpfen.

M A N A G E M E N T R E P O R T

in large divisions placed higher demands on staff and management. Achim Schwanitz retired

as Managing Partner after 14 years of service; Walter Muyres, a personality connected with the

company for decades, was appointed Managing Partner and now chairs the Vorwerk Group

together with Peter Oberegger. The termination of the fitted kitchen business and the resolution

to suspend activities in Feelina Ironing Systems were grave entrepreneurial decisions that had

direct consequences on the staff and advisers working there. Important steps to modernise the

entire Kobold direct sales operations were prepared at Kobold Deutschland in 2008, steps that

now need to be communicated and implemented. Besides this, large expansive projects such as

the commencement of JAFRA operations in Brazil, the restructuring of the Lux Asia Pacific sales

organisation in Japan, the construction of new manufacturing facilities for JAFRA Cosmetics in

Mexico, the high increase in Thermomix sales figures, the high level of growth in new business

at akf group as well as the step-by-step modernisation and standardisation of the IT landscape

also required the attention of management.

I m p l i c a t i o n s o f t h e G l o b a l F i n a n c i a l M a r k e t C r i s i s

In the last few weeks of 2008 there were no direct implications from the financial market

crisis that could be felt on the activities of Vorwerk – with two exceptions. Firstly, the neces-

sity to refinance the akf group with funds from commercial banks will represent a considerable

challenge with a view to the year 2009 and somewhat dulls the expectations for growth. Secondly,

among the financial assets at the Vorwerk Group there was a decline in the unrealised gains in

securities held. However, the fall in the market values is much lower than the comparable indices.

Due to the good economic situation of the company, both these implications will be manageable

for the Vorwerk Group.

The extent to which other concrete consequences

may ensue for Vorwerk from the global financial crisis cannot currently be predicted. It is

probable that Vorwerk, too, will be affected. However, there are a number of indices which

would suggest that the crisis will not hit Vorwerk with absolute severity. The business model is based

to a great extent on the direct approach towards customers. The personal demonstration of the

products and individual talks to customers is best suited to overcoming scepticism and reluctance

"It's moving!" Or isn’t it? Or is it?

to make a purchase. And in economically difficult times it may become more attractive to have

a job in direct selling to provide a main or supplementary source of income. Vorwerk focuses

resolutely on quality for its products and services and is, therefore, not compelled to become

involved in ruinous price wars. Not least of all, Vorwerk as a company in family ownership

with a high proportion of partners' equity is largely independent of external financial sources –

with the exception of the refinancing possibilities needed for the akf group.

There have been no incidents of any particular significance that have occurred since

the close of the 2008 balance sheet.

T h a n k s a n d O u t l o o k

The Executive Board would like to thank all staff as well as all direct sales advisers

throughout the world for the commitment shown for the interests of the company. The good and

trustworthy cooperation at Vorwerk is an important guarantee for ensuring that the forthcoming

challenges can be successfully met.

Overcoming the consequences of the worldwide economic crisis has, in the opinion of

the Executive Board, the very highest priority for management staff at all levels. In the direct

sales organisations it will be a question of emphasising the income and career opportunities and of

always keeping the sales systems attractive, even if this means a modernisation as e.g. at Kobold

Deutschland in order to attract new sales staff. The outstanding product quality and improving

service excellence remain important arguments in favour of Vorwerk both from a customer as

well as an adviser point of view. This enables trust to be established and enhanced, something

that is particularly important in a crisis. In the services sector covered by HECTAS, akf and

Vorwerk Carpets it will be a case of continuing with the distinct orientation towards small and

medium-sized companies. Vorwerk will continue along its secure path of low risk and long-term

alignment with regard to its policy for investments in securities.

M A N A G E M E N T R E P O R T

1 4

Classic horse trading generally involves some serious wrangling. But to achieve a real win-win situation, both parties should be willing to make a move and meet each other half-way.

Divisional turnover (incl. sales tax) in million 1

2005 2006 2007 2008

Direct Sales 1,497.1 1,555.7 1,495.5 1,530.5

Division Kobold incl. Fitted Kitchens* 758.5 746.9 686.7 695.8

Division Thermomix 261.2 291.1 330.8 386.2

Division Feelina 3.5 3.7 3.8 3.3

Division JAFRA Cosmetics 399.3 447.2 432.2 409.1

Division Lux Asia Pacific 74.6 66.8 42.0 35.9

HECTAS Facility Services 191.2 187.6 186.6 201.2

Vorwerk Carpets 69.8 74.1 77.9 79.1

Others 13.8 18.2 16.9 21.1

Group turnover 1,771.9 1,835.6 1,776.9 1,831.7

New business. akf group** 409.5 507.0 546.1 605.1

Total business volume 2,181.4 2,342.6 2,323.0 2,436.8

*Fitted Kitchens until 30 June 2008 **akf group included in the consolidated statements at equity

Despite the financial market crisis, Vorwerk still intends to maintain the volume

of business and profit at the same level in 2009 as that achieved in previous year. This ambitious

target will, however, require particular efforts in terms of cost control and an undiminished

willingness to resolutely implement the changes and renewal processes already initiated. Once

the global economic turmoil has been overcome, new opportunities will open up for strong

companies, opportunities that Vorwerk will then take. Vorwerk, therefore, will adapt its growth

strategy for 2009 to the altered general circumstances. The growth drivers will be reassessed and

supplemented with other aspects. Entrepreneurship and accountability, features of any family-

owned company, should become even more evident among management.

The global brand strategy will be revised. New avenues will be pursued in terms of

management development programmes. And the process of internationalisation will be advanced

more systematically and resolutely than in the past.

M A N A G E M E N T R E P O R T

1 6

1 7

D i r e c t S a l e s , Vo r w e r k K o b o l d

For 80 years Vorwerk’s Kobold vacuum cleaner has set the standard for optimal

cleaning of the home. Almost 100 million cleaners and attachment appliances have left the

Vorwerk Elektrowerke manufacturing facilities since 1929. The Kobold is the market leader in

Italy and a very strong brand for high-quality vacuum cleaners worldwide. Even older models

– as used second-hand appliances – do their job in households around the world and leave some

new appliances from other manufacturers well behind them in terms of quality and reliability.

As was the case with the preceding models, the upright vacuum cleaner Kobold VK 136, recom-

mended for allergy sufferers because it is air-tight and dependable, and the Tiger canister-type

version are particularly environmentally-friendly on account of their low energy consumption

and long durability. In combination with the motorised brush, the Pulilux hard-floor attachment

and the Polsterboy upholstery cleaner as well as many other different accessories, the Vorwerk

vacuum cleaner offers a complete solution for cleaning in the household using dry methods. The

strict German consumer watchdog “Stiftung Warentest” rated the Tiger in 2008 – as the Kobold

previously – best in class. Kobold and Tiger are demonstrated and sold directly at customers’

homes and depending upon the country-specific customs prevailing either with or without prior

announcement of a visit.

The Kobold Division could increase its sales volume with vacuum cleaners in the

year under review by 3 per cent to 683 million euros (adjusted to take account of the turnover

at Vorwerk Fitted Kitchens) and was thus able to reverse the negative trend of the previous year.

This was mainly due to the positive development in major markets.

In Italy, the strongest market, the Vorwerk sales organisation there was able to raise sales

by 6 per cent to 375 million euros. Folletto, the Italian name for the Kobold, is a synonym in Italy

for high-quality vacuum cleaners. The position as market leader is undisputed. Some one million

appliances are supplied each year. Despite the enormous market significance that Vorwerk has

now enjoyed for 70 years in Italy with vacuum cleaners, the subsidiary company there records

M A N A G E M E N T R E P O R T K O B O L D

M A N A G E M E N T R E P O R T K O B O L D

1 8

consistent growth from year to year and thus proves that even established and deeply-penetrated

markets can offer growth perspectives for direct selling. The standing and development of Kobold

in Italy is the result of resolute, persistent optimisation of the sales system in small steps, so as not

to overwhelm the experienced staff in direct selling but to gradually take them along the path of

change. Folletto is currently strengthening its customer care activities e.g. by optimising supply

lines for consumables and financing options.

Turnover at Kobold Germany in 2008 could just about be maintained at 213 million

euros after the declines experienced in the three previous years. The Executive Board regards

this as a partial success of great significance. The profound restructuring of the Kobold sales

organisation is now entering its decisive phase. The most fundamental step – the adoption of

new direct sales concepts to complement the previous sales model – is planned for 2009. From

the restructuring of the German Kobold direct sales organisation, divisional management does

not only hope to achieve long-term growth impulses for Germany but to learn more about the

implications of innovations for the entire division.

Vorwerk Kobold is also progressing well in China. 6 per cent growth in sales

volumes is an excellent performance in view of the legal framework in China, one that is not

exactly conducive to direct selling. The current continued focus on the urban centres Shanghai

and Beijing and the optimised sales system practised there may be applied to other regions of

China. To this end, Vorwerk wishes to develop management staff from the existing organisation

to take on leadership roles there.

By contrast, the Kobold sales organisation in Spain and France could not develop to the

desired degree. The affects of the already long-continuing national economic slowdown in Spain,

together with an erratic increase in the number of unemployed persons and very widespread

uncertainty among households have all had a choking effect.

Sales in Austria could be stabilised with a newly-introduced sales system. The develop-

ment in the Czech Republic has been pleasing as has the trend in exports through distributors.

The establishment of the business in Russia is also developing very positively. This means that

a stable base has been created to enable the Kobold vacuum cleaner business, which is today

highly dependent on Italy and Germany, to be more diversified in the future.

There was an Old Lady of Chertsey,

Who made a remarkable curtsey;

She twirled round and round,

Till she sunk underground,

Which distressed all the people of Chertsey.

There was a Young Lady of Portugal,

Whose ideas were excessively nautical:

She climbed up a tree,

To examine the sea,

But declared she would never leave Portugal.

There was an Old Man on a hill,

Who seldom, if ever, stood still;

He ran up and down,

In his Grandmother's gown,

Which adorned that Old Man on a hill.

There was a Young Lady whose eyes,

Were unique as to colour and size;

When she opened them wide,

People all turned aside,

And started away in surprise.

There was an Old Man with a flute,

A sarpint ran into his boot;

But he played day and night,

Till the sarpint took flight,

And avoided that man with a flute.

Just pulling your leg

2 0

M A N A G E M E N T R E P O R T K O B O L D / J A F R A C O S M E T I C S

The fitted kitchen company, a business that was pursued only in Germany and was a

part of the Kobold Division, ceased operations in 2008 on the basis of the resolutions passed

in 2007. In view of the prevailing market circumstances there were no perspectives for a viable

future. The negative implications for staff in the production and administration areas could be

minimised through comprehensive in-house and social measures. Advisers and management staff

were presented with alternatives within the Vorwerk Group.

D i r e c t S a l e s , J A F R A C o s m e t i c s

Facial and body care, decorative cosmetics, fragrances and spa – the product portfolio at

JAFRA covers the entire spectrum of innovative cosmetics. By selling directly to the customer

at home, it is possible to explain and make personally perceivable the high product quality and,

in addition, provide consultation on the proper application. These distinct advantages of direct

selling when compared with other sales approaches can be optimally applied in the cosmetics

business. This is also the reason why the cosmetics segment is the most rapidly growing one of

all in direct selling.

JAFRA has constantly further developed and refined its products and sales systems over

the fifty years since its establishment. Cosmetics from the house of JAFRA are developed in the

company’s own R&D facilities in Westlake (USA) as well as in close cooperation with laboratories in

France and Switzerland. They are manufactured at JAFRA in Mexico in accordance with Vorwerk

quality standards. In this way the high quality level is assured and customers receive products that

are optimally matched to meet individual needs. And in some specific lines e.g. the Royal Jelly

anti-ageing products, JAFRA has succeeded in attaining a unique market position.

The attractiveness of a job in the JAFRA direct sales organisation is a success factor that is

just as important as the quality of the products. At JAFRA everyone can become financially and

occupationally independent through self-employment and a free allocation of time spent working.

It is particularly in countries having few interesting occupational opportunities for women that

JAFRA often represents the only practicable way of becoming self-employed without any capital

and without any great bureaucratic hurdles needing to be overcome. Since the consultants decide

for themselves how much time they wish to devote to their work in direct selling, this job suits

women who also have another employment or who would like to reconcile family management

with career opportunities. Since personal success directly determines income and career

development, the system is considered attractive and fair. All management staff started work

as consultants and they have developed into their present day positions thanks to their own

personal commitment. Dreams can be inspired through such examples.

Sales at JAFRA grew worldwide by 2 per cent to 602 million US dollars. It was

only the devaluation of the peso, the currency in the largest market Mexico, which prevented a

distinct increase in the figures in US dollars. Concerning the number of consultants, too, a new

record level was achieved with a sales force of some 526,000. And so JAFRA’s success story under

Vorwerk’s leadership continues.

JAFRA is the market leader in Mexico with cosmetics; the brand is well-known and is

associated not only with high quality but also with attractive career perspectives and opportuni-

ties. Sales there in local currency increased by 6.2 per cent to 5.3 billion pesos (482 million US

dollars). The role of JAFRA as the No. 1 in the cosmetics business could be further enhanced. The

Mexican sales organisation successfully sustained its position against a recessive trend throughout

the country and was able to develop far better than other direct sellers in Mexico. The outstand-

ing management at the regional level represents a particular strength. These people contribute

to the dynamic development of the business mainly in their own responsibility and are optimally

supported by national sales management.

JAFRA has two sales organisations in the USA and in this way takes into account the

difference between English and Spanish as native languages. Turnover declined here in 2008.

Sales of 77 million US dollars were 16 per cent below those of previous year. New management

in the USA will try to curb this trend. One aspect of particular interest in the USA is management

development, an issue which will be far more targeted in the future. Further, the commission

system was improved.

2 1

2 2

The development was inconsistent in the relatively small JAFRA country companies

in Europe. Good progress in Italy had to be seen in the light of stagnating or declining turnover

levels in other countries. Sales in Europe amounted to 27 million euros (39 million US dollars).

A significant milestone in 2008 was the establishment of JAFRA’s own sales company

in the growth market of Brazil. JAFRA has good experience from past years and can build on a

determined base of previously independent JAFRA sales partners. The insights that can be gained

here will be of significance for the whole of South America.

JAFRA has set itself the objective for the future of improving still further the

leadership and training of sales consultants, of positioning the products more intensively in the

up-market quality segment and of expanding the business into other countries of Latin America,

Eastern Europe and Asia. This should enable the success of JAFRA to be more widely supported

from several countries thus gradually reducing JAFRA’s continued very strong dependence on

the success achieved in Mexico. Vorwerk is investing at JAFRA in a new manufacturing facility

in Mexico for cosmetics. This will – in the same way as the already established distribution centre

– support the course of expansion and enhance, in addition, the quality and delivery reliability.

D i r e c t S a l e s , Vo r w e r k T h e r m o m i x

A kitchen appliance that leaves a lasting impression! It combines all the functions of

a universal kitchen processor and, in addition, it can cook and simmer and even enable less

proficient cooks to quickly and simply prepare healthy meals from fresh ingredients. Anyone

who experiences the Vorwerk Thermomix in use in the kitchen is quickly convinced that such

an appliance should be a part of the basic equipment in every household and is something that

no-one will want to do without it in the future.

The Thermomix is the prototype of a direct selling product: unique, complex in its

functionality and versatile in its application – with benefits that are not easily recognisable at

first sight. It is not an exceptional product feature that can be highlighted in the specialised retail

outlet or advertising, but the intelligent combination of partial functions that makes it special.

Curiosity is quickly aroused among customers. And surprising effects are guaranteed during the

M A N A G E M E N T R E P O RT J A F R A C O S M E T I C S / T H E R M O M I X

2 3

In light of the brake-light speed of 1,079,252,848.8 km/h, driving right up behind another car is of little real advantage. Because tailgaters only get to know the intentions of the driver in front a billionth of a second faster than anyone else.

2 4

demonstration. Here it is often only a small step from the initial enthusiasm to a purchase. The

qualified presentation at home, in which the Thermomix is demonstrated and the delicacies

enjoyed, allows the special features of the appliance to be convincingly highlighted and the

benefits clearly shown, something which arouses the desire to purchase. Since this is so successful

with the Thermomix, not only is the number of customers constantly growing but the number

of representatives too.

The Thermomix Division has managed to convincingly combine a product, sales

system and growth strategy into a successful business model. Thermomix achieved a turnover

of 386 million euros worldwide with an increase of 17 per cent. No other Vorwerk company is

growing as dynamically as this. In this respect it has been possible to support the business

success from an increasing number of countries and thus to further strengthen independency

from regional fluctuations. Besides the core countries of Italy and Spain other, to-date smaller

countries are developing considerably. In this context the talk today cannot only be of a success-

ful product for Southern Europe but of one for the whole of Europe. For the very first time some

400,000 appliances were sold worldwide, a fact which also presented challenges for production

and distribution operations.

Italy just had the edge in 2008 in the sportsmanlike competition to be ranked the largest

Thermomix company. The Vorwerk sales organisation there, Contempora, achieved an in-

crease in turnover of 7 per cent to 114 million euros for its “Bimby”, the name of the Thermomix

appliance in Italy i.e. another new record. Spain, in the previous year just ahead of Italy, had to

accept a decrease in 2008 with sales standing at 102 million euros. The cause of this is not only

to be found in the already difficult economic situation in Spain before the global financial market

crisis, but also in the structural consolidation, something Italy has already been through. The

measures initiated represent a good basis to enable Spain to once again grow at rates achieved

in previous years. However, the financial crisis will probably hit Spain harder than most other

European countries.

The most pleasing signal in the Thermomix Division was the extraordinary success in

Germany. The sales volume here was increased remarkably by 60 per cent to 66 million euros.

Germany was thus able to impressively maintain its third place ranking among the largest Thermomix

countries. The readjustments made in recent years, whilst accepting possible losses in the num-

ber of representatives, are now beginning to pay off to the full. A particularly attractive finance

M A N A G E M E N T R E P O RT T H E R M O M I X

Movement actuator

Cold buffetBanana skinAlarm clockAttractive woman/man Prize moneySteep slopeMeter maidContractionsRain showerDateFleasHungerCholesterol levelThunderstormSeven-league boots Alarm systemSwarm of waspsEmpty iceboxDay’s work over Bathroom scalesSpecial offersMirageClosing timeA child’s cries

Movement inhibitor

Tight skirtWarm bedWheel clampTraffic jamDelayLeg in castHolding patterStop signSpeed limitDriver wearing a hatLonesome islandPrice of gasolineBall and chainRich mealBraTirednessHandcuffsDoldrumsCornSteep ascentHigh heelsChockExcess weightLimp biscuit

We moveWe are moved

We would move...

2 6

model was created as an anniversary-year campaign and this led to additional purchases. The

sales team is highly motivated and success-oriented and as a result the positive development will

continue.

The development in France (plus 42 per cent) and Poland (plus 46 per cent) was

similarly dynamic. In Portugal, the country with the most sustainable growth rates in recent

years, the sales performance could once again be improved, this time by 36 per cent.

The basis for success is a cross-border, uniform understanding of “best practice” and

its resolute application. This will now be adopted in new markets. The small yet successfully-

growing sales organisation in Taiwan and the establishment of a Thermomix sales unit in Mexico

represent two bridgeheads for Asia and for the Americas. Their development will demonstrate

the degree of unutilised potential for Thermomix. The export business to other countries with

sales through independent distributors is also growing noticeably and is an additional pointer to

the fact that the Thermomix is an appliance for the future for all manner of cuisines and tastes.

D i r e c t S a l e s , L u x A s i a P a c i f i c

A direct sales turnover of 36 million euros at Lux Asia Pacific – the organisation primarily

selling vacuum cleaners and water purifiers under the Lux brand throughout many parts of Asia

– was well below expectations and poorer than the development in the previous year. In particular,

it still has not been possible to lead the business in Japan back to the successes of earlier years

despite fundamental restructuring. Additionally, the adjustment of the sales lines in Indonesia

resulted in lower sales volumes. There are products and concepts in the future-oriented field

of water purification that have not yet been satisfactorily implemented. To be successful in this

area, it is essential to be able to offer an affordable product for use in private households, one

that is technically sound and reliable and which is able to compete against the keen competition

represented by bottled water.

The Vorwerk strategy for Asia envisages further gradual integration into the Vorwerk

organisation of the Lux Asia Pacific country companies following the already-implemented

change-over to Vorwerk appliances for some individual product lines. The successes of Vorwerk

Kobold in China and the encouraging progress of Thermomix in Taiwan show that Asia will

continue to be of more and more significance for Vorwerk. Lux Asia Pacific will also make its

contribution to this.

M A N A G E M E N T R E P O RT T H E R M O M I X / L U X A S I A PA C I F I C

D i r e c t S a l e s , Vo r w e r k F e e l i n a

It is a part of the dynamism of the family-owned company Vorwerk that new things are

always being tried out, even though they may turn out to be unsuccessful. At the beginning of

the decade a new market trend became apparent with the emergence of ironing systems. With

its competence in and around the household and family Vorwerk felt that it would be able to

participate in this development and was quickly able to offer a high-quality ironing system,

Feelina, from its own production facilities. It is a great help in doing this unpopular chore.

However, shortly after the launch of the Feelina in 2002, the still young market was

already moving in favour of the less convenient and efficient yet much more compact and less

expensive ironing stations that manage without an intigrated ironing board. The market for fully-

equipped systems like the Feelina stagnated from then onwards. Moreover, it was more difficult

than expected to find suitable advisers for the direct sale of ironing systems without jeopardising

the positive development of the similarly-structured Thermomix sales organisation. Both rely on

a presentation in the form of a demonstration party in the home.

Other considerations, too, regarding separate sales channels in order to achieve a higher

and thereby economic number of units find their limitations in any realistic assessment of the

market. So the only decision that remained was to suspend the activities of the Feelina sales force

in the first quarter of 2009. Staff and consultants were made offers to work in other sections of

Vorwerk.

Vo r w e r k E n g i n e e r i n g

The Vorwerk Engineering Division with its main facilities in Wuppertal (Germany) as well

as with production sites at Cloyes (France), Arcore (Italy) and Shanghai (China) is responsible

for the development and manufacture of household appliances for the direct sales activities. The

special requirements entailed in this form of selling – demonstrability and dependability – are

directly considered during the inception process. More than 18 million euros were invested in R&D

by the Vorwerk Group in 2008. Engineers at R&D are expected to have the ability and willingness

to embrace the view of the direct selling organisations. By the same token, the development of

the products directly reflects the practical experience of the sales force in the households. As a

consequence, Vorwerk Engineering thinks and acts differently to colleagues in other companies:

M A N A G E M E N T R E P O RT F E E L I N A / E N G I N E E R I N G

2 7

2 8

it is not the ‘cheap-as-possible’ mass production and competition orientation that is in focus, but

far more it is the quality and sensible, unique features of the appliance, demonstrable in direct

selling, that are to the fore – like the filter technology of the Kobold that make it suitable for allergy

sufferers or the electronically-controlled motor in the Thermomix that creates hitherto unknown

possibilities for stirring and chopping. “Thinking Differently” is the motto at Vorwerk Engineer-

ing, also in terms of a demarcation towards manufacturers producing for the retail trade.

Vorwerk Engineering relies on its own production in core

areas. This means that the depth of manufacturing is greater than average. Quality-decisive com-

ponents such as injection moulded parts or the motors are entirely manufactured at Vorwerk. The

international launch of the new Kobold VK 136 vacuum cleaner with its likewise new motorised

brush together with the great increase in the Thermomix sales figures meant that Vorwerk En-

gineering had once again to demonstrate its innovative power. Against this background, it was

again possible to enhance the already high product quality across the entire range and to further

improve the process excellence.

The exclusivity of Vorwerk Engineering, to only produce for its own company,

makes the manufacturing operation and the economic success of this part of the company very

dependent on the planned and then realised sales volumes achieved by the sales organisations.

Since sales of vacuum cleaners and water purifiers at Kobold and Lux Asia Pacific are behind the

mid-term plans, the high level of hours in the work time accounts of the staff at the plants concerned

– Wuppertal and Shanghai – will have to be reduced over the next few months. Utilisation at the

facilities in France was, by comparison, very good thanks to the high sales figures achieved with

the Thermomix.

a k f g r o u p

akf group continues to enjoy ever-growing interest in its offerings for the leasing and

financing of mobile assets, in particular cars and commercial vehicles but also manufacturing

technology and other equipment. akf was able to improve its level of new business transacted

by 11 per cent to 605 million euros and was thus able to maintain its position despite a market

trend reflecting fewer new car registrations. akf even did better than expected in the particularly chal-

lenging dealer business segment. The market obviously wants to have rapid and uncomplicated

financial solutions, something which akf as a partner of small and medium-sized companies can

M A N A G E M E N T R E P O R T E N G E N E E R I N G / A K F G R O U P

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3 0

M A N A G E M E N T R E P O R T A K F G R O U P / H E C TA S

provide better than leasing companies with an attachment to a large high-street bank or an auto-

motive manufacturer. It was this group of small and medium-sized companies in particular that

took advantage of the leasing and finance deals offered by akf, and this to an over-proportionate

extent. akf achieved this growth in new business against a background of satisfactory economic

parameters. In this respect the careful risk assessment process and the conservative estimation of

residual values again proved their worth. akf group is a sound financial institute.

Given its good positioning on the German market, akf continued with its efforts towards

internationalisation. Irrespective of the difficult economic situation in Spain, expansion is con-

tinuing there according to plan, just as it is in Poland. akf is also extending its sphere of activity

in Germany with targeted finance schemes for customers in the yachting segment, one that is

enjoying growing demand.

The success of akf shows that there is a strong and growing long-term role that

independent leasing companies can play in Germany. akf will also maintain this position in the

current financial crisis. In the last few weeks of 2008 some lenders, themselves under pressure to

increase the ratio of their core capital to balance sheet total, directly reduced refinancing funds

for other credit institutions or failed to implement prospective credit lines. However, in the

following weeks the refinancing possibilities for akf improved again quite distinctly. A market

adjustment in favour of larger leasing institutes at the expense of independent financiers of small

and medium-sized companies as a consequence of the crisis would be counter productive for the

stability of the German financial system.

akf group is included in Vorwerk’s consolidated financial statements at equity.

H E C TA S F a c i l i t y S e r v i c e s

HECTAS Facility Services is a Europe-wide, highly professional, industrial services

company operating in the infrastructure facility management sector. This strategic alignment was

resolutely pursued again in 2008. HECTAS was able to increase its sales volumes in the Euro-

pean markets for infrastructural facility management by 8 per cent to 201 million euros despite

some very difficult market circumstances. A distinct sales orientation in the acquisition of new

customers, a resolute customer care approach, an increase in the number of existent customers

as well as an acquisition in Austria played a decisive role in HECTAS passing the 200 million

euro mark for the first time.

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3 2

Particularly pleasing was the development of business in the Benelux states and in Eastern

Europe with sales growing at double-digit rates. HECTAS has been firmly established on the

market in the Netherlands for many decades. In Belgium and Luxemburg HECTAS is develop-

ing with contracts that are generally generated through customer relationships to multinational

groups. Additional new business is then acquired locally from this starting point. In Eastern

Europe too – a region with low wage levels and, therefore, still today low overall contract values

– HECTAS often follows an expanding customer from Western Europe and then gradually starts

to acquire a standing in that country.

HECTAS successfully completed the acquisition of the traditional Vienna-based Heim-

lich company in Austria. This has distinctly enhanced the national market coverage of HECTAS

Austria and it has thus become the fifth largest service company in infrastructural facility

management there.

In Germany, HECTAS’s most significant market, three large contracts were lost in

the recurring invitation-to-tender rounds. These losses in turnover could not be completely or

quickly compensated for with sales activities to acquire new accounts. Consequently, HECTAS

in Germany recorded a decline in turnover in 2008. The required restructuring measures in

Germany were promptly initiated and they encumber the results in the year under review.

The increasingly competitive situation in some European countries again led to

more intense pressure on market pricing in 2008 and consequently to a negative development in

margins. HECTAS is countering this trend with differentiated, quality proposals. The approach

adopted by HECTAS of targeted and resolute process optimisation is intended to convince exist-

ing and new customers of HECTAS’s services portfolio and so ensure that improved margins

can be achieved in the future. Against the background of its mid and long-term growth strategy,

HECTAS regards the continuing consolidation of the markets for infrastructural facility manage-

ment as an opportunity for the further development of the company.

The current financial market crisis and the expected downturn in the economy will

present HECTAS with some great challenges. The reputation among customers, the competence

of the company and its staff as well as innovations with regard to the type and extent of the

services provided will help to keep the implications to a minimum.

M A N A G E M E N T R E P O R T H E C TA S

Vo r w e r k C a r p e t s

Vorwerk Carpets – the origin of the family-owned company Vorwerk – has further

enhanced its position as a manufacturer of high-quality carpeting in its 125th anniversary year.

Quality and design have always been the key to success in this segment. It pays not to enter into

any ruinous price competition in periods when markets are difficult. It is far better to focus on

quality and service. Turnover could be increased by 2 per cent to 79 million euros despite a very

difficult market environment. According to a customer research study, Vorwerk Carpets has the

best degree of availability and the best reputation among specialised retailers in Germany.

Foreign countries, too, are increasingly becoming interested in carpets bearing the Vorwerk

brand. Exports account for some 30 per cent. The strategic objective of the Carpets Division is to

have a greater presence abroad and thereby to become less dependent on domestic trends.

Vorwerk resolutely invests in new technologies and new market segments. The corner-

stone was laid in 2008 for the company’s own carpet tile collection and access was gained to the

luxury hotel segment. Supported by the European Fund for Regional Development, considerable

investments are being made in the improvement and extension of the plant in Hamelin (Germany).

H u m a n R e s o u r c e s

The number of people working for Vorwerk worldwide – in other words the employed

staff including those at akf group as well as self-employed advisers (sales representatives) – increased in

2008 to an average figure of 578,193. The slight decrease in the number of employees to present-

day 22,255 persons (without akf) is attributable to reductions in headcount at Lux Asia Pacific in

some Asian countries. By contrast, employment at companies of the Vorwerk Group in Germany

and Europe increased overall. The distinct rise in the number of self-employed advisers by more

than 12,000 to a total figure of 555,718 persons is mainly due to the success of JAFRA Cosmetics

and Vorwerk Thermomix.

People development at Vorwerk is especially aligned to generating an adequate number of

management staff in the sales areas through appropriate personnel development measures and attrac-

tive programmes for young persons just commencing their careers. A lack of such management staff

is a decisive limiting factor on the growth perspectives of the company, particularly in direct selling.

Of course, there are limits to the extent to which staff can be exchanged between the divisions at

levels below that of senior management due to the diversity of the product portfolio and the different

sales channels, the regional particularities and not least of all the differing cultures and languages that

M A N A G E M E N T R E P O R T C A R P E T S / H U M A N R E S O U R C E S

3 3

3 4

Staff (annual average) 2005 2006 2007 2008

Direct Sales

Division Kobold 4,086 4,413 4,562 4,625

Division Thermomix 874 914 968 954

Division Feelina 21 27 23 23

Division Lux Asia Pacific 4,171 3,701 3,439 2,411

Division JAFRA Cosmetics 1,411 1,454 1,543 1,635

HECTAS Facility Services 12,130 11,653 11,558 12,105

Vorwerk Carpets 343 337 342 352

Others 127 129 135 150

Total* 23,163 22,628 22,570 22,255

Self-employed sales advisers (annual average) Division Kobold 10,709 10,398 9,736 9,335

Division Thermomix 15,097 14,614 16,361 18,569

Division Feelina 263 284 280 152

Division Lux Asia Pacific 2,925 3,177 1,887 1,799

Self-employed sales advisers ”household appliances“ 28,994 28,473 28,264 29,855

Self-employed sales advisers JAFRA Cosmetics 435,348 482,384 515,151 525,863

Self-employed sales advisers in total 464,342 510,857 543,415 555,718

akf group** 195 212 250 220

Total Vorwerk Workforce 487,700 533,697 566,235 578,193

of which sales advisers 467,626 514,046 546,897 558,872

*Including employed sales advisers **akf group included in the consolidated statements at equity

M A N A G E M E N T R E P O R T H U M A N R E S O U R C E S

prevail. In this respect the most promising approach is a long-term development of personnel as they

progress through the various management levels. Appropriate division-specific programmes with this

purpose in mind are supported by Corporate Human Resources.

Being an international company, Vorwerk endeavours to have trusting and efficient coopera-

tion between all members of staff across all national borders. The growing numbers of persons with an

international focus in their work are prepared for global assignments with language and intercultural

training programmes. The proportion of management staff at Head Office and divisional levels with

a non-German cultural background is constantly increasing.

Vorwerk strives for good working conditions and compatibility between family and career.

Regular staff surveys allow evaluation of the personnel policy. Individual measures such as the

establishment of a ‘mother-child’ bureau at Head Office as well as participation in external audits and

the implementation of recommendations contribute to positively positioning the employer Vorwerk

towards employees and potential staff. Targeted personnel development, not only in direct selling,

will grow in significance in the future.

A s s e t s a n d F i n a n c i a l S i t u a t i o n

As a family-owned company with growth perspectives, Vorwerk attaches great importance

to remaining financially independent. Any possible investments or acquisitions should be financed

to a great extent from the company’s own financial resources so as to ensure this independence

long-term. Mindful of this, Vorwerk decides in favour of a rather conservative investment strategy

that secures and increases the assets long-term but which does not neglect interesting investment

strategies that may present themselves. In recent years this strategy has provided a better yield

than comparable external investment opportunities, without any high risks needing to be taken.

There is an internal Finance Committee to monitor market developments and financial

trends and to prepare decisions regarding investment strategy. The parameters for such an in-

vestment strategy are set by the Executive Board and approved by the Supervisory Board. The

finance department also ensures that as a result of the expansion of business in Asia and America,

the ever-increasing level of foreign currency transactions required is adequately hedged.

The balance sheet total increased against previous year by 5 million euros. The liquid

funds amounted to 600 million euros. The asset structure was characterised by a slight reduction

in liquidity and other assets as well as an increase in fixed assets, thus reflecting the capital increase

at akf group and the capital expenditure in the new JAFRA plant in Mexico. Other reasons for

the rise in the balance sheet total were the higher level of receivables from trade accounts in an

amount of some 28 million euros as well as an increase of 13 million euros in the level of securities

held short-term.

The global financial market crisis caused the quotations on all markets to slump dramat-

ically in autumn 2008. Vorwerk’s portfolio of financial assets coped well with this exceptional

situation. As a reaction to the crisis, Vorwerk currently focuses on high liquidity bond issues and

has greatly reduced the proportion of shares in its portfolio. Financial obligations falling due in

the first half of the year were, with foresight, refinanced mid-term. These measures are within the

scope of the investment strategy. It has proven itself and will be retained throughout 2009 as an

underlying principle.

M A N A G E M E N T R E P O R T F I N A N C E S

3 5

3 6

The proportion of partners' equity rose from 49.3 per cent in previous year to 51.9 per

cent in the year under review. Given a fall, in particular, in the other provisions and accruals

as well as in short-term obligations towards third parties, the level of liabilities towards affiliate

companies increased by 20 million euros. The partners' equity fully covers the long-term fixed

assets. In addition, current assets are funded to 33 per cent long-term through equity. Adequate

liquidity and credit lines are available to ensure continued growth.

An increase of 3 per cent in expenditures on materials was consistent with the develop-

ment of turnover. Personnel costs increased by 4 per cent as a result of the increased number of

staff worldwide.

Vorwerk Direct Selling Ventures participates in young companies focusing on direct

selling. Two such participations were implemented in the year under review. The objective is

to identify new trends in direct sales and to support new, innovative companies with Vorwerk’s

financial resources and experience.

O p p o r t u n i t i e s a n d R i s k s

The more diversified structure in terms of business segments as well as countries means

that Vorwerk has great opportunities to participate in the positive development of the markets.

The core business at Vorwerk, direct sales, is a growing, dynamic sector of the economy world-

wide and is one in which Vorwerk has a strong and ever-growing position.

At the same time the Vorwerk Group is exposed to a range of diverse risks. Handling such

risks is an essential element of the entrepreneurial leadership function at the Vorwerk Group. The

principles of risk management are determined and approved by the Executive Board. Effective

planning, reporting and monitoring systems have been put in place for the early recognition,

assessment and correct handling of existing business risks. Risk management at the Vorwerk

Group is ensured by a uniform set of guidelines that are adapted to suit the various segments

M A N A G E M E N T R E P O R T F I N A N C E S

Blues USA ~1920Bolero Spain ~1780Boogie-woogie USA ~1920Breakdance USA ~1970Calypso Trinidad ~1900Cancan France ~1830Cha-Cha-Cha Cuba ~1950Charleston USA ~1920Disco swing Switzerland ~1987Ententanz Germany 1982Flamenco Spain 16th c. Foxtrott USA ~1910Lambada Latin America 1989Slow waltz England ~1920Letkiss Finland ~1960Lipsi GDR 1959Mambo Cuba ~1940Rumba Cuba 19th c.Salsa New York ~1960Samba Brazil ~1920Swing USA ~1930Tango Argentina ~1900Twist USA ~1960Viennese waltz Austria ~1770

Dancing is the best opportunity to tread on each other’s toes. Walter Ludin

No sane man will dance. Marcus Tullius Cicero

Smooth ice is paradise for those who dance with expertise. Friedrich Wilhelm Nietzsche

of the business. Monthly reporting as well as continual monitoring, particularly of production

processes, round off this risk management system. The objective is to improve still further the

existing risk structure. Exchange rate fluctuations are an unavoidable element in global business.

Being an international operation, the Vorwerk Group takes into account exchange rate risks that

may ensue from its operative business activities and hedges them.

Vorwerk is exposed to financial risks for portfolio management investments made

on international money and capital markets. However, the company also participates in any profit

opportunities. The internal Finance Committee regularly monitors the respective net currency

status and modifies it whenever necessary within the risk strategy parameters. Vorwerk avails

itself of derivative financial instruments in some individual cases to limit the financial risk. Only

marketable instruments with adequate market liquidity are used. The utilisation of derivative

financial instruments is subject to internal Vorwerk guidelines and control mechanisms.

One risk for the future development of Vorwerk consists in the fact that direct sales

is dependent upon general legislative conditions which could, in principle, be amended to the

disadvantage of the corporation. When compared with commerce in general, direct sales still

represents a relatively low percentage despite its over-proportionate growth. Therefore, there is

a latent risk of a lack of awareness among legislative bodies at national and European levels. To

make decision-makers more conscious of the advantages of direct sales and its positive effects

on employment, Vorwerk implements public relations campaigns, is a member of the industry-

specific and cross-industry business associations and maintains an information bureau at the

European Union in Brussels.

From today’s point of view there are no risks that could have a negative impact on the

long-term existence of the Vorwerk Group. In recent years the high proportion of partners' equity,

the improvement in the worldwide strategic position and better operating results have led to the

creation of a higher risk-covering volume. Moreover, this broad base on the global market means

that Vorwerk is generally well protected against implications for the corporation ensuing from

problems experienced in regional or industry-specific areas.

If you’re running in the wrong direction, there’s no point increasing the speed. Dr. Birgit Breuel

Consolidated Balance Sheet 40

Consolidated Profit and Loss Account 42

Movements in Fixed Assets 44

Explanatory Notes 46

Auditors’ Report 49

C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 2 0 0 8

4 0

As at 31 December 2008

Assets 2008 2007

1 000 1 000

A. Fixed Assets I. Intangible Assets 1. Concessions, patents, trademarks and similar rights

as well as licences thereto 13,569 17,760

2. Goodwill 283,952 295,148

3. Payments on account 250 276

297,771 313,184 II. Tangible Assets 1. Land, land rights and buildings,

including buildings on third-party land 47,613 42,097

2. Technical plants and machinery 36,692 33,204

3. Other fixtures, fittings and office equipment 28,661 23,674

4. Payments on account and assets under construction 10,910 6,141

123,876 105,116 III. Financial Assets 1. Participations in associated companies 43,799 21,773

2. Other participations 5,458 1,611

3. Long-term investments 3,096 3,021

4. Other loans 335 855

52,688 27,260 Fixed Assets 474,335 445,560B. Current Assets I. Inventories 1. Raw materials and consumables 27,421 31,048

2. Work in progress, services in progress 6,967 5,709

3. Finished products and merchandise 70,760 67,194

4. Payments on account 68 219

105,216 104,170 II. Receivables and other Assets 1. Trade accounts receivable; 373,310 345,105

of which with a remaining term of more than 1 year: (1,290) (1,249)

2. Accounts receivable from associated companies 10,643 2,771

3. Other assets; 78,375 93,980

of which with a remaining term of more than 1 year: (2,035) (2,122)

462,328 441,856

III. Other Securities 402,517 389,805

IV. Cheques, Cash in Hand, Bank Balances 194,015 247,292 Current Assets 1,164,076 1,183,123C. Prepaid Expenses and Deferred Charges 6,872 7,088 D. Deferred Tax Assets 2,980 7,437 1,648,263 1,643,208

C O N S O L I D AT E D B A L A N C E S H E E T

4 1

Equity and Liabilities 2008 2007

1 000 1 000

A. Partners’ Equity 1. Capital shares, reserves, capital contributions

of silent partners, net profit of parent company 854,761 807,552

2. Minority interests

in capital and reserves 470 3,337

in profits 491 -1,409

961 1,928 855,722 809,480 B. Provisions and Accruals 1. Provisions for pensions and similar obligations 105,664 109,454

2. Provisions for taxes 23,033 25,451

3. Other provisions and accruals 142,375 171,774

271,072 306,679C. Liabilities

1. Amounts payable to banks; 199,896 203,216

of which due within 1 year: (28,976) (30,310)

of which due after more than 5 years: (15,000) (30,000)

2. Advance payments received 18,217 22,372

of which due within 1 year: (1,953) (3,019)

of which due after more than 5 years: (0) (0)

3. Trade accounts payable; 44,294 58,693

of which due within 1 year: (44,157) (58,585)

of which due after more than 5 years: (0) (0)

4. Notes payable; 77 27

of which due within 1 year: (77) (27)

5. Amounts payable to associated companies; 20,490 9

of which due within 1 year: (20,490) (9)

6. Other liabilities; 216,955 222,093

of which due within 1 year: (209,325) (215,292)

of which due after more than 5 years: (3,215) (1,851)

of which taxes; (48,887) (47,414)

of which within the scope of social security: (8,970) (8,066)

499,929 506,410

D. Deferred Income 21,540 20,639 1,648,263 1,643,208

E. Contingent Liabilities arising from 1. Bills of exchange 146 172

2. Secondary liability for pension obligations

transferred to the relief fund 8,747 8,266

3. Liability for sureties 484 505

4 2

For the Period 1 January to 31 December 2008 2008 2007

1 000 1 000

1. Gross sales 1,831,677 1,776,942

less sales tax 264,870 254,824

1,566,807 1,522,118

2. Change in finished goods and work in progress 5,943 589

3. Own work capitalised 761 334

1,573,511 1,523,041 4. Other operating income 62,445 65,564

5. Raw materials and consumables:

a) Expenditure on materials

and purchased merchandise 245,044 236,974

b) Expenditure on purchased services 20,852 21,588

265,896 258,562

1,370,060 1,330,043 6. Personnel costs

a) Wages and salaries 368,140 353,196

b) Social security contributions

and pensions; 83,689 82,527

of which for retirement pensions (13,501) (15,419)

451,829 435,723

7. Depreciation and amortization on tangible and

intangible fixed assets 37,646 39,479

8. Result from participations in associated companies -18,712 -26,433

9. Income from other securities and

long-term loans 302 121

10. Other interest and similar income 70,982 64,657

11. Write-down of financial assets and

marketable securities 6,322 2,173

12. Interest and similar charges 14,563 20,615

13. Collective heading 912,272 870,398

Other items not shown separately

(Other operating costs, taxes, net profit for the year)

C O N S O L I D AT E D P R O F I T A N D L O S S A C C O U N T

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4 4

M O V E M E N T S I N F I X E D A S S E T S

From 1 January to 31 December 2008 Gross values

As at Currency Book As at

1.1.2008 conversion Additions Disposals transfers 31.12.2008

differences

1 000 1 000 1 000 1 000 1 000 1 000

I. Intangible Assets 1. Concessions, patents,

trademarks and similar rights

as well as

licenses thereto 44,780 -4,685 905 2,673 — 38,327

2. Goodwill 335,177 — — — — 335,177

3. Payments on account 330 — 55 78 — 307

380,287 -4,685 960 2,751 — 373,811 II. Tangible Assets 1. Land, land rights and

buildings, including

buildings on

third-party land 104,645 -229 8,268 1,974 314 111,024

2. Technical plants

and machinery 192,628 -1,527 14,836 22,249 1,634 185,322

3. Other fixtures, fittings

and office equipment 117,805 -2,397 16,069 9,993 593 122,077

4. Payments on account and

assets under construction 6,141 -332 8,164 522 -2,541 10,910

421,219 -4,485 47,337 34,738 — 429,333 III. Financial Assets 1. Participations in

associated companies 21,773 — 22,026 — — 46,799

2. Other participations 1,626 — 4,398 551 — 5,473

3. Long-term

investments 3,071 -4 352 275 — 3,144

4. Other loans 1,518 — — 1,152 — 366

27,988 -4 26,776 1,978 — 55,782 829,494 -9,174 75,073 39,467 — 855,926

Everything is in flow, “Panta rhei”

Accumulated depreciation / amortization Net valuesAs at Currency As at As at As at

1.1.2008 conversion Additions Disposals 31.12.2008 31.12.2008 31.12.2007

differences

1 000 1 000 1 000 1 000 1 000 1 000 1 000

27,020 -1,998 2,354 2,618 24,758 13,569 17,760

40,029 — 14,196 — 54,225 283,952 295,148

54 — 3 — 57 250 276

67,103 -1,998 13,553 2,618 76,040 297,771 313,184

62,548 91 2,741 1,969 63,411 47,613 42,097

159,424 -763 11,864 21,895 148,630 36,692 33,204

94,131 -1,882 9,489 8,322 93,416 28,661 23,674

— — — — — 10,910 6,141

316,103 -2,554 24,094 32,186 305,457 123,876 105,116

— — — — — 43,799 21,773

15 — 491 491 15 5,458 1,611

50 — 3 5 48 3,096 3,021

663 — 164 796 31 335 855

728 — 658 1,292 94 52,688 27,260383,934 -4,552 38,305 36,096 381,591 474,335 445,560

Everything is on the move. Heraklit

4 64 6

E X P L A N AT O R Y N O T E S T O F I N A N C I A L S TAT E M E N T S

4 6

I. Introductory RemarksFor the financial year 2008, as in pre-vious years, Vorwerk & Co. KG is pu-blicly disclosing its worldwide conso-lidated financial statements in accord-ance with the provisions contained in the German Publication and Dis-closure Law (PublG) and the German Commercial Code (HGB) governing consolidated financial statements and group annual reports. A record of the affiliated and associated companies giving the direct or indirect participa-tions in them (§ 313, Section 2 Nos. 1 and 2 of the HGB) is contained in a separate listing of investment holdings (§ 313, Section 4 of the HGB).

II. Consolidated GroupThe parent company is Vorwerk & Co. KG (Holding Company). The Group companies do business in the following commercial segments: production and direct sales of high-quality household appliances and cosmetic, facial and body-care products as well as infrastruc-tural facility services and carpets. In the year under review nine newly-founded or acquired companies have been in-cluded in the consolidated figures for the first time. Two companies have been removed from the consolidated figures because they were liquidated or sold. Further, the remaining 10 per cent held by other shareholders in Vorwerk’s Lux Asia Pacific were acquired in the busi-ness year under review. The domestic akf banking group and a foreign-based logistics company have been included in the figures at equity as associated companies in accordance with the pro-visions of §§ 311 and 312 of the HGB. Two associated companies of lesser sig-nificance have not been incorporated in the consolidated figures pursuant to

§ 311, Section 2 of the HGB, but have been included at acquisition cost.

III. Accounting and Valuation MethodsThe balance sheet and the profit and loss account are laid out for reporting purposes in accordance with the format stipulated in §§ 290 ff, 266 and 275 of the HGB for corporate entities. For disclosure purposes, the option pro-vided for under the German Publication and Disclosure Law (to show capital, re-serves and profit as partners’ equity) has been exercised. In this respect the invest-ments of silent partners have also been included in partners’ equity on account of the fact that they are provided with a subordination clause and since they are of an equity-capital-similar nature. Moreover, with respect to § 13, Section 3, Clause 2 of the PublG, information is also provided in the explanatory notes to the consolidated financial statements as per § 5, Section 5 of the same PublG. In this respect taxes and profit for the year have been included with other oper-ating costs under the collective heading “Other items not shown separately”. Vorwerk & Co. KG’s accounting and valuation principles also pertain to the consolidated financial statements. The financial statements of non-German subsidiaries drawn up in accordance with national rules and regulations and at variance with to German legal re-quirements have been adjusted in line with what is known as the Handelsbilanz II (Type II Commercial Balance Sheet). The valuation methods applied can be regarded as a uniform valuation as de-fined in § 308, Section 1 of the HGB. They have remained unchanged from those applied in previous year apart from some insignificant modifications regard-

ing write-down of low-value assets and the changeover from declining-balance to straight-line depreciation of tangible fixed assets for the German companies. Purchased intangible assets have been valued at their cost of acquisition less scheduled straight-line amortization. In the case of tangible fixed assets, where the period of usefulness is limited, the acquisition or manufacturing cost has been depreciated (straight-line or de-clining-balance) at reasonable, scheduled rates. As a rule, the straight-line method of depreciation has been used for all ad-ditions up till1 January 2008 where this resulted in higher amounts of deprecia-tion. The tax-relevant benefits of de-preciating low-value assets have been taken advantage of. Financial assets have been valued at cost or lower attri-butable value. The movements in fixed assets can be seen in the corresponding “Movements in Fixed Assets” table. Inventory has been valued at average acquisition cost or manufacturing cost in accordance with the principle of lowest value. Apart from direct costs, the manufacturing costs only include reasonable proportions of the material and manufacturing overheads invol-ved. Receivables and other assets have been shown at nominal value less ap-propriate provisions for bad debts and other write-downs. Marketable securities have been assessed at acquisition cost or at the lower attributable value pre-vailing as of balance sheet date plus proportionate incidental costs for ac-quiring such. Liquid funds have been strated at nominal value.Revaluations have been effected in accordance with § 280, Section 1 of the HGB. All identifiable risks and uncertain liabilities have been ad-

4 74 74 7

equately considered in the formation of the provisions. The accrual amounts for pensions, which relate primarily to Germany, have been determined in accordance with the current value principle pursuant to § 6a of the In-come Tax Law (EStG); the guideline tables 2005 G and an interest rate of 6 percent being applied. Liabilities have been shown at the amount payable. The deferred income item relates pri-marily to hire purchase finance trans-actions.

IV. Foreign Currency ConversionAll balance sheet items of the compa-nies of the Group that are included in the consolidation, but which are lo-cated outside the eurozone have been converted into euros from the respective currency at the rate of exchange prevail-ing as of balance sheet date (average value). Income and expenditure shown in the corresponding profit and loss ac-counts have, with the exception of write-downs correspondingly transformed as of balance sheet date, been converted at the average rate of exchange for the year 2008 (modified closing rate valua-tion method). The ensuing differences of 7.2 million euros after conversion have been included for the first time without profit effect within the partners’ equity. The conversion effects resulting from the change in rates between bal-ance sheet dates have led to a 7.5 mil-lion euro decrease in reserves within the context of the development of partners’ equity, but having no effect on profits.

V. Consolidation Principles The companies included in the conso-lidated financial statements all have 31 December as their balance sheet date. Consolidation of the balance sheets and

profit and loss accounts of the compa-nies included therein has been carried out in accordance with the following principles:

1. Capital ConsolidationCapital has been consolidated in accord-ance with the book value method. In this respect the book values of the hold-ings have been set against the equity capital level of the corresponding sub-sidiary companies including reserves and the result brought forward at the date of initial consolidation or at the date of acquisition. Debit differences resulting from the first-time consolida-tion of the JAFRA Group have been stated as goodwill after the appropria-tion of hidden reserves to assets and liabilities. The goodwill of the JAFRA Group will be written-off over a period of 30 years using the straight-line meth-od. The remaining debit differences from previous years have been netted against reserves. Debit differences aris-ing from the acquisition of subsidaries in 2008 (10.0 million euros) have been openly netted against reserves in accord-ance with § 309, Section 1, Clause 3 of the HGB. Should any credit differences have resulted from this netting, such have been incorporated into the re-serves in previous years on account of their reserve character. The participa-ting interests of outside shareholders in the equity capital subject to consolida-tion and in the results of the subsidiary companies included in the consolida-tion have been shown in the compen-sating item for minority interests. The associated companies of akf banking group and the foreign-based logistics company, included at equity, have been consolidated in accordance with the same principles. In this respect the

valuation principles of the associated companies have been adopted without change. Since Vorwerk exercises no uniform direction over the akf banking group, its figures have been included in the financial statements at equity. akf leasing Beteiligungs GmbH has pre-pared consolidated financial statements for the companies of the akf leasing business as of 31 December 2008. In accordance with § 312, Section 6 of the HGB, these figures have been taken as the basis for consolidation. Vorwerk’s share of profits for the year under re-view from the companies consolidated at equity has been included in the profit and loss account as the result from par-ticipations in associated companies.

2. Consolidation of DebtAmounts due as receivables or payables in respect of companies within the con-solidated group have been offset against each other for consolidation purposes (§ 303 of the HGB).

3. Consolidation of EarningsThe consolidation of expenditure and income contained in the items shownin the consolidated profit and loss account comply with § 305 of the HGB. Inter-company sales and the corre-sponding level of expenditure as well as other, mutual inter-company expendi-ture and income from the consolidated companies’ profit and loss accounts have been set against each other.

4. Deferred TaxationDebit deferred taxation from the individ-ual financial statements have been netted with credit deferred taxation balances from the individual financial statements or from the consolidation process and an amount of 3.0 million euros has been

4 8

reported (§ 306, Clause 3 of the HGB) pursuant to the assessment option pro-vided for in § 274, Section 2 in associa-tion with § 300, Section 2 of the HGB. 6.0 million euros of credit deferred taxation balances have resulted from the consolidation measures, from the elimination of inter-company results and from the consolidation of debt. When calculating taxation for consolidation entries affecting profits pursuant to § 306 of the HGB, a uniform Group-wide average rate of taxation has been ap-plied. The calculation of deferred taxa-tion for individual financial statements has been effected on the basis of tax rates applying for individual companies.

VI. Other Statutory Disclosures in Accordance with § 314 of the HGB and Explanatory Notes to Various Items in the Consolidated Balance Sheet and Consolidated Profit and Loss Account

1. Other Financial CommitmentsThe expenses arising from rental, ten-ancy and leasing contracts amounted to 34.1 million euros in 2008 and are expected to be at a similar level in the next two financial years. These ex-penses are spread over the entire Group worldwide and relate to contracts with various terms of duration. Order ob-ligations for investments in tangible fixed assets amount to 17.3 million (9.1 million euros in previous year).

2. Profit and Loss AccountGroup Sales (including sales tax)Breakdown by 2007 2008Region millions 1 millions 1Germany 461.1 459.9Europe 832.2 910.7North America 405.9 385.3Rest of world 77.7 75.8Total 1,776.9 1,831.7Group sales divided according to busi-ness segment are shown in the Group Management Report.

3. Present Value of Derivative Financial InstrumentsTo hedge against currency risks, the Vor-werk Group uses exchange rate futures and options as well as interest rate swaps both in its operative business activities as well as in the area of foreign currency financing. The present value of a deriva-tive financial instrument is the price at which a party would acquire the rights and/or obligations entailed in this finan-cial instrument from another party. The book and present values of the financial instruments of the Vorwerk Group are reported as follows:

Derivative Financial Instruments in 1 000 a) Currency options b) Exchange futures c) Interest rate swaps

Nominal value Book value Present value31. 12. 08

a) 27,725 0 5,206b) 43,264 -193 43,773c) 86,654 0 -2,411

Provisions for threatening losses of 0.2 million euros have been formed to cover eventualities in exchange rate future transactions. The nominal value of the derivative financial instruments is determined using the exchange rate

valuation on closing date. The present values of exchange rate futures are de-termined according to the closing rate as of balance sheet date, taking forward discounts and premiums into account. The present values of currency options are assessed on the basis of option price models pursuant to Black & Scholes. The present values of interest rate hedging instruments (interest rate swaps) are determined on the basis of discounted, anticipated future cash flows, whereby the current market in-terest rates for the remaining term of the financial instruments are applied.

4. Other InformationAverage annual staffing level 2007 2008Employees* 22,570 22,255Sales SystemAdvisers 543,415 555,718 Kobold 9,736 9,335 Thermomix 16,361 18,569 Feelina 280 152 JAFRA Cosmetics 515,151 525,863 Lux Asia Pacific 1,887 1,799*Including employed sales advisers

Management at the parent company Vorwerk & Co. KG is in the hands of the Managing Partners Peter Oberegger, Düsseldorf and Walter Muyres, Jüchen.

Wuppertal, 15 April 2009

4 8

E X P L A N AT O R Y N O T E S T O F I N A N C I A L S TAT E M E N T S

4 8

Peter Oberegger

Walter Muyres

4 94 94 9

The foregoing consolidated balance sheet with its explanatory notes as in-tended for publication together with the Group Management Report comply with the legal requirements. PricewaterhouseCoopers Aktiengesell-schaft Wirtschaftsprüfungsgesellschaft, Essen, expressed the following opinion on the complete consolidated financial statements and the Group Manage-ment Report: “Audit opinionWe have audited the consolidated fi-nancial statements – prepared by the Vorwerk & Co. KG, Wuppertal, com-prising the balance sheet, profit and loss account and explanatory notes – and the Group Management Report for the business year from 1 January to 31 De-cember 2008. The preparation of the consolidated financial statements and the Group Management Report in ac-cordance with German commercial law is the responsibility of the managing partners of the company. Our respon-sibility is to express an opinion on the consolidated financial statements and the Group Management Report based on our audit. We conducted our audit

the annual financial statements of the companies included in consolidation, the determination of the companies to be included in consolidation, the ac-counting and consolidation principles used and significant estimates made by the managing partners as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations. In our opinion, based on the findings of our audit, the consolidated finan-cial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of the group in accordance with German principles of proper accounting. The Group Man-agement Report is consistent with the consolidated financial statements and as a whole provides a suitable view of the group’s position and appropriately presents the opportunities and risks of future development.”

Essen, 15 April 2009

of the consolidated financial statements in accordance with § 317 of the German HGB (German Commercial Code) and the generally accepted standards for the audit of financial statements promul-gated by the Institut der Wirschaftsprüfer in Deutschland (IDW). Those standards require that we plan and perform the audit such that misstatements material-ly affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with German principles of proper accounting and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environ-ment of the Group and expactations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated finan-cial statements and the group manage-ment report are examined primarily on a test basis within the framework of the audit. The audit includes assessing

PricewaterhouseCoopersAktiengesellschaftWirtschaftsprüfungsgesellschaft

Peter Albrecht Thomas HofmannAuditor Auditor

A U D I T O R S ' R E P O R T

5 0

SpainVorwerk España M.S.L., S.C.Avda. Arroyo del Santo, 728042 Madrid

FranceVorwerk France s.c.s.5, rue Jacques Daguerre44306 Nantes Cedex 3

ChinaVorwerk Household Appliances Co., Ltd.9F, Vorwerk Plaza1768 Yishan Road201103, Shanghai

PortugalVorwerk Portugal Electrodomesticos LDARua Quinta do PaizinhoEdificio Bepor, Bloco 2-2° Esq.2790-237 Carnaxide/Lisboa

AustriaVorwerk Austria GmbH & Co. KGSchäfferhofstr. 156971 Hard/Bregenz

PolandVorwerk Polska Sp. z o. o.ul. Strzegomska 2-453-611 Wrocław

Czech RepublicVorwerk CS k.s.Pod Pekar ˇkou 1/107147 00 Praha 4

Taiwan R.O.C.Vorwerk Lux (Far East) Ltd.Taiwan Branch 5F, No. 85, Sec 1Chung-Hsiao East Rd.Taipei City 100

RussiaVorwerk CIS LLCSchipok street, 9/26, Building 1115054 Moskva

MexicoVorwerk México S. de R.L. de C.V.Av. Paseo de las Palmas No. 320, Local PB-ACol. Lomas de ChapultepecDelegación Miguel Hidalgo C.P. 11000México D.F

Vorwerk & Co. KGMühlenweg 17 - 3742270 WuppertalDeutschland

Vorwerk & Co. Interholding GmbHMühlenweg 17 - 3742270 WuppertalDeutschland

Vorwerk & Co.Beteiligungsgesellschaft mbHMühlenweg 17 - 3742270 WuppertalDeutschland

Vorwerk InternationalMittelsten Scheid & Co.Verenastr. 398832 WollerauSchweiz

Vorwerk & Co. KGBruxelles Bureau47, Rue Montoyer1000 BruxellesBelgique

Vorwerk Direct Selling Ventures GmbHMühlenweg 17 - 3742270 WuppertalDeutschland

Direct Sales, Vorwerk

ItalyVorwerk Folletto s.r.l.Via Ludovico di Breme, 3320156 Milano

Vorwerk Contempora s.r.l.Via Ludovico di Breme, 3320156 Milano

GermanyVorwerk Deutschland Stiftung & Co. KGGeschäftsbereich KoboldMühlenweg 17 - 3742270 Wuppertal

Vorwerk Deutschland Stiftung & Co. KGGeschäftsbereich ThermomixMühlenweg 17 - 37 42270 Wuppertal

T H E M A I N C O M PA N I E S I N T H E V O R W E R K G R O U P

Vorwerk Engineering

GermanyVorwerk Elektrowerke GmbH & Co. KGMühlenweg 17 - 3742270 Wuppertal

FranceVorwerk Semco S.A.S.20, route de Montigny28220 Cloyes-sur-le-Loir

ItalyVorwerk Folletto Manufacturing s.r.l.Via Garibaldi, 2720043 Arcore-Milano

ChinaVorwerk Household ApplianceManufacturing (Shanghai)Co., Ltd.Songze Ave. 8777Qinpu District201700, Shanghai

Direct Sales, JAFRA Cosmetics

Headquarters & USAJAFRA Cosmetics International, Inc.2451 Townsgate RoadWestlake Village, CA 91361

MexicoJAFRA Cosmetics S.A. de C.V.Blvd. Aldolfo López Mateos #515Colonia TlacopacDelegación Alvaro Obregón01040 México

GermanyJAFRA Cosmetics GmbH & Co. KGLeonrodstr. 5280636 München

ItalyJAFRA Cosmetics S.p.A.Piazza San Vittore 221100 Varese

SwitzerlandJAFRA Cosmetics AGRiedstr. 3/56330 Cham

AustriaJAFRA Cosmetics Handelsgesellschaft mbHSchäfferhofstr. 156971 Hard

5 1

HECTAS GebäudemanagementGmbH & Co. KGAm Diek 5242277 Wuppertal

HECTAS Sicherheitsdienste GmbHAm Diek 5242277 Wuppertal

BeneluxHECTAS Bedrijfsdiensten C.V.Geograaf 30NL 6921 EW Duiven

AustriaHECTAS GebäudediensteGes.m.b.H. & Co. KGSonnwendgasse 189020 Klagenfurt

PolandHECTAS usługi Sp. z o. o.ul. Grabiszynska 241 B53-234 Wrocław

Czech RepublicHECTAS Technické a bezpecnostní sluzby, s.r.o.Luzická 961600 Brno – Zabovresky

HungaryHECTAS MagyarországÉpületfenntartó Kft.Hungária krt. 140-144, Stock III1146 Budapest

Vorwerk Carpets

Vorwerk & Co. Teppichwerke GmbH & Co. KGKuhlmannstr. 1131785 HamelnDeutschland

Taiwan R.O.CVorwerk Lux (Far East) Ltd.Taiwan Branch (H.K.)2F, No. 2, Ruiguang RoadNeihu DistrictTaipei City 114

PhilippinesLux Marketing Inc.Molave Building 2F 2231 Pasong TamoMakati City

akf Financial Services

Germanyakf bank GmbH & Co. KGFriedrichstr. 5142105 Wuppertal

akf leasing GmbH & Co. KGFriedrichstr. 5142105 Wuppertal

akf servicelease GmbHJohannisberg 742103 Wuppertal

Spainakf Equiprent S.A.P.E. La MoralejaAv. de Europa 12, 3a 28108 Alcobendas/Madrid

akf servicelease España S.L.P.E. La MoralejaAv. de Europa 12, 3a 28108 Alcobendas/Madrid

Polandakf leasing polska S. A.ul. Jana Pawla II 1500828 WarszawaRegon 141060180

HECTAS Facility Services

GermanyHECTAS GebäudediensteStiftung & Co. KGAm Diek 5242277 Wuppertal

HECTAS GebäudereinigungStiftung & Co. KGKonsumstr. 4542285 Wuppertal

BrazilDistribuidora JAFRA de Cosmeticos, Ltd.Avenida Jurema 137Moema CEP 04079-002Sao Paulo

The NetherlandsJAFRA Cosmetics International B.V.Geograaf 306921 EW Duiven

Dominican RepublicJAFRA Cosmetics Dominicana S.A.Gustavo Mejia Ricart No. 121Ensanche JulietaSanto Domingo

RussiaJAFRA Cosmetics International LLC10 Pervyi Volokolamskiy proezd123060 Moskva

ProductionCosméticos y Fragancias S.A. de C.V.Victoria #25Fracc. Industrial Alce BlancoNaucalpanEstado de México 53370

Direct Sales, Lux Asia Pacific

HeadquartersLux Asia Pacific Pte Ltd.390 Havelock Road #08-02King's CentreSingapore 169662

ThailandLux Royal (Thailand) Co., Ltd.523-525 Lux BuildingSukhumvit 71, Phra Khanong-NuaWattana, Bangkok 10110

IndonesiaP. T. Luxindo RayaJL. Agug Timur 9Blok 01/29-30Sunter Agung Podomoro14350 Jakarta

JapanLux (Japan) Ltd.Crescendo Bldg., 2-3-4 Shin-YokohamaKohoku-ku222-0033 Yokohama

5 2

S o u r c e s :

Bilderbogen-Dokumentationszentrum

Neuruppin, page 2; Hans Traxler,

page 9, 43; Akiyoshi Kitaoka, page 13;

Bob Langrish, page15; Regina Göllner,

page 15, 23; Edward Lear, page 19;

André Poloczek, page 19, 25, 29, 39;

Giacomo Balla, page 45;

Matthew Flinders, page 52

Publication: Vorwerk & Co. KG,

Mühlenweg 17 - 37, 42270 Wuppertal

+49 202 564-1221

www.vorwerk.com

[email protected]

Editorial staff: Jürgen Hardt

(person responsible),

Alexandra Stolpe,

Corporate Communications

of the Vorwerk Group

Design: Hermann Michels

and Regina Göllner, Wuppertal

Text: Vorwerk & Co. KG,

Stefan Hoinka, Bochum

Translation: Alan Hall, Wuppertal,

Lynda Matschke, Hamburg

Production: Druckhaus

Ley + Wiegandt, Wuppertal

© Vorwerk & Co. KG, 2009

Our annual report is published

in German and English with a

total circulation of 12,000 copies.

Wood products originating

from responsibly managed forests are

marked with the FSC trademark and are

independently certified in accordance

with stringent Forest Stewardship

Council (FSC) criteria.

Only FSC-approved paper was used

in the printing and preparation of this

annual report.

“If you want to reach the source you have to swim against the current.” Chinese proverb