A good start, now let's step up - Kendrion NV

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A good start, now let's step up - Kendrion NV
volume 8 | 2017 |

A good start,
now let’s
step up
TOP MANAGEMENT MEETING, LÜBECK GERMANY

Next generation spill valve | Behind the scenes: Kendrion Mishawaka
             Together@Kendrion | Kendrion’s legal team
   International HR Meeting 2017 | Adapting to growing markets
A good start, now let's step up - Kendrion NV
KENDRION N.V.

IN THIS MAGNETISED
                                           05
RESULTS Q3 2017                       04

TOP MANAGEMENT MEETING,               05
STEPPING UP!

KENDRION HONOURS ITS                  06
EMPLOYEES

NEXT GENERATION SPILL VALVE           07

BEHIND THE SCENES AT
KENDRION MISHAWAKA

NEW POWER PLANT IN MALENTE
                                      08

                                      10
                                           06                    09
TEAM LEGAL                            11

INTERNATIONAL HR MEETING 2017         12

CSR STRATEGY 2018 AND BEYOND          13

OPEN DAY AT KENDRION MARKDORF         14

FULL-AUTOMATIC PRODUCTION
UNIT FOR IDS
                                      15
                                           11               12
WORKSHOPS PURCHASING                  16

 COLOPHON
 Organisation:
 Publisher:
                 Wilma Stuiver
                 Kendrion N.V.
                                                                 15
 Design:         teamtva! reclamebureau
 Copy:           Wim Dieleman

 Magnetised is printed on
 environmentally friendly paper.
 www.kendrion.com

                                                  2
A good start, now let's step up - Kendrion NV
COLUMN CEO

                                                                                           PC      MY FAVOURITE MAGNET

                       Stepping                                                           ‘My name is Jerry Chen. I am 35 years
                                                                                          old, graduated from university in 2005

                       up!
                                                                                          and majored in mechanical engineering.
                                                                                          I joined Kendrion in Suzhou four years ago,
                                                                                          in 2013. My job title is Process Engineering
                                                                                          Supervisor in the Passenger Cars (PC)
                                                                                          business unit. I am involved in process
                                                                                          development for new PC projects at the
                                                                                          launch phase, and will also support the
                                                                                          project related process control when we
                       ‘The Kendrion Magnetised in front of you is the first issue in     ramp up to mass production. My favourite
                       a completely new design. You will find that we have used           magnet is the 6DCT200 Parking Lock
                       the opportunity to implement a few changes to the content          solenoid. I like it because it is small but has a
                       of our magazine. Most of this is the direct result of the reader   big magnet force. It is energised by a Pulse-
                       survey we held some time ago: thank you for all your input.        Width Modulation signal and has a stable
                       We hope you like this new Magnetised and - as always               and reliable force-stroke characteristic.
                       - please feel free to share your ideas and opinions                This solenoid’s performance on response
                       (magnetised@kendrion.com).                                         times, so when switching on and off, is really
                                                                                          perfect. The 6DCT200 Parking Lock solenoid
                       Kendrion is performing well and we all have every reason to        is used in Dual Clutch Transmissions. It’s
                       be proud of that. We have worked hard, have been alert to          responsible for the primary activation
                       opportunities to simplify and streamline our business and are      of locking the gear while shifting into ‘P’
                       confident about the future. The implementation of our ‘Simplify    position. This is a very successful product
                       Focus Grow’ strategy has brought and will continue to bring        because of its smart and reliable design.
                       us benefits. And we expect to implement further simplification     The 6DCT200 is a new product for us here
‘Kendrion is          measures across our business units over the next six months.       in Kendrion Suzhou. Start of Production
  performing well                                                                         is expected next year, in 2018. Based on
                       With our performance on the sales side added to this, the          forecasts, we expect the annual volume
  and we all have      overall results are satisfying. But, we have only just started!    to reach 400,000 pieces in the next three

  every reason to be   We are aiming at sustainable profitable growth and are not         years. The Kendrion Kuhnke team in Malente
                       there yet. So, let’s move up a gear and get started on the next    originally designed this solenoid, and also
  proud of that’.      part of our journey!’                                              the A-sample and B-sample were built in
                                                                                          Malente. I participated in the C-sample
                                                                                          building in Suzhou with support from

                       Joep van Beurden                                                   Malente. Now I’m working on the process
                                                                                          development to set up the new production
                                                                                          and testing line for mass production in
                       CEO Kendrion                                                       Suzhou. In the meantime, I’m also working on
                                                                                          the set-up of a solvent washing machine and
                                                                                          a cleanliness inspection lab, which will serve
                                                                                          this solenoid and other products.’

                                                                                                Jerry Chen,
                                                                                                    Process Engineering
                                                                                                     Supervisor PC Suzhou, China

Magnetised 2017 3                                      3
A good start, now let's step up - Kendrion NV
MEET PAULA VINCENT

                                                            Results Q3 2017
                                                            Strong performance
                                                            with higher revenue
                                                            and profit
                                                       Kendrion performed strongly in the third quarter with
                                                       positive figures on all financial indicators. Market
                                                       conditions are favourable; further simplification adds
                                                       to the results, and has not been finished yet, if ever!
                                                       Kendrion continued its good performance of the first half year into the third
Nationality                                            quarter of 2017. The revenue grew by a solid 6% and earnings before interest,
Canadian-born, US citizen                              taxes and amortisation (the so-called EBITA) increased by 25%, compared to
Marital status                                         Q3 2016. Favourable market conditions in combination with the more direct and
Happily single, with three sons                        streamlined way in which Kendrion runs its business, bears fruit.
Hobbies
Working out, bodybuilding competitor                   New project
Job                                                    CEO Joep van Beurden says: “Just to illustrate how internal and external
HR Manager and member Executive                        developments come together: we are on track to open our new facility in Suzhou,
Management Team, Kendrion Shelby                       China in December this year. Parallel to this, we recently signed a letter of intent
                                                       with a large customer to start producing permanent magnet brakes for industrial
                                                       robots in Suzhou. We expect to finalise the first phase of that investment in Q1 2019.”

“Working here                                         Confidence

  makes me feel we                                     The global economic outlook remains positive with favourable order patterns
                                                       across Kendrion’s business and especially in the Industrial business units.

  are one big family”                                  Joep van Beurden: “We look at the future with confidence, based on our strong
                                                       business fundamentals, broad R&D capabilities, close customer relationships
                                                       and growing project pipeline.”
In Shelby Paula Vincent is responsible for all
employee relations issues; she also administers
and enforces federal, state and Kendrion Policies
and Procedures: “To me the most important part
of my job is ensuring we have a safe and happy                         1 116.7
work environment. It is also very important to me                          million
that the employees respect the Company and the          1 110.1
Company respects the employees. Fair treatment              million
both ways is key. One of the things that keep me
very busy in Shelby is temporary staffing. We
carry about 15-20% temporary direct employees.
Some don’t always stay long and therefore I am
continually working with the Staffing agency to                                                          1 9.9
                                                                                                         million
keep the plant fully staffed. Failure to do so could
                                                                                          1 7.9
result in shutting lines down and that is the last                                        million
thing we want to do.”
Paula does not just like Kendrion, she loves it:                                                                                                   1 5.9
“The people here at Shelby are great and working                                                                                                   million
                                                                                                                                  1 4.9
together with Zeist and Villingen makes me feel we                                                                                million
are one big family. What I also like about Kendrion
are the opportunities the company wants to create
for people like me to move to other positions
internationally. It is my ambition to work for
Kendrion in another country, preferably Germany.
                                                       ‘16 1 ‘17 1                    ‘16 1 ‘17 1                             ‘16 1 ‘17 1
I am a real people person, always walk around
                                                       Q3             Q3             Q3             Q3                      Q3               Q3
with a smile and love to keep people happy.
                                                        REVENUE                        EBITA                                 NET PROFIT
That’s not so difficult if you work for Kendrion.”
                                                                                                           1)
                                                                                                                Normalised for non-recurring restructuring costs

                                                               4
A good start, now let's step up - Kendrion NV
EVENT

                                In September Kendrion’s
                                Top Managers from around                             A good start,
                                                                                     now let’s
                                the world met in Lübeck,
                                Germany for their annual
                                get-together on the company’s
                                development and progress.
                                This year’s theme: Stepping Up!                      step up …
        Success can lead to two possible outcomes:       to keep our shareholders satisfied, to create
        one can sit back, relax and enjoy the new        value for everybody and - probably most
        position taken. Or one can see the ground        important - because it is fun to win! Joep
        gained as a boost to get everything out of       van Beurden: “Excellent performance starts        Megatrends
        further development and growth. CEO Joep         with our Leadership Team. The performance
        van Beurden does not even have to think          of our company and the quality of our             Megatrends are long-term changes
        about the choice Kendrion should make: “We       leadership are two sides of the same coin: it’s   that affect governments, societies and
        have come a long way. We have considerably       impossible to separate the one from the other.    economies permanently over a long
        simplified and streamlined our organisation,     We have therefore started a Leadership &          period of time. Megatrends can be
        and brought about many changes. Our              Performance Programme for the Leadership          relevant to our business and should
        profitability has gone up from 5.8% to 9%.       Team consisting of the 25 most senior men         be assessed as such. Where they
        And look at the growing value of our shares!     and women from within Kendrion. This              affect our business, they should be
        Every reason to celebrate and be proud           training focuses on understanding and             included in our long-term strategic
        of what we have achieved. BUT… this is a         improving performance and on leading for          mind-sets and choices. We should be
        marathon, not a sprint. We are not there yet     performance and change.” This does not            aware of our opportunities to make a
        and, you know what, we will never get there.     mean that improving performance is only           difference and grow. Megatrends are
        What we have done is create the conditions       the responsibility of the Leadership Team. It     a framework for serious thoughts on
        for growth. All low hanging fruit has now been   starts at the top, but ‘stepping up’ applies to   the future of Kendrion. There are many
        consumed. Everything that is easy is behind      everyone at all levels within Kendrion.           sources of Megatrends, each have a
        us. Growing our profit from 9% to 10% is so                                                        different perspective. During the Top
        much more difficult than from 5.8% to 9%.        Near future                                       Management Meeting Neil Richmond
        But that is exactly what we want to do. There    Another important and recurring topic             presented the Megatrends below
        is still ample performance improvement           on the agenda of the Top Management               as those related to the business of
        opportunity throughout the company.”             Meeting were the so-called Megatrends.            Kendrion:
                                                         What is their relevance for Kendrion? How         • Rapid urbanisation
        Leadership                                       can we anticipate and make use of these           • Globalisation/mobility
        At the recent Top Management Meeting             trends at an early stage? In order to trigger     • Climate change
        everybody agreed on the need to ‘step up’.       the imagination and to make clear that            • Silver society
        At all levels and in every field within the      growth does not come automatically, Neil          • Shift in global economic power
        company we must continue to work hard and        Richmond of Kendrion IDS gave an extensive        • Individualisation
        constantly improve our performance. Why?         presentation, that helps the business units       • Demographic change
        For a number of reasons: to keep control of      think about their roadmaps and business
        our own future, to be ready for ‘bad times’,     plans for the near future.

Magnetised 2017 3                                             5
A good start, now let's step up - Kendrion NV
INSIDE KENDRION
                                                                                                                     The Technical University Ilmenau is one
    EVENT     PC                                                                                                     of Germany’s Top-10 universities. More
                                                                                                                     than 6,000 students are matriculated in

 Kendrion at the                                                                                                     2017. Almost traditionally Kendrion Group
                                                                                                                     Services HR and Kendrion Mechatronics
                                                                                                                     Center took part in the Inova Job Fair

 26 Aachen
        th
                                                              From left to right: Claudia Kallenbach, Thomas Fritz
                                                                                                                     in Ilmenau. Connecting to interested
                                                                                                                     students, they discussed their Bachelor
                                                              and Nadine Maier                                       and Master theses, internships or

 Colloquium                                                     EVENT
                                                                                                                     positions within Kendrion. Having made
                                                                                                                     a number of very good contacts Claudia
                                                                                                                     Kallenbach (Kendrion Mechatronics
Kendrion Passenger Cars recently presented
its valve and sound technology at the
26th Aachen Colloquium. With over 1,800
                                                              Inova Job                                              Center, Ilmenau), Thomas Fritz and
                                                                                                                     Nadine Maier (Kendrion Group Services
                                                                                                                     HR, Villingen) concluded that they would

                                                              Fair 2017
participants and more than 100 lectures, held                                                                        definitely be present at the Inova again
by prominent guests on current developments                                                                          next year.
in the Automotive Industry, the event ranks
amongst the biggest European conferences
on vehicle and engine technology.
“The Aachen Colloquium is a very important
platform for networking with experts and
decision makers in the Automotive business,”
says Wolfgang Keller, Sales Manager at                       Kendrion honours its employees
Passenger Cars. In the accompanying trade
fair 64 international exhibitors showed the                  Kendrion’s employees are the ‘backbone of the company’. We highly appreciate and
latest developments and trends. Together                     value the commitment and drive of all our people, even more so of those who have been
with the annual ‘International Vienna Motor                  loyal to the company for such a long time.
Symposium’ the Aachen Colloquium is one
of the highlights of the supplier industry.                              IMS Engelswies: Martina Schmid, Albin Reger, Armin Herbst,

                                                              25         IMS Donaueschingen: Tim Drescher, ICS Malente: Sven Koch, Inga Dohse,
                                                                         PC Malente: Kirsten Pahl, Claudia Lüth, Melanie Jähnke,
                                                                         CV Markdorf: Ralf Sessinghaus.

                                                                         ICS Malente: Walter Heilers, Maren Schuster, Ina Luckhardt, Nicole

                                                              30
                                                                         Harder-Kröger, Wolfgang Findeisen, Uwe Raudzus, Borgar Pfeiffer,
                                                                         PC Malente: Dirk Hinrichsen, Frank Bode, Britta Schumacher, Doris Tarnau,
                                                                         Annette Bannas, Sylvia Lange, Angelika Koth, Rolf Peine, Benno Zabel,
                                                                         PC Eibiswald: Hans-Werner Weber, CV Markdorf: Gabi Romano, Gisela
                                                                         Nigmann, Michael Wieler, CV Shelby: Barbara Philbeck.

                                                              35         PC Shelby: Steven Davis

                                                                         IMS Donaueschingen: Raimund Königsberger, IMS Engelswies: Peter

                                                              40         Geissler, ICS Malente: Wolfgang Blunck, Marion Dreiack, Gabriele Schulz,
                                                                         Ullrich Wehde, IDS Villingen: Karin Kreische, Wolfgang Haas, Peter Dazer,
                                                                         PC Malente: Bernd Pflüger, Klaus-Dieter Kühl, Heike Bünz, Stephan Stark.

Kendrion Running Team wins
Gehrenberg run
Night-time rain made parts of the track difficult to pass. But it did not
seem to disturb the tough sportsmen of the Kendrion Running Team. They
did not only win the team prize of the cross-country race, but also the
overall victory and prizes in different age categories. The cross-country
race on the local mountain in Markdorf (Germany) was just one event
in the team’s time schedule. They also successfully completed several
company races, half marathons and the Munich Marathon.

                                                                             6
A good start, now let's step up - Kendrion NV
How it works
                                                                                                                     Kendrion Shelby’s hydraulic spill valve is
                                                                                                                     used to regulate the fuel flow to the high
                                                                                                                     pressure GDI pump, which supplies the
                                                                                                                     rail with gasoline. The valve determines
     PC
                Cutting-edge fuel injection technology from Shelby
                                                                                                                     the quantity of gasoline that flows to the

                Next generation spill valve                                                                          piston pump and thus controls the pressure
                                                                                                                     in the rail. By changing the response time
                                                                                                                     of the valve, the flow and consequently
                                                                                                                     the pressure is regulated and the pump
   In 2012 Kendrion Shelby (North Carolina, USA) started producing                                                   compresses only as much fuel as needed
   its first spill valve series, originally developed in Germany. Together                                           in the rail. Kendrion’s next generation
                                                                                                                     spill valves is based on cutting-edge fuel
   with customer Stanadyne Kendrion Shelby has looked for ways to
                                                                                                                     injection technology.
   optimise the design and further reduce costs. In March 2018 it will
   launch its next generation spill valves.

   “Our customer Stanadyne, 1st tier supplier to          here in Shelby, in close cooperation with                  price.” Kendrion Shelby’s next generation
   General Motors, came up with a new design for          the customer. This was the product I started               spill valve is now in pre-production. Start of
   the spill valve,” tells manufacturing and process      working on when I joined Kendrion in 2015. We              Production will be in March 2018; volumes
   engineer Rodney Huss. “The design eliminates           have now entered the phase of finalising the               are expected to be between 650,000 and
   critical parts like o-rings, flanges and bolted        product and determining how to produce it.                 850,000 pieces. Impressive numbers that
   assemblies, but also conceals improvements.            So this is where we for instance decide what               illustrate the importance of this product
   Many of the concepts on how manufacturing              equipment suppliers we want to work together               not only for Kendrion Shelby, but also for
   could be or should be done were developed              with, always targeting at: best concept, best              Kendrion worldwide.

          IDS
                     Aerzen specialises
                     in small PM brakes
                    Industrial Drive Systems prepares for the future and
                    has decided to have the Aerzen location specialise
                    in the production of small permanent magnet (PM)
                    brakes. Ralf Wieland is convinced, IDS customers
                    and the Kendrion locations Villingen and Aerzen will
                    both benefit from this decision.

                    Since its acquisition in 2010 the Kendrion          The relocation of the frame size 02 was finished                 The relocated workstations for the
                    Aerzen location is the specialist in the            after a limited transition time. As from December                assembly of the PM02 brakes from
                    production of small electromagnetic                 the Aerzen production facilities will be ready                   Villingen to Aerzen. From left to right
                    clutches and brakes within our company.             to meet all customer needs and demands. The                      from the Kendrion Aerzen team: Petra
                    The Aerzen location focuses on the serial           relocation of the frame size 03 will also be finished            Michalski, Thomas Schöttelndreier,
                    production of customer specific components          in 2017. The expected increasing demand for                      Detlef Schulte, Holger Druffel.
                    and the full service production of orders of        smaller permanent magnet brakes definitely offers
                    smaller production batches. The relocated           growth potential for the Aerzen location. At the
                    production perfectly strengthens the existing       same time the production capacities for the PM
                    product portfolio.                                  production at the Villingen location were extended.

Magnetised 2017 3                                                   7
A good start, now let's step up - Kendrion NV
BEHIND THE SCENES AT KENDRION MISHAWAKA

          Small is beautiful
           IMS     Kendrion Mishawaka is one of the company’s smallest
                   locations when it comes to doing complete projects
                   all under one roof. It serves several niche markets and
                   manages to grow in promising alternative directions. And
                   with a remarkable webshop Kendrion Mishawaka follows
                   new creative paths in opening up new markets.

                                                                         TRI-TECH, LLC
                 ‘76                                ‘99             BECAME PART OF KENDRION       ‘12
                              RENAMED                                 AND JOINED INDUSTRIAL
                             TRI-TECH, LLC                           MAGNETIC SYSTEMS (IMS)

        START OF COMPANY                         MOVE TO NEW                              KENDRION TRI-TECH, LLC
            TRINETICS IN                      17,000 SQUARE FOOT                                 RENAMED
            MISHAWAK A,                      FACILITY AT MAGNETIC                           KENDRION MISHAWAK A
           INDIANA (USA)         ‘97           DRIVE, MISHAWAK A             ‘07

                                                          8
3   | ecare 2017
A good start, now let's step up - Kendrion NV
MARKETS

                                                                         In 2007 Kendrion acquired Tri-Tech, LLC, because
                                                        30%     35%      of a potentially very big order for the supply of parts
                                                                         for postal machines in the US. For local production
                                                                         Kendrion was looking for a manufacturing facility.
                                                                         Managing Director Corey Hurcomb says: “It was
                                                           35%           also around the time that Kendrion started to look
                                                                         to expand outside of Europe. It had just opened
                                                                         the factory in Suzhou and the company wanted to
                                                   BEVERAGE INDUSTRY     enter the US as well. We were the first American
                                                                         manufacturing location.”
                                                   GREENERGY/POWER
                                                     DISTRIBUTION        Two markets
                                                                         At that time the company’s biggest customer was
                                                    OTHER MARKETS        in the beverage dispensing industry. Kendrion
                                                                         Mishawaka produced the coils for the Coca-Cola
                                                                         drinks dispensers worldwide. And it still does, now
                                                                         also for other drinks and other customers. “A niche
                                                                         market, which is still big in the States. But we have
                                                        33 EMPLOYEES     also developed into other directions, for instance
                                                                         in energy and power distribution. Our colleagues
                                                                         in Germany have always been strong in this field
                                                                         and we have learned a lot from them. Of course,
                                                                         markets, players and legislation are different but the
                                                                         technology is very similar. Instead of depending on
                                                                         just one market, we now aim at two major industrial
                                                                         sectors.”
                                                   19 WOMEN | 14 MEN
                                                                         Challenge
                                                                         Corey sees drafting and retaining good talent
                                                                         as his biggest challenge for the near future. With
                                                                         manufacturing and industry withdrawing from
                                                                         the US, in the 1990’s and early 2000’s, training
                                                                         engineers and mechanics has been neglected.
                                                                         But the tables are turning and over the past two to
                                                        AVERAGE AGE      three years production and manufacturing have
www.solenoid-ninja.com                                                   been coming back. With a ‘war for talent’ and fierce
                                                                         competition in the labour market as a result. “We are
A special part of the Kendrion Mishawaka                                 lucky to have good and loyal people on board with
business model is a website called solenoid-                             relatively long-term relationships with the company.
ninja.com. With a potentially large market                          45   Part of our CSR programme is therefore keeping
like the US but with only three sales people,                            our people happy and taking good care of them.
Corey and his people do things differently                               We have company picnics, Christmas parties and
when it comes to marketing. Kendrion                                     general celebrations, offer training opportunities,
Mishawaka started a stand-alone webshop,                AVERAGE AGE      support the local community by sponsoring a Middle
selling off-the-shelf solenoids and valves               OF SERVICE      School robotics team, and when we do well, we
to customers from all over the US. Not only                              share our success with our staff.”
products from Mishawaka, but also from other
Kendrion locations. Corey Hurcomb: “A great                   6,5
way of selling without the intervention of sales
people. But at the same time an opportunity to
build up business relationship with companies
and people that want something special
or bigger quantities. With more than USD
100,000 in turnover this year the webshop is
doing better than we expected.”

Magnetised 2017 3                                   9
                                                                                                               brood 2017 | 4
A good start, now let's step up - Kendrion NV
projects
                                                                                                Corporate IT:

                                                                                                and activities
                                                                                                Corporate IT runs a packed schedule.
                                                                                                We picked out six topics to give you an
                                                                                                idea of the diversity IT is dealing with.

                                                                                                1
                                                                                                IFS in China
                                                                                                On 1 October 2017 IFS was implemented in Suzhou, replacing
                                                                                                their old ERP systems, a very successful project.

                                                                                                IFS Barcoding solution
   From left to right: Ronny Splettstößer, Joep van Beurden, Frank Sonnemans,                   Based on the practical experience of barcoding in Eibiswald

                                                                                                2
   Florian Perkiewicz and Robert Lewin in front of the heat buffer holding 10,000 liters        (Austria) and an agreed new concept of our business units
                                                                                                last year, IFS adapted a Kendrion specific barcoding solution.

              New power plant
                                                                                                Before the implementation and rollout to our locations gets
    ICS                                                                                         started, a very detailed test is indispensable to avoid any
                                                                                                pitfalls. Several locations will go live in the next months.
     PC

              in Malente                                                                        Sourcing projects
                                                                                                Corporate IT has started two pilot projects to set up a unique

                                                                                                3
                                                                                                platform for corporate communication and collaboration,
   Just in time for the upcoming winter season,                                                 focusing on the technical feasibility of Microsoft Office towards
   Kendrion Kuhnke in Malente commissioned a                                                    cloud services and on creating a concept for a Communication
   new combined heat and power plant (CHP).                                                     & Collaboration Platform with the focus on Microsoft SharePoint.
                                                                                                This will reduce all our efforts for general office administration,
   The old heating system was more than 25 years old and is now                                 making the handling of our document management and the
   replaced by a modern, highly efficient CHP system. Kendrion                                  coordination of schedules and tasks much easier.
   Kuhnke also exchanged all connected pumps and thermostatic
   valves. CHPs are very energy-efficient because of an almost                                  IT Security Policy

                                                                                                4
   entirely converted fossil combustible material (gas) into useful                             IT Security is increasingly important. A new policy will guide us
   energy. At the heart of the system is a Viessmann Vitobloc 200,                              corporate-wide and protect us better from e.g. cyber-attacks
   which basically works as a gas-powered engine, producing                                     through the internet, social engineering and hacking. Focus
                      both heat and electricity. With this new CHP                              in the coming period will be on making our employees better
                       Kendrion Kuhnke achieves a CO2 reduction                                 aware of this increasing risk.
                        of about 88 tons per year as a contribution to
                        the overall Kendrion CSR programme.                                     KPIs

                                                                                                5
                                                                                                Corporate IT has created a number of Key Performance
                               Lower costs                                                      Indicators in order to provide the business with more
                                During the first four weeks of operation,                       transparency referring to their activities and actions. They are
                                 the system produced 45,900 kWh of                              now finetuning the KPIs on e.g. availability, response times and
                                  electricity and 76,950 kWh of heat,                           customer satisfaction.
                                  which is approx. 15% of the overall
                                   electrical energy consumption. In a                          New IT Service Manager

                                                                                                6
                                    second step Kendrion Kuhnke plans                           In July 2017 the new leader of the Corporate IT service team,
                                     to invest in an additional module of                       Andreas Doepfer, joined Kendrion. Over the last two years
                                      the same size in 2018.                                    he already worked for Kendrion as an external consultant,
                                       The amortisation of the investment                       managing the IFS specific tickets at Kendrion. Andreas has
                                     will be achieved by lower energy                           a lot of practical and very detailed
Claus-Peter Puknus and          costs and governmental subventions                              experience related to our logistic and
the CHP control unit            within 4-5 years. During a recent visit                         IT processes. We are really happy
                                to Malente Kendrion CEO Joep van                                that with Andreas we could finally
                                Beurden and CFO Frank Sonnemans got                             close this long open position and can
                                a first-hand impression of the successful                       now intensify our cooperation with all
                                commissioning of the new power plant.                           local IT colleagues and sites.
                                                                                                                        Andreas Doepfer

                                                                                           10
TEAM LEGAL

   Anticipating issues,
   resolving business                                                                                           Yvonne Wiersma (left) and Hélène Verhoeven

   challenges
        Every single aspect of doing business
        nowadays has a legal or regulatory
        component. Think of sales conditions,
        contracts, labour and employment,
        compliance, litigation, risk and dispute
        management and corporate governance…
        With three specialists Kendrion’s legal team
        supports management and the business
        operations by interpreting the legal and
        regulatory environment and by resolving
        complex business challenges and
        identifying proactive solutions to eliminate
        or mitigate risks.
                                                                                        Arne-Christoph Hutter
                                                                                        and Wilma Stuiver

    “We are a centralised balancing act in a             Areas of expertise                                     Yvonne Wiersma
    decentralised organisation,” laughs Yvonne           The legal team members are, apart from                 Joined Kendrion in September 2017;
    Wiersma, the recently appointed new General          Yvonne Wiersma, Hélène Verhoeven, Arne-                started her professional career as
    Counsel (but first among equals, as she wishes       Christoph Hutter and Wilma Stuiver. They all           a lawyer; worked at several stock
    to stress). “In order to add value to the Kendrion   have specific legal and technical expertise            listed companies and a private equity
    organisation, it is important that the legal team    as well as non-legal business expertise.               firm; committed to development and
    not only provides an answer to the specific          Hélène focuses on Corporate Governance                 improvement.
    legal question, but also anticipates issues and      and Compliance; Arne, working from Markdorf
    complex business challenges, and proactively         Germany, concentrates on the commercial and            Hélène Verhoeven
    identifies solutions to eliminate or mitigate        operational side of the business; Wilma focuses        Joined Kendrion a year and a half ago;
    risks. We do our utmost to make sure that the        on trademark registrations and supports the            started her career at a reputable Dutch
    business can operate at its best. We do not          team administratively; and Yvonne is overall           law firm; has particular experience in
    impose anything on anybody, but are committed        responsible for all legal and regulatory affairs       corporate governance and securities law.
    to the interests of the whole company and to         of Kendrion and has a special focus on the
    delivering the best results for the business.        development and implementation of global               Arne-Christoph Hutter
    In providing support it is critical that the legal   policies and business and governance standards         Joined Kuhnke (now Kendrion Kuhnke) in
    team possesses legal and technical expertise,        and Kendrion’s stock-exchange listing.                 2009; worked at legal firms, specialising
    but also non-legal business expertise, such as                                                              in media and copyrights; has extensive
    industry expertise, and a solid understanding        Strategic direction                                    industry expertise and well developed
    of relationships and the business aspects of         “In line with Kendrion’s Simplify Focus Grow           contract drafting skills.
    how to function in a decentralised corporate         strategy, we allocate our resources as efficiently
    environment.”                                        and effectively as possible, and we constantly         Wilma Stuiver
                                                         assess our individual areas of expertise and our       Joined Kendrion 19 years ago after
                                                         division of tasks, all with a view to continuously     working at a bank for a short time;
                                                         improving our performance. That’s how we are           committed, experienced and proactive
                                                         aligned with Kendrion’s Simplify Focus Grow            executive assistant.
                                                         strategy.”

Magnetised 2017 3                                              11
INSIDE KENDRION

                                                                                         EVENT

                                                                                       International HR
                                                                                       Meeting 2017
                                                                                     In October 14 Kendrion HR colleagues from around the world
                                                                                     came to Eibiswald, Austria for the third international HR meeting.
                                                                                     Especially for the new HR Managers the meeting was a great
From left to right:                                                                  opportunity to get to know their colleagues personally. All Kendrion
Adriana Ciubotaru,                                                                   locations presented their novelties and brought up a variety of
Arno Hoffmann, Waltraud                                                              topics. After three CSR workshops about the themes ‘Diversity’,
Freigassner, Nadine Maier,                                                           ‘Company culture’ and ‘Employee satisfaction survey’ the Kendrion
Martina Svobodova, Karin                                                             Eibiswald location introduced its work and objectives, followed
Pichlbauer, Jenny Jiang,                                                             by a discussion on ‘Applicants’ Management’ and a factory tour.
Dirk Faupel, Kathrin Grahl,                                                          The meeting ended with a joint dinner, to which Joep van Beurden
Victoria Zhou, Matthias                                                              could be welcomed. All participants agreed that these two days
Gesell, Alexandra Noll,                                                              will step up international cooperation and contribute to further
Paula Vincent, Thomas Fritz                                                          developments in the HR field.

      EVENT      IMS

                                                                                                                   Work@SIG
    IMS at the
                                                                                                                   at Kendrion
    MOTEK 2017                                                                                                     During the company experience days
                                                                                                                   ‘Work@SIG’ pupils of different schools
                                                                                                                   could gather information on the job
                                                               Max Stroppel, Karlheinz Stroppel, Jens Griener,     opportunities in the region. Many
                                                               Stefan Laufer (Kendrion IMS)                        youngsters visited Kendrion at the
                                                                                                                   Engelswies location in Germany.
                                                                                                                   After welcoming the pupils, trainer

                                                               Kendrion                                            Hans-Peter Hipp and Key Account
                                                                                                                   Manager Karlheinz Stroppel

  From left to right: Andreas Rosenfelder, Gerd-Uwe Jurenka,
                                                               Team takes                                          introduced Kendrion, led a company
                                                                                                                   tour and answered questions. The
  Sören Storbeck, Sarah Schütz, Daniel Guggolz, Albert Münch
                                                               part in                                             pupils could also experience the daily

                                                               Kraftstein
                                                                                                                   tasks of an industrial mechanic or
  For the 7th time in a row Kendrion was one of the 900                                                            mechatronics engineer.

                                                               Battle
  exhibitors of the MOTEK, the international trade fair
  for automation in production and assembly. IMS
  showed its latest oscillating systems, linear and rotary
  solenoids and complete assembly units. Co-exhibitor
  IDS presented its newest braking magnets. For many           The Kraftstein Battle is a real sports
  solutions in robot technology and in handling and            challenge. Last September four
  mounting systems, electromagnetic products are               Kendrion employees took part and had
  indispensable. That is why Kendrion could welcome            to overcome demanding obstacles
  many interested visitors. An absolute showstopper            over a distance of 13 kilometres. The
  was the Kendrion bullet track with sweets dispenser,         obstacles could only team wise be
  demonstrating the working methods of electromagnets.         coped with. The highlight was right at
  MOTEK 2017 was successful for Kendrion; existing             the end: two water filled containers that
  customer contacts could be extended, new contacts            could only be passed diving through.                From left to right: trainee Simon Kiesewetter,
  started. The fair also gives an idea of the trends and       The organiser WERMA Signaltechnik                   Jonas Reiser, Azubi Simon Stier, Jan Reichle,
  developments: this year the focus was on man-machine         finished it all off with a grand barbecue!          Leonard Querner, Sophia Hayn, Artur Gaiser,
  cooperation and security and digitisation of production.                                                         Anna Marquart, Pascal Laplace, Lara Marquart,
                                                                                                                   Key Account Manager Karlheinz Stroppel,
                                                                                                                   trainer Hans-Peter Hipp

                                                                       12
Together@
                                                       CSR Strategy
      Kendrion
                                                       2018 and beyond
      supports local                                   With the Corporate Social Responsibility (CSR) programme
                                                       “Taking Responsibility” great achievements have been realised
      initiatives                                      over the past three years. Progress has been made in various
                                                       areas, including the establishment and further improvement
      As part of our Taking Responsibility             of sustainable business processes, the reduction of energy
      Programme we have started a new initiative,      consumption and CO2 emissions, the introduction of different
      Together@Kendrion. With Together@
                                                       Health & Safety initiatives, the increased commitment of our
      Kendrion we reward community investment
      initiatives, submitted by our companies and      suppliers to make a positive contribution through their adherence
      employees. On the basis of specific criteria     to the Kendrion supplier Code of Conduct, the realisation of
      Kendrion will support these financially. The     community investments by offering Indian students internships
      annual total funds of Together@Kendrion
                                                       at Kendrion and the Together@Kendrion initiative… and in many
      are EUR 10,000. You will understand that
      we can only support a selection of the           other areas important improvements have been accomplished.
      proposals handed-in.
                                                       As the current Corporate Social Responsibility (CSR) programme comes to its end, we
      Criteria                                         are near the beginning of the updated CSR strategy covering the years 2018 and beyond.
      Do you have a project you want Kendrion          Although the updated CSR programme will formally be launched in 2018, a sneak preview
      to support? Make sure the project meets          of the CSR programme is provided here. Kendrion’s CSR programme will be closely
      the Together@Kendrion criteria (ask your         aligned with the Simplify Focus Grow strategy and will reflect our joint mission to further
      Plant Manager or CSR Ambassador!).               integrate sustainability within our business processes and to conduct business in an
      Then use the special Together@Kendrion           environmental conscious manner and to practice social responsibility in our day-to-day
      form for your application. Explain the           business operations. With our CSR programme, we express our commitment to operate
      exact goal of the project and the way in         our businesses in an economically, socially and environmentally responsible manner.
      which it contributes to the focus areas
      Education & Development, Human rights,           With the new CSR programme we:
      Equal opportunities, Health & Well-being,
      Environmental protection, Recycling/             •   Simplify the way we think, act and communicate about CSR;
      Circularity and Technology. However, if you
      think your selected project really fits in the   • Focus on long-term value creation, meaningful contributions and making a positive
      philosophy of Together@Kendrion although                difference;
      it does not meet the criteria / focus areas,
      please apply anyway!                             •  Grow   the community committed to CSR and sustainable operation of businesses
                                                        and continuously improve and grow our CSR footprint, impact and awareness.
      Community
      Send your applications for 2017 in before        Pillars of Value Creation
      31 December of this year. For next years         We aim at creating value for Kendrion and others through important so-called Pillars of
      the dates are 1 April and 1 October. The         Value Creation: Natural Capital and Human Capital. With Natural Capital we focus on
      Review Committee (Joep van Beurden               renewable and non-renewable environmental resources, aim to realise further reduction
      (CEO Kendrion N.V.), Yvonne Wiersma              of energy consumption and CO2 emissions, and take a responsible approach towards
      (General Counsel Kendrion N.V.) Kathrin          renewable energy sources. With Human Capital we emphasize people’s competences,
      Grahl (HR Kendrion Kuhnke Malente) and           capabilities and experiences and their motivations, including ethical values and risk
      Wilma Stuiver (Executive Assistant Kendrion      management approach. Human Capital themes for the new CSR programme that are
      N.V.) will assess all applications and has       under consideration include important topics like ‘diversity and inclusion’ and ‘company
      the final say on approval or rejection. With     culture’. How do we drive operational excellence, and how can behaviours contribute to
      Together@Kendrion we aim at supporting           the successful realisation of the Simplify Focus Grow strategy?
      employee engagement and the community.
      For any questions, please feel free to                                As today, the updated CSR programme will be
      contact Wilma Stuiver (takingresponsibility@
                                                                            supported by concrete, measurable and time-bound
      kendrion.com).
                                                                            targets through which we keep track of our progress.
                                                                            More details about the CSR programme will follow.

Magnetised 2017 3                                       13
INSIDE KENDRION

        EVENT      CV

       Suppliers Day
       in Markdorf                                                                  CV

                                                                                    PC
                                                                                             Management bonding
                                                                                             in Shelby (USA)
       On their Suppliers Day on the 20th October, Markdorf
       welcomed companies, specialising in the C-Parts field.                      Shelby Management team has changed, with a new Managing
       C-Parts are especially fasteners (screws, nuts, pins, washers               Director, Operations Manager and Quality Manager. In order to
       etc.). 25 people representing 11 different companies took                   make this new team cohesive, productive and most of all unified,
       part. Kendrion introduced the CV business unit to these                     the Managing Director Lu Reckmann and HR Director Paula Vincent
       potential and existing suppliers and familiarised them with the             figured why not have a little bit of fun so everyone could see the inner
       specific requirements of C-Parts Management at Kendrion                     personalities of each Manager, outside of their managerial role. The
       Markdorf. Kendrion called all participants to tender for a                  first activity would be working in pairs matched with a manager that
       C-Parts Management relationship in Markdorf. Offers and                     you normally do not have a lot of dealings with. We thought pumpkin
       logistic concepts are expected to come in before the end of                 carving would be a lot of fun and take us back to our childhood. The
       this year.                                                                  2nd team building activity is scheduled for December 5, 2017. Staff
                                                                                   have been recruited as part of an elite group of Black Out agents,
                                                                                   involved in intense problem solving as they find clues, solve puzzles,
                                                                                   and crack codes to complete the mission and escape the Trade St.
                                                                                   Epidemic and save the world from a zombie apocalypse! We will let
                                                                                   you know if they are successful.

 ICS
           Kendrion Kuhnke
 PC

           goes international
                                                                                            CV      Open Day at
                                                                                                    Kendrion Markdorf
                                                Kendrion is a European
                                                company with an
                                                international customer
                                                base. English is therefore                Last October Kendrion Markdorf (Germany) granted
                                                the business language not                 visitors the opportunity to discover the secrets of
                                                only for customer contacts,               electromagnetism. All Markdorf inhabitants and
                                                but also for internal                     everybody interested were invited to take a look behind
                                                communication between                     the scenes. Secondary school pupils could inform
                                                companies of the Kendrion                 themselves on Kendrion job training opportunities.
Group. Kendrion Kuhnke in Malente encourages not only managers                            In the company show room visitors could get to
and persons in direct customer contact to learn English. Employees                        know Kendrion’s products and have their functioning
in administrative functions, such as procurement, production, product                     principles explained to them. During company tours
development, as well as technical and general services are also eligible                  they were given an insight into Kendrion’s core
to join the ongoing English courses.                                                      activities; the production departments ran a regular
Increased interest in the ongoing language training programmes                            working day. At the end of the tour one could see how
at Kendrion Kuhnke indicates that more and more employees are                             and where Kendrion products are built in in a bus.
aware of the benefits of being able to fluently communicate in English.                   Kendrion Markdorf was pleasantly surprised about the
The courses are held by an English native speaker and are highly                          great interest in our company and can look back on an
appreciated by those participating. Employees wishing to join the next                    incredibly successful event!
course are encouraged to simply approach their supervisor.

                                                                              14
ICS
                Adapting to growing markets
    Especially among brand          This has boosted production volumes at                Improvement
                                    Industrial Control Systems (ICS), but since           Even Kendrion’s Taking Responsibility
    label partners, Kendrion        such customers demand custom-made                     initiative was taken into consideration
    Kuhnke’s modular                solutions in short lead times, the related            by moving from printed documents to
    EtherCAT® I/O system FIO        production processes and logistics also               paperless on-screen information at
    enjoys increasing popularity.   became increasingly complex. To tackle this           the mounting stations. The improved
                                    complexity, a special workshop was used to            production and logistics processes
                                    gather ideas, define targets and develop an           reduced inventories, minimised
                                    especially adaptable logistics concept. As a          administrative tasks and resulted in
                                    result, barcode scanning was introduced to            higher employee satisfaction due to self-
                                    further optimise supply processes and trigger         responsible work processes. Additionally,
                                    material orders directly at the mounting stations.    ICS is now better able to produce any
                                    In order to further improve production and            quantity from 1 onward without delays.
                                    logistic processes, material storage was newly        Due to the huge improvement, ICS is
                                    defined and moved from the warehouse directly         planning to transfer this production and
                                    to the production floor. Suppliers were closely       logistics concept also to other production
                                    integrated into the overall process by newly          lines.
                                    defined bin sizes and lead times.
     Tobias de Kathen

     Kendrion
                                                                           Through dedicated hard work, attention to detail and a
                                                                           robust quality process Kendrion Shelby has achieved the

     Shelby
                                                                            ‘Outstanding Quality Award’ from FCA. This performance
                                                                             based award was for the 2016 calendar year and is

     achieves
                                                                             based on a number of tight performance metrics.
                                                                             All these were met as volumes have steadily risen to

     FCA Quality
                                                                              all time high levels. From a choice of suppliers FCA
                                                                              chose Kendrion as their partner to grow the 8 speed

     Award
                                                                               transmission business to nearly 800,000 units in
                                                                               calendar year 2018. Congratulations are in order for
                                                                                the entire Kendrion team in Shelby North Carolina!

                              IDS
                                      Full-automatic production unit
                                      for Industrial Drive Systems
                                    In order to remain competitive the business          The automation project is done in two stages
                                    unit Industrial Drive Systems has planned the        that will be finished by the end of 2018.
                                    optimisation of parts units in the permanent
                                    magnet brake area. As a result, output and           The IDS employees are excited about the unit
                                    productivity are expected to increase and            and curious to see how a full-automatic robot-
                                    quality will improve. IDS has implemented a          driven unit will automatically mount the single
                                    radial point-riveting unit that will take over the   parts, especially when operating at full speed
                                    riveting of the spring segment onto the anchor.      and maximum capacity. For the operation of
                                    Where before two CNC units were operated             the units production employees were
                                    manually by one employee each, it is now the         selected who are excited,
                                    full-automatic unit doing the entire job. On         motivated and looking
                                    the manual riveting units the employees did          forward to executing
                                    approximately 500 pieces, per shift and unit;        these new tasks.
                                    the new full-automatic unit does approximately
                                    1,125 pieces (per shift) and does not get tired!

Magnetised 2017 3                              15
Purchasing workshops

   Savings are
   1:1 profits
      Purchasing costs are easily the biggest
      expense of the Kendrion Group. Our
      purchasing efforts are therefore a
      critical success factor, which contributes
      considerably to Kendrion’s company results.

Benjamin Krämer, Manager Purchasing & Logistics PC Villingen, is convinced the
present-day purchaser should not think in prices, but in costs. In a modern purchasing
organisation negotiations are not only about RFQs but also about objective cost                    Picture above, back: Benno Zabel, Christoph Becker, Christina Krämer,
reasoning. ‘Far too expensive’ is a subjective notion and out of date. In order to                 Matthias Laug, Alexandru Bocsa, Patrick Mossmann, Benjamin Krämer.
improve this understanding of costs Benjamin organised two calculation workshops.                  Front: Patrick Noack, Eugen Eckhardt, Swetlana Schnekenburger,
With Berthold Schneider (famous business consultant for purchasing and logistics)                  Paul Stroescu, Daniel Gojkic, Berthold Schneider (Coach)
they involved an eminent authority in the field of cost analysis. Both company-wide
workshops were held in Villingen. Benjamin was happy he could provide 24 Kendrion                  Picture belowe, back: Volker Raithel, Erwin Messner, Peter Födisch,
purchasers with the possibility to get to know each other personally, exchange                     Gerhard Wagner, Roman Pliska, Berthold Schneider (Coach), Oliver
information and learn from each other. On 16 November 2017 a Kendrion Global                       Düsing. Front: Ralf Radke, Mario Reese, Ralf Brunner, Peter Prattes,
Purchasers meeting was organised in Villingen to further discuss this important topic.             Tanja Dahm, Ludek Hranicka

Kendrion HiPo Programme trains to lead
                                                      From left to right: Frank       The Kendrion HiPo programme aims at identifying, promoting
                                                      Sonnemans, Julia Kramer,        and developing Kendrion employees who are in time expected
                                                      Bernd Fuerst, Ann-Christin      to take over a higher position within Kendrion. All selected
                                                      Balschus, Jie Shi, Andreas      candidates start the programme with an individual analysis
                                                      von Döhren, Andrei Nicolae      of their strenghts and weaknesses, followed by an intensive
                                                      Iorgulescu, Thomas Prior,       High-Potential Programme. The programme lasts three years
                                                      Ludĕk Hranička, Andreas         and involves personal development and six different workshops,
                                                      Baumann, Michael Schaefer,      each running over two days together with Mercuri Urval.
                                                      Sven Desens, Janina Willmann,   The workshops include the setting of a personal development
                                                      Christiane Diefenbach and       agenda, self-management, teamwork, focus on finance, conflict
                                                      Joep van Beurden                management and people management tools.

                                                                                      Entrepreneurial
On Tuesday 21 November 11 Kendrion employees                                          At the end of the last workshop, the 11 graduates of the second
                                                                                      HiPo group were welcomed by their head office colleagues
from around the world finished their three
                                                                                      in Zeist. CEO Joep van Beurden took the opportunity to make
year High Potential course. During an informal
                                                                                      a speech and to ask each of the participants what they have
ceremony at the Kendrion head office in Zeist                                         learned, where they see themselves in five years’ time and
(NL) glasses were raised and congratulations                                          what Kendrion should improve on. With respect to Joep’s final
exchanged. The participants are ready to take                                         question, ‘sharing knowledge and expertise’ was the most
over a management or specialist position within                                       frequently heard remark. He also urged and encouraged the
                                                                                      HiPo’s to adopt an entrepreneurial attitude. After a few drinks and
our company.
                                                                                      a nice dinner in a restaurant all participants prepared to travel
                                                                                      back to their home base. Ready to take on their next challenge.
                                                                           16
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