Values, topics and developments

The strength of a world market leader What characteristics must a business enterprise possess in order to be continuingly successful? In our view, one of the most essential is autonomy. We therefore attach great importance to our ability, as a family firm, to act independently – and have done so for almost 140 years. For our customers in the petrochemicals, power technology With one of the most modern Research & Development and industrial furnace sectors – among others – we invest in department, we are able to realistically mirror production steps, technologies, materials and services that set...

People are our driving force We are strongly aware of the importance of our employees for the success of Schmidt + Clemens and so we invest heavily in their skills and motivation.

Our proprietary S+C Academy offers completely new and very Schmidt + Clemens is certified to OHSAS 18001:2007 and extensive basic and further training programmes. Our works ISO 14001:2004. Both certificates are a spur for us to sustain kindergarten, a company fitness studio and our state-of-the- our efforts in the fields of environmental protection and art canteen are clear indications of the weight we also attach occupational health and safety on a high level. At S+C, it is a to the work environment. Flexible work time models and the matter of course for different cultures to work harmoniously...

Foreword In 2016, the Schmidt + Clemens Group was once again able to close the financial year with a positive result. However, the difficult economic and political operating environment, the fall in the price of nickel and For 2017, despite some difficult the postponement of major projects on the important oil and gas mar- ket all took their toll, with the result that sales closed some 21% down Board expects to see the Group on the previous year. One of the most important strategic goals – the continuing to develop positively. It profitability of all the plants – was achieved through the sale...

In the past financial year, our work was dominated by several major The market environment continued to be characterized by difficult projects: the restructuring at our parent site in Germany and the con- operating conditions in 2016: a debt and refugee crisis in Europe, struction of a further production hall at our plant in the Czech Republic. war in Syria, worldwide terrorist attacks. And the oil price with its We had already embarked in 2014 on work to optimize the plant only very slow rise also played a role in this context. layout in Lindlar-Kaiserau from the bottom up. This project will...

Tradition and future Schmidt + Clemens is an independent family enterprise that is proud of its almost 140-year tradition and is looking with confidence into the future. From left to right: Dominic Otte and Jan Schmidt-Krayer

We know our strengths, are continually building on them, and as other values such as honesty, responsibility, respect and utilize them for the specific benefit of our customers. Values tolerance. Our ability to act and react with autonomy and are the basis for everything we do. This includes conducting on our own responsibility makes us a fast-responding and our customer relationships in a spirit of partnership and dependable partner for our customers. pursuing a cooperative personnel management style, as well CO RPO RATE STRUC TURE O F SCHMIDT  +  CLE ME N S GMB H  +  CO.  KG CHIEF EXECUTIVE...

The only slow recovery in the oil price resulted in a marked reluctance to invest on the part of our customers in the petrochemicals sector. This in turn led to a sharp reduction in the consolidated sales of the S+C Group in the 2016 financial year. However, the modernisation and optimization of the production in large part to the gratifying development in business on the processes brought about by the investments of the preceding ethylene market, which also remains highly promising for years, and the cost savings this gave rise to, enabled us to the future thanks to the technological market...

REVENUE DISTRIBUTION BY REGION 31.12.2016 (IN %) 1 Germany, Schmidt + Clemens Group 3 Czech Republic, S+C Alfanametal 4 Malaysia, S+C Asia / Schmidt & Clemens Engineering Services CONSOLIDATED FINANCIAL STATEMENTS IN BRIEF (IN THOUSAND €) Schmidt + Clemens Group

Sales -overcoming challenges

Petrochemicals A reluctance to invest was already making itself felt in the financial year 2015, and this trend continued in 2016. Identified projects were repeatedly postponed or else shelved altogether. This not only impacted on the new installations business; many producers also extended their replacement intervals. In some cases, plants in the methanol, fertilizer production and direct reduction sectors are still operating at less than full capacity, resulting in a corresponding lengthening of their lifecycles. Schmidt + Clemens Group

Market segment: Ethylene The ethylene market is still the main pillar for our Petrochemicals business. The principal source of volume in this area are the plant operators. In the recent past, we have succeeded in winning some new customers in this sector, thanks also to our technical differentiation. Especially noteworthy in this context are framework agreements with E uropean and North American operators. We have also been successful in landing a number of important, largescale investment projects in the cracker segment. Our latest technical innovation, known as “Scope”, is meeting with broad...

Special Products Despite the difficult operating conditions, it proved possible to tap into potential available in other segments, e.g. Mechanical Engineering, Power Technology and Industrial Furnace Construction, allowing a positive outlook to be made for 2017. The increased investment interest in the growth region of North compared to the previous year – we were able to win some America and in the Industrial Furnace Construction segment, the relevant new customers and reference projects and to very nearly restructuring that has been undertaken in the Special Products reach the targets we had...