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We engineer the future

Andritz AG

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Stattegger Strasse 18A-8045 GrazAustria

Andritz AG

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Andritz AG

Stattegger Strasse 18

A-8045 Graz, Austria

Tel.: +43 316 6902-0

Fax: +43 316 6902 415

E-Mail: [email protected]

Internet: http://www.andritz.com

For information please contact:

Michael Buchbauer

Corporate Communications/Investor Relations

E-mail: [email protected]

Tel.: +43 316 6902 2979

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Andritz Group Key Figures 1998-2001 (IAS) Key Figures 2001

✂

✂

Notes:

1) Includes consolidation of Andritz-Ahlstrom Corporation from July 1, 20002) EBITDA: Earnings before interest, tax, depreciation and amortization of goodwill3) EBITA: Earnings before interest, tax and amortization of goodwill4) Additions to tangible assets and intangible assets5) Shareholders’ equity w/o minority interests

in MEUR 2001 20001) 1999 1998

Order Intake 1,121 1,083 638 605

Order Backlog (Dec. 31) 740 939 514 524

Sales 1,319 937 656 666

EBITDA2) 95 63 38 35

EBITDA Margin 7.2% 6.7% 5.8% 5.2%

EBITA3) 68 44 23 21

EBITA Margin 5.2% 4.7% 3.5% 3.2%

Earnings Before Interest and Tax (EBIT) 55 34 21 20

Earnings Before Tax (EBT) 60 34 32 40

Net Income for the Year 37 20 20 37

Cash Flow from

Operating Activities 72 43 40 51

Capital Expenditure 4) 24 21 17 13

Employees at Year-End 4,545 4,241 3,021 2,991

(excluding apprentices)

in MEUR 2001 20001) 1999 1998

Fixed Assets 317 339 120 116

Current Assets 625 595 685 703

Total Assets 942 934 805 819

Shareholders’ Equity 5) 230 161 358 376

Equity-to-Assets Ratio (%) 24 17 45 46

Minority Interests 9 60 10 6

Provisions 178 159 112 110

Liabilities incl. Deferred Income 484 517 296 284

Share Capital 95 73 73 73

Extract from Balance Sheet

Sales by Business Area Order Intake by Business Area

Employees by Business Area Employees by Region

Order Intake by Region Sales by Region

Pulp and Paper 67%

Rolling Mills and Strip Processing Lines

13%

Environment and Process Technologies 10%

Feed Technology8%

Others2%

North America27%

Europe41%

Others1%

Asia24% South America

7%

Europe46%

Others2%

Asia14%

Great Britain1%

South America10%

Others 9% Netherlands4%

Austria25%

Germany 9%

North America23%

Northern Europe25%

Pulp and Paper 57%


17%


Feed Technology10%

Others3%

Pulp and Paper 58%


12%


Feed Technology15%

Others5%

France 4%

North America28%

An

nu

al R

epo

rt 2

001

We engineer the futureWe engineer the future

Annual Report 2001

Contents

Highlights of the 2001 Business Year/

Corporate Mission 1

Milestones in the History of Andritz 2

The Year 2001 at Andritz 3

The Business Areas at a Glance 4

Corporate Profile 6

Letter from the Managing Board 8

Status Report

- General Economic Conditions 10

- The 2001 Business Year 11

- Research and Development 15

- Employees 17

- Outlook 20

The Business Areas

Pulp and Paper 22

Pulp Mill Technologies

- Wood Processing Division 27

- Kraft Mill Systems Division 29

- Pulp Mill Services Division 31

Paper Mill Technologies

- Mechanical Pulping Systems Division 33

- Fiber Preparation Systems Division 36

- Tissue Machines Division 38

- Paper Mill Services Division 40

Rolling Mills and Strip Processing Lines 42

Environment and Process Technologies 48

Feed Technology 54

Other Operations/Hydraulic Machines 60

Andritz Shares 64

eBusiness 66

Andritz Automation 68

Quality 70

Environmental Protection 71

Consolidated Financial Statements 2001 73

Report of the Supervisory Board 111

Global Presence 112

- Survey of Andritz Group Companies 114

- Addresses 116

Sales Range 121 Andritz Group Key Figures 1998-2001 (IAS)

Financial Calendar 2002

Full Year Results of 2001

14 March 2002

Annual General Meeting

17 April 2002 (Grazer Congress)

First Quarter of 2002

13 May 2002

First Half of 2002

8 August 2002

First three Quarters of 2002

7 November 2002

Highlights of the 2001 Business Year

Clearly improved market and

competitive position

Sales and EBIT reach record levels,

increase in profitability

Surge of Net Income

Successful Initial Public Offering

Purchase of the remaining 50% stake

in Andritz-Ahlstrom

Corporate Mission

"A Global Market Leader

in High-Tech Production Systems

for Pulp and Paper, Steel and

Other Specialized Industries"

2

Andritz 2001

Milestones in the History of Andritz

1852Andritz is founded by Josef Körösi as

a foundry and machine works.

1900Transformation into a stock holding

company.

1950Creditanstalt-Bankverein buys the

majority of shares.

1987AGIV AG, an investment company

headquartered in Frankfurt, Germany,

becomes new major owner.

1990Andritz buys Sprout-Bauer, a leading

global producer of systems for

mechanical pulp and feed, based in

Pennsylvania, USA. The purchase of

Sprout-Bauer marks the beginning of

the strategic and technological new

orientation of Andritz.

1992By buying Durametal Corporation in

Tualatin, Oregon, USA, Andritz ac-

quires a successful refiner plate

manufacturer. Soon after, it dramati-

cally strengthened its position on the

North American market.

1994In mid-1994, Andritz buys the Kone

Wood Group, a leading supplier of

wood processing equipment for the

pulp industry.

1995The purchase of Jesma-Matador A/S,

a Danish company with an excellent

local market position for feed mill

plants (later renamed Sprout-Matador

A/S) strengthens Andritz’ Feed Tech-

nology Business Area.

1998In January, Andritz buys 75% of Sund-

wiger Eisenhütte Maschinenfabrik

GmbH & Co. based in Hemer, Ger-

many. Sundwig is a leading supplier

of cold rolling mills and strip proces-

sing lines for the international steel

industry.

1999AGIV AG sells its shareholding in

Andritz to a consortium, consisting of

The Carlyle Group, GE Capital, Unter-

nehmensinvest AG, Deutsche Beteili-

gungs AG, Custos Privatstiftung

(founded by Andritz President & CEO

Wolfgang Leitner) and other mem-

bers of the Andritz Managing Board.

2000Andritz buys a 50% stake in Andritz-

Ahlstrom, previously Ahlstrom

Machinery Group, making Andritz a

leading global supplier of production

systems for all types of pulp, includ-

ing chemical recovery systems.

With the acquisition of Universal Mil-

ling Technology (UMT) Andritz be-

comes a global market leader in the

field of feed technology as well.

2001Andritz AG is first listed on the Vienna

Stock Exchange on June 25, 2001.

At the end of June, Andritz buys the

remaining 50% stake in Andritz-Ahl-

strom.

3

Andritz 2001

The Year 2001 at Andritz

JanuaryJiangxi Paper Co. Ltd. (China) entrusts Andritz AG

with the supply of a 550 ADMT/d RT/RTS-TMP

system* including high-consistency post bleaching

for a new paper machine producing newsprint from

local pine.

FebruaryOne of the largest producers of copper, Compañia

Minera Disputada de las Condes Ltda. (Chile), en-

trusts Andritz AG with the supply of two Hyperbaric

Filters – HBF 60/5. These high performance pressure

filters will be used for dewatering copper ore con-

centrate. Disputada has operated Andritz Hyperbaric

Filters for 10 years now.

MarchAndritz presents the financial results for the year

2000 with record values for Sales, Order Intake and

Order Backlog and a marked increase in Earnings

before Interest and Tax (EBIT).

MayThe contract for supply of a deinking system for

secondary fiber treatment to produce newsprint and

SC paper is signed by Yanbin Shixian Bailu Paper

Co., Ltd., one of the largest paper producers in Jilin

Province (China), and Andritz in a formal ceremony.

Andritz presents the financial results for the first

quarter of 2001 and reports substantial increases in

Sales, Order Intake and Earnings.

JuneMarkku Hänninen is appointed President of Andritz-

Ahlstrom as of July 1, 2001.

Andritz shares are listed for the first time on the

Vienna Stock Exchange on June 25, 2001.

Andritz AG buys the remaining 50% stake in Andritz-

Ahlstrom, Finland.

JulyFrom China, Andritz receives a contract for three tis-

sue machines and for the highest-capacity push

pickling line in China, worth over 40 MEUR, confirm-

ing and extending its leading position as a supplier

in this region.

AugustAndritz continues its successful business develop-

ment during the first half of 2001. It reports increas-

es in Sales, Earnings and Order Intake.

OctoberAndritz-Ahlstrom receives a letter of intent from

Zellstoff Stendal GmbH in Saxony-Anhalt, Germany,

for major chemical recovery systems for a green-

field kraft mill. The total value of the letter of intent

is approximately 95 MEUR.

NovemberDespite difficult economic conditions, Andritz suc-

ceeds in boosting its Sales, Order Intake and Earn-

ings for the first three quarters of 2001. A clear

increase in the EBITDA margin is achieved.

DecemberThe City of Singapore awards Andritz a contract for

supply of a drum drying system consisting of five

lines, each with a water evaporation rate of 11 t/h.

With the large systems supplied to Bran Sands,

Glasgow, Cardiff, Louisville and Singapore as the

most recent one, Andritz is the global leader in this

market segment.

The ATX Committee resolves that Andritz AG is to

be included in the ATX share index of the Vienna

Stock Exchange as of January 21, 2002.

*R = Retention Time, T = Temperature, S = Speed, TMP = Thermo-mechanical pulp

4

Andritz 2001

The Business Areas of the Andritz Group at a Glance

Pulp and Paper

Profile

The Pulp and Paper Business Area is one of the global leaders in the supply of plants,

systems, processes and services for production of all types of pulp, for chemical

recovery in kraft pulp production, for fiber preparation in paper making, tissue pro-

duction systems, and engineered, customized and technologically advanced wear

and spare parts. Extensive services complete the large product portfolio.

Products

Plants, systems, processes and services


Profile

The Rolling Mills and Strip Processing Lines Business Area designs and constructs

complete lines for the production of cold-rolled carbon steel, stainless steel and non-

ferrous metal strip. The Andritz Group is the only supplier to master all processes

involved in the manufacture of stainless steel (rolling, annealing and pickling) on a

comprehensive basis and can supply all the production systems through a single

source.

Products

Equipment for the steel, non-ferrous metal and aluminium industry:

/ for all production steps in the

woodyard

/ for manufacturing chemical pulp,

including chemical recovery

/ for mechanical pulp for the paper

and board industry and mechanical

fibers for production of MDF fiber

boards

/ for treatment of recycled paper,

fiber preparation for all paper-

making processes as well as sludge

dewatering

/ for making tissue paper: Crescent-

Former machines, through-air dry-

ing machines and tissue machines

with the TissueFlexTM*) shoe press.

/ Services: original spare parts,

engineered, customized and techno-

logically advanced wear parts, plant

rebuilds and modernization

*)Trademark of Voith Paper, cooperation

partner of Andritz

/ Cold rolling mills/ Strip processing lines/ Surface treatment systems

/ Finishing systems/ Regeneration plants/ Continuous heat treatment

systems

Share of total Sales:

approx. 67%


approx. 13%

5

Andritz 2001

Environment and Process Technologies

Profile

The Environment and Process Technologies Business Area’s product range covers

the entire spectrum of technologies for mechanical and thermal treatment of sludge

from municipal and industrial sewage sludge plants. Critical machines and compo-

nents (screens, crushers, drum and belt thickeners, belt filter presses, centrifuges,

dryer drums and fluidized bed dryers) are developed and produced in-house. The

Andritz Group is a global market leader for systems for mechanical and thermal

sludge treatment.

/ Process water treatment/ Mechanical waste water treatment/ Sludge thickening/ Sludge dewatering

/ Sludge drying / Thermal sludge utilization/ Industrial solid/liquid separation

Products

Plants, systems, machines and processes for

/ Water turbines/ Large-scale pumps/ Centrifugal pumps

/ Reactor pumps/ Space technology components

Products


approx. 8%


approx. 2%

Feed Technology

Profile

The Feed Technology Business Area is the global market leader for development and

production of systems, machines and processes for the industrial production of ani-

mal feed. This comprises complete feed mill lines as well as unit equipment for grind-

ing and mixing, expanding, pressing, extruding, cooling, vacuum coating and drying.

The Business Area also supplies plants and systems for industrial production of bio-

fuel pellets.

Other Operations/Hydraulic Machines

Profile

Other Operations/Hydraulic Machines encompass Andritz Group activities such as

the planning, development, and manufacture of water turbines, large-scale pumps

for selected applications, pumps for the primary and secondary loop in nuclear

power stations, centrifugal pumps for the pulp and paper industry, space technology

components.

/ Size reduction systems/ Conditioners and expanders/ Pellet mills/ Extruders

/ Dryers and cooling equipment/ Pellet coating systems/ Spare and wear parts

Products


approx. 10%

Andritz, the listed Technology Group based in Graz, Austria, is a world market leader

in developing and manufacturing advanced, customized production systems for pulp

and paper making, the steel and other specialized industries (sewage sludge de-

watering and drying, feed industry). Each of the Business Areas also offers special

services – for instance sale of original spare parts or technologically advanced enginee-

red wear parts.

Over the past few years the Group has grown by over 10% per year on average and

in 2001 achieved Sales of over 1,300 MEUR. It has been profitable since 1987.

The Andritz Group was first listed on the Vienna Stock Exchange on June 25, 2001.

From the beginning of 2002, Andritz shares have been quoted in the Prime Market –

the top stock exchange segment – and were included in the ATX share index of the

Vienna Stock Exchange as of January 21, 2002.

Business Areas

The activities of the Andritz Group are focused within four Strategic Business Areas,

which offer high-tech production systems, plants and services for

/ Producing pulp and (tissue) paper (Pulp and Paper Business Area, approx. 67% ofGroup Sales),

/ Processing steel (Rolling Mills and Strip Processing Lines Business Area, approx.13% of Group Sales),

/ Processing and treating waste water and sludge (Environment and Process Tech-nologies Business Area, approx. 10% of Group Sales), and

/ Producing animal feed (Feed Technology Business Area, approx. 8% of GroupSales).

In all four Stategic Business Areas the Andritz Group is one of the global market lead-

ers in the different market segments.

The company’s activities also comprise production of different hydraulic machines,

e.g. water turbines, pumps for the pulp and paper industry, as well as components

for space technology (Other Operations/Hydraulic Machines, approx. 2% of Group

Sales).

Employees and Locations

The Andritz Group has a global staff of over 4,500 employees and more than 60 affil-

iates, distribution and service companies. There are 16 production sites in Austria,

Germany, Finland, Denmark, France, Netherlands, Great Britain, USA, Canada and

China.

6

Andritz 2001

Company Profile

The CompanyBoards

Managing Board

Wolfgang Leitner(President and CEO)

Markku Hänninen (as of 1 January 2002)

Franz Hofmann

Friedrich Papst

Bernhard Rebernik

Supervisory Board

Appointed Members:

Kurt Stiassny(Chairman)

Hans Albrecht

(Deputy Chairman)

Michael Hildisch

Christian Nowotny

Anton Schneider

Hellwig Torggler

Delegated Members:

Johann Tschrischnig

Brigitta Wasserbauer

Andreas Martiner

Growth throughresearch & development andcomplementaryacquisitions

Extension of theservices business

Intelligent costmanagement andpre-emptiverestructuring

In its research centers in Europe and in USA, Andritz develops innovative processes

on an on-going basis. These processes employ patented and other proprietary tech-

nology and have helped the Group obtain its top position. Its global presence and the

technology leadership strengthen the Group’s competitive position and ensure that

important strategic company goals are reached.

Strategy

The strategic target of the Andritz Group is organic growth through intensive re-

search and development and utilization of synergies between the Business Areas,

combined with the acquisition of complementary products and technologies. The

goal is to become a comprehensive supplier of complete process lines in each of the

Business Areas. Pursuant to this strategy, a number of businesses have been purchased

over the past few years and successfully integrated into the Group. For example, the

acquisition of the Finnish company Andritz-Ahlstrom Corporation has enabled the

Andritz Group to become a global leader for high-tech production systems for all

types of pulp, including chemical recovery. Similarly, with the purchase of UMT, An-

dritz advanced to global market leadership for feed technology.

Continuous growth of the services business is a further very important growth area

for the Group. The services business, which accounts for approximately 25% of over-

all Sales, comprises the supply of original spare parts and of technologically advanc-

ed engineered wear parts. Other services include comprehensive Mill Audits, which

help customers identify potentials of optimizing production and of saving money. In

addition, within the framework of an extensive eBusiness Project of the Andritz

Group, special customer-oriented Internet solutions have been implemented. For

instance, the Pulp and Paper Business Area’s Service Club, which was established in

early 2002, offers a wide range of customized services, from online spare parts order-

ing to complete plant documentation and production sequences with online support.

Cost management and future-oriented pre-emptive restructuring have helped secure

the Group’s long-term profitability.

Financial Goals

The Group’s financial goals are:

/ Long-term Sales growth of approx. 10% per year on average

/ EBITDA margin of over 7% (EBITDA as % of Sales)

/ A Return on Capital Employed (ROCE) of over 20%

/ A dividend payout ratio of at least 30% of the Net Income for the Year.

7

Andritz 2001

Ladies and Gentlemen, Dear Shareholders,

2001 was the most successful business year in the long history of Andritz. Despite

the very difficult economic environment, which was additionally exacerbated by the

tragic terrorist attacks in the United States, Andritz succeeded in extending its mar-

ket position and in achieving considerable improvements of its most important

financial key figures. Group Sales and Earnings before Interest and Tax (EBIT) in-

creased to historical records. There are two reasons for this: Firstly the Andritz Group

has succeeded in establishing itself further in its markets as a comprehensive supplier

of overall systems. In this regard, it has enhanced its market position clearly on

account of the last year’s strategically important purchases, Andritz-Ahlstrom and

UMT. Secondly the consistent pursuit of both cost management and pre-emptive

restructuring has increased the Group’s profitability. This strategy will be continued

in the future. The planned merger of the two Finnish affiliates, Andritz-Ahlstrom and

Andritz Oy, and the closure of the UMT production site in Hull, England as of Decem-

ber 31, 2001, are two important actions in support of this.

Andritz AG’s Initial Public Offering in June 2001 was an outstanding event for our

company. In spite of the problems on the international financial markets when An-

dritz went public, we were able to place 2 million new shares successfully with estab-

lished institutional investors at home and abroad. A most remarkable factor was the

high level of participation by our own employees. A total of 8% of the volume issued

was subscribed by Andritz employees, which shows just how closely Andritz

employees identify with the company.

Since January 1, 2002, Andritz shares have been quoted in the highest segment of

the Vienna Stock Exchange, the Prime Market, and since January 21, have been

included in the Vienna Stock Exchange index (ATX). High transparency, quick supply

of information and active Investor Relations vis-à-vis our shareholders are clearly

defined company goals.

As a consequence of a contractual clause related to the IPO, Andritz was able to buy

the remaining 50% of Andritz-Ahlstrom Corporation. The full ownership of Andritz-

Ahlstrom permits the latter’s complete organizational and product-related integra-

tion into the Pulp and Paper Business Area. To this end, the re-organization of the

Business Area into Pulp Mill Technologies and Paper Mill Technologies (effective

January 1, 2002) was implemented. This customer-oriented bundling of the product

and system know-how of both Andritz and Andritz-Ahlstrom makes us one of the glo-

bal market leaders for high-tech production systems and processes for the pulp and

paper industry, with additional synergies being utilized, the competitive situation

being improved and a further Earnings improvement being achieved. Markku

Hänninen, President of Andritz-Ahlstrom, was appointed as member of the Managing

Board of Andritz AG beginning January 1, 2002.

Improved marketposition and Earnings despiteweak economy

Successful IPO

Inclusion in the Prime Market andin ATX

Purchase of theremaining 50%stake in Andritz-Ahlstrom

Re-organizationof Pulp andPaper BusinessArea

8

Andritz 2001

Letter from the Managing Board

An important focus of the past year was the implementation of the eBusiness project

for the Andritz Group. The goal is to turn the opportunities that Internet Technologies

offer into advantages for our customers. Both simplifying business processes in the

value-added chain and creating client-specific, personalized and transaction-oriented

web solutions are of great importance to our customers. With the successful re-launch

of the Andritz public website and the implementation of the Pulp and Paper Service

Club the first two eBusiness solutions of this ambitious project have been realized.

Leading economic research institutes predict that the difficult economic conditions

will likely persist in 2002. During the second or third quarter of 2002 a slight recov-

ery is expected. With a good Order Backlog, satisfactory project activity in the markets

which Andritz serves and the letters of intent received, we expect business to devel-

op favorably in the current year. The logical continuation of Group integration for

optimum exploitation of synergies and the management of projects according to

deadlines and customer requirements will continue to be priority goals for the Group

in 2002. Another focus will be continuous expansion of the services business and

optimization of existing production capacity.

The Managing Board wishes to thank all employees in the Group for their contribu-

tion during the year under review. Only on account of this input, active cooperation

and diligence of each employee has it been possible for Andritz to hold its own in a

very difficult competitive environment and to achieve the best annual result ever in

our history. We also thank our customers and business partners for the confidence

they have placed in us in the past business year. We assure them that we will per-

form to their requirements fully during the year to come.

9

Andritz 2001

Successful start ofAndritz eBusinessproject

Good Order Backlog and highproject activity as abasis of satisfac-tory businessdevelopment in2002

Wolfgang Leitner (President and CEO)

Friedrich Papst Bernhard Rebernik

Markku Hänninen(Member of the Managing Board since January 1, 2002)

Franz Hofmann

Andritz AG Managing Board,

from left to right:

Franz Hofmann,

Markku Hänninen,

Wolfgang Leitner

(President & CEO),

Friedrich Papst,

Bernhard Rebernik

General Economic Conditions

Economic growth became much weaker during 2001. In each of the large economic

regions – the USA, Europe and Japan/Asia – the economy cooled off, a trend that

was further intensified by the terrorist attacks of September 11 in the United States.

The terrible events in New York and Washington hit the USA during a time of parti-

cular economic vulnerability. Partly as a consequence of the expansionary interest

policy of the American Federal Reserve Board (during 2001, interest rates were low-

ered 11 times to the lowest level in 40 years), at the beginning of the third quarter of

2001 the USA was poised to enter a phase of economic recovery. A rise in order intake

and a gradual increase in construction activity gave reason to expect a slight accel-

eration in economic growth. However, the terrorist attacks left American consumers

and companies in a state of apprehension, the consequence being a drop in private

consumption and restrictive investment policies of companies. The US economy

declined during the third quarter – for the first time since the early 1990’s – by 1.3%.

During the fourth quarter, there was a slight growth of 0.2 %. In total, the economic

growth for year 2001 should be approximately 1.1% (2000: 4.1%) in the USA.

The economic development in Euroland was similar to the United States. Declining

exports, which came as a result of the weak demand from the Americas, consider-

ably receding investment activity by companies and diminished consumer spending

weakened the economy significantly. In the view of a harmonized rate of inflation of

plainly over 2%, the European Central Bank (ECB), which is strongly oriented toward

securing monetary stability, pursued a reluctant policy of interest rate cuts. The Euro-

land in 2001 saw total growth of approx. 1.6%, compared to 3.3% in 2000. Austria’s

economy, which is strongly dependent on exports, did not succeed in uncoupling

from this development. Its economic growth decreased to approx. 1.1% in 2001, ver-

sus 3.2% for 2000.

The economic development in Asia and South America experienced considerable

regional variations in 2001. It shrank in Japan, Hong Kong, South Korea, Singapore

and Taiwan, but in China, an important buyer country for Andritz products (rolling

mills and strip processing lines, pulp and tissue paper machines, increasingly also

environmental and process technology equipment) the gross national product

increased approx. 7.6%, maintaining the already high level of the previous year

(+8.0% in 2000).

South America was affected increasingly by the economic downturn in the USA. Its

economic growth declined somewhat from the previous year.

Sources: RZB, WIFO; OECD, OeNB

Considerable slowing of theworld economiesin 2001

USA: Interestrates at lowestlevel in 40 years

Delay in econom-ic upswing as aresult of terroristattacks

Europe: Conservativeinterest policy of ECB

China is experi-encing sustainedhigh economicgrowth

10

Andritz 2001

Status Report

The 2001 Business Year

Note:

For better comparability, the figures of the Consolidated Income Statement as well

as the Cash flow for the year 2000 are presented pro forma including Andritz-Ahlstrom.

Sales

The 2001 Sales of the Andritz Group rose to 1,318.7 MEUR, the highest value in the

history of the company. Compared to 2000, Sales increased by 18.7% (2000: 1,111.4

MEUR).

The Pulp and Paper Business Area increased its annual Sales by 22.9% due to the

very favorable development of Andritz-Ahlstrom, where Sales went up 21.2% over

those of 2000. Rolling Mills and Strip Processing Lines was faced with a slight decline

of its Sales (-1.0%). All other Business Areas in the Group saw their Sales rise: Envi-

ronment and Process Technologies by 1.6%, Feed Technology by 57.7% due to the

consolidation of Universal Milling Technology, and Other Operations/Hydraulic

Machines by 14.5%.

With a share of 67.0% (2000: 64.7%) in the total Group Sales, Pulp and Paper is the

largest Business Area of the Group. Rolling Mills and Strip Processing Lines and

Environment and Process Technologies contribute 12.7% and 10.3% respectively

(2000: 15.2% and 12.0%). The Sales share of the Feed Technology Business Area

increased from 6.1% in 2000 to 8.0% in 2001. The Andritz Group’s Other Oper-

ations/Hydraulic Machines contributed 2.0% to the Sales (2000: 2.0%).

11

Andritz 2001

Status Report

Sales are at thehighest level in thecompany’s history

Sales by Business Area

Pulp and Paper 67%

Rolling Mills and StripProcessing Lines

13%


Feed Technology8%

Others2%

12

Andritz 2001

Sales by Business Area

MEUR 2001 2000*) % change

Pulp and Paper 883.0 718.6 +22.9%

Rolling Mills and Strip Processing Lines 167.4 169.1 -1.0%

Environment and Process Technologies 135.3 133.2 +1.6%

Feed Technology 107.0 67.8 +57.7%

Other Operations 26.0 22.7 +14.5%

Total Group 1,318.7 1,111.4 +18.7%

*) Pro forma including Andritz-Ahlstrom, without UMT

Geographically, the largest market for the Andritz Group was Europe: It

accounted for 46.1% of the total Sales (2000: 47.2%). The share of the Ameri-

cas, 37.5%, showed a slight increase (2000: 33.5%). Asia dropped from 17.0%

in the previous year to 14.2% in 2001.

Order Intake and Order Backlog

Order Intake showed a satisfactory development during the year in spite of

the very difficult economy. It amounted to 1,120.9 MEUR, slightly less than in

2000 (1,233.0 MEUR). It is to be noted, however, that especially Andritz-Ahl-

strom had a particularly high Order Intake, 506.2 MEUR, in 2000 (2001: 339.4

MEUR). Also, the order received from Zellstoff Stendal GmbH in October

2001, in the form of a Letter of Intent worth 95 MEUR, is not contained in the

Order Intake for 2001. The contract is expected to take effect in the second

quarter of 2002 after the overall financing concept has been finalized, where-

upon it will be booked as Order Intake. Pulp and Paper had the largest share

in the Order Intake: 57.3% (2000: 71.9%), followed by Rolling Mills and Strip

Processing Lines, 17.5% (2000: 10.6%) and Environment and Process Techno-

logies, 12.5% (2000: 9.6%). Feed Technology’s share increased to 10.0% –

mainly on account of the consolidation of UMT (2000: 5.7%). The Andritz

Group’s Other Operations/Hydraulic Machines accounted for 2.6% of the total

Order Intake (2000: 2.2%).

The distribution by regions shows the increasing importance of Asia, espe-

cially China. The receipt of some major reference orders for (stainless-) steel

and tissue paper production equipment boosted the Asian proportion from

10.7% in 2000 to 23.5% in 2001. Order Intake from Europe and America rea-

ched 40.8% and 34.3% respectively (2000: 41.6% and 46.5%).

The Andritz Group’s Order Backlog was 740.4 MEUR as of December 31, 2001,

21.1% less than in the previous year (Dec. 31, 2000: 938.6 MEUR), when the

Order Backlog had reached an exceptionally high value.

Status Report

Order Intake by Region

North America27%

Europe41%

Others1%

Asia24%

South America7%

Earnings

The Earnings of the Andritz Group in 2001 developed very favorably. All essential

financial ratios improved considerably from the previous year, due to the improved

competitive position that the Andritz Group has achieved as a supplier of overall

systems. In the Pulp and Paper Business Area, above all, the acquisition of the

remaining 50% stake in Andritz-Ahlstrom led to an enhancement of the Andritz

market position despite a difficult economic environment. Efficient cost management

and pre-emptive restructuring also continued successfully.

EBITDA (Earnings before Interest, Tax, Depreciation and Amortization of goodwill)

rose to 94.5 MEUR or 36.9% over the figure for year 2000. It is the best result that

Andritz has ever achieved. The EBITDA margin (EBITDA as % of Sales) rose from

6.2% in 2000 to 7.2% in year 2001. EBIT (Earnings before Interest and Tax) advanced

56.5% over the previous year, reaching 54.6 MEUR in year 2001 (2000: 34.9 MEUR).

The Andritz Group’s Financial Result for 2001 was 5.5 MEUR against 0.4 MEUR in

2000. This rise is basically attributable to the significantly increased net liquidity.

The Earnings before Tax (EBT) amounted to 60.1 MEUR (2000: 35.3 MEUR).

The Net Income for the Year after deducting Minority Interests was 33.6 MEUR (2000:

17.1 MEUR), an increase of 96.1% compared to the previous year.

Andritz Group Key Figures

MEUR 2001 2000*) % change

Sales 1,318.7 1,111.4 +18.7%

EBITDA 94.5 69.1 +36.9%

EBITDA Margin 7.2% 6.2% –

EBITA 68.0 47.6 +42.9%

EBITA Margin 5.2% 4.3% –

Earnings before Interest and Tax (EBIT) 54.6 34.9 +56.5%

Earnings before Tax 60.1 35.3 +70.2%

Net Income for the Year (including minorities) 37.5 19.6 +91.3%

*) Pro forma including Andritz-Ahlstrom, w/o UMT

13

Andritz 2001

Status Report

Higher Earningsdue to improvedmarket positionand efficient costmanagement

EBITDA reachesrecord level

Increase in profita-bility

14

Andritz 2001

Status Report

Increase of the Equi-ty-to-Assets ratio to24.5%

Net liquidity surgedto 77.3 MEUR

19980

10

20

30

40

50

60

70

13

51 51

17

40

2224

72

1999 2000 2001

Capital expenditure

Cash flow

Net Worth Position and Capital Structure

Andritz AG’s Initial Public Offering (on June 25, 2001), as well as the purchase of the

remaining 50% stake in Andritz-Ahlstrom and the first-time consolidation of UMT

caused a shift of some essential balance sheet items as of December 31, 2001.

Due to the placement of two million new shares in the course of going public (initial

issue price: 21 EUR per share) and the favorable Earnings development, Share-

holders’ Equity of the Andritz Group increased from 160.7 MEUR as of December 31,

2000 to 230.3 MEUR as of December 31, 2001. The equity-to-assets ratio rose to

24.5%, compared to 17.2% on December 31, 2000. This high ratio signals a solid and

balanced financial structure. The Minority Interests, due to acquisition of the remain-

ing 50% of Andritz-Ahlstrom, went down to 9.3 MEUR (31.12.2000: 60.2 MEUR). No

other balance sheet items were subject to any major changes from the year before.

The traditionally low Net Working Capital of the Group amounted to 123.6 MEUR or

9.4% of Sales as of December 31, 2001 (December 31, 2000: 102.5 MEUR or 10.9% of

Sales).

Net liquidity of the Andritz Group underwent a very favorable development, amount-

ing to 77.3 MEUR as of December 31, 2001 and rising considerably over the previous

year (31.12.2000: 45 MEUR).

Cash Flow and Capital Expenditure

Cash flow from operating activities increased to 71.9 MEUR in 2001 (2000: 50.5

MEUR). All investments in tangible and intangible assets could thus be financed

from Cash flow, as has been the case during previous years.

Cash Flow from Operating Activities and Capital Expenditure, 1998 to 2001

in MEUR

Research and Development

The continued focus on our R&D activities is a declared strategic goal of the Andritz

Group. Steady new and further developments of processes, systems, products and

services are the only means by which the Group’s competitiveness can be further

strengthened and its market leadership extended.

With over 150 employees in R&D and many research centers and pilot plants located

all over the world, the Andritz Group continues to develop innovative, proprietary

processes, equipment and technology that are protected by patents and intellectual

property rights. The most essential research facilities and pilot plants are located in

Springfield (Ohio, USA), Glens Falls (New York, USA), Graz, Vienna (Austria), Kotka

(Finland), and Châteauroux (France). The Group also cooperates with the Biotechno-

logical Institute in Kolding (Denmark).

During 2001, 18.4 MEUR, or 1.4% of total sales, was invested in Research and Devel-

opment. Including the expenditure for contract-related development, the total R&D

expenditure amounted to over 3% of Sales.

The Research and Development activities in the Andritz Group’s largest Business

Area, Pulp and Paper, concentrated on the following priorities: minimizing water con-

sumption and improving environmental compatibility in kraft mill bleaching proc-

esses, improvements in the field of refiner systems for optimized fiber quality, at the

same time achieving a reduction in energy input, and numerous other product and

system improvements in the tissue machines, fiber preparation and wood processing

areas.

Application of our in-house developed automation and sensor technology was also a

strong focus in all Divisions of the Pulp and Paper Business Area.

15

Andritz 2001

Status Report

Research andDevelopment as animportant strategicgoal of the AndritzGroup

Expenditure forR&D: over 3% ofSales

16

Andritz 2001

Status Report

The development activities of the Rolling Mills and Strip Processing Lines Business

Area were focussed on the process-technology side of strip processing (electrolytic

pickling of stainless steel, electrolytic galvanization in a radial cell with insoluble

anodes). Membrane technology is being pilot-tested for use in regeneration plants.

Additionally, a new reactor design for acid regeneration was realized at a customer’s

plant. Computer simulations of process sequences were drawn up with the aim of

achieving improved plant integration and control.

The main area of R&D work for Environment and Process Technologies centered on

the development of centrifuges for industrial processes as well as standardization of

sewage sludge drying systems and product improvements in dewatering systems

both for municipal and industrial applications.

The Feed Technology Business Area succeeded in developing and marketing a num-

ber of new products in 2001. Examples are a new generation of dryers, a high-capac-

ity (16 t/h) extruder, a hammer mill for fine grinding, which also offers very high

capacity, and a newly developed automation system for extruder plants.

The test facility which is operated together with the Biotechnological Institute in Kol-

ding, Denmark, was enlarged, especially in the sector of special feed. Customers can

use a complete extruder line with dryer and vacuum coater for trial purposes.

Employees

As of December 31, 2001, the Andritz Group had a total of 4,545 employees, an

increase of 304 employees or 7.2% over the same date in 2000. The figure for 2000

did not contain the UMT Group with its 227 employees as at December 31, 2001.

1,143 are Andritz AG employees (2000: 1,072) and 3,402 employees (2000: 3,169) of

Andritz Group companies.

The regional distribution of the Group’s personnel remained virtually unchanged

from the year 2000: 25% work in Northern Europe, 25% in Austria, 23% in North

America, 9% in Germany, 1% in Great Britain, 4% in France, 4% in the Netherlands

and the remaining 9% in other countries of the world.

The goals formulated with regard to personnel development in the Andritz Group

were followed up consistently and successfully during the past year. Systematic func-

tional training for employees was given high priority. Training programs involving

both internal courses and meaningful external seminars were attended by all

employee groups. Seminars were offered to promote individual personal develop-

ment. Group-wide training in business management and employee leadership, which

has been conducted for several years, is now being revised and developed. More

than 100 employees from different functional areas and from all companies in the

Group participated in this promotional “Management Challenge Program“.

At production sites, service centers and on-site at customers’ mills, Andritz relies on

its highly skilled specialists who have undergone basic instruction in the company’s

own training centers but whose practical and theoretical training never stops over the

entire career at Andritz.

17

Andritz 2001

Status Report

Global balanced staff structure

Further extension ofthe personnel devel-opment

Regional Distribution of Andritz Group Employees

Great Britain 1%

Others 9%

Netherlands 4%

Austria 25%

Germany 9%

North America 23%

Northern Europe 25%

France 4%

18

Andritz 2001

Status Report

19

Andritz 2001

A benchmarking process made last year comparing Andritz with other international

industrial groups proved our personnel development concept to be targeted and

attractive.

Employee discussions and assessments, which are being held more consistently, are

an important factor in systematically determining the training needs of each employ-

ee and, in addition, support an active communications culture.

Full integration of Andritz-Ahlstrom employees was prepared by drafting an all-out

organizational development project. Several workstreams for structuring a future-

oriented follow-up and build-up organization included members from the Andritz-

Ahlstrom team.

Vacant positions were filled in time despite the pronounced increased shortage of

qualified workers in a free labor market. New employees were recruited from com-

mitted, well-versed graduates from vocational high-schools, colleges and universi-

ties. Adding new employees with initial successful occupational experience to a staff

of many long-term and very experienced employees ensures that the qualification

structure of the personnel is future-oriented.

The Andritz Group appears as an attractive employer, which is expressed, amongst

other factors, by the comparatively low labor turnover. This fact is also underpinned

by the participation of so many of the employees in the IPO subscription program.

Low turnover as a sign of high employee satisfaction

Vacant positions filled in time

Status Report

20

Andritz 2001

Status Report

Outlook

Leading economic research institutes have predicted a slight recovery of the global

economy in 2002. According to forecasts, the upswing will take place rather slowly

and will not start until the second or even the third quarter. The United States is like-

ly to be the first of the three major economic areas to leave the trough and be back

on the road of growth. The low level of interest rates and increased government

spending should give the essential impetus for the future upswing. Europe’s eco-

nomy is also expected to recover during 2002, but with a certain time lag of one or

two quarters. According to forecasts, Japan will remain at the rear of the leading eco-

nomic regions. No significant, sustained economic upswing is to be expected for

2002.

Given these general conditions, the markets where Andritz is active (Pulp & Paper

and Steel) can be expected to recover slightly in the course of 2002.

According to forecasts, the global pulp market should – after a weak development at

the beginning of the year – undergo a slight increase in demand and in pulp pricing

during 2002. The general economic recovery of the large industrial nations and mas-

sive production cuts by the large pulp producers over the past months should lead

toward a minor increase in pulp prices in the course of year 2002. Increased project

activity is expected for South America and some single regions in Asia.

A similar development is predicted for the global steel and stainless steel markets.

Here, too, only a slight upward trend in steel consumption is expected to take place

along with the development of the overall economy in 2002. According to the Inter-

national Iron and Steel Institute, IISI, the development will vary greatly from one

region to another. The demand in North America and Europe is predicted to rise only

somewhat above the 2001 level, but China is said to be looking ahead to further

large growth rates of between 6% and 8%, especially in the area of stainless steel

consumption.

In the light of these forecasts and assumptions, the Andritz Group expects a satisfac-

tory business development for 2002. These expectations are, firstly, founded on the

good Order Backlog, which was about 740 MEUR as of December 31, 2001. Secondly,

continued satisfactory project activity is to be expected for 2002 in the markets that

are relevant to the Group. In China and South America, above all, where Andritz

enjoys a strong competitive position, some larger projects in the field of steel, stain-

less steel and pulp are expected to materialize. Additionally, a number of investment

decisions are planned for systems and processes for municipal waste water and

sludge treatment and also feed technology – fields in which Andritz has global lead-

ership.

Only moderaterecovery predictedby economic research institutes

Analysts expectslight increase indemand and prices of pulp

Continuing highgrowth of steelconsumption inChina

Andritz expects satisfactory businessdevelopment for2002

If, however, against all expectations of forecasting institutes, world economy

growth stagnates or even recedes in 2002 and no upswing materializes, this would

likely not leave the business development of the Andritz Group unaffected.

The intensified consolidation and integration of the affiliates acquired last year con-

tinue to be a central issue in 2002. The re-organization of the Pulp and Paper Busi-

ness Area, whose goal is even better customer focus, will boost Andritz’ competitive

position decidedly. Complete implementation of this new organization is one of the

priority goals for 2002. Aided by the consistent cost and capacity management An-

dritz is aiming at an increase in profitability. The further expansion of the services

business by all Business Areas will back this development.

21

Andritz 2001

Status Report

22

Andritz 2001

Pulp and Paper

Profile

The Pulp and Paper Business Area is one of the global leaders in

the supply of plants, systems, processes and services for the pro-

duction of fiber and pulp for all paper grades (chemical pulp,

mechanical pulp and recycled fibers) including chemical recovery

for kraft mill plants, paper stock preparation systems, tissue pro-

duction systems, and engineered, customized and technologically

advanced wear parts (refiner plates, chipper knives, screen bas-

kets, etc.).

The successful acquisition of complementary product areas over

the past few years enables the Pulp and Paper Business Area to

supply complete processing lines from log handling in the wood-

room to making equipment for different types of pulp and certain

paper grades.

In 2001, Andritz successfully completed the acquisition of Andritz-

Ahlstrom with the purchase of the remaining 50% stake. With this

acquisition, this Business Area has become the leading supplier of

production systems for all pulp types, including chemical recovery,

and strengthened its competitive position in fiber preparation and

recycled fiber technologies.

Following the integration of Andritz-Ahlstrom, the Pulp and Paper

Business Area was newly organized at the beginning of 2002. In the

interest of stronger customer and market orientation the Business

Area was structured into "Pulp Mill Technologies”, consisting of

the Wood Processing, Kraft Mill Systems, and Pulp Mill Services

Divisions, and "Paper Mill Technologies”, comprising the Mechan-

ical Pulping Systems, Fiber Preparation Systems, Tissue Machines

and Paper Mill Services Divisions.

Under the existing cooperation agreement between Andritz AG

and Voith Paper, the businesses of Andritz and Andritz-Ahlstrom

Corporation in the field of fiber preparation are operated separate-

ly and will continue to be so until expiration of the agreement on

June 30, 2002. Thereafter, Andritz will combine these activities in

the newly implemented Fiber Preparation Division. The Business

Area’s new organization will be completely in place by then.

In each major market, the Pulp and Paper Business Area has a

number of service and sales locations. In the emerging regions of

Asia and Latin America, Andritz has improved its strong foothold

considerably with excellent reference deliveries.

23

Andritz 2001

Business Area Managers:

Markku Hänninen

(Pulp Mill Technologies, as of

January 1, 2002)

Bernhard Rebernik

(Paper Mill Technologies)

Market Development

Despite forecasts by international institutes at the end of 2000 predicting economic

recovery as from mid-2001, the global pulp market weakened considerably in 2001.

The slowdown of global economic growth which began during the second half of

2000 continued undiminished throughout 2001, leading to a tangible decline in the

demand for pulp and paper. Despite massive production cuts by the international

pulp producers, Norscan inventories rose to close to two million tonnes by the end

of the first quarter of 2001 and decreased to 1.5 million tonnes by the end of Octo-

ber. Due to the latent over-supply the price for NBSK (Northern Bleached Softwood

Kraft Pulp) decreased from approx. 700 USD at the beginning of the year to a low of

just over 400 USD in mid-September 2001. When some pulp producers in North

America indicated their intention to increase pulp prices gradually during the fourth

quarter, pulp prices began to recover slightly toward mid-September. Generally,

demand by the paper industry remained quite moderate during the second half of

2001. Only from China was there increased interest.

In spite of the difficult economic conditions,

there were many project opportunities, with

wide regional differences. Few projects were

awarded in Asia, and only some in China for

deinking and tissue paper mills. Virtually no

larger investment projects were carried out in

North America, but in South America, especi-

ally in Brazil, and also in Europe, project activ-

ity was quite brisk. Here, some large projects

for rebuilds of existing plants and construction

of new pulp mills were awarded.

Due to the softness of the pulp and paper mar-

ket the investment volume of the industry was

on the decline. As market research institutes

estimate, capital expenditure by pulp and

paper makers decreased by approx. 20% in

2001. Most projects consisted of replacement

investments or upgrading existing equipment.

Decisions to build greenfield pulp mills or

paper mills were rare.

MEUR 2001 2000*) 1999 1998

Sales 883.0 718.6 328.5 358.7

Order Intake 642.8 886.6 298.2 309.3

Order Backlog 31.12. 431.5 665.5 195.3 225.6

EBITDA 69.8 44.6 25.0 24.2

EBITDA Margin 7.9% 6.2% 7.6% 6.7%

EBITA 53.9 30.8 18.2 17.6

EBITA Margin 6.1% 4.3% 5.5% 4.9%

Capital Expenditure 10.8 15.0 8.6 7.4

Employees 2,626 2,656 1,426 1,434

*) pro forma includingAndritz-Ahlstrom

Key Figures for the Pulp and Paper Business Area (IAS)

MEUR 2001 2000 1999 1998

Sales 493.4 407.0 335.0 417.9

Order Intake 339.4 506.2 398.4 323.9

Order Backlog 31.12. 260.3 402.3 285.2 182.3

EBITDA 29.5 18.4 -10.0 25.5

EBITDA Margin 6.0% 4.5% n.sp. 6.1%

EBITA 24.5 12.9 -15.4 19.8

EBITA Margin 5.0% 3.2% n.sp. 4.7%


Employees 1,201 1,255 1,354 1,497

Key Figures Andritz-Ahlstrom (IAS)

24

Andritz 2001

Pulp and Paper Business Area

Business Development in 2001

Note: All following comparative figures for 2000 include Andritz-Ahlstrom on a pro

forma basis.

The Sales and Order Intake figures for the Pulp and Paper Segments reflect the new

organization of the Business Area and were calculated retroactively for 2000.

In 2001, the Pulp and Paper Business Area developed satisfactorily. Sales reached

883.0 MEUR (2000: 718.6 MEUR) and were thus 22.9% above those of the previous

year. This increase is for the major part attributable to the good development of

Andritz-Ahlstrom, whose Sales increased 21.2% over 2000, to 493.4 MEUR (2000:

407.0 MEUR).

Order Intake, 642.8 MEUR, was 27.5% less than in the previous year (2000: 886.6 MEUR).

This is attributable to the generally weak global pulp and paper markets during last

year and the related very conservative investment policy of international pulp and

paper producers. Order Intake in 2001 by Andritz-Ahlstrom was 339.4 MEUR. Com-

pared to the extraordinary high level of the previous year, this was a 33.0% decline

(2000: 506.2 MEUR).

The Letter of Intent received at the end of October 2001 from Zellstoff Stendal GmbH,

Germany, for the purchase of large chemical recovery systems for a greenfield pulp

mill in Saxony-Anhalt is especially worth mentioning. Andritz-Ahlstrom was en-

trusted with supplying extensive chemical recovery systems for the total project

value of approx. 95 million Euros. The contract is expected to take effect in the

second quarter of 2002 after the overall financing concept has been finalized,

whereupon it will be booked as Order Intake.

25

Andritz 2001


Deinking line with disk filters and screw presses

Marked increase inSales

Receipt of an LOIworth 95 millionEuros

26

Andritz 2001

The receipt of contracts for the supply of three tissue machines for China was instru-

mental in the Business Area’s further extending its position in this growth region.

The Earnings and EBITDA margin of the Pulp and Paper Business Area developed

favorably. Despite a difficult economic environment, the Business Area was able to

boost its results in 2001 in a very competitive sector. This is a result of the acquisi-

tion of Andritz-Ahlstrom, which has enhanced the Business Area’s market position.

Another factor is successful cost management. The EBITDA of the Business Area

increased 56.5% over 2001 to 69.8 MEUR (2000: 44.6 MEUR). Profitability expressed

as EBITDA margin increased from 6.2% in 2000 to 7.9% in 2001. Andritz-Ahlstrom

was able to continue the positive Earnings development achieved in 2000 and in-

creased its EBITDA by 60.3% to 29.5 MEUR (2000: 18.4 MEUR).

Business Development 2001 by Business Segments


In spite of the difficult economic environment, Pulp Mill Technologies saw a satis-

factory development during year 2001. Sales increased 26.9% from the previous year

and reached 518.7 MEUR (2000: 408.9 MEUR). Each of the three Divisions of the Pulp

Mill Technologies – Wood Processing, Kraft Mill Systems and Pulp Mill Services –

achieved considerable Sales increases. Order Intake amounted to 324.9 MEUR and

was thus 38.6% below the exceptional high level in 2000. This decline is due to the

weak development of the market and the accompanying receding investment activi-

ty by pulp and paper producers. Also, the order received from Zellstoff Stendal

GmbH in October 2001, which is worth 95 MEUR, is not contained in the Order Inta-

ke for 2001. This order is likely to come into effect during the second quarter in 2002.


Paper Mill Technologies also proceeded well in 2001. Sales increased 17.7% over the

previous year and were 364.3 MEUR (2000: 309.6 MEUR). All four Divisions –

Mechanical Pulping Systems, Fiber Preparation Systems, Tissue Machines and Paper

Mill Services – recorded increased Sales. The Order Intake by Paper Mill Technolo-

gies declined slightly. It was 318.0 MEUR and thus 11.1% below the previous year’s

value (2000: 357.6 MEUR). Viewed by Divisions the development is quite distinct.

While the Order Intake by the Mechanical Pulping Systems and Fiber Preparation

Systems Divisions receded from the previous year, the Tissue Machines and Paper

Mill Services experienced increases. Especially the Tissue Machines Division was

successful in increasing its Order Intake considerably.


Increase inEarnings andprofitability

27

Andritz 2001


Profile

The Wood Processing Division is the world’s leading supplier of systems, equipment and processes for all steps

required in a woodyard – from the arrival of logs to their subsequent preparation into wood chips – for the pro-

duction of chemical and mechanical pulps.

The Wood Processing Division is headquartered in Hollola, Finland and has sites in Sweden, USA, Canada, Brazil

and Austria.

Wood Processing Division


Despite the difficult conditions on the pulp and

paper market the Wood Processing Division

progressed favorably during 2001. Sales were

increased over those achieved during the pre-

vious year. The Division succeeded in keeping

or extending its leading position in the major

markets of Northern and Central Europe, South

America and the USA.

Order Intake, however, considerably declined in

comparison to the previous year, when the Divi-

sion booked a record Order Intake. The main

reason is the generally slowing market develop-

ment.

Major Orders

During 2001, the Wood Processing Division received major orders from key custom-

ers all over the world.

The Division booked an order for a complete wood and chip processing installation

from Lenzing AG in Austria. The delivery includes the first horizontal-fed HHQ-Chip-

perTM in Central Europe.

Andritz groundwood processing know-how was impressively confirmed by an order

from Myllykoski Paper Oy, Finland, for a major modernization, including a high-

capacity slasher deck for the mill’s groundwood plant.

Other important orders came from Celulose Beira Industrial (Celbi) S.A in Portugal,

as well as from other well-known mills in Nordic countries, China, South America

and Central Europe.

Division Manager:Jarmo Viiala

(Hollola, Finland)


HHQ-ChipperTM withhorizontal log feed

28

Andritz 2001




The main focus of R&D activity is the further development of a system to optimize

chip quality and yield for a customer’s selected pulp quality. The first installation of

this system, called Total Chip Quality Package, was completed and has shown

remarkable results.

Development work for a new system for debarking tropical plantation hardwoods

(e.g. acacia, which is difficult to peel because of its long-fiber barks, and eucalyptus)

has continued successfully.

Also a new system was developed to debark frozen logs. The full-scale test installa-

tion has demonstrated good results, and the tests will be carried on and intensified

over the coming months.

Two complete Andritz woodprocessing lines

29

Andritz 2001

Profile

The Kraft Mill Systems Division is the world’s leader in the supply of systems, machines and processes used in the

production of chemical pulp, and in the recovery of chemicals used in the pulping process.

The products of this Division are continuous digesters, washers, bleaching equipment, recovery boilers, evapora-

tion systems, recausticizing systems, lime kilns and effluent evaporators.

The Kraft Mill Systems Division is based in Kotka, Finland, with significant operations in Alpharetta, Georgia, USA.

The Division maintains research laboratories in Kotka, Finland and Glens Falls, New York, USA.

Kraft Mill Systems Division




Sales of the Division were increased significantly during year 2001.

Some very significant projects were concluded in 2001, amongst them Stora Enso’s

new fiberline in Imatra, Finland, where Andritz-Ahlstrom received an award for being

the Number One process supplier in the project. The start-up of Metsä Botnia´s new

fiberline in Joutseno, Finland, was also on schedule. The Division supplied the entire

washing and bleaching line based on the proven DD WasherTM.

Division Manager:Hannu Tynkkynen

(Kotka, Finland)

New evaporationplant with calcium

deactivation andliquor heat treatment

concentrator

Order Intake of the Division fell considerably from the exceptionally high Order In-

take level of 2000. This downward trend in bookings reflects the general weak deve-

lopment of capital investments in the pulp and paper industry in 2001. It is to be

noted that the order received from Zellstoff Stendal GmbH in October 2001, in the

form of a Letter of Intent worth 95 MEUR, is not contained in the Order Intake for

2001.

Despite the difficult markets, the Division maintained its leading market position for

production systems for chemical pulp and chemical recovery.

Major Orders

Bowater Inc., USA, ordered the supply of a complete fiber-

line for its mill in Catawba, South Carolina.

VCP, Brazil, placed an order for a chemical recovery system

with evaporation technology.

To Nippon Paper, Japan, the Division will supply a contin-

uous digester.

Zellstoff Stendal GmbH of Saxony-Anhalt, Germany, in

October 2001 gave the Division a Letter of Intent for supply

of extensive chemical recovery systems for a greenfield

kraft pulp mill. The contract is scheduled to take effect

during the second quarter of 2002 and to be booked as

Order Intake.


Reductions in fresh water and energy consumption in pro-

duction processes are important goals of our pulp and

paper industry customers. Better control of emissions is

also very critical to meet the environmental permits of

investments. Taking these trends into account, the research

and development work focused on the advancement of

continuous cooking technology, re-use of process water

and maximizing the energy output of recovery boilers.

30

Andritz 2001



Drum Displacer™ washer system feed

31

Andritz 2001

Profile

The Pulp Mill Services Division encompasses the service activities for the Wood Processing and Kraft Mill Systems

Divisions. Primary emphasis is on production efficiency and availability services (engineered wear parts, replace-

ment parts, equipment rebuilds and upgrades) to kraft pulp mills and woodyards supplied either by Andritz or other

equipment manufacturers.

Apart from the traditional services business the Division is currently working on new continuous improvement and

online support solutions to increase the competitiveness and availability at customers’ plants further.

The Pulp Mill Services Division serves the large installed base of Andritz equipment all over the world, with the core

of the sales being obtained from North America and Europe.

Headquarters for the Pulp Mill Services Division is in Savonlinna, Finland. The Division is managed through sales

and service locations worldwide, providing fast and responsive services to local customers. Production facilities for

rebuilds and parts are located in Finland and the USA.

Pulp Mill Services Division



Division Manager:Risto Hämäläinen

(Savonlinna, Finland)

Replacement of lime kiln shell section


The Pulp Mill Services Division progressed very favorably in

2001. Both the Sales and the Order Intake increased from the

previous year.

While Order Intake from the USA was stagnant at the level of

the previous year, growth was particularly strong in Northeast

Europe and also in Asia-Pacific. Investments were for the

most part for modernization and replacement of existing

plants.

A new service center was opened in Imatra, Finland, support-

ing mills in Southeast Finland.

32

Andritz 2001



Wichtige Auftragseingänge

Im Bereich Holzplatztechnik wurden bei einem kanadischen Kunden Sanierungs-

und Umbauarbeiten an einem von einem Mitbewerber gelieferten Portalkran durch-

geführt. Dabei wurde nicht nur die Lagerkapazität unterhalb des Krans vergrößert,

sondern auch die Fahrgeschwindigkeit erhöht und eine dem Stand der Technik ent-

sprechende Elektronik eingebaut.

Bei Stora Enso in Port Hawkesbury, Kanada, wurden die Entrindungstrommeln

durch eine neue Schweißtechnik, die die vor kurzem von Andritz erworbene Firma

Industrial Welding eingebrachte hatte, saniert. Dadurch konnte die Lebensdauer der

bereits sehr abgenützten Trommeln um einige Jahre verlängert werden.

Im Bereich Kraftzellstoffanlagen wurde die Division mit dem Umbau von Rückge-

winnungskesseln, Zellstoffwaschanlagen und Sortiersystemen beauftragt.

Portucel S.A., Portugal, erteilte der Division für das Werk in Setubal den bisher größ-

ten Serviceauftrag. Er umfasst das komplette Service und die Wartung der gesam-

ten Faserlinie.

P.H. Glatfelter, USA, erteilte den Auftrag zur Modernisierung einer bestehenden

Rückgewinnungsanlage mit dem Ziel, die Verbrennung von nicht kondensierbaren

Gasen zu ermöglichen. Dieses Projekt folgt damit den neuesten amerikanischen

Gesetzesauflagen in Bezug auf Rauchgas-Emissionen.

Stora Enso, Finnland, und Phoenix Pulp and Paper, Thailand, beauftragten die

Erneuerung bzw. Erweiterung von Rückgewinnungsanlagen.

Zahlreiche Aufträge zur Erneuerung bzw. Erweiterung von Verdrängungswäscher-

Systemen kamen von namhaften Kunden in Russland, Neuseeland, Finnland und

Spanien.

Forschung und Entwicklung

Die im Jahr 2001 begonnenen Entwicklungsarbeiten am sogenannten OPETM-Kon-

zept (Overall Production Efficiency) zur kontinuierlichen Verbesserung und Optimie-

rung des gesamten Produktionsprozesses wurden im Berichtsjahr weiter forciert.

Diese Lösung wurde erfolgreich bei namhaften Kunden in den USA und Europa

implementiert.

Im Zuge der Errichtung eines Service-Centers in Savonlinna, das sich – basierend auf

neuesten Informationstechnologien – auf die Online-Diagnostik und -Überwachung

von Anlagen konzentriert, wurden umfangreiche Investitionen getätigt.

Ebenso wurde ein neues Verfahren zur Ausrichtung von Kalköfen während des Pro-

duktionsprozesses entwickelt.

33

Andritz 2001

Profile

The Mechanical Pulping Systems Division is one of the leading global suppliers of complete systems for producing

high-quality mechanical pulps for the Paper and Board industry as well as fibers for Medium Density Fiberboard

(MDF). Equipment for pulp dewatering, washing and high-consistency bleaching, now integrated in the Mechanical

Pulping Systems Division with the reorganization of the Pulp and Paper Business Area, complete the product port-

folio and make the Division a comprehensive supplier of systems for mechanical pulp production.

Complete dewatering and baling systems are offered for the production of market pulp, with capacities of up to 3,000

tonnes/day. Such systems include pulp dewatering machines with a working width of over eight meters and with

high-pressure presses, shoe presses and complete pulp baling lines.

The Division mainly operates through its Vienna and Graz locations, where it is also headquartered. The main pro-

duction facility is located in Graz. Other significant centers of activity are Muncy, Pennsylvania, Springfield, Ohio,

Alpharetta, Georgia, all in the USA, and Montreal, Quebec, Canada.

Mechanical Pulping Systems Division




The Sales by the Division were increased in 2001 compared to the previous year. The

Order Intake declined during year 2001 from 2000. This is due mainly to the fact that

no major sheet drying system contract for a new pulp mill was awarded during the

year under review.

Division Managers:Humbert Köfler

(Vienna, Austria)

Rudolf Sand

(Graz, Austria)

Screw press for pulpwashing in a BCTMP line

Integration of the product rights for the cross-cutter and baling lines, acquired from

Lamb-Grays Harbor Co. in 2000, into the product family was concluded successfully,

with improvements to many aspects of the design and functionality.

Another highlight in 2001 was the successful start-up of the largest Pressurized

Refining System in the fiberboard industry. Supplied to Kunz/KFB in Germany, the

system includes an S 2070-1CP refiner with a motor power of 12 MW and a capacity

of more than 1000 BDMT/d. This installation includes several machines with the

biggest throughput ever implemented.

Major Orders

Jiangxi PM, China, ordered a state-of-the-art 550 ADMT/d RT/RTS-TMP plant with

high-consistency bleaching technology. This low energy-consuming process allows

the use of pine wood to produce newsprint in a very economical way.

Also in China, Gaotang placed an order for the newly developed PRC-APMP System.

This is a refining process for hardwood chips and enables paper mills to replace

expensive pulp imports for their production of fine paper grades.

With two high-speed refiners type 3068, Holmen Paper in Hallstavik, Sweden, is

modernizing its existing TMP plant by converting two lines to Andritz’ advanced RTS

technology and by extending its existing bleach plant.

Stora Enso has increased the capacity of its present TMP plant at the Summa, Fin-

land mill by adding two reject refiners to the system.

34

Andritz 2001



Andritz Series 2070 refiner for large throughputsand special applications in theMDF industry

35

Andritz 2001



Taking these two lines into account the new RTS process has met with global accept-

ance: a total of thirteen plants are in operation or under construction, and it has defi-

nitely become the most progressive mechanical pulping process.

UPM Kymmene, Lapeenranta, Finland, placed a repeat order for a second ground-

wood rejects refining line.

The Division further received orders from important customers in China for a total of

six pressure refiners for fiberboard production. Its now undisputed world market

leadership was thus further expanded.


The Division developed several new processes and products during the year. One

focus has been the development of the RTS process which gives improved fiber with

reduced energy consumption. Current efforts are concentrating on process opti-

mization through the pre-treatment of wood chips (RT pretreatment.)

Another focus was to further improve the process for refining of hardwood chip

sources (PRC-APMP Process). Together with the high-consistency bleaching technol-

ogy and washing, this process optimizes the utilization of chemicals and energy con-

sumption and upgrades optical fiber properties. It opens a wider spectrum of uses

for hardwoods such as eucalyptus.

Major improvements were achieved in optimizing the feed concepts to refiners.

Development work for Medium Density Fiberboard production centers on technol-

ogies and processes for utilizing sawdust. These respond especially to the needs of

fiberboard producers in Europe and yield high-quality fibers at low energy input.

In the field of dewatering engineering, a new disc filter, an Andritz and Andritz-Ahl-

strom inter-company development that combines the strengths of the present two

filter designs, was developed. Marketing for the new product is to begin in the

second quarter of 2002.

In high-consistency bleaching, the product range was supplemented with further

model sizes for high-consistency chemical mixers and bleach tower discharge

systems. This makes adaptation to a given plant size easier and reduces capital

expenditure for customers.

RTS Process iswidely accepted

36

Andritz 2001

Fiber Preparation Systems Division

Profile

Fiber Preparation Systems is a new Division created in the course of the reorganization of the Pulp and Paper

Business Area that will combine the activities of Andritz and Andritz-Ahlstrom in the stock preparation areas as of

July 1, 2002.

Under the existing cooperation agreement between Andritz AG and Voith Paper, the businesses of Andritz and

Andritz-Ahlstrom are operated separately and will continue to be so until expiration of the agreement on June 30,

2002. Andritz AG will continue to offer Voith technology and components until mid-2002 in Austria, Eastern Europe,

Russia and China, and Andritz-Ahlstrom will continue to promote its own proprietary technology, products and

components globally.

As the product and system know-how of Andritz and Andritz Ahlstrom is to be combined as of July 1, 2002, the

Fiber Preparation Systems Division is a global supplier of systems, equipment and services for all papermaking pro-

cesses such as recycled fiber processing, fiber stock preparation, paper machine approach systems, broke handling

as well as paper mill internal water loop handling, sludge and reject handling.

The Division has its headquarters in Kotka, Finland and Graz, Austria, with significant operations in Glens Falls,

New York, USA.




The Development of the Division in 2001 was satisfactory, with Sales increased from

the previous year.

In China, the deinking lines that were ordered by Huatai Paper and Nanping Paper in

2000 were successfully handed over to the customers.

The Division’s Order Intake receded in comparison to the previous year. This is due

to the declinig investment activity in the paper industry.

Division Managers:Jarmo Häkkinen

(Kotka, Finland)

Christian Pedratscher

(Graz, Austria)

Four disc filters (twoas thickeners and twoas savealls) for UPM-Kymmene's PM4machine for LWCpaper production

37

Andritz 2001



Major Orders

In the wake of the successful installations at Gebr. Lang, Ger-

many, the Division received orders from the Myllykoski Group

for pulp and sludge dewatering equipment for Madison Paper,

USA, and Hürth, Germany.

SCA Laakirchen, Austria, Norske Skog Parenco, Netherlands

and Renteria, Spain, also ordered dewatering machines for their

deinking plants from Andritz. A large number of single orders

further underlines Andritz’ lead in this product segment.

Two Chinese customers, Guangxi Guitang Group Co. Ltd. and

Changde Hengan Paper Products Co. ordered three fiber prepar-

ation lines.

In the summer of 2001, the Division received another order for a

rebuild of the secondary fiber treatment system from Kartonsan, the largest produc-

er of folding boxboard in Turkey. This order is a continuation of a long-term success-

ful cooperation between Kartonsan and Andritz begun back in 1985. With this rebuild

Kartonsan places further emphasis on the quality of the finished stock for its board

production.

Yanbin Shixian Bailu Paper Co. Ltd., one of the largest paper producers in the Jilin

Province (China), selected Andritz for the supply of a deinking system for secondary

fiber treatment to produce newsprint and SC-paper. It will be the seventh deinking

line supplied to China during the last years, showing once again the strength of An-

dritz in this important growth market.

Contracts for supply of complete approach flow systems for paper machine systems

were obtained by the Division from SCA Laakirchen, Austria, Holmen Paper, Sweden,

UPM-Kymmene, Finland and Germany, Myllykoski Hürth, also in Germany, Cartiera

di Cadidavid, Italy, OAO Arkangelisk, Russia and Nine Dragon, Lee & Man as well as

Taishan Paper, all of them in China.

In December, Stora Enso placed the order for a pulper drum for recycling papers

(FibreFlow® Drum), coarse screening, pulp and sludge dewatering and screens for the

approach flow system for a new newsprint paper line in Langerbrugge in Belgium.


R&D activities, started in the previous year for advancing and optimizing the Fibre-

Flow® Drum concept (pulper drum) and the Short Flow concept, a new system in the

approach flow sector, were continued in the year under review.

Development of a new generation of screens and an improved concept for treating

OCC is also under way.

FibreFlow® drum pulper for processing

waste paper intohigh-quality

recycled pulp

38

Andritz 2001

Tissue Machines Division

Profile

The Tissue Machines Division provides all modern types of tissue machines, including CrescentFormer technology,

Through-Air Drying technology and machines with the patented TissueFlexTM*) shoe press. Ventilation and drying

systems with high-efficiency hoods for tissue and other paper and board grades complement the product portfolio.

Andritz and Voith Paper are parties in a cooperation agreement for tissue machines. The parties share know-how

and conduct joint research and development. Andritz is responsible for the production and sale of tissue machines

in Europe, Asia and Africa.

In the USA, Voith Andritz Tissue LLC, a 50:50 joint venture of Andritz and Voith Paper, headquartered in Janesville,

Wisconsin, USA, supplies state-of-the-art tissue technology and related services to the NAFTA markets. The Tissue

Machines Division is based in Graz, Austria.

*)Trademark of Voith Paper, cooperation partner of Andritz



Division Manager:Rudolf Greimel

(Graz, Austria)

CrescentFormer-Tissue machine


The Division performed well during the business year. Sales were increased signifi-

cantly from those in year 2000.

To British LPC Group plc the Division supplied a CrescentFormer tissue machine with

patented TissueFlexTM press for an annual capacity of 50,000 tonnes. This tissue ma-

chine system is equipped with the latest shoe press technology for producing excep-

tionally high-grade tissue. While Andritz TissueFlexTM systems had been included in

previous upgrade contracts, the British installation is the first-ever TissueFlexTM press

installed as part of a new machine.

The receipt of a high number of important orders, especially from China, is also

reflected in the development of the Order Intake. It was increased markedly over that

in 2000.



Major Orders

Guangxi Guitang Group Co. Ltd., China, entrusted Andritz with an order for the sup-

ply of two CrescentFormer tissue machines. Due to a high portion of bagasse pulp in

the furnish, the tissue paper can be produced at low cost. Guitang makes this special

pulp itself, from sugar cane after sugar production.

A further order for a CrescentFormer tissue machine was placed by Changde Hengan

Paper Products Co. Ltd., China. This is the second tissue machine for Hengan, the

first one having been successfully installed by Andritz in 1998. These supplies will

strengthen the good position that Andritz has on the Chinese tissue market.

Dunapack Ltd. of Dunaujvaros, Hungary, entrusted Andritz with the extension of the

heat recovery and exhaust air system for the existing linerboard machine, with the

aim of increasing machine capacity and reducing energy consumption.

Papierfabrik Rieger GmbH - a longstanding customer of Andritz - ordered an exten-

sion of the machine and hall ventilation equipment for its board mill in Trostberg,

Germany. Andritz equipment will be a major factor in the overall project to

improve the production capacity of the board machine.

The elimination of dust at the dry end of tissue machines is becoming more

and more important to tissue producers. Andritz was awarded the supply of

dust removal systems by tissue mills in England and Germany. The Andritz

dust removal equipment – developed in-house – considerably reduces the

dust concentration in machine halls, thus improving the operators' work envi-

ronment. It also ensures higher production capacity of the tissue machine.


Following the trend towards higher tissue qualities, development efforts in

the Tissue Machines Division focus on the advancement of the proven

Through-Air Drying and on optimization of the TissueFlexTM shoe press in

commercial installations.

In addition, R&D in the field of tissue machines centers on further improve-

ments on dust removal systems in paper machine dryer sections.

In the area of high-efficiency drying, the development of a new hood genera-

tion for very high impingement temperatures (up to 700oC) with the aim of

increasing the drying capacity of tissue machines has been finalized.

Three orders forCrescentFormertissue machinesfrom China confirmleadership in thisregion

TissueFlexTM Shoe Press

39

Andritz 2001

40

Andritz 2001

Paper Mill Services Division

Profile

Paper Mill Services encompasses the service activities for the Mechanical Pulping Systems and Fiber Preparation

Systems Divisions.

Primary emphasis is on traditional aftermarket services (engineered wear parts, replacement parts, equipment

rebuilds and upgrades) to existing customers. The two major wear parts are refiner plates and wedgewire screen

cylinders, which are manufactured in Andritz proprietary plants.

Additionally, the Division offers innovative approaches for increasing reliability, efficiency and equipment availabi-

lity of machines and systems in the paper industry.

Headquarters for the Paper Mill Services Division is Muncy, Pennsylvania, USA. The Division is managed through

major geographic regions, each with at least one Andritz Service Center equipped to provide fast and responsive

services to local customers. Production of refiner plates is performed in Tualatin, Oregon and Muncy, Pennsylvania

in the USA. Production of replacement screen baskets is performed in Brantford, Ontario, Canada.




Both the Sales and Order Intake by the Division experienced growth in 2001.

The refiner plate Sales varied over the regions. Although refiner plate Sales were

down nearly 10% in North America due to mill closures and production curtailments,

Sales in Europe were up approx. 15%, up over 50% in South America, and up over

15% in Southeast Asia.

Major Orders

Several products were introduced in all areas to improve performance of existing

equipment. This string of innovations has brought to Andritz several rebuild orders,

for instance, the rebuild of the press section of a dewatering line at Zellstoff Pöls AG,

Austria, performance upgrades on dewatering machines in Japan (Oji Paper, Fuji

mill), North America and China (Guangzhou mill), and a complete rebuild of a disc

filter in Germany (MD Papier Plattling).

Division Manager:Sergio Torza

(Muncy, Pennsylvania, USA)

Top: Durametal's state-of-the-art high-consistencyplate pattern

Bottom: Energy cost is saved by optimized fibertransport through the refiner

41

Andritz 2001



Refiner upgrades and spare parts orders included Pacifica Papers Ltd, Stora Enso

Port Hawkesbury, both Canada, Norske Skog Golbey, France and Stora Enso Summa,

Finland.

Large spare parts contracts were obtained from Homanit MDF plant, North Carolina,

USA, as a five-year contract.

Further service orders related to increasing the availability of Andritz equipment and

reducing operating costs, including rebuilds of the press zone on twin wire presses

(Pöls pulp mill, Austria) and bleach towers (Aylesford, Great Britain), the latter result-

ing in a considerable boost in the availability of the bleach plant.


In 2001, Andritz’ subsidiary Durametal introduced several new proprietary products

such as DuraGlideTM for low-consistency refiners, the Chip DoctorTM inner ring, which

improves the efficiency of high consistency refiners, and milled bar refiner

plates for special stock preparation applications. These innovations will maintain the

Division’s status as the major supplier of solutions to refiner plants around the world.

The successful upgrade of Bauer 485 Refiners to maximize horsepower in the exist-

ing infrastructure has opened up new opportunities, permitting customers to in-

crease quality and capacity without spending money for new installations, foun-

dations, or piping.

With the goal of achieving further process automation and preventive maintenance

– to keep downtime low – special sensors and systems were developed which make

remote diagnosis of production runs possible.

Swing Door of aSeries S2000

refiner with refiner plate mounted

42

Andritz 2001


43

Andritz 2001

Profile

The Rolling Mills and Strip Processing Lines Business Area plans,

develops and constructs complete lines for the production of cold-

rolled carbon steel, stainless steel and non-ferrous metal strip.

These lines consist of plants for cold-rolling, surface processing,

finishing, acid regeneration and production of metal oxides. The

know-how and the critical (in terms of quality) components are

proprietary developments which the Group produces in its own

production plants.

The Andritz Group is the only supplier in the world to master all

processes involved in the manufacture of stainless steel (rolling,

annealing and pickling) on a comprehensive basis and to supply all

the production systems through a single source. This fact elimi-

nates the number of customer interfaces and permits front-to-end

optimization of the processes viewed against special customer

requirements.

The Rolling Mills and Strip Processing Lines Business Area oper-

ates via Andritz AG (Austria), Andritz-Ruthner Inc. (USA), Thermtec

B.V. (Netherlands), Sundwig GmbH (Germany) and Sundwig-

Kohler GmbH (Germany) and has manufacturing and assembly

lines in Graz (Austria) and Hemer (Germany).

Business Area Manager:

Peter Gravert

Market Development

The relevant steel and stainless steel markets for the Andritz Group weakened during

2001 in step with the decline in the global economy. Timewise and geographically

there were great differences in the development. During the first half year,

there was brisk project activity in Europe and in China. A number of major projects

were awarded, mainly in the important stainless steel sector. Steel companies in the

USA made practically no capital investments. During the second half year, due to the

accelerated downswing in global economies, project activity slackened in Europe as

well. Most projects were postponed, only in China was there no noticeable slowing.

Given the difficult economic environment and high competitive pressure, the price

situation on the supplier side was quite tense throughout the year.

Basically, worldwide steel consumption seems to have receded approx. 1% to 2% in

2001 as the data of the International Iron and Steel Institute (IISI) show. Steel con-

sumption in Asia, which accounts for over 40% of the market and is the most import-

ant buyer region, grew 3% to 4%, while in the United States and Europe it was 5%

down. On the other hand, stainless steel consumption in 2001 seems to have risen

approx. 1% or 2% over the previous year, with an above-average growth in con-

sumption in China.

Worldwide steel production declined approx. 1% in 2001 versus 2000 according to

IISI data, a fact that is due to global inventories being reduced. Production cuts

occurred primarily in North America, Europe and partly also in Japan.

Source: IISI, October 2001

44

Andritz 2001

Rolling Mills and Strip Processing Lines Business Area

MEUR 2001 2000 1999 1998

Sales 167.4 169.1 140.8 135.0

Order Intake 196.3 130.2 141.9 112.6

Order Backlog 31.12 159.2 141.2 180.2 179.0

EBITDA 8.7 8.7 7.5 6.9

EBITDA Margin 5.2% 5.1% 5.3% 5.1%

EBITA 6.1 6.4 5.7 4.6

EBITA Margin 3.7% 3.8% 4.0% 3.5%


Employees 562 522 551 536

Key Figures for the Rolling Mills and Strip Processing

Lines Business Area according to IAS


Order Intake reaches recordlevel


The Rolling Mills and Strip Processing Lines Business Area looks back on a very suc-

cessful year. For all the tight pricing and sales situations that came as a result of the

weak economic environment, Order Intake increased 50.8% from the previous year’s

value to the all-time record of 196.3 MEUR (2000: 130.2 MEUR). In Europe and in the

growing Chinese market some major orders for cold rolling mills, stainless steel

treatment lines, push pickling and acid regeneration lines were won and the Busi-

ness Area’s leadership was strengthened in these regions.

The Sales by the Business Area were 167.4 MEUR in 2001 (2000: 169.1 MEUR), a

slight decline of 1.0% that is attributable to the lower level of the Order Backlog as of

December 31, 2000.

The push-pickline linewith the highest capacity

in Europe, at Thyssen-Krupp Stahl, Bochum

(Germany)

45

Andritz 2001

46

Andritz 2001

The successful start-up of a high-capacity push pickling line with integrated skin-pass

mill at ThyssenKrupp Stahl AG, Bochum, Germany, deserves special mentioning.

This line has the highest capacity in all of Europe (960,000 tonnes per year,

operating speed up to 200 meters per minute and strip thickness up to 12.5 mm).

EBITDA reached 8.7 MEUR despite the adverse economic background (2000: 8.7

MEUR). Profitability (EBITDA margin) rose to 5.2% (2000: 5.1%).

Major Orders

The recognized global position that Andritz holds in respect of systems for the stain-

less steel industry was corroborated impressively by the contract for an annealing

and pickling line from Krupp Thyssen Nirosta, Krefeld, the largest stainless steel pro-

ducer in the world. The affiliates that are united under the roof of the Business Area,

Sundwig GmbH, Thermtec B.V. and Ruthner Surface Technologies will supply the

mechanical equipment, including the inline skin-pass mill, furnace with annealing

and cooling section and the cleaning and pickling section, complete with auto-

mation. The receipt of this order confirms that Andritz’s customers agree with the

pursued strategy of offering complete process lines.

Rolling Mills and Strip Processing Lines Division succeeded in securing major orders

in China as well, leading to a further improved market leadership. Kunming Iron &

Steel Co. and Handan ordered push pickling lines and acid regeneration systems,

Baosteel, Baoxin and Tayuan Iron & Steel Co. ordered chemical treatment sections

for a stainless steel pickling line, a mixed acid regeneration plant, slitting lines and

skinpass mills.


A view into the finish-ing room at KTN KruppThyssen Nirosta, Krefeld (Germany). Thephoto shows slittinglines LZ 3N, LZ 4N andLZ 5N for stainless steelstrip

Push pickling linewith the highestcapacity in Europegoes on line

Jiangyin Changfa Antifinger Print Steel Co. Ltd., China, entrusted the Business Area

with the supply of an electrolytic (Gravitel) galvanizing line.

Plansee AG, Reutte, Austria, placed an order for a cold rolling mill with combined

four-high/S6-high stand for rolling molybdenum and molybdenum alloys, niobium

and tantalum strip and plates. With the new, modern rolling mill, Plansee AG will

boost both its production capacity and quality.

Rolling mill orders also came from KTN, F.G. Theis, Giebel, Sundwiger Messingwerk,

all in Germany. The Business Area’s leadership in the field of flatness measuring and

adjusting systems was confirmed by a number of orders.

Novolipezk Combine in Russia ordered an inspection line.


A major goal of the research and development program during the year was opti-

mization of the process-technology aspects of organic coating, for electrolytic pickling

of stainless steel and electrolytic galvanization of carbon steel strip. The SBC (Strip

Bow Control) system was launched successfully. Computer simulations of process

runs are used for achieving improved plant integration.

Membrane technology is being tested for use in regeneration plants in a pilot plant.

47

Andritz 2001


Pickled coils on exitcoil ramp in a pushpickling line inBochum, (Germany)

48

Andritz 2001

Environment andProcess Technologies

49

Andritz 2001

Profile

The Environment and Process Technologies Business Area has a

strong focus on sewage sludge dewatering and drying. Its product

range covers the entire spectrum of technologies for mechanical

and thermal treatment of sludge from municipal and industrial

sewage sludge plants. The Business Area handles the full range

from planning, fabrication, installation and start-up work of com-

plete plants to the entire automation and safety equipment. Critical

machines and components (screens, crushers, drum and belt

thickeners, belt filter presses, centrifuges, dryer drums and fluidized

bed dryers) are developed and produced in-house. The Andritz

Group is a global market leader for systems for mechanical and

thermal sludge treatment.

Industrial process technology is another important sector for the

Business Area. Andritz supplies filtration systems (hyperbaric

drum and disc filters as well as vacuum filters of different types)

especially for coal and ore suspension treatment. In addition, An-

dritz addresses applications in the pigment and filler industry.

The Business Area’s extensive product portfolio in the industrial

and municipal solid/liquid separation is supplemented by a large

range of screens, sieves and filters, offering Andritz customers

several technical solutions for almost all applications.

The Business Area operates direct from the Graz (Austria) head-

quarters and through its affiliates Andritz-Ruthner Inc. (USA), An-

dritz GmbH (Germany), Andritz S.A. (France), Andritz Ingeniería

S.A. (Spain), Andritz Technologies Ltd. (China), Andritz Ltd. (Great

Britain), Andritz Pty. Ltd. (Australia) and Guinard Centrifugation

S.A. (France). Production sites are in Graz (Austria), Châteauroux

(France), Pittsburg (USA) and Foshan (China).


Olaf Jansen

Johannes Kappel

Market Development

The municipal waste water and sludge treatment market continues to represent the

largest sales market of the Environment and Process Technologies Business Area. In

2001, the business for unit components (continuous screens, centrifuges and belt fil-

ter presses) regained momentum in Britain, traditionally a good market for Andritz.

In Germany and North America, on the other hand, investment activity by public au-

thorities was quite reluctant. No change has occurred in the dynamic development

in France and Spain, where Andritz enjoys a strong market position. Also, the deve-

lopment in some overseas markets like Korea, Malaysia, Singapore, Chile, Australia

and Eastern Europe is quite favorable. Increasing sales and project activity give rea-

son to hope for gradual revival in the future.

The offering of complete sludge treatment lines during the past year was concentrat-

ed more on Central Europe and Asia. However, the project situation gives reason to

assume that apart from these regions, Southern Europe and Australia might develop

into future buyer markets for Andritz.

Globally speaking the operators of large plants are showing increasing interest in

buying service. On account of its large installed base – more than 100 plants world-

wide – Andritz is well positioned to provide these services.

In the industrial process technology sector, Environment and Process Technologies

are profiting from the stabilization of the economic climate in China and Russia and

some countries in South America. The mining industry in these regions has an enor-

mous demand for equipment, rebuilds and extensions for recovery of flotate.

Environment and Process Technologies Business Area

MEUR 2001 2000 1999 1998

Sales 135.3 133.2 97.3 70.8

Order Intake 140.6 118.6 123.6 100.8

Order Backlog 31.12. 99.7 96.3 110.8 77.5

EBITDA 9.0 5.9 1.5 -4.7

EBITDA Margin 6.7% 4.4% 1.5% n.sp.

EBITA 7.2 4.0 -0.5 -6.1

EBITA Margin 5.3% 3.0% n.sp. n.sp.


Employees 435 421 396 260

Key Figures for the Environment and Process

Technologies Business Area according to IAS

50

Andritz 2001


51

Andritz 2001


Environment and Process Technologies succeeded in further improving all financial

key figures in 2001. Especially the sludge dewatering and drying sector extended its

leadership, and for the centrifuge business, 2001 was the fourth record year in a row.

The Business Area’s Sales increased 1.6% during year 2001 to 135.3 MEUR (2000:

133.2 MEUR).

Order Intake also underwent a very favorable development. It was 140.6 MEUR and

thus 18.5% higher than in 2000 (118.6 MEUR).

Earnings also developed positively. The Business Area was successful in pursuing

the favorable earnings trend of the previous years and in increasing the EBITDA to

9.0 MEUR (2000: 5.9 MEUR), which is mainly due to the rising volume of centrifuge

and drying plant sales. Profitability (EBITDA margin) rose to 6.7% (2000: 4.4%).

Centrifuges achievethe fourth recordyear in a row

The first of four sludge dryingplants for Southern Water,England, was placed in operation in 2001

Major Orders

Following a tender call with very strong international competition, the city of Singa-

pore placed an order with Andritz for a DDS (drum drying system). The plant to be

supplied by Andritz consists of five lines, each with an evaporation capacity of

eleven tonnes of water per hour and will be the largest of its kind in the world. The

large systems supplied to Cardiff, Glasgow, Bran Sands, Louisville in the USA and

now also Singapore, underline the leadership of Andritz in this field. Singapore is the

largest order ever received by the Business Area and also marks a breakthrough on

the growing Southeast Asian market, with very high reference effect on other coun-

tries in this region.

The Business Area also received orders for industrial sludge drying equipment from

two well-known pulp and paper mills. In this industry Andritz has traditionally en-

joyed a strong foothold with its mechanical sludge dewatering equipment. Palm

paper mill, for instance, selected Andritz for a follow-up order, after the system com-

missioned two years previously had fulfilled all customer expectations.


52

Andritz 2001

The second developmentstage for the large sludge drying plant in Bran Sands in the northof England was acceptedby Northumbrian Waterin 2001

Andritz receivesorder for supply ofa dryer systemfrom Singapore –the largest in theworld

In the Southeast United States, where as many as five Andritz drying

systems have been placed in service, Environment and Process Tech-

nologies was again successful in 2001. Pinellas County Waste Water

Authority, Florida, USA, ordered Andritz drying equipment for a sew-

age treatment near St. Petersburg, Florida.

Continuous follow-up on the Russian market also yielded successful

results. The supply of four vacuum disc filters for Belowskaja mining

operations in Kuzbass (Siberia), Russia, deserves special mention.

They will be used for filtering coal concentrate.

Mosvodokanal, the water supply company for the city of Moscow, Rus-

sia, has ordered the supply of a total of nine PowerDrain gravity dewa-

tering tables. This equipment will be used for mechanical thickening of

sludges from the two largest sewage treatment systems in the city.

Among the supply of centrifuges, the large order received from the city

of Santiago de Chile, already the second from this authority, is parti-

cularly noteworthy. Andritz affiliate Guinard Centrifugation will supply

five decanter centrifuges of the D7LL type. With over 280 units sold in

2001, Andritz has become the leader in sludge dewatering centrifuges.


The central point of Research and Development work of the Business Area has been

plant optimization based on the evaluation of operating experience, which brings

better performance and efficiency of single components. Safety standards have also

been adapted in line with this experience.

A new plant concept was developed for fluidized bed drying, which enables a more

compact construction, ease of maintenance and handling. This concept is now imple-

mented in the course of an order being filled in a paper mill in Germany. In addition,

adaptation of drying systems to the large boilers used in mono or co-combustion of

sewage sludge was also emphasized.

The range of centrifuge models was supplemented with a few new sizes for industri-

al and municipal applications. In addition, Andritz developed systems for remote diag-

nosis with which all essential operating parameters can be measured and evaluated.

53

Andritz 2001


Andritz has been a reliable partner to the

mining industry formany years, supplying

Hyperbaric Filters (photo) and heavy-duty

belt filter presses

54

Andritz 2001

Feed Technology

55

Andritz 2001

Profile

The Feed Technology Business Area develops and constructs

systems, machines and processes for the industrial production of

animal feed. This comprises complete feed mill lines as well as unit

equipment for grinding and mixing, expanding, pressing, extrud-

ing, cooling, vacuum coating, and drying.

The Business Area also supplies plants and systems for industrial

production of biofuel pellets.

Nearly half of the Business Area’s Sales come from aftermarket

services for installed equipment.

With the acquisition of Universal Milling Technology (UMT) in

November 2000, Andritz has become a global market leader in feed

technology.

The Feed Technology Business Area operates primarily through

Sprout-Matador (Denmark), Andritz Inc. (USA), and UMT (Nether-

lands). It has production facilities in Esbjerg (Denmark), Muncy

(USA), Boxtel and Deurne (both in the Netherlands).


Finn N. Jensen

(Sprout-Matador)

David Billingsley

(UMT)

Market Development

The international feed market improved slightly during the year 2001 and continued

the upward trend begun in the previous year. The market grew by approximately 3%

for the first time in two years.

Development of the market for conventional feed – which, at an average annual rate

of about 1% to 2%, grows considerably less quickly than the special feed market –

varied regionally. While in Continental Europe and North America practically no capi-

tal investments in new feed producing plants were made, Eastern Europe, South Ame-

rica and Asia were characterized by a somewhat higher project activity.

In the special feed market, the focus segment of the Feed Technology Business Area,

higher demand for salmon feed production systems was noticeable, especially

during the first half of 2001. In Norway and Chile, the two most important salmon-

producing countries, project activity was excellent. The drop in the prices of salmon

during the third quarter in 2001 caused many large projects to be postponed. The

market for other aquaculture feed (fish and crab feed) also developed positively,

especially in Asia.

The project activity for pet food producing equipment proceeded slightly toward the

end of the year in Europe and Latin America. The Business Area was successful in

securing and extending its competitive position.

56

Andritz 2001

Feed Technology Business Area

MEUR 2001*) 2000 1999 1998

Sales 107.0 67.8 59.6 69.0

Order Intake 112.6 70.7 53.5 61.7

Order Backlog 31.12. 27.6 14.3 11.5 17.6

EBITDA 4.7 4.6 0.6 4.0

EBITDA Margin 4.4% 6.8% 1.0% 5.8%

EBITA 0.9 2.4 -1.4 2.1

EBITA Margin 0.9% 3.5% n.sp. 3.0%


Employees 676 412 408 464

*) Including first-time consolidation of UMT

Key Figures for the Feed Technology

Business Area according to IAS


57

Andritz 2001


Note: In 2001, UMT was for the first time consolidated in the Group’s Financial

Statements, the figures for 2000 are without UMT.

The business development of the Feed Technology Business Area in 2001 was char-

acterized by the difficult market conditions in North America, increased expenditure

for project work and Research and Development as well as the results of UMT being

below expectations.

The Business Area’s Sales were 107.0 MEUR in 2001 (2000: 67.8 MEUR). This mark-

ed increase by 57.8% resulted from the first-time consolidation of UMT during the

year under review (+4.3% without UMT).

The development of Order Intake was quite similar, it was increased 59.3% to 112.6

MEUR (2000: 70.7 MEUR) over the year. Without UMT, Order Intake would have been

5.1% above that in 2000.

Improvement inSales and OrderIntake

Hammermill for fine grinding

58

Andritz 2001

The Feed Technology’s Earnings during the year under review did not proceed as

expected. As a result of the sluggish development of the feed market in North Amer-

ica and the related heightened price pressure many projects experienced a weaken-

ing of margins. Increased expenditure for Research and Development and an unsat-

isfactory Earnings situation at UMT were also encumbering. EBITDA was 4.7 MEUR,

slightly above the level of the previous year (2000: 4.6 MEUR).

Due to the successful integration and restructuring of UMT, a substantial improve-

ment in Earnings can be expected in 2002.

Major Orders

Most of the orders received in 2001 were valued between 0.5 MEUR and 1.5 MEUR.

Orders related mainly to extrusion systems for special feed and production systems

for industrial production of pellets for domestic animal feed and fuel.

Important reference orders were won, mainly in the special feed area, in Asia, South

America and Northern Europe. In these regions, Feed Technology considerably

increased its market and competitive position.

The development of the Order Intake for production systems for fuel pellets was

satisfactory, with some orders being booked especially in Asia and Central Europe.


Earnings develop-ment below expectations

Extruder with automationsystem and expansioncontrol equipment (patentpending)


Research and Development activities were focused on the continued development of

extrusion plants and systems for special feed.

A new generation, "Combizone" dryer, a high-capacity extruder for 16 tonnes per

hour, a hammer mill for fine grinding at highest capacity and an advanced automation

system for extrusion plants were successfully launched on the market.

The development work for a new grinding system for larger capacities (50 to 100 ton-

nes per hour) for conventional feed was intensified. The product will be launched

during the first half of 2002.

A new test center for extruder technology was implemented in cooperation with the

Danish Biotechnological Institute. Its establishment is likely to increase the market posi-

tion of the Business Area in the field of extrusion systems, products and in service.

.

59

Andritz 2001


The newly developedCombizone dryer

Construction of atest center forextruders

Successful launchof new products

Other OperationsHydraulic Machines

60

Andritz 2001

61

Andritz 2001

Profile

Other Operations/Hydraulic Machines encompasses Andritz Group

activities such as the planning, development and manufacture of

water turbines, large-scale pumps for selected applications, pumps

for the primary and secondary loops in nuclear power stations,

centrifugal pumps for the pulp and paper industry, and space tech-

nology components.

The main markets are Europe, China and some Southeast Asian

countries.

Manager Other Operations/Hydraulic Machines:

Manfred Wörgötter

Market Development

The general conditions for the Business Area’s main product, water turbines, remain-

ed quite strained during 2001. There were but a few modernization projects, and the

investment activity by utility companies in Europe was feeble. The competitive and

pricing situation for turbines remained difficult all through the year.

Where new installations in Austria are concerned, the business segment of small

power stations was somehow revived, and there were projects for a station output

below 10 MW.

In China the project activity continued to be brisk, with some promising projects for

turbines and also for large-scale pumps.


The Andritz Group’s Other Operations/Hydraulic Machines in year 2001 increased

Sales to 26.0 MEUR (2000: 22.7 MEUR). Compared to the previous year, this is a con-

siderable increase of 14.5%.

Order Intake also developed favorably. Despite difficult conditions in the markets, the

amount was increased to 28.6 MEUR in 2001 (2000: 26.8 MEUR).

The business with stock pumps developed positively in Europe and especially also

in China. Andritz is well positioned in this region thanks to the Andritz-Kenflo Joint

Venture in Foshan (Andritz share: 60%), it extended its market leadership in 2001.

Toward the middle of the year the Business Area launched a newly developed head-

box fan pump. The first orders came in shortly after.

One strong pillar of the Business Area was the services business. Rebuilds and

modernizations for water turbines and turbine governors, spare parts supplies to

nuclear power stations, centrifugal pumps for the pulp and paper industry account-

ed for approx. 40% of the overall Order Intake. The new electronic turbine governor

was sold to two power stations in Austria.

The earnings development of Other Opera-

tions in 2001 failed to come up to expectations.

Difficulties encountered in the course of hand-

ling two large orders which were due to unex-

pected problems with two major subsuppliers

led to a marked decline in results. EBITDA

amounted to 2.3 MEUR (2000: 5.3 MEUR). Pro-

fitability as EBITDA margin was still high: 8.9%.

62

Andritz 2001


MEUR 2001 2000 1999 1998

Sales 26.0 22.7 29.5 32.4

Order Intake 28.6 26.8 21.2 20.8

Order Backlog 31.12. 22.6 20.3 16.2 24.6

EBITDA 2.3 5.3 3.6 4.4

EBITDA Margin 8.9% 23.3% 12.2% 13.6%

EBITA -0.1 3.9 0.8 3.0

EBITA Margin n.sp. 17.2 2.7% 9.3%


Employees 246 230 240 297

Key Figures for Other Operations according to IAS

Major Orders

For a Chinese water power station Andritz will supply key components for the tur-

bines.

An order for the electromechanical equipment for a pumping station in Africa is also

noteworthy.

Further orders for DAAR rings for Ariane 5 launcher rockets were booked.


Together with ASTRÖ (Anstalt für Strömungsmaschinen), research activities were

carried out and intensified in the field of hydraulics development. By developing

peak hydraulics with efficiencies far higher than in competitive products, it was pos-

sible to proceed successfully with the marketing of the new headbox fan pump.

Developments also concerned the shaft seals of nuclear power station pumps to

strengthen the services business.

Further Research and Development activities concentrated on developing new pro-

ducts for headbox fan pumps, which are used in the pulp and paper industry. A

clear boost of the business volume is expected for the coming years.

The development of our a proprietary turbine governor was concluded. It is selling

successfully and is superior to other turbine governors both technically and cost-

wise.


63

Andritz 2001

Successful launchof the new Andritzfan pump

Initial Public Offering

Andritz Shares were first listed and officially traded on the Stock Exchange in Vien-

na on June 25, 2001. A total two million new shares were placed as a stock capital

increase and publicly offered to national and international investors. The issue price

was 21 Euros per share.

On July 25, 2001 half of the Greenshoe option of the company was exercised

(150,000 non-par value shares). They were shares exclusively held by existing share-

holders. The entire placing volume, including Greenshoe, was thus 45.15 MEUR.

Since January 1, 2002, Andritz shares have been quoted in the top segment of the

Vienna Stock Exchange, the Prime Market, and have been part of the ATX since

January 21, 2002.

64

Andritz 2001

Andritz Shares

Major Key Figures for Andritz Shares

Security Identification Number AT 000 0730007

ISIN-Code 073000

First Listing Day June 25, 2001

Types of Shares no-par value shares, bearer shares

Number of Shares 13 million

Free Float approx. 16%

Stock Exchange Vienna (Prime Market), Frankfurt (Unofficial Market)

Ticker Symbols Reuters: ANDR.VIBloomberg: ANDR,AV

Stock Exchange Indices ATX; WBI

ATX Weighting approx. 0.65%

Free Float Factor 0.25

Carlyle: ~31%

Certus: ~24%

Free Float: ~16%

UIAG, Univest: ~13% GE Capital: ~6%

Management: ~2%

AGIV AG: ~2%

Andritz Ownership Structure

Deutsche Beteiligungs AG: ~6%

Trading Volume

The average daily trading volume of Andritz shares between their first listing on

June 25, 2001 and December 31, 2001 amounted to about 19,802 shares or 417,101

EUR. Andritz shares rank 34th place in the turnover statistics of the most frequently

traded stocks on the Vienna Stock Exchange. The market capitalization of Andritz on

the basis of the final price on December 31, 2001 was 276.9 MEUR.

Investor Relations

In the course of the Initial Public Offering, a large number of national and internation-

al institutional investors was visited. In Vienna, a roadshow was held, presenting the

company to smaller investors and representatives of financial institutions. Company

presentations on a regular basis were held before analysts. Various one-on-one

meetings with large investors in Austria (Vienna) and abroad (Helsinki, Frankfurt)

complete the Investor Relations activities of the past year with their strong orientati-

on to transparency. The new Internet pages of the Andritz Group also contain a com-

prehensive section on Investor Relations (www.andritz.com/investors).

The following investment banks published regular research reports on Andritz

during 2001: Deutsche Bank, ERSTE Bank, Raiffeisen Zentralbank.

65

Andritz 2001

Active InvestorRelations

Information on Andritz Shares

Andritz Investor Relations

Stattegger Strasse 18, A-8045 Graz

Tel.: +43 316 6902 2979, Fax: +43 316 6902 465

Internet: www.andritz.com


Development of the Share Price

Since the first listing day, Andritz shares developed

solidly. In a generally quite difficult and volatile

stock exchange environment, the Andritz share

price increased 3.8% from the first listing day to the

end of 2001, outperforming the ATX share index of

the Vienna Stock Exchange, which dropped 7.6%

over the same time. The lowest closing price of the

Andritz share was 20.52 EUR and was noted on

June 25, 2001, the highest closing price came on

August 29, 2001, when the price reached 23.50

Euros. AugJul

2001Sep Oct Nov Dec

80

85

90

95

100

105

110

115

ATX

Andritz Shares versus ATX

Intensive utilization of new media, with the increased application of internet-based

customer and system solutions, are important strategic targets of the Andritz Group.

Consistent use of eBusiness-methods will provide essential support for business

processes with customers, suppliers and employees, making the processes much

easier and less costly. Creating a joint benefit and value-added for Andritz Stake-

holders is a priority goal.

For quicker and more efficient achievement of this goal the eBusiness project team,

which was first established in November 2000 and which is composed of represen-

tatives from all Business Areas in the Andritz Group, created what it termed "Andritz-

eBusiness Connectivity Model". Its aim is implementation of the opportunities that

Internet technologies offer for the benefit of all users. To secure this goal each of the

single eBusiness projects was evaluated critically against the background motto

"eBusiness is Business” before being realized.

All these projects had their main starting points in making the business processes

along the value-added chain more effective and efficient and also to offer customers

new services. The focal point of activities in 2001 were: eService-Business, eProcure-

ment and eMarketing. A total of nine eBusiness solutions were finalized in 2001.

Andritz Web Services for Customers

Under the heading "One face to the Customer", new and individualized Web Services,

with which the Andritz Group meets its customers as a global partner, were devel-

oped. The main starting point is creation of eBusiness solutions with a customer-

related content (customized and personalized).

Creating valueadded througheBusiness

eBusinessConnectivityModel

A total of nineeBusiness solutions finalizedin 2001

66

Andritz 2001

eBusiness

Andritz Service Club

The Andritz Service Club is a Web Portal for customers from the Pulp and Paper indus-

try. Registered visitors to the site are offered the following customized contents:

Status of an order, dispatch papers retrievable online, special information on pro-

ducts and services, operating and maintenance instructions for Andritz machines,

problem solution platform and design/sizing programs for Andritz systems.

Online Ordering for Wear Parts

Wear Parts – refiner plates, for instance – can be ordered online. In addition to the

ordering functionality this solution has a statistics and evaluation package that offers

the user precise information on the transactions handled over the previous two

years.

MyMill.com

MyMill.com is a complete, customized and personalized Extranet solution. Custom-

ers can order all spare parts online, and the complete plant documentation plus

general service information can be recalled at any time online.

OPE Remote

OPE Remote is a Web solution to increase productivity of processes (OPE = Overall

Production Efficiency). With online access to production critical data of the custom-

er process control system, Andritz experts can come to the rescue of customers if

there are difficulties in production or the wish to improve processes. Web technolo-

gy places Andritz in a position to provide know-how immediately and without expen-

sive time consuming travelling.

Advantages for Andritz

eBusiness solutions hold essential advantages for Andritz in that customer relations

can be intensified further, for instance by being able to react more quickly to custom-

er requirements or by greater transparency in processing orders. To be successful,

this is of the essence, especially in the services business.

Secondly, with joint Web solutions the integration of the Andritz locations is intensi-

fied. Getting in touch with Andritz more quickly and efficiently is made easier for

Andritz’ partners.

67

Andritz 2001

In addition to lower purchase costs, users of technological production systems are

especially interested in such factors as sustained value of the plant over its useful life

("Life Cycle Value") and the quality of the products made with these systems. These

customer requirements can be met by integrated automation solutions.

The Andritz Group recognized this trend early on, and Andritz Automation activities

were extended further during year 2001. Currently approx. 200 engineers are

employed in automating Andritz plants and Andritz technologies. A Group-wide

organization makes sure that the global automation and process know-how is utilized

and advanced jointly.

Research and Development in Automation

New automation solutions that increase customer value from operating Andritz

plants are elaborated in research and development projects together with custom-

ers. During the past year a number of projects such as online quality control, opti-

mization of rolling processes, condition monitoring for plants and simulations for

processes were started and successfully concluded.

Process Simulation

Short start-up times and trouble-free plant operation are achieved by process simu-

lation before the actual start-up. Simulation of dynamic processes supports testing

and optimization of the DCS system software and user training.

The first pilot application was carried out for Aracruz, Brazil, in the field of bale hand-

ling logistics.

Remote Condition Monitoring System (CMS)

Higher plant availability and lower downtime, combined with low operating and

maintenance costs are important factors for the paper industry, the steel industry

and environmental protection.

To provide quick, competent aid to our customers’ service teams, Andritz CMS per-

mits viewing the current plant status from anywhere in the world, using the latest

information technology. The advantage of the Andritz CMS compared to commercial

systems for Data Logging and vibration analysis is the specific adaptation of sensor

systems and software to the plants supplied by the Andritz Group.

Andritz Automation: 200engineers all overthe world

68

Andritz 2001

Andritz Automation

Realized Automation Solutions and consistent Product Advancements

On the basis of the technological know-how in different Business Areas, automation

systems are designed according to the latest state-of-the-art and tested before being

supplied to the site with simulation equipment.

A special challenge is the continued development of the sensors for control of the

product quality produced with Andritz systems.

The system solutions that Andritz has developed for wood processing, BarkScan™,

WoodScan™, LogScan™, offer online quality control of the wood raw material input

for the pulp industry. With the DrumMatic™, production sequences are optimized in

woodyards. These products are successfully used, for instance at the following mills:

Metsä-Botnia Joutseno, Finland, Cartiere Burgo, Italy, and Lenzing, Austria.

Modernizations of the refiner lines at Plum Creek, USA, with automation and visual-

ization components have brought about ease of operation and have good examples

for systematic extension of automation activities.

At LPC and ICT, tissue paper mills in England and Poland, automation and electrical

engineering equipment from the high-voltage and low-voltage systems to the field

units and the Andritz Tissue-Matic process control system were planned, made and

started up.

In rolling mill technology, the POS (Process Optimizing System) was developed fur-

ther and placed in operation at First Copper in Taiwan. This system measures plant

parameters online and optimizes the pass plans for cold rolling processes. The rol-

ling mills at First Copper and Chien Shing, both in Taiwan, run with the latest AC and

DC technology in the megawatt range. This integration of the power electronics was

planned and started by Andritz Group automation engineers.

The entire automation technology including efficient connection to the production

control level was supplied to EKO-Stahl and ThyssenKrupp Stahl in Bochum, Ger-

many, and thus, Andritz equipment integrated into the Customer’s production chains

logistically.

69

Andritz 2001

BarkScan™, Wood-Scan™, LogScan™:Technologically challenging systemsolutions for woodprocessing

Apart from well-trained employees who are prepared to take responsibility, the com-

plexity of Andritz’ systems also requires manufacturing standards of the highest

level and systematic organization of the sequences that are required for planning,

manufacture and installation. Thorough knowledge of the technologies that are

essential for the customers are the prerequisite for developing machines, plants and

processes with which warranty values can be met and surpassed.

Key components whose design and manufacture needs special knowledge and

equipment are produced at one of 16 production sites run by the Andritz Group.

Other components are made by sub-suppliers that Andritz selects and whose quali-

ty it monitors. These suppliers have long-term experience in co-operating with An-

dritz and are a key factor in the cost leadership of the Andritz Group.

During the year under review the organizational aspects of quality assurance for out-

sourcing were newly defined, streamlining the planning and realization flows of

quality audits.

Transition to a paperless system of quality documentation was started, and this

makes it possible to prepare the documentation for plant quality in an electronic for-

mat for each order.

With the acquisition of a pressurized container permit for China and of the ASME-N

certificate and the ensuing improvement and demonstration of the quality capabili-

ties of our engineering and order processing departments, marketability of certain

products in China was improved.

Work on process-oriented presentation of management systems in the meaning of

ISO9001: 2000 continued successfully.

70

Andritz 2001

Quality

71

Andritz 2001

Respect for the environment and conservation of natural resources have historically

been central themes of the Andritz Group. Therefore, environmental protection has

had a prominent place in the corporate philosophy, and all employees actively live

by these standards. Andritz "environmental protection assignees” ensure that the

environmental protection rules defined by the Company are implemented with con-

sistency. Active and even proactive environmental protection, plus an increasingly

heightened awareness among employees of the very notion of environmental pro-

tection, are clearly defined goals for the future.

During the year, the main focus of the environmental protection program continued

to be measures to save materials and resources in production processes and to re-

duce the quantities of residual waste by optimizing the existing waste management

system. The result has been a considerable reduction of energy and disposal cost.

The measures introduced and the results achieved have been confirmed by the re-

ceipt of an award from the local Environment Authority as a "Graz Ökoprofit” com-

pany, now for the seventh time in a row.

The goal for 2002 is optimization of the existing waste management system, by

examining possible further uses of the waste material and conservation of resources

as a main aspect of material purchase.

Environmental protection is an important subject not only within our operations but

also with the products we develop. One design goal is to create systems that contri-

bute to protecting nature and to recycling raw materials. To reduce environmental

pollution and operating costs are prioritized goals for the benefit of customers.

In the area of Pulp and Paper, the Andritz Group offers sophisticated systems and

processes for efficient recovery of chemicals used in the production of kraft pulp. The

range of products offered runs from recovery boilers to black liquor evaporation and

recausticizing systems, to effluent evaporation. The long-term experience in chemi-

cal recovery places the Andritz Group first and foremost among global suppliers in

this area, as a large installed base at renowned customers confirms.

The drying systems for sewage sludge developed and constructed by Environment

and Process Technologies also help save raw materials and reuse waste. With these

plants, the sewage sludge that is a by-product of cleaning municipal and industrial

effluents is dried and converted into granulate which can be used as fuel, fertilizer or

soil improver, or as aggregate material in the brick and cement industry.

Andritz pressure filters make reuse of coal from the coal slurry in mining operations

possible. The recovered coal can be treated to obtain a commercial product, and the

sludge lagoons where the coal wastes used to be collected can be recultivated.

Environmental Protection

Environmentalprotection as anintegral elementof the corporateAndritz philoso-phy

Ökoprofit awardfor the seventhtime in a row

Andritz productsare environ-mentally friendly

Leading supplierof chemical recovery processes

Andritz 2001

72

Finally, the Rolling Mills and Strip Processing Lines Business Area also offers a num-

ber of environmentally protective devices, whose good economy also lowers opera-

ting expenses. The PYROMARS system for stainless steel, as well as other regener-

ation systems that Andritz developed, recover the spent pickling acid from pickling

plants. The acids are returned to the process and can be used once again. The results

are a reduction of pickling costs and largely waste-water free pickling operations.

There is no environmental pollution because with this process, all loops for liquids

are closed.

The Chemcoater is used in strip coating systems (e.g. electrolytic or hot-dip galvaniz-

ing and painting lines) for application with the so-called no-rinse process. This is a

closed system, hence no chromate goes into the waste water.

Regenerative burners in continuous annealing furnaces for stainless steel strip pro-

vide energy savings of 10% to 20% over the central recuperator system. At the same

time, the lowest NOx values are achieved.

Environmental Protection

Acid regenerationprocess to re-duce operatingcosts

A regeneration plant for treatingused pickling acids

73

Andritz 2001

Consolidated Financial Statements 2001of the Andritz Group according to IAS

Independent Auditors’ Report 74

Consolidated Balance Sheet 75

Consolidated Income Statement 76

Consolidated Cash Flow Statement 77

Consolidated Statement of Shareholders’ Equity 78

Notes to the Consolidated Financial Statements 79

We have audited the accompanying consolidated group balance sheet of Andritz AG ("Andritz Group”) as at 31

December 2001, and the related consolidated statement of income, consolidated cash flow statement and consolidated

statement of shareholders’ equity for the year then ended. These group financial statements are the responsibility

of the Company’s management. Our responsibility is to express an opinion on these group financial statements

based on our audit.

We conducted our audit in accordance with International Standards on Auditing ("ISA”) as published by the Inter-

national Federation of Accountants ("IFAC”). Those Standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatements. An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit

also includes assessing the accounting principles used and significant estimates made by management, as well as

evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our

opinion.

In our opinion, the group financial statements give a true and fair view of the consolidated financial position of the

Andritz Group as at 31 December 2001 and of the consolidated results of its operations and its consolidated cash flo-

ws for the year then ended in accordance with International Accounting Standards ("IFRS”).

We confirm, that the accompanying status report is in compliance with the group financial statements and that the

legal requirements are met for the exemption of the obligation of preparing group financial statements and a status

report according with Austrian law.

Vienna, 26 February 2002

Arthur Andersen

Wirtschaftsprüfungsgesellschaft mbH

74

Andritz 2001

Independent Auditors’ Report

75

Andritz 2001

Consolidated Balance Sheet as at December 31, 2001 and 2000

2001 2000

Notes (in TEUR) (in TEUR)

Assets

Intangible assets 5,908 7,816

Goodwill 147,982 155,500

Property, plant and equipment 126,775 128,897

Shares in associated companies 3,276 3,126

Investments 11,572 21,389

Fixed and financial assets 1. 295,513 316,728

Deferred tax assets 18. 21,114 22,131

Inventories 2. 118,134 105,268

Advance payments made 3. 25,287 23,385

Trade accounts receivable 4. 212,945 200,151

Cost and earnings of projects under construction

in excess of billings 5. 99,392 92,646

Other receivables 6. 34,204 31,704

Prepayments and deferred charges 9,393 7,093

Marketable securities 7,908 19,122

Cash and cash equivalents 117,835 116,186

Current assets 625,098 595,555

Total Assets 941,725 934,414

Shareholders' Equity and Liabilities

Share capital 94,510 72,700

Capital reserves 45,966 1,931

Amounts due to agreed capital increase

(thereof share capital: EUR 7,270,000) 0 27,000

Retained earnings 89,854 59,027

Shareholders' equity 230,330 160,658

Minority interests 9,345 60,219

Provisions for severance payments 10. 23,468 22,003

Provisions for pensions 10. 14,424 19,837

Other provisions 140,552 117,528

Provisions 9. 178,444 159,368

Liabilities for deferred taxes 18. 39,605 37,011

Non-current interest bearing borrowings 976 32,683

Interest bearing borrowings 47,494 57,640

Trade accounts payable 142,379 124,947

Billings in excess of cost and earnings of projects under

construction 5. 94,823 142,617

Advance payments received 73,618 31,854

Liabilities for current taxes 3,540 11,212

Other liabilities 12. 121,171 116,205

Liabilities 11. 484,001 517,158

Total Shareholders' Equity and Liabilities 941,725 934,414

The following notes to the consolidated financial statements form

an integral part of this consolidated balance sheet.

Consolidated Income Statementfor the years ended December 31, 2001 and 2000

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Andritz 2001

2001 2000

Notes (in TEUR) (in TEUR)

Sales 13. 1,318,701 936,847

Changes in inventories of finished goods

and work in progress 8,669 979

Capitalized cost of self-constructed assets 1,225 212

1,328,595 938,038

Other operating income 14. 19,018 17,656

Cost of materials (802,435) (538,615)

Personnel expenses 15. (289,932) (222,956)

Other operating expenses 16. (160,715) (131,211)

Earnings before interest, taxes, depreciation

and amortization (EBITDA) 94,531 62,912

Depreciation and amortization

(without amortization of goodwill) (26,539) (18,595)

Earnings before interest, taxes and

amortization of goodwill (EBITA) 67,992 44,317

Amortization of goodwill (13,404) (10,318)

Earnings before interest and taxes (EBIT) 54,588 33,999

Income/expenses from investments in associated companies 325 (212)

Interest result 3,093 (814)

Other income/expenses from financing activities 2,105 919

Financial results 17. 5,523 (107)

Earnings before taxes (EBT) 60,111 33,892

Income taxes 18. (22,635) (13,675)

Net income 37,476 20,217

Share of profit/loss due to minority interests (3,882) (2,397)

Net income excluding minority interests 33,594 17,820

Earnings per non par value share (in EUR) 19. 2.82 1.78

Proposed or paid dividend

per non par value share (in EUR) 0.90 0.30

Weighted average number of non par value shares 11,916,667 10,000,000

The following notes to the consolidated financial statements form

an integral part of this consolidated income statement.

Consolidated Cash Flow Statementfor the years ended December 31, 2001 and 2000

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Andritz 2001

2001 2000

(in TEUR) (in TEUR)


Interest result (3,093) 814

Depreciation and amortization of fixed assets 39,811 28,989

Income/Expense from investments in associated companies (393) 212

Changes in accrued expenses (420) (1,998)

Results from the sale of fixed and financial assets (1,482) (1,757)

Taxes paid (19,244) (24,672)

Interest received 12,670 16,206

Interest paid (10,941) (13,766)

Gross Cash flow 77,019 37,920

Changes in inventories (10.962) (3.613)

Changes in advance payments made (1.912) (5.107)

Changes in receivables, prepayments and

deferred charges (21,264) (33,722)

Changes in short-term provisions and accruals 19,104 (6,326)

Changes in advance payments received 41,618 2,347

Changes in liabilities and deferred income (31,713) 51,885

Cash flow from operating activities 71,890 43,384

Payments received for asset disposals 9,197 2,127

Payments made for investments in fixed tangible and intangible assets (24,058) (20,810)

Payments made for investments in financial assets (1,778) (7,968)

Cash flow due to business acquisitions 0 15,067

Cash flow due to purchase of minority interests (58,449) 0

Cash flow from investing activities (75,088) (11,584)

Changes in interest bearing borrowings (41,877) 30,181

Repayment of bridge-loan 0 (356,403)

Dividends paid by Andritz AG (3,000) 0

Dividends paid to minority shareholders (962) (717)

Amounts due to capital increase 39,745 24,800

Payments made by associated companies 184 124

Cash flow from financing activities (5,910) (302,015)

Change in cash and cash equivalents (9,108) (270,215)

Changes in cash and cash equivalents resulting from

exchange rate fluctuations (457) (865)

Cash and cash equivalents at the beginning of the period 135,308 406,388

Cash and cash equivalents at the end of the period 125,743 135,308

Thereof marketable securities 7,908 19,122

Thereof cash-in-hand, cheques, bank deposits and cash equivalents 117,835 116,186

The following notes to the consolidated financial statements form an

integral part of this consolidated cash flow statement.

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Andritz 2001

Consolidated Statement of Shareholders’ Equity

Amounts due

to agreed Currency

Share Capital capital Retained IAS 39 translation

(in TEUR) Notes capital reserves increase earnings Reserve adjustment Total

Status as at 1 January 2000 72,673 1,931 0 21,647 14,698 110,949

Net income excluding

minority interests 17,820 17,820

Currency translation adjustments 4,070 4,070

Amounts due to agreed

capital increase 27,000 27,000

Capital increase 27 (27) 0

Other changes 819 819

Status as at 31 December 2000 72,700 1,931 27,000 40,259 18,768 160,658

Status as at 1 January 2001 72,700 1,931 27,000 40,259 0 18,768 160,658

Adjustment 1.1.2001

due to IAS 39 18. (372) (372)

Net income excluding

minority interests 33,594 33,594

Dividend payments 8. (3,000) (3,000)

Currency translation adjustments 1,910 1,910

Capital increase 7,270 19,730 (27,000) 0

Initial public offering 14,540 27,460 42,000

Costs of initial public offering 18. (3,155) (3,155)

Changes to IAS 39 reserve (1,498) (1,498)

Other changes 193 193

Status as at 31 December 2001 94,510 45,966 0 71,046 (1,870) 20,678 230,330

The following notes to the consolidated financial statements form an integral

part of this consolidated statement shareholders’ equity.

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Andritz 2001

Notes to the Consolidated Financial Statements as at December 31, 2001 and 2000

A. General

Andritz AG ("Andritz”) is incorporated under the laws of the Republic of Austria and is listed at on the Vienna Stock

Exchange since June 2001. The Andritz Group (the "Group”) is a leading producer of high technology industrial

machinery and operates in four main strategic business areas: Pulp and Paper, Rolling Mills and Strip Processing

Lines, Environmental and Process Technologies and Feed Technology.

The average number of employees in the Group was 4,498 in 2001 and 3,832 in 2000. The registered office address

of the Group is located at Stattegger Strasse 18, 8045 Graz, Austria.

The consolidated financial statements are the responsibility of the management and will be acknowledged by the

Supervisory Board. The comparability of prior year figures is limited due to the acquisition of Andritz-Ahlstrom

Group which has been consolidated in 2000 since July 1.

Various amounts and percentages set out in this consolidated financial statements have been rounded and accord-

ingly may not total.

B. Summary of significant Accounting Policies

The principal accounting policies adopted in preparing the financial statements of Andritz are as follows:

a. General

The accompanying financial statements are prepared in accordance with the standards formulated by the Interna-

tional Accounting Standards Committee (IASB). The accompanying financial statements have been prepared under

the historical cost convention, except for marketable securities which are stated at their fair values.

For these financial statements prepared in accordance with IFRS based on §245a of Austrian Commercial Code the

legal requirements are met for the exemption of the obligation of preparing group financial statements.

b. Changes of Accounting Standards

Following the introduction of IAS 39 (Financial Instruments: Recognition and Measurement) available-for-sale invest-

ments are carried at fair value and all derivative financial instruments have been recognised as assets or liabilities.

The opening balance of equity (retained earnings and hedging reserve) as at January 2001 has been adjusted. Prior

year comparative figures have not been restated. Changes in fair values for available-for-sale investments in 2001

have resulted in negligible income effects. The hedging reserve for losses from cash flow hedges increased from

EUR 325 thousand as of January 1, 2001 to EUR 1,821 thousand as of December, 2001.

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c. Reporting Currency

The Group financial statements are prepared in EURO.

d. Principles of Consolidation

The consolidated financial statements of the Group include Andritz and the companies that it controls. This control

is normally evidenced when Andritz owns, either directly or indirectly, more than 50% of the voting rights of a com-

pany’s share capital and is able to govern the financial and operating policies of an enterprise so as to benefit from

its activities. The equity and net income attributable to minority shareholders’ interests are shown separately in the

balance sheets and income statements, respectively.

The purchase method of accounting is used for acquired businesses. Guinard Centrifugation SA, France, ("Guinard”)

was fully consolidated for the first time in 1999 although Andritz only controls 50% of the voting shares. The Group

is able to control the business activities of Guinard. Guinard has been strictly included in the internal reporting and

control structure of the Group. Companies acquired or disposed of during the year are included or excluded, accor-

dingly, in the consolidated financial statements from the date of acquisition or from the date of disposal.

Joint Ventures with equal voting rights are consolidated on a proportionate basis.

e. Major Differences between Austrian and IAS Accounting Principles

Goodwill: In accordance with IAS 22, goodwill from capital consolidation is capitalized and amortized over the use-

ful life. The Austrian Commercial Code allows a credit to reserves, with no effect on the income statement.

Construction Contracts: According to Austrian accounting regulations, sales and profits are first realised upon

customer invoicing (completed contract method). Under IAS 11, order completion is accounted using the percentage

of completion method in accordance with progress and pro rata profit realisation. The extent of completion is

established by considering the ratio of accumulated costs to estimated total costs to complete each contract (cost-

to-cost method).

Deferred Taxes: The Austrian Commercial Code requires the creation of deferred tax provisions for temporary differ-

ences if a tax liability is expected to arise when these differences are reversed. IAS require the creation of deferred

taxes for all temporary differences which arise between financial statements prepared for tax purposes and IAS

financial statements, measured at actual or enacted tax rates. Deferred tax assets must also be recorded for unused

loss carry forwards and unused tax credits which are expected to be offset against taxable profits in the future.

Other Provisions: In contrast to the Austrian Commercial Code, IAS interprets the principle of prudence differently

with respect to provisions. IAS tends to place stricter requirements on the probability of an event occurring and on

estimating the amount of the provisions. According to Austrian Commercial Code certain amounts reported as lia-

bilities under IAS would be normally shown as provisions.

Provisions for Pensions: In keeping with the Austrian Commercial Code, provisions for pensions are calculated by an

actuary without incorporating the effect of future wage and salary increases. Under IAS, provisions for pensions are

calculated using the projected unit credit method, based on a discount rate determined by reference to market yields

on high quality corporate bonds and an expected compensation increase.

Marketable Securities: Austrian accounting principles require securities to be recorded at the lower of acquisition

costs or market value. Under IAS marketable securities are valued at market prices, and the changes in these market

prices are credited or charged directly to the income statement.

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Andritz 2001


Foreign Currency Transactions: These two accounting systems require different treatments for unrealized profits aris-

ing from the valuation of foreign exchange items as of the balance sheet date. According to Austrian law, only unrea-

lized losses are recorded, where IAS also requires the recognition of unrealized profits.

Non-current Securities: In accordance with IAS non-current securities of the Group are classified as "available for

sale” and are valued at their quoted market price at the balance sheet date. The Austrian Commercial Code requires

a valuation at acquisition costs or a lower market value if there is a sustainable decrease.

Hedging: With the adoption of IAS 39, the Group has designated its forward exchange contracts as cash flow hed-

ges and carries them at fair value. Changes in the fair value of a hedging instrument that qualifies as a highly effec-

tive cash-flow hedge are recognised directly in the hedging reserve in shareholders’ equity. The Austrian Commer-

cial Code does not require a valuation of hedging contracts at fair value as of the balance sheet date but the impact

of the hedged rates have to be considered for valuation of assets and liabilities.

f. Changes in Presentation of Balance Sheet Items

Certain amounts concerning personnel and order related costs have been reclassified from provisions to other liabi-

lities in 2001. For comparison reasons prior year figures have been adopted accordingly.

C. Acquisitions and Other Changes in Scope of Consolidation

Andritz-Ahlstrom

At June 30, 2001 the Group acquired the remaining 50% interest in Andritz-Ahlstrom OY for a cash price of EUR

57,960 thousand. Andritz-Ahlstrom and its subsidiaries ("Andritz-Ahlstrom”) have been fully consolidated into the

Group Financial statement as of end of last year already. The additional goodwill of EUR 2,515 thousand arising from

the surplus of the purchase price for the remaining shares over the minority interests of EUR 55,445 thousand as of

the date of the purchase will be amortized on a straight-line basis over the remaining period of 14 years. Andritz-Ahl-

strom contributed to the Group’s net income EUR 10,183 thousand of which EUR 2,174 thousand has been transfer-

red to minority interests for the period until the purchase of the remaining shares of Andritz-Ahlstrom.

In addition, other minor business acquisitions and changes in scope of consolidation took place, which did not lead

to material changes in the business position of the Group.

Inter-company balances and transactions, including inter-company profits and unrealized profits and losses have

been eliminated. The consolidated financial statements have been prepared using uniform accounting policies for

like transactions and other events in similar circumstances. These uniform accounting policies are not used for the

financial statements of associated companies.

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D. Accounting and Valuation Principles

a. Intangible Assets

Intangible assets are accounted for at acquisition cost. After initial recognition, intangible assets are accounted for

at cost less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a

straight-line basis over the best estimate of their useful lives. The amortisation period and the amortization method

are reviewed annually at each financial year-end.

Concessions, industrial rights and similar rights and values

Amounts paid for concessions, industrial rights and similar rights and values are capitalized and then amortized on

a straight-line basis over the expected periods of benefit. The expected useful lives vary from 3 to 15 years.

Goodwill

The excess of the cost of an acquisition over the Company’s interest in the fair value of the net identifiable assets

and liabilities acquired as at the date of the exchange transaction is recorded as goodwill and recognised as an asset

in the balance sheet. Goodwill is carried at cost less accumulated amortisation and accumulated impairment losses.

Goodwill is amortized on a straight-line basis over its useful life.

The amortization period is determined at the time of the acquisition based upon the particular circumstances and

ranges from 10 to 15 years. The unamortised balances are reviewed at each balance sheet date by assessing the pro-

bability of continuing future benefits. If there is an indication that goodwill may be impaired, the recoverable

amount is determined for the cash-generating unit to which the goodwill belongs. If the carrying amount is higher

than the recoverable amount, an impairment loss is recognised. Goodwill and negative goodwill arising from business

combinations before 1 January 1995 were written off against reserves.

b. Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

When assets are sold or retired, their cost and accumulated depreciation are eliminated from the accounts and any

gain or loss resulting from their disposal is included in the income statement.

The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-

refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location

for its intended use. Expenditures incurred after the fixed assets have been put into operation, such as repairs and

maintenance and overhaul costs, are normally charged to income in the period in which the costs are incurred.

Depreciation is calculated on a straight-line basis over the following estimated useful lives:

Buildings 20 – 50 years

Machinery and technical equipment 4 – 10 years

Tools, office equipment and vehicles 3 – 10 years

In the majority of cases, depreciation is taken in full for those assets added during the first half of the financial year;

for assets added during the second six months, one half of the annual depreciation is charged. Low-value assets are

capitalised and fully written off in the year of purchase.

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Andritz 2001


The useful life and depreciation methods are reviewed periodically to ensure that the method and period of depre-

ciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment.

Assets in the course of construction represent plant and properties under construction and are stated at cost. These

include costs of construction, plant and equipment and other direct costs. They are not depreciated until such time

as the relevant assets are completed and put into operational use.

c. Financial Assets and Investments in associated Companies

These long-term investments consist primarily of shares in associated companies and non-current securities.

Investments in associated companies (generally investments of between 20% to 50% in a company’s equity) where

a significant influence is exercised by the Group are accounted for by using the equity method. An assessment of

investments in associates is performed when there is an indication that the asset has been impaired or the impair-

ment losses recognised in prior years no longer exist.

Other non-current securities held on a long-term basis are classified as available-for-sale investments and valued at

fair value. Changes of these fair values are recognised as gains or losses in the income statement.

d. Finished Goods, Work in Progress, Raw Materials

Inventories, including work in progress, are valued at the lower of cost and net realisable value, after provision for

obsolete and slow moving items. Net realisable value is the selling price in the ordinary course of business, less the

costs of completion, marketing and distribution. Cost is determined primarily on the basis of the FIFO method. For

processed inventories, cost includes the applicable allocation of fixed and variable overhead costs. Unrealisable

inventory has been fully written off. Contracts other than construction contracts are valued at production costs. For

these contracts the revenue is recognised when the ownership of the goods is transferred ("completed contract

method”).

e. Construction Contracts

Receivables from construction contracts and the related sales are accounted for using the percentage of completion

method. The construction contracts are determined by the terms of the individual contract, which are agreed at fixed

prices. The extent of completion ("stage of completion”) is established by the cost-to-cost method. Reliable estimates

of the total costs and sales prices and the actual figures of the accumulated costs are available on a monthly basis.

Estimated contract profits are recorded in earnings in proportion of recorded sales. In cost-to-cost method sales and

profits are recorded after considering the ratio of accumulated costs to estimated total costs to complete each con-

tract. Changes to total estimated contract costs and losses, if any, are recognised in the income statement of the peri-

od in which they are determined. For remaining technological and financial risks which might occur during the remai-

ning construction period, an individually assessed amount is included in the estimated contract costs.

Impending losses out of the valuation of construction contracts are recognised at the time of occurrence. Impending

losses are recognised when it is probable that the total contract costs will exceed the contract revenues. For possible

customer warranty claims provisions are accounted for according to the profit realisation. At the completion of a

contract the remaining warranty risk is reassessed.

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Andritz 2001


f. Trade Accounts Receivable

Receivables are stated at face value, after allowances for doubtful accounts.

g. Marketable Securities

Marketable securities consist of governmental bonds and bonds of first-class banks that are traded in liquid markets.

They are held for the purpose of investing in liquid funds and are not generally intended to be retained on a long-

term basis. Marketable securities are stated at the market value. Adjustments in valuation are included in the income

statement. Interest received on trading securities is reported as interest income. On a disposal of an investment, the

difference between the net disposal proceeds and the carrying amount is included in the income statement.

h. Cash and Cash Equivalents

Cash includes cash in hand and cash with banks. Cash equivalents might include short-term deposits with non-banks

with original maturities of three months or less and that are not subject to any risk of change in value.

i. Share Capital

Only ordinary shares exist and all shares are issued and have the same rights.

At the extraordinary shareholders’ meeting of the Company held on 6 September 2000 the share capital of the Com-

pany of ATS 1 billion was converted into Euros on the basis of the official exchange rate. In addition, it was resolved

to convert the shares from par value shares to non par value shares. As a result, the converted share capital of EUR

72,700,000 was divided into 10,000,000 shares of non par value.

At the same shareholders’ meeting the shareholders resolved to authorise the Managing Board to increase the nomi-

nal value of the Company’s share capital with prior approval of the Supervisory Board by an amount of up to EUR

36,350,000 through the issue of up to 5,000,000 shares in bearer or registered form and for a contribution in cash or

in kind. This increase has been authorised for a maximum of five years from the registration of the amendment to

the Articles of Association in the commercial register which took place on 19 September 2000. Out of this authori-

sation Andritz issued 1,000,000 shares at the end of 2000. For these shares an amount of EUR 27.0 million was paid

by the shareholders (thereof EUR 24.8 million before 31 December 2000). This increase was registered in the com-

mercial register on 26 January 2001.

At the 94th ordinary shareholders’ meeting the shareholders resolved to authorize the Managing Board to increase

the nominal value of the Company’s share capital with prior approval of the Supervisory Board by a further amount

of up to EUR 10,905,000 through the issue of up to 1,500,000 shares in bearer form and for contribution in cash or

kind, so that authorized capital was increased to EUR 39,985,000 or 5,500,000 shares respectively.

In the course of the Company’s IPO out of this authorization Andritz issued 2,000,000 shares in June 2001, the issue

price was fixed at EUR 21 per share. This increase was registered in the commercial register on 23 June 2001.

Consequently the share capital amounts to EUR 94,510,000 divided into 13,000,000 shares of non par value.

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Andritz 2001


j. Capital Reserves

Capital Reserves are created in accordance with Austrian requirements and include share premium amounts.

k. Provisions

A provision is recognised when, and only when, an enterprise has a present obligation (legal or constructive) as a

result of a past event and it is probable (i.e. more likely than not) that an outflow of resources embodying economic

benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligati-

on. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the

effect of the time value of money is material, the amount of a provision is the present value of the expenditures

expected to be required to settle the obligation.

l. Other Accounting and Valuation Principles

Financial Instruments

Financial assets and financial liabilities carried on the balance sheet include cash and cash equivalents, marketable

securities, trade and other accounts receivable and payable, long-term receivables, borrowings and investments. The

accounting policies on recognition and measurement of these items are disclosed in the respective accounting poli-

cies found in these notes.

Financial instruments are classified as assets or liabilities in accordance with the substance of the contractual

arrangement. Therefore interest, dividends, gains and losses relating to these financial instruments classified as an

asset or a liability are reported as expense or income. Financial instruments are offset when the Group has a legally

enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability

simultaneously.

Hedging

The Group uses forward exchange contracts to mitigate exposure to foreign currency risk out of projects and regu-

larly business in foreign currency. According to the Group’s hedging policy all forward contracts are used for highly

probable future Cash flows for these projects or regularly sales and can therefore be classified as cash flow hedges.

Changes in the fair value of a hedging instrument that qualifies as a highly effective cash-flow hedge are recognised

directly in the hedging reserve in shareholders’ equity. If the hedged cash flow results in the recognition of an asset

or a liability, all gains or losses previously recognised directly in equity are transferred from equity and included in the

initial measurement of the cost or carrying value of the asset or liability. Otherwise, for all other cash-flow hedges,

gains and losses initially recognised in equity are transferred from hedging reserve to net profit or loss in the same

period or periods during which the hedged firm commitment or forecast transaction affects the income statement.

When the committed or forecast transaction is no longer expected to occur, any net cumulative gain or loss pre-

viously reported in equity is transferred to the income statement.

All investments in a foreign entity are long-term investments and presently a sale of such investments is not expect-

ed to occur in the foreseeable future. According to the Group’s hedging policy there are no hedges of net investments

in foreign currencies.

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Andritz 2001


Derivative Financial Instruments

All derivative financial instruments are designated as hedging instruments. Only fixed forward exchange rate con-

tracts are used for hedging of currency risks.

Research and Development Costs

Expenditures for research and development are charged against income in the period incurred because the criteria

for capitalisation (IAS 38) are not met. In 2001 EUR 18,425 thousand and in 2000 EUR 17,864 thousand have been

recognised as an expense.

Revenue Recognition (except for Construction Contracts)

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the

enterprise and the amount of the revenue can be measured reliably. Sales are recognised net of sales taxes and dis-

counts when delivery has taken place and transfer of risks and rewards has been completed.

Interest is recognised on a time proportion basis that reflects the effective interest rate of the asset. Dividends are

recognised when the shareholder’s right to receive payment is established.

Borrowing Costs

Borrowing costs are generally expensed as incurred.

Impairment of Assets

Property, plant and equipment and intangible assets are reviewed for impairment whenever events or changes in cir-

cumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of

an asset exceeds its recoverable amount, an impairment loss is recognised in income for items of property, plant and

equipment and intangibles carried at cost. Recoverable amounts are estimated for individual assets or, if it is not

possible, for the cash-generating unit.

m. Foreign Currency

Foreign Currency Transactions

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the

exchange rate between the reporting currency and the foreign currency at the date of the transaction. Exchange rate

differences arising on the settlement of monetary items at rates different from those at which they were initially

recorded during the periods are recognised in the income statement in the period in which they arise.

Foreign Entities

Foreign consolidated subsidiaries are regarded as foreign entities since they are financially, economically and orga-

nisationally autonomous. Their reporting currencies are their respective local currencies. Financial statements of for-

eign consolidated subsidiaries are translated at year-end exchange rates with respect to the balance sheet. Expense

and revenue items are translated using the average exchange rates for the year. All resulting translation differences

are included in a currency translation reserve in equity.

Any goodwill arising on the acquisition of a foreign entity is recorded using the exchange rate at the effective date

of the transaction. Exchange differences arising on a monetary item that, in substance, forms part of the Group’s net

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Andritz 2001


investment in a foreign entity are classified as equity in the consolidated financial statements until disposal of the

net investment.

n. Employee Benefits

Defined Benefit Plans (Provisions for Pensions)

Some Group companies provide defined benefit pension plans for certain employees. The funds are valued every

year by professionally qualified independent actuaries. The obligation and costs of pension benefits are determined

using a projected unit credit method. The projected unit credit method considers each period of service as giving rise

to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past

service costs are recognised on a straight-line basis over the average period until the amended benefits become

vested. Gains or losses on the curtailment or settlement of pension benefits are recognised when the curtailment or

settlement occurs. Actuarial gains or losses are amortised based on the expected average remaining working lives

of the employees. The pension obligation is measured at the present value of estimated future Cash flows using dif-

ferent discount rates for different countries.

In 1999 part of the pension obligations were transferred to a multi-employer pension fund. According to IAS 19.30

these pension obligations were accounted as a defined contributions plan, although the obligations met the criteria

of a defined benefit plan. All surplus or deficit in the plan will affect the future contributions of the Group. No mate-

rial amounts are expected out of future deficits, as the initial funding seems to be sufficient to cover future deficits.

Other Group companies provide defined contribution plans for certain employees. The related costs are expensed

as they occur.

Severance Payments

In certain countries the Group is also obliged by law to pay termination indemnities in some cases of termination of

employment. No termination indemnities are payable for voluntary termination at the request of the employee.

Expenses related to termination indemnities are accrued.

o. Income Taxes

The income tax charge is based on profit for the year and considers deferred taxation. Deferred taxes are calculated

using the balance sheet liability method. Deferred income taxes reflect the net tax effects of temporary differences

between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for

income tax purposes. Deferred tax assets and liabilities are measured using the tax rates expected to apply to tax-

able income in the years in which those temporary differences are expected to be recovered or settled, based on tax

rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement

of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner

in which the enterprise expects, at the balance sheet date, to recover or settle the carrying amount of its assets and

liabilities.

Deferred tax assets and liabilities are recognised regardless of when the timing difference is likely to reverse.

Deferred tax assets are recognised when it is probable that sufficient taxable profits will be available against which

the deferred tax assets can be utilised. At each balance sheet date, the Group re-assesses unrecognised deferred tax

88

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assets and the carrying amount of deferred tax assets. The enterprise recognises a previously unrecognised defer-

red tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to

be recovered. The Group conversely reduces the carrying amount of a deferred tax asset to the extent that it is no

longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax

asset to be utilised.

Deferred tax is charged or credited directly to equity if the tax relates to items that are credited or charged, in the

same or a different period, directly to equity, including exchange differences arising on the translation of inter-com-

pany loans.

E. Segments

Business Segments

For management purposes the Group is organised on a worldwide basis into four major operating businesses. The

strategic business units are the basis upon which the Group reports its primary segment information. Financial infor-

mation on business and geographical segments is presented in section I (see "segment information” below).

There are no material inter-segment transactions. All consolidation entries are included in the relevant segment.

According to the monthly reporting scheme, which is the basis for the primary segment information, all sales and all

direct and indirect expenses (including overhead and administrative costs) are allocated to business segments.

Net segmental assets consist of:

• intangible fixed assets, property, plant and equipment;

• current assets not including cash and cash equivalents and marketable securities; and

• liabilities not including interest bearing borrowings, liabilities for taxes and personnel related costs

of each segment.

F. Contingencies

Contingent liabilities are not recognised in the financial statements. They are disclosed unless the possibility of an

outflow of resources embodying economic benefits is remote.

A contingent asset is not recognised in the financial statements but disclosed when an inflow of economic benefits

is probable.

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G. Notes to the Balance Sheet

1. Changes in Fixed and Financial Assets

2001

Acquisition or Production Costs:

Balance Changes Balance

as at Currency due to as at

1 January translation business 31 December

(in TEUR) 2001 differences Additions Disposals acquisitions Transfers 2001

Concessions, industrial rights and

similar rights and values 27,003 439 2,667 2,270 0 (613) 27,226

Advance payments on

intangible assets 0 0 0 0 0 0 0

Total intangible assets 27,003 439 2,667 2,270 0 (613) 27,226

Goodwill 249,100 7,301 3,162 0 0 613 260,176

Land and buildings 133,619 2,080 2,517 2,888 0 (1,721) 133,607

Technical equipment and machinery 132,888 2,429 7,119 3,513 0 1,355 140,278

Other equipment, factory and office

equipment 72,933 1,401 11,897 7,908 63 1,006 79,391

Assets in course of construction 1,986 59 (607) 448 0 (564) 426

Advance payments on

tangible assets 110 0 111 110 0 0 112

Total property, plant and equipment 341,536 5,969 21,037 14,866 63 76 353,814

Shares in affiliated companies 8,765 38 22 8.471 (20) 0 333

Other investments (participations) 521 0 0 377 0 43 188

Shares in associated companies 3,126 (59) 393 184 0 0 3,276

Other loans 520 (6) 19 45 0 0 488

Non-current securities 12,596 20 947 2,379 0 (43) 11,141

Advance payments on financial

assets 0 0 4 0 0 0 4

Total financial assets 25,528 (6) 1,385 11,455 (20) 0 15,431

Total fixed and financial assets 643,167 13,703 28,249 28,592 43 76 656,647

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Andritz 2001


Depreciation and Amortization

Balance Changes Balance

as at Currency due to as at


(in TEUR) 2001 differences Additions Disposals acquisitions Transfers 2001

Concessions. industrial rights and

similar rights and values 19,187 357 4,592 2,204 0 (614) 21,317

Advance payments on intangible

assets 0 0 0 0 0 0 0

Total intangible assets 19,187 357 4,592 2,204 0 (614) 21,317

Goodwill 93,600 4,576 13,404 0 0 614 112,194

Land and Buildings 58,775 1,110 3,713 343 0 (1,789) 61,467

Technical equipment and machinery 96,243 1,651 9,449 3,398 0 489 104,434

Other equipment, factory and office

equipment 57,621 1,214 8,785 7,532 19 1,029 61,137

Assets in course of construction 0 0 0 0 0 0 0

Advance payments on tangible

assets 0 0 0 0 0 0 0

Total property, plant and equipment 212,639 3,976 21,947 11,272 19 (271) 227,038

Shares in affiliated companies 571 0 0 264 0 0 307

Other investments (participations) 50 0 0 0 0 0 50

Shares in associated companies 0 0 0 0 0 0 0

Other loans 358 0 0 0 0 0 358

Non-current securities 34 0 (132) 34 0 0 (132)

Advance payments on financial assets 0 0 0 0 0 0 0

Total financial assets*) 1,013 0 (132) 298 0 0 583

Total fixed and financial assets 326,439 8,909 39,810 13,775 19 (271) 361,133

*) Impairment losses

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Andritz 2001


Net Book Value

Net book Net book

Costs as at value as at value as at

31 December Accumulated 31 December 31 December

(in TEUR) 2001 depreciation 2001 2000

Concessions, industrial rights and

similiar rights and values 27,226 21,317 5,909 7,816

Advance payments on intangible assets 0 0 0 0

Total intangible assets 27,226 21,317 5,909 7,816

Goodwill 260,176 112,194 147,982 155,500

Land and buildings 133,607 61,467 72,140 74,844

Technical equipment and machinery 140,278 104,434 35,844 36,645

Other equipment, factory and office equipment 79,391 61,137 18,254 15,312

Assets in course of construction 426 0 426 1,986

Advance payments on tangible assets 112 0 112 110

Total property, plant and equipment 353,814 227,038 126,776 128,897

Shares in affiliated companies 333 307 26 8.194

Other investments (participations) 188 50 138 471

Shares in associated companies 3,276 0 3,276 3,126

Other loans 488 358 130 162

Non-current securities 11,141 (132) 11.273 12,562

Advance payments on financial assets 4 0 4 0

Total financial assets 15,431 583 14,848 24,515

Total fixed and financial assets 656,647 361,133 295,514 316,728

Impairment Loss

Due to the lower level of business activity in some markets where the Group is active the capacity utilization of cer-

tain manufacturing facilities is expected to be lower than the break-even level. Updated analyses were prepared to

determine if there is an impairment of assets. For certain units which met these tests the impaired assets including

buildings, machinery and equipment were written down to their recoverable value which is their net selling price.

Net selling price is determined using the best estimate available for the disposal of these assets on an arm´s length

basis between knowledgeable willing parties. For the year 2001 the group recorded in depreciation a non-cash

impairment loss for these manufacturing facilities of EUR 2,472 thousand (buildings EUR 1,376 thousand, technical

equipment and machinery EUR 1,096 thousand).

In addition, impairment loss of EUR 1,865 thousands has been recognised in 2001 for intangible assets (patents

and industrial rights) due to changed production processes and changed market outlook. This impairment charge

represents a partial write-off to the recoverable amount based on estimates of their net selling prices.

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Andritz 2001


Goodwill

(in TEUR) 2001 2000

Andritz Ahlstrom 60,174 60,471

Acquisition of Andritz AG 77,474 83,434

Other 10,334 11,595

147,982 155,500

2. Inventories

(in TEUR) 2001 2000

Finished goods 37,815 29,078

Work in process 58,018 51,754

Raw materials 22,300 24,436

118,134 105,268

The shown inventories are valued at cost.

3. Advance Payments Made

The advance payments made and presented in the balance sheet relate to open purchase orders for contracts.

4. Trade Accounts Receivables

(in TEUR) 2001 2000

Accounts receivable 216,413 203,422

Allowance for doubtful accounts (3,468) (3,271)

212,945 200,151

5. Construction Contracts

(in TEUR) 2001 2000

Contract revenue recognised as sales in the period 858,147 572,432

Contract costs incurred and recognised profits

(less recognised losses) to date 1,023,539 739,219

Advances received and progress billings 806,560 789,190

Amount of retentions 860 1,747

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Andritz 2001


The billings in excess of costs and earnings of projects under construction represent, primarily, payments from

customers for work, which is not performed yet.

6. Other Receivables

(in TEUR) 2001 2000

Receivables from associated companies 17 168

Receivables from affiliated companies 0 1,426

Other receivables 34,187 30,110

34,204 31,704

7. Statement of Receivables

2001Thereof Thereof

remaining remaining

term term

(in TEUR) Total under 1 year over 1 year

Trade accounts receivable 212,945 205,904 7,041


in excess of billings 99,392 98,939 453

Other receivables 34,204 34,082 121

346,541 338,925 7,616

2000Thereof Thereof

remaining remaining

term term

(in TEUR) Total under 1 year over 1 year

Trade accounts receivable 200,151 196,207 3,944


in excess of billings 92,646 92,646 0

Other receivables 31,704 30,511 1,193

324,501 319,364 5,137

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Andritz 2001


8. Retained Earnings

Dividends

Cash dividends declared for the years 2001 and 2000 were as follows:

(in TEUR) 2001 2000

Ordinary shares, non-par value 11,700 3,000

The dividend for 2001 will be proposed by the Managing Board. The dividend for 2000 was paid to the shareholders

at the end of March 2001.

On 25 February 2002 the Managing Board authorised the consolidated financial statements for the year ended 31

December 2001 according to IAS. On 26 February 2001 the management authorised the consolidated financial

statements for the year ended 31 December 2000 according to IAS to be issued to its Supervisory Board. The Super-

visory Board is made up solely of non-executives and includes representatives of employees. The consolidated finan-

cial statements were presented for information purposes only to the Supervisory Board and subsequently acknow-

ledged by the meeting of shareholders. The Supervisory Board and the meeting of shareholders acknowledged the

consolidated financial statements.

9. Provisions

Balance Changes

as at Currency due to


(in TEUR) 2001 differences acquisitions Use Reversal Addition 2001

Provisions for severance

payments 22,003 0 0 0 187 1,651 23,467

Provisions for pensions 19,837 249 0 3,896 1,810 44 14,424

Longterm provisions 41,840 249 0 3,896 1,996 1,695 37,891

Other provisions 117,528 828 0 27,334 12,239 61,769 140,552

Total 159,368 1,077 0 31,230 14,235 63,464 178,443

Other provisions consist primarily of order related provisions (2001: EUR 119,592 thousand; 2000: EUR 102,285

thousand). The provisions for order related costs consist primarily of provisions for warranties and contingencies

and are expected to be incurred within the next three financial years.

Restructuring

A detailed plan of restructuring was completed and approved by the Supervisory Board in November 2001. The

restructuring plan is designed to streamline the production within the Group. The Group recorded a restructuring

charge of EUR 8,817 thousands to cover the costs of reducing certain sectors of its workforce and facilities to levels

more appropriate to expected business requirements. The balance is comprised of EUR 4,523 thousand for the reduc-

tion of employees and EUR 4,293 thousands for closing of excess facilities.

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Andritz 2001


10. Employee Benefit Obligations

Defined Benefit Plan for Pensions

Some Group companies in Austria, USA, Germany and Sweden provide defined benefit pension plans for some clas-

ses of employees. Provisions for pension obligations are established for benefits payable in the form of retirement,

disability and surviving dependant pensions. The benefits offered vary according to the legal, fiscal and economic

conditions of each country. Benefits are dependent on years of service and in some cases on the respective employ-

ee’s compensation.

The following table reconciles the funded status of defined benefit plans to the amounts recognised in the balance

sheet:

(in TEUR) 2001 2000

Present value of funded defined benefit obligations 16,437 25,925

Fair value of plan assets (2,904) (15,256)

13,534 10,669

Present value of unfunded defined benefit obligations 1,613 11,446

Unrecognised actuarial gains/losses (740) (3,372)

Unrecognised past service costs 16 1,094

Net liability in balance sheet 14,424 19,837

Pension expense is comprised of the following:

(in TEUR) 2001 2000

Current service costs 278 411

Interest expense on obligations 861 1,601

Expected return on plan assets 0 (876)

Net actuarial gains/losses recognised (90) 383

Past service costs 182 (15)

Effect of any curtailment or settlement (344) 1,544

889 3,048

Payments to defined contribution plans 12,813 7,105

13,702 10,153

Principal actuarial assumptions used to determine pension obligations as of 31 December were as follows:

(in per cent) 2001 2000

Discount rate 6.5% 6.5%

Expected return on plan assets 8.5% 8.5%

Wage and salary increases 3.0% 3.0%

Retirement benefit increases 2.5% 2.5%

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Andritz 2001


In prior years Andritz transferred some of the pension liabilities to a multi-employer pension fund. This pension plan

is accounted as a defined contribution plan although the obligations met the criteria for a defined benefit plan. The

plan covers some full-time employees and provides for contribution ranging from 3% to 5% of salary.

Severance Payments

(in TEUR) 2001 2000

Present value of unfunded defined benefit obligations 23,468 22,003

Net liability in balance sheet 23,468 22,003

Severance expense is comprised of the following:

(in TEUR) 2001 2000

Current service costs 1,263 1,028

Interest expense on obligations 1,335 1,315

Net actuarial gains/losses recognised (141) (2,323)

Effect of any curtailment or settlement 0 1,115

2,458 1,135

Payments to defined contribution plans 397 5

2,855 1,140

Principal actuarial assumptions used to determine serverance obligations as of 31 December were the same as used

for pension obligations.

Management Share Option Plan

A selected group of executives employed by the Group as at 1 June 2001 were eligible to participate in a Mana-

gement Share Option Plan in connection with the Initial Public Offering. Each eligible executive who has subscribed

Shares having an aggregate subscription value calculated at the Offer Price (21 EUR per share) of at least 20,000

EUR (each such subscription a "Private Investment”) is eligible for a special remuneration in the form of option

rights. These option rights can be exercised provided that the average price of the Shares during two separate asses-

sment periods exceeds a certain percentage of the Offer Price. The first assessment period will run for a period of

three months preceding the second anniversary of the initial listing of the Shares on the Vienna Stock Exchange,

whereas the second assessment period will run for a period of three months preceding the third anniversary of the

initial listing of the Shares on the Vienna Stock Exchange. If the average market value of the Shares exceeds the Offer

Price by 15% in the first assessment period (Option 1) or by 20% in the second assessment period (Option 2), the eli-

gible executive will be entitled to purchase up to a maximum of 1,500, 2,500 and 5,000 Shares with respect to Opti-

on 1 or Option 2 at the Offer Price depending on the seniority of the relevant executive, provided that the relevant

executive can prove uninterrupted ownership of his Private Investment until the end of the assessment period. The

options can be exercised only once and are not transferable. Option 2 can only be exercised if during the fist asses-

sment period the average market value of the Shares does not exceed the Offer Price by 15%, making the exercise

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Andritz 2001


of Option 1 impossible. The options can only be exercised at given times. Each participant may subscribe up to 50%

of the number of Shares stated in the Average Price Notice immediately after exercise of the option and payment of

the pro-rata subscription price, the relevant participant can subscribe up to the remaining 25% of the Shares set out

in the notice on the exercise of the option. At the end of a six-month term from the exercise of the option and pay-

ment of the remaining subscription price, the relevant participant can subscribe up to the remaining 25% of the Sha-

res set out in the notice on the exercise of the option.

Due to legal requirements, executives in the United States will not be allowed to make a Private Investment but will

be granted option rights. 37 executives are participating in the Management Share Option Plan, together they are eli-

gible to exercise options for the purchase of 116,000 shares. Andritz may either provide these shares by issue of new

shares out of authorised share capital or by repurchase of own shares what has to be approved by the Shareholders‘

Meeting.

11. Statement of Liabilities

2001Thereof Thereof Thereof

remaining remaining remaining

term under term between term over

(in TEUR) Total 1 year 1 and 5 years 5 years

Non-current interest bearing borrowings 976 0 960 16

Interest bearing borrowings 47,494 47,494 0 0

Trade accounts payable 142,379 140,880 1,499 0

Billings in excess of costs and earnings of projects

under construction 94,823 94,440 383 0

Advance payments received 73,618 73,618 0 0

Liabilities for current taxes 3,540 3,540 0 0

Other liabilities 121,171 119,776 1,121 274

484,001 479,748 3,963 290

2000Thereof Thereof Thereof

remaining remaining remaining

term under term between term over

(in TEUR) Total 1 year 1 and 5 years 5 years

Non-current interest bearing borrowings 32,683 0 32,653 30

Interest bearing borrowings 57,640 57,640 0 0

Trade accounts payable 124,947 124,463 484 0

Billings in excess of costs and earnings of projects

under construction 142,617 138,704 3,913 0

Advance payments received 31,854 31,854 0 0

Liabilities for current taxes 11,212 11,212 0 0

Other liabilities 116,204 114,601 1,318 284

517,157 478,474 38,368 314

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Andritz 2001


The interest bearing borrowings consist primarily of current bank loans at floating interest rates and fixed rates.

Property, plant and equipment amounting to EUR 419 thousand and EUR 2,032 thousand as at 31 December 2001

and 2000, respectively, has been pledged as security for long-term debt.

12. Other Liabilities

(in TEUR) 2001 2000

Payables to affiliated companies 51 29

Payables to associated companies 436 36

Other personnel related costs 30,436 31,826

Other order related costs 31,985 29,677

Deferred income 3,200 3,476

Other 55,063 51,161

121,171 116,205

H. Notes to the Consolidated Income Statement

13. Sales

(in TEUR) 2001 2000

Contract revenue recognised as sales in the period 858,147 572,432

Other 460,554 364,415

1,318,701 936,847

14. Other Operating Income

(in TEUR) 2001 2000

Profit on disposal of fixed assets excluding financial assets 1,749 1,379

Exchange rate gains 2,487 3,302

Rental income 1,268 1,301

Other 13,514 11,674

19,018 17,656

15. Personnel Expenses

(in TEUR) 2001 2000

Wages 65,320 45,486

Salaries 167,084 132,988

Pension expenses 13,702 10,153

Severance and termination expenses 6,627 983

Social security and payroll related duties 30,247 25,801

Other social payments 6,953 7,545

289,932 222,956

16. Other Operating Expenses

(in TEUR) 2001 2000

Exchange rate losses 4,899 3,099

Sales expenses 75,186 58,884

Administration expenses 22,455 16,667

Other 58.175 52,561

160,715 131,211

17. Financial Results

(in TEUR) 2001 2000

Income / expenses from investments in associated companies 325 (212)

Other interest and similar income 10,495 13,057

Interest and similar expenses (7,401) (13,871)

Interest result 3.093 (814)

Income / expenses from investments 7 1

Impairment losses of financial assets (30) (76)

Profit on disposal of short-term securities 2,184 2,138

Income from write-ups of financial assets 163 0

Reductions to market value of short-term securities (218) (1,642)

Profit / losses on disposal of long-term financial assets 0 498

Other income / expenses from financing activities 2,105 919

5,523 (107)

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Andritz 2001


100

Andritz 2001


18. Income Taxes

(in TEUR) 2001 2000

Current tax expense (16,985) (6,337)

Deferred tax income relating to the origination and

reversal of temporary differences (5,650) (7,338)

(22,635) (13,675)

Changes in the deferred income tax account consist of the following:

(in TEUR) 2001 2000

Tax assets 22,131 18,824

Tax provision for deferred taxes (37,011) (28,257)

Balance as at 31 December, as previously stated (14,880) (9,433)

Deferred taxes from changes in consolidation range 1,399 10,426

Defered taxes from changes in group structure 0 (8,648)

Deferred tax expense relating to the origination and

reversal of temporary differences

Income statement charge (5,650) (7,338)

Foreign exchange differences 274 781

Tax effect on IAS 39 reserve 938 0

Tax effect of foreign exchange translation differences (572) (668)

(18,491) (14,880)

thereof

Deferred tax assets 21,114 22,131

Provision for deferred taxes (39,605) (37,011)

The reconciliation of the effective tax rate to the statutory tax rate is as follows:

(in TEUR) 2001 2000


Tax at the applicable tax rate (34% in 2001 and 2000) (20,437) (11,523)

Tax effect of income not taxable in determining taxable profit

(non-temporary differences) (977) (4,326)

Tax effect of

changes in valuation allowance (2,421) 1,827

adjustment of using new tax rates 1,200 347

(22,635) (13,675)

Tax charge per statutory book 16,985 6,337

Changes in deferred taxes (5,650) (7,338)

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Andritz 2001


Income tax effects related to tax deductible IPO costs are directly recognised in capital reserve in equity.

Deferred tax assets and provisions for deferred taxes as at 31 December 2001 and 2000 are the result of the follow-

ing temporary valuation and accounting differences between book values in the IAS consolidated financial state-

ments and the relevant tax bases:

2001 2000

Deferred tax Deferred tax

(in TEUR) asset provision asset provision

Intangible assets 2,197 (467) 2,417 (84)

Tangible assets 2,797 (9,702) 2,558 (10,527)

Financial assets 249 (150) 2 0

Inventories 140,946 (363) 149,848 (349)

Receivables 2,993 (22,239) 751 (17,608)

Short-term securities and shares 0 (537) 2 (898)

Other assets 1,562 (22) 283 0

150,744 (33,480) 155,861 (29,466)

Provisions 18,250 (5,804) 15,709 (2,489)

Liabilities 4,876 (152,649) 6,182 (162,263)

Deferred income 1 (687) 0 (2,522)

23,127 (159,140) 21,891 (167,274)

Tax loss carry-forwards 8,429 0 11,179 0

Deferred tax assets/provisions 182,300 (192,620) 188,931 (196,740)

Valuation allowance for deferred tax assets (6,502) 0 (4,104) 0

Other deferred taxes from consolidation 0 (2,607) (430) (2,537)

IAS 39 reserve 938 0 0 0

Offset within legal tax units and jurisdiction (155,622) 155,622 (162,266) 162,266

Net deferred tax assets and provisions 21,114 (39,605) 22,131 (37,011)

19. Earnings per Share

Basic earnings per share (see Consolidated Income Statement) are calculated by dividing the net profit for the

period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during

the period.

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Andritz 2001


I. Segment Information

Segment information is prepared on the following basis:

Business Segments

The Andritz Group conducts the majority of its business activities in the following areas:

a. Pulp and Paper (P+P)

b. Rolling Mills and Strip Processing Lines (WB)

c. Environment and Process Technologies (EP)

d. Feed Technology (FT)

All other minor business activities are included in "Other”.

Geographical Segments

The Group’s activities are conducted predominantly in Europe, North America and Asia.

2001

Business Segment Data

(in TEUR) P + P WB EP FT Other Total

Sales 882,992 167,391 135,309 107,000 26,009 1,318,701

Segment result before amortisation

of goodwill 53,852 6,131 7,225 920 (136) 67,992

Net segmental assets 166,658 2,996 43,161 35,238 8,223 256,275

Capital expenditure 10,772 3,445 1,919 6,704 863 23,703

Depreciation and amortisation on tangible

and intangible fixed assets 15,943 2,560 1,825 3,773 2,439 26,539

thereof impairment losses 2,730 79 315 1,213 4,337

Share of net profit / loss of associates 325 325

Investment in associates 3,276 3,276

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Andritz 2001


Geographical Segment Data

Rest of

the world

North and con-

(in TEUR) Europe America Asia solidation Total

External sales 607,485 367,563 187,711 155,943 1,318,701

Total assets 1,161,553 158,581 4,932 (383,342) 941,724

Capital expenditures 20,070 3,208 78 347 23,703

2000

Business Segment Data

(in TEUR) P + P WB EP FT Other Total

Sales 543,999 169,130 133,155 67,844 22,719 936,847

Segment result before amortisation

of goodwill 27,564 6,447 3,992 2,390 3,924 44,317

Net segmental assets 155,641 1,154 33,520 27,555 21,353 239,223

Capital expenditures 13,714 1,926 3,121 780 1,269 20,810

Depreciation and amortisation on tangible

and intangible fixed assets 10,890 2,213 1,906 2,224 1,362 18,595

Share of net profit / loss of associates (212) (212)

Investment in associates 3,126 3,126

Geographical Segment Data

Rest of

the world

North and con-

(in TEUR) Europe America Asia solidation Total

External sales 461,711 273,479 155,136 46,521 936,847

Total assets 1,146,034 157,167 3,725 (372,512) 934,414

Capital expenditures 16,623 3,958 216 13 20,810

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Andritz 2001


J. Notes to Cash Flow Statements

Cash flows from Acquisition of Subsidiaries

(in TEUR) 2001 2000

Cash and cash equivalents 0 74,470

Receivables 0 141,952

Inventories 0 13.964

Fixed assets 0 82,154

Financial assets 0 4,252

Accounts payable and accrued expenses 0 (171,914)

Short-term and long-term loans 0 (47,128)

Net assets/liabilities acquired 0 97,750

Cash and cash equivalents 0 (74,470)

Goodwill (2,807) 10,448

Changes in minority interests (55,642) (48,795)

Net cash flow (58,449) (15,067)

K. Financial Instruments

a. Foreign Exchange Risk Management

The Group only enters into fixed forward foreign exchange contracts in managing its foreign exchange risk resulting

from Cash flows from current business activities. Transaction risk is calculated in each foreign currency and includes

currency denominated assets and liabilities and certain off-balance sheet items such as highly probable future Cash

flows for firm commitments and highly probable purchases and sales. The currency risks of the Group occur due to

the fact that the Group operates and has production and sales in different countries worldwide. With the adoption of

IAS 39, the Group has designated its forward exchange contracts as cash flow hedges and carries them at fair value.

b. Liquidity Risks

The group’s policy is to maintain sufficient cash and cash equivalents or have available funding through an adequate

amount of credit facilities to meet its commitments. Any excess cash is invested mostly in listed securities which are

actively traded.

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Andritz 2001


c. Credit Risks

Credit risks, or the risk of counterparties defaulting, are controlled by the application of credit approvals, limits and

monitoring procedures. Where appropriate, the corporation obtains guarantees from governmental export agencies

or similar private institutions to reduce the risk of a counterpart defaulting. Credit risk associated with the investment

of liquid funds and securities is limited by the fact that the Group works only with financial partners who can demons-

trate sound creditworthiness. For some financial assets and financial liabilities the Group has a legally enforceable

right to set off. These amounts are only reported on a net basis. For all existing risks, valuation allowances are includ-

ed, so that the Managing Board believes that no other credit risk will occur.

d. Interest Risk

Managing Board believes that the exposure to interest rate risk of financial assets and liabilities is negligible.

Consequently, derivative instruments for hedging of interest risks are not used within the Group.

The weighted average effective interest rates at the balance sheet date were as follows:

2001 2000

Cash on current accounts 1.4% 2.6%

Short term deposits 3.3% 4.9%

Securities, short term 4.8% 7.4%

Securities, long term 6.1% 3.9%

Overdraft on current accounts 5.1% 6.5%

Short term loans 3.5% 4.9%

Long term loans 2.5% 5.8%

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Andritz 2001


e. Fair Value of Financial Instruments

Fair Value Estimation

The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the

balance sheet date. The fair values of the forward contracts are confirmed to the Group by financial institutions.

At the balance sheet date, the fair values of forward contracts designated as cash flow hedges were as follows:

Remaining period

not more

exceeding than Total Total

(in TEUR) 1 year 1 year 2001 2000

Forwards used to hedge anticipated sales US dollars (3,752) (122) (3,874) 5,346

Swedish crowns 1,361 0 1,361 1,660

Other currencies (198) 0 (198) (651)

Forwards used to hedge firm purchase US dollars 368 0 368 (2,230)

Swedish crowns (5) 0 (5) (4,236)

Other currencies (412) 0 (411) (381)

(2,638) (122) (2,759) (492)

Fair values of forward contracts designated as cash flow hedges are classified as current assets or liabilities.

(in TEUR) 2001 2000

Forward contracts with positive fair values 2,749 12,034

Forward contracts with negative fair values (5,508) (12,526)

(2,759) (492)

The group’s principal financial instruments not carried at fair value are cash and cash equivalents, trade receivables,

other current assets, other non current assets, trade and other payables, bank overdrafts, long-term borrowings.

Cash and Cash Equivalents, Current Investments and other Non-current Financial Assets

The carrying amount of cash and other financial assets approximates fair value due to the relatively short-term matu-

rity of these financial instruments.

107

Andritz 2001


Non-current and Current Securities

The fair values of publicly traded instruments are stated based on quoted market prices. For all other instruments for

which there are no quoted market prices, a reasonable estimate of fair value has been calculated based on the

expected Cash flows or the underlying net asset base for each investment. Non-current securities of the Group are

classified as "available for sale” and are valued at their quoted market price at the balance sheet date.

Receivables and Payables

The historical cost carrying amounts of receivables and payables which are all subject to normal trade credit terms

approximate their fair values.

Short-term Borrowings

The carrying amount approximates fair value because of the short period to maturity of those instruments.

Long-term Borrowings

The fair value of the long-term debts is based on the current rates available for debt with the same maturity profile.

The fair value of non-current borrowings and other payables with variable interest rates approximates their carrying

amounts.

The carrying amount is equal to the estimated fair value of the Group’s financial instruments.

Management believes that the exposure to interest rate risk of financial assets and liabilities was negligible.

Impact of Adoption of IAS 39 at 1 January 2001

The group adopted IAS 39 as of 1 January 2001. In accordance with the transitional provisions of that standard, the

comparative financial statements for periods prior to the effective date of the standard have not been restated.

The impact of the valuation of available-to-sale investments according to IAS 39 on net profit or loss for 2001 as well

as on the equity was negligible.

The table below shows the movements in the hedging reserve in equity in respect to gains and losses on forward

contracts designated as cash flow hedges during the period.

(in TEUR) Hedging Reserve

Adoption of IAS 39 at 1 January 2001:

Gains/(losses) or remeasurement to fair value (492)

Deferred income taxes 167

Balance at 1 January 2001 (325)

Movements in the period:

Gains and losses from changes in fair value (2,708)

Deferred income taxes thereon 921

Transfers to income statement 441

Deferred income taxes thereon (150)

Balance at 31 December 2001 (1,821)*

*) In the hedging reserve acc. to the Consolidated Statement of Shareholders’ Equity, an additional amount of TEUR 49 is included which

arises from the valuation of available-for-sales investments.

108

Andritz 2001

L. Leases

The Group and its subsidiaries have entered into various operating lease agreements for machinery, offices and

other facilities as lessees. Lease terms do not contain restrictions on the Group’s activities concerning dividends,

additional debt or further leasing. Rent expense amounts to EUR 7,850 thousand in 2001 and EUR 5,958 thousand in

2000 respectively.

Future lease payments under non-cancellable operating lease are as follows:

(in TEUR) 2001 2000

Next 1 year 2,892 2,586

1 year through 5 years 6,969 3,089

After 5 years 160 143

10,021 5,818

M. Commitments

Commitments arising from contracts for expenditure on property, plant and equipment are only in the normal

course of business. For 2001 these commitments amount to EUR 1,523 thousand and for 2000 to EUR 1,030 thousand.

N. Contingent Liabilities

a. Litigation

Various legal actions and claims are pending or may be asserted in the future against Group companies from litiga-

tions and claims incidental to the ordinary course of business. These mainly include matters relating to warranties

and infringement on intellectual property rights. Related risks have been analysed as to likelihood of occurrence. Alt-

hough the outcome of these matters cannot always be ascertained with precision the Managing Board believes that

no material liabilities are likely to result.

Andritz-Ahlstrom, Inc. (since renamed Andritz Inc.), is the defendant in eleven multi-party lawsuits in the state court

in Louisiana and Mississippi in the United States alleging personal injury and wrongful death arising from exposure

to asbestos contained, inter alia, in products supplied by Andritz-Ahlstrom, Inc. or its predecessors. The Managing

Board does not believe (having taken appropriate legal advice) that any of these law suits is meritorious. In the event

that any of the plaintiffs prevail in any of these law suits, the Managing Board further believes that the Group's expo-

sure to this asbestos litigation is adequately covered by means of an indemnity obligation from Ahlstrom and one

or more policies of insurance.


109

Andritz 2001

b. Other

(in TEUR) 2001 2000

Outstanding bank guarantees concerning contracts with customers 167,697 84,618

Other contingent liabilities 15,505 976

According to several contracts the customer is entitled to hold retention until the end of the warranty period. In order

to redeem these retentions bank guarantees were submitted to the customer. In addition, other bank and company

guarantees were issued as guarantees for advance and progress payments from customers. The management be-

lieves that the provisions for warranties and the shown liabilities are sufficient. No additional financial outflows from

these guarantees are expected. In some cases Andritz has similar retention agreements with suppliers. In order to

settle these retentions Andritz receives bank guarantees from the suppliers.

O. Related Party Transactions

Only minor business relations exist with the shareholders.

The shareholders are:

Carlyle Europe Partners 31%

Certus 24%

Unternehmens Invest AG and Univest 13%

GE Capital Equity Holdings BV 6%

Deutsche Beteiligungs AG 6%

AGIV AG 2%

Management 2%

Free Float 16%

Emoluments of the Managing Board

A provision of EUR 3,948 thousand in 2001 (EUR 3,991 thousand in 2000) has been recorded for pensions of former

members of the Managing Board and their dependants; the current year expense for these pensions amounted to

EUR 231 thousand (EUR 389 thousand in 2000).

Managing Boards total remuneration was approximately EUR 2,351 thousand in 2001 and EUR 1,847 thousand in 2000.


110

Andritz 2001


P. List of Consolidated Subsidiaries

Place of Incorporation Ownership interest

direct indirect

Material Affiliated Companies

Andritz Denmark A/S Esbjerg/Denmark 100%

Sprout-Matador A/S Esbjerg/Denmark 100%

Andritz (USA), Inc. Arlington/Texas/USA 100%

Andritz Inc. Muncy/Pennsylvania/USA 100%

Andritz-Ruthner, Inc. Arlington/Texas/USA 100%

Durametal Corporation Tualatin/Oregon /USA 100%

Guinard Centrifugation S.A. Vélizy/France 50%

Andritz S.A. Vélizy/France 100%

Andritz Ingenieria S.A. San Sebastian/Spain 100%

Andritz GmbH Hemer/Germany 100%

Sundwig GmbH Hemer/Germany 75%

Andritz Ltda. Sao Paulo/Brazil 100%

Andritz Oy Hollola/Finland 100%

Andritz Ltd./Ltée. Montreal/Canada 100%

Andritz AB Örnsköldsvik/Sweden 100%

Andritz Ltd. Chesterfield/UK 100%

Andritz-Kenflo Foshan Pump Co. Ltd. Foshan/China 60%

U.M.T. Limited Hull/UK 100%

U.M.T. Deurne B.V. Deurne/Netherlands 100%

U.M.T. Boxtel B.V. Boxtel/Netherlands 100%

Universal Milling Technology S.A. Saint Martin Le Beau/France 100%

Andritz-Ahlstrom Ltda. Curitiba/Brazil 100%

Andritz-Ahlstrom Oy Helsinki/Finland 100%

Andritz-Ahlstrom Holdings USA Inc. Alpharetta/Georgia/USA 100%

Andritz-Ahlstrom Inc. Alpharetta/Georgia/USA 100%

Kamyr Canada Inc. Montreal/Canada 100%

Andritz-Ahlstrom AB Stockholm/Sweden 100%

Andritz-Ahlstrom GmbH Kirchheim/Germany 100%

Andritz-Ahlstrom KK Tokyo/Japan 100%

Graz, 25 February 2002

Wolfgang Leitner Markku Hänninen Franz Hofmann Friedrich Papst Bernhard Rebernik

111

Andritz 2001

Report of the Supervisory Board of Andritz AG

The Supervisory Board was regularly informed by the Managing Board both verbally and in writing of the situation

of the company and of its development as well as of major business transactions. The transactions that were sub-

ject to approval by the Supervisory Board were investigated and reviewed together with the Managing Board.

Walter Rotschädl vacated his seat as a delegated member of the Supervisory Board in March 2001.

Andreas Martiner was appointed as his successor.

Markku Hänninen was appointed as Member of the Managing Board beginning January 1, 2002.

The Financial Statement of Andritz AG and the Consolidated Financial Statements for year 2001 were audited (also

including the accounts) by Arthur Andersen Wirtschaftsprüfungsgesellschaft m.b.H., Vienna, who had been appoint-

ed as auditors by the Meeting of Shareholders and who certified the Financial Statements.

The Supervisory Board has examined the Financial Statement certified by the Auditors as well as the proposed

appropriation of profit and the Status Report of the Managing Board and concurs with the result of the Audit.

The Supervisory Board has approved the Financial Statement, which is herewith adopted in compliance with Article

125 para. 2 of the Corporation Act.

Graz, March 2002

Kurt Stiassny

Chairman of the Supervisory Board

Global Presence

112

Andritz 2001

Production site

Sales office

Karlstad

Esbjerg Vejle

RotterdamDeurne

Hemer

MadridBarcelona

Châteauroux

St. Martin-le-Beau

Velizy

Schweig-house

Hull

CorbyChesterfield

Edmonton

Tualatin

Arlington

CanonsburgPell City

NorcrossPittsburg Alpharetta

Muncy

Janesville

São Paulo

Curitiba

Montreal

Hudiksv

Boxtel

Mettmann

Hedemor

Glens Falls

Ventura

SpringfieldLenexa

Porto Alegre/RS

Puerto Montt

Kirc

Lahr

Carapina

Brantford

The Andritz Group has a global staff of over 4,500

employees and more than 60 subsidiaries, distribution

and service companies. There are 16 production sites in

Austria, Germany, Finland, Denmark, France, the Nether-

lands, Great Britain, USA, Canada and China.

For a survey of the most important sites of the Andritz

Group and their addresses please refer to the following

pages:

Andritz Group Companies 114

at a Glance

Addresses of the

Andritz Group Companies 116

113

Andritz 2001

Örnsköldsvik

Stockholm

e

ViennaGraz

Beijing

Foshan

Jakarta

New Delhi

Dandenong

Bangalore

Tokyo

vall

HelsinkiSt. Petersburg

Kotka

Varkaus

oraSavonlinna

Hollola

Durban

Auckland

Chennai

rchheim/Teck

r

Andritz Group Locations Pulp Mill Technologies

Wood Processing Kraft Mill Systems Services

Andritz AG, Graz ▲ ▲ ▲

Andritz AG, Vienna ▲ ▲ ▲

Sprout-Matador A/S, EsbjergSprout-Matador A/S, VejleAndritz Ltd., ChesterfieldUMT Limited, HullFrisby Extrusion Services Ltd., Corby Andritz Oy, Helsinki ▲ ▲ ▲

Andritz Oy, Hollola ▲ ▲

Andritz Oy, Kotka ▲ ▲ ▲

Andritz Oy, Savonlinna ▲ ▲ ▲

Andritz Oy, Varkaus ▲ ▲

Andritz S.A., Vélizy-VillacoublayAndritz S.A., Schweighouse/Moder ▲ ▲ ▲ ▲

Guinard Centrifugation S.A., Vélizy-VillacoublayGuinard Centrifugation S.A., ChâteaurouxUMT S.A., St. Martin Le BeauAndritz GmbH, HemerSundwig GmbH, HemerSundwig Kohler GmbH, LahrAndritz GmbH, Kirchheim/Teck ▲ ▲

Andritz GmbH, MettmannU.M.T. B.V, DeurneU.M.T. B.V., BoxtelThermtec B.V., RotterdamLLC Andritz, St. Petersburg ▲ ▲ ▲ ▲

Andritz Ingeniería S.A., MadridAndritz Ingeniería S.A., Barcelona ▲ ▲ ▲ ▲

Andritz AB, Örnsköldsvik ▲ ▲

Andritz AB, Stockholm ▲ ▲

Andritz AB, Hedemora ▲

Andritz AB, Hudiksvall ▲

Andritz AB, Karlstad ▲

Andritz Ltda., São Paulo ▲ ▲

Andritz Ltda., Carapina ▲

Andritz Brasil Ltda., Curitiba ▲ ▲ ▲

Sprout-Matador do Brasil Ltda., Porto Alegre/RSSprout-Matador A/S Chile Ltda., Puerto MonttAndritz Ltd./Ltée., Montreal, QC ▲ ▲ ▲

Andritz Ltd./Ltée., Brantford, ON ▲

Andritz Ltd./Ltée., Edmonton, AB ▲

Andritz Inc., Alpharetta, GA ▲ ▲

Andritz Inc., Springfield, OH ▲

Andritz Inc., Muncy, PA ▲ ▲

Andritz Inc., Norcross, GA ▲ ▲ ▲

Andritz Inc., Glens Falls, NY ▲ ▲

Andritz Inc., Pell City, AL ▲

Andritz Inc., Lenexa, KSAndritz Inc., Ventura, CA ▲

Andritz-Ruthner, Inc., Arlington, TXAndritz-Ruthner, Inc., Canonsburg, PAAndritz-Ruthner, Inc., Pittsburg, TXDurametal Corp., Tualatin, ORVoith-Andritz Tissue LLC, Janesville, WI

Andritz-Kenflo, Foshan, GuangdongAndritz AG Representative Office, Beijing ▲ ▲

Andritz Oy Representative Office, Beijing ▲ ▲

Andritz Technologies Ltd., Foshan, GuangdongAndritz Technologies Pvt. Ltd., BangaloreAndritz Oy Liaison Office, New Delhi ▲ ▲

Enmas Andritz Limited, Chennai ▲

Andritz AG Representative Office, Jakarta ▲ ▲

PT. Andritz Indonesia, Jakarta ▲ ▲

Andritz K.K., Tokyo ▲ ▲ ▲ ▲

Andritz Pty. Ltd., Dandenong, VIC ▲ ▲

Andritz (ANZ) Ltd., Auckland ▲ ▲ ▲

Andritz South Africa (Pty.) Ltd., Durban ▲ ▲ ▲

EUROPEAustria

Denmark

England

Finland

France

Germany

Netherlands

RussiaSpain

Sweden

AMERICASBrazil

ChileCanada

USA

ASIAChina

India

Indonesia

Japan

AUSTRALIANew Zealand

AFRICASouth Africa

Pulp and Paper Busines

Mechanical Pulping Systems

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ess Area

Paper Mill Technologies Rolling Mills and StripProcessing Lines

Environment and Process Technologies

Feed Technology Hydraulic Machines

Fiber PreparationSystems

Tissue Machines Services

Europe

Austria

Andritz AG

Stattegger Strasse 18

8045 Graz

Austria

Phone: +43 316 6902 0

Fax: +43 316 6902 415


Andritz AG

Eibesbrunnergasse 20

1120 Vienna

Austria

Phone: +43 1 81 195 0

Fax: +43 1 81 37 645

Rolling Mills and Strip

Processing Lines

Phone: +43 1 81 195 0

Fax: +43 1 81 37 645



Phone: +43 1 81 195 0

Fax: +43 1 81 55 358


Kraft Mill Systems

Phone: +43 1 81 195 6235

Fax: +43 1 81 195 6301

Anstalt für Strömungsmaschinen

Gesellschaft mbH

Andritzer Reichsstrasse 68B

8045 Graz

Austria

Tel.: +43 316 692 728 0

Fax: +43 316 691 575


Denmark

Sprout-Matador A/S

Glentevej 5-7

6705 Esbjerg

Denmark

Phone: +45 72 160 300

Fax: +45 72 160 301


Sprout-Matador A/S

Skomagervej 12

7100 Vejle

Denmark

Phone: +45 72 160 300

Fax: +45 72 160 390

England

Andritz Ltd.

Unit B, Sheepbridge Centre

Sheepbridge Lane, Chesterfield

Derbyshire S41 9RX

England

Phone: +44 1 246 260660

Fax: +44 1 246 260760


UMT Limited

Stockholm Road

Sutton Fields Industrial Estate

Hull HU7 0XL

England

Phone: +44 1482 82 5119

Fax: +44 1482 83 9806

Frisby Extrusion Services Ltd.

Tyson Courtyard, Cronin Road

Weldon South Ind. Est.

Corby, Northants NN18 8AZ

England

Phone: +44 1536 263 545

Fax: +44 1536 205 184


Finland

Andritz Oy

Tammasaarenkatu 1

00180 Helsinki

Finland

Phone: +358 20 450 5555

Fax: +358 20 450 5150


Andritz Oy

Keskikankaantie 9

15870 Hollola

Finland

Phone: +358 20 450 5555

Fax: +358 20 450 6711


Andritz Oy

Kyminlinnantie 6

48600 Kotka

Finland

Phone: +358 20 450 5555

Fax: +358 20 450 5540


Kraft Mill Systems

Fax: +358 20 450 5190

Fiber Preparation Systems

Fax: +358 20 450 5422

Pulp and Paper Mill Services

Address: Lasimestarintie 5

Fax: +358 20 450 5048

Works

Fax: +358 20 450 5045

Andritz Oy

Lypsyniemenkatu 5

57200 Savonlinna

Finland

Phone: +358 20 450 5555

Fax: +358 20 450 6220


Works

Fax: +358 20 450 6239

Kraft Mill Systems

Fax: +358 20 450 6336


Fax: +358 20 450 6384


Fax: +358 20 450 6446

Andritz Oy

Relanderinkatu 2

78200 Varkaus

Finland

Phone: +358 20 450 5555

Fax: +358 20 450 5974


Päivärinne Works

Address: Kiertotie 21-23

Fax: +358 20 450 5971

Kraft Mill Systems/Recovery Boilers

Address: Relanderinkatu 2

Fax: +358 20 450 5974

116

Andritz 2001

Andritz Group Companies

Kraft Mill Systems/Evaporators

Address: Kiertotie 25

Fax: +358 20 450 5972


Fax: +358 20 450 5975

France

Andritz S.A.

2-4 Avenue de l’Europe

78140 Vélizy-Villacoublay

France

Phone : +33 1 392 60 550

Fax : +33 1 392 60 560


Andritz S.A.

Z.I. Zinsel

67590 Schweighouse sur

Moder

France

Phone: +33 3880 72730

Fax: +33 3880 72732


Guinard Centrifugation S.A.

2-4 Avenue de l’Europe

78140 Vélizy-Villacoublay

France

Phone : +33 1 392 60 660

Fax : +33 1 392 60 666

E-Mail:

[email protected]

Guinard Centrifugation S.A.

Allée de la Garenne – Z.I.

36000 Châteauroux

France

Phone : +33 2 54 61 3333

Fax: +33 2 54 61 3300

Universal Milling Technology S.A.

Za des Grillonnières

37270 Saint Martin Le Beau

France

Phone : +33 247 50 6364

Fax : +33 247 50 2066


Germany

Andritz GmbH

Stephanopeler Strasse 22

58675 Hemer

Germany

Phone: +49 2372 96 96 0

Fax: +49 2372 96 96 50


Andritz GmbH

Heinkelstrasse 19-21

73230 Kirchheim/Teck

Germany

Phone: +49 7021 50 74 0

Fax: +49 7021 50 7410

Andritz GmbH

Industriestrasse 15A

40802 Mettmann

Germany

Phone: +49 2104 91970

Fax: +49 2104 12054

Sundwig GmbH

Stephanopeler Strasse 22

58675 Hemer

Germany

Phone: +49 2372 54 0

Fax: +49 2372 54 200


Sundwig Kohler GmbH

Airport Lahr

Europastrasse A 65

77933 Lahr

Germany

Phone: +49 7821 9949 0

Fax: +49 7821 9949 100


Netherlands

U.M.T. Deurne B.V.

Indumastraat 9-13

5753 RJ Deurne

Netherlands

Phone : +31 493 31 4344

Fax: +31 493 31 0030

U.M.T. Boxtel B.V.

Ladonkseweg 1 B

5281 RN Boxtel

Netherlands

Phone: +31 411 65 3500

Fax: +31 411 65 3505

Thermtec B.V.

Wijnhaven 76

3011 WT Rotterdam

Netherlands

Phone: +31 10 413 7628 / 10 280 1660

Fax: +31 10 404 7356


Russia

LLC Andritz

4th Krasnoarmeiskaya Street 4A

198005 St. Petersburg

Russia

Phone: +7 812 316 0913

Fax: +7 812 110 1582

Spain

Andritz Ingeniería S.A.

Agustin y Antonia, 12

28700 S. Sebastián de los Reyes

Madrid

Spain

Phone : +34 91 663 6409

Fax : +34 91 651 1931

E-Mail : [email protected]

Andritz Ingeniería S.A.

Calle Riera, 11-bajos

08190 Sant Cugat del Vallés

Barcelona

Spain

Phone: +34 93 674 9482

Fax: +34 93 674 9315

117

Andritz 2001


118

Andritz 2001

Sweden

Andritz AB

Artullsvägen 1

89121 Örnsköldsvik

Sweden

Phone: +46 660 295 300

Fax: +46 660 295 399


Andritz AB

Ivarshyttevägen 4

77633 Hedemora

Sweden

Phone: +46 225 63550

Fax: +46 225 63551


Andritz AB

Jakobsbergsvägen 2

82443 Hudiksvall

Sweden

Phone: +46 650 15570

Fax: +46 650 15579


Andritz AB

Gräsdalsgatan 7

65343 Karlstad

Sweden

Phone: +46 54 55 54 50

Fax: +46 54 55 54 59


Andritz AB

Gävlegatan 22

10031 Stockholm

Sweden

Phone: +46 8 736 2500

Fax: +46 8 736 2529

Americas

Brazil

Andritz Ltda.

Rua Tabapua, 627 cjt. 92

Andar

04533-012 São Paulo

Brazil

Phone: +55 11 3168 6114

Fax: +55 11 3846 2098

Andritz Brasil Ltda.

Rua Presidente Faria, 248 – 10° Floor

CEP 80020-290 Curitiba-PR

Brazil

Phone: +55 41 304 7611

Fax: +55 41 224 0014

Andritz Ltda.

Av. Presidente Castelo Branco, 1577,

Sala 203

Caixa Postal 32 – Cep. 29.160-970 –

Carapina – Serra

Espirito Santo

Brazil

Phone: +55 27 9941 8107

Fax: +55 27 3318 1761


Sprout-Matador do Brasil Ltda.

Rua Vicente de Fontoura, 2352/402

CEP 90460-002, Porto Alegre/RS

Brazil

Phone: +55 51 3328 9850

Fax: +55 51 3328 8563


Chile

Sprout-Matador A/S Chile Ltda.

Seminaro 202

Puerto Montt

Chile

Phone: +56 65 434 366

Fax: +56 65 434 367


Canada

Andritz Ltd./Ltée.

3339 rue Griffith Street

Ville St-Laurent, Montreal

Quebec H4T 1W5

Canada


Phone: +1 514 731 0404

Fax: +1 514 731 8558


Wood Processing

Phone: +1 514 738 3707

Fax: +1 514 731 9422


Andritz Ltd./Ltée.

Service Center

45 Roy Blvd.

Brantford

Ontario N3R 7K1

Canada

Phone: +1 519 754 4590

Fax: +1 519 754 4594


Andritz Ltd./Ltée.

Service Center

3448-78 Avenue

Edmonton

Alberta T6B 2X9

Canada

Phone: +1 780 465 3344

Fax: +1 780 440 4354


USA

Andritz Inc.

10745 Westside Parkway

Alpharetta, GA 30004

USA

Phone: +1 770 640 2500

Fax: +1 770 640 9454


Kraft Mill Systems

Fax: +1 770 640 2603


Fax: +1 770 640 2455

Wood Processing

Fax: +1 770 640 9454

Feed Technology

Fax: +1 770 640 2676

Andritz Inc.

35 Sherman Street

Muncy, PA 17756

USA

Phone: +1 570 546 8211

Fax: +1 570 546 1306

E-Mail: pp&[email protected]

[email protected]

Andritz Inc.

101 Ridge Street

Glens Falls, NY 12804

USA

Phone: +1 518 793 5111

Fax: +1 518 793 1917


Fax: +1 518 745 2858


Fax: +1 518 745 7005

Fiberline R&D Facility

Fax: +1 518 745 2971

Andritz Inc.

R&D Facility

3200 Upper Valley Pike

Springfield, OH 45504

USA

Phone: +1 937 390 3400

Fax: +1 937 390 6827

Andritz Inc.

302 Research Drive, Suite 300

Norcross GA 30092

USA


Phone: +1 770 613 7050

Fax: +1 770 613 7055

Wood Processing

Phone: +1 770 613 7000

Fax: +1 770 613 7055

Andritz Inc.

Service Center

Cogswell Avenue Industrial Park

Pell City, AL 35125

USA

Phone: +1 205 338 3331

Fax: +1 205 338 3334

Andritz Inc.

TS Division

8259 Melrose Drive

Lenexa, KS 66214

USA

Phone: +1 913 541 1703

Fax: +1 913 541 1631

Andritz Inc.

Service Center

1565 Callens Road

Ventura, CA 93003

USA

Phone: +1 805 642 7419

Fax: +1 805 642 7476

Andritz-Ruthner, Inc.

1010 Commercial Blvd. South

Arlington, TX 76001

USA

Phone: +1 817 465 5611

Fax: +1 817 468 3961



125 Technology Drive,

Southpoint Industrial Park

Canonsburg, PA 15317

USA

Rolling Mills and Strip Processing

Lines

Phone: +1 724 745 7599

Fax: +1 724 745 9570



110 Dickson Street

Pittsburg, TX 75686

USA

Phone: +1 903 856 0445

Fax: +1 903 856 3498

Durametal Corporation

9560 S.W. Herman Road

Tualatin, OR 97062

USA

Phone: +1 503 692 0850

Fax: +1 503 692 1169


Durametal Corporation

35 Sherman Street

Muncy, PA 17756

USA

Phone: +1 570 546 8211

Fax: +1 570 546 1312


Voith Andritz Tissue LLC

101 South Main Street, Suite 400

Janesville, WI 53545

USA

Phone: +1 608 758 5920

Fax: +1 608 758 5935


119

Andritz 2001


120

Andritz 2001

Asia

China

Andritz-Kenflo Foshan Pump Co.

Ltd.

14 He Bin Road

Foshan, Guangdong 528000

China

Phone: +86 757 280 2050

Fax: +86 757 281 7010


Andritz AG

Representative Office Beijing

Catic Plaza, Room 1604

No. 18 Beichen East Road,

Chaoyang District

100101 Beijing

China

Phone: +86 10 8497 0637

Fax: +86 10 8497 0638


Andritz Oy

Representative Office Beijing

27-02 CITIC Building

19 Jian Guo Men Wai Daije

100004 Beijing

China

Phone: +86 10 6500 6413

Fax: +86 10 6500 6415

Andritz Technologies Ltd.

14 He Bin Road, Foshan

528000 Guangdong Province

China

Phone: +86 757 280 2046

Fax: +86 757 280 2047


India

Andritz Technologies Pvt. Ltd.

Makam Plaza, 2nd Floor

No. 63/1, 3rd Main Road

18th Cross, Malleswaram

Bangalore-560 055

India

Phone: +91 80 346 5995

Fax: +91 80 346 5997


Andritz Oy

Liaison Office

7, M.G. Bhawan, Flat No. 202-206

Local Shopping Centre,

Madangir Road

New Delhi 110 062

India

Phone: +91 11 608 3324

Fax: +91 11 608 1227

Enmas Andritz Limited

V Floor, Guna Buildings Annexe,

304-305

Anna Salai, Teynampet

Chennai-600 018

India

Phone: +91 44 459 977

Fax: +91 44 432 2412

Indonesia

PT. Andritz Indonesia

Gedung Bank Panin Pusat, 3rd Floor

JI. Jend. Sudirman 1

Senayan, Jakarta 10270

Indonesia

Phone: +62 21 725 0137

Fax: +62 21 571 0896

Andritz AG

Representative Office Jakarta

Jln. HOS. Cokroaminoto No. 81

2nd Floor, Jakarta Pusat

Indonesia

Phone: +62 21 324 423

Fax: +62 21 324 753


Japan

Andritz K. K.

Toyo-cho, Shinei Bldg., 7F

4-chome 3-1 Toyo, Koto-ku,

Tokyo

135-0016 Japan

Phone: +81 3 5634 3450

Fax: +81 3 5634 3460

Australia

Andritz Pty. Ltd.

56-58 Gaine Road

Dandenong South, Victoria 3175

Australia

Phone: +61 38 795 9800

Fax: +61 39 799 4899


New Zealand

Andritz (ANZ) Ltd.

1450 Alfriston Road

Alfriston

Auckland 1750

New Zealand

Phone: +64 9 266 2641

Fax: +64 9 266 2645

Africa

South Africa

Andritz South Africa (Pty) Ltd.

Suite 105 A, York House,

Aubrey Drive

Glenashley 4022

Durban

South Africa

Phone: +27 31 562 8909

Fax: +27 31 562 8936

‚


Pulp and Paper

Wood Processing

Wood processing plants and equipment

/ Turnkey woodyards

/ LogPorterTM portal cranes

/ PowerFeedTM drum infeed conveyors

/ De-icing conveyors

/ Slasher decks

/ Debarking drums

/ Drum - chipper process lines

/ HHQ-ChipperTM and other disc chippers

/ Breakage chippers

Chip and bark processing plants and equipment

/ JetScreenTM

/ Chip screens

/ HQ-SizerTM for oversize management

/ Rechippers

/ Bark shredders

/ Bark presses

Conveying, stacking and reclaiming

systems for chip and bark

/ Screw reclaimers like PowerScrewTM, CenterScrewTM,

ParaScrewTM, and CantiScrewTM

/ HelpTM pre-steaming bins and dischargers

Groundwood processing plants and equipment

/ Automatic grinder charging systems

/ LogScanTM log-sorting system

Automation systems for woodyards

/ DrumMaticTM for debarking process optimization

/ LogScanTM for automatic log sorting

/ BarkScanTM for wood-loss measurement

/ WoodScanTM for debarking degree measurement

Kraft Mill Systems

Fiberline systems

/ Cooking

/ Washing

/ Knot separation and screening

/ Oxygen delignification

/ Bleaching

/ Bleached pulp screening

Chemical recovery systems

/ Black liquor evaporation

/ Effluent evaporation

/ Condensate stripping

/ Heat recovery

/ Chemical recovery boilers

Cooking liquor chemical preparation

/ Recausticizing

/ White liquor oxidation

/ Lime reburning


Refiner systems

/ Complete mechanical pulping systems from

chip washer to final bleached pulp, including

refining, screening, cleaning, dewatering and

heat recovery systems

/ Refiners for high, medium, and low-consistency

systems

/ Complete panelboard (HDF, MDF) refining systems

/ Control, simulation and training systems for

all types of refiners and refiner systems

Pulp washing and bleaching systems

/ Medium and high-consistency bleach plants for

mechanical pulp and annual fibers

/ Bleaching stages based on peroxide, oxygen, ozone

and dithionite

/ Wash presses

/ Medium and high-consistency mixers

/ Medium and high-consistency tower feed and

discharge systems

/ Medium-consistency pumps

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Dewatering systems

/ Twin wire presses

/ Screw presses

Wet-end systems for market pulp

/ Dewatering systems for sheet and flash drying

/ Heavy duty presses, shoe presses

/ Web cross cutters and layboys

/ Bale transport and finishing lines

Fiber Preparation

Paper machine approach systems

/ Screening

/ Cleaning

/ De-aeration

/ Closed loops

/ White water treatment

/ Filler recovery

/ Broke handling

Recycled fiber systems

/ Pulping systems including

FibreFlow® drum pulping

/ Screening

/ Cleaning

/ De-inking

/ Disperging

/ Bleaching

Dewatering systems

/ Disc filters and disc thickeners (Hydrodisk)

/ Twin wire presses

/ Screw presses

/ Gravity tables with PolyScan flocculent optimisation

system

/ Screw presses and belt presses for sludge dewatering

Tissue Machines (Voith Paper design)

/ Greenfield systems and modernizations

/ Crescent formers, S-Wrap and C-Wrap twin wire

formers for single-ply or multi-layer sheet formation

/ Through-air dryers, TissueFlexTM shoe presses

Ventilation and Drying Equipment

/ High-efficiency Yankee dryer hoods

/ Hall ventilation systems

/ Paper and board machine ventilation systems

/ Impingement dryers for paper and board machines

/ Web stabilizers and steam blow boxes

/ Dust extraction systems

Pulp & Paper Mill Services

/ OPETM agreements (Overall Production Efficiency)

C Level: inspections, special maintenance, shutdown

maintenance

B Level: C Level + continuous remote process and

condition monitoring, responsibility

for availability

A Level: C + B Levels + maintenance, complete

responsibility for Overall Production

Efficiency

/ Upgrades

- Modernization of old equipment for improved

reliability and efficiency

/ Rebuilds

- Reconditioning of wearing equipment

- Own service shops in Finland and USA

- Trained partner service shops in Portugal,

South Africa, Brazil, Indonesia and New Zealand

/ Spare part services

- Spare parts, wear parts

- Inventory management

/ Field services

- 24-hour emergency help

- Troubleshooting, optimization

- Operator and maintenance training

- Inspections and audits

- Shutdown planning, coordination and work

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Equipment for the steel, stainless

steel, non-ferrous metals and

aluminium industry

Rolling mills

/ Turnkey cold rolling mills

/ Two-high, four-high, combined mills and S-high mills

/ 6, 12, 20-high rolling mills

/ Skin-pass mills

/ Roll adjustment and strip thickness regulation

systems

/ Flatness measuring and adjustment systems

Strip Processing Lines

/ Push pickling lines

/ Continuous pickling lines for carbon steel

/ Annealing and pickling lines

for hot-rolled stainless steel strip

for cold-rolled stainless steel strip

for hot and cold-rolled stainless steel strip

with electrolytic or acid pickling

(horizontal or vertical design)

with horizontal furnaces

/ Degreasing plants

/ Electrolytic galvanizing lines (Gravitel)

/ Electrolytic tinning lines

/ Hot-dip galvanizing systems

/ Carbon-steel coating lines

/ Combined aluminium annealing and coating lines

/ Stainless steel bright annealing lines with vertical

muffle furnaces

/ Grinding, sandblasting, polishing and customized sur-

face treatment systems

Finishing Systems

/ Slitting lines

/ Cut-to-length lines

/ Packing lines for narrow and wide coils and for plates

/ Large levelling machines and precision levelling

machines

Regeneration and oxide plants

/ Plants for regeneration of waste acid and rinse water

from pickling carbon steel (hydrochloric acid) and

stainless steel (PYROMARS mixed acid process)

/ Plants for producing high-purity magnesium oxide

Annealing furnaces

/ Vertical furnaces (including muffle furnaces)

/ Horizontal furnaces

Turnkey systems for producing

/ Foils for screen masks

/ Thermostatic bimetals

/ Razor blade strip

/ Special material for the electronics industry

/ Stainless steel strip

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Environment and ProcessTechnologies

Water Treatment

/ Sand filtration systems

Waste Water Treatment

/ Raked and perforated plate screens

/ Static and rotary screens and sieves

Sludge thickening

/ Belt thickeners

/ Drum thickeners

/ Decanter centrifuges

Sludge dewatering

/ Belt filter presses

/ High-performance decanter centrifuges

/ FlocSave flocculent preparation system

Sludge drying

/ Drum drying plants

/ Fluidized bed drying plants

Thermal sludge utilization

/ EcoDry granulate burning plant

Industrial solid/liquid separation

/ Hyperbaric pressure filters

/ Vacuum filters

/ Belt filter presses

/ Decanter centrifuges

/ Screen centrifuges

Feed Technology

Raw material size reduction

/ Hammermills

/ Disc mill refiners

/ Roller mills

/ Crumblers

Mixing of feed ingredients

/ Horizontal ribbon mixers

/ Horizontal paddle mixers

/ Vertical mixers

Weighing and metering

/ Hopper scales

/ Loss-in-weight weighing systems

/ Micro ingredients weighers

/ Belt weighers

/ Liquid dosing equipment

Conditioning and expanding

/ Single-shaft conditioners

/ Twin-shaft conditioners

/ Thermal feed expanders

Pelleting

/ Pellet mills, gear driven

/ Pellet mills, belt driven

Extrusion

/ Single-screw extruders

Drying and cooling of pellets

/ Horizontal belt dryers

/ Horizontal belt coolers

/ Counter-flow coolers

Coating of pellets

/ Drum coaters

/ Vacuum coaters

/ Micro fluid systems

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Dust separation filters

/ Filters for conveyor aspiration

/ Rectangular free standing filters

/ Modularly built filters

/ Cylindrical free standing filters

/ Intake hopper filters

Material separation and cleaning

/ Roto-shaker screeners

/ Rotary feed dressers

Conveying equipment

/ Chain conveyors

/ Bucket elevators

/ Screw conveyors

/ Rotary valves

Process controls

/ Pellet mill/Feed expander controls

/ Extruder controls

/ Dryer/Cooler controls

/ Hammermill controls

/ Weight controls

Wear and spare parts

/ Pellet mill dies and rolls

/ Expander and extruder screws

/ Extruder dies and barrels

/ Hammermill screens and hammers

Hydraulic Machines

Water turbines

/ Kaplan turbines

/ Francis turbines

/ Pelton turbines

/ Storage pumps

/ Shut-off devices

/ Compact turbines

/ Turbine governors

Large-scale pumps

/ Axial-flow pumps

/ Mixed-flow pumps

/ Volute casing pumps

/ Pumping stations

Centrifugal pumps

/ Stock pumps

/ Medium-consistency pumps

/ Fan pumps

/ Pumps for flue-gas desulphurization systems

Reactor pumps

/ Main-coolant pumps

/ Secondary-loop pumps

/ Components for handling fuel elements

Space technology

/ Components for launcher rockets

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Notes

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Notes

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