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STADA’s employees – the pillars of corporate success

STADA’s employees, with their extensive expertise, their experience and their strong commitment, play an important part in the longstanding success of the Group. The organization and management of a complex network of internal and external resources of the Group, particularly in the areas of product development, procurement and production as well as sales and marketing, can only succeed with employees that have proven expertise and a high level of commitment.

In view of this, STADA’s personnel management generally pursues a long-term personnel policy with the goal of optimally developing employees, maintaining their loyalty to the Group and implementing the necessary personnel changes for the continued success of the Group.

Decentralized organization of personnel management

The Group’s personnel management is organized in a decentralized way, allowing the Group to better meet the employees’ various needs at the individual locations. This applies in particular to the international STADA sales companies, which in accordance with Company guidelines are largely independent in many areas of personnel policy such as recruitment, training and remuneration policy – this, however, is always done in consideration of the Group’s strategic and operational guidelines and, in particular, compliance regulations.

Background information regarding the personnel policy of the Group companies that are located in Bad Vilbel is included in the STADA Group’s annual personnel and social report.

Continual personnel development

In view of the great importance of STADA’s employees, their training and development take on great importance. STADA offers various career training programs at the pharmaceutical level and in the areas of administration and warehouse logistics. In addition, young people can obtain their first insights into the processes of a company in the pharmaceutical industry in the form of work placements. Further training for managers, foreign language training as well as specialized workshops and seminars provide general support to Group employees and ensure up-to-date knowledge in the respective specialist areas.

Development of the number of employees

In 2011 the average number of employees in the STADA Group decreased to 7,826 (previous year: 8,080). When considered in relation to the balance sheet, the number of employees as of December 31, 2011 decreased – despite the purchase of a branded product portfolio in Eastern Europe and the Middle East including the associated sales structures and employees in the amount of approx. 70 – to 7,900 (December 31, 2010: 8,024). 

In the first 3 months of 2012 the average number of employees was 7,807 (1-3/2011: 7,842 employees). When considered in relation to the balance sheet, the number of employees as of March 31, 2012 increased to 7,813 (March 31, 2012: 7,772).

The reduction in the number of employees within the Group is predominantly due to the continuous implementation of the „STADA – build the future” project and the associated planned staff reductions. Taking into account outsourcing and disposals, a total of approx. 800 full-time positions and thus approx. 10% of the existing Group-wide personnel level at the beginning of financial year 2010 are to be reduced – mainly outside Germany. The restructuring of the sales of branded products in Italy carried out on October 31, 2010, that was also followed by a corresponding reduction in the sales force there as of January 1, 2011, contributed to the reduction in the number of employees in the Group in financial year 2011 among other things. Furthermore in the financial year 2011 in Russia, STADA implemented a restructuring of the local sales model, which on the basis of a strong concentration of the sales activities led to a reduction in the number of local employees in the sales area. The implementation of “STADA – build the future” continues to focus on measures to improve earnings at STADA’s Serbian subgroup, these include a further optimization in the number of employees there in the coming years.

The regional breakdown of employees in the Group shows that there was an average of 1,226 employees in Germany in 2011 (previous year: 1,192). Of these, an average of 979 employees were under contract at the Group’s headquarters in Bad Vilbel in the financial year 2011 (previous year: 929). The average number of persons employed at international Group locations in financial year 2011 amounted to 6,600 (previous year: 6,888).

A breakdown of the average number of employees in 2011 according to their function shows that there were no significant changes as compared to the previous year.

With regard to the Group’s average total number of employees, the following percentage distributions resulted for the individual functional areas as of December 31, 2011:

• Marketing/Sales 27% (previous year: 31%)
• Production/Procurement 49% (previous year: 47%)
• Product Development 7% (previous year: 6%)
• Administration 17% (previous year: 16%)

The Group-wide share of women in management positions amounted to approx. 49% in financial year 2011.

In view of the health care policy framework conditions in the German market – especially as a result of the health insurance organization tenders – in financial year 2011, a 40-hour week with no wage increase was introduced effective until the end of 2012 in Bad Vilbel and Florstadt – in the context of a company agreement with the Works Council and with approval of the parties to the wage agreement – in the course of implementing a cost efficiency program to ensure the long-term competitiveness of the STADA Group locations in Germany. In return, for the first time in the Company’s history, STADA gave the affected employees a commitment effective until December 31, 2012 that no dismissals for operational reasons will take place.

At the beginning of the financial year 2011, STADA carried out a functional consolidation of all German activities in the area of product development and quality management at the Bad Vilbel location. In this context, STADA negotiated with the Works Council a balancing of interests and social compensation plan for 15 employees at the Laichingen location. The associated expenses were reported in 2011 as one-time special effects. With a view to the centralization in logistics, 12 employees from the drug sample area were also transferred from Laichingen to the Distribution and Service Center location in Florstadt in financial year 2011. STADA has also given the remaining employees at the Laichingen location a commitment effective until December 31, 2012 that no dismissals for operational reasons will take place.

Personnel expenses

Personnel expenses in the financial year 2011 were EUR 272.2 million (previous year: EUR 268.6 million) and also included severance compensation for employees affected by the personnel measures in the context of the “STADA – build the future”. The ratio of personnel expenses to sales amounted to 15.9% in 2011 (previous year: 16.5%).

In view of the personnel measures introduced in the Group in the context of the further consistent implementation of the cost efficiency program, STADA expects a reduction in the ratio of personnel expenses to sales in the coming years (without the inclusion of severance compensation).