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STADA's employees

The basis of the STADA Group’s operative alignment is in principle the management of a comprehensive network of internal and external resources. This applies in particular to sales and marketing, product development as well as procurement and production. In view of this, STADA’s employees, with their significant experience, their extensive expertise and their high degree of commitment, are the actual pillars of the longstanding business success. Against this backdrop, STADA’s personnel management aims to comprehensively develop employees, maintain their loyalty to the Group and to implement necessary personnel changes.

Decentralized personnel management

In the area of personnel management, STADA deliberately relies on a decentralized organization which allows the Group to better target the different needs of its employees at the various locations. This is especially true of the international STADA subsidiaries, which in accordance with Company guidelines are largely independent in many areas of personnel policy such as recruitment, training and remuneration policy. In this context, the Group’s strategic and operational guidelines, in particular the compliance regulations, must continue to be observed.

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.

Development of the number of employees

In financial year 2010, the average number of employees in the STADA Group was 8,080 (previous year: 8,064) and thus at approximately the level of the previous year. When considered in relation to the balance sheet date, the number of employees in the STADA Group increased slightly to a total of 8,024 as of December 31, 2010 (December 31, 2009: 7,981). 

In the first nine months of 2011 the average number of employees was 7,826 (1-9/2010: 8,083 employees). 

The “STADA – build the future” provides, among other things, for a reduction in staff in all Company divisions and regions. Including outsourcing and disposals, approximately 800 full-time positions and thus approximately 10 percent of the existing Group-wide personnel level at the beginning of financial year 2010 are affected by these personnel measures – which were mainly outside Germany. The reduction in the number of employees will gradually become noticeable over the course of the current financial year 2011. In the third quarter of 2010, for example, a restructuring implemented in the sales of branded products in Italy led to a corresponding reduction in the sales force as of December 31, 2010, which, however, thus only had an effect on the number of employees as of January 1, 2011.

The Group introduced a functional consolidation of all German activities in the area of product development and quality management at the Bad Vilbel location in the first quarter of 2011, which has been completed in the meantime. 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 related expenses were reported as a one-time special effect in the reporting quarter.

In the second quarter of 2011, STADA continued to restructure the sales model for the Russian market, in the process of which the number of local employees was reduced due to an increased concentration of sales activities there.

Furthermore, the Serbian STADA subgroup remained a focus for measures to improve earnings in the context of the “STADA – build the future” project in the second quarter of 2011, which also include a further optimization in the number of employees there over the coming years.

The regional breakdown shows that there was an average of 1,192 employees in Germany in financial year 2010 (previous year: 1,128). Of these, an average of 929 employees were under contract at the Group’s headquarters in Bad Vilbel in 2010 (previous year: 910). The average number of employees working outside Germany in the same period was 6,888 (previous year: 6,936). This reduction was primarily due to the transfer of the Dutch packaging unit in Etten-Leur in 2010.

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, 2010:

• Sales/Marketing 31% (previous year: 31%)
• Production/Procurement 47% (previous year: 48%)
• Product Development 6% (previous year: 6%)
• Administration 16% (previous year: 15%)
    

Personnel expenses

Personnel expenses increased in financial year 2010 to EUR 268.6 million (previous year: EUR 247.2 million). The ratio of personnel expenses to sales amounted to 16.5% in 2010 (previous year: 15.8%). Personnel expenses include severance compensation for employees affected by the personnel reductions.

As the Group will, in accordance with the efficiency improvement program, continue the introduced personnel measures in the current financial year 2011, STADA aims for a reduction in the ratio of personnel expenses to sales in the coming years (without inclusion of severance compensation).