40
ANNUAL REPORT 2016 ZKL GROUP
[Zadejte text.] [Zadejte text.] [Zadejte text.]
ANNUAL REPORT 2016 ZKL GROUP
www.zkl.cz
2
ZKL Concern Mission ZKL Concern, joint-stock company, a traditional Czech manufacturer of
roller bearings and the largest manufacturer of special and technological bearings in Central Europe, promotes flexibility and speed in meeting customer requirements and the ability to take responsibility. In all our activities we apply considerate approach to the environment.
We focus on industries that require precision and high operational
reliability of roller bearings in mechanical engineering applications. We offer special and technology bearings of 400-1600 diameters in an entire range, together with technical solution, functionality, using advanced design and development methods and technologies.
Through the development of stable business ties in the traditional ZKL
markets worldwide we intend to increase the market share and strengthen the position mainly in the sectors of power engineering, mining, metallurgical, manufacturing and transport industries.
The management is going to create reliable background and environment
for individual development for employees. From our employees we will require loyalty and maximum commitment to fulfil the company vision and achieve reasonable return on the investments made.
www.zkl.cz
3
Contents
ZKL Concern Mission ....................................................................................... 2
Contents ........................................................................................................... 3
Introductory word of CEO ................................................................................. 5
Current organizational scheme ........................................................................ 7
Sales & Marketing ............................................................................................ 8
LATIN AMERICA .......................................................................................... 8
Argentina .................................................................................................. 8
Brazil ......................................................................................................... 8
Chile, Peru, Colombia ............................................................................... 8
ASIA ............................................................................................................. 9
China ........................................................................................................ 9
India .......................................................................................................... 9
EU COUNTRIES ......................................................................................... 10
2016 BUSINESS ACTIVITIES .................................................................... 11
Strengthening ZKL brand’s image ........................................................... 11
Building branded sales network .............................................................. 12
Processes ............................................................................................... 13
Technological development, innovation, research and development ............. 14
Quality management and environmental protection system ........................... 17
QUALITY MANAGEMENT SYSTEM .......................................................... 17
ZKL’s QUALITY POLICY ............................................................................ 17
ENVIRONMENTAL PROTECTION ............................................................ 19
Human Resources ......................................................................................... 20
PERSONAL GROWTH ............................................................................... 20
EMPLOYEE TRAINING AND GROWTH .................................................... 22
Significant events and changes in subsidiaries .............................................. 23
ZKL BRNO, a.s. .......................................................................................... 23
New members of the ZKL Brno’s machine fleet ...................................... 23
Sealed spherical roller bearings .............................................................. 24
www.zkl.cz
4
Special custom spherical roller bearings ................................................. 25
ZKL KLÁŠTEREC NAD OHŘÍ, a. s. ............................................................ 26
Expected company development ............................................................ 26
Research & development activities ......................................................... 27
Consolidated financial data ............................................................................ 30
Auditor´s report .............................................................................................. 36
www.zkl.cz
5
Introductory word of CEO
Dear business partners,
in 2016 we completed the difficult
period of the previous three years from 2014,
when our business was impacted by several
unexpected effects. Just to remind you, I
would like to mention the devaluation of the
Czech crown at the end of 2013 and the
termination of the cooperation with the VW
Group concerning the deliveries of special
tubes for the passenger cars cooling
systems. The devaluation of the Czech
crown known as the Intervention of CNB had
a negative impact on the results of ZKL, as
we hedged foreign currency risks arising
from EUR and USD for the years 2014 -
2016. Those factors negatively affected our
economic results in the recent years by an
amount of nearly CZK 250 m, and important
is that we jointly managed to eliminate those
negative effects by the end of 2016.
For the above reasons, to be able to finance those expenditures, we had to
reduce the inventories of bearings on the stock in the ZKL Bearings CZ, a. s. trade
organization by about 15 %, and reduce the operating inventories in the
manufacturing enterprises by another 15 %. In absolute statement, this meant cutting
down the inventory by about CZK 90 m and thus freeing up cash to finance the
aforementioned losses. We succeeded in doing so and I can say that the
implementation of the said measures helps to ensure gradual stabilization of the
production and sales of the ZKL bearings.
Despite those difficulties and the overall decline in the production of heavy
machinery in the world, i.e. power engineering, steel and mining industry, we
recorded an approximate 10 % decline in the sales to a volume of CZK 1,068 m, but
it is important that we managed to improve profitability measured by EBITDA by 50 %
www.zkl.cz
6
to CZK 101 m, as indicates the below table:
2015 2016 Index 2016/2015
Revenues from sales (CZK thous.) 1 195 811 1 068 313 0,89
Added value (CZK thous.) 452 702 404 503 0,89
Operating result - EBITDA (CZK thous.) 66 928 101 254 1,51
Positive in the 2016 results is the acquisition of new business for the supply of
bearings to wind farms and new projects in the sector of railway bearings. Those are
particularly special bearings for low-floor trams manufactured in CRRC China and
bearings to locomotives for Russian railways and so on. Those new projects,
together with other innovative bearings, underpin the expected growth in the ZKL
Group sales in 2017 and beyond. The important thing is that the proportion of direct
deliveries of bearings to the primary production (OEM) is increasing and in 2017
should amount to approx. 40 % of the total sales of bearings. In 2017, we expect
sales growth of around 10.4 % against 2016 to CZK 1,179 thousands, and efficiency
growth measured by EBITDA by 57 %, i.e. to the amount of CZK 159 m.
Finally, I would like to thank you all for your cooperation in 2016, for your
support in dealing with the difficult situation in the years 2014 to 2015 with our task
and goal being to continue to be a promising business partner.
Ing. Jiří Prášil, CSc.
CEO
www.zkl.cz
7
Current organizational scheme
Ing. Jiří Prášil, CSc.
www.zkl.cz
8
Sales & Marketing
In 2016 ZKL Group continued to develop key territories that include Latin
America, Asia and Europe. Business is in individual territories carried out by business
offices through direct acquisitions. We further try to increase the sales of bearings to
primary manufacturers and end users. The general trend is that large end users and
primary manufacturers seek to eliminate intermediaries and buy directly from
manufacturers through their dealers. At the same time, that trend however challenges
logistics, as customer needs are transmitted directly to the manufacturer. The
advantage of an intermediary (distributor) is greater availability of goods and that
service is now transmitted more on primary producers.
The development of sales and ZKL’s market share in selected territories is
documented by following charts and detailed information relating to individual
markets.
LATIN AMERICA
Argentina
In 2016, Argentina contributed with more than 70 % to the total ZKL exports to
Latin America. In 2015, Argentina's share was more than 60 % and in 2016 it even
increased. We could thus mark Argentina within Latin America as dominant despite
the fact that imports into the country are still subject to state regulation in the form of
import licences. The distributor network is very good and stable.
In addition to the segment of agro-industry and manufacturers of gearboxes,
ZKL bearings begin to gain ground also in the metallurgical and mining industries.
Brazil
Key to the development of sales has become a successful project of a delivery
of sealed spherical roller bearings in the segment of the mining industry. Significant
segments of the territory are also iron works.
Brazil's potential is high, the political and economic situation in the country is
however complicated and gaining a more significant market position is a matter for a
longer period.
Chile, Peru, Colombia
The growing inter-year numbers in those countries show a stable potential of
those markets. In Colombia and Peru we have managed to stabilize cooperation with
strategic business partners. An important step in Chile became the cooperation with
a new strategic partner, which thus completed several years major efforts to
penetrate this territory.
www.zkl.cz
9
ASIA
China
Personnel changes in the management of the Chinese office contributed
significantly to the development of new opportunities in the Chinese territory and, at
the same time, successful cooperation with our customers was build in the steel
industry and the power engineering sector.
Ongoing are also the deliveries of bearings for Skoda 27T trams for the end
customer CSR, and the preparation of a project for another operator in supplies of
bearings to the underground trains has been initiated.
India
The ZKL representative office provides mainly deliveries to end customers and
operates in the area of technical support. Within MSV (International Engineering
Trade Fair) in Brno, negotiations with a NLC representative (end customer) were held
which was the basis for future cooperation.
By extending the product range we managed to re-build the existing
cooperation with ELECON. Promising appears negotiations with New Cheran and
others.
The India distribution network is covered by a number of authorised dealers.
Together with its master distributor, ZKL was able to deliver by some 20 % of its
products more than in 2015.
In 2016, there was a police crackdown in India on ZKL bearings counterfeits.
Bearing counterfeiting is a global problem.
www.zkl.cz
10
EU COUNTRIES
ZKL market share in the European Union is stagnating. In 2016, the share of
ZKL reached 0.92 % which is a slight decrease compared to 2015. It was mainly
caused by the low price of commodities such as coal, oil and steel. For large
manufacturers of gearboxes and heavy industrial equipment this meant reduction of
market needs, i.e. lack of orders and that was also reflected in the supplier network.
The below table indicates the territorial distribution of revenues of ZKL
Bearings CZ, a.s., in CZK thousands.
Business Unit 2012 2013 2014 2015 2016
Latin America 177 972 192 609 73 660 101 506 89 420
Asia 133 166 175 884 135 785 178 600 155 240
Europe, SNS, Africa 191 757 144 591 158 285 171 233 144 231
Far East 80 857 65 517 80 600 98 893 67 456
Czech and Slovak Republic 111 285 124 326 230 977 220 854 218 351
Central and Western Europe 147 867 179 158 173 595 168 141 151 668
Total 842 904 882 085 852 902 939 227 826 366
www.zkl.cz
11
2016 BUSINESS ACTIVITIES
Strengthening ZKL brand’s image
The ZKL concern has been continuously working on the development and
promotion of its image. ZKL participated in several domestic and foreign fairs:
Fair City Date
METALLOOBRABOTKA - SVARKA Perm, Russia 5. 4. – 8. 4. 2016
Expomin Santiago de Chile, Chile 25. 4. – 29. 4. 2016
FIMAQH Buenos Aires, Argentina 10. 5. – 13. 5. 2016
BIEHM Bilbao, Spain 30. 5. – 4. 6. 2016
CzechRaildays Ostrava, Czech Republic 14. 6. – 17. 6. 2016
InnoTrans Berlin, Germany 20. 9. – 23. 9. 2016
MSV Brno, Czech Republic 3. 10. – 7. 10. 2016
In 2016, those activities were focused on building the awareness of the brand
in the territories of Latin America. On the European continent, we presented our
company primarily on specialised fairs where we were increasing the awareness of
ZKL as a manufacturer of bearings for railway industry.
We have developed activities towards the professional community when we
started to work more with the ZKL company profile on LinkedIn.
Regular customer satisfaction survey showed that with the products being
offered to them, they increasingly look for services and related professional
www.zkl.cz
12
consultancy. Flexible response to emerging customer needs is provided by the sales
support technical department (OTPP) that offers technical solutions in choosing
suitable bearings, attendance at assemblies of special and large-size bearings or
technical training for customers and distributors.
ZKL’s own added value is its own research and development focused on the
innovation of the existing range of bearings, expansion of the production programme
by new design series, the development of special bearings and a variety of additional
services. In 2016, the activities of research and development focused on toroidal
roller bearings, bearings for wind farms and certification of bearings for railway
industry, which in terms of the market copies segments that also have great future
potential.
Building branded sales network
ZKL has direct dealership in seven countries of the world: China, Mexico,
Brazil, Argentina / Uruguay, Germany and India. The main activities of representative
offices include support of distributors on technical issues, promotion, dealing with
complaints, etc.
The authorised ZKL’s distribution network expands every year and authorised
distributors are the main sales channel. ZKL keeps focusing on increasing the
proportion of customers from primary production, especially in the European Union,
as well as on increasing sales to end customers.
In 2016 sales in the US had dropped due to the loss of the principal distributor
and therefore measures were taken to compensate that drop in the coming years. It
is mostly about finding new potential distributors and customers among the primary
producers. At the turn of the year 2016/2017 ZKL had already 6 distributors in the US
where it regularly sells its products. The loss of the main distributor was thus solved
in a relatively short time.
www.zkl.cz
13
Processes
One of the main goals for 2016 was also to perform process analysis and set
up processes with the support of the latest IT technologies. The main processes,
such as tender, introduction of new products and claims management, are now fully
supported by the database system Windchill from PTC.
Another important improvement was achieved by using a new planning
algorithm that takes into account the turnaround, custom or serial bearings and
dimension. Using predictions we can calculate that level of safety stock to meet the
limits of stocks and invest money only in what is merchantable with higher probability.
The entire model is directly integrated into the SAP information system.
Ing. Jiří Prášil
Managing Director
ZKL Bearings CZ, a. s.
www.zkl.cz
14
Technological development,
innovation, research and
development Increasing competitiveness of ZKL bearings is significantly affected by the
development, design and implementation of new innovative types of bearings into the
production. Innovation management is implemented through a plan of technical and
production development (TPD) which is integrated into the financial plan of ZKL
Group.
Costs that invest in the technological development are shown in the annual comparison in the following table:
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
ZKL Brno, a.s.
Costs of research and development
47,625 49,231 52,676 63,947 57,850 59,442 35,116 33,095 13,551 4,549
ZKL Klášterec nad Ohří, a.s. ZKL-ROLL, s.r.o.
TPV, special tools, project solutions
0 4,071 3,876 6,620 3,508 11,142 10,254 8,116 8,866 12,270
ZKL Výzkum a vývoj, a.s.
Costs of research and development
5,314 17,026 18,228 21,449, 24,051 31,780 26,462 21,438 21,223 17,638
ZKL Tech-Tools,a.s.
Costs of special tooling
- - - - - - 6,248 1,760 4,171 4,171
TOTAL 52,939 70,328 74,780 92,016 85,409 10,2364 78,080 64,409 47,811 38,628
Costs for the development, design and implementation of new
productions
To finance the ZKL concern’s research and development beyond the
abovementioned costs, MIT (the Ministry of Interior and Trade) is together with ZKL
also involved as part of its subsidy programmes for the sector.
www.zkl.cz
15
The result of that 2016 activity is realized innovations in the below structure:
Innovations for ZKL Brno, a.s.
Tprm Tprm Tprm
23228EW513MH NF 22316EW513MH NF 22336EW513MH NF
23240EW513MH NF PLC 84-11-11.12T PLC 33-14-02.C3
22252-2RSHK TM NF PLC 01-12-03.4 EE743240FR/743320
PLC 32-14-06.CR 21313CKW33J EE243190/243250
21311CW33J 22228-2RSHK TM NF 23156-2RSHK TM NF
23226-2RSH TM NF 22219EKMHD2 R C3 618/750MA
PLC 84-12-111.T 23164-2RSHK TM NF 23134-2RSHK TM NF
29492EM_NF 294/560EM_NF PLC 01-12-04.B1T
23144-2RSHK TM NF 23148-2RSHK TM NF 618/560MA NF
S-NCF2956.V 23122-2RSH TM NF 23220-2RSN TM NF
23156-2RSHK TM NF 23140-2RSHK TM NF B2-2211-2RSN TM NF
PLC 32-12-01.R 22234-2RSH TM NF 23156-2RSHK TM NF
23144-2RSHK TM NF 22311EW33J TPF 11526-16 23260W513M
22322EX3MHD2 R 22328EX3MHD2 R 22312EW33J TPF 11526-16
B2-2218-2RSN TM NF M270744FR/M270710 230/800EW33MH TPF 11517-15
241/530EW33MH TPF 11517-15 23140-2RSHK TM NF 239/710EW33MH NF
PLC 01-16-02 22213EW33MH NF 22215EW33MH NF
22212EW33MH NF
Innovations for ZKL Klášterec nad Ohří, a.s.
Tprm Tprm Tprm
22210EW33J R 22205EW33J R NU2215EMAP C4 TPF 11522-15
32940 TPF 11522-15 QJ215N2MA C3 TPF 11522-15 N312E NF
NJ312E NF NU312E NF N313E NF
NJ313E NF NU313E NF NJ409E NF
NU409E NF NDPLC 410-15.3-2 NDPLC 410-16.3-2
PLC 410-59 PLC 410-13 PLC 410-14
C 6218MA NF PLC 82-09-01.4 B2-2207-2RSN TM NF
PLC 410-15 PLC 410-16 PLC 71800
In connection with the installation of a new manufacturing line for cylindrical
roller bearings in the ZKL Klášterec nad Ohří, a.s. plant, in 2015, as well as in 2016
innovations of that type of bearings continued. The innovations were aimed both at
expanding the range of single row roller bearings for industrial applications in the
New Force power class, as well as the introduction of the production of roller
bearings for railway applications.
www.zkl.cz
16
Another thing that took place in 2016 was the expansion of the manufactured
product range by other types of bearings. As concerns conventional industrial
bearings that mainly involved expanding the range of spherical roller bearings in both
the open design, and especially the design with seals. All innovated spherical roller
bearings are manufactured as standard in the New Force power class.
Another area of innovation is the development of special bearings that takes
place in cooperation with end customers in particular projects. Here, there were
traditionally projects in the areas of hardware, mining and railway industry. However,
ZKL has recently begun to pay more attention to projects in the field of wind power
engineering. In 2016 the company continued by implementing other projects in the
cooperation with a manufacturer of wind turbines, which had commenced in 2015.
In the development and design of new types of bearings, ZKL uses the
previously implemented advanced PLM systems. This involves in particular the
design and optimisation of the internal bearing structures through FEM calculations
using the PATRAN/MENTAT/MARC programme, and the creation and management
of the design documentation using the PTC (Creo + Windchill) products. The
properties of the developed bearings are then tested on prototypes of the designed
bearings. Those tests are performed in various test facilities in ZLK’s own test
premises.
Ing. Jiří Šafek
Managing Director
ZKL - Výzkum a vývoj, a. s.
www.zkl.cz
17
Quality management and
environmental protection system
QUALITY MANAGEMENT SYSTEM
The ZKL concern, profiling itself as a reliable supplier for the most demanding
customers, including customers from the automotive industry, has constantly been
improving and developing its quality management system certified according to EN
ISO 9001.
The Group management pays great attention to the quality management
system and the related learning processes. The implementation of new projects that
aim to increase the level of work environment in terms of achieving the maximum
thermal stability of workplaces and their high degree of cleanliness, as well as the
installation of the most modern manufacturing and measurement equipment, move
significantly both the ZKL’s options and the quality level of products. The system is
constantly being improved on the basis of the defined quality principles.
ZKL’s QUALITY POLICY
ZKL Group management is aware of its responsibility to apply, develop, and
continually improve the quality system efficiency which is one of the decisive factors
affecting the ZKL products position on the market. Therefore it specifies the below
quality policy:
ZKL focuses on meeting the customer requirements with the aim to increase
its satisfaction, taking into account considering parties involved in complying
with the legal requirements and regulations.
The base of the pro-customer relationship stands on fulfilling the declared
parameters for final products and providing qualified technical services.
ZKL sensitively perceives the development of customer needs and
requirements enabling them to react efficiently.
The company aims at permanent increasing of the product utility value and
efficiency of the ZKL trademark production.
In order to increase the parameters and level of the ZKL products quality, a
Group structure has been created focusing on own research and
development.
The company aims at permanent improvement of the quality system efficiency,
removes found insufficiencies by means of implementing corrective measures,
and takes preventative measures in order to prevent potential nonconformities.
Considering the utilization of the knowledge and performance potential of own
employees/ team collaborators, the company promotes the equal opportunities
www.zkl.cz
18
principle enabling all employees an equal access to further vocational training
and development, as well as retraining in compliance with the training plans
and possibilities of expendable resources, if required.
Building partner relationships with the suppliers and their involvement in the
ZKL quality system plays a great part in the efficiency.
ZKL product quality is based on the awareness of importance related to high
quality work performed by every single employee – performing quality work is
the personal goal of every employee / team collaborator.
Motivation and reward for work results, employee growth and objective know-
how create the prerequisites for the successful fulfilment of work assignments,
minimising errors.
ZKL demonstrates the achieved level of quality system by obtained certificates:
ZKL Group’s Quality Management System State in 2016:
ZKL, a. s.:
Certificate: EN ISO 9001:2008
ZKL - Výzkum a vývoj, a. s.:
Certificate: EN ISO 9001: 2008
CTLA
IRIS
ZKL Bearings CZ, a.s.:
Certificate: EN ISO 9001:2008
IRIS
ZKL Brno, a. s.:
Certifikát: EN ISO 9001: 2008
ZKL Klášterec nad Ohří, a.s.:
Certificate: EN ISO 9001:2008
Certificate: EN ISO 14001:2004
Certificate: ISO/TS 16949:2009
IRIS
ZKL Tech-Tools, a.s.
Certificate: EN ISO 9001:2008
www.zkl.cz
19
ENVIRONMENTAL PROTECTION
ZKL has paid considerable attention to the protection of environment with the
criteria being the requirements of the international standard ISO 14 001. Certified is
according to the international standard ISO 14001: ZKL Klášterec nad Ohří, a.s.. The
principles of environmental management are gradually becoming a natural part of all
activities aimed at improving companies’ environmental profile.
Strict compliance with legislative requirements for safeguarding the
environment is commonplace to us. The environmental profile includes all effects
arising from the business activity of companies that has an impact on the
environment. Environmental impacts relate not only to pollution but also consumption
of resources - materials, energy and water. All energy consumption, production of
waste and packaging are carefully monitored and evaluated. The aim of those
processes is the systematic examination of input sources and savings of aggregate
financial costs depending on the economic performance of companies.
As part of product innovations and in the acquisition of new technologies the
efficient use of energy has been strived for, along with protecting the environment
and preserving natural resources.
As part of upgrading technologies and test methods, the consumption of acids
has been reduced significantly thanks to the investments in testing surfaces after
grinding, which significantly reduced the environmental burden in that area.
Ing. Zuzana Fišerová
Process & Quality Manager
www.zkl.cz
20
Human Resources In the area of human resources and personnel policy management, ZKL
Group puts great emphasis on the long-term stabilisation of qualified employees in
the company. The main objective is to use the knowledge and performance potential
of the Group’s employees. The company strongly encourages all age groups of
employees, their personal growth, and promotes its attractiveness as an employer.
PERSONAL GROWTH
The year 2016 was a stabilising year in the personnel sector. Gradual
reduction of the number of employees took place in relation to the further introduction
of new technologies and the related increase in labour productivity.
Recounted number of employees as of 31. 12. 2016
ZKL Group 2012 2013 2014 2015 2016
TOTAL 755 761 827 802 749
Employee structure remains almost identical to the previous period. The total
number of employees within the Group accounts for more than half of employees
working directly in the manufacturing.
www.zkl.cz
21
Compared to the previous period, the proportion of employees with university
degree and secondary education has increased, and there is a reduction in the
proportion of employees who have completed only the primary education or are
apprenticed in the field.
ZKL is a traditional Czech manufacturer that can also build on a number of
long-term experienced employees who share their experience with young and
prospective newcomers.
The trend of the last five years was increasing the share of employees up to
30 years; in 2016 there was a slight decline in the share of that group of employees.
It is associated with an effort to stabilize the staff. Many of those who joined ZKL then
gradually move to higher age groups.
www.zkl.cz
22
EMPLOYEE TRAINING AND GROWTH
Training of employees and their professional growth is an integral part of the
ZKL’s HR policy. One of the key tasks of the HR department is providing professional
growth of employees in order to optimally provide the current educational needs of
ZKL and timely respond to the requirements of the future employee performance
needs and employment in the company.
In 2016 the Human Resources department was in charge of the education and
professional growth of ZKL employees with the aim to ensure both their professional
and personal development. Employees were offered a number of interesting trainings
and seminars in the field of legislation and new technologies. The seminar
"Developing and improving business processes" that had been prepared for the sales
personnel of the Group was successfully taken up.
ZKL recognizes the importance of
technical education and its significance
for the production of bearings, and
therefore through its participation in the
evaluation committee encouraged the
contest KOVO JUNIOR 2016 – mechanic
fitter for the South Moravian Region at
SSSE Brno, where the ZKL Brno
representatives also participated in the
Exchange of job opportunities for
students in the highest grade.
Within the framework of cooperation with schools several secondary schools
excursions took place in 2016. ZKL Brno was visited by students and teachers,
among others from the Secondary Vocational School of Znojmo or from the
Secondary Olomoucka School of
Technology and Business in Brno. For all
excursion participants ZKL staff always
prepared a brief presentation about the past
and present of the Group that was followed
by a visit to the manufacturing at the plant
ZKL Brno where the participants took part in
a short workshop where they compiled a
small two-row bearing.
An important part of the education
growth are regular language courses that were expanded in 2016, also with the
support of the Operational Programme Employment and Training of employees II.
Ing. Lada Serreli
HR Manager - ZKL, a. s.
www.zkl.cz
23
Significant events and changes in
subsidiaries
ZKL BRNO, a.s.
Product portfolio in ZKL Brno, a.s. includes:
spherical-roller bearings
tapered roller bearings
cylindrical roller bearings
axial bearings
large-size bearings
special bearings
bearing components
New members of the ZKL Brno’s machine fleet
The 2016 investment: Purchase of a modern carousel lathe BASICTURN 1250
C2 made by TOSHULIN a.s. bears the motto “History is the foundation of the
present".
An investment worth CZK 10 m renews the cooperation with that traditional
Czech manufacturer that has been in the market since 1949. This contractor was
selected on the basis of a public tender thanks to the most comprehensive solution to
a technologically very demanding machining of
turbid bearing rings. Rich references and the
quality of products also speak in favour of the
contractor - their SK12 machines have lathed
parts of large-size bearings in ZKL Brno for over
50 years.
At a one-rack structure a fully controlled
CNC machine is built with a clamping plate of
1250 mm where parts can be machined to a
diameter of 1400 mm and a weight up to 8000 kg.
Modern control system Sinumerik 840D SL and
other Siemens electronics will guarantee
precision machining of even parts complex in
shape. Machining tools will be stored in a nine-
place tray and, before use, measured
automatically by an integrated Renishaw tool
probe. If necessary, efficient drilling and milling
applications will be enabled on the machine which will facilitate the full completion of
Old 1966 machine SK12
www.zkl.cz
24
the bearing component without any additional operations on other machines. Since
the machine is primarily intended for the so-called hard turning of bearing rings, it will
be equipped with specially designed tools by Iscar. Cutting tools based on ceramics
and cubic boron nitride must withstand temperatures just below the melting point of
1400°C, but even under these conditions they can be machined in the accuracy of
0.01 mm.
The machine with accessories
will weigh about 35,500 kg and the
complicated transport – fortunately
only within the country - will be
provided by several trucks. In recent
months, the ZKL Brno technical
section workers have worked closely
with the manufacturer in assembling
the machine and testing its technical
parameters.
The installation of the machine
in facility 5 will begin from 16. 1. 2017.
After the installation and final acceptance scheduled for the beginning of February
2017 BASICTURN will be fully integrated into the ZKL Brno, a.s.’s fleet as the key
machine of the large-size bearings machine shop. Its mission and the biggest
challenge is a wind farm project it was designed for.
Sealed spherical roller bearings
NEW FORCE sealed spherical roller bearings are a completely new type of
product the manufacture of which in the Czech Republic was introduced by ZKL. Until
now, that design has only been manufactured by a few major global bearing
manufacturers. As long as the price is competitive and the delivery terms acceptable,
ZKL has great preconditions to be successful in the sealed bearings market. To
achieve that, there was the first development phase of sealed bearings of outer
diameter up to 200 mm. The interest in the sealed bearings to 200 mm in diameter
persists, and there is a growing demand to expand the range of sealed spherical
roller bearings above 200 mm. The market demand to expand the existing range by
bearings of up to 400 mm diameter is constantly
growing.
Customers require that the manufacture of
roller bearings used in critical conditions utilizes
the latest technologies and design, ensuring
reliable operation in even the harshest operating
conditions. At the same the requirements to
minimize the required maintenance, lubricant
www.zkl.cz
25
consumption and the emphasis on the environmental policy have increased.
ZKL Brno initiated the development focused on large-size roller bearings with
external diameters from 200 mm to 400 mm equipped with a sealing to prevent dirt
entering the bearings and leakage and degradation of lubricants used as a
permanent filler of the bearings.
The aim of the project is to develop a design solution that would include the
shape, dimension and quality specification of bearing components, their material and
quality specification applicable to a wide range of operating conditions. At the same
time develop the manufacturing technology of parts as the basis for serial production
of a new type of roller bearings, which has not been launched in the Czech Republic
by another manufacturer.
Special custom spherical roller bearings
ZKL Brno has been accommodating its customers and is working closely with
them in the development and production of special roller bearings. This allows users
simplify the construction of their bearing equipment and thus the cost of production or
maintenance of those nodes. Special bearings are mainly used in applications where
there are requirements for high technical and operating parameters, low maintenance
costs, and facilitating the assembly and disassembly of bearings.
Below are examples of bearings manufactured in 2016:
PLC 84-12-111.T – 4row tapered roller bearing with seals
PLC 32-14-06.CR.- 2row roller bearing with locking rings
M270744FR_M270710 - single-row tapered roller bearing with tapped cage
S-NCF.2956.V - roller bearing with seal for vehicle axles
PLC 32-12-01.R - 2row cylindrical roller bearing split in the longitudinal axis
Ing. Tomáš Poršek
Managing Director
ZKL Brno, a. s.
www.zkl.cz
26
ZKL KLÁŠTEREC NAD OHŘÍ, a. s.
The product portfolio in ZKL Klášterec nad Ohří, a.s., includes:
single row ball bearings
double row angular contact ball bearings
double row self aligning ball bearings
axial thrust ball bearings
cylindrical roller bearings
special bearings
bearings for automotive industry
spherical-roller bearings
bearing components
Expected company development
ZKL Klášterec nad Ohří builds on the previous operator ZKL Klášterec as a
traditional producer of ball bearings with long experience with customers from the
automotive industry with increasing cooperation with the world leading manufacturers
of bearings and a stable customer base. An important sector is further the sector of
deliveries of special bearings according to customer requirements, and the evolving
area of partly cooperated tapered single-row ball and cylindrical roller bearings.
The dominant position of the axial thrust ball bearings manufacture in Europe
continues to be significant. It is supported by the long-term cooperation with major
foreign buyers.
In the past period there has been a strengthening of the developed activities in
terms of seeking new potential customers of the ZKL production and in expanding
the cooperation with the existing customers to launch more projects with those
customers, both in other versions of an already produced bearing designs, as well as
in the introduction of completely new dimensional types. The produced product
portfolio has been expanded by a new design series - Spherical Roller Bearings, now
also in a sealed version.
ZKL Group has been expanding the production of ZKL Klášterec nad Ohří, a.s.
by the production of cylindrical roller bearings and tapered roller bearings. The
developed project envisages creation of new projects for companies CRRC,
Deutsche Bahn and Transportation businesses. In Klášterec nad Ohří, ZKL will
primarily manufacture bearings for railway applications. This production has already
run successfully in 2015, and then in 2016 the IRIS certification was successfully
introduced to allow supplies to the most important customers of that product. Along
with the production of railway bearings a progressive expansion of the offered
assortment takes place by catalogue roller bearings or bearings developed according
to special customer requirements.
www.zkl.cz
27
Also, there was a process of centralizing the production of stamped sheet
metal cages in ZKL Klášterec nad Ohří, a.s., and deliveries to other manufacturing
companies of the ZKL Groups have commenced.
In the past years the company has been revitalised with a focus on
streamlining the manufacturing process in order to achieve higher labour productivity
and higher added value. Part of the revitalization was terminating the operation of
the pellet production centre, reducing the number of overhead staff and increasing
the level of cooperation. Another process that took place in ZKL Klášterec nad Ohří,
a.s. in 2016 was a 20 % reduction of overhead blue-collar workers and white-collar
employees. Due to the company restructuring, section were merged with the aim of
increasing the efficiency of process management.
In the coming period the process of restructuring will continue, especially in
the areas of:
increasing the share of purchased semi-finished products with the aim of
saving input costs,
further streamlining the processes in order to create savings in fixed costs,
selling useless movable and immovable property.
Research & development activities
ZKL Klášterec nad Ohří, joint stock company, continued in 2016 to expand the
activities in research and development with the following focus:
The grant project FR-TI4/244 approved by the Ministry of Industry and Trade
(MPO) continued according to contract of 10/2012. The project is focused on
research and development of axial thrust ball bearings with one-piece sheet metal
cages reinforced in carbonitriding process. In 2016 the development continued by
other prototype representatives. The functional prototypes were MFO tested. The
result was a slight improvement of the limit frequency of surface coated bearings’
rotation.
Within the project of the acquisition of a manufacturing line for the operations
of grinding and finishing of cylindrical roller bearings (the INNOVATIONS grant
project) additional roller bearing items were manufactured in the catalogue field and
in the railway bearing applications.
Within the applied research and experimental development programme
support EPSILON the "Automation, measuring and monitoring of assembly
processes” project was financially supported. The project will deal with the research
and subsequent development of monitoring devices for specific assembly processes
of axial thrust bearings. The project aims to ensure early diagnosis of faulty products
followed by intervention during the inspection and ultimate elimination of defects. The
research is scheduled for 2017-2019 with the participation of the VUT Faculty of
Electrical Engineering and Communication Technologies Brno.
www.zkl.cz
28
Last but not least, our company applied for grant in the 2nd public tender of the
TRIO programme. The project aims to design and build roller bearings with an
extended service interval designed especially for rail transport. The co-investigator of
the project will be our sister organization ZKL - Výzkum a vývoj, a.s. together with the
VUT Faculty of Mechanical Engineering Brno. The start of the project is planned for
2017.
In 2016, prototype bearings for tram PLC_82-09-01 were completed and
submitted for testing at the customer’s in China.
Also the bearing PLC 71800 for Škoda Motorsport has been developed. In late
2016 there was the first series production of that bearing.
www.zkl.cz
29
Further the B2-2205-2RSN to B2-2210-2RS bearings were developed and
serial deliveries have already started to customers in Western Europe.
For SRL SC Primagra, ZKL Klášterec, a.s. has developed an axial thrust
bearing PLC 410-59 with plastic cage.
Miroslav Bárta
Managing Director
ZKL Klášterec nad Ohří, a. s.
www.zkl.cz
30
Consolidated financial data CONSOLIDATED BALANCE SHEET
(Figures in CZK thousand)
date
31.12.2016
Year Month ID Company name
2016 12 25568353 ZKL, a. s.
Item a
ASSETS b
Line No. c
Current period Previous period
Net 3
Net 4
TOTAL ASSETS (02+03+40+77) 01 2 333 663 2 480 313
A. Receivables for subscribed capital 02
B. Fixed assets (04+14+27+37+38+39) 03 1 232 949 1 426 049
B. I. Intangible fixed assets (05+06+09+10+11) 04 21 813 24 687
B. I. 1. Intangible results of research and development 05
2. Valuable rights (07+08) 06 16 544 23 172
2.1. Software 07 13 826 18 662
2.2. Other valuable rights 08 2 718 4 510
3. Goodwill 09
4. Other intangible fixed assets 10 5 074 1 515
5. Advances for intangible fixed assets and unfinished intangible assets under construction (12+13)
11 195 0
5.1. Advances for intangible fixed assets 12
5.2. Intangible assets under construction 13 195 0
B. II. Tangible fixed assets (15+18+19+20+24) 14 1 193 177 1 247 839
B. II. 1. Lands and constructions (16+17) 15 716 245 745 306
1.1. Lands 16 103 649 114 823
1.2. Constructions 17 612 596 630 483
2. Individual movables and groups of movables 18 412 112 436 386
3. Valuation differences to acquired assets 19
4. Other tangible fixed assets (21+22+23) 20 24 997 23 054
4.1. Perennial crops 21
4.2. Breeding herds and draught animals 22
4.3. Other tangible fixed assets 23 24 997 23 054
5. Advances for tangible fixed asset and tangible fixed assets under construction (25+26)
24 39 823 43 093
5.1. Advances for tangible fixed assets 25 11 576 7 333
5.2. Tangible fixed assets under construction 26 28 247 35 760
B. III. Long-term financial assets (28+29+30+31+32+33+34) 27 12 681 136 742
B. III. 1. Investments in subsidiaries 28 11 694 135 756
2. Loans and borrowings to subsidiaries 29 987 986
3. Investment in associates 30
4. Loans and borrowings to associates 31
5. Other securities and investments 32
6. Other loans and borrowings 33
7. Other financial assets 34 0 0
7.1. Other financial assets 35
www.zkl.cz
31
7.2. Advances for investments 36
B.IV Positive consolidation difference 37 18 203 38 201
B.V (-) Negative consolidation difference 38 -12 925 -21 420
B.VI Securities in equivalence 39
C. Current assets (41+49+71+74) 40 1 093 709 1 044 909
C. I. Inventories (42+43+44+47+48) 41 563 440 648 831
C. I. 1. Raw material 42 72 505 79 483
2. Work-in-progress and semi-finished products 43 70 891 82 778
3. Finished products and goods 44 418 460 486 570
3.1. Finished products 45 337 200 371 727
3.2. Goods 46 81 260 114 843
4. Animals 47
5. Prepayment on inventories 48 1 584 0
C. II. Receivables (50+60) 49 497 288 370 779
C. II. 1. Long-term receivables (51+52+53+54+55) 50 0 0
1.1. Trade receivables 51
1.2. Receivables from controlling entities 52
1.3. Receivables from associates 53
1.4. Deferred tax receivable 54
1.5. Other receivables (56+57+58+59) 55 0 0
1.5.1. Receivables from partners, cooperative member and association members 56
1.5.2. Long-term advances 57
1.5.3. Estimated receivables 58
1.5.4. Other receivables 59
2. Short-term receivables (61+62+63+64) 60 497 288 370 779
2.1. Trade receivables 61 331 165 273 720
2.2. Receivables from controlling entities 62 35 969 34 216
2.3. Receivables from associates 63
2.4. Other receivables (65+66+67+68+69+70) 64 130 154 62 843
2.4.1. Receivables from partners, cooperative member and association members 65
2.4.2. Social security and health insurance 66
2.4.3. Government - tax receivables 67 21 409 28 051
2.4.4. Short-term advances 68 17 359 13 007
2.4.5. Estimated accrued revenues 69 7 006 13
2.4.6. Other receivables 70 84 380 21 772
C. III. Current financial assets (72+73) 71 0 0
C. III. 1. Investments in subsidiaries 72
2. Other short-term financial assets 73
C. IV. Cash and bank accounts (75+76) 74 32 981 25 299
C. IV. 1. Cash 75 521 366
2. Bank accounts 76 32 460 24 933
D. Prepayments and accrued income (78+79+80) 77 7 005 9 355
D. 1. Prepaid expenses 78 5 600 8 612
2. Complex prepaid expenses 79
3. Accrued income 80 1 405 743
www.zkl.cz
32
Item a
LIABILITIES b
Line No.
c
Current period
5
Previous period
6
TOTAL LIABILITIES AND EQUITY (82+107+147+150) 81 2 333 663 2 480 313
A. Equity (83+87+95+98+102+105+106) 82 991 169 1 163 752
A. I. Subscribed capital (84+85+86) 83 805 802 805 802
A. I. 1. Subscribed capital 84 805 802 805 802
2. Treasury shares 85
3. Changes in subscribed capital 86
A. II. Share premium and capital reserves (88+89) 87 -2 947 -3 153
A. II. 1. Share premium 88 1 236 1 236
2. Capital reserves (90+91+92+93+94) 89 -4 183 -4 389
2.1. Other capital reserves 90
2.2. Valuation differences from revaluation of assets and liabilities (+/-) 91 -4 183 -4 389
2.3. Valuation differences from revaluation by transformation (+/-) 92
2.4. Differences in company transformation (+/-) 93
2.5. Differences from valuation company transformation by (+/-) 94
A. III. Revenue reserves (96+97) 95 5 455 5 455
A. III. 1. Other reserve fund 96 5 455 5 455
2. Statutory and other reserve 97
A. IV. Retained earnings (+/-) (99+100+101) 98 351 230 427 854
A. IV. 1. Retained earnings from previous years 99 351 230 427 854
2. Accumulated losses of previous years (-) 100
3. Other retained earnings (+/-) 101
A. V. Profit/loss of current accounting period without minority shares (+/-) 102 -168 371 -72 206
1. Profit/loss of current accounting period 103 -168 371 -72 206
2. Share in economic result in equivalence 104 0 0
A. VI. Consolidation reserve fund 105
A. VII. Decided on advanced payment for dividends (-) 106
B. + C. Liabilities (108+113) 107 1 234 843 1 216 166
B. Provisions (109+110+111+112) 108 5 402 17 828
B. 1. Provisions for pensions and similar obligations 109
2. Provision for income tax 110
3. Provision according to special legal regulations 111
4. Other provisions 112 5 402 17 828
C. Payables (114+129) 113 1 229 441 1 198 338
C. I. Long-term liabilities (115+118+119+120+121+122+123+124+125) 114 275 564 326 395
C. I. 1. Bonds issued (116+117) 115 0 0
1.1. Exchangable bonds 116
1.2. Other bonds 117
2. Payables to banks 118 162 253 170 360
3. Long-term advances received 119
4. Trade payables 120 32 294 33 362
5. Long-term promissory notes payable 121
6. Payables - controlling or controlled entity 122
7. Payables to associates 123
www.zkl.cz
33
8. Deferred tax liabilities 124 34 992 36 451
9. Other payables (126+127+128) 125 46 025 86 222
9.1. Payables to partners 126
9.2. Estimated payables 127
9.3. Other payables 128 46 025 86 222
C. II. SHORT-TERM LIABILITIES (130+133+134+135+136+137+138+139) 129 953 877 871 943
C. II. 1. Bonds issued (131+132) 130 0 0
1.1. Exchangeable bond 131
1.2. Other bonds 132
2. Payables to banks 133 350 835 317 052
3. Short-term advances received 134 4 999 4 843
¨4. Trade payables 135 319 756 326 678
5. Short-term notes payable 136
6. Payables - controlling or controlled entity 137
7. Payables to associates 138
8. Other payables (140+141+142+143+144+145+146) 139 278 287 223 370
8.1. Payables to partners 140 13 788 11 052
8.2. Short-term borrowings 141
8.3. Payables to employees 142 14 509 14 721
8.4. Payables to social security and health insurance 143 11 152 8 213
8.5. Government - tax payables and subsidies 144 22 738 11 688
8.6. Estimated accrued items 145 3 863 2 777
8.7. Other payables 146 212 237 174 919
D. Accruals and deferred income (148+149) 147 5 565 1 957
D. 1. Accrued expenses 148 5 515 860
2. Deferred income 149 50 1 097
E. 1. Minority equity (151+152+153+154) 150 102 086 98 438
2. Minority basic capital 151 49 528 49 528
3. Minority capital funds 152 47 535 40 927
4. Minority profit funds incl. undistributed profit / unpaid loss of last years 153
5. Minority economic result of current accounting period 154 5 023 7 983
www.zkl.cz
34
PROFIT AND LOSS STATEMENT
(Figures in CZK thousand)
date
31.12.2016
Year Month ID Company name
2016 12 25568353 ZKL, a. s.
Item a
TEXT b
Line No.
c
Values in accounting period
current period
1
previous period
2
I. Sales of goods and services 01 837 995 914 580
II. Sales of goods 02 230 648 281 231
A. Consumption from production (04+05+06) 03 800 598 1 002 240
A. 1. Costs of goods sold 04 193 462 225 196
2. Consumption of material and energy 05 512 544 660 444
3. Services 06 94 592 116 600
B. Increase/decrease in finished goods and in work-in-progress (+/-) 07 -110 582 -243 246
C. Own work capitalized (-)
08 -32 267 -15 885
D. Staff costs (10+11) 09 311 285 337 062
D. 1. Wages and salaries 10 229 649 248 053
2. Social security and health insurance costs and other costs (12+13) 11 81 636 89 009
2.1. Social security and health insurance costs 12 75 256 82 441
2.2. Other social costs 13 6 380 6 568
E. Adjustment of values in operating activities (15+18+19) 14 104 321 89 289
E. 1. Adjustment of values of intangible and tangible assets (16+17) 15 107 241 89 289
1.1. Adjustment of values of intangible and tangible assets - permanent 16 107 241 89 289
1.2. Adjustment of values of intangible and tangible assets - temporary 17
2. Adjustment of values of inventories 18 -5 063
3. Adjustment of values of receivables 19 2 143
III. Other operating income (21+22+23) 20 110 480 80 900
III. 1. Proceeds on sale of fixed assets 21 9 932 33 188
2. Proceeds on sale of material
22 16 101 11 238
3. Other operating income 23 84 447 36 474
F. Other operating expenses (25+26+27+28+29) 24 103 659 72 606
F. 1. Net book value of fixed assets sold 25 11 430 31 195
2. Net book value of material sold 26 18 675 12 866
3. Taxes and fees relating to operating activities 27 10 914 3 590
4. Provisions and adjustments relating to operating activities and complex deferred expenses 28 -7 282 8 591
5. Other operating expenses 29 69 922 16 364
Clearing (depreciation) of the negative consolidation difference 30 8 496 11 471
Clearing (depreciation) of the positive consolidation difference 31 -19 998 -27 842
* Profit/loss from operating activities (+/-) (01+02+20-03-07-08-09-14-24+30-31) 32 -9 393 18 274
IV. Revenues from long-term investments (34+35) 33 0 0
IV. 1. Revenues from investments in subsidiaries 34
www.zkl.cz
35
IV. 2. Other revenues from investments 35
G. Expenses spend on investments sold 36
V. Revenues from other long-term investments (38+39) 37 0 0
V. 1. Revenues from other long-term investments in subsidiaries 38
V. 2. Other revenues from long-term investments 39
H. Expenses related to other long-term financial assets 40
VI. Interest income and similar income (42+43) 41 2 337 1 367
VI. 1. Interest income and similar income in subsidiaries 42 1 905
2. Other interest income and similar income 43 432 1 367
I. Adjustment relating to financial activities 44 124 061
J. Interest expense and similar expenses (46+47) 45 17 887 16 413
J. 1. Interest expense and similar expenses in subsidiaries 46 0
2. Other interest expense and similar expenses 47 17 887 16 413
VII. Other financial revenues 48 21 819 42 588
K. Other financial expenses 49 31 533 105 499
* Profit/loss from financial activities (+/- ) (33+37+41+48-36-40--44-45-49) 50 -149 325 -77 957
** Profit/loss before tax (+/-) (32+50) 51 -158 718 -59 683
L. Income tax (53+54) 52 4 630 4 540
L. 1. .- due 53 6 090 6 891
2. .- deferred (+/-) 54 -1 460 -2 351
** Profit/loss after tax (51-52) 55 -163 348 -64 223
M. Transfer of profit to partners (+/-) 56
Profit/loss for the period without Equivalence 57 -163 348 -64 223
of it: .- Economic result of current accounting period without minority shares 58 -168 371 -72 206
.- Minority economic result of current accounting period 59 5 023 7 983
Share in economic result in equivalence 60
**** Profit/loss for the period (+/-) (57-56) 61 -163 348 -64 223
* Net turnover for the period = I. + II. + III. + IV. + V. + VI. + VII. 62 1 203 279 1 320 666
www.zkl.cz
36
Auditor´s report
www.zkl.cz
37
www.zkl.cz
38
www.zkl.cz
39
www.zkl.cz
40
