Maintaining and Enhancing our Financial Strength.
Our goal is to further improve the equity ratio in fiscal 2006/2007. We will seek to keep the amount of funds tied up in the Group, and with it the ratio of working capital to net sales, at a low level. We also expect to see an improvement in operating cash flow. The figure for net financial liability is expected to lie below the average of recent years.

Targeted Capital Investment Projects.
Over the course of the next two fiscal years, we intend to make further targeted capital investments in Germany and Asia, expand our production structures and strengthen our international services and sales activities. We will also maintain an acquisitions policy that provides for individual company purchases on a relatively small scale to complement our service activities.

Workforce.
In terms of employee numbers, we expect to pass the 8,000 mark within the entire Group in fiscal 2006/2007 (compared to 7,787 in the year under review). This increase will be concentrated outside Germany and will primarily serve to build up our service and sales resources, as well as research and development. There are likely to be further appointments in the following year. However, the scale of this increase will depend on achieving anticipated sales growth and productivity targets. New personnel will also be weighted toward our faster-growing regional markets outside Germany.

In fiscal 2006/2007, we will hold a series of new pay negotiations with the majority of our employees in Germany, in an effort to maintain the competitiveness of the German workforce as part of our global operating network.

Research and Development.
With a view to expanding our portfolio and taking advantage of our strength in the field of innovation, we will devote increasing investment to research and development in the coming years, thus maintaining our established R&D ratio of around 4.5% of net sales. The main focus of our development work is likely to remain constant for the foreseeable future.

Purchasing.
We expect the trend toward falling prices of our products and services to continue in the next few years. As part of the "ProImprove" program, we will collaborate with our suppliers and partners to develop and implement appropriate solutions to compensate for receding prices. One such measure involves pooling our purchasing volumes by means of a procurement management system in order to reduce costs. On the manufacturing side, we intend to expand our global production and development network still further. Our aim is to mesh our own processes even more closely with those of our suppliers. This will allow us to optimize logistical processes, improve reliability of supply and streamline costs. By globalizing our procurement operations, we hope to offset the impact of higher prices for raw materials, which are generally traded on the world market in U.S. dollars. This trend is likely to continue in both 2006/2007 and 2007/2008.

Opportunities.
We believe we hold a very strong competitive hand within our markets. Thanks to our impressive record of innovation and a comprehensive portfolio of services, we are in a position to identify potential opportunities and translate them into new growth.

We are likely to benefit from continuing optimization pressures in our target sectors and are well prepared to meet these demands through the ongoing development of our hardware and software as well as our IT services and solutions. From a geographical perspective, the European region, which for our target sectors is a particularly competitive one and also the region where we have the strongest presence, provides us with vital new impetus for the further development of highly complex solutions and services. In turn, this makes us more competitive at an international level.

We see particularly good prospects over the next few years in the American and Asia/Pacific/Africa markets, with the potential to achieve levels of growth well above those of the national economies of these regions. Our focus here is on two countries that could make a significant contribution to that growth: the United States, where we have improved our future business prospects by expanding our services infrastructure, and China, where we have succeeded in strengthening our competitive position, especially in the banking market.

Our solutions are also helping to promote economic growth in newly industrialized countries (NICs).

Our aim is to drive forward international growth through our network of subsidiaries. In addition, we will look to strengthen our established partnerships and expand our network of partners, particularly in markets such as Australia, New Zealand and the Arab states.

We believe that the levels of growth we have already achieved confirm our strategy of accelerating our service-based operations, and we expect to see continuing growth in both software and services. Sustained demand for outsourcing solutions offers further opportunities for growth.

In expanding our product business, we aim to exploit the opportunities that arise from our customers’ requirements for replacement systems. Our strategy of offering innovative high-end solutions, such as in Intelligent Deposit for retail banks, reverse vending and self-checkout systems for the retail trade, is bearing fruit. These innovations allow us to respond to market demand both for highly complex system solutions geared toward the increasing automation of business processes and for volume-production systems. Regarding the latter, we are able to benefit particularly from the strong position we have developed through our global manufacturing network.

Risks.
As outlined, we anticipate possible risks in the rising cost of raw materials and a further depreciation of the dollar vis-à-vis the euro. We also expect to face increased pressure on prices for our own products and services as a result of intense competition.

Our risk management system allows us to identify risks at an early stage across the entire Group and in relation to individual business streams, and to take appropriate action to minimize and avoid them. In this way, we can ensure we are well prepared to deal thoroughly with potential risks, including those arising from new business streams.

A more detailed picture and explanation of the risks affecting the Group can be found in the Risk Report.