Statement Dr. Markus Conrad

Dear customers and readers,

as a Hamburg-based family business, we model our values on those of the traditional “honourable businessman”. We focus on long-term economic success and believe that as a business, we are not just part of society but also bear responsibility for it. This has been our guiding principle ever since our company came into being over 60 years ago.

The concept of sustainability is relatively new. It reflects the raised expectations an increasingly critical public has in relation to the scope of responsibility an “honourable” company has today and to values-oriented company management. Today, the idea of sustainability encompasses responsibility for employees and suppliers and for the social and environmental impact of all corporate processes.

Sustainability has become an integral part of Tchibo’s corporate strategy and Code of Conduct. Our sustainability concept comprises both our absolute compliance with the law and our responsibility to create and continuously improve transparent business processes in the sense of an all-encompassing sustainability strategy.

This is one of the reasons why, in 2009, we joined the United Nations Global Compact, a voluntary alliance of companies and organisations working worldwide to protect human rights, fair working conditions and the environment.

Our third Sustainability Report gives you the details where we are now and our progress in this respect.

Our activities focus on those areas where we are able and willing to get things moving on the basis of our Tchibo business model.

Coffee
In 2010, we already produced more than 50% of all certified sustainable coffee bought by households in Germany. We have been serving only certified coffee at our Tchibo shops since the end of 2009. In 2011, we will increase the share of coffee processed by us globally to recognised base and certification standards such as 4C, Fairtrade, Rainforest Alliance and Bio to approximately 13%.

We have already decided on the next important steps: As of the beginning of 2012, all our “Privat Kaffee” premium roasted coffees and the entire “Cafissimo” capsule system product range will be 100% sustainable. We hope to provide the entire German market with new momentum by implementing this change.

In our role as market and quality leader, we consider it our duty and responsibility to work together with our national and international partners in the coffee sector and with the help of further specific programmes to drive the implementation of minimum standards and to cultivate raw coffee in a responsible manner.

Cotton
The current world market is still short of cotton in certified ecological and social quality. We are pursuing the stated aim of continuously pushing up demand for such cotton and therefore supply. We are already one of Europe’s largest buyers of “Cotton made in Africa” today. This cotton complies with a basic sustainability standard.

Wood and pulp
Until 2013, all wood and pulp used by us will comply with our own “Forest Tracing System” standard. All tropical and boreal hardwoods are already certified in accordance with FSC (Forest Stewardship Council) requirements. We will change the type of paper for our magazine and other graphic products by the end of 2012.

Our suppliers’ social standards
In 2008, we launched the training programme WE (“Worldwide Enhancement of Social Quality”) for our consumer goods production facilities, with financial backing from the Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung – BMZ) and the German Association for International Cooperation (Gesellschaft für internationale Zusammenarbeit – GIZ). No other international programme has so fundamentally improved working conditions in developing countries. 115 of our strategic suppliers and their production facilities are participating in the pilot programme until the end of 2011, with more joining in the coming years.

Environment
Up to now, we have reduced our transport-related carbon dioxide emissions in absolute terms by around 30% compared to the base year 2006.

Employees
In 2010, we were the first German retail company to be awarded the “family-friendly employer” certificate by the family-focused social auditing organisation berufundfamilie. We have been gradually implementing a range of measures in agreement with the organisation since then.

Our progress in recent years would not have been possible without the extraordinary commitment of our employees and I would like to take this opportunity to thank all of them sincerely. Their personal commitment is placing social and ecological responsibility firmly at the heart of our processes and strategy.

The following report contains detailed information on how our company is developing sustainably. Please send us any suggestions, comments or requests you may have as well as your thoughts on our reporting – we look forward to reading them!

Yours sincerely
Dr. Markus Conrad