Further processing Customers of customers Didactic Customers Didactic Production and logistics Customers Factory and process automation Customers of customers Automation Further processing Raw materials and supplies Research and development 1. Strategy and sustainability management 1. Strategy and sustainability management 1.1 Industrial transformation as a business model Digitisation, individualisation, education and climate protection are the driving forces behind industrial change and cover all stages of value creation – from development, production, logistics and energy supply to services. The Festo Group is a leading global provider of automation technology and technical training and further education, divided into the Automation and Didactic business divisions. Important industry segments are automotive, food and packaging, electronics and assembly, biotech, pharma and cosmetics, chemicals and water, as well as – with growing importance – medical technology and laboratory automation (life tech), which have been in focus since the beginning of the pandemic. Festo also supports all automated process steps in the field of electromobility, from battery production to the production of electric vehicles. The Automation business division The Automation division offers a wide range of solutions for factory and process automation: the business purpose comprises the development, manufacture and sale of pneumatic and electrical components, technical systems and services as well as the transfer of knowledge for automation tasks such as control, regulation, positioning and handling of machines, apparatus and technical processes. In terms of customer solutions, the increasing demand for energy and resource efficiency and humanisation of work is becoming a competitive factor in all industry segments. The Didactic business division The group’s activities in the Didactic division stand for technical basic and further training and, for more than five decades, have included the continuous development of professional, industry-oriented learning products and services relating to automation technology. The educational offerings focus on pneumatics, hydraulics, electronics and mechatronics as well as sensor technology, robotics, CNC and fieldbus technology. Festo Didactic is a system partner of companies as well as private and public educational institutions to make and keep people fit for work through education and training and to allow them to participate in economic development.  GRI 102-2 The value chain in the automation sector is currently participating in the global industrial transformation processes. Automation technology is changing from components to smart components with software. Digitisation permeates all value creation processes and changes business models. The speed of innovation is increasing. Virtual simulations create security for real investments. The use of artificial intelligence and new technologies such as piezo technology and superconductivity opens up new technical solution areas in industry for Festo. The main driver of business activities, apart from digitisation, is global growth. The value-added chains of the Festo Group will become more international in the coming years. Nevertheless, globalisation is reaching its limits. The global trend towards ‘local for local’ is calling previous value-added chains into question and increasing the pressure on productivity in procurement, production and logistics at all locations around the world – for us and our customers. Online business is becoming increasingly important. With regard to supply chains, there were no significant changes at Festo in the reporting year. Nevertheless, we are increasingly trying to procure raw materials in the countries where production takes place.  GRI 102-10, GRI 102-48 Acquisitions No acquisitions were made in 2021.  GRI 102-10 10 11 Festo SE & Co. KG Sustainability Report 2021 Festo SE & Co. KG Sustainability Report 2021