Annual Report 2009

Annual Report 2009

Sheet Metal Processing SystemsBystronic: Solutions for the processing of sheet metal and other sheet materials

Sporting GoodsMammut Sports Group: Mountaineering, climbing and winter sports equipment

Foam MaterialsFoamPartner: Foam products for industry and comfort applications

Automation Systemsixmation: Systems for automation of assembly and testing

Glass Processing SystemsBystronic glass: Systems for processing flat glass

Real EstatePlazza Immobilien: Management of the Conzzeta Group’s portfolio of properties

Graphic CoatingsSchmid Rhyner: Print varnishes and laminating adhesives for the graphical industry

Conzzeta is an internationally active Swiss holding company with broadly diversified businesses. Its activities are in the areas of machinery and systems engineering, foam materials, sporting goods, graphic coatings and real estate. In the interests of cus-tomers, employees and shareholders, Conzzeta develops its businesses with a long-term perspective.

www.conzzeta.ch

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Conzzeta at a glance








Conzzeta is an internationally active Swiss holding company with broadly diversified businesses. Its activities are in the areas of machinery and systems engineering, foam materials, sporting goods, graphic coatings and real estate. In the interests of customers, employees and shareholders, Conzzeta develops its businesses with a longterm perspective.


2009 2008

Group

Net revenue CHF m 955.2 1 472.5

Operating result CHF m – 1.4 97.8

Group result CHF m 3.3 78.8

Free cash flow CHF m 141.8 – 30.8

Shareholders’ equity CHF m 978.3 1 000.9

Total assets CHF m 1 254.8 1 332.9

Shareholders’ equity as % of total assets % 78.0 75.1

Investments in property, plant and equipment and intangible assets CHF m 28.0 56.0

Number of employees at year-end Number 3 225 3 718

Net revenue per employee CHF thousand 269.0 411.2

Conzzeta AG

Net income for the year CHF m 36.5 139.6

Share capital CHF m 46.0 46.0

Total dividend CHF m 13.81 27.6

Number of shares on 12 / 31 bearer Number 406 000 406 000

registered Number 270 000 270 000

Gross dividend per share bearer (par CHF 100) CHF 30.001 60.00

registered (par CHF 20) CHF 6.001 12.00

Market price per share bearer high / low CHF 1 934 / 1 135 2 850 / 1 450

year-end CHF 1 800 1 540

Total capitalization on 12 / 31 CHF m 828 708

Group key figures per share

Group result bearer CHF 7.10 171.20

per share registered CHF 1.40 34.20

Cash flow from operating bearer CHF 304.20 141.70

activities per share registered CHF 60.80 28.30

Shareholders’ equity bearer CHF 2 126.70 2 175.80


1 As proposed by the Board of Directors

Consolidated net revenues fall by 35.1 % as a result –of the economic crisis. The machinery and systems engineering business units are hardest hit by the downturn.

Rapid adjustments are made to production capacity –in response to the weaker market environment. The number of employees fell by 13.3 % compared with the end of 2008.

The steps taken to secure the Group’s liquidity are –successful.

The high degree of self-financing and the diversifica- –

tion of the Group’s businesses prove their worth. The Sporting Goods and Real Estate business units contrib-ute to stabilizing the Group.

The Group maintains its geographic market coverage –and continues to invest in innovation and developing its presence in growth markets.

The consolidated operating result shows a small loss. –It contains non-recurring costs for capacity adjust-ments.

The Group result is just on the positive side, owing –to the extraordinary result.

The annual report is published in German and English.

The German version prevails.

Changes in personnel were up-to-date at the editorial deadline of March 18, 2010.

Key figures

Key facts 2009 Publication details

Publisher Conzzeta AG, Zurich

Concept and design Prime, Zurich

Photography Jolanda Flubacher Derungs, Sebastian Derungs, Daniel Gerber, et al.

Translation Peter Thomas Hill, Stäfa ZH

Printing Staffel Druck AG, Zurich

Publishing System Multimedia Solutions AG, Zurich

Net revenue (in CHF m)

2005

2006

2007

2008

2009

1 15

3.4

1 27

3.6

1 50

7.0

1 47

2.5

955.

2

1 500

1 750

2 000

1 250

1 000

750

500

250

0

2005

2006

2007

2008

2009

EBIT and Group result (in CHF m)

Ordinary result Extraordinary result

Operating result (EBIT)

150

175

125

100

75

50

25

0

– 25

Free cash flow (in CHF m)

29.7

70.1

195.

9

– 30

.8

141.

8

250

300

200

150

100

50

0

– 50

2005

2006

2007

2008

2009

Investments in property, plant and equipment and intangible assets (in CHF m)

28.5

31.8

49.0

56.0

28.0

60

70

50

40

30

20

10

0

2005

2006

2007

2008

2009 Se

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2009 2008

Group











Conzzeta AG






























Key figures









2005

2006

2007

2008

2009

1 15

3.4

1 27

3.6

1 50

7.0

1 47

2.5

955.

21 500

1 750

2 000

1 250

1 000

750

500

250

0

2005

2006

2007

2008

2009




150

175

125

100

75

50

25

0

– 25


29.7

70.1

195.

9

– 30

.8

141.

8

250

300

200

150

100

50

0

– 50

2005

2006

2007

2008

2009


28.5

31.8

49.0

56.0

28.0

60

70

50

40

30

20

10

0

2005

2006

2007

2008

2009 Se

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6 Foreword

9 Business overview10 Board of Directors11 Group Executive Board and Corporate Staff12 Overview of the business year 200918 Interview with the Group CEO20 Business units

27 Corporate governance

39 Financial report

81 Further information82 Employee pension funds in Switzerland84 Five-year summary86 Information and calendar for investors

Table of contents

Jacob Schmidheiny, Chairman of the Board of Directors,and Robert Suter, Group Chief Executive Officer (from right to left)

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Conzzeta – Annual report 2009

6

Foreword

make a measured response to the crisis. As a result, the Board of Directors considers it appropriate to propose halving the previous dividend, despite the fact that the retained earnings and liquidity position would permit the payout of a higher dividend.

The outlook in the capital goods sector, which con-tributes a good half of our Group revenues, is still very difficult to gauge. Although there was a slight recovery towards the end of 2009, orders were still about 40 % below the level of two years ago. We therefore expect another difficult year, with a succession of upswings and setbacks. Overall, however, we expect a perceptible improvement in the situation, which, together with the efficiency measures adopted, should bring us back into the black.

Difficult situations often result in everyone pulling together – which is just what happened at Conzzeta in the past year. It was impressive to see the understanding and courage with which serious problems were tackled, and how morale was maintained despite the strained situation. This is the best possible basis for measuring up to whatever challenges the future holds, and we wish to thank everyone for showing such a positive spirit.

Jacob SchmidheinyChairman of the Board of Directors

Robert SuterGroup Chief Executive Officer

Ladies and Gentlemen

This report covers the most difficult business year in decades. The Group Executive Board, under its new lead-ership, and the whole of management faced great chal-lenges. For many employees, the situation was a strain, and in objective terms the financial result is poor. The sober figures give an impression of just how difficult a period it was: Group revenue fell by 35 %, while the order intake in machinery and systems engineering slumped by almost a half, and the operating result shows a small loss. The Group result was just on the positive side, boosted by extraordinary income from the sale of properties.

Following the massive slump in orders since autumn 2008, the focus of the Board of Directors and manage-ment was less on optimizing profits and more on long-term maintenance of competitiveness. Our goal remains to emerge from the crisis stronger. We therefore decided to continue developing products and building our market presence, while on the operational level we have taken steps to adjust costs only where this was unavoidable. Even so, the adjustments made have had far-reaching consequences for the business units and employees con-cerned. The restructuring charges totaled CHF 22 million. The headcount across the Group showed a fall of 13 % over the year.

It would be one-sided to speak only of the difficul-ties in this annual report and to ignore all the work that has gone into developing our businesses. The Sporting Goods business unit continued to produce gratifying results, recording another increase in sales. Less visible are the many measures taken to secure competitiveness in the years ahead. Our machinery and systems engineer-ing businesses succeeded in developing cost-effective systems in record time and responded to the new market requirements with innovative products and services.

In addition, current assets were successfully adjusted in line with the lower volume of business, resulting in a cash flow from operating activities of CHF 140 million.

The slump during the previous year provided a reminder of the importance of a sound financing policy. Thanks to our excellent equity ratio, we were able to

“Our goal remains to emerge from the crisis stronger.”


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Foreword


8

Group10 Board of Directors11 Group Executive Board and Corporate Staff12 Overview of the business year 200918 Interview with the Group CEO

Business units20 Sheet Metal Processing Systems21 Glass Processing Systems22 Automation Systems23 Foam Materials24 Sporting Goods25 Graphic Coatings26 Real Estate

Business overview

Philip Mosimann, Member of the Board since 2007

Robert F. Spoerry, Member of the Board since 1996

Werner Dubach, Member of the Board since 1993

Jacob Schmidheiny, Chairman since 1977

Thomas W. Bechtler, Member of the Board since 1987

Matthias Auer, Member of the Board since 1996

All Board members are elected until the 2011 Ordinary General Meeting.

Board of Directors

Names and functions from left to right as in the listing below.

> For detailed information on the Board of Directors, see page 30 et seq.


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Business overview / Group

Carlo Menotti, Head of Corporate Services and Secretary of the Board of Directors since 2008

Ferdi Töngi, Head of the Sheet Metal Processing Systems business unit since 2002

Kaspar W. Kelterborn, Group Chief Financial Officer since 2006

Robert Suter, Group Chief Executive Officer since April 2009

Richard Jakob, Head of the Glass Processing Systems business unit since 2007

Barbara Senn, General Counsel since February 2010

Rolf G. Schmid, Head of the Sporting Goods business unit since 2004

Serge Entleitner, Head of the Graphic Coatings business unit since 2009

Ralph Siegle, Head of the Real Estate business unit since 2003

Bart J. ten Brink, Head of the Foam Materials business unit since October 2009

Martin Pfister, Head of the Automation Systems business unit since 2005

Group Executive Board and Corporate Staff

Names and functions from left to right as in the listing below.

> For detailed information on the Group Executive Board, see page 33 et seq.


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The Conzzeta Group was strongly affected by the eco-nomic crisis in the 2009 business year. The Sporting Goods business unit alone was able to continue on its growth path. The machinery and systems engineering businesses were the first to feel the impact of the abrupt downturn in the world economy in autumn 2008. It was not long before the Foam Materials and Graphic Coatings business units also faced declining orders. Despite the still healthy state of order books from the previous year, the machinery and systems engineering business units had to introduce short-time working in early 2009. The slump in orders was at times as much as 60 % and recov-ery was slow. Given the downturn in the economy and the lower volume of orders expected, the Group decided

The Conzzeta Group experiences one of the most difficult years ever and adjusts capacities in line with the market environment. Competitiveness is secured.

Net revenue by business unit2009 2008 Change

CHF m CHF m in %

Sheet Metal Processing Systems 356.1 745.1 – 52.2

Glass Processing Systems 145.6 244.6 – 40.5

Automation Systems 56.1 73.6 – 23.7

Foam Materials 116.8 146.3 – 20.1

Sporting Goods 215.3 192.6 11.8

Graphic Coatings 43.2 47.5 – 9.2

Real Estate and miscellaneous revenue 22.1 22.8 – 3.1

Total 955.2 1 472.5 – 35.1

to adjust its capacities in response to the market envi-ronment. This resulted in job losses in the Sheet Metal Processing Systems, Glass Processing Systems, Auto-mation Systems and Foam Materials business units. The Group’s solid financial basis enabled it to make a meas-ured response to the dramatic slump in the markets, adjusting capacities only where this was unavoidable. In order to secure our future market position, we made sure that our geographic market coverage and innovation projects were maintained in all business units. In addition, we further strengthened our presence in growth markets. At the end of the second third of 2009, demand stabi-lized, though still at a very low level.

Overview of the business year


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Development of Group revenues

In the 2009 business year, the Group recorded consoli-dated net revenues of CHF 955.2 million, representing a decline of 35.1 % over the previous year (CHF 1 472.5 million). The fall in revenues contains negative currency translation effects of 2.4 %, as well as minor effects due to changes in the scope of consolidation. In organic terms, the decline was 32.6 %.

The Sporting Goods business unit achieved a grat-ifying increase in revenues, generating sales growth of 11.8 %. All other businesses reported declining revenues. The three business units operating in the machinery and systems engineering sector were hardest hit by the crisis, with sales down between 23.7 % and 52.2 %. As a result, there was a shift in the share of the various business units in consolidated net revenues. The share of the three machinery and systems engineering units was 58.5 % of overall revenues (previous year: 72.2 %). Sporting Goods increased to 22.5 % (previous year: 13.1 %). In terms of geographic markets, Switzerland and Asia / Pacific held their ground best, with revenues declining by 14.9 % and 16.7 % respectively. The other market regions reported slumps of between 31.9 % and 57.5 %. Worst affected by the crisis were the markets of Eastern Europe and North and South America.

Net revenue by geographical area2009 2008 Change

CHF m CHF m in %

Switzerland 156.0 183.5 – 14.9

Euro area 386.3 567.1 – 31.9

Rest of Europe 130.7 307.3 – 57.5

Total Europe 673.0 1 057.9 – 36.4

North and South America 119.4 214.9 – 44.4

Asia and Pacific 157.3 188.8 – 16.7

Africa 5.5 10.9 – 49.5

Total 955.2 1 472.5 – 35.1

Business units

Sheet Metal Processing SystemsThe Sheet Metal Processing Systems business unit (Bystronic) had to cope with a 52.2 % slump in sales, which came in at CHF 356.1 million (previous year: CHF 745.1 million).

Although the 2009 business year began with well-filled order books, short-time working had to be brought in from February onwards.

The slump affected the laser and waterjet cutting systems as well as pressbrakes. Demand fell steeply in markets such as Scandinavia, as well as Southern and Eastern Europe. The fall-off was less marked in Central Europe and Great Britain. In Asia, China showed an up-ward trend, returning to growth.

Despite the difficult business environment, Bystronic maintained, and in some cases strengthened, its market presence. The sales and service network, with dedicated companies in over 20 countries, was further developed through the opening of a subsidiary in Russia. In Germany and Korea, the sales and services companies moved into their own newly built complexes. The past year also saw development of the business with used machinery. Bystronic systems are overhauled by specially trained personnel at the subsidiary in Romania and sold on through the Bystronic sales network.


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There were notable achievements on the develop-ment side, as well. Bystronic introduced the BySprint Pro 3015 laser cutting system, which offers impressive top-performance cutting speeds on thin sheets. Another highlight was the launch of the ByJet Classic 3015 water-jet cutting system, after a development lead time of only six months. Bystronic aims to conquer new markets with the ByJet Classic 3015, thanks to an attractive purchase price and comparatively low running costs.

Glass Processing SystemsThe Glass Processing Systems business unit (Bystronic glass) generated sales of CHF 145.6 million (previous year: CHF 244.6 million) in the reporting year, which represents a decline of 40.5 %. The global recession brought a slump in demand for glass and glass-processing machinery. Investment in new systems was very cautious. With systems for glass processing operating on a reduced schedule at many customers, the service and spare-parts business also declined. Bystronic glass had to deal with falling demand in all product groups and market regions. Worst-affected was the machinery for automotive ap -plications, but the situation in the architectural glass segment was also difficult. The tense market situation increased the competitive pressure on all suppliers. In addition, many customers were confronted with financing problems. In regional terms, the markets hardest hit by the crisis were Great Britain and the USA.

However, the reporting year also produced some positive results. In the Middle East, Bystronic glass won further major orders for turnkey manufacturing installa-tions. The first automated production line for Sashlite PVC windows was launched in the USA, offering window manufacturers significant cost and quality advantages. The production site in China, which was started up in 2008, made pleasing progress. A new machine for the manufacture of insulating glass, using TPS® technology, was presented at the leading Asian glass trade show “China Glass”.

Automation SystemsThe Automation Systems business unit (ixmation) closed the reporting year with sales of CHF 56.1 million (pre-vious year: CHF 73.6 million). Almost half the 23.7 % decline in sales was due to a divestment. ixmation is concentrating its activities in Switzerland on sales and servicing of systems for automation of assembly lines and testing, based at a new site in Burgdorf. The business with production automation systems at the Pieterlen site was sold in a management buyout.

In a demanding market environment, the ixmation companies in the USA and Asia succeeded in gaining high-profile new customers. As a result, the strategic business segments of medical technology and alternative energies increased their share of overall revenues. The reporting year again saw numerous projects for inter-national customers, involving cross-border collaboration across several ixmation sites.

The uncertain economic situation also left its mark on the ixmation businesses, with customers very cau-tious about committing to investments, often postponing projects. The business in Malaysia received a welcome boost from major contracts for the electronics industry in 2009. Construction started on a new production and office building in Penang.

Foam MaterialsThe Foam Materials business unit (FoamPartner) gen-erated sales of CHF 116.8 million in 2009, a decline of 20.1 % compared with the previous year (CHF 146.3 mil-lion).

Sales volumes were down in the technical foams (industry, packaging and automotive) and comfort (mat-tress and pillow cores) business segments. Customers generally kept inventories at a low level owing to the economic crisis. The crisis had a greater impact on the technical foams, specifically for automotive applications, than on the consumer-oriented comfort segment. On the whole, FoamPartner was able to maintain market share. As a result of the fall in demand overall, there was a tangible increase in competitive pressure in the foam materials market.

FoamPartner achieved an important intermediate goal in foam materials development. Initial customer tests with the new sealant foam RegiSealAqua were a great success. In the comfort segment, the novel AventO2 mat-tress core material, which is enriched with lavender, was successfully launched. The plant in Changzhou (China), which was opened in 2008, succeeded in significantly increasing output in the reporting year. As a result, local production of important foam types for the Asian growth market is possible. That means FoamPartner is now rep-resented on three continents (Europe, North America and Asia).

Sporting GoodsThe Sporting Goods business unit (Mammut Sports Group) increased sales in the reporting year by 11.8 % to CHF 215.3 million (previous year: CHF 192.6 million). This result is very pleasing, even in the context of a


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robust outdoor market. Two product groups made impor-tant contributions to the revenue growth. In the clothing segment, the snow and alpine / mountain collections were in particular demand; while in technical products, the avalanche rescue device Barryvox and the headlamp made good progress. The new Mammut shoe collection, with Raichle technology, was well received by customers. The Toko brand was unable to match 2008 sales levels, due particularly to the clothing segment.

There was vigorous sales growth in the markets of Germany, Switzerland, Italy and Great Britain, as well as in important new markets such as Japan and Korea, where the business unit targeted investments at an expansion of the sales network. Mammut also succeeded in expand-ing in the USA, against the market trend. The develop-ment of sales in Eastern Europe failed to meet expecta-tions, above all because of the adverse exchange rate situation. In 2009, Mammut further improved logistics and delivery performance, to the benefit of specialist retailers and end-customers. The newly opened Mammut Stores made pleasing progress, as did numerous shops-in-shop, run in collaboration with specialist retailers.

Graphic CoatingsThe Graphic Coatings business unit (Schmid Rhyner) reported sales of CHF 43.2 million (previous year: CHF 47.5 million), representing a fall of 9.2 %.

As a result of the economic crisis, demand in the printing industry (commercial and packaging printing) declined. Despite the increase in competitive pressure, Schmid Rhyner succeeded in maintaining its market posi-tion, and increasing both market share and sales in some sales markets. The sales company in the USA, established in 2008, also achieved advances in the market.

In the reporting year, a number of new product lines were introduced. For packaging printing, a special line was developed for food, beverages and tobacco packag-ing. The introduction of an extra-matt product line for luxury packaging also met with great success. The labo-ratory and application technology teams were strength-ened.

Real EstateThe Real Estate business unit (Plazza Immobilien) gener-ated revenues of CHF 21.4 million (previous year: CHF 22.0 million) in 2009. The decrease of 2.5 % is largely due to lower rental incomes, following the sale of a prop-erty. In the reporting year, two properties not essential to business operations were sold, bringing an extraor-dinary result of CHF 11.0 million. The Swiss residential

property market proved largely crisis-proof in 2009. Ac-cordingly, rental income remained at a constant level. As expected, the situation in the commercial property mar-ket deteriorated. In the case of terminations, it is gen-erally difficult to relet properties without interruption. There was also an increase in the number of tenants defaulting on payments, although the impact on Plazza Immobilien was only minor. For a former industrial site in Wallisellen, Plazza Immobilien launched a planning project for a high-end development with a strong resi-dential element. A modern development with around 190 apartments is planned.

Earnings situation

In the reporting year, the Conzzeta Group recorded an operating result (EBIT) of CHF – 1.4 million (previous year: CHF 97.8 million). The negative operating result is due primarily to the steep fall in demand due to the global economic crisis, most notably affecting business units in the machinery and systems engineering sector. The operating result contains non-recurring costs of CHF 22.3 million for capacity adjustments to take account of the changed market environment. In the reporting year, personnel costs and other operating expenses were reduced by short-time working and further cost-saving measures.

The Group result was just on the positive side at CHF 3.3 million (previous year: CHF 78.8 million). This figure contains an extraordinary result of CHF 11.0 million from the divestment of properties not essential to business operations.

Investments and acquisitions

The investments in property, plant and equipment and intangible assets were adjusted in line with economic developments, falling by half to CHF 28.0 million (pre-vious year: CHF 56.0 million). The biggest investments during the reporting year were in Switzerland and Ger-many. The Sheet Metal Processing Systems business unit completed construction of the new assembly and ware-house facility in Gotha (Germany), and a new building for the sales company was realized in Heimsheim (Ger-many). In Niederönz (Switzerland), a parcel of land for a planned assembly building was purchased. The Glass Processing Systems business unit completed the exten-sion of its production plant in Gunzenhausen (Germany)


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and invested in the ERP system. The Sporting Goods business unit also invested in its ERP system. At the Seon (Switzerland) location, land was purchased for a planned storage facility. There were no acquisitions in the reporting year.

Free cash flow, financing and liquidity

In 2009, the Conzzeta Group recorded a cash flow from operating and investment activities (free cash flow) of CHF 141.8 million (previous year: CHF – 30.8 million). Two factors are mainly responsible for the positive free cash flow. In the first place, it was possible to reduce net working capital, particularly through a decrease in accounts receivable and inventories. Apart from system-atic management of net working capital, this effect is due to the decrease in the volume of business. Secondly, the investment activity in fixed assets was cut by about a half and adapted to the business environment.

The positive cash flow led to an increase in cash, cash equivalents and fixed-interest securities, which reached CHF 456.0 million (previous year: CHF 347.3 million). As a result of the reduction in the balance sheet total, the

equity ratio increased to 78.0 % (previous year: 75.1 %). Even in a difficult economic environment, the Group re-mains on a very solid financial footing.

Dividends

Continuing the flexible dividend policy, the Board of Directors proposes to adjust the dividend to the changed economic situation. It is proposing a dividend of CHF 30.00 (60.00) per bearer share and CHF 6.00 (12.00) per registered share.

Employees

At the end of 2009, the worldwide workforce of the Conzzeta Group stood at 3 225 employees (previous year: 3 718). In view of the negative economic development, jobs had to be cut in the Sheet Metal Processing Systems, Glass Processing Systems and Automation Systems and Foam Materials business units.

Staff changes

At the beginning of April 2009, Robert Suter took over as Group CEO from Heinrich M. Lanz, who stood down after seven years in office. Foam Materials also saw a change at the top: in November 2009, Bart J. ten Brink took over as head of the business unit from Heinz Dü rrenberger, who retired at the end of 2009 after 18 years’ service with the Group. The Board of Directors and Group Executive Board would like to thank Heinrich M. Lanz and Heinz Dü rrenberger for their great commitment and wishes them all the best for the future.

In February 2010, Barbara Senn joined the Group. She takes over as General Counsel from Thomas Emch, who is retiring at the end of June 2010.

Trends and outlook

It is still difficult to make predictions about business developments in 2010. There are increasing signs of a slow recovery in the world economy, raising hopes of an improvement in the market environment of the Conzzeta Group businesses. In the capital goods sector, there are emerging signs of a slow upturn, but the pick-up in incoming orders is still uneven. Furthermore, the machin-


16


ery and systems engineering businesses are beginning the 2010 business year with their order books at a much lower level than in the previous year. It can be expected that 2010 will be another challenging year, with a suc-cession of advances and setbacks. As a result, the ma-chinery and systems engineering sector will not return to its previous position of strength. In the consumer goods sector, we may have to live with the fact that it will no longer be possible to achieve the growth rates seen in previous years.

The Group’s goal for 2010 is to get back into the profit zone. The sound financial structure, as well as the capacity adjustments made in 2009 in response to the changing market situation, will contribute to achieving that goal. In the current year, the Group will focus on positioning the business units to take full advantage of the next upswing, with the goal of emerging from the crisis stronger.


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Conzzeta took appropriate action in 2009, focusing on capacity adjustments, innovation and strength-ening the Group’s presence in Asia. The personal assessment of the new Group CEO, Robert Suter, is a positive one – despite an unsatisfactory financial result.

Robert Suter, you took over the leadership of Conzzeta in a difficult economic situation. What is your personal assessment of the first year?Robert Suter: In operational terms, the 2009 business year was one of the most difficult ever. The financial result is unsatisfactory. However, in this challenging sit-uation, we were able to respond with rapid and appro-priate action. Seen from today’s economic perspective, we are well prepared for what lies ahead. My personal assessment is a very positive one. I am well supported by those around me and feel that I can make a valid contri-bution to Conzzeta, taking advantage of my international experience in different industries. It is an exciting oppor-tunity to use these abilities to good effect at Conzzeta.

What has given you greatest satisfaction?Without doubt, the strong identification of employees with the companies and the possibility, even in difficult situations, of conducting an open dialogue. I always had the feeling that our people stand together and pull their weight. This commitment, in such a difficult year, is par-ticularly valuable and very gratifying to see.

What has Conzzeta done to maintain its competitive-ness?Overall, there were three packages of measures which took effect in 2009. First of all, we intensified our in -novation programs, which produced tangible results. For example, Bystronic’s launch of a new waterjet cutting machine, after only six months in development. Secondly, we adjusted our cost base to the volume of business, above all in machinery and systems engineering, and took

additional measures, such as reducing manufacturing costs. On the basis of careful market and demand anal-ysis, we also managed to make significant reductions in production costs on certain machines. The third set of measures involved strengthening Conzzeta’s presence in the growth markets. This has enabled us to achieve above-average success rates in key Asian markets.

A long perspective and solidity are core values for Conzzeta. What does that mean in real terms?To have a long-term perspective, as Conzzeta does, is doubly valuable in a difficult market environment. Thanks to our solid capital base, we are in a position to act with a long-term perspective, despite the turbulent environ-ment. The reliability and stability that grow out of that are of great benefit to our customers, business partners and suppliers. It also enables us to take advantage of opportunities.

Where do you see the greatest growth potential for the Group?The focus of our business units’ activities is currently on Europe. But important growth markets are in regions such as Asia. Companies should site their production where the growth markets are. That’s why almost all our businesses have established a foothold in Asia in the form of pro-duction facilities or even through the placement of top management. The growth potential for the Group lies in China and Southeast Asia, and also, increasingly, in other emerging markets. Our European parent companies will also benefit from the growth of these new markets.

“Rapid and appropriate action in a difficult business year”


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In which areas is Conzzeta particularly innovative?In many areas! Mammut is very active and innovative at the moment. It won the coveted marketing prize of the Swiss Marketing Association (GfM). Mammut has also demonstrated its commitment to corporate social respon-sibility through its membership of the Fair Wear Founda-tion, a non-profit organization which campaigns for good working conditions in the clothing industry. Other inter-esting innovations have come from the likes of Bystronic glass, with a new production line for bonded windows with PVC frames, making it possible to achieve a very high insulation efficiency on buildings, at low cost. Foam-Partner has developed a trend-setting core material for mattresses with properties that enhance well-being. And Schmid Rhyner has significantly expanded its UV print varnish range for food packaging.

How do you explain to an outsider the purpose and objec-tives of Conzzeta’s portfolio of equity holdings?The past year has shown the value of a broadly diversified portfolio, with holdings in industry, consumer-oriented goods and real estate. While the volume of demand in

machinery and systems engineering plummeted by up to a half, the Real Estate and Sporting Goods businesses remained stable or actually grew, helping to shore up results.

What are your main goals for the current business year?The crisis is not over yet. So it’s important that we con-tinue to have an accurate assessment of market trends and to respond quickly, professionally and with flair.

Could you sum up the outlook for the current business year?We are working on the assumption that most business units will not see a tangible recovery before 2011. We expect a modest pick-up in the markets during 2010; but we will continue to face challenges. Whatever the future holds, we will do everything in our power to ensure that Conzzeta emerges from the crisis stronger and in pole position to take advantage of the next upswing.

“Our reliability and stability are of great benefit to customers, partners and suppliers. ”


19


Important events in 2009

Bystronic gets back on its growth path in China, dem- –onstrating the value of a long-standing commitment and local presence. An Asia / Pacific division is created to underline the importance of Asian markets for the business unit.

Under the motto “simply economical”, Bystronic show- –cases impressive new products in the areas of water-jet cutting, bending and automation at leading trade fairs in Germany, China and the USA.

2007

2008

2009

Net revenue in CHF m

793.5

745.1

356.1

Investments in property, plant and equipment and intangible assets in CHF m

14.0

26.9

11.7

Number of employees

1 524

1 627

1 389

Bystronic is a world-leading supplier of solutions for the processing of sheet metal and other sheet materials.

The new production building at the Gotha (Germany) –location greatly increases the productivity of press-brake manufacture.

Sheet Metal Processing Systems − Bystronic

Overview Bystronic– Head: Ferdi Töngi– Presence: worldwide, over 20 sales and service

companies; 3 development and production sites in Switzerland, Germany and China

www.bystronic.com

20

Conzzeta – Annual report 2009Business overview / Business units


With the growing importance of energy efficiency –around the world, ordinary glazing is increasingly being replaced by insulating glass. Following the launch of the world’s first fully automated assembly line for bonded PVC windows in Atlanta, Bystronic glass can offer window manufacturers tangible advantages: higher output, better quality and lower manufacturing costs.

The production center in Shanghai, opened in 2008, –looks back on a successful first year, delivering the first compact insulating-glass production line to be made entirely in China.

Bystronic glass offers high-quality system solutions for the processing of architectural and automotive glass.

2007

2008

2009


237.3

244.6

145.6


7.5

11.0

4.4

Number of employees

727

801

668

Bystronic glass puts 45 years of experience in glass –processing to work in the solar industry: the first sys-tems for preprocessing in the front- and back-end segment are successfully realized.

Glass Processing Systems – Bystronic glass

Overview Bystronic glass– Head: Richard Jakob– Presence: worldwide sales and service network,

with 6 subsidiaries and several representative offices; 3 technology centers (development and production) in Germany and Switzerland; 1 production site in China

www.bystronic-glass.com

21



ixmation focuses in Switzerland on automation of –assembly lines and testing systems. The production automation segment continues operations in a man-agement buyout as an independent company outside the Group.

In Malaysia, ixmation has developed a system for the –assembly of electronic components, with an innovative machine design which cuts down by as much as 50 % the costly floor space required for production.

The second ixmation location in China, Tianjing, is –extended by the addition of a production plant.

ixmation is an international supplier of systems for the automation of assembly lines and quality assurance for mass products.

2007

2008

2009


76.7

73.6

56.1


0.6

1.0

0.9

Number of employees

357

399

305

ixmation gains major new customers in promising –growth sectors such as medical technology and alter-native energy.

Automation Systems – ixmation

Overview ixmation– Head: Martin Pfister– Presence: 5 locations in China, Malaysia,

the USA and Switzerlandwww.ixmation.com

22



FoamPartner launches the AventO – 2 mattress core material, enriched with lavender, positioning itself as an innovative specialist in foam materials for the mattress market.

The plant opened in Changzhou (China) in 2008 in- –creases output. Local foam production and processing enable FoamPartner to target expansion in the Asian growth market.

At the end of the year, Bart J. ten Brink takes over as –head of FoamPartner. He has long years of interna-tional experience in the foam materials industry.

FoamPartner manufactures high-quality foam materials and offers customized solutions for the industry and comfort business segments.

2007

2008

2009


156.5

146.3

116.8


19.9

9.6

2.3

Number of employees

470

495

444

The foam-processing specialist Kureta is successfully –integrated, following acquisition at the end of 2008.

Foam Materials – FoamPartner

Overview FoamPartner– Head: Bart J. ten Brink– Presence: 9 production, processing and sales

locations in Europe, Asia and the USA; world-wide marketing through a partner sales network

www.foampartner.com

23



Mammut demonstrates its strong commitment to cor- –porate social responsibility by joining the Fair Wear Foundation, a non-profit organization that campaigns for good working conditions in emerging economies.

Further Mammut Stores are opened, in collaboration –with specialist retailers, in Switzerland (Zurich, Lucerne and Bern), Germany (Berlin and Regensburg) and Japan (Sapporo, Kobe and Sendai).

The company presents a completely revamped collec- –tion of backpacks to the retail trade. The new models, in the alpine, backpacking, hiking and climbing prod-uct groups, are in stores from summer 2010.

Mammut Sports Group develops, manufactures and markets innovative mountaineering, climbing and winter sports equipment.

2007

2008

2009


177.1

192.6

215.3


6.1

5.4

4.5

Number of employees

308

331

348

Mammut wins the renowned marketing prize of the –Swiss Marketing Association (GfM).

Sporting Goods – Mammut Sports Group

Overview Mammut Sports Group– Head: Rolf G. Schmid– Presence: worldwide sales network in over 80

countries; head offices, product devel op ment and rope manufacture in Seon (Switz erland); numerous production partners in Europe and Asia

www.mammut.ch

24



In record time, Schmid Rhyner develops a special prod- –uct range for printing packaging used for food, bever-ages and tobacco products.

The laboratory and application technology teams are –strengthened, enhancing the company’s expertise in innovation and consultancy.

The introduction of new extra-matt UV varnishes for –luxury packaging is a great success.

Schmid Rhyner develops and manufactures environmentally friendly print varnishes and laminating adhesives for the graphical industry.

2007

2008

2009


44.1

47.5

43.2


0.8

1.0

1.1

Number of employees

33

39

45

Advances are made in the drive to develop markets in –the USA, the Middle East and Asia.

Graphic Coatings – Schmid Rhyner

Overview Schmid Rhyner– Head: Serge Entleitner– Presence: worldwide sales network in over

90 countries; 1 production site in Adliswil (Switzerland); 1 subsidiary in New Jersey (USA)

www.schmid-rhyner.ch

25



The planning process for an industrial site in Wallisel- –len is launched. The aim is to realize a modern develop-ment on the site, with around 190 apartments.

Plazza Immobilien succeeds in selling a major property –in Döttingen and a parcel of land in Rafz.

Plazza Immobilien manages the Conzzeta Group’s portfolio of properties.

2007

2008

2009


21.0

22.0

21.4


0.1

1.0

3.0

Number of employees

11

11

11

Real Estate – Plazza Immobilien

Overview Plazza Immobilien– Head: Ralph Siegle– Presence: properties throughout

Switzerlandwww.plazza-immobilien.ch

26


28 Group structure and shareholders29 Capital structure30 Board of Directors33 Group Executive Board35 Content and method of determining

compensation35 Shareholders’ participation rights36 Change of control and defensive measures36 Auditors37 Information policy

Corporate governance

1 Group structure and shareholders

Group structureFinancially, the Group is controlled by Conzzeta AG. It is organized in seven business units: Sheet Metal Processing Systems, Glass Processing Systems, Automation Systems, Foam Materials, Sporting Goods, Graphic Coatings and Real Estate. At Group level, Corporate Staff supports the activities of the holding company and the operational units. Conzzeta AG has direct or indirect equity holdings in the companies listed on page 66 et seq. Conzzeta AG, which is headquartered in Zurich, is the only company that is listed. The Conzzeta bearer share (Swiss security number 265 798, ISIN CH0002657986) is listed on the SIX Swiss Exchange. The market capitalization (bearer shares) as of 12 / 31 / 2009, was CHF 731 million; the total capitalization (registered and bearer shares) amounts to CHF 828 million.

The Conzzeta Group attaches importance to a transparent management structure and open dia-logue. The Group is guided by the principles of the Swiss Code of Best Practice for Corporate Gov-ernance, which it implements in accordance with its size and structure. It always acts in compliance with legal requirements and urges its employees to do likewise.

This corporate governance report summarizes all the available information relating to Conzzeta AG and reports it in accordance with the SIX Swiss Exchange directive. Any points not applicable to Conzzeta or which correspond to legal norms are not listed. In certain selected cases, so-called negative declarations are given.

Significant shareholders

Percentage of shares represented

Percentage of nominal capital

in % in %

TEGULA AG, Zurich 81.8 74.2

No disclosures were received in the reporting year.

Corporate Governance


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2 Capital structure

Capital and sharesThe share capital is fully paid-up. There was no approved or conditional capital as of 12 / 31 / 2009.

Number of bearer shares par CHF 100

Number of registered shares par CHF 20 Total nominal capital

Number Number CHF

Share capital 406 000 270 000 46 000 000

Each share has a single vote at the Annual General Meeting of Shareholders. The dividend rights of the registered and bearer shares are proportional to the par value of the two share categories.

Changes in share capitalThe year-by-year changes in the capital structure are explained in the notes to the annual financial statement of Conzzeta AG in the relevant annual reports.

Share capital Reserves Retained earnings Total equity

CHF CHF CHF CHF

Share capital as of 12 / 31 / 2006 46 000 000 263 406 325 76 676 515 386 082 840

Change 2007 10 000 000 122 900 873 132 900 873


Change 2008 60 000 000 47 442 637 107 442 637


Change 2009 50 000 000 – 41 125 416 8 874 584



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3 Board of Directors

1 2 3

4 5 6

Guiding principleThe Board of Directors provides a personnel and orga-nizational framework for the company’s leadership to exercise its responsibilities. The Board of Directors assesses the progress made toward achieving targets as well as the financial results. In strategic decisions, it seeks

to strike a balance between opportunities and risks in the context of financial sustainability. It delegates the responsibility for management, with comprehensive pow-ers, to the Group Executive Board, enabling the execu-tives to strive proactively for business success.


30


Members of the Board of DirectorsJacob Schmidheiny1 – Lic. oec. publ. – born 1943 – Chairman of the Board of Directors – Member of theBoard of Directors since 1977 – In 1976, he became a member of the Executive Board of Zürcher Zie-geleien, today Conzzeta AG. From 1978 to 2001 he was President and Chief Executive Officer. The transition from construction materials group to the present-day industrial holding company took place under his leadership. – Jacob Schmidheiny has been Chairman of the Board of Directors of TEGULA AG, Zurich, since 1984.

Matthias Auer2 – Dr. iur. – born 1953 – Member of the Board of Directors since 1996 – He has prac-ticed as a lawyer and notary public in Glarus since 1981. He is a member of the Cantonal Council in Glarus and the Municipal Council in Netstal. – Matthias Auer is a member of the Board of Directors of TEGULA AG, Zurich.

Thomas W. Bechtler3 – Dr. iur., LL.M. – born 1949 – Member of the Board of Directors since 1987 – Since 1982 he has been CEO of Hesta AG, Zug. From 1975 to 1982, he held various managerial positions at Luwa AG. – Thomas W. Bechtler is Vice-President of the Board of Directors of Sika AG, Baar, and a member of the Board of Directors of Bucher Indus-tries, Niederweningen.

Werner Dubach4 – Dipl. Ing. Chem. ETH, MBA – born 1943 – Member of the Board of Directors since 1993 – Since the sale of the beverages and real estate segments of Eichhof Group in 2008, he has headed Datacolor AG, Lucerne (formerly Eichhof Holding AG) as Chairman of the Board. From 1998 to 2008, he was Chief Executive Officer and a member of the Board of Directors of Eichhof Hold-ing AG, Lucerne. In 1983 he became a member of the board of Brauerei Eichhof. Between 1970 and 1983, he held various managerial posts within the Eichhof Group. – Werner Dubach is a board member of a number of start-up enterprises.

Philip Mosimann5 – Dipl. Ing. ETH – born 1954 – Member of the Board of Directors since 2007 – He joined Bucher Industries AG, Niederwenigen, in 2001, becoming Chief Executive Officer in 2002. Between 1980 and 2001, Philip Mosimann held a number of managerial positions with the Sulzer Group, Winterthur, including Sulzer Innotec AG (1980 – 1992), as Head of Division at Sulzer Therm-tec (1992 – 1996) and as Head of Division at Sulzer Textil, Rüti (1997 – 2000).

Robert F. Spoerry6 – Dipl. Masch.-Ing. ETH, MBA – born 1955 – Member of the Board of Directors since 1996 – He is Chairman of the Board of Directors of Mettler-Toledo International Inc., Greifen-see, which he also led as CEO from 1993 to 2007. – Robert F. Spoerry is a member of the Board of Directors of Holcim Ltd, Jona, Sonova Holding AG, Stäfa, Geberit AG, Jona, and Schaffner Holding AG, Luterbach.

All members of the Board of Directors are Swiss nationals. No member is actively involved in the executive man-agement of the Conzzeta Group, nor has been in the last three years. Apart from the role of shareholder, no mem-ber has significant business relations with the Group.


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Election and term of officeIn accordance with the Articles of Incorporation, the Board of Directors comprises at least four and no more than eight members. It is elected for a term of three fiscal years. The next complete re-election is due to be held at the Ordinary General Meeting of Shareholders in 2011. The Board of Directors is customarily elected in its entirety.

Internal organizationThe Board of Directors acts as an integral body and does not appoint special committees. The Chairman is involved in and supervises the preparation of the bases for deci-sion of the Board of Directors and the implementation of its decisions. The substantive preparation and operational implementation of the Board’s decisions are the re -sponsibility of the Group Executive Board. This applies in matters of strategy, financing, personnel appointments and important individual transactions.

The Group Chief Executive Officer, the Group Chief Financial Officer, the General Counsel and the Secretary of the Board usually take part in Board meetings. In ad -dition, heads of business units, senior executives from Group companies, and, on occasions, external consultants are also called upon to take part in Board meetings, depending on the specific topic to be discussed. Annu-ally, the Board of Directors holds four or five ordinary half- to full-day sessions. Four such meetings were held in 2009.

Risk assessment: The company has methodical pro-cedures which serve the Board of Directors as a basis for its risk assessment of the business situation and risks. In addition to the financial reports and analyses (see “Infor-mation”), these include the internal control system as well as strategic and operative risk management.

CompetencesThe Board of Directors has delegated responsibility for management of the Group’s business to the Group Executive Board, in accordance with the powers set forth in the Articles of Incorporation.

The Group Executive Board and the managements of the individual business units have extensive competences in regard to the strategic and operational management of the units assigned to them. It is their task, through the careful development of human, material and organi-zational resources, to deliver a competitive performance in future-oriented industries as well as robust financial results. Decision-making competences are graded accord-ing to their significance and financial magnitude.

The Board of Directors has the following responsibili-ties:

determination of the corporate organization –appointment of the corporate agents –supervision of Group management and evaluation of –prospects and resultsdetermination of the Group’s strategic and financial –goals ratification of the main features of the business unit –strategiesdecisions on important investments, divestments, ac - –quisitions and cooperative ventures determination of the principles of accounting, financial –planning, internal auditing and reportingassessment of the risk situation of the Group, evaluat- –ing the opportunities and the sustainability in terms of human and financial resources

InformationThe Conzzeta Group has a well-developed planning and information system. It is built from the base up, becoming increasingly concentrated towards the top.

The Board of Directors is oriented verbally and in writing about the strategies, plans and results of all busi-ness units. The Board of Directors receives monthly writ-ten reports comprising the key figures and a commentary on important events. Every four months, the Board of Directors receives a detailed report with the complete financial statements of the business units and the Group, a preview and comprehensive management reports. On an annual basis, the Board of Directors is presented with the medium-term, annual and financial planning as a basis for its decisions on these matters. The Board of Directors also receives a report on the risk situation, the employee pension fund and the management letter of the auditors.

The Board of Directors meets in a rotating cycle for an in-depth review of key strategic questions at corporate and business unit level. At the invitation of the Board of Directors, the individual business units present their situation and plans. A special documentation is produced for important individual transactions and presented at Board meetings by those responsible.


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4 Group Executive Board

Robert Suter 1 – Dipl. Ing. ETH, MBA – born 1958 – Group Chief Executive Officer since April 2009 – Starting in 1995, Robert Suter worked for ABB in a number of management positions. Most recently, as a member of management in the Transformers business unit, with worldwide responsibility for the Small Power and Traction Transformers product group. Between 2000 and 2005, he was head of the High Voltage Products business unit and also served as head of ABB operations in Korea. From 1995 to 1999, Robert Suter was CEO at Micafil. Before 1995 he worked at Cellpack AG (as division head in Canada and Switzerland) and at Oerlikon Contraves AG as a development engineer in the aerospace field.

Bart J. ten Brink2 – Dipl. Ing. VAT Tilburg, Neth-erlands – born 1964 – Head of the Foam Materials business unit since November 2009 – From 1991, he served in various management and senior man-agement positions within the international foam manufacturing group Recticel N. V., for the last ten years as head of two strategic business units, composite foams and acoustical products, with worldwide responsibility. From 1995 to 1998, he was Technical Director and Industrial Manager for the Nordflex Group Scandinavia (joint venture of Recticel Int. and Shell Scandinavia). Between 1992 and 1995, he served as Plant Manager of Recticel Industry Buren. Bart J. ten Brink is a Dutch citizen.

1 2 3

4 5 6

7 8 9


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Serge Entleitner3 – Mag. rer. soc. oec. – born 1964 – Head of the Graphic Coatings business unit – He joined Schmid Rhyner AG as chief executive in 2005. Since 2009 an autonomous business unit of the Conzzeta Group, the company was previously man-aged as Other Industrial Activities. From 2000 to 2005, he was a member of divisional management of Sefar AG in Thal. As Assistant Vice-President, he was responsible for distribution, marketing and the branches in Europe, Latin America and Africa. Prior to that, he held various management positions in the textile machinery industry. Serge Entleitner is an Austrian citizen.

Richard Jakob4 – Dipl. El.-Ing. ETH – born 1950 – Head of the Glass Processing Systems business unit since 2007 – He served in various positions with-in the Schindler Group, most recently heading the corporate task force. From 2000 to 2005, he was Senior Vice-President in charge of the Eastern Europe market region and later Northern Europe. Before that, as a member of executive management of Schindler Switzerland, he was responsible for new installations and assembly, the home-market business at Schindler France as well as various market regions in Switzerland.

Kaspar W. Kelterborn5 – Lic. oec. HSG – born 1964 – Group Chief Financial Officer since 2006 – From 2003 until mid-2005, he was CFO and a member of Executive Board of Unaxis Group. From 1996 to 2002, he held various international senior mana-gement positions in the area of finance at Clariant Group; between 1992 and 1995, he worked for Sandoz International AG in Switzerland and abroad.

Martin Pfister6 – Engineer FH, BSc in economics, MBA – born 1966 – Head of the Automation Systems business unit since 2005 – He joined the Conzzeta Group in 2004 as CEO of the former Seckler AG. From 2002 to 2004, he was CEO of Feintool Auto-mation AG, Aarberg. Between 1996 and 2001, he served in various leading and management functions in the engineering industry.

Rolf G. Schmid7 – Lic. oec. HSG – born 1959 – Head of the Sporting Goods business unit – He joined the Conzzeta Group in 1996 as Head of the sports division of Arova Mammut AG. He took over as CEO of today’s Mammut Sports Group AG in 2000. Between 1985 and 1995, he held leading positions in the pharmaceutical industry as well as in the watch and tourist industries. Rolf G. Schmid is a member of the Executive Board of economie suisse.

Ralph Siegle8 – Fed. dipl. in real estate management –born 1959 – Head of the Real Estate business unit since 2003 – From 2002 to 2003, he was in charge of portfolio management at Mobimo AG, Zollikon. Between 1993 and 1998, he was a team leader at Livit Immobilien Management AG, Zurich, becoming head of property management and a member of management in 1999.

Ferdi Töngi9 – Engineer HTL, MBA – born 1951 – Head of the Sheet Metal Processing Systems busi-ness unit since 2002 – He joined the Conzzeta Group in 2000 as Head of the Machinery and Sys-tems Engineering business unit. From 1997 until 1999, he was Head of division Europe North and a member of management at AGIE Charmilles Group, Losone and Geneva. Between 1992 and 1996, he was a member of management at AGIE Group, Losone, with responsibility for marketing, sales and customer services. From 1974 to 1989, he held various management positions in the precision instrument and engineering industry.

With the exception of Serge Entleitner and Bart J. ten Brink, all members of the Group Executive Board are Swiss nationals.

The following members left the Group Executive Board in the reporting year:Heinrich M. Lanz, Group Chief Executive Officer from 2002 to March 2009.Heinz Dürrenberger, Head of the Foam Materials business unit from 1993 to November 2009.


34


5 Content and method of determining compensation

In accordance with the Articles of Incorporation, the members of the Board of Directors determine their own compensation on an annual basis, taking account of the personal contribution that each has made and the finan-cial situation of the company. The compensation received by the members of the Board of Directors is reported in the notes to the financial statements of Conzzeta AG.

The members of the Group Executive Board receive a salary comprising a fixed and a variable part. The vari-able part is between a quarter and a third of the gross compensation and is based on the achievement of the management targets agreed annually. The variable part (bonus) reflects the extent to which objectives have been achieved, is determined by fair consideration after the annual closing and is paid out in a single cash sum. A proposal regarding the compensation packages for the members of the Group Executive Board is submitted by the Group Chief Executive Officer to the Chairman of the Board of Directors for approval. The Chairman of the Board of Directors determines the compensation to be paid to the Group Chief Executive Officer and informs the full Board of Directors once a year about all compen-sation packages. No formalized calculation models are used to determine compensation packages, as appro-priate appraisal is considered to be a management re -sponsibility. The details of the individual compensation received by the members of the Group management are reported in the notes to the financial statements of Conzzeta AG. There are no share or option participation programs.

6 Shareholders’ participation rights

Statutory quora(Article 10 of the Articles of Incorporation)A resolution of the General Meeting of Shareholders which carries at least two-thirds of the represented votes and an absolute majority of the par value of the repre-sented votes is required for:1 – changes to the Articles of Incorporation2 – changes to the share capital3 – the limitation or annulment of subscription rights4 – the liquidation of the Company

Convocation of the General Meeting of Shareholders(Article 7 of the Articles of Incorporation)There is nothing in the rules which differs from applicable legal provisions. The invitation to Ordinary and Extraor-dinary General Meetings is issued by the Board of Direc-tors, or by the auditors as the case may be, no later than 20 days before the date of the meeting. The invitation, which sets out an agenda of matters for discussion, the proposals of the Board of Directors and – where applica-ble – of shareholders who have demanded the convoca-tion of the General Meeting or the tabling of an item on the agenda, is published in the Swiss Official Gazette of Commerce.

Agenda(Article 7 of the Articles of Incorporation)Shareholders who represent shares with a par value of at least CHF 1 million can demand the inclusion of an item on the agenda. The request must be submitted to the Company at least 40 days before the General Meeting of Shareholders.

Registrations in the share register(Article 4 of the Articles of Incorporation)From the date of invitation to a General Meeting of Shareholders up to the day after the General Meeting itself, no registrations will be accepted in the share reg-ister.


35


7 Change of control and defensive measures

Duty to make an offer (Article 5 of the Articles of Incorporation)Opting out: persons or companies acquiring shares in the company are not under obligation to make an offer in accordance with the Stock Exchanges and Securities Trading Act.

8 Auditors

Duration of the mandate and term of office of the auditor in chargeThe statutory auditors of Conzzeta AG since 1939 are KPMG AG in Zurich, or its legal predecessor. The auditor in charge, Herbert Bussmann, has held this position since 2003.

Auditing fees and additional feesIn the reporting year, the auditors responsible for the Group’s annual financial statements and some of the Group companies’ annual financial statements submitted accounts for the following fees:Auditing fees: CHF 374 500Additional fees: CHF 0

Supervisory and control instruments vis-à-vis the auditorsThe Chairman represents the Board of Directors vis-à-vis the statutory auditors. After hearing the auditors and the Group Chief Financial Officer, the Chairman determines the main points the Company wishes to be covered by the audit. He discusses the audit results with the auditors, along with the Group Chief Executive Officer and the Group Chief Financial Officer, and assesses the results after hearing the Group Executive Board. The Group Chief Financial Officer adopts the recommended improve-ments. The Board of Directors takes note of the auditors’ reports which are commented upon by the head auditor at a Board meeting. The Chairman and the Group Chief Financial Officer brief the Board meeting about their assessment and the measures adopted. They inform the Board of Directors about the auditing costs and give their opinion of the quality of the audit services provided. Unless there is a compelling reason to do so, the Board of Directors makes no further assessment.


36


9 Information policy

Up to 2009, the company published an annual business report as of December 31 and interim reports as of April 30 and August 31. Starting 2010, the company will pub-lish an annual business report as of December 31 and an interim report as of June 30. Interested parties are informed about the financial statements in writing. A separate presentation is held for the media and the finan-cial analysts in conjunction with the publication of the annual business report as of December 31. The consol-idated financial statements in accordance with Swiss GAAP FER give a true and fair view of the actual circum-stances.

This and other information about the Company, calendar dates and contacts can be found at www.conzzeta.ch


37



38

Consolidated financial statements41 Income statement42 Balance sheet43 Cash flow statement44 Statement of changes in shareholders’ equity45 Notes to the consolidated financial statements66 List of consolidated companies by business unit68 Statutory auditor’s report

Financial statements of Conzzeta AG70 Income statement71 Balance sheet72 Notes to the financial statements75 Additional information on the financial statements77 Proposed appropriation of available earnings78 Statutory auditor’s report

Financial report

Conzzeta – Annual report 2009Financial report

2009 2008

Notes CHF m CHF m

Net revenue 3 955.166 1 472.497

Changes in inventory and own work capitalized 4 – 50.675 17.020

Total revenue 904.491 1 489.517

Cost of materials 5 – 421.391 – 757.303

Personnel expenses 6 – 286.691 – 337.112

Other operating expenses 7 – 159.704 – 245.806

Depreciation on property, plant and equipment, and financial assets 16, 17 – 32.386 – 39.199

Depreciation on intangible assets 18 – 5.674 – 12.309

Operating result – 1.355 97.788

Financial result 8 0.608 4.920

Result from unconsolidated investments 9 0.150 0.040

Ordinary result before taxes – 0.597 102.748

Extraordinary result 10 10.138 3.925

Result before taxes 9.541 106.673

Taxes 11 – 6.199 – 27.890

Minority interests – 0.071 – 0.030

Group result 3.271 78.753

Consolidated income statement – Group


41

Financial report

Consolidated balance sheet at December 31 – Group

2009 2008

Notes CHF m CHF m

Assets

Cash and cash equivalents 403.284 286.192

Securities 12 52.700 61.083

Trade receivables 13 166.030 233.718

Prepayments to suppliers 4.282 7.442

Other receivables 14 14.668 26.397

Prepaid expenses and accrued income 7.829 11.449

Inventories 15 204.967 288.175

Current assets 853.760 914.456

Property, plant and equipment 16 349.886 362.169

Financial assets 17 44.075 45.754

Intangible assets 18 7.084 10.474

Fixed assets 401.045 418.397

Total assets 1 254.805 1 332.853

Liabilities and shareholders’ equity

Trade payables 59.170 76.880

Advance payments from customers 19 24.995 34.886

Short-term financial liabilities 5.484 3.701

Other short-term liabilities 20 10.533 20.665

Accrued expenses and deferred income 21 69.028 80.685

Short-term provisions 22 28.905 30.911

Short-term liabilities 198.115 247.728

Long-term financial liabilities 23 8.510 7.114

Other long-term liabilities 0.126 0.766

Pension fund liabilities 0.860 0.532

Long-term provisions 22 68.925 75.853

Long-term liabilities 78.421 84.265

Share capital 24 46.000 46.000

Capital reserves 1.600 1.600

Retained earnings 930.491 953.146

Shareholders’ equity excluding minority interests 978.091 1 000.746

Minority interests 0.178 0.114

Shareholders’ equity including minority interests 978.269 1 000.860

Total liabilities and shareholders’ equity 1 254.805 1 332.853


42

Financial report

2009 2008

Notes CHF m CHF m

Group result 3.271 78.753

Minority interests in net income 0.071 0.030

Depreciation 38.060 51.508

Gain on disposal of fixed assets and business activities – 14.323 – 5.601

Change in provisions and pension fund liabilities – 4.843 6.657

Non-liquidity-related currency and valuation influences – 2.483 11.488

Cash flow from operating activities before change in working capital 19.753 142.835

Change in inventories 82.807 – 34.582

Change in receivables, prepaid expenses and accrued income 82.504 14.938

Change in prepayments to suppliers 3.121 0.473

Change in liabilities, accrued expenses and deferred income – 38.970 – 43.036

Change in advance payments from customers – 9.301 – 15.458

Cash flow from operating activities 139.914 65.170

Investment in fixed assets – 35.203 – 73.984

Proceeds from sale of fixed assets 28.368 17.919

Purchase of securities – 26.066 – 34.498

Sale and redemption of securities 34.774 4.925

Acquisition of business activities 25 – 11.363

Divestment of business activities 25 1.000

Cash flow from investing activities 1.873 – 96.001

Cash flow from operating and investing activities (free cash flow) 26 141.787 – 30.831

Dividend paid to holding company shareholders – 27.600 – 32.200

Change in short-term financial liabilities 2.000 1.317

Change in long-term financial liabilities 1.355 6.984

Change in other long-term liabilities – 0.691 – 0.135

Cash flow from financing activities – 24.936 – 24.034

Effect of currency translation on cash and cash equivalents 0.241 – 5.458

Change in cash and cash equivalents 117.092 – 60.323

Cash and cash equivalents at 1 / 1 286.192 346.515

Cash and cash equivalents at 12 / 31 403.284 286.192

Consolidated cash flow statement – Group


43

Financial report

Consolidated statement of changes in shareholders’ equityat December 31 – Group

Share capital

Agio /capital

reserves Retained earnings

Total excl. minority interests

Minority interests

Total incl. minority interests

Currency translation

effects

Other retained earnings

Value fluctuation

financial instruments

CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m

At 12 / 31 / 2007 46.000 1.600 – 8.493 951.676 0.074 990.857 0.071 990.928

Group result 2008 78.753 78.753 0.030 78.783

Dividend payment – 32.200 – 32.200 – 32.200

Change to market value of financial instruments 1.953 1.953 1.953

Currency translation effects – 38.617 – 38.617 0.013 – 38.604

At 12 / 31 / 2008 46.000 1.600 – 47.110 998.229 2.027 1 000.746 0.114 1 000.860

Group result 2009 3.271 3.271 0.071 3.342

Dividend payment – 27.600 – 27.600 – 27.600

Change to market value of financial instruments – 1.223 – 1.223 – 1.223

Currency translation effects 2.897 2.897 – 0.007 2.890

At 12 / 31 / 2009 46.000 1.600 – 44.213 973.900 0.804 978.091 0.178 978.269


44

Financial report

General principles

The consolidated financial statements comprise the audited financial statements of the Group compa-

nies of Conzzeta AG at December 31, using accounting policies which are consistent throughout the

Group and in accordance with Swiss GAAP FER. For the 2009 consolidated financial statements, the

historical costs have been reported using the same valuation policies and basis as in the previous year.

The principle of individual valuation has been applied to assets and liabilities.

Consolidation principles

Scope and method of consolidationThe consolidated financial statements include the financial statements of Conzzeta AG and of all com-

panies directly or indirectly controlled by Conzzeta AG, through investments with more than 50 % of

the votes or by another means, and uniformly managed. These investments are fully consolidated. The

share of the minority shareholders in the net assets and net result is disclosed separately. Investments

with 50 % of the voting rights are consolidated on a pro rata basis in accordance with the share in the

capital. Intragroup receivables and payables as well as expenses and income are offset against each

other, and intragroup profits have been eliminated. The assets and liabilities of companies included in

the consolidation for the first time are valued and disclosed in accordance with Group accounting poli-

cies. Goodwill arising from this revaluation is capitalized and amortized to the income statement. First-

time consolidations are included from the date on which control is acquired; deconsolidations from the

date on which control is relinquished. Investments in associates (at least 20 %, but less than 50 % of the

voting rights) are accounted for under the equity method. Other minority interests are valued at acqui-

sition cost, less any necessary provisions for diminution in value.

A list of the consolidated companies and the associated companies can be found on page 66 et seq.

Foreign currency translationThe financial statements of foreign Group companies are prepared in their respective functional cur-

rencies and translated into CHF as follows:

balance sheets at year-end exchange rates –

income statements at annual average rates –

cash flow statements at annual average rates –

The resulting translation differences as well as foreign currency gains and losses on long-term, equity-

like loans to Group companies are taken directly to the consolidated shareholders’ equity.

All gains and losses resulting from transactions in foreign currencies as well as adjustments to foreign

currency balances at the balance sheet date are recognized in the income statement.

Notes to the consolidated financial statements


45

Financial report

Accounting and valuation policies

Cash and cash equivalentsCash and cash equivalents include cash on hand, postal checking and bank account balances as well

as fixed-term deposits with a maximum residual term of 90 days.

SecuritiesThe securities are marketable, readily realizable monetary and capital investments (including struc-

tured financial products). They are shown at market value.

ReceivablesTrade receivables and other receivables are shown at invoiced amounts, less appropriate provisions for

debtors’ risks. Specific provisions for bad debts are accounted for where required.

InventoriesInventories are shown at the lower of acquisition or production cost and fair value less cost to sell.

Production cost is calculated without imputed interest. Discounts are recognized as purchase price

reductions. Provisions are made for inventories that are difficult to realize or slow-moving.

Property, plant and equipmentLand has been valued at acquisition cost less impairment adjustments. Other tangible fixed assets are

valued at acquisition or production cost less accumulated depreciation. Depreciation is calculated using

the straight-line method over the estimated useful life of the asset. Estimated useful lives are as fol-

lows:

Properties for rent 30 to 45 years

Factory buildings 30 to 40 years

Plant and machinery 5 to 12 years

Tools, fixtures and fittings, vehicles 2 to 8 years

IT hardware and office machinery 3 to 5 years

As a result of the Group’s diversified business activities, it has a broad range of fixed assets, and the

useful lives of property, plant and equipment vary. In the estimated useful lives of properties for rent

and factory buildings, the loss in value of short-lived components is also taken into account.


46

Financial report

Financial assetsFinancial assets are valued at acquisition cost, less appropriate provisions for value adjustments. Also

recognized in the financial assets are employer contribution reserves not subject to renounced use.

Intangible assetsIntangible assets include goodwill arising from the acquisition of business activities as well as of formu-

las, licenses, trademarks and software. Goodwill and other intangible assets are generally amortized

to the income statement over their estimated useful life using the straight-line method. Normally, this

is five years for goodwill and between three and five years for software and licenses.

Impairment of assetsThe value of assets is assessed at regular intervals. Where there are signs of loss of value, the realizable

value is reassessed. If the book value exceeds the realizable value, an additional depreciation adjust-

ment is made.

LiabilitiesLiabilities are usually recognized in the balance sheet at invoiced amounts.

ProvisionsProvisions are formed when an event likely to give rise to an obligation occurs prior to the balance sheet

date, and the amount involved and / or the settlement date are uncertain, but can be estimated. This

obligation can have legal or factual grounds. In the case of land which contains waste or noxious mate-

rials, there is a legal obligation to undertake measures for remediation or decontamination. An appro-

priate provision is made for such cases.

Deferred taxesDeferred income tax is provided for all temporary differences arising between the tax bases of assets

and liabilities and their carrying value for reporting purposes, using the currently enacted tax rates on

an entity level. Movements in the deferred tax provision are included in the tax position in the income

statement. Deferred taxes for loss carry-forwards are only capitalized when in all probability future

taxes on profits can be offset.


47

Financial report

Employee pensionsThe pension obligations of Group companies in respect of retirement, death and disability benefits are

based on local rules and customs in each country. Regular contributions are paid to government bodies,

autonomous pension funds or insurance companies. The pension and benefit payments and outstand-

ing benefits during the accounting period and the regular contributions to the various pension funds

are charged to the income statement. The private pension plans in Switzerland are defined contribution

schemes for the creation of retirement assets for conversion into fixed pensions, with additional risk

benefits. Certain foreign Group companies have defined benefit schemes. These are valued and pre-

sented in accordance with the standards of Swiss GAAP FER 16. Any actual economic impact of the

pension funds on the company is calculated at the balance sheet date. An economic benefit is only

capitalized when this is to be used for the future service cost of the company. An economic obligation

is recognized as a liability when the requirements for the formation of a provision are met. Freely avail-

able employer contribution reserves are shown as assets. The difference between the annually deter-

mined economic benefits and obligations and the change in the employer contribution reserves are

included in the income statement.

The summarized statement for the autonomous pension funds in Switzerland is valued in accordance

with Swiss GAAP FER 26 and shown on page 82 et seq. Actuarial reviews are undertaken on a regular

basis.

Research and developmentResearch and development costs are fully charged to the income statement.

Derivative financial instrumentsForward exchange contracts and options are used to hedge against some currency risks arising from

business operations. Hedge transactions, like the underlying transactions, are shown at market value

and recognized in the balance sheet as accrued income or expense. Value changes on hedge transac-

tions against future currency risks will be shown directly in equity until completion of the underlying

transaction.


48

Financial report

Additional notes to the consolidated financial statements

1 Changes in the scope of consolidationSale of investments and business activities:

In mid-2009, the Automation Systems business unit announced that it was to shut down the manu-

facture of production automation systems in Switzerland. As a result, ixmation AG in Pieterlen (Swit-

zerland) was divested in a management buyout, with effect from September 1, 2009. The company is

continuing operations under the name of Seckler AG.

Internal merger:

With effect from July 1, 2009, Neutex AG in Döttingen (Switzerland) was merged with Fritz Nauer AG

in Wolfhausen (Switzerland).

The present structure of the Group companies is shown on page 66 et seq.

2 Currency translation rates

Year-end

exchange rates

Year-end exchange rates

Annual average rates

Annual average rates

2009 2008 2009 2008

CHF CHF CHF CHF

Euro area 1 EUR 1.48 1.49 1.51 1.59

USA 1 USD 1.03 1.04 1.08 1.08

Great Britain 1 GBP 1.67 1.53 1.69 2.00

Sweden 100 SEK 14.50 13.30 14.20 16.50

China 100 CNY 15.10 15.30 15.90 15.60

South Korea 100 KRW 0.09 0.08 0.09 0.10

Japan 100 JPY 1.11 1.15 1.16 1.05

Singapore 1 SGD 0.73 0.73 0.75 0.76


49

Financial report

Consolidated income statement

3 Net revenue

CHF m %

Net revenue 2008 1 472.5 100.0

Changes in Group revenue 2009 due to:

– currency translation effects – 35.0 – 2.4

– divestments – 8.4 – 0.6

– acquisitions 6.7 0.5

– changes in quantity and price – 480.6 – 32.6

Total change – 517.3 – 35.1

Net revenue 2009 955.2

The divestment effect is due to the disposal of ixmation AG, Pieterlen (Switzerland), with effect from

September 1, 2009. The acquisition effect stems from the purchase of Kureta GmbH, Stadtallendorf

(Germany), with effect from December 31, 2008, and Mammut UK Ltd, Macclesfield (Great Britain),

with effect from March 31, 2008.

2009 2009 2008 2008

CHF m % CHF m %

Net revenue by business unit

Sheet Metal Processing Systems 356.1 37.3 745.1 50.6

Glass Processing Systems 145.6 15.3 244.6 16.6

Automation Systems 56.1 5.9 73.6 5.0

Foam Materials 116.8 12.2 146.3 9.9

Sporting Goods 215.3 22.5 192.6 13.1

Graphic Coatings 43.2 4.5 47.5 3.2

Real Estate and miscellaneous revenue 22.1 2.3 22.8 1.6

Total 955.2 100.0 1 472.5 100.0

2009 2009 2008 2008

CHF m % CHF m %

Net revenue by geographical area

Switzerland 156.0 16.3 183.5 12.5

Euro area 386.3 40.4 567.1 38.5

Rest of Europe 130.7 13.7 307.3 20.9

Total Europe 673.0 70.4 1 057.9 71.9

North and South America 119.4 12.5 214.9 14.6

Asia and Pacific 157.3 16.5 188.8 12.8

Africa 5.5 0.6 10.9 0.7

Total 955.2 100.0 1 472.5 100.0


50

Financial report

4 Changes in inventory and own work capitalized 2009 2008

CHF m CHF m

Change in inventory – 50.7 16.7

Own work capitalized - 0.3

Total – 50.7 17.0

The change in inventory is due to the change in inventories of semifinished products, work in progress

and finished products.

5 Cost of materialsCost of materials summarizes the overall cost of raw materials, intermediates and supplies, as well as

merchandise held for resale and expenses for third-party manufacturing, handling or processing of the

Group’s products (external services).

6 Personnel expenses 2009 2008

CHF m CHF m

Wages and salaries 233.2 279.8

Social security benefits 45.3 50.6

Other personnel expenses 8.2 6.7

Total 286.7 337.1

In addition to contributions to state pension plans, social security benefits include the contributions to

pension funds described in note 27.

7 Other operating expensesOther operating expenses include the cost of repairs and maintenance on property, plant and equip-

ment, sales provisions, expenses for guarantees, assembly, transport and energy, as well as sundry

expenses for production, development, sales and administration.


51

Financial report

8 Financial result 2009 2008

CHF m CHF m

Financial income 4.2 8.3

Financial expenses – 3.6 – 3.4

Total 0.6 4.9

Financial income from liquid assets was down owing to the marked fall in interest rates. The lower inter-

est income was partly offset by income from securities arising from the CHF bonds and a gain on the

investments of the employer contribution reserves. Financial expenses comprise currency losses on the

valuation of liquid assets, on short-term and repaid loans between Group companies, and on other

financial assets, as well as interest expense arising, inter alia, from the financing of a production site

abroad.

9 Result from unconsolidated investmentsThe result from unconsolidated investments comprises gains and losses from associated companies.

10 Extraordinary resultThe extraordinary result amounting to CHF 10.1 million is due to the sale of land in Rafz (Switzerland)

and a factory building in Döttingen (Switzerland). The divestment of a company by the Automation

Systems business unit through a management buyout resulted in a loss of CHF 0.9 million. The previous

year’s figure included proceeds from the sale of land and buildings in Switzerland, Germany and the

USA amounting to CHF 2.9 million. It also included CHF 1.0 million from the sale of the protective

packaging business by the Foam Materials business unit.

11 Taxes 2009 2008

CHF m CHF m

Current taxes on income 8.8 22.3

Deferred taxes – 2.6 5.6

Total 6.2 27.9

Current taxes on income include taxes paid and owed on taxable income of the individual companies in

accordance with local tax laws. The taxable results of subsidiaries belonging to the tax group in Ger-

many are transferred to the controlling company, Conzzeta Holding Deutschland AG. Deferred taxes are

calculated individually per tax subject using the actual expected tax rate. The deferred tax income is

due to the net reversal of temporary differences.


52

Financial report

Consolidated balance sheet

12 SecuritiesThe securities are fixed-interest bonds denominated in CHF.

13 Trade receivables 2009 2008

CHF m CHF m

Trade receivables 187.5 255.6

Provision – 21.5 – 21.9

Total 166.0 233.7

For doubtful accounts, individual and overall value adjustments have been deducted. The overall provi-

sion is based on the experience of the respective company.

14 Other receivablesOther receivables consist mainly of recoverable value-added tax and other tax credits.

15 Inventories 2009 2008

CHF m CHF m

Raw materials and supplies 64.7 88.5

Merchandise for resale 52.3 57.4

Semifinished products and work in progress 38.3 56.8

Finished products 49.7 85.5

Total 205.0 288.2

The decrease in inventories, particularly of raw materials and supplies as well as finished products, is

due to the low level of orders in Machinery and Systems Engineering. Overall, the value adjustments on

inventories amounted to CHF 41.2 million (previous year: CHF 30.4 million).


53

Financial report

16 Property, plant and equipment

Undeveloped

real estate

Properties for rent

Factory buildings

Plant and machinery

Fixtures and fittings, vehicles

Assets under construction,

payments on account

Total property, plant and

equipment

CHF m CHF m CHF m CHF m CHF m CHF m CHF m

Cost

At 12 / 31 / 2007 9.4 220.0 263.0 189.7 57.6 8.7 748.4

Currency translation effects – 0.1 – 9.8 – 6.8 – 3.9 – 0.2 – 20.8

Changes in scope of consolidation 4.7 3.5 0.6 8.8

Additions 0.8 1.0 24.2 11.4 9.6 5.5 52.5

Disposals – 0.2 – 0.1 – 12.8 – 4.4 – 6.9 – 24.4

Reclassifications – 0.7 9.1 – 7.6 4.6 0.4 – 5.8 -

Cost at 12 / 31 / 2008 9.2 230.0 261.7 198.0 57.4 8.2 764.5

Currency translation effects – 0.4 – 0.9 0.1 0.3 – 0.9

Changes in scope of consolidation – 0.5 – 1.4 – 1.9

Additions 5.5 0.2 9.3 3.2 6.0 1.6 25.8

Disposals – 0.5 – 4.0 – 28.9 – 3.6 – 37.0

Reclassifications 1.0 4.7 – 6.7 10.3 – 0.7 – 8.7 – 0.1

Cost at 12 / 31 / 2009 15.2 234.9 259.9 181.2 57.8 1.4 750.4

Accumulated depreciation

At 12 / 31 / 2007 2.1 102.5 114.2 130.1 40.6 - 389.5

Currency translation effects – 2.6 – 4.4 – 2.5 – 9.5

Changes in scope of consolidation 1.5 2.5 0.5 4.5

Ordinary depreciation 5.5 7.3 12.5 6.9 32.2

Extraordinary depreciation 6.6 0.2 6.8

Disposals – 10.4 – 4.0 – 6.8 – 21.2

Reclassifications 8.4 – 8.4 -

Accumulated depreciation at 12 / 31 / 2008 2.1 116.4 101.6 143.3 38.9 - 402.3

Currency translation effects – 0.2 – 0.4 – 0.6


Ordinary depreciation 5.6 7.3 11.4 7.0 31.3

Extraordinary depreciation 0.8 0.1 0.9

Disposals – 0.3 – 1.1 – 27.2 – 3.1 – 31.7

Reclassifications 1.9 – 1.9 0.6 – 0.7 – 0.1

Accumulated depreciation at 12 / 31 / 2009 1.8 123.9 106.5 127.4 40.9 - 400.5

Net book value of property, plant and equipment at 12 / 31 / 2008 7.1 113.6 160.1 54.7 18.5 8.2 362.2

Net book value of property, plant and equipment at 12 / 31 / 2009 13.4 111.0 153.4 53.8 16.9 1.4 349.9


54

Financial report

The fire insurance value of property, plant and equipment amounts to CHF 950.8 million (previous

year: CHF 950.9 million). Of this, CHF 653.9 million comprises building insurance values (CHF 640.4

million).

Additions under undeveloped real estate include two land purchases in Niederönz and Seon (Switzer-

land), to facilitate future construction by the Sheet Metal Processing Systems and Sporting Goods

business units. Under factory buildings, the completion of the new assembly and storage building in

Gotha (Germany) and a new building for the sales company in Heimsheim (Germany), both in the Sheet

Metal Processing Systems business unit, and the extension of the production building in Gunzenhausen

(Germany) by the Glass Processing Systems business unit, led to further additions. The other invest-

ments in plant and machinery, fittings, fixtures and vehicles are mostly replacement investments. Fol-

lowing the start-up of the facility for production and processing of polyurethane foams in Changzhou

(China), the assets under construction have been reclassified as plant and machinery.

The disposals are in large measure due to the shutdown of latex-foam production and the sale of the

corresponding property in Döttingen (Switzerland).

Extraordinary depreciation contains planning costs for unrealized building projects, totaling CHF 0.7

million. In the previous year, the closure of the latex-foam facility in Döttingen (Switzerland) resulted

in extraordinary depreciation of CHF 6.5 million.


55

Financial report

17 Financial assets

Non-consolidated investments

Long-term receivables

and loans

Securities held as

fixed assets

Employer contribution

reserves held as assets

Active deferred

taxes

Total financial

assets

CHF m CHF m CHF m CHF m CHF m CHF m

Cost

At 12 / 31 / 2007 0.6 10.7 0.4 24.1 6.8 42.6


Additions 8.9 9.0 1.4 19.3

Disposals – 0.2 – 3.6 – 6.8 – 2.8 – 13.4

Cost at 12 / 31 / 2008 0.4 15.2 0.4 26.3 4.9 47.2

Currency translation effects 0.1 0.1

Additions 0.1 6.6 0.5 1.1 8.3

Disposals – 3.3 – 4.7 – 2.0 – 10.0

Cost at 12 / 31 / 2009 0.5 18.6 0.4 22.1 4.0 45.6


At 12 / 31 / 2007 0.1 1.2 0.3 - - 1.6

Currency translation effects – 0.1 – 0.1

Ordinary depreciation 0.2 0.2

Disposals – 0.1 – 0.2 – 0.3

Accumulated depreciation at 12 / 31 / 2008 - 1.1 0.3 - - 1.4

Currency translation effects

Ordinary depreciation 0.2 0.2

Disposals – 0.1 – 0.1

Accumulated depreciation at 12 / 31 / 2009 - 1.2 0.3 - - 1.5

Net book value of financial assets at 12 / 31 / 2008 0.4 14.1 0.1 26.3 4.9 45.8

Net book value of financial assets at 12 / 31 / 2009 0.5 17.4 0.1 22.1 4.0 44.1


56

Financial report

The additions and disposals in long-term receivables and loans are due to long-term hire-purchase

business with customers, loans to third parties and deposits for rents and securities for old environ-

mental liabilities.

The addition in the employer contribution reserves includes the financial gain of CHF 0.5 million (pre-

vious year: CHF – 1.8 million). The disposal comprises the debited employer contributions amounting to

CHF 4.7 million (CHF 3.5 million) in favor of Group companies.

The evaluation of active deferred taxes using current income tax rates is based on temporary differ-

ences in individual companies. The active deferred taxes from recognized loss carry-forwards as well as

temporary valuation differences amount to CHF 4.0 million (CHF 4.9 million). As a precautionary meas-

ure and because of uncertainties regarding the future scope for offsetting, the tax effects from loss

carry-forwards amounting to CHF 16.8 million (CHF 10.7 million) were not capitalized. This evaluation

is based on the average projected Group tax rate of 20.5 % (21.9 %).


57

Financial report

18 Intangible assets

Goodwill

Software and licenses

Total intangible assets

CHF m CHF m CHF m

Cost

At 12 / 31 / 2007 78.6 28.4 107.0


Changes in scope of consolidation 6.4 6.4

Additions 3.6 3.6


Cost at 12 / 31 / 2008 77.0 30.8 107.8

Currency translation effects 1.8 – 0.1 1.7

Changes in scope of consolidation – 0.8 – 0.8

Additions 2.2 2.2


Reclassifications 0.1 0.1

Adjustment of goodwill – 51.7 0.1 – 51.6

Cost at 12 / 31 / 2009 27.1 31.9 59.0


At 12 / 31 / 2007 73.8 19.4 93.2


Ordinary depreciation 2.6 3.9 6.5

Extraordinary depreciation 5.8 5.8


Accumulated depreciation at 12 / 31 / 2008 74.9 22.4 97.3



Ordinary depreciation 1.7 3.8 5.5

Extraordinary depreciation 0.2 0.2


Reclassifications 0.1 0.1

Adjustment of goodwill – 51.7 0.1 – 51.6

Accumulated depreciation at 12 / 31 / 2009 26.6 25.3 51.9

Net book value of intangible assets at 12 / 31 / 2008 2.1 8.4 10.5

Net book value of intangible assets at 12 / 31 / 2009 0.5 6.6 7.1


58

Financial report

All goodwill under historical acquisition costs and accumulated depreciation was previously included in

the asset overview. To improve readability, the overview was revised in 2009. Fully depreciated good-

will values, which can no longer be assigned a measurable value, are no longer listed in the asset over-

view. They are removed the year following complete write-off, usually after expiry of the useful life of

five years.

Additions in asset values for software and licenses include costs for significant investments in the fur-

ther development and rollout of new, unit-specific ERP solutions in the Glass Processing Systems and

Sporting Goods business units.

On the basis of a revaluation of the expected business development of investments acquired in the

Foam Materials and Sporting Goods business units, extraordinary depreciation of CHF 5.8 million was

charged in the previous year to goodwill positions.

19 Advance payments from customersCustomer payments on account originate from the companies in the Machinery and Systems Engineer-

ing business area.

20 Other short-term liabilitiesThe other short-term liabilities consist mainly of taxes owed and social security contributions.

21 Accrued expenses and deferred income 2009 2008

CHF m CHF m

Accruals and deferrals for taxes 15.2 14.6

Accruals and deferrals for personnel expenses 20.1 29.8

Other accruals and deferrals 33.7 36.3

Total 69.0 80.7

Accrued expenses and deferred income shows all expenses and income determined on an accrual basis.

Other accruals and deferrals contain commissions, volume discounts, assembly and maintenance ser-

vices, as well as goods and services obtained from third parties and not yet invoiced.


59

Financial report

22 Provisions

Deferred taxes

Environmental commitments Guarantees Restructuring

Other provisions

Total provisions

CHF m CHF m CHF m CHF m CHF m CHF m

Short-term provisions

At 12 / 31 / 2007 - - 28.5 0.6 3.6 32.7


Changes in scope of consolidation 0.1 0.1

Additions 20.0 3.0 23.0

Amounts used – 0.7 – 20.4 – 0.2 – 0.1 – 21.4

Amounts reversed – 0.2 – 3.1 – 0.2 – 2.6 – 6.1

Reclassifications 0.9 4.0 0.2 5.1

Short-term provisions at 12 / 31 / 2008 - - 26.9 0.2 3.8 30.9



Additions 1.0 11.1 13.3 0.5 25.9

Amounts used – 24.3 – 0.2 – 0.8 – 25.3

Amounts reversed – 2.7 – 2.4 – 5.1

Reclassifications 4.9 0.3 5.2

Short-term provisions at 12 / 31 / 2009 - 1.0 16.1 10.4 1.4 28.9

Long-term provisions

At 12 / 31 / 2007 18.6 29.5 6.6 17.0 71.7

Currency translation effects – 0.1 – 0.6 – 0.5 – 1.2

Additions 5.1 0.6 6.1 4.0 15.8

Amounts used – 1.0 – 0.4 – 1.4


Reclassifications – 0.9 – 4.2 – 5.1

Long-term provisions at 12 / 31 / 2008 22.4 28.7 6.5 - 18.3 75.9

Currency translation effects 0.1 0.1


Additions 2.8 0.7 2.7 1.9 8.1

Amounts used – 0.6 – 1.1 – 1.7


Reclassifications – 4.9 – 0.3 – 5.2

Long-term provisions at 12 / 31 / 2009 18.7 29.2 3.9 - 17.1 68.9


60

Financial report

The expected timing of the outflow of funds is the basis for the separate disclosure of short- and long-

term provisions. Provisions are classified as short-term when the payment of the liability covered is

likely to arise within a year.

Deferred taxes are evaluated using current income tax rates on the basis of the formation and reversal

of temporary differences between the tax bases of assets and liabilities and their carrying value for

reporting purposes in the individual companies.

There are land holdings from previous operating activities and landfill sites which contain waste or

noxious materials and are shown in the register of polluted sites. The liability status and the necessary

measures were assessed by an expert, but uncertainties attach to some of the findings regarding the

nature and extent of the liability. Where liability-related, future-based costs arise on legal or factual

grounds, an appropriate provision is formed to cover the estimated costs. Provisions of CHF 1.7 million

for environmental commitments were booked for monitoring and removal of newly identified residual

liabilities relating to divested and existing industrial sites. The remediation measures carried out were

minor and the reversal of CHF 0.2 million relates to the expiry of residual pollution risks. More detailed

investigations and remediation measures are in progress at these sites.

The guarantee provisions are held mainly in the Sheet Metal Processing Systems and Glass Processing

Systems business units. The reduction in the guarantee provisions is attributable to the decline in

sales.

Provisions of CHF 13.3 million were added for future expenses relating to restructuring measures

affecting certain business units, as announced in mid-year.

23 Long-term financial liabilitiesA Group company has continued to extend a long-term bank loan for financing to a foreign production

facility.

24 Share capitalThe share capital of CHF 46.0 million is divided into 406 000 bearer shares with a nominal value of

CHF 100 each and 270 000 registered shares with a nominal value of CHF 20 each.


61

Financial report

Consolidated cash flow statement

25 Acquisition and divestment of business activities

2009 2009 2008 2008

Purchase Disposal Purchase Disposal

CHF m CHF m CHF m CHF m

Current assets 6.2 – 5.3

Fixed assets 0.3 – 4.3

Short-term liabilities – 5.3 2.8

Long-term liabilities – 0.3

Net assets acquired or divested - 0.9 – 6.8 -

Plus cash and cash equivalents - 1.8

Subtotal - 0.9 – 5.0 -

Goodwill – 6.4

Result from disposal of business activities – 0.9 1.0

Net cash flow - - – 11.4 1.0

26 Operational free cash flow 2009 2008

CHF m CHF m

Cash flow from operating activities 139.9 65.2

Investment in fixed assets – 35.2 – 74.0

Proceeds from sale of fixed assets 28.4 17.9

Operational free cash flow 133.1 9.1

Purchase of securities – 26.1 – 34.5

Sale and redemption of securities 34.8 4.9

Acquisition of business activities – 11.4

Divestment of business activities 1.0

Free cash flow 141.8 – 30.8


62

Financial report

Further information

27 Employee pension funds

Nominal value 12 / 31 / 2009

Renounced use

12 / 31 / 2009

Balance sheet 12 / 31 / 2009

Balance sheet 12 / 31 / 2008

Result in personnel expenses

2009

Result in personnel expenses

2008

Result in financial

income 2009

Result in financial

income 2008

CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m

Employer contribution reserves

Employer’s pension fund 26.2 – 4.1 22.1 26.3 – 4.7 – 5.0 0.5 – 1.8

In the previous year, the nominal value of the employer contribution reserves was CHF 30.4 million and

the renounced use amounted to CHF 4.1 million.

The result in personnel expenses comprises the debited employer contributions amounting to CHF 4.7

million (previous year: CHF 3.5 million) in favor of the Group companies. In 2008, the settlement of a

deficit of CHF 1.5 million was charged and an allocation of CHF 9.0 million for the addition of assets

from the employer contribution reserves was booked. The financial result amounted to CHF 0.5 million

(CHF – 1.8 million).

Surplus / deficit

12 / 31 / 2009

Economic benefit /

obligation 12 / 31 / 2009

Economic benefit /

obligation 12 / 31 / 2008

Change to prior year affecting result in

reporting period

Contributions to be allocated

to reporting period

Current service cost

in personnel expenses

2009

Current service cost

in personnel expenses

2008

CHF m CHF m CHF m CHF m CHF m CHF m CHF m

Economic benefit / obligation and current service cost

Employer’s pension fund 3.5

Pension funds without surplus / deficit 9.5 9.5 11.0

Pension funds with deficit – 0.3 – 0.3 0.2 0.5 0.5 1.0

Pension funds without own assets – 0.5 – 0.5 – 0.5

Total 2.7 – 0.8 – 0.3 0.5 10.0 10.5 11.0

In the previous year, the surpluses amounted to CHF 3.4 million, the year-on-year change affecting

result was CHF – 0.5 million and the contributions to be allocated to the reporting period were CHF 11.5

million.

It is not planned to use the free reserves of the employer’s pension fund for the economic benefit of

the Group. The economic obligation in relation to the pension funds with deficit concerns a defined

benefit scheme abroad. This was calculated using a dynamic model in accordance with international

accounting standards. The increase in the economic obligation of CHF 0.5 million was recognized in

the income statement under personnel expenses.


63

Financial report

28 Contingent liabilitiesIn connection with customer financing, there are repurchase obligations against leasing companies

for machinery amounting to CHF 41.4 million (previous year: CHF 43.1 million). Assets to the value of

CHF 7.5 million (CHF 6.3 million) are held with retention of title as security for remediation of residual

environmental liabilities and for loans.

29 Other commitmentsCommitments not recognized in the balance sheet comprise operational leasing contracts with a period

of notice longer than one year.

Maturity of operational leasing contracts at 12 / 31 2009 2008

CHF m CHF m

Under 1 year 7.1 6.4

1 to 5 years 12.0 8.5

Over 5 years 1.9 0.4

Total 21.0 15.3

In addition, there are long-term purchase commitments of CHF 1.4 million (CHF 6.4 million) to secure

exclusive supplies.

30 Derivative financial instrumentsValues at 12 / 31 2009 2008

CHF m CHF m

Contract values 28.0 52.4

Replacement value, positive 0.7 2.4

Replacement value, negative 0.1

The contracts were entered into as a hedge against exchange risks on future cash flows in USD, EUR

and GBP. The change in value of derivative instruments still outstanding as of the balance sheet date is

recognized in the shareholders’ equity.


64

Financial report

31 Related-party transactionsTransactions with related parties consist of normal business transactions under normal market condi-

tions, with associated companies acting as commercial agents and distributors.

2009 2008

CHF m CHF m

Trade receivables 2.2 1.8

Financial assets 0.1 0.1

Trade payables 1.7 1.5

Net revenue 4.7 5.9

Commission expenses 3.5 4.2

32 Risk assessmentIn addition to assessing strategies, projects and monitoring the course of business on an ongoing basis,

the Board of Directors has conducted a comprehensive risk assessment. This is based on detailed man-

agement reporting and a separate Group risk report, describing the risk management process and the

top-level risks. The risk management process has been implemented throughout the Group and encom-

passes the identification, evaluation and qualitative appraisal of operational, financial and strategic

risks. It is supported by risk monitoring, a plan of action and standardized risk reporting. The control

and management of risks is considered a management responsibility.

33 Compensation and shareholdingsThe compensation paid to members of the Board of Directors and the Group Executive Board, as

well as their investments in Conzzeta AG, are reported in the notes to the financial statements of

Conzzeta AG.


65

Financial report

Company capital Investments in % Investments in %

Company, domicile Notes Country in local currency direct indirect

Sheet Metal Processing Systems

Bystronic Laser AG, Niederönz CH CHF 50 000 100

Bystronic Maschinenbau GmbH, Gotha DE EUR 3 400 100 100

Bystronic (Tianjin) Machinery Co. Ltd, Tianjin CN USD 6 095 600 100

Regional sales and service companies:

Bystronic, Inc., Hauppauge NY US USD 250 000 100

Bystronic Scandinavia AB, Arlandastad SE SEK 200 000 100

Bystronic France SAS, Les Ulis FR EUR 2 500 000 100

Bystronic Italia S.r.l., Bovisio Masciago IT EUR 900 000 100

Bystronic Deutschland GmbH, Heimsheim DE EUR 52 000 100

Bystronic Co. Ltd, Shanghai CN USD 1 000 000 100

Bystronic Iberica S.A., San Sebastián de los Reyes ES EUR 262 000 100

Bystronic Mexico S.A. de C.V., Guadalajara MX MXN 2 500 000 100

Bystronic Austria GmbH, Linz AT EUR 300 000 100

Bystronic do Brasil Ltda., São José dos Pinhais PR BR BRL 5 000 000 100

Bystronic Pte. Ltd, Singapore SG SGD 2 500 000 100

Bystronic Benelux B.V., Hardinxveld-Giessendam NL EUR 18 151 100

Bystronic UK Ltd, Coventry GB GBP 1 200 000 100

Bystronic Sales AG, Niederönz CH CHF 2 000 000 100

Bystronic Korea Ltd, Anyang-si KR KRW 6 000 000 000 100

Bystronic Polska Sp. z o.o., Raszyn PL PLN 1 000 000 100

Bystronic Slovakia s.r.o., Bratislava SK EUR 66 000 100

Bystronic Czech Republic s.r.o., Brno CZ CZK 6 000 000 100

Bystronic Laser India Private Ltd, Pune IN INR 34 130 000 100

Bystronic Turkey, Istanbul TR TRY 660 000 100

Hämmerle Ltd, Ichikawa City JP JPY 10 000 000 100

Bystronic Canada Ltd, Mississauga ON CA CAD 100 000 100

OOO Bystronic Laser, Moscow RU RUB 30 000 000 100

S.C. Bystronic Laser S.R.L., Brasov 1 RO RON 1 000 000 100

Glass Processing Systems

Bystronic Maschinen AG, Bützberg CH CHF 100 000 100

Bystronic Lenhardt GmbH, Neuhausen-Hamberg DE EUR 2 045 168 100

Bystronic Armatec GmbH, Gunzenhausen DE EUR 300 000 100

Bystronic Solution Centre Inc., Ottawa CA CAD 2 000 000 100

Bystronic Glass Machinery (Shanghai) Co. Ltd, Shanghai CN EUR 1 500 000 100

Regional sales and service companies:

Bystronic Glass UK Ltd, Telford GB GBP 3 400 000 100

Bystronic Asia Pte. Ltd, Singapore SG SGD 1 000 000 100

Bystronic Glass do Brasil Ltda., Indaiatuba SP BR BRL 3 494 779 100

OOO Bystronic Steklo RUS, Moscow RU RUB 64 975 930 100

Bystronic Glass (Shanghai) Co. Ltd, Shanghai CN USD 1 900 000 100

Bystronic Glass, Inc., Aurora CO US USD 250 000 100

List of consolidated companies by business unit


66

Financial report

Company capital Investments in % Investments in %

Company, domicile Notes Country in local currency direct indirect

Automation Systems

ixmation AG, Pieterlen 2 CH

ixmation AG, Burgdorf 3 CH CHF 100 000 100

ixmation, Inc., Bloomingdale IL US USD 100 100

ixmation (Asia) Sdn. Bhd., Penang MY MYR 900 003 100

ixmation (Suzhou) Co. Ltd, Suzhou CN USD 750 000 100

ixmation (Tianjin) Co. Ltd, Tianjin 4 CN CNY 1 000 000 100

Foam Materials

Fritz Nauer AG, Wolfhausen CH CHF 5 000 000 100

Reisgies Schaumstoffe GmbH, Leverkusen DE EUR 1 000 000 100

Frina Mousse France S.à r.l., Wittenheim FR EUR 117 386 100

Neutex AG, Döttingen 5 CH

Büttikofer AG, Gontenschwil CH CHF 250 000 100

Swisstex, Inc., Greenville SC US USD 2 023 640 100

Foampartner-Bock AG, Zug CH CHF 1 000 000 50

Foampartner-Bock Trading (Shanghai) Ltd, Shanghai CN USD 600 000 50

Foampartner-Bock Polyurethane Materials (Changzhou) Co. Ltd, Changzhou CN USD 11 500 000 50

Woodbridge FoamPartner Company, Chattanooga TN US USD 2 000 000 51

Kureta GmbH, Stadtallendorf DE EUR 100 000 100

Sporting Goods

Mammut Sports Group AG, Seon CH CHF 25 000 000 100

Mammut Sports Group GmbH, Memmingen DE EUR 500 000 100

Mammut Sports Group, Inc., Shelburne VT US USD 51 100

Ajungilak AS, Oslo NO NOK 2 000 000 100

Mammut Sports Group Japan Inc., Tokyo JP JPY 30 000 000 80

Mammut UK Ltd, Macclesfield GB GBP 1 000 100

Graphic Coatings

Schmid Rhyner AG, Adliswil CH CHF 1 200 000 100

Schmid Rhyner (USA), Inc., Marlton NJ US USD 50 000 100

Real Estate

Plazza Immobilien AG, Zurich CH CHF 5 000 000 100

Swilac Immobilien AG, Zurich CH CHF 600 000 100

Prebe AG, Zurich CH CHF 7 500 000 100

Holding and Management Companies

Conzzeta Holding Deutschland AG, Leverkusen DE EUR 6 000 000 100

Conzzeta Grundstücksverwaltungs GmbH, Leverkusen DE EUR 50 000 100

Conzzeta Management AG, Zurich CH CHF 100 000 100

Associated Companies

Mammut Sports Group Austria GmbH, Steyr AT EUR 363 400 25.1

Mammut Nederland B.V., Benthuizen NL EUR 18 000 36

Notes:

1 Incorporation at 1 / 5 / 2009 4 Incorporation at 4 / 17 / 2009

2 Divestment at 9 / 1 / 2009 5 Merger with Fritz Nauer AG at 7 / 1 / 2009

3 Incorporation at 10 / 13 / 2009


67

Financial report

Report of the Statutory Auditor on the Consolidated Financial Statements

to the General Meeting of Conzzeta AG, Zurich

As statutory auditor, we have audited the consolidated financial statements of Conzzeta AG on pages

41 to 67, which comprise the balance sheet, income statement, cash flow statement, statement of

changes in equity and notes for the year ended December 31, 2009.

Board of Directors’ Responsibility

The Board of Directors is responsible for the preparation and fair presentation of the consolidated

financial statements in accordance with Swiss GAAP FER and the requirements of Swiss law. This

responsibility includes designing, implementing and maintaining an internal control system relevant to

the preparation and fair presentation of consolidated financial statements that are free from material

misstatement, whether due to fraud or error. The Board of Directors is further responsible for select-

ing and applying appropriate accounting policies and making accounting estimates that are reasonable

in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our

audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those stand-

ards require that we plan and perform the audit to obtain reasonable assurance whether the consoli-

dated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the consolidated financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the consolidated financial state-

ments, whether due to fraud or error. In making those risk assessments, the auditor considers the inter-

nal control system relevant to the entity’s preparation and fair presentation of the consolidated finan-

cial statements in order to design audit procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system.

An audit also includes evaluating the appropriateness of the accounting policies used and the reason-

ableness of accounting estimates made, as well as evaluating the overall presentation of the consol-

idated financial statements. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements for the year ended December 31, 2009, give a

true and fair view of the financial position, the results of operations and the cash flows in accordance

with Swiss GAAP FER and comply with Swiss law.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act

(AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances

incompatible with our independence.

Statutory auditor’s report


68

Financial report

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm

that an internal control system exists, which has been designed for the preparation of consolidated

financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG

Herbert Bussmann Markus Ackermann

Licensed Audit Expert Licensed Audit Expert

Auditor in Charge

Zurich, March 18, 2010


69

Financial report

2009 2008

CHF m CHF m

Income

Income from investments 31.449 142.000

Interest income and income from securities 10.187 18.425

Total income 41.636 160.425

Expenses

Personnel expenses – 0.708 – 0.535

Operating expenses – 2.641 – 2.674

Financial expenses – 1.408 – 2.302

Taxes – 0.404 – 1.153

Depreciation – 14.118

Total expenses – 5.161 – 20.782

Net income 36.475 139.643

Income statement – Conzzeta AG


70

Financial report

2009 2008

CHF m CHF m

Assets

Cash and cash equivalents 352.842 226.824

Securities 52.700 61.083

Accounts receivable 0.176 0.395

Prepaid expenses and accrued income 0.853 3.241

Current assets 406.571 291.543

Investments 176.710 180.000

Receivables from Group companies 152.316 200.701

Fixed assets 329.026 380.701

Total assets 735.597 672.244

Liabilities and shareholders’ equity

Short-term payables 0.023 0.034

Accrued expenses and deferred income 0.799 4.218

Short-term liabilities 0.822 4.252

Payables to Group companies 79.124 21.216

Provisions 20.350 20.350

Long-term liabilities 99.474 41.566

Share capital 46.000 46.000

Legal reserves 33.406 33.406

Special reserve 350.000 300.000

Retained earnings 205.895 247.020

Shareholders’ equity 635.301 626.426

Total liabilities and shareholders’ equity 735.597 672.244

Balance sheet at December 31 – Conzzeta AG


71

Financial report

Contingent liabilities 2009 2008

CHF m CHF m

Sureties and guarantee obligations for subsidiaries 117.829 116.395

Effective obligations 27.505 28.158

InvestmentsSee overview on page 66 et seq.

Significant shareholders 2009 2008

% %

TEGULA AG, Zurich Capital 74.2 73.8

Votes 81.8 81.5

Notes to the financial statements – Conzzeta AG


72

Financial report

Compensation for members of the Board of Directors and the Group Executive Board

Gross

compensation

Gross compensation

Benefits in kind / social

security benefits


security benefits

Total compensation

Total compensation

2009 2008 2009 2008 2009 2008

CHF thousands CHF thousands CHF thousands CHF thousands CHF thousands CHF thousands

Board of Directors

J. Schmidheiny, Chairman 518.8 783.0 47.2 46.7 566.0 829.7

M. Auer, Member 53.2 68.1 2.2 2.9 55.4 71.0

Th. W. Bechtler, Member 53.2 68.1 2.2 2.9 55.4 71.0

W. Dubach, Member 51.8 68.1 - - 51.8 68.1

Ph. Mosimann, Member 53.2 68.1 2.2 2.9 55.4 71.0

R. F. Spoerry, Member 53.2 68.1 2.2 2.9 55.4 71.0

Total 783.4 1 123.6 56.0 58.2 839.4 1 181.8

Gross

compensation

Gross compensation


security benefits


security benefits

Total compensation

Total compensation

2009 2008 2009 2008 2009 2008

CHF thousands CHF thousands CHF thousands CHF thousands CHF thousands CHF thousands

Group Executive Board

Total 5 899.2 4 482.3 706.2 562.3 6 605.4 5 044.5

Highest single amount: R. Suter, CEO 826.7 94.1 920.8

Highest single amount: F. Töngi, CEO Bystronic 931.0 111.7 1 042.7

Gross compensation includes the fixed and variable compensation paid in the 2009 calendar year. See

corporate governance, page 35, for details of the method of determination.

Total compensation relates to all members of the Group Executive Board active in the 2009 business

year. Owing to organizational changes and overlaps in some positions, the number people involved

increased from 8 to 11 compared with 2008. There were also one-off payments during the period.

Benefits in kind and social security benefits comprise employer contributions to state and private

schemes (Swiss AHV and company pension plans) to establish or augment benefit provisions, as well as

private usage of a company car.

There are no share or option plans for members of the Board of Directors and the Group Executive

Board.


73

Financial report

Shareholdings of the members of the Board of Directors and the Group Executive Board in Conzzeta AG

Bearer shares Bearer shares

Registered shares

Registered shares

12 / 31 / 2009 12 / 31 / 2008 12 / 31 / 2009 12 / 31 / 2008

Number Number Number Number

Board of Directors

J. Schmidheiny, Chairman 230 230 - -

M. Auer, Member - - 25 25

Th. W. Bechtler, Member 90 90 - -

W. Dubach, Member 140 140 - -

J. Schmidheiny and M. Auer sit as shareholders on the Board of TEGULA AG. The shareholding of

TEGULA AG in Conzzeta AG comprises 288 302 bearer shares with a par value of CHF 100 each and

264 874 registered shares with a par value of CHF 20 each.

Bearer shares Bearer shares

Registered shares

Registered shares

12 / 31 / 2009 12 / 31 / 2008 12 / 31 / 2009 12 / 31 / 2008

Number Number Number Number

Group Executive Board

R. Jakob 1 1 - -

Risk assessmentThe Board of Directors has conducted a comprehensive risk assessment for the Group. This is based on

detailed management reporting and a separate Group risk report, describing the risk management pro-

cess and the top-level risks. The risk management process has been implemented throughout the Group

and encompasses the identification, evaluation and qualitative appraisal of operational, financial and

strategic risks. It is supported by risk monitoring, a plan of action and standardized risk reporting.

Conzzeta AG is an integral part of this process.


74

Financial report

Additional information on the financial statements – Conzzeta AGIncome statement

IncomeThe investment income for the year amounted to CHF 31.4 million (previous year: CHF 142.0 million).

This sum comprises CHF 34.8 million (CHF 142.0 million) in dividends and a loss CHF 3.4 million on the

divestment of the ixmation AG company in Pieterlen (Switzerland). This company had previously paid

an in-substance dividend of CHF 2.8 million. The dividend payments by the Group companies were

determined in relation to available retained earnings and liquidity requirements.

The interest income and interest on securities amounted to CHF 10.2 million (CHF 18.4 million). They

comprise the interest income on accounts receivable from Group companies of CHF 7.7 million (CHF

10.7 million), the interest income from third parties amounting to CHF 0.7 million (CHF 5.9 million) and

a gain on securities from the CHF bond portfolio of CHF 1.8 million (CHF 1.8 million).

ExpensesPersonnel and operating expenses include current administration expenses, the cost of organizing the

Annual General Meeting, producing the annual report, project costs, taxes on capital, as well as fees to

the Board of Directors and further personnel expenses.

The financial expenses of CHF 1.4 million (CHF 2.3 million) result from interest on intragroup payables

of CHF 0.8 million (CHF 1.0 million) and currency losses on liquid assets and on receivables from Group

companies of CHF 0.6 million (CHF 1.3 million).

Taxes comprise income taxes for the fiscal year.


75

Financial report

Balance sheet

Current assetsThe liquid assets of CHF 352.8 million (previous year: CHF 226.8 million) consist of bank balances in

CHF, EUR, USD and GBP, as well as fixed-term deposits in CHF. Securities of CHF 52.7 million (CHF 61.1

million) comprise fixed-interest investments in CHF. Accounts receivable are made up exclusively

of withholding tax claims on interest income. Prepaid expenses and accrued income comprise accrued

interest of CHF 0.8 million (CHF 1.1 million), as well as accruals for balances from exchange rate hedges

of CHF 0.1 million (CHF 2.1 million).

Fixed assetsThe figure for investments in the balance sheet is CHF 176.7 million (CHF 180.0 million). In the report-

ing year, ixmation AG in Pieterlen (Switzerland) was sold and ixmation AG in Burgdorf (Switzerland)

was newly incorporated. Most Group financing is handled by the holding company. Accounts receivable

from Group companies decreased in the reporting year by CHF 48.4 million and now amount to CHF

152.3 million.

LiabilitiesThe short-term liabilities consist of unpaid dividends. Accrued expenses and deferred income consists

of outstanding taxes of CHF 0.7 million (CHF 2.1 million) and liabilities arising from exchange rate

hedges of CHF 0.1 million (CHF 2.1 million).

Long-term liabilities of CHF 99.5 million (CHF 41.6 million) include CHF 79.1 million (CHF 21.2 million)

in outstanding payables to subsidiaries and provisions of CHF 20.4 million (CHF 20.4 million).

Shareholders’ equityThe share capital of CHF 46.0 million consists of 270 000 registered shares and 406 000 bearer shares.

As the result of a transfer to the special reserves, the special reserves balance sheet item increased in

the reporting year by CHF 50.0 million to CHF 350.0 million.


76

Financial report

2009 2008

CHF CHF

The Board of Directors proposes to the Annual General Meeting on April 28, 2010, that the retained earnings at December 31, 2009, consisting of:

Net income for the year 36 474 584 139 642 637

Retained earnings carried forward from previous year 169 420 025 107 377 388

Available retained earnings 205 894 609 247 020 025

be appropriated as follows:

Dividend of CHF 30.00 per bearer share (previous year: CHF 60.00) 12 180 000 24 360 000

Dividend of CHF 6.00 per registered share (previous year: CHF 12.00) 1 620 000 3 240 000

Transfer to the special reserve 50 000 000 50 000 000

Retained earnings to be carried forward 142 094 609 169 420 025

If this proposal is approved, the dividend distribution for the 2009 reporting year will be:

Gross dividend 35 % withholding tax Net dividend

CHF CHF CHF

per bearer share 30.00 10.50 19.50

per registered share 6.00 2.10 3.90

The dividend on bearer shares will be paid out against submission of Coupon No. 11.

The registered shareholders or their custodian banks will be sent a dividend credit or dividend order,

according to their instructions.

Coupon No. 11 and the dividend order can be redeemed free of charge from May 5, 2010, at all Swiss

branches of the banks listed below:

CREDIT SUISSE

UBS AG

Zürcher Kantonalbank

Proposed appropriation of available earnings – Conzzeta AG


77

Financial report

Report of the Statutory Auditor on the Financial Statements

to the General Meeting of Conzzeta AG, Zurich

As statutory auditor, we have audited the financial statements of Conzzeta AG on pages 70 to 76, which

comprise the balance sheet, income statement and notes for the year ended December 31, 2009.

Board of Directors’ Responsibility

The Board of Directors is responsible for the preparation of the financial statements in accordance with

the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes

designing, implementing and maintaining an internal control system relevant to the preparation of

financial statements that are free from material misstatement, whether due to fraud or error. The Board

of Directors is further responsible for selecting and applying appropriate accounting policies and

making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We con-

ducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require

that we plan and perform the audit to obtain reasonable assurance whether the financial statements are

free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers the internal control system relevant to

the entity’s preparation of the financial statements in order to design audit procedures that are appro-

priate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of

the entity’s internal control system. An audit also includes evaluating the appropriateness of the ac-

counting policies used and the reason ableness of accounting estimates made, as well as evaluating the

overall presentation of the financial statements. We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements for the year ended December 31, 2009, comply with Swiss law

and the company’s articles of incorporation.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act

(AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances in-

compatible with our independence.

Statutory auditor’s report – Conzzeta AG


78

Financial report

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm

that an internal control system exists, which has been designed for the preparation of financial state-

ments according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and

the company’s articles of incorporation. We recommend that the financial statements submitted to you

be approved.

KPMG AG

Herbert Bussmann Markus Ackermann

Licensed Audit Expert Licensed Audit Expert

Auditor in Charge

Zurich, March 18, 2010


79

Financial report


80

82 Employee pension funds in Switzerland84 Five-year summary86 Information and calendar for investors

Further information

The number of currently employed fund participants decreased in the reporting year from 1 390 to

1 164, while the number of persons drawing retirement benefits fell from 893 to 886. The proportion

of pensioners to overall fund participants increased to 43 % (previous year: 39 %). The dedicated fund

capital decreased by 3.0 % to CHF 363.7 million, of which 52.1 % comprised annuities, 45.0 % fund

capital and 2.9 % technical provisions.

The decrease in the number of fund participants is due to job cuts in the business units affected by the

financial crisis. The fund capital decreased in the reporting period by 6.5 % from CHF 174.8 million to

CHF 163.5 million.

The financial situation of the autonomous and organizationally independent Conzzeta pension funds

improved considerably thanks to the upward trend in the financial markets. In contrast with a fall in

asset values of 8.6 % in 2008, the reporting year saw a return on assets of 8.3 %. The asset value fluc-

tuation reserves increased by CHF 27.8 million to CHF 42.4 million, which is 71 % of the defined target

value.

The consolidated funding ratio, not including the employer contribution reserves, increased from

104.9 % to 112.6 %. This computation is based on a technical interest rate of 3 %.

Marc Sutter

Manager of employee pension funds in Switzerland

Employee pension funds in Switzerland


82

Further information

2009 2008

CHF m CHF m

Net fund assets at 1 / 1

Fund capital 374.911 373.451

Fluctuation reserves 14.625 59.382

Employer contribution reserves 30.350 28.196

Free reserves 3.680 4.095

Total net fund assets at 1 / 1 423.566 465.124

Inclusion and exclusion of companies - – 0.556

Company contributions 9.967 10.759

Employee contributions 6.746 6.611

Departure benefits brought into the fund 5.530 10.924

Investment income 35.659 – 39.696

Contributions and income 57.902 – 11.402

Payments to insured persons – 39.407 – 32.188

Provisions / valuation adjustments – 5.502 3.397

Administrative expenses – 0.766 – 0.807

Payments and expenses – 45.675 – 29.598

Net fund assets at 12 / 31

Fund capital 363.706 374.911

Fluctuation reserves 42.391 14.625

Employer contribution reserves 26.149 30.350

Free reserves 3.547 3.680

Total net fund assets at 12 / 31 435.793 423.566


83

Further information

2009 2008 2007 2006 2005

Net revenue by business unit

Sheet Metal Processing Systems CHF m 356.1 745.1 793.5 632.0 490.0

% 37.3 50.6 52.7 49.6 42.5

Glass Processing Systems CHF m 145.6 244.6 237.3 219.2 196.5

% 15.3 16.6 15.7 17.2 17.0

Automation Systems CHF m 56.1 73.6 76.7 49.6 32.0

% 5.9 5.0 5.1 3.9 2.8

Foam Materials CHF m 116.8 146.3 156.5 147.5 135.2

% 12.2 9.9 10.4 11.6 11.7

Sporting Goods CHF m 215.3 192.6 177.1 164.7 145.0

% 22.5 13.1 11.7 12.9 12.6

Graphic Coatings CHF m 43.2 47.5 44.1 36.5 31.6

% 4.5 3.2 2.9 2.9 2.7

Real Estate and miscellaneous revenue CHF m 22.1 22.8 21.8 21.9 20.3

% 2.3 1.6 1.5 1.7 1.8

Revenue from discontinued activities CHF m 2.2 102.8

% 0.2 8.9

Total CHF m 955.2 1 472.5 1 507.0 1 273.6 1 153.4

Consolidated income statement

Net revenue CHF m 955.2 1 472.5 1 507.0 1 273.6 1 153.4

Operating result CHF m – 1.4 97.8 132.1 80.6 66.8

Extraordinary result CHF m 10.1 3.9 56.5 9.6 9.6

Group result CHF m 3.3 78.8 161.4 71.1 63.6

Consolidated balance sheet

Current assets CHF m 853.8 914.5 970.0 799.0 683.6

Fixed assets CHF m 401.0 418.4 413.7 418.2 443.7

Short-term liabilities CHF m 198.1 247.7 318.3 286.2 232.7

Long-term liabilities CHF m 78.4 84.3 74.5 78.2 95.3

Shareholders’ equity CHF m 978.3 1 000.9 990.9 852.8 799.3

Total assets CHF m 1 254.8 1 332.9 1 383.7 1 217.2 1 127.3

Shareholders’ equity as % of total assets % 78.0 75.1 71.6 70.1 70.9

Investment in fixed assets / employees

Investments in property, plant and equipment and intangible assets CHF m 28.0 56.0 49.0 31.8 28.5

Employees at year-end Number 3 225 3 718 3 444 3 273 3 280

Employees, average Number 3 551 3 581 3 356 3 086 3 069

Net revenue per employee CHF thousand 269.0 411.2 449.0 412.7 375.8

Personnel expenses per employee CHF thousand 80.7 94.1 97.1 96.7 93.0

Five-year summary


84

Further information

2009 2008 2007 2006 2005

Share information

Share capital CHF m 46.0 46.0 46.0 46.0 46.0

Number of shares issued at 12 / 31

Bearer shares (par CHF 100) Number 406 000 406 000 406 000 406 000 406 000

Registered shares (par CHF 20) Number 270 000 270 000 270 000 270 000 270 000

Market prices of the bearer shares

High / low CHF 1 934 / 1 135 2 850 / 1 450 2 925 / 2 170 2 349 / 1 650 1 750 / 1 300

Year-end CHF 1 800 1 540 2 777 2 165 1 700

Total dividend CHF m 13.81 27.6 32.2 20.7 18.4

Key indicators per share (on capital entitled to dividend)

Group result per bearer share CHF 7.10 171.20 350.90 154.60 138.30

per registered share CHF 1.40 34.20 70.20 30.90 27.70

Cash flow from per bearer share CHF 304.20 141.70 370.20 121.20 154.00

operating activities per registered share CHF 60.80 28.30 74.00 24.20 30.80

Shareholders’ equity per bearer share CHF 2 126.70 2 175.80 2 154.20 1 853.80 1 737.60


Gross dividend per bearer share CHF 30.001 60.00 70.00 45.00 40.00




85

Further information

2010

Wednesday, April 28 Ordinary General Meeting at the Lake Side, Zurich

Wednesday, May 5 Payment of dividends

Wednesday, August 18 Interim report as at June 30, 2010

2011

Wednesday, March 30 Year-end results as at December 31, 2010

Thursday, April 28 Ordinary General Meeting at the Lake Side, Zurich

Investor Relations

Carlo Menotti

Phone + 41 44 468 24 84

Fax + 41 44 468 24 81

[email protected]

Ticker Symbols

Swiss security

no. 265 798

ISIN CH0002657986

Telekurs CZH

Reuters ZZZZ.S

Bloomberg CZH SW

Further information about the company,

calendar dates and contacts can be found

at www.conzzeta.ch.

Changes in interim reporting

As a result of a change in the listing regulations of the SIX Swiss Exchange, Conzzeta will publish an

interim report as at June 30, from the 2010 business year onwards. Interim reporting in four-month

periods will be discontinued.

Information and calendar for investors


86

Further information

2009 2008

Group











Conzzeta AG






























Key figures









2005

2006

2007

2008

2009

1 15

3.4

1 27

3.6

1 50

7.0

1 47

2.5

955.

2

1 500

1 750

2 000

1 250

1 000

750

500

250

0

2005

2006

2007

2008

2009




150

175

125

100

75

50

25

0

– 25


29.7

70.1

195.

9

– 30

.8

141.

8

250

300

200

150

100

50

0

– 50

2005

2006

2007

2008

2009


28.5

31.8

49.0

56.0

28.0

60

70

50

40

30

20

10

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2005

2006

2007

2008

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Annual Report 2009








Conzzeta is an internationally active Swiss holding company with broadly diversified businesses. Its activities are in the areas of machinery and systems engineering, foam materials, sporting goods, graphic coatings and real estate. In the interests of cus-tomers, employees and shareholders, Conzzeta develops its businesses with a long-term perspective.

www.conzzeta.ch

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Annual Report 2009

Documents

yearend chf

year chf

employee chf

share registered chf

group result chf

operating bearer chf

share capital chf

shareholders equity