Annual Report 2010
Mar 22, 2016
Annual Report 2010
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 Groups 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 customers, employees and shareholders, Conzzeta develops its businesses with a long-term perspective.
www.conzzeta.ch
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Conzzeta at a glance
Annual Report 2010
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 Groups 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 customers, employees and shareholders, Conzzeta develops its businesses with a long-term perspective.
www.conzzeta.ch
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Conzzeta at a glance
2010 2009
Group
Net revenue CHF m 1 051.9 955.2
Operating result CHF m 56.9 1.4
Group result CHF m 51.5 3.3
Free cash flow CHF m 17.6 141.8
Shareholders equity CHF m 982.7 978.3
Total assets CHF m 1 287.6 1 254.8
Shareholders equity as % of total assets % 76.3 78.0
Investments in property, plant and equipment and intangible assets CHF m 21.1 28.0
Number of employees at year-end Number 3 322 3 257
Net revenue per full-time position CHF thousand 324.9 300.4
Conzzeta AG
Net income for the year CHF m 68.7 36.5
Share capital CHF m 46.0 46.0
Total dividend CHF m 18.41 13.8
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 40.001 30.00
registered (par CHF 20) CHF 8.001 6.00
Market price per share bearer high / low CHF 2 000 / 1 690 1 934 / 1 135
year-end CHF 1 900 1 800
Total capitalization on 12 / 31 CHF m 874 828
Group key figures per share
Group result bearer CHF 111.90 7.10
per share registered CHF 22.40 1.40
Cash flow from operating bearer CHF 164.50 313.30
activities per share registered CHF 32.90 62.70
Shareholders equity bearer CHF 2 136.40 2 126.70
per share registered CHF 427.30 425.30
1 As proposed by the Board of Directors
Se
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There is a noticeable recovery in the Conzzeta Groups business environment.
Consolidated net revenues rise by 10.1 % and the Group result improved significantly.
All industrial business units report growth in sales.
The main source of growth is Asia, where around a quarter of consolidated revenues are generated.
Changes in the exchange rate situation have a negative impact on revenue, result and equity.
The operating result (EBIT) and Group result both show a clear improvement compared with the previous year.
The Group remains very solidly financed, with an equity ratio of 76.3 %.
In view of the improved economic situation, the Board of Directors is proposing a one-third increase in the dividend.
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 17, 2011.
Published on March 30, 2011.
Net revenue (in CHF m)
2006
2007
2008
2009
2010
1 27
3.6
1 50
7 .0
1 47
2.5
955.2
1 051.9
1 500
1 750
2 000
1 250
1 000
750
500
250
0
2006
2007
2008
2009
2010
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)
70.1
195.9
30
.8
141.8
17.6
250
300
200
150
100
50
0
50
2006
2007
2008
2009
2010
Investments in property, plant and equipment and intangible assets (in CHF m)
31.8
49.0
56.0
28.0
21.1
60
70
50
40
30
20
10
0
2006
2007
2008
2009
2010
Publication details
Publisher Conzzeta AG, Zurich
Concept and design Prime, Zurich
Photography Jolanda Flubacher Derungs, Sebastian Derungs, Eric Leleu et al.
Translation Hill Johnson Associates GmbH, Zollikon
Printing Staffel Druck AG, Zurich
Publishing system Multimedia Solutions AG, Zurich
Key figures
Key facts 2010
2010 2009
Group
Net revenue CHF m 1 051.9 955.2
Operating result CHF m 56.9 1.4
Group result CHF m 51.5 3.3
Free cash flow CHF m 17.6 141.8
Shareholders equity CHF m 982.7 978.3
Total assets CHF m 1 287.6 1 254.8
Shareholders equity as % of total assets % 76.3 78.0
Investments in property, plant and equipment and intangible assets CHF m 21.1 28.0
Number of employees at year-end Number 3 322 3 257
Net revenue per full-time position CHF thousand 324.9 300.4
Conzzeta AG
Net income for the year CHF m 68.7 36.5
Share capital CHF m 46.0 46.0
Total dividend CHF m 18.41 13.8
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 40.001 30.00
registered (par CHF 20) CHF 8.001 6.00
Market price per share bearer high / low CHF 2 000 / 1 690 1 934 / 1 135
year-end CHF 1 900 1 800
Total capitalization on 12 / 31 CHF m 874 828
Group key figures per share
Group result bearer CHF 111.90 7.10
per share registered CHF 22.40 1.40
Cash flow from operating bearer CHF 164.50 313.30
activities per share registered CHF 32.90 62.70
Shareholders equity bearer CHF 2 136.40 2 126.70
per share registered CHF 427.30 425.30
1 As proposed by the Board of Directors
Se
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There is a noticeable recovery in the Conzzeta Groups business environment.
Consolidated net revenues rise by 10.1 % and the Group result improved significantly.
All industrial business units report growth in sales.
The main source of growth is Asia, where around a quarter of consolidated revenues are generated.
Changes in the exchange rate situation have a negative impact on revenue, result and equity.
The operating result (EBIT) and Group result both show a clear improvement compared with the previous year.
The Group remains very solidly financed, with an equity ratio of 76.3 %.
In view of the improved economic situation, the Board of Directors is proposing a one-third increase in the dividend.
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 17, 2011.
Published on March 30, 2011.
Net revenue (in CHF m)
2006
2007
2008
2009
2010
1 27
3.6
1 50
7 .0
1 47
2.5
955.2
1 051.9
1 500
1 750
2 000
1 250
1 000
750
500
250
0
2006
2007
2008
2009
2010
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)
70.1
195.9
30
.8
141.8
17.6
250
300
200
150
100
50
0
50
2006
2007
2008
2009
2010
Investments in property, plant and equipment and intangible assets (in CHF m)
31.8
49.0
56.0
28.0
21.1
60
70
50
40
30
20
10
0
2006
2007
2008
2009
2010
Publication details
Publisher Conzzeta AG, Zurich
Concept and design Prime, Zurich
Photography Jolanda Flubacher Derungs, Sebastian Derungs, Eric Leleu et al.
Translation Hill Johnson Associates GmbH, Zollikon
Printing Staffel Druck AG, Zurich
Publishing system Multimedia Solutions AG, Zurich
Key figures
Key facts 2010
6 Foreword
9 Businessoverview10 BoardofDirectors11 GroupExecutiveBoardandCorporateStaff12 Overviewofthe2010businessyear18 InterviewwiththeGroupCEO20 Businessunits
27 Corporategovernance
39 Financialreport
81 Furtherinformation82 EmployeepensionfundsinSwitzerland84 Five-yearsummary86 Informationandcalendarforinvestors
Tableofcontents
ConzzetaAnnualreport2010
JacobSchmidheiny,ChairmanoftheBoardofDirectors(atleft)andRobertSuter,GroupChiefExecutiveOfficer(atright)
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ConzzetaAnnualreport2010
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Foreword
toovercomethedramaticslumpandrespondtochangesinthemarketbecauseofthesetwinstrengths.Wehavethatinmindinexpressingourrecognitionandgratitudetoouremployeesallovertheworld.
The Conzzeta Group has emerged strengthenedfromthefinancialcrisis,withtheorderbooksshowingasustainedupwardtrend.Thisenablesustomoveforwardwithconfidence.
JacobSchmidheinyChairmanoftheBoardofDirectors
RobertSuterGroupChiefExecutiveOfficer
LadiesandGentlemen
Thingsare lookingup!Thisshortsentenceneatlysumsupthe2010businessyear.Thedramaticslumphasgivenwaytoamarkedandcontinuingrecovery.Theeconomicupturn is being fuelledbydemand inAsia,where theConzzetaGrouphasconsiderablystrengtheneditspres-enceinrecentyearsandnowgeneratesalmostaquarterofitsrevenues(23%).
Howeverwelcomethisupwardtrendmaybe,itmustbeconsideredoveranextendedperiod.Consolidatednetrevenuesarestillsignificantlylower(30%)thaninthepeakyears,anditmaybesometimebeforethatlevelisreachedagain.Measurestostrengthencompetitivenessandreduceoperatingcosts,whichprovednecessary,ledto amarked improvement in the result.However, it isnotyetenoughfortheGrouptosustainvigorousdevel-opment.
In other words, we must continue the efforts toincrease our competitiveness, including continuousrenewalandimprovementofproductsandservicesandconstant reduction of costs. This is also necessarybecausethestrengthoftheSwissfranchashadastrongimpact on our export-oriented Group, with its strongbase inSwitzerland.Theshift towardsgrowthmarketssuch as those in Asia creates opportunities for theGroup,but italsoposeschallenges.Theneedtokeeppace with the competition places great demands intheareasofmarketing,management,developmentandproductpricing.
Despitenumerouschallengesandeconomicuncer-tainties,includinggeopoliticalinstability,welooktothefuturewithadoseofoptimism.Thepressureofconstantrenewalandadaptationisanintegralpartofindustrialactivity,andtheConzzetaGroupiswellequippedtodealwith it.On theonehand, theGrouphasa committedand loyalworkforce; andon theother, it hasmaterialresourcesintheformofcapitalwhichmakeitpossibletoadoptalong-termapproach.TheGroupwasonlyable
Conzzetahasemergedstrengthenedandismovingforward.
ConzzetaAnnualreport2010
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Foreword
8ConzzetaAnnualreport2010
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Group10 BoardofDirectors11 GroupExecutiveBoardandCorporateStaff12 Overviewofthe2010businessyear18 InterviewwiththeGroupCEO
Businessunits20 SheetMetalProcessingSystems21 GlassProcessingSystems22 AutomationSystems23 FoamMaterials24 SportingGoods25 GraphicCoatings26 RealEstate
Businessoverview
PhilipMosimann,MemberoftheBoardsince2007
RobertF.Spoerry,MemberoftheBoardsince1996
WernerDubach,MemberoftheBoardsince1993
JacobSchmidheiny,Chairmansince1977
ThomasW.Bechtler,MemberoftheBoardsince1987
MatthiasAuer,MemberoftheBoardsince1996
AllBoardmembersareelecteduntilthe2011OrdinaryGeneralMeeting.
>FordetailedinformationontheBoardofDirectors,seepage30etseq.
BoardofDirectors
Names and functions from left to right, as in the listing below.
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Businessoverview/Group
CarloMenotti,HeadofCorporateServicesandSecretaryoftheBoardofDirectorssince2008
FerdiTngi,HeadoftheSheetMetalProcessingSystemsbusinessunitsince2002
KasparW.Kelterborn,GroupChiefFinancialOfficersince2006
RobertSuter,GroupChiefExecutiveOfficersince2009
RichardJakob,HeadoftheGlassProcessingSystemsbusinessunitsince2007
BarbaraSenn,GeneralCounselsinceFebruary2010
RolfG.Schmid,HeadoftheSportingGoodsbusinessunitsince2004
SergeEntleitner,HeadoftheGraphicCoatingsbusinessunitsince2009
RalphSiegle,HeadoftheRealEstatebusinessunitsince2003
BartJ.tenBrink,HeadoftheFoamMaterialsbusinessunitsince2009
MartinPfister,HeadoftheAutomationSystemsbusinessunitsince2005
>FordetailedinformationontheGroupExecutiveBoard,seepage33etseq.
GroupExecutiveBoardandCorporateStaff
Names and functions from left to right, as in the listing below.
ConzzetaAnnualreport2010
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Businessoverview/Group
For the Conzzeta Group, 2010 brought a tangibleimprovementintheeconomicenvironmentfollowingthefinancialandeconomiccrisis.Theupwardtrendindemandled to a recovery in themarkets for capital goods andindustrialproducts.However,thedemandtrendsshowedregionalvariations.InEuropeandtheUSA,therecoverywasmostly slow and to some extent variable over thecourseoftheyear.InAsiaandothergrowthmarkets,ontheotherhand,thebusinessunitsbenefitedfromarapideconomic recovery and an early return tohighgrowthdynamics.TheoutdoormarketandtheSwissresidentialpropertymarketremainedstable.
TheConzzetaGrouprecordsasignificantimprovementintheresultandstrongsalesgrowthinAsia.
Further important economic factors included thetrend in rawmaterial prices and the exchange rate sit-uation. Higher rawmaterial prices as a result of risingdemandand increasedcrudeoilpriceshadaparticularimpactonthe industrialproductsmarket.TheGroupseconomic environment was also affected by changesintheexchangeratesituation.TheparityoftheSwissfrancagainsttheweakeuroandUSdollarwasaparticu-lardisadvantageforcompaniesexportingfromaSwissbase, with a negative overall impact on consolidatedrevenuesandtheGroupresult.
Thanks to the growth in Asia and the improvedcoststructure,theGroupwasabletopostasignificantlyimprovedresult.
Overviewofthebusinessyear
Netrevenuebybusinessunit2010 2009 Change
CHFm CHFm in%
SheetMetalProcessingSystems 410.9 356.1 15.4
GlassProcessingSystems 167.5 145.6 15.0
AutomationSystems 56.4 56.1 0.4
FoamMaterials 127.9 116.8 9.5
SportingGoods 221.2 215.3 2.8
GraphicCoatings 46.6 43.2 7.9
RealEstateandmiscellaneousrevenue 21.4 22.1 3.2
Total 1051.9 955.2 10.1
ConzzetaAnnualreport2010
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Businessoverview/Overviewofthebusinessyear
DevelopmentofGrouprevenues
In the reporting year, the Conzzeta Group increasedconsolidatednetrevenuestoCHF1051.9million,ariseof10.1%overthepreviousyear(CHF955.2million).Afteradjustmentfornegativecurrencytranslationeffectsof 3.6% and divestment effects of 1%, the growthamountedto14.7%.
All the industrial businesses generated increasedsales.TheRealEstatebusinessunitproducedastableresult,takingaccountofthesaleoftwopropertiesinthepreviousyear.Thestrongestsalesgrowthwas recordedin themachinery and systemsengineeringbusinesses,whichwerehardesthitinthepreviousyearbytheslumpindemandduetotheeconomiccrisis.
Right fromthebeginningof theyear, salesof in-dustrialproducts(FoamMaterialsandGraphicCoatingsbusinessunits)wereonanrisingtrend,comparedwiththelevelayearago.Bycontrast,thethreebusinessunitsinthemachineryandsystemsengineeringsectorbegan2010withloworderbooks.Thissituationimprovedoverthecourseoftheyear,withanincreasinglypositiveeffectonsalesfigures.TheSportingGoodsbusinessunitalsoprogressedoverthecourseoftheyear,withsalesgrowingby2.8%,despitethedivestmentoftheTokobusiness(ski wax and care products) and currency translationeffects.
The share of machinery and systems engineeringinGroup revenuesagain rose slightly to60.4% (pre-vious year: 58.4%). In terms of geographic markets,Asias importance for the Group increased further inthereportingyear.ThankstotheGroupslong-termcom-mitmentandexpansionofitspresenceinAsia,salesintheAsiaandPacificmarketregionincreasedby53.9%toCHF242.1million.TheregionsshareinoverallGrouprevenuesgrewasaresultto23%(previousyear:16.5%).
Businessunits
SheetMetalProcessingSystemsThe Sheet Metal Processing Systems business unit(Bystronic) increased net revenues by 15.4% to CHF410.9million (previousyear:CHF356.1million).Ad-justedforcurrencytranslationeffects,theincreasewas19.3%.WhileAsiaexperienceda stronggrowth trendearlyintheyear,therecoveryinEuropeandtheUSAwashesitantanddidnotgainmomentumuntil the secondhalfof2010.Thegainswereparticularlymarkedinthegrowthmarkets ofAsia and SouthAmerica, in whosedevelopmentBystronichasinvestedinrecentyearsandwhich generate an increasing portion of the businessunitssales.Thankstotheimprovedordersituation,allBystronicGroupcompanieswereabletoendshort-time
Netrevenuebygeographicarea2010 2009 Change
CHFm CHFm in%
Switzerland 160.3 156.0 2.8
Euroarea 360.2 386.3 6.8
RestofEurope 140.5 130.7 7.5
TotalEurope 661.0 673.0 1.8
NorthandSouthAmerica 143.9 119.4 20.5
AsiaandPacific 242.1 157.3 53.9
Africa 4.9 5.5 10.9
Total 1051.9 955.2 10.1
ConzzetaAnnualreport2010
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Businessoverview/Overviewofthebusinessyear
working. Bystronic launched important product inno-vations,suchasthefirstlaser-cuttingsystemwithfiberlaser technology (BySprint Fiber 3015), which wasawardedaprizeat theEuroBLECHtradefair.BystronicalsopresentedanewmachineaimedattheChinesemar-ket,whichwasdevelopedlargelyinChina.Inadditiontoproductdevelopment,thebusinessunitalsoinvestedinanewprocessingcenterforlargeparts,anewsalesofficeinSaigon(Vietnam)anditsmarketingplatform.TheBestchoice.campaign, running in40countries, increasedawarenessofBystronicasasupplierofcompletesystemswho is close to the customer, strengthening both thebrandandemployeemotivation.
GlassProcessingSystemsTheGlassProcessingSystemsbusiness unit (Bystronicglass) increased sales by 15% to CHF 167.5 million(previousyear:CHF145.6million).Adjustedforcurrencytranslationeffects, the increasewas21.1%comparedwiththepreviousyear.ThegrowthwasgeneratedlargelyintheAsianmarket,wheremajorordersboostedsalesinthearchitecturalglasssegment.Demandforvehicleglassprocessingmachineryfromtheautomotiveindustryalsorecovered. But there was little growth impetus fromtheEuropeanandAmericanmarkets,wherebusinesswaspartlyaffectedbytheadverseexchangeratesituation.In the Middle East and Eastern Europe, customersfinancing problems prevented the realization of someprojects.InEurope,demandbegantopickuptowardstheendoftheyear.Therecoverywasparticularlyappar-entintheserviceandsparepartsbusiness.Onthewhole,competitivepressureinthemarketisstillatahighlevel.Thebusinessunittightenedcostsandinvestedinprod-uctdevelopmentin2010.Bystronicglassdemonstratedthestrengthofitsinnovationpotentialbypresentinganumberofnewdevelopmentsatglasstec,theindustryslargesttradeshow.Theseincludedanewgenerationofmachineryforprocessingautomotiveglassandamachinefor uninterruptedproductionof triple-layer insulatingglassunitswithflexiblespacers.
AutomationSystemsTheAutomationSystemsbusinessunit(ixmation)closedthereportingyearwithsalesofCHF56.4million(pre-viousyear:CHF56.1million).Whencurrencytranslationeffects and the divestment of production automationactivitiesthepreviousyeararetaken intoaccount,thisequates to salesgrowthof13.9%. In the firsthalfof2010, customers, particularly in the automotive sectorandtheUSA,werereticentaboutcommittingtoinvest-
ments,butthesituationimprovedinthesecondhalf.IntheUSA,orderswerereceivedaboveall inthemedicaltechnologyandalternativeenergysegments.ixmationsinternationalpresenceenabledittoexecuteanincreasingnumberofrepeatordersforgloballyactivecompanies.CapacitywaswellutilizedattheplantinMalaysia,whereanewproduction andofficebuildingwas inauguratedinSeptember2010.Thebuildingisequippedwithsolarcellsmanufacturedbyanixmationcustomer.TheplantinChinaexecutedanumberoforders for theautomotiveindustry which came through the intermediary of theEuropeansubsidiaryinSwitzerland.InEurope,ixmationenteredthemarketwithaheliumleakdetectionsystemwhichcanbeusedforvariouspartsandcomponentsindifferentindustries.ThesystemwasdevelopedfromstarttofinishinMalaysia,whereitisalsoproduced.
FoamMaterialsThe Foam Materials business unit (FoamPartner) in-creasedsalestoCHF127.9millionin2010,anincreaseof9.5%comparedwiththepreviousyear(CHF116.8million).Adjustedfornegativecurrencytranslationef-fects, thebusinessunitposteda13.8%increasecom-paredwiththepreviousyear.Technicalfoams(industry,packaging and automotive) generated marked salesgrowth,althoughtheperformance inthefirsthalfyearwasbetter than in the second. InEurope, theGermanmarket recovered well. There was also clear volumegrowthinChinaandtheUSA,wherethecustomerbasewasexpandedinthereportingyear.Thecomfortproductsegment(mattressandpillowcores)closed2010atthesamelevelasthepreviousyear.ThestrengthoftheSwissfranchinderedexportsfromSwitzerlandandintensifiedthecompetitivestruggleontheSwissmarket,particularlyin the case of simpler products. On the procurementfront,FoamPartnerhadtoabsorbapriceriseonkeyrawmaterialsforfoamproduction,resultingfromincreaseddemand on the one hand and higher crude oil priceson theother.The reporting year sawnewproducts in-troducedandimprovementsinlogistics.Inthecomfortsegment, theentire foammaterialsofferingwasgivena major overhaul. In the technical foams segment, anewsealantfoamwaspresentedand introducedtothemarket.
SportingGoodsThe Sporting Goods business unit (Mammut SportsGroup)increasedsalesinthereportingyearby2.8%toCHF221.2million(previousyear:CHF215.3million).After adjustments to account for the sale of theToko
ConzzetaAnnualreport2010
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Businessoverview/Overviewofthebusinessyear
skiwax and careproducts business to theNorwegianSwixSportASwitheffectfromSeptember1,2010,aswellastheeffectsofcurrencytranslation,thegrowthinsalesequatedto6.7%.TheMammutSportsGroup,nowfocusedontheMammutbrand,wasabletoholditsowninthegrowingoutdoormarket.Thecompanyrecordedparticularly strong gains in the Japanese and Koreanmarkets,aswellasinGermanyandItaly.Mammutcon-tinuedtoinvestinitssalesnetwork,althoughinsomeplacesitisachallengetofindsuitablemarketingpart-ners and affordable, well-positioned locations for theMammutstores.Sales in thehomemarketofSwitzer-land,whereMammuthasaveryhighmarketshare,couldnotbemaintainedatthepreviousyearslevel.Thefoot-wearproductgroup,thenewbackpackcollection,climb-ing harnesses and the clothing lines all developedwell.ApatentdisputewithOrtovoxSportartikelGmbHrelating to avalanche rescue transceivers was settledamicably.Theretailtradereactedpositivelytothepres-entationofthenewEigerExtremecollection,whichgoeson sale in autumn 2011, aswell as to the companyscommitmenttotheincreasinglyimportantissueofcor-poratesocialresponsibility,inwhichMammutisplayingapioneeringroleinitsindustry.
GraphicCoatingsThe Graphic Coatings business unit (Schmid Rhyner)increasednetrevenuesinthereportingyearby7.9%toCHF46.6million(previousyear:CH43.2million).SchmidRhynerreturnedtogrowthinalmostallitskeymarkets,withjustafewremainingatthepreviousyearslevel.Thebusinessunitrecordedabove-averagegainsinAsiaandSouthAmerica,aswellassomeEuropeanmarkets.TherewasalsohealthygrowthinNorthAmerica.SchmidRhynergainedaboveallfromthelaunchofnewproductsandgeographicexpansionin2010,althoughdemandincom-mercial and packaging printing remained well belowthelevelpriortothecrisis.Oneofthebigchallengesinthereportingyearwastheshortageofprimarymaterialsforvarnishmanufacture,resultinginamassiveincreaseinmaterialpricesandcorrespondingadjustmentstosalesprices. Despite these developments, Schmid Rhynerwasabletomaintainsecurityofsupplyanddelivertoallcustomersontime.NewproductsweresuccessfullyintroducedinthedispersionvarnishesaswellastheUV-hardening line.Production capacity for thedispersionsproductlinewasexpandedin2010.
RealEstateTheRealEstatebusinessunit(PlazzaImmobilien)gener-atedrevenueofCHF20.9millionin2010(previousyear:CHF21.4million).Thedeclineof2.3%waslargelydueto lowerrental income,followingthesaleoftwoprop-ertiesthepreviousyear.Rentalincomeremainedstablein the Swiss residential propertymarket.There is stillanacuteshortageofapartments,particularlynearlargeconurbationssuchasZurich.Thedevelopmentplanfora residential estatewith around200 apartments on aformerindustrialsitebelongingtoConzzetainWallisellenwasmadeavailableforpublicinspection.Themunicipal-itywillprobablyvoteontheplanduring2011.
Earningssituation
Thecombinedeffectofvolumegrowthandthecapacityadjustments undertaken theprevious year enabled theConzzetaGroup tomakea clear return toprofit, alsoonanoperationallevel.Theoperatingresult(EBIT)im-provedbyCHF58.3million toCHF56.9million (pre-vious year: CHF 1.4 million). Operating profit rosein the second half of the year on the strength ofthehighervolumeofdeliveries.Overall,theresultwassignificantlyaffectedbynegativecurrencyeffects.Theoperatingmarginfortheyearasawholewas5.3%,sig-nificantlyhigherthanin2009,thoughitdidnotreturntothepre-crisislevel(8.8%in2007).TheGroupresultincludes an extraordinary profit of CHF 5.4 millionfromthesaleofbusinessactivitiesandproperties.TheConzzeta Group closed the 2010 business year with aGroupresultofCHF51.5million(previousyear:CHF3.3million).
Investmentsanddivestments
Investment activity in 2010wasmarkedby caution inviewofthepartlyuncertaineconomicenvironment.In-vestments in property, plant and equipment and in-tangibleassetsamountedtoCHF21.1million(previousyear:CHF28.0million).Themostsignificantinvestmentsinfixedassetswereanewproductionandofficebuildingfor the Automation Systems business unit in Penang(Malaysia) and a processing center for large parts attheSheetMetalProcessingSystemsfacilityinNiedernz(Switzerland).Investmentsinintangibleassetsincludedfurther development of the ERP systems within thevariousbusinessunits.TheSportingGoodsbusinessunit
ConzzetaAnnualreport2010
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Businessoverview/Overviewofthebusinessyear
sold the business activities of Toko, specialist in skiwaxandcareproducts,witheffectfromSeptember1,2010.
Freecashflow,financingandliquidity
In2010,theConzzetaGrouprecordedacashflowfromoperatingactivitiesofCHF75.7million(previousyear:CHF144.1million).Theincreaseinvolumeagaintiedupmorecapitalinthereportingyear.However,itwaspos-sibletomaintainsystematicmanagementofnetworkingcapital.The cash flow from operating and investmentactivities (free cash flow) generated by the ConzzetaGroupwasCHF17.6million(previousyear:CHF141.8million).Apart from investments inproperty,plantandequipment and intangible assets of CHF21.1million,there were net investments in securities of CHF 54.9million, as well as divestments of business activitiesamountingtoCHF9.7million.
Cash, cash equivalents and securities held by theGroupincreasedbyCHF54.9milliontoCHF510.9mil-lion(previousyear:CHF456.0million).
TheGroupissolidlyfinanced,withanequityratioof76.3%(previousyear:78.0%).
Dividends
Continuingtheflexibledividendpolicy,andinviewoftheimprovedeconomicsituation,theBoardofDirectors isproposing an increase in thedividend. Its proposal totheAnnualGeneralMeetingofShareholderswillbeforadividendofCHF40.00(previousyear:CHF30.00)perbearershareandCHF8.00(previousyear:CHF6.00)perregisteredshare.
Employees
In2010,theConzzetaGroupcreated65newposts.Attheendoftheyear, theworldwideworkforcestoodat3322employees(previousyear:3257).MostofthenewjobswerecreatedinAsia.
Staffchanges
In February 2010, Barbara Senn joined the Group asGeneral Counsel. She succeeded Thomas Emch whoretiredattheendofJune2010.TheBoardofDirectorsandGroupExecutiveBoardwouldliketothankThomasEmchforhiswork indevelopingthepostoverthelastfouryearsandwishhimallthebestforthefuture.
Trendsandoutlook
In spite of the prevailing uncertainties in the businessenvironment,Conzzetacan lookforwardto2011withsome confidence, partly thanks to the sustained levelofdemandfromcustomers.Therisksanduncertaintiesincludethemonetary imbalancesandhigh levelof in-debtedness affecting various countries, aswell as thepoliticalinstabilityinkeyregions.Theeconomicimpactof the devastating earthquake in Japan onMarch 11,2011,arestillunclear.Regardingthecurrencysituation,itistobeexpectedthattheSwissfrancwillmaintainitsstrengthagainsttheeuroandUSdollarin2011.
Employeesbygeographicarea2010
Switzerland1145
Germany875
RestofEurope344
NorthandSouthAmerica323
AsiaandPacific635
TotalEurope2364
TotalGroup3322
ConzzetaAnnualreport2010
16
Businessoverview/Overviewofthebusinessyear
Overall, there has been a significant recovery intheGroupsmarketenvironment.Thisappliestoindustrialproductsaswellasmachineryandsystemsengineering,whereincomingorderscontinuedtoriseoverthecourseof the2010businessyear, creatinga stronger startingposition for 2011.The outdoormarket and the Swissresidentialpropertymarketarealsoexpectedtobenefitfromafavorabledevelopmentinthecurrentyear.
Conzzeta aims to take advantage of growth op-portunities.However,despiteallthepositivesigns,theeconomic environment is still fragile and Conzzetawillcontinuetoproceedwithcautionwhenitcomestocosts and investments inexpansionprojects.Thegoalistoincreasethecompetitiveness in internationalmar-ketsandstrengthen theGroupspresence inemergingmarkets.
ConzzetaAnnualreport2010
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Businessoverview/Overviewofthebusinessyear
Conzzetasuccessfullyovercametheeffectsofthefinancialcrisisinthe2010businessyearandisbackinoperatingprofit.Inthisinterview,GroupChiefExecutiveOfficerRobertSuterexplainswhyConzzetaisinbettershapetofacethefuture.
Mr. Suter, where does the Conzzeta Group stand today, compared with a year ago?Weareinmuchbettershapenow.Wehavecomethroughthefinancialcrisis.Revenuesareattheplannedlevelandwearebackinoperatingprofit.Thereareseveralreasonsforthispositiveturnofevents:first,theglobaleconomicsituationhasimproved;andsecond,ouremployeeshaveshown tremendous commitment in seizing whateveropportunitiespresentedthemselves.
How have the Groups main markets developed?The economic recovery has been variable with oneexception,Asia,wherewewereabletoachievedouble-digitgrowthinallareasofactivity.ConzzetaestablishedafootholdinAsiaearlyon,sowecannowreaptheben-efitsofthisdevelopment.Ontheotherhand,AmericaandourmainmarketinEuroperemainveryimportantforusandtherecovery intheseregions isonly justtakingoff.
What impact has the weaker euro and US dollar had on the run of business?Like many export-oriented businesses, the ConzzetaGrouphasbeenhardhitby theweaknessof thedollarandtheeuroagainsttheSwissfrancasignificantpor-tionofourproductionandvalue-creatingactivitiesarelocated in Switzerland. But there have always beenperiodsofcurrencyfluctuationinthepast;theyforceustobeevenmore innovative andproductive inSwitzer-land.That isnt such a bad thing. However, the speedwithwhichcompetitivenesshastoberampedupisverydemanding.
Conzzeta resolved to emerge stronger from the crisis. Did you achieve that goal?Yes,wedid.WeexpandedourbusinessesinAsia,care-fullyplannedourcapacitiesanddevelopedandlaunchednumerousnewproducts.Oneexampleisanewmachineforcuttingflatsheetmetalwithafiberlaser,forwhichwewonahigh-profileinnovationprize.Otherimportantinnovations are anew sealant foamandamachine foruninterruptedproductionoftriple-layerinsulatingglassunits with flexible spacers.We also used last year tostrengthenothercompetitivestrengths,suchassoftfac-tors,forexampletheBystronic:Bestchoice.programlaunchedbyBystronic(SheetMetalProcessingSystems)withtheaimofstrengtheningthebrandinternationally.Finally, I should again mention the strong growth oftheAsianbusiness.Duringthecrisis,wehavetakenonpersonnel, built up the first development center inChina,openedanewfactoryinMalaysia,andmadeclearprogresswithourSportingGoodsbusinessinJapanandKorea.
Conzzeta employees know you for your question: Why do people buy from us? Now a question in return: What added value does Conzzeta offer its business units? It is thepeople inacompany that reallymake thedif-ference. Conzzeta has a big influence in this respect,becauseitdeterminesthebasicvaluesandcultureoftheGroup. Innovation isoneofourbasicvalues.Asarule,goodideaswillalwaysgetbacking inourcompany.Wewant toofferemployeesanenvironment inwhich theyfeelateaseandabletodeveloptheirpotential.Ourbasicvaluesalso include reliabilityanda long-termperspec-
Significantgainsininnovation
ConzzetaAnnualreport2010
18
Businessoverview/Group
tive.Thatbuildstrustwithemployees,managerialstaffand,ultimately,withourcustomersandbusinesspart-ners,too.
What are your goals for 2011?Myprimaryobjective is to securehealthyprofitabilityforthecompany.Toachievethat,Iwanttoensurethatthestrategiesofourbusinessunitsaremorefocusedandbuilding on existing strengths. We want to continuedeveloping our business in Asia and also to pursue amore active strategy in the Real Estate business unit.More generally, balancing risks and diversifying ourportfolioremain important.Andafurthercentralcon-cernistheneedtosecureskilledpersonnelandmanage-rialtalent.
And personally?Iamfullycommitted,withhead,handsandheart,tomyworkand likeeverybodyelse Ihavetomakesure Igetthework-lifebalanceright.ThatswhyIengageinsportsonaregularbasisandattachgreatimportancetorelaxeddaysonvacation.Veryimportanttomeisopencoopera-
tionwithemployeesandwithcolleaguesintheExecutiveBoardandtheBoardofDirectors.Workisonlyfunifyougetthehumaninteractionright!
Workisonlyfunifyougetthehumaninteractionright!
ConzzetaAnnualreport2010
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Businessoverview/Group
Importanteventsin2010
Bystronic launches its first cutting system based onfiber laser technology, forwhich it receives aEuro-BLECH award.The system achieves perfect cuttingresults andmaximumpart yield, especiallywith thinsheets.
Bystronic advertisinghasanew taglineadded to itsname:Bestchoice.This representsthecompanyscommitmenttobeingthepartnerofchoiceforcustom-ers.Thecampaignstrengthenstheinternationalbrandaswellasthemotivationofemployees.
2008
2009
2010
NetrevenueinCHFm
745.1
356.1
410.9
Investmentsinproperty,plantandequipmentandintangibleassetsinCHFm
26.9
11.7
5.8
Numberofemployees
1627
1389
1393
Bystronicisaworld-leadingsupplierofsolutionsfortheprocessingofsheetmetalandothersheetmaterials.
The first laser cutting machine developed for themostpartinChinaispresentedinBeijing,indicatingBystronicsfocusontherequirementsofthegrowingAsianmarkets.
SheetMetalProcessingSystemsBystronic
OverviewBystronic Head:FerdiTngi Presence:worldwide,over20salesandservice
companies;threedevelopmentandproductionsitesinSwitzerland,GermanyandChina
www.bystronic.com
20
ConzzetaAnnualreport2010Businessoverview/Businessunits
Importanteventsin2010
Bystronic glass receives the Crystal AchievementAward of the American glass industry magazineWindow&Door for the most innovative machinein the glass processing category.The awardwent tothe sashline assembly system, a line for the fullyautomatedmanufactureofglazedcasements.
Bystronic glass launches the champspeed line ontothemarket,acompletelynewgenerationofmachinesforprocessingautomotiveglass.Thelineofferscutting,breaking,polishinganddrillingofautomotiveglass,withthegreatestprecisionandflexibility.
Bystronicglassoffershigh-qualitysystemsolutionsfortheprocessingofarchitecturalandautomotiveglass.
2008
2009
2010
NetrevenueinCHFm
244.6
145.6
167.5
Investmentsinproperty,plantandequipmentandintangibleassetsinCHFm
11.0
4.4
1.7
Numberofemployees
801
675
670
Deliveryofthe1000thinsulatingglasspressunder-lines the companys longyearsofexperience in thefieldofinsulatingglassmanufacture.
GlassProcessingSystemsBystronicglass
OverviewBystronicglass Head:RichardJakob Presence:worldwidesalesandservicenet-
work,withsixsubsidiariesandseveralrepre-sentativeoffices;threetechnologycenters(developmentandproduction)inGermanyandSwitzerland;oneproductionsiteinChina
www.bystronic-glass.com
21
ConzzetaAnnualreport2010Businessoverview/Businessunits
Importanteventsin2010
ixmationenters themarket inEuropewithaheliumleakdetectionsystemmadeinAsia.Thesystemcanbeusedforleakdetectiononawidevarietyofpartsandcomponents(forexample,condensers,evaporatorsandcompressors).
InMalaysia, ixmation inauguratesanewproductionandofficebuildingwithasurfaceareaof4000m2.Theflatroofisfittedwithsolarcellswhichwereassembledbyacustomeronanixmationsystem.
ixmationisaninternationalsupplierofcustomizedautomationsystemsforassemblyandqualityassuranceinmassproduction.
2008
2009
2010
73.6
56.1
56.4
1.0
0.9
4.4
399
305
353
Globallyactivecustomersbenefitfromtheadvantagesof ixmations international presence. For example,technical consultation isprovided inEuropeand thesolutionsdevelopedareinstalledatproductioncentersintheUSAorinAsia.
NetrevenueinCHFm Investmentsinproperty,plantandequipmentandintangibleassetsinCHFm
Numberofemployees
AutomationSystemsixmation
Overviewixmation Leitung:MartinPfister Presence:fivelocationsinChina,Malaysia,
theUSAandinSwitzerlandwww.ixmation.com
22
ConzzetaAnnualreport2010Businessoverview/Businessunits
Importanteventsin2010
In themattress coreproduct segment,FoamPartnerreplacesallcoldfoamswithanewgenerationoffoammaterial which is both highly elastic and climate-resistant.Yet again, FoamPartner setsmilestones infoammaterialtechnology.
FoamPartner introduces a new sealant foam to themarket.Thismaterialhaswinningcharacteristicswhichincludealowcompressionratio,remarkablehydrolyticstabilityandexcellentdensity.
FoamPartnermanufactureshigh-qualityfoammaterialsandofferscustomizedsolutionsfortheIndustryandComfortbusinesssegments.
2008
2009
2010
146.3
116.8
127.9
9.6
2.3
3.4
495
444
450
NewcustomersweregainedinChina,whilesalestre-bledcomparedwiththepreviousyear.
NetrevenueinCHFm Investmentsinproperty,plantandequipmentandintangibleassetsinCHFm
Numberofemployees
FoamMaterialsFoamPartner
OverviewFoamPartner Head:BartJ.tenBrink Presence:nineproduction,processingand
saleslocationsinEurope,AsiaandtheUSA;worldwidemarketingthroughapartnersalesnetwork
www.foampartner.com
23
ConzzetaAnnualreport2010Businessoverview/Businessunits
Importanteventsin2010
MammutsellstheTokobusinesstotheNorwegianskiwaxmanufacturerSwix,allowingittoconcentrateonthe strongMammut brand and the growing outdoorsportsbusiness.
Ananalysisof76companiesaspartoftheCleanClothesCampaignconfirmsMammuts roleasapioneer in itsindustryontheissuesofcorporatesocialresponsibility.
200keyaccountcustomersandjournaliststestthenewEigerExtremecollectioninrealalpineconditionsoveratwo-dayperiod.Theprogramprovesagreatsuccessandrangesfromspendingthenightinasleepingbagat3600mtoabseilingfromthenorthwalloftheEiger.
MammutSportsGroupdevelops,manufacturesandmarketsinnovativemountaineering,climbingandwintersportsequipment.
2008
2009
2010
192.6
215.3
221.2
5.4
4.5
3.7
368
369
376
MammutAlpineUnderwear, the functional lineofunderwear introduced in2008,takesfirstplace inatestonKassensturz,SwissTelevisionspopularcon-sumeraffairsprogram.
NetrevenueinCHFm Investmentsinproperty,plantandequipmentandintangibleassetsinCHFm
Numberofemployees
SportingGoodsMammutSportsGroup
OverviewMammutSportsGroup Head:RolfG.Schmid Presence:worldwidesalesnetworkinover80
countries;headoffices,productdevelopmentandropemanufactureinSeon(Switzerland);numerousproductionpartnersinEuropeandAsia
www.mammut.ch
24
ConzzetaAnnualreport2010Businessoverview/Businessunits
Importanteventsin2010
SchmidRhynerintensifiesitsbusinessactivitiesinAsiaandtheUSA,achievingaboveaveragegrowthinbothmarkets.
At thebeginningof theyear, there is a shortageofmain raw materials for the manufacture of varnish,leadingtosupplybottlenecks.SchmidRhynerisabletoguaranteesecurityofsupplyforitscustomersanddeliverontime.
SchmidRhynerdevelopsandmanufacturesenviron-mentallyfriendlyprintvarnishesandlaminatingadhesivesforthegraphicalindustry.
2008
2009
2010
47.5
43.2
46.6
1.0
1.1
1.5
39
45
47
Schmid Rhyner launches a new generation of user-friendlydispersionsofconsistentlyreliablequalityanddoublesitsproductioncapacityforwater-baseddisper-sionvarnishes.
NetrevenueinCHFm Investmentsinproperty,plantandequipmentandintangibleassetsinCHFm
Numberofemployees
GraphicCoatingsSchmidRhyner
OverviewSchmidRhyner Head:SergeEntleitner Presence:worldwidesalesnetworkinover
100countries;oneproductionsiteinAdliswil(Switzerland);onesubsidiaryinNewJersey(USA)
www.schmid-rhyner.ch
25
ConzzetaAnnualreport2010Businessoverview/Businessunits
Importanteventsin2010
All Plazza Immobiliens residential properties arefullylet.
TheplansfortheredevelopmentofanindustrialsiteinWallisellenaremadeavailableforpublicinspection.Itisplannedtobuildaround200attractiveapartmentsonthisurbansite.Thenextmilestoneintheprojectisthevoteontheplanatthemunicipalassembly,prob-ablyduringthecourseof2011.
PlazzaImmobilienmanagestheConzzetaGroupsportfolioofproperties.
2008
2009
2010
22.0
21.4
20.9
1.0
3.0
0.1
16
15
16
In Brunnenthal (canton Solothurn) approximately42500 m2 of recultivated agricultural land is soldtotheformerleaseholders.
NetrevenueinCHFm Investmentsinproperty,plantandequipmentandintangibleassetsinCHFm
Numberofemployees
RealEstatePlazzaImmobilien
OverviewPlazzaImmobilien Head:RalphSiegle Presence:propertiesthroughoutSwitzerlandwww.plazza-immobilien.ch
26
ConzzetaAnnualreport2010Businessoverview/Businessunits
28 Groupstructureandshareholders29 Capitalstructure30 BoardofDirectors33 GroupExecutiveBoard35 Contentandmethodofdetermining
compensation35 Shareholdersparticipationrights36 Changeofcontrolanddefensivemeasures36 Auditors37 Informationpolicy37 Significanteventssincethebalancesheetdate
Corporategovernance
1 Groupstructureandshareholders
GroupstructureThe Conzzeta Group is organized in seven businessunits:SheetMetalProcessingSystems,GlassProcessingSystems,AutomationSystems,FoamMaterials,SportingGoods,GraphicCoatingsandRealEstate.AtGrouplevel,Corporate Staff supports the activities of the holdingcompany, Conzzeta AG, and the operational units.ConzzetaAG, with its registered offices in Zurich, hasdirectorindirectequityholdingsinthecompanieslistedonpage66etseq.ConzzetaAGistheonlycompanythatis listed. The Conzzeta bearer share (Swiss securitynumber265798,ISINCH0002657986)islistedontheSIXSwissExchangeAG.Themarketcapitalization(bearershares)asofDecember31,2010,wasCHF771400000;the total capitalization (registered and bearer shares)amountedtoCHF874000000.
TheConzzetaGroupattachesimportancetoatransparentmanagementstructureandopendialogue.TheGroupisguidedbytheprinciplesoftheSwissCodeofBestPracticeforCorporateGovernance,whichitimplementsinaccordancewithitssizeandstructure.Italwaysactsincompliancewithlegalrequirementsandurgesitsemployeestodolikewise.ThefollowingreportisbasedontheSIXSwissExchangeAGDirectiveonInformationrelatingtoCorporateGovernance,validonDecember31,2010,insofarasapplicabletoConzzetaAG.
Thiscorporategovernancereportdoesnotincludeissueswhichcorrespondtolegalnorms.Incertainselectedcases,so-callednegativedeclarationsaregiven.
Significantshareholders
Percentageofsharesrepresented
Percentageofnominalcapital
in% in%
TEGULAAG,Zurich 81.8 74.2
Nodisclosureswerereceivedinthereportingyear.
Corporategovernance
ConzzetaAnnualreport2010
28
Corporategovernance
2 Capitalstructure
CapitalandsharesThesharecapitalisfullypaid-up.TherewasnoauthorizedorconditionalcapitalasofDecember31,2010.
BearersharesparCHF100
RegisteredsharesparCHF20 Total
Numberofshares 406000 270000 676000
SharecapitalinCHF 40600000 5400000 46000000
EachsharehasonevoteattheGeneralMeetingofShareholders.Thedividendrightsoftheregisteredandbearersharesareproportionaltotheparvalueofthetwosharecategories.
ChangesinsharecapitalThesharecapitalofConzzetaAGhasnotchangedinthelastthreereportingyears.
LimitationsontransferabilityandnomineeregistrationsTheregisteredsharesarenotsubjecttoanytransferabilitylimitations.Accordingly,nomineesarelistedintheshareregister.
ConzzetaAnnualreport2010
29
Corporategovernance
3 BoardofDirectors
1 2 3
4 5 6
GuidingprincipleThe Board of Directors provides a personnel and or-ganizational framework for the companys leadershipto exercise its responsibilities.The Board of Directorsassessestheprogressmadetowardachievingtargetsaswellasthefinancialresults.Instrategicdecisions,itseeks
to strikeabalancebetweenopportunitiesand risks inthecontextoffinancialsustainability. Itdelegatestheresponsibilityformanagement,withcomprehensivepow-ers,tothemembersoftheGroupExecutiveBoard,en-ablingtheexecutivestostriveproactivelyforbusinesssuccess.
ConzzetaAnnualreport2010
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Corporategovernance
MembersoftheBoardofDirectors1 JacobSchmidheinyLic.oec.publ.born1943
ChairmanoftheBoardofDirectorsMemberoftheBoardofDirectorssince1977In1976,hebecameamemberoftheExecutiveBoardofZrcherZie-geleien,todayConzzetaAG.From1978to2001,hewasPresidentandChiefExecutiveOfficer.Thetransitionfromtheconstructionmaterialsgrouptothepresent-dayindustrialholdingcompanytookplaceunderhisleadership.JacobSchmidheinyhasbeenChairmanoftheBoardofDirectorsofTEGULAAG,Zurich,since1984.
2 MatthiasAuerDr.iur.born1953MemberoftheBoardofDirectorssince1996Hehasprac-ticedasalawyerandnotarypublicinGlarussince1981.HeisamemberoftheCantonalCouncilinGlarus.MatthiasAuerisamemberoftheBoardofDirectorsofTEGULAAG,Zurich.
3 ThomasW.BechtlerDr.iur.,LL.M.born1949MemberoftheBoardofDirectorssince1987Since1982,hehasbeenamemberoftheBoardofDirectorsandCEOofHestaAG,Zug.From1975to1982,heheldvariousmanagerialpositionsatLuwaAG.ThomasW.BechtlerisVice-ChairmanoftheBoardofDirectorsofSikaAG,Baar,andamemberoftheBoardofDirectorsofBucherIndus-triesAG,Niederweningen.
4 WernerDubachDipl.Ing.Chem.ETH,MBAborn1943MemberoftheBoardofDirectorssince1993SincethesaleofthebeveragesandrealestatesegmentsofEichhofGroupin2008,hehasheadedDatacolorAG,Lucerne(formerlyEichhofHoldingAG)asChairmanoftheBoard.From1998to2008,hewasChairmanoftheBoardofDirectorsandChiefExecutiveOfficerofEichhofHoldingAG,Lucerne.In1983hebecameCEOandamemberoftheboardofBrauereiEichhof.Between1970and1983,heheldvariousmanagerialpostswithintheEichhofGroup.WernerDubachisaboardmemberofanumberofstart-upenterprises.
5 PhilipMosimannDipl.Ing.ETHborn1954MemberoftheBoardofDirectorssince2007HejoinedBucherIndustriesAG,Niederweningen,in2001,becomingChiefExecutiveOfficerin2002.Between1980and2001,PhilipMosimannheldanumberofmanagerialpositionswiththeSulzerGroup,Winterthur,includingSulzerInnotecAG(19801992),asHeadofDivisionSulzerThermtec(19921996)andasHeadofDivisionSulzerTextil,Rti(19972000).
6 RobertF.SpoerryDipl.Masch.-Ing.ETH,MBAborn1955MemberoftheBoardofDirectorssince1996HeisChairmanoftheBoardofDirectorsofMettler-ToledoInternationalInc.,Greifen-see,whichhealsoledasCEOfrom1993to2007.RobertF.SpoerryisamemberoftheBoardofDirectorsofHolcimLtd,Jona,SonovaHoldingAG,Stfa,GeberitAG,Jona,andSchaffnerHoldingAG,Luterbach.
AllmembersoftheBoardofDirectorsareSwissnationals.Nomember is actively involved in the executiveman-agementoftheConzzetaGroup,norhasbeeninthelastthreeyears.Apartfromtheroleofshareholder,nomem-berhassignificantbusinessrelationswiththeGroup.
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31
Corporategovernance
ElectionandtermofofficeIn accordance with the Articles of Incorporation, theBoardofDirectorscomprisesat leastfourandnomorethaneightmembers.Itiselectedforatermofthreeyears.ThenexttotalrenewalisduetotakeplaceattheAnnualGeneralMeetingofShareholdersin2011.Therearenolimitationsontermsofoffice.
InternalorganizationTheBoardofDirectorsactsasanintegralbodyanddoesnotappointspecialcommittees.TheChairmanisinvolvedinandsupervisesthepreparationofthebasesfordeci-sionof theBoardofDirectors and the implementationofitsdecisions.Thesubstantivepreparationandopera-tional implementationof theBoardsdecisionsare theresponsibilityoftheGroupChiefExecutiveOfficer.Thisapplies in matters of strategy, financing, personnelappointmentsandimportantindividualtransactions.
TheGroupChiefExecutiveOfficer,theGroupChiefFinancialOfficer,theGeneralCounselandtheSecretaryoftheBoardattendBoardmeetings,unlesstheBoardofDirectorsdecidesotherwise.Inaddition,headsofbusi-nessunits,seniorexecutivesfromGroupcompanies,and,onoccasions,externalconsultantsarealsocalledupontotakepartinBoardmeetings,dependingonthespecifictopictobediscussed.Annually,theBoardofDirectorsholdsfourorfiveordinaryhalf-tofull-daysessions.Fivesuchmeetingswereheldin2010.
Risk assessment: theGrouphasmethodical proce-dureswhichservetheBoardofDirectorsasabasisforitsassessmentofthebusinesssituation,aswellasstrategic,financialandoperationalrisks.Inadditiontothefinancialreports and analyses (see Instruments of informationandcontrol),theseincludetheinternalcontrolsystemaswellasstrategicandoperativeriskmanagement.
CompetencesTheBoardofDirectorshasdelegatedresponsibilityformanagementoftheGroupsbusinesstothemembersoftheGroupExecutiveBoard,inaccordancewiththepow-erssetforthintheArticlesofIncorporation.
ThemembersoftheGroupExecutiveBoardandthemanagementsoftheindividualbusinessunitshaveexten-sivecompetencesinregardtothestrategicandoperationalmanagementoftheunitsassignedtothem.Itistheirtask,throughthecarefuldevelopmentofhuman,materialandorganizational resources, to deliver a competitive per-formanceinfuture-orientedindustriesaswellasrobustfinancialresults.Decision-makingcompetencesaregradedaccordingtotheirsignificanceandfinancialmagnitude.
TheBoardofDirectorshasthefollowingmainresponsi-bilities: determinationoftheGrouporganization appointmentofthemembersoftheGroupExecutiveBoard
supervisionofGroupmanagementandevaluationofprospectsandresults
determinationof theGroups strategic and financialgoals ratificationofthemainfeaturesofthebusinessunitstrategies
decisionsonimportantinvestments,divestments,proj-ects and financial obligations, the decision-makingcompetencebeing limitedtosumsexceedingthresh-oldsbetweenCHF3millionandCHF10million
determinationoftheprinciplesofaccounting,financialplanning,internalcontrollingandreporting
assessmentoftherisksituationoftheGroup,evaluat-ingtheopportunitiesandthesustainabilityintermsofhumanandfinancialresources.
InstrumentsofinformationandcontrolTheConzzetaGrouphasawell-developedplanningandinformationsystem.Itisbuiltfromthebaseup,becomingincreasinglyconcentratedtowardsthetop.
The Board of Directors is oriented verbally and inwritingaboutthestrategies,plansandresultsofallbusi-nessunits.TheBoardofDirectorsreceivesmonthlywrit-tenreportscomprisingthemainkeyfiguresandacom-mentaryonimportantevents.Everythreemonths,theBoard ofDirectors receives a detailed reportwith thecompletefinancialstatementsofthebusinessunitsandtheGroupandcomprehensivemanagementreports.Onanannualbasis,theBoardofDirectorsispresentedwiththemedium-termandannualplanningasabasisforitsdecisionsonthesematters.TheBoardofDirectorsalsoreceivesareportontherisksituation(seealsopage65),themanagementletteroftheauditorsandthereportontheemployeepensionfunds.
TheBoardofDirectorsmeetsinarotatingcycleforan in-depth reviewofkeystrategicquestionsatGroupand business unit level.At the invitation of the BoardofDirectors, the individualbusinessunitspresent theirsituationandplans.Aspecialdocumentationisproducedfor important individual transactions and presented atBoardmeetingsbythoseresponsible.
TheChairmanoftheBoardofDirectorstakespartinthestrategymeetingsofthebusinessunits,aswellasinsomeclosingdiscussionsandprojectmeetings.
ConzzetaAnnualreport2010
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Corporategovernance
4 GroupExecutiveBoard
1 RobertSuterDipl.Ing.ETH,MBAborn1958GroupChiefExecutiveOfficersince2009Startingin1995,RobertSuterworkedforABBinanumberofmanagementpositions.Mostrecently,asamemberofmanagementintheTransformers-businessunit,withworldwideresponsibilityfortheSmallPowerandTractionTransformersproductgroup.Between2000and2005,hewasheadoftheHighVoltageProductsbusinessunitandalsoservedasheadofABBoperationsinKorea.From1995to1999,RobertSuterwasCEOatMicafil.Before1995,heworkedatCellpackAG(asdivisionheadinCanadaandSwitzerland)andatOerlikonContravesAGasadevelopmentengineerintheaerospacefield.
2 BartJ.tenBrinkDipl.Ing.VATTilburg,Nether-landsborn1964HeadoftheFoamMaterialsbusinessunitsince2009From1991,heservedinvariousmanagementandseniormanagementpositionswithintheinternationalfoammanufac-turinggroupRecticelN.V.,forthelasttenyearsasheadoftwostrategicbusinessunits,compositefoamsandacousticalproducts,withworldwideresponsibility.From1995to1998,hewasasTech-nicalDirectorandIndustrialManagerresponsiblefortheNordflexGroupScandinavia(jointventureofRecticelInt.andShellScandinavia).Between1992and1995,heservedasPlantManagerofRecticelIndustryBuren.BartJ.tenBrinkisaDutchcitizen.
1 2 3
4 5 6
7 8 9
ConzzetaAnnualreport2010
33
Corporategovernance
3 SergeEntleitnerMag.rer.soc.oec.born1964HeadoftheGraphicCoatingsbusinessunitHejoinedSchmidRhynerAGaschiefexecutivein2005.Since2009anautonomousbusinessunitoftheConzzetaGroup,thecompanywaspreviouslyman-agedasOtherIndustrialActivities.From2000to2005,hewasamemberofdivisionalmanagementofSefarAGinThal.AsAssistantVice-President,hewasresponsiblefordistribution,marketingandthebranchesinEurope,LatinAmericaandAfrica.Priortothat,heheldvariousmanagementpositionsinthetextilemachineryindustry.SergeEntleitnerisanAustriancitizen.
4 RichardJakobDipl.El.-Ing.ETHborn1950HeadoftheGlassProcessingSystemsbusinessunitsince2007Heservedinvariouspositionswith-intheSchindlerGroup,mostrecentlyheadingthecorporatetaskforce.From2000to2005,hewasSeniorVice-PresidentinchargeoftheEasternEuropemarketregionandlaterNorthernEurope.Beforethat,asamemberofexecutivemanagementofSchindlerSwitzerland,hewasresponsiblefortheprofitcenternewinstallationsandassembly,atSchindlerFranceforthehomemarketbusinessandasGeneralManagerforvariousmarketregionsinSwitzerland.
5 KasparW.KelterbornLic.oec.HSGborn1964GroupChiefFinancialOfficersince2006From2003untilmid-2005,hewasCFOandamemberoftheExecutiveBoardofUnaxisGroup.From1996to2002,heheldvariousinternationalseniorman-agementpositionsintheareaoffinanceatClariantGroup;between1992and1995,heworkedforSandozInternationalAGinSwitzerlandandabroad.KasparW.KelterbornisamemberoftheBoardofDirectorsofSimilasanHoldingAG,Sarnen.
6 MartinPsterEngineerFH,BScineconomics,MBAborn1966HeadoftheAutomationSystemsbusinessunitsince2005HejoinedtheConzzetaGroupin2004asCEOoftheformerSecklerAG.From2002to2004,hewasCEOofFeintoolAuto-mationAG,Aarberg.Between1996and2001,heservedinvariousleadingandmanagementfunctionsinthemachineindustry.
7 RolfG.SchmidLic.oec.HSGborn1959HeadoftheSportingGoodsbusinessunitHejoinedtheConzzetaGroupin1996asHeadofthesportsdivisionofArovaMammutAG.HetookoverasCEOoftodaysMammutSportsGroupAGin2000.Between1985and1995,heheldleadingpositionsinthepharmaceuticalindustryaswellasinthewatchandtouristindustries.RolfG.SchmidisamemberoftheExecutiveBoardofeconomiesuisseandamemberoftheBoardofDirectorsofCFHoldingAG,St.Gallen,andKuhnRikonAG,Zell.
8 RalphSiegleFed.dipl.inrealestatemanagementborn1959HeadoftheRealEstatebusinessunitsince2003From2002to2003,hewasinchargeofportfoliomanagementatMobimoAG,Zollikon.Between1993and1998,hewasateamleaderatLivitImmobilienManagementAG,Zurich,becomingheadofpropertymanagementandamemberofmanagementin1999.
9 FerdiTngiEngineerFH,MBAborn1951HeadoftheSheetMetalProcessingSystemsbusi-nessunitsince2002HejoinedtheConzzetaGroupin2000asHeadoftheMachineryandSys-temsEngineeringbusinessunit.From1997until1999,hewasHeadofdivisionEuropeNorthandamemberofGroupmanagementatAGIECharmillesGroup,LosoneandGeneva.Between1992and1996,hewasamemberofGroupmanagementatAGIEGroup,Losone,withresponsibilityformar-keting,salesandcustomerservices.From1974to1989,heheldvariousmanagementpositionsintheprecisioninstrumentandmachineindustry.
With the exceptionof SergeEntleitner andBart J. tenBrink,allmembersoftheGroupExecutiveBoardareSwissnationals.
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Corporategovernance
5 Contentandmethodofdeterminingcompensation
Theamountofcompensationreceivedbythemembersof the Board of Directors and of the Group ExecutiveBoardisreportedinthenotestothefinancialstatementsofConzzetaAG(page73).
InaccordancewiththeArticlesofIncorporation,themembersoftheBoardofDirectorsdeterminetheirowncompensationonanannualbasis,takingaccountofthepersonalcontributionthateachhasmadeandthefinan-cialsituationofthecompany.
ThemembersoftheGroupExecutiveBoardreceiveasalarycomprisingafixedandavariablepart.Indeter-miningthefixedsalary,theindividualresponsibilityandexperience of the person concerned is taken into con-sideration.Thevariablepart(bonus)isbetween15and45% of the gross compensation and is based on theachievementoftheindividualmanagementtargetswhichare reviewed and agreed annually and which containquantitativeaswellasqualitativeelements.Thebonusreflects the overall situation and the extent to whichobjectiveshavebeenachieved;itisdeterminedbyfairconsiderationat theendof the financialyearandpaidoutinasinglecashsum.
A proposal regarding the compensation packagesforthemembersoftheGroupExecutiveBoardissubmit-tedbytheGroupChiefExecutiveOfficertotheChairmanoftheBoardofDirectorsforapproval.TheChairmanoftheBoardofDirectorsdeterminesthecompensationtobepaidtotheGroupChiefExecutiveOfficerandinformstheBoardofDirectorsonceayearaboutallcompensationpackages.Noformalizedcalculationmodelsareusedtodetermine compensationpackages, as appropriate ap-praisalofperformanceisconsideredtobeamanagementresponsibility.
TherearenoshareoroptionparticipationprogramsfororloanstomembersoftheBoardofDirectorsortheGroupExecutiveBoard.
6 Shareholdersparticipationrights
RestrictionofvotingrightsandrepresentationEvery bearer share and every registered share has onevoteattheGeneralMeetingofShareholders.Theregis-teredsharesofConzzetaAGarenotsubject to restric-tionsofvotingrights.
Statutoryquora(Article10oftheArticlesofIncorporation)A resolution of the General Meeting of Shareholderswhichcarriesatleasttwo-thirdsoftherepresentedvotesandanabsolutemajorityoftheparvalueoftherepre-sentedvotesisrequiredfor:1changestotheArticlesofIncorporation2changestothesharecapital3thelimitationorannulmentofsubscriptionrights4theliquidationoftheCompany
SubjecttoArticle704CO,theGeneralMeetingofShare-holderspassesallotherresolutionsanddecidesitselec-tionsbyanabsolutemajorityofthevotescast,excludingblankandinvalidballots.
ConvocationoftheGeneralMeetingofShareholders(Article7oftheArticlesofIncorporation)TheArticlesofIncorporationhavenorulewhichdiffersfromapplicablelegalstandards.TheinvitationtoAnnualand Extraordinary General Meetings is issued by theBoardofDirectors,orbytheauditorsasthecasemaybe,nolaterthan20daysbeforethedateofthemeeting.Theinvitation,whichsetsoutanagendaofmattersfordis-cussion, theproposalsof theBoardofDirectorsandwhereapplicableofshareholderswhohavedemandedtheconvocationoftheGeneralMeetingorthetablingofanitemontheagenda,ispublishedintheSwissOfficialGazetteofCommerce.
Agenda(Article7oftheArticlesofIncorporation)ShareholderswhorepresentshareswithaparvalueofatleastCHF1millioncandemandtheinclusionofanitemon the agenda.The requestmust be submitted to theCompanyatleast40daysbeforetheGeneralMeetingofShareholders.
ConzzetaAnnualreport2010
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Corporategovernance
Registrationsintheshareregister(Article4oftheArticlesofIncorporation)From the date of invitation to a General Meeting ofShareholdersup to thedayafter theGeneralMeetingitself,noregistrationswillbeacceptedinthesharereg-ister.
7 Changeofcontrolanddefensivemeasures
Dutytomakeanoffer(Article5oftheArticlesofIncorporation)Optingout:personsorcompaniesacquiringsharesintheCompany are not under obligation tomake anoffer inaccordancewiththeFederalActonStockExchangesandSecuritiesTrading.
8 Auditors
DurationofthemandateandtermofofficeoftheauditorinchargeThestatutoryauditorsofConzzetaAGandgroupauditorssince1939areKPMGAGinZurich,oritslegalpredeces-sor.Theauditor incharge,HanspeterStocker,hasheldthispositionsincethe2010businessyear.
AuditingfeesandadditionalfeesIn the reporting year, the auditors responsible for theGroups annual financial statements and some of theGroupcompaniesannualfinancialstatementssubmittedaccountsforthefollowingfees:Auditingfees:CHF384108Additionalfees:CHF159228
InformationalinstrumentspertainingtotheauditorsTheChairmanrepresentstheBoardofDirectorsvis--vistheauditors.Afterhearing theauditors and theGroupChiefFinancialOfficer,theChairmandeterminesthemainpointstheCompanywishestobecoveredbytheaudit.He discusses the audit resultswith the auditors, alongwith theGroupChiefExecutiveOfficerandtheGroupChief Financial Officer, and assesses the results. TheGroupChiefFinancialOfficeradoptstherecommendedimprovements.TheBoardofDirectorstakesnoteoftheauditorsreportswhicharecommenteduponbytheheadauditoratanordinarymeetingoftheBoardofDirectors.TheChairmanandtheGroupChiefFinancialOfficerbrieftheBoardofDirectors about their assessment and themeasuresadopted.They informtheBoardofDirectorsabouttheauditingcostsandgivetheiropinionofthequalityoftheauditservicesprovided.Unlessthereisacompellingreasontodoso,theBoardofDirectorsmakesnofurtherassessment.
ConzzetaAnnualreport2010
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Corporategovernance
9 Informationpolicy
TheCompanypublishesanannualreportasofDecember31andaninterimreportasofJune30.Interestedpartiesare informed about the financial statements and otherimportant events in writing. A conference is held formedia representatives and financial analysts in con-junctionwiththepublicationoftheannualreportasofDecember31.Theconsolidated financial statements inaccordancewithSwissGAAPFERgiveatrueandfairviewoftheactualcircumstances.
ThisandotherinformationabouttheCompany,calendardatesandcontactscanbefoundathttp://www.conzzeta.ch
10 Significanteventssincethebalancesheetdate
SergeEntleitner,HeadoftheGraphicCoatingsbusinessunit, hasgivennotice andwill leave theGroup in July2011.
ConzzetaAnnualreport2010
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Corporategovernance
38
ConzzetaAnnualreport2010
38
Consolidatedfinancialstatements41 Incomestatement42 Balancesheet43 Cashflowstatement44 Statementofchangesinshareholdersequity45 Notestotheconsolidatedfinancialstatements66 Listofconsolidatedcompaniesbybusinessunit68 Statutoryauditorsreport
FinancialstatementsofConzzetaAG70 Incomestatement71 Balancesheet72 Notestothefinancialstatements75 Additionalinformationonthefinancialstatements77 Proposedappropriationofavailableearnings78 Statutoryauditorsreport
Financialreport
Conzzeta Annual report 2010 Financial report
2010 2009
Notes CHF m CHF m
Net revenue 3 1 051.943 955.166
Changes in inventory and own work capitalized 4 25.916 50.675
Total revenue 1 077.859 904.491
Cost of materials 5 531.674 421.391
Personnel expenses 6 269.216 286.691
Other operating expenses 7 185.539 159.704
Depreciation on property, plant and equipment, and financial assets 16, 17 31.524 32.386
Depreciation on intangible assets 18 3.020 5.674
Operating result 56.886 1.355
Financial result 8 2.605 0.608
Result from unconsolidated investments 9 0.123 0.150
Ordinary result before taxes 54.404 0.597
Extraordinary result 10 5.400 10.138
Result before taxes 59.804 9.541
Taxes 11 8.228 6.199
Minority interests 0.117 0.071
Group result 51.459 3.271
Consolidated income statement Group
Conzzeta Annual report 2010
41
Financial report
Consolidated balance sheet at December 31 Group
2010 2009
Notes CHF m CHF m
Assets
Cash and cash equivalents 404.008 403.284
Securities 12 106.903 52.700
Trade receivables 13 167.704 166.030
Prepayments to suppliers 5.088 4.282
Other receivables 14 18.109 14.668
Prepaid expenses and accrued income 8.799 7.829
Inventories 15 204.430 204.967
Current assets 915.041 853.760
Property, plant and equipment 16 320.330 349.886
Financial assets 17 45.044 44.075
Intangible assets 18 7.152 7.084
Fixed assets 372.526 401.045
Total assets 1 287.567 1 254.805
Liabilities and shareholders equity
Trade payables 89.386 59.170
Advance payments from customers 19 34.293 24.995
Short-term financial liabilities 6.592 5.484
Other short-term liabilities 20 10.433 10.533
Accrued expenses and deferred income 21 66.232 69.028
Short-term provisions 22 24.532 28.905
Short-term liabilities 231.468 198.115
Long-term financial liabilities 23 8.876 8.510
Other long-term liabilities 0.084 0.126
Pension fund liabilities 0.435 0.860
Long-term provisions 22 63.973 68.925
Long-term liabilities 73.368 78.421
Share capital 24 46.000 46.000
Capital reserves 1.600 1.600
Retained earnings 934.834 930.491
Shareholders equity excluding minority interests 982.434 978.091
Minority interests 0.297 0.178
Shareholders equity including minority interests 982.731 978.269
Total liabilities and shareholders equity 1 287.567 1 254.805
Conzzeta Annual report 2010
42
Financial report
2010 2009
Notes CHF m CHF m
Group result 51.459 3.271
Minority interests in net income 0.117 0.071
Depreciation 32.817 36.969
Impairments 1.727 1.091
Gain on disposal of fixed assets and business activities 7.389 14.323
Change in provisions and pension fund liabilities 7.462 4.843
Other non-liquidity-related positions 2.189 1.717
Cash flow from operating activities before change in working capital 69.080 23.953
Change in inventories 18.036 82.807
Change in trade receivables 15.638 67.159
Change in prepayments to suppliers 0.906 3.121
Change in other receivables, prepaid expenses and accrued income 5.659 15.345
Change in trade payables 33.161 17.475
Change in advance payments from customers 12.198 9.301
Change in other liabilities, accrued expenses and deferred income 1.470 21.495
Cash flow from operating activities 75.670 144.114
Investment in property, plant and equipment 18.034 25.878
Divestment of property, plant and equipment 2.367 20.362
Investment in financial assets and securities 72.978 32.711
Divestment of financial assets and securities 23.896 38.060
Investment in intangible assets 3.097 2.160
Divestment of business activities 25 9.748
Cash flow from investing activities 58.098 2.327
Cash flow from operating and investing activities (free cash flow) 26 17.572 141.787
Dividend paid to holding company shareholders 13.800 27.600
Change in short-term financial liabilities 1.035 2.000
Change in long-term financial liabilities 0.614 1.355
Change in other long-term liabilities 0.038 0.691
Cash flow from financing activities 12.189 24.936
Effect of currency translation on cash and cash equivalents 4.659 0.241
Change in cash and cash equivalents 0.724 117.092
Cash and cash equivalents at 1 / 1 403.284 286.192
Cash and cash equivalents at 12 / 31 404.008 403.284
Consolidated cash flow statement Group
Conzzeta Annual report 2010
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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 / 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
Group result 2010 51.459 51.459 0.117 51.576
Dividend payment 13.800 13.800 13.800
Change to market value of financial instruments 1.362 1.362 1.362
Currency translation effects 34.678 34.678 0.002 34.676
At 12 / 31 / 2010 46.000 1.600 78.891 1 011.559 2.166 982.434 0.297 982.731
Conzzeta Annual report 2010
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 2010 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 consolidation The 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 at current values. 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. In-
vestments 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 acquisition cost, less any necessary provi-
sions 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 curren-
cies 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
Conzzeta Annual report 2010
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
follows:
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 Groups 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.
Conzzeta Annual report 2010
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.
Conzzeta Annual report 2010
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 trans-
actions against future currency risks will be shown directly in equity until completion of the underlying
transaction.
Conzzeta Annual report 2010
48
Financial report
Additional notes to the consolidated financial statements
1 Changes in the scope of consolidationCompany closures and internal mergers:
Bystronic Slovakia s.r.o. in Bratislava (Slovakia) was liquidated with effect from March 12, 2010.
Bystronic Solution Centre Inc. in Ottawa (Canada) was liquidated with effect from December 31, 2010.
Swilac Immobilien AG and Prebe AG in Zurich (Switzerland) were merged with Plazza Immobilien AG in
Zurich (Switzerland) with effect from January 1, 2010.
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
2010 2009 2010 2009
CHF CHF CHF CHF
Euro area 1 EUR 1.25 1.48 1.38 1.51
USA 1 USD 0.94 1.03 1.04 1.08
Great Britain 1 GBP 1.45 1.67 1.61 1.69
Sweden 100 SEK 13.95 14.50 14.48 14.20
China 100 CNY 14.17 15.10 15.39 15.90
South Korea 100 KRW 0.08 0.09 0.09 0.09
Japan 100 JPY 1.15 1.11 1.19 1.16
Malaysia 100 MYR 30.53 30.10 32.35 30.80
Conzzeta Annual report 2010
49
Financial report
Consolidated income statement
3 Net revenue
CHF m %
Net revenue 2009 955.2 100.0
Changes in Group revenue 2010 due to:
currency translation effects 34.3 3.6
divestments 9.5 1.0
acquisitions
changes in quantity and price 140.5 14.7
Total change 96.7 10.1
Net revenue 2010 1 051.9
The divestment effect is due to the disposal of the Toko product line, with effect from September 1, 2010,
and the disposal of ixmation AG, Pieterlen (Switzerland), with effect from September 1, 2009.
2010 2010 2009 2009
CHF m % CHF m %
Net revenue by business unit
Sheet Metal Processing Systems 410.9 39.1 356.1 37.3
Glass Processing Systems 167.5 15.9 145.6 15.3
Automation Systems 56.4 5.4 56.1 5.9
Foam Materials 127.9 12.2 116.8 12.2
Sporting Goods 221.2 21.0 215.3 22.5
Graphic Coatings 46.6 4.4 43.2 4.5
Real Estate and miscellaneous revenue 21.4 2.0 22.1 2.3
Total 1 051.9 100.0 955.2 100.0
2010 2010 2009 2009
CHF m % CHF m %
Net revenue by geographic area
Switzerland 160.3 15.2 156.0 16.3
Euro area 360.2 34.2 386.3 40.4
Rest of Europe 140.5 13.4 130.7 13.7
Total Europe 661.0 62.8 673.0 70.4
North and South America 143.9 13.7 119.4 12.5
Asia and Pacific 242.1 23.0 157.3 16.5
Africa 4.9 0.5 5.5 0.6
Total 1 051.9 100.0 955.2 100.0
Conzzeta Annual report 2010
50
Financial report
4 Changes in inventory and own work capitalized 2010 2009
CHF m CHF m
Change in inventory 25.6 50.7
Own work capitalized 0.3 -
Total 25.9 50.7
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
Groups products (external services).
Changes in inventories of semifinished products, work in progress and finished products have a sig-
nificant influence on the cost of materials in relation to total revenue.
6 Personnel expenses 2010 2009
CHF m CHF m
Wages and salaries 224.7 233.2
Social security benefits 41.3 45.3
Other personnel expenses 3.2 8.2
Total 269.2 286.7
In addition to contributions to state pension plans, social security benefits include the contributions to
pension funds described in note 27 on page 63.
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.
Conzzeta Annual report 2010
51
Financial report
8 Financial result 2010 2009
CHF m CHF m
Financial income 3.2 4.2
Financial expenses 5.8 3.6
Total 2.6 0.6
Income from securities fell by CHF 0.6 million. Interest income rose owing to the increased level of
CHF bond holdings, though it was not quite sufficient to offset the currency losses. The gain on the
investments of the employer contribution reserves also showed a decrease, being CHF 0.4 million low-
er. Financial expenses comprise the interest expense arising, inter alia, from the financing of sites
abroad, currency losses on the valuation of liquid assets, on short-term or repaid loans between Group
companies, and on other financial assets.
9 Result from unconsolidated investmentsThe result from unconsolidated investments comprises gains and losses from associated companies.
10 Extraordinary resultThe extraordinary result amounting to CHF 5.4 million comprises CHF 4.3 million from the sale of a
product line in the Sporting Goods business unit and CHF 1.1 million from the sale of land as well as of
production buildings no longer required for production. The previous years figure of CHF 10.1 million
included proceeds from the sale of land and a production building in Switzerland, as well as a loss on
the divestment of a company by the Automation Systems business unit.
11 Taxes 2010 2009
CHF m CHF m
Current taxes on income 8.8 8.8
Deferred taxes 0.6 2.6
Total 8.2 6.2
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 Germany
are transferred to the controlling company, Conzzeta Holding Deutschland AG. Deferred taxes are cal-
culated individually per tax subject using the actual expected tax rate. The deferred tax income is due
to the net reversal of temporary differences. Current taxes on income were reduced by CHF 4.4 million
by recognizing tax-loss carryforwards to offset taxable income
Conzzeta Annual report 2010
52
Financial report
Consolidated balance sheet
12 SecuritiesThe securities are fixed-interest bonds denominated in CHF and shares in a CHF money-market fond.
13 Trade receivables 2010 2009
CHF m CHF m
Trade receivables 186.6 187.5
Provision 18.9 21.5
Total 167.7 166.0
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 2010 2009
CHF m CHF m
Raw materials and supplies 69.0 64.7
Merchandise for resale 33.3 52.3
Semifinished products and work in progress 46.5 38.3
Finished products 55.6 49.7
Total 204.4 205.0
Most of the decrea