ANNUAL REPORT2016

401.5 MILLIONNET SALES
47.9 MILLION
EBIT
36.8 MILLION
CASH FLOWANNUAL REVIEW	2

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT4

GROUP MANAGEMENT6

INTERROLL ON THE CAPITAL MARKET

8

OUR BUSINESS10

INTEVIEW DANIEL BÄTTIG

12

FINANCIAL POSITION, EARNINGS AND CASH FLOWS

14

PRODUCT GROUPS16

REGIONS22
INTERVIEW DR RALF GARLICHS AND DR CHRISTOPH REINKEMEIER26

CORPORATE RESPONSIBILITY

30

SEAMLESS CUSTOMER SOLUTIONS

34

MARKETING38
INTERVIEW MAURIZIO CATINO

40

CORPORATE GOVERNANCE43

REMUNERATION REPORT53

FINANCIAL STATEMENTS OF INTERROLL GROUP

63

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

115

KEY FIGURESin CHF million, unless stated differently

2016

2015

2014

2013

2012

405.2

385.1

350.7

318.8

302.6

Order intake / net sales
Total order intake
Rollers

93.5

93.4

81.2

75.4

80.4

Drives

123.6

110.3

114.9

109.4

99.3

Conveyors & Sorters

120.9

107.2

79.8

71.2

69.3

Pallet & Carton Flow

63.5

49.8

59.4

60.3

58.1

Total net sales

401.5

360.7

335.3

316.3

307.2

EBITDA

65.7

58.2

44.1

45.4

41.1

in % of net sales

16.4

16.1

13.2

14.3

13.4

EBITA

54.7

47.6

33.2

34.0

30.3

in % of net sales

13.6

13.2

9.9

10.7

9.9

EBIT

47.9

39.8

25.4

27.2

24.8

Profitability

in % of net sales

11.9

11.0

7.6

8.6

8.1

Result

36.2

29.3

19.1

20.5

19.4

in % of net sales

9.0

8.1

5.7

6.5

6.3

Cash flow
Operating cash flow

36.8

40.2

27.8

44.5

38.2

in % of net sales

9.2

11.1

8.3

14.1

12.4

Free cash flow

18.0

17.3

12.0

5.0

30.2

in % of net sales

4.5

4.8

3.6

1.6

9.8

Total capital expenditures

19.5

24.3

16.8

39.8

10.6

Total assets

324.8

293.0

278.2

258.2

227.6

Goodwill

17.3

16.7

17.6

16.0

9.0

Net financial assets (debts)

38.0

31.3

23.9

20.2

8.7

Equity

233.1

207.6

200.3

187.2

157.6

Equity ratio (equity in % of assets)

71.8

70.9

72.0

72.5

69.3

Return on equity (in %)

16.4

14.4

9.9

11.9

12.8

Balance sheet (31.12.)

Other key figures
RONA (Return on Net Assets, in %)

17.1

15.3

9.8

12.2

12.6

Average number of employees

1,892

1,820

1,675

1,488

1,420

Net sales per employee (in thousands CHF)

212

198

200

213

216

Productivity (added value / total personnel expenses)

2.10

2.04

1.86

1.95

1.92

ABOUT INTERROLL
The Interroll Group is a leading global provider of high-quality key products and services for internal
logistics. The company offers a broad product range in the four product groups “Rollers”, “Drives”,“Conveyors & Sorters” and “Pallet & Carton Flow” to about 23,000 customers (systems integrators
and OEMs) around the world. Our core industries include courier, parcel, express and postal services,
airports, food processing as well as distribution centres.
Interroll products are in use at well-known global brands such as Amazon, Bosch, Coca-Cola, Coop,
DHL, FedEx, Peugeot, PepsiCo, Procter & Gamble, Siemens, Walmart and Yamaha, amongst others.
Interroll is engaged in global research projects on logistics efficiency and actively supports industry
associations in developing standards. Headquartered in Sant’Antonino, Switzerland, Interroll operates
a worldwide network of 32 companies with around 2,000 employees. The company was founded in
1959. Since 1997, Interroll Group has been listed on the SIX Swiss Exchange and included in the SPI
index.
www.interroll.com

23,000CUSTOMERSAROUND
THE WORLD

32
COMPANIESAROUND
THE WORLD

2,000
EMPLOYEESAROUND
THE WORLDCONVEYORS & SORTERS

PALLET & CARTON FLOWINTERROLL PRODUCT GROUPSROLLERSDRIVESANNUAL REVIEW2

HIGHLIGHTS OF THE
BUSINESS YEAR 2016

LOGIMAT:INTERROLL PRESENTS THE MSC 50

FIRST BRAZIL POST SORTERS
DELIVEREDLAUNCH OF THE MSC 50 IN EMEAAt the LogiMAT trade fair in Stuttgart, Germany, we present
the new MSC 50 magnetic speed controller to the public for the
first time.

INTERROLL INNOVATION SUMMIT
Around 250 international participants use this industry forum
to gather information regarding the latest ideas, processes andtrends in intralogistics.

SOLUTIONS FOR THE TIRE INDUSTRY LAUNCHEDInterroll presents intelligent conveyor technologies andenergy-­efficient drive solutions at the Tire Technology Expo.
This includes the 24 V RollerDrive, a powerful key productfor an optimised production flow, especially in the Tire Industry.

CEMAT: 50TH “ROLLING ON INTERROLL” MEMBERInterroll’s trade fair presence at this year’s CeMAT is entirely
dedicated to innovation and partnership. The global partner
programme “Rolling on Interroll” provided the inspiration forthe stand concept.

LAUNCH OF THE MCP IN THE AMERICAS REGION
The modular conveyor platform (MCP) that was successfullylaunched on the European and Asian markets in the last two
years is now being presented in the Americas.

SORTER DELIVERY TO BRAZIL POST STARTED
Following a two part agreement with the systems integrator
National Presort (NPI), Interroll has started to roll out the
ten Cross Belt Sorters ordered into ­multiple mail sort centres
throughout Brazil.

Q1

Q2

ANNUAL REVIEW

330 YEARS OF TECHNOPOLYMERE PRODUCTION
IN TICINO CELEBRATED
30 YEARS OF INTERROLL PRODUCTION IN TICINO
A factory for all: Interroll celebrates the thirtieth anniversaryof its Centre of Excellence for technopolymers in Ticino,­Switzer­land. It serves the entire Interroll Group as the global
Centre of ­Excellence for this product category.
BELT CURVE PRODUCTION IN SHENZHENWITH RECORD VOLUMESInterroll Shenzhen/China produced a record volume of belt
­curves. Already 60 % of the airports in China and 80 % of the CEP
distribution centres are serviced by Interroll Portec belt curves.
PARMA STUDY PUBLISHED
A study by the University of Parma compares drum motors
and gear motors. From the perspective of food safety, it can beconcluded that the drum motor provides significant advantages,
particularly in the areas of hygiene and on-site cleaning.

Q3

PAUL ZUMBÜHL WELCOMES
THE NEW EMPLOYEES IN KRONAU
EXPANSION OF BELT CURVE PRODUCTION IN EUROPE
Paul Zumbühl welcomes the new employees. With the­purchase of the sheet metal working and coating departmentsof Ortner GmbH in Kronau, Germany, Interroll is continu­
ing the expansion of its production capacities for Interroll Portec
belt curves in Europe.
INTERROLL THAILAND WINS THE 5S AWARDInterroll wins Thailand’s 5S Award 2016 in silver.
SAP: 30 COMPANIES ARE NOW ONLINEInterroll welcomes our colleagues in Cañon City, USA;in ­Newmarket, Canada; and La Roche-sur-Yon, France; which
joined the SAP user community in 2016.

Q4

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

4GROWTH STRATEGY
SUCCESSFULLY CONTINUEDPaul Zumbühl, Chief Executive Officer

Dear Shareholders, Employees,
Customers and Business Partners,
Interroll has completed financial year 2016 with record
levels of order intake, sales and net earnings. All regions
and product groups have contributed positively.
In the production volumes of conveyors and RollerDrive in Germany, we were able to exceed the previous year’s figures again. Production in the Pallet andCarton Flow segment in France also developed very
promisingly. In addition, the first cross belt sorters
were delivered to Brazil Post and the production ofbelt curves in China increased considerably. These areall very good examples of how our products and solutions were well-accepted in the market, and how thename Interroll increasingly stands for global quality
and reliability.
At CHF 405.2 million, order intake in 2016 was 5.2 %above the previous year’s figure of CHF 385.1 million(+4.4 % in local currencies). This means the highest
order intake in the company’s history was achieved.
Organic growth was 5.1 %.
Net sales in the reporting currency rose by 11.3 % from
CHF 360.7 million to CHF 401.5 million (+10.4 % in
local currencies), which also corresponds to a company record value. Organic sales growth contributed
11.2 %.

Our EBITDA rose by 12.9 % from CHF 58.2 million
to CHF 65.7 million. The EBITDA margin was 16.4 %higher than the previous year (16.1 %).
EBIT of CHF 47.9 million in 2016 climbed by 20.4 %from the comparable period of the previous year (CHF
39.8 million). The EBIT margin was 11.9 % (previous
year: 11.0 %).
These particularly strong improvements to operating
earnings are mainly due to higher net sales, strict costand investment discipline, and Group-wide productivity improvements.
Due to the strong net profit of CHF 36.2 million (previous year: CHF 29.3 million), we will suggest to you,our valued shareholders, a dividend of CHF 16.00 per
share at the Annual General Meeting on 12 May 2017.
In the previous year a dividend of CHF 12.00 per share
was paid out.
With strong earnings in financial year 2016, Interroll
continues the positive development of the past years.
At the Annual General Meeting in May 2016, Kurt
Rudolf resigned as Chairman of the Board of Directors. Constructive and ultimately successful coope­ration with the Group Executive Board will be­continued under the leadership of the new Chairmanof the Board of Directors, Urs Tanner.

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

5“We rely on trusted, ­­­­
well-established partnerships
with our customers, suppliers,
investors and employees.”

PROVEN TECHNOLOGY AND INNOVATIONLEADERSHIPInterroll demonstrated its high level of technicalexpertise at the beginning of the year. At the LOGIMAT trade fair in Stuttgart, Germany, we presented
the new magnetic speed controller MSC 50 for the firsttime to the public.
Interroll has also successfully introduced new technologies in markets outside Europe. Since April, we havebeen offering the Modular Conveyor Platform (MCP)in the US, which we had already successfully placedin the European and Asian markets over the past two
years. Interroll has continued its tradition of offering
innovative, high-quality technologies to customers
worldwide.
On the occasion of our Innovation Summit in Baal,
Germany, over 150 customers and partners were able
to experience our outstanding innovation performance. Baal is also home to the Interroll ResearchCentre and our Academy. Here, we demonstrate ourbroad competence in internal logistics.
In September, the Centre of Excellence for Technopolymers in Ticino, Switzerland, celebrated its 30th
anniversary. Whether checkout, warehouse or airport
logistics, wherever Interroll conveyors, sorters or flow
storage systems are delivered, technopolymers fromTicino are never missing.
With the acquisition of the sheet processing unit ofOrtner GmbH together with its employees, machineryand business premises in Kronau, Germany, Interroll
could begin producing its belt curves in Europe in
December, opening up additional growth potential
for a market already established in the Americas and
Asia.

Urs Tanner, Chairman of the Board of Directors

TOGETHER TOWARD A CULTURE OF GROWTH
Success is always the result of collaboration – both
externally and internally. With this in mind, we havelaunched the “Culture for Growth” programme as afurther pillar of our growth path. We want use it toconvey a common message of leadership, values andcooperation to all Interroll employees to embody ineveryday life.
“Culture for Growth” is not a project in the traditional
sense, but an attitude that allows us to continue offering excellence to our customers and shareholders with
our most important resources – Interroll’s employees.
In this spirit, we would like to thank all our employees
for their great commitment which has contributed toInterroll’s positive development.
We would also like to thank our customers, suppliers,
investors and, of course, you, dear shareholders, foryour trust in our company.
Sant’Antonino, 10 March 2017

Urs Tanner
Chairman of theBoard of Directors

Paul Zumbühl
CEOGROUP MANAGEMENT

6

GROUP
MANAGEMENT
From left to right
Daniel Bättig
Chief Financial Officer (CFO)Paul Zumbühl
Chief Executive Officer (CEO)Tim McGill
Executive Vice President Americas

Dr Ralf Garlichs
Executive Vice President Products & Technology

Jens Karolyi
Senior Vice President
Corporate Marketing & Culture

Dr Ben Xia
Executive Vice President Asia

Dr Christoph Reinkemeier
Executive Vice President Global Sales & Service

GROUP MANAGEMENT

7

PROFESSIONAL BACKGROUND AND VESTED INTERESTS
OF THE GROUP MANAGEMENTPAUL ZUMBÜHLJENS KAROLYI(born 1957, Swiss)(born 1970, German)

Paul Zumbühl studied engineering sciences at the University ofApplied Sciences Lucerne, Switzerland, and holds a degree as
Dipl.-Ing. He also holds an MBA from the Joint University­Programme of the universities of Boston, Berne and Shanghai.
He participated in an AMP at the Kellogg Business School ofNorthwestern University, Evanston / Chicago, and holds a
Swiss Federal Marketing Management Diploma (Eidg. Dipl.).
After working for Symalit AG as a Sales Manager / Engineer, heheld several management positions and was Managing Director of Sarna Group. From 1994 until 1999 he was the CEO of
Mikron Plastics Technology and a member of the Executive
Management Board of Mikron Group. In January 2000 hejoined the Interroll Group Management as Chief Executive­Officer (CEO). Paul Zumbühl is a member of the Board of­Directors with the listed Swiss company Schlatter Holding AG
as well as a member of the Industry Executive Advisory Boardfor the “Executive MBA Supply Chain Management” with
ETH, Zurich, Switzerland.

Jens Karolyi studied business administration at the Universities
of Bamberg and Giessen, Germany. He started his c­ areer with
Ericsson, where he held various management positions in­Marketing, Branding and Communications and was based in­Stockholm, Zurich and Düsseldorf. In 2007 he was promoted
to Vice President Marketing & Communications Northern­Europe. In 2011 he joined Interroll Group as Vice President
Corporate Marketing and member of the Interroll Group Management. In February 2015 he took over additional responsibilities as Senior Vice President Corporate Marketing & Culture.

DANIEL BÄTTIG
(born 1964, Swiss)
Daniel Bättig holds an Executive MBA from the Graduate
School of Business Administration (GSBA), Zurich, Switzer­land, and a Bachelor in Business Economics from the Fach­hochschule Nordwestschweiz (FHNW), Olten, Switzerland.
Furthermore, he is a Certified Public Accountant with the Swiss
Institute of Certified Accountants and Tax Consultants. At thestart of his career he held various positions in finance ­with
Von Roll Holding AG in Switzerland, Brazil and the USA.
­After working for Südelektra Holding AG as the Group Chief
Accountant, he joined the Executive Management Board of
Swiss Post International as CFO and later served as Head ofInternational Mail. Since 2013 he has been the Chief Financial
Officer (CFO) of ­Interroll Holding AG and a member of­Interroll Group ­Management.

DR RALF GARLICHS(born 1962, German)
Dr Ralf Garlichs studied mechanical engineering with a focus
on production engineering at the University of Hanover, Germany, and holds a PhD degree (Dr.-Ing.). After working for
Festo Tooltechnic as Head of Production and Logistics, hejoined the Winkelmann Group where he held several management positions. He joined Interroll Group in 2006 as Executive
Vice President “Drives & Rollers.” Since 2011, Ralf Garlichs has
been Executive Vice President Products & Technology and amember of the Interroll Group Management.

TIM MCGILL(born 1955, British)
Tim McGill majored in English literature at the Brockenhurst
College in Hampshire, Great Britain. He joined Interroll­Canada in 1990 as Sales Director having previously been employed by Brammer, Europe’s leading supplier of quality industrial maintenance, repair and overhaul products in a seriesof roles with increasing management responsibility. After
having been President of Werner Precision Rollers Canada for
one year, he rejoined Interroll in 1996 as President of Interroll
Canada. He was promoted to Head of ­Interroll Dynamic­Storage North America in 2000. Since 2011 he has been acting
as Executive Vice President Americas and is a member of­Interroll Group Management.

DR CHRISTOPH REINKEMEIER(born 1966, German)
Dr Christoph Reinkemeier studied business administration
with a focus on industrial marketing at the University of­Münster, Germany, and holds a PhD degree (Dr. rer. pol.).
After working for E.On AG as Project Manager of Corporate
Development he held several management positions at Ista
­International ­GmbH. From 2007 to 2010 he was CEO for Northand South America at Deckel Maho Gildemeister (DMG)
America Inc. In 2011 he joined Interroll Group as Executive
Vice President Global Sales & Service and a member of ­Interroll
Group ­Management.

DR BEN XIA(born 1966, Chinese)
Dr Ben Xia graduated with a B.Sc. degree in electrical­engineering from Shanghai Jiaotong University, China. After
that, he studied electrical machinery at the Moscow Power­Engineering Institute, Russia, and holds a PhD in electrical­engineering (Dr.-Ing.). He also passed the Advanced Management Programme for Senior Executives at the China Europe­International Business School (CEIBS) in Shanghai, China.
After working for Pirelli Cables Asia-Pacific as Marketing
Manager, he held positions as General Manager of Shanghai
Citel Electronics Co. Ltd. and Managing Director of­Vanderlande Industries North Asia. In 2013 he joined Interroll
Group as Executive Vice President Asia and member of­Interroll Group Management.

INTERROLL ON THE CAPITAL MARKET

8

INTERROLL ON
THE CAPITAL MARKETINVESTOR INFORMATIONInterroll share information

2016

2015

2014

2013

2012

Number of registered shares

854,000

854,000

854,000

854,000

854,000

Number of average outstanding shares

850,634

849,155

849,170

826,920

799,090

Number of outstanding shares as of 31.12.

851,559

851,015

849,830

850,151

802,282360.00Share price highCHF

1,172.00

858.00582.50490.00Share price low

CHF

707.00429.00490.00333.00270.00Year-end share price as of 31.12.

CHF

1,110.00

856.50525.50490.00333.00Market capitalisation as of 31.12.

CHF million

945.01731.45448.78416.57267.16

10.00

10.00

10.00

Par value as of 31.12.

CHF

1.00

1.00

Dividend

CHF

16.00

12.00

Reduction of par value

CHF

Distribution out of reserves from capital contributions

CHF

Earnings per average share outstanding

CHF

9.00
42.57

8.80

8.00

34.51

22.45

24.84

24.25

Payout ratio

37.59

34.78

40.09

35.43

32.98

P/E Ratio

26.07

24.82

23.41

19.73

13.72

Cash flow per average share outstanding

CHF

43.30

47.33

32.69

53.79

47.78

Equity per share outstanding as of 31.12.

CHF

273.72244.00235.73220.25

198.64

IPO: 1997 | Stock Exchange: SIX Swiss Exchange |Market segment: Main Standard | Index: SPI
ISIN: CH0006372897 | Security identification symbol: INRN |Security identification number: 637289

Share price performance of Interroll relative
to Swiss Performance Index SPI in 2016
40 %
30 %

1,110.00
CHF

20 %
10 %
0 % 856.50
CHFInterroll share
Share price as of 31.12.2015: CHF 856.50
Share price as of 31.12.2016: CHF 1,110.00
Swiss Performance Index (SPI)

–10 %
–20 %
Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

© SwissquoteINTERROLL ON THE CAPITAL MARKET

9

SWISS STOCK MARKETS CHARACTERISED
BY UNEXPECTED DEVELOPMENTS
The performance of the stock markets in Switzerland
was distinguished by a weak start into the new business year, Brexit and the unexpected election of Donald Trump as the new President of the United Statesof America. While the Swiss Market Index (SMI) fell
by 6.8 % from the beginning of the year, the Swiss­Performance Index (SPI) increased slightly by 0.5 %in 2016.

Shareholder structure as at 31 December 2016

POSITIVE DEVELOPMENT OF THE
INTERROLL SHARE
Also in 2016, the Interroll share strongly climbed andreached the price of CHF 1,110.00, the highest year
end closing value ever measured since the company
went public in 1997. This represents an increaseof 30 % over the closing price at the end of 2015 of
CHF 856.50.
In light of this, the ­Interroll share performed muchstronger than the Swiss Performance Index once
again in 2016. The share price had already increasedby 63 % in the previous year, 2015.
STABLE FREE FLOAT
Around 22 % (2015: 22 %) of Interroll shares are heldby the remaining founder families. As of 31 December 2016, the shareholding of Group ­Management
and their relatives reached 2.9 % (2015: 2.7 %).
Information about significant shareholders can befound on page 120. Based on the SIX definition, thecompany’s free float is around 78 % (2015: 78 %).
As per 31 December 2016, market capitalisation ofInterroll Holding AG reached some CHF 945 million(as per 31 December 2015: around CHF 732 million).

Fixed shareholding: 22 %Free float: 78 %Geographical distribution of the identified
shareholder base acc. to the share register as
at 31 December 2016

SHAREHOLDER BASE INCREASINGLYINTERNATIONAL
In 2016, an increasing percentage of shareholders based outside Switzerland purchased shares of­Interroll. On 31 December 2016, about 50 % of shareholders were based abroad, compared with 41 % on
31 December 2015.
At the same time, shareholders with pending registration were reduced to less than 31 %. In the previous
year, around 37 % of shareholders were not registeredwith the company.
We publish information relating to the Interroll shareon our website www.interroll.com. Financial reports,
presentations and other documents are available fordownloading.
Interested parties can register for our mailing list or
request our standard publications. All key financial
market data is published there as well.

Switzerland: 50 % EMEA region (excluding Switzerland): 48 %Rest of the world: 2 %OUR BUSINESS

10THE BUSINESS MODEL OF ­INTERROLL IS ORIENTED TOWARDSSUSTAINABLE GLOBAL GROWTHPRODUCT PLATFORMS, KEY MARKETS AND
MARKET TRENDS
As a leader in innovation and technology, Interroll
stands for high-quality key products and services ininternal logistics worldwide. Our customer solutions
for daily logistical challenges are based on globally
available product platforms which are focused on:

ROLLERSDRIVESCONVEYORS &SORTERSPALLET &­CARTON FLOW

The company supplies more than 23,000 customers
worldwide. In the key markets, these mainly include
regionally oriented plant manufacturers, OEMs andglobal systems integrators:

AIRPORT

COURIER,
EXPRESS,
PARCEL

FOOD,
BEVERAGE

DISTRIBUTION,
WAREHOUSE

Further global growth of the Interroll Group focuses
on clearly identifiable market trends that have not only
shown sales potential thus far, but will continue toshow such potential in the future:–– Steadily growing passenger traffic in inter­national
air travel and the related expansionof airport capacity and security technology forpassenger and luggage transport.
–– The global E-commerce and Retail Shopping Boom.
–– The liberalisation and regionalisation in the courier,express and parcel markets.
–– The stringent hygiene regulations in the foodindustry that are being adopted by an increasing
number of countries, and the use of high-quality
solutions that comply with legal requirements (suchas drum motors as a conveyor drive).
–– The decentralisation of distribution centres in orderto shorten delivery times.
–– Increasing product variety and the shortened­production life cycles require increased flexibility
and individualisation when commissioning
goods in the flow of materials.
–– Demand for material flow plants with better returnon investment.
–– Increased productivity in the industry andthe related rise in efficiency in storage systems.

OUR BUSINESS

11

ORGANISATION, STRATEGY AND
SUCCESS FACTORSThe Interroll Group consists of a single business unit.
All products are sold in all markets via the respective
regional sales companies, whereby the specific requirements of the customer groups of plant manufacturers,
OEMs, systems integrators as well as end customers
are met with a tailor-made variety of products andadvice.
The Interroll Academy is responsible for excellent
training and professional development of all employees of the Interroll Group worldwide. It will also begin
offering training and courses for customers in 2016.
The Interroll Research Centre (IRC) develops new
products, processes and technologies. The production
plants concentrate as global competence centres(Centres of Excellence) on the development and the
manufacture of specific product groups. In order toquickly meet customer needs in all parts of the world,
regional production centres (Regional Centres of
Excellence) have been built which are under the direction of the competence centres. Assembly plants (local
assembly) are supplied by production plants withsemi-finished products and assemble products for theindividual, local market.
The Interroll Group strives for a position of market
leadership in its key products, solutions and services
worldwide. An important element of this strategy
is therefore the permanent, continued development
and redevelopment of intelligent products that enable­customers to save space and energy and secure a quick
return on investment. It has the following technolo­
gical makeup in this regard:

The success of Interroll to date and into the future isbased on the following factors:–– The concentration of resources on key products,
solutions and services through which global market
leadership can be achieved in the longer term.
–– The development and expansion of application-­oriented product platforms according to a modular
principle, which increases flexibility and quality
for the customer and makes possible significant
economies of scale within the Group.
–– The global sales network with local sales sub­sidiaries that quickly recognise customer needs
and market trends and can tap market potential
worldwide.
–– The Group-wide, uniform production technologies at all production facilities, supported by the­Interroll Production System (IPS).
–– The quality standards for the products that are
identical worldwide and the zero-error strategy.
–– The worldwide networking of Interroll Group­companies via the uniform SAP system.
–– Its own permanent development and the quick
launch of new products onto the market.
–– The support, training and professional development of all employees worldwide.
–– The ability to digitise our own processes.

TECHNOLOGY ORGANISATION AT INTERROLL:AMERICAS

EMEA

ASIA-PACIFIC

Interroll Academy (D)Interroll Research Centre (D)7 Global Centresof Excellence• Belt Curves (USA)• Rollers / RollerDrive (D)• Drum Motors (D)• Conveyors and Sorters (D)• Flow Storage Systems (F)• Supermarket Solutions (DK)• Technopolymers (CH)

• Atlanta (USA)• Wilmington (USA)• Kronau (D)• Suzhou (China)• Shenzhen (China)• Canada• Brazil• South Africa• Thailand• Australia

Know-how

5 Regional Centresof Excellence
Know-how

5 Local Assemblies

INTEVIEW DANIEL BÄTTIG

12“WE WANT TO IMPROVEOURSELVES CONTINUOUSLY.”We spoke with Daniel Bättig, the Chief Financial
Officer (CFO) of the Interroll Group, about
the past f­ inancial year, value-enhancing investments
and responsible corporate management.

Mr. Bättig, Interroll once again enjoyed profitable
growth in the last financial year. Sales revenues
are up 11.3 percent, while net profit even rose by
23.6 percent. What were the most important­reasons for this development?
Daniel Bättig: The outstanding commitment andexpertise displayed by our employees was the mostimportant reason for this success. With their hard
work, they were able to win the trust of our customers across the globe. At the same time, our continuous
measures to increase efficiency and to adapt our rangeof solutions to customer wishes really paid off.
However, the uncertainty we have all been facing
increased significantly last year, particularly inthe political arena. How do you handle these risks?
Daniel Bättig: Interroll learned valuable lessons fromthe issues faced by the international economy in 2009.
Since that time, we have not simply grown, but also
greatly diversified both geographically and technologically. We are currently present in the most important
global regions and also a much greater number of sectors with our significantly extended product portfolio.
In addition, we finance our investments internally andtherefore operate largely independently of the global
financial market. This long-term strategy, together

with our lean decision-making structures which facilitate fast, short-term reactions, allows potential risks to
be mitigated more effectively. Although it cannot offer
absolute protection from all uncertainties, it definitely
helps us address adversities that nobody is even awareof today.
But the Swiss export industry in particular has been
struggling for years with the strong franc, hasn’t it?
Daniel Bättig: That’s true. Thanks to its decentralised
production and sales structure, however, Interroll
can hardly be described as a “classic” Swiss industrial­
manufacturer that delivers its products to other currency areas. We produce the vast majority of our solutions in precisely the regions and global currencies
where they are marketed. This not only provides forgood, rapid local market access, it also offers us naturalprotection from potential currency transaction risks.
In addition to this, we manufacture virtually all of our
products so that they are of identical quality at various
locations throughout the world. This is appreciated byour customers, and it also affords us protection fromunforeseeable events, such as fires or natural disasters
that can occur locally in an area.
Are you not worried that so much flexibility anddecentralisation in the company might negatively
impact efficiency?
Daniel Bättig: No. Group-wide introduction of
SAP is one key factor that has helped us continually
increase efficiency within a Group that now boasts
32 active companies. To date, we have integrated thiscontrol instrument seamlessly in over 95 percent of
all Group companies. The benefits of this networking are not only impressive for order or production
management. Indeed, the controlling department
also enjoys significantly increased efficiency. With
SAP, we basically have a real-time overview at Grouplevel of how our projected figures are developing.
This allows us to take action far more quickly in theevent of undesirable developments such as, for example, putting a brake on costs immediately. However,controlling is not the only department in which weare continuously increasing our financial efficiency.
Shared services, which we use either Group-wide
or in the regions depending on the subject matter,­represent another example. For example, we have
set up umbrella insurance that covers all of our subsidiaries and we centralised our management andpersonnel services in the major markets. By taking
these steps, we avoid costly duplicate structures in theindividual companies while improving conditions the
procurement of third-party services through a higher
purchase volume.

INTEVIEW DANIEL BÄTTIG

13“Efficiency, culture andinnovation have a lasting
impact on us.”But achieving these efficiency improvements
surely also required investment?
Daniel Bättig: Anyone looking for a healthy harvest
must first sow good seeds. It is obviously important
to ensure that our owners accompany us on this longterm growth strategy, so they can see the changes forthemselves in black and white. Our stable shareholder
structure, which no longer exclusively comprises thefounder families and now includes several domestic
and overseas institutional investors, obviously helps
us in this regard. When presenting our work to prospective investors, we no longer operate exclusively
from Zurich. Indeed, we are now also present at thestock exchange locations in Frankfurt, Paris, London,
Amsterdam and even New York. Additionally, weorganise live English-language events on the Internet
to present our operating results and activities. Thisis certainly another reason why foreign investors are
increasingly investing in Interroll.
What is particularly important to these investors?
Daniel Bättig: Well, everyone is obviously interested in profitability, growth, and future prospects.
The world has now started to recognise that internal
logistics has developed into a promising growth market. Responsible corporate management also has anincreasingly important part to play in many investment decisions. Since our company was founded, we
have always placed great emphasis on acting responsibly. This is why we adhere to the regulations of ourCompliance Management System, such as our Codeof Conduct and our Supplier Code of Conduct. We
recently underlined these responsibilities throughjoining the UN Global Compact initiative and thereby
provided another clear commitment to accepting
responsibility towards mankind, society and the environment throughout the world.

Daniel Bättig, Chief Financial Officer (CFO)

What part do employees play in yourgrowth strategy?
Daniel Bättig: Committed and qualified employees
actually play a key role, as even the most modern production and office facilities are no use if they standempty. We were therefore delighted when all employees from our latest acquisition in Kronau decided tojoin Interroll. Our first worldwide employee survey
in summer 2016 showed that Interroll provides its
employees and managers with a productive environment, with motivation levels very high across theglobe. In addition, we have launched a special training
programme as part of our “culture for growth” that will
help our approximately 200 managers and specialists
develop and utilise their potential even more effectively. We are keen to continuously develop, learn andimprove – this is precisely the point of our Climate of
Excellence guideline.

FINANCIAL POSITION, EARNINGS AND CASH FLOWS

14FINANCIAL POSITION,EARNINGS AND CASH FLOWSNET SALES

307.2

316.3

335.3

2012

2013

2014

EBITDA AND
EBITDA MARGIN
360.7

401.5
41.1
13.4 %

2015

2016

EBIT AND EBIT MARGIN
39.8
11.0 %
24.8
8.1 %

2012

27.2
8.6 %

25.4
7.6 %

2013

2014

2015

157.6
69.3 %

2012

200.3
72.0 %

207.6
70.9 %

44.1
13.2 %

2013

2014

2016

2015

65.7
16.4 %

2016

NET PROFIT

47.9
11.9 %EQUITY AND
EQUITY RATIO

187.2
72.5 %

2012

45.4
14.3 %

58.2
16.1 %

29.3
8.1 %
19.4
6.3 %

20.5
6.5 %

19.1
5.7 %

2012

2013

2014

2015

36.2
9.0 %

2016

OPERATIONAL
CASH FLOW
233.1
71.5 %

44.5

40.2

38.2

36.8

27.8

2013

2014

2015

2016

All amounts in million Swiss francs.

2012

2013

2014

2015

2016

FINANCIAL POSITION, EARNINGS AND CASH FLOWS

15

ORDER INTAKE AND NET SALES DEVELOPAT RECORD LEVELAt CHF 405.2 million, order intake for 2016 was 5.2 %higher than the previous year (+4.4 % in local currencies), making this the highest order intake in the company’s history. This was driven by continuous productbusiness as well as projects with systems integrators,
especially in the areas of e-commerce and airports.
Consolidated net sales rose by 11.3 % to CHF 401.5
million in the reporting currency (+10.4% in local
currencies), which is also a record high. All regions
and product groups contributed to growth, albeit tovarying degrees. Integrating business units purchasedfrom Ortner GmbH in K
­ ronau, Germany, in December 2016 contributed 0.1 % to growth.
NET PROFIT ACHIEVES A NEW HIGH AS WELL
In 2016, earnings before interest, taxes, depreciation
and amortisation (EBITDA) rose by 12.9 % to CHF
65.7 million (previous year: CHF 58.2 million), driven
by higher net sales, strict cost and investment discipline, and Group-wide productivity improvements.
The EBITDA margin was 16.4 % (previous year:
16.1 %). Earnings before interest and taxes (EBIT)
also increased. After CHF 39.8 million in the previous
year, they stood at CHF 47.9 million in 2016, which is
20.4 % higher. The EBIT margin was 11.9 % (previous
year: 11.0 %).
Net profit rose by a significant 23.6 % compared to theprevious year, from CHF 29.3 million to CHF 36.2
million. The profit margin amounted to 9.0 % (previous year: 8.1 %).

DEVELOPMENT OF THE BALANCE SHEETREFLECTS GROWTH
As of 31 December 2016, the balance sheet total rose
to CHF 324.8 million, 10.9 % above the value for 2015
(CHF 293.0 million). Increases were seen in inventories and mainly in receivables from customers. Thisdevelopment underscores the intense project work
conducted with Interroll Group systems integrators in
the reporting year.
Higher income also affected the equity of CHF 233.1
million as of 31 December 2016, which was 12.3 %above the 31 December 2015 value of CHF 207.6 million. Driven by higher earnings, return on equity rose
to 16.4 % (previous year: 14.4 %).
FREE CASH FLOW CONTINUES TO INCREASE
Mainly due to higher accounts receivables, operating
cash flow decreased slightly to CHF 36.8 million from
CHF 40.2 million in the previous year.
Investments totaling CHF 19.5 million were lower
compared to the previous year (CHF 24.3 million).
Among other things, this was due to the fact that theconstruction project Interroll Academy in Baal, Germany, no longer affected the reporting year.
In view of a slightly lower cash flow but lower investments, free cash flow improved by CHF 0.7 million
from CHF 17.3 million in the previous year to CHF
18.0 million in the year under review despite theacquisition.

PRODUCT GROUPS

16

PRODUCT GROUPS
Sales by product group
23 %
31 %
30 %
16 %

Rollers
DrivesConveyors & Sorters
Pallet & Carton Flow

SALES (CHF MILLION)ROLLERSSALES (CHF MILLION)
DRIVES

References
Dematic
Knapp
SSI Schäfer
TGW
Vanderlande

References
Itab
Smiths Detection
Triumph International
Villeroy & Boch
WalmartSALES (CHF MILLION)CONVEYORS & SORTERS

SALES (CHF MILLION)PALLET & CARTON FLOW

References
AmazonChina Post
FedEx
Hugo Boss
Smiths Detection

References
Coca-ColaFirst Quality Tissue
Procter & Gamble
Red Bull
Yamaha93.5 123.6
120.9 63.5

PRODUCT GROUPS

17

CONTINUING PRODUCT BUSINESS AND
INCREASING PROJECT BUSINESSInterroll has divided its performance portfolio into the four product groups“Rollers”, “Drives”, “Conveyors & Sorters” and “Pallet & Carton Flow”.
In 2016, all product groups developed satisfactorily.

PRODUCT GROUPROLLERSThe “Rollers” product group forms the basis for theInterroll portfolio. Since 1959, Interroll has been
producing conveyor rollers in Wermelskirchen, Germany, the global Centre of Excellence for conveyors
and driven rollers. Interroll plants also produce theseproducts in the USA, Canada, Brazil, Thailand, China
and South Africa.
Since its inception, Interroll has produced more than
500 million conveyor rollers, making it the world’s
leading supplier in this sector. These are used innumerous internal logistics applications.
Very short delivery times, highly efficient production
processes and the high quality of the Interroll products
also contributed significantly to further growth during
the year under review. In all regions, Interroll was able
to grow its business with conveyor rollers in 2016.
Another reason for growing demand is the customer
base which Interroll has been able to expand thanks
to intensive sales activities. As in the case of drives,
the increasing use of conveyor rollers in the new MCP
conveyor platform could reinforce synergies between
Interroll’s individual product groups.

Top quality Interroll conveyor rollers, available
in 60,000 different configurations.

Strong demand is also reflected in production. In
financial year 2016, Interroll produced more conveyor
rollers and RollerDrive units in a single year than everbefore.
The good development of the product group wasreflected in sales and order intake in 2016. Consolidated sales of CHF 93.5 million (2015: CHF 93.4
million) and order intake of CHF 93.7 million (2015:
CHF 91.9 million) were again slightly higher than therecord levels of the previous year.
Sales in the EMEA region were particularly pleasing,where Interroll rose by around 9.5 % compared to theprevious year.
With the MSC 50 magnetic speed controller, ­Interroll
launched another innovation in the spring of 2016,
which intelligently regulates the speed of sloped
conveyors, preventing damage to the material being
carried.
The new product was immediately met with a positive
response on the market. The Interroll Production System (IPS) lays the foundation for efficiency and excellent quality in all processes at Interroll. This enables
Interroll to offer its customers a wide range of around60,000 conveyor roller variants, while simultaneously
producing small batches – more than half of orders
have a lot size of less than 10 pieces.

PRODUCT GROUPS

18

PRODUCT GROUP
DRIVES
The portfolio of the product group “Drives” includes
driven conveyor rollers (24-volt RollerDrive), controllers and 400V drum motors.
24-VOLT ROLLERDRIVE
With its RollerDrive products, Interroll is a leader
in energy-efficient 24-volt technology. Our 24-volt
motorised roller drives are characterised by low
energy consumption, reduced noise pollution and easy
installation and maintenance. In this way, we help ourcustomers remain competitive and organise processes
efficiently in internal logistics.
CONTROLLERS
We offer our customers the right conveyor controller
for each conveyor task, meeting their requirements
exactly. In the previous year, we expanded our controller family for the RollerDrive EC 310 with the Interroll
MultiControl, a network card for PROFINET, EtherNet/IP and EtherCAT.

This expansion has proven to be very successful in theyear under review and is enjoying high demand.
DRUM MOTORSDrum motors from Interroll meet the highest hygienic
standards in the food industry and are certified by
the European Hygienic Engineering & Design Group(EHEDG). The Global Centres of Excellence in Baal,
Germany, and Hvidovre, Denmark, have global
responsibility for the drum motors within the Interroll
Group. Overall, sales amounted to CHF 123.6 million,
an increase of 12.1 % over the previous year (CHF
110.3 million). Consolidated order intake rose to CHF
124.4 million compared with CHF 111.5 million in
the prior-year period. The EMEA region developed
strongly with sales growth of 27 % for RollerDrive. The
Asia-Pacific region also posted a gratifying increase.
EMEA recorded a 12 % higher sales of drum motors
than in 2015. This positive development is largely due
to strong performance in the important food markets
of France and Great Britain. Interroll is a global leader
in this product segment.
The high demand for Interroll’s driven conveyor rollers
makes it necessary to expand capacity at the Wermels­
kirchen, Germany, site.
Interroll will be able to further develop its technologies
and to continue successfully positioning itself for thesustainable success of these activities in the future. In
June 2016, Interroll began work on the construction ofa new hall, due to be completed in 2017.

Interroll Drum Motors and the RollerDrive product family comply
with highest efficiency standards.

PRODUCT GROUPS

19

PRODUCT GROUPPALLET & CARTON FLOWThe “Pallet & Carton Flow” product group offers
dynamic storage solutions for pallets and container
packages according to the FIFO (first-in, first-out) or
LIFO (last-in, first-out) principle.
The global Centre of Excellence in La Roche-sur-Yon,
France, is responsible for this product group withinInterroll.
At the end of the 2016 financial year, Interroll had
increased its consolidated sales by 27.3 % to CHF 63.5
million compared to the same period of the previous
year (CHF 49.8 million).
Consolidated order intake decreased slightly to CHF
61.1 million (previous year: CHF 61.4 million).
Demand in 2016 was particularly strong in Asia andEurope. In Korea, a large project was invoiced in thearea of mineral water.

Robust and reliable Interroll
flow storage solutions.

In Europe, demand grew in many markets. In Italy, forexample, Interroll was able to conclude product specification work at a leading automotive group.
In Egypt, Interroll is implementing one of its largest
dynamic storage projects outside Europe, equipping
the warehouse of a food group with space for 11,000
pallets in collaboration with the assistance of a systems
integrator.
Dynamic storage solutions have proven to be parti­
cularly cost-effective for warehouses with high turnover frequencies. Interroll’s flow storage systems aretested at the Interroll test centre in La Roche-sur-Yon,
France.
After 50,000 test cycles under extreme conditions,Interroll guarantees a long service life and maximum
safety.
Dynamic storage systems use the oblique plane effect..
This eliminates the need for an energy supply for drive
systems. Studies show the high energy efficiency andenvironmental compatibility of dynamic storage systems with an average return on capital of two to three
years.

PRODUCT GROUPS

20

PRODUCT GROUPCONVEYORS & SORTERS
The “Conveyors & Sorters” product group comprises
sorter and conveyor solutions developed by the Global
Centres of Excellence in Sinsheim, Germany, andCañon City, USA.
These include cross belt sorters, the Modular Conveyor Platform (MCP) and belt curves. With theseproducts and solutions, Interroll has further expanded
its strong position equipping airports as well as postal
and logistics distribution centres.
In financial year 2016, the product group achieved
consolidated sales of CHF 120.9 million, exceeding theprior-year period (CHF 107.2 million) by 12.8 %.
In the year under review, the first Interroll cross belt
sorters were delivered to Brazil Post.
Order intake rose by a significant 4.8 % to CHF 126.0
million compared to CHF 120.2 million in the previous year.

MODULAR CONVEYOR PLATFORM
In 2016, Interroll completed important new orders on
the equipment of airport baggage control stations with
its Modular Conveyor Platform. In Germany, Interroll
was also able to bill a project that equipped a distribution centre of a leading fashion manufacturer with
one of the longest conveyor stretches Interroll has everdelivered.
Following successful launches in Europe and Asia,
Interroll rolled out the Modular Conveyor Platform inthe spring of 2016 in the Americas market. In SouthAmerica, Interroll has already signed a major contract
for the new conveyor platform.
Interroll is thus consistently pursuing its globalisation
strategy through innovative products that are rapidly
available worldwide.
Modern material flow systems can be planned quickly
and efficiently using Interroll’s modular concept.
Modifications can still be made to restore maximum
availability and achieve energy efficiency in existing facilities that have undergone renovation work.
Interroll’s Modular Conveyor Platform provides flexible applications.
BELT CURVES
With the acquisition of the sheet metal processing
company Ortner GmbH, together with its employees,
machinery and business premises in Kronau, Germany, Interroll continues to pursue its strategy of

PRODUCT GROUPS

21

near-market production. This new Group location,near the existing plant in Sinsheim, will be expanded
into the Regional Competence Centre for Belt Curves
in Europe, Middle East and Africa (EMEA).
In 2013, Portec was bought in Cañon City, USA, andsubsequently expanded into the Global CompetenceCentre for Belt Curves. A year later, the acquisitionof Pert followed in Shenzhen, China, which has been
providing the markets in the Asia-Pacific with highly
efficient belt curves since then.

Interroll’s modular
conveyor platform offers
application flexibility.

REGIONS22

REGIONS
SALES
EMEA

61 %

SALES
AMERICAS

25 %

SALES
ASIA-PACIFIC

14 %INTERROLL IS ACTIVE WORLDWIDE VIA OWN COMPANIES,AGENTS AND DISTRIBUTORS.

REGIONS

23

By opening up new markets and new customer­potential, we continued our globalisation strategy
in the 2016 financial year. Interroll’s revenue
share is 61 % in the Europe, Middle East and Africa(EMEA) region, 25 % in the Americas and 14 % in the
Asia/Pacific region.

EUROPE, MIDDLE EAST
AND AFRICA (EMEA)STRONG DEVELOPMENT AGAIN
In the EMEA region, the positive growth of the previous year continued in 2016. Order intake rose by
10.5 % year-on-year to CHF 244.0 million (previous
year: CHF 220.9 million). Revenues were CHF 245.4
million, 14.5 % higher than in the same period of theprevious year (CHF 214.3 million).
This development was driven by continued highdemand for rollers and drives and, above all, for conveyors and sorters.
The demand for pallet and carton flow solutions
remained strong in Northern and Western Europe.

All European markets developed positively. Significantly higher performance was achieved in Italy andSpain, despite their generally difficult economic circumstances, as well as in Germany, France and Scandinavia, in particular.
Spain and Great Britain recorded record orders.
Northern and Eastern Europe also developed positively, while South Africa fell short of expectations.
Accounting for 61 % of Interroll’s total revenues,
EMEA remains the most economically significant
region within the Group.
The technical requirements in internal logistics arehigh and require innovative responses to increasing
complexity and new developments, in addition torobust customer relationships, industry knowledge
and technical solution expertise.

+14.5 %At its Innovation Summit in Baal, Germany, as well
as at the international trade fair CeMAT in Hanover,Germany, Interroll presented not only technical innovations but also broad industry know-how and highquality in production and sales processes.

IN REPORTING CURRENCY

As of this year, Interroll has also focused its activities
on the Tire & Automotive industry. A new international key account team serves customers in Europe
and abroad, and is opening up new markets at thesame time. The interest in Interroll in this segment is
considerable and the business trend in the first financial year was very positive.

EMEA SHOWED STRONGGROWTH IN ­GERMANY,FRANCE AND SCANDINAVIA.

REGIONS

24

AMERICAS
BREATHER AFTER TWO YEARSOF DOUBLE-DIGIT GROWTH
In the Americas region, the strong market positions
from the previous two years were maintained in 2016.
At CHF 99.9 million, sales were 2.3 % higher than theprevious year (CHF 97.6 million).
Order intake fell only slightly by 1.2 % from CHF 107.2
million in the previous year to CHF 105.9 million.
Demand in the areas of e-commerce, food and distribution centres remained high in the North American
market.
Interroll also consistently pursued its strategy of globally available products and services in the Americas
region.

At the largest logistics fair in the Americas, Modex
in Atlanta, Interroll presented its Modular Conveyor
Platform (MCP) in the spring of 2016. After successful
market launches in Europe and Asia in the past two
years, this solution is now also available in all American markets.
South America developed nicely. This positive development also continued in Brazil. With the delivery of
the first sorters for the Brazil Post project, Interroll wasable to successfully position itself in a politically andeconomically difficult environment.
For this project, Interroll’s responsible regional competence centre in Atlanta and the globally responsible
competence centre for conveyors and sorters in Sinsheim will work closely together.
In the year under review, Interroll took account of thegreat growth dynamics in Central America by founding a sales and service company in Mexico City.

+2.3 %IN REPORTING CURRENCYGROWTH IN THE AMERICAS REGIONWAS DRIVEN BY THE CANADIAN AND­BRAZILIAN MARKETS.

From this point on, Interroll intends to further
develop the logistics hub of Mexico as well as neighbouring countries which are growing dynamically due
to e-commerce, food distribution and the automotive
industry and offer great business potential as a result.

REGIONS

25

ASIA PACIFICA REGION WITH MUCH POTENTIAL
Interroll continued to grow in the Asia-Pacific regionin financial year 2016.
Following the seasonally weaker start, sales after theend of the financial year were CHF 56.1 million, an
increase of 15.0 % over the prior-year period (CHF
48.8 million).
Order intake fell by 2.9 % from CHF 57.0 million in
the previous year and reached a total of CHF 55.3 million. The previous year included a large pallet and carton flow project in Korea, which was invoiced in thereporting year.
As in previous years, China was the most important
market for Interroll in the region. Sales growth inSoutheast Asia was subdued due to shifts in new projects (in Thailand) and ongoing projects not yet billed+15.0 %IN REPORTING CURRENCY
IN THE ASIA-PACIFIC REGION, THE­CHINESE AND THE KOREAN SUBSIDIARIESBOTH REPORTED GROWTH.

(in Singapore). On the other hand, for the first timein Interroll history, a large dynamic storage projectin the Philippines amounting to over CHF 4 million
could be booked towards the end of the year following
intensive preparatory work and tests.
High demand for Interroll technology in the region
affected all product groups. For example, in the year
under review, Interroll collaborated with a systems
integrator to equip a large airfreight hub of a global
postal and logistics group.
The region is increasingly benefiting from the globalisation of the Interroll Group, with the establishmentof its own on-site production facilities. The successful
integration of regional competence centres in Suzhou
and Shenzhen into the production network ensured
positive synergy effects in the 2016 financial year
thanks to higher on-site technical expertise and better
customer proximity.
Interroll is also consistently implementing its productstrategy in Asia. After the successful market introduction of the Modular Conveyor Platform (MCP) lastyear, the Magnetic Speed Controller 50 (MSC 50) was
brought to the Asian market this autumn.
As a result, Interroll is continuing to reduce thetimeframe of global product launches and globallystrengthening its market opportunities through innovative, globally available technologies and services.

INTERVIEW DR RALF GARLICHS AND DR CHRISTOPH REINKEMEIER

26“WE WILL PROVIDE OUR CUSTOMERSWITH EVEN MORE PROFESSIONALAND COMPREHENSIVE SUPPORT.”
A close connection between Product Development, Production andSales is a proven recipe for success in the Interroll Group – in bothits day-to-day business and in Group Management. We spoke to
Dr Ralf Garlichs, Executive Vice President Products & Technology,
and Dr Christoph Reinkemeier, Executive Vice President Global
Sales & Services, about current market and technology trends, thechallenges of the next few years and the benefits of a consistentplatform strategy.

Dr Ralf Garlichs, Executive Vice President
Products & Technology

Dr Garlichs and Dr Reinkemeier, how did
the ­market for material flow solutions develop
in the past financial year?
Dr Reinkemeier: The international intralogistics­markets lost none of their momentum last year: quite
the contrary in fact, as they were actually changing
more than ever. Even in the field of e-commerce,
which has already provided major growth impetus
in the last few years, developments are still in theirinfancy. Alongside the necessary increase in capacity of the intralogistics infrastructure which must be
capable of handling this growth, new services and newoffers for end customers are also generating further
potential for suitable material flow solutions – justthink of ever shorter delivery times and easier processing of returns or online grocery sales. Any companies wishing to enter the food trade as e-commerce
providers require mature logistics solutions that fulfil
special requirements. They cannot simply use their
existing systems. At the same time, we see that modern
internal logistics operations are increasingly including
the ­production industry and that there is still a great
deal of catching up to do, particularly in the emerging economies. These all represent extremely attractive
business opportunities which Interroll will be looking
to utilise over the next few years.

INTERVIEW DR RALF GARLICHS AND DR CHRISTOPH REINKEMEIER

27

Dr Christoph Reinkemeier, Executive Vice President Global Sales & Services“The international intralogistics
markets lost none of
their dynamism last year.”
Dr Christoph Reinkemeier

Dr Garlichs: In terms of technology, we are aware that
our customers (i.e., systems integrators and equipment manufacturers) are having to master increasingly complex tasks. Alongside performance, delivery
times and energy efficiency, the topic of automation inparticular now plays an important role. Products suchas our sorter, drive and flow storage systems are now
becoming central components of more comprehensive solutions. This trend toward automation is great
for us, as quality requirements become stricter withsolutions of this kind. In addition, as a quality provider we have been using uniform and open interfaces
for years. For example, our extremely energy-efficient
flow storage systems can be combined with automatic
stacking/retrieval machines, while our conveyors withintegrated drive controllers can be incorporated seamlessly into warehouse management systems.

At the same time, concepts created within the scopeof Industry 4.0 are gradually gaining momentum.
Dr Garlichs: Yes. The opportunities offered by endto-end digital networking will make intralogistics
procedures even more efficient over the next few years.
This is an important reason behind why it has been so
essential for Interroll to significantly increase its innovative capacity in recent times. One key factor in thisregard was our totalling €13 million investment in an
innovation campus with Group-wide responsibility
in Baal near Düsseldorf, Germany. This expertise andthe close collaboration with both university-based andindustrial partners help us secure many advantages.
Among other things, they enable us to ensure thatsystems integrators can use our key products as endto-end networked solutions for a seamless data flow
within the scope of Industry 4.0 concepts.
Also groundbreaking was the complete range of control systems for individually required drive solutions,which Interroll developed very early on with leading
strategic partners. In the future, these control systems
will significantly reduce the complexity of process
design for material flows. This is because they can
perform tasks that previously had to be coordinatedwith higher-level systems, a process which was often
time-consuming and costly. In the future, these control systems will make it far easier to make changes tothe layout of a material flow system.

INTERVIEW DR RALF GARLICHS AND DR CHRISTOPH REINKEMEIER

28

Dr Reinkemeier, will these technological­developments change the future role of Interroll?
Dr Reinkemeier: No, we will unequivocally be sticking to our successful business concept. We will remaina neutral service provider and partner to both systems integrators and equipment manufacturers that ischaracterised by the highest quality, a diverse range ofsolutions, and short delivery times. Anyone looking toremain successful in the long term must be capable ofsetting clear boundaries in their business. In our case,
we focus on key products and solutions that help ourcustomers and partners become even more successful– with the benefits of a uniform global context such as
quality standards, sourcing, economies of scale, worldwide availability, etc. This gives us an edge over ourcompetitors and grants us access to a world of intralogistics whose greater complexity, stricter requirements and closer networking will provide us with awhole host of new opportunities. For example, we canmake more effective use of our expertise as a materials
handling specialist in the planning, configuration andoperating phases to offer both small and large systems
integrators key added value as a service partner. Thiscan be achieved by using innovative information technology (IT) planning and layout tools, local services
or additional sector expertise to reduce costs for ourcustomers and make cooperation with Interroll evenmore beneficial for them.
While we are on the subject of sector knowledge,
how do you intend to use this expertise in sales?
Dr Reinkemeier: In the future, we will provide evenmore intensive support for systems integrators andequipment manufacturers with operations that go
beyond the boundaries of the mainstream intralogistics applications in which we traditionally operate. We
believe there are plenty of interesting new opportunities that will allow us to use our expertise more comprehensively. The international tire industry is a good
example of this, as we have been providing systems
integrators with targeted and successful support intheir projects for around two years here. We are confident that we can offer our customers genuine added
value by expanding our sector expertise and utilizing
our global presence. We are keen to intensify these
sector-specific sales activities in the next few years andexpand them using a targeted approach.

Dr Garlichs, won’t the additional focus on­special sector requirements lead to a significant
increase in costs for the product portfolio?
Dr Garlichs: The answer to this is no, thanks to theconsistent platform strategy we have been pursuingfor many years. This approach also enables us to meetcustomers’ segment-specific requirements flexibly
without having to constantly reinvent the wheel fordifferent sectors. A good example of this is our modular conveyor platform, which we can scale and adapt
to a very wide range of requirements. In addition tothis, when potential offers arise, we always keep a close
eye on the commercial aspects that a stronger sector
focus can tap into, such as the competitive situationand market volume. The fact that we are continuously
expanding our international presence obviously helps
in this regard as well.
To what extent?
Dr Reinkemeier: Many systems integrators, particularly in the sector-oriented project business, operateinternationally and attach great importance to being
able to provide users with optimum solutions, including for overseas operations. We can really play to ourstrengths here, as we have been building up our international structure for years. Local firms simply cannot
compete with that. Our customers therefore benefit
from our global presence, while our internationali­
sation strategy allows us to increase the market volume
that can be tapped for segment-specific solutions.

INTERVIEW DR RALF GARLICHS AND DR CHRISTOPH REINKEMEIER

29“Worldwide production
at identical quality
is of key importance.”
Dr Ralf Garlichs

Dr Garlichs: With our international presence, ourstrategy of producing products at identical quality
and with the greatest efficiency worldwide is also of
key importance. This is also why we adopt a uniform
worldwide approach with our Group-wide production
system, which is based on the automotive industry’s
Kaizen principle. At a production facility acquired in
China, this not only enabled us to successfully raise thequality to Interroll’s level, but also increase productivity by 100 percent within just one year.
What part does the Interroll brand playin this strategy?
Dr Reinkemeier: The brand definitely plays an important part, especially in light of the increasing internationalisation of our business activities. Our customer
pledge is crystallised in the brand. It represents thefact that all customers worldwide who cooperate with
Interroll can rely on top quality, expertise and a highdegree of reliability. We have made good progress on
the path to establishing Interroll as a leading brand in

our market. At the same time, it is important for us
to further raise our profile in customer perceptions.
After all, many customers still associate us primarily
with a specific product: conveyor rollers. We therefore
need to continue working hard to emphasize our solution expertise more comprehensively. In the future, weshould reach the point where every systems integrator
and equipment manufacturer worldwide with a materials handling task to solve can get direct information
about what Interroll has to offer them.

CORPORATE RESPONSIBILITY30

CORPORATERESPONSIBILITY
Interroll aims to create added value for its customers, ­employees
and shareholders by delivering quality products and services
around the world, operating sustainably, increasing customer­­satisfaction and employee loyalty, and meeting the needs of
its shareholders through its growing market position.

THE POWER OF PRINCIPLES:

ENGAGE, ENABLE, SUSTAINInterroll connects the physical and the digital worldand sets new global standards with its products, project solutions and services. This makes it easier for ourcustomers and employees to work responsibly every
day in a complex environment. In the long term, webring economic success in line with sustainable, ecological awareness and social responsibility.
PRINCIPLES WITH RESPECT TOOUR CUSTOMERS–– Our products are comprehensible and easy to use–– Our project solutions lead to partner relationships–– Our services create a consistent customer experience in the long term

PRINCIPLES WITH RESPECT TOOUR EMPLOYEES–– We pursue common goals and maintain constructive, respectful cooperation on a Group-wide basis–– We help our employees to work efficiently and offer
advanced, market-oriented working conditions–– We understand the commitment and the innovative strength of employees as an important sourceof our success
PRINCIPLES WITH RESPECT TO SOCIETY–– As a provider of internal logistics, we make a­significant contribution to modern infrastructures–– We secure international connections througha global network of Group companies andpartnerships
PRINCIPLES WITH RESPECT TO SUSTAINABILITY–– We act sustainably and focus on long-term businesssuccess. We strive for an appropriate balance
between ecological action, social responsibility andeconomic success–– We also oblige business partners and suppliers tocomply with minimum principles
RELATED DOCUMENTS–– Interroll Code of Conduct(https://www.interroll.com/downloads/company/)–– Anti-Bribery & Anti-Corruption Guidelines(https://www.interroll.com/downloads/company/)–– Supplier Code of Conduct(https://www.interroll.com/downloads/company/)

CORPORATE RESPONSIBILITY

31

Best in class

Climate ofexcellence

INTERROLL PROVIDES ITS EMPLOYEESAND EXECUTIVES WITH A PRODUCTIVEENVIRONMENT
The results show a good overall level of enablement in
the Group (70 points). This is clearly above the Manufacturing Standard of 65 points and very close to theHigh-Performing Standard at 71 points. In particular,
the employees strongly confirmed Interroll’s quality
and customer focus as well as the clear and promisingorientation of the Group.

We areInterroll

Reliableand fair

Fast andcommitted

Long-termthinking

ProvensolutionsGlobally
consistent

ENGAGE

INTERROLL’S FIRSTWORLDWIDEEMPLOYEE SURVEY
In June 2016, Interroll surveyed approximately 1,750
employees from 30 Group companies and in 16 different languages for the first time. An independent survey
institute used a measuring model with around 50 multiple choice and open-ended questions, and the results
were benchmarked: on one hand, high-performing
companies (the HP Standard), and on the other, manufacturing companies (the Manufacturing Standard).
On a scale of up to 100, results from 65 to 75 points
were considered a “good rating.”
HIGH PERFORMANCE OF INTERROLLEMPLOYEESThe first Global Employee Survey showed very gratifying results. Interroll has a dedicated workforce that isready to go the extra mile for the company:
Employee commitment received 69 points. This is above
the Manufacturing Standard of 67, but under the HP
Standard of 73 points. That means there is still potential for improvement. According to employee opinions,
possibilities for training and individual development in
the Group should be improved above all.

An exceptionally high response rate of 80 % ensured
a solid data set for this first personnel survey, underlining the outstanding commitment from around theworld.
CONTINUE INCREASING THE STRENGTHS,WORK ON THE WEAKNESSESIn the second half of the year, the Managing Directors,
together with their local department and staff directors, carefully analysed the results of the survey andalso developed measures to further strengthen thestrengths identified and to work on the weaknesses.
A total of around 150 improvement measures havebeen defined throughout the Group and are alreadybeing implemented. To this end, more than 1,500 candid employee comments were drawn from the personnel survey.
The Interroll Global Employee Survey will be conducted for the second time in the 2017 financial year
and will then allow another important benchmark:comparison with the previous year and thus an assessment of the appropriateness of the measures introduced in 2016.

CORPORATE RESPONSIBILITY

32

ENABLE

INTERROLL ACADEMYThe Interroll Academy in Baal, Germany, is the driving force for the transformation of the Interroll Group
into a learning organisation. Continued investment inmodern training methods and facilities reflects ourstrong commitment to employee, customer and partner training.
EMPLOYEE TRAINING
We are convinced that only well-trained employees
can be motivated employees. This is why we train
them with the aim of furnishing them with the expertise they need to provide valuable support to our­customers. Our participants, who come from all areasof the company, are not only familiar with Interroll
products, but also with the applications and concernsof our customers.

Through our numerous training and further education
programmes, all employees can develop and optimallydeploy their talents. Blended learning, which combines classical instruction with new Internet-based
training methods (e-learning offers), can overcome
internal hurdles and even reach interested employees
who are not on site.
CUSTOMER TRAINING
Trained, motivated employees are a unique source ofideas for increasing productivity, but also for the continuous further development of materials handlingsolutions.
With the Interroll Academy, we want to offer our customers the best possible training so that their employees can acquire the skills and knowledge required tosuccessfully present Interroll products and solutions totheir customers.
LEADERSHIP TRAINING
As part of the “Culture for Growth” programme
launched at Interroll, not only is a systematic survey
conducted to assess the commitment of employees
from around the world but a total of around 200 managers and specialists from the Group attended external
leadership training seminars in 2016 and 2017 withthe aim of achieving these main goals:–– Communicate clearly, compellingly andcommittedly–– Accompany and facilitate team processes–– Strengthen self-responsibility among employees–– Develop personal leadership skills–– Set up a coaching programme that acknowledges
and encourages employees–– Promote effective problem analysis anddecision-making–– Resolve conflicts constructively–– Drive innovation

All participants receive a Leadership Certificate.

CORPORATE RESPONSIBILITY

33

Network
Switzerland

WE SUPPORTSUSTAIN

INTERROLL AND THE
UN ­GLOBAL COMPACT
Since the fourth quarter of 2016, Interroll has been aformal member of the UN Global Compact, and since
the first quarter of 2017, also a member of the local
Swiss network.
This joint initiative between economic enterprises,
the United Nations and groups representing labour
interests and civil society is intended to promote thesocial commitment of companies to human rights,
work practices, environmental protection and the fightagainst corruption.
Interroll has joined the UN Global Compact because
its principles are in line with those of our Group.
The UN Global Compact (UNGC) is the world’s largest corporate network for an ecologically, economically and socially sustainable economy. The UNGC
promotes a sustainable, global economy that enables
long-term added value for people, communities, companies and markets.
It helps the members with responsible corporate
governance so that they can shape and continuously
improve their strategies and activities with regard
to the ten UNGC principles on human rights, international working standards, the environment andanti-corruption along the entire economic value chain.

In constructive cooperation with various stakeholders, it contributes to global sustainable development inaccordance with the UN goals for sustainability.
The Global Compact Network Switzerland takes on
the tasks described under the UN Global Compact
for Switzerland, offering relevant events, information,
training, networking and consultations, and looks foras many new companies as possible for responsible
and sustainable business management.
From financial year 2017, Interroll will publish a progress report on the implementation of the UN Global
Compact (COP) as well as other, selected performanceindicators on the topic.
RELATED DOCUMENTS–– United Nations Global Compact(http://www.unglobalcompact.org)–– United Nations Global Compact Principles(https://www.unglobalcompacts.org/what-is-gc/
mission/principles)–– Universal Declaration on Human Rights(http://www.un.org/Overview/rights.html)

SEAMLESS CUSTOMER SOLUTIONS

34

SPEEDY, GENTLY, SWEET!
Biscuits and cookies are universally popular and the global ­market­outlook is promising. Global trends like health and well-being on
the one hand and indulgences on the other hand are forcing biscuit
manufacturers adopt shorter innovation cycles and as a result,increase process complexity. Efficient m­ aterial handling solutions ­and intelligent automation are ­becoming prerequisites
for ­success, as illustrated in the case of a leading Dutch cookie
manufacturer.

Highest efficiency with 24V roller conveyors from Interroll.

SEAMLESS CUSTOMER SOLUTIONS

35

manufacturers to implement lean and efficient processes and invest in intelligent automation solutions.

One of the reasons why people have always liked biscuits – a word derived from the Latin “biscoctus,” or“twice baked” – is that they fit a variety of occasions
and lifestyles. As a treat after a hard day of work or
study, as an everyday habit together with a cup of tea
or coffee or simply as nourishment to subdue hunger
when our busy lives make us skip meals. The global
cookie market is growing and competition between
large, multinational players and local manufacturers
in each region is fierce. Price pressure requires biscuit

PRODUCT CUSTOMISATION REQUIRES­FLEXIBLE SYSTEMS
For a leading industrial cookie producer in the Netherlands, the strategic focus has always been on the
optimisation of both the products and the production processes. For more than 80 years, the company
has produced an ever-growing variety of high-quality cookies, which are sold to consumers worldwide.
Despite the worldwide supply of high volumes, thecompany retains a high level of flexibility, as entry
into a new market frequently requires product customisation in terms of recipe, size, weight and/or
packaging.
The vast range of biscuits and cookies that the company offers has one requirement in common: They
are all delicate, fragile and perishable products thatneed delicate handling and protective packaging toguard against breakage and loss of freshness and flavour. Production machines and especially material
handling equipment and associated software pack-SEAMLESS CUSTOMER SOLUTIONS

36

Efficient material flow
with Interroll’s modular
conveyor platform
ages need to enable operators to perform fast changeovers and reduce errors while minimizing the risk of
product damage.

in the Netherlands and Germany for the automationof manufacturing plants and logistics centres withover 400 successfully implemented projects.

ON THE ROAD TO LARGE-SCALE AUTOMATION
To maintain its competitiveness and lay the foundation for future growth, this cookie manufacturer has,over the course of years, made significant investments
in intelligent material handling solutions. The Dutch
automation company Technisch Buro West-Brabant(TBWB) was selected as the primary automation
partner many years ago and since then has delivered
a number of turnkey projects based on its customer’scookie handling needs. TBWB is a renowned player

THE CHALLENGE: AUTOMATION OF­PALLETIZING OPERATIONS
In early 2015, TBWB was asked to work out anautomation concept for its customer’s palletizing
operations, which were mainly performed manuallyand caused a bottleneck for shipping operations. A
great variety of biscuit boxes coming out of morethan 10 production lines needed to be processed
faster: the palletizing capacity should be increased
to 3,000 boxes per hour. Because of the tight project

System throughput was increased to a level of 3,000 boxes per hour.

SEAMLESS CUSTOMER SOLUTIONS

37

Automatic palletizing for higher capacity

only extremely easy to install but also brought theadvantage of ongoing energy savings for TBWB’s customer, due to the decentralised, zone-driven conveying concept. For inclines and declines, Interroll belt
conveyors were used. From the controls side, the newMultiControl allowed fast and easy setup and smooth
integration with the PLC.

Interroll’s product quality: a real guarantee for TBWB.

timing and the complexity that TBWB, as the responsible systems integrator, had to deal with, TBWB CEO
Bart Friederichs needed to rely on trusted project
partners: “For TBWB, the main goal in each project isto deliver a turnkey system for our customer. It must
work according to their specifications, no matter
what. To keep this promise towards our customer, weneed project partners we can rely on, like Interroll.”
MODULAR CONVEYORS AND INTELLIGENTCONTROLS FROM INTERROLL
The project required a great number of roller conveyors along with automatic palletisers and vertical lifts,
which were supplied by another trusted partner, theDutch company Qimarox, leading manufacturer ofpalletisers and vertical conveyors. TBWB integrated
all products into the existing factory infrastructure,taking care of PLC controls, electrical wiring, userinterfaces and ERP connectivity. For the transportation of biscuit boxes from the different production lines to the palletisers, TBWB implemented
Interroll’s latest generation of conveyor modules.
The industry-leading 24V roller conveyors were not

A SWEET SUCCESSTBWB installed this large, turnkey system within thegiven timeframe and resolved the key customer problem: increase of overall capacity while maintaining
product quality. Due to the fragility of the biscuits,
the conveying task was critical: “Avoiding productdamages during the packaging operations was of critical importance. This is why the transportation of theboxes needed to be extremely gentle but at the sametime really fast. For this reason, we have relied on the
product quality of Interroll, which is a real guarantee for us. As in the past, the Interroll team has once
again proven to be a great partner! At TBWB we’re
proud to put the Rolling On Interroll label on our systems,” concludes Bart Friederichs.

MARKETING38

OUR MARKETINGSTRATEGY

The global Interroll marketing team received twointernational awards in 2016. The first was for thead “Ready to rumble”, which took the silver prize at
a competition for corporate ads. The second was forthe global campaign known as “Rolling on Interroll”,
which captured the bronze medal at the most important German-language competition, the “Best of Business” awards.
A key component of our marketing strategy is toappear at specialist and industrial trade fairs. In 2016,
we attended some 20 international trade fairs as well

as a number of local events, which allowed us to present our products and services. Particularly noteworthy
was the introduction of the MSC 50 speed controller
at the LogiMAT trade fair in Stuttgart. Another highlight was Interroll’s presence at the CeMAT logistics trade fair in Hanover, which was held under the
motto ­“Rolling on Interroll”. Customers and visitors
were advised in a booth made to look like a first-classlounge, allowing for a direct exchange with and among
our partners regarding new joint projects. We also
arranged an in-house exhibition in conjunction with
our leading partners in Baal, near Düsseldorf, which

Bildlegende. Bildlegende. Bildlegende. Bildlegende. Bildlegende.
Bildlegende. Bildlegende. Bildlegende. Bildlegende.

Rolling on Interroll won the 2016 BoB (Best of Business) Award in the “Cross-media” category.

MARKETING

39

Interroll signed the prolongation of the contract with the Sauber F1 Team.

“Marketing activities promote
global growth.”

was attended by some 200 international business partners. Interroll plans to expand “Rolling on Interroll”,
the customer loyalty programme that it introducedin March 2015 and which currently has 50 worldwide
partners, into an industry community and to further
increase joint activities in the area of communications,development and partnership.
There was a particular focus on the expansion of thecompany’s global website. Significant investments
were made in new services, such as the complete 3D
representation of all products in 3D CAD quality andso-called matchmakers. Both offerings are intended
to simplify planning with our products for customers
and they further underscore the advantages of Interroll solutions.

The partnership with the Sauber F1 Team was extended
for another two years at the end of 2016. Sauber andInterroll share a passion for team spirit, technology
and precision as well as an absolute desire for success.
A number of factory tours were conducted for customers in Hinwill in 2016. In addition, the partnershipwas ­presented at trade fairs and other customer events.

INTERVIEW MAURIZIO CATINO

40“SPEAKING THE CUSTOMER’SLANGUAGE”
For about the last two years, Interroll has been taking a ­closer lookat systems integrators that work for the international ­tire industry. Maurizio Catino, Industry Sales Manager at­Interroll, reports on the successful establishment of sales in this­sector and the special requirements of production facilities.

Mr Catino, what motivated Interroll to start­focusing on the tire industry?
Maurizio Catino: The idea of addressing the special
requirements of the international automotive andtire sector came about at the beginning of 2014. It wasborn from experience I have gained over the courseof my career, both in the Italian automotive industry
and in the field of intralogistics with Interroll. The key
was to combine this knowledge and these contacts
productively and then use them even more intensively
for the business. This strategy really paid off. Today,
Interroll has established itself and its solutions in thetire industry and has become a recognised partner forsystems integrators active in this sector. Discerning
users certified our products, so we were quickly able
to increase our market share. Our solutions are now
in use at four of the five largest tire manufacturers in
the world. All the work and efforts of the last few years
have, therefore, been worth it.
What approach did you adopt when establi­
shing this sales segment? Did this require major
investments?
Maurizio Catino: No, we did not simply set up a
new sales organisation overnight. We believed in thisopportunity we had, but chose a targeted and cautious
approach, working through our defined area step bystep. Initially, it was obviously important to get an
accurate overview of our existing presence in this sector’s environment. When taking stock, we then cameto the conclusion that the systems integrators in thissegment had been using us in a rather unstructured
and ad hoc manner. In other words, the integrators

were not making full use of our particular strengths.
There was no solution-oriented or benefit-driven focus
in this market. We then changed this. We also decided
that we would not establish parallel distribution forthis sector offer. Instead, we simply extended the existing regional sales operations to include a vertical function. We were fortunate enough to get a professionalsales employee on board for each important country
and each major region, supporting us in this projectin addition to his other duties. My international andpartly virtual team now comprises 11 focused industry
champions.
What characterises the international marketof the tire industry?
Maurizio Catino: The tire market is fiercely contested
internationally, not only in terms of innovations, butalso with regard to prices. Any company capable ofmaking its internal production processes more efficient and, at the same time, more reliable than thecompetition already has an important edge. This obviously fits in with our efficiency-oriented portfolio andsuits the systems integrators that work with us. One
example of this is the buffering of manufactured products on the conveyor system. We can really impress
in many respects with our zero-pressure conveyor­concept here, which is based on 24 V drive technology. This solution is far more energy-efficient than
­traditional hydropneumatic technology and also significantly more compact, not to mention quieter. This
dramatically reduces the typical noise level in industrial applications, which not only improves working
conditions for staff, but also increases their concen-INTERVIEW MAURIZIO CATINO

41

tration and productivity levels. The noise reduction
achieved is actually a quantum leap for running operations. I remember an operations manager once asking
us to switch on the system when it was actually alreadyrunning at full speed.
So it is important for you to know all aboutthe ­production processes of users?
Maurizio Catino: Yes, this is the only way for us toprovide the systems integrators with optimum support
for their work. We need to speak and understand thelanguage of our customers and also their customers.
This then enables us to address customers as partners on an equal footing and generate the necessary
trust in the solution. For example, if you know thatthe ­production lines in tire production operations
need to be reconfigured once a year, you can offer
users a g­ enuine advantage in the form of our modular­conveyor platform. With this solution it’s very easy tomodify and extend the original layout. In other words,
it is precisely what users require – without the need forcomplex welding work to reconfigure existing systems
or even a completely new system design.

Maurizio Catino, Industry Sales Manager“Interroll has establisheditself and its solutions in thetire industry and has
become a recognised partner
for systems integrators.”

What part does the flow of materials playin this sector?
Maurizio Catino: Logistics and production are growing closer and closer together. The conveyor solution
used has been a business-critical infrastructure forsome time now. Its failure could lead to all production operations being stopped. Even if they deliver
major benefits, new solutions are therefore initiallysubjected to comprehensive testing by users and theninternally certified (i.e., approved for company-wideuse). We passed this test with flying colours and werethen also able to impress with our worldwide presence.
Many systems integrators also support their customers in international projects. This approach lets us
fully exploit the internationalisation strategy we havebeen implementing over the last few years, as it enables our customers with international operations to
see the potential disadvantages of collaborating withconstantly changing local suppliers. When they workwith us, on the other hand, they can be certain thatthey will receive consistently high quality anywhere in
the world in terms of technology and service.

CORPORATE GOVERNANCE

43

CORPORATEGOVERNANCE

1INTRODUCTION

44

2

GROUP STRUCTURE AND SHAREHOLDERS

44

3

CAPITAL STRUCTURE

444OPERATIONAL MANAGEMENT STRUCTURE

45

5BOARD OF DIRECTORS

48

6

INTERNAL ORGANISATION

50

7AUTHORITY REGULATIONS

50

8INFORMATION AND CONTROL INSTRUMENTS

50

9GROUP MANAGEMENT

51

10SHAREHOLDERS’ PARTICIPATION RIGHTS

51

11

CHANGE IN CONTROL AND DEFENCE MEASURES

52

12

AUDITOR

52

13

INFORMATION POLICY52

CORPORATE GOVERNANCE

44

1

INTRODUCTION

Basis of the of the corporate governance report
The corporate governance report 2016 of the Interroll
Group refers to the official guideline of the SIX Swiss
Exchange on Corporate Governance, best practicerelated to the Minder initiative as well as to the regulations of the “Swiss Code of Best Practice for Corporate
Governance”.
Cross references
In order to minimise repeated comments, certain­sections cross refer to other sections, especially to thefinancial report.

2

GROUP STRUCTURE AND
SHAREHOLDERS

Group structure
The operational management structure is disclosed inchapter 4 of this report.
Mother company and stock listing
The holding company of the Group, Interroll Holding Ltd., is headquartered in Sant’Antonino / TI, Switzerland. Its registered shares are traded in the main
segment of the SIX Swiss Exchange under the security­number 637289. Further notes to the listing can befound in chapter “Interroll on the Capital Market” onpage 8 of the annual report.
Consolidation range
Subsidiaries belonging to the consolidation range of
the Interroll Group are disclosed in note 8.4 of theGroup’s financial statements. There are no other equity
instruments publicly traded except those of Interroll
Holding Ltd.
Significant shareholders
All significant shareholders holding a reportable shareare disclosed in note 3.5 (“Significant shareholders”)
of the financial statements of Interroll Holding Ltd.
Changes made during the year can be viewed on the
SIX Swiss Exchange website under Significant Shareholders with Interroll.
Cross shareholdings
The Interroll Group maintains neither capital nor voting rights with other entities.

3

CAPITAL STRUCTURE

Share capital and voting rights
The share capital of Interroll Holding Ltd. amounts
to CHF 854,000 and is made up of 854,000 fully
paid registered shares with a par value of CHF 1 each.
Each share has one voting right.
Authorised or conditional capital
There is no authorised or conditional capital.
Other equity or participation instruments
Furthermore, there are no other equity-like instruments such as profit-sharing rights or participation
certificates.
Changes in capital
There were no changes to the capital structure in thereporting or previous year.
Limitations on transferability andnominee rights
Information about limitations on transferability andother nominee rights of the shareholders is disclosed
in chapter 10 (“Shareholders’ participation rights”) of
this report on corporate governance.
Further information on shareholders’ equity
Additional information on equity is disclosed in thefinancial statements of the Group (see 1.5 “Consolidated statement of changes in equity”) and in therespective notes.

CORPORATE GOVERNANCE

45

4OPERATIONAL MANAGEMENTSTRUCTURE

Functional organisational structure
The Interroll Group consists of one single business unit. The complete product range is sold in all
markets through local sales organisations. Interroll caters to the needs of its customers (original
equipment manufacturers, systems integrators,
end users) by offering a ­tailor-made product portfolio and expert consulting services. The Interroll
manufacturing units focus on the production of­specific product ranges. Assembly units receive semifinished products from the manufacturing units andassemble a wide product range for their local markets.
The Interroll Research Centre (IRC), which is centrally
located, researches new application technologies anddevelops new products. Global Centres of Excellence
continue developing the product range they focus on.

Management structure
The Group Management and the Interroll management structure are organised by function (Overall
Management, Products & Technology, Global Sales& Service, Corporate Marketing, Corporate Finance).
The Board of Directors bases its financial management of the Group on both the turnover generated
in the product groups and geographical markets aswell as on consolidated financial reports. In addition, Group Management assesses the achievement offinancial and qualitative targets and other key performance indicators of all subsidiaries.
The Interroll Group has no advisory body.

Board of Directors
CHAIRMAN

Urs Tanner

VICE CHAIRMAN

AUDIT COMMITTEECOMPENSATIONCOMMITTEEOTHER MEMBERS

Prof. Dr Horst Wildemann

Philippe Dubois

Urs Tanner

Stefano Mercorio

Paolo Bottini

Prof. Dr Horst Wildemann

Ingo Specht

Group Management
CHIEF EXECUTIVE OFFICERPaul Zumbühl
CHIEF FINANCIAL
OFFICERSENIOR VICE PRESIDENTCORPORATE MARKETING &CULTURE

Daniel Bättig

Jens Karolyi

EXECUTIVE VICE PRESIDENTGLOBAL SALES & SERVICEEXECUTIVE VICE PRESIDENTPRODUCTS & TECHNOLOGYDr Christoph Reinkemeier

Dr Ralf Garlichs

REGIONS

Executive Vice President Americas

Tim McGill

Executive Vice President Asia		

Dr Ben Xia

CORPORATE GOVERNANCE

46

Interroll Research Centre (IRC),
Global Product Management
The Interroll Research Centre (IRC) develops new products, techniques and technologies in close cooperation
with the Centres of Excellence, Global Product Management and Global Sales.
FUNCTIONAL UNIT

MANAGED BY

COMPANY

Research & Development

Helmut Maiwald

Interroll Holding GmbH, Wermelskirchen (DE)Global Product Management

Dietmar Hager

Interroll Holding GmbH, Wermelskirchen (DE)Global Centres of Excellence (CoE)The seven Interroll Centres of Excellence are responsible worldwide for product development, strategicpurchasing and the application and development of
production technologies for specific product ranges.
Furthermore, they produce and supply semi-finishedgoods to Group companies. The global Centres of
Excellence of the ­Interroll Group are managed by thefollowing persons:
FUNCTIONAL UNIT

MANAGED BY

COMPANY

Rollers, RollerDrive

Armin LindholmInterroll Engineering GmbH, Wermelskirchen (DE)

Industrial Drum Motors

Dr Hauke TiedemannInterroll Trommelmotoren GmbH, Baal (DE)Supermarket Products

Dr Anders-Staf Hansen

Interroll Joki A/S, Hvidovre (DK)

Dynamic Storage Products

Bertrand ReymondInterroll SAS, La Roche-sur-Yon (FR)Conveyors and Sorters

Bernhard Kraus

Interroll Automation GmbH, Sinsheim (DE)Belt Curves

Richard Keely

Interroll Engineering West Inc., Cañon City (US)Technopolymers

Ingo Specht

Interroll AG, Sant’Antonino (CH)CORPORATE GOVERNANCE

47

Worldwide sales and production companies
Regional Centres of Excellence (RCoE)
Regional Centres of Excellence produce for the EMEA,
Americas and Asia-Pacific regions. These centres­handle the full product range of the global Centres of
Excellence and provide the regional sales and service
subsidiaries with finished products and the assembly
sites with unfinished goods. Production assets and realestate were acquired as of 1 December 2016 in Kronau,
Germany, which now form the Regional CompetenceCentre for Belt Curves in Europe-Middle East-Africa(EMEA).

Production companies and local assemblies
Guided by the production processes and production
technology of the Interroll Centres of Excellence,
local production companies manufacture and assemble
products for regional markets. They concentrate on
specific product groups within the full product range.
Sales and service subsidiaries
Interroll sales companies concentrate on specific market and customer segments offering the full range
of Interroll products and 24-hour repair service.
Management of the operational subsidiaries
The management of the above companies was delegated to the following persons:

EUROPE–MIDDLE EAST–AFRICA (EMEA)FUNCTIONREGION/COUNTRY

MANAGED BY

COMPANY

Sales, service

Central Europe

J. Mandelatz

Interroll Fördertechnik GmbH, Wermelskirchen (DE)Sales, service

FranceG. Calvez

Interroll SAS, Saint-Pol-de-Léon (FR)Sales, service

Northern Europe

E. KaiserInterroll Nordic A/S, Hvidovre (DK)

Sales, service

Great Britain, Ireland

Ch. Middleton

Interroll Ltd., Corby (GB)Sales, service

Iberian peninsula

R. RoviraInterroll España SA, Cerdanyola del Vallès (ES)Sales, service

Czech Rep., Balkans, Hungary

F. Ratschiller

Interroll CZ s.r.o., Breclav (CZ)

Sales, service

Poland, Russia, Ukraine

F. Ratschiller

Interroll Polska sp. z o.o., Warsaw (PL)Sales, service

Turkey, Middle East

F. Ratschiller

Interroll Lojistik Sistemleri Ticaret Limited, Istanbul (TR)Sales, service

Italy

F. Ratschiller

Interroll Italia Srl (IT)Sales, assembly, service

AfricaH. Campbell

Interroll SA (Proprietary) Ltd., Johannesburg (ZA)

RCoE

EMEA

M. KuhnInterroll Kronau GmbH (DE)FUNCTIONREGION/COUNTRY

MANAGED BY

COMPANY

RCoE, sales, service

USA

S. Page

Interroll Corporation, Wilmington/NC (US)RCoE, sales, service

USA

R. KeelyInterroll Atlanta LLC, Hiram/GA (US)CoE, sales, service

USA

R. KeelyInterroll Engineering West Inc., Cañon City/CO (US)Sales, assembly, service

CanadaS. Gravelle

Interroll Canada Ltd., Newmarket/Toronto (CA)Sales, assembly, service

Brazil, Argentina

M. GaioInterroll Logística Ltda., Jaguariuna/São Paulo (BR)Sales, service

MexicoL. PallaresInterroll Mexico S. de R.L de C.V. (MX)FUNCTIONREGION/COUNTRY

MANAGED BY

COMPANY

RCoE

China

T. Zhang

Interroll (Suzhou) Co. Ltd., Suzhou (CN)

RCoE

Asia-Pacific

MK Lo

Interroll Shenzhen Co. Ltd., Shenzhen (CN)Sales, service

China

L. ZhiInterroll Holding Management (Shanghai) Lo. Ltd. (CN)Sales, service

South Korea

S. Jeong

Interroll Korea Corp. Seoul (KR)Sales, service

Japan

G. W. Seng

Interroll Japan Co. Ltd., Tokyo (JP)Sales, assembly, service

ThailandN. Grisorn

Interroll (Thailand) Co. Ltd., Panthong (TH)Sales, service

Singapore, South East Asia

G. W. Seng

Interroll (Asia) Pte. Ltd., Singapore (SG)Sales, assembly, service

Australia

P. CieriInterroll Australia Pty. Ltd., Melbourne (AU)AMERICAS

ASIA-PACIFICCORPORATE GOVERNANCE

48

5BOARD OF DIRECTORSMembers of the Board of Directors

From left to right
Back row: Stefano Mercorio, Ingo Specht,
Prof. Dr Horst Wildemann, Philippe Dubois
Front row: Urs Tanner, Paolo Bottini

Election principles and terms of office
The Board of Directors is composed of at least six
members. These members are elected individually at
the General Meeting of Shareholders for a one-year
term. The shareholders Dieter Specht and Bruna
Ghisalberti or their direct first-generation descendants
are entitled to nominate two representatives (one representative per family) in total, as long as they hold atleast 10 % each of the share capital.

CORPORATE GOVERNANCE

49

PROFESSIONAL BACKGROUND AND VESTED INTERESTS
OF THE BOARD OF DIRECTORSURS TANNER

STEFANO MERCORIO(born 1951, Swiss)(born 1963, Italian)

Executive MBA University St. Gallen, AMP Harvard, served
as CEO of Medela Group, Managing Director of the Tools &Plastics business segment of Mikron Group and held leading
positions with Styner & Bienz AG (Adval Tech). Currently heis a co-owner of Halcyon Associates Inc. in the USA as well asa member of the Board of Directors of Belimed AG and
Neutrik AG. Mr. Tanner, a member since 2008, was appointed Vice Chairman in 2009, has served as Chairman of theBoard of Directors with Interroll Holding AG since 13 May
2016 and member of the Compensation Committee.

holds a degree in economics. He is currently working asa legal auditor and is the founder and senior partner of S­ tudio
Castellini Mercorio & Partners. Since 1987 he has b­een­Dottore Commercialista iscritto all “Albo dei Dottori Commercialisti e degli Esperti contabili di Bergamo”. Mr. Mercorio has been a member of the Board of Directors of Interroll Holding AG since 2013.

PAOLO BOTTINI
lic. iur., lawyer and tax specialist (Eidg. Dipl.) held various
positions within the law firm Bär & Karrer and is currently amanaging partner of the firm in Lugano. Mr. Bottini has beena member of the Board of Directors of Interroll Holding AG
and a member of the Audit Committee since 2003.

holds a professional qualification as an industrial business
manager from the Chamber of Commerce and Industry­Cologne, Germany. He was owner and Managing Directorof Luxis, Locarno, and has held various senior positions in IT,
marketing and business development within the Interroll
Group. ­Currently, he is serving as Managing Director of­Interroll SA. Mr. Specht has been a member of the Board of
Directors ­since 2006.

PHILIPPE DUBOISPROFESSOR DR HORST WILDEMANN(born 1950, Swiss)(born 1942, German)

lic. iur. and lic. oec., was responsible for the IPO of Interroll
Holding AG while working for UBS Warburg. He also held
senior investment banking positions at the bank Julius Bär.
­Currently he is an independent management and financial
consultant for M&A, corporate finance and management­coaching. Mr. Dubois has been a member of the Board of­Directors of Interroll Holding AG and a member of the Audit
Committee since 2003.

Dipl.-Ing. in mechanical engineering and Dipl.-Kfm. inbusiness administration, Prof. Dr. Dr. h.c. mult., ­serves as
Managing Director of TCW Transfer-Centrum for Production Logistics and Technology Management GmbH & Co.
KG, head of the research institute for management, production and l­ogistics at the Technical University of Munich andan honorary professor at the universities of Klagenfurt,
Passau and Cottbus. He is currently Chairman of the­­Advisory Boards of Möhlen­hoff GmbH and Rudolf GmbHas well as a member of the Advisory Board of Hamberger
Industriewerke AG. He is also a member of the Boards of
Directors of Sick AG and Zeppelin GmbH. Prof. Dr Wildemann has been a member of the Board of Directors with
Interroll Holding AG and a member of the Compensation
Committee since 1999. Furthermore, he has served as theVice Chairman of the Board of Directors with Interroll
Holding since 13 May 2016.

(born 1965, Swiss)

INGO SPECHT(born 1964, German)

CORPORATE GOVERNANCE

50

6INTERNAL ORGANISATION

Constitution and committees of theBoard of Directors
The Board of Directors consists of the Chairman, theDeputy Chairman and the other members. The Boardof Directors is assisted by two permanent committees
within the areas of auditing (Audit Committee) andremuneration policy (Compensation Committee).
Audit Committee
The Audit Committee receives the audit reports prepared by the local external auditors and by the Groupauditor. It prepares the respective report on them tothe Board of Directors. In particular, it ensures that theGroup companies are also being audited on a regularbasis. The Audit Committee mandates the ­internal
audit department to execute internal audits and revises
respective audit reports.
At least once a year, the Audit Committee also commissions a report on audits undertaken and planned
as well as on any proposals to improve the audit function. The Audit Committee submits its proposals to theBoard of Directors for decision.
Compensation Committee
The Compensation Committee submits its proposals
for the salary and bonus of the CEO, the membersof Group Management, and the compensation of theBoard of Directors to the Board of Directors for decision. At the request of the CEO at the beginning of theyear, it defines the targets required for bonus payments.
In addition, the Compensation Committee is responsible for establishing the terms of the share ownership
scheme. The remuneration scheme is described in the
remuneration report.
Mode of collaboration of the Board of Directors
and its committees
The Board of Directors meets as often as business
requires, but at least four times per year.
The meetings are convened by the Chairman of theBoard of Directors. Each member of the Board of
Directors may demand that a meeting be convened,
specifying the item on the agenda to be discussed.
The CEO partici­pates in the meetings of the Board of
Directors. The executive vice presidents of the respective functional units and the vice presidents of the corporate functions as well as other members of management are invited to attend meetings when necessary.
The Board of Directors is deemed quorate if an absolute majority of its members is present in person.
­Resolutions are adopted on the basis of an absolutemajority of votes present. In the event of an equal division of votes, the Chairman casts the deciding vote. All

resolutions are recorded in the minutes. The meetings
usually take a full day.
Both committees of the board meet as necessary. Any
member is entitled to convene committee meetings.
In the business year 2016, the Board of Directors met
on five occasions, the Audit Committee three times
and the Compensation Committee twice for regularscheduled meetings.

7

AUTHORITY REGULATIONS

Statutory base for the authority regulations
All basic authorities and tasks of the organs are
lined out in the Articles of Association of Interroll
Holding Ltd. Responsibilities and duties that cannot betransferred to third parties are defined in these ­articles.
Responsibility of the Board of Directors
The Board of Directors is responsible for the Group’s
strategy and governs the overall management, supervision and control over the operational management of the Interroll Group. The Board of Directors
has exercised its statutory authority to delegate­management to third parties who need not be shareholders (Group Management).
Management and organisational regulations
In the provisions of the organisational regulations,
the Board of Directors has delegated the managementof ongoing business to a Chief Executive Officer (CEO).
The CEO is responsible for the overall ­managementof the Interroll Group and for all matters not fallingunder the purview of another governing body, as
specified by law, the Articles of Association or theorganisational regulations. In particular, the CEO
is responsible for the operational management of thecompany as a whole. Competencies and controls are
specified within a set of organisational regulations.

8

INFORMATION AND CONTROLINSTRUMENTS

Reporting to the Board of Directors
At each meeting, the CEO informs the Board of Directors of the course of business, the principal events
within the Group and the discharge of duties delegatedto Group Management.
Management information system
The Management Information System (MIS) of theInterroll Group consolidates the balance sheet, income
statement and cash flow statement, as well as financial data pertaining to the subsidiary companies, on amonthly basis and compares the current figures with

CORPORATE GOVERNANCE

51

those of the previous year and the budget. On thebasis of the quarterly financial statements, the budget
is assessed in the form of a forecast as to whether it isattainable with regard to each entity and also for the
consolidated group. The financial reports are discussed
during the meetings of the Board of Directors.
Internal audit and control instruments
On behalf of the Audit Committee, internal audits are
performed annually at selected subsidiary companies.
The focal points of the audit are defined according to
the risk profile of the respective entity. The reportsof the Audit Committee are discussed with the local
management.
Extraordinary occurrences and decisions of material importance, as specified in the organisational
regulations, are immediately brought to the attentionof all members of the Board of Directors in writing.

9

GROUP MANAGEMENTThe Group Management of the Interroll Group had thefollowing members as of the end of 2016:
NAME/ YEAR OF BIRTH

NATIONALITYFUNCTION

MEMBER SINCEPaul Zumbühl (1957)

Swiss

Chief Executive Officer (CEO)January 2000

Daniel Bättig (1964)

Swiss

Chief Financial Officer (CFO)

March 2013

Dr Ralf Garlichs (1962)

GermanExecutive Vice President Products & Technology

July 2006

Dr Chr. Reinkemeier (1966)

GermanExecutive Vice President Global Sales & Service

January 2011

Jens Karolyi (1970)

GermanSen. Vice President Corporate Marketing & Culture

January 2011

Tim McGill (1955)

EnglishExecutive Vice President Operations Americas

January 2011

Dr Ben Xia (1966)

Chinese

Executive Vice President Operations Asia

June 201310 SHAREHOLDERS’ PARTICIPATIONRIGHTS
Representation and restriction of voting rights
Rights governing shareholder participation are inaccordance with the requirements specified within
the Swiss Code of Obligations. Each share issued has
one vote. A shareholder’s voting rights are restricted
to a maximum of 5 % of the total number of votes.
Individual nominees, however, are entitled to exercise more than 5 % of the total votes if they disclose
the identity of the beneficiaries they represent and if
the ­respective beneficiaries as a whole do not exercise
more than 5 % of the voting rights. This restriction of
voting rights does not apply to the founding families,
insofar as the individual families hold at least 10 %of the share capital.
Registered shares of nominees that exceed 2 % of
the shares outstanding are only listed in the shareregister as shares furnished with voting rights if

the nominee has provided written consent to thepossible disclosure of names, addresses and shareholdings of those persons for whom the said nominee holds 0.5 % or more of the shares outstanding.
Statutory quorum
Subject to contrary statutory or legal provisions, theGeneral Meeting of Shareholders is quorate irrespective of the number of shareholders present and theshares represented by proxy.
Convocation of the General Meetingof Shareholders
The invitation to the General Meeting of Shareholders
is issued at least twenty days prior to the Meetingand is legally effective upon inclusion in the Company’s
chosen vehicle of communication (“Schweizerisches
Handelsamtsblatt”). In addition, the Board of Directors
sends a written invitation to those registered share­holders listed in the share register.

CORPORATE GOVERNANCE

52

Agenda and registration in the share register
The invitation to the General Meeting of Shareholders
shall include all items on the agenda as well as all
motions put forward by the Board of Directors and,if applicable, by the shareholders who have called
for a General Meeting or the inclusion of an item on
the agenda. No resolutions shall be passed on motions
relating to items which have not been announced
in the requisite manner, with the exception of thosemotions relating to the convocation of an Extraordinary Meeting of Shareholders or the execution of a
special audit. No entries are made into the share­register less than ten days prior to a General Meetingof Shareholders up to the day subsequent to the­General Meeting of Shareholders.

11 CHANGE IN CONTROL AND
DEFENCE MEASURES
Obligation to make an offer
There are no statutory regulations regarding opting up
and opting out.
Change in control clauses
There are no agreements for severance pay, other agreements and plans in the event of a change in c­ ontrol
or upon termination of a contract of employment.

12 AUDITOR
Duration of the mandate and term of officeof the lead auditor
By decision of the General Assembly of 13 May 2016,
Interroll Holding Ltd. has appointed Pricewaterhouse­
Coopers (PwC) for another term of one year as its
auditing company. PwC has been the Group Auditorof the Interroll Group since 2011. Mr. Patrick Balkanyi
has been the lead auditor with audit responsibility
since 2012.
Audit fees
The audit fees charged by PwC to subsidiaries of­Interroll Group in the business year 2016 amounted
to CHF 0.4 million. The audit fees charged by PwC in2015 amounted to CHF 0.4 million.

Supervisory and control instruments
pertaining to the audit
The Audit Committee is responsible for evaluating
the external audit. The external auditors prepare an
audit report to be submitted to the Board of Directors.
At least two consultations are held each year between
the external auditors and the Audit Committee.
­Material findings for each entity (Management Letters)
as well as for the consolidated accounts are presented
in the “Comprehensive Auditor’s Report to the Boardof Directors”, which is discussed in detail.

13 INFORMATION POLICY
Contact person
Interroll is committed to providing swift, transparent and synchronous information to all stakeholders.
To ensure that, the Group CEO and the Group CFO
are available as direct contact persons.
Published reports on the course of business
Interroll Group publishes comprehensive financial
results twice a year: for the first half and for the financial year as a whole. In addition to the financial resultsthat are carried out in accordance with IAS / IFRS,
shareholders and financial markets are regularly
informed of significant changes and developments.
Source of information
Further relevant information and financial reports
are available on www.interroll.com/investor-relations,where reports can be downloaded. Shareholders
recorded in the share r­egister may r­equest to receive
the Annual Report in printed form and register for
automatic delivery of the Annual Report with theInvestor Relations department.

REMUNERATION REPORT53

REMUNERATIONREPORT

BASIC REMUNERATION PRINCIPLES54

REMUNERATION OF THE BOARD OF DIRECTORS54

REMUNERATION OF GROUP MANAGEMENT56

REPORT OF THE STATUTORY AUDITOR

61

REMUNERATION REPORT54

The remuneration report provides information about
the principles of Interroll’s remuneration policy, themanagement process and the remuneration of theBoard of Directors and Group Management. It complies with the requirements of Sections 14 to 16 of the
Swiss Ordinance Against Excessive Compensation in
Stock Exchange Listed Companies dated 20 November
2013 (VegüV), the guidelines on corporate governanceinformation of SIX Swiss Exchange and the principlesof the Swiss Code of Best Practice for Corporate Governance of Economiesuisse, which came into force on
30 June 2014.

BASIC REMUNERATION PRINCIPLES
A fair, systematic and transparent remuneration system is aimed at contributing to the long-term development of the Interroll Group and to securing its
business success. The Interroll Group’s remuneration
system is in line with its corporate strategy and basedon appropriately rewarding short-term and long-termtargets which have been achieved. It is aimed at putting
Interroll in a position to attract, develop and retain thebest people in its particular field and sector.
The Interroll Group’s remuneration policy features thefollowing aspects:–– The Board of Director’s compensation exclusively
comprises fixed remuneration. In this way, Interroll
ensures the corporate body’s independence in its
supervision of Group Management.
–– The ratio of fixed to variable remuneration formembers of Group Management is appropriate andthe level of the respective elements does notfluctuate excessively in order to prevent excessive
variable remuneration components from negatively
influencing individuals’ willingness to take risks
or resulting in a short-term approach.
–– Remuneration must be commensurate with the
responsibility, quality of the work and individual
workload of the relevant role.
–– In addition, remuneration is to ensure appropriate
and competitive compensation based on the value
contribution, the role and individual performance.
–– As a component of the remuneration for membersof Group Management, share plans are aimed
at rewarding the achievement of long-term Grouptargets in the interests of shareholders and promoting long-term corporate performance.
The Board of Directors is responsible for the principles of the Group’s remuneration policy and management process and is supported by the Compensation
Committee in the fulfilment of this responsibility. The
Board of Directors decides on the total remuneration

for the Board of Directors as well as Group Management and presents a proposal to the Annual General
Meeting for approval.
On behalf of the Board of Directors, the Compensation Committee prepares all proposals and the basis
for remuneration decisions to be taken. Its key duties
are as follows:–– Propose and regularly review the Interroll Group’s
remuneration policy–– Propose and develop remuneration regulations for
the Board of Directors and Group Management–– Propose and specify the remuneration principles
for the following financial year–– Propose the remuneration for members of theBoard of Directors–– Propose the remuneration for the CEO and, at
the CEO’s request, the remuneration of the othermembers of Group Management–– Propose employment terms and conditions, material amendments to existing contracts of employment with members of Group Management as wellas other strategic HR decisions
At the Annual General Meeting of Interroll Holding
AG on 12 May 2017, the Board of Directors will propose the total remuneration of the Board of Directors
for the period up to the 2018 Annual General Meetingand the total remuneration for Group Management
for financial year 2017 for approval. The voting rules
authorising the remuneration of Board of Directors
and Group Management are included in the Articles of
Association of the Company.

REMUNERATION OF THE BOARD
OF DIRECTORS
Principles and and the determinationof remuneration
Remuneration paid to members of the Board of
Directors is fixed, commensurate with their responsibilities and paid in cash. No variable components
are included. In this way, Interroll ensures the independence of the Board of Directors in its supervisionof Group Management. The remuneration depends
on the workload and responsibilities of the Board of
Directors. It takes into account market conditions andis based on the comparative values from other listed
Swiss medium-sized industrial companies with international activities.
All remuneration paid to members of the Board of
Directors of Interroll Holding AG by Interroll Holding AG and the subsidiaries over which it has direct
or indirect control is decisive in determining annual

REMUNERATION REPORT

55

remuneration. Every year, the Board of Directors
determines the fixed remuneration of the members of
the Board of Directors of Interroll Holding AG for theperiod of time up to the next Annual General Meetingof Interroll Holding AG on the basis of the remuneration regulations of 15 March 2014 and at the Compensation Committee’s request, subject to approval by the
Annual General Meeting. Extraordinary efforts that
go beyond the normal duties of the Board of Directors
may be additionally compensated. All social security
contributions are made by the employer.
Fixed-term contracts of employment and mandate
agreements for members of the Board of Directors
may be for a fixed contractual term of up to one year.
Total remuneration for the 2016 term (audited)
Compensation paid to members of the Board of­Directors is disclosed in accordance with VegüV and
OR 663c as follows:in thousands CHF

Cash

Shares /options

Socialsecurity*

Other
benefits

Total com­ Shares heldpen­sation as of 31.12.

Votingrights in %Urs Tanner
2016

P, CC **

150

17

167

0.00

2015

VP

75

12

87

0.00

2016

AC

60

10

70

20

0.00

2015

AC

57

9

66

20

0.00

2016

AC

60

6

66

100

0.01

2015

AC

57

9

66

100

0.01

2016

VP**, CC

75

7

82

820

0.10

2015

CC

57

5

62

0.00

2016

60

12

72

0.00

2015

57

12

69

0.00

2016

60

10

70

76,135

9.55

2015

57

9

66

82,340

10.35

2016

465

62

527

77,075

9.67

2015

510

74

584

82,86010.42

Paolo Bottini

Philippe Dubois

Horst Wildemann

Stefano Mercorio

Ingo Specht

Total Board of Directors

P: Chairman of the BoD; AC: Audit Committee; VP: Vice Chairman of the BoD; CC: Compensation Committee* Social security costs consist of employer and employee contributions to the state-run Swiss social security system.
** In this new function since 13 May 2016.

The Board of Directors holds no stock options withrespect to Interroll Holding AG shares.

REMUNERATION REPORT

56

Valuation of total remuneration
for the 2016 term
The remuneration of the Board of Directors of approximately CHF 527,000 from GM 2016 to GM 2017 contains no significant special effects and is at the samelevel as in the previous year, within the CHF 700,000
approved at the Annual General Meeting 2016.
Outlook for the total remuneration
for the 2017 term
For the first time in 11 years, the Board of Directors
is proposing a general increase in management feesof a total of max. CHF 160,000 p.a. and is proposing
a maximum remuneration of CHF 800,000 at theAnnual General Meeting 2017 for the term until thenext Annual General Meeting 2018 (previous year:
CHF 700,000).
Other remuneration (audited) and additional
information
No further payments in cash or in kind are made andno other remuneration, e.g. commission for the take­over or transfer of companies or parts thereof, is paid
to members of the Board of Directors.
Severance pay for members of the Board of Directors
is not permitted, whereby remuneration due to members up to the end of the contractual term does notconstitute severance pay.
Loans and credits (audited)
Interroll Holding AG and its subsidiaries granted noloans, advances or credits to members of the Board of
Directors in the two reporting years.

REMUNERATION OF GROUPMANAGEMENT
Principles and specification of total
remuneration
An individual remuneration agreement exists for eachGroup Management member whereby the projected
total remuneration is based on the criteria specified
below for determining the remuneration and market conditions in the relevant country. The projected
total remuneration comprises a fixed and a variable
remuneration component and may be exceeded as aresult of excellent performance. The Group Management’s actions must always focus on achieving a longterm sustained increase in value rather than pursuing
short-term profit maximisation. The composition of
total remuneration for the members of Group Management in general and the CEO in particular is basedon this aim.

Total remuneration is determined on the basis of key
criteria, such as global responsibility in the relevantrole, individual actual performance contributing to
the Group’s long-term strategic development, the complexity of the area of responsibility and the personal
results achieved on behalf of the Group.
External consultants may additionally be involved indetermining the structure and level of remuneration
on a case-by-case basis. As part of the Group’s reorganisation and the appointment of a new Group Management in 2011–2013, market comparisons were madewith the help of the relevant recruitment consultants
and used in determining the level of remuneration
when recruiting staff in Europe, America and Asia.
Furthermore, comparisons were made on the basisof a detailed up-to-date Kienbaum salary study and a
Towers Watson salary survey. These comparisons wererepeated based on both studies in 2016.
In determining the annual total remuneration, allremuneration paid to members of Group Management
by Interroll Holding AG and the subsidiaries overwhich it has direct control is taken into account, irrespective of whether such compensation relates to theglobal or local activities of the respective member ofGroup management and whether these are carried out
for one or more subsidiaries in Switzerland or abroad(based on a separate contract of employment).
On the basis of the remuneration regulations dated
15 March 2014 and at the Compensation Committee’s request, the Board of Directors specifies the total
remuneration of Group Management every year, subject to approval from the Annual General Meeting. The
Compensation Committee works out the CEO’s total
remuneration. The CEO works out the total remuneration of the other members of Group Management andsubmits his proposal to the Compensation Committee
every year for approval by the Board of Directors. At
the Annual General Meeting of Interroll Holding AG
on 12 May 2017, the Board of Directors will present for
approval a proposal regarding the total remunerationof Group Management for financial year 2017.
Fixed remuneration
The fixed remuneration component of total remuneration is contractually stipulated and generally remains
unchanged for three to five years if the job does notchange. Adjustments may be made on the basis of theassessment of individual performance and in the eventof changes to the area of responsibility.

REMUNERATION REPORT

57

Variable remuneration
The maximum possible share of variable remuneration
amounts to 60 % of total remuneration for the CEO,
50 % for members of Group Management in an operational management role and 30 % for members withcentralised roles within the holding company. In thereporting year, the variable share in relation to total
remuneration of Group Management amounted toapprox. 37 %.
The calculation basis for variable remuneration
includes the measurable sustained financial success (ofthe company or a part thereof) and annual individual
targets, which must be measurable and of considerable
strategic significance.
The company’s financial success used to calculate thefinancial success component of variable remunerationis measured in terms of key figures compared with theprevious year and a rolling 3-year plan. The key financial figures are: operating profit (EBITDA), operating
profit margin (EBITDA in % of sales), gross margin(in % of sales), sales growth (growth compared with
forecast and/or previous year) and return on net assets(RONA).
Specific key figures may be weighted differently or disregarded, depending on the company’s strategic position or the role of each member of Group Management.

As a rule, the weighting of the financial success component in variable remuneration amounts to 100 % for
the CEO, at least 66 % for members of Group Management in an operational management role and at
least 33 % for members of Group Management with a­centralised role within the holding company.
For the “individual targets” component, between 3
and a maximum of 5 individual measurable targets
are agreed every year, with either the same or a different weighting. These targets must make an important
contribution to the current or long-term success of
the Group or parts thereof. They relate, for example,
to new products, gaining market share, developing
new markets, the successful integration of an acquiredcompany, successful strategic projects, the achievement of inventory reduction targets, etc.
Basing variable remuneration on a multi-year plan(rather than the budget) motivates members of GroupManagement to think long-term. It means that therelative improvement is measured compared with theprevious one-year period and the rolling 3-year plan,and short-term cost-cutting is prevented in the areasof market development and innovation, etc.
The Compensation Committee may deviate from theagreed variable remuneration in favour of a GroupManagement member if failure to achieve specific­targets was solely attributable to external factors, or if
an exceptional one-off performance was delivered.

Overview: weighting of the variable part of total remunerationRole inGroup Management

Variable compensation
for the total remuneration

Share component“financial ­success” in variable
remuneration

Share component “individual­targets” in variable remuneration

Group CEOup to max. 60 %100 % as a rule

0 % to approx. 33 %Executive VP*

up to max. 50 %66 % or more

up to approx. 33 %Corporate VP*

up to max. 30 %33 % or more

up to approx. 66 %possible*** Executive Vice President: operational management role; Corporate Vice President: centralised role within the holding company.
** In extraordinary strategic situations; in reporting year 2016: 0 %.

REMUNERATION REPORT

58

Long-term remuneration component:
allotment of shares
Based on their commitment and influence, GroupManagement members are to participate long-term in
the Group’s increased value and also share the businessrisk as shareholders (and equity co-investors), as wellas identify with Interroll’s values.
As a result of this objective, a long-term share plan
was agreed with the CEO in early 2005. As a longterm compensation component, the CEO receives anumber of shares, which (since 2014) are dependent
on the performance of the share price and the exceeding of certain minimum thresholds of earnings per
share, operating profit margin and return on net assets(RONA). These shares are blocked for 6 to 8 years.
The share plan for the rest of Group Management wasalso introduced as a long-term remuneration component with the restructuring of the Group in 2011.
These members of Group Management receive a number of shares as a long-term component of the variable
remuneration (min. 20 %). These shares are blocked
for 4 years.

The conversion rate for variable remuneration applicable to the number of Interroll shares allotted is therelevant share price on 31 December of the financial
year ended less the deduction permitted for tax purposes, depending on the length of the blocking period.
Total remuneration for 2016 (audited)
Compensation paid to members of Group Management is disclosed in accordance with the requirements of Sections 14 to 16 of the Swiss Ordinance
Against Excessive Compensation in Stock Exchange
Listed Companies dated 20 November 2013 (VegüV),
the guidelines on corporate governance informationof the SIX Swiss Exchange and the principles of the
Swiss Code of Best Practice for Corporate Governance of Economiesuisse, which came into force on 30
June 2014, and is as follows:

Remuneration (net)

Equity-based compens.

Fixed

Variable

Shares

2016

656

2015

661

2016
2015

Options

Socialsecurity 3)

Otherbenefits

Specialcompen­sation 4)

Total com­pen­sation

497

0

560

44

627

3,265

389

0

520

43

2,469

419

311

0

277

118

2,502

1,347

407

341

0

258

118

2,471

2016

2,033

1,301

807

0

838

161

2015

2,008

1,263

730

0

778

161

in tousands CHF

1)

2)

881
856

1,377

CEO (highest)

Other members

Total Group Management
627

5,767
4,940

 he difference between provisions made in the previous year and the bonuses actually paid out is netted with the variable compensationT
planned for the year under review.
2)
In the period under review 2,289 (previous year: 2,043) own shares were granted. 2,289 of these shares (previous year: 2,043) may not be soldfor a period of four to eight years as of grant date. Share-based payments correspond to tax values.
3)
Social security costs consist of employers'- and employees' contributions to the state run Swiss social security system.
4)700 Interroll shares, may not be sold for a period of five years as of the grant date (tax value). Explanation under “Valuation of total
remuneration for financial year 2016” (page 59).
1)

REMUNERATION REPORT

59

Explanations regarding the calculation method
The calculation method under IFRS differs in two
aspects from the calculation of remuneration andshareholdings of members of the Board of Directors and Group Management in accordance with OR
663bis and OR 663c:

Since his entry into office on 1 January 2000 (2½ years
after the going public), the share price has risen tenfold. His leadership is characterised by a solid strategy, a high discipline, a continuous strengthening of
the balance sheet and a global and successful market
expansion.

–– Compensation for company cars under IFRS isbased on the expenses including depreciation andlease instalments stated in the annual accounts.
Under the OR, a rate of 0.8 % per month of theacquisition cost of the vehicles is used.
–– Under IFRS, share-based remuneration is determined at market value on the allotment date. Under
the OR, shares are valued at their taxable value,
which is derived from the market value. As a resultof the blocking period, the taxable value decreases
compared with the market value according to theblocking period defined.
–– The difference of CHF 0.641 million (previous year:
CHF 0.390 million) related to company cars – CHF
0.058 million (previous year: CHF 0.070 million) –and share-based remuneration – CHF 0.583 million(previous year: CHF 0.320 million).

To date, no compensation has ever been paid for additional or extraordinary achievements to Paul Zumbühl.
Thus, this special indemnity has a onetime character.
Excluding this special compensation, the regular total
remuneration in the financial year 2016 was CHF 5.14
million (previous year: 4.94 million).

Valuation of total remuneration for 2016
At CHF 5.77 million, total remuneration paid to theGroup Management was higher than in the previous
year (CHF 4.94 million), but within the maximum
total remuneration of CHF 5.80 million as approvedby the Annual General Meeting in 2016. This is dueto the high target achievement and a special compen­
sation of CHF 0.63 million (in the form of 700 shareswith a 5-year vesting period) to CEO Paul Zumbühl.
This special compensation is intended to express ourappreciation for exceptional achievements and merits
during his 17 years of excellent management work for
the Interroll Group.

in CHF million

Group Management

Outlook for total remuneration in 2017
The effective amount of the variable remuneration 2017
to the Group Executive Board is – as in recent years– based on the actual achievements. The fixed remuneration 2017 was adjusted after three to five years forfour members of the Group Management. The maximum possible total remuneration for the financial year2017 of CHF 5.90 million (previous year: CHF 5.80
million) submitted for approval at the Annual General Meeting on May 12, 2017 assumes a maximum
achievement of the plan targets and c­ ontains a reservefor currency fluctuations. The effective remunerationis generally lower than the maximum authorized at
the General Meeting. The regular and disbursed total
remuneration 2016 of CHF 5.14 million (excluding thespecial compensation) is therefore the reference.
Development of total remunerationin the last 10 years
The table below shows total remuneration of GroupManagement over the last 10 years:

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

5.2

4.4

4.3

4.9

5.0

5.2

4.7

4.9

4.9

5.8*

* incl. one time special compensation of CHF 0.6 million
Source: Annual Reports 2007–16, according to figures in the column “Total Compensation”, e.g. incl. all pension and other benefits.

REMUNERATION REPORT

60

Since 2007, the total remuneration (including pension
and other employee benefits) has remained at a steadylevel with roughly the same number of members ofGroup Management. During these 10 years, Interroll
has advanced to become the global market leader for
key products in the internal logistics business and its
market capitalisation was increased three-fold.
Other remuneration (audited)
and additional information
The regulations on expenses and pensions are specified
in the applicable local employment terms and conditions as well as the relevant statutory and prevailingmarket conditions of the countries concerned, in particular Germany, the USA, China and Switzerland.
In Switzerland, each Group Management member
contributes a quarter to a third of the “savings element”
to the pension fund. The rest is paid by the employer.
A company car and mobile phone are made available to the members of Group Management for business and private use. Alternatively, the corresponding
amount is paid as a monthly flat rate. The maximum
permitted limits in terms of the value of company cars
are regulated in-house.

No further payments in cash, in kind or other remuneration, e.g. commission for the takeover or transfer
of companies or parts thereof, is paid to members ofGroup Management.
Severance pay for members of Group Management is
not permitted, whereby remuneration due to members
up to the end of the contractual term does not constitute severance pay.
The notice periods for members of Group Management range from three to twelve months.
Loans and credits (audited)
Interroll Holding AG and its subsidiaries granted noloans, advances or credits to members of Group Management in the two reporting years.

REPORT OF THE STATUTORY AUDITOR61

REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETINGOF INTERROLL HOLDING AG SANT’ANTONINO
We have audited the remuneration report of Interroll Holding AG for the year ended 31 December 2016. The
audit was limited to the information according to articles 14–16 of the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance) contained in the tables labeled “audited” on pages 55, 56,
58 and 60 of the remuneration report.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the remuneration reportin accordance with Swiss law and the Ordinance against Excessive Compensation in Stock Exchange Listed
Companies (Ordinance). The Board of Directors is also responsible for designing the remuneration system anddefining individual remuneration packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the accompanying remuneration report. We conducted our audit
in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the remuneration report complies
with Swiss law and articles 14–16 of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration report with regard to compensation, loans and credits in accordance with articles 14–16 of the Ordinance.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatements in the remuneration report, whether due to fraud or error. This audit also includes evaluating
the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall
presentation of the remuneration report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
OpinionIn our opinion, the remuneration report of Interroll Holding AG for the year ended 31 December 2016 complies
with Swiss law and articles 14–16 of the Ordinance.

PricewaterhouseCoopers AG

Patrick Balkanyi				Nicole Bertschinger
Audit expert				Audit expert			
Auditor in charge

Zurich, 13 March 2017

FINANCIAL REPORT OF INTERROLL GROUP

63

FINANCIAL REPORTOF INTERROLL GROUPCONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL GROUP

64

1.1

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

64

1.2

CONSOLIDATED INCOME STATEMENT

65

1.3

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

66

1.4

CONSOLIDATED STATEMENT OF CASH FLOWS

67

1.5

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY68

NOTES TO THE FINANCIAL STATEMENT OF INTERROLL GROUP

69

2

GENERAL INFORMATION ON THE FINANCIAL STATEMENTS

69

3

RISK MANAGEMENT

78

4CHANGES IN THE SCOPE OF CONSOLIDATION

81

5

OPERATING SEGMENTS

82

6

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

83

7

NOTES TO THE CONSOLIDATED INCOME STATEMENT

101

8

OTHER DISCLOSURES ON THE FINANCIAL STATEMENTS

106

9REPORT OF THE STATUTORY AUDITOR

110

1

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

64

1

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL GROUP

1.1

Consolidated statement of financial positionseenotes*

31.12.2016

Property, plant and equipment

6.1

95,85990,374

Intangible assets

6.3

38,62943,160in thousands CHF

in %31.12.2015

in %ASSETS

Financial assets
Deferred tax assets

7.6

Total non-current assets
Inventories

655

626

3,207

3,959

138,350
6.5

Current tax assets
Trade and other accounts receivable

6.6

Cash and cash equivalents

6.7

42.6

48,274

138,11947.1

44,833

1,202

1,360

98,72576,98938,26431,654

Total current assets

186,465

57.4

154,836

52.9

Total assets

324,815100.0

292,955

100.0

EQUITY AND LIABILITIESShare capital

854

854

Share premium

7,184

6,519

Reserve for own shares–1,914–1,623

Translation reserve–55,083–55,227

Retained earnings

282,044

257,123

Non-controlling interests
Total equity

6.10

Non-current financial liabilities

6.12

Deferred tax liabilities

7.6

3,050

4,505

Pension liabilities

6.15

8,154

6,324

Provisions

6.14

6,867

Total non-current liabilities

233,08571.8

207,64670.9

818,071

5,893
5.6

16,730Current financial liabilities

6.12

283

296

Current tax liabilities

7.6

13,95911,784

Trade and other accounts payable

6.16

59,4175.7

56,499Total current liabilities

73,65922.6

68,57923.4

Total liabilities

91,73028.2

85,30929.1

Total liabilities and shareholder’s equity

324,815100.0

292,955

100.0* See notes to the consolidated financial statements which form an integral part of this year’s financial statement.

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

65

1.2

Consolidated income statementin thousands CHF

Sales

see notes*

2016

in %

2015

in %

5

401,460

100.0

360,738

100.0

Material expenses–162,848–40.6–149,900–41.6

6.15 & 7.1–114,106–28.4–105,099

–29.1

2,197

0.5

4,194

1.2

Other operating expenses

7.3–63,247–15.8–54,057–15.0

Other operating income

7.4

2,228

0.6

2,358

0.7

65,68416.4

58,234

16.1

Personnel expenses
Increase / (decrease) in work in progress,
finished products and own goods capitalised

Operating result before depreciation
and amortisation (EBITDA)
Depreciation

6.1–10,997–2.7–10,597–2.9

Amortisation

6.3–6,810–1.7–7,830–2.2

47,877

11.9

39,807

11.0

Finance expenses

–913

–0.2

–138

–0.0

Finance income

604

0.2

74

0.0

–309

–0.1

–64

–0.0

47,56811.8

39,74311.0–11,353–2.8–10,440–2.9

36,2159.0

29,303

8.1

36,2159.0

29,303

8.1

Operating result (EBIT)

Finance result, net

7.5

Result before income taxes
Income tax expense

7.6

ResultResult attributable to:– non-controlling interests– owners of Interroll Holding AG
Values per share (in CHF)
Non-diluted earnings (result) per share

6.11

42.57

34.51

Diluted earnings (result) per share

6.11

42.57

34.51

12.00

9.00

Face value reduction / dividend payment* See notes to the consolidated financial statements which form an integral part of this year’s financial statement.

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

66

1.3

Consolidated statement of comprehensive incomein thousands CHF

see notes*

Result

2016

in %

2015

36,21529,303–1,332–840

in %Other comprehensive income
Items that will not be reclassified to income statement
Remeasurements of pension liabilities

6.15

Income tax

270

174

–1,062–666

144–14,123

to income statement

144–14,123

Other income–918–14,789

35,297

14,514

Total items that will not be reclassified to income statement
Items that in the future may be reclassified subsequently to income
statement
Currency translation differences
Income taxes
Total items that in the future may be reclassified subsequently

Comprehensive income
Result attributable to:– non-controlling interests– owners of Interroll Holding AG* See notes to the consolidated financial statements which form an integral part of this year’s financial statement.

35,2978.8

14,514

4.0

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

67

1.4

Consolidated statement of cash flows

in thousands CHF

see notes*

ResultDepreciation, amortisation and impairments

2016

2015

36,21529,303

6.1 & 6.3

17,807

18,427

Loss / (gain) on disposal of tangible and intangible assets

7.4

–28

–453

Financial result, net

7.5

309

64

Income tax expense

7.6

11,353

10,440Changes in inventories–3,503–6,167

Changes in trade and other accounts receivable–21,636–12,077

Changes in trade and other accounts payable

3,646

8,175

2,822

–1,451–9,570–7,807

1,238

972

Other non-cash expenses / (income)–1,824764

Cash flow from operating activities

36,82940,190–21,179

Changes in provisions, net

6.14

Income tax paid
Personnel expenses on share-based payments

Acquisition of property, plant and equipment

7.1

6.1

–13,094

Acquisition of business segment

4–4,778Acquisition of intangible assets

6.3–1,635Acquisition of financial assets
Proceeds from disposal of property, plant and equipment

6.2

Settlement of loans receivable
Interests received
Cash flow from investing activities

–46

815

1,344

6

14

123

74

–18,600–22,927

Distribution out of reserves from capital contributions
Dividends paid

–3,134–37–7,661
4

Purchase of own shares
Sale of own shares–10,231–2,075

–900

972

381

–23

–156

Proceeds from financial liabilities

13

Repayment of financial liabilities
Interest paid

–18

–32

–11,375–8,355

Translation adjustments on cash and cash equivalents–244–1,634

Change in cash and cash equivalents

6,610

7,274

Cash flow from financing activities

Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December* See notes to the consolidated financial statements which form an integral part of this year’s financial statement.

6.7

31,654

24,38038,26431,654

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

68

1.5

Consolidated statement of changes in equity

in thousands CHF

see notes*

Balance at 1 January 2015

Share capital

Share
premium

Reserve forown shares

Translation
reserve

Retainedearnings

8,540

6,416

–2,008–41,104

228,486

200,330

29,30329,303ResultNon-controllinginterests

Total equity

Other comprehensive income,net of taxes–14,123–666–14,789

Total comprehensive income–14,123

28,637

14,514

Face value reduction, net
Share-based payments–7,68625–7,661

7.1

–15

987

972

6.10

118

273

391

6,519

–1,623

Sale of own sharesincl. tax effects
Purchase of own sharesincl. tax effects

–900

–900

6.10

Balance at 31 December 2015

854

–55,227

Result257,123

207,646

36,21536,215

Other comprehensive income,net of taxes

144–1,062–918

Total comprehensive income

144

35,15335,297–10,231–10,231

Dividend payment, net
Share-based payments

7.1

370

868

1,238

6.10

295

915

1,210

7,184

–1,915

Sale of own sharesincl. tax effects
Purchase of own sharesincl. tax effects
Balance at 31 December 2016

–2,075–2,0756.10

854–55,083* See notes to the consolidated financial statements which form an integral part of this year’s financial statement.

282,045

233,085



GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

69

2

GENERAL INFORMATION ON THE FINANCIAL STATEMENTS

2.1

Convention of preparation

General notes on the convention of preparation
The 2016 consolidated financial statements of the Interroll Group are based on the annual financial statements of Interroll Holding Ltd.,Sant’Antonino, and its subsidiaries as of 31 December 2016, drawn up according to uniform Group accounting principles. The consolidated financial statements present a true and fair view of the financial position, results of operations and cash flows in accordance with
the International Financial Reporting Standards (IFRS) and comply with Swiss law.
The consolidated financial statements are based on historical cost except for marketable securities, investments not involving significant
influence and derivative financial instruments, which are stated at fair value.
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and recognisedthat affect the application of policies and reported amounts of assets and liabilities, income and expenses. These judgments, estimatesand assumptions are based on historical experience and other factors that are believed to be reasonable under the given circumstances.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting e­ stimates are recognized in the
period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if therevision affects both current and future periods.
Judgments made by management in the application of IFRS that have a significant effect on the consolidated financial statements andestimates with a significant risk of material adjustment in the next years are disclosed under “2.2 – Critical accounting estimates andjudgments.”
New and amended standards (IAS/IFRS) and interpretations that have become effective in 2016
The Group prepares its annual report in accordance with IAS/IFRS. To this end, the Group regularly assesses the impact of adjustments
and renewals communicated by the International Accounting Standards Board (IASB).
As of 1 January 2016, the Interroll Group amended the standards and interpretations of IFRS 10, IAS 28 (Consolidated Financial Statements and Investments in Associates and Joint Ventures), IFRS 11 (Joint Arrangements) and IAS 16 and IAS 38 (Clarification of Acceptable Methods of Depreciation). The application of these new and amended standards and interpretations has not had any material effects
on the Interroll Group’s Consolidated Financial Statements.
Future changes and amendments to IAS/IFRS standards and interpretations
The IASB has adopted new and revised standards and interpretations which will only be applied from 1 January 2017 or later and havenot been prematurely applied in these Consolidated Financial Statements. The effects of the adoption/amendment of IFRS 9 (Financial Instruments), IFRS 16 (Leases) and IFRS 15 (Revenue from Contracts with Customers) cannot yet be determined with sufficientcertainty.
Therefore, Group Management analyses potential effects of other new or amended standards and interpre­tations on the consolidated financial statement. Interroll Group closely follows discussions on IAS / IFRS standards and checks potential effects on groupfinan­cial statement or disclosure requirements. At the time being, the Group expects only minor impacts in the presentation of thefinancial statements and no material impact on the annual financial statements except regarding IFRS 15, revenue from contracts
with customers.
The new standard on the recognition of revenue (IFRS 15) applies to all contracts with customers except those that are financial instruments, leases or insurance contracts. IFRS 15 is based on a five step approach: 1) Identify the contract with the customer, 2) Identify
the separate performance obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to separate­performance obligations, 5) Recognise revenue when a performance obligation is satisfied. To what extent IFRS 15 will require Interroll
to redefine the revenue recognition, to adjust the invoicing and accounting systems and to renegotiate contracts with the clients and theoverall impact on the consolidated financial statements of Interroll is being assessed at the moment.

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

70

2.2 Critical accounting estimates and judgments
When preparing the consolidated financial statements, Group Management and the Board of Directors must make estimates andassumptions concerning the future. The resulting accounting estimates have an impact on the Group’s assets, liabilities, income andexpenses. Also, these estimates have an impact on the presentation of financial statments. Estimates made are assessed continuously
and are based principally on historical experiences and other factors. The resulting accounting estimates can, by definition, deviate
from the actual outcome.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and­liabilities within the next financial years are discussed below:a) Income tax expense
The Holding company and its subsidiaries are subject to income taxes in various countries. Significant judgment is required in determining the required worldwide provision for current and deferred income taxes and the realisation of tax losses carried forward. There
are many transactions and calculations made for which the final tax determination is uncertain in the year under review. In case final
tax assessments or tax audits of such matters are different from the amounts that were initially recorded, such differences may materially
impact income tax expenses of the current period. The assessment of deferred tax assets is done with reference to business plans.
Capitalised effects of losses carried forward are subject to annual review. Losses carried forward are only capitalised if they are usable
under valid fiscal law in respective countries. The relevant figures are outlined in note 7.6.
b) Recoverable amount of goodwill, patents and licenses
The assessment of the recoverable amount of goodwill and other intangible assets is, by definition, ­subject to uncertainties regarding
expected future cash flows. It requires making adequate assumptions ­and ­calculating parameters. We refer to comments made undernote 6.3 that also includes the relevant carrying amounts.
c) Provisions
Liabilities from warranty are a result of the operational business of the Group. These provisions are accrued at balance sheet datebased on historical experience. The actual cash flow can be lower or higher, or specific requests can be covered by insurance.
The assessment of provisions and pension liabilities is, by definition, subject to uncertainties regarding future cash flows. It requires
making assumptions and determining parameters, whose adequacy will ­only become clear in the future. We refer to comments madeunder notes 6.14 and 6.15, which also include the relevant carrying amounts.

2.3

Principles of consolidation and valuation

General notes on the principles of consolidation
The consolidated financial statements of Interroll Holding Ltd. include the parent company’s financial statements and the financial
statements of all directly or indirectly held Swiss and foreign subsidiaries where the parent company holds more than 50 % of thevoting rights or effectively exercises control through other means.
The full consolidation method is applied, whereby the assets, liabilities, income and expenses are fully ­incorporated. The proportionof the net assets and net income attributable to minority shareholders is ­presented separately as non-controlling interests in the
consoli­dated statement of financial position, the consolidated income statement and the consolidated statement of comprehensive
income. Accounts payable to, accounts receivable from, income and expenses between the companies included in t­ he scope of consolidation are eliminated. Intercompany profits included in inventories of goods produced are also eliminated.
Subsidiaries acquired during the year are included in the consolidated financial statements from the date on which control is
obtained, while subsidiaries sold are excluded from the consolidated financial statements from the date on which control is given
up. The capital consolidation at acquisition date is carried out using the purchase method. The acquisition price for such a businesscombination is defined by the sum of assets and liabilities acquired or incurred, measured at fair value, and of the sum of equity
instruments issued. Transaction costs related to a business combination are expensed. The goodwill resulting from such a businesscombination is to be recognised as an intangible asset. It corresponds to the excess of the sum of the acquisition price, the amount of
non-controlled ­interests of the entity acquired, the fair value of equity instruments already held, liabilities and contingent liabilities
at fair value. For the valua­tion of non-­controlled interests there are options per transaction. Either the non-controlled interests arevalued at fair value or based on the proportion of the net assets acquired at fair value related to the non-controlled interests. Any
negative goodwill is immediately recognised in the income statement after review of the fair value of the net assets acquired and set



GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

71

off against the purchase price. The goodwill is subject to a yearly impairment test or even earlier, if indications for an early impairment test exist.
Changes in the amount of the holding which do not result in a loss of control are considered to be transactions with equity holders.
Any ­difference between the acquisition price paid or the consideration received and the amount by which the non-controlled interests’value is adjusted, is recognised in the equity.
Investments in associates are investments where the parent company is either (directly or indirectly) entitled to 20 %–50 % of
the voting rights or has considerable influence through other means. Investments in ­associates are accounted for by applying theequity method. Under this method, the investment is initially recorded at the purchase price and subsequently increased or decreasedby the share of the associate’s profits or losses incurred after the acquisition, adjusted for any impairment losses. The Group’s shareof ­results of associates is recognised in the income statement and in the statement of comprehensive income under share of profit
and loss of associates. Goodwill included in the purchase price, representing any excess of consideration over the Group’s sharein net assets of the associate, is recognised as part of the investment’s carrying amount. Dividends received during the year reducethe carrying amount of such investments.
Investments of which the Group does not hold a significant position of voting rights or of which the Group holds less than 20 % are notconsolidated but stated at their estimated fair value. Such investments are p­ resented under financial assets at their estimated fair value.
Any fair value adjustments are recognised in ­retained earnings. Fair value adjustments are recycled through the income statement at
the date of disposal.
Foreign currency translation
The consolidated financial statements are presented in Swiss francs (CHF). All assets and liabilities of the consolidated foreign­subsidiaries are translated using the exchange rates prevailing at the closing date. ­Income, expenses and cash flows are translated at
the average exchange rates for the year under review. The foreign currency translation differences resulting from applying different
translation rates to the statement of financial position, the income statement and the statement of comprehensive income are added toor ­deducted from the line translation reserve of the equity. The same principle is applied for those resulting from the translation of thesubsidiaries’ opening net asset values at year-end rates and those arising from long term intercompany loans (net investment approach).
Transactions in consolidated entities where the transaction currency is different from the functional currency of the entity are recorded
using exchange rates prevailing at the time of the transaction. Gains or ­losses arising on settlement of these transactions are included in
the income statement. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates prevailingat year-end (closing date). Any gains or losses resulting from this translation are also recognised in the income statement.
The following exchange rates were the most important rates used for the translation of financial statements denominatedin foreign currencies:
Income statement (average rates)

Balance sheet (year-end rates)

ChangeChange

2016

2015

in %

31.12.2016

31.12.2015

in %

EUR

1.091

1.065

2.5

1.074

1.083

–0.9

USD

0.989

0.964

2.6

1.019

0.995

2.4

CAD

0.748

0.748

0.0

0.757

0.717

5.6

GBP

1.330

1.470

–9.5

1.254

1.476

–15.0

SGD

0.716

0.700

2.3

0.705

0.703

0.3

CNY

0.149

0.153

–3.1

0.147

0.153

–4.4

JPY

0.009

0.008

13.8

0.009

0.008

4.8

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

72

Current / non-current distinction
Current assets are assets expected to be realised within one year or consumed in the normal course of the Group’s operating cycle, orassets held for trading purposes. All other assets are classified as non-current assets.
Current liabilities are liabilities expected to be settled by use of cash generated in the normal course of the Group’s operating cycle or
liabilities due within one year from the reporting date. These also include short-term borrowings made as part of credit limits granted
for an indefinite period, but subject to a termination period of less than one year from the reporting date. All other liabilities are classified
as non-current liabilities.
Segment reporting
The Interroll Group has consisted of one single business unit since 1 January 2011.. The complete product range is sold in all markets
through the respective local sales organisations. The customer groups that are OEMs (original equipment manufacturers), system integrators and end users are provided with tailor-made product offerings and differentiated consulting levels. The Interroll manufacturing
units focus on the production of specific product ranges. Assembly units receive semi-finished products from the manufacturing units
and assemble a wide product range for their local markets. The Interroll Research Centre, which is centrally ­located, develops new application ­technologies and new products for all product groups. The manufacturing units continuously refine the current product ranges
they are focused on.
Group Management and the Interroll management structure are organised by function (Overall ­Man­agement, Products & Technology,
Global Sales & Service, Corporate Marketing and Corporate Finance). The Board of Directors bases its financial management of the Groupon both the turnover generated in the product groups and geographical markets as well as on consolidated financial reports. Group Management additionally assesses the achievement of financial and ­qualitative ­targets of all legal entities.
Based on the current management structure, financial reporting to the chief operating decision makers is carried out in one reportablesegment which is equal to the consolidated statements of the Group.
Statement of cash flows
The statement of cash flows presents, net of any foreign exchange rate effects, changes in cash flows during the year classified by o
­ perating,investing and financing activities, thereby providing information about the changes in cash and cash equivalents during the reporting
period. Cash equivalents are held for the purpose of meeting the Group’s short-term cash commitments rather than for investment or
any other purposes. The effect of foreign exchange rate changes on cash and cash equivalents in foreign currencies is disclosed separately.
Net cash from operating activities is determined using the indirect method, whereby the net result f­ or the year is adjusted for:a) effects of transactions of a non-cash nature;b) deferrals or accruals of past or future operating cash receipts or payments;c) items of income or expense associated with investing or financing cash flows.



GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

73

Impairments
The carrying value of long term non-financial assets, except assets from retirement benefits and assets from deferred taxes, are assessedat least once a year. If indications for an impairment exist, a calculation of the ­recoverable amount is performed (impairment test). For
goodwill, other intangible assets with an indefinite useful lifetime and intangible assets which are not yet available for use, the recoverable
amount is calculated regardless of the existence of indications of a decrease in value. If the carrying value of such an asset or the cash
generating unit to which such an asset belongs is to exceed the recoverable amount, an adjustment is recognised through the income
statement. Impairments on a cash generating unit or a group of cash generating units are first adopted on the goodwill and are thereafter
proportionally split onto the other assets of the unit (or the Group).
The recoverable amount is the higher value of fair value less selling costs and value in use. The estimated f­ uture discounted cash flows
are evaluated to determine the value in use. The discounting rate applied ­corresponds to a pre-tax rate which reflects the risk related tothe assets. If an asset does not largely generate independent cash flows, the recoverable amount of the cash generating unit is calculated
to which the ­asset concerned belongs to.
Impairments on the remaining assets are reversed if the estimations made in the calculation of the ­recoverable amount have changed
and either has resulted in a reduction of the impairment amount or no impairment is required anymore. An appreciation in value of the
goodwill may not be performed.
Derivative financial instruments
Derivative financial instruments are stated at fair value. The method of recognizing gains or losses depends on the type of the underlying
transaction. The Group designates certain transactions with derivatives as either hedges of the fair value of recognised assets or liabilities(fair value hedges) or hedges of highly probable forecasted financial transactions (cash flow hedges). The Group documents at the
inception of the transaction the relationship between hedging instruments and hedged items within the context of its risk management
objective and strategy. The Group also documents its assessment of the effectiveness of the ­derivatives at acquisition and during its termin relation to both, the values hedged or also in view of future cash flows.
Changes in fair value are recognised as follows:a) Fair value hedges
Changes in the fair value of derivatives designated and qualified as fair value hedges are recorded in the income statement, together withany changes in the fair value of the hedged assets or liabilities.
b) Cash flow hedges
Changes in fair value of derivatives designated and qualified as cash flow hedges are recognised in equity. Amounts accumulated inequity are recycled to the statement of comprehensive income in the periods when the hedged item will affect profit or loss. When ahedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
existing in equity at that time remains in equity and is recognised when the initial transaction is ultimately recognised in the income
statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.
c) Other securities or financial instruments
Certain derivatives do not qualify for hedge accounting. Changes in the fair value of such hedging instruments are recognised immediately in the income statement. The fair value of derivatives traded in public markets is based on quoted market prices at the balance
sheet date. The quoted market price used for ­financial assets is the current bid price; the appropriate quoted market price for financial
liabilities is the current ask price. The fair value of derivatives which are not traded publicly (for example, “over-the-counter” derivatives)is determined by a valuation provided by the financial institution from which the derivative has been acquired.

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

74

2.4

Accounting principles: statement of financial position

Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Non-current assets acquiredby way of finance leases are recognised at the lower of the present value of ­future minimum lease payments and fair value, and depreciatedaccordingly. The related leasing liabilities are presented at their present value.
Depreciation is recognised on a straight-line basis over the estimated useful life and considering a potential residual value. The following
useful economic life terms apply to the Group’s main asset categories:
Buildings
Machinery
VehiclesOffice machines and furniture
Tools and moulds
IT infrastructure

25 years
10 years
5 years
5 years
5 years
3 years

Land is not depreciated.
Components of major investments in fixed assets with different estimated useful lives are recognised s­ eparately and depreciated accordingly.
Estimated useful lives and estimated residual values are revised on a yearly basis as per the reporting date and resulting adjustments
are recorded in the income statement.
Assets under construction for which completion has not yet been concluded or which cannot be used yet are capitalised based on
incurred costs as per the closing date. Respective depreciation is recognised when the construction can be used.
Interests directly related to the acquisition or construction of property, plant and equipment is recognised and allocated to the related
asset.
Intangible assets
Intangible assets include goodwill, intangible assets purchased in the course of business combinations (­ patented and unpatented technology, customer relationship), licenses and patents and similar rights a­ cquired from third parties as well as software acquired fromthird parties. These assets are stated at cost and are amortised on a straight-line basis over the following, expected useful lifetime:Standard software
ERP software
Customer relationshipPatents, technology and licenses

3 years
8 years
5–10 years
6 years

Acquired customer relationships are customer values identified within the scope of IFRS 3. They are amortised based on their estimatedmelt-off time being a period of 5 to 10 years. In markets in which Interroll holds a solid market position, customer value is amortisedover 10 years. A shorter amortization period is defined in markets with stiff competition.
Patents and technical know-how are amortised over their expected useful life. In view of the innovative market and competitiveenvironment, the amortisation period has been determined to be 6 years.
Furthermore, intangible values acquired through business combinations may be identified. Such result from individual contractual­agreements. These values are amortised over the period derived from the c­ ontractual agreement.
Goodwill with an indefinite useful life is allocated to specific cash generating units in order to allow the identification of possible impairments. Such impairment tests are carried out on an annual basis and any impairment is recognised in the income statement. Goodwill­arising from the acquisition of a foreign entity is attributed to that entity’s net assets and reported in the functional currency of that
entity, then translated to the Group’s reporting currency at the year-end rate.



GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

75

Financial assets
Financial assets mainly comprise loans receivable that are stated at amortised cost less any valuation ­allowance. The recognition of interest
income is based on the effective interest rate method.
Non-current assets held for saleTangible assets or a group of assets are classified as “non-current assets held for sale” if their carrying value will most probably be realised
in a divestment transaction rather than by being used in the normal course of business. Such assets are actively brought onto the market
and should be sold within one year. Non-current assets held for sale are presented at the recoverable amount, which is the lower of bookvalue or fair value less costs to sell.
Inventories
Inventories are stated at the lower of cost (purchase price or Group production cost) and net realisable value. The cost of inventories
is calculated using the weighted average method. Production overheads are allocated to inventories on a proportional basis. Slow
moving goods and obsolete stocks are impaired. Intercompany profits included in inventories are eliminated by affecting net result.
Trade and other accounts receivable
Trade and other accounts receivable are stated at amortised cost, generally equalling nominal value. The amount of valuation adjustments corresponds to the difference between the carrying amount and the net present value of the future estimated cash flow. The
valuation adjustments include individual impairments for specifically identified positions, where indication exists that the outstanding
amount might not be fully recovered.
Collective impairment covers expected losses that cannot be excluded based on historical data and payment statistics. As soon as­sufficient evidence is available that the receivable will definitively not be recovered, the related amount is directly written off and offset
with the specific individual impairment respectively.
Marketable securities
Marketable securities are stated at their fair value as of the balance sheet date. Unrealised gains and losses are included in the financial
result.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, postal and bank accounts, as well as credit balances ­payable on demand and deposits
with a residual maturity of not more than 90 days at the acquisition date. These balances are stated at nominal value.
Shareholders’ equity
Shareholders’ equity is categorised as follows:a) Share capital
The share capital contains the fully paid-in registered shares.
b) Share premiumShare premium comprises payments from shareholders that exceed the par value as well as realised gains / losses including tax on­transactions with own shares.
c) Reserve for own shares
The acquisition price of own shares is disclosed as a reduction of shareholders’ equity. Realised gains and losses on transactions with
own shares are recognised in share premium. Compensation and cash inflows resulting from the issue and subsequent possible exerciseof share options are credited to the Groups’ ­reserves.
d) Translation reserve
Translation reserve consists of accumulated translation differences resulting from translation of group subsidiaries’ financial statementswith a functional currency other than Swiss franc and of intercompany loans with equity characteristics. The changes in currency
differences are ­presented in the consolidated statement of comprehensive income.
e)	Retained earnings
Retained earnings contain non-distributed profits.

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

76

Financial liabilities
Loans payable and overdrafts are stated at amortised cost. The recognition of interest expenses is based on the effective interest rate
method.
Provisions
Provisions relate to product warranties and impending losses whose amount and timing is uncertain. They are recognised if theGroup has an obligation based on past occurrences at balance sheet date or a cash drain is probable and can be reliably determined.
The amounts recognised represent management’s best ­estimate of the expenditure that will be required to settle the obligation. Providing
the effect is material, long-term provisions are discounted.
Retirement benefits
The Group sponsors pension plans according to the national regulations of the countries in which it ­operates. All significant pension
plans are operated through pension funds that are legally independent from the Group. Generally, they are funded by employees’ andemployers’ contributions. The foreign ­pension schemes are normally defined contribution plans whereby the pension expense for aperiod equals the companies’ contributions during that period. The Swiss and French pension schemes have certain c­ haracteristics ofa defined benefit plan; the financial impact of this plan on the consolidated financial statements is determined based on the Projected
Unit Credit Method.
Trade accounts payable and advanced payments from customers
Trade accounts payable are stated at amortised cost, generally equalling nominal value.

2.5

Accounting principles: income statement

Revenue recognition, income from services
Revenue is generally recognised upon delivery (transfer of risk and use). The Group establishes appropriate warranty provisions­relating to rendered services in order to cover expected claims. Services which the I­ nterroll Group performs in direct relation to its
core products sold are recognised upon delivery in net sales.
Material expenses
Material expenses include all costs of raw materials and consumables used, goods purchased and third-­party manufacturing, processing
or conversion of the Group’s products (services purchased).
Product development
Expenditure on research and development is only capitalised when the cumulative recognition criteria of IAS 38 are met. Expenses
for product development include wages and salaries, material costs, depreciation of technical equipment and machinery dedicatedto research and development, as well as proportional o­ verhead costs. Such expenses are included in the respective line item of theincome statement.
Employee participation plans
Certain employees participate in equity-based compensation plans of Interroll Holding Ltd. All equity-based compensation granted
to these employees is valued at fair value at the grant date and recognised as personnel expense over the period until the vesting date.
The fair value is calculated on the basis of the binomial method. Discounts granted to beneficiaries on the unconditional purchase ofInterroll shares are recognised in the income statement at the grant date. Cash inflows resulting from equity-based participation plans
are recognised as an increase in equity. Cash compensated participation plans are recognised as other liabilities and are valued at fairvalue at the balance sheet date.
Operating lease expenses
Property, plant and equipment that are held under operating leases are not recognised on the statement of financial position. The
operating lease expense is recognised in the income statement on a straight-line basis over the lease contract period. Operating leaseobligations depending on revenues are estimated and accrued as they become due.



GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

77

Financial result
Interest expenses on loans and finance lease liabilities are recognised as financial expenses, whereas interest income on financial assets
is recognised in financial income, both on an accrual basis. Moreover, the ­financial result includes foreign exchange gains and losses
arising from the translation of items of the ­statement of financial position and transactions in foreign currencies as well as changes in
the fair value of ­financial instruments.
Income tax expense
Current income taxes are calculated on the statutory results of the Group companies at the enacted or ­substantively enacted tax rate.
They also include adjustment charges and credit notes issued on previous years’ results.
Changes in deferred taxes are generally recognised in the income tax position, unless the underlying ­transaction has been directly recognised in the other comprehensive income. In such case the related i­ ncome tax is also directly recognised in the statement of comprehensive income or in equity. Temporary differences resulting from initial recognition of assets and liabilities are not recognised in theincome s­ tatement. Temporary differences on the participation value of subsidiaries are recognised except the parent is able to control
the timing of the reversal of temporary differences and it is probable that the temporary difference will not be reversed in the foreseeable
future. Deferred tax effects from the initial recording of assets / debts related to a transaction that affects neither the taxable result nor
the annual profit are also not registered in the deferred tax expenses or deferred tax income.
Deferred taxes are calculated using local enacted or substantively enacted tax rates. The future benefits of tax loss carryforwards arerecognised as an asset if it is probable that future taxable profits will be available to realise such benefits.

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

78

3

RISK MANAGEMENT

3.1 Operational and strategic risk management
Risk management at Group level supports strategic decision making. Operational and strategic risk ­management coordinates andmonitors risks arising from the economic activities of the Group.
A systematic operational and strategic risk analysis is performed annually by Group Management. In an annual strategy ­meeting, GroupManagement discusses and analyses such risks. The Board of Directors is regularly informed in a uniform manner of the nature, scope,
assessment and counteractive measures of the risks.

3.2

Financial risk management

General information on the financial risk management of the Interroll GroupThe Group’s activities expose it to a variety of financial risks: market risk (currency risk, interest rate risk and price risk), credit risk,
liquidity risk and cash flow risk. The Group’s risk management programme focuses on the unpredictability of financial markets andseeks to minimise potential adverse effects on Group’s ­financial performance.
The Board of Directors has supreme responsibility for risk management. To this end, the Board of Directors has delegated responsibility for the development and supervision of the risk management principles to the Audit Committee. The Audit Committee reports
regularly to the Board of Directors.
The principles established for risk management are geared toward identifying and analysing those risks that might ­impact the Group,
defining ad­equate limits and implementing and adhering to risk controls. The risk management principles and the related procedures
are regularly verified in order to reflect changing market conditions and operations of the Group. The goal is to develop management
regulations and management processes as well as a disciplined and constructive control environment through existing t­raining andguidelines to ensure that risks are handled in a disciplined, deliberate manner.
The Audit Committee supervises the management’s monitoring of compliance with principles and processes. Their adequacy is continuously verified with respect to the risks that the Group is exposed to. The Audit C­ ommittee is supported in this respect by the Internal
Audit department.
Financial risk management is carried out by Group Treasury. Group Treasury identifies, evaluates and reduces financial risks in close
cooperation with the Group’s operating units and reports at regular intervals to the Audit Committee.
The following sections provide a summary of the scope of individual risks and the targets, principles and processes implemented
for measuring, monitoring and hedging financial risks. Additional information on the financial risks is included in the notes to theconsolidated financial statements (see note “6.9 – Financial risks”).

RISK MANAGEMENT

79

Market risk
Market risks to which Interroll Group is exposed can be summarised into the following three main risk categories:a) Currency risk exposure
The Group operates internationally and is exposed to foreign exchange risks arising from various currencies. Foreign exchange risksarise from future commercial transactions and from recognised assets and liabilities. To manage its foreign exchange risk arisingfrom future commercial transactions and recognised assets and liabilities, the Group operates an internal monthly “netting” process. Net exposure r­esulting from assets and liabilities recognised is partially reduced using forward currency contracts. Suchcontracts are entered into only with highly rated financial institutions. Furthermore, the decentralised structure of the Group contributes to a substantial reduction of foreign currency exchange risks.
b) Interest rate risk
Financial assets and liabilities contain interest-bearing loans at either a fixed or a variable rate. Related interest risks are disclosed in 6.9.
c) Price risk
The Group is exposed to raw material price changes (steel, copper, technical polymers) as well as to price changes in financial liabilities
and assets. Raw material price risks are not hedged, while risks from financial assets and liabilities may be ­partially or fully reduced
using derivative financial instruments (as described in 2.3 – Principles of ­consolidation and valuation, section “derivative financial
instruments”).
Credit risk
The risk of default is the risk of incurring a financial loss when a customer or a counterparty to a financial instrument does not fulfill its
legal obligation. The default risk at Interroll exists on trade and other accounts receivable and on cash and cash equivalents.
A credit check is performed for any customers who exceed the EUR 5,000 credit limit before the order is ­executed. The credit check isalso based on the credit information database provided by an international service provider that is a leader in this sector. Their software
enables a credit limit to be established for each individual customer based on existing data and a special calculation formula defined by
the Interroll Group.
Accumulation of credit risks in trade and other accounts receivable is limited due to large number of customers and their global distribution. The extent of credit risks is mainly determined by the individual characteristics of each single customer. The risk evaluation
includes an assessment of creditworthiness by con­sidering the customer’s financial situation, its credit history and other factors. Sales
and services are provided only to customers whose creditworthiness is verified by means of the process described above. A credit limit
is defined for each customer. These limits are verified at least once a year.
Interroll invests its funds in short-term deposits at a multitude of banks with whom long standing rela­tionships exist. Such deposits
have a maturity date shorter than twelve months. Likewise, transactions with derivative financial instruments are entered into only withmajor financial institutions. Interroll does not hold material open positions with these institutions.
The maximum credit risk from financial instruments corresponds to the balance sheet amount of each ­single financial asset. There areno guarantees or other liabilities that could increase the risk over the corresponding amount in the statement of financial position.
Liquidity risk
Liquidity risk is the risk that the Group cannot fulfill its financial obligations on time.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the ­availability of funding through anadequate amount of committed credit facilities and the ability to close market positions at any time. Due to the dynamic nature of theunderlying business, Group Treasury aims to ensure funding by keeping committed credit limits available.

RISK MANAGEMENT

80

3.3

Capital risk management

Objectives and principles of capital management
The Interroll Group strives to safeguard its going concern by defining and adhering to a strong equity base. This equity level is defined
based on the operational and balance sheet risk of the Group. The Group’s refinancing should be adapted to suit the asset structure andallow further growth of the ­business. The distribution of a regular portion of the profits shall be made possible based on the realisationof an appropriate return on equity.
Equity ratio targets and payout ratio
Based on above targets and principles, Group Management aims for a long-term equity ratio of 50–60 %. The ordinary payout ratio­corresponds to 30–35 % of net profits. This ratio may deviate depending on the general economic outlook and planned future investment activities.
Key figures for capital risk management
The following table shows the key indicators with regard to capital risk management. Additional information can be found in the coverof the annual report.
Debt convenants
Debt covenants defined for comitted credit lines of over CHF 40 million call for an equity ratio of at least 35 % (see 6.9 “Financial risks– Credit facilities and debt covenants”)
in million CHF, if not noted differently

2016

2015

Total assets

324.8

293.0

Net financial assets

38.0

31.3

Gearing (net debts/equity)

n/a

n/a

Operating cash flow

36.8

40.2

Indebtedness factor (net debts/cash flow)

n/a

n/a

Equity

233.1

207.6

Equity ratio (equity in % of assets)

71.8

70.9

Result36.2

29.3

Return on equity (in %)

16.4

14.4

Non-diluted eranings per share (in CHF)

42.57

34.51

Distribution per share (in CHF)

16.00

12.00

Payout ratio (in %)

37.6

34.8

CHANGES IN THE SCOPE OF CONSOLIDATION

81

4CHANGES IN THE SCOPE OF CONSOLIDATION

Changes in business year 2016
New companies
The Interroll Group launched Mexico S. de R.L. de C.V. during the year under review, its second subsidiary in Latin America. No newcompanies were started in the previous year.
Acquisitions / Divestitures
On 1 December 2016, Interroll bought the sheet shaping business of Ortner GmbH in Kronau, Germany, through the purchase of
selected assets. Around 40 employees will produce Interroll belt curves for Europe, a product which is already well established in theAmericas and Asia-Pacific regions. The acquisition included the operational real estate. This business will operate under the name ofInterroll Kronau GmbH. No acquisitions or divestitures were made during the year under review.
Allocation of net assets acquired
The following overview shows a summary of the purchase price paid for the acquisition as well as the values of the identified assets ofOrtner GmbH.
in thousands CHF

2016
Fair value

Property, plant and equipment

4,276

Intangible assets

54

Deferred tax assets

554

Inventory
Total assets

266
5,150

Deferred tax liabilities

158

Total liabilities

158

Total acquisition costs

4,992

Cash flow from acquisitions
The amount settled in cash and with shares in 2016 was for the assets bought from Ortner GmbH.
in thousands CHF

2016

Cash settlement of acquisition

4,992./. Shares at market value–213

Net cash used in acquisitions

4,778

Further notes regarding the acquisition of the Ortner assets
Acquisition-related expenses of CHF 0.05 million were stated under consultancy expenses in the profit and loss account for financial
year 2016.
Based on third-party evaluations, the fair value of the real estate amounted to CHF 3.2 million and the fair value of the machinery
totalled around CHF 0.8 million.
Since 1 December 2016, Interroll Kronau GmbH has made a contribution totalling CHF 0.3 million to Interroll Group’s sales revenue.
Its share in the profit for the same period was not material.
Had Interroll Kronau GmbH already been consolidated from 1 January 2016, sales revenue of CHF 3.8 million and a net profit of
CHF 0.2 million would have been reported in Interroll Group’s profit and loss account.

OPERATING SEGMENTS

82

5

OPERATING SEGMENTS

Sales and non-current assets by geographical market
Sales and non-current assets according to geographical market are presented as follows:
Sales

2016

in %

Germany

65,493

Rest of EMEA *179,943

Total EMEA*

Non-current assets

2015

in %

2016

in %

2015

in %

16.3

49,93813.8

60,44044.9

55,48741.6

44.8

164,33445.6

38,95129.0

43,411

32.5

245,43661.1

214,272

59.4

99,391

73.9

98,89874.1

USA70,21517.5

80,99822.5

28,53721.3

28,803

21.6

Other Americas

29,675

7.4

16,646

4.6

1,540

1.1

1,177

0.9

Total Americas

99,89024.9

97,64427.1

30,07722.4

29,98022.5

in thousands CHF

Total Asia-Pacific

56,13414.0

48,822

13.5

5,020

3.7

4,656

3.4

Total Group401,460

100.0

360,738100.0

134,488100.0

133,534

100.0* Europe, Middle East, Africa

Sales were broken down by invoice address. Non-current assets are disclosed excluding financial assets and deferred tax assets.
Information about major customers
Sales are transacted with more than 10,000 customers. No customer accounts for more than 4 % percent of Group sales.
Sales by product group
Sales broken down by product group:

2016

in %

2015

in %

2014

in %

Drives123,64530.8

110,27630.6

114,905

34.3

Rollers

93,48623.3

93,36925.981,20924.2

Conveyors & Sorters

120,86430.1

107,23929.7

79,77323.8

Pallet- & Carton Flow

63,46515.8

49,85413.8

59,41917.7

401,460

100.0

360,738100.0

335,306

100.0

in thousands CHF

Total GroupNOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

83

6	NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6.1

Property, plant and equipment

Movements of property, plant and equipment

Land & buildingsin thousands CHF

Production equipment& machinery

Office equipment& motor vehicles

Assets underconstruction

Total

2016

2015

2016

2015

2016

2015

2016

2015

2016

2015

COSTS
At 1.1.

92,79086,54495,353

94,857

8,208

9,044

1,094

4,463

197,445

194,908

Currency translation adj.

–165

–5,824–71–5,589

–34

–644

–23

–392

–293

–12,449

Additions

419

2,330

5,475

8,222

1,872

980

5,328

9,647

13,094

21,179

Disposals–609–1,885–4,107–3,305–662–1,215–6–11–5,384–6,416

Reclassifications

167

11,625

807

1,168

10

43

–964

–12,61320

223

Acquisition

3,480

At 31.12.

96,082

4,344

864
92,79098,321

95,353

9,394

8,208

5,429

1,094

209,226

197,445–108,939

ACCUMULATED DEPRECIATION & IMPAIRMENTS
At 1.1.
Currency translation adj.
Depreciation–31,776–32,666–69,449–70,038–5,846–6,235–107,071

20

2,377

45

3,905

6

435

71

6,717

–3,487–3,131–6,316–6,387–1,194–1,079–10,997–10,597

1,644

4,104

3,095

492

1,037

4,596

5,776

34

–24

–4

34

–28

–113,367–107,071

95,85990,374

Disposals
Reclassifications
At 31.12.

–35,243–31,776–71,582–69,449–6,542–5,846

60,83961,014

26,73925,904

2,852

2,362

1,453

745

3

1

104,834

117,456

113,646

Property, plant and­equipment at 31.12.
Capital commitments
Insurance value*

1,718
110,199

5,429

1,094

3,174

746

227,655

218,480* The insurance value of production equipment and machinery also covers other tangible assets.

Further notes to property, plant and equipment
In the opinion of Group Management, no risks exist at the end of the period under review which negatively impacted the book valueof fixed assets.

6.2 Non-current assets held for saleNo non-current assets were held for sale, neither in the year under review nor in the previous year.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

84

6.3

Intangible assets

Movements of goodwill and intangible assets
Goodwillin thousands CHF

SoftwarePatents, technology
and licences

Customer
relationships

Total

2016

2015

2016

2015

2016

2015

2016

2015

2016

2015

19,80920,73335,51733,074

18,562

20,42723,99225,96097,880100,194

11

–828

8

–172

–239

–1,956–198–1,968–418–4,924

1,635

3,044

1,635

3,135

–50

–429

–50

–525

COSTS
At 1.1.
Currency translation adj.
Additions
Disposals
Acquisition
At 31.12.

–96

91

562
20,382617

55
19,80937,11035,51718,323

18,562

23,84923,992

99,664

97,880–17,856–14,000–14,458–14,673–19,281–18,521–54,721–50,320

–8

126

221

1,367

234

1,665

447

3,158

–4,652–4,253–1,174–1,152–984–2,425–6,810–7,830ACCUMULATED AMORTISATION & IMPAIRMENTS
At 1.1.

–3,126–3,126

Currency translation adj.
Amortisation

49

272

49

272

–3,126–3,126–22,467–17,855–15,411–14,458–20,031–19,281–61,035–54,720

17,256

16,683

14,643

17,662

2,912

4,104

3,818

4,711

38,62943,160

Disposals
At 31.12.
Total intangible assets,
net at 31.12.

Goodwill: impairment test
The impairment tests are generally based on a three-year plan and on the present value of future (pre-tax) cash flows (value in use)
determined using pre-tax discount rate of 12.3 % (2015: 11.3 %). The growth rate is defined as a key assumption. No further growth was
assumed for the extrapolation of free cash flows. The Cash Generating Unit (CGU) equals the Interroll Group. There is only one operating segment and this is synonymous with the reporting segment. All decisions are made at Interroll Group level.
Sensitivity analysis of the goodwill impairment tests
For both the year under review and the previous year, the sensitivity analysis performed revealed that the discounted value of future
free cash flows exceeds the value of the current goodwill, even when assuming a change of the discount rate under normal economic
conditions. The growth rate was reviewed in regards to its sensitivity. This test led to the conclusion that the discounted value of future
cash flows exceeds the value of the current goodwill position, even if no growth is assumed.
SoftwareOf the accumulated acquisition costs, CHF 31.6 million (2015: CHF 29.9 million) relate to the setup and introduction of SAP. In the year
under review, the additions to this process management system amounted to CHF 1.7 million (2015: CHF 1.2 million). Amortisation
starts with the go live date and ends after 8 years.
SAP was launched in 2011 for the two Centres of Excellence for Drum Motors and Rollers / RollerDrive units in Germany as well as for
all European sales and service subsidiaries. In 2012, SAP was also launched in the Centre of Excellence for Supermarket Products in­Denmark, in the Regional Centre of Excellence for Rollers and Drum Motors in the USA as well as in several sales subsidiaries in the
Asia-Pacific region. SAP went live in Interroll China in 2013, at the Centre of Excellence for Automation in Sinsheim in 2014 and SAP
was implemented in more additional sites in North America and in France during the current year.
Patents and licenses
Patents and licenses are normally amortised on a straight line basis over 6 years unless the life cycle is shorter. In the year under review
and in the previous year, no essential patents or licenses were bought. As per the end of 2016, an amortisation term of additional three
years remains on the majority of patents and licenses. A review was performed for indications of impairment in ­patents and licenses was
performed. There are no signs that would indicate an impairment of this value.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

85

Customer relationships
Customer relationships are amortised on a straight line basis over 10 years unless the life cycle is shorter. At the end of 2016, an amortisation term of an additional six years remains on the majority of customer relationships. A review was performed for indications of
impairment in customer relationships. There are no signs that would indicate an impairment of this value.

6.4

Assets pledged or assignedin thousands CHF

31.12.2016

31.12.2015

Trade receivables

415

201

Total assets pledged or assigned

415

201

in thousands CHF

31.12.2016

31.12.2015

Raw materials

34,581

31,258Work in progress

10,437

11,341Finished products

5,543

4,388

Valuation allowance–2,287–2,154

Total inventory, net

47,00844,8332016

2015–2,154–2,213

These assets are pledged or assigned to local credit lines granted (see liquidity risk in note 6.9).

6.5

Inventories

Detailed overview on the positions belonging to the inventory

No inventory was pledged in either year under review.

Development of valuation allowance on inventory
in thousands CHF

Balance as per 1.1.
Currency translation adjustment

–28

219

Additions

–317

–566

Reductions
Total valuation allowance on inventory as per 31.12.

212

406

–2,287–2,154

The addition of valuation allowances is due to slow or non-moving items within the inventory. The reduction of the valuation ­allowanceon inventory is related to the sale or scrapping of items, as well as to a reassessment of the valuation allowance affecting the consolidated
income statement of the Group.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

86

6.6

Trade and other accounts receivable

Detailed overview of trade and other accounts receivable
Trade accounts receivable arise from deliveries and services relating to the Group’s operating activities. VAT, withholding tax and othercurrent receivables are included in the other accounts receivable. The other accounts receivable are analysed for valuation adjustment
like trade receivables. There was no valuation adjustment necessary on other accounts receivable in either year under review.
31.12.2016

31.12.2015

Trade accounts receivable from goods and services

82,04962,256

Valuation allowance–4,927–2,784

Total trade accounts receivable, net

77,12259,472

Prepaid expenses and accrued income

3,931

5,934

Prepayments for inventories

2,014

1,594

Other accounts receivable

15,584

10,471

Forward exchange dealing

74

–482

Total other accounts receivable

21,603

17,517

Total trade and other accounts receivable, net

98,72576,989in thousands CHF

Ageing and valuation allowances of trade accounts receivable
Trade accounts receivable are due and specific / general valuation allowances have been evaluated as follows:
31.12.2016

in thousands CHF
Grossindividual

31.12.2015

Net

Valuation allowance

Gross

Valuation allowancecollective

individualNet

collective

Not past due

48,355

48,107

41,831

Past due 1–30 days

9,699

9,699

9,573

Past due 31–60 days

7,717

7,717

4,061

Past due 61–90 days

2,325

–1

2,324

2,415

–10

Past due > 90 days

13,953–4,238

–440

9,275

4,376

–2,075

–444

1,857

82,049–4,487–440

77,12262,256–2,340–444

59,472–248

41,576

–255

9,573
4,061
2,405

Total trade accounts
receivable

Development of the individual and collective valuation allowances of trade accounts receivable
The valuation allowances on trade accounts receivable from third parties developed as follows:
2016

2015

Valuation allowance

Valuation allowancein thousands CHF
Total

individualcollective

Total

individualcollective–2,784–2,340–444–2,783–2,290

–493

48

44

4

230

181

49

–3,289–3,289–1,078–1,078

Allowance used

758

758

381

381

Allowance reversed

340

340

466

466

–4,927–4,487–2,784–2,340At 1.1.
Currency translation adjustment
Additions

At 31.12.

–440

–444

During the year under review, an amount of CHF 0.8 million (2015: CHF 0.4 million) relating to irrecoverable trade receivables
was ­written off. Currently, no other risks are identifiable in the net trade accounts receivable. Sales are broadly diversified across­geographical and industrial markets. Thus, the risk of unexpected losses from trade receivables is deemed low.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

87

Currencies in trade accounts receivable
Trade accounts receivable reported in CHF are held in the following currencies:
31.12.2016

in %31.12.2015

in %

EUR

32,47339.6

25,32540.7

USD

23,511

28.7

13,11921.1

CNY

13,19916.1

11,449

18.4

THB

2,117

2.6

1,272

2.0

DKK

1,489

1.8

1,774

2.8

all other currencies

9,260

11.2

9,317

15.0

Total trade accounts receivable, gross

82,049100.0

62,256100.0

31.12.2016

in %31.12.2015

in %Europe, Middle East, Africa

37,93146.2

30,97049.7

Americas26,08531.8

14,05922.6

Asia-Pacific

18,03322.0

17,227

27.7

Total trade accounts receivable, gross

82,049100.0

62,256100.0

in thousands CHF

Regional breakdown of trade accounts receivable
Trade accounts receivable can be broken down into the following geographical areas:in thousands CHF

On average, trade accounts receivable are 63 days outstanding (DSO). The respective value is for Europe 41, for Americas 89 and for Asia 82.
In the previous year, the DSO was 56 for the Group, for Europe 47, for Americas 62 and for Asia 84.

6.7

Cash and cash equivalents

Positions included in cash and cash equivalents
31.12.2016

31.12.2015

Cash on hand, bank and postal accounts

35,75430,289

Short-term deposits

2,510

1,365

Total cash and cash equivalents

38,26431,654in thousands CHF

Interest rates of cash and cash equivalents
The interest rates on cash and cash equivalents vary between 0 % (CHF) and 12 % (BRL). The respective rates for 2015 were 0 % (CHF)
and 16 % (BRL).

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

88

Currencies held in cash and cash equivalents
in %31.12.2016

31.12.2015

EUR

21.0

29.0

CHF

18.0

8.0

USD

20.0

21.0

THB

3.0

6.0

JPY

3.0

3.0

KRW

4.0

10.0

ZAR

2.0

1.0

other currencies

29.0

22.0

Total cash and cash equivalents

100.0

100.0

Transfer limitations on cash and cash equivalents
Cash and cash equivalents of CHF 1.1 million (2015: CHF 0.6 million) of Interroll South Africa as well as of Interroll Brazil are s­ ubject
to transfer limitations. These transfer limitations do not have any impact on their operating activities.

6.8

Financial instruments

Reconciliation from balance sheet items to valuation categories as per IAS 39
The table below shows an overview of financial instruments held by valuation category according to IAS 39:
31.12.2016

31.12.2015

Cash and cash equivalents

38,26431,654

Trade and other accounts receivable w / o advances

96,63775,877in thousands CHF

Financial assets
Total financial assets at amortised cost

655

626

135,556

108,157

Foreign currency forward contracts*

74

–482

Total financial instruments at fair value

74

–482

41,316

39,767283

304

41,59940,071

Trade and other accounts payable
Financial liabilities
Total financial liabilities
at carrying value*see note 6.9Book values of cash and cash equivalents, trade and other accounts receivable and payable as well as financial assets closely correspondto fair value due to their short-term maturity. Advance payments for inventory are excluded from the valuation categories as per IAS 39
because the subsequent transaction is not of a monetary nature. Financial assets and liabilities are predominantly due within approximately 2 years and their net present values correspond very closely to their book values.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

89

6.9

Financial risks

Currency risk exposure
Due to its international focus, Interroll Group is exposed to foreign currency risks. Risk exposures result from transactions incurrencies deviating from the entity’s functional currency.
The following table shows the major currency risks at the respective balance sheet date:
31.12.2016

in thousands CHF

Financial assets

EUR

CHF

3

67

7,346

1,338

1,536

20,982

USD

SGD

JPY

3,552

31.12.2015
EUR

CHF

3

75

USD

SGD

JPY

4,038

Trade and other accounts
receivable

4,574

1,727

1,529

5,227

1,030

5,342

1,870

762

1,481

14

2,495

11,747

2,751

1,476

2,730

Cash and cash equivalentsincl. intercompany loans
Financial liabilities

3,412

4,998

Trade and other accounts
payable

9,835

6,544

2,337

Current liabilities

2,696

32,544

481

1,278

1

9,330

5,711

2,744

314

28,361

158

17,36946,924

15,993–8,389–25,704–6,373

21,220

9,620

1,267

3

8,651

2,733

8,651

2,733

Currency risks on
the balance sheet (gross)

21,416

61,475

11,566

Elimination same currency–9,986–44,774–6,779the balance sheet (net)

11,43016,701

4,787

Natural hedges–1,714–371–1,932

FX forward contracts–2,496–7,643

Net currency risk exposure

7,220

8,687

8,038

1,544

Currency risks on
8,038

1,544

8,980
–311

–260

–478

–60

–2,140–3,965–862–1,423–13,862–6,042–4,214

–743

715

4,073

682

7,246

7,098

3,100

4,377

1,990

The currency risk on the balance sheet (gross) is equal to the sum of the value of all positions in the balance sheet that are held in adifferent currency than the functional currency of a company. Such positions contain both group-internal as well as external amounts.
In a first step, all of those risks are added up because a currency risk can arise on the debit as well as on the credit side of the balance
sheet. The total is then disclosed as currency risk on the balance sheet (gross). The risk of each currency group is translated into CHF
at the closing rate and added together for total Group values. “Elimination same currency” results from offsetting short positions andlong positions of currency risks which exist in the same foreign currency, however different from the functional currency, and which
are presented in the same group entity. Natural hedges result from netting out currency risks among all Group entities. The amount disclosed under “FX forward contracts” (foreign currency forward contracts) corresponds to the amount actually h­ edged and translated
into CHF. Changes in the valuation of fair value hedges are recognised in the financing result (see note 7.5). The table only contains thematerial foreign currency risks. All others are regarded as immaterial in both years.
Net investments in foreign subsidiaries are long-term investments. Such investments are exposed to currency fluctuations, because they
are held in a currency other than the Group’s functional currency. From a macroeconomic and long-term perspective, the currency
exchange effects should be neutralised by the inflation rate at the subsidiaries’ domiciles. For this reason, and also due to the costs
incurred in connection with the respective derivative instruments, the Group does not hedge such risks.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

90

Foreign currency forward contracts
The Group regularly prepares a rolling forecast of foreign currency cash flows. 0–50 % of such budgeted, future foreign currency flows
may be hedged through forward contracts. At the end of the year under review, there were no open cash flow hedges held by the Group.
The notional amount corresponds to the hedged balance sheet risk, translated into CHF. With derivative financial instruments, theGroup normally hedges 50–100 % of its net currency risks on the balance sheet.
The following table shows the contractual and fair values of the foreign currency forward contracts held by the Group:
31.12.2016

in thousands CHF
Hedgedcurrency

31.12.2015

Sell / buy

Maturity

Notional
amount in CHF

USD

CHF / USD

Feb.17747–25

USD / CAD

980

–63

USD

EUR / USD

Feb.17573

25

USD / CHF

632

–30

EUR / USD

1,764

73

SGD / EUR

879

–19

USD
SGD

Fair value

Feb.17
SGD / EUR

Feb.17

748

1

SGD

SGD / CHF

Feb.17

2,574

34

EUR

USD / EUR

Feb.17EUR

GBP / EUR

Feb.17

1,235

–54

EUR

EUR / BRL

Feb.17520

JPY

JPY / EUR

Feb.17862

JPY

JPY / SGD

Feb.17CNY

CNY / EUR

Feb.17CNY

CNY / CHF

Feb.17CHF

EUR / CHF

CHF

CNY / CHF

Sell / buy

Notional
amount in CHF

Fair value

SGD / CHF

2,717

–76

USD / EUR

2,665

–87

–24

BRL / EUR

631

–33

68

JPY / EUR

743

–25

643

50

JPY / SGD

617

–9

1,414

–8

CNY / EUR

1,433

–26

CNY / CHF

905

–24

Feb.17

7,081

78

EUR / CHF

12,957–91

Feb.17

562

3

GBP

GBP / EUR

1,888

8

CZK

EUR / CZK325

USD / BRL

468

BRL
ZAR

EUR / ZAR

Feb.17

741

–53

CAD

USD / CAD

Feb.17

820

–21

–80

Total FX forward
contracts

74

–482

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

91

Sensitivity analysis of currency risk exposure
As per year-end, a sensitivity analysis was carried out with respect to financial instruments. The sensitivity analysis calculates the effectof FOREX–changes on the major currency pairs within the Group. These risks particularly result from differences between the currency
used at the production site and the currency used for invoicing the customer. Assumed currency fluctuations would have the following
effects on the foreign currency positions in the balance sheet:
31.12.2016

in thousands CHF
Currency pairFinancial assets

EUR
vs. CHF

CAD
vs. USD

509

1,448

4

646

67

Trade and other receivables
Cash and cash equiv. incl. IC-loans

CHF
vs. USD

20,84431.12.2015
EUR
vs. CHF

CHF
vs. USDCAD
vs. USD

525

1,673

2

752

75
11,511

Financial liabilities
Trade and other payables

2,981

Current liabilities

32,544Gross exposure per currency pair

56,436

Offsetting risks
FX forward contracts
Net FX exposure per currency pair
Currency change in %

814

1,901

606

28,362513

2,908

41,849527

3,031–40,822345–1,627–7,081–747–820–22,335573–1,213–12,957

–632

8,533

111

461

–980

6,557

468

838

3

3

3

12

5

14

256

3

14

787

23

117

Income tax expense at 20.73 %

–53

–1

–3

–163

–5

–24

Net FX exposure after income taxes

203

2

11

624

18

93

Effect on the result (+ / –)As in the current risk analysis, the net risks for currency pairs are summed up. The amount disclosed under the line item “Offsetting ofrisks” is the result obtained after netting any contradictory risks. The amount disclosed in the line item “FX forward contracts” is equal
to the total hedged currency risks of a currency pair. It is also deducted from the gross risk since its deviation is linear with respect tocurrency fluctuations. Income taxes are calculated in line with the rate levied for companies taxed at the standard rate in Switzerland(see note 7.6).

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

92

Interest rate risks
As per balance sheet date, the Group had net financial assets of CHF 2.9 million (2015: CHF 1.7 million, see ­also note 6.12). Financial
assets amount to CHF 3.1 million (2015: CHF 1.9 million), CHF 0.6 million (2015: CHF 0.7 million) of which are not interest-bearing.
There are financial liabilities of CHF 0.2 million (2015: CHF 0.2 million). The portion of not interest-­bearing financial liabilities was
immaterial in both years under review.
The following table divides interest-bearing assets and liabilities into fixed and variable components. Furthermore, it shows non-interest-bearing positions within financial assets and liabilities. A change in the interest rate would have had no effect on equity because
the Group ­currently does not hold any cash flow hedges to hedge currency risks and because there are no assets held for sale at a fixedinterest rate. The Group ­regularly monitors its interest rate risks and reserves the right to hedge such risks in future.
31.12.2016

in thousands CHF
Nom. int. rate in % Book values

Basis points
+100

–100

31.12.2015
Nom. int. rate in % Book values
00

0–0.73195

0–5.75

1,055

–

690

Basis points
+100

–100

11

–11

11

–11

11

–11

11

–11

FINANCIAL ASSETS
0.00–12.00

1,883

Variable interest rate

0–6.50627

Non-interest bearing–

604

Fixed interest rate

Total deposits

3,114

6
6

–6
–6

1,940

Total loans
Cash on hand, bank and postal accounts

35,754

Trade and other receivables

98,92330,28976,359Total other financial assets

134,677

106,648

Total financial assets

137,7916–6

108,588

FINANCIAL LIABILITIES
Total bank loans
Fixed interest rate

3.6

8

Non-interest bearing

176

183

Total other loans

176

191

Bank overdrafts

1

1

Trade and other accounts payable

41,316

39,767

Total trade and other accounts payable

41,31739,768

Total financial liabilities

41,49339,959Net financial liabilities

96,2986–6

68,629 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

93

Sensitivity analysis of interest risks
Interest sensitivity is only calculated on interest-bearing items of the balance sheet. No effect is calculated on items bearing interest at­a fixed rate. As per the above analysis, the Group’s annual result would have changed slightly by CHF 0.01 million in the event of a one
percentage point increase or decrease in the interest rate. In the previous year, an increase in the interest rate of one percentage point
would have changed the Group’s result slightly by CHF 0.01 million. For certain interest-bearing positions, the interest rate is already­lower than one percent. In these cases, calculations were only performed for interest rate reductions of no more than the interest rates
concerned.
Liquidity risk
The Group performs comprehensive liquidity planning on a quarterly basis. The Group holds liquidity reserves in the form of committed and uncommitted credit lines in order to satisfy unexpected and extraordinary liquidity requirements.
Credit facilities and debt covenants
The amount of unused credit facilities as per end of the reporting year amounted to CHF 78.6 million (­ 2015: CHF 78.5 million).
In the year under review, the committed credit lines in the amount of CHF 40.0 million which were agreed upon in 2015 were extended
with the same conditions for another three-year period. They safeguard funding of the future investment programme and generally serve
to finance the business. The Group has always complied with the agreed debt covenants, which are as follows:
EBITDANet debt
EquityNet interest costs = min. 4.0
EBITDA = max. 3.0
total assets = min. 35 %The maturity structure of the financial liabilities is disclosed in note 6.12 (see “Maturities of financial liabilities”).

6.10

Information on shareholders’ equity

Reconciliation from total shares issued to outstanding shares
2016

2015

854,000

854,000

Own shares held by the Group as per 1.1.

2,985

4,170

Purchase of own shares

2,212

1,360

Sale of own shares–1,167–502

Granting of shares related to bonus plan

–1,589–2,043Own shares held by the Group as per 31.12.

2,441

2,985

thereof unreserved

2,441

2,985

851,559

851,015

Shares issued at a par value CHF 10.00 each (previous year: CHF 10.00)

Shares outstanding at 31.12.

* The sales of own shares comprises 202 shares, which were ceased in the context of the acquisition of the business segment of Ortner GmbH.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

94

6.11 Earnings per shareNon-diluted earnings per share
The non-diluted earnings per share in 2016 amount to CHF 42.57 (2015: CHF 34.51). The calculation is based on the profit ­attributable
to the shareholders of the parent company, divided by the weighted average of shares outstanding.
2016

2015

Result attributable to the shareholders (in thousands CHF)

36,21529,303

Shares outstanding as per of 1.1.

851,015

849,830

Effect of the purchase of own shares

–17

–63

Effect of the sale / granting of own shares

–364

–612

Weighted average of shares outstanding

850,634

849,155

Non-diluted earnings per share (in CHF)

42.57

34.51

Effect of the issue of shares under option plans

Diluted earnings per share
The diluted earnings per share in 2016 amount to CHF 42.57 (2015: CHF 34.51). They are calculated by adjusting the weighted average
number of ordinary shares outstanding to include all dilutive potential ordinary shares.
There were no dilutive effects in 2016 or 2015.
2016

2015

Result attributable to the shareholders (in thousands CHF)

36,21529,303Weighted average of shares outstanding (diluted)

850,634

849,155

42.57

34.51

31.12.2016

31.12.2015

Diluted earnings per share (in CHF)

6.12 Financial liabilities
Details of current and non-current financial liabilities
in thousands CHF

Bank overdrafts
Other loans

1

1

176

182

Finance leases

106

113

Total current financial liabilities

283

296

Other loans

8

Total non-current financial liabilities

8

Total financial liabilities

283

304

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

95

Ratio of net financial liabilities to equity
31.12.2016

in thousands CHF

Total financial liabilities

31.12.2015

283

304

./. Cash and cash equivalents–38,264–31,654

Net financial liabilities (-net cash)–37,981–31,350

Equity233,085

207,646n/a

n/a

Net financial debt in % of the equity

Loan structure
31.12.2016

in thousands CHF
Currency

Other loans

DKK

Weighted av.
Interest dueinterest rate fixed / variable0%F

Year ofmaturity

Face
value

2017

Total loans

31.12.2015

Carrying
amountFace
value

Carrying
amount

176

176

190

190

176

176

190

190

Maturities of financial liabilities
The financial liabilities as per 31 December 2016 are due as follows:in thousands CHF

Other loans
Bank overdrafts

Book value

Face value(undiscounted)

176

176

1

1

within6 months

within
6–12 months

within
1–2 years

within
2–5 years

176
1

Trade / other accounts payable*

41,31641,31641,316

Total financial liabilities

41,49341,49341,317176* A maturity analysis is not readily available. Based on past experience, it can be reliably assumed that the full amount is due within less than 6 months.

The financial liabilities as per 31 December 2015 were due as follows:in thousands CHF

Other loans
Bank overdrafts

Book value

Face value(undiscounted)

190

190

1

1

within6 months

within
6–12 months

within
1–2 years

182

8

182

8

1

Trade / other accounts payable*

39,767

41,97041,970Total financial liabilities

39,95842,161

41,971* A maturity analysis is not readily available. Based on past experience, it can be reliably assumed that the full amount is due within less than 6 months.

within
2–5 years

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

96

6.13 Leasing liabilities
Finance leases
In the year under review, there were CHF 0.2 million in finance leases (2015: CHF 0.1 million), of which CHF 0.0 million (2015:
CHF 0.1 ­million), will become due in one to five years.
Operating leases
Liabilities from operating leases mainly relate to building rentals and will become due as follows:
31.12.2016

31.12.2015

within 1 year

2,348

2,149

between 1 and 5 years

5,124

4,154

in thousands CHF

over 5 years
Total operating leases

529

618

8,001

6,921

In both years under review, operating lease expenses do not include material amounts for contingent rent.

6.14 Provisions
Movements in provisions
Warranties

Total

Other provisions

in thousands CHF

2016

2015

2016

2015

2016

2015

At 1.1.

5,831

5,955

62

45

5,893

6,000

–8

–450

–3

–4

–11

–454

Provisions created

3,902

3,013

63

30

3,965

3,043

Provisions used

–2,269–1,595–21–690–1,092

6,766

5,831

Currency translation adjustments

Provisions reversed–2,290–1,595–9–690–1,101

62

6,867

5,893

Acquired provisions
At 31.12.

101

Warranty provisions
The Group companies normally grant a 24-month warranty. The warranty provision is recognised based on past experience as well as
on specific projects. The warranty provision in 2016 corresponds to roughly 1.7 % ­(2015: 1.6 %) of net sales.
Other provisions
The other provisions mainly include provisions for litigation. In connection with the restatement related to IAS 19, pension liabilities
were reclassified from other provisions to a separate balance sheet line.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

97

6.15 Pension costs
General information on the pension plans of the GroupThe pension costs for 2016 amounted to CHF 3.1 million (2015: CHF 1.8 million). Such costs consist of e­ mployer contributions relating
to the defined contribution plans and pension costs relating to the defined benefit plans.
The pension plans in Switzerland and France are regarded as defined benefits plans in line with IAS 19. 224 employees participated in
the defined benefit plans in 2016 and 216 participated in 2015. The Swiss plan is outsourced to a collective foundation whereas the planin France is outsourced to an insurance company. For the defined benefit plans the pension costs in each period are calculated on thebasis of an actuarial valuation. The deficit or excess of the fair value of plan assets over the present value of the defined benefit obligationis recognised as a liability or an asset in the balance sheet. Actuarial gains and losses arise mainly from changes in actuarial assumptions anddifferences between actuarial assumptions and actual developments. They are recognised in the statement of comprehensive income.
It can be assumed that the assets of both plans do not include Interroll shares.
Composition of pension costsin thousands CHF

2016

2015

Costs of the defined contribution plans

1,973

1,389

Current service costs, net

1,028

253

Administrative expenses

54

54Interest costs

64

70

1,146

377

Costs of the defined benefit plans
Effects of changes in demographic assumptions

216

Effects of changes in financial assumptions

759

523

Experience-based adjustments

522

137

(Return) on plan assets (excl. interest income)

–165

180

Remeasurements included in other income

1,332

840

Pension plan costs

4,451

2,606

The expected contributions of the employer will not change materially in future years provided the number of insured employees
remains stable.

Amounts recognised in the statement of financial position
2016

2015

Present value of defined benefit obligation–26,237–22,477

Fair value of plan assets

18,083

16,153Pension liability–8,154–6,324in thousands CHF, as per 31.12.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

98

Roll forward of the defined benefit obligation
2016

2015

–22,477–19,907–1,028–253

Interest costs

–235

–264

Contributions from employees

–440

–409

Benefits (funded) / paid, net–579–1,061in thousands CHF

Benefit obligation as per 1.1.
Current service costs, net

Benefits (funded) / paid, net from employer

12

1Translation difference

776

Remeasurements– Effects of changes in demographic assumptions–216– Effects of changes in financial assumptions–759– Effects of experience assumptions

–522

–137

–26,237–22,477

2016

2015

Benefit obligation as per 31.12.

–523

Roll forward of the present value of plan assets
in thousands CHF

Fair value of plan assets as per 1.1.

16,15314,141

Administrative expenses

–54

–54

Interest income

171

194

Employer contributions

630

591

Employee contributions

440

409

Benefits funded / (paid), net

579

1,061

Translation difference–1–9

Income of plan assets

165

–180

18,083

16,1532016

2015

18,083

16,153

Fair value of plan assets as per 31.12.

Investment categories
in thousands CHF

Qualified insurance policies** These assets are fully invested in qualified insurance policies offered by the AXA collective foundation.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

99

Reconciliation of net defined benefit liability (asset)
2016

2015

Net defined benefit liability as per 1.1.

–6,324–5,766

Defined benefit costs included in P / L–1,146–377

Total remeasurements included in OCI–1,332–840

Employer contributions

642

591

Translation difference

668–8,154–6,3242016

2015

Discount rate

0.7

1.0

Future salary increases

1.5

1.5

Expected benefit increases

0.0

0.0

Fluctuation rate

10.0

10.0

Mortality table

BVG 2015

BVG 2010

in thousands CHF

Net defined benefit liability as per 31.12.

Actuarial assumptionsin %Sensitivities
Discount rates and future salary increases are considered essential actuarial assumptions. The following effects are expected:
Discount rate

0.73 %+0.25 %

–0.25 %

Benefit obligation–26,237–24,838–27,530

Rate of salary increase

1.50 %+0.25 %

-0.25 %

Benefit obligation–26,237–26,369–26,106

Sensitivities are based on likely possible changes as per end of 2016.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

100

6.16 Trade and other accounts payablein thousands CHF

31.12.2016

31.12.2015

Trade accounts payable to third parties

11,365

10,896

Total trade accounts payable

11,365

10,896

Other liabilities

18,566

14,342

Advances received from customers

11,385

14,529Total other accounts payable

29,951

28,871

Accrued personnel expenses

9,602

8,835

Accrued interest

5

3

Other accrued expenses

8,494

7,894

Total accrued expenses

18,101

16,732

Total trade and other accounts payable

59,41756,499Advances received from customers mainly relate to larger projects within the product groups Conveyors & Sorters and Pallet &­Carton Flow. Other liabilities include VAT and social security-related liabilities. Accrued personnel expenses relate to accrued paid
time off and bonuses.

NOTES TO THE CONSOLIDATED INCOME STATEMENT

101

7

NOTES TO THE CONSOLIDATED INCOME STATEMENT

7.1

Personnel expenses

Details on personnel expenses and number of employees
2016

2015

Wages and salaries

93,63587,575Social security costs

13,68013,560Pension costs (see note 6.15)

3,119

1,766

Other personnel-related costs

2,434

1,226

Equity-based personnel expenses for management personnel

1,238

972

114,106

105,099

Thereof production-related personnel expenses

54,581

47,923

Average number of employees

1,892

1,820

in thousands CHF

Total personnel expenses

In the period under review, 2,289 own shares (2015: 2,043) were granted to management members as part of their bonus scheme. In theyear under review, 2,289 shares (2015: 2,043) have been blocked from sale for a period of four to eight years as of the grant date. The
shares were measured at market value on the date granted.

7.2 Research and development expenditures
These expenses are mostly incurred to further develop and complete the product ranges of the segments. They are included in p
­ ersonnel
and other operational expenses as well as in depreciation on fixed tangible assets. No expenses have been capitalised as the preconditions
stated in IAS 38 are not met cumulatively.
The Group incurred the following expenses for research and development during the years under review:in thousands CHF

2016

2015

Research and development (R&D) expenditures

7,480

8,465

R&D in % of net sales

1.86

2.35

NOTES TO THE CONSOLIDATED INCOME STATEMENT

102

7.3

Other operating expenses
2016

2015

Production-related expenses

9,321

9,302

Freight

10,158

9,132

Office, administration and IT services

7,358

6,196

Building costs

5,451

4,937

Travelling and transportation

5,740

5,809

Marketing

4,551

3,786

Consultancy, auditing and insurance

5,362

3,778

Provisions and allowances, net

3,315

2,790

Variable sales costs

5,063

2,618

Non-income taxes

2,048

2,065

Other expenses and services

4,813

3,644

in thousands CHF

Realised effects on cash flow hedges
Total other operating expenses

67
63,24754,057in thousands CHF

2016

2015

Income from freight and packing

7.4

Other operating income

1,851

1,603

Income from services

261

263

Government grants received

88

14

Loss / (gain) on disposal of tangible and intangible assets

28

453

2,228

2,358

2016

2015

Realised gains on cash flow hedges
Total other operating income

7.5

25

Financial resultin thousands CHF

Fair value changes of foreign currency forward contracts

567

Realised translation loss

–249

236

Realised translation expenses

–644

–908

Interest expenses

–20

–33

Financial expenses

–913

–138

Fair value changes of foreign currency forward contracts

511

Interest income

93

74

Financial income

604

74

Financial result, net

–309

–64

NOTES TO THE CONSOLIDATED INCOME STATEMENT

103

7.6

Income tax expense

Components of income tax expense
2016

2015

Income taxes relating to the current period

11,341

10,844

Income taxes relating to past periods, net

677

59

Current income tax expense

12,018

10,903Due to temporary differences–1,181–1,503in thousands CHF

Due to tax rate changes

–38

–34

Due to (recognition) / use of tax loss carryforwards

558

1,093

Adjustments to deferred tax assets
Other effects (including acquisition)
Deferred income tax expense / (income)
Total income tax expense

–40
–4

21

–665

–463

11,353

10,440

Taxes on capital are included in other operating expenses (see note 7.3).
Deferred tax liabilities of CHF 0.1 million (2015: CHF 0.2 million) have not been recognised for w­ ithholding and other taxes on theunremitted earnings. Such distributable earnings which are subject to withholding tax are normally left in the respective companies.

Reconciliation of effective tax rate
2016

2015

Result before income taxes

47,56839,743

Income tax expenses at the expected tax rate of 20.7 % (2015: 20.7 %)

9,861

8,239

in thousands CHF(Tax credits) / tax charges on prior-year results, net

677

59

2,339

2,273

Tax rate changes, net

–38

–34

(Non-taxable income) / non-tax deductible expenses, net

–249

710

–1,237–774

Effect of different tax rates applied to Group companies(Use of unrecognised tax losses) / effect of unrecognised tax losses on the current year’s result, net(Reversal)/ write-offs of deferred tax assets, net–32

Other effects
Effective (total) income tax expense–111,353

10,440The income tax expense analysis is based on the expected tax rate levied for companies taxed at the standard rate in Switzerland.

NOTES TO THE CONSOLIDATED INCOME STATEMENT

104

Tax effects on and expiry dates of losses carried forward
31.12.2016

in thousands CHF
Not capitalised

Capitalised

31.12.2015
Not capitalised

Capitalised

34

Expiry:
2017

31

29

2018

696

661

2019

536

509

2020

141

2021

857

2022 and later

9,232

unlimited

10,090Total

21,583591

Tax benefit

6,449

230

Thereof unrecognisable–6,449Deferred tax assets from losses carried forward

591

8,292

1,693

10,92020,413

1,727

6,191

787

–6,191
230

787

A tax effect of CHF 0.1 million resulted from new tax losses carried forward of CHF 0.7 million in 2016 (2015: new tax losses of CHF 4.0
million with a tax effect of CHF 1.2 million, none of which was capitalised). During the year under review no tax assets were capitalised.
Deferred tax assets on unused tax losses carried forward and based on temporary differences are capitalised in case it is probable thatsuch assets can be offset against future taxable profits. Due to the probability of offsetting current tax losses carried forward against
future profits in various subsidiaries, an amount of CHF 0.2 million has been capitalised in 2016 (2015: CHF 0.8 million). Based on
approved business plans, Interroll considers offsetting probable in future. The majority of non-capitalised deferred tax assets on losses
carried forward concern US-based subsidiaries. The applicable tax rate for both years under review is 39 %.

NOTES TO THE CONSOLIDATED INCOME STATEMENT

105

Allocation of deferred tax assets / liabilities to balance sheet items
31.12.2016

in thousands CHF

Intangible assets
Property, plant and equipment

Deferredtax assets

Deferredtax liabilities

661
1,115

Financial assets
Inventory
Benefits of loss carryforwards

31.12.2015
Deferredtax assets

Deferredtax liabilities

1,491

799

1,644

2,811

1,117

2,482

800
1,909

192

230

649
1,291

394

787

Receivables

1,214

2,525

181

1,404

Total assets

5,129

7,819

4,175

6,573

Long-term debt

150

139

Provisions

3,494

1,842

2,371

2,506

Short-term debt

2,047

1,141

1,213

65

Other liabilities

139

Total liabilities

5,830

2,983

4,423

700
2,571

Offsetting–7,752–7,752–4,639–4,639Total net

3,207

3,050

3,959

4,505

Deferred tax assets and deferred tax liabilities are offset within and between companies belonging to the same taxable unit.

OTHER DISCLOSURES ON THE FINANCIAL STATEMENTS

106

8

OTHER DISCLOSURES ON THE FINANCIAL STATEMENTS

8.1 Contingent liabilities and other commitments
In 2016, the Interroll Group has committed to guarantees to third parties in the amount of CHF 0.2 million (2015: CHF 0.1 million).
These guarantees relate to customer orders. There are no further contingent liabilities in either of the years under review.

8.2

Related party transactions

Transactions with related parties
VolumeOutstanding liabilities

Category

2016

2015

31.12.2016

31.12.2015

Purchase of materials

a

251

310

30

22

IT Investments / IT Services

a

154

234

Other purchases

a

2

28

407

572

in thousands CHF

Total purchases

Volumein thousands CHF

Category

Sale of materials
Total services

a

2016

2015

1
30

23

Outstanding receivables

31.12.2016

31.12.2015

137

188

33

15

137

188

33

15

Definition of related parties
Interroll Group defines and categorises its related parties as follows:a) Shareholders of Interroll Holding Ltd. holding more than 3 % of the shareholder capital.
b) Members of the Board of Directors and Group Management of Interroll Holding Ltd. This definition also applies to transactions withcompanies controlled by a member of the Board of Directors.

OTHER DISCLOSURES ON THE FINANCIAL STATEMENTS

107

Total remuneration of Board of Directors
Total remuneration of the Board of Directors of Interroll Holding Ltd. amounted to CHF 0.53 million (2015: 0.58 million) in 2016. The
detailed disclosures regarding the remuneration of and shares owned by the Board of Directors and Group Management as required by
Swiss law are included in the Remuneration Report.
Total remuneration of Group Managementin thousands CHF

2016

2015

Salaries incl. bonus

3,779

3,708

Post-employment benefits

612

566

Equity based remuneration

2,017

1,052

Total remuneration of Group Management

6,408

5,326

Loans were granted neither in the period under review nor in the previous year.
Detailed disclosures regarding the remuneration of and equities held by the Group Management in accordance with Swiss law (OR) can
be found in the Remuneration Report.

8.3 Subsequent events
The consolidated financial statements for the year 2016 were approved by the Board of Directors on 10 March 2017 and are subject tofurther approval by the Annual General Meeting of Shareholders on 12 May 2017.
No event has occurred between 31 December 2016 and 10 March 2017 which would require adjustment to the carrying amountof the Group’s assets and liabilities as per 31 December 2016, or would require disclosure in accordance with IAS 10.

OTHER DISCLOSURES ON THE FINANCIAL STATEMENTS

108

8.4

Scope of consolidation

Name

Location (country)

Function

Owner

Share capital in 1,000 Ownership in %Interroll Holding AG

Sant’Antonino (CH)

F

0

CHF

Interroll SA

Sant’Antonino (CH)

P

HD

CHF

100.0

100 %

Interroll (Schweiz) AG

Sant’Antonino (CH)

F

HD

CHF

5,000.0

100 %Interroll Management AG

Sant’Antonino (CH)

F

HD

CHF

100.0

100 %

Interroll Fördertechnik GmbH

Wermelskirchen (DE)

S

DP

EUR

25.6

100 %

Interroll Engineering GmbH

Wermelskirchen (DE)

P

DHO

EUR

1,662.2

100 %Interroll Automation GmbHSinsheim (DE)

P

DHO

EUR

2,000.0

100 %Interroll Holding GmbH

Wermelskirchen (DE)

F

HD

EUR

500.0

100 %

Interroll Kronau GmbH

Kronau (DE)

P

DHO

EUR

25.0

100 %

Interroll Trommelmotoren GmbH

Baal/Hückelhoven (DE)

P

DHO

EUR

77.0

100 %

Interroll SAS

Saint-Pol-de-Léon (FR)

F

HDE

EUR

2,808.0

100 %Interroll SAS

La Roche sur Yon (FR)

P

F

EUR

2,660.0

100 %Interroll SAS

Saint-Pol-de-Léon (FR)

S

F

EUR

61.0

100 %

Interroll Nordic AS

Hvidovre (DK)

S

DKP

EUR

67.1

100 %

Interroll Joki AS

Hvidovre (DK)

P

HD

EUR

2,013.8

100 %Interroll Ltd.

Kettering (GB)

S

HDE

GBP

0.0

100 %

Interroll Engineering Ltd.

Corby (GB)

D

HDE

GBP

0.1

100 %

Interroll Italia S.r.l

Rho/Cornaredo (IT)

S

HDE

EUR

10.0

100 %

Interroll España SA

Cerdanyola del Vallès (ES) S

HDE/TI

EUR

600.0

100 %

Interroll CZ sro.

Breclav (CZ)

S

HDE

CZK

1,000.0

100 %Interroll Europe BV

Emmeloord (NL)

F

HD

EUR

18.2

100 %

Interroll Polska Sp.z.o.o.

Warsaw (PL)

S

HD

PLZ

100.0

100 %

Interroll Lojistik Sistemleri

Istanbul (TR)

S

HD/PR

TRY

1,000.0

100 %Interroll SA (Proprietary) Ltd.

Johannesburg (ZA)

S

HD

ZAR

0.3

100 %

Interroll Corporation

Wilmington, NC (US)

P/S

IAU

USD

65.0

100 %

Interroll USA Holding, LLC

Wilmington, DE (US)

F

HD

USD

0.1

100 %

Interroll Engineering West, Inc.

Cañon City, CO (US)

P/S

IAU

USD

0.0

100 %

Interroll Atlanta, LLC

Hiram/Atlanta, GA (US)

P/S

IAU

USD

0.0

100 %

Interroll Real Estate, LLC

Wilmington, DE (US)

F

IAU

USD

0.0

100 %

Interroll Canada Ltd.

Aurora (CA)

P/S

HD

CAD

1,720.1

100 %Interroll Logistica Ltda

Jaguariuna/S. Paolo (BR)

P/S

HD/E

BRL

9,049.7

100 %Interroll Mexico S. de R.L. de C.V.

Mexico City (MX)

S

HD/PR

MXN

1,720.1

100 %Switzerland
854.0

EMEA (without Switzerland)

Americas

OTHER DISCLOSURES ON THE FINANCIAL STATEMENTS

109

Name

Location (country)

Function

Owner

Share capital in 1,000 Ownership in %Interroll (Asia) Pte. Ltd.

Singapore (SG)

S

HDE

SGD

18,625.0

100 %Interroll Suzhou Co. Ltd.

Suzhou (CN)

P/S

SGP

CNY

42,490.2

100 %(Shanghai) Co. Ltd.

Shanghai (CN)

S

SGP

CNY

3,066.5

100 %Interroll Shenzhen Co. Ltd.

Shenzhen (CN)

P

SGP

CNY

5,770.0

100 %Portec Asia Limited

Hong Kong (CN)

S

SGP

HKD

700.0

100 %

Interroll Australia Pty. Ltd.

Victoria (AU)

S

HD

AUD

51.2

100 %

Interroll (Thailand) Co. Ltd.

Panthong (TH)P/S

SGP/HD

THB

100,000.0

100 %Interroll Japan Co. Ltd.

Tokyo (JP)

S

HD

JPY

10,000.0

100 %Interroll (Korea) Corporation

Seoul (KR)P/S

SGP/HDKRW 1,500,000.0

100 %Asia-PacificInterroll Holding Management

Function: P = Production, S = Sales, F = Finance, D = Dormant
Owner: HD = Interroll Holding Ltd., HDE = Interroll Europe BV, TI = Interroll SA, DHO = Interroll Holding GmbH, DKP = Interroll Joki AS, F = Interroll SAS, Saint-Polde-Léon, E = Interroll España SA, SGP = Interroll (Asia) Pte. Ltd., Singapore, IAU = Interroll USA Holding LLC, PR = Interroll (Schweiz) AG

Movements within the scope of consolidation in 2016
During the year under review Interroll Mexico S. de R.L. de C.V. (MX) was founded in Mexico City. Interroll GmbH (DE) in Wermels­
kirchen moved its registered office to Kronau and now operates under the name of Interroll Kronau GmbH (DE).
Movements within the scope of consolidation in 2015
During the previous year, the share capital of Interroll Holding AG was reduced from CHF 8.5 million to CHF 0.854 million. Portec
International Ltd. in Leicester (UK) was liquidated. Portec Group International, Inc. in Cañon City (US) was merged with into Interroll
Engineering West, Inc. Furthermore, Interroll Dynamic, Inc. (US) changed its name to Interroll Real Estate, Inc. and moved its registered office to Wilmington, DE (US).

REPORT OF THE STATUTORY AUDITOR110

REPORT OF THE STATUTORY AUDITOR TO THE BOARD OF DIRECTORSOF INTERROLL HOLDING AG, SANT’ANTONINO
Report on the audit of the consolidated financial statements
OpinionWe have audited the consolidated financial statements of Interroll Holding AG and its subsidiaries (the Group),
which comprise the consolidated statement of financial position as at 31 December 2016 and the consolidated
income statement, consolidated statement of comprehensive income, consolidated statement of cash flows andconsolidated statement of changes in equity for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements (pages 64 to 109) give a true and fair viewof the consolidated financial position of the Group as at 31 December 2016 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRS) and comply with Swiss law.
Basis for opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss
Auditing Standards. Our responsibilities under those provisions and standards are further described in the“Auditor’s responsibilities for the audit of the consolidated financial statements” section of our report.
We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the
Swiss audit profession, as well as the IESBA Code of Ethics for Professional Accountants, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.
Our audit approach
Overall materiality: CHF 2,378,000
We concluded full scope audit work at ten reporting units in seven countries.
In addition, specified audit procedures were performed on a further nine group companies in six countries.
Our audit scope addressed 71 % of the sales revenue and 80 % of the assets of the Group.
As a key audit matter, the following area of focus was identified: Impairment testing of goodwill

REPORT OF THE STATUTORY AUDITOR

111

Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the
consolidated financial statements. In particular, we considered where subjective judgements were made; forexample, in respect of significant accounting estimates that involved making assumptions and considering
future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management
override of internal controls, including among other matters consideration of whether there was evidence ofbias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on
the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.
Our instructions ensured an appropriate and a consistent audit was performed by the component auditors.
In addition, we were involved in the audits of the component auditors by means of various telephone calls,
written correspondence and the inspection of reports.
Further, as the Group auditor, we performed on site at the Company’s headquarters the audits of the consolidation, of the disclosures in the consolidated financial statements and of the more complex elements. This
included, among others, the annual impairment testing of goodwill.
Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide
reasonable assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the consolidated financial statements as a whole as set out in the table below.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature,timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually andin aggregate, on the consolidated financial statements as a whole.

Overall Group materiality
How we determined it
Rationale for the materiality­benchmark applied

CHF 2,378,000
5 % of the result before income taxes
We chose the result before income taxes as the benchmark because,in our view, it is the benchmark against which the performance of
the Group is most commonly measured,

We agreed with the Audit Committee that we would report to them misstatements above CHF 118,000 identified during our audit as well as any misstatements below that amount which, in our view, warranted reportingfor qualitative reasons.

REPORT OF THE STATUTORY AUDITOR

112

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our auditof the consolidated financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Impairment testing of goodwill
Key audit matter

How our audit addressed the key audit matter

Intangible assets included goodwill in theamount of CHF 17.3 million as at
31 December 2016, representing around
5 % of total assets. We consider goodwill
to be a key audit matter because of the­significant scope for judgement involved
in determining the parameters of theimpairment test in the following areas:

Group Management performs impairment tests and submits
them to the Audit Committee for approval. The budget
approved by the Board of Directors forms the basis for this.
Revenues for the forecast period are estimated on the basisof historical experience and expectations of market growth.
The weighted cost of capital is derived from observable market data inputs and specific factors pertaining to the Group.

–– Assumptions concerning expected revenue
growth and EBITDA during the forecast
period.
–– Assumptions used in deriving the weighted
cost of capital (discount rate).
Management’s assumptions used in impairment testing are disclosed in note 6.3 to theconsolidated statement of financial position.

We checked the forecasted revenues and the weighted costof capital applied as follows.
We compared the revenues of the year under review withthe forecasts prepared in the prior year in order to verify theaccuracy of the forecasts.
We reconciled the forecasted revenues used for the
impairment test with the budget approved by the Board of
Directors.
We compared the assumptions for the weighted cost of­capital with independent market data, where possible.
To this end, we involved our own valuation experts from
PwC’s Corporate Finance unit.
Further, we tested the sensitivity analyses of the key assumptions mentioned above. These analyses allowed us to assess
any potential impairment of goodwill.
We obtained adequate assurance through our audit­procedures and we were able to corroborate the assumptions
used by Group Management.

REPORT OF THE STATUTORY AUDITOR

113

Other information in the annual report
The Board of Directors is responsible for the other information in the annual report. The other information
comprises all information included in the annual report, but does not include the consolidated financial statements, the standalone financial statements and the remuneration report of Interroll Holding AG and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in the annual report
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation in the annual report and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a trueand fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Boardof Directors determines is necessary to enable the preparation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors intends either to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with Swiss law, ISAs and Swiss Auditing Standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located at thewebsite of EXPERTsuisse: http://expertsuisse.ch/en/audit-report-for-public-companies. This description forms
part of our auditor’s report.

REPORT OF THE STATUTORY AUDITOR

114

Report on other legal and regulatory requirements
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that aninternal 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.

PricewaterhouseCoopers AG

Patrick Balkanyi
Audit expert
Auditor in charge

Zürich, 13 March 2017

Nicole Bertschinger
Audit expert

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

115

FINANCIALSTATEMENTS
OF INTERROLLHOLDING LTD.

1

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

116

2

GENERAL INFORMATION ON THE FINANCIAL STATEMENTS

118

3

NOTES TO THE FINANCIAL STATEMENTS

119

4

OTHER DISCLOSURES ACCORDING TO SWISS LAW

121

5PROPOSED APPROPRIATION OF AVAILABLE EARNINGS

121

6REPORT OF THE STATUTORY AUDITOR

122

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

116

1

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

1.1

Balance sheet

in thousands CHF

see notes*

31.12.2016

31.12.2015

ASSETSCash and cash equivalents

1,772

592

Accounts receivable from subsidiaries

1,543

1,144

785

126

Other receivables from third parties
Loans to subsidiaries

39,2320.0

Total current assets

43,332

1,862

106,916

106,957

Investments
Loans to subsidiaries

5,335

39,757

Total non-current assets

112,251

146,714

Total assets

155,583

148,576

Trade and other accounts payable from subsidiaries

258

337

Trade and other accounts payable from third parties

25

43

3.3

EQUITY AND LIABILITIESLoans from subsidiaries

3.4

547

Accrued expenses

1,948

1,887

Total current liabilities

2,778

2,267

854

854

Total non-current liabilities
Share capital

3.5

Legal reserve– Share premium– Other legal reserve– Available earnings
Own shares

8

8

5,209

5,209

148,648

141,861–1,914–1,623

Total shareholder’s equity

152,805

146,309

Total liabilities and equity

155,583

148,576* See notes to the financial statements.

3.1

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

117

1.2

Income statement

2016

2015

Investment income

14,88237,534

Royalty income

3,944

3,524

Other operating income

2,434

1,333

Financial income

2,256

1,431

Total income

23,51643,822in thousands CHF

Administration expenses

–466

–468

Personnel expenses*–3,031–1,886

Other operating expenses–1,701–1,510Financial expenses–1,279–2,468

Total expenses–6,477–6,332

Result before income taxes

17,03937,490

Direct taxes–21

Result17,01837,490* CHF 0.7 million for bonuses were accrued with Interroll Holding AG in the reporting year. In the previous year, bonuses were accrued with Interroll Management AG.

1.3

Statement of changes in equity

in thousands CHF

Share capital

Reserves from
capital contrib.

As of 1.1.2015

8,540

8

Legal reserve Available earnings

5,209

Result 2015
Distribution from face value reduction

104,371

Total–2,008116,120
37,49037,490–7,686–7,686

Change of balance for own shares
Per 31.12.2015

Own shares

854

8

5,209

141,861

385

385–1,623

146,309

Result 2016

17,01817,018Dividend payment, net–10,231–10,231

Change of balance for own shares
Per 31.12.2016

854

8

5,209

148,648

–291

–291

–1,914

152,805

GENERAL INFORMATION ON THE FINANCIAL STATEMENTS

118

2

GENERAL INFORMATION ON THE FINANCIAL STATEMENTS

2.1

Accounting policies

Accounting law
These financial statements were prepared according to the provisions of the Swiss Law on Accounting and Financial Reporting (32ndtitle of the Swiss Code of Obligations).
Current / non-current distinction
Current assets are assets expected to be realised or consumed in the normal course of the Company’s ­operating cycle or assets held for
trading purposes. All other assets are classified as non-current assets.
Current liabilities are liabilities expected to be settled by use of cash generated in the normal course of the Company’s operating cycle or
liabilities due within one year from the reporting date. All other liabilities are classified as non-current liabilities.
Foreign currency translation
Transactions in foreign currencies are recorded using exchange rates prevailing at the time of the transaction. Gains or losses arising on
settlement of these transactions are included in the current year’s income under financial income and financial expenses respectively.
Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rates prevailing at the balance sheet
date. Any gains or losses resulting from this translation are also included in the current year’s income, except for realised gains which
are deferred.
Foregoing a cash flow statement and additional disclosures in the notes
As Holding Ltd has prepared its consolidated financial statements in accordance with a recognised accounting standard (IFRS), it
has decided to forego presenting additional information on interest-bearing liabilities and audit fees in the notes as well as a cash flow
statement in accordance with the law.

2.2

Principles of valuation

Cash and cash equivalents, accounts receivable and payable
Cash and cash equivalents are stated at nominal value. Accounts receivable are stated at nominal value less any valuation adjustment for
credit risks. Accounts payable are stated at nominal value. Accounts receivable from Group companies arise from services provided byInterroll Holding Ltd. and related interest and ­royalties billed. These services are recognised on an accrual basis.
Own shares
Own shares are stated at the lower of cost and fair value.
Loans
Non-current loans receivable are stated at nominal value less any valuation adjustments deemed necessary to reflect the credit risk.
Non-current loans payable are stated at nominal value.
Investments
Investments are stated at cost less any valuation adjustments deemed necessary to recognise a decline other than temporary in value(impairment). Additional provisions are recognised for general investment risks.
Accrued expenses
Accrued expenses primarily relate to interest due on loans payable stated at nominal value and to accruals for the remuneration of theBoard of Directors.

NOTES TO THE FINANCIAL STATEMENTS

119

3

NOTES TO THE FINANCIAL STATEMENTS

3.1

Own shares

Shares sold, acquired and held in the periods under review
In the year under review, the Company sold 1,167 own shares at an average price of CHF 1,058.68 (2015: the Company sold 502 own
shares at an average price of CHF 800.44). In the year under review, the Company acquired 2,212 shares (2015: 1,360 shares). At­year-end 2016, the Company held 2,441 own shares at a book value of CHF 1.9 million (2015: 2,985 own shares at a book value of CHF
1.6 million).
Allocation of own shares to employees
2,289 shares (2015: 2,043 shares) at a carrying value of CHF 2.1 million (2015: CHF 1.0 million) were allocated to employees.

3.2 Investments
An overview of the material investments either directly or indirectly held by Interroll Holding Ltd. can be found in the notes to theconsolidated statements of the Interroll Group (see 8.4 “Scope of consolidation”).

3.3

Loans to subsidiaries

The interest rates used were the following:

lowesthighestIn 2016

0.00%

3.25%

In 2015

0.00%

3.50%

The loans to subsidiaries are normally redeemable with a notification period of three months. As of year-end, the total outstanding
group loans amounted to CHF 44.6 million (2015: CHF 39.8 million). An impairment has been recognised for loans amounting to CHF
2.8 million (2015: CHF 2.8 million).
In 2016, CHF 39.2 million were reported as short-term loans. In 2015 no short-term loans were reported.

3.4

Loans from subsidiaries

The following interest rates were used:lowesthighestIn 2016

1.00%

2.75%

In 2015

0.25%

0.25%

The loans due from subsidiaries are normally redeemable with a notification period of three months. As of year-end 2015 no Grouploans were outstanding.

NOTES TO THE FINANCIAL STATEMENTS

120

3.5

Shareholders’ equity

Composition of the share capital
As in the previous year, the share capital consists of 854,000 fully paid-in registered shares with a par value of CHF 1 per share. Eachshare entitles the holder to equal dividend and voting rights.
Significant shareholders (at least 3 % of the share capital)
The following table shows the number of shares held by the most significant shareholders as well as their participation in percent.
31.12.2016

31.12.2015

Number of shares

Participationin %Number of shares

Participationin %B. Ghisalberti, E. Moreschi and Family

109,21312.79

109,213

12.79

D. Specht and Family

76,135

8.92

82,3409.64

Allianz Group

50,084

5.86

50,084

5.86

Schroders PLC

43,833

5.13

43,833

5.13

Kempen Oranje Participaties N.V.

Shareholder/Shareholder group

43,554

5.10

43,554

5.10

Sarasin Investmentfonds AG**

40,1504.70

N. Axmann and Family (new Stiftung Erlebnispark)

0

0.00

39,017

4.57

Stiftung Erlebnispark Fördertechnik GmbH36,475

4.27

0

0,00

Swisscanto Fondsleitung AG

34,371

4.02

34,371

4.02

Various other shareholders

460,335

53.91

411,438

48.19

Total

854,000

100.00854,000

100.00*As per 31 December 2016 this shareholding was below 3 %.

3.6 Contingent liabilities
Interroll Holding Ltd. has issued a guarantee for an existing shared credit facility in the amount of CHF 42 million (2015:
CHF 42 million) in favour of Interroll (Schweiz) AG. The credit facility was not utilised on 31 December 2016.
In addition, Interroll Holding Ltd. issued letters of continuing financial support in favour of the following Group companies:
Country

Company

Germany

Interroll Automation GmbH, Sinsheim (DE)FranceInterroll S.A.S., La Roche sur Yon (FR)Switzerland

Interroll (Schweiz) AG, Sant’Antonino (CH)In favour of two customers in South Africa Interroll Holding AG granted retention guarantees in the total amount of CHF 0.3 million(2015: CHF 0.0 million).
Furthermore, Interroll Holding Ltd. carries joint liability with respect to the federal tax authorities for value added tax debts of all Swiss
subsidiaries.



OTHER DISCLOSURES ACCORDING TO SWISS LAW

121

4	OTHER DISCLOSURES ACCORDING TO SWISS LAW
4.1 Full-time equivalents
The annual average number of full-time equivalents for the reporting year, as well as the previous year is zero.
4.2 Remuneration of and shares held by the Board of Directors and the Group Management
The remuneration of the members of the Board of Directors and the Group Management as well as the shares and options held by themembers of the Board of Directors at year end are disclosed in the Compensation Report in accordance with VegüV and the Swiss Codeof Obligations 663c (see Remuneration Report, pages 53 to 61).
4.3

Shares held by Group Management
Shares as of 31.12.

2016

2015

Paul Zumbühl

19,59818,598Tim McGill

3,339

3,205

Dr Christoph Reinkemeier

550

516

Daniel Bättig

461

329

Dr Ralf Garlichs

430

390

Dr Ben Xia

266

161

Jens Karolyi

120

104

24,76423,303Total

5PROPOSED APPROPRIATION OF AVAILABLE EARNINGS

Appropriation of available earnings
The Board of Directors proposes to the General Assembly as of 12 May 2017 to appropriate the available earnings as per end of the year
under review as follows:in thousands CHF

2016

2015

Result17,01837,490Available earnings carried over from previous year

131,630

104,371

148,648

141,861

Distribution of a dividend of

13,664

10,248to be carried forward

134,984

131,613

148,648

141,861

Proposed dividend payment
The Board of Directors proposes to the General Assembly to pay a dividend in the amount of CHF 16.00 per share or a maximum of
CHF 13.7 million in total. In the previous year a dividend in the amount of CHF 12.00 per share or a maximum of CHF 10.2 million wasapproved. If this year’s dividend proposal is approved, the respective payment will be processed in the second quarter of 2017.

REPORT OF THE STATUTORY AUDITOR122REPORT OF THE STATUTORY AUDITOR TO THE BOARD OF DIRECTORSOF INTERROLL HOLDING AG, SANT’ANTONINO
Report on the audit of the financial statements
OpinionWe have audited the financial statements of Interroll Holding AG, which comprise the balance sheet as at
31 December 2015, income statement for the year then ended and notes, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements (pages 116 to 121) as at 31 December 2016 comply with
Swiss law and the articles of incorporation.
Basis for opinion
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities underthose provisions and standards are further described in the “Auditor’s responsibilities for the audit of the financial
statements” section of our report.
We are independent of the entity in accordance with the provisions of Swiss law and the requirements of the
Swiss audit profession and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Our audit approach
Overall materiality: CHF 700,000
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on
the financial statements as a whole, taking into account the structure of the entity, the accounting processes
and controls, and the industry in which the entity operates.
As a key audit matter, the following area of focus was identified:
Impairment testing of Group assets (investments in subsidiaries and loans granted to subsidiaries)
Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in thefinancial statements. In particular, we considered where subjective judgements were made; for example, inrespect of significant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. As in all of our audits, we also addressed the risk of management override ofinternal controls, including among other matters consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud.

REPORT OF THE STATUTORY AUDITOR

123

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide
reasonable assurance that the financial statements are free from material misstatement. Misstatements may
arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing andextent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate,
on the financial statements as a whole.

Overall materiality
How we determined it
Rationale for the materiality benchmark applied

CHF 700,000
0.5 % of total assets
We chose total assets as the benchmark because the Company primarily holds equity investments in and grants loans to subsidiaries.

We agreed with the Audit Committee that we would report to them misstatements above CHF 35,000 identified during our audit as well as any misstatements below that amount which, in our view, warranted reportingfor qualitative reasons.
Report on key audit matters based on the Circular 1/2015 of the Federal Audit Oversight Authority
Key audit matters are those matters that, in our professional judgement, were of most significance in our auditof the financial statements of the current period. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.

REPORT OF THE STATUTORY AUDITOR

124

Impairment testing of Group assets (investments in subsidiaries and accounts receivable fromsubsidiaries)
Key audit matter

How our audit addressed the key audit matterWe consider impairment testing of Groupassets to be a key audit matter becauseof their significance on the balance sheet.
Investments in subsidiaries amount to
CHF 106.9 million (69 % of total assets)
and loans granted to subsidiaries amountto CHF 44.6 million (29 % of total assets).

Management carried out impairment tests on all investments in subsidiaries. We performed the following audit
procedures:

Please refer to note 3.3 (Loans to subsidiaries) and note 3.2 (Investments) in “General
information on the financial statements”
in the notes to the financial statements ofInterroll Holding AG.

Subsequently, for a sample of selected investments, we verified the factors used to calculate potential impairment andreperformed the calculation.

Firstly, we discussed with Management whether any
indications of impairment were identified in relation to an
investment.

Management assessed individually the recoverability ofaccounts receivable from subsidiaries, except where thestandalone financial statements prepared in accordance withIFRS or an impairment test showed that these were secured
by positive equity. We discussed in detail with Management
their assessment and reperformed it, and we checked forplausibility the outlook based on the budget approved by the
Board of Directors.
On the basis of the audit procedures described above, wehave addressed the risk of an incorrect valuation of theinvestments in subsidiaries and loans to subsidiaries. We
have no findings to report.

Responsibilities of the Board of Directors for the financial statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with theprovisions of Swiss law and the company’s articles of incorporation, and for such internal control as the Boardof Directors determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors intends either to liquidate the entity or to cease operations, or
has no realistic alternative but to do so.

REPORT OF THE STATUTORY AUDITOR

125

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and Swiss Auditing Standards will always detect a material misstatement when it exists.
­Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the financial statements is located at the website of
EXPERTsuisse: http://expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of ourauditor’s report.

Report on other legal and regulatory requirements
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that aninternal control system exists which has been designed for the preparation of financial statements 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.

PricewaterhouseCoopers AG

Patrick Balkanyi
Audit expert
Auditor in charge

Zurich, 13 March 2017

Nicole Bertschinger
Audit expert

FINANCIAL CALENDAR
2017
Preliminary Financial Figures 2016 (unaudited)

23 January

Publication Annual Report 2016 and Balance Sheet Press Conference

24 March

Annual General Assembly

12 MayPublication Half-Year Report 2017 and Web Conference (English)

4 August

CONTACT AND IMPRINT
If you have any questions regarding the Interroll Group or
would like to be included in our distribution list, pleasecontact the Investor Relations Team:
investor.relations@interroll.com

Jens Karolyi
Senior Vice President Marketing & Culture
Tel: +41 91 850 25 21
E-mail: j.karolyi@interroll.com
EditorInterroll Holding AG
Via Gorelle 36592 Sant’Antonino, Switzerland
Tel: +41 91 8502525
Fax: +41 91 8502505
www.interroll.com
LayoutCalydo, Steinhausen (Zug)
Production
GateB, Steinhausen (Zug)
Printing
Victor Hotz AG, Steinhausen (Zug)NOTE ON THE ANNUAL REPORTThis annual report is also available in German. If there are differences between the two, the German version
shall prevail.
NOTE ON ROUNDING
Please note that slight differences may arise as a result of the use of rounded amounts and percentages.
FORWARD-LOOKING STATEMENTS
This annual report contains certain forward-looking statements. forward-looking statements include all statements which do not relate to historical facts and events and contain future-oriented expressions such as “believe”,­“estimate”, “assume”, “expect”, “forecast”, “intend”, “could” or “should” or expressions of a similar kind. Such forward-looking statements are subject to risks and uncertainties since they relate to future events and are based on
the company’s current assumptions, which may not in the future take place or be fulfilled as expected. The company points out that such forward-looking statements provide no guarantee for the future and that the actual
events, ­including the financial position and profitability of the Interroll Group and developments in the eco­nomic
and regulatory fundamentals, may vary substantially (particularly on the down side) from those explicitly or implicitly assumed in these statements. Even if the actual assets for the Interroll Group, including its financial position and profitability and the economic and regulatory fundamentals, are in accordance with such f­ orward-looking
statements in this annual report, no guarantee can be given that this will continue to be the case in the future.

Interroll Holding Ltd.
Via Gorelle 3 | 6592 Sant᾽Antonino | Switzerland
www.interroll.com© Interroll Holding AG