INTERROLL ANNUAL REPORT 2017

ANNUAL REPORT 2017

ENABLEEXPANDEVOLVEENABLEEXPANDEVOLVE

450.7 MILLIONNET SALES
47.4 MILLION
EBIT
46.2 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

INTERVIEW PAUL ZUMBÜHL12

REGIONS16
INTERVIEW DR BEN XIA20

PRODUCT GROUPS22

INTERVIEW DR RALF GARLICHS

28

FINANCIAL POSITION, EARNINGS AND CASH FLOWS

32

CORPORATE RESPONSIBILITY

34

ROLLING ON INTERROLL

38

MARKETING40
CORPORATE GOVERNANCE43

REMUNERATION REPORT53

FINANCIAL STATEMENTS OF THE INTERROLL GROUP

63

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

115

KEY FIGURES
2017

2016

2015

2014

2013

Total order intake

458.1

405.2

385.1

350.7

318.8

Drives

146.7

123.6

110.3

114.9

109.4

Rollers

105.8

93.5

93.4

81.2

75.4

Conveyors & Sorters

142.6

120.9

107.2

79.8

71.2

Pallet & Carton Flow

55.6

63.5

49.8

59.4

60.3

Total net sales

450.7

401.5

360.7

335.3

316.3

EBITDA

66.3

65.7

58.2

44.1

45.4

in % of net sales

14.7

16.4

16.1

13.2

14.3

EBITA

54.1

54.7

47.6

33.2

34.0

in % of net sales

12.0

13.6

13.2

9.9

10.7

EBIT

47.4

47.9

39.8

25.4

27.2

in % of net sales

10.5

11.9

11.0

7.6

8.6

Result

39.1

36.2

29.3

19.1

20.5

in % of net sales

8.7

9.0

8.1

5.7

6.5

Operating cash flow

46.2

36.8

40.2

27.8

44.5

in % of net sales

10.3

9.2

11.1

8.3

14.1

Free cash flow

20.1

18.0

17.3

12.0

5.0

in % of net sales

4.5

4.5

4.8

3.6

1.6

Total capital expenditures

25.4

19.5

24.3

16.8

39.8

Total assets

355.3

324.8

293.0

278.2

258.2

Goodwill

17.6

17.3

16.7

17.6

16.0

Net financial assets

37.1

38.0

31.3

23.9

20.2

Equity

261.7

233.1

207.6

200.3

187.2

Equity ratio (equity in % of assets)

73.6

71.8

70.9

72.0

72.5

Return on equity (in %)

15.8

16.4

14.4

9.9

11.9

in CHF million, unless stated differently

Order intake / net sales

Profitability

Cash flow

Balance sheet (31.12.)

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

16.5

17.1

15.3

9.8

12.2

Average number of employees

2,067

1,892

1,820

1,675

1,488

Net sales per employee (in thousands CHF)

218

212

198

200

213

Productivity (added value / total personnel expenses)

2.02

2.11

2.04

1.86

1.95

ABOUT INTERROLL
The Interroll Group is a leading global provider of material handling solutions. The company was
founded in 1959 and has been listed on the SIX Swiss Exchange since 1997. Interroll provides system
integrators and OEMs with a wide range of platform-based products and services in these categories:
Rollers (conveyor rollers), Drives (motors and drives for conveyor systems), Conveyors & Sorters aswell as Pallet & Carton Flow (flow storage systems). Interroll solutions are used in express and postal
services, e-commerce, airports, the food and beverage industry, fashion, and automotive sectors, andmany other manufacturing industries. Among the end users are leading brands such as Amazon,
Bosch, Coca-Cola, DHL, Nestlé, Procter & Gamble, Siemens, Walmart and Zalando. Headquarteredin Switzerland, Interroll has a global network of 32 companies with sales of CHF 450.7 million andaround 2,100 employees (2017).
www.interroll.com

28,000CUSTOMERSAROUND
THE WORLD

32
COMPANIESAROUND
THE WORLD

2,100
EMPLOYEESAROUND
THE WORLDCONVEYORS & SORTERS

PALLET & CARTON FLOWINTERROLL PRODUCT GROUPSDRIVESROLLERSANNUAL REVIEW2

HIGHLIGHTS OF THE
2017 FINANCIAL YEAR

Culture for Growth

Talent wins games, but teamwork and intelligence win championships.

Michael Jordan

TAKE THE TIME FOR THE NEXT GLOBALEMPLOYEE SURVEY. DON’T MISS IT.

THE NEW GENERATION OF DRUM MOTORSPRESENTED AT THE LOGIMATNEW DRUM MOTOR PLATFORM
The innovative, modularly designed motor platform presented
at the LogiMAT trade fair is ideal for use in modern
conveyor belt systems and encompasses both synchronousand asynchronous drive solutions.
EXPANSION IN AMERICASInterroll opens a branch in Mexico. With a population inexcess of 120 million people, Mexico is one of the world’s 15 largest
economies and has a growing manufacturing industry.

Your opinion matters.
It starts with us!

INTERROLL BOOSTSEMPLOYEE SATISFACTIONGLOBAL EMPLOYEE SURVEY
The 2017 global employee survey yielded impressive results:
Interroll provides its employees and executives with an attractive
work environment that is greatly appreciated by its staff.
INTERROLL PRESENTS THE MOST POWERFULSYNCHRONOUS DRUM MOTOR
The new drive adds greater flexibility to belt conveyors, offering
an output of up to 1.1 kilowatts while also permitting high torquesof up to 100 Nm.

INTERROLL AND SAUBER F1 TEAM RENEW
THEIR PARTNERSHIPInterroll will continue to be a close partner of the Sauber F1 teamgoing forward and is renewing the partnership.

MAJOR ORDER FROM THE US
Interroll has been contracted by a leading express and parcel
delivery service in North America to deliver sorter systems; thetotal value of the project will be in the low double-digit million
range (in USD).

Q1

Q2

ANNUAL REVIEW

3

THE WENKO DISTRIBUTION CENTER
IN BAAL, GERMANY GOES ONLINEINTERROLL EXPANDSITS CONTROL FAMILYLOGISTICS SYSTEM FOR YOUNGONE (SOUTH KOREA)
Outdoor specialist Youngone contracted Hyundai Elevator asa systems integrator and Interroll as a producer to set up acomplete logistics system in its new distribution center. Interroll
delivered three modular conveyor platforms and a horizontal
crossbelt sorter.

ZERO-PRESSURE-ACCUMULATION PALLET CONVEYANCE
The launch of the Pallet Control PC 6000 marks Interroll’s
expansion of its decentralised control and drive concept which
had already been successfully implemented in the Interroll
24V DC RollerDrive and Interroll MultiControl to achieve zeropressure accumulation.

VERSATILE SYSTEMATIC SOLUTIONS FROM INTERROLLFOR THE WENKO DISTRIBUTION CENTER
Interroll and REMA TEC provided their end user WENKO with acomplete automation solution that handles the intermediate storageand order picking of the company’s range of 6,000 products.

SUCCESSFUL PRESENCE AT CEMAT ASIA
Interroll rolled out its new generation of drum motors in Asia at
the CeMAT Asia trade fair in Shanghai.

ROLLING ON INTERROLL IS GROWING“Growing together” was the motto of the first Global Summit
which was held in Barcelona in early September and attended by
130 participants as part of the Rolling On Interroll partner
programme.

Q3

MAXIMUM FLEXIBILITY WITH OPTIMISEDCARTON WHEEL FLOW
Interroll’s new Carton Wheel Flow beds feature simple installationand dramatically reduced mounting time. The pick-to-lightsystem can easily be placed above it.

Q4

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

4DRIVING TECHNOLOGICAL
TRANSFORMATION AHEAD AS
AN “ENABLER”

Paul Zumbühl, Chief Executive Officer

Dear shareholders, customers,
employees and business partners,
Despite the strong financial year in 2016, the Interroll
Group has now succeeded in accelerating its growtheven further over the course of the past year. This performance was underscored by particularly strong
order intake, net sales and cash flow.
Order intake rose by 13.0 % (12.0 % in local currencies) to a new record high of CHF 458.1 million (previous year: CHF 405.2 million). Consolidated net sales
grew by 12.3 % (11.3 % in local currencies), thus also
setting a new all-time high of CHF 450.7 million (previous year: CHF 401.5 million). Organic growth contributed 12.0 %.
This positive momentum was driven by increases in
global market share which were attributable to ourinnovation strength, our proximity to customers andour clear strategic alignment. We were right about
global trends like the focus on cost efficiency in logistics, strong growth in several industries including
fashion, tyres and e-commerce, as well as heavy
demand for efficient materials handling solutions by
the providers of postal and logistics services. In add­
ition, Interroll continues to generate a large number oforders in the food and beverage industry as well as airport construction.
The Group is making an ongoing effort to simultan­
eous­ly expand the expertise of its sales team, its application engineers and its R&D team. We are investing in

training and new technologies and are in the process ofsetting up a team of industry managers. These experts
are closely interconnected with their industries, speak
our customers’ lingo and develop industry-specificsolutions. Particularly in new growth areas like fashionor the tyre and automotive industry, Interroll is increasingly impressing its very demanding customers andbeing perceived and appreciated as an “enabler” withthe right solutions that generate added value.
Interroll has once again been able to successfully position itself in terms of trends related to Industry 4.0.
Processes are being digitalised in the area of materials
handling technology, as well, with the goal of optimising throughput times in the transport chain and solutions for decentralised conveyors. Interroll intends toplay a leading role here, too, and planned to invest up
to an additional CHF 5 million per year in researchand development, both in the reporting year and thefollowing year.
Nevertheless, EBITDA rose by 1.0 % to CHF 66.3 million (previous year: CHF 65.7 million). Favoured by
tax effects, net profit rose by 7.8 % to CHF 39.1 million(previous year: CHF 36.2 million). Operating cash
flow climbed significantly by 25.5 % to CHF 46.2 million (previous year: CHF 36.8 million). At CHF 25.4
million, gross investments increased substantiallyyear-on-year (CHF 19.5 million). Our shareholders
participate in the positive business development, asa dividend of CHF 16.50 (previous year: CHF 16.00)
is applied for at the Annual General Meeting on
4 May 2018.

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

5“Efficiency, culture andinnovation form the perfectprerequisites for this.”

A DRIVING FORCE IN THE EVOLUTION
OF MATERIAL FLOW SOLUTIONS
New solutions document Interroll’s enormous innov­
ation strength. Starting off with the new DM 0080
drum motor model, Interroll introduced a new generation of motor platforms at LogiMAT in March. In
May, Interroll underscored its claim to technologicalleadership by launching the market’s most powerfulsynchronous drum motor with an output of up to 1.1
kilowatt. The family of controls also grew: the newSoftstart Control solution for checkout counters, presented by Interroll at EuroShop in March, is a brandnew, multifunctional system that is very easy to install.
The November launch of the Pallet Control 6000, a
decentralised control unit solution for zero-pressure-accumulation handling, marked the market rollout of an all-in-one solution that also comprises therollers, the MultiControl and the Interroll Pallet
Drive as the drive module.

Urs Tanner, Chairman of the Board of Directors

ant to have a corporate culture with a clear focus andstrong identity. This is why Interroll is intensifying its“Culture for Growth” programme this year. To thisend, leadership training courses were held once again
for our managing directors, department directors
and specialists and a second employee survey was
conducted.
We also underlined our commitment to responsible
corporate governance and sustainability in February
2018 with the submission of our first Communication
on Progress to the UN Global Compact. We have­realigned several of our compliance management processes and courses to more strongly support this Compact. This way, we will further improve the Group’s
competitive position.

Interroll not only offers innovative products but also
stimulates the market with its new partner programme
Rolling On Interroll (ROI). The first ROI Global Summit, a unique platform for the ROI community composed of 65 partner companies from 31 different countries, was held in Barcelona in September. 80 % of the
ROI partners accepted the invitation to share experiences, jointly identify opportunities on the market andcooperate closely to promote forward-looking mater­
ial flow solutions.

Together with our most valuable resource – the em­ployees of Interroll – we wish to lay a solid foundation
for long-term excellence and create added value
for our customers and shareholders. Our efficiency,­culture and innovation form the perfect prerequisites
for this.

“CULTURE FOR GROWTH” PROGRAMME ANDCOMPLIANCE MANAGEMENT STRENGTHENEDFURTHERInterroll’s global success is based on the conduct of ouremployees within their teams and our close attention
to the needs of our customers. In order to achieve thestrong growth that we are targeting, it is very import­

Urs Tanner
Chairman of theBoard of Directors

Sant’Antonino, 6 March 2018

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 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 Direct­
or of Sarna Group. From 1994 to 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 at 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 the 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 University of Applied Sciences and Arts Northwestern Switzerland
FHNW, Olten, Switzerland. Furthermore, he is a certified public accountant with the Swiss Institute of Certified Accountants
and Tax Consultants. At the start of his career he held various
positions in finance w­ ith Von Roll Holding AG in Switzerland,Brazil and the US. ­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 of International Mail. Since 2013, he has been the
Chief Financial Officer (CFO) of I­nterroll Holding AG and amember of ­Interroll 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 the Interroll Group in 2006 as­Exe­cutive Vice President Drives & Rollers. Since 2011, Ralf
Garlichs has been Executive Vice President Products & Technology and a member 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
serving as 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
North and South America at Deckel Maho Gildemeister (DMG)
America Inc. In 2011, he joined the Interroll Group as Exe­cutive Vice President Global Sales & Service and is a memberof ­Interroll Group ­Management.

DR BEN XIA(born 1966, Chinese)
Dr Ben Xia graduated with a bachelor of science degree in electrical ­engineering from Shanghai Jiaotong University, China.
After that, he studied electrical machinery at the Moscow­Power ­Engineering Institute, Russia, and holds a PhD in electrical ­engineering (Dr.-Ing.). He also passed the Advanced
Management Programme for Senior Executives at the China
Europe ­International 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 the­Interroll Group as Executive Vice President Asia and is amember of ­Interroll Group Management.

INTERROLL ON THE CAPITAL MARKET

8

INTERROLL ON
THE CAPITAL MARKETINVESTOR INFORMATIONInterroll share information

2017

2016

2015

2014

2013

Number of registered shares

854,000

854,000

854,000

854,000

854,000

Number of average shares outstanding

849,934

850,634

849,155

849,170

826,920

Number of shares outstanding as of 31.12.

847,099

851,559

851,015

849,830

850,151

Share price highCHF

1,475.00

1,172.00

858.00582.50490.00Share price low

CHF

1,097.00

707.00429.00490.00333.00Year-end share price as of 31.12.

CHF

1,443.00

1,110.00

856.50525.50490.00Market capitalisation as of 31.12.

CHF million

1,222.36

945.01731.45448.78416.57

10.00

10.00

Par value as of 31.12.

CHF

1.00

1.00

1.00

Dividend

CHF

16.50

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
8.80
45.95

42.57

34.51

22.45

24.84
35.43

Payout ratio

35.91

37.59

34.78

40.09

P/E ratio

31.40

26.07

24.82

23.41

19.73

Cash flow per average share outstanding

CHF

54.39

43.30

47.33

32.69

53.79

Equity per share outstanding as of 31.12.

CHF

308.91273.72244.00235.73220.25

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 201740 %1,443.00
CHF

30 %

20 %

10 %
Interroll share
Share price as of 31.12.2016: CHF 1,110.00
Share price as of 31.12.2017: CHF 1,443.00
Swiss Performance Index (SPI)

0%1,110.00
CHF

–10 %
Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sep.

Oct.

Nov.

Dec.

© SwissquoteINTERROLL ON THE CAPITAL MARKET

9

SWISS STOCK MARKETS CHARACTERISEDBY GAINS IN 2017
The stock markets in Switzerland performed very
positively in the year under review: the blue-chipbarometer, the Swiss Market Index (SMI), reached
9,382 points, a plus of 14 %. The broader Swiss­Performance Index (SPI) achieved 10,752 points andincreased by as much as 20 % on year-end 2016.

INTERROLL SHARE O­ UTPERFORMEDSWISS INDICES ONCE AGAIN IN ITS­ANNIVERSARY YEAR
The Interroll share once again improved on the pre­vi­
ous year’s performance: at a closing price of CHF
1,443.00 on 31 December 2017, the Interroll share
was up 30 % on the closing price at the end of 2016
(CHF 1,110.00). As such, the Interroll share once
again outperformed the Swiss indices.
I­nterroll celebrated its 20-year stock exchange anniversary during the year under review. The registeredshares were issued at CHF 235.00 per share on 5 June
1997, the company was valued at some CHF 200
million.

Shareholder structure as at 31 December 2017

On 31 December 2017, market capitalisation of­Interroll Holding AG reached more than CHF 1.2 billion (as at 31 December 2016: around CHF 0.9
billion).
HIGHER FREE FLOAT
Around 20 % (2016: 22 %) of Interroll shares are heldby the remaining founder families. As of 31 December
2017, the shareholding of Group ­Management andtheir relatives reached 3.1 % (2016: 2.9 %).
Based on the SIX definition, the company’s free float isaround 80 % (2016: 78 %).
Information about significant shareholders can befound on page 120.

Free float: 80 %Fixed shareholding: 20 %Geographical distribution of the identified
shareholder base acc. to the share register as
at 31 December 2017

SWISS SHAREHOLDERS ARE INCREASING
In 2017, an increasing percentage of shareholders
based in Switzerland purchased shares of ­Interroll.
On 31 December 2017, about 54 % of shareholders
were registered in Switzerland, compared with 50 % on
31 December 2016.
At the same time, shareholders with pending registration increased to 34 %. In the previous year, around
31 % of shareholders were not registered with thecompany.
FURTHER INFORMATION FOR INVESTORS
We publish information relating to the Interroll shareon our website www.interroll.com/en/investors.
Financial reports, presentations and other documents
are available for downloading.
Interested parties can register for our mailing list or
request our standard publications. All key financial
market data is published there as well.

Switzerland: 54 %
 EMEA region (excluding Switzerland): 43 %Rest of the world: 3 %OUR BUSINESS10CONSISTENT ORIENTATION OF
THE BUSINESS MODEL TOWARDS SUSTAINABLE
AND 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 the daily challenges in material handling are basedon globally available product platforms which arefocused on:

DRIVESROLLERSCONVEYORS &SORTERSPALLET &­CARTON FLOW

The company supplies more than 28,000 customers
worldwide. In the key markets, these mainly include
regionally oriented plant manufacturers, OEMs andglobal systems integrators:

COURIER,
EXPRESS,
PARCELAIRPORT

FOOD,
BEVERAGE

DISTRIBUTION,
WAREHOUSE

Further global growth of the Interroll Group focuses
on clearly identifiable market trends that will continue
to show 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.
–– Liberalisation and regionalisation in the courier,express and parcel markets.
–– More stringent hygiene regulations and standards
in the food industry, which require solutions of acorrespondingly high quality.
–– The decentralisation of distribution centers in orderto shorten delivery times.
–– Increasing product variety and shortened­production life cycles require increased flexibility
and individualisation when commissioning
goods in the flow of materials.
–– Demand for material flow plants with a better
return on 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 2018.
The Interroll Research Center (IRC) develops new
products, processes and technologies. The production
plants concentrate as global competence centers(Centers of Excellence) on the development and manufacture of specific product groups. In order to quickly
meet customer needs in all parts of the world, regional
production centers (Regional Centers of Excellence)
have been built which are under the direction of the
global competence centers. 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 istherefore the permanent, continued development andredevelopment of intelligent products that enable­customers to save space and energy and secure a quick
return on investment. The technological makeup is asfollows:

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 the 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 Center (D)

7 Global Centersof Excellence• Belt Curves (USA)• Rollers / RollerDrive (D)• Drum Motors (D)• Conveyors and Sorters (D)• Dynamic Storage (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 Centersof Excellence
Know-how

5 Local Assemblies

INTERVIEW PAUL ZUMBÜHL

12

ENABLING CUSTOMERSTO GENERATE ADDED
VALUE
An interview with Paul Zumbühl, CEO of the global Interroll Group,
about the financial year just ended and Interroll’s prospects.

Paul Zumbühl, CEO of the worldwide Interroll Group.

INTERVIEW PAUL ZUMBÜHL

13

Interroll concluded the 2017 financial year withnew record highs. Is sustaining such a high rate of
growth even possible?
Paul Zumbühl: Nobody knows what the future has instore for us, but we’re working on reinforcing ourstrengths even further. We look at our growth fromtwo different perspectives, both as the result of thegroundwork we have laid over the past few years andalso in terms of how it relates to positive market trends.
We have invested heavily in our market position overthe past few years and gained market share in every
country. Our innovative new developments havebecome well established in the market.
What comes next?
We’re standing on extremely solid ground and enjoy
an outstanding reputation in the market. There’s nodoubt about it: we want to keep growing and are capable of doing so. Yet success always hinges on having theright market environment. Estimates put growth in theintralogistics market at around 4 to 7 percent per year.
What’s important to us is that our long-term growth isstrong and that it exceeds the industry average by
about 50 percent. We experienced extremely strong
growth in 2017, but that doesn’t mean this kind ofgrowth will happen automatically every year. How wedevelop over the course of any given year certainly
hinges on our specific product mix and project portfolio as well.

“Continuous improvement,
in other words a consolidationof our existing products, isextremely important, however
we also want to offer innovative
solutions to expand our
product range at key points.”

Interroll is now operating in relatively new customer segments, like the tyre industry, for instance.
How does Interroll create added value there?
New technologies are our main means of creating
added value. Take our 24V RollerDrives in combination with our new smart controls, for example.
Together they are capable of significantly reducing
energy consumption, particularly in that industry. Plustyre manufacturers can boost their flexibility enormously by using one of our modular conveyor solutions. That means: users can recoup the cost of theirinvestment much more quickly, quite often in less than
two years, and we also offer users the solutions theyneed to greatly enhance their material flows in order toachieve greater productivity and shorter lead times.
The fashion industry is another perfect example ofthis. There, we offer solutions capable of transporting
an extremely diverse range of goods and coping withhighly fluctuating quantities. We recognised thegrowth trend in returns management years ago. There,
the goal is to implement conveyor technology to efficiently manage the wide variety of goods returned.
With a reasonable financial investment, Interroll en­­ables its customers to create a high level of added
value.

INTERVIEW PAUL ZUMBÜHL

14“At Interroll, top management
spends more time in themarket and with customers
than in the office. It allows
us to not only talk as equals,
but also to actively promotetechnological developmentsin the area of material
flows and speed them up.”
Customers’ added value has already risen­significantly in the past. Going forward, how muchupward potential is still left?
We still have enormous potential, in terms of speed,for instance, that we can exploit to help our customers
solve problems. The “time” element offers great added
value. In addition, requirements regarding workplacesafety and good working environments are on the rise.
Noise levels need to be reduced even further. We needto simplify, to reduce complexity. We aim to improve
our customers’ lives and make them as easy as possible
while also striving to boost the performance, availabili­ty and throughput times of the systems.
“Industry 4.0” pops up frequently as a catchphrase
in this context. How can Interroll succeed in transforming it into a viable business model?
We’ve been promoting the key elements of digitalisation, with respect to the “Internet of Things”, forinstance, since even before the “Industry 4.0” trend
was identified. In that sense, we were the ones to set
the trend in motion in our industry. For us, however,digitalisation isn’t an end in itself, rather we want to
use it to help our customers achieve specific strategic
objectives, with one example being the use of decentralised control units in conveyors. The new generation of the MultiControl is an excellent example of
how state-of-the-art technology can be implemented

to boost customer value. This unit now lets customers
eliminate the PLC in certain applications and considerably simplifies the control architecture in the process. We can now leverage this technology to expand
our business model by offering data analytics services
to interested customers; these services would use a setof algorithms to analyse data collected to gain insights
into the flow of goods. In other words, there are manydifferent ways of leveraging data profitably. Internally,
we are on our way to having a paperless factory andadministration. That means we have long since left theplanning phase and are currently working on implementation. That gives us an edge over the compe­
tition. Over the past seven years, we have been busy
implementing a global ERP system which is now­supplying us with useful data. I, myself, have beenpromoting digitalisation efforts within the company
for years now.
Does this have any impact on the service business?
Over the long term, predictive maintenance and otherservices will allow us to boost the already high availability level of customers’ systems even further. At present, Interroll generates nearly 10 percent of its total
sales through its service business. We want to expand
this share to 20 percent. After all: our global presenceis growing stronger. On the other hand, the installedbase of our products at our customers’ facilities is rising steadily as well. Our clear goal is to greatly expand
our service offering over the course of the next three
years.
In 2017, further steps were taken tohone the global focus of the Group’s activities.
Will this trend continue?
One thing is clear: there is currently no comparable
rival on the market with the same systematic global
focus. And that global focus offers enormous advantages for customers with global operations. Even local
customers receive solutions that have been tested theworld over and are at the cutting edge. We invest much
more than our competitors because our global presence allows us to achieve advantageous economies ofscale. These then benefit our customers since we canoffer top-notch quality at a competitive price. We currently have 28,000 customers around the world who
see the huge impact that Interroll’s solutions have on
the value added of their material flows. In 2017, webuilt up a sales and service company in Mexico andalso decided to expand our capacities in a new factoryin Thailand. There are still white spots on our map,
however, that we could cover in the medium to longterm. Here, I’m thinking of India, Vietnam, Russia andChile. We will have to continue to expand specificINTERVIEW PAUL ZUMBÜHL

15

capacities even further in order to pursue our continued growth strategy.

words, things that will simplify their lives today plus
things they haven’t even thought of yet.

2017 brought the launch of a large numberof new solutions on the market. Has Interroll
picked up the pace on innovations?
It hasn’t just picked up the pace, it has overhauled theentire discipline. We have made systematic improvements to the quality of our innovation process, andalso improved the fine-tuning of our solutions’launches. At Interroll, top management spends moretime in the market and with customers than in theoffice. That allows us to identify key trends and needs
with our own eyes, through personal observations anddetailed discussions. The result is an entirely different
level of quality as well as a greater awareness of innovation-related matters. It allows us to not only talk tocustomers as equals, but also to actively promote technological developments in the area of material flows
and speed them up. We analyse customers’ current andfuture pain points and find solutions for them. We getto the heart of our customers’ needs, especially interms of what they will need going forward. In other

With this approach, is Interroll broadening or
consolidating its base?
Continuous improvement, in other words a consolidation of our existing products, is extremely important,however we also want to offer innovative solutions to
expand our base at key points.
How do you bring employees on board?
Our successful “Culture for Growth” programme will
be continued. As a medium-sized group, we can offer
opportunities and a working environment otherwise
only found in large corporations. At Interroll, the difference is that talented employees have a much greater
impact on our day-to-day business and they can participate in important decision-making processes. Thatis a big motivator. The strength of our corporate­culture was also evident in our employee survey. The
results confirm our concerted efforts. Already at a highlevel, employee motivation has improved even further,as has the general working environment, particularly
with regard to young, highly qualified individuals.
And how do you bring your partners and­medium-sized customers on board?
With our partner programme Rolling On Interroll wehave created a platform, the first of its kind in our
industry, that allows smaller, local market leaders tocontact comparable companies in other markets
around the world. They can engage in in-depth discussions about technical advances and, in doing so,strengthen their individual market positions. Over thelong term, we expect this to culminate in a strong network and a pooling of expertise which we also want tomake accessible. We demonstrate state-of-the-art solutions, for instance, and work with our customers andpartners to take advantage of extremely interesting
new opportunities. Together.

To Paul Zumbühl, trust and partnership are essential values determining
market success (here: at Rolling On Interroll Summit in Barcelona).

REGIONS16

REGIONSSHARE OFGLOBAL SALES
EMEA

59 %

SHARE OFGLOBAL SALESAMERICAS

27 %SHARE OFGLOBAL SALES
ASIA-PACIFIC

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

REGIONS

17+9.9 %SUSTAINABLE GROWTHIN ALL REGIONSORDER INTAKE

We continued our globalisation strategy during the 2017 financial year by tapping into new markets and reaching new customers. Interroll posted growthin both order intake and net sales to hit new record highs in the company’s
history. Large-scale projects in the Americas brought disproportionately large
growth to this region and overall growth in the Asia-Pacific region was above
average. A focused Industry Management team is providing support to anincreasingly large number of customers in Europe and overseas while exploiting new markets at the same time. Europe, the Middle East and Africa (EMEA)
accounted for 59 % of total revenue (previous year: 61 %), the Americas for
27 % and Asia-Pacific for 14 %.

+8.6 %NET SALESEMEAEUROPE, MIDDLE EAST AND AFRICA (EMEA)REGION POSTS SOLID PERFORMANCEIn the EMEA region, the growth of the past few years
continued during the 2017 financial year. Order intake
in 2017 amounted to CHF 268.3 million, up 9.9 % on
the previous year’s figure (CHF 244.0 million). Sales
totalled CHF 266.5 million, up 8.6 % on the same
period of the previous year (CHF 245.4 million).
This performance was driven by a huge demand for
drum motors and sorters. While central Europe, eastern Europe and northern Europe beat their prior-year

results yet again, growth in western Europe declined in
the wake of a strong previous year. Middle East-­Africa
reported encouragingly strong sales growth, albeit
starting from a lower level.
At 59 % of total sales, EMEA is still the most importanteconomic region for the Interroll Group. The technicalrequirements for internal logistics suppliers are highand demand flexible customer relationships, industry
knowledge, the technical expertise to solve problems,innovative answers to growing complexity, and new
developments. The fact that Interroll meets theserequirements with its well-coordinated platform solutions is something that the Group underscored in its
joint project with system integrator REMA TEC, onethat incorporated nearly every solution in the Interroll
portfolio, to equip the new distribution center of­Wenko-Wenselaar GmbH & Co. KG.

At the international LogiMAT trade fair in Stuttgart inGermany in March 2017, Interroll’s newly designed standpresented technical innovations and showcased thecompany’s broad industry knowledge.

REGIONS

18+20.4 %ORDER INTAKE+20.0 %NET SALESAMERICAS

In June, Interroll made an impressive showing at the FISPAL trade fair in São Paulo, Brazil
where it presented all its product groups to the local food industry.

AMERICAS
ACTIVE PROJECT REGION
Sales for the Americas region amounted to CHF 119.8
million, up 20.0 % on the previous year (CHF 99.9 million). The North American market spearheaded by the
US accounted for the lion’s share of this performance.
Interroll continued to grow significantly in this region
as well thanks to sustained strong demand from the
distribution center business. Interroll further strengthened its sales footprint in the US in the reporting
period by establishing a new sales company in the
Atlanta metropolitan area.

An office was opened in Mexico City to expand Interroll’s presence in the important South-American
growth market. Interroll intends to use this location asa hub for tapping into the markets in Mexico and its
neighbouring countries, which are growing dynamic­
ally on the back of e-commerce and the automobile
industry and offer much business potential. This was
successfully demonstrated by the Interroll productportfolio at the Intralogistics Latin America trade fairheld in Mexico City at the end of June.

Order intake, which grew by 20.4 %, from CHF 105.9
million to CHF 127.5 million, added substantial sustained impetus to the success of this region. In May,Interroll received a large contract for the production
and delivery of vertical sorters in the low tens of millions for a leading provider of packaging and logistics
solutions in the US.

Delivery of sorters to the Brazilian Post continued in
the reporting year. Interroll has a very successful local
team to look after its long-standing customer relationships in the challenging but still very promising Brazilian market.

REGIONS

19+12.6 %ORDER INTAKE+14.7 %NET SALES

ASIA-PACIFIC

ASIA-PACIFIC
WITH EXCELLENT GROWTH PROSPECTS
Interroll’s sales in the Asia-Pacific region grew by
14.7 % during the 2017 financial year. Overall in that
region, Interroll generated sales revenue of CHF 64.4
million (previous year: CHF 56.1 million). Orderintake rose by 12.6 % to CHF 62.3 million (previous
year: CHF 55.3 million). Demand for Interroll “Rollers” and “Drives” technologies, in particular, improvedin this region.
As in the past years, China was Interroll’s most import­
ant market in the region and posted further growth aswell as good order intake. Strong growth impetus camefrom Thailand. A high order volume in Korea helped
support the positive outlook. Sales trended encouragingly in South-East Asia and some growth potential

could be realised. This growth trend also continued
with strong order intake.
This region is increasingly benefiting from the global­
isation of the Interroll Group and the establishment oflocal production facilities. The successful integrationof the Regional Centers of Excellence in Suzhou andShenzhen into the global production network con­tinued to generate consistently positive synergy effects
during the 2017 financial year as well thanks to
improved local technical expertise and greater proximity to customers.
Interroll is consistently implementing its productstrategy in Asia, too. This was very visible in April at
KoreaMAT, one of the leading intralogistics trade fairs
in the region, as well as at the CeMAT ASIA, which
was held in Shanghai in late October, where Interroll
launched its new generation of drum motors on the
Asian market. Global market opportunities are thus
strengthened by innovative and globally available
technologies and services.

Dr Ben Xia (Executive Vice President Asia) andDietmar Hager (Head of Global Product Management)
during the market launch of the new drum
motor generation in Asia at the CeMAT Asia.

INTERVIEW DR BEN XIA

20Asia’s flow of goods continues to generate demand for material handling solutions.

LAND OF UNLIMITEDOPPORTUNITIESFor many years, numerous industries have been turning their­attention to the Middle Kingdom. And material handling companies
are no exception. Which trends shape the Chinese market?
What are the features of competition in the Far East? A conversation
with Dr Ben Xia, Executive Vice President of Interroll in Asia.

Dr Xia, how is the economic development
in China at present?
Dr Ben Xia: Extremely dynamic. The growth forecasts
for the Chinese gross domestic product in 2018 predict a range of 6.5 to 7 percent, alongside a percentage increase in industrial production. The medium
and long-term perspectives for this national economy,
which includes almost 1.4 billion people, are extremely
favorable. China is even expected to replace the US as
the largest economic powerhouse on the planet withinaround ten years. This growth market – particularly in
combination with the development of other densely
populated Asian countries such as Indonesia, Malaysia, Thailand and South Korea – continues to provide
great opportunities for powerful companies.
Does this also apply to the logistics industry?
Absolutely. An impressive example is our own company in China. Since we decided fifteen years ago tostart working in Suzhou, China, we have been able tocontinually increase the contribution China that andAsia (remark: Interroll has been operational in Asia

INTERVIEW DR BEN XIA

21

since 1988) make to Interroll’s business success. We
can thus reap the benefits of our long-term investments in local know-how and on-site production.
Over the past four years, we have grown by almost 23
percent in China – much faster than the market.
What is the key driver of the Chinese materials
handling industry?
Like in many other countries, it is the flourishing areaof e-commerce. However, in China this has taken on
immense dimensions, both in terms of scope anddynamism. In 2016, earnings in this sector totaled theequivalent of 366 billion US dollars – as much as in the
US and Great Britain combined. The Chinese love
online shopping, especially using their smartphones.
In the major cities, around 80 percent of adults havealready made a purchase online. So it is no wonder that
the Chinese online retail platform Alibaba alone islikely to invest around 15 billion US dollars in its logistics within the next five years.
Will this boom continue?
Yes, we can assume it will. The dynamism is simply
unbelievably high. For example, in 2017, in the courseof the “Alibaba-Double-11-Festival” – a 24-hour,country-wide discount campaign – the order revenues
from the previous year’s campaign had already been
exceeded by shortly after 1 p.m. A total of almost 1.4
billion parcels were sent in China as a result of thiscampaign. And the logistic processing speed wasastonishing: orders received shortly after midnight
were dispatched at 5:30 a.m. and had already reached
the consumer at 4 p.m.
And what is competition like in the industry?
The fact that groups like Toyota and Honeywell havebecome involved in the flow of materials businessdemonstrates above all that intralogistics has become akey market, which companies outside the industry are
now discovering. In China, all the key providers are
represented, and the competition for major projects iscorrespondingly fierce. This provides excellent opportunities for globally active partners like Interroll who
produce quality products on a platform basis and can
network with their customers via SAP. At the sametime, we should not overlook the fact that around 80
percent of the market volume is served by small or
medium-sized system integrators. These customers arevital for Interroll, and it is important that we support
them with expertise and competent support. This is
why we are strengthening our service and support
activities.

Dr Ben Xia, Executive Vice President Asia

How are users responding to the increasing significance of internal logistics for their business?
They are doing the same thing as with other business-critical infrastructures, that is to say increasing
internal expertise in order to be able to communicate
at eye level with external providers. This is a very exciting development that places new demands on the system integrators as well as manufacturers. As we allknow, anything is possible on the Chinese market(laughs). It really is the land of unlimited opportun­
ities. Encouraging news for all pessimists. However, in
China nothing is really easy, which can of course
quickly bring those who are too optimistic back down
to Earth with a bump.

PRODUCT GROUPS

22

PRODUCT GROUPS
Sales by product group
32 %
24 %
32 %
12 %

DrivesRollers
Conveyors & Sorters
Pallet & Carton Flow

SALES (CHF MILLION)
DRIVESSALES (CHF MILLION)ROLLERS

References
Itab
Smiths Detection
Triumph International
Villeroy & Boch
Walmart

References
Dematic
Knapp
SSI Schäfer
TGW
Vanderlande

SALES (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
Yamaha146.7 105.8
142.6 55.6

PRODUCT GROUPS

23

GROWING PRODUCT BUSINESS, ­PROMISING PROJECT DEMAND
Interroll’s service portfolio comprises four product groups: “Rollers”, “Drives”, “Conveyors & Sorters” and “Pallet & Carton Flow”. The “Drives” and “Conveyors & Sorters” product groups performed particularly well during the 2017 reporting year.

DRIVESPRODUCT GROUP
The portfolio of the “Drives” product group includes
driven conveyor rollers (24-volt RollerDrive), control
systems and drum motors. The global Centers of
Excellence in Baal, Germany, and in Hvidovre, Denmark, bear global responsibility for drum motors at
the Interroll Group.
Sales amounted to CHF 146.7 million, up 18.6 % on
the previous year (CHF 123.6 million). Consolidated
order intake rose by 16.6 % to CHF 149.6 million(2016: CHF 128.3 million). The Asia-Pacific region
posted encouraging growth with sales of drum motors
up 19.7 %.
Interroll, with its flexible, easy-to-install solutions, is a
global leader in this field. In addition to being energy
efficient, the 24-volt RollerDrive produces much lessnoise than comparable products.

In March 2017, Interroll introduced a new generationof drum motors to the European market. The innovative motor platform, which is predominantly used formodern conveyor belt systems in distribution centers,in production areas or in the food industry, has a completely modular design and encompasses both synchronous and asynchronous drive solutions.
In May, Interroll also launched the world’s mostpower­ful synchronous drum motor for conveyor belt
systems with a proven output of 1.1 kilowatts. With
this new drum motor, Interroll customers can flexibly
and efficiently implement new application scenariosin the internal flow of materials.
At the EuroShop trade fair in Düsseldorf, Interroll presented a new, smart controlling system for checkout
counters. The new Softstart Control solution assumes
numerous control functions and is easy to install. It
guarantees smooth running and gentle braking of thebelt, even when it is heavily laden. Worldwide, morethan 60 % of all checkout counters are now fitted withkey components from Interroll, with customers
including Walmart, Tesco, Coop, Metro, Lidl, Aldi andEdeka.
In November, Interroll expanded its decentralised
control and drive concept which, for years, had alreadybeen successfully implemented in the Interroll 24V
DC RollerDrive and Interroll MultiControl to achieve
zero pressure accumulation. The portfolio now also
contains a special solution for conveying pallets that
permits the use of 400V AC drive technology.

The drum motors and RollerDrive family comply with the very highest
efficiency requirements.

PRODUCT GROUPS

24

ROLLERSPRODUCT GROUP
The “Rollers” product group serves as the foundationof the Interroll portfolio. Interroll has been producing
rollers at Wermelskirchen in Germany since 1959, andnow also produces rollers at five other sites. As such,
Interroll is the world leader in this field.
Rollers are used in many applications for internal
logistics. Growth in the 2017 financial year was also
supported by very short delivery times, highly efficient
production processes, proximity to customers and theexcellent quality of Interroll’s products.

Interroll rollers stand for top quality in 60,000 variants.

Interroll anticipated and harnessed global trends likethe focus on increased productivity in logistics, strong
growth in several industries including fashion, tyres
and e-commerce, as well as heavy demand for efficientmaterials handling solutions by the providers of postal
and logistics services.
Interroll also continues to generate a large number oforders in the food and beverage industry as well as luggage handling. Interroll acquired new business for rollers in all regions in 2017.

PRODUCT GROUPS

25

Major update: Interroll
published a brand new roller
catalog at the end of 2017.

This strong demand is reflected in the production figures. Demand was also boosted by the further expansion of the customer base through Interroll’s intensive
sales efforts. The growing use of rollers in the MCP
conveyor platform further strengthened synergies
between Interroll’s individual product groups. A fully
updated roller catalogue featuring a clear and comprehensive overview of the diverse range of rollers, all
60,000 different variants, was published at theend of 2017 (Link: www.interroll.com/company/new-­conveyor-roller-catalog/).

All regions contributed to this result. Growing demandin Asia and Europe was particularly encouraging. The
regional Center of Excellence in Suzhou in China wasequipped with a new production line and the related
know-how by the global Center of Excellence in Wermelskirchen in Germany.

The good performance of this product group is confirmed by the sales and order intake figures for the2017 financial year. At CHF 105.8 million, consolidated sales were up 13.2 % on the prior-year period(CHF 93.5 million). Consolidated order intake of CHF
105.6 million was 17.7 % higher than in the prior-year
period (CHF 89.8 million).

Strong demand for this product group allowed the
expansion of the global Center of Excellence for rollers
in Wermelskirchen, Germany. Interroll alreadyinvested EUR 5 million in a building expansion in2016, followed by another EUR 3 million to increase
its office capacities in 2017.

The innovative magnetic speed controller MSC 50 has
been welcomed by the markets. This device smartly
controls the speed of items carried on gravity roller
conveyors, thus preventing damage to these goods.

PRODUCT GROUPS

26

CONVEYORS & SORTERS
PRODUCT GROUP
The “Conveyors & Sorters” product group comprises
sorter and conveyor solutions that were developed at
the global Centers of Excellence in Sinsheim (Germany) and Cañon City (USA). These include crossbelt
sorters, belt curves and modular conveyor platforms(MCP).

In the 2017 financial year, Interroll received new orders
for equipping the distribution centers of a leadingcourier company in North America. In Europe, too,many orders were received from the postal and logistics services sector and from the food and beverageindustry.

Interroll has a strong position in this segment with its
products and solutions, in particular in the equippingof airports and of postal/logistics distribution centers
and in e-commerce. Projects for the tyre industry arealso on the rise.

Modern materials flow facilities can be quickly andefficiently planned using Interroll’s modular concept.
Changes can be made at any time and can even be
implemented during the installation phase.

This product group generated consolidated sales of
CHF 142.6 million in the 2017 financial year, up by
18.0 % over the previous year (CHF 120.9 million).
Order intake increased by 20.6 % to CHF 152.0 million
compared to CHF 126.0 million in the previous year.

Facilities designed to take advantage of Interroll’s drive
concepts are notable for their maximised availability,
energy efficiency and very low operating and maintenance costs. This applies to new facilities as well as tomodernised equipment.
The regional Center of Excellence for belt curves in
Kronau, Germany, was commissioned in the first quarter of 2017. It was built from the company divisionsacquired from Ortner GmbH in the fourth quarter of
2016. Additional land reserves were purchased for thisregional Center of Excellence in Kronau, Germany,
during the reporting period.

Interroll’s modular conveyor
platform opens up a wide range of
flexible application options.

PRODUCT GROUPS

27

PALLET & CARTON FLOWPRODUCT GROUP
The “Pallet & Carton Flow” product group offers flow
storage solutions for pallets and parcel packaging
based on the first in, first out (FIFO) or last in, first out(LIFO) principles.
This product group is the responsibility of Interroll’s
global Center of Excellence in La Roche-sur-Yon in
France. At the end of 2017, consolidated sales in thisproduct group were down 12.4 % to CHF 55.6 million(previous year: CHF 63.5 million).
Some projects in South Africa could be invoiced in thecurrent year. The big mineral water project in Asia thatwas invoiced last year could not be compensated, however. Consolidated order intake dropped by 16.7 % to
CHF 50.9 million (previous year: CHF 61.1 million).

In 2017, strong growth in demand was reported in
Asia, in particular, where demand in the beverage andfood industry remains high. Interesting orders werereceived from Indonesia and the Philippines in thereporting period. The operation of flow storage solutions has proven to be particularly cost-effective forwarehouses with high stock turnover.
Interroll’s flow storage systems are checked at theInterroll test center in La Roche-sur-Yon in France.
After 50,000 test cycles under extreme conditions,Interroll can guarantee a long service life and max­
imum safety. Interroll sees great market potential in
expanding this area with semi-automatic and fully
automatic solutions and is preparing for new developments in this field.
December saw Interroll launch a modernised carton
wheel flow solution featuring optimised beds, simple
installation and dramatically reduced mounting time.
A pick-to-light system can easily be placed above it.
For 2018 we have a number of promising projects.

Flow storage solutions from Interroll are robust and safe.

INTERVIEW DR RALF GARLICHS28

WE ARE SYSTEMATICALLYPURSUING OUR INNOVATIONTRAJECTORY
More, quicker, and repeat: the international flow of goods has longsince become one of the economy’s main arteries while the developmentof new technologies and products in the area of material flow solutions
plays a central role in efforts to boost its performance. In an interview,
Dr Ralf Garlichs, Executive Vice President Products & Technology ofthe ­Interroll Group, talks about how the company plans to expand its position
as an innovation leader in this age of e-commerce and ongoing digitalisation.

Dr Garlichs, intralogistics has already been afast-growing sector of the economy for several years
now. Isn’t it about time for that to end?
Dr Ralf Garlichs: Of course nobody knows precisely
what the future has in store for us. It’s common knowledge that economic trends always depend on external
factors, some of which are political in nature. Yet if you
take a look at the general market environment, you see
strong growth drivers in the intralogistics sector whichhave not yet taken full effect. These include not only
the forecast increase in global air traffic and the ongoing integration of modern material flow solutions in
production, but the e-commerce boom in industrial
countries and emerging markets, in particular. Despite
the fact that we have already been reporting rapid
growth rates for some years now, experts say that weare still at the onset of the e-commerce trend and predict that global e-commerce sales will more than double between 2016 and 2020. Not only is the volume ofgoods ordered online growing, but expectations withrespect to the speed and reliability of deliveries are rising as well, with this trend visible in terms of bothbusiness with end consumers and the increasingly

common just-in-time production method. We play apivotal role in this scenario. Because without ongoingenhancements in the efficiency of technical equipmentin the distribution centers and a higher degree of automation in the material flow, it will be impossible tocope with this trend.
Some might think that, at some point in the near
future, there should be enough new infrastructure
already in place ...
Don’t make the mistake of mixing up material flow
with transportation or telecommunication infrastructures. Those types of connections can convey both lorries and passenger cars, or voice and data, through one
and the same conduit. Conveyors for in-house logistics
are designed to meet much more specific requirements. Factors like weight, size, quantity and the typeof packaging used on the goods being transported aredecisive. Companies that change these parameters,
possibly because of new offers to customers, usuallycannot simply continue using their existing infrastructure for this. I’m not even talking about the difference
between multi-tonne pallets or lightweight boxes here,

INTERVIEW DR RALF GARLICHS29

Dr Ralf Garlichs, Executive Vice President Products and Technology.

“Our customers can now
implement a complete,
zero pressure accumulation
pallet conveyor while
simultaneously profiting fromthe advantages of componentsthat have proven themselves
hundreds of thousands of times.”or even about the special hygienic requirements of thefood or pharmaceutical industries. If demographic
shifts cause a rise in the number of small households,
for example, or if businesses’ marketing strategies
prompt changes to either the size or type of packaging
used for a product, the corresponding material flow
solution needs to be adapted accordingly or even redesigned from scratch. Poly bags are an excellent example of this. This type of packaging calls for adaptations
to be made to the existing conveyor technology. In
other words, there is still a lot of work awaiting
high-performance suppliers like Interroll over the next
few years.
Does that mean you need to develop new products
for each application, just because of this trend?
No. That would be financially infeasible for us, for ourcustomers, in other words, the system integrators andplant engineers, as well as for the users of our solutions. For years now, our technology development
work has followed a platform-based strategy, precisely
for that reason. Like the ever-popular LEGO system,
customers around the world can assemble user-spe-INTERVIEW DR RALF GARLICHS30

Dr Ralf Garlichs,
Executive Vice President
Products & Technology.

“Our partners and customers
can also look forward to more
exciting new products
and solutions from Interroll
in the future.”cific solutions based on proven, high-quality compon­
ents. The advantage of this strategy is not only that we
considerably reduce the complexity of our production
processes, but also that we can push ahead with our
product development and expansion work in a gradual, targeted manner by taking existing components
and adapting them, combining them in new ways oradding individual elements to achieve specific results.
This approach helps us continuously enhance the value
added of our product portfolio, to expand the productportfolio itself and, in doing so, tap new sectors andareas of application.
What exactly does that mean?
Take our modular MCP conveyor platform, forinstance. This plug-and-play solution for a highly efficient, zero-pressure-accumulation material flow was
initially designed for use in applications that offer theoperators of distribution centers, our traditional target
markets in other words, true added value. We thenevaluated the corresponding material flow requirements in the manufacturing industry and also positioned our solution in the tyre industry where it was

equally successful. We are now moving forward andassessing the solution with regard to its suitability forthe fashion and frozen food industries. Our ability to
expand the fields of application and our sales markets
isn’t the only advantage offered by this approach: ourplatform strategy’s charm also lies in the fact that we
can make more profitable use of our existing expertiseby transferring this technology relatively easily toother applications. One example of this is how we took
the principle behind our decentralised drives and controls, which had previously been used for 24V RollerDrives, and applied it for use in 400V pallet conveyance solutions. Our customers can now implement acomplete, zero-pressure-accumulation pallet conveyor
while simultaneously profiting from the advantages ofcomponents that have proven themselves hundreds ofthousands of times. We plan to systematically follow
this path of targeted innovation in order to help ourcustomers effectively reach their business objectives.

INTERVIEW DR RALF GARLICHS

31

Industry is becoming increasingly digitalised.
How are you coping with developments related to“Industry 4.0”?
Digitalisation has already reached the intralogistics
sector. We were prepared for it and not only did we use
a Kaizen-based corporate culture to continuously
improve our production workflows and expand our
locations in Wermelskirchen, Kronau and soon in
Thailand, but the past few years also saw us invest
around 13 million EUR in our Group’s central innovation campus in Baal, near Düsseldorf. These efforts
have sustainably strengthened our innovativeness,particularly with an eye to what might be termed“Intralogistics 4.0”. For instance, we made sure that ourplug-and-play products are based on open, standardised data interfaces to enable system integrators to easily feed data from networked sensors or controls intohigher-level processing systems. At the same time, ourdevelopers are working on increasing our solutions’already extremely high availability even further byoffering additional maintenance features. These features would allow products to automatically indicate
to users that their ideal replacement date is coming up
soon. We also wanted to make sure that our controls
automatically configure themselves via plug-and-play– yet another feature that offers our customers added
value and simplifies their jobs.

Speaking of “simplicity”, that is one of the central
promises of digitalisation...
Absolutely – and we keep that promise, but not just at
the product level. We also help our customers withproject layout and design work by providing easy-touse software, like our Layouter. With this programme,
assembling sophisticated solutions that integrate our
products takes just a few clicks of a mouse. This virtual
configuration platform is extremely popular amongcustomers because it greatly simplifies their work processes. Plus the HANA-based global SAP infrastructure lets us significantly simplify and accelerate ourown internal and external processes. Yet despite all theopportunities digitalisation offers us, our employees
are and will always be our most valuable foundation.
That is why we invest in Group-wide training and­further education programmes – and our in-house
Interroll Academy in Baal is one of the central pillarsof our innovation strategy.

The Interroll Research Center(IRC) in Baal is one of Interroll’s
key facilities for further growing
the leadership in innovation.

FINANCIAL POSITION, EARNINGS AND CASH FLOWS

32

FINANCIAL POSITION,EARNINGS AND CASH FLOWSNET SALES

316.3

335.3

360.7

2013

2014

2015

EBITDA AND
EBITDA MARGIN
401.5

2016

450.7

2017

EBIT AND EBIT MARGIN
39.8
11.0 %
27.2
8.6 %

25.4
7.6 %

2013

2014

2015

47.9
11.9 %

2016

187.2
72.5 %

2013

200.3
72.0 %

233.1
71.8 %

44.1
13.2 %

2013

2014

2015

2017

65.7
16.4 %

66.3
14.7 %

2016

2017

NET PROFIT

47.4
10.5 %EQUITY AND
EQUITY RATIO

207.6
70.9 %

45.4
14.3 %

58.2
16.1 %

29.3
8.1 %

20.5
6.5 %

19.1
5.7 %

2013

2014

2015

36.2
9.0 %

2016

39.1
8.7 %

2017

OPERATIONAL
CASH FLOW
261.7
73.6 %

46.2

44.5

40.2

36.8

27.8

2014

2015

2016

2017

All amounts in million Swiss francs.

2013

2014

2015

2016

2017

FINANCIAL POSITION, EARNINGS AND CASH FLOWS33

STRONG ORDER INTAKE, NET SALESAND CASH FLOWAs announced at the financial press conference in March 2017, Interroll is exploiting its
financial strength to invest up to an additional CHF 5 million per year in research anddevelopment in the 2017 reporting year and the 2018 financial year. The Group also
wants to strengthen its position as a technology and innovation leader in materials
hand­ling to accommodate the “Industry 4.0” trend.

ORDER INTAKE AND NET SALES REACH
NEW RECORD HIGHS
During the 2017 financial year, the Interroll Group
received record new orders for CHF 458.1 million(previous year: CHF 405.2 million). In local currencies, the Group posted 12.0 % growth. Growth in thereporting currency reached 13.0 % (organically 12.7 %)and was supported by the regular product business aswell as by projects for the food and beverage industry,
e-commerce and airports. New orders received fromthe Americas region were up by more than 20 %.
At CHF 450.7 million (previous year: CHF 401.5 million), consolidated net sales also reached a new recordand grew by 12.3 % in the reporting currency (organic­
ally: 12.0 %). In local currencies, the Group posted
11.3 % growth. Particularly strong sales growth wasreported in the “Drives” and “Conveyors & Sorters”
product groups, at 18.6 % and 18.0 %, respectively.
SOLID OPERATING RESULTS, TAX EFFECTS
BOOST NET PROFIT
Despite the increase in research and development
costs mentioned above, earnings before interest, taxes,
depreciation and amortisation (EBITDA) increased by
1.0 % in the 2017 financial year to CHF 66.3 million(previous year: CHF 65.7 million).
The EBITDA margin was 14.7 % (previous year:
16.3 %).
Earnings before interest and taxes (EBIT) amounted to
CHF 47.4 million (previous year: CHF 47.9 million),while the EBIT margin stood at 10.5 % (previous year:
11.9 %).
Net profit rose by 7.8 % to CHF 39.1 million (previous
year: CHF 36.2 million), in part due to tax effects.
The net profit margin was 8.7 % (previous year: 9.0 %).

GOOD BALANCE SHEET PERFORMANCE
Total assets increased to CHF 355.3 million on
31 December 2017, up 9.4 % from the end of 2016
(CHF 324.8 million). An increase was seen in the shareof finished products and work in progress included ininventory, in particular. Interroll also received more
payments on deposit. This development reflects theintensive project work done by the Interroll Group in
the reporting period.
Following the payment of a dividend and the purchaseof treasury shares, net financial assets dropped to CHF
37.1 million as at 31 December 2017 (31 December
2016: CHF 38.0 million).
Equity rose by 12.3 % to CHF 261.7 million (31 De­­
cember 2016: CHF 233.1 million).
The equity ratio was 73.6 %, compared to 71.8 % at theend of 2016.
STRONG CASH FLOW
Thanks to prudent management of net working capitalon the balance sheet, operating cash flow increased
substantially on the prior-year period (CHF 36.8 million) by 25.5 % to CHF 46.2 million.
At CHF 25.4 million, gross investments rose considerably over the previous year (CHF 19.5 million). Specifically, these include the further expansion of capacity
at the Center for Excellence for rollers in Wermels­
kirchen, Germany, the purchase of an additionalbuilding by the global Center for Excellence for drives
in Baal, Germany, and the purchase of land reserves
for the regional Center of Excellence for belt curves in
Kronau, Germany.
Because of the higher cash flow, the free cash flow also
improved significantly to CHF 20.1 million (previous
year: CHF 18.0 million).

CORPORATE RESPONSIBILITY

34

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 customer satisfaction and employee loyalty, and meeting the needs of its shareholders through its growing market position.

THE POWER OF PRINCIPLES:

ENGAGE, ENABLE, SUSTAINInterroll sets new global standards with its material
flow solutions. We are committed to responsibly devising new connections between the physical and the­digital world. Our principles make it easier for our­customers and employees to work responsibly every
day in a complex environment. We bring economic
success in line with sustainable, ecological awarenessand social responsibility, both in the short term andover 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 andoffer advanced, market-oriented working conditions–– We consider the commitment and the innovative
strength of employees to be an important source of
our success

PRINCIPLES WITH RESPECT TOOUR CUSTOMERS–– Our high-quality products are comprehensible andeasy to use–– Our project solutions lead to partner relationships–– Our services create a consistent customer experience in the long term

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 (www.interroll.com/
investor-relations/corporate-governance/)–– Anti-Bribery & Anti-Corruption Guidelines(www.interroll.com/investor-relations/
corporate-governance/)–– Supplier Code of Conduct (www.interroll.com/
investor-relations/corporate-governance/)

CORPORATE RESPONSIBILITY

35

Best in class

Climate ofexcellence

improvement in terms of the development of work
structures and processes. Together with the employees,
this topic will be promoted more strongly in the future.

We areInterroll

Reliableand fair

Fast andcommitted

Long-termthinking

ProvensolutionsGlobally
consistent

ENGAGE

INTERROLL’S WORLDWIDEEMPLOYEE SURVEY
In May 2017, Interroll conducted its second worldwide
engagement survey among nearly 1,900 employees
from more than 30 Group companies and in 16 different languages. This survey generated an extremely
high response rate of 89 % (2016: 80 %).
An independent survey institute used a measurement
model with around 50 multiple choice and openended questions. The overall results of this employee
survey were quite satisfying: scores from 60 to 74
points are considered “positive”, while scores between
75 and 84 points are viewed as “extremely positive”.
INTERROLL PROVIDES ITS EMPLOYEESAND EXECUTIVES WITH A PRODUCTIVEENVIRONMENTThe 2017 Global Employee Survey confirmed the gratifying results of the very first worldwide survey in 2016.
Coming in at 71 points (2016: 70 points), the results
revealed a good, even higher overall level of enablement within the Group.
At 82 points, the employees strongly confirmed Interroll’s quality and customer focus, in particular, as wellas the clear and promising orientation of the Group.
However, the respondents also saw some potential for

INTERROLL EMPLOYEES ARE COMMITTED
AND READY TO EXCEL
Employee engagement earned 71 points (2016: 69
points). Moreover, employees are proud to work forInterroll (80 points): they feel motivated to go that extra
mile, beyond their official tasks and responsibilities.
Various factors are relevant for rating the work situation, including working conditions, involvement andpersonal responsibilities.
Interroll employees are dedicated and indicate more
frequently that they understand the relationshipbetween their job and the Group’s strategies and goals.
Yet despite the higher score, there is still potential for
improvement: the employees feel that more could
be done in terms of training opportunities as wellas their individual development within the Group.

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 reinforce thestrengths identified and to work on the weaknesses.
The results and findings of the survey as well as themeasures identified for each company were presented
to Group Management and were discussed as part ofthe 2018 budget process.
RELATED DOCUMENTS
Press release dated 11 September 2017 on the resultsof the second Global Employee Survey conductedby the Interroll Group: (www.interroll.com/press/
detail-page/article/employees-strongly-confirminterrolls-quality-and-customer-focus/).

CORPORATE RESPONSIBILITY

36

ENABLE

INTERROLL ACADEMYThe Interroll Academy in Baal, Germany, is the driving
force for the transformation of the Interroll Group intoa 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 themwith the aim of furnishing them with the expertisethey need to provide valuable support to our customers. Our participants, who come from all areas of thecompany, are not only familiar with Interroll products,
but also with the applications and concerns of ourcustomers.

Through our numerous training and further educational programmes, all employees can develop andoptimally deploy 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 material 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 and then provide them with professional maintenance and care over the course of theircustomer relationships.
LEADERSHIP TRAINING
As part of the “Culture for Growth” programme
launched at Interroll, not only was a systematic survey
conducted to assess the commitment of employees
from around the world, but a total of nearly 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

CEO Paul Zumbühl (second from the right) with the participants
who successfully completed the leadership training programme in Baal.

CORPORATE RESPONSIBILITY

37

Network
Switzerland

WE SUPPORTSUSTAIN

INTERROLL AND THE
UN ­GLOBAL COMPACT
Interroll has been a formal member of the UN Global
Compact since the fourth quarter of 2016, and a­member of the local Swiss network since the first­quarter of 2017.
This joint initiative between economic enterprises, theUnited Nations and groups representing labour inter­
ests and civil society is intended to promote the social
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 larg­
est corporate network for an ecologically, economic­
ally and socially sustainable economy. The UNGC pro­
motes a sustainable, global economy that enables
long-term added value for people, communities, com­panies and markets.
It helps the members with responsible corporate gov­
ernance 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 that are ready tocommit to responsible and sustainable business
management.
COMMUNICATION ON PROGRESS (COP) 2017
Interroll drafted its first progress report, referred to as
Communication on Progress, for the UN Global Com­
pact on 28 February 2018. In this report, the Group
renewed its commitment to upholding the network’s
basic principles for another year.
Also refer to the press release dated 28 February 2018
on the Communication on Progress submitted to the
UN Global Compact: (www.interroll.com/en/press/
detail-page/article/interroll-is-putting-the-un-globalcompact-principles-into-practice/) and the Communi­
cation on Progress (COP) 2017: (www.interroll.com/
fileadmin/user_upload/Downloads__PDF_/Company/
UN_Global_Impact/INT_Communication_on_
Progress_2017_EN.pdf)
RELATED DOCUMENTS–– United Nations Global Compact(www.unglobalcompact.org)–– United Nations Global Compact Principles(www.unglobalcompacts.org/what-is-gc/mission/
principles)–– Universal Declaration on Human Rights(www.un.org/Overview/rights.html)

ROLLING ON INTERROLL

38

ROLLING ON INTERROLL
Rolling On Interroll (ROI), the exclusive customer loyalty­programme called into life by the Interroll Group in March 2015,
has now evolved into a globally respected quality label.
This programme targets decision-makers and users across allindustries in an effort to raise their awareness of the pivotal­importance of using high-quality key products for machine andplant engineering.

FROM E-COMMERCE TO THE FOOD INDUSTRY:­­INTERROLL AS A STRONG PARTNER
FOR M­ EDIUM-SIZED OEMS AND SYSTEMINTEGRATORS
They come from over 30 coutries: around 65 selectedmaterial handling companies, with whom Interroll has
long-standing business relationships based on mutual
trust, are currently exclusive ROI partners. These partners are all medium-sized OEMs and system integrators, often leaders in their respective niche markets

The ROI community at the first Global Summit in Barcelona

who rely on the outstanding product expertise, delivery reliability and innovation of Interroll as a strong,
global partner. Not only that, but the ROI partner programme has become a veritable forum for the industry, one that promotes an active exchange of experience and best practices while also opening up
opportunities for partners to generate new businessand grow together. Many of the partners are now collaborating across international borders and work
together with Interroll to offer customers first-class

ROLLING ON INTERROLL

39“Long-standing partners joinInterroll to form whatjust could be the industry’s
strongest global alliance.”

Rolling On Interroll: our global quality label

solutions. This alliance opens up new opportunities,
allows partners to complement their respective areasof expertise and accept more complex projects bypooling their resources and know-how.
“GROWING TOGETHER”:
THE MOTTO OF THE ROI COMMUNITY
This motto’s double meaning, which conveys both theconcepts of joint growth and growing closer to one
another, plays a central role in the ROI programme.
The very first ROI Global Summit was held in Barcelona in September. This event offered ROI partners in
the international ROI Community a unique platform
where they finally had an opportunity to meet otherpartners in person and exchange ideas. This networking platform was attended by more than 80 % of ROI
partners, namely 130 participants from 28 countries
and five continents, coming from as far away as Australia, China, Thailand, South Africa and Egypt, fromthroughout all of Europe or even the US, Argentina,
Chile and Uruguay.
Podium discussions, workshops, individual talks andlectures held by renowned experts, such as Professor
Howard H. Yu and futurologist and trend expert
Magnus Lindkvist, provided for a lively exchange ofexperiences during the two-day meeting of the Rolling
On Interroll Community in Catalonia’s capital city.
Under the motto “Growing together”, participants hailing from all corners of the world discussed the topics
of interaction, innovation and inspiration. Common

topics of discussion included not only current user andmarket trends, but especially the business opportunities that could arise through Industry 4.0, for instance,
as well as the rising levels of digitalisation and automation in the material handling sector. More than 90 % of
those in attendance indicated that having business
partners they can trust is extremely important to their
growth strategy.
“The Global Summit in Barcelona, which was
extremely well received by our international partners,
represents yet another important step for us towardfirmly establishing our Rolling On Interroll programme as an exclusive forum within the industry. The
intense, candid sharing of experiences, which extended
far beyond the use of concrete solutions, illustrated
just how beneficial close business partnerships can bein our industry,” explained ROI Programme Director
Franz Schöpf.
“1+1=3” – THE ROI SUCCESS FORMULA
With its sights set on the ultimate goal of working
together to achieve profitable growth, Rolling On
Interroll offers its programme partners a concrete
opportunity to enter into meaningful, reliable partnerships. Banding together not only allows them to realise
larger projects but also to minimise their risk. Interroll
customers view this as a real opportunity and are
grateful. The continued, systematic expansion of thiscustomer programme is firmly anchored as a strategic
activity in the Interroll Group and is implemented by a
dedicated team.
For additional information, go to:www.rollingoninterroll.com

MARKETING40

IN TOUCH WITH
THE MARKET –ON ALL CHANNELS

Innovative booth design attracted an exceptionally high number of visitors
at the LogiMAT 2017 in Stuttgart.

Interroll continued to strengthen its customers’ awareness of their role as partners for growth during the2017 reporting year. One central component of its
marketing strategy is the appearance at specialist andindustrial trade fairs. In 2017, Interroll attended some
20 international trade fairs as well as a number of local
events to showcase our products and solutions. In
addition to presenting highlights like the market
launch of the new generation of drum motors at the
LogiMAT trade fair in Stuttgart, Interroll uses industry-specific trade fairs like the Tiretec in Hanover andShanghai, Euroshop in Düsseldorf, PackExpo in Las
Vegas and interairport in Munich, to target and tap
new customer segments for the Group as well as to becloser to its end users.

Visitors are impressed by Interroll’s leading material
flow solutions at the KoreaMAT trade fair in Seoul.

Scoring points not only for the fresh, innovative
designs of its booths, Interroll boasted a modular trade
fair booth design based on flexible, scalable models
which dramatically cut both transport costs andassembly times yet still provided a booth size of
between 50 and 100 square meters. Unlike with standard, conventional booth constructions, the same hardware has been in use for nearly seven years now. Not
only is that extremely efficient, but sustainable as well.
During the reporting year, the global Interroll marketing team introduced some important marketing automation tools that focus on key performance indicators(KPIs). These are used to more systematically pursue
leads generated at trade fairs and follow up on online
visits by providing visitors with a customised packageof relevant information. Online tools like 3D CAD
downloads and the Belt Drive Matchmaker help customers simplify their planning processes and customise Interroll’s solutions to precisely fit their needs. Bothtools have become well-established among our customers during the reporting year.

MARKETING

41

Alfa Romeo as new Sauber F1Team Partner also brings
new momentum to Interroll’ssponsoring activities.

THE PARTNERSHIP WITH THE SAUBERF1 TEAM WAS RENEWED
Sauber and Interroll both share a passion for teamspirit, technology and precision as well as an absolutedesire for success. In 2017, a number of factory tours
were conducted for customers in Hinwil, Switzerland,presentations were organised for customers and joint
videos were released. In addition, the partnership waspresented at trade fairs and other customer events.
Sauber’s addition of Alfa Romeo as a new team partnerat the end of 2017 also opens up attractive new opportunities in terms of Interroll’s positioning.
In 2017, Interroll succeeded in scoring points by substantially strengthening its presence in trade publications, both in the areas of logistics media and industry-specific media. Here, a special focus is placed on
public relations work in growth segments and emerging markets.
Interroll also increased its presence at trade and industry events and in associations. At the Munich Management Colloquium, CEO Paul Zumbühl spoke on the
topic “With Individualisation and Speed ​​to Global
Market Success”. At the Logimat, Interroll was on thepanel discussion “Value Added through Industry 4.0?
Roadmap for the SME!” of the the EffizienzCluster
LogistikRuhr.

In Asia, Executive VP Dr Ben Xia represented Interroll
as a spokesman at the Asia Food Manufacturing
Forum in Huai’An, China. In addition, the Corporate
Marketing Team is involved in the steering committee
and as sponsor of the Robotics4Retail Initiative of the
EHI Retail Institute in Germany, which deals with theautomation of material flow in the warehouse and in
the retail sector.
At the end of 2017, Interroll released its new catalog ofrolling stock which covers 282 pages of the complete
range of rollers, conveyor elements, RollerDrive, controls and accessories. Compared to the edition 5 years
ago, 80 % of the printed edition has already been
replaced by the digital version.

Interroll’s presence in key trade media wasstrengthened. Picture: Senior VP Marketing Jens
Karolyi at the expert roundtable of the Germanmagazine “materialfluss”.
© materialfluss / Thilo Härdtlein

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 corporate governance report
The corporate governance report 2017 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.
Parent company and stock listing
The holding company of the Group, Interroll Holding
Ltd., is headquartered in Sant’Antonino / TI, Switzer­
land. 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 the chapter “Interroll on the Capital Market”
on page 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 throughlocal sales organisations. Interroll caters to the needs of
its customers (original equipment manufacturers, systems integrators, end users) by offering a t­ailor-madeproduct portfolio and expert consulting services. The
Interroll manufacturing units focus on the productionof ­specific product ranges. Assembly units receive semifinished products from the manufacturing units andassemble a wide product range for their local markets.
The Interroll Research Center (IRC), which is centrally
located, researches new application technologies anddevelops new products. Global Centers 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,Marketing and Finance). The Board of Direct­ors bases
its financial management of the Group on both theturnover generated in the product groups and geographical markets as well as on consolidated financial
reports. In addition, Group Management assesses theachievement of financial and qualitative targets andother 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 Center (IRC),
Global Product Management
The Interroll Research Center (IRC) develops new products, techniques and technologies in close cooperation
with the Centers 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 Centers of Excellence (CoE)The seven Interroll Centers 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 Centers 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

Shane Belcher

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

Ingo Specht

Interroll AG, Sant’Antonino (CH)Worldwide sales and production companies
Regional Centers of Excellence (RCoE)
Regional Centers of Excellence produce for the EMEA,
Americas and Asia-Pacific regions. These centers­handle the full product range of the global Centers 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 as from then formed the Regional
Competence Center 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 Centers 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. As
per 1 January 2017, Interroll USA, LLC in Wilmington, NC started as a sales unit for the United Statesof America.

CORPORATE GOVERNANCE

47

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

USAA. Robinson

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

USA

R. Wright

Interroll Atlanta LLC, Hiram/GA (US)Sales, service

USA

R. KeelyInterroll USA LLC, Wilmington/NC (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., Mexico City (MX)FUNCTIONREGION/COUNTRY

MANAGED BY

COMPANY

RCoE

China

T. Zhang

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

RCoE

Asia-Pacific

M.K. LoInterroll Shenzhen Co. Ltd., Shenzhen (CN)Sales, service

China

L. ZhiInterroll Holding Management (Shanghai) Co. 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 Annual General Meeting 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 of 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 Board member of the Board of Directors of Neutrik AG.
Mr. Tanner, a member since 2008, was appointed Vice Chairman in 2009, has served as Chairman of the Board of Directorsof Interroll Holding AG since 13 May 2016 and is also a 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 Industry of­Cologne, Germany. He was owner and Managing Directorof Luxis, Locarno, and has held various senior positions in
IT, marketing and business development with 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, and as head of the research institute for management,
production and l­ogistics at the Technical University of­Munich. He has honorary doctorates from the universities
of Klagenfurt, ­Passau and Cottbus. He is currently Chairman of the A­ dvisory Boards of Möhlen­hoff GmbH and­Rudolf GmbH as well as a member of the Advisory Board ofHamberger Industriewerke AG. He is also a member of theBoards of Directors of Sick AG and Zeppelin GmbH. Prof.
Dr Wildemann has been a member of the Board of Directors of Interroll Holding AG and a member of the Compensation Committee since 1999. Furthermore, he has served as
the Vice Chairman of the Board of Directors of Interroll
Holding since 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, theVice Chairman and the other members. The Board of
Directors is assisted by two permanent committees
focusing on the areas of auditing (Audit Committee)
and remuneration 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
the Group companies are also being audited on aregular basis. The Audit Committee mandates the­internal audit department to execute internal audits
and reviews 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 for bonus payments. In addition, the Compensation Committee is responsible forestablishing 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 Boardof Directors. The executive vice presidents of therespect­ive functional units and the vice presidentsof the corporate functions as well as other membersof management are invited to attend meetings whennecessary.
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. If votes are tied, the Chair-

man has the casting vote. All resolutions are recordedin 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 2017 financial year, 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 governing bodies
are set out in the Articles of Incorporation of Interroll
Holding Ltd. Responsibilities and duties that cannot bedelegated 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
Under the organisational regulations, the Board of
Directors has delegated the management of ongoing business to a Chief Executive Officer (CEO). The
CEO is responsible for the overall ­management of
the Interroll Group and for all matters not fallingunder the purview of another governing body, as
specified by law, the Articles of Incorporation 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
delegated to 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 local
management.
Extraordinary occurrences and decisions of mater­
ial 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 2017:
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)

BritishExecutive 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 in 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. Indi­
vidual nominees, however, are entitled to exercise
more than 5 % of the total votes if they disclose theidentity of the beneficiaries they represent and if the­respective 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, theAnnual General Meeting is quorate irrespective of thenumber of shareholders present and the shares represented by proxy.

CORPORATE GOVERNANCE

52

Convocation of the Annual General Meeting
The invitation to the Annual General Meeting is issued
at least twenty days prior to the AGM and is legallyeffective 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.
Agenda and registration in the share register
The invitation to the Annual General Meeting has
to 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 Extraordin­
ary General Meeting or the execution of a
special audit. No entries are made into the share­register less than ten days prior to an Annual General
Meeting up to the day subsequent to the AGM.

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 Annual General Meeting of 12
May 2017, Interroll Holding Ltd. has appointed
Pricewaterhouse­Coopers (PwC) for another term of
one year as its auditing company. PwC has been theGroup Auditor of 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 of the­Interroll Group in the business year 2017 amounted
to CHF 0.4 million. The audit fees charged by PwC in2016 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
The 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 DIRECTORS55

REMUNERATION OF GROUP MANAGEMENT57

REPORT OF THE STATUTORY AUDITOR

62

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 Articles 14 to 16 of theOrdinance Against Excessive Compensation in Swiss
Listed Companies dated 20 November 2013 (VegüV),
the Directive on Information relating to Corporate
Governance of SIX Swiss Exchange and the principlesof the Swiss Code of Best Practice for Corporate Governance of economiesuisse, which entered into force
on 28 August 2014. Further improvements were madeto this remuneration report for 2017 to make it moretransparent and understandable. The aim is to ensure
the best possible transparency for the reader.

BASIC REMUNERATION PRINCIPLES
A fair, transparent remuneration system is designed
to contribute to the long-term development of theInterroll Group and secure its business success. The
Interroll Group’s remuneration system is in line with
its corporate strategy and is geared toward appropriately rewarding the achievement of both short-termand long-term targets. It is aimed at putting Interroll
in a position to attract, develop and retain the best
people in its particular field and sector.
The Interroll Group’s remuneration policy is based on
the following principles:–– 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 intended as asolid, prudent framework for preventing excessive
fluctuations in the respective elements. Specific­
ally, it has been devised to safeguard the Group’s
sustained business success and to prevent an
individual’s willingness to take risks from negative­­ly impacting the Group’s medium- and long-term
interests.
–– Remuneration must be commensurate with thelevel of responsibility, the individual’s concrete
contribution toward the Group’s success and theindividual workload of the relevant role.
–– In addition, remuneration is to ensure appropriate
and competitive compensation based on the roleand individual performance.
–– As a component of the remuneration for membersof Group Management, share plans are aimed atrewarding the achievement of long-term Group targets in the interests of shareholders and promoting
long-term corporate performance.

The Board of Directors is responsible for the prin­ciplesof 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 both the Board of Directors and 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 regarding the remuneration of the Board of Directors and Group Management pursuant to the Articles of Incorporation, Article
23bis (Compensation Committee). 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
and make proposals regarding other strategic HR
decisions.
At the Annual General Meeting of Interroll Holding
AG on 4 May 2018, the Board of Directors will propose the maximum possible total remuneration of
the Board of Directors for the period up to the 2019
Annual General Meeting and the maximum possible
total remuneration for Group Management for financial year 2018 for approval. The voting rules governing
the authorisation of the Board of Directors and GroupManagement are included in the Articles of Incorporation dated 8 May 2015 (Article 12bis Remunerationof the Board of Directors and Group Management).
The Articles of Incorporation can be found on thewebsite www.interroll.com at www.interroll.com/de/investoren/corporate-governance/statuten.

REMUNERATION REPORT

55

Overview of the areas of responsibility of the Compensation Committee,
Board of Directors and General Meeting
Stages of authorisation

Recommendation

Review

Authorisation

Principles of remuneration

Compensation Committee

Board of Directors

Annual General Meeting

Detailed remuneration model Compensation Committee

Board of Directors

Board of Directors

Board of Directors

Annual General Meeting

Compensation Committee

Board of Directors

Board of Directors

Maximum total remuneration Compensation Committee

Board of Directors

Annual General Meeting
Board of Directors(Articles of Incorporation)(mandatory vote)(remuneration regulations)
Maximum total remuneration Compensation Committeeof the Board of Directors
Individual remuneration for(mandatory vote)members of the Board of
Directorsof Group Management(mandatory vote)

Remuneration of the CEO

Compensation Committee

Board of Directors

Individual remuneration

CEO

Compensation Committee Board of Directors

for all other members ofGroup Management

REMUNERATION OF THE BOARD
OF DIRECTORS
Remuneration model 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 benchmarks from other listed Swiss medium-sized industrial companies with international
activities.
All remuneration paid to members of the Boardof Directors of Interroll Holding AG by Interroll­Holding AG and the subsidiaries over which it has
direct or indirect control is decisive in determining
annual remuneration.

Every year, the Board of Directors determines the fixed
remuneration of the members of the Board of Directors of Interroll Holding AG for the period until thenext Annual General Meeting of Interroll Holding
AG on the basis of the approved Articles of Incorporation of 8 May 2015 (Article 22bis, Total Remuneration of the Board of Directors and the Management),
the remuneration regulations of 15 March 2014, andat the Compensation Committee’s request, subject toapproval by the Annual General Meeting. Extraordinary efforts that go beyond the normal duties of theBoard of Directors may be additionally compensated.
All social security contributions are made by theemployer.
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.

REMUNERATION REPORT

56

Total remuneration for 2017 (audited)
Compensation paid to members of the Board of Direct­
ors (BoD) is disclosed in accordance with VegüV and
OR 663c as follows:in thousands CHF

Cash

Shares /options

SocialSecurity*

Other
benefits

Total com­pen­sation

Shares held
as of 31.12.

Voting rights
in %Urs Tanner
2017

P, CC **

210

26

236

0.00

2016

VP

150

17

167

0.00

2017

AC

80

13

93

20

0.00

2016

AC

60

10

70

20

0.00

2017

AC

80

8

88

100

0.01

2016

AC

60

6

66

100

0.01

2017

VP,CC **

105

12

117

633

0.08

2016

CC

75

7

82

820

0.10

2017

70

14

84

0.00

2016

60

12

72

0.00

2017

70

12

82

69,745

8.55

2016

60

10

70

76,135

9.55

2017

615

85

700

70,498

8.64

2016

465

62

527

77,075

9.67

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.
Valuation of total remuneration
for the 2017 term
The remuneration of the Board of Directors of CHF
700,000 (previous year: CHF 527,000) from AGM
2017 to AGM 2018 contains no significant special
effects and is within the CHF 800,000 approved at theAnnual General Meeting 2017.
Outlook for total remuneration
for the 2018 term
At the Annual General Meeting on 4 May 2018, theBoard of Directors will propose a maximum remuneration of CHF 800,000 for the term until the next
Annual General Meeting 2019 (previous year: CHF
800,000).
Other remuneration (audited) andadditional 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.
Members of the Board of Directors do not receive any
flat-rate compensation for business expenses apartfrom the reimbursement of travel expenses actually
incurred.
Loans and credits (audited)
The terms and conditions governing any loans or­credits granted to members of the Board of Directors
are defined in the Articles of Incorporation under
Article 22bis (Total Remuneration of the Board of
Directors and the Management). Interroll Holding
AG and its subsidiaries granted no loans, advances or
credits to members of the Board of Directors in the2017 and 2016 reporting years.

REMUNERATION REPORT57

REMUNERATIONOF GROUP MANAGEMENT
Remuneration model and the determinationof 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 shortterm remuneration component (Short Term Incentive,STI) as well as a long-term remuneration component
paid out in shares with a vesting period of at least
four years (Long Term Incentive, LTI). Depending on
performance and the course of business, actual total
remuneration can be either higher or lower than the
projected total remuneration. 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 thefollowing key criteria:–– global responsibility of the relevant role–– actual individual performance contributing to theGroup’s long-term strategic development–– professional and market-related experience–– complexity of the area of responsibility–– personal results achieved on behalf of the Group.
External consultants may additionally be involved indetermining the structure and level of remuneration.
As part of the Group’s reorganisation and the appoint-

ment of a new Group Management in 2011–2013,
market comparisons were made with the help of therelevant recruitment consultants and used in determining the level of remuneration when recruiting staff
in Europe, America and Asia. Furthermore, comparisons were made on the basis of a detailed, up-to-date
Kienbaum Salary Forecast and a Willis Towers Watson
Salary Survey. These comparisons were updated basedon both studies in 2016 and 2017.
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 authorised Articles of Incorporation of 8 May 2015 (Article 22bis, Total Remunerationof the Board of Directors and the Management), theremuneration regulations dated 15 March 2014 andat the Compensation Committee’s request, the Boardof Directors specifies the total remuneration of GroupManagement every year, subject to approval from theAnnual General Meeting. The Compensation Committee works out the CEO’s total remuneration. The
CEO works out the total remuneration of the othermembers of Group Management and submits 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 4 May
2018, the Board of Directors will propose the max­
imum possible total remuneration for Group Management for financial year 2018 for approval.

Overview of the remuneration model for Group Management: composition of total remuneration
Definition

Instrument

PurposeFixed remuneration

Monthly cash payments

Remuneration for performanceof the function and all qualifications
required to perform the role

Variable remuneration

Annual cash payment(Short Term Incentive, STI)

Remuneration for financial andindividual target achievement during
the reporting year

Share ownership

Annual share allocation with ­Promotion of sustainable results(Long Term Incentive, LTI)

multi-year vesting period

and long-term focus on the interests

Social security contributions

Pension scheme, insurance and non- Protection against risks and coverageand fringe benefits

cash benefitsof shareholders

Short-term: fixed and variable cash components

Long-term: blocked sharesof business expenses (car)REMUNERATION REPORT

58

Fixed remuneration
The fixed remuneration portion of total remuner­
ation 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.

“Financial success” component of variable
remuneration (STI):
The company’s financial success used to calculate thefinancial success component of variable remunerationis measured in terms of financial key performanceindicators as compared against a predefined benchmark that is set for a three-year period.

Short-term remuneration component: variable
remuneration (Short Term Incentive, STI)
In accordance with Article 22bis of the Articles ofIncorporation, the variable remuneration compon­ent for Group Management generally should notexceed 60 % of total remuneration (or 150 % of fixed
remuneration).
The ratio of variable remuneration (STI) to fixed remuneration for the CEO is 75 % if all targets are reached(with a maximum of 150 % and a minimum of 0 %).
For members of Group Management in an operational
management role, the targeted amount is 50 % (with amaximum of 100 % and a minimum of 0 %). Finally,
for members with centralised roles within the holding
company, the targeted amount of the variable remuneration component is 25 % of fixed remuner­ation(with a maximum of 50 % and a minimum of 0 %).
The maximum specified is a theoretical cap and notintended to be an achievable target. For more information, please refer to the table at the bottom of this page
(Overview of weighting of the variable part [STI] of
total remuneration).

The financial key performance indicators are:–– operating profit (EBITDA)–– operating profit margin (EBITDA as a % of sales)–– sales growth (growth compared to the previous
year, in %)–– gross margin (as a % of sales)–– return on invested capital (ROIC)

The calculation basis for variable remuneration (STI)
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.

Specific performance indicators may be weighted differently or disregarded, depending on the com­pany’s
strategic position or the role of each member of GroupManagement. The benchmark is based on both agroup of five comparable, extremely well-­positioned
companies from within our industry (material handling) as well as the ambitious, medium-term financial
perform­ance goals we set for our company. The overview provided on the next page of how the “financial
success” component of variable remuneration (STI)
was calculated is intended to illustrate how performance is measured.
As a rule, the weighting of the financial success component in variable remuneration (STI) amounts to
100 % for the CEO, at least 75 % for members of GroupManagement in an operational management role andat least 50 % for members of Group Management witha centralised role within the holding company.

Overview of weighting of the variable part (STI) of total remuneration:
Variable remuneration (STI)
in relation to total remunerationRole in Group Management

Min.

Projected

Max.3)

Share of “financial success”
component in variable
remuneration (STI)

Share of “individual targets”
component in variable
remuneration (STI)Group CEO0%

Approx.

150 %

100 %

0%

0%

75 %
Approx.

100 %

75 %

25 %

0%

50 %
Approx.

50 %

50 %

50 %

Excecutive VP1)
Corporate VP2)

25 %Executive Vice President (EVP): operational management role
Corporate Vice President (CVP): centralised role within the holding company (Corp. Finance, Corp. Marketing)3)
Max. theoretical value for cap, not intended to be an achievable target
1)
2)

REMUNERATION REPORT

59

Overview of the calculation of the “financial success” component in variable remuneration (STI)
Performance indicators

Meaning

Var. remuneration 3)(“financial success” portion)

Operating profit (EBITDA)
Operating profit margin (% of EBITDA)
Sales growth (% compared to PY)
Gross margin (as a % of sales)
Return on invested capital (ROIC)

Earnings power
Profitability
Market position, innovation
Pricing power, procurement power
Management, current andIn x % of EBITDA 1)
Performance factor 2)
Performance factor 2)
Performance factor 2)
Performance factor 2)

non-current assets
in x % of EBITDA:
the x in the percentage is determined based on the projected remuneration and projected EBITDA
Performance factor:
1 corresponds to the benchmark (as described on page 58)
		< 1 below the benchmark (min. 0)		> 1 above the benchmark (max. 1.25)
3)
Variable remuneration: the “financial success” portion is calculated by multiplying the percentage x by the EBITDA generated during		the financial year and then adjusting that amount upward/downward based on the performance factors.
1)
2)“Individual targets” componentof variable remuneration (STI):
For the individual targets component, between 3 anda maximum of 5 individual measurable targets areagreed 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 theGroup or parts thereof.
The individual targets relate to, for example:–– developing and launching new products–– gaining market share–– tapping new markets and customer segments–– successfully integrating an acquired company–– successful strategic projects–– achieving inventory reduction targets, etc.
Basing variable remuneration on a multi-year plan(rather than the annual budget) motivates members ofGroup Management to think long-term. It means that
relative continuous improvement is measured against
the prior-year periods and the three-year fixed benchmark, and short-term cost-cutting is prevented in theareas of market development and innovation, etc.
The Compensation Committee may, as an exception,
deviate from the agreed variable remuneration infavour of a Group Management member if failure toachieve specific targets was solely attributable to external factors. There was no deviation from the agreement during the reporting year.

Long-term remuneration component:­allotment of shares (Long Term Incentive, LTI)
Pursuant to Article 22bis (Total Remuneration of theBoard of Directors and the Management) of the Articles of Incorporation, shares with multi-year vesting
periods may be allotted to members of Group Management as part of total remuneration.
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.
CEO share plan:
As a result of this objective, a long-term share plan
(LTI) 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 target thresholds of earnings
per share, operating profit margin (EBITDA in %) andreturn on invested capital (ROIC). If one or more ofthese three financial key performance indicators fallshort of the target threshold, the agreed number ofshares to be allotted will be reduced in accordancewith a predefined formula. If all three financial key
performance indicators exceed the target thresholds,
the predefined number of shares will be allotted, however only up to a maximum cash value of CHF 500,000
after any applicable tax deduction. These shares areblocked for 6 to 8 years. The share plan as describedabove is agreed for a period of three years and shallremain unchanged over this period of time. The valueof the defined and blocked shares corresponds toapproximately 20 % of the projected total remuneration
at the time the three-year cycle is contractually agreed.

REMUNERATION REPORT

60

Share plan for the rest of Group Management:
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.
Under the plan, these members of Group Management
receive a number of shares as a long-term componentof the variable remuneration. The shares received aspart of this component must account for at least 20 %and no more than 100 % of variable remuneration.
Each member of the rest of Group Management mustreach a decision regarding the individual share to bereceived and report this by no later than 15 December of the current financial year, otherwise 20 % will beallotted. These shares are blocked for 4 years.
Allotment arrangement:
The conversion rate for variable remuneration applic­able to the number of Interroll shares allotted to the

CEO and the rest of Group Management is the relevant share price on 31 December of the financial year
ended less the deduction permitted for tax purposes,
depending on the length of the vesting period. Sharesare allotted during the first quarter of each new financial year after the results of the past financial year havebeen made available.
Total remuneration for 2017 (audited)
Remuneration of the members of Group Management
complies with the requirements of Articles 14 to 16of the Ordinance Against Excessive Compensationin Swiss Listed Companies dated 20 November 2013
(VegüV), the Directive on Information relating toCorporate Governance of SIX Swiss Exchange and theprinciples of the “Swiss Code of Best Practice for Corporate Governance” of economiesuisse, which enteredinto force on 28 August 2014, and is as follows:

Remuneration (net) Equity-based compens.
Other
Specialbenefits compensation4)

Total com­pensation

Fixed

Variable1)

Shares2)

Options

Socialsecurity3)

2017

711

854

499

0

572

43

2016

656

881

497

0

560

44

2017

1,452

227

525

0

327

116

2,647

2016

1,377

419

311

0

277

118

2,502

2017

2,163

1,081

1,024

0

899

159

0

5,326

2016

2,033

1,301

807

0

838

161

627

5,767

CEO (highest)
2,679
627

3,265

Other members

Total Group Management

1)

2)

3)
4)

The difference between provisions made in the previous year and the actually paid-out bonuses is netted with the variable compensation
planned for the year under review.
In the year under review a total of 2,010 treasury shares (of which 700 shares for remuneration 2016) were given to senior management
for bonuses (2016: 1,589), of which 2,010 shares (2016: 1,589 shares) may not be sold for a period of four to eight years as of grant date. ­­Share-based payments correspond to tax values.
Social security costs consist of employer and employee contributions to the state-run Swiss social security system.
700 Interoll shares, may not be sold for a period of five years as of grant date (tax value). Please find the explanation under “Valuation of
total remuneration for 2016” (page 59) in the Annual Report 2016.

CORPORATE GOVERNANCE

61

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 Swiss
Code of Obligations (OR) 663bis and OR 663c:–– 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 vesting period, the taxable value decreases
compared with the market value according to thevesting period defined.
–– The difference of CHF 0.484 million (previous year:
CHF 0.641 million) related to company cars – CHF
0.049 million (previous year: CHF 0.058 million) –and share-based remuneration – CHF 0.434 million(previous year: CHF 0.583 million).
Valuation of total remuneration for the 2017financial year
At CHF 5.3 million, total remuneration paid to GroupManagement in the year just ended was considerably
lower than the previous year (CHF 5.8 million) andthus also significantly lower than the maximum total
remuneration of CHF 5.9 million approved at theAnnual General Meeting 2017.
Due to the target achievement calculated in accordancewith the calculation method described, the total remuneration of Group Management in 2017 amounted to
109 % of projected total remuneration (previous year:
130 %). Variable remuneration for Group Management
was equal to 64 % (previous year: 66 %) of fixed remuneration with a projected value of 51 %, and accounted
for 35 % (previous year: 31 %) of total remuneration at
a projected value of 31 %.
Outlook for total remuneration for the 2018
financial year
The effective amount of the variable remuneration2018 to the Group Executive Board is based on the targets actually achieved in 2018. The fixed remuneration2018 was adjusted for two members of Group Management. The maximum possible total remuneration
for the financial year 2018 of CHF 5.9 million (previous year: CHF 5.9 million) submitted for approval at
the Annual General Meeting on 4 May 2018 assumes
that plan targets will be exceeded considerably andcontains a reserve for currency fluctuations. The total
remuneration actually paid out is calculated based on
the method described in this report and is generally

lower than the maximum authorised at the Annual
General Meeting.
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,
and are compliant with the details contained in Article
22bis (Total Remuneration of the Board of Directors
and the Management) of the Articles of Incorporation.
Apart from the total Group Management remuner­
ation presented in the table, members of Group Management only receive compensation for travel costs
actually incurred, upon presentation of the receipts
and in accordance with the expense policy. Any flat
rate expenses paid form part of the remuneration andare thus contained in the total remuneration table.
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. The company car is included in
total remuneration under “Other benefits”.
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 Group 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 six months, and 12 months
for the CEO. These are thus in compliance with Article
23bis (Compensation Committee) of the Articles ofIncorporation.
Loans and credits (audited)
The terms and conditions governing any loans or
credits granted to members of Group Management
are defined in the Articles of Incorporation under
Article 22bis (Total Remuneration of the Board of
Directors and the Management). Interroll Holding AG
and its Group companies granted no loans, advancesor credits to members of Group Management in the2017 and 2016 reporting years.

REMUNERATION REPORT62

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 2017. The
audit was limited to the information according to articles 14–16 of the Ordinance against Excessive Compen­
sation in Stock Exchange Listed Companies (Ordinance) contained in the tables and sections labelled “audited”
on pages 56, 60 and 61 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 2017 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, 6 March 2018

FINANCIAL REPORT OF THE INTERROLL GROUP

63

FINANCIAL REPORTOF THE INTERROLL GROUPCONSOLIDATED FINANCIAL STATEMENTS OF THE 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 STATEMENTS OF THE 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

102

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 THE INTERROLL GROUP

1.1

Consolidated statement of financial position
see notes*

31.12.2017

Property, plant and equipment

6.1

109,770

95,859Intangible assets

6.3

36,852

38,629in thousands CHF

in %31.12.2016

in %ASSETS

Financial assets
Deferred tax assets

7.6

Total non-current assets
Inventories

1,864

655

3,758

3,207

152,244
6.5

Current tax assets
Trade and other accounts receivable

6.6

Cash and cash equivalents

6.7

42.8

60,957

138,350

42.6

48,274

1,595

1,203

103,236

98,72537,30738,264

Total current assets

203,095

57.2

186,465

57.4

Total assets

355,339100.0

324,815

100.0

EQUITY AND LIABILITIESShare capital

854

854

Share premium

7,902

7,184

Reserve for treasury shares–8,695–1,914

Translation reserve–46,221–55,083

Retained earnings

307,840

282,044

Non-controlling interests
Total equity

6.10

261,680

Non-current financial liabilities

6.12

19

Deferred tax liabilities

7.6

99

3,050

Pension liabilities

6.15

8,149

8,154

Provisions

6.14

8,107

Total non-current liabilities

16,37473.6

233,085

71.8

6,867
4.6

18,071

Current financial liabilities

6.12

193

283

Current tax liabilities

7.6

15,952

13,959Trade and other accounts payable

6.16

61,1405.6

59,417

Total current liabilities

77,28521.8

73,65922.6

Total liabilities

93,65926.4

91,73028.2

Total liability and shareholder's equity

355,339100.0

324,815

100.0* See notes to the consolidated financial statements which are 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*

2017

in %

2016

in %

5

450,682

100.0

401,460

100.0

Material expenses–190,893–42.4–162,848–40.6

6.15 & 7.1–129,665–28.8–114,106

–28.4

2,738

0.6

2,197

0.5

Other operating expenses

7.3–69,339–15.4–63,247–15.8

Other operating income

7.4

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

Operating result before depreciation and amortisation (EBITDA)

2,809

0.6

2,228

0.6

66,332

14.7

65,68416.4–2.7

Depreciation

6.1–12,209–2.7–10,997

Amortisation

6.3–6,712–1.5–6,810–1.7

47,411

10.5

47,877

11.9

Finance expenses

–769

–0.2

–913

–0.2

Finance income

172

0.0

604

0.2

–597

–0.1

–309

–0.1

46,81410.4

47,56811.8–7,760–1.7–11,353–2.8

39,054

8.7

36,215

9.0

39,054

8.7

36,215

9.0

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

45.95

42.57

Diluted earnings (result) per share

6.11

45.95

42.57

16.00

12.00

Dividend payment* See notes to the consolidated financial statements which are 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

2017

in %

2016

39,05436,215456–1,332in %Other comprehensive income
Items that will not be reclassified to income statement
Remeasurement of pension liabilities

6.15

Income tax

–96

270

Total items that will not be reclassified to income statement360–1,062

8,862

144

to income statement

8,862

144

Other income

9,222

–918

Comprehensive income

48,27635,297

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

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

48,276

10.7

35,297

8.8

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

67

1.4

Consolidated statement of cash flows

in thousands CHF

see notes*

ResultDepreciation, amortisation and impairment

2017

2016

39,05436,215

6.1 & 6.3

18,921

17,807

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

7.4

–11

–28

Financial result, net

7.5

597

309

Income tax expense

7.6

7,760

11,353

Changes in inventories
Changes in trade and other accounts receivable
Changes in trade and other accounts payable
Changes in provisions, net

6.14

Income tax paid
Personnel expenses on share-based payments–11,175–3,503–473–21,636

–742

3,646

814

2,822

–10,226–9,570

2,313

1,238

Other non-cash expenses/(income)–604–1,824

Cash flow from operating activities

46,22836,829–20,975–13,094

Acquisition of property, plant and equipment

7.1

6.1

Acquisition of business segment

4

Acquisition of intangible assets

6.3

Acquisition of financial assets
Proceeds from disposal of property, plant and equipment

6.2–4,778–4,384–1,635–1,157

–37

219

815

Settlement of loans receivable

136Interest received

171

123

–26,113–18,600–13,619–10,231–8,375–2,075

Cash flow from investing activities
Dividends paid

1.5

Purchase of treasury shares
Sale of treasury shares

972

Proceeds from financial liabilities

18

Repayment of financial liabilities–101

Interest paid

–27

–18

–22,104–11,375

Cash flow from financing activities–23

Translation adjustments on cash and cash equivalents

1,032

–244

Change in cash and cash equivalents

–957

6,610

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

6.7

38,26431,65437,30738,264

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

68

1.5

Consolidated statement of changes in equity

in thousands CHF

see notes*

Balance at 1 January 2016

SharecapitalSharepremium

Reserve fortreasurysharesTranslation
reserve

Retainedearnings

854

6,519

–1,623–55,227

257,123

207,646

36,21536,215ResultNon-controllinginterests

Total equity

Other comprehensive income,net of taxes

144–1,062–918

Total comprehensive income

144

35,15335,297–10,231–10,231

Face value reduction, net
Share-based payments

7.1

370

868

1,238

6.10

295

915

1,210

7,184

–1,915

Sale of treasury sharesincl. tax effects
Purchase of treasury
sharesincl. tax effects–2,075–2,075

6.10

Balance at 31 December 2016

854

–55,083

Result282,045

233,085

39,05439,054

Other comprehensive income,net of taxes

8,862

360

9,222

Total comprehensive income

8,862

39,414

48,276–13,619–13,619

Dividend payment, net
Share-based payments

7.1

718

1,595

7,902

–8,6952,313

Sale of treasury sharesincl. tax effects

6.10

Purchase of treasury
shares incl. tax effects
Balance at 31 December 2017

–8,375–8,375

6.10

854* See notes to the consolidated financial statements which are an integral part of this year's financial statement.

–46,221

307,840

261,680

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69

2

GENERAL INFORMATION ON THE FINANCIAL STATEMENTS

2.1

Convention of preparation

General notes on the convention of preparation
The 2017 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 2017, drawn up according to uniform Group accounting principles. The consoli­
dated 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 judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These judgements, 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 ­estimates are recognised 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.
Judgements 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 andjudgements.”
New and amended standards (IAS/IFRS) and interpretations that have become effective in 2017
The Group prepares its Annual Report in accordance with IAS/IFRS. To that end, the Group regularly assesses the effects of adjustments
and renewals communicated by the International Accounting Standards Board (IASB).
As of 1 January 2017, the Interroll Group has reapplied the standards and interpretations of IAS 12 (Income Taxes), IAS 7 (Statement of
Cash Flows) and IFRS 12 (Disclosure of Interests in Other Entities) as amended by the IASB. The application of these amended stand­ards and interpretations has had no material effect on the consolidated financial statements of the Interroll Group.
Future changes and amendments to IAS/IFRS standards and interpretations
New and revised standards and interpretations have been adopted by the IASB. However, these will not be applied until 1 January 2018or later and have not been applied early in these consolidated financial statements. The impact of the introduction/amendment of IFRS
16 cannot yet be determinded with sufficient certainty. The introduction/amendment of IFRS 9 has no significant impact on the con­solidates financial statements.
The Interroll Group is therefore regularly following the discussions on the accounting standards (IAS/IFRS) and examining the potential
effects on the consolidated financial statements or disclosure requirements of the Group.
The new standard for recognising the proceeds from contracts with customers (IFRS 15) is based on the principle that revenue is rec­ognized when the control of a good or service is transferred to the customer. The standard contains a five-step model with the following
five steps: 1.) Identification of the contract with the customer, 2.) Identification of individual performance obligations in the contract, 3.)
Determination of the transaction price, 4.) Distribution of the transaction price to the individual performance obligations and 5 .) Sales
recognition when fulfilling the performance obligations.
The standard allows either a full retrospective application or a modified retrospective application. The Group has opted for the modified
retrospective application. This means that the cumulative effect of the application of IFRS 15 will be recorded in retained earnings as of
1 January 2018, and the comparative figures will not be adjusted.
Management has assessed the impact of the new standard. The introduction of the new standard has no significant impact on the con­solidated financial statements of the Interroll Group.

GENERAL INFORMATION ON THE FINANCIAL STATEMENTS

70

Various amendments that will not have a material impact on the future financial reporting of the Interroll Group: IFRS 2 (Share-based
Payment), IFRS 4 (Insurance Contracts), IFRS 10 (Consolidated Financial Statements), IAS 28 (Investments in Associates and Joint
Ventures), IAS 40 (Investment Property), the 2014-16 Annual Improvements, IFRIC 22 (Foreign Currency Transactions and Advance
Consideration) and IFRIC 23 (Uncertainty over Income Tax Treatments) will also take effect.

2.2 Critical accounting estimates and judgements
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 statements. 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 judgement 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 licences
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 include 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



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71

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
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 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)

Change
2017

2016

1 EUR

1.116

1 USD

0.982

1 CAD

0.758

1 GBP

1.275

1 SGD

Changein %31.12.201731.12.2016

1.091

2.3

1.170

1.074

8.9

0.989

–0.7

0.976

1.019

–4.2

0.748

1.4

0.778

0.757

2.8

1.330

–4.2

1.319

1.254

5.2

0.715

0.716

–0.1

0.730

0.705

3.6

1 CNY

0.146

0.149

–1.9

0.150

0.147

2.2

1 JPY

0.009

0.009

–3.3

0.009

0.009

0.0

in %

GENERAL INFORMATION ON 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 Center, which is centrally ­located, develops new appli­
cation ­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, Marketing and Finance). The Board of Directors bases its financial management of the Group on both the turnover
generated in the product groups and geographical markets as well as on consolidated financial reports. Group Management additionallyassesses 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 ON 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 exceeds 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 of fair value less selling costs and value in use. The estimated ­future discounted cash flows areevaluated to determine the value in use. The discounting rate applied c­ orresponds to a pre-tax rate which reflects the risk related to theassets. If an asset does not largely generate independent cash flows, the recoverable amount of the cash generating unit is calculated towhich 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 recognising 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 imme­
diately 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 imme­
diately 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 ON 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.
Interest 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 tech­
nology, customer relationships), licences and patents and similar rights ­acquired 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 relationships
Patents, technology and licences

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 amortisation 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 ON 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 adjust­ment
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 amountmight 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 treasury shares
The acquisition price of treasury shares is disclosed as a reduction of shareholders’ equity. Realised gains and losses on transactions
with treasury shares are recognised in share premium. Compensation and cash inflows resulting from the issue and subsequent possible
exercise of share options are credited to the Group’s ­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 ON 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 employee andemployer 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 in the statement of financial position. The­operating 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.

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GENERAL INFORMATION ON 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 item, unless the underlying ­transaction has been directly recog­
nised in the other comprehensive income. In such case the related i­ncome tax is also directly recognised in the statement of compre­
hensive income or in equity. Temporary differences resulting from initial recognition of assets and liabilities are not recognised in theincome ­statement. Temporary differences on the participation value of subsidiaries are recognised except if 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.

RISK MANAGEMENT

78

3

RISK MANAGEMENT

3.1 Operational and strategic risk management
Risk management at Group level supports strategic decision-making. Operational and strategic risk m­ anagement 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 the Group’s fi­ nancial performance.
The Board of Directors has supreme responsibility for risk management. To this end, the Board of Directors has delegated responsi­
bility 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 the 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 contrib­
utes 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 the 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 longstanding 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 risk 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 the 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 invest­
ment 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 committed 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

2017

2016

Total assets

355.3

324.8

Net financial assets

37.1

38.0

Gearing (net debts/equity)

n/a

n/a

Operating cash flow

46.2

36.8

Indebtedness factor (net debts/cash flow)

n/a

n/a

Equity

261.7

233.1

Equity ratio (equity in % of assets)

73.6

71.8

Result39.1

36.2

Return on equity (in %)

15.8

16.4

Non-diluted earnings per share (in CHF)

45.95

42.57

Distribution per share (in CHF)

16.50

16.00

Payout ratio (in %)

35.9

37.6

CHANGES IN THE SCOPE OF CONSOLIDATION

81

4CHANGES IN THE SCOPE OF CONSOLIDATION

Changes in business year 2017
New companies
As per 1 January 2017, Interroll USA, LLC in Wilmington, NC started as the dedicated sales office in the USA. In the previous year theInterroll Group launched Mexico S. de R.L. de C.V., its second subsidiary in Latin America. Both companies represent sales and service
units.
Acquisitions / divestitures
No acquisitions or divestitures were carried out during the year under review.
On 1 December 2016, Interroll bought the sheet shaping business of Ortner GmbH in Kronau, Germany, through the purchase of
selected assets. Since then around 40 employees are producing the Interroll belt curves for Europe, a product well established in theAmericas and Asia-Pacific regions. The acquisition included the operational real estate. Subsequently, this business operated under thename of Interroll Kronau GmbH.
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

2017

2016

Fair value

Fair value

Property, plant and equipment

4,276

Intangible assets

54

Deferred tax assets

554

Inventory

266

Total assets
Deferred tax liabilities

158

Total liabilities

158

Total acquisition costs

–

4,992

2017

2016

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

Cash settlement of acquisition

4,992./.Purchase price retention
Net cash used in acquisition

–213
–

4,778

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

2017

in %

Germany

64,922

Rest of EMEA *201,575

Total EMEA*

Non-current assets

2016

in %

2017

in %

2016

in %

14.4

65,493

16.3

73,01549.8

60,44044.9

44.7

179,94344.8

39,34326.8

38,951

29.0

266,49759.1

245,436

61.1

112,358

76.6

99,39173.9

USA97,932

21.7

70,21517.5

27,66018.9

28,537

21.2

Other Americas

21,892

4.9

29,675

7.4

1,488

1.0

1,540

1.1

Total Americas

119,824

26.6

99,89024.9

29,14819.9

30,07722.4

in thousands CHF

Total Asia-Pacific

64,361

14.3

56,134

14.0

5,110

3.5

5,020

3.7

Total Group450,682

100.0

401,460

100.0

146,616100.0

134,488

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 % of Group sales.
Sales by product group
Sales broken down by product group:
2017

in %

2016

in %

Drives146,644

32.6

123,645

30.8

Rollers

105,801

23.5

93,48623.3

Conveyors & Sorters

142,62931.6

120,86430.1

Pallet & Carton Flow

55,60812.3

63,46515.8

450,682

100.0

401,460

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 & buildings

Production equipment& machinery

Office equipment& motor vehicles

Assets underconstruction

Total

2017

2016

2017

2016

2017

2016

2017

2016

2017

2016

At 1.1.

96,082

92,79098,321

95,353

9,394

8,208

5,429

1,094

209,226

197,445

Currency translation adj.

5,821

–165

4,182

–71

523

–34

274

–23

10,800–293

Additions

5,722

419

6,164

5,475

2,158

1,872

6,931

5,328

20,975

13,094–16–609–2,147–4,107

–929

–662

–6

–3,092–5,384

3,862

167

2,286

807

–94

10

–6,236–964–182

in thousands CHF

COSTS

Disposals
Reclassifications
Acquisition
At 31.12.

3,480
111,471

96,082

20
4,344

864
108,806

98,321

11,052

9,394

6,398

5,429

237,727

209,226–107,071

ACCUMULATED DEPRECIATION & IMPAIRMENTS
At 1.1.

–35,243–31,776–71,582–69,449–6,542–5,846–113,367

Currency translation adj.

–1,98320–3,025

45

–319

6

–5,32771

Depreciation–3,797–3,487–7,000–6,316–1,412–1,194–12,209–10,997

2,015

4,104

866

492

2,884

4,596

34

55

Disposals

3

Reclassifications

7

At 31.12.

–41,013–35,243–79,592–71,582–7,352–6,54270,45860,83929,214

26,739

3,700

2,852

62

34

–127,957–113,367

109,770

95,859Property, plant and­equipment at 31.12.
Capital commitments
Insurance value*

408

1,718

2,975

1,453

121,913110,199

130,079

117,456

6,398

3

5,429

3,383

3,174

251,992

227,655* 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 there were no risks at the end of the period under review which negatively impacted the carrying
value of 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

Total

Customer relationships

2017

2016

2017

2016

2017

2016

2017

2016

2017

2016

20,38219,80937,11035,51718,323

18,562

23,84923,992

99,664

97,880

371

11

168

8

1,631

–239

1,351

–198

3,521

–418

3,563

1,635

791

4,384

1,635

–14

–50

–14

–50

COSTS
At 1.1.
Currency translation adj.
Additions
Disposals
Acquisition

562

Reclassifications
At 31.12.

30

2

2
20,753

20,382617

5540,82937,11020,74518,32325,23023,849107,557

99,664–22,467–17,856–15,411–14,458–20,031–19,281–61,035–54,720–115–8–1,393221–1,464234–2,972447–4,828–4,652–1,254–1,174–630–984–6,712–6,810ACCUMULATED AMORTISATION & IMPAIRMENTS
At 1.1.

–3,126–3,126

Currency translation adj.
Amortisation

14

49

14

49

–3,126–3,126–27,396–22,467–18,058–15,411–22,125–20,031–70,705–61,035

17,627

17,256

13,433

14,643

2,687

2,912

3,105

3,818

36,852

38,629

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) which
is determined using a pre-tax discount rate of 10.9 % (2016: 12.3 %). 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 the 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 32.3 million (2016: CHF 31.6 million) relate to the setup and introduction of SAP. In the year
under review, the additions to this process management system amounted to CHF 0.3 million (2016: CHF 1.7 million). Furthermore,around CHF 0.4 million were transferred from other applications to SAP as per 1 January 2017. Amortisation starts with the go live dateand ends after 8 years.
SAP was launched in 2011 for the two Centers 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 Center of Excellence for Supermarket Products in­Denmark, in the Regional Center of Excellence for Rollers and Drum Motors in the USA as well as in several sales subsidiaries in the
Asia-Pacific region. Subsequently as from 2013, further production and sales units in Germany, France, North America and China werelaunched. Particularely, in the year under review SAP was linked with CAD to enhance the Product Lifecycle Management of the Group,and SAP Cloud for Customers was implemented to offer the service business even more efficiently.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

85

Patents and licences
Patents and licences 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 licences were bought. As per the end of 2017, an amortisation term of an additional two
years remains on the majority of patents and licences. A review was donce for indications of impairment in ­patents and licences. There
are no signs that would indicate an impairment of this value.
Customer relationships
Customer relationships are amortised on a straight-line basis over 10 years unless the life cycle is shorter. At the end of 2017, an amortisation term of an additional five 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 assigned
31.12.201731.12.2016

Trade receivables

360

415

Total assets pledged or assigned

360

415

in thousands CHF

31.12.201731.12.2016

Raw materials

44,641

34,581Work in progress

12,853

10,437

Finished products

6,380

5,543

Valuation allowance–2,917–2,287

Total inventory, net

60,957

48,2742017

2016–2,287–2,154in thousands CHF

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

–73

–28

Additions

–824

–317

Reductions
Total valuation allowance on inventory as per 31.12.

267

212

–2,917–2,287

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.
31.12.201731.12.2016

Trade accounts receivable from goods and services

91,99082,049Valuation allowance–6,679–4,927

Total trade accounts receivable, net

85,311

77,122

Prepaid expenses and accrued income

5,345

3,931

Prepayments for inventories

2,811

2,014

Other accounts receivable

9,870

15,584

Forward exchange dealing

–101

74

Total other accounts receivable

17,925

21,603

Total trade and other accounts receivable, net

103,236

98,725in 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:
31.12.2017

in thousands CHF
GrossValuation allowance
individual

Not past due

54,219

Past due 1-30 days

16,352

Past due 31-60 days

6,102

Past due 61-90 days

1,440

Past due > 90 days

13,877–6,193

Total trade accounts receivable

91,990–6,199Net

31.12.2016
Grosscollective

Valuation allowance
individualNet

collective

54,212

48,355

16,352

9,699

6,103

7,717

1,440

2,325

–1

–480

7,204

13,953–4,238

–440

9,275

–480

85,311

82,049–4,487–440

77,122–7
1

48,107

–248

9,699
7,717
2,324

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

87

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:
2017

2016

Valuation allowance

Valuation allowancein thousands CHF
Total

individualcollective

Total

individualcollective

At 1.1.

–4,927–4,487–440–2,784–2,340–444

Currency translation adjustment–1,060–1,021

–39

48

44

4

Additions–1,676–1,676–3,289–3,289Alllowance used

235

235

758

758

Allowance reversed

749

749

340

340

–6,679–6,199–4,927–4,487

At 31.12.

–480

–440

During the year under review, an amount of CHF 0.2 million (2016: CHF 0.8 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.

Currencies in trade accounts receivable
Trade accounts receivable reported in CHF are held in the following currencies:
31.12.2017

in %31.12.2016

in %

EUR

39,41942.932,473

39.6

USD

24,49326.6

23,51128.7

CNY

11,29812.3

13,199

16.1

THB

2,313

2.5

2,117

2.6

DKK

2,265

2.5

1,489

1.8

all other currencies

12,202

13.2

9,260

11.2

Total trade accounts receivable, gross

91,990100.0

82,049100.0

31.12.2017

in %31.12.2016

in %Europe, Middle East, Africa

46,81650.8

37,931

46.2

Americas27,64930.1

26,085

31.8

Asia-Pacific

17,52519.1

18,03322.0

Total trade accounts receivable, gross

91,990100.0

82,049100.0

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 58 days outstanding (DSO). The respective value is for Europe 48, for Americas 78 and for Asia 53.
In the previous year, the DSO was 61 for the Group, for Europe 38, for Americas 89 and for Asia 82.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

88

6.7

Cash and cash equivalents

Positions included in cash and cash equivalents
31.12.201731.12.2016

Cash on hand, bank and postal accounts

35,38335,754Current deposits

1,924

2,510

Total cash and cash equivalents

37,30738,264in thousands CHF

Interest rates of cash and cash equivalents
The interest rates on cash and cash equivalents vary between 0 % (CHF) and 6.25 % (ZAR). The respective rates for 2016 were 0 % (CHF)
and 12 % (BRL).

Currencies held on cash and cash equivalents
in %31.12.201731.12.2016

EUR

20.0

21.0

CHF

2.0

18.0

CNY

23.0

10.0

USD

27.0

20.0

THB

2.0

3.0

JPY

2.0

3.0

KRW

8.0

4.0

ZAR

3.0

2.0

other currencies

13.0

19.0

Total cash and cash equivalents

100.0

100.0

Transfer limitations on cash and cash equivalents
Cash and cash equivalents of CHF 1.2 million (2016: CHF 1.1 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.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

89

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:
31.12.201731.12.2016

Cash and cash equivalents

37,30738,264

Trade and other accounts receivable w/o advances

100,526

96,637in thousands CHF

Financial assets
Total financial assets

1,864

655

139,697

135,556

Foreign currency forward contracts*

–101

74

Total financial instruments at fair value

–101

74

Trade and other accounts payable

40,29641,316212

283

40,50841,599Financial liabilities
Total financial liabilities at carrying value* see notes 6.9

Carrying amounts of cash and cash equivalents, trade and other accounts receivable and payable as well as financial assets closely correspond to 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 withinapproximately 2 years and their net present values correspond very closely to their carrying amounts.

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

90

6.9

Financial risks

Currency risk exposure
Due to its international focus, the Interroll Group is exposed to foreign currency risks. Risk exposure results from transactions incurrencies deviating from the entity’s functional currency.
The following table shows the major currency risks at the respective balance sheet date:
31.12.2017

in thousands CHF

Financial assets

EUR

CHF

USD

SGD

3

75

5,913

1,995

5,845

1,076

1,960

13,774

1,549

366

JPY

31.12.2016
EUR

CHF

3

67

1,521

7,346

1,338

294

1,536

20,982

5,227

USD

SGD

JPY

3,552

Trade and other accounts
receivable

4,574

1,727

1,529

762

1,481

14

1,278

1

8,038

1,544

8,038

1,544

Cash and cash equivalentsincl. intercompany loans
Financial liabilities

3,412

Trade and other accounts
payableCurrent liabilities

11,260

8,762

3,157

248

21,164

3,615

589

17

9,835

6,544

2,337

2,696

32,544481

21,416

61,475

11,566–9,986–44,774–6,77911,43016,701

4,787

Currency risks onthe ­balance sheet (gross)

19,38445,77014,166

7,258

Elimination same currency–8,255–31,688–7,621–62

11,12914,082

6,545

7,196

1,832

Currency risks onthe ­balance sheet (net)Natural hedges

1,832

–332

–397

–1,714–371–1,932

FX forward contracts–3,288–8,739–2,318–4,513–5–802–2,496–7,643–2,140–3,965–862

Net currency risk exposure

7,509

4,946

4,227

2,678

1,030

7,220

8,687

715

4,073

682

The currency risk on the balance sheet (gross) is equal to the sum of all positions in the balance sheet that are held in a different­currency than the functional currency of a company. Such positions contain both group-internal as well as external amounts. In afirst 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 theclosing rate and added together for total Group values. “Elimination same currency” results from offsetting short positions and longpositions of currency risks which exist in the same foreign currency, however different from the functional currency, and which arepresented 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 financial 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 non-current 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

91

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:
31.12.2017

in thousands CHF
Hedgedcurrency

notional
amount in CHF

Fair value

31.12.2016
Sell/Buy

notional
amount in CHF

Fair value

Sell/Buy

Maturity

USD

USD/CHF

Feb. 18

711

1

CHF/USD

747

–25

USD

USD/EUR

Feb. 18

1,670

20

EUR/USD

573

25

USD

USD/CAD

Feb. 18

1,001

–8

USD

SGD/USD

Feb. 18

1,316

–19

SGD

SGD/EUR

Feb. 18931–3

SGD/EUR

748

1

SGD

SGD/CHF

Feb. 18

2,938

–41

SGD/CHF

2,574

34

EUR

GBP/EUR

Feb. 18816–9

GBP/EUR

1,235

–54

EUR

EUR/BRL

Feb. 18884

35

EUR/BRL

520

–24

JPY

JPY/EUR

Feb. 18802

11

JPY/EUR

862

68

JPY

JPY/SGD

Feb. 18644

11

JPY/SGD

643

50

CNY

CNY/EUR

Feb. 18

1,293

–15

CNY/EUR

1,414

–8

CNY

CNY/CHF

Feb. 18

814

–19

CHF

EUR/CHF

Feb. 18

7,213

–80

EUR/CHF

7,081

78

CNY/CHF

562

3

EUR/ZAR

741–53

USD/CAD

820

–21

CHF
CZK

EUR/CZK

Feb. 18

733

2

PLN

CHF/PLN

Jan. 18537

7

CHF/CAD

Jan. 18

1,084

6

ZAR
CAD
Total FX forward
contracts

–101

74

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

92

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 theeffect of FOREX changes on the major currency pairs within the Group. These risks in particular result from differences between
the ­currency used at the production site and the currency used for invoicing the customer. Assumed currency fluctuations would havethe following effects on the foreign currency positions in the balance sheet:
31.12.2017

in thousands CHF
Currency pair

EUR
vs. CHF

CHF
vs. USDCAD
vs. USD

Financial assets

75

Trade and other receivables

336

180

1,541

13,593882

267

Cash and cash equiv. incl. IC-loans

31.12.2016
EUR
vs. CHF

CHF
vs. USDCAD
vs. USD

509

1,448

4

646

67
20,844

Financial liabilities
Trade and other payables

3,780

322

2,981

Current and current liabilities

21,164556

32,544Gross exposure per currency pair

38,948

1,062

2,686

56,436

Risks opposing each other–28,007806–1,756

FX forward contracts–7,213711–1,001Net FX exposure per currency pair

3,728

2,579

–71

814
513

2,908

–40,822345–1,627–7,081

–747

–820

8,533

111

461

Currency change in %

2

1

2

3

3

3

Effect on the result (+/–)

75

26

1

256

3

14

Income tax expense at 20.73 %

–15

–5

–

–53

–1

–3

Net FX exposure after income taxes

60

21

1

203

2

11

As with the exchange rate risk analysis, the net risks of a currency pair are first added together. The item “Elimination of countervailingrisks” results from offsetting of countervailing risks between the respective currency pair. The amount shown in the line “Currency
forwards” corresponds to the hedged contract value converted into CHF. The amount shown is also deducted from the gross exchange
rate risk of the currency pair as it changes linearly with a change in the currency. The assumed currency fluctuation of the reporting year
corresponds to the effective change in the average exchange rate of the currency pair. Income taxes are based on the expected tax rate ofa properly taxed company in Switzerland (see note 7.6).

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

93

Interest rate risks
As per the balance sheet date, the Group had net financial assets of CHF 3.6 million (2016: CHF 2.9 million, see ­also note 6.12). Financial
assets amount to CHF 3.7 million (2016: CHF 3.1 million), CHF 1.8 million (2016: CHF 0.6 million) of which are not interest-bearing.
There are financial liabilities of CHF 0.2 million (2016: CHF 0.2 million). The portion of 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.
31.12.2017

in thousands CHF
Nom. int.
rate in %Carrying
amounts

Basis points
+ 100

–100

9

–9

31.12.2016
Nom. int.
rate in %Carrying
amounts

Basis points
+ 100

–100

6

–6

6

–6

6

–6

6

–6

FINANCIAL ASSETS
Fixed interest rate

0.05–1.40

977

Variable interest rate

0.00–6.25

947

Non-interest-bearing

–

1,805

Total deposits

3,729

9

–9

0.00–12.00

1,883

0.00–6.50

627

–

604
3,114

Total loans
Cash on hand, bank and postal accounts

35,383

Trade and other receivables

100,627

35,754
98,923

Total other financial assets

136,010

134,677

Total financial assets

139,7399–9137,791

FINANCIAL LIABILITIES
Total bank loans
Fixed interest rate
Non-interest-bearing

190

176

Total other loans

190

176

Bank overdrafts

1

1

Trade and other accounts payable

40,29641,316

Total trade and other accounts payable

40,29741,317

Total financial liabilities

40,48741,493

Net financial liabilities

99,2529–996,298

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

94

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 the end of the reporting year amounted to CHF 78.4 million (­ 2016: CHF 78.6 million).
Committed credit limits amounted to CHF 40 million, of which CHF 20 million were extended for a further three years in 2017 under
the same conditions. 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
2017

2016

854,000

854,000

Treasury shares held by the Group as per 1.1.

2,441

2,985

Purchase of treasury shares

6,470

Issued shares par value CHF 10.00 each (previous year: CHF 10.00)

Sale of treasury shares

2,212–1,167

Attribution of shares relating to bonus plan

–2,010–1,589Treasury shares held by the Group as per 31.12.

6,901

2,441

thereof unreserved

6,901

2,441

847,099

851,559

Shares outstanding at 31.12.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

95

6.11 Earnings per shareNon-diluted earnings per share
The non-diluted earnings per share in 2017 amount to CHF 45.95 (2016: CHF 42.57). The calculation is based on the profit ­attributable
to the shareholders of the parent company, divided by the weighted average of shares outstanding.
2017

2016

Result attributable to the equity holders (in thousands CHF)

39,05436,215

Shares outstanding as per of 1.1.

851,559

851,015

Effect of the purchase of treasury shares

–852

–17

Effect of the sale/attribution of treasury shares

–773

–364

Weighted average of shares outstanding

849,934

850,634

Non-diluted earnings per share (in CHF)

45.95

42.57

Diluted earnings per share
The diluted earnings per share in 2017 amount to CHF 45.95 (2016: CHF 42.57). 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 2017 or 2016.
2017

2016

Result attributable to the equity holders (in thousands CHF)

39,05436,215Weighted average of shares outstanding (diluted)

849,934

850,634

45.95

42.57

31.12.201731.12.2016

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
Finance lease
Total current financial liabilities

1

1

190

176

2

106

193

283

Other loans

19

Total non-current financial liabilities

19

Total financial liabilities

212

283

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

96

Ratio of net financial liabilities to equity
31.12.2017

in thousands CHF

Total financial liabilities

31.12.2016

212

283

./. Cash and cash equivalents–37,307–38,264

Net financial liabilities (-net cash)–37,095–37,981

Equity261,680

233,085n/a

n/a

Net financial debt in % of equity

Loan structure
31.12.2017

in thousands CHF

Other loans

Currency

Weighted av.
interest rate

DKK/USD

0%Interest due
fixed/variable

Year ofmaturity

Face
value

F 2018/2020

Total loans

31.12.2016

Carrying
amountFace
value

Carrying
amount

209

209

176

176

209

209

176

176

Maturities of financial liabilities
The financial liabilities as per 31 December 2017 are due as follows:in thousands CHF

Other loans
Bank overdrafts

Carrying
amuontFace value(undiscounted)

209

209

1

1

within6 months

within
6–12 months

within
1–2 years

190

19

190

19

within
2–5 years

1

Trade/other accounts payable*

40,29640,29640,296

Total financial liabilities

40,50640,50640,297*An ageing 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 2016 were due as follows:in thousands CHF

Other loans
Bank overdrafts

Carrying
amuontFace value(undiscounted)

176

176

1

1

within6 months

within
6–12 months

within
1–2 years

176
1

Trade/other accounts payable*

41,31641,31641,316

Total financial liabilities

41,49341,49341,317176*An ageing 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

97

6.13 Lease liabilities
Finance leases
In the year under review, there were CHF 0.0 million in finance leases (2016: CHF 0.2 million), of which CHF 0.0 million (2016:
CHF 0.0 m­ illion), 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:
31.12.201731.12.2016

within 1 year

2,464

2,348

between 1 and 5 years

4,215

5,124

in thousands CHF

over 5 years
Total operating leases

503

529

7,182

8,001

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

2017

2016

2017

2016

2017

2016

At 1.1.

6,766

5,831

101

62

6,867

5,893

356

–8

10

–3

366

–11

Provisions made

4,268

3,902

76

63

4,344

3,965

Provisions used

–2,587–2,269–21–2,587–2,290

–872

–690

–11

–883

–690

7,931

6,766

176

8,107

6,867

Currency translation adjustments

Provisions reversed
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 2017 corresponds to roughly 1.8 % ­(2016: 1.7 %) 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

98

6.15 Pension costs
General information on the pension plans of the GroupThe pension costs for 2017 amounted to CHF 2.8 million (2016: CHF 3.1 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 benefit plans in line with IAS 19. 217 employees participated in thedefined benefit plans in 2017 and 224 participated in 2016. The Swiss plan is outsourced to a collective foundation whereas the plan inFrance is outsourced to an insurance company. For the defined benefit plans, the pension costs in each period are calculated on the basisof an actuarial valuation. The deficit or excess of the fair value of plan assets over the present value of the defined benefit obligation isrecognised 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

2017

2016

Costs of the defined contribution plans

1,642

1,973

Current service costs, net

996

1,028

Administrative expenses

58

54

Interest costs

60

64

1,114

1,146

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

216

Effects of changes in financial assumptions–499

Effects of experience assumptions

692

759
522

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

–649

–165

Remeasurements included in other income

–456

1,332

Total expenditure

2,300

4,451

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
2017

2016

Present value of defined benefit obligation–28,473–26,237

Fair value of plan assets

20,32318,083Pension liability–8,149–8,154in thousands CHF, as per 31.12.

 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

99

Roll forward of the defined benefit obligationin thousands CHF

Benefit obligation as per 1.1.

2017

2016

–26,237–22,477

Current service costs, net–996–1,028Interest costs

–191

–235

Contributions from employees

–481

–440

Benefits (funded)/paid, net

–349

–579

Benefits (funded)/paid, net from employer

37

12Translation difference–63

7Remeasurements–– Effects of changes in demographic assumptions–216–– Effects of changes in financial assumptions499–– Effects of experience assumptions

–692

–522

–28,473–26,237

2017

2016

Benefit obligation as per 31.12.

–759

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

Fair value of plan assets as per 1.1.

18,083

16,153Administrative expenses

–58

–54

Interest income

131

171

Employer contributions

680

630

Employee contributions

481

440

Benefits funded/(paid), net

349

579

Translation difference

8–1

Income of plan assets

649

165

20,32318,0832017

2016

20,31518,083

Fair value of plan assets as per 31.12.

Investment categories
in %Qualified insurance policies *CashTotal investments in %* These assets are fully invested by the collective foundation of AXA in qualified insurance policies with AXA

820,32318,083

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

100

Reconciliation of net defined benefit liability
2017

2016

Net defined benefit liability as per 1.1.

–8,154–6,324

Defined benefit costs included in P/L–1,114–1,146

Total remeasurements included in OCI

456–1,332

Employer contributions

717

642

Translation difference–54

6–8,149–8,1542017

2016

Discount rate

0.8

0.7

Future salary increases

1.5

1.5

Expected benefit increases

0.0

0.0

Fluctuation rate

10.0

10.0

BVG 2015

BVG 2015

in thousands CHF

Net defined benefit liability as per 31.12.

Actuarial assumptionsin %Mortality probabilities

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

0.82 %+0.25 %

–0.25 %

Benefit obligation–28,473–27,102–29,949

Rate of salary increase

1.50 %+0.25 %

-0.25 %

Benefit obligation–28,473–28,609–28,340

Sensitivities are based on possible changes that are likely as at the end of 2017.

NOTES TO THE CONSOLIDATED INCOME STATEMENT

101

6.16 Trade and other accounts payablein thousands CHF

31.12.201731.12.2016

Trade accounts payable to third parties

14,143

11,365

Total trade accounts payable

14,143

11,365

Other liabilities

12,834

18,566

Advances received from customers

13,31911,385

Total other accounts payable

26,15329,951

Accrued personnel expenses

9,657

9,602

Accrued interest

5

5

Other accrued expenses

11,182

8,494

Total accrued expenses

20,844

18,101

Total trade and other accounts payable

61,14059,417

Advances 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

102

7

NOTES TO THE CONSOLIDATED INCOME STATEMENT

7.1

Personnel expenses

Details on personnel expenses and number of employees
2017

2016

Wages and salaries

106,991

93,635Social security costs

15,607

13,680Pension costs (see note 6.15)

2,756

3,119

Other personnel costs

1,998

2,434

Equity-based personnel expenses to management personnel

2,313

1,238

129,665

114,106

Thereof production-related personnel expenses

63,32054,581

Average number of employees

2,067

1,892

in thousands CHF

Total personnel expenses

In the period under review, 2,010 treasury shares (2016: 1,589) were granted to management members as part of their bonus scheme. In
the year under review, 2,010 shares (2016: 1,589) 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

Research and development (R&D) expenditures
R&D in % of net sales

2017

2016

10,706

7,480

2.38

1.86

NOTES TO THE CONSOLIDATED INCOME STATEMENT

103

7.3

Other operating expenses

in thousands CHF

2017

2016

Production-related expenses

10,0539,321

Freight

11,295

10,158

Office,administration and IT services

8,212

7,358

Building costs

5,479

5,451

Travelling and transportation

6,408

5,740

Marketing

4,960

4,551

Consultancy, auditing and insurance

5,296

5,362

Provisions and allowances, net

3,597

3,315

Variable sales costs

5,151

5,063

Non-income taxes

2,342

2,048

Other expenses and services

6,546

4,813

69,33963,247in thousands CHF

2017

2016

Income from freight and packing

Realised effects on cash flow hedges
Total other operating expenses

7.4

67

Other operating income

2,290

1,851

Income from services

217

261

Government grants received

291

88

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

11

28

2,809

2,228

2017

2016

Realised effects on cash flow hedges
Total other operating income

7.5

Financial resultin thousands CHF

Fair value changes of foreign currency forward contracts

131

Realised translation losses

–491

–249

Realised translation expenses

–376

–644

Interest expenses

–33

–20

Financial expenses

–769

–913

Fair value changes of foreign currency forward contracts

511

Interest income

172

93

Financial income

172

604

Financial result, net

–597

–309

NOTES TO THE CONSOLIDATED INCOME STATEMENT

104

7.6

Income tax expense

Components of income tax expense
2017

2016

Income taxes relating to the current period

11,888

11,341

Income taxes relating to past periods, net

–684

677

Current income tax expense

11,20412,018Due to temporary differencesin thousands CHF–2,815–1,181

Due to tax rate changes

–777

–38

Due to (recognition)/use of tax loss carryforwards

148

558

Deferred income tax expense/(income)–3,444–665

Total income tax expense

7,760

11,353Adjustments to deferred tax assets
Other effects (including acquisition)–4

Taxes on capital are included in other operating expenses (see note 7.3).
Deferred tax liabilities of CHF 0.1 million (2016: CHF 0.1 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
2017

2016

Result before income taxes

46,81447,568

Income tax expense at the expected tax rate of 20.7 % (2016: 20.7 %)

9,705

9,861

(Tax credits)/tax charges on prior years' results, net

–684

677

Effect from deviation to tax rates in Group companies–1,522

2,339

in thousands CHF

Tax rate changes, net

–355

–38

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

655

–249

(use of unrecognised tax losses)/effect of unrecognised tax losses on the current year's result, net–40–1,237(Reversal of)/write offs on deferred tax assets, net

1

Other effects
Effective (total) income tax expense

7,760

11,353The 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 STATEMENT105

Tax effects on and expiry dates of losses carried forward
31.12.2017

in thousands CHF
not activatedactivated

31.12.2016
not activatedactivated

Expiry:
2017

31

2018

693

696

2019

534

536

2020
2021

141
819

857

2022
2022 and later

13,073

9,232

unlimited

11,44910,090Total

26,56821,583591

Tax benefit

6,706

6,449

230

Thereof unrecognisable–6,706–6,449Deferred tax assets from losses carried forward

591

230

A tax effect of CHF 1.2 million resulted from new tax losses carried forward of CHF 4.4 million in 2017 (2016: new tax losses of CHF
0.7 million with a tax effect of CHF 0.1 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, no amount has been capitalised in 2017 (2016: CHF 0.2 million). The majority of non-capitalised
deferred tax assets on losses carried forward concern US-based subsidiaries. The applicable tax rate for the year under review is 26 %(2016: 39 %).

Allocation of deferred tax assets / liabilities to balance sheet items
31.12.2017

in thousands CHF
Deferredtax assets

Intangible assets
Property, plant and equipment

31.12.2016
Deferredtax assets

Deferredtax liabilities

539

926

661

1,491

1,460

2,169

1,115

2,811

Financial assets
Inventory

Deferredtax liabilities

9
988

218

Benefits of loss carryforwards

800
1,909

192

230

Receivables

494

1,013

1,214

2,525

Total assets

3,481

4,335

5,129

7,819

4,995

893

3,494

1,842

Current debts

124

199

2,047

1,141

Other liabilities

486

Total liabilities

5,605

1,092

5,830

2,983

Set-off–5,328–5,328–7,752–7,752

Total net

3,758

99

3,207

3,050

Non-current debts
Provisions

150

139

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 2017, the Interroll Group has committed to guarantees to third parties in the amount of CHF 0.2 million (2016: CHF 0.2 million).
These guarantees relate to customer orders. There are no other contingent liabilities in either of the years under review.

8.2

Related party transactions

Transactions with related parties
Volumein thousands CHF

Category

2017

2016
251

Purchase of materialsa222

Consulting services

b

1,548

IT investments/IT servicesa140

Other purchases

a

142

2

2,052

407

Total purchases

Open payables

31.12.201731.12.2016

12

30

142
154
154

Volumein thousands CHF

Category

Sale of materialaTotal services

2017

2016

30

Open receivables

31.12.201731.12.2016

129

137

33

129

137

33

Definition of related parties
The Interroll Group defines and categorises its related parties as follows:a) Shareholders of Interroll Holding Ltd. owning 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 0.7 million (2016: 0.53 million) in 2017. 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

2017

2016

Salaries incl. bonus

3,693

3,779

Post-employment benefits

658

612

Equity-based compensation

1,458

2,017

Total compensation to the Group Management

5,809

6,408

No loans were granted either in the period under review or in the previous year.
Detailed disclosures regarding the remuneration of and shares 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 2017 were approved by the Board of Directors on 6 March 2018 and are subject tofurther approval by the Annual General Meeting of Shareholders on 4 May 2018.
No event has occurred between 31 December 2017 and 6 March 2018 which would require adjustment to the carrying amountof the Group’s assets and liabilities as per 31 December 2017, 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.

Warszaw (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

IAU

USD

65.0

100 %

Interroll USA, LLC

Wilmington, NC (US)

S

IAU

USD

0.0

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

13,373.0

100 %Interroll Shenzhen Co. Ltd.

Shenzhen (CN)

P

SGP

CNY

5,770.0

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., Singapur, IAU = Interroll USA Holding LLC, PR = Interroll (Schweiz) AG

Changes to the scope of consolidation in 2017
During the year under review, Interroll USA, LLC in Wilmington, NC (US) started as a sales unit in the USA. Portec Asia Limited was
liquidated. The share capital of Interroll Holding Management (Shanghai) Co. Ltd. (CN) was increased by CNY 10,306,500 from CNY
3,066,500 to CNY 13,373,000.
Changes to the scope of consolidation in 2016
In the previous year, Interroll Mexico S. de R.L. de C.V. (MX) was founded in Mexico City. Interroll GmbH (DE) in Wermels­kirchen
moved its registered office to Kronau and from then operated under the name of Interroll Kronau GmbH (DE).

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 2017 and the consolidated
income statement, consolidated statement of comprehensive income, consolidated statement of changes inequity and consolidated statement of cash flows 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 2017 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 2,300,000
We concluded full scope audit work at ten Group companies
in seven countries.
In addition, specified audit procedures were performed on a further tenreporting units in six countries.
Our audit scope addressed 79 % of the sales revenue and 78 % of the assetsof the Group.
As key audit matter the following area of focus has been identified:
Impairment 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 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.
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 siteat the Company’s headquarters audits of the consolidation, of the disclosures in the consolidated financial
statements and of more complex elements. This included, among other matters, 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 2,300,000
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 performanceof the Group is most commonly measured, and it is a generally
accepted benchmark for materiality considerations.

We agreed with the Audit Committee that we would report to them misstatements above CHF 115,000 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 comprised goodwill
amounting to CHF 17.6 million as at
31 December 2017 (prior year: CHF 17.3
million), which represents about 5 % of
total assets (prior year: 5 % of total assets).
We considered goodwill to be a key audit
matter because of the significant scope forjudgement involved in determining
the para­meters of the impairment test in
the ­following areas:

We checked the forecast revenues and the weighted cost ofcapital that was applied as follows:–– Assumptions concerning expected
revenue growth and EBITDA during theforecast 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 the consolidated statement of financial
position.

–– We compared the revenues of the year under review
with the forecasts prepared in the prior year in order toverify the accuracy of the forecasts.
–– We reconciled the forecast 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 the potential for an impairment of goodwill.
There was adequate headroom between the calculated
value in use, which we used in testing the sensitivity
analyses, and the book values in the consolidated financial
statements.
We obtained adequate assurance through our audit­procedures and we are 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 either intends 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

Zurich, 6 March 2018

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
31.12.201731.12.2016

Cash and cash equivalents

1,305

1,772

Accounts receivable from subsidiaries

1,721

1,543

Other receivables from third parties

140

785

Loans to subsidiaries

26,79739,232

Total current assets

29,96343,332

106,916

106,916

in thousands CHF

see notes*

ASSETS

Investments
Loans to subsidiaries

6,305

5,335

Total non-current assets

113,221112,251

Total assets

143,184

155,583

Trade and other accounts payable from subsidiaries

282

258

Trade and other accounts payable from third parties

80

25

1,637

547

3.3

EQUITY AND LIABILITIESLoans from subsidiaries

3.4

Accrued expenses

2,052

1,948

Total current liabilities

4,051

2,778

854

854

Total non-current liabilities
Share capital

3.5

Legal reserve–– Share premium–– Other legal reserves–– Available earnings
Treasury shares

8

8

5,209

5,209

141,757

148,648–8,695–1,914

Total shareholder's equity

139,133

152,805

Total liabilities and equity

143,184

155,583*See notes to the financial statements.

3.1

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD

117

1.2

Income statementin thousands CHF

2017

2016

Investment income

4,276

14,882

Royalty income

4,872

3,944

Other operating income

2,563

2,434

Financial income

3,249

2,256

Total income

14,96023,516

Administration expenses

–453

–466

Personnel expenses–3,481–3,031Other operating expenses–2,000–1,701

Financial expenses–2,298–1,279Total expenses–8,232–6,477

Result before income taxes

6,728

17,0396,728

17,018Own shares

Total–1,623

146,309

Direct taxes–21

Result1.3

Statement of changes in equity

in thousands CHF

Share capital

Reserves from
capital contrib.

As of 1.1.2016854

8

Legal reserve Available earnings

5,209

141,861

Result 2016

17,01817,018Distribution from face value reduction–10,231–10,231

Change of balance for own shares
Per 31.12.2016

854

8

5,209

Result 2017
Dividend payment, net

148,648

854

8

5,209

–291
152,805

6,728

6,728

–13,619–13,619

Change of balance for own shares
Per 31.12.2017–291–1,914

141,757–6,781–6,781–8,695

139,133

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 (32ndchapter 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.
Forgoing a cash flow statement and additional disclosures in the notes
As Interroll Holding Ltd has prepared its consolidated financial statements in accordance with a recognised accounting standard (IFRS),
it has decided to forgo 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.
Treasury shares
Treasury 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

Treasury shares

Shares sold, acquired and held in the periods under review
In the year 2017, the Company did not sell any treasury shares as reported under 6.10 of the financial reporting of the Interroll Group(2016: the Company sold 1,167 treasury shares at an average price of CHF 1,058.68). In the year under review, the Company acquired
6,470 shares (2016: 2,212 shares). At ­year-end 2017, the Company held 6,901 treasury shares at a carrying amount of CHF 8.7 million(2016: 2,441 treasury shares at a carrying amount of CHF 1.9 million).
Allocation of treasury shares to employees
2,010 shares (of which 700 shares for remuneration 2016) at a carrying amount of CHF 2.4 million were allocated to employees(2016: 1,589 shares at a carrying amount of CHF 1.3 million).

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 the consolidated statements of the Interroll Group (see 8.4 “Scope of consolidation”).

3.3

Loans to subsidiaries

The interest rates used were the following:

lowesthighestIn the year 2017

0.00%

2.89%

In the year 2016

0.00%

3.25%

The loans to subsidiaries are normally redeemable with a notice period of three months. As of year-end, the total outstanding Grouploans amounted to CHF 33.1 million (2016: CHF 44.6 million). An impairment has been recognised for loans amounting to CHF
2.8 million (2016: CHF 2.8 million).
In 2017, of the total loans in the amount of CHF 33.1 million (2016: CHF 44.6 million), CHF 26.8 million (2016: CHF 39.2 million)
were reported as short-term loans.

3.4

Loans from subsidiaries

The following interest rates were used:lowesthighestIn the year 2017

1.00%

2.50%

In the year 2016

1.00%

2.75%

The loans due from subsidiaries are normally redeemable with a notice period of three months. As of year-end 2017, no Group loans
were due.

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 interest in percent.
31.12.2017
Shareholder/shareholder group31.12.2016

Number of sharesInterest in %Number of sharesInterest in %B. Ghisalberti, E. Moreschi and Family

102,682

12.02

109,213

12.79

D. Specht and Family

69,745

8.17

76,135

8.92

Allianz Group

50,084

5.86

50,084

5.86

Schroders PLC**

43,833

5.13

Groupama Asset Managment

43,726

5.12**

Kempen Oranje Participaties N.V.

42,481

4.97

43,554

5.10

Stiftung Erlebnispark Fördertechnik GmbH36,475

4.27

36,475

4.27

Swisscanto Fondsleitung AG

25,661

3.00

34,371

4.02

Various other shareholders

483,14656.59

460,335

53.91

Total

854,000

100.00854,000

100.00* No interest of at least 3% of the share capital

3.6 Contingent liabilities
Interroll Holding Ltd has issued a guarantee for an existing shared credit facility in the amount of CHF 42 million (2016:
CHF 42 million) in favour of Interroll (Schweiz) AG. The credit facility was not utilised on 31 December 2017.
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 the year under review there were no retention guarantees in favour of customers of Interroll Holding Ltd (2016: Interroll Holding Ltd
granted retention guarantees in the total amount of CHF 0.3 million to two customers in South Africa).
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 remuneration 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.

2017

2016

Paul Zumbühl

21,012

19,598Tim McGill

3,432

3,339

Dr Christoph Reinkemeier

699

550

Daniel Bättig

570

461

Dr Ralf Garlichs

474

430

Dr Ben Xia

372

266

Jens Karolyi

182

120

26,741

24,764Total

5PROPOSED APPROPRIATION OF AVAILABLE EARNINGS

Appropriation of available earnings
The Board of Directors proposes to the Annual General Meeting of 4 May 2018 to appropriate the available earnings as per the end of
the year under review as follows:in thousands CHF

ResultAvailable earnings carried over from previous year

2017

2016

6,728

17,018135,029

131,630

141,757

148,648

Distribution of a dividend of

14,091

13,619to be carried forward

127,666

135,029

141,757

148,648

Proposed dividend payment
The Board of Directors proposes to the Annual General Meeting to pay a dividend in the amount of CHF 16.50 per share or a maximumof CHF 14.1 million in total. In the previous year, a dividend in the amount of CHF 16.00 per share or a maximum of CHF 13.7 million
was approved. If this year’s dividend proposal is approved, the respective payment will be processed in the second quarter of 2018.

REPORT OF THE STATUTORY AUDITOR122REPORT OF THE STATUTORY AUDITOR TO THE BOARD OF DIRECTORSOF INTERROLL HOLDING LTD, 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 2017, income statement for the year then ended and notes, including a summary of significant
accounting policies.
In our opinion, the financial statements (pages 116 to 121) as at 31 December 2017 comply with Swiss law andthe 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 key audit matter the following area of focus has been identified:
Impairment testing of Group assets (investments in subsidiaries and loans
granted to subsidiaries)

REPORT OF THE STATUTORY AUDITOR

123

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.
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 misstatements. 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 materiality­benchmark applied

CHF 700,000
0.5 % of total assets
We chose total assets as the benchmark because the Company­primarily 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 OF THE STATUTORY AUDITOR

124

Report on key audit matters based on 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.

Impairment testing of Group assets (investments in subsidiaries and short- and long-term loans
granted to subsidiaries)
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 (75 % of total assets) andshort- and long-term loans granted to subsidiaries amount to CHF 33.1 million (23 %of total assets).

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

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

Firstly, we discussed with Management whether any
indications of impairment were identified in relation to an
investment.
Subsequently, for a sample of selected investments, we verified the factors used to calculate potential impairment andreperformed the calculation.
Management assessed individually the recoverability ofshort- and long-term loans granted to subsidiaries andinvestments in subsidiaries, if these were not already considered secure on the basis of either an impairment test or
positive equity as shown in standalone financial statements
prepared in accordance with IFRS. We discussed in detailwith Management its assessment and reperformed it, andwe checked for plausibility the outlook based on the budget
approved by the Board of Directors.
On the basis of the audit procedures described above,
we addressed the risk of an incorrect valuation of the investments in subsidiaries and loans granted 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 either intends 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 accordancewith 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, 6 March 2018

Nicole Bertschinger
Audit expert

FINANCIAL CALENDAR
2018
Preliminary financial figures 2017 (unaudited)

22 January

Publication Annual Report 2017 and balance sheet press conference

23 March

Annual General Meeting
Publication Half-Year Report 2018 and web conference (English)

CONTACT AND PUBLISHING DETAILS
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

Martin Regnet
Global PR Manager
Tel: +41 91 850 25 21
E-mail: investor.relations@interroll.com
EditorInterroll Holding Ltd
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)

4 May
3 August

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 downside) 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