HALF-YEAR REPORT 2018

ENABLEEXPANDEVOLVEENABLEEXPANDEVOLVE

KEY FIGURES
01.01.–

01.01.–

30.06.2018

30.06.2017

Change in %Total incoming orders

324.6

244.5

32.8

Rollers

54.7

53.5

2.2

Drives

84.4

71.7

17.7

Conveyors & Sorters

71.4

51.1

39.7

in CHF million, unless otherwise indicatedIncoming orders / net sales

Pallet & Carton Flow

30.2

27.0

11.9

Total net sales

240.7

203.3

18.4

EBITDA

35.5

29.6

19.8

in % of net sales

14.8

14.6

EBITA

28.6

23.8

in % of net sales

11.9

11.7

EBIT

25.3

20.5

in % of net sales

10.5

10.1

Net profit

18.6

15.3

in % of net sales

7.7

7.5

Operating cash flow

31.2

17.6

in % of net sales

13.0

8.7

Free cash flow

18.0

8.2

in % of net sales

7.5

4.0

Total investments / capital expenditure

15.6

9.7

Profitability

20.3
23.2
21.5

Cash flow

Balance sheet

77.1
119.5
60.8

30.06.2018

31.12.2017

Total assets

397.7

355.3

Goodwill

17.6

17.6

0.0

Net financial assets

33.9

37.1

–8.6

Equity

260.1

261.7

–0.6

Equity ratio (equity in % of assets)

65.4

73.6

Return on equity (in %)

14.2

15.8

–10.1

11.9

Other key figures
RONA (return on net assets, in %)

15.6

16.5

–5.5

Average number of employees

2,140

2,067

3.5

Net sales per employee (in CHF thousand)

225

218

3.2

Productivity (added value / total personnel expenses)

2.07

2.02

2.5

ABOUT INTERROLL

4

INTERROLL ON THE CAPITAL MARKET5REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT 

6

FINANCIAL POSITION, EARNINGS AND CASH FLOWS

8

PRODUCT GROUPS10

REGIONS14
INTERIM FINANCIAL STATEMENTS OF INTERROLL GROUP

17

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

17

CONSOLIDATED INCOME STATEMENT18

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

19

CONSOLIDATED STATEMENT OF CASH FLOWS

20

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY21

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

22

BASIS OF THE CONSOLIDATED FINANCIAL STATEMENTS

22

SEGMENT INFORMATION

24

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

25

NOTES TO THE CONSOLIDATED INCOME STATEMENT26

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

27

NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY27

FURTHER DISCLOSURES AND INFORMATION

27

FINANCIAL CALENDAR 2019

28

CONTACT AND IMPRINT

28

ABOUT INTERROLL

4ABOUT 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) and Conveyors &Sorters, as well 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, and many other manufacturing industries. Among the end users are leading brands suchas Amazon, Bosch, Coca-Cola, DHL, Nestlé, Procter & Gamble, Siemens, Walmart and Zalando.
Headquartered in Switzerland, Interroll has a global network of 32 companies with sales of CHF 450.7
million and around 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INTERROLL ON THE CAPITAL MARKET

5

INTERROLL ON THE CAPITAL MARKET

Share price performance of Interroll relative to
Swiss Performance Index SPI / SXGE
30%
25%

1,740.00
CHF

20%
15%
Interroll share
Share price as at 31 Dec. 2017: CHF 1,443.00
Share price as at 29 June 2018: CHF 1,740.00

10%
5%

SPI / SXGE

0% 1,443.00
CHF

–5%
–10%
January

February

March

April

Mai

June

SWISS STOCK MARKETS IN THE RED
The Swiss stock markets have lost ground since 2018
began. Trading conflict between the United States (US)and China, new sanctions for Russia and Iran, nuclear
discussions with North Korea and anti-European­banter in individual European Union (EU) states haveunsettled investors.

INTERROLL SHARE ON THE RISE AGAIN
The performance of individual listed stocks varied
greatly, however. Numerous project orders, innovative
products and services as well as consistent cost andinvestment management were the company-specificgrowth drivers of the Interroll Group in the first halfof 2018.

The Swiss Market Index (SMI) blue-chip barometerstood at 8,609 points at the end of June. This represented a decrease of 8.5 %.

The Interroll share once again performed much morestrongly than the previous year.

The broad Swiss Performance Index (SPI) fell to 10,327
points, 4.2 % below the end of 2017.

The closing price of CHF 1,740.00 on 29 June 2018
meant the Interroll share was 20.6 % higher than at theend of 2017 (CHF 1,443.00).
The Interroll share therefore once again outperformed
the Swiss indices and the Group’s market capitalisation
reached nearly CHF 1.5 billion.
LITTLE CHANGE IN FREE FLOAT
Around 19 % of Interroll shares (31 December 2017:20 %) are held by the remaining founding families. The
free float as defined by the SIX Swiss Exchange therefore stood at 81 % as of 29 June 2018 (31 December
2017: 80 %).

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

6INTERROLL ACHIEVESSTRONG ORGANIC GROWTHPaul Zumbühl, Chief Executive Officer

Dear shareholders, valued customers,
employees and business partners,
The Interroll Group has started 2018 very positively
and has even increased the great momentum of theprevious year. Thanks to an extremely large numberof orders and significant improvements in net sales,earnings and cash flow, the success of the growth strategy has been driven forward in the first six months of
2018. All regions and product groups have experienced
growth in comparison to the same period in the previous year. It is pleasing to see purely organic growth
here, created by our own efforts.
Incoming orders rose organically by 32.8 % in the firstsix months to a new record value of CHF 324.6 million(previous year: CHF 244.5 million). This was 27.4 %in local currency. Included in the orders received arefollow-up orders for crossbelt sorters for a packaging
and logistics provider in the United States (US), as well
as a major order from Korea for a customer from the
e-commerce sector for modular conveying platforms –each in the low tens of millions.
Net sales grew organically by 18.4 %, reaching a newconsolidated company record of CHF 240.7 million(previous year: CHF 203.3 million). The sales growthamounted to 13.4 % in local currency.

SELECTIVE EXPANSION OF CAPACITY
Interroll's business growth is based on innovations thatwere successfully introduced in the market during thelast few years and is facilitated by the global e-commerce trend, as well as post and logistics providers’high demand for efficient conveyor technology solutions. Our global activities are also generating manyorders in the food and beverage industry, in the airport
construction sector (including passenger screening)and other areas. Growth in the Asian region has beendisproportionately strong.
Our expansion in the market is accompanied by necessary selective expansion of capacity, as a result of which
the sites in Wermelskirchen, Germany and Hiram(Atlanta, US) have been expanded. A testing facility has
been purchased at the Baal site in Germany. A factoryof our own is currently under construction in Thailand.
Thanks to local production, from 2019 this will enable
Interroll to serve the fast-growing markets in Southeast
Asia more comprehensively and more quickly than iscurrently the case.
DISCIPLINED COST AND
INVESTMENT MANAGEMENT
We want to be pioneers in our field for Logistics 4.0.
We are making this happen within the company not
only by increasingly digitalizing our business procedures and production processes, but also by investingin the automation of our plants. As an enabler, it is ourjob to facilitate planning, installation, maintenanceand modernization for our customers and end users

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

7“Our business growth is based on
innovations that were successfully
introduced in the market.”

Urs Tanner, Chairman of the Board of Directors

with our platform products and control systems aswell as through increased system availability. We are,therefore, offering solutions for decentrally controlledconveyors and expanding our range of services, such as
those for operation and after sales. To consolidate ourposition of technological leadership, we are budgetingin the current year as much as an extra CHF 5 million
for research and development costs.
Despite higher research and development expenditure,
Interroll increased its EBITDA in the first six months ofthe year by 19.8 % to CHF 35.5 million (previous year:
CHF 29.6 million). The EBITDA margin was 14.8 %(previous year: 14.6 %). The EBIT rose by 23.2 % to
CHF 25.3 million (previous year: CHF 20.5 million).
The EBIT margin was 10.5 % (previous year: 10.1 %).
The net profit increased by 21.5 % to CHF 18.6 million(previous year: CHF 15.3 million). The net profit margin reached 7.7 % (previous year: 7.5 %).
The intensive project activity in the Group came to thefore at the half-year point in high inventory levels andcustomer downpayments on the balance sheet. The
operating cash flow has increased by 77.1 % to CHF
31.2 million (previous year: CHF 17.6 million). Gross
investment reached CHF 15.6 million and has thereby
increased significantly in comparison to the previous
year (CHF 9.7 million) by CHF 5.9 million. Free cash
flow more than doubled and was at CHF 18.0 million(previous year: CHF 8.2 million).

PROMOTING PARTNER AND
EMPLOYEE KNOWLEDGE
The partners in our Rolling on Interroll (ROI) program
continue to appreciate our extensive expertise and project-based market experience. The partner program
now comprises 73 small and medium-sized enterprises
from 36 countries, with whose support we are continuing to develop a common vision of material flow in
the future and intensifying our efforts to increase value
added for our customers on all continents.
Interroll's global success depends entirely on our
employees and mutual, intensive, fruitful teamwork
with our customers. The Interroll Academy plays an
increasingly important role in reaching our long-termgoals in knowledge sharing and exchanging expertise,both in internal programs and in customer training
courses and events.
Sant'Antonino, 3 August 2018

Urs Tanner
Chairman of theBoard of Directors

Paul Zumbühl
Chief Executive Officer

FINANCIAL POSITION, EARNINGS AND CASH FLOWS

8FINANCIAL POSITION,­EARNINGS AND CASH FLOWSNET SALESEBITDA AND
EBITDA MARGIN
240.7

29.6
14.6 %

203.3

2014

2015

2016

2017

2018

EBIT AND EBIT MARGIN
20.5
10.1 %

2014

2015

2016

2017

2015

2016

2018

2017

2018

NET PROFIT

25.3
10.5 %EQUITY AND
EQUITY RATIO
231.2
69.5 %

2014

35.5
14.8 %

15.3
7.5 %

2014

2015

2016

2017

18.6
7.7 %

2018

OPERATIONAL
CASH FLOW
260.1
65.4 %

31.2

17.6

2014

2015

2016

2017

All amounts in CHF million

2018

2014

2015

2016

2017

2018

FINANCIAL POSITION, EARNINGS AND CASH FLOWS9STRONG CASH FLOW DEVELOPMENT
As announced at the financial media conferences in March 2017 and 2018,
Interroll will use its solid financial position to spend up to an additional CHF
5 million on research and development this year. In doing so, the Group aims
to bolster its technology and innovation leadership in material handling­t­echnology for Logistics 4.0, too.

INCOMING ORDERS AND NET SALESARE REACHING RECORD LEVELSIn the first half of 2018, the Interroll Group saw arecord number of incoming orders amounting to
CHF 324.6 million (previous year: CHF 244.5 million). In local currencies, the Group grew by 27.4 %.
The exclusively organic growth in the reporting currency reached 32.8 % and was driven by the increasing
product business and a strong demand for projects,
particularly in the areas of packaging and express services, airports, and the food and beverage industries.
This meant that the orders received for the Asia region
were able to grow by a significant 68.4 %.
At CHF 240.7 million (previous year: CHF 203.3 million), the consolidated net sales also reached a record
level and saw purely organic growth of 18.4 % in thereporting currency. In local currencies, the Groupgrew by 13.4 %. Particularly strong sales increases was
registered in the Asia region (39.1 %).
RESULTS GROWING DISPROPORTIONATELY
Despite higher research and development expenditure,
Interroll increased its EBITDA in the first six months ofthe year by 19.8 % to CHF 35.5 million (previous year:
CHF 29.6 million). The EBITDA margin was 14.8 %(previous year: 14.6 %). The EBIT rose by 23.2 % to
CHF 25.3 million (previous year: CHF 20.5 million).
The EBIT margin was 10.5 % (previous year: 10.1 %).
The net profit increased by 21.5 % to CHF 18.6 million(previous year: CHF 15.3 million). The net profit margin reached 7.7 % (previous year: 7.5 %).

SOLID DEVELOPMENT OF THE BALANCESHEET, STRONG CASH FLOWThe balance sheet total grew by June 30, 2018 to CHF
397.7 million and was therefore 11.9 % above the figure
recorded at the end of 2017 (CHF 355.3 million). The
equity capital is CHF 260.1 million, while the equity
ratio is 65.4 % (December 2017: 73.6 %).
The intensive project activity in the Group came tothe fore at the half-year point in high inventory levels
and customer downpayments on the balance sheet.
The operating cash flow increased by 77.1 % to CHF
31.2 million (previous year: CHF 17.6 million).
Gross investment reached CHF 15.6 million and has
thereby increased significantly in comparison to theprevious year (CHF 9.7 million) by CHF 5.9 million.
In particular, the Hiram/Atlanta site in the UnitedStates has been expanded and work has begun on a
new site in Phan Thong (Bangkok area) in Thailand.
In light of the significantly higher cash flow anddespite higher investments, the free cash flow morethan doubled and reached CHF 18.0 million (previous
year: CHF 8.2 million).

PRODUCT GROUPS10STRONG PRODUCT BUSINESS, GREATPOTENTIAL IN DEMAND FOR PROJECTSInterroll has split its service portfolio into the four product groups “Rollers,”“Drives,” “Pallet & Carton Flow” and “Conveyors & Sorters.” In the first halfof 2018, order intake and net sales in all product groups were up year on year.
“Conveyors & Sorters” and “Drives” experienced particularly strong growth of
39.7 % and 17.7 % respectively.

ROLLERSPRODUCT GROUP
The “Rollers” product group forms the basis of theInterroll portfolio. Interroll was producing conveyor
rollers in Wermelskirchen, Germany, as early as 1959,
and now manufactures them at five additional locations. This makes Interroll the leading provider in thisarea. Conveyor rollers are used in countless internal
logistics applications.

In addition, we anticipated and took advantage of thepotential of market trends and the continued strong
development of e-commerce and investments in modernization and outsourcing. The Americas region
showed a temporary declining trend, while the Europe,
the Middle East and Africa (EMEA) and Asia-Pacificregions reported solid growth.

Extremely short delivery times, highly efficient manufacturing processes, customer proximity and the highquality of Interroll products also made a significant
contribution to further growth in the first half of theyear. This growth is supported by the rising level ofautomation of particularly suitable production steps.

The higher number of “Rollers” orders in Thailand(up 20.9 % year on year) was particularly encouraging.
Thailand will be home to Interroll’s third local Centerof Excellence in the Asia-Pacific region; the center iscurrently under construction and will be completed by
the spring of 2019.
At CHF 54.7 million, consolidated net sales exceeded
the already high CHF 53.5 million achieved in thesame period of the previous year by 2.2 %. At CHF
55.7 million, consolidated order intake increased 1.0 %on the previous year’s high level.

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

PRODUCT GROUPS

11

DRIVESPRODUCT GROUP
The “Drives” product group portfolio includes driven
conveyor rollers (Volt RollerDrive), control systems
and drum motors. The global Centers of Excellence in
Baal, Germany and Hvidovre, Denmark have worldwide responsibility for drum motors within the Interroll Group.
Here, sales amounted to CHF 84.4 million, and werethus 17.7 % higher year on year (CHF 71.7 million).
Consolidated order intake increased by 16.3 % to CHF
87.8 million compared to CHF 75.5 million in thesame period of the previous year.
The EMEA and Asia-Pacific regions performed especially strongly. Drum motors recorded sales increasesof 16.3 %. Here too, the Asia-Pacific region experienced an encouraging rise of 30.0 % year on year. In“RollerDrive,” China had a 62.5 % higher order intake
than in the first half of 2017.

Interroll’s drum motors and RollerDrive family as well its controls comply withthe very highest efficiency requirements.

The RollerDrive is not only energy efficient but also
generates considerably less noise than comparable
products. In March 2018, Interroll launched additionalmodels from the new generation of drum motors on
the European market: the DM 0113 and DM 0138. The
innovative motor platform, which is predominantly
used for modern conveyor systems in goods distribution centers, in production, and in the food industry,
has a fully modular design and includes both synchronous and asynchronous drive solutions.
Interroll’s flexible, easy-to-install solutions play a leading role worldwide. The increasing use of drives in the
new Modular Conveyor Platform (MCP) allows evengreater synergy between Interroll’s individual productgroups.

PRODUCT GROUPS

12PALLET & CARTON FLOWPRODUCT GROUP
The “Pallet & Carton Flow” product group provides
flow storage solutions for pallets and container packaging based on the first in, first out (FIFO) or lastin, first out (LIFO) principles. Within Interroll, theglobal Center of Excellence in La Roche-sur-Yon,
France is responsible for this product group.

Consolidated order intake also increased by a substantial 19.1 % to CHF 34.1 million (previous year:
CHF 28.6 million). The Americas region reported
strong growth of 28.4 %, while demand from the
EMEA region showed significant recovery, improving by a considerable 56.7 % in the first half of 2018.

In the first half of 2018, Interroll recorded an increaseof 11.9 % in consolidated sales in this product group,from CHF 27.0 million in the prior-year period to
CHF 30.2 million.

When it comes to warehouses with high turnoverrates, flow storage solutions prove to be particularly
cost-effective in the long term. The Interroll flow
storage solution was tested in the Interroll test centerin La Roche-sur-Yon. Following 50,000 test cycles
under extreme conditions, Interroll guarantees a long
lifetime and maximum safety. Interroll sees major
market potential in expanding its range with partiallyor fully automated solutions and is preparing for further enhancements.

Flow storage solutions from Interroll are robust and safe.

PRODUCT GROUPS

13

CONVEYORS & SORTERS
PRODUCT GROUP
The “Conveyors & Sorters” product group comprises
sorter and conveyor solutions developed by the global
Centers of Excellence in Sinsheim, Germany andCañon City, US. These include crossbelt sorters, belt
curves, and the MCP. With its products and solutionsin this segment, Interroll enjoys a strong position particularly when it comes to supplying equipment for
airports, mail and logistics distribution centers, e-commerce and, increasingly, the tire industry.
Since March 2018, Interroll has also offered a deepfreeze version of its MCP. In addition, the prototype
for a new Spiral Lift was presented for the first time at
the LogiMAT in March 2018 and has been commercially available since July 2018.

In the first half of 2018, this product group achieved
consolidated sales of CHF 71.4 million, which was anincrease of 39.7 % year on year (CHF 51.1 million).
Order intake increased strongly by 72.5 % to CHF
147.0 million, compared to CHF 85.2 million in theprior-year period.
In the first half of 2018, Interroll concluded follow-up
orders to supply equipment to the distribution centersof a leading parcel delivery company in North America. In Europe, too, numerous orders were placed in
the mail and logistics fields as well as the food andbeverage industry. In Asia, Interroll concluded a follow-up order with record volumes. Here, Interroll
will supply a record number of conveyor modules
with a total length of 12 km as well as eight Spiral Lifts
for the customer’s distribution center in South Korea.
Modern material flow systems can be planned quickly
and with ease thanks to Interroll’s modular concept:
Customers can make further modifications andimplement these themselves during assembly. Interroll’s drive solutions are creating systems that boast
maximum availability and energy efficiency as well as
extremely low operating and maintenance costs. Thisis true of both new systems and modernized existing
systems.

Interroll’s Modular Conveyor Platform (MCP) opens up a wide range of
flexible application options. Since March 2018 it has also been available as asolution for deep-freeze environments.

REGIONS

14

SUSTAINABLE GROWTHIN ALL REGIONS+34.6 %ORDER INTAKE

By opening up new markets and gaining new customers, we have continued
with our globalization strategy in the first half of 2018. Interroll has been able
to achieve growth in incoming orders and net sales in all regions.

+17.1 %NET SALES

We can clearly see strong trends with the orders that are coming in: The
Asia region increased orders by 68.4 %, Europe, the Middle East and Africa(EMEA) by 34.6 % and the Americas by 14.5 %.
EMEA

At the end of the first half of the year, Interroll’s share of total sales in EMEA
is 61 %; in the Americas it is 26 % and in Asia-Pacific it is 13 %. The company
has exceeded its own expectations in the area of Courier, Express and Parcel– also in conjunction with the growing e-commerce sector.

EUROPE, MIDDLE EAST, AFRICA (EMEA)REGION WITH STRONG GROWTH
In the Europe, Middle East and Africa (EMEA) region,
the strong organic growth of recent years continued
into the first half of 2018. Incoming orders increased
by 34.6 % compared to the previous year, reaching
CHF 182.8 million. At CHF 146.1 million, turnoverwas 17.1 % higher than the previous year (CHF 124.8
million).
The driving force behind this development has been ahigh demand for rollers, drives and conveyor systems.
While central, eastern and southern Europe were able
to improve on their respective previous year’s orders

once again, western Europe recovered after a difficult
previous year. Positive signs, albeit from a lower level,
can also be seen in the orders received in Africa andthe Middle East.
Comprising 61 % of Interroll’s total turnover, EMEA
continues to be the most economically importantregion within the Group. The technical requirements
for suppliers in internal logistics are high and, in addition to lasting customer relationships, industry knowledge and technical solution expertise, they demand
innovative responses to increasing complexity andnew developments.

In March of this year, Interroll
presented technical innovations such as
the Spiral Lift, its extensive expertise in
the sector, and its high quality with regard
to the production and sales process
at the international logistics trade fair
LogiMAT in Stuttgart, Germany.

REGIONS

15+14.5 %ORDER INTAKE+13.3 %NET SALESAMERICASIn April, Interroll presented all of its product groups in an impressive mannerat the MODEX in Atlanta.

AMERICASREGION WITH ACTIVE PROJECT ACTIVITY
The sales in the Americas region were CHF 63.9 million and were therefore 13.3 % higher than in theprevious year (CHF 56.4 million). The lion’s share ofthis development was made up of the North American market, with the United States (US) at the top of
this. This is where Interroll has been able to see further growth. The reason for this positive development
is the continuing strong demand in courier, express,
parcel (CEP), food and distribution centers. In the US,
Interroll further expanded its capacities at the Hiram/
Atlanta site in Georgia during the reporting period.
Incoming orders, which increased by 14.5 % to CHF
87.3 million, are making a key contribution to successin the region. Interroll has received a large follow-up
order amounting to the low tens of millions for a lead-

ing logistics and packaging provider in the US. These
new orders include delivering sorter systems. The neworders were placed in addition to the large orders thatwere announced by the company back in May 2017.
The sorter systems ordered in 2018 are being installed
mainly in new installations, for example in two of thecustomer’s distribution centers in two of its largest US
hubs.
The delivery of sorters to the Brazilian postal service
has continued into the reporting year. With an excellent local team, Interroll is committed to long-term
customer relationships in the challenging yet promising Brazilian market.

REGIONS

16+68.4 %ORDER INTAKE+39.1 %NET SALES

ASIA-PACIFICREGION WITH HIGH GROWTH PROSPECTS
Interroll’s sales in the first half of 2018 saw strong
growth in the Asia-Pacific region with 39.1 %, reaching
CHF 30.7 million (previous year’s period: CHF 22.1
million) at the end of the first six months of this year.
In contrast, however, the CHF 32.6 million worth oforders received in the previous year grew by a significant 68.4 % to a new record level of CHF 54.7 million
in total.
Receiving a large order for Modular Conveyor Platforms (MCP) and Spiral Lifts in the low tens of millions CHF contributed significantly to this. The ordercame from a South Korean e-commerce company.
­Interroll will ­supply and install a record number ofconveying modules with a total length of 12 km, as
well as eight Spiral Lifts for the customer’s distribution
center in South Korea. Strengthening the customer’s
intra­logistics capacities should equip the customer to

ASIA-PACIFIC­ etter deal with upcoming seasonal peaks during theb
Korean autumn festival and the Christmas season. It is
expected that the installation work will be completed
in 2018. The order for Interroll follows a previously
successfully installed project in one of this customer’s
distribution centers in 2017.
The demand for Interroll technology in this region has
shown a particularly positive development in the areasof “Rollers” and “Drives.”
As in previous years, China was the most important
market for Interroll in the region. As such, it was able
to achieve further growth and a good level of incoming
orders. Positive impetus also came from Thailand andSouth Korea, where the growth trend also continues
with a high number of incoming orders.
The region is also increasingly benefiting from the globalization of the Interroll Group with the foundationof its own production facilities on-site. The successful integration of the regional Interroll CompetenceCenters in Suzhou and Shenzhen into the production
network guaranteed consistently positive synergistic
effects in the first half of 2018, too, thanks to the higher
level of on-site technical expertise and closer proximity
to customers.

Interroll is also consistently implementing its
product strategy in Asia. At the AUTOMACH fair in
Thailand in March 2018, Interroll demonstrated
its increased market proximity in Southeast Asia.

STATEMENT OF FINANCIAL POSITION

17

1

INTERIM FINANCIAL STATEMENTS OF INTERROLL GROUP

1.1

Consolidated statement of financial positionin thousands CHF

30.06.2018

in %31.12.2017

in %ASSETS
Property, plant and equipment

114,784

109,770

Intangible assets

34,90836,852Financial assets

700

1,864

Deferred tax assets

8,881

Total non-current assets
Inventories

159,273

3,758
40.0

88,700152,244

Current tax assets

1,144

1,595

Trade and other accounts receivable

97,659103,236

Cash and cash equivalents

42.8

60,95750,94637,307

Total current assets

238,44960.0

203,095

57.2

Total assets

397,722100.0

355,339

100.0

EQUITY AND LIABILITIESShare capital

854

854

Share premium

8,161

7,902

Reserve for own shares–14,030–8,695

Translation reserve–47,264–46,221

Retained earnings

312,426

Total equity

260,147

307,840
65.4

261,680

Financial liabilities

19

Deferred tax liabilities

3,493

99

Pension liabilities

8,353

8,149

73.6

19

Provisions

8,864

Total non-current liabilities

20,7298,107

Financial liabilities

16,997

193

Current tax liabilities

12,767

15,952

Trade and other accounts payable

61,25047,820

Advances received from third party

25,831

5.2

16,374

4.6

13,320Total current liabilities

116,84529.4

77,285

Total liabilities

137,575

34.6

93,65921.8
26.4

Total liabilities and equity

397,722100.0

355,339

100.0

CONSOLIDATED INCOME STATEMENT

18

1.2

Consolidated income statement
Jan.–Jun.

Jan.–Jun.

2018

in %

2017

in %

Variancein %Net sales

240,734100.0

203,276

100.0

37,458

18.4

Material expenses–110,116

45.7–83,787

41.2

Personnel expenses–70,13729.1–64,207

31.6

5,870

19.8

4,830

20.3

4,749

23.2

in thousands CHF

Increase / (Decrease) in workin progress, finished products andown goods capitalised

14,812

6.2

6,569

3.2

Other operating expenses–41,31417.2–33,675

16.6

Other operating income

1,538

0.6

1,471

0.7

and amortisation (EBITDA)

35,517

14.8

29,647

14.6

Depreciation–6,8692.9–5,8292.928,648

11.9

23,818

11.7

Operating result before depreciation

Operating result before
amortisation (EBITA)
Amortisation–3,387

1.4–3,306

1.6

Operating result (EBIT)

25,261

10.5

20,512

10.1

Financing expenses

–883

0.4

–827

0.4

Financing income

150

0.1

75

0.0

Financing result

–733

0.3

–752

0.4

19

–2.5

24,52810.2

19,760

9.7

4,768

24.1

Result before income taxes
Income tax expense–5,9652.5–4,485

2.2

Result18,563

7.7

15,275

7.5

3,288

21.5

18,563

7.7

15,275

7.5

3,288

21.5

Result attributable to:–– Non-controlling interests–– Owners of Interroll Holding Ltd.

–

Values per share (in CHF)
Non-diluted earnings (result) per share

21.87

17.94

3.93

21.9

Diluted earnings (result) per share

21.87

17.94

3.93

21.9

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

19

1.3

Consolidated statement of comprehensive incomein thousands CHF

ResultJan.–Jun.

Jan.–Jun.

2018

2017

18,563

15,275

Other income
Items that in the future may be reclassified subsequently to income statetement–– Currency translation differences–1,043–2,605

Total items that in the future may be reclassified subsequently to income statetement–1,043–2,605

Other income–1,043–2,605Comprehensive income

17,52012,67017,52012,670Result attributable to:–– Non-controlling interests–– Owners of Interroll Holding Ltd.

CONSOLIDATED STATEMENT OF CASH FLOWS

20

1.4

Consolidated statement of cash flows
Jan.–Jun.

Jan.–Jun.

2018

2017

Result18,563

15,275

Depreciation, amortisation and impairment

10,2559,135

in thousands CHF

Loss/(gain) on disposal of tangible and intangible assets
Financing result, net
Income taxes

3

–3

734

752

5,964

4,485

–28,919–15,049

Changes in trade and other accounts receivable

4,690–1,664

Changes in trade and other accounts payable, advances

26,773

10,508Changes in provisions, net

1,234

552

–10,393–8,542

1,561

2,240

Changes in inventories

Income taxes paid
Personnel expenses on share-based payments
Other non-cash expenses/(income)

771

–48

Cash flow from operating activities

31,236

17,641

Acquisition of property, plant and equipment–14,162–7,915Acquisition of intangible assets–1,423–1,741

Acquisition of financial assets

–34

–12

Proceeds from disposal of property, plant and equipment and intangible assets

980

128

Settlement of loans receivable

1,214

3

145

69

Cash flow from investing activities–13,280–9,468

Free cash flow

17,956

8,173

Dividends–13,977–13,619

Acquisition of own shares–6,638–3,181

Proceeds from financial liabilities

17,000

3,000

Repayment of financial liabilities

–195

–55

Interests paid

–24

–12

–3,834–13,867Interests received

Cash flow from financing activities
Translation adjustment on cash and cash equivalents
Changes in cash and cash equivalent

–483

–595

13,639–6,289Cash and cash equivalent at 1 January

37,30738,264

Cash and cash equivalent at 30 June

50,946

31,975CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

21

1.5

Consolidated statement of changes in equity

in thousands CHF

Balance at 1 January 2017

SharecapitalSharepremium

Reserve forown shares

Translation
reserve

Retainedearnings

Total
equity854

7,184–1,914–55,083

282,044

233,085

15,275

15,275ResultOther comprehensive
income, net of taxes–2,605Comprehensive income–2,605

Share-based payments

710

Purchase of own shares incl. tax effects–2,605
15,275

12,670

1,530

2,240

–3,181–3,181Dividends–13,619–13,619

Balance at 30 June 2017

854

7,894

–3,565–57,688283,700

231,195

Balance at 31 December 2017

854

7,902

–8,695–46,221

307,840

261,680

18,563

18,563ResultOther comprehensive
income, net of taxes–1,043Comprehensive income–1,043

Share-based payments

259

Purchase of own shares incl. tax effects
854

8,161

17,520

1,302

1,561

–6,637–6,637

Dividends
Balance at 30 June 2018

–1,043
18,563–14,030–47,264–13,977–13,977

312,426

260,147

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

22

2

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

2.1

Basis of the consolidated financial statements

Convention of preparation
The condensed, unaudited consolidated interim financial statements at 30 June 2018 have been prepared in accordance with IAS 34(“interim period”) and are based on the uniform financial statements of Interroll Holding LTD. and its subsidiaries (“the Group”). All
statements are prepared based on uniform Group accounting principles. These interim statements reflect an update of previously published information. Therefore, they should always be read in conjunction with the Annual Report 2017. The interim statements were­approved by the Board of Directors on 25 July 2018.
The accounting standards used for these interim financial statements are identical to those published and described in the Annual
Report 2017 with the exception of IFRS 15 and IFRS 9.
The Group has applied IFRS 15 using the modified retrospective approach and therefore the comparative information has not been
restated and is disclosed as under IAS 18 and IAS 11. The details of accounting policies under IAS 18 and IAS 11 are disclosed separately
if they are different from those under IFFRS 15. The impact of changes is not material.
Revenue is measured based on the consideration specified in a contract with a customer where it acts as principal and excludes amounts
collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer. On
the one side performance obligations for products are typically satisfied on shipment or delivery (depending on agreed Inco terms).
On the other side performance obligations for projects like sorters are typically satisfied after installation on site on final approval by
the customer (according to the contract specifications). Orders are recognised at a point of time except for a few contracts in a specificlocation which are immaterial for the group. The contracts don’t comprise multiple performance obligations. The company has also
assessed if there is a need to combine contracts for accounting purpose and made the conclusion that there is no need. As well there areno significant finance components considered as contracts are usually satisfied in less than 1 year. On these grounds Interroll uses thepractical expedient 129.
Performance obligations for services are typically satisfied when the service is rendered. Maintenance or support level agreements covering a certain period are the exception so far. Such maintenance contracts are recognized over time. Variable considerations exist but
are very limited. Customers outreaching certain buying volumes are entitled for refunds. Variable consideration contracts are therefore
assessed periodically. Any likely refunds are promptly considered in revenue recognition as reduction of revenue. Variable considerationis only recognised if it is highly probable that revenue will not be reversed. Provided warranties are limited to assurance warranty thatcovers the compliance of a product with agreed-on specifications. The company does not offer service warranties.
In the comparative period, revenue was measured at the fair value of the consideration received or receivable. Revenue from sales ofgoods was generally recognised upon delivery to the customer (transfer of risks and use), recovery of the consideration was probable,
there was no continuing management involvement with the goods and the amount of revenue could be measured reliably. Revenue fromsales of projects was generally recognised after installation on site on final approval by the customer (according to the contract specifications). Revenue from rendering services in direct relation to its core products sold were recognised upon delivery.
The description of the principle activities from which the Group generates its revenue can be found in chapter “product groups”.
The introduction/amendment of IFRS 9 has no significant impact on the consolidated financial statement. The group applies the IFRS
9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Trade
receivables are written off when there is no reasonable expectation of recovery. Indcators that there is no reasonable expectation ofrecovery include, among others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual
payments for a period greater than 90 days past due.

 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

23

Foreign currency translation
The following key exchange rates were used for the translation of financial statements denominated in foreign currencies:
Income statement(average rates)

Balance sheet(Year end rates)

Jan.–Jun.

Jan.–Jun.

Change

2018

2017

in %

30.06.2018

31.12.2017

1 USD

1.167
0.967

1.078
0.986

8.2
–2.0

1.157
0.992

1.170
0.976

1 CNY

0.152

0.144

5.4

0.150

0.150

1 EUR

New or amended IAS / IFRS standards and interpretations
The IASB has published new and revised standards and interpretations. These come into force on or later than 1 January 2019 and are
not early adopted in this financial statement.
IFRS 16 (leasing) will be implemented as per 1st of January 2019. The group is currently assessing the impact.
Various amendments will also come into force, which will have no significant impacts on the consolidated financial statements of theInterroll 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 Annual improvements 2014-16, IFRIC 22 (Foreign
Currency Transactions and Advance Consideration) and IFRIC 23 (Uncertainty over Income Tax Treatments).
Critical accounting estimates and judgements
The preparation of the consolidated interim financial statements requires management to make estimates, assumptions and judgements
for the determination of income, expenses, assets, liabilities and for the disclosure of contingent liabilities. Such estimates, which are
based on management’s best knowledge and belief at the reporting date, may deviate from actual circumstances. In such a case, they will
be modified as appropriate in the period in which the circumstances change.
Segment reporting
The Interroll Group consists of one single business unit. The complete product range is sold in all markets through the respective regionalsales organisation. The customer groups of OEMs, system integrators and end users are provided with tailor-made product offeringsand 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 to serve their local markets. The­Interroll Research Center, which is centrally located, develops new application techno­logies and new products for all product groups.
Centers of Excellence, which focus on specific product groups, concentrate on the development of their assigned product portfolio.
Group Management and the whole Interroll management structure are organised by function (Overall Management, Products &­Technology, Global Sales & Services, Marketing and Finance). The Board of Directors bases its financial management of the Group on
both the sales generated in the product groups and geographical markets as well as on the consolidated financial statements. GroupManagement additionally assesses the achievement of financial and qualitative targets of all legal entities.
Financial instruments
Interroll Group has only financial instruments classified as hierarchy 2 in line with IFRS 13. These financial instruments include only
foreign currency forward contracts and cash flow hedges. The valuation in hierarchy 2 is based on ­factors which cannot be tracked toactively listed prices on public markets. Instead, they can be monitored directly (as a price) or indirectly (as a derivative of the price). The
amount of the financial instruments ­classified as hierarchy 2 is CHF 0.1 million at 30 June 2018 (31 December 2017: CHF –0.1 million).
The Group also has a number of financial instruments which are not measured at fair value in the balance sheet. For the majority ofthese instruments, the fair values are not materially different to their current amounts.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

24

2.2

Segment information

Net sales by geographical markets
Sales by geographical market is presented as follows:
Jan.–Jun.

Jan.–Jun.

2018

in %

2017

in %

Germany

35,845

14.9

25,612

12.6

Other Europe, Middle East, Africa

110,30245.8

99,203

48.8

Total Europe, Middle East, Africa

146,147

60.7

124,815

61.4

USA54,29922.6

42,395

20.9

Other Americas

9,603

4.0

14,011

6.9

Total Americas

63,902

26.6

56,40627.8

in thousands CHF

Asia incl. Australia

30,686

12.7

22,055

10.8

Total Asia-Pacific

30,686

12.7

22,055

10.8

Total Group240,734100.0

203,276

100.0

Material sales with specific customers
Sales are realised with more than 14,000 active customers. No customer accounts for net sales of more than ten percent of Group sales.
Sales by product group
Sales realised in the first half-year by product group is presented as follows:
Jan. – Jun.

Jan. – Jun.

2018

in %

2017

in %

Drives84,45835.1

71,65835.3

Rollers

54,72022.7

53,50726.3

Conveyors & Sorters

71,401

29.7

51,06925.1

Pallet & Carton Flow

30,15512.5

27,04213.3

240,734100.0

203,276

100.0

in thousands CHF

Total Group NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS25

2.3	Notes to the consolidated statement of financial position
Consolidated statement of financial position
Total assets increased by CHF 42.4 million compared to year-end 2017. Work in progress as part of inventories increased to a record
level, while accounts receivable decreased. This development shows the strong project growth of the Interroll Group in the first halfof 2018. Current liabilities increased by CHF 39.6 million to CHF 116.8 million. Net working capital decreased by CHF 1.0 million
to CHF 87.7 million.
Investments / capital expenditures
A total of CHF 15.6 million in gross capital expenditures were invested in various production facilities, however mainly in Hiram/
Atlanta, USA and Phan Thong (Bangkok area), Thailand. Total non-current assets reached CHF 159.3 million. Capital expenditure into
­intangible assets are mainly for the further development of the SAP ERP system.
In line with IAS 36, goodwill and other intangible assets are subject to an annual impairment test. These tests are normally performedin the second half of the year. Currently, there is no indication of impairment.
Net financial assets
Net financial assets at the end of the reporting period decreased by CHF 3.2 million compared to year-end 2017 and reached
CHF 33.9 million by 30 June 2018.
Total credit lines available but unused at the end of the reporting period amount to CHF 61.4 million (end of 2016: CHF 78.6 million).
From these credit lines, CHF 40.0 million are committed until first half 2021.
Debt covenants have always been complied with during the reported interim period as well as during the previous-year period.
EquityThe equity position decreased by CHF 1.5 million to CHF 260.1 million compared to the end of 2017, mainly as a result of the higher
dividend payment and a higher position of own shares. The equity ratio at the end of the interim period corresponds to 65.4 % (year-end
2017: 73.6 %). In mid-2018, a dividend of CHF 16.50 per share was paid as agreed during the annual general meeting (previous year:
CHF 16.00 per share).

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

26

2.4

Notes to the consolidated income statement

Net sales
Net sales in the reporting currency have increased organically by 18.4 % to CHF 240.7 million compared to the same period last year. In
local currencies the increase reached 13.4 %. All regions and all product groups have contributed to this positive development.
Earnings before interest and taxes (EBIT)
Despite higher expenses for research and development Interroll increased the EBITDA by 19.8 % to CHF 35.5 million (previous year:
CHF 29.6 million). The EBITDA margin was at 14.8 % (previous year: 14.6 %).
Interroll is accelerating development and extension of products and services for the fast growing “Industry 4.0” trend.
The EBIT increased by 23.2 % and reached CHF 25.3 million (previous year: CHF 20.5 million) in the reporting period, The EBIT
margin reached 10.5 % (previous year: 10.1 %). Depreciation increased and amortisation slightly increased compared to previous year.
  
Financing result
The net financial loss of CHF 0.7 million includes, apart from immaterial net financial interest income, mainly realised and ­unrealised­foreign exchange losses. Due to its decentralised structure, the Interroll Group is generally not very highly exposed to currency­fluctuations.
Income tax
Income tax expense is recognised based upon the best estimates of the weighted average annual income tax rate for the full financial
year. The tax rate presented in the interim report generally contains tax recoveries / adjustment charges from previous years. It is also
influenced by a differentiated assessment of future ­realisable losses carried forward. In the period under review, tax revenues resulting
from previous periods amounted to CHF 0.6 million (previous year: tax charges of CHF 0.2 million).
Result
The net profit increased by 21.5 % to CHF 18.6 million (previous year: CHF 15.3 million). The net profit margin reached 7.7 % (previous
year: 7.5 %).

 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

27

2.5

Notes to the consolidated statement of cash flows

Cash flow from operating activities
Cash flow from operating activities amounts to CHF 31.2 million (previous year: CHF 17.6 million).
Cash flow from investing activities
Total investments of CHF 15.6 million (previous year: CHF 9.7 million) mainly include the amendment of the Local CompetenceCenter in Hiram/Atlanta, USA as well as the start up of the new construction of a Local Competence Center in Phan Thong (Bangkok
area), Thailand. In the previous year investments mainly included the amendment of the Global Competence Center for Rollers in
Wermels­kirchen, Germany and the purchase of land reserves for the Local Competence Center for Belt Curves in Kronau, Germany.
Cash flow from financing activities
In the first half of 2018, dividends totalling CHF 14.0 million were paid out (previous year: CHF 13.6 million), which were financed byexisting credit limits.

2.6

Notes to the consolidated statement of changes in equity

Share capital
The shareholders’ capital of CHF 854,000 is unchanged compared to year-end 2017.
Assignment of shares
Shares assigned to members of the management in the amount of CHF 1.3 million (previous year: CHF 1.5 million) were expensed.

3

FURTHER DISCLOSURES AND INFORMATION

Events after the balance sheet date, seasonality
The Group did not identify any events after the closing date of the interim statements that would have a ­material effect on the presen­tation of its financial position as at 30 June 2018. There are no other facts which require disclosure according to IAS 34.
The industry in which the Group operates does not have significant seasonal variations. However, changes in the economical environment could have an impact on the short-term profitability.
Contingent liabilities
No significant contingent liabilities were incurred in the reporting period.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

28

FINANCIAL CALENDAR
2019
Preliminary Annual Figures 2018

January 21

Annual Press Conference and Annual Report 2018

March 22

General AssemblyHalf-Year Report 2019CONTACT AND IMPRINT
If you have any questions regarding 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: m.regnet@interroll.com
EditorInterroll Holding AG
Via Gorelle 36592 Sant’Antonino, Switzerland
Tel: +41 91 8502525
Fax: +41 91 8502505
www.interroll.com

May 3
August 5 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

29

NOTE ON THE HALF-YEAR REPORTThis half-year report is also available in German. If there are differences between the two, the German version
takes priority. The half-year report is available as a PDF document.
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 half-year report contains certain forward-looking statements. Forward-looking statements include all statements which do not relate to historical facts and events and contain forward-looking expressions such as “believe”,“estimate”, “assume”, “expect”, “forecast”, “intend”, “could” or “should” or expressions of a similar kind. Such­forward-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 take place in the future or be fulfilled as expected. The company points out that such forward-looking statements provide no guarantee for the future and that the actual
events including the financial position and profitability of the Interroll Group and developments in the economic
and regulatory fundamentals may vary substantially (particularly on the down side) from those explicitly or implicitly assumed in these statements. Even if the actual assets for the Interroll Group, including its financial positionand profitability and the economic and regulatory fundamentals, are in accordance with such forward-looking
statements in this half-year report, no guarantee can be given that this will continue to be the case in the future.

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