INTERROLL ANNUAL REPORT2014

ANNUAL REPORT 2014

INSPIRED BY
BY EFFICIENCYEFFICIENCY335.3 MILLION
NET REVENUE
25.4 MILLION
EBIT
27.8 MILLION
CASH FLOW1_INT_GB2014_Imageteil_Inhalt_EN.indd 1

ANNUAL REVIEW	2

REPORT BY THE BOARD OF DIRECTORSAND GROUP MANAGEMENT4

GROUP MANAGEMENT6

INTERROLL ON THE CAPITAL MARKET8

INTERVIEW JENS KAROLYI10

OVERVIEW12

OUR BUSINESS12OVERVIEW OF FINANCIAL POSITION, EARNINGS
AND CASH FLOWS14

OVERVIEW BY PRODUCT GROUPS16

OVERVIEW BY REGION

22

INTERVIEW DR. RALF GARLICHS26

CORPORATE RESPONSIBILITY

28

INNOVATION

32

CONVEYOR MODULES34

DRUM MOTORS36

DYNAMIC STORAGE

38

CONVEYOR ROLLERS40

CORPORATE GOVERNANCE43

REMUNERATION REPORT53

FINANCIAL STATEMENTS OF INTERROLL GROUP

61

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

117

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KEY
FIGURES
2014

2013

2012

2011

2010

Total incoming orders

350.7

318.8

302.6

288.7

285.2

Drives

114.9

109.4

99.3

95.1

97.9

Rollers

81.2

75.4

80.4

83.2

79.2

Conveyors & Sorters

79.8

71.2

69.3

42.8

52.1

Pallet & Carton Flow

59.4

60.3

58.1

50.8

53.9

Total net sales

335.3

316.3

307.2

271.9

283.1

EBITDA

44.1

45.4

41.1

36.2

35.8

in % of net sales

13.2

14.3

13.4

13.3

12.6

EBITA

33.2

34.0

30.3

25.7

24.8

in % of net sales

9.9

10.7

9.9

9.5

8.8

EBIT

25.4

27.2

24.8

20.4

20.4

in CHF million, if not stated differently

Incoming orders / net sales

Profitability

in % of net sales

7.6

8.6

8.1

7.5

7.2

Net profit

19.1

20.5

19.4

18.2

14.4

in % of net sales

5.7

6.5

6.3

6.7

5.1

18.7

Cash flow
Operating cash flow

27.8

44.5

38.2

14.5

in % of net sales

8.3

14.1

12.4

5.3

6.6

Free cash flow

12.0

5.0

30.2

–5.6

–8.5

in % of net sales

3.6

1.6

9.8

–2.1

–3.0

Total investments / capital expenditure

16.8

39.8

10.6

19.6

26.4

Total assets

278.2

258.2

227.6

239.2

211.3

Goodwill

17.6

16.0

9.0

9.0

9.3

Net financial assets (debts)

23.9

20.2

8.7

–17.6

–12.9

Gearing (net debt / equity)

0.12

0.10

Indebtedness factor (net debt / cash flow)

1.21

0.69

Balance sheet (31.12.)

Equity

200.3

187.2

157.6

143.3

127.5

Equity ratio (equity in % of assets)

72.0

72.5

69.3

59.9

60.3

Return on equity (in %)

9.9

11.9

12.8

13.4

11.1

Other key figures
RONA (Return on Net Assets, in %)Average number of employees

9.8

12.2

12.6

9.9

10.4

1 675

1 488

1 420

1 340

1 255

Net sales per employee (in thousands CHF)

200

213

216

203

226

Productivity (added value / total personnel expenses)

1.86

1.95

1.92

1.77

1.98

ABOUT
INTERROLL
Interroll Group is a worldwide leading provider of high-quality key products and services for internal logistics. The company offers a broad product range in the four product groups “Rollers”, “Drives”, “Conveyors &­Sorters” and “Pallet & Carton Flow” to around 23,000 customers around the world.
Core industries are courier, parcel, express and postal services, airports, food processing as well as distribution ­centers. Our products are in daily use at amongst others well-known global brands such as Amazon,
Bosch, Coca-Cola, Coop, DHL, FedEx, Peugeot, PepsiCo, Procter & Gamble, Siemens, Walmart and Yamaha.
Interroll is engaged in global research projects on logistics efficiency and actively supports industry associations
in developing standards. Headquartered in Sant’Antonino, Switzerland, Interroll operates a worldwide networkof 31 companies with around 1,800 employees. The company was founded in 1959. Since 1997, Interroll Grouphas been listed on the SIX Swiss Exchange and included in the SPI index.
www.interroll.com

INTERROLL PRODUCT GROUPSROLLERSDRIVESCONVEYORS & SORTERS

PALLET & CARTON FLOWREVIEW OF THE YEAR2

HIGHLIGHTS OF THE
FINANCIAL YEAR 2014

EFFICIENT AND FLEXIBLE DELIVERY OF CUSTOMERSOUT OF ATLANTAATLANTA
Opening of the regional Center of Excellence in Atlanta, USA
SHANGHAI
Opening of the Asian headquarter in Shanghai, China
PARTNERSHIP WITH GEORGIAS TECH
Partnership with Georgia Tech Supply Chain & Logistics­Institute, USA, started

SUCCESSFUL LAUNCH OF THE MODULAR CONVEYOR
PLATFORM
WORLD PREMIEREWorld premiere of the new modular conveyor platform at
CeMAT in Hanover, Germany
AWARD
Global Impact Award for foreign direct investments of Metro
Atlanta Chamber, USA, received
PORTUGAL
Start of own sales activities in Portugal
ASYNCHRONOUS DRUM MOTORSApproval of asynchronous drum motors by the U.S. Departmentof Agriculture (USDA)

Q1
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Q2
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REVIEW OF THE YEAR

3

MULTIPROFILE OFFERS MORE FLEXIBILITY FORCUSTOMERSACQUISITION
Acquisition of Pert Engineering in Shenzhen, China
MARKET LAUNCHWorldwide market launch of Interroll Multiprofile for drum
motorsNEW BUILDING IN BAAL
STRENTHENS COMPETITIVENESS
AWARDCoup de Cœur-Award for Interroll High Performance Divert
HPD received at Manutention trade show in Paris, France
NEW BUILDING
Groundbreaking for extension of global Center of Excellence forDrum Motors in Baal/Hückelhoven, Germany
SAUBER F1
Extension of partnership with the Sauber F1 teamBRAZIL
Major order for 6 sorters for Brazil Post

Q3

Q4

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

4Dear Shareholders, Customers and Business Partners,
Interroll has grown from being an internationallyactive company to become a globally networked
Group in recent years. And 2014 clearly ranks as oneof our most important years. We continued to increase
our investments in product innovations, infrastructure, and market expansion and achieved important
strategic goals as planned.

STRONGLY SUCCESSFUL INTO
These include, first and foremost, the market launch
THE FUTURE BY FOCUSING
of our modular conveyor platform in May 2014. We
have received extremely positive feedback from our
ON CUSTOMERS
customers on this high-performance solution andhave already taken some very interesting orders. And
AND OFFERING INNOVATIVE
interest remains high. Up until now we have only beenmarketing the platform in Europe. America and China
SOLUTIONS
will follow in the second half of 2015. We therefore
Paul Zumbühl (left)
CEO
Kurt Rudolf (right)
Chairman of the Board of Directors

expect to see the positive development continue in the
product group Conveyor Modules.

Of course, this also includes consolidation of ourplants in North America, which has now been completed. The relocation of production of subsystems andflow storage modules from Jeffersonville in the UnitedStates and flow storage production from Concord,
Canada, to the new regional Center of Excellence inAtlanta and to our plant in Newmarket, Canada, has
now been concluded. This means we will be able toreap the full benefits of the synergies we discussed lastyear and, even more importantly, serve our customers
in the region more efficiently and more quickly.
We also opened our new Asian headquarters in Shanghai in March. The Chinese sales force, which used to be
based in Suzhou, is now based here. This measure alsoenables us to serve our customers better and faster, acompetitive factor that is not to be underestimated intoday’s competitive market.
And with Pert Engineering in China, we acquired amanufacturing company in September of 2014 that
already very successfully manufactures Portec belt
curves in high quality for the Asian market. This acquisition has proven to be a valuable strategic addition to
our acquisition of Portec in the United States in 2013.
Integration of the company is currently proceeding asplanned.
We have also taken further important steps in Europe.
For example, we modified the production layout at ourCenter of Excellence for drum motors in order to beable to offer our customers faster delivery. The launchof our modular conveyor platform also called for us toreorganise manufacturing at the Center of Excellence
for modules and subsystems. Furthermore, we started
expanding the Center of Excellence for drum motors

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REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

5in November 2014 and plan to unite our Academy, theResearch Center and rubber coating under a single
roof at a much larger complex by the fall of 2015.
We made further progress with the continued implementation of SAP in 2014. In the meantime, 27 of ourcompanies are now using SAP and we are in a position
to serve our customers more effectively and roll out
new products globally much faster. This too enables us
to strengthen our market position with respect to thecompetition.
We made all of these strategic investments in 2014
from a position of economic strength. As expected, theincreased investment activity had an impact on our
income statement. This is a short-term effect, nevertheless it lays the foundation for sustainable growththat all of you, our dear shareholders, will benefit from.

“In 2014 we reached important
strategic goals.”

to all employees for their strong commitment andthe expertise they show for our company. Many ofthese individuals have been with us for years or even
decades.
We therefore look forward to the future with optimism. 2015 will be a challenging year, however. We willcontinue to work on our platform strategy in order tobe able to offer our customers even more well matchedsolutions. Our customers are in need of products thatoffer fast return on investment and thus flexibility. The
topic of energy efficiency is also at the top of our list.
And, of course, continued automation based on intelligent products that can be controlled and thus have apositive effect on the energy balance. We need products that are technologically mature, yet easy to operate. We at Interroll consider manufacturing to be oneof our core strengths. Our goal is to give our customers
the chance to make changes at the latest possible point
in time and provide them with customised solutions
with extremely short delivery times.

We concluded financial year 2014 with solid earnings. Order intake rose by 10 % to CHF 350.7 million and sales increased by 6 % to CHF 335.3 million.
Although we made substantial investments into our
future, our EBITDA decreased only slightly by 2.8 % to
CHF 44.1 million. Our EBITDA margin also slippedslightly to 13.2 % after 14.4 % in 2013.

The global availability of our innovative products, ourproven quality and our fast delivery times, but also thecontinued globalisation of our company will continue
to provide the basis for our success. We also plan tocontinue expanding our leading market and technological position in the area of internal logistics in theyears to come. In fact, we have laid the cornerstone forachieving this in recent years. We will continue to pursue our strategy in a consistent manner and continue
to convince you of our achievements.

We will be proposing the reduction of the nominal
share value by CHF 9.00 from CHF 10.00 to CHF 1.00,
dear shareholders, at our Annual General Meeting on
8 May 2015.

We would like to thank you for the trust and loyalty
you showed us again in 2014. Furthermore, we thankour customers and business partners for the trustfulcooperation.

As part of implementation of the Minder Initiative,
we will be recommending a number of changes to our
Articles of Association at the Annual General Meeting.
A comprehensive list will be published in the Investor
Relations section of our website www.interroll.com.

Sant’Antonino, 20 March 2015

From an operational perspective, we look back on avery successful year. We achieved an important successby receiving an order for six sorters from Brazil Post
through our U.S. partner NPI (National Presort Inc.)for delivery between 2015 and 2017. At the same time,
we also received another new order for additionalsorters from China Post. These repeat orders also fromother customers clearly show the confidence they havein our products and that we are on the right track.

Kurt Rudolf
Chairman of the Boardof Directors

Paul Zumbühl
CEOAll employees of Interroll work hard to achieve thiseach and every day. We could never achieve this success without them. For this reason, our thanks go out

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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

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GROUP MANAGEMENT

7

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

Paul Zumbühl studied engineering sciences at the University ofApplied Sciences Lucerne, Switzerland, and holds a degree as
Dipl.-Ing. He also holds an MBA from the Joint University­Program 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 Sales Manager / Engineer, he held
several management positions and was Managing Director of
Sarna Group. From 1994 until 1999 he was the CEO of Mikron
Plastics Technology and a member of the Executive Management Board of Mikron Group. In January 2000 he joined Interroll Group as Chief Executive Officer (CEO). Paul Zumbühl isa Board member of the Swiss companies Looser Holding AG
and Schlatter Holding AG.

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

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

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

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TIM MCGILL(born 1955, British)
Tim McGill majored in English literature at the Brockenhurst
College in Hampshire, Great Britain. He joined Interroll Canada 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 series ofroles with increasing management responsibility. After having
been President of Werner Precision Rollers Canada for one
year, he rejoined Interroll in 1996 as President of Interroll Canada. He was promoted Head of ­Interroll Dynamic Storage
North America in 2000. Since 2011 he has been acting as Executive Vice President Americas and is a member of Interroll
Group Management.

DR. CHRISTOPH REINKEMEIER(born 1966, German)
Dr. Christoph Reinkemeier studied business administration
with a focus on industrial marketing at the University of Münster, 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 International­GmbH. From 2007 until 2010 he was CEO for North and SouthAmerica at Deckel Maho Gildemeister (DMG) America Inc. In
2011 he joined Interroll Group as Executive Vice President
Global Sales & Service and member of Interroll Group­Management.

DR. BEN XIA(born 1966, Chinese)
Dr. Ben Xia, graduated as B.Sc. in electrical ­engineering at the
Shanghai Jiaotong University, China. Further on, he studied
electrical machinery at the Moscow Power Engineering Institute, Russia, and holds a PhD degree 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 of Vanderlande Industries North
Asia. In 2013 he joined Interroll Group as Executive Vice President Asia and member of Interroll Group Management.

04.03.15 11:53

INTERROLL ON THE CAPITAL MARKET

8

INTERROLL ON THE CAPITAL
MARKETINVESTOR INFORMATIONInterroll share information

2014

2013

2012

2011

2010

Number of registered shares

854.000

854.000

854.000

854.000

854.000

Number of average outstanding shares

849.170826.920799.090791.452775.724

Number of outstanding shares as of 31.12.

849.830850.151802.282793.901

779.600
371

Share price highest

CHF

582.50

490

360

450

Share price lowest

CHF

490

333

270

271

267

Year-end share price as of 31.12.

CHF

525.50

490

333

279

368

Market capitalization as of 31.12.

CHF million

448.78416.57267.16221.50286.89

CHF

10.00

10.00

10.00

10.00

10.00

Par value as of 31.12.
Reduction of par value

9.00

Distribution out of reserves from capital contributions

CHF

Pay out ratio
Earnings per average share outstanding

CHF

P/E Ratio

8.8

8.0

7.0

5.0

40.09

35.43

32.98

30.45

26.89

22.45

24.84

24.25

22.99

18.59

23.41

19.73

13.72

12.14

19.79

Cash flow per average share outstanding

CHF

32.69

53.79

47.78

18.34

24.09

Equity per share outstanding as of 31.12.

CHF

235.73220.25

198.64180.48163.49

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 Interroll
20 %

15 %

10 %
525
CHF

5%

509
CHF

Interroll share
Share price at 28.12.2013: CHF 490.–
Share price at 30.12.2014: CHF 525.50
SPI/SXGE

0%

–5 %
Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

© Swissquote

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INTERROLL ON THE CAPITAL MARKET

9

SWISS EQUITY MARKET SHOWED A VERYPOSITIVE DEVELOPMENT
Overall, international equity markets developed very
positively in 2014. Reasons were the expansive monetary policy of the central banks, decreasing fears of acollapse of the Eurozone and the positive expectationsof investors regarding the economic development. In
contrast, geopolitical developments like the Ukraine
crisis or the rise of IS in Iraq led to uncertainties.
The Swiss financial market also showed a positive
development albeit with some volatility during theyear. The Swiss Market Index (SMI) achieved a plus ofaround 10 % from January to December.

Shareholder structure in %as at 31 December 2014

INTERROLL SHARE CLEARLY GAINEDMOMENTUM
The Interroll share showed a further strong upward
trend in 2014. After a year-end closing price of
CHF 490.00 in 2013, the share closed at CHF 525.50
on 30 December 2014. This corresponds to a rise in theshare price of 7.1 %. This good performance reflects
the very sound fundamental position of the company.
STABLE SHAREHOLDER STRUCTURE
Around 23 % of Interroll shares are held by thefounding family Specht and another main shareholder. As of 31 December 2014, the shareholdingof the Group management was unchanged at 2.2 %.
Information about the significant shareholders can befound on page 122. Based on the SIX definition, thecompany’s free float is around 48 %.
ACTIVE INVESTOR RELATIONS WORKIn 2014, we continued our ongoing communication
with institutional investors, private investors andanalysts in order to strengthen and further develop
the perception of the Interroll share as an attractive
growth stock. Our strategic aim is focused on sustainable growth and sustainable margins.
We publish information relating to the Interroll shareon our website www.interroll.com. Financial reports,
presentations and other documents are available fordownloading. Interested parties can register for our
mailing list or request our standard publications. All
key financial market data is published there as well.

Fixed shareholding 52 %Free float 48 %Geographical distribution of theidentified shareholder base as per shareregister in % as at 31 December 2014

Switzerland 60 % EMEA region excluding Switzerland 37 %Rest of the world 3 %1_INT_GB2014_Imageteil_Inhalt_EN.indd 904.03.15 11:53

INTERVIEW

10WITH OUR GLOBAL
FOCUS, WE WILLCONTINUE TO GENERATESUSTAINABLE GROWTH.
Interview with JENS KAROLYI
Senior Vice President Corporate Marketing & Cultureand Member of Group Management

Interroll was founded as a 2-man company 55 years
ago. Today it is a global group with 31 companies
around the world. What are the pillars of its continued growth?
Interroll’s strategy was clear from the very beginning –to concentrate on intralogistics, production and doing
business with system integrators and OEMs. Our sustained development can be characterised by constantly
learning within the organisation, continuous optimisation and strong branding.
What convinced Interroll to establish an inter­national presence back at an early point in time?
The company has experienced strong growth alongsideits customers. Our customers’ businesses are becoming
increasingly international and we see excellent opportunities to grow abroad. Intralogistics is also becoming
more and more important. Whereas it was considered
to be a cost factor only a few years ago, internal logistics
that functions properly has now become a competitive
advantage. It is a strategic, highly regarded process thathas helped companies such as Amazon and Zalando to
become so successful.
The company has invested quite strongly in recent
years. Is this already having a positive effect?
Interroll is definitely on a global growth course. We
have invested not only in products and sites or acquisitions, but also quite strongly in our own team – indeveloping expertise, in many new employees whostrengthen Interroll on a global basis with their experience. At Interroll, we call this a “Culture for Growth,”a culture in which the idea of growth is extremely
important.
What exactly does “Culture for Growth” stand for?
We have invested very strongly in the future and follow
the markets that offer the respective growth potentials.
At the same time, we also want to strengthen this message to our team from the inside. We want all of ouremployees to be able to identify with it and understandhow they personally can contribute to this growth.
But what about the competition? What environment
does Interroll find itself in here?
There are many differences between us and the competition. For one, we are more or less globally present.
You will see that we have sites wherever our customers
are active. We manufacture in the region for the region.
This pays off for both small and large global customers.
Large customers can be sure that they will find with us
the same partner everywhere. Smaller customers, on
the other hand, benefit from Interroll’s global experience and presence.

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INTERVIEW

11

We offer important products for use in intralogistics –from the conveyor roller to modules and sub-systems,
dynamic storage systems, drives and drum motors. No
other competitor currently offers as broad a productrange at the global level as we do.
And do you consider that to be an advantage or doesthat also make Interroll vulnerable to attack?
I think that does make us vulnerable in some ways.
Therefore, it is all the more important that we maintain a distinctive profile on the market. And this is definitely our strategy. We supply key products for internal
logistics. We are experts on manufacturing, not system
integrators. This makes us a neutral vendor, not a competitor for our customers.

“ Interroll is on a global growthcourse and we have invested
strongly in products, sites, butalso in our own team.”
You introduced the loyalty programme “Rolling
On Interroll” in 2014. How do customers benefit
from this programme?
Many of our customers have been relying on us andour high-quality products for years, if not decades.
With “Rolling On Interroll,” these customers shouldreap even greater benefits from our expertise. This canbe achieved by attending training courses at our Academy, joint workshops together with our Global ProductManagers or other advantages that are quite typical ofloyalty programmes. We invite all of our customers toattend, but are well aware that it is even more exciting
for customers who use our products in mission-criticalapplications based on a strong sense of conviction.

And, of course, we trigger that so-called pull effectthrough our “end user marketing.” Ideally, this meansthat we get end customers excited about our solutions,convince them with reference projects, some of which
we could call lighthouse projects, and then encourage them to specify our products for their projects.
In other words, they state very clearly in their bids fortender that Interroll products are to be used to perform certain tasks.
What do you mean when you refer to lighthouseprojects? Can you give us a few examples?
For me, lighthouse projects are projects that are of
global relevance that were possibly realised together
with a customer or user who also happens to be known
for innovation or some form of leadership in a specificmarket. They set the agenda in a certain way or for certain trends and inspire other companies to implement
the same or similar measures. For me, such a lighthouseproject was for example started by Hermes Fulfilment, acompany that belongs to Otto Group. They are replacing
their conventional 400 volt drives with our 24 volt
drives. This is being done as part of the Otto Group’s
climate protection programme with which the entire
group has to save 50 percent of its energy by 2020. Thisis a very ambitious project and we are pleased to be able
to contribute to it with our products.
What inspires you about Interroll?
The customer orientation, power of innovation andglobal presence. Our main focus is always on the customer. We don’t develop and improve our products andsolutions merely for their own sake, but rather always
keep our eye on our customers’ applications.

The marketing approach has mainly been ­focussed on the end user in recent years. Isn’t thata contradiction?
By no means. This approach is intended to support
our customers, in other words system integrators andOEMs, with the sales process and show them what astrong partner they have in Interroll. We use that niceword “emancipate” to describe this in marketing.
What does it mean?
We also provide end users with our expertise, knowhow and our global focus. We want them to see thebenefits our products offer through our marketing
activities, but also to learn about the technologicalpossibilities that are available, what pays off, and what
applications are possible under certain circumstances.

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OUR BUSINESS12OUR BUSINESSINTERROLL
Marketing activity, also aiming at being specified by end user

Delivery of products/services
for internal logistics

Orders forInterroll

ORIGINAL EQUIPMENTMANUFACTURER /SYSTEM INTEGRATOR
Deliveryof overall systems

Orders for OriginalEquipment Manufacturer (OEM) /system integrator

END USER** In particular–– Courier, express, parcel
services–– Airport logistics–– Food industry–– Distribution

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OUR BUSINESS13

WE ARE A LEADING PRODUCT SUPPLIERIN ATTRACTIVE END-MARKETSAs global market leader and technological front runnerin key products for internal logistics we supply some
23,000 customers around the world with high-quality and often mission-critical products and solutions
within our four product groups – Rollers (conveyor
rollers), Drives (motors and drives for conveyors),
Conveyors & Sorters (conveyor and sorter systems)
and Pallet & Carton Flow (dynamic storage).
We are focussed on the industries of courier, express
and postal services, airports, food processing anddistribution as well as on special applications in the
packaging industry and other industries. Our products include easy-to-integrate drive solutions such as
drum motors for belt conveyors, conveyor rollers anddirect current (DC) drive rollers for roller conveyors,
zero-energy flow storage modules for compact pallet/
carton storage systems at distribution centers, crossbelt sorters and belt curves.
WE FOCUS ON HIGH ADDED VALUE FOR OUR
CUSTOMERS AND END-CUSTOMERSAs production experts we supply system integrators,
OEMs and plant manufacturers worldwide. We standout due to decades of expertise and a high global availability of consistently high-quality products and fastdelivery times.
Creating benefits for the end user, i.e. the customer ofour customer, is our central priority. Our marketing
effort, which not only aims at our customers but also
at the end user, pursues two goals: on the one hand wewould like to support our partners in their sales process, on the other hand we want to show the advantages our products offer to the end user. Our products
deliver a return on investment after two years on average. This is one of the reasons why they are often specified through the end user.
OUR STRENGTHS ARE OUR EXPERIENCE ANDTECHNOLOGICAL EXPERTISE
As a strategic partner to our customers, we deliver innovative solutions to them and to the end users. In doing
so, we draw on our expertise and in-depth knowledgeof the needs of the market. We apply substantial understanding of products and deep know-how of production technology and guarantee exceptionally fast delivery times. System integrators on the other hand haveexperience in project management and knowledge ofmaterial flows at end user companies.

MEGATRENDS FAVOUR THE LONG-TERM
DEPLOYMENT OF OUR PRODUCTS AND
SOLUTIONS
Requirements like greater product diversity, less packaging and simpler operation of products in the conveying process are changing continuously and are thebasis of changes of customer requirements. Mega­
trends like globalisation and urbanisation, more pronounced networking, rising mobility and the greater
individualisation present our customers and theirclients with fresh challenges. E-commerce keeps on
growing and poses increasing challenges to an efficientlogistical process. We are proactively supporting ourcustomers with a broad range of tailor-made solutions
to meet these challenges.
OUR SUCCESS FACTORS ARE A GLOBAL­PRESENCE, PROVEN RELIABILITY AND A
TALENT FOR INNOVATION
We are active with 31 companies worldwide which arelinked to each other via SAP. In the last years we havesteadily built up our production and sales presence inemerging markets with good growth prospects to participate in the growing demand for logistic solutions.
With the acquisition of Pert Engineering in China in
2014, we further strengthened our presence in Asia.
We continuously demonstrate our power of innov­
ation. The launch of the modular conveyor platform in
May 2014 was the largest product launch in the historyof Interroll. The platform can be flexibly adjusted tosuit different customer and user-specific demands. It
offers customers important advantages ranging fromquick planning and installation to short delivery times,
high flexibility and higher throughput, not to mention lower energy consumption and a fast return on
investment.
WE ARE CONTINUALLY OPTIMISING OUR PRODUCTION PROCESSES AND COST STRUCTURES
Our strategic goals are to position ourselves as theclear technological front runner and global market
leader, while steadily increasing market share. Alongwith a strict cost discipline and continual improvements to processes across all functions and regions,this leads to a sustainable profitability and strengthens our cash flow. In the meantime, SAP has alreadybeen installed in 27 of our companies worldwide andsupports our aim to harmonise processes even more.
We want to keep and even increase our healthy margin
in the long-term. To remain competitive, we will continue to pursue the Cost Fitness Programme that welaunched worldwide a few years back.

This combination forms the basis for strong customer
satisfaction and provides the foundation for success inour business over the long term.

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OVERVIEW OF FINANCIAL POSITION, EARNINGS AND CASH FLOWS14OVERVIEW OF FINANCIAL
POSITION, EARNINGS AND
CASH FLOWSEBITDA AND
EBITDA MARGIN

NET SALES
283.1

271.9

2010

2011

307.2

316.3

2012

2013

335.3

2014

EBIT AND EBIT MARGIN
20.4
7.2 %

20.4
7.5 %

2010

2011

24.8
8.1 %

27.2
8.6 %

2010

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143.3
59.9 %

36.2
13.3 %

2010

2011

18.2

44.1
13.2 %

2013

2014

19.4

20.5

2012

2013

19.1

14.4

2012

2013

2014

157.6
69.3 %

187.2
72.5 %

2010

2012

2013

2011

2014

CASH FLOW
44.5

200.3
72.0 %

38.2
27.8
18.7

2011

2012

45.4
14.3 %NET PROFIT

25.4
7.6 %

EQUITY AND
EQUITY RATIO
127.5
60.3 %

35.8
12.6 %

41.1
13.4 %

2014

2010

14.5

2011

2012

2013

2014

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OVERVIEW OF FINANCIAL POSITION, EARNINGS AND CASH FLOWS

15

DYNAMIC GROWTH IN THE AREA OF LOGISTICS
AND A RESOLUTE EXECUTION OF OUR­STRATEGY HAD A POSITIVE IMPACT ON ORDERINTAKE AND SALES
Order intake rose by 10.0 % to CHF 350.7 million
in 2014 (2013: CHF 318.9 million). Organic growthreached 7.4 %. Adjusted for minor divestments, theacquisitions of Portec in the USA and Pert in China
contributed 2.6 % to this increase.
Net sales increased to CHF 335.3 million, 6.0 % higher
than in the previous year (2013: CHF 316.3 million).
This increase can be attributed to both organic revenue
growth of 3.6 % and the successful integration of theacquisitions Portec and Pert which, adjusted for minor
divestments in Europe, brought another 2.4 % growth.
In terms of local currency, order intake rose quite
strongly by 12.0 % and net sales by 8.0 %.
Because our production facilities are located in therespective markets they serve, costs accrue for themost part in the currency in which we generate sales.
For this reason, it is possible to compensate for transaction risks caused by currency effects, which play only
a minor role for our company.
However, Interroll Group experiences a significant
translation risk from the conversion of sales mainly
from the EUR, USD and CNY regions into the reporting currency CHF. The lower rates in 2015 will eliminate a good portion of the growth in revenue expressedin CHF. In local currency, growth will continue unabated, however.
EARNINGS NEGATIVELY IMPACTED BY ONETIME STRATEGIC INVESTMENTS
We made significant strategic investments in longterm growth and sustainable profitability in 2014.
Development costs and the introduction of our modular conveyor platform, but also the consolidation of
our plants in the USA in connection with the acquisition of Portec in 2013 and the new Center of Excellence in Atlanta had a one-off negative impact on thefinancial year.
In spite of this, earnings before interest, taxes, depreciation and amortisation (EBITDA) only fell slightly
by 2.8 % to CHF 44.1 million in 2014 (2013: CHF 45.4
million). The EBITDA margin was 13.2 % in 2014(2013: 14.3 %).

Amortisation in the amount of CHF 3.8 million for
SAP (2013: CHF 3.6 million) was also taken into
account in the reporting year. Amortisation on thecustomer values, patents and licenses we acquired
increased to CHF 3.9 million in 2014 (2013: CHF 3.2
million). Portec’s values were amortised for a full year
for the first time.
Correspondingly, earnings before interest and taxes(EBIT) were also lower than last year. After CHF 27.2
million in the previous year, EBIT amounted to CHF
25.4 million in 2014. The EBIT margin for 2014 was
7.6 % (2013: 8.6 %).
Net profit amounted to CHF 19.1 million, somewhat
lower than last year’s figure of CHF 20.5 million.
TOTAL ASSETS REFLECT GROWTH AND
AN ACQUISITION
Total assets rose to CHF 278.2 million as of 31 December 2014 and were thus 7.7 % higher than on the last
day of 2014 (CHF 258.2 million). The increase was dueto the acquisition of Pert on the one hand, but also tovarious asset additions. The initial inclusion of Pert inInterroll’s scope of consolidation and the impact thishad on assets and liabilities are shown in the notes tothe consolidated balance sheet starting on page 61.
Shareholders’ equity as of 31 December 2014 was
CHF 200.3 million, 7.0 % higher than the figure of
CHF 187.2 million recorded as of 31 December 2013.
The main factor behind the increase was net profit;on the other hand, the distribution out of reserves
from capital contributions reduced equity. The equity
ratio thus stood at 72.0 %, compared to 72.5 % as of
31 December 2013.
Despite the Pert acquisition in September 2014, which
was paid for from cash and cash equivalents, net financial assets remained well within positive territory at
CHF 23.9 million.
STRONG CASH FLOW UNDERSCORES SOUNDFINANCIAL POSITION
Sales increased by 15.3 % in the fourth quarter of 2014
compared to the previous year. Operating cash flow
declined to CHF 27.8 million (2013: CHF 44.5 million)
as a result of higher net current assets.
Investments of CHF 15.4 million (2013: CHF 16.1 million) mainly related to the expansion of the new
regional Center of Excellence in Atlanta, USA, theupgrade and renewal of machine assets and the SAP
project.
Free cash flow increased in 2014 to CHF 12.0 million(2013: CHF 5.0 million).

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OVERVIEW BY PRODUCT GROUPS16

OVERVIEW BY PRODUCTGROUPS
Sales by product groups
34 %
24 %
24 %
18 %

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
Yamaha114.9 81.2
79.8 59.4
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OVERVIEW BY PRODUCT GROUPS

17

MEGATRENDS SUSTAINABLY­CONTRIBUTE TOWARD THE USE OFOUR PRODUCTS AND SOLUTIONS
Globalisation and urbanisation, more and more networking, greater mobility, and increasing individualisation all lead to changes in consumer behaviour, as
well as people’s needs and values.
Today, many companies are expanding into newmarkets and offering their products and services on
a global basis. According to the International Transport Forum (ITF), the global freight volume could
well quadruple by 2050. They forecast a 125 percent
increase in land freight in the OECD countries and a
430 percent increase in the non-OECD countries. The
competitive pressure caused by increasing globalisation continues and it will be increasingly important forcompanies to be able to organise their processes efficiently and keep their costs under control.
The growing concentration of the population in metropolitan regions results in a higher volume and flowof goods. The United Nations’ Department of Economic and Social Affairs estimates that the numberof city dwellers will increase by 2.5 billion by the year
2050. Asia and Africa in particular will account for
90 percent of this growth. The demand for provision of
goods, for instance the desire to have an even greater
variety of products, is also growing. And hygiene
requirements are also on the rise. According to an estimate from the World Health Organization (WHO),even in certain industrial nations, roughly 30 percentof the population is afflicted by food-related diseases.
High-performance material flow systems help to meetthese challenges.

Supplying on a daily basis, transportation, everyday
life and many other activities require energy. Furthermore, even more energy will be needed in the future.
According to the forecasts of the International Energy
Agency (IEA), the annual demand for energy on ourplanet could well increase by around one third by 2035.
Higher energy efficiency is therefore becoming more
and more important in protecting the environment.
According to an IEA study, for example, the world’s
projected energy consumption could be reduced by
17 to 33 percent by 2050 by improving the energy­efficiency of buildings, transportation and industrial
processes. Internal logistics must also face up to thischallenge that will be accompanied by stricter regulations and threshold values in the years to come.
All of these megatrends mean that customer requirements in the respective end markets will continue tochange. We proactively help our customers to meetthese challenges with our broad range of tailor-madesolutions.

Besides supermarkets, department stores and specialty
stores, consumers are being increasingly supplied withgoods by Internet trade. According to statista.com,
approximately 2.9 billion people owned a computerwith Internet access in 2014. E-commerce business will
also continue to grow due to mobile Internet access via
smartphones and the internal logistics processes are
becoming more and more sophisticated due to theresulting highly complex distribution chains. Furthermore, vendors must cope with more and more returns.
For example, the return rate in the area of textiles now
even exceeds 50 percent in some areas. Only companies with a high-performance material handling solution are able to manage these challenges.

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OVERVIEW BY PRODUCT GROUPS

18

PRODUCT GROUP
DRIVESThe Drives product group comprises our 24 volt
drive technology (RollerDrive), including the control systems, and our drum motors. By increasing our
net sales by 5.0 %, we managed to continue to growhere to CHF 114.9 million (2013: CHF 109.4 million). Order intake rose to CHF 113.6 million (2013:
CHF 109.6 million).

24 VOLT DRIVE TECHNOLOGY AT HERMES FULFILMENT

24 volt RollerDrive
Today, Interroll is the world’s leading manufacturerof motor-driven 24 volt conveyor rollers that are particularly efficient solutions for enabling material flow.
Thanks to their low energy consumption, reductions innoise and their easy installation and maintenance, ourcustomers are able to remain competitive and organise
their internal logistics processes efficiently. RollerDrive
can be used to build completely new conveyor systems
or gradually modernise existing machinery and thus
give the end customer high planning flexibility.
Customers around the world appreciate the advantages that 24 volt technology offers and we were able
to increase order intake in this product group quite
significantly in all three regions. An increase of nearly
15 % in Asia-Pacific shows that consciousness of using
drives that save energy is growing in this region as well.

“We installed this technology in order to save energy.
At the same time, however, we noticed in tests how quiet
it is. This is a success we never really expected and arequite pleased about. Furthermore, we have found thatmaintenance can now be performed much more easily.”Michael Schekatz, Head of the Technical Services Department at Hermes Fulfilment
and responsible for sustainability
Hermes Fulfilment, an Otto Group company that manages all services along the supply
chain for European distance dealers at its four own logistics centers, introduced a masterplan on climate protection in 2006. As part of this energy-saving program, the company
is replacing its conventional 400 volt technology with energy-saving 24 volt drive technology from Interroll.

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OVERVIEW BY PRODUCT GROUPS

19

CONVEYOR ROLLERS AT PAUL ANDERL GMBH

PRODUCT GROUPROLLERSThe Rollers product group includes all non-driven
conveyor rollers. Net sales for this product group
amounted to CHF 81.2 million, 7.7 % higher than in
the previous year (2013: CHF 75.4 million). Orderintake was CHF 84.6 million in 2014 (2013: CHF 75.1
million).

“Today, we are able to sort our empties much faster andcan cope much better with seasonal peaks.”
Bernhard Oppacher, Operations Manager Logistics, beverage wholesalePaul Anderl GmbH
Non-driven conveyor rollers are in use in the sorting plant for empties of Paul Anderl,Germany, which is operated by gravity.

Drum motors
In developing our asynchronous and synchronous
drum motors, we not only place a great deal of importance on making sure that they are extremely durable,
reliable and low on maintenance, but also on achieving the highest possible energy efficiency. Because theentire drive unit is found inside the drum capsule, ittakes up less space and meets the requirements of theinternational protection classes IP66 and IP69k.
Our drum motors that are specially designed for conveyor applications in supermarkets are perfectly suitedfor meeting the special requirements of check-out
desks and reverse vending machines and are quick andeasy to install. Furthermore, they can be integrated
into existing installations very easily. In Europe, inparticular, we managed to increase our order intake bynearly 13 % in this segment.

The demand for our high-quality conveyor rollers
was extremely gratifying in all regions. Particularly in
Eastern Europe and America, we were able to achievestrong growth in excess of 30 % and nearly 29 %respectively with respect to order intake. Our intensified market activities in China are also bearing fruit
and we managed to also increase our order intake inthis country by close to 30 %.
The 500 million conveyor rollers we have manufactured make us one of the leading suppliers in this area.
Thanks to our platform we can offer a variety of 60,000
different types of conveyor rollers for every application. Thanks to our short delivery times, our customers
can remain flexible when it comes to purchasing andmust maintain only low stock levels. Operational reliability is guaranteed thanks to consistently high product quality. The Kaizen philosophy was introduced atroller manufacturing in Wermelskirchen, Germany,
several years ago and we are an official benchmark
partner and reference operation of the Kaizen Institute.
This means we offer the highest reliability and security
for our customers’ supply chains. Our conveyor roller
manufacturing is designed to accommodate very small
quantities and approximately 47 percent of our order
positions in Wermelskirchen have a lot size of less than
10 units. Our customers are thus able to react to shortterm project changes in a flexible and efficient manner.

We also pay particularly close attention to hygiene
requirements. Interroll drum motors for the foodindustry stand up to intensive cleaning processes
without breaking down. For example, our synchronous drum motors meet the material requirementsthat the USDA/FDA and the EU ordinance EG
1935/2004 make on use in the area of food. They are
the only drum motors that have been certified for use
in hygienic industrial applications by the European
Hygienic Engineering & Design Group (EHEDG) following in-depth testing.

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OVERVIEW BY PRODUCT GROUPS

20

PRODUCT GROUPCONVEYORS & SORTERS
Our Conveyors & Sorters product group encompasses
subsystems and modules that are used in key positionsin the field of internal logistics. These include crossbelt sorters, belt curves, roller and belt conveyors, butalso the new modular conveyor platform. We once
again managed to exceed last year’s high sales. At
CHF 79.8 million, sales were 12.1 % higher than in theprevious year (2013: CHF 71.2 million). Order intake
stood at CHF 95.9 million and thereby 36.4 % higher
than in the previous year (2013: CHF 70.3 million).

CROSSBELT SORTER FOR CHINA POST“In 2014 we ordered seven crossbelt sorters in order tobe able to increase our efficiency in the area of material
flow and sorting of packages, but also our speed ofdelivery quite noticeably – a challenge that pretty much
all leading Chinese CEP service providers must battlewith to at least some degree.”Jingxin Li, General Manager of China Post Science & Technology Co. Ltd.
In 2014, the Chinese Post successfully put seven crossbelt sorters from Interroll into
operation to improve processing of packages in peak periods.

The launch of our new modular conveyor platform at
CeMAT in Hanover in May 2014 was the most important product introduction in the 55-year history ofInterroll. Customers realise what advantages ourplatform offers when it comes to managing fluctuations in the flow of goods, managing changes in order
structures and product assortments both quickly andefficiently. Conveyor systems can be retrofitted at
any time and changes can be made while the system
is in operation. We already received lucrative orders
during the rollout phase of market introduction in
Europe and expect the order situation to continue
to develop positively. We are currently preparing to
introduce this product in America and China in thesecond half of 2015.
Sorting is considered to be the most costly area ofinternal logistics next to picking. The capital recovery
times (return on investment, ROI) of two years on
average for Interroll solutions are significantly shorter
than those of competitive solutions. This represents
a key advantage, especially in an environment dominated by fast-changing offers and product portfolios.
Our solutions have been helping customers to masterthe growing demands that have resulted from the trend
towards automation. For example, material handlingsolutions that feature crossbelt sorters are capable ofprocessing extremely large quantities of bulk goods
and huge product varieties quite easily. Furthermore,they are known for their quiet operation and how little
space they take up.
Thanks to increasing automation in the Asia-Pacificregion, we managed to grow by increasing our orderintake in this region by an impressive 41 %. Furthermore, the Americas region also developed very positively in 2014.

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21

PRODUCT GROUPPALLET & CARTON FLOWThe Pallet & Carton Flow product group includes ourdynamic storage solutions for pallets and parcel packaging based on the FIFO principle (First In, First Out)or LIFO (Last In, First Out). Net sales of CHF 59.4 million were slightly below the previous year’s level (2013:
CHF 60.3 million). Order intake declined to CHF 56.6
million due to the fact that the orders received in2013 (CHF 63.9 million) included a one-time orderfrom Red Bull Thailand worth approximately CHF 6.5
million.

DYNAMIC STORAGE AT GETRAG FORD UK“The new Interroll pallet flow system has now been set
up closer to our production area and provides compact,
space saving storage that allows for identical products
to be grouped in a way that makes good sense. Thisin turn simplifies the location and order picking of parts
to support production of some 1,600 to 2,000 gearboxes
per day.”

In contrast to other solutions, there is no need to supply
power to these dynamic storage systems. Flow storage
utilises the effect of inclined planes. The pallets andother types of packages are thus able to move inthe desired direction on their own due to gravity.
According to a study conducted by the German firm
Intralenco, significant monthly cost savings of up to
28 % per pallet space result with pallet warehouses
that have medium to high turnover rates compared
to competitive solutions. Another study conducted by
the Leibniz University in Hanover, Germany, under thescientific direction of Prof. Dr.-Ing. Lothar Schulze incooperation with the Southeast University in Nanjing,
China, also confirms that flow storage is known
for its high energy efficiency and environmental
compatibility.
We received several lucrative orders in 2014, especiallyin Northern and Southern Europe, and managed
to increase our order intake by nearly 10 % in the
EMEA region.

Neil Hodgkinson, Contract Manufacturing Engineer, Getrag Ford Transmissions UK.
Getrag Ford Transmissions recently had a dynamic storage system from Interroll
installed as part of a large-scale investment in its Liverpool site (Halewood). The new
Interroll pallet flow system offers space and energy saving FIFO storage (First In, First
Out) for a total of 228 pallet positions in rack structure four pallets deep, three tiers
high with 19 lanes. The project on optimising storage of structural components was partof a much more comprehensive lean logistics project aimed at centralising logistics
within the plant.

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OVERVIEW BY REGION

22OVERVIEWBY REGION
SALES
EMEA

63 %

SALES
AMERICAS

24 %

SALES
ASIA-PACIFIC

13 %INTERROLL IS WORLDWIDE ACTIVE VIA OWN COMPANIES,AGENTS AND DISTRIBUTORS.

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OVERVIEW BY REGION

23

DEVELOPMENT DIFFERS
IN THE THREE OPERATIONAL REGIONSEUROPE–MIDDLE EAST–AFRICA
We continue to pursue our strategy of internationalisation by moving into new markets and attracting newcustomers. Performance varied considerably in thethree regions of business: EMEA (Europe, Middle East
and Africa), Americas and Asia-Pacific.

203.0

210.2

EMEA REGION DEVELOPED POSITIVELY
Net sales in the EMEA region developed positively
in 2014. At CHF 210.2 million, this figure was 3.5 %higher than the previous year (CHF 203.0 million).
The EMEA region accounted for roughly 63 % of total
revenue (2013: 64 %) due to accelerated expansion in
the Americas and Asia-Pacific regions.
Sales developed quite differently in the various European regions. Interroll experienced solid growth in its
main markets Germany and France and even stronger
growth in Italy and Eastern Europe. We were quite
pleased with the rise in order intake of close to 10 %in Spain and the United Kingdom. Our companies inSouth Africa and Turkey are also developing positively.
By contrast, the saturation point was temporarily
reached in the internal logistics field in other regions,especially Scandinavia.
By forming our own sales unit in Portugal, we are now
able to serve this market directly. The main focus here
is on the areas food processing, e-commerce, postal andparcel delivery and security and logistics at airports.

2013

2014

Sales development in the EMEA region
in CHF million

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OVERVIEW BY REGION

24

AMERICAS
VERY PLEASING SALES PERFORMANCEIN THE AMERICAS
Revenue growth of 20.3 % in the Americas was driven bystrong organic growth of nearly 10 % and the acquisitionof Portec in July 2013. Net sales amounted to CHF 81.9
million in 2014 (2013: CHF 68.1 million). The region
thus contributed roughly 24 % to our total revenue,compared to approximately 22 % the previous year.
We are also seeing an above-average development inBrazil. In November 2014, we signed a frameworkagreement with the Brazilian Post together with the
US-based system integrator National Presort L.P. tosupply a total of six sorters from 2015 to 2017. Due tothe size of this order, the regional Center of Excellencein Atlanta is working together very closely with theglobal Interroll Center of Excellence for Subsystems in
Sinsheim, Germany.
As we already reported in our Annual Report 2013, weplan to invest up to USD 40 million by 2015 on thebasis of the good market prospects in North and SouthAmerica. In fact, most of these investments have alreadybeen made. We also consolidated our companies
in North America in 2014 by closing our plants in­Jeffersonville, USA, and Concord, Canada. Furthermore, we bundled manufacturing at our regional Centerof Excellence in Wilmington and at our new Center of
Excellence in Atlanta, which officially opened in March
2014. In addition, we are in the process of developing
the Portec site in Cañon City, Colorado, into a regional
Center of Excellence.

81.9
68.1

2013

2014

Sales development in the Americas region
in CHF million

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OVERVIEW BY REGION

25

ASIA-PACIFICDEVELOPMENT OF SALES IN THE
ASIA-PACIFIC REGION IMPACTED BY A
MAJOR ORDER RECEIVED IN 2013
The Asia-Pacific region continues to be of great
importance to our growth potential. The rise in living
standards in these emerging markets has led to greater
demand for products and therefore the appropriate internal logistics. Net sales in 2013 amounted to
CHF 45.2 million and included the large single order
we received from Red Bull in Thailand that was ­valued
at approximately CHF 6.5 million. With net sales of
CHF 43.2 million in 2014, we managed to keep oursales at about the same level. This region accounted
for roughly 13 % of total sales in 2014 (2013: approximately 14 %).

The business also developed very positively in Australia in 2014.

We also continued to execute our growth strategy in the
Asia-Pacific region in 2014. We celebrated the official
opening of our new Asian headquarters in Shanghai
in March. In July, we acquired Portec Asia in Hong
Kong and in September Pert Engineering (Pert) in
Shenzhen, China. The company has achieved a leading
market position and specialises in serving airport,­distribution and logistics customers in the Asia-Pacificregion. Pert has succeeded in using the Portec brand toestablish long-term relationships with leading express
package delivery services such as China Post EMS,SF Express and many other customers. Pert’s solutions
are also used in the baggage handling systems of large
airports, for instance in Beijing or Shanghai Pudong.
Through this acquisition, Interroll gains direct sales
access for high-quality belt curves and other internal
logistics solutions in continental China.

+26%

Southeast Asia, on the other hand, clearly failed to meet
our expectations due to several delays in projects. We
still managed to receive lucrative sorter and dynamic
storage orders from leading Indonesian and Malaysianretailers and international courier services, in particular. For example, Alfamart in Indonesia purchased
conveyor technology from Interroll for the ninth time.
Furthermore, we put the first Interroll crossbelt sorter
into operation at City Link Express in Malaysia andInterroll’s first dynamic storage system in Indonesia at
Lotte, a leading confectionary manufacturer.

WE INCREASED OUR NET SALESIN CHINA BY AROUND 26.0 % COMPAREDTO THE PREVIOUS YEAR.

45.2

43.2

With Shenzhen being our fourth site in China we continue to execute our strategy of supplying our customers
around the world with our global product portfolio
more quickly by strengthening local manufacturing.
We will continue to pursue Interroll’s expansion in
China through our four sites. We expect the boomin e-commerce and the food processing industry tocontinue in China and bring a steady rise in demand.
We increased our net sales in China by around 26.0 %compared to the previous year. Here, we have worked
very hard to continue expanding our customer base andrepeatedly received orders from important customers such as the Chinese Post. Overall, seven Interroll
crossbelt sorters were successfully put into operation
with this customer in 2014.

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2013

2014

Sales development in the Asia-Pacificregion in CHF million

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26

Dr. Garlichs – how important is innovation
for Interroll?
It is a crucial topic for Interroll’s further development.
Nevertheless, it can only be successful if it enables
us to create added value for our customers throughnew products and solutions. Without innovation,
we would experience stagnation, and that is clearlysomething that we as a market leader cannot afford.

CUSTOMER ORIENTATION
AND POWER OFINNOVATION ARE OURSTRENGTHS
Interview with DR. RALF GARLICHS
Executive Vice President Products & Technology andMember of Group Management

How can employees, suppliers and partners­contribute to driving innovations in a company?
All innovations are based on ideas, which can thenbe converted into products or production processes.
Here, it is important to listen – to our employees, butalso our suppliers, and customers, of course. After all,they are our partners. And the more closely we listen
to them and convert what they tell us into innovation,
the more successful we will be.
Based on your own personal experience,is ­it possible to include customers in the­innovation process?
Yes, this is possible. All partners must ask themselves
what they want the mutual future to look like andthen decide what each side can contribute. And thenwe must work on developing solutions together. We
have been doing this successfully with our modular
conveyor platform amongst others together with
Swisslog but also with other customers.
Speaking of the modular conveyor platform –what makes it so innovative?
Many different aspects. The basic idea is plug & play.
Speed is an extremely important factor, not only at aconstruction site, but also when it comes to delivery.
Here, you need a set of building blocks that can be
put together like a Lego building set, which thenallows you to meet customer demands by offering theshortest possible delivery times. And then, of course,
our goal with the conveyor platform was to transfer
customer demands into the individual modules inan optimal way. One demand, for example, was tooffer conveyors with conveying speeds of two meters
per second. This simply wasn’t possible with ourexisting technology, therefore we developed new
solutions for this. Our new High Performance Divert
HPD that offers maximum system performance is yet
another good example. It lowers the operating costs
because it doesn’t interrupt the material flow and canbe operated using our energy-efficient drives and amaster-slave concept that allows for multiple HPD
cassettes to be operated by a single drive instead of
their own drive unit.

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27Interroll consequently pursues a platform strategy.
What is the rationale behind this?
Platforms play an important role for us. Our goal is
to develop as broad a product range as possible using
only a small number of starting materials. We strive tomanufacture specific solutions for our customers, yetkeep the internal complexity low. While that mightsound trivial, this needs to be controlled and monitored in our daily work. Considering the hundredsof customer requests we receive every day, we needspecific processes that allow us to avoid high complexity as this would result in long delivery times, highcosts and often losses in quality. And that is exactly
what neither we nor our customers want.
So have you developed platforms for all
Interroll products?
We realised the platform idea for the first time withour conveyor roller several years ago and continued tostrongly pursue this idea with our conveyors. We are
currently working on a project aimed at reengineering all of our drum motors and uniting the various
generations and models in a single platform withshort throughput times, manageable complexity andhigh quality, but also broad variety for our customers.

“Innovation has to add value
for customers.”
Interroll already introduced the Interroll­Production System under your leadership backin 2006. What are its main pillars?
There are four main pillars: excellent processes, execution of the platform strategy, our global manufacturing organisation and the innovation process. Thismeans that we transfer lean production ideas over toour own production, generate many solutions for ourcustomers from a small number of starting materials
and support our customers from our plants on allcontinents. And, of course, we conduct annual process audits to measure every single plant and determine to what extent the Interroll Production System
is being used there and what progress still needs tobe made.

faultless products. Today our quality is already quite
high. Our customers also confirm this. But we stillaren’t perfect.
So what is the zero defect strategy all about?
That is an interesting question. It doesn’t necessarilymean we must produce completely faultless products,
although we obviously always work on minimising
the number of defects in production. For example,
the defect ratio on our drives for use in checkout
desks was 0.004 % in 2013. We managed to lower it to
0.0034 % in 2014. Our main goal, however, is to avoid
delivering any products that have defects. At the endof 2014, we visited top plants in Germany that are
virtually free from defects together with an international team of 20 Interroll employees. And we reallylearned a lot. We are currently transferring this overto our plants and starting off with a few pilot projects.
Construction and development must also be includedin the process if we are to deliver faultless products. The products we supply today basically ­containhardly any defects, however their construction
might not be completely perfect. For this reason, we
need to think about whether the innovation processneeds to be changed accordingly or how we need tochange the product design.
And this is where we come back to the platform strategy. Here we are working with proven componentsthat we consistently install. The platform strategy
therefore supports the topic of zero defect. And now
that the zero defect strategy is part of the Interroll
Production System, we will monitor its implemen­tation while conducting our regular process audits.
What is the most important aspectin ­implementing this type of strategy?
People’s attitudes are most important here – seeking
to avoid mistakes and if one is made then it is only
made once and not more often. This means we not
only need the proper methods, but also the rightemployees. Creating awareness of how we at Interroll
deal with a defect and seeing to it that our strategy isunderstood and executed properly at all levels – thatis the management task.

The market is aware that Interroll’s products
are of high quality. Now you have adopted thezero defect strategy. Why?
We want our customers to be able to depend one
hundred percent on our products. Many of our­customers sell our products all over the world andsimply can’t afford to have a product beakdown andthen provide service. For this reason, it is important
to us as a supplier to constantly work on providing

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28

CORPORATERESPONSIBILITYINVESTMENT IN RESEARCH AND DEVELOPMENT
FOR LONG-TERM SUCCESSAs an international market and technology leader,Interroll invests in research and development of new
products and further development of its existing products and thus strengthens the company’s sustained
power of innovation. Highly effective quality management ensures the recognised and certified quality ofthe solutions we offer. We place great importance on
meeting current legal requirements in an optimal way
and anticipate future requirements when we develop
our products.
The Interroll Research Center (IRC) in Germany is
one of our most important facilities when it comesto steadily expanding our innovation leadership. By
working together closely with the Interroll Centers of
Excellence, the global product management team andsales, it constantly develops solutions that improve theinternal logistics material flow. Its focus lies on topics
such as energy efficiency, noise reduction, hygiene,
the development of new materials and open automation solutions with distributed intelligence. Thanks to
our many partnerships with leading universities suchas the RWTH Aachen or the Technical Universityof Munich and industrial partners like the EHEDG
Institute (European Hygienic Engineering & DesignGroup), we have a great deal of experience when it
comes to all issues that pertain to conveyor technology
and help our customers to meet the requirements they
face in an efficient manner and thus make them morecompetitive.

Our IRC worked on the following important developments in 2014 together with the respective Centers of
Excellence, to list just a few examples:–– Various types of conveyor belts from different
manufacturers can be driven by using the Interroll
Multiprofile for drum motors to offer our­customers even greater flexibility.
–– A new generation of drum motors reduces thenoise level, particularly at high transport speeds,
and thus contributes to ergonomic workplacedesign by reducing noise.
–– We have been working on yet another solutionthat will allow for control modules to communicate
directly with the PLC via conventional field bus
systems such as Profinet or EtherCat to meet thetrend towards programmable logic controller
connections. This control system that is not specificto a certain manufacturer will enable us to offer ourcustomers free programming via a PLC.
We protect many of our innovations globally with ourmany patents and other property rights.

Focus of our IRC (from top to bottom): noise reductions, energy efficiency, hygiene,
automation solutions, new materials, distributed intelligence.

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29

Interroll invests in continuous education to further
qualify its employees.

HIGH IDENTIFICATION OF
OUR EMPLOYEES
People from more than 20 different countries work forInterroll Group. The number of employees has risen
by approximately 50 percent in the last ten years. Our
workforce is highly motivated and works very hard forthe company and its success. This is also reflected in
our low staff turnover rate.
Interroll will also continue to grow internationally inthe future – both organically and by making acquisitions. We rely on well-trained employees at all levelsof the company in order to be able to integrate newparts of the Group and collaborate effectively betweensites. By training qualified employees, Interroll also
invests in its own future. We continuously train our
employees at our Interroll Academy. Targeted training courses were also held at our new sites and at thecompanies we acquired. Expert employees contribute
their unique know-how and experience and at thesame time benefit from their new colleagues’ expertise.
We thus encourage internal knowledge transfer, intercultural awareness, the formation of networks andthe participants’ individual development. In autumn
2014, we organised a one-week visiting programme in­Germany for an international team of 20 employees.
This group visited external companies which are bestin class in their industries. With programmes like thiswe support the knowledge transfer from other industries and provide the opportunity for our employees togain new experience which they can benefit from intheir daily work.

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We also seek to stand out from the competition moreclearly by focussing on our company culture and bycontributing to stronger identification of our employeeswith the company. More emphasis will also be placedon variety and diversity. In other words, our employees
will act as brand ambassadors. They will be supportedby special programmes for staff members, management tools and a number of new communications
activities, both inside and outside Interroll.
Manufacturing companies like Interroll are in needof healthy and satisfied employees. For this reason, we
contribute to our employees’ health through a variety
of different activities. For example, Health Days were
held at our global Center of Excellence for conveyor
rollers in Wermelskirchen, Germany. The employees
here were given the chance to learn more about the
topics nutrition, exercising and relaxation.

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30

FOCUSSED MARKETING
ACTIVITIESThe Interroll Group has grown steadily over the last
few years and awareness of the company in the market
is now considerably higher.
Attendance of trade exhibitions is an important element of our marketing strategy. We showcased our
products and solutions at 18 different global and many
local events in 2014. Here, the launch of our modular
conveyor platform at CeMAT in Hanover in May 2014is clearly worthy of special mention. This proved to be
the biggest product introduction in Interroll’s history.
We direct our marketing activities either centrally or
locally depending on the type of activity and the objective, but always in a strategic manner that focusses
on certain topics. This ensures that we achieve better
than average results and avoid high scatter losses. By
arranging for the main corporate marketing team towork together closely with the local organisations, we
make sure that the local market situation is also taken
into consideration.

The customer loyalty programme “Rolling On ­Interroll”
was successfully launched in 2014, 55 years after­Interroll was founded. The mechanical engineering
companies and OEMs that participate in it clearly showthat they rely on Interroll’s expertise and technology bydisplaying the respective sign on their machinery. We
reward them for their loyalty by admitting them to ourtraining programmes, supporting their advertising andexhibition budgets and by organising joint seminars.
Furthermore, we remain the Sauber F1 team’s intra­
logistics partner and view this to be an excellent way
of presenting our product line in a context in which
logistics is considered to be a crucial success factor.
The focus of our marketing in 2015 will again be on
acquiring new customers, positioning ourselves in
the areas of sustainability and innovation, but also on
communicating the competitive advantages we offer.

In our marketing activities we focus not only on ourcustomers, the system integrators and OEMs, but also
on end customers. On the one hand, this approach isintended to support our direct customers in their sales
process. On the other hand, we want the end customers
to see the benefits our products offer.

Customers rely on Interroll’s competence andtechnological expertise.

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SUSTAINABLE AND EFFICIENT
USE OF RESOURCES
As a manufacturing company, we are very much awareof our ecological, economic and social responsibilities.
By implementing sustainable measures that conserve
resources, we can help our customers to reduce theircosts and thus brighten their competitive prospects.
In order to make our contribution to the sustainable useof resources, we invest in measures that optimise theefficiency of our processes and reduce our consumption of resources in a targeted manner. For example,
we have already installed lighting that saves energy
such as LEDs at most of our production plants anduse motion sensors to control the light in some cases.
Wherever possible, we separate waste to allow for better
recycling. We also invested in an energy-efficient insulation concept for our new building at the Center of
Excellence for drum motors in 2006. This facility isheated by using geothermal heat. In order to keep thepollution of the environment by hazardous substances
as low as possible, our manufacturing employees aretrained regularly on how to handle these substances.
We have been employing the Interroll Production­System (IPS) on the basis of Kaizen in a consistentmanner since 2006. In combination with our useof so-called Poka Yoke, a principle for immediately
detecting and preventing defects that consists of mul-

tiple elements, and the introduction of our zero defectstrategy in 2014, this has significantly reduced waste.
Materials and machines are being used more efficiently
and waste is being avoided. This also contributes tohigher productivity.
Through these Group-wide efforts, we are striving toachieve continuous improvements in order to defend
our company’s long-term continued success.
At the same time, our products help our customers
achieve their climate protection, environmental andefficiency goals. For example, Hermes Fulfilment inGermany is replacing its conventional 400 volt drive
technology with our 24 volt RollerDrive technology.
Through this and other measures, the company will
be looking to achieve its ambitious goal of reducing its
CO2 emissions by 50 percent by the year 2020.
The usage of polymer materials is one of the main
focuses of research at Interroll. Using polymer components reduces weight and thus allows for materials to
be used more efficiently and indirectly helps conserve
resources. The polymer can then be recycled at the endof the product’s lifecycle.
Our products are often critical to the quality, performance and operational reliability of the user’s ­conveyor
systems. Interroll products allow for resources to be
used in a more environmentally friendly, sustainable
and efficient manner due to the fact that many of
our solutions lower energy consumption and can beinstalled in a way that saves space. Last, but not least,
many installations that include Interroll products also
lead when it comes to occupational safety and ergonomics. Due to the often critical role that our products
play in the end customer’s overall system, we also havea great responsibility to them. Our goal is therefore toensure the highest possible product reliability. Using
modern quality and testing techniques that we also
make available to our customers also contributes tothis. Among other benefits, this means we significantly
lower the risk of negative consequences for the environment and society.

Interroll products as the 24 volt drive technology contributeto a sustainable use of ressources.

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INTERROLL – INNOVATION32

CUSTOMER BENEFITS
ARE WHAT DRIVES US.
INNOVATION IS KEY.
WE WANT TO PROVIDE OUR
CUSTOMERS WITH WELL
MATCHED SOLUTIONS WITH
A FAST RETURN ON
INVESTMENT AND THUS
OFFER THEM MORE
FLEXIBILITY.

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MODULAR AND FLEXIBLE SYSTEMSTHAT ENABLE FUTURE GROWTHCONVEYOR MODULESHIGHEST HYGIENE STANDARDSAND SPACE SAVINGDRUM MOTORSOCCUPATIONAL HEALTH AND
HIGH THROUGHPUT
DYNAMIC STORAGE

CONVEYOR ROLLERS FOR
ALL APPLICATIONS WITHOUT DELAY
CONVEYOR ROLLERS

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CONVEYOR MODULESOUR MODULAR CONVEYOR PLATFORM IS THE ANSWER TO
THE GROWING IMPORTANCE OF EFFICIENT MATERIAL FLOW
Plug & play is the basic idea behind our modular conveyor platform. Our global Center of Excellence in ­Sinsheim,
Germany, has developed new solutions for individual modules and thus effectively transferred customer requirements over to these.
The Interroll High Speed Divert HPD is an excellent example of this. Installation inside a conveyor is extremely
easy, just as simple as retrofitting or repositioning. Furthermore, the conveyor flow or direction can be changed
later on at any time. The HPD was already awarded a Coup de Coeur Innovation Award at the 2014 Manutention
trade exhibition in Paris.
Much like a set of building blocks, all of Interroll’s main components can be combined with one another inside
the entire system. New conveyor lines can thus be planned and realised very quickly and existing systems can beeasily modified to suit changing demands. And all of this is possible with short delivery times. The modules arepreassembled to a large extent and this significantly minimises the installation efforts.
The modules can also be integrated into the customer’s layout quite easily by using the new “Interroll Layouter”
planning software. All entries are validated to minimise the risk of planning errors. Project planning of the­conveyor system can thus be completed much more quickly and reliably.

MODULAR AND FLEXIBLESYSTEMS THAT ENABLE
FUTURE GROWTH“OUR INNOVATIVE CONVEYOR PLATFORM ALLOWS CUSTOMERSTO REACT MORE QUICKLY TO NEW CHALLENGES AND TAKE ADVANTAGE
OF THEIR MARKET CHANCES.”
Michael Kuhn
Managing Director Interroll Automation GmbHSinsheim, Germany

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3577%
OF CUSTOMERS CONFIRM THAT­INTERROLL IS TECHNOLOGYLEADER ­IN THE FIELD OF CONVEYOR
MODULES. PROVEN.

FRANCIS MEIER
Senior Vice President, Head Asia-Pacific WDS, Swisslog(until the end of 2014 Managing Director Technology Center Swisslog)“With their new conveyor platform, Interroll has got it right:
modularity and scalability all the way, with plug & playmodules and standard components. We have been involvedin the product development process at an early stage, giving
us the possibility to actively contribute ideas and suggest
improvements where needed.”

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36

DRUM MOTORSMORE FLEXIBILITY FOR MEETING THE HIGHEST HYGIENEREQUIREMENTS WITH INTERROLL MULTIPROFILE
The global Center of Excellence for Drum Motors in Baal, Germany, has developed the Interroll Multiprofile, a
new profile which can be used to drive up to nine different conveyor belts. This translates into higher flexibility
for customers when replacing belts. Time needed to retrofit and perform maintenance work on the conveyors
is reduced quite significantly because motors do not have to be replaced. The new Interroll Premium Hygienic
PU material, also a new development, complements the EHEDG product portfolio, allows for extremely easycleaning and is resistant to oil, grease and chemicals.
The synchronous drum motors which meet EHEDG (European Hygienic Engineering & Design Group) guidelines and the asynchronous drum motors which are certified by the USDA (US Department for Agriculture) are
extremely hygienic and energy efficient solutions for the food processing and pharmaceutical industries.
But also other industries like airports, supermarkets, the packaging industry and many more make use of theenergy efficient Interroll drum motors.
Within the Interroll Group, the Center of Excellence in Baal is responsible for all technical concerns ranging
from development and application engineering to production of drum motors. The production facilities also
include the Coating Center for rubberized drum motors.

HIGHEST HYGIENE
STANDARDS
AND SPACE SAVING“OUR DRUM MOTORS ARE EXTREMELY EFFICIENT SHOWINGAN EFFICIENCY FACTOR OF UP TO 83 %.”Dr. Hauke Tiedemann
Managing Director Interroll Trommelmotoren GmbH
Hückelhoven/Baal, Germany

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80%

INTERROLL DRUM MOTORS POWER
80 % OF THE CONVEYORS INSIDECHECKPOINT SCANNERS ON AIRPORTS
WORLDWIDE. PROVEN.

ALESSANDRO TURATTISales Director, Turatti Srl“Research and development is at the heart of everythingat Turatti and we pride ourselves for innovative approaches.
This is a vision we share with Interroll and we believe it
is very important to have such reliable business partners
with excellent products. In fact, their drum motors actually
meet the most stringent requirements in terms of quality
and hygiene and are regularly installed in our state-of-the-art
equipment.”

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38

DYNAMIC STORAGE

HIGH THROUGHPUT AS WELL AS A SAFE WORKING­ENVIRONMENT PLAY A CRUCIAL ROLE IN INTERNAL
WAREHOUSE LOGISTICS
Interroll offers the only patented magnetic speed controller for dynamic storage on the market which was developed by the global Center of Excellence in La Roche-sur-Yon, France. Electromagnetic resistance allows an optimal
braking effect and the lifespan of the wear-free controller is increased considerably. The speed of the conveyed
pallets is kept under 0.3 m/s independent of the weight. In combination with the safety separator Time Plus
Separator which by time delay enables the pallet to be taken out safely until the following pallet flows to the front
picking station, high occupational safety is guaranteed.
The Interroll PalletFlow und CartonFlow solutions help to save energy costs, take up less space than conventional
storage solutions and are able to handle a diverse product range with lower personnel costs much faster. And
the newly developed Interroll TCO (total cost of ownership) calculation tool helps the customer to easily calculate the Return on Investment by entering his specific data in terms of storage capacity, turnover rates, building
costs, etc.
Within the Interroll Group, the Center of Excellence in La Roche-sur-Yon is responsible for development
and application engineering as well as production of dynamic storage solutions. The performance and safety
aspects of the modules are tested under real conditions down to –28 °C in the company’s own ISO-9001
certified test center.

OCCUPATIONAL SAFETY
AND HIGH THROUGHPUT“THE INITIAL INVESTMENTS IN DYNAMIC STORAGE ARE AMORTISED THROUGHSAVINGS IN DAY-TO-DAY OPERATIONS, USUALLY AFTER LESS THAN TWO YEARS.”
Bertrand ReymondManaging Director Interroll SAS
La Roche-sur-Yon, France

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28%

DYNAMIC STORAGE SYSTEMS CAN REDUCEMONTHLY COSTS PER PALLET POSITIONBY UP TO 28 % COMPARED TO RADIO-SHUTTLE
SOLUTIONS. PROVEN.

LUCKY JURISTAPPIC Manager, Lotte Indonesia“The Interroll FIFO systems can meet all of our requirements
regarding short shelf life, energy saving, less maintenanceand less space. As a food processing company, efficiency andquality is always a concern. I am happy that we madethe right choice.”

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CONVEYOR ROLLERS

500 MILLION CONVEYOR ROLLERS – UNBEATABLE,ALSO IN SMALLEST LOT SIZESNearly half of the order volumes of approximately 6,500,000 conveyor rollers and 200,000 RollerDrive that are
manufactured each year at the global Center of Excellence for conveyor rollers and RollerDrive in Wermels­
kirchen, Germany, are for less than ten units and therefore manufactured to meet the respective customer’s
requirements. All of the manufacturing processes here are geared toward lot size 1. This guarantees maximum
flexibility, speed and the shortest possible reaction times.
More than 60,000 different types of conveyor rollers are possible. Thanks to the efficient and flexible on-demand
manufacturing, more than 80,000 orders are processed here each year – and the delivery times are nearly always
under one week. Not a single roller is kept on stock at the warehouse.
All of the thirteen production lines are modified 60 to 70 times per day and it takes only around 80 seconds on
average to convert the machinery: this is pure excellence in manufacturing.
Within Interroll Group, the Center of Excellence is also responsible for the development of new solutions andapplication engineering. Under its management the worlwide product line has been continuously extended from
non-powered rollers to RollerDrive that feature controls with a connection to the PLC via field buses and to
RollerDrive for deep freeze applications.

CONVEYOR ROLLERSFOR ALL APPLICATIONS –WITHOUT DELAY“NOT ONLY PRODUCTS CAN BE DVELOPED, BUT ALSO THE
ENTIRE PRODUCTION PROCESS.”
Armin Lindholm
Managing Director Interroll Engineering GmbH
Wermelskirchen, Germany

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99%

AVAILABILITY OF THE PRODUCTION EQUIPMENT. WHICH MEANS OUR CUSTOMERSGET HIGH-QUALITY ROLLERS ON DEMAND IN
RECORD TIME. PROVEN.

BERTRAM KAUFMANNManaging Director, Kaufmann Systems AG“I receive the products ordered from Interroll, such as conveyor
rollers manufactured to my requirements, in the shortest
period of time, in the right quantity, at the right location.
Interroll is a reliable partner, for both product quality
and collaboration. Consulting and service are always skilled.
This makes for a very pleasant customer/supplier
relationship ...”

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PROVEN TECHNOLOGYFROM THE SINGLECONVEYOR ROLLER TO THE
WHOLE PLATFORM:
OUR INNOVATIONS SATISFYMARKET AND CUSTOMERNEEDS. YESTERDAY, TODAY,TOMORROW.

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43

CORPORATEGOVERNANCE

1INTRODUCTION

44

2

GROUP STRUCTURE AND SHAREHOLDERS

44

3

CAPITAL STRUCTURE

44

4

OPERATIONAL MANAGEMENT STRUCTURE

45

5

BOARD OF DIRECTORS

48

6

INTERNAL ORGANISATION 

50

7COMPETENCE REGULATIONS50

8INFORMATION AND CONTROL INSTRUMENTS

50

9

GROUP MANAGEMENT

51

10SHAREHOLDERS’ PARTICIPATION RIGHTS

51

11

CHANGE IN CONTROL AND DEFENCE MEASURES

52

12

AUDITOR

52

13

INFORMATION POLICY

52

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1

INTRODUCTION

Base of the corporate governance report
The corporate governance report 2014 of the Interroll
Group refers to the official guideline of the SIX Swiss
Exchange on Corporate Governance, best practicerelated to the Minder initiative as well as to the regulations of the “Swiss code of best practice for corporate
governance”.
Cross references
In order to minimise repeated comments, certain­sections cross refer to other sections, especially to thefinancial report.

2

GROUP STRUCTURE AND
SHAREHOLDERS

Group structure
The operational management structure is disclosed inchapter 4 of this report.
Mother company and stock listing
The holding company of the Group, Interroll Holding Ltd., is headquartered in Sant’Antonino/TI, Switzerland. Its registered shares are traded in the main
segment of the SIX Swiss Exchange under the security­number 637289. Further notes to the listing can befound in chapter “Interroll on the Capital Market” onpage 4 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 expect those of Interroll
Holding Ltd.

3

CAPITAL STRUCTURE

Share capital and voting rights
The share capital of Interroll Holding Ltd. amounts
to CHF 8.5 million and is made up of 854,000 fully
paid registered shares with a par value of CHF 10 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 capitalIn the year under review, the share capital remained
unchanged at CHF 8.5 million.
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 the corporate governance.
Further information on the shareholders’ equity
Additional information on the equity is disclosed in
the financial statements of the Group (see 1.5 “Consolidated statement of changes in equity”) and in therespective notes.

Significant shareholders
All significant shareholders holding a reportableparticipation are disclosed in note 3.6 (“Significant
shareholders”) of the financial statements of Interroll
Holding Ltd.
Cross shareholdings
The Interroll Group does neither maintain capital nor
voting rights with other entities.

2_INT_GB2014_Corporate-Governance_EN.indd 44

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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, system integrators, end users) by offering a ­tailor-madeproduct portfolio and expert consultancy. The Interroll
manufacturing units focus on the production of­specific product ranges. Assembly units receive semifinished products from the manufacturing units andassemble a wide product range for their local markets.
The Interroll Research Centre (IRC), which is centrally
located, researches new application technologies anddevelops new products. Global Centers of Excellence
continue developing the product range they focus on.

Management structure
The Group Management and the Interroll management structure are organized by functions (Overall
Management, Products & Technology, Global Sales& Service, Corporate Marketing, Corporate Finance).
The financial management of the Group by the Boardof Directors is, on the one hand, based on turnover ofthe product groups and geographical markets and, on
the other hand, on the reporting of the consolidated
financial statements. In addition, Group Management
assesses the achievement of financial and qualitative
targets and other key performance indicators of all
subsidiaries.
The Interroll Group has no advisory body.

Board of Directors
CHAIRMAN

Kurt Rudolf

VICE CHAIRMAN

AUDIT COMMITTEECOMPENSATIONCOMMITTEEOTHER MEMBERS

Urs TannerPhilippe Dubois

Kurt Rudolf

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 & TECHNOLOGY

Dr. Christoph Reinkemeier

Dr. Ralf Garlichs

REGIONS

2_INT_GB2014_Corporate-Governance_EN.indd 45

Executive Vice President Americas

Tim McGill

Executive Vice President Asia		

Dr. Ben Xia

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CORPORATE GOVERNANCE

46

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

MANAGED BY

COMPANY

Research & Development

Helmut Maiwald

Interroll Holding GmbH, Wermelskirchen (DE)Global Product Management

Dietmar Hager

Interroll Holding GmbH, Wermelskirchen (DE)Global Centres of Excellence
The seven Interroll Centres of Excellence are responsible worldwide for product development, strategicpurchasing and the application and development of
production technologies for specific product ranges.
Furthermore, they produce for the European markets
and supply semi-finished goods to group companies
overseas. The global Centres of Excellence of the­Interroll Group are managed by the following 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 RaymondInterroll SAS, La Roche-sur-Yon (FR)Conveyor modules

Michael Kuhn

Interroll Automation GmbH, Sinsheim (DE)

Subsystems

Dr. Heinrich Droste

Interroll Automation GmbH, Sinsheim (DE)Techno-polymers

Ingo Specht

Interroll AG, Sant’Antonino (CH)

2_INT_GB2014_Corporate-Governance_EN.indd 46

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CORPORATE GOVERNANCE

47

Worldwide sales and production companies
Regional Centres of Excellence (RCoE)
Regional Centres of Excellence produce for the Americas and Asia-Pacific. These centres take over the fullproduct programme of the global Centres of Excellence and serve the regional sales and service subsidiaries with finished products and the assembly sites
with unfinished goods.

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

EUROPE–MIDDLE EAST– AFRICAFUNCTIONREGION/COUNTRY

MANAGED BY

COMPANY

Sales, service

Central Europe

C. ReinkemeierInterroll 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

Iberic peninsula

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

Czech Rep., Balcany, 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

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)

AMERICAS
FUNCTIONREGION/COUNTRY

MANAGED BY

COMPANY

RCoE, sales, service

USA

R. KeelyInterroll Corporation, Wilmington/NC (US)RCoE, sales, service

USA

V. Saunders

Interroll Atlanta LLC, Hiram (US)RCoE, sales, service

USA

M. Means

Interroll Engineering West Inc., Cañon City (US)Sales, assembly, service

CanadaS. Gravelle

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

Brazil, Argentina

D. HahnInterroll Logística Ltda., Jaguariuna/São Paulo (BR)

ASIA-PACIFIC

2_INT_GB2014_Corporate-Governance_EN.indd 47

FUNCTIONREGION/COUNTRY

MANAGED BY

COMPANY

RCoE, sales, service

China

S. Foong

Interroll (Suzhou) Co. Ltd., Suzhou (CN)RCoE, sales, service

China

MK Lo

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

South Korea

N. KimInterroll 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

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CORPORATE GOVERNANCE

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5BOARD OF DIRECTORSMembers of the Board of Directors

From left to rightback row: Stefano Mercorio, Ingo Specht,
Prof. Dr. Horst Wildemann, Philippe Dubois,
Paolo Bottini
front row: Urs Tanner, Kurt Rudolf

2_INT_GB2014_Corporate-Governance_EN.indd 48

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

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49

PROFESSIONAL BACKGROUND AND VESTED INTERESTS
OF THE BOARD OF DIRECTORSKURT RUDOLF

STEFANO MERCORIO(born 1942, Swiss)(born 1963, Italian)

Dipl.-Ing. ETH, served as Managing Director of LGZ Landis& Gyr Zug AG and Chief Executive Officer of Portescap
Group. He was a member of the Board of Directors of Medela
Group and is currently a member of the foundation council of
the Olle Larsson-Rosenquist Stiftung. Mr. Rudolf has been
Chairman of the Board of Directors of Interroll Holding AG
since 2006 and has been a member since 2001, where he­served as its Deputy Chairman. Since 2006 Mr. Rudolf has
also been part of the Compensation Committee.

holds a degree in economics. He is currently working as a­Legal Auditor and is the founder and Senior Partner of Studio
Castellini Mercorio & Partners. Since 1987 he has been
­Dottore Commercialista “Albo dei Dottori Commercialisti edegli Esperti contabili di Bergamo”. Mr. Mercorio has been amember of the Board of Directors of Interroll Holding AG
since 2013.

URS TANNER(born 1951, Swiss)
Executive MBA University St. Gallen, AMP Harvard, served
as CEO of Medela Group, Managing Director of the Tools &Plastics business segment of Mikron Group and held leading
positions with Styner & Bienz AG (Adval Tech). Currently heis a co-owner of Halcyon Associates Inc. in the USA as well asa member of the Board of Directors of Belimed AG and­Plaston AG. Mr. Tanner has been a member of the Board of
Directors of Interroll Holding AG since 2008 and has been its
Vice Chairman since 2009.

PAOLO BOTTINI(born 1965, Swiss)lic. iur., lawyer and tax specialist (Eidg. Dipl.) held various positions within the law firm Bär & Karrer and currently is theManaging 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.

PHILIPPE DUBOIS(born 1950, Swiss)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 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 .

2_INT_GB2014_Corporate-Governance_EN.indd 49

INGO SPECHT(born 1964, German)
holds a professional qualification as Industrial Business­Manager of Chamber of Commerce and Industry Cologne,
Germany. He was owner and Managing Director of Luxis,
Locarno, and held various senior positions in IT, Marketing
and Business Development within the Interroll Group.
­Currently, he is serving as Managing Director of Interroll SA.
Mr. Specht has been a member of the Board of Directors­since 2006.

PROFESSOR DR. HORST WILDEMANN(born 1942, German)
Dipl.-Ing. in mechanical engineering and Dipl.-Kfm. in business administration, Prof. of university Dr. Dr. h. c. mult.,­serves as Managing Director of TCW Consulting GmbH andis a Professor ordinarius for management, production and­logistics at the Technical University of Munich and a honorary professor at the universities of Klagenfurt, Passau andCottbus. He currently is Chairman of the Advisory Board of
Möhlen­hoff GmbH and Rudolf GmbH as well as a memberof the Advisory Board of Hamberger Industriewerke AG.
He is also a member of the Board of Directors of Sick AG and
Zeppelin GmbH. Prof. Dr. Wildemann has been a member ofthe Board of Directors of Interroll Holding AG and a memberof the Compensation Committee since 1999.

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6INTERNAL ORGANISATION

Constitution and committees of the Boardof Directors
The Board of Directors consists of the Chairman, theDeputy Chairman and the other Members. The Boardof Directors is assisted by two permanent committees
within the areas of auditing (Audit Committee) andremuneration policy (Compensation Committee).
Audit Committee
The Audit Committee receives the audit reports prepared by the local external auditors and by the Groupauditor. It prepares the respective reporting on them tothe Board of Directors. In particular, it ensures itself
that the Group companies are also being audited ona regular basis. The Audit Committee mandates the­internal audit department to execute internal audits
and revises respective audit reports.
At least once a year, the Audit Committee also commissions a report on audits undertaken and planned
as well as on any proposals to improve the auditing
function. The Audit Committee submits its proposals
to the Board 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
the Board of Directors to the Board of Directors for
decision. At the beginning of the year, it defines thetargets to be attained for bonus payments to become
applicable. In addition, the Compensation Committee
is responsible for establishing the terms of theshare ownership scheme.
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 the Board of Directors. Each member of the Board of Directors may
demand that a meeting be convened, specifying theitem on the agenda to be discussed. The CEO partici­
pates in the meetings of the Board of Directors. The
Executive Vice Presidents of the respective functional
units and the Vice Presidents of the Corporate Functions as well as other members of management are
invited to attend meetings when necessary.
The Board of Directors is deemed quorate if an absolute majority of its members is present in person.
Resolutions are adopted on the basis of an absolutemajority of votes present.In the event of an equal divisionof votes, the Chairman casts the deciding vote. All­resolutions are recorded in the minutes.

2_INT_GB2014_Corporate-Governance_EN.indd 50

Both committees of the board meet as necessary. Any
member is entitled to convene committee meetings. In
the business year 2014, the Board of Directors met on
five occasions, the Audit Committee three times andthe Compensation Committee twice for regular scheduled meetings.

7

COMPETENCE REGULATIONS

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

8

INFORMATION AND CONTROLINSTRUMENTS

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

51

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

9

GROUP MANAGEMENTThe Group Management of Interroll Group had thefollowing members as of the end of 2014:
NAME/ YEAR OF BIRTH

NATIONALITYFUNCTION

MEMBER SINCEPaul Zumbühl (1957)

Swiss

Chief Executive Officer (CEO)January 2000

Daniel Bättig (1964)

Swiss

Chief Financial Officer (CFO)

March 2013

Dr. Ralf Garlichs (1962)

GermanExecutive Vice President Products & Technology

July 2006

Dr. Chr. Reinkemeier (1966)

GermanExecutive Vice President Global Sales & Service

January 2011

Jens Karolyi (1970)

GermanSen. Vice President Corporate Marketing & Culture

January 2011

Tim McGill (1955)

EnglishExecutive Vice President Operations Americas

January 2011

Dr. Ben Xia (1966)

Chinese

Executive Vice President Operations Asia

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

2_INT_GB2014_Corporate-Governance_EN.indd 51

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

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CORPORATE GOVERNANCE

52

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

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

12 AUDITOR
Duration of the mandate and term of officeof the lead auditor
By decision of the general assembly of 9 May 2014,
Interroll Holding Ltd. has appointed PricewaterhouseCoopers (PwC) for another term of one year as
its auditing company. PwC has been the Group Auditor of Interroll Group since 2011. Mr. Patrick Balkanyi
has been the lead auditor with audit responsibility
since 2012.

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 simultaneous information to all stakeholders.
To ensure that, the CEO is available as a direct contact
person.
Published reports on the course of business
Interroll Group publishes comprehensive financial
results twice a year: for the first half and for thefinancial year as a whole. In addition to the financial
results that are carried out in accordance with IAS/IFRS, shareholders and financial markets are regularly
kept informed of significant changes and developments.
Source of information
Further relevant information and financial reports
are available on www.interroll.com, where reports canbe downloaded. Shareholders recorded in the share­register may ­request to receive the Annual Report inprinted form and register for automatic submissionof the Annual Report with the Investor Relations
department.

Audit fees
The audit fees charged by PwC to subsidiaries of­Interroll Group in the business year 2014 amounted
to CHF 0.4 million. The audit fees charged by PwC in2013 amounted to CHF 0.4 million.

2_INT_GB2014_Corporate-Governance_EN.indd 52

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REMUNERATION REPORT53

REMUNERATIONREPORT

2_INT_GB2014_Corporate-Governance_EN.indd 53

BASIC REMUNERATION PRINCIPLES 

54

REMUNERATION OF THE BOARD OF DIRECTORS54

REMUNERATION OF GROUP MANAGEMENT56

REPORT OF THE STATUTORY AUDITOR

60

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REMUNERATION REPORT54

The remuneration report provides information about
the principles of Interroll’s remuneration policy, themanagement process and the remuneration of the Boardof Directors and Group Management. It complies withthe requirements of Sections 14 to 16 of the Swiss ordinance against excessive compensation in listed stockcompanies of 20 November 2013 (VegüV), the guidelines on corporate governance information of SIX Swiss
Exchange and the principles of the Swiss Code of Best
Practice for Corporate Governance of Eco­nomiesuisse,which came into force on 30 June 2014.

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

2_INT_GB2014_Corporate-Governance_EN.indd 54

ment and presents a proposal to the Annual General­Meeting for approval, starting from financial year 2015.
On behalf of the Board of Directors, the Compensation Committee prepares all proposals and the basis forremuneration decisions to be taken.
The Compensation Committee’s key duties are as
follows:–– Propose and regularly review Interroll Group’s
remuneration policy–– Propose and develop remuneration regulations for
the Board of Directors and Group Management–– Propose and specify the remuneration principles forthe following financial year–– Propose the remuneration for members of theBoard of Directors–– Propose the remuneration for the CEO and,at the CEO’s request, the remuneration of the othermembers of Group Management–– Propose employment terms and conditions, material
amendments to existing contracts of employment
with members of Group Management as well asother strategic HR decisions
At the Annual General Meeting of Interroll Holding AG
on 8 May 2015, for the first time, the Board of Directors
will propose the total remuneration of the Boardof Directors for the period up to the 2016 Annual­General Meeting and the total remuneration for GroupManagement for financial year 2015 for approval. The
voting rules authorising the remuneration of Boardof Directors and Group Management are included­separately in the application of the adjustments of the
Articles of Association to the Company pursuant to
VegüV. These adjustments to the Articles of Association
shall also be submitted on 8 May 2015 for approvalin advance.

REMUNERATION OF THE BOARD
OF DIRECTORS
Principles and specifying the 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 theBoard of Directors in its supervision of Group Management. The remuneration depends on the workload
and responsibilities of the Board of Directors. It takes
into account market conditions and is based on thecomparative values from other listed Swiss mediumsized industrial companies with international activities.
All remuneration paid to members of the Board of
Directors of Interroll Holding AG by Interroll H­ olding

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REMUNERATION REPORT55

AG and the subsidiaries over which it has direct orindirect control is decisive in determining the annual
remuneration.
Every year, the Board of Directors determines the fixed
remuneration of the members of the Board of Directorsof Interroll Holding AG for the period of time up to thenext Annual General Meeting of Interroll Holding AG
on the basis of the remuneration regulations and at theCompensation Committee’s request, subject to approvalby the Annual General Meeting. No separate remuneration is paid to members of committees. Extraordinary
efforts that go beyond the normal duties of the Board of
Directors may additionally be compensated. All social
security contributions are made by the employer.
Fixed-term contracts of employment and mandate
agreements for members of the Board of Directors may
be for a fixed contractual term of up to one year.
Total remuneration for 2014 (audited)
Compensation paid to members of the Board of Directors is disclosed in accordance with VegüV and OR 663c
as follows:in thousands CHF

Cash

Shares/
Options

SocialSecurity 1

Other
Benefits

Total
Compensation

Shares held
as of 31.12.

Voting Rights
in %Kurt Rudolf
2014

P, CC

150

18

168

500

0.06

2013

P, CC

150

18

168

800

0.10

60

0.01

Urs Tanner
2014

VP

75

12

87

2013

VP

75

12

87

0.00

Paolo Bottini
2014

AC

50

8

58

20

0.00

2013

AC

50

8

58

20

0.00

Philippe Dubois
2014

AC

50

8

58

100

0.01

2013

AC

50

8

58

100

0.01

Horst Wildemann
2014

CC

50

4

54

0.00

2013

CC

50

5

55

0.00

21

3

24

2014

50

10

60

0.00

2013

29

5

34

0.00

2014

50

8

58

86,695 4

11.17

2013

50

8

58

108,610 4

13.25

2014

475

68

543

87,315

11.25

2013

475

67

542

109,590

13.37

Marco Ghisalberti 2
2013

112,743 3

0.00

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
1Social Security costs consist of employers- and employees contributions to the state run Swiss social security system.
2
M. Ghisalberti left the Board of Directors in May 2013. His successor is S. Mercorio.
3
Number of shares held by M. Ghisalberti and family.
4
Number of shares held by I. Specht and family.

2_INT_GB2014_Corporate-Governance_EN.indd 55

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REMUNERATION REPORT56

The Board of Directors holds no stock options in
respect of Interroll Holding AG shares.
Valuation of total remuneration for 2014
In the reporting year, the remuneration of the Boardof Directors comprised no non-recurring effects. Nochange has occurred compared with the previous year.
At the 2015 Annual General Meeting, the Board of
Directors will propose the same remuneration as in
the past period.
Other remuneration (audited) and additional
information
No further payments in cash or in kind are made orother remuneration, e.g. commission for the takeoveror transfer of companies or parts thereof, is paid tomembers of the Board of Directors.
Severance pay for members of the Board of Directors
is not permitted, whereby remuneration due to members up to the end of the contractual term does notconstitute severance pay.
Loans (audited)
Interroll Holding AG and its subsidiaries granted noloans and advances to members of the Board of Directors in the two reporting years. There were no loans
from past years.

REMUNERATION OF GROUPMANAGEMENT
Principles and specifying total remuneration
For each Group Management member an individual
remuneration agreement exists, the projected total
remuneration, which is based on the criteria specified
below for determining the remuneration and market
conditions in the relevant country. The projected total
remuneration comprises a fixed and a variable remuneration component and may be exceeded as a resultof excellent performance. The Group Management’s
actions must always focus on achieving a long-termsustained increase in value rather than pursuing shortterm profit maximisation. The composition of total
remuneration for the members of Group Management in general and the CEO in particular is based on
this aim.
Total remuneration is determined on the basis of key
criteria, such as global responsibility in the relevantrole, individual actual performance contributing to
the Group’s long-term strategic development, the complexity of the area of responsibility and the personal
results achieved on behalf of the Group.

2_INT_GB2014_Corporate-Governance_EN.indd 56

External consultants may additionally be involved indetermining the structure and level of remuneration
on a case-by-case basis. As part of the Group’s reorganisation and the appointment of a new Group Management in 2011–2013, market comparisons were madewith the help of the relevant recruitment consultants
and used in determining the level of remuneration
when recruiting staff in Europe, America and Asia.
Furthermore, comparisons were made on the basisof a detailed up-to-date Kienbaum salary study and a
Towers Watson salary survey.
In determining the annual total remuneration, allremuneration paid to members of Group Management by Interroll Holding AG and the subsidiaries
over which it has direct control is taken into account,irrespective of whether global or local activities for one
or more subsidiaries in Switzerland or abroad (basedon a separate contract of employment) of the respective
member of Group Management are compensated.
On the basis of the remuneration regulations and at
the Compensation Committee’s request, the Board of
Directors specifies the total remuneration of GroupManagement every year, subject to approval by the
Annual General Meeting from 2015 onwards. The
Compensation Committee works out the CEO’s total
remuneration. The CEO works out the total remuneration of the other members 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 8 May 2015, the Board of Directors
will present for the first time a proposal for total remuneration of Group Management for financial year 2015
for approval.
Fixed remuneration
The fixed remuneration component of total remuneration is contractually stipulated and generally remains
unchanged for three to four 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.
Variable remuneration
The maximum possible share of variable remuner­
ation amounts to approx. 60 % of total remuneration
for members of Group Management in an operating
managerial role and approx. 30 % for members in acentralised holding role. In the reporting year, the variable share in relation to total remuneration of GroupManagement amounted to 36 %.

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REMUNERATION REPORT57

The calculation basis for variable remuneration
includes the measurable sustained financial success (ofthe company or a part thereof) and annual individual
targets, which must be measurable and of considerable
strategic significance.
The company’s financial success used to calculate thefinancial success component of variable remunerationis measured in terms of the key figures listed below,
compared with the previous year and a rolling 3-year
plan:
Operating profit (EBITDA), operating profit margin(EBITDA in % of sales), gross margin (in % of sales),sales growth (growth compared with forecast and/or
previous year) and return on net assets (RoNA).
Specific key figures may be weighted differently or disregarded, depending on the company’s strategic position or the role of each member of Group Management.
As a rule, the weighting of the financial success component in variable remuneration amounts to at least 66 %for members of Group Management in an operating
managerial role and at least 33 % for members ofGroup Management in a centralised holding role.
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
the Group or parts thereof. They relate, for example,
to new products, gaining market share, developing
new markets, the successful integration of a businessacquired, successful strategic projects, the achievement of stock reduction targets etc.

Allotment of shares
The Interroll shares granted as part of fixed (CEO)and variable remuneration to members of Group Management are blocked for four to a maximum of eight
years. The blocking period is aimed at motivating GroupManagement to perform its duties in the interests of
the Interroll Group’s long-term s­ustainable development rather than short-term profit maximising.
Based on their commitment and influence, GroupManagement members are to participate long term in
the Group’s increased value and also share the business risk as shareholders (and equity co-investors).
In this sense, the share plan for Group Management
represents a long-term performance incentive and isintended to promote identification with and loyalty toInterroll in the long run.
The conversion rate for variable remuneration applicable to the number of Interroll shares allotted is the rele­vant share price on 31 December of the financial year
ended less the deduction permitted for tax p­ urposes,
depending on the length of the blocking period. The
members of Group Management decide by 15 December of the relevant financial year ended on the percentage of variable remuneration which they wish toreceive in the form of Interroll shares (min. 20 % ofvariable remuneration). In the financial year ended,Group Management members held no stock options
entitling them to subscribe to Interroll ­Holding AG
shares.

Using the plan for several years as the basis of variable
remuneration (rather than the budget) motivates
members of Group Management to think long-term.
It means that the relative improvement is measured
compared with the previous year, and short-termcost-cutting is prevented in the areas of market development and innovation etc. which could otherwise
hamper the long-term development of Interroll.
The Compensation Committee may deviate from theagreed variable remuneration in favour of a GroupManagement member if failure to achieve specific­targets was solely attributable to external factors, or if
an exceptional one-off performance was delivered. In
the two reporting years, no deviation from the agreement occurred.

2_INT_GB2014_Corporate-Governance_EN.indd 57

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58

Total remuneration for 2014 (audited)
Compensation paid to members of Group Management is disclosed in accordance with the requirementsof Sections 14 to 16 of the Swiss ordinance against
excessive compensation in listed stock companies of
20 November 2013 (VegüV), the guidelines on corporate governance information of SIX Swiss Exchange
and the principles of the Swiss Code of Best Practicefor Corporate Governance of Economiesuisse, whichcame into force on 30 June 2014 as follows:
Remuneration (net)in thousands CHF

fixvariable*

Equity based compens.
Shares**

Options

SocialSecurity***

Other
Benefits

Total
Compensation

CEO (highest)
2014

663

792

390

0

508

43

2,396

2013

667

798

386

0

496

43

2,390

Other members
2014

1,429

471

226

0

262

94

2,482

2013

1,321

444

243

0

268

69

2,345

Total Group Management
2014

2,092

1,263

616

0

770

137

4,878

2013

1,988

1,242

629

0

764

112

4,735

*

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 period under reivew 1,769 (previous year: 2,580) own shares were attributed. 1,769 of these shares (previous year: 2,175) may not besold for a period of four to eight years as of grant date. Share based payments correspond to tax values.
*** Social security costs consist of employers’ and employees’ contributions to the state run Swiss social security system.

Explanations regarding the calculation method
The calculation method under IFRS differs in two
aspects from the calculation of remuneration andshareholdings of members of the Board of Directors
and Group Management in accordance with OR 663(bis) and OR 663c:–– Compensation for company cars under IFRS isbased on the expenses including depreciationand lease instalments stated in the annual accounts.
Under the OR, a rate of 0.8 % per month of theacquisition cost of the vehicles is used.
–– Under IFRS, share-based remuneration is determined at market value on the allotment date. Under
the OR, shares are valued at their taxable value,
which is derived from the market value. As a resultof the blocking period, the taxable value decreases
compared with the market value according to theblocking period defined.
–– The difference of CHF 0.36m (previous year:
CHF 0.32m) related to company cars – CHF 0.08m(previous year: CHF 0.05m) – and share-based
remuneration – CHF 0.24m (previous year:
CHF 0.14m).

2_INT_GB2014_Corporate-Governance_EN.indd 58

Valuation of total remuneration for 2014
Total remuneration paid to members of Group Management in the financial year ended was approx­
imately at the previous year’s level. In the previous
year, one member of Group Management enteredonly during the business year. On the one hand, sales
growth (and order intake) was significantly up on theprevious year. On the other hand, additional non-­recurring expenses for consolidating production in
the USA and the high one-off development costs forthe new platform for conveyor modules reduced operating profit compared with the previous year. The strategic targets for significant long-term strengtheningof the Group’s market position were substantiallyexceeded.

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59

Total remuneration, 2006 to 2014
The table below indicates total remuneration of GroupManagement from 2006 to 2014:
in CHFm

2006

2007

2008

2009

2010

2011

2012

2013

2014

Executive

5.8

5.2

4.4

4.3

4.9

5.0

5.2

4.7

4.9

* Source: Annual Reports 2006 –14, according to figures in column “Total Compensation” e.g. incl. all pension and other services.

Group Management and the total remuneration ofGroup Management remained at a steady level. During
the last 10 years, Interroll has advanced to become theglobal market leader for key products in the internal
logistics business. Net indebtedness was reduced andnet financial assets were posted. Equity increased by
2.5 times and market capitalisation by 3.5 times.
Outlook for total remuneration in 2015
In 2015, total remuneration is likely to be higher thanin 2014. In view of Interroll Group’s ambitious budget
for 2015, a higher amount is budgeted for the variable
share of remuneration than in 2014, which comprises
a reserve for the event that targets set are exceeded andfor any other influences (e.g. currency and social cost
fluctuations). The actual amount of variable remuneration and its payment depend on the targets which
are actually achieved. Fixed remuneration will not be
adjusted for any member of the Group Managementin 2015.

No further payments in cash or in kind are made orother remuneration, e.g. commission for the takeoveror transfer of companies or parts thereof, is paid tomembers 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 twelve months as 1 January
2016.
Loans (audited)
Interroll Holding AG and its subsidiaries granted noloans and advances to members of Group Management in the two reporting years. There were no loans
from past years.

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, inparticular Germany, the USA and China as well as
Switzerland.
In Switzerland, each Group Management member
contributes a quarter to a third of the “savings element”
to the pension fund. The rest is paid by the employer.
A company car and mobile phone are made available tothe members of Group Management for business andprivate 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.

2_INT_GB2014_Corporate-Governance_EN.indd 59

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REPORT OF THE STATUTORY AUDITOR60

REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING
INTERROLL HOLDING LTD
Sant’Antonino

We have audited the remuneration report (pages 54 to 59) dated 3 March 2015 of INTERROLL HOLDING LTD for the year ended
31 December 2014.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the remuner-ation report in accordancewith 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 and defining individual remuneration packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the remuneration report. We conducted our audit in accordance with Swiss AuditingStandards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance 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 LTD for the year ended 31 December 2014 complies with
Swiss law and articles 14–16 of the Ordinance.
PricewaterhouseCoopers AG

Patrick Balkanyi				Martin Graf
Audit expert				Audit expert
Auditor in charge			

Zürich, 3 March 2015

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FINANCIAL REPORT OF INTERROLL GROUP

61

FINANCIAL REPORTOF INTERROLL GROUP

1

3_INT_GB2014_Finance_EN.indd 61

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

61

1.1

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

62

1.2

CONSOLIDATED INCOME STATEMENT

63

1.3

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

64

1.4

CONSOLIDATED STATEMENT OF CASH FLOWS

65

1.5

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

66

NOTES TO THE FINANCIAL STATEMENT OF INTERROLL GROUP

67

2

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

67

3

RISK MANAGEMENT

77

4

CHANGES TO THE SCOPE OF CONSOLIDATION

80

5

OPERATING SEGMENTS

83

6

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

84

7

NOTES TO THE CONSOLIDATED INCOME STATEMENT

106

8

OTHER DISCLOSURES TO THE FINANCIAL STATEMENTS

111

9

REPORT OF THE STATUTORY AUDITOR

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CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

62

1

CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

1.1

Consolidated statement of financial position
see notes*

31.12.2014

Property, plant and equipment

6.1

85,96983,266

Intangible assets

6.3

49,87453,054in thousands CHF

in %31.12.2013

in %ASSETS

Financial assets
Deferred tax assets

7.6

732

4,150

3,387

140,619

Total non-current assets
Inventories

626

6.5

Current tax assets
Trade and other accounts receivable

6.6

Cash and cash equivalents

6.7

50.6

42,273

140,43954.4

38,119457

706

70,42858,164

24,38020,797

Total current assets

137,53849.4

117,786

45.6

Total assets

278,157

100.0

258,225

100.0

EQUITY AND LIABILITIESShare capital

8,540

8,540

Share premium

6,416

13,740Reserve for own shares–2,008–1,641

Translation reserve–41,104–45,454

Retained earnings

228,486

211,916145

Non-controlling interests
200,330

72.0

187,246

Total equity

6.10

Non-current financial liabilities

6.12

153

253

Deferred tax liabilities

7.6

5,286

5,071

Pension liabilities

6.15

5,766

2,824

Provisions

6.14

6,000
17,205

Total non-current liabilities

72.5

5,902
6.2

14,050Current financial liabilities

6.12

317

320

Current tax liabilities

7.6

8,029

9,831

Trade and other accounts payable

6.16

52,276

5.4

46,779Total current liabilities

60,62221.8

56,93022.0

Total liabilities

77,82728.0

70,98027.5

Total liability and shareholder’s equity

278,157

100.0

258,226

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

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CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

63

1.2

Consolidated income statementin thousands CHF

see notes*

Sales
Material expenses
Personnel expenses

6.15 & 7.1

2014

in %

2013

in %

335,306

100.0

316,334

100.0–143,585–42.8–131,878–41.7–103,507–30.9–94,131

–29.8

1,825

0.5

–771

–0.2

Increase/(decrease) in work in progress,
finished products and own goods capitalized
Other operating expenses

7.3–55,112–16.4–52,516–16.6

Other operating income

7.4

9,178

2.7

8,341

2.6

44,10513.2

45,379

14.3

Operating result before depreciation
and amortisation (EBITDA)
Depreciation

6.1–10,919–3.3–11,389–3.6

Amortisation

6.3–7,805–2.3–6,799–2.1

25,381

7.6

27,191

8.6

Finance expenses

–954

–0.3

–1,689–0.5

Finance income

993

0.3

145

0.0

39

0.0

–1,544–0.5

25,4207.6

25,647

8.1–6,232–1.9–5,041–1.6

19,188

5.7

20,606

6.5

120

0.0

62

0.0

19,068

5.7

20,544

6.5

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

22.45

24.84

Diluted earnings (result) per share

6.11

22.45

24.71

8.80

8.00

Distribution out of reserves from capital contributions* See notes to the consolidated financial statements which are an integrated part of this year’s financial statement.

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CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

64

1.3

Consolidated statement of comprehensive incomein thousands CHF

see notes*

2014

in %

19,188Result2013

in %20,606

Other comprehensive income
Items that will not be reclassified to income statement–3,009

903

605

–182

–2,404721

4,359–1,144subsequently to income statement

4,359–1,144

Other income

1,955

–423

Comprehensive income

21,143

20,183Remeasurements of pension liabilities
Income tax

6.15

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

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

120

0.0

62

0.0

21,023

6.3

20,121

6.4* See notes to the consolidated financial statements which are an integrated part of this year’s financial statement.

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CONSOLIDATED FINANCIAL STATEMENTS OF INTERROLL

65

1.4

Consolidated statement of cash flows

in thousands CHF

see notes*

Result2014

2013

19,18820,60618,188

6.1 & 6.3

18,724

6.2, 7.3 & 7.4

–197

206

Financial result, net

7.5

–39

1,544

Income tax expense

7.6

6,232

5,041

Depreciation, amortisation and impairment
Loss/(gain) on disposal of tangible and intangible assets

Changes in inventories–2,612–2,870Changes in trade and other accounts receivable–8,9583,580

Changes in trade and other accounts payable

3,889

1,380

452

1,256

–8,148–5,855926

1,012

Changes in provisions, net

6.14

Income tax paid
Personnel expenses on share based payments

7.1

Other non-cash expenses/(income)–1,701

396

Cash flow from operating activities

27,75644,484

Acquisition of property, plant and equipment

6.1–13,750–14,444

Acquisition of intangible assets

6.3–1,645–1,641–20–129

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

6.2

Settlement of loans receivable
Acquisition of subsidiaries, net of cash acquired

4Interests received
Cash flow from investing activities
Distribution out of reserves from capital contributions
Purchase of shares of subsdiary

4

1,165

75

156

288

–1,430–23,739

107

154–15,417–39,436–7,493–6,520–367–1,123Purchase of own shares–143
14,988

Sale of own shares
Proceeds from financial liabilities

33

469

Repayment of financial liabilities–382–5,815Interests paid
Cash flow from financing activities
Translation adjustments on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December

6.7

–42

–407

–9,374

2,572

618

–932

3,583

6,688

20,797

14,10924,38020,797* See notes to the consolidated financial statements which are an integrated part of this year’s financial statement.

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66

1.5

Consolidated statement of changes in equity

in thousands CHF

see notes*

Balance at 1 January 2013

Share capital

Share
premium

Reserve forown shares

Translation
reserve

Retainedearnings

8,540

20,427–17,670–44,319

190,659
20,544

ResultNoncontrollinginterests

Total equity

157,63762

20,606

Other comprehensive income,net of taxes–1,144721

Total comprehensive income–1,144

21,265–423
6220,183Distribution from reserves from
–6,521–6,521

capital contributions, net
Share based payments

7.1

–114

1,127

1,013

Sale of own shares incl. tax effects

6.10

–52

15,045

14,993–143–143

Purchase of own sharesincl. tax effects

6.10

Acquisition of
211,924145

83
187,245

19,068120

19,188120

21,14383

non-controlling interests
8,540

Balance at 31 December 2013

13,740–1,641–45,463

ResultOther comprehensive income,net of taxes

4,359–2,404

Total comprehensive income

4,359

16,664

1,955

Distribution from reserves from
Share based payments–7,493–7,493

capital contributions, net
7.1

169

756

6,416

–2,008925

Acquisition of sharesin subsidiaries
Balance at 31 December 2014

–102

4

8,540

–41,104

228,486–265–367
200,330* See notes to the consolidated financial statements which are an integrated part of this year’s financial statement.

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

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

67

2

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

2.1

Convention of preparation

General notes to the convention of preparation
The 2014 consolidated financial statements of Interroll Group are based on the annual financial statements of Interroll Holding Ltd.,Sant’Antonino and its subsidiaries as of 31 December 2014, drawn up according to uniform Group accounting principles. The consolidated financial statements present a true and fair view of the financial position, results of operations and cash flows in accordance with
the International Financial Reporting Standards (IFRS) and comply with Swiss law.
The consolidated financial statements are based on historical cost except for marketable securities, investments not involving significant
influence and derivative financial instruments, which are stated at fair value.
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These judgments, estimatesand assumptions are based on historical experience and other factors that are believed to be reasonable under the given circumstances.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting ­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.
Judgments made by management in the application of IFRS that have a significant effect on the consolidated financial statements andestimates with a significant risk of material adjustment in the next years are disclosed under “2.2 – Critical accounting estimates andjudgments.”
New and amended IAS/IFRS standards and interpretations coming into effect in 2014
The Group’s results are in line with IAS/IFRS standards and interpretations. Thus, the Group regularly monitors the amendments andnew standards published by the International Accounting Standards Board (IASB). In the course of the business year 2014, the following
amended standards and interpretations were enacted:–– New: IFRIC 21 (effective as per 1/1/2014, levies)–– Amendment to IAS 32 (effective as per 1/1/2014, offsetting financial assets with financial liabilities)–– Amendment to IAS 39 (effective as per 1/1/2014, novation of derivatives and continuation of hedge accounting)Future new or revised IAS/IFRS standards and interpretations
The following new or revised standards and interpretations were enacted before the balance sheet date but will come into force later.
Interroll does not early adopt these standards and interpretations in its consolidated financial statements:–– New: IFRS 9 (effective as per 1/1/2018, financial instruments)–– New: IFRS 15 (effective as per 1/1/2017, revenue from contracts with customers)–– Amendment to IFRS 10 and IAS 28 (effective as per 1/1/2016, consolidated financial statements and investments in associates
and joint ventures)–– Amendment to IFRS 11 (effective as per 1/1/2016, accounting for acquisitions of interests in joint operations)–– Amendment to IAS 16 and IAS 38 (effective as per 1/1/2016, clarification of acceptable methods of depreciation and amortisation)–– Amendment to IAS 19 (effective as per 1/7/2014, defined benefit plans: employee contribution)–– Annual improvement, cycle 2010-13 (effective as per 1/1/2014)
Group Management currently analysis potential effects of other new or amended standards and interpre­tations on the consolidated
financial statement. Interroll Group closely follows discussions on IAS/IFRS standards and checks potential effects on group financial
statement or disclosure requirements. At the ­moment being, the Group expects only minor impacts in the presentation of the financial
statements and no material impact on the annual financial statements except regarding IFRS 15, revenue from contracts with customers.

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The new standard on the recognition of revenue (IFRS 15) applies to all contracts with customers exept those that are financial instruments, leases or insurance contracts. IFRS 15 bases on a five step approach: 1) Identify the contract with the customer, 2) Identify theseparate performance obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to separate­performance obligations, 5) Recognise revenue when a performance obligation is satisfied. To what extend IFRS 15 will require Interroll
to redefine the revenue recognition, to adjust the invoicing and accounting systems and to renegotiate contracts with the clients and theimpact overall on the consolidated financial statements of Interroll is being assessed at the moment.

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

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2.3

Principles of consolidation and valuation

General notes to 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 the voting
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 proportion of
the net assets and net income attributable to minority shareholders is ­presented separately as non-controlling interests in the consoli­
dated 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 ­the 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 capitalconsolidation at acquisition date is effected on the purchase method. The acquisition price for a business combination is defined by
the sum of assets and liabilities acquired or incurred, measured at fair value, and of the sum of equity instruments issued. Transaction
costs related to a business combination are expensed. The goodwill resulting from such business combination is to be recognised as anintangible 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 before, liabilities and contingent liabilities at fair value. For the valuation ofnon-­controlled interests there are options per transaction. Either the non-controlled interests is valued at fair value or based on the
proportion of the net assets acquired at fair value related to the non-controlled interests. An eventual negative goodwill is immediately
recognised in the income statement after review of the fair value of the net assets acquired and eliminated against the purchase price.
The goodwill is subject to a yearly impairment test or even before if indications for an early impairment test exist.
Changes in the amount of 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 respectively the consideration received and the amount, by which the non-controlledinterests value is adjusted, is recognised in the equity.
Investments in associates are investments where the parent company is either (directly or indirectly) entitled to 20 % to 50 % of thevoting rights or has considerable influence through other means. Investments in a­ ssociates are accounted for by applying the Equity
Method. Under this method, the investment is initially recorded at the purchase price and subsequently increased or decreased by
the share of the associate’s profits or losses incurred after the acquisition, adjusted for any impairment losses. The Group’s share of­results of associates is recognised in the income statement and in the statement of comprehensive income under share of profit andloss of associates. Goodwill included in the purchase price, representing any excess of consideration over the Group’s share in net
assets of the associate, is recognised as part of the investment’s carrying amount. Dividends received during the year reduce thecarrying 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 thedate of disposal.

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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 most important exchange rates were used for the translation of financial statements denominated in foreign currencies:
Income statement (average rates)

Balance sheet (year end rates)

Change
2014

2013

in %

Change31.12.2014

31.12.2013

in %

1

EUR

1.213

1.229

–1.3

1.202

1.228

–2.1

1

USD

0.920

0.924

–0.5

0.990

0.890

11.3

1

CAD

0.829

0.894

–7.2

0.855

0.837

2.2

1

GBP

1.511

1.446

4.5

1.544

1.473

4.8

1

SGD

0.724

0.738

–1.9

0.749

0.705

6.2

1

CNY

0.149

0.150

–0.9

0.160

0.147

8.6

1

JPY

0.009

0.010

–9.5

0.008

0.009

–2.4

1

PLZ

0.289

0.292

–0.9

0.281

0.296

–4.8

1

THB

0.028

0.030

–5.7

0.030

0.027

10.7

1

ZAR

0.085

0.894

–90.5

0.086

0.084

1.7

1

DKK

0.163

0.165

–1.3

0.162

0.165

–1.9

1

AUD

0.824

0.886

–7.0

0.811

0.796

1.9

1

CZK

0.044

0.047

–6.8

0.043

0.045

–3.1

1

BRL

0.390

0.427

–8.7

0.373

0.377

–0.9

100

KRW

0.087

0.084

3.3

0.091

0.085

7.3

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 reporting date. All other liabilities are classified
as non-current liabilities.

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Segment reporting
Since 1 January 2011, Interroll Group consists of one single business unit. The complete product range is sold in all markets throughthe respective local sales organisation. The customer groups being OEM’s (original equipment manufacturers), system integrators andend users are taken care of by 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 andassemble a wide product range for their local markets. The Interroll Research Center, which is centrally ­located, develops new application­technologies and new products for all product groups. The manufacturing units continuously refine the current product ranges they arefocused on.
Group Management and the Interroll management structure are organised by functions (Overall M­ an­agement, Products & Technology,
Global Sales & Service, Corporate Marketing and Corporate Finance). The financial management of the Group by the Board of Directors
is effected on one hand by turnover of the product groups and geographical markets and on the other hand by the reporting of theconsolidated financial statements. Group Management additionally assesses the achievement of financial and ­qualitative ­targets of alllegal 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, cash flows during the year classified by operating, investing
and financing activities, thereby providing information about the changes of 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 otherpurposes. 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 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.
Impairments
The carrying value of long term non-financial assets except assets from retirement benefits and assets from deferred taxes are assessedat least once a year. If indications for an impairment exist, a calculation of the ­recoverable amount is performed (impairment test). For
goodwill, other intangible assets with an indefinite useful lifetime and intangible assets which are not yet available for use, the recoverable
amount is calculated regardless of the existence of indications of a decrease in value. If the carrying value of such an asset or the cash
generating unit to which such an asset belongs is to exceed the recoverable amount, an adjustment is recognised through the income
statement. Impairments on a cash generating unit or a group of cash generating units are first adopted on the goodwill and are thereafter
proportionally split onto the other assets of the unit (or the Group).
The recoverable amount is the higher value of fair value less selling costs and value in use. The estimated ­future discounted cash flows
are evaluated to determine the value in use. The discounting rate applied ­corresponds to a pre-tax rate which reflects the risk related tothe assets. If an asset does not largely generate independent cash flows, the recoverable amount of the cash generating unit is calculated
to which the ­asset concerned belongs to.
Impairments on the remaining assets are reversed if the estimations made in the calculation of the r­ ecoverable 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.

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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 d­ erivatives at acquisition and during its termin relation to both, the values hedged or also in view of future cash flows.
Changes in fair value are recognised as follows:a) Fair value hedges
Changes in the fair value of derivatives designated and qualified as fair value hedges are recorded in the income statement, together withany changes in the fair value of the hedged assets or liabilities.
b) Cash flow hedges
Changes in fair value of derivatives designated and qualified as cash flow hedges are recognised in equity. Amounts accumulated inequity are recycled to the statement of comprehensive income in the periods when the hedged item will affect profit or loss. When ahedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
existing in equity at that time remains in equity and is recognised when the initial transaction is ultimately recognised in the income
statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.
c) Other securities or financial instruments
Certain derivatives do not qualify for hedge accounting. Changes in the fair value of such hedging instruments are recognised immediately in the income statement. The fair value of derivatives traded in public markets is based on quoted market prices at the balance
sheet date. The quoted market price used for fi­ nancial 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 whom the derivative has been acquired.

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 f­ uture 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 being 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 reporting date and resulting adjustments arerecorded in the income statement.

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Assets under construction which completion has not yet been concluded or which cannot be used yet are capitalised based on incurredcosts as per closing date. Respective depreciation is recognised when the construction can be used.
Interests directly related to the acquisition or construction of property, plant and equipment is capitalised and allocated to the related
asset.
Intangible assets
Intangible assets include goodwill, intangible assets purchased in the course of business combinations (­ patented and unpatented technology, customer relationship), licenses and patents and similar rights ­acquired from third parties as well as software acquired fromthird parties. These assets are stated at cost value and are amortised on a straight-line basis over the following, expected useful life time:Standard software
ERP software
Customer relationshipPatents, technology and licenses

3 years
8 years
5–10 years
6 years

Acquired customer relationship are customer values identified within the scope of IFRS 3. They are amortised based on their estimatedmelt off being a period of 5 –10 years. In markets in which Interroll holds a solid market position, customer value is amortised over
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 competition­environment the amortisation period has been determined to be 6 years.
Furthermore, intangible values acquired within business combinations may be identified. Such result from individual contractual agreements. These values are amortised over the period deviated 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 impairment. Such impairment tests are carried out on a yearly 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 being translated to the Group’s reporting currency at the year end rate.
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 brought actively onto 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 iscalculated 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.

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74

Trade and other accounts receivable
Trade and other accounts receivable are stated at amortised cost, generally equalling nominal value. The amount of valuation adjustments corresponds to the difference between the carrying amount and the net present value of the future estimated cash flow. The
valuation adjustments include individual impairment for specifically identified positions, where indication exists that the outstanding
amount might not be fully recovered.
Collective impairment covers expected losses that cannot be excluded based on historical data and payment statistics. As soon as­sufficient evidence is available that the receivable will definitively not be recovered, the related amount is directly written off and offset
with the specific individual impairment respectively.
Marketable securities
Marketable securities are stated at their fair value as of 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 p­ ayable on demand and deposits
with a residual maturity of not more than 90 days at acquisition date. These balances are stated at nominal value.
Shareholders’ equity
Shareholders’ equity is categorised as follows:a) Share capital
The share capital contains the fully paid in registered shares.
b) Share premiumShare premium comprises payments from shareholders that exceed the par value as well as realised gains/losses including tax on­transactions with own shares.
c) Reserve for own shares
The acquisition price of own shares is disclosed as a reduction of shareholders’ equity. Realised gains and losses on transactions with
own shares are recognised in share premium. Compensation and cash inflows resulting from the issue and subsequent possible exerciseof share options are credited to the Groups’ ­reserves.
d) Translation reserve
Translation reserve consists of accumulated translation differences resulting from translation of group subsidiaries’ financial statementswith a functional currency other than Swiss Franc and of equity-alike intercompany loans. The changes in currency differences is­presented in the consolidated statement of comprehensive income.
e)	Retained earnings
Retained earnings contain not distributed profits.
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 the Group
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 theeffect is material, long-term provisions are discounted.

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75

Retirement benefits
The Group sponsors pension plans according to the national regulations of the countries in which it ­operates. All significant pension
plans are operated through pension funds that are legally independent from the Group. Generally, they are funded by employees’ andemployers’ contributions. The foreign p­ ension 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 ­characteristics 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
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 ­Interroll Group performs in direct relation to its
core products sold are recognised upon delivery in net sales. The Group performs services to third parties in connection with administrative tasks and freight. Revenue resulting from these services are disclosed as other operating income in the income statement.
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 dedicated toresearch and development, as well as proportional ­overhead costs. Such expenses are included in the respective line item of the income
statement.
Employee participation plans
Certain employees participate in equity based compensation plans of Interroll Holding Ltd. All equity based compensation granted tothese employees is valued at fair value at grant date and recognised as personnel expense over the period until vesting date. The fairvalue is calculated on the basis of the binomial method. Discounts granted to beneficiaries on the unconditional purchase of Interroll
shares are recognised in the income statement at 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 fair value at balance
sheet date.
Operating lease expenses
Property, plant and equipment that are held under operating leases are not recognised on the statement of financial position. The
operating lease expense is recognised in the income statement on a straight-line basis over the lease contract period. Operating leaseobligations depending on revenues are estimated and accrued as they become due.

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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 fi­ nancial 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 infair value of ­financial instruments.
Income tax expense
Current income taxes are calculated on the statutory results of the Group companies at the enacted or ­substantively enacted tax rate.
They also include adjustment charges and credit notes issued on previous years’ results.
Changes in deferred taxes are generally recognised in the income tax position, unless the underlying ­transaction has been directly
recognised in the other comprehensive income. In such case the related ­income tax is also directly recognised in the statement ofcomprehensive income or in equity. Temporary differences resulting from initial recognition of assets and liabilities are not recognisedin the income ­statement. Temporary differences on the participation value of subsidiaries are recognised except the parent is able tocontrol the timing of the reversal of temporary differences and it is probable that the temporary difference will not go into reverse in
the foreseeable future.
Deferred taxes are calculated using local enacted or substantively enacted tax rates. The future benefits of tax loss carry-forwards arerecognised as an asset if it is probable that future taxable profits will be available to realise such benefits.

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77

3

RISK MANAGEMENT

3.1 Operational and strategic risk management
Risk management on group level supports strategic decision making. Operational and strategic risk m­ anagement coordinatesand ­monitors 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 m­ eeting, GroupManagement discusses and analysis such risks. The Board of Directors is regularly informed in a uniform manner with the nature, scope,
assessment and counteractive measures of the risks.

3.2

Financial risk management

General information to the financial risk management of 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 program focuses on the unpredictability of financial markets and seeks
to minimize potential adverse effects on Group’s ­financial performance.
The Board of Directors has the supreme responsibility for risk management. The Board of Directors ­appoints thereto the Audit­Committee, who is responsible for the development and the supervision of the risk management principles. The Audit Committee
reports regularly to the Board of Directors.
The principles established for risk management are geared to identify and analyse those risks that may ­impact the Group, to definead­equate limits and to perform controls over the risks and their adherence to. The risk management principles and the related procedures
are regularly verified in order to consider changing market conditions and operations of the Group. The target is to develop management
regulations and management processes and a disciplined and constructive control environment through existing t­ raining and guidelines
ensuring a disciplined and conscious handling of risks.
The Audit Committee supervises management in the control of compliance with principles and processes. Their adequacy is ­permanently
verified in respect of 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 the central treasury department. Group Treasury identifies, evaluates and reduces financial
risks in close co-operation 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”).

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Market risk
Market risks to which Interroll Group is exposed to 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 high-credit-quality financial institutions. Furthermore, the decentralised structure of the Group
contributes to a substantial reduction of foreign currency exchange risks.
b) Interest rate risk
Financial assets and liabilities contain interest bearing loans at either a fixed or a variable rate. Relating 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 on financial liabilities and assets. Raw material price risks are not hedged while risks from financial assets and liabilities may ­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 to incur 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.
Customers exceeding EUR 5,000 credit limit are verified for their creditworthiness before the order is ­executed. The creditworthinessverification is also based on the credit information database provided by an international service provider leading in this sector. Theirsoftware allows determining a credit limit per single customer, based on specifically determined calculation formulas. The calculation
formulas have been defined by Interroll Group.
Accumulation of credit risks in trade and other accounts receivable is limited due to numerous customers and their worldwide location.
The extent of credit risks is mainly determined by the individual characteristics of each single customer. The risk evaluation includes
an assessment of the creditworthiness by con­sidering the customer’s financial situation, its credit history and other factors. Sales andrevenue from services are performed only with customers whose credit worthiness is proved through the above process. A credit limit
is defined for each customer. These limits are verified at least once a year.
Interroll invests its funds in short term deposits at a multitude of banks with whom long standing rela­tionships exist. Such deposits
have a maturity date shorter than twelve months. Likewise, transactions with derivative financial instruments are entered into only withmajor financial institutions. Interroll does not hold material open positions with these institutions.
The maximum credit risk from financial instruments corresponds to the balance sheet amount of each ­single financial asset. There areno guarantees or other liabilities that could increase the risk over the corresponding amount in the statement of financial position.
Liquidity risk
Liquidity risk is the risk that the Group cannot fulfil its financial obligations on time.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the a­ vailability 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.

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3.3

Capital risk management

Objectives and principles of capital management
It is the objective of Interroll Group to safeguard its going concern by the definition and adherence to a strong base of equity. Suchequity level is defined based on the operational and balance sheet risk of the Group. Refunding of the Group shall be adapted to the asset
structure and allow further growth of the b­ usiness. The distribution of a regular portion of the profits shall be made possible based on
the realisation of an appropriate return on equity.
Equity ratio targets and pay-out ratio
Based on above targets and principles, Group Management aims at a long-term equity ratio of approximately 50 %. The ordinary payout ratio corresponds to about 30 % of net profits. This ratio may deviate depending on the general economic outlook and the planned
future investment activities.
Key figures to capital management
The following table discloses some essential key figures in regards to capital risk management. Further notes can be found in theinbounds of the annual report.
Debt Covenants
Determined debt covenants for comitted credit lines over CHF 40 million demand an equity ratio of at least 35 % (see 6.9 “Financial
risks – Credit facilities and debt covenants”)
in million CHF, if not noted differently

2014

2013

Total assets

278.2

258.2

Net financial assets

23.9

20.2

Gearing (net debts/equity)

n/a

n/a

Operating cash flow

27.8

44.5

Indebtedness factor (net debts/cash flow)

n/a

n/a

Equity

200.3

187.2

Equity ratio (equity in % of assets)

72.0

72.5

Result19.1

20.5

Return on equity (in %)

9.9

11.9

22.45

24.84

Non-Diluted Earnings per share (in CHF)
Distribution per share (in CHF)

9.0

8.8

Pay out ratio (in %)

40.1

35.4

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4CHANGES IN THE SCOPE OF CONSOLIDATION

Changes in business year 2014
New companies
In Shanghai the Interroll Holding Management (Shanghai) Co. Ltd. started its sales activities in China in August 2014. Besides two
Regional Centers of Excellence Interroll is now also managing a sales unit in this important market. The effects of the establishment of
this new company had no material impact on the Interroll Group’s consolidated financial statements in the 2014 reporting year as theemployees, assets and business activities mainly were transferred from the existing Interroll Suzhou Co. Ltd.
Acquisitions/Disinvestments
As per 28 February 2014 the activities of the Interroll Dynamic Storage Inc. in Hiram/Atlanta (USA) were sold for USD 1.1 million to
the local management. The company had achieved a turnover of CHF 1.7 million in fiscal year 2013. The result was not essential for the
consolidation of the Interroll Group.
As per 1 July 2014 a 40 % minority stake into Portec Asia Limited in Hong Kong, China was bought for USD 0.4 million from the Pert
Group. Interroll is now controling 100 % of the equity of this company. At the moment of the purchase the book value of the minority
participations of Potec Asia Limited amounted to CHF 0.3 million. This amount was booked out from the equity of the minority­participations and the difference to the purchase price in the amount of CHF 0.1 million was booked to the shareholders’ equity.
Furthermore, as per 1 September 2014 100 % of the shares of Pert Engineering Limited in Shenzhen, China were bought from the Pert
Group for USD 2.2 million. Thereby, Interroll took over its Asian partner for the production and the sales of belt curves in the Asia-­
Pacific region. Besides direct access to the important Chinese sales market Interroll also gained an own production plant for belt curvesin Shenzhen, China. Belt curves are primarily sold to customers from the airport, postal services and logistics sectors. The value of the
net assets acquired totalled CHF 1.0 million. Goodwill amounted to CHF 1.0 million. It is not expected that the goodwill will be deductiblefor income tax purposes. Intangible assets amounting to CHF 0.9 million comprised of customer relationships. The purchase price allocation was not final as at the reporting date of 31 December 2014. It is expected that Interroll’s presence in China and other Asian countries
is strengthened in particular, following these acquisitions. The goodwill amounting to CHF 1.0 million resulted from the ­customer baseand major synergies expected from the integration of the Pert companies into the Interroll Group.

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81

Allocation of net assets acquired
The following overview shows in summary paid purchase price for the acquisition as well as the values of the identified assets and­lia­bilities as per acquisition date. Shown are Pert Engineering Limited in 2014 and Portec Group International, Inc. in 2013.
in thousands CHF

2014

2013

Fair value

Fair value

Property, plant and equipment

82

3,640

Intangible assets

866

12,977

Deferred tax assets
Total non-current assets

608
948

17,225

50

1,619

2,205

4,597

Other receivables
Inventory
Trade receivables
Cash & cash equivalents

44

245

1,591

Total current assets

2,500

7,851

Total assets

3,448

25,076

Trade payables

1,116

1,531

Bank loans

217

431

Other short term accounts payables

844

29

Accrued expenses & deferred income

30

437

Deferred tax liabilities

194

4,462

Provisions

45

201

Total liabilities

2,446

7,183

Total net assets acquired

1,002

17,893

Goodwill acquired

1,045

7,436

Total acquisition costs

2,047

25,329Minority interests

92

Cash flow from acquisitions
The full amount settled in cash was for the acquisition of 100 % shares of Pert Engineering Limited in 2014 respectively Portec GroupInternational, Inc., in 2013.
2014

2013

Settled in cash for the acquisition of CSA Conveyor

2,047.0

25,329./. Acquired liquid funds from Portec–245.0–1,591./.Purchase price retention–372.0Net cash used in acquisitions

1,430.0

in thousands CHF

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82

Further notes to the acquisition of Pert Engineering Limited
Acquisition-related expenses of CHF 0.1 million were stated under consultancy expenses in the profit and loss account for financial
year 2014.
The fair value of trade receivables amounted to CHF 2.2 million. The gross amount of trade receivables due totalled CHF 2.3 million.
Of this amount, it is expected that CHF 0.1 million will be irrecoverable.
Since 1 September 2014, Pert Engineering has made a contribution totalling CHF 0.8 million to Interroll Group’s sales revenue. Its sharein the profit for the same period of time amounted to CHF 0.09 million.
Had Pert Engineering already been consolidated from 1 January 2014, sales revenue of CHF 339.4 million and a profit of CHF 19.3 million would have been reported in Interroll Group’s profit and loss account.

Changes in business year 2013
New companies
In the previous year, Interroll Italia S.r.l in Rho, Italy and Interroll Atlanta LLC in Atlanta, USA were founded.
Acquisitions
As per 10 July 2013 100 % of shares of the Portec Group International, Inc. in Cañon City, USA, were bought at a purchase price of
CHF 25.3 million. Thereby control was gained over the Portec Group including Portec, Inc. in Cañon City, USA a dormant company in
the UK and a 60 % majority stake into Portec Asia Limited in Hong Kong, China. The company produces belt curves for customers in
the airport, postal and logistics businesses in the USA, Europe and the Asia-Pacific region. The purchase price allocation is final as at
the reporting date of 31 December 2014.

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83

5

OPERATING SEGMENTS

Sales and non-current assets by geographical markets
Sales and non-current assets according to geographical markets is presented as follow:
Sales

Non-current assets

2014

in %

2013

in %

2014

Other EMEA*

150,41244.9

140,915

44.5

Germany

55,868

16.7

58,06318.4

in thousands CHF

in %

2013

11,605

8.5

12,914

9.5

52,21938.4

50,33736.9

in %Switzerland

3,967

1.2

4,034

1.3

37,33627.5

42,072

30.9

Total EMEA*

210,24762.7

203,01264.2

101,160

74.5

105,323

77.3

USA63,40018.9

54,936

17.4

28,54521.0

26,513

19.4

Other Americas

18,485

5.5

13,200

4.2

1,526

1.1

1,465

1.1

Total Americas

81,88524.4

68,13621.5

30,071

22.1

27,978

20.5

Total Asia-Pacific

43,17412.9

45,186

14.3

4,612

3.4

3,019

2.2

Total Group

335,306

100.0

316,334

100.0

135,843

100.0

136,320100.0* Europe, Middle East, Africa

The key definition of turnover has been defined according to the invoice address. Switzerland is the country of domicile of Interroll
Holding Ltd. Non-current assets are disclosed excluding financial assets and deferred tax assets.
Information about major customers
Sales are realised with more than 10,000 customers. There is no customer achieving a turnover of more than 4 % percent of Group sales.
Sales by product group
Sales realised by product group is presented as follow:
in thousands CHF

2014

in %

2013

in %

2012

in %

Drives114,905

34.3

109,447

34.6

99,29732.3

Rollers

81,20924.2

75,40623.8

80,42826.2

Conveyors & Sorters

79,77323.8

71,16422.5

69,347

22.6

Pallet- & Carton Flow

59,41917.7

60,31719.1

58,08318.9

335,306

100.0

316,334

100.0

307,155

100.0

Total Group

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84

6	NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6.1

Property, plant and equipment

Movements of property, plant and equipment
Land& buildingin thousands CHF

Production equip­ment& machinery

Office equipment& motor vehicles

Assets underconstruction

Total

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

85,62074,90591,73487,796

8,804

8,287

1,281

805

187,439

171,793

COSTS
At 1.1.
Currency translation adj.

726

242

660

–495

87

–95

46

3

1,519

–345

Additions

791

8,137

7,015

3,884

1,290

1,416

4,654

1,007

13,75014,444

Disposals

–588

–99

–3,605–1,120–890–874–5,083–2,093–1,026

544

–251

2

–1,518

–546
12

83

3,640

4,463

1,281

194,908

187,439–94,965

Reclassifications–5–2,800Changes in the scopeof consolidation*
At 31.12.

86,544

2,435

79

1,125

4

68

85,62094,857

91,734

9,044

8,804

ACCUMULATED DEPRECIATION & IMPAIRMENTS
At 1.1.

–29,442–26,359–68,981–63,095–5,750–5,511–104,173

–144

–151

–507

394

–60

81

–711

324

Depreciation–3,208–3,007–6,509–7,349–1,202–1,033–10,919–11,389

Disposals

124

75

3,249

1,069

743

713

4,116

1,857

Currency translation adj.

Reclassifications
At 31.12.

4

2,710

2,748

34

–32,666–29,442–70,038–68,981–6,235–5,75053,87856,17824,81922,753

2,809

3,054

2,584

1,227

104,235

115,407

116,776–108,939–104,173

85,96983,266

Property, plant and equipment at 31.12.
Capital commitments**
Insurance value***

9,670
101,423

4,463

1,281

16

12,254

1,243

216,830

221,011* Detailed information on the changes in the scope of consolidastion is disclosed in note 4.
** Capital commitments for land and buildings are related to the extension of the IRC in Baal (Germany).
*** The insurance value of production equipment and machinery also covers other tangible assets.

Further notes to property, plant and equipment
At the end of the period under review no risks exist in the opinon of Group Management which negatively impacted the book value of
fixed assets.

6.2 Non-current assets held for saleIn the year under review 2014 as well as in the previous year 2013 there were no non-current assets held for sale.

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6.3

Intangible assets

Movements of goodwill and intangible assets
Goodwillin thousands CHF

SoftwarePatents, technology
and licences

Total

Customer relationship

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

19,091

12,12531,50829,994

21,514

13,52825,113

20,73997,22676,386

–470

–356

229

–261

COSTS
At 1.1.
Currency translation adj.

732

13

–21

–363

611

–1,108Additions

42

1,585

1,641

2

16

1,645

1,641

Disposals

–176

–73

–106

–593

–110

–952

–106

–133

–154

–246

Reclassifications

41

Changes in the scopeof consolidation*

1,045

7,436

At 31.12.

20,73419,091

8,342

866

4,635

1,911

20,41333,07431,50820,42721,51425,96025,113

100,195

97,226–10,288–6,757–14,310–13,458–16,448–13,893–44,172–37,234

–20

19

227

–169

199

–50

406

–200

–683

–2,536–2,505–7,805–6,79961

ACCUMULATED AMORTISATION & IMPAIRMENTS
At 1.1.

–3,126–3,126

Currency translation adj.
Amortisation–176–3,777–3,611–1,316

Disposals

176

73

61

593

110

952

133

154

298

Reclassifications
At 31.12.

11–3,126–3,126–14,001–10,288–14,673–14,310–18,521–16,448–50,321–44,172

17,60815,965

19,073

21,220

5,754

7,204

7,439

8,665

49,87453,054

Total intangible assets,
net at 31.12.

* Detailed information on the changes in scope of consolidastion is disclosed in Note 4.

Goodwill: impairment test
The impairment tests are generally based on a three year plan and on the present value of future (pre-tax) cash flows (value in use)
determined using a discount rate before tax of 10.6 % (2013: 12.0 %). The growth rate is defined as 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 which equals the Reporting Segment. All decisions are made at Interroll Group level.
Sensitivity analysis to the goodwill impairment tests
The sensitivity analysis performed resulted in both years under review in the conclusion that the discounted value of future free cash
flows exceeds the value of the current goodwill also when assuming a change of the discount rate under normal economical conditions.
The growth rate was reviewed in regards to its sensitivity. This test lead 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.

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86

Software
Out of the accumulated acquisition costs, CHF 28.7 million (previous year: CHF 27.9 million) relate to the setup, design and introduction of SAP. In the year under review the additions to this process management system amount to CHF 1.6 million (previous year:
CHF 1.6 million).
SAP was launched in 2011 for the two Centers of Excellence for Drum Motors and Rollers/RollerDrive as well as for all European sales
and service subsidiaries. In 2012, SAP was also launched in the Center of Excellence for Supermarket Products, in the Regional Centerof Excellence for Rollers and Drum Motors in the USA as well as in several sales subsidiaries in Asia-Pacific. In 2013, SAP became activewith Interroll China. Finally, SAP went live with the Center of Excellence for Automation in Sinsheim as per 1 August 2014. Amorti­
sation starts with the go live date and ends after 8 years.
Patents and licenses
Patents and licenses are normally amortised on a straight line basis over 6 years. In the year under review no essential patents oderlicenses were bought. In 2014, due to the acquisition of Portec in 2013, an amortisation term of additional 5 years remains on the major
portion of patents and licenses. A review if indicators exist that point towards an impairment of patents and licenses was performed.
There are no signs that would indicate an impairment of this value.
Customer relationship
Customer relationship is amortised on a straight line basis over 10 years at the maximum. At year end 2014, an amortisation term of
additional eight years remains on the major portion of customer relationship. A review if indicators exist that point towards an impairment of customer relationship was performed. There are no signs that would indicate an impairment of this value.

6.4

Assets pledged or assigned
31.12.2014

31.12.2013

Land & buildings

1,289

1,317

Trade receivables

185

161

1,474

1,478

in thousands CHF

Total assets pledged or assigned

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

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87

6.5

Inventories

Detailed overview on the positions belonging to the inventory
in thousands CHF

31.12.2014

31.12.2013

Raw materials

32,03327,050Work in progress

10,16812,001Finished products

2,285

969

Valuation allowance–2,213–1,901

Total inventory, net

42,273

38,1192014

2013–1,901–2,205No inventory was pledged in both years under review.

Developement of valuation allowance on inventory
in thousands CHF

Balance as per 1.1.
Currency translation adjustment

–27

56

Additions

–665

–583

Reductions
Total valuation allowance on inventory as per 31.12.

380

831

–2,213–1,901

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

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88

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, whithholding 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 both years under review.
in thousands CHF

31.12.2014

31.12.2013

62,24251,608Trade accounts receivable from goods and services
Valuation allowance–2,783–2,873

Total trade accounts receivable, net

59,45948,735
1,501

Prepaid expenses and accrued income

1,623

Prepayments for inventories

1,677

2,273

Other accounts receivable

7,584

5,496

Forward exchange dealing

85

159

Total other accounts receivable

10,969

9,429

Total trade and other accounts receivable, net

70,42858,164Aging and valuation allowance of trade accounts receivable
Trade accounts receivable are due and specific/general valuation allowance have been evaluated as follows:
31.12.2014

in thousands CHF
GrossValuation allowance
individualNet

31.12.2013
Grosscollective

Valuation allowance
individualNet

collective

Not past due

41,56041,56034,209–78

Past due 1– 30 days

11,683

11,6838,036–134,131

Past due 31– 60 days

3,412

3,412

3,259

Past due 61– 90 days

2,418

7

2,425

1,599

Past due > 90 days

3,169

–2,297

–493

379

4,506

–1,813

–982

1,711

62,242–2,290–493

59,45951,609–1,892–982

48,735

8,035
3,259
1,599

Total trade accounts
receivable

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89

Development of the individual and collective valuation allowance of trade accounts receivable
The valuation allowance on trade accounts receivable from third parties developed as follows:
2014

2013

Valuation allowance

Valuation allowancein thousands CHF

At 1.1.

Total

individualcollective

Total

individualcollective–2,873–1,891–982–2,376–1,169–1,207

Currency translation adjustment

–32

–52

20

243

264

–21

Additions

–868

–868

–1,557–1,557

Alllowance used

422

422

581

581

Allowance reversed

568

99

469

236

–10

246

–2,783–2,290–493–2,873–1,891–982

At 31.12.

During the year under review, an amount of CHF 0.4 million (2013: CHF 0.6 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 across geographical and industrial markets. Thus, the risk of unexpected losses from trade receivables is assessed to be low.

Currencies in trade accounts receivable
Trade accounts receivable reported in CHF are denominated from the following currencies:
31.12.2014

in %31.12.2013

in %

EUR

25,928

41.7

23,10544.8

USD

14,675

23.6

10,04619.5

CNY

10,169

16.3

6,244

12.1

THB

1,528

2.5

938

1.8

DKK

1,452

2.3

2,181

4.2

all other currencies

8,490

13.6

9,094

17.6

Total trade accounts receivable, gross

62,242100.0

51,608100.0

31.12.2014

in %31.12.2013

in %Europe, Middle East, Africa

31,11050.0

28,725

55.7

Americas16,761

26.9

10,86521.0

Asia-Pacific

14,371

23.1

12,018

23.3

Total trade accounts receivable, gross

62,242100.0

51,608100.0

in thousands CHF

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

At average, trade accounts receivable are 57 days outstanding (DSO). The respective value is for Europe 49, for Americas 68 and for Asia 81.
In the previous year, the DSO was 57 for the Group, for Europe 54, for Americas 58 and for Asia 69.

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6.7

Cash and cash equivalents

Positions included in cash and cash equivalents
31.12.2014

31.12.2013

Cash on hand, bank and postal accounts

21,147

17,532

Short term deposits

3,233

3,265

Total cash and cash equivalents

24,38020,797in thousands CHF

Interest rates of cash and cash equivalents
The interest rates on cash and cash equivalents vary between 0 % (for CHF) and 11 % (BRL). The respective rates of 2013 were 0 % (CHF)
and 10 % (BRL) respectively.

Currencies hold in cash and cash equivalents
in %31.12.2014

31.12.2013

EUR

27.0

39.0

CHF

7.0

3.0

USD

15.0

18.0

THB

7.0

11.0

JPY

6.0

KRW

5.0

ZAR

3.0

3.0

other currencies

30.0

24.0

Total cash and cash equivalents

100.0

100.0

2.0

Transfer limitations on cash and cash equivalents
Cash and cash equivalents of CHF 0.8 million (2013: CHF 0.9 million) of Interroll South Africa as well as of Interroll Brasil are s­ ubject
to transfer limitations. These transfer limitations do not have any impact on their operating activities.

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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:
31.12.2014

31.12.2013

Cash and cash equivalents

24,38020,797

Trade and other accounts receivable w/o advances

68,66655,573626

732

93,672

77,102in thousands CHF

Financial assets
Total financial assets at amortised costs
Foreign currency forward contracts*

85

159

Total financial instruments at fair value

85

159

39,611

34,916

Trade and other accounts payable
Financial liabilities
Total financial liabilities at carrying value

470

573

40,08135,489* see notes 6.9

Book values of cash and cash equivalents, trade and other accounts receivable and payable as well as financial assets amount closely tofair value due to their short-term maturity. Advance payments for inventory are excluded form the valuation categories as per IAS 39
because the subsequent transaction is not of monetary nature. Financial assets and liabilities are predominantly due within approximately 2 years and their net present values corresponds very closely to their book values.

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92

6.9

Financial risks

Currency risk exposure
Due to its international focus, Interroll Group is exposed to foreign currency risks. Risk exposures result from transactions
in currencies deviating from the entity’ functional currency.
The following table shows the major currency risks at the respective balance sheet date:
31.12.2014

in thousands CHF
EUR

CHF

USD

SGD

70

12

2,983

6,624

558

5,599

1,978

2,520

11,719

1,443

1,573

Financial assets

JPY

31.12.2013
EUR

CHF

USD

SGD

JPY

70

Trade and other accounts
receivable

1,454

3,559

532

5,246

2,701

1,486

2,089

14,189

2,057

353

3

1,347

8

1,497

Cash and cash equivalentsincl. intercompany loans
Financial liabilities

6,633

7,452

Trade and other accounts
payableShort term liabilities

7,737

3,417

2,652

569

6,994

118

1,353

7,114

3,380

3,262

54

17,027267

12,81635,19818,284

4,401–5,268–29,204–7,050

–92

7,548

5,994

11,234

4,309

–290

–189

–282

–189

–865

–2,705–2,295

–880

4,940

8,247

1,825

617

Currency risks on the­balance sheet (gross)

17,45022,75816,457

7,887

Elimination equal currency–9,534–17,798–6,141–7­balance sheet (net)

7,916

4,960

10,316

7,880

Natural hedges–996–1,117

FX forward contracts–848

Net currency risk exposure

6,072

1,454

Currency risks on the

3,843

1,454

–279

–84

–3,915–3,779

–750

6,122

4,017

704

7,258

1,497

The curency risk on the balance sheet (gross) is equal to the sum of the value of all positions in the balance sheet that are held in adifferent currency than the functional currency of a company. Such positions contain both, group internal as well as external amounts.
In a first step, all of those risks are added up because a currency risk can arise on the debit as well as on the credit side of the balance
sheet. The total is then disclosed as currency risk on the balance sheet (gross). The risk of each currency group is translated into CHF
at the closing rate and added up to total Group values. “Elimination equal currency” results from setting off short positions versus longpositions of currrency risks which exist in the same foreign currency deviating from the functional currency and which are presented
in the same group entity. Natural hedges result from netting out currency risks among all group entities. The amount disclosed in line
“FX forward contracts” (foreign currency forward contracts) corresponds to the amount actually ­hedged and translated into CHF.
Changes in the valuation of fair value hedges are recognised in the financing result (see note 7.5). The table only contains the material
foreign currency risks. All others are regarded to be immaterial in both years.
Net investments in foreign subsidiaries are long term investments. Such investments are exposed to currency fluctuation, because they
are held in another currency than the Group’s functional currency. From a macroeconomic and long term point of view, the currency
exchange effects should be neutralised by the inflation rate at the subsidiaries’ domicile. Due to this reason and also due to costs forrespective derivative instruments, the Group does not hedge such risks.

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93

Foreign currency forward contracts
The Group prepares regularly 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 hedges normally 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:
31.12.2014

in thousands CHF

31.12.2013

Sell/Buy

Maturity

Notional
amount in CHF

USD

USD/CADFeb.15839

USD

USD/CHF

USD

EUR/USD

Feb.152,488

USD

CNY/USD

Feb.15

588

–1

SGD

SGD/EUR

Feb.15834–15

SGD/EUR

1,245

30

SGD

JPY/SGD

Feb.15694

51

JPY/SGD

1,050

56

SGD

SGD/CHF

Feb.152,251–32

SGD/CHF

EUR

EUR/CHF

865

–4

EUR

CHF/EUR

Feb.15

848

–3

JPY

JPY/EUR

Feb.15750

47

JPY/EUR

880

71

CNY

CNY/EUR

Feb.15

1,482–84CNY/EUR

1,723

25

THB

THB/EUR

Hedged currency

Fair value

–25
147

Sell/Buy

Notional
amount in CHF

Fair value

USD/CAD

1,202

–35

USD/CHF

1,503

16

EUR/USD

EUR/CHF
CHF/EUR

THB/EUR

Total FX forward­contracts*

85

159

* see note 6.16

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94

Sensitivity analysis of the currency risk exposure
As per year end, a sensitivity analysis was carried out in respect to financial instruments. The sensitivity analyses calculates the effect of
FOREX–changes on the major currency pairs within the Group. These risks particularly result from different currencies ­between costs
for production and invoicing currency to the customers. Assumed currency fluctuations would have the following effects on the foreign
currency positions in the balance sheet:
31.12.2014

in thousands CHF
Currency pairFinancial assets
Trade and other receivables
Cash and cash equiv. incl. IC-loans

EUR
vs. CHF

31.12.2013

CHF
vs. USDCAD
vs. USDEUR
vs. CHF

–267

847

2,600

10,739

1

860

70

CHF
vs. USDCAD
vs. USD–1,361879

2,183

13,069

367

989

70

Financial liabilities
Trade and other payables
Short term and current liabilities

779
6,995

1,645

1,360

17,027Gross exposure per currency pair

17,537848

4,239

30,450Risks opposing each other–15,399308–1,559–23,558

–839

–865

–1,503–1,202

1,156

1,841

6,027

–257

609

FX forward contracts–848

Net FX exposure per currency pair

1,290

1,246

4,532
–2,721

Currency change in %

1

1

7

2

1

4

Effect on the result (+/–)

13

12

129

121

3

24

Income tax expense at 20.1 %

–3

–2

–26

–24

–1

–5

Net FX exposure after income taxes

10

10

103

97

2

19

Analogously to the currency risk analyis, the net risks of currency pairs are summed up. The position “Risks opposing each other” is a
result of netting out those risks that are contrary to each other. The disclosed amount in line “FX forward contracts” equals the total ofhedged currency risks of a currency pair. It is also deducted from the gross risk as it deviates linearly with the fluctuation of the currency.
The income taxes are calculated in line with the applicable rate for an ordinary taxed entity in Switzerland (see note 7.6).

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95

Interest risks
As per balance sheet date, the Group had interest bearing net financial assets of CHF 3.3 million (previous year: CHF 3.6 million, see­also note 6.12). There are CHF 3.7 million (previous year: CHF 4.0 million) financial assets, of which CHF 0.5 million (previous year:
CHF 0.6 million) are not interest bearing. There are financial liabilities of CHF 0.3 million (previous year: CHF 0.5 million). The portionof not interest bearing financial liabilies was immaterial in both years under review.
The following table divides interest bearing assets and liabilities into fix and variable as well as shows none interest bearing positions
within financial assets and liabilities. A change of the interest rate would have had no effect on equity because the Group c­ urrently does
not hold any cash flow hedges to hedge currency risks and because there are no assets held for sale at a fix interest rate. The Group­regularly monitors its interest risks and reserves the possibility to hedge such in future.
31.12.2014

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

Basis points
+ 100

–100

24

–24

31.12.2013
Nom. int. rate in % Book values
00

0–2.63

1,593

0–10.3

1,809

Basis points
+ 100

–100

18

–18

18

–18

18

–18

18

–18

FINANCIAL ASSETS
Fix interest rate

0–2.63754

Variable interest rate

0–10.32,410

Not interest bearing

502

Total deposits

3,666

645
24

–24

4,047

Total loans
Cash on hand, bank and postal accounts

21,147

Trade and other receivables

68,581

17,532
55,414

Total other financial assets

89,72872,946

Total financial assets

93,39424–24

76,993

FINANCIAL LIABILITIES
Total bank loans
Fix interest rate

6.0-9.85

153

6.0-9.85

310

Not interest bearing

188

158

Total other loans

341

468

Bank overdrafts

1

1

Trade and other accounts payable

39,611

34,916

Total trade and other accounts payable

39,612

34,917

Total financial liabilities

39,95335,385

Net financial liabilities

53,441

5_INT_GB2014_Finance_EN.indd 95

24

–24

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NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

96

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 interests at
a fixed rate. As per above analysis, the Group’s annual result would have changed slightly by CHF 0.02 million in case of an interest rate
being one percentage point higher or lower. In the previous year, an increase of the interest rate of one percentage point, would havechanged the Group’s result also slightly by CHF 0.02 million. For certain interest bearing positions, the interest rate is already ­lower than
one percent. Therefore, the effect of the reduction was only calculated up to the current interest rate being lower than 1.0 %.
Liquidity risk
The Group carries out a complete liquidity planning on a quarterly basis. The Group holds liquidity reserves in form of committed anduncommitted credit lines in order to comply with an unexpected and extraordinary liquidity demand.
Credit facilities and debt covenants
The amount of unused credit facilities as per end of the reporting year amounted to CHF 78.4 million (­ 2013: CHF 80.6 million).
In the year under review, the committed credit lines for an amount of CHF 40.0 million which were agreed upon in 2009 were extended
with the same conditions for another duration of 3 years. They ensure the f­unding of the future investment programme and serve­generally for the business financing. The Group ­always complied with the agreed debt covenants which are the following:
EBITDA:Net debt:
Equity:net interest costs = min. 4.0
EBITDA = max. 3.0
total assets = min. 35 %The ageing of the financial liabilities is disclosed in note 6.12 (see “Ageing of financial liabilities”).

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97

6.10 Information on shareholders’ equity
Reconciliation from total issued shares to outstanding shares
2014

2013

854,000

854,000

Own shares held by the Group as per 1.1.

3,849

51,718Purchase of own shares

2,090

300

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

Sale of own shares
Attribution of shares relating to bonus plan

–2,964–1,769Attribution of shares related to options exercised
Own shares held by the Group as per 31.12.

–2,580–42,625

4,170

3,849

4,170

3,849

849,830

850,151

thereof reserved for issuance under option program
thereof unreserved
Shares outstanding at 31.12.

6.11 Earnings per shareNon-diluted earnings per share
The non-diluted earnings per share in 2014 amount to CHF 22.45 (2013: CHF 24.84). The calclulation is based on the profit a­ ttributable
to the equity holders of the parent company, divided by the weighted average of shares outstanding. In 2014 there is no diluting effect.
2014

2013

Result attributable to the equity holders (in thousands CHF)

19,06820,544

Shares outstanding as per of 1.1.

850,151

802,282

Effect of the purchase of own shares–294

Effect of the sale/attribution of own shares–687

Effect of the issue of shares under option plans

2,177
22,461

Weighted average of shares outstanding

849,170

826,920

Non-diluted earnings per share (in CHF)

22.45

24.84

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98

Diluted earnings per share
The diluted earnings per share in 2014 amount to CHF 22.45 (2013: CHF 24.71). They are calculated by adjusting the weighted average
number of ordinary shares outstanding to include all dilutive potential ordinary shares.
The potential ordinary shares resulting from the issue of options under the employee stock option plan (see note 7.1) had a dilutive effectin the previous year due to the fact that the strike price of CHF 323 was below the average share price of CHF 409. This effect is outlined
below. In 2014 there were no dilutive effects.
2014

2013

Result attributable to the equity holders (in thousands CHF)

19,06820,544Weighted average of shares outstanding

849,170

826,920

849,170

831,482

22.45

24.71

31.12.2014

31.12.2013

Dilutive effect of share options
Weighted average of shares outstanding (diluted)
Diluted earnings per share (in CHF)

4,562

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

Bank overdrafts
Other loans

1

1

188

215

Finance lease

128

104

Total current financial liabilities

317

320

Other loans

153

253

Total non-current financial liabilities

153

253

Total financial liabilities

470

573

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Net financial liabilities to equity ratio
31.12.2014

in thousands CHF

Total financial liabilities

31.12.2013

470

573

./. Cash and cash equivalents–24,380–20,797

Net financial liabilities (-net cash)–23,910–20,224

Equity200,330

187,246n/a

n/a

Net financial debt in % of the equity

Loan structure
31.12.2014

in thousands CHF

Other loans
Total loans

5_INT_GB2014_Finance_EN.indd 99

Currency

Weighted av.
interest rate

Interest due
fix/variable

Year ofmaturity

USD/DKK

0%–6.00%

F

2017

Face
value

Carrying
amount31.12.2013
Face
value

Carrying
amount

341

341

623

572

341

341

623

572

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NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

100

Ageing of financial liabilities
The financial liabilities as per 31 December 2014 are due as follows:in thousands CHF

Other loans
Bank overdrafts

Book value

Face value(undiscounted)

341

341

1

1

within6 months

within
6–12 months

within
1–2 years

188

153

188

153

within
2–5 years

1

Trade / other accounts payable*

39,61137,53037,530Total financial liabilities

39,95337,87237,531* 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 2013 were due as follows:in thousands CHF

Other loans
Bank overdrafts

Book value

Face value(undiscounted)

within6 months

within
6–12 months

572

623

110

211

302

1

1

1
211

302

Trade / other accounts payable*

34,91634,91634,916

Total financial liabilities

35,48935,54035,027

within
1–2 years

within
2–5 years* 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.

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101

6.13 Leasing liabilities
Finance leases
In the year under review, there were CHF 0.3 million finance leases (2013: CHF 0.4 million) of which CHF 0.1 million (2013:
CHF 0.3 ­million) will become due in one to five years.
Operating leases
Liabilities from operating leases mainly relate to building rentals and will become due as follows:
31.12.2014

in thousands CHF

31.12.2013

within 1 year

2,175

2,308

between 1 and 5 years

5,650

6,550

over 5 years

1,319

1,539

Total operating leases

9,144

10,397

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

2014

2013

2014

2013

2014

2013

At 1.1.

5,868

5,122

34

200

5,902

5,322

132

–97

4

132

–93

Provisions made

2,913

3,280

34

2,924

3,314

Provisions used

–1,987–1,997–1,987–1,997

Provisions reversed–1,016–620–1,016–824

Acquired provisions

45

180

5,955

5,868

Currency translation adjustments

At 31.12.

11

–204
45

34

45

180

6,000

5,902

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 2014 corresponds to roughly 1.8 % ­(2013: 1.9 %) of net sales. The increase in the percentage
of sales is a consequence of more warranty cases for certain product groups.
Other provisions
The other provisions mainly include provision for litigation. In connection with the restatement related to IAS 19 pension liabilities werereclassified from other provisions to a separate balance sheet line.

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102

6.15 Pension obligations and pension costs
General information to the pension plans of the GroupThe pension costs for 2014 amounted to CHF 2.3 million (2013: CHF 2.1 million). Such costs consist of ­employer contributions relating
to the defined contribution plans and pension costs relating to the defined benefit plans.
The pension plans in Switzerland and France are regarded as defined benefits plans in line with IAS 19. In 2014, 201 and also in 2013,201 employees participated in the defined benefit plans. 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 is­recognized as a liability or an asset in the balance sheet. Actuarial gains and losses arise mainly from changes in actuarial assumptions anddiffereneces between actuarial assumptions and actual developments. They are recognized in the statement of comprehensive income.
It can be assumed that the assets of both plans do not include Interroll shares.
Components of defined benefit costin thousands CHF

2014

2013

Costs of the defined contribution plans

1,525

1,477

Current service costs, net

500

802

Interest costs

59

66

Costs of the defined benefit plans

559

868

Effects of changes in demographic assumptions–3,012–741

Effects of experience assumptions

7

–123

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

–4

–64

Remeasurements included in other income–3,009

–928

–925

1,417

Effects of changes in financial assumptions

Defined benefit costs

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
2014

2013

Present value of defined benefit obligation–19,907–15,787

Fair value of plan assets

14,141

12,962

Pension liability–5,766–2,824in thousands CHF, as per 31.12.

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103

Roll forward of the defined benefit obligationin thousands CHF

Benefit obligation as per 1.1.

2014

2013

–15,787–14,888

Current service costs, net

–500

–802

Interest costs

–366

–302

Contributions from employees

–394

–393

Benefits funded/(paid), net

–120

–521

Benefits funded/(paid), net from employer

11

Translation difference

10–9Insurance premiums

244

263

–3,012741

Remeasurements– Effects of changes in demographic assumptions– Effects of changes in financial assumptions– Effects of experience assumptions
Benefit obligation as per 31.12.

7

123–19,907–15,787

2014

2013

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

Fair value of plan assets as per 1.1.

12,962

11,418Interest income

307

236

Employer contributions

606

591

Employee contributions

394

393

Benefits funded/(paid), net

120

521

Insurance premiums

–244

–263

Translation difference2

Remeasurements– Income of plan assets
Fair value of plan assets as per 31.12.

–4

64

14,141

12,9622014

2013

Investment categories
in %Equity securities*

520

386

Debt securities*

10,381

9,742

Real estate**

2,402

2,137

Other investments*
Total Investments in %

838

697

14,141

12,962* with quoted market price** w/o quoted market price

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NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION104

Net defined benefit liability (asset) reconciliationin thousands CHF

Net defined benefit liability (asset) as per 1.1.

2014

2013

–2,824–3,469Defined benefit costs included in P/L

–559

–868

Total remeasurements included in OCI–3,009929

Employer contributions

606

591

Translation difference

20–7–5,766–2,8242014

2013

Discount rate

1.3

2.3

Expected return on plan assets

1.5

1.5

Future salary increases

1.5

1.5

Expected benefit increases

1.8

1.8

Fluctuation rate

10.0

10.0

BVG 2010

BVG 2010

Net defined benefit liability (asset) as per 31.12.

Actuarial assumptionsin %Mortality probabilities

Sensitivities
Discount rate and future salary increases are considered as essential actuarial assumptions. Following effects are expected:
Discount rate
Benefit obligation
Rate of salary increase
Benefit obligation

1.30%+0.25%-0.25%–19,907–19,064

20,8121.50%+0.25%-0.25%–19,907–20,055–19,751

Sensitivities are based on likely possible changes as per end of 2014.

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 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

105

6.16 Trade and other accounts payable
31.12.2014

31.12.2013

Trade accounts payable to third parties

13,446

13,371

Advances received from customers

14,746

11,863

Total trade accounts payable

28,192

25,234in thousands CHF

Other liabilities

11,419

9,618

Total other accounts payable

11,419

9,618

Accrued personnel expenses

8,272

7,854

Accrued interest

3

7

Other accrued expenses

4,390

4,066

Total accrued expenses

12,665

11,927

Total trade and other accounts payable

52,276

46,779Advances 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 vacation
and bonuses.

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NOTES TO THE CONSOLIDATED INCOME STATEMENT

106

7

NOTES TO THE CONSOLIDATED INCOME STATEMENT

7.1

Personnel expenses

Details to personnel expenses and number of employees
2014

2013

Wages and salaries

84,42077,260Social security costs

13,074

11,374

Pension costs (see note 6.15)

2,084

2,345

Other personnel related costs

3,004

2,139

in thousands CHF

Equity based personnel expenses to management personnel

925

1,013

103,507

94,131

thereof production related personnel expenses

46,504

41,125

Average number of employees

1,675

1,488

Total personnel expenses

In the period under review 1,769 own shares (2013: 2,580) were attributed to management members as part of their bonus scheme. In
the year under review 1,769 shares (2013: 2,175) have been blocked for sale for a period of four to eight years as of grant date. The shareswere valuated at the market value of the attribution date.
Option plan
On 3 March 2006 the Board of Directors approved a management share option plan for the next five years. In the course of thefirst half year of 2010, the option life time and blocked period was extended by two years. This plan ceased as per 30 September 2013. In
the previous year 2013 42,625 options were exercised and 600 options expired.
31.12.2014 attributed

exercised

expired reclassified

31.12.2013

attributed

exercisedreclassified

1.1.2013

Outstanding options–42,625–600

43,225

Option life until 30.09.2013–42,625–600

43,225–42,625–600

43,225

Option life until 30.09.2011
thereof closed
thereof exercisable

7.2 Research and development expenditures
These expenses are mostly incurred to further develop and complete the product range 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

2014

2013

Research and development (R&D) expenditures

8,694

8,931

R&D in % of net sales

2.59

2.82

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NOTES TO THE CONSOLIDATED INCOME STATEMENT

107

7.3

Other operating expenses

in thousands CHF

2014

2013

Production related expenses

9,079

7,121

Freight

8,644

8,238

Office,administration and IT services

6,277

6,463

Building costs

4,932

5,388

Travelling and transportation

5,707

5,297

Marketing

4,673

4,767

Consultancy, auditing and insurances

6,249

5,739

Provisions and allowances, net

1,743

2,354

Variable sales costs

2,599

2,486

Non-income taxes

1,737

1,776

Other expenses and services

3,472

2,681

55,11252,516in thousands CHF

2014

2013

Income from freight and packing

Loss on disposal of property, plant and equipment / intangible assets
Total other operating expenses

7.4

206

Other operating income

8,715

7,869

Income from services

252

363

Government grants received

14

109

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

197

Total other operating income

7.5

9,178

8,341

2014

2013

Financial resultin thousands CHF

Fair value changes of foreign currency forward contracts

–74

–54

Realised translation loss

–840

–1,211

Interest expenses

–40

–387

Finance expenses–954–1,689Realised translation expenses–37

Realised translation result, net

885

Interest income

108

145

Finance income

993

145

Finance result, net

39–1,544

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108

7.6

Income tax expense

Components of income tax expensein thousands CHF

2014

2013
5,274

Income taxes relating to the current period

7,394

Income taxes relating to past periods, net

–793

1,454

Current income tax expense

6,601

6,728

Due to temporary differences–1,745–1,267

Due to tax rate changes

1,318

–61

127

–321

Adjustments to deferred tax assets

109

–123

Other effects (including acquisition)

–178

85

Deferred income tax expense/(income)–369–1,687

Total income tax expense

6,232

5,041

Due to (recognition)/use of tax loss carry-forwards

Taxes on capital are included in other operating expenses (see note 7.3).
Deferred tax liabilities of CHF 0.2 million (2013: CHF 0.2 million) have not been recognised for ­withholding 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
2014

2013

Result before income taxes

25,42025,647in thousands CHF

Income tax expenses at the expected tax rate of 20.1% (2013: 20.1%)

5,109

5,155

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

–793

1,454

Effect from deviation to tax rates in Group companies

–990

92

Tax rate changes, net

1,318

–61

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

707–1,781(use of unrecognised tax losses)/effect of unrecognised tax losses on the current year’s result, net

829

293

(Reversal of)/write offs on deferred tax assets, net

51

–123

Other effects
Effective (total) income tax expense

1

12

6,232

5,041

The income tax expense analysis is based on the expected tax rate for an ordinarily taxed company in Switzerland.

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NOTES TO THE CONSOLIDATED INCOME STATEMENT

109

Tax effects on and expiry dates of losses carried forward
31.12.2014

in thousands CHF
not activatedactivated

31.12.2013
not activatedactivated

Expiry:
2014

186

2015
2016
2017

30

2018

662

2019

510

30
64

2019 and later

10,9794,468

14,891

unlimited

15,103

406

9,108

Total

27,284

4,938

24,215

5,177

Tax benefit

8,838

1,906

7,903

1,767

Thereof unrecognisable–8,838Deferred tax assets from carried forward losses

5,177–7,903
1,906

1,767

A tax effect of CHF 1.3 million resulted from new tax losses carried forward of CHF 3.8 million in 2014 of which CHF 0.3 million were
capitalised (2013: new tax losses of CHF 5.2 million with a tax effect of CHF 1.4 million, whereof CHF 0.1 million were capitalised).
Deferred tax assets on unused tax losses carried forward and based on temporary differencies are capitalised in case it is probable thatsuch assets can be set off against future taxable profits. Due to the probability to set off current tax losses carried forward against future
profits in various subsidiaries, an amount of CHF 1.9 million has been capitalised in 2014 (2013: CHF 1.8 million). Interroll considers
the future set off probable based on approved business plans. The majority of non-capitalised deferred tax assets on losses carried foward
concern US-based subsidiaries. The applicable tax rate for both years under review is 39 %.

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110

Attribution of defered tax assets/liabilities to balance sheet items
31.12.2014

in thousands CHF

31.12.2013

Deferred tax
assetsDeferred tax
liabilities

Deferred tax
assetsDeferred tax
liabilities

Intangible assets

1,632

2,018

956

1,513

Property, plant and equipment

1,032

2,657

663

2,590

2,873

194

31

670

298

62

Financial assets
Inventory
Benefits of loss carry forwards

376
1,906

1,703

Receivables

96

266

226

85

Total assets

5,042

8,484

4,040

4,281

124

27

1,992

330

1,196

2,629

1

188

323

Long term debts
Provisions

78

Short term debts

554

Other liabilities

13

Total liabilities

2,637

331

1,536

2,979

Set-off–3,529–3,529–2,189–2,189Total net

4,150

5,286

3,387

5,071

28

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

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111

8

OTHER DISCLOSURES TO THE FINANCIAL STATEMENTS

8.1 Contingent liabilities and other commitments
In 2014 Interroll Group has committed to guarantees versus third parties in the amount of CHF 0.3 million (2013: CHF 0.3 million).
These guarantees are in relation to customer orders. There are no further contingent liabilities in both years under review.

8.2

Related party transactions

Transactions with related parties
Volumein thousands CHF

Category

2014

2013

31.12.2014

31.12.2013

15

115

Purchase of materials

a

591

1,751

Consulting services

b

2,122

2,680

IT Investments / IT Services

a

206

221

Other purchases

a

6

193

2,925

4,845

Total purchases

Open payables

3

4
2

18

Volume121

Open receivables

Category

2014

2013

31.12.2014

31.12.2013

Sale of material

a

338

4,936

38

917

Other income

b

15

232

353

5,168

38

917

in thousands CHF

Total services

Definition of related parties
Interroll Group defines and categorises its related parties as follows:a) Shareholders of Interroll Holding Ltd. holding more than 3 % of the shareholder capital.
b) Members of the Board of Directors of Interroll Holding Ltd. and legal entities that are directly controlled by them.
c) Members of Group Management of Interroll Group and legal entities that are directly controlled by them.
d) Local managing directors as well as people reporting to them (only for substantial transactions).

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112

Total compensation to the Board of Directors
Total compensation in the year 2014 to the Board of Directors of Interroll Holding Ltd. is CHF 0.54 million (2013: 0.54 million). The
detailed disclosure on the compensation to and shares owned by the Board of Directors and Group Management required by Swiss law
are included in the Compensation Report.
Total compensation to Group Managementin thousands CHF

2014

2013

Salaries incl. bonus

3,780

3,646

Post-employment benefits

557

541

Equity based compensation

903

867

5,240

5,054

Total compensation to the Group Management

In the period under review as well as in the previous year no loans were granted.
The detailed disclosure of the compensation and equities held by the Group Management in line with Swiss law (OR) can be found in
the Compensation Report.

8.3
Subsequent events
The Swiss National Bank (SNB) on 15 January 2015 has decided not to defend anymore the exchange rate floor of CHF 1.20 per euro.
The business of Interroll is organized pronounced locally and therefore only small transaction risks arise from foreign currency movements. However, by translating financial statements of Group companies from local currency into the reporting currency Swiss francs,
considerable translation risks on results and the equity of the group may arise.
The consolidated financial statements for the year 2014 were approved by the Board of Directors on 3 March 2015 and are subject tofurther approval by the General Meeting of the Shareholders on 8 May 2015.
No event has occurred between 31 December 2014 and 3 March 2015 which would require adjustment to the carrying amountof the Group’s assets and liabilities as per 31 December 2014, or would require disclosure in accordance with IAS 10.

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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)

S

HD

CHF

5,000.0100%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

2,000.0100%Interroll Holding GmbH

Wermelskirchen (DE)

F

HD

EUR

500.0

100%

Interroll GmbH

Wermelskirchen (DE)

D

HD

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

2,808.0100%Interroll SAS

La Roche sur Yon (FR)

P

F

EUR

2,660.0100%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

Hvidovre (DK)

P

HD

EUR

2,013.8

100%

Portec International Ltd.

Leicester (GB)

D

HDP

GBP

0.0

100%

Interroll Ltd.

Corby (GB)

S

HDE

GBP

0.0

100%

Interroll Engineering Ltd.

Corby (GB)

D

HDE

GBP

0.1

100%

Interroll Italia S.r.l

Rho (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

1,000.0100%Interroll Europe BV

Emmeloord (NL)

F

HD

EUR

90.8

100%

Interroll Polska Sp.z.o.o.

Warszaw (PL)

S

HD

PLZ

100.0

100%

Interroll Lojistik Sistemleri

Istanbul (TR)

S

HD

TRY

1,000.0100%Interroll SA (Proprietary) Ltd.

Johannesburg (ZA)

S

HD

ZAR

0.3

100%

Interroll Corporation

Wilmington, NC (US)

P/S

IAU

USD

65.0

100%

Interroll USA Holding LLC

Wilmington, DE (US)

F

HD

USD

0.1

100%

Portec Group International, Inc.

Cañon City, CO (US)

F

IAU

USD

0.2

100%

Interroll Engineering West, Inc.

Cañon City, CO (US)

P/S

HDP

USD

33,500.0100%Interroll Atlanta LLC

Hiram/Atlanta, GA (US)

P/S

IAU

USD

0.0

100%

Interroll Dynamic Storage, Inc.

Hiram/Atlanta, GA (US)

P/S

USA

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

E

BRL

9,049.7

100%

Switzerland
8,540.0

EMEA (without Switzerland)

Americas

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OTHER DISCLOSURES TO THE FINANCIAL STATEMENTS

114

Name

Location (country)

Function

Owner

Share capital in 1,000

Ownership in %Asia-PacificInterroll (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

0.0

100%

Interroll Shenzhen Co. Ltd.

Shenzhen (CN)

P

SGP

CNY

880.0

100%

Portec Asia Limited

Hong Kong (CN)

S

SGP

HKD

700.0

100%

Interroll Australia Pty. Ltd.

Victoria (AU)

S

HD

AUD

51.2

100%

Interroll Holding Management

Interroll (Thailand) Co. Ltd.

Panthong (TH)P/S

SGP/HD

THB

100,000.0

100%

Interroll Japan Co. Ltd.

Tokyo (JP)

S

HD

JPY

10,000.0100%Interroll (Korea) Corporation

Seoul (KR)P/S

SGP/HDKRW 1,500,000.0

100%

Function: P = Production, S = Sales, F = Finance, D = dorming
Owner: HD = Interroll Holding Ltd., HDE = Interroll Europe BV, TI = Interroll SA, DHO = Interroll Holding GmbH, DKP = Interroll Joki AS, F = Interroll SAS,
Saint-­­Pol-de-Léon, E = Interroll España SA, SGP = Interroll (Asia) Pte. Ltd., Singapur, IAU = Interroll USA Holding LLC, HDP = Portec Group International Inc.

Movements within the scope of concolidation in 2014
In Shanghai, China Interroll Holding Management (Shanghai) Co. Ltd. was started up. Furthermore, in 2014 a 40 % minority stake into
Portec Asia Limited in Hong Kong, China, and 100 % of the shares of Pert Engineering Limited in Shenzhen, China, were bought. Pert
Engineering Limited subsequently changed its name to Interroll Shenzhen Co. Ltd. Portec Asia Limited in Hong Kong is now hold byInterroll (Asia) Pte. Ltd. in Singapore, Singapore (2013: Portec Group International in Cañon City, USA). In the year under review theshare capital of Interroll Logistica Ltda in Brasil was increased by BRL 8,050 from BRL 1,000 to BRL 9,050. Interroll Automation LLC
formerly located in Jeffersonville, IN trades now under the name Interroll USA Holding LLC and is registered in Wilmington, DE, USA,as a holding company.
Movements within the scope of concolidation in 2013
In 2013, Portec Group International, Inc. including the subsidiaries Portec, Inc., Portec International Ltd. and Portec Asia Limited was
acquired. Portec, Inc. is now trading under the name Interroll Engineering West, Inc. Furthermore, in the USA the company Interroll
Atlanta LLC and in Italy the company Interroll Italia S.r.l were set up. In Canada Interroll Components Canada Ltd. was merged into
Interroll Canada Ltd.

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REPORT OF THE STATUTORY AUDITOR

115

9REPORT OF THE STATUTORY AUDITOR

Report of the statutory auditor to the General Meeting on the consolidated
financial statements 2014
Report of the statutory auditor on the consolidated financial statements
As statutory auditor, we have audited the consolidated financial statements of INTERROLL HOLDING LTD,
which comprise the balance sheet, income statement, statement of comprehensive income, cash flow
­statement, statement of changes in equity and notes (pages 62 to 114), for the year ended 31 December 2014.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the International Financial Reporting Standards (IFRS) and the requirementsof Swiss law. This responsibility includes designing, implementing and maintaining an internal control system
relevant to the preparation and fair presentation of consolidated financial statements that are free from­material misstatement, whether due to fraud or error. The Board of Directors is further responsible for­selecting and applying appropriate accounting policies and making accounting estimates that are reasonable
in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards as well as the Inter­national
Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable­assurance whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to
the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control system. An audit also includes evaluating the appro­priatenessof the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating
the overall presentation of the consolidated financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion.

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REPORT OF THE STATUTORY AUDITOR

116

OpinionIn our opinion, the consolidated financial statements for the year ended 31 December 2014 give a true and fairview of the financial position, the results of operations and the cash flows in accordance with the International
Financial Reporting Standards (IFRS) and comply with Swiss law.
Report on other legal requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA)
and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with
our independence.
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				Martin Graf
Audit expert				Audit expert
Auditor in charge

Zürich, 3 March 2015

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FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

117

FINANCIALSTATEMENTS
OF INTERROLLHOLDING LTD.

6_INT_GB2014_Finance_EN.indd 117

1

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

118

2

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

120

3

NOTES TO THE FINANCIAL STATEMENTS 

121

4OTHER DISCLOSURES ACCORDING TO SWISS LAW123

5

PROPOSED APPROPRIATION OF AVAILABLE EARNINGS124

6

REPORT OF THE STATUTORY AUDITOR

12504.03.15 12:15

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

118

1

FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

1.1

Balance sheet
31.12.2014

31.12.2013

Cash and cash equivalents

1,141

1,361

Accounts receivable from subsidiaries

1,268

907

Other receivables from third parties

197

278

in thousands CHF

see Notes*

ASSETSOwn shares

3.1

Total current assets
Investments

2,008

1,641

4,614

4,187

217,728

213,169

9,615

19,298

Total non-current assets

227,343

232,467

Total assets

231,957

236,654

Trade and other accounts payable from subsidiaries

264

1,080

Trade and other accounts payable from third parties

77

51

Loans to subsidiaries

3.3

EQUITY AND LIABILITIESLoans from subsidiaries

1,648

Accrued expenses

1,069

1,180

Total current liabilities

3,058

2,311

Provision for loan assets and investment risks

3.5

Total non-current liabilities
Share capital

3.6

Share premium
General legal reserve

110,771

110,771

110,771

110,771

8,540

8,540

8

7,501

5,209

5,209

2,008

1,641

Available earnings

102,363

100,681

Total shareholder's equity

118,128

123,572

Total liabilities and equity

231,957

236,654

Reserve for own shares

3.6* See notes to the financial statements.

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FINANCIAL STATEMENTS OF INTERROLL HOLDING LTD.

119

1.2

Income statement2014

in thousands CHF

Investment income
Royalty income

2013

520

575

3,165

3,005
5,893

Other operating income

1,334

Financial income

1,396

2,397

Total income

6,415

11,870Administration expenses

–504

–405

Personnel expenses–1,877–1,984

Other operating expenses–1,236–4,379Financial expenses–749–1,428

Total expenses–4,366–8,196

Result before income taxes

2,049

3,674

2,049

3,652

Income tax expenses–22

Result1.3

Statement of changes in equity

in thousands CHF

Share capital

Reserves from
capital contrib.

Legal reserve

Reserve forown shares

Available
earnings

Total

As of 1.1.2013

8,540

14,022

5,209

17,67180,999126,441

3,652

3,652

Result 2013
Distribution from approbrationfrom capital contributions–6,521–6,521

Change of reserve for own shares
Per 31.12.2013

8,540

7,501

5,209

–16,030

16,0301,641

100,681

123,572

2,049

2,049

Result 2014
Distribution from approbrationfrom capital contributions–7,493–7,493

Change of reserve for own shares
Per 31.12.2014

6_INT_GB2014_Finance_EN.indd 119

8,540

8

5,209

367

–367

2,008

102,363

118,12804.03.15 12:15

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

120

2

GENERAL INFORMATION TO THE FINANCIAL STATEMENTS

2.1

Accounting Policies

Current/Non-current distinction
Current assets are assets expected to be realised or consumed in the normal course of the Company’s o­ perating 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 unrealised gains which
are deferred.
Accounting law
Applying the transitional provisions of the new accounting law, these financial statements have been ­prepared in accordance of the Swiss
Code of Obligations effective until 31 December 2012.

2.2

Principles of valuation

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

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NOTES TO THE FINANCIAL STATEMENTS

121

3

NOTES TO THE FINANCIAL STATEMENTS

3.1

Own shares and options

Shares sold, acquired and held in the periods under review
In the year under review, the Company did not sell any own shares (previous year: sale of 2,964 shares at an average price of CHF 409).
In the year under review, the Company did acquire 2,090 shares (previous year: 300 shares). At year end 2014, the Company held 4,170
own shares at a book value of CHF 2.0 million (2013: 3,849 own shares at a book value of CHF 1.6 million).
Shares held to cover the option plan
In the previous year, 42,625 shares from the option plan were sold at the strike price of CHF 323. The option plan ceased in September 2013.
Attribution of own shares to employees
1,769 shares (previous year: 2,580 shares) at a carrying value of CHF 0.9 million (previous year: CHF 1.0 million) were attributed to
employees.

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

3.3

Loans to subsidiaries

The interest rates used were the following:

lowesthighestIn the year 2014

0.00%

4.50%

In the year 2013

0.00%

4.00%

The loans due to Group companies are normally redeemable with a notification period of three months. As of year end, the total outstanding group loans amounted to CHF 9.6 million (2013: CHF 19.3 million). For CHF 2.8 million (previous year: CHF 2.8 million) a
valuation allowance has been accounted for.

3.4

Loans from subsidiaries

The following interest rates were used:lowesthighestIn the year 2014

1.50%

4.50%

In the year 2013

1.00%

1.50%

The loans due from Group companies are normally redeemable with a notification period of three months. As of year end 2014, the total
outstanding group loans amounted to CHF 1.6 million (2013: CHF 0.0 million).

3.5 Provision for investment risks
In 2003 as well as in 2008, the Group implemented internal changes in the financing structure that generated an unrealised capital gain.
Therefore the Company created a provision for investment risks that relates to investments in and loans due from Group companies.
Thereby, it is ensured that the amount of shareholders’ equity presented of the parent company appears reasonable compared to theconsolidated shareholders’ equity.

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122

3.6

Shareholders equity

Composition of the share capital
The share capital consists of 854,000 fully paid-in registered shares with a par value of CHF 10 each (­ previous year: CHF 10). Each shareentitles to equal dividend and voting rights.
Significant shareholders (at least 3% of the share capital)
The following table shows the number of shares held by the most significant shareholders as well as their participation in percent.
31.12.2014

Shareholder / Shareholder Group31.12.2013

Number of sharesparticipationin %Number of sharesparticipationin %D. Specht and family

86,695

10.15

108,610

12.72

B. Ghisalberti/E. Moreschi and family

111,243

13.03

112,743

13.20

N. Axmann and family

39,017

4.57

39,017

4.57

Sarasin Investmentfonds AG

66,8507.83

72,874

8.53

Allianz Group

50,084

5.86

42,9305.03

Kempen European Participations N.V.

43,554

5.10

0

0.00

Schroders PLC

43,833

5.13

0

0.00

Public (floating)412,72448.33

477,826

55.95

Total

854,000

100.00854,000

100.00Reserve for own shares
The reserve for own shares equals the purchase price of own shares held as of balance sheet date.

3.7 Contingent liabilities
Interroll Holding Ltd. has issued a guarantee for an existing shared credit facility in the amount of CHF 42 million (previous year:
CHF 42 million) in favour of Interroll (Schweiz) AG.
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)

CanadaInterroll Canada Ltd., Aurora (CA)Interroll Holding Ltd. carries joint liability in respect of the federal tax authorities for value added tax debts of all Swiss subsidiaries.

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

OTHER DISCLOSURES ACCORDING TO SWISS LAW

123

4	OTHER DISCLOSURES ACCORDING TO SWISS LAW
4.1 Risk assessment
The risk management coordinates and aligns the risk management processes and reports to the Board of Directors on a regular basis
on risk assessment and risk management. Organizational and process measures designed to identify and mitigate risks at an early stage
have been assessed to be satisfactory by the Board of Directors.

4.2 Internal control system
The Board of Directors and management of the Group are responsible for establishing and maintaining ­adequate internal control overfinancial reporting. Interroll Holding Ltd.’s and the Interroll Group’s internal control system was designed to provide reasonable assurance to the Interroll Group’s Management and Board of Directors regarding the reliability of financial reporting and the preparation andfair presentation of its published consolidated financial statements.
All internal control systems no matter how well designed have inherent limitations. Therefore, even those systems determined to ­beeffective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement pre­paration and presentation. Also, projections of any eva­luation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Interroll Group Management assessed the effectiveness of the Group’s internal control over financial reporting as per 31 December 2014.
Based on its assessment, management has concluded that, as per 31 December 2014, the Interroll Group’s internal control over financial
reporting was effective based on those criteria (see notes to the consolidated financials statements “3 Risk Management”).

4.3 Compensation of and shares held by the Board of Directors and the Group Management
The compensation of the members of the Board of Directors and the Group Management as well as the shares and options held by themembers of the Board of Directors at year end are disclosed in the Compensation Report in accordance with VegüV and the Swiss Codeof Obligations 663c (see Compensation Report, page 53 to 60).

4.4

Compensation of and shares held by Group Management
Shares as of 31.12.

2014

2013

Paul Zumbühl

17,26816,088

Dr. Ralf Garlichs

350

250

Dr. Christoph Reinkemeier

390

290

Jens Karolyi

83

57

Tim McGill

3,003

2,886

Daniel Bättig*

Options as of 31.12.

2014

2013

147

Dr. Ben Xia**
Total

21,241

19,571* Daniel Bättig entered Group Management as per 1 March 2013.
** Dr. Ben Xia entered Group Management as per 1 July 2013.

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PROPOSED APPROPRIATION OF AVAILABLE EARNINGS

124

5PROPOSED APPROPRIATION OF AVAILABLE EARNINGS

Appropriation of available earnings
The Board of Directors proposes to the General Assembly as of 8 May 2015 to appropriate the available earnings as per end of the year
under review as follows:in thousands CHF

ResultAvailable earnings carried over from previous year
Change of reserve for own shares
To be carried forward

2014

2013

2,049

3,652

100,681

80,999–367

16,030102,363

100,681

Proposed reduction in nominal value of the Interroll share
The Board of Directors proposes to the General Assembly in lieu of a dividend payment the reduction in nominal value of the Interroll
share in the amount of CHF 9.00 from CHF 10.00 to new CHF 1.00 per share. In total a maximum of CHF 7.7 million is proposed to be
paid out. In the previous year the distribution of reserves from capital contributions in the amount of CHF 8.80 per share was proposed,
approved and a total of CHF 7.5 million was paid out. If the reduction in nominal value of the Interroll share is approved, the respective
settlement will be processed in the third quarter of 2015.

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REPORT OF THE STATUTORY AUDITOR

125

6REPORT OF THE STATUTORY AUDITOR

Report of the statutory auditor to the General Meetingon the financial statements 2014
Report of the statutory auditor on the financial statements
As statutory auditor, we have audited the financial statements of INTERROLL HOLDING LTD, which comprisethe balance sheet, income statement and notes (pages 118 to 124), for the year ended 31 December 2014.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation of the financial statements in accordance with therequirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing,
implementing and maintaining an internal control system relevant to the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error. The Board of Directors is further
responsible for selecting and applying appropriate accounting policies and making accounting estimates thatare reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we planand perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the­financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purposeof expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes eva­
luating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made,as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion.

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REPORT OF THE STATUTORY AUDITOR

126

OpinionIn our opinion, the financial statements for the year ended 31 December 2014 comply with Swiss law andthe company’s articles of incorporation.
Report on other legal requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA)
and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with
our independence.
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 comply with Swiss law and the­company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.
PricewaterhouseCoopers AG

Patrick Balkanyi
Audit expert
Auditor in charge

Martin Graf
Audit expert

Zürich, 3 March 2015

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FINANCIAL CALENDAR
2015
Preliminary Financial Figures 201423 January 2015

Publication Annual Report 2014 and Balance Sheet Press Conference

20 March 2015

Annual General Assembly
Publication Half-Year Report 2015

8 May 2015
7 August 2015

CONTACT UND 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

Petra Müller
Head of PR & Investor Relations
Tel: +41 91 850 25 21
Email: p.mueller@interroll.com
EditorInterroll Holding AG
Via Gorelle 36592 Sant’Antonino, Schweiz
Tel: +41 91 8502525
Fax: +41 91 8502505
www.interroll.com

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NOTE ON THE ANNUAL REPORTThis annual report is also available in German. If there are differences between the two, the German version
takes priority.
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 future-oriented statements. Future-oriented 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 future-oriented 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 future-oriented statements provide no guarantee for the future and that the actual events including
the financial position and profitability of the Interroll Group and developments in the economic and regulatory
fundamentals may vary substantially (particularly on the down side) from those explicitly or implicitly assumed
in these statements. Even if the actual assets for the Interroll Group, including its financial position and profitability and the economic and regulatory fundamentals, are in accordance with such future-oriented statements in thisannual report, no guarantee can be given that this will continue to be the case in the future.

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