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Financial Report199923779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite ug2

Contents

2
3
4
5
8
21
22
23

Forbo Group Consolidated Financial Statements
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Accounting Policies
Notes to the Consolidated Financial Statements
Report of the Group Auditors
Consolidated Income Statements 1995 –1999
Consolidated Balance Sheets 1995 –1999

32

Financial Statements of Forbo Holding SA
Income Statement
Balance Sheet
Notes to the Financial Statements
Proposal for the Appropriation of Available Earnings
Report of the Statutory Auditors

34

Additional Information
Group Companies

26
27
28
31

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Forbo Group Consolidated Financial Statements

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Consolidated Income Statement

1999

Gross sales

Notes

m CHF

m CHF

27

1,874.4

1,832.2–119.9–117.727

1,754.5

1,714.5–1,125.1–1,092.3

629.4

622.2

Deductions from sales
Net sales
Cost of goods sold
Gross profit
2

Development costs

1998

Marketing and distribution costs

–30.2

–31.2

–335.2–333.0–120.0Administrative costs

3–122.3

Other operating expenses

4

–18.7

–25.8

123.0

112.2

Operating profit before specific provisions
6

Specific provisions
Operating profit after specific provisions

–70.0
53.0

112.2

Financial income

7

13.8

12.8

Financial expenses

8

–19.4

–20.6

47.4

104.4

–31.3

–27.7

16.1

76.7

1999

1998

Profit before taxes
24

Taxes
Net profit for the year

Notes

CHF

CHF

Earnings per share before specific provisions

9

58.44

52.06

Earnings per share after specific provisions

9

10.93

52.06

Presentation was adapted to IAS 1 (revised)

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23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 3

Consolidated Balance Sheet

31.12.1999

31.12.1998

Assets
Notes

Long-term assets

m CHF

m CHF

866.9

828.9

Tangible assets

10

813.1

781.3

Intangible assets

10

24.0

20.3

Investments in associates

10

2.5

2.5

Deferred taxes

24

27.3

24.8

Current assets

860.5

751.4

Inventories

11

306.2

291.4

Trade receivables

12

282.1

247.1

Other receivables

31.1

33.4

Prepaid expenses and deferred charges

19.6

18.9

73.6

71.6

13

Marketable securities
Cash
Total assets

147.9

89.0

1,727.4

1,580.3

31.12.1999

31.12.1998

Shareholders’ equity and liabilities
Notes

Shareholders’ equity
Share capital

14

Own shares, nominal (issued, not outstanding)15

Reserves and retained earnings
Long-term liabilities

m CHF

m CHF

794.8

798.3

75.7

75.7

–2.0

–2.0

721.1

724.6

458.6

372.5

4.0

5.2

Deferred taxes

24

Employee benefit obligations

16

91.8

67.1

Other provisions

17

115.5

48.5

Bond issues

18

175.0

175.0

Long-term bank loans and mortgages

19

72.3

76.7

474.0

409.5

139.6

120.5

50.1

42.0

105.0

93.4

Current liabilities
20

Trade payables
Other payables
Accrued expenses

21

Bank loans and overdrafts

22

179.3

153.6

1,727.4

1,580.3

Sharecapitalm CHF

Own Reserves and reshares tained earnings
m CHF
m CHF

Translationdifferences
m CHF

Total
m CHF

75.7

–2.0

–48.2

761.1

–11.7

–11.7

–59.9

798.3

Total shareholders’ equity and liabilities
Presentation was adapted to IAS 1 (revised)

Statement of changes in shareholders’ equity

Total shareholders’ equity at 31.12.1997
Net profit for the year

735.6
76.7

Translation differences
Dividend distribution
Total shareholders’ equity at 31.12.1998

–27.8
75.7

–2.0

784.5

Change in accounting policies (IAS 19)–16.5

Net profit for the year

16.1

Translation differences

–27.8
–16.5
16.1
29.3

Dividend distribution
Total shareholders’ equity at 31.12.1999

76.7

–32.4
75.7

The column ‘Translation differences’ contains the currency-related
value adjustments since the adoption of International AccountingStandards (IAS) as of 1.1.1992

3 Forbo Financial Report 1999

–2.0

751.7

29.3
–32.4

–30.6

794.8

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Consolidated Cash Flow Statement

1999

1998

Cash flow from operating activities
m CHF

m CHF

Net profit for the year

16.1

76.7

Depreciation of tangible assets

100.7

96.1

Amortization of intangible assets

4.8

5.2

Increase (+)/decrease (–) in deferred income taxes and other provisions

63.3

–11.7

Increase (+)/decrease (–) in current liabilities (bank loans/overdrafts not included)

20.5

–2.8

Increase (–)/decrease (+) in current assets1)

–18.3

–8.3

Total cash flow from operating activities

187.1

155.2

1999

1998

m CHF

m CHF

Cash flow from investing activities
Decrease (+) in long-term assets through divestments1)
Increase (–) in long term assets
Decrease (+) in long term assets
Total cash flow from investing activities

0.0

1.0

–125.5–158.86.1

10.4–119.4–147.4

1999

1998

Cash flow from financing activities
Increase (+)/decrease (–) in long-term bank loans and mortgages

m CHF

m CHF

–7.9

–41.9

Increase (+)/decrease (–) in employee benefit obligations

7.0

9.7

Increase (+)/decrease (–) in short-term bank loans/overdrafts

20.5

–23.1

Dividend paid

–32.4

–27.8

Total cash flow from financing activities

–12.8

–83.1

1999

1998

Change in cash and marketable securities
m CHF

m CHF

Increase (+)/decrease (–) in cash

52.9

–49.6

Increase (+ )/decrease (–) in marketable securities

2.0

–25.7

Translation differences

6.0

–1.2

Cash and marketable securities at beginning of year

160.6

237.1

Total cash and marketable securities at year-end

221.5

160.6

1999

1998

Change in net debt
m CHF

m CHF

Net debt at January 1

244.7

226.3

Increase (–)/decrease (+) in cash and marketable securities

–54.9

75.3

Translation differences

–6.0

1.2

Increase (+)/decrease (–) of debt

21.3

–58.1

Net debt at December 31

205.1

244.7

1) excluding cash and marketable securities

The consolidated cash flow statement is prepared using the indirect method.
The changes in balance sheet positions are based on values exclusive of translationdifferences.

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Accounting Policies
Basis of consolidation

The Group’s consolidated financial statements have been prepared in accordance with International Accounting Standards (IAS) as issued by the International Accounting Standards
Committee (IASC), and comply with the law and the accounting provisions as contained in
the Listing Rules of the Swiss Exchange.
The consolidated financial statements are based on the audited financial statements of theindividual group companies as at and for the year ended December 31, 1999.
Scope of consolidation

The consolidated financial statements include Forbo Holding SA and all subsidiaries overwhich the Group exerts a controlling influence. A controlling influence normally exists when
the Group owns more than 50% of the voting rights in a company. Intra-group transactions
and balances are eliminated.
Companies acquired during the reporting year are included in the consolidated financial
statements as of their acquisition date, and all companies disposed of are eliminated fromthe accounts as of the date of disposal. The companies included in the consolidated financial
statements are listed under Group Companies (pages 34–36). Equity interests in companies
over which the Group does not exert any significant influence are included in the balance
sheet at cost, with adequate provision for long-term impairment in value.
Capital consolidation

The purchase method is used, whereby goodwill is capitalized and amortized over its
estimated useful life (but over a period not exceeding twenty years).
The value of the net capitalized balance is reviewed at the end of the year, and provision
is made for any impairment in value where the capitalized balance is considered to exceed
the future benefits.
Foreign currency translation

The assets and liabilities of group companies which do not report in Swiss francs as theirfunctional currency are translated at year-end exchange rates and their income statements aretranslated at weighted average exchange rates for the year. Currency translation differences
arising from changes in exchange rates between the beginning of the year and the end of theyear and the difference in net income translated at weighted average and year-end exchange
rates are taken directly to shareholders’ equity. Exchange gains and losses arising from longterm intra-group financings with equity character denominated in foreign currencies are
likewise taken to shareholders’ equity. Exchange gains and losses arising in group companies
from transactions in foreign currencies are taken to the income statement.
Valuation principles

The consolidated financial statements of Forbo Holding SA are prepared in accordance withthe historical cost convention.
Tangible assets

Tangible assets are stated at their acquisition or production cost less depreciation over theirestimated useful lives. Depreciation is charged on a straight-line basis over 30 years forbuildings and over a period of five to ten years for machinery, equipment and other tangible
assets. The same applies for leased assets where the group companies assume all the risks
and rewards of ownership (financial leasing). These assets are capitalized at the estimatedpresent value of the underlying lease payments. The corresponding payment obligations,excluding the associated financing costs, are shown in the balance sheet as short or longterm loans, depending on their due date.
Expenditures for maintenance and repairs are charged directly to the income statement,
whereas expenditures which enhance the value of assets, are capitalized.

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Intangible assets

Intangible assets, other than goodwill, comprise patents, licenses and trademarks acquired
from third parties. These assets are capitalized and depreciated on a straight-line basis overtheir estimated useful life (but over a period not exceeding 20 years). The value of the net
capitalized balance is reviewed at the end of the year, and provision is made for any impairment in value where the capitalized balance is considered to exceed the future benefits.
Inventories

Inventories of raw materials, work in progress and finished goods are valued at the lower of
their average acquisition or, where applicable, group production cost and their market(net realizable) value. The valuation of work in progress and finished goods includes related
production overheads. Appropriate provision is made for excess and obsolete inventories
and reductions in sales prices.
Unrealized profits on inventories resulting from intra-group transactions have been eliminated in the income statement and balance sheet.
Trade receivables

Trade receivables are stated at their nominal value less necessary provisions for doubtfulreceivables. Provisions are made for individual receivables positions for which recovery is
doubtful. A general provision is made on the basis of past experience.
Marketable securities

Marketable securities are valued at the lower of cost or market value on a portfolio basis.
The Group’s own shares are also valued at the lower of cost or net realizable value.
CashThis position comprises cash on hand, balances in post office accounts, bank accounts, callaccounts and deposit accounts.
Warranties

On the basis of past experience, provision is made for warranty costs at the time the sales
revenue is recognized.
Deferred taxes

Deferred income taxes are accounted for using the ‘balance sheet liability’ method. Provisions for deferred taxes are established in respect of all temporary differences between
the tax values of assets and liabilities and their values in the consolidated financial statements. Deferred taxes are calculated on the basis of standard local tax rates, with immediateadjustment for any changes in the relevant tax law. Deferred tax assets arising from a reduction of future tax liability due to the carry forward of allowable losses and valuationdifferences are shown as assets only if levels of forecast profits make it likely that such tax
assets will be realized.
Pension plans

For defined contribution plans the expense charged to the income statement correspondswith the contributions made by the Group companies.
For defined benefit plans, the pension costs are assessed using the projected unit credit
method. Under this method, the cost of providing pensions is charged to the income statement so as to spread the regular cost over the service lives of employees in accordancewith the advice of qualified actuaries. Actuarial valuations were carried out in 1999 on all
significant defined benefit plans. As a rule full actuarial valuations are carried out every
three years and up-dated during the intervening period. The pension obligation is measured
as the present value of the estimated future cash outflows using interest rates of long-termhigh quality corporate bonds. All actuarial gains and losses are spread forward over the

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remaining service lives of employees. The capitalisation of surpluses of funded plans islimited to the net total of any unrecognised losses and past service cost, and the present
value of any economic benefits available in the form of refunds from the plans or reductions
in future contributions to the plan.
As of January 1, 1999, the group has implemented IAS 19 (revised) Employee Benefits andaccounted for the transitional liability by adjusting retained earnings at January 1, 1999.
The 1998 consolidated financial statements have not been restated.
Provisions for restructuring costs and specific provisions

Provisions for restructuring costs and specific provisions are made at such time as management approves the decision and determines the nature and amount of the provision or
identifies the risks. Other provisions serve as precautionary cover for identifiable and quantifiable business risks.
Revenue recognition

Revenues from the sale of goods are recognized at the time of transfer of the risks andrewards of ownership to the buyer. Appropriate provision is made for all costs incurred inconnection with sales, including the cost of returned goods.
Research and development

Expenditure under this heading refers exclusively to development and design activities and ischarged to the income statement as and when incurred.
Changes in presentation

The Group has reclassified certain information relating to the previous year in order toconform with the presentation adopted for the year under review (IAS 1, revised).

Description of terms
Cash flow

Cash flow is defined as net profit for the year before specific provisions plus depreciation
and amortization.
EVA®

EVA® (Economic Value Added) is a financial figure indicating how much value a company has
generated in a given year. Our calculations based on the Capital Asset Pricing Model (CAPM)
resulted in weighted average cost of capital (WACC) of 6.7%.
EVA® = NOPAT - WACC x IC
NOPAT: Net Operating Profit After Tax
WACC: Weighted Average Cost of Capital
IC: Invested CapitalSpecific provisions

Provisions for restructuring measures and valuation adjustments in connection with theGroup’s strategic renewal program.

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Notes to the Consolidated Financial Statements
Changes in the scope of consolidation
1

There were no changes in the scope of consolidation compared with the previous year.
82 group companies were included in the consolidated financial statements at 31.12.1999.
Development and production overheads

2

In the reporting year development costs amounted to CHF 30.2 million(1998: CHF 31.2 million).
Production overheads totalled CHF 184.5 million (1998: CHF 182.0 million) and areincluded in ‘Cost of goods sold’.
Administrative costs

3

The Group has no significant costs for licence fees or royalties.
Other operating expenses

1999

1998

4
m CHF

m CHF

Current restructuring costs and projects

8.0

13.2

Other expenses

10.7

12.6

Total

18.7

25.8

Restructuring costs include costs for measures carried out in Flooring and Industry Specialties
as well as provisions for current projects.
Personnel expenses
5

The Group’s total personnel expense comprised CHF 383.6 million (1998: CHF 375.3
million) for salaries and wages and CHF 87.3 million (1998: CHF 86.0 million) for employer’s social security contributions. The average headcount for the year was 6,803 employees(1998: 6,916).
Specific provisions

6

In context with the strategic renewal a specific provision for restructuring and valuation
adjustments in the amount of CHF 70 million (after tax) was created. This provision relateswith CHF 29.2 million to the Flooring Division, and with CHF 40.8 million to the Industry
Specialties Division.

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Financial income

1999

1998

7
m CHF

m CHF

Interest income

2.8

6.9

Securities and exchange gains and other financial income

11.0

5.9

Total financial income

13.8

12.8

Financial expenses

1999

1998

8
m CHF

m CHF

Interest on debt

17.7

15.5

Securities and exchange losses and other financial expense

1.7

5.1

Total financial expenses

19.4

20.6

The average interest rate on interest-bearing debt (bond issues, long- and short-term bankloans, mortgages and discounted bills) in 1999 was 4.2% (1998: 3.6%).
Earnings per share
9

Earnings per share are calculated from net profit for the year divided by the weighted
average number of shares outstanding.
1999

Net profit for the year (m CHF )

1998

16.1

76.7

1,473,416

1,473,416

10.93

52.06

1999

1998

Net profit for the year (m CHF )

16.1

76.7

Specific provisions (m CHF )70.0

Weighted average number of shares issued and outstanding
Earnings per share (net profit) (CHF)

Earnings per share, adjusted for specific provisions

Net profit for the year before specific provisions (m CHF )

86.1

76.7

Earnings per share (net profit for the year before specific provisions) (CHF)

58.44

52.06

At 31.12.1999 and at 31.12.1998 there were no financial instruments outstanding that could
have caused a dilution of the values shown above. The Board of Directors had also taken nodecision to increase the number of shares outstanding.

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Long-term assets
10

The tangible assets also include leased assets with a net book value of CHF 5.5 million(1998: CHF 6.3 million).
Tangible assets

Cost
At 31.12.1997, grossLand andbuildings
m CHF

Machinery& equipment
m CHF

Other tangible
assetsm CHF

Assets under
Total
construction tangible assets
m CHF
m CHF

514.9

788.0

132.5

82.8

1,518.2

Additions

3.3

26.5

11.5

115.4

156.7

Reductions through divestments

–6.2

–3.5

–0.7

–0.3

–10.7

Disposals

–11.9

–15.2

–9.0

–0.4

–36.5

Transfers

28.2

47.3

10.1

–85.6

0.0

Translation differences

0.7

–7.0

–0.2

–0.3

–6.8

At 31.12.1998, gross

529.0

836.1

144.2

111.6

1,620.9

Additions

9.3

22.3

10.6

82.1

124.3

Disposals

–5.8

–23.5

–11.3

–0.6

–41.2

Transfers

30.2

54.9

17.7

–112.1–9.3

Translation differences

15.2

31.4

3.9

1.5

52.0

At 31.12.1999, gross

577.9

921.2

165.1

82.5

1,746.7

Accumulated depreciation

Land andbuildings
m CHF

Machinery Other tangible& equipment
assetsm CHF
m CHF

Assets under
Total
construction tangible assets
m CHF
m CHF

At 31.12.1997, gross

149.2

516.9

109.4

0.4

775.9

Depreciation

18.0

61.5

16.5

0.1

96.1

Reductions through divestments

–0.9

–1.6

–0.5

–3.0

Disposals

–6.7

–13.4

–7.3

–27.4

Translation differences

0.2

–2.3

0.1

At 31.12.1998, gross

159.8

561.1

118.2

0.5

839.6

Depreciation

16.9

64.2

16.2

3.4

100.7

Disposals

–4.7

–21.0

–9.6

Transfers

12.0

–8.1

–5.6

Translation differences

4.8

22.7

3.0

At 31.12.1999, gross

188.8

618.9

122.2

3.7

933.6

Total tangible assets at 31.12.1998, net

369.2

275.0

26.0

111.1

781.3

Total tangible assets at 31.12.1999, net

389.1

302.3

42.9

78.8

813.1

–2.0

–35.3
–0.2

The fire insurance value of buildings, machinery and factory equipment of CHF 2,427 million(1998: CHF 2,225 million) covers the replacement cost. The business interruption risk arisingfrom fire and the production and product liability risks are covered by a group-wide policy.
Maintenance and repair costs amounted to CHF 28.4 million (1998: CHF 29.2 million). The
depreciation expense is included in ‘Cost of goods sold’, ‘Development costs’, ‘Marketing anddistribution costs’ and ‘Administrative costs’.
The Group’s tangible assets consist almost exclusively of operational assets.

10 Forbo Financial Report 1999

–1.9
30.5

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 11

Intangible assets and investments in associates
Cost

Intangible assets

Goodwillm CHF

At 31.12.1997, gross

19.9

Additions

2.1

Trademarks/ Investments inpatents
associates
m CHF
m CHF

29.0

2.5

Total
m CHF

51.4
2.1

Reductions through divestments

0.0

Disposals–9.0Translation differences–1.1

At 31.12.1998, gross

11.9

Additions

1.2

1.2

Reductions through divestments

–0.2

–0.2

Transfers

8.6

8.6

Translation differences

3.1

At 31.12.1999, gross

24.6

Accumulated amortization

–9.0
–1.1
29.0

2.5

43.4

3.1
2.5

56.1

Trademarks/ Investments inpatents
associates
m CHF
m CHF

Total
m CHF

29.0

Intangible assets

Goodwillm CHF

At 31.12.1997, gross

12.8

10.8

Amortization

2.3

2.9

Disposals

–7.7

–7.7

Translation differences

–0.5

–0.5

At 31.12.1998, gross

6.9

13.7

Amortization

1.9

2.9

Transfers

3.1

3.1

Translation differences

1.1

1.1

At 31.12.1999, gross

13.0

16.6

0.0

29.6

5.0

15.3

2.5

22.8

11.6

12.4

2.5

26.5

1999

1998

0.0

23.6
5.2

0.0

20.6
4.8

Total intangible assets and investments
in associates at 31.12.1998, net
Total intangible assets and investments
in associates at 31.12.1999, net

Inventories
11

m CHF

m CHF

Raw materials and supplies

65.2

56.8

Work in progress

99.6

87.0

Finished goods

159.8

166.4

Provisions for product risks

–18.4

–18.8

Total inventories

306.2

291.4

Trade receivables

1999

1998

m CHF

m CHF

Accounts receivable

264.9

232.0

Notes receivable

37.0

34.2

12

Provisions for doubtful receivables

–19.8

–19.1

Total trade receivables

282.1

247.1

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Marketable securities
13

The market value of the Group’s portfolio of marketable securities was CHF 82.5 million(1998: CHF 83.4 million). Book value: CHF 73.6 million (1998: CHF 71.6 million).
1999

1998

Breakdown of marketable securities by type
m CHF

m CHF

Equities1)

50.9

47.4

Derivatives on equities2)

0.0

0.0

31.6

36.0

82.5

83.4

1999

1998

Bonds

3)

Total marketable securities (market values)
1) Shares, equity fund units, etc.
2) Options, warrants, etc.
3) Incl. bonds with warrants and convertible bonds

Breakdown of bonds by residual maturity
m CHF

m CHF

0 –1 year

4.4

4.6

over 1 year

27.2

31.4

Total bonds

31.6

36.0

Share capital
14

The share capital of Forbo Holding SA amounts to CHF 75,677,500 and is divided into
1,513,550 registered shares with a nominal value of CHF 50 each. Of these, 40,134 registeredshares without voting and dividend rights are at the disposition of the Board of Directors.
Accordingly, 1,473,416 registered shares carried voting and dividend rights in the 1999
financial year.
Own shares

15

Own shares consist of registered shares without voting and dividend rights(see ‘Share capital’ above).
Issued and outstanding shares held by group companies are accounted for under‘Marketable securities’.
Employee benefit obligations

16

The Group has established several pension plans on the basis of the specific requirements ofthe countries in which the group has such plans. The Group has both defined contribution
and defined benefit plans.
The expense for contributions to defined contribution plans, which is included in personnel
expenses, amounted to CHF 8.5 million (1998: CHF 8.3 million).
The pension expense related to the major defined benefit plans consisted of the following in1999 (amounts for 1998 have not been calculated):
1999

m CHF

Current service cost

11.3

Interest on obligation

24.6

Expected return on plan assets–29.4

Net periodic pension cost

6.5

Increase of unrecognized assets (limit under IAS 19 para. 58b)

7.6

Translation differences on unrecognized assets–3.3

Total pension expenses as included in personnel expenses

10.8

The actual return on plan assets amounted to CHF 49.5 million in 1999.

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The amounts recognized in the balance sheet are as follows:
31.12.99

1.1.99

m CHF

m CHF

Present value of wholly or partly funded obligations

466.8

412.3

Fair value of plan assets–538.1–454.5

Balance

–71.3

–42.2

Present value of unfunded obligations

42.4

36.6

Unrecognized actuarial gains, net

21.9

0.0

Unrecognized assets (limit under IAS 19 para. 58b)

62.8

55.2

Net liability in the balance sheet

55.8

49.6

The employee benefit obligations of CHF 91.8 million (1998: CHF 67.1 million) also include
provisions for early retirement and other benefits of about CHF 36 million.
Movements in the net liability recognized in the balance sheet are as follows:
Net liability at 1.1.1999
m CHF

as previously reported

33.1

effect of adopting IAS 19 (revised)

16.5

as restated

49.6

Total pension expenses as included in personnel expenses

10.8

Employer contributions–8.7

Translation differences

4.1

Net liability at 31.12.1999

55.8

The principal actuarial assumptions used for accounting purposes were
(expressed as weighted averages):%

Discount rate

5.2

Expected return on plan assets

6.3

Future salary increases

3.1

Other provisions
17

Other provisions serve as a precautionary measure to cover identifiable business risks
and also comprise the newly created specific provisions of CHF 70 million (after tax) incontext with the strategic renewal program.

Provisions to cover identifiable risks

1999

1998

m CHF

m CHF

45.5

48.5

Specific provisions 1999

70.0

Total other provisions

115.5

13 Forbo Financial Report 1999

48.5

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 14

Bond issues

1999

1998

m CHF

m CHF

18

3% Bond with warrants 1994–2000

75.0

75.0

4% Bond 1996–2001

100.0

100.0

Total bonds

175.0

175.0

3% Bond with warrants 1994– 2000

The exercise period for the warrants was until 8.8.1997. A total of 8,080 warrants
were exercised in exchange for 1,616 Forbo Holding SA registered shares at a price of
CHF 640 each. The bond (due on 8.8.2000) has no early redemption clause. The
Group intends to refinance this bond on a long-term basis.
The market value of the bond was CHF 75.2 million at 31.12.1999 (1998: CHF 75.5 million).
4% Bond 1996 –2001

The bond’s duration is from 11.6.1996 to 11.6.2001. There is no early redemption clause.
The market value of the issue was CHF 100.8 million at 31.12.1999 (1998: CHF 103.5
million).
Long-term bank loans and mortgages

1999

1998

19
m CHF

m CHF

Unsecured bank loans

95.0

76.5

Secured bank loans

35.9

32.0

Lease obligations

5.5

6.3

Sub-total

136.4

114.8

Less current portion

–64.1

–38.1

Total*

72.3

76.7*of which loans without fixed maturity date secured by mortgage

35.9

32.0

1999

1998

m CHF

m CHF

Maturities of long-term bank loans and mortgages
2000

0.0

0.0

2001

14.3

4.2

2002

1.5

23.3

2003

1.1

8.4

2004

6.1

8.8

Later

13.4

0.0

Loans without fixed maturity date but secured by mortgage

35.9

32.0

Total

72.3

76.7

Trade payables

1999

1998

m CHF

m CHF

Accounts payable

124.6

100.7

Notes payable

15.0

19.8

Total trade payables

139.6

120.5

Secured bank loans are covered by property of the Group (book value CHF 57.5 million).
For interest charges, see ‘Financial expenses’ (8).

20

14 Forbo Financial Report 1999

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Accrued expenses

1999

1998

21
m CHF

m CHF

Current taxes

18.3

14.5

Accrued personnel expenses

25.9

22.7

Other accruals

60.8

56.2

Total accrued expenses

105.0

93.4

1999

1998

Other accruals comprise accrued volume rebates, commissions, premiums, interest andprovisions for warranty liabilities and similar items.
Short-term bank loans and overdrafts
22

Bank loans and overdrafts

m CHF

m CHF

115.2

115.5

plus current portion of long-term bank loans

64.1

38.1

Total short-term bank loans and overdrafts

179.3

153.6

1999

1998

m CHF

m CHF

6.0

4.4

For interest charges, see ‘Financial expenses’ (8)Commitments and contingent liabilities
23

Commitments and contingent liabilities

Contingent liabilities relate to sureties and guarantees in favor of third parties.
The effects on the Group’s earnings of changes in legal, fiscal and political conditions are notpredictable and therefore not quantifiable.
There are no significant lawsuits pending.
Income taxes

1999

1998

m CHF

m CHF

33.7

29.4

24

Current taxes
Deferred taxes

–2.4

–1.7

Total income taxes

31.3

27.7

Current taxes represent amounts paid or payable to tax authorities based on the current
year’s income as determined by the rules and regulations applicable in each country.
Forbo Holding SA is resident in Switzerland, but the Group carries out most of its commercial activities in countries with differing tax regulations and tax rates. A significant portionof the income before taxes of the Group is generated outside Switzerland. Thus the effective
tax rate and tax provisions change each year, according to the geographical distribution of
the taxable income.
The income taxes for 1999 of CHF 31.3 million on the Group’s pre-tax profit before specificprovisions of CHF 117.4 million differs from the theoretical amount that would arise using
the maximum tax rate of Eglisau/Zurich, Switzerland of 28% as follows:

15 Forbo Financial Report 1999

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1999

1998

m CHF

m CHF

Tax at the applicable tax rate of 28% for Eglisau/Zurich, Switzerland

32.9

29.2

Effect of different tax rates in other countries

4.6

6.3

Effect of uncapitalized tax credits from tax loss carry forwards

–1.7

–7.5

Other

–4.5

–0.3

Total income taxes (effective)

31.3

27.7

The tax loss carry forwards of the Group amount to about CHF 190 million. Tax loss carryforwards totalling CHF 37 million will expire within the next seven years if they are not used.
The remaining amount of CHF 153 million has no expiry date.
Deferred income tax assets and liabilities are offset when they relate to the same fiscal
authority. The following amounts are shown in the balance sheet:
1999

1998

m CHF

m CHF

Deferred tax assets

27.3

24.8

Deferred tax liabilities

–4.0

–5.2

Deferred tax assets, net

23.3

19.6

Deferred tax assets and liabilities and deferred tax charges and credits are attributable tothe following items:
Deferred tax assets
At 31.12.1998

Inventories
m CHF

Tangible
assetsm CHF

Provisions
m CHF

Tax losscarry forwards
m CHF

Other
m CHF

Total
m CHF

11.1

0.0

8.0

13.7

1.2

34.0
5.1

Credited (+), charged (–)
to the income statement

0.4

0.0

–0.2

5.5

–0.6

Translation differences

0.1

0.0

0.2

0.9

0.0

1.2

At 31.12.1999

11.6

0.0

8.0

20.1

0.6

40.3

Inventories
m CHF

Tangible
assetsm CHF

Provisions
m CHF

Tax losscarry forwards
m CHF

Other
m CHF

Total
m CHF

–5.7

–6.7

–0.9

0.0

–1.1

–14.4
–2.7

Deferred tax liabilities
At 31.12.1998
Credited (+), charged (–)
to the income statement

–0.1

–3.4

–0.2

0.0

1.0

Translation differences

0.0

0.0

0.1

0.0

0.0

0.1

At 31.12.1999

–5.8

–10.1

–1.0

0.0

–0.1

–17.0

Deferred tax assets at 31.12.1998, net

5.4

–6.7

7.1

13.7

0.1

19.6

Deferred tax assets at 31.12.1999, net

5.8

–10.1

7.0

20.1

0.5

23.3

The deferred tax assets of about CHF 23 million resulting from the specific provisions for
restructuring measures and valuation adjustments have been offset directly against theprovision.

16 Forbo Financial Report 1999

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Statement of added value

1999

1998

25
m CHF

m CHF

Gross added value

699.7

674.8

Depreciation and amortization expense–105.5–101.3

Net added value

594.2

573.5

Employees

470.9

461.3

Public sector

31.3

27.7

Creditors

5.9

7.8

Investors

32.4

27.8

Specific provisions

70.0

0.0

Retained in the Group

–16.3

48.9

Total

594.2

573.5

Net added value per employee (CHF)

87,34582,926

Distribution of added value

Acquisitions/divestments
26

There were no acquisitions and divestments in the reporting year. The net decrease in assets
through divestments was as follows:
1999

1998

m CHF

m CHF

Current assets (excluding cash and marketable securities)

0.0

–8.1

Tangible assets

0.0

–7.7

Liabilities and provisions

0.0

3.6

Total

0.0

–12.2

17 Forbo Financial Report 1999

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Segment information
27

Segment results 1998*
Flooring
m CHF

Industry
Specialties
m CHF

Group
consolidation
m CHF

Total
Group
m CHF

Gross sales

1,066.0

766.2

1,832.2

Net sales

977.2

737.3

1,714.5

Operating profit before depreciation,interest and taxes (EBDIT)

155.7

73.7

–15.9

Operating profit before interest and taxes (EBIT)

97.1

35.7

–20.6

213.5
112.2

Operating assets

745.3

630.0

36.7

1,412.0

Number of employees

3,371

3,376

34

6,781

Flooring
m CHF

Industry
Specialties
m CHF

Group
consolidation
m CHF

Total
Group
m CHF

Gross sales

1,088.3

786.1

1,874.4

Net sales

994.4

760.1

1,754.5**Formerly under Flooring reported values for wallcoverings

have been reclassified and transferred to Industry Specialties
EBDIT and EBIT include the non-operating net expenses

Segment results 1999

Operating profit before depreciation,interest and taxes (EBDIT)*

163.6

85.2

–20.3

228.5

Operating profit before interest and taxes (EBIT)*

103.5

44.5

–25.0

123.0

Operating assets

777.3

685.2

41.0

1,503.5

Number of employees

3,334

3,462

33

6,829

*Before specific provisions of CHF 70 million

Further segment information is presented in the general part of the Annual Report.
Changes in gross sales by businesses
28

Gross sales 1998

Total change
on previous
year
m CHF

Of which due
to exchange
rate changes
m CHF

Due to change
in scope of
consolidationm CHF

Due to volume
and pricechangesm CHF

Flooring*–39.5

Industry Specialties–156.3

–17.0

–5.3

–17.2

–12.8

–179.8

36.3

Total

–195.8–29.8–185.1

19.1

Total change
on previous
year
m CHF

Of which due
to exchange
rate changes
m CHF

Due to change
in scope of
consolidationm CHF

Due to volume
and pricechangesm CHF*also contains wallcoverings

Gross sales 1999

Flooring

22.3

–3.7

–2.6

28.6

Industry Specialties

19.9

13.9

–15.0

21.0

Total

42.2

10.2

–17.6

49.6

The change that took place in 1999 includes the impact of the sale of Forbo Parquet SA in
1998 as well as the impact of the restructuring of the wallcoverings business at Forbo
Lancaster Ltd.

18 Forbo Financial Report 1999

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Translation of foreign currencies
29
1999
1998
Income statement (average rates for the year)

Currency

CHF

CHF

1999

Change%1998
Balance sheet (year-end rates)

CHF

CHF

Change%1.60601.60360Euro Countries

EUR 1

1.6011

Germany

DEM 100

81.86

82.19

0

82.11

82.52

0

Netherlands

NLG 100

72.66

72.96

0

72.87

73.23

0

FranceFRF 100

24.42

24.49

0

24.48

24.60

0

Austria

ATS 100

11.63

11.70

–1

11.67

11.73

0

Sweden

SEK 100

18.18

18.21

0

18.76

17.00

10

United Kingdom

GBP 1

2.49

2.35

6

2.58

2.28

13

USA

USD 1

1.55

1.39

12

1.59

1.38

15

Canada

CAD 1

1.01

0.98

3

1.10

0.90

22

Japan

JPY

1.33

1.10

21

1.56

1.21

29

100

Financial risk management30

In its international operations and financial activities the Forbo Group is exposed to various
types of financial risk. These are managed by means of an appropriate financial policy.
The Group’s central treasury department monitors group-wide risk exposures and undertakes hedging transactions as required.
Details of the Group’s management of interest rate, currency and credit risks are given
below.
Currency risk

Risks arising from short-term currency exposures created by purchases and sales of goods
and services and from investment of cash in foreign currency positions (transaction risks)
are identified and selective hedging strategies are implemented in the light of an ongoingassessment of exchange rate movements.
These hedging transactions resulted in the following open positions at year-end:
1999
Gross value
hedged1)
m CHF

1998
Gross value
hedged1)
m CHF

31.12.99

31.12.98

Market valuem CHF

Market value
m CHF

Forward transactions

4.5

6.1

4.5

6.4

Options

0.1

1.4

0.0

0.0

1) Gross value hedged at year-end value

As a rule, the terms of these instruments are less than 12 months. Since exposures relate tovarying proportions of production and sales, in particular in the United Kingdom andScandinavia, a considerable number of the hedging transactions are conducted in GBP and
Scandinavian currencies.
Furthermore, the Group has in place an appropriate funding policy to take proper accountof the risks associated with the conversion of assets and liabilities denominated in foreign
currencies (translation risks). Translation differences arising from exchange rate fluctuations
are taken to equity (see ‘Accounting policies’, page 5).

19 Forbo Financial Report 1999

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Interest rate risk

The market values of interest-bearing assets and liabilities change whenever interest rates
move up or down. Forbo makes use of financial derivatives in order to hedge against risinginterest rates and to manage interest rate sensitivity.
These actions resulted in the following open positions at year-end:
1999
Gross value
hedgedm CHF

1998
Gross value
hedgedm CHF

31.12.1999
Unrealized
gain/loss
m CHF

31.12.1998
Unrealized
gain/loss
m CHF

Interest rate swaps1)

59.8

63.3

–0.7

–2.6

Options

0.0

0.0

0.0

0.0

2)

0.0

0.0

0.0

0.0

Futures

1) Present value of discounted future cash flows
2) Sales of futures; changes in value are continually entered in the income statement

Contract duration is generally less than five years. Given that much of the Group’s borrowing
is in CHF, the bulk of its hedging activity is in CHF interest rate instruments.
Credit risk

The Group uses only first-rate banks for depositing cash and securities and for effecting
transactions in financial derivatives. Their financial standing is assessed on the basis ofleading credit agency ratings.

20 Forbo Financial Report 1999

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Report of the Group Auditors

Report of the Group Auditors
to the General Meeting of
Forbo Holding SA, Eglisau

As auditors of the Group, we have audited the consolidated financial statements (income
statement, balance sheet, statement of changes in shareholders’ equity, statement ofcash flows and notes to the consolidated financial statements) on pages 2 to 20 of Forbo
Holding SA for the year ended 31 December 1999.
These consolidated financial statements are the responsibility of the board of directors.
Our responsibility is to express an opinion on these consolidated financial statements basedon our audit. We confirm that we meet the legal requirements concerning professional
qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the profession and with the International Standards on Auditing issued by the International Federation of Accountants (IFAC), which require that an audit be planned and performed to obtainreasonable assurance about whether the consolidated financial statements are free frommaterial misstatement. We have examined on a test basis evidence supporting the amounts
and disclosures in the consolidated financial statements. We have also assessed the accounting principles used, significant estimates made and the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, the results of operations and the cash flows in accordance with the International Accounting Standards (IAS), and comply with the law and the accounting provisions
as contained in the Listing Rules of the Swiss Exchange.
We recommend that the consolidated financial statements submitted to you be approved.
PricewaterhouseCoopers Ltd

L. Monn

S. Räbsamen

Zurich, 7 March 2000

21 Forbo Financial Report 1999

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Consolidated Income Statements 1995– 1999

1999

Gross sales

1998

1997

1996

1995

m CHF

m CHF

m CHF

m CHF

m CHF

1,874.4

1,832.2

2,028.0

1,918.8

1,901.4

Deductions from sales–119.9–117.7–123.0–118.0–115.0Net sales

1,754.5

1,714.5

1,905.01,800.8

1,786.4

Cost of goods sold

–1,125.1–1,092.3–1,249.1–1,176.0–1,180.8

Gross profit

629.4

622.2

655.9

624.8

605.6

Development costs

–30.2

–31.2

–34.6

–33.8

–32.2

Marketing and distribution costs–335.2–333.0–375.0–359.3–328.8Administrative costs–122.3–120.0–133.9–126.9–130.7

Other operating expenses

–18.7

–25.8

–16.1

–18.8

–22.4

Operating profit before specific provisions

123.0

112.2

96.3

86.0

91.5

Specific provisions–70.0–21.0*–30.0*

Operating profit after specific provisions

53.0

112.2

75.3

56.0

Financial income

13.8

12.8

15.5

30.5

16.6

Financial expenses

–19.4

–20.6

–22.1

–31.0

–27.3

Profit before taxes

47.4

104.4

68.7

55.5

80.8

Taxes

–31.3

–27.7

–27.6

–24.5

–25.2

Net profit for the year

16.1

76.7

41.1

31.0

55.6

*Presentation was adapted to IAS 1 (revised)*Divestment costs

22 Forbo Financial Report 1999

91.5

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 23

Consolidated Balance Sheets 1995– 1999

1999

1998

1997

1996

1995

Assets
m CHF

m CHF

m CHF

m CHF

m CHF

Long-term assets

866.9

828.9

770.1

794.4

730.3

Tangible assets

813.1

781.3

742.3

758.5

690.5

Intangible assets

24.0

20.3

25.3

28.1

31.5

2.5

7.8

8.3

Investments in associates

2.5

2.5

Deferred taxes

27.3

24.8

Current assets

860.5

751.4

847.9

938.4

784.9

Inventories

306.2

291.4

295.1

350.2

304.7

Trade receivables

282.1

247.1

259.3

280.5

262.4

Other receivables

31.1

33.4

35.8

33.3

20.1

Prepaid expenses and deferred charges

19.6

18.9

20.6

18.2

13.1

Marketable securities

73.6

71.6

97.3

73.2

83.5

Cash
Total assets

147.9

89.0

139.8

183.0

101.1

1,727.4

1,580.3

1,618.0

1,732.8

1,515.2

1999

1998

1997

1996

1995

Shareholders’ equity and liabilities
m CHF

m CHF

m CHF

m CHF

m CHF

Shareholders’ equity

794.8

798.3

761.1

765.4

684.8

Share capital

75.7

75.7

75.7

75.6

75.6

Own shares, nominal (issued, not outstanding)

–2.0

–2.0

–2.0

–2.3

–2.3

Reserves and retained earnings

721.1

724.6

687.4

692.1

611.5

Long-term liabilities

458.6

372.5

416.2

484.9

352.4

4.0

5.2

8.4

10.0

13.1
56.4

Deferred taxes
Employee benefit obligations

91.8

67.1

59.5

81.2

Other provisions

115.5

48.5

62.3

62.5

38.3

Bond issues

175.0

175.0

175.0

255.0

155.0

Long-term bank loans and mortgages

72.3

76.7

111.0

76.2

89.6

Current liabilities

474.0

409.5

440.7

482.5

478.0

Trade payables

139.6

120.5

119.8

161.4

158.1

Other payables

50.1

42.0

47.9

68.1

56.0

Accrued expenses

105.0

93.4

95.6

95.9

103.1

Bank loans and overdrafts
Total shareholders’ equity and liabilities

179.3

153.6

177.4

157.1

160.8

1,727.4

1,580.3

1,618.0

1,732.8

1,515.2

Presentation was adapted to IAS 1 (revised)

23 Forbo Financial Report 1999

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23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 25

Financial Statements of Forbo Holding SA

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 26

Income Statement of Forbo Holding SA

1999

1998

Commentary

CHF

CHF

from investments in and advances to group companies

152,013,174

45,367,704

from securities and short-term investments

2

8,479,609

7,953,359

Income from services and other sources3

IncomeIncomeTotal income

1,974,700

529,050

62,467,483

53,850,113

1999

1998

ExpensesCommentary

CHF

CHF

Administrative expenses

4

2,155,635

1,853,294

Financial expenses

5

4,000,000

4,000,000

Taxes

6

1,005,785

1,039,450

Valuation adjustments on investments and advances

7

21,771,311

13,921,118

Total expenses

28,932,731

20,813,862

Net profit for the year

33,534,752

33,036,251

See page 29 for commentary on the income statement

26 Forbo Financial Report 1999

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 27

Balance Sheet of Forbo Holding SA(before appropriation of available earnings)
31.12.1999

31.12.1998

AssetsCommentaryLong-term assets

CHF

CHF

462,505,175

472,752,881

Investments in group companies

8311,539,119

327,951,597

Advances to group companies

9150,966,056

144,801,284

Current assets

108,526,866

98,239,956

Other receivables from group companies

10

2,142,323

8,697,526

Other receivables from third parties

11

1,407,327

884,296

Prepaid expenses and deferred charges

12715,829

828,745

Marketable securities

13

67,282,167

55,662,724

Cash

14

36,979,220

32,166,665

571,032,041

570,992,837

31.12.1999

31.12.1998

Total assets

Shareholders’ equity and liabilities
Commentary

Shareholders’ equity
Share capital

15

CHF

CHF

439,146,392

438,026,793

75,677,500

75,677,500

Statutory reserves
General reserves

15,600,000

15,600,000

16

7,794,460

12,349,152

17

279,571,456

275,016,765

Profit carried forward

26,968,224

26,347,125

Net profit for the year

33,534,752

33,036,251

131,885,649

132,966,044

Reserve for own shares
Other reserves
Available earnings

Liabilities
Long-term provisions

18

28,000,000

28,000,000

Bond issues

19

100,000,000

100,000,000

69,86967,920

Other current liabilities to third parties
Accrued expenses

20

Total shareholders’ equity and liabilities
See pages 29 and 30 for commentary on the balance sheet

27 Forbo Financial Report 1999

3,815,780

4,898,124

571,032,041

570,992,837

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 28

Notes to the Financial Statementsof Forbo Holding SA
Contingent liabilities

Guarantees and letters of support issued to third parties in favour of group companies
amount to CHF 146.8 million (1998: CHF 179.3 million), of which CHF 96.7 million(1998: CHF 105.9 million) are utilized.
Bonds
CHF 100.0 million bond issue 1996–2001 at 4% coupon; due for redemption on 11.6.2001.
Investments in group companies

See list of group companies on pages 34–36.
Own shares
Value CHF

No. of registeredshares Nom.
value CHF 50

Total at 1.1.99

12,349,152

58,726

Change–4,554,692–8,698

7,794,460

50,028

Total at 31.12.99**Including 40,134 registered shares without voting and dividend rights

valued at a nominal value of CHF 2,006,700

Conditional capital increase
CHF 8,500,000 of conditional capital reserved for the exercise of shareholder options andwarrants in connection with a with-warrants bond issue was created by resolution of
the Annual General Meeting of Shareholders held on April 27, 1994. Following the exercise
of options and warrants in 1994, 1995 and 1997 the conditional capital at 31.12.1999
was unchanged on the previous year-end total at CHF 8,322,500 (see commentary 15 ‘Sharecapital’).
No further information is required by law to satisfy Art. 663b of the Swiss Code ofObligations.

28 Forbo Financial Report 1999

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 29

Commentary on the Income Statement
Income from investments in and advances to group companies
1

Income from investments in and advances to group companies amounted to CHF 52.0 million
and consisted exclusively of interest and dividend income.
Income from securities and short-term investments

2

Income from securities and short-term investments amounted to CHF 8.5 million, an
increase of CHF 0.5 million on the previous year. This increase is attributable to slightly
higher securities holdings and money market positions.
Income from services and other sources3

Income from services and other sources was CHF 2.0 million, which is CHF 1.5 million
above the previous year. This increase is due to higher income from other sources.
Administrative expenses

45Administrative expenses totalled CHF 2.2 million, CHF 0.3 million more than in the previous
year.
Financial expenses
The amount of CHF 4.0 million shown under ‘Financial expenses’ relates to the 4% bondissue of CHF 100.0 million.
Taxes

6

Taxes totalled CHF 1.0 million and are on previous year’s level.
Valuation adjustments on investments and advances

7

Valuation adjustments on investments in and advances to group companies totalled
CHF 21.8 million (previous year: CHF 13.9 million). This item reflects for the most partthe business development of individual group companies.

Commentary on the Balance Sheet
Investments in group companies
8

The net decrease on the previous year shown under ‘Investments in group companies’
was CHF 16.4 million and includes a capital increase at Forbo Beteiligungen GmbH as well
as appropriate valuation adjustments for some group companies.
Advances to group companies

9

Advances to group companies are denominated in Swiss francs and foreign currencies.
There was a CHF 6.2 million increase over the previous year’s figure.
Other receivables from group companies

10

Other receivables from group companies comprise interest due and other short-term receivables. The CHF 6.6 million decrease on the previous year was mainly due to lower interest
receivables.
Other receivables from third parties

11

Other receivables from third parties principally consist of withholding taxes receivable.

29 Forbo Financial Report 1999

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 30

Prepaid expenses and deferred charges
12This item covers the usual accrued and deferred items at year-end.

13

Marketable securities
At CHF 67.3 million marketable securities were CHF 11.6 million above the previous year.

This item is largely made up of marketable bonds and shares, which are valued at the lowerof cost or market value.
Cash
14

The cash position increased by CHF 4.8 million. It is largely made up of deposits in Swiss
francs.
Share capital

15

16

The Company’s share capital amounts to CHF 75,677,500 and is divided into 1,513,550
registered shares with a nominal value of CHF 50 each. Of these, 40,134 registered shares
without voting and dividend rights are at the disposition of the Board of Directors.
Accordingly, 1,473,416 registered shares carried voting and dividend rights in the 1999
financial year. The shares are listed on the Swiss Stock Exchange. The conditional sharecapital at 31.12.1999 amounted to CHF 8,322,500 (see notes to the financial statements).
Reserve for own shares
The CHF 7.8 million included under ‘Reserve for own shares’ refer to shares of theCompany held by group companies valued at cost.
Other reserves
17

18

Other reserves showed a year-on-year increase of CHF 4.6 million, attributable to a transferfrom ‘Reserve for own shares’.
Long-term provisions
The CHF 28.0 million stated under this heading serve as a precautionary provision

against general risks.
Bond issues
19

The 4% bond issue of CHF 100.0 million has a maturity of 5 years and is due for redemption on 11.6.2001.
Accrued expenses

20This item covers the usual accrued expenses and is mainly composed of accumulated
interest payable on the bond issue.

30 Forbo Financial Report 1999

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 31

Proposal for Appropriation of Available Earnings
Forbo Holding SA
The Board of Directors proposes to the Annual General Meeting of Shareholders that theavailable earnings, consisting of
1999

1998

CHF

CHF

Net profit for the year

33,534,752

33,036,251

Profit carried forward from the previous year

26,968,224

26,347,125

Total available earnings

60,502,976

59,383,376

1999

1998

be appropriated as follows:
Dividends on outstanding shares

CHF

CHF

1,473,416 registered shares at CHF 22.– (1998: CHF 22.–)

32,415,152

32,415,152

To be carried forward to the following year

28,087,824

26,968,224

Total

60,502,976

59,383,376

1999

1998

Upon approval of this proposal the dividend payment per sharefor the 1999 business year will be as follows:
Gross dividend

CHF

CHF

22.00

22.00

less 35% federal withholding tax

7.70

7.70

Net dividend payment

14.30

14.30

31 Forbo Financial Report 1999

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 32

Report of the Statutory Auditors

Report of the Statutory Auditors
to the General Meeting of
Forbo Holding SA, Eglisau

As statutory auditors, we have audited the accounting records and the financial statements(income statement, balance sheet and notes) on pages 26 to 28 of Forbo Holding SA for theyear ended 31 December 1999.
These financial statements are the responsibility of the board of directors. Our responsibility
is to express an opinion on these financial statements based on our audit. We confirm that
we meet the legal requirements concerning professional qualifications and independence.
Our audit was conducted in accordance with auditing standards promulgated by the profession in Switzerland, which require that an audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in
the financial statements. We have also assessed the accounting principles used, significant
estimates made and the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the accounting records, the financial statements and the proposed appropriation of available earnings comply with the law and the company’s articles of incorporation.
We recommend that the financial statements submitted to you be approved.
PricewaterhouseCoopers Ltd

L. Monn

S. Räbsamen

Zurich, 7 March 2000

32 Forbo Financial Report 1999

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 33

Additional Information

Company

Place

General management

Holding/Services

Flooring

Group Companies(January 2000)

Industry Specialties

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 34

Share capital

Australia
Forbo Floorcoverings PTY. Ltd.

Chester Hill N.S.W.

Ross Angus

AUD

1 400 000

Siegling Australia PTY. Ltd.

Auburn N.S.W.

Bernard Coates

D

AUD

1 000 000SS

Austria
Forbo Contel Handelsges.m.b.H.

ViennaFranz Kahr

ATS

1 000 000

Forbo Industrieprodukte Ges.m.b.H.

Steyr/St. Ulrich

Walter A. SchmidATS

1 000 000

Forbo Teppich Ges.m.b.H.

ViennaF. Horinek/P. WolfsgruberATS

40 685 000

Siegling Austria Ges.m.b.H.

ViennaErich Knoll

ATS

4 500 000

Forbo Decor S.A.

Braine-L’Alleud

Geneviève Moreels

BEF

70 000 000

Forbo Krommenie S.A.

Brussels

Danny De Bondt (ai)BEF

10 000 000

S

Forbo Tapijt N.V.

Antwerp

Wil A. S. Staffhorst

BEF

1 250 000

S

Itapevi-SP

Raul E. A. Gollmann

BRL

306 000

D

S
S
S
S

BelgiumS

BrazilSiegling Brasil Ltda.

PN

MS

CanadaForbo Resilients Inc.

TorontoBruce W. Heazel

CAD

500 000

Siegling Canada Ltd.

Mississauga

Rick Zingel

CAD

501 411

Brno

Gijsbertus A. Zoons

CZK

500 000S
S

Czech Republic
Forbo s.r.o.

H

Denmark
Forbo Forshaga A/S

Glostrup

Jens-Christian Holm Iversen

DKK

500 000

Siegling Danmark A/S

BrøndbyIb Petersen

DKK

1 000 000

HelsinkiJörgen Michelsson

FIM

200 000

Forbo Helmitin SA

Surbourg

Pierre Lux

FRF

20 000 000

MS

Forbo Murs SA

Marne-la-ValléeHans Peter Zimmermann

FRF

10 000 000

S

Forbo Participations SA

Surbourg

Francis Bischwiller

FRF

75 460 000

Forbo Sarlino SA

Reims

Alain Réquillart

FRF

40 000 000

MS

Forbo Tapis S.à.r.l.

Reims

Frank Vermeiren

FRF

1 000 000S

CIT Systems SA

Lomme

Marc Douez

FRF

2 400 000

S

Siegling France SA

Lomme

Marc Douez

FRF

5 250 000

S

Forbo Beteiligungen GmbH

Waldshut-Tiengen

Gerold A. Zenger

DEM

30 000 000

Forbo Erfurt GmbH

ErfurtDietmar Wiegand

DEM

4 000 000SMS

Finland
Forbo Forshaga Oy AB

SFranceD

H

Germany
D

H
MS

Forbo Glawo GmbH

Wermelskirchen

Manfred Kirchherr

DEM

3 000 000

Forbo Helmitin GmbH

Pirmasens

Karl Nohr

DEM

10 000 000

Forbo Novilon GmbH

Frankfurt/Main

Hans-Heinrich Kuhn

DEM

2 000 000

Forbo Uli-Chemie GmbH

Schenklengsfeld

Gerhard Groesch

DEM

200 000

Forbo Werke GmbH

Paderborn

Dr. Benjamin J. Fuchs

DEM

6 000 000

MS

MS
MS
S
H

Design-Tuft DT GmbH

Bad Hersfeld

Dr. Benjamin J. Fuchs

DEM

250 000

MS

Nairn Bodenbelag GmbH

Frankfurt/Main

Margit Bräutigam

DEM

100 000

S

Siegling GmbH

HanoverDr. Hans-Bernd Pillkahn

DEM

20 000 000

N Not included in the 1999
consolidation
MS Manufacturing and Sales
S Sales
H Holding/Services

D Direct participationsof Forbo Holding SA
P Participations which are
not held at 100%

34 Forbo Financial Report 1999

MS

Company

Place

General management

Share capital

Budapest

Franz Horinek

HUF

5 000 000S

DublinDerek F. Byrne

IEP

100 000S

S

Holding/Services

Industry Specialties

Flooring

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 35

Hungary
Forbo Padloburkolatok Kft.
Ireland
Forbo Ireland Ltd.
Italy
Forbo Resilienti S.r.l.

Milan

Dr. Pierluigi Pacini

ITL

99 000 000

Siegling Italia S.p.a.

Paderno Dugnano

Ezio Tommasi

ITL

200 000 000

S

Yokohama

Kazuya Togashi

JPY

330 000 000

MS

St. Helier

Marc Ait-Hocine

GBP

25 000Tlalnepantla

Hans Joerg Stege

MXN

17 974 664

Forbo Bonaparte B.V.

GoirleDrs. Hans A. M. van den Berg

NLG

1 000 000

Forbo Genderen B.V.

GenderenToon A. T. Burghouts

NLG

60 000Forbo Krommenie B.V.

Krommenie

Willem I. Verzijl

NLG

25 000 000

Japan
Siegling (Japan) Ltd.
Jersey, C.I.
Forbo Invest Ltd.

D

H

MexicoSiegling Mexico S.A. de C.V.

MS

Netherlands

D

S
S
MS

Forbo NL Holding B.V.

Soest

Maarten Waasdorp

NLG

30 000 000

Forbo Novilon produktiebedrijven bv

Coevorden

Drs. Cornelis van Oostenrijk

NLG

8 000 000

Forbo Parade Tapijt B.V.

Soest

Dick B. Kraima

NLG

1 000 000

S

Forbo Tapijt B.V.

GoirleAnton H. W. Janus

NLG

8 000 000MS

B.V. Tapijtveredelingsindustrie

GoirleBastiaan van der Hee

NLG

100 000

MS

Corepro B.V.

Coevorden

Maarten Waasdorp

NLG

40 000MS

HMS

Eurocol B.V.

Wormerveer

Ruud A. Kuyper

NLG

1 000 000

Nairn Floors Benelux B.V.

Coevorden

Jules Bries

NLG

500 000

Siegling Nederland B.V.

Spankeren-Dieren

Egbert J. van Heerikhuizen

NLG

250 000

VettreDag Ekner

NOK

1 000 000

Shenyang

Rolf Fischer

CNY

49 780 000

MS

Ruud A. Kuyper

PLZ

100 000

S

Henrique M. Santos Jr.

PTE

15 000 000

MS
SS

NorwayForbo Forshaga A/S

DS

People’s Republic of China
Forbo Siegling (Shenyang)
Belting Co. Ltd.
PolandForbo Techniki Budowlane Polska Sp. z o. o. Warszawa
Portugal
Forbo Pergol Revestimentos S.A.
N Not included in the 1999
consolidation
MS Manufacturing and Sales
S Sales
H Holding/Services

Porto
D Direct participationsof Forbo Holding SA
P Participations which are
not held at 100%

35 Forbo Financial Report 1999

S

Company

Place

General management

Share capital

SingaporeFrank Klohr

SGD

500 000

10 000 000

Holding/Services

Industry Specialties

Flooring

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite 36

Singapore
Forbo Siegling Singapore Pte Ltd.

S

Spain
Forbo Pavimentos S.A.

Barcelona

Agustin Matamoros

ESP

Siegling Iberica S.A.

Montcada i Reixac

Gottfried Pfaffeneder

ESP 255 000 000

Forbo Forshaga AB

Gothenburg

Lars Ivar Norén

SEK

50 000 000MS

GD-Golvdepån i Sverige AB

JönköpingPeter Körner

SEK

700 000

S

Siegling Svenska ABKållered

Roger Olsson

SEK

1 000 000

S

Forbo CTU SA

Schönenwerd

Peter Haubner

D

CHF

10 000 000

MS

Forbo Finanz SA

Eglisau

Gerold A. Zenger

D

CHF

5 000 000

Forbo Giubiasco SA

GiubiascoFrank P. Gross

D

CHF

10 000 000

CHF

1 700 000CHF

100 000

CHF

100 000

MS
MS

S
S

SwedenD

Switzerland

Forbo Immob SA

EglisauAndreas P. Lerch

Forbo International SA

EglisauWerner Kummer

Forbo Repoxit SA

Winterthur

Jürg D. Wettstein

Forbo Stamoid SA

EglisauPatrick M. Lindt

D

CHF

4 000 000

Forbo Stamtex SA

WallbachPeter J. Bachmann

DCHF

1 000 000

Forbo Teppichwerke SA

EnnendaDr. Benjamin J. Fuchs

D

CHF

15 000 000

Immobilien Emmenau SA

Hasle-Rüegsau

Andreas P. Lerch

CHF

1 000 000

Mesotex SA

LachenRonald J.C. de Heer

CHF

100 000

Siegling (Schweiz) SA

WallbachPeter Pauli

CHF

500 000

Swifloor SA

GiubiascoFrank P. Gross

CHF

50 000

D

D

H
MS
H
H

S
MS
H
S
MS
S

United Kingdom
Forbo CP Ltd.

Cramlington

Martin G. Kellaway

GBP

10 000 000

Forbo Nairn Ltd.

Kirkcaldy

R. Pemberton/P. M. Gunn

GBP

8 000 000

GBP

22 500 000

GBP

160 000

Forbo UK Ltd.

Cramlington

Shaun Hastings

Novilon Ltd.

WatfordDennis Prior

D

Forbo America Inc.

Wilmington, DE

Eugene Chace

USD

20 000 000

Forbo CP Inc.

Swedesboro, NJ

Eugene Chace

USD

3 755 000

Forbo Industries Inc.

Hazleton, PA

Dennis Darragh

USD

3 517 000

Siegling America Inc.

Huntersville, NC

Wayne Hoffman

USD

16 455 000

MS
MS
H
S

United States

N Not included in the 1999
consolidation
MS Manufacturing and Sales
S Sales
H Holding/Services

D Direct participationsof Forbo Holding SA
P Participations which are
not held at 100%

36 Forbo Financial Report 1999

D

H
S
S
MS

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite ug3

Addresses
Forbo Holding SA
CH-8193 Eglisau

Tel. +41 1 868 25 50
Fax +41 1 868 25 51
Forbo International SA
CH-8193 Eglisau

Tel. +41 1 868 25 25
Fax +41 1 868 25 26
www.forbo.com
Investor Relations

Gerold A. Zenger(E-Mail: gz@forbo.com)
Corporate Communications

Ursula Leonhard(E-Mail: ul@forbo.com)

23779_fb_Forbo_E 21.3.2000 14:10 Uhr Seite ug4