Annual Report 2010

Conzzeta at a glance Conzzeta is an internationally active Swiss holding company with broadly diversified businesses. Its activities are in the areas of machinery and systems ­engineering, foam materials, sporting goods, graphic coatings and real estate. In the interests of customers, employees and shareholders, Conzzeta develops its businesses with a long-term perspective.

Sheet Metal Processing Systems Bystronic: Solutions for the processing of sheet metal and other sheet materials

Glass Processing Systems Bystronic glass: Systems for processing flat glass

Automation Systems ixmation: Systems for automation of assembly and testing

Foam Materials FoamPartner: Foam products for industry and comfort applications

Sporting Goods Mammut Sports Group: Mountaineering, climbing and winter sports equipment

Graphic Coatings Schmid Rhyner: Print varnishes and laminating ­adhesives for the graphical industry

Conzzeta

www.conzzeta.ch

Annual Report 2010

Annual Report 2010

Real Estate Plazza Immobilien: Management of the Conzzeta Group’s portfolio of properties

Conzzeta at a glance Conzzeta is an internationally active Swiss holding company with broadly diversified businesses. Its activities are in the areas of machinery and systems ­engineering, foam materials, sporting goods, graphic coatings and real estate. In the interests of customers, employees and shareholders, Conzzeta develops its businesses with a long-term perspective.

Sheet Metal Processing Systems Bystronic: Solutions for the processing of sheet metal and other sheet materials

Glass Processing Systems Bystronic glass: Systems for processing flat glass

Automation Systems ixmation: Systems for automation of assembly and testing

Foam Materials FoamPartner: Foam products for industry and comfort applications

Sporting Goods Mammut Sports Group: Mountaineering, climbing and winter sports equipment

Graphic Coatings Schmid Rhyner: Print varnishes and laminating ­adhesives for the graphical industry

Conzzeta

www.conzzeta.ch

Annual Report 2010

Annual Report 2010

Real Estate Plazza Immobilien: Management of the Conzzeta Group’s portfolio of properties

Ordinary result Extraordinary result Operating result (EBIT)

1 250

100

3.3

Free cash flow

CHF m

17.6

141.8

1 000

75

750

50

Shareholders’ equity

CHF m

982.7

978.3

500

25

Total assets

CHF m

1 287.6

1 254.8

76.3

78.0

250

0

%

0

– 25

46.0

Total dividend

CHF m

18.41

13.8

70.1

Number of shares on 12 / 31 bearer registered

406 000

Number

270 000

270 000

06 20

20

20

250

60

200

50

150

40

100

30

50

20

(par CHF 20)

CHF

8.001

6.00

0

10

bearer

high / low

CHF

2 000 / 1 690

1 934 / 1 135

– 50

0

year-end

CHF

1 900

1 800

CHF m

874

828

Total capitalization on 12 / 31 Group key figures per share

20

20

20

20

06

30.00

registered

20 10

40.001

09

CHF

08

(par CHF 100)

07

bearer

06

Market price per share

406 000

70

20

Gross dividend per share

Number

300

21.1

46.0

20 10

CHF m

28.0

Share capital

09

36.5

20

68.7

56.0

CHF m

Conzzeta AG

08

Net income for the year

Investments in property, plant and equipment and intangible assets (in CHF m)

Free cash flow (in CHF m)

20

300.4

49.0

324.9

07

CHF thousand

31.8

Net revenue per full-time position

17.6

3 257

141.8

28.0

3 322

– 30.8

21.1

Number

195.9

CHF m

Number of employees at year-end

20

Investments in property, plant and equipment and intangible assets

20

Shareholders’ equity as % of total assets

p. 84 et seq. for detailed five-year summary for Group

– 1.4

51.5

 See

56.9

CHF m

20 10

CHF m

Group result

09

Operating result

20

125

20 10

1 500

09

955.2

08

1 051.9

07

CHF m

06

Net revenue

08

150

20

1 750

07

175

20

2 000 Group

1 051.9

955.2

2009

EBIT and Group result (in CHF m)

1 472.5

1 273.6

2010

1 507.0

Net revenue (in CHF m)

20

Key figures

Publication details

Key facts 2010

Publisher Conzzeta AG, Zurich Concept and design Prime, Zurich

Group result

bearer

CHF

111.90

7.10

per share

registered

CHF

22.40

1.40

Cash flow from operating

bearer

CHF

164.50

313.30

activities per share

registered

CHF

32.90

62.70

Shareholders’ equity

bearer

CHF

2 136.40

2 126.70

per share

registered

CHF

427.30

425.30

As proposed by the Board of Directors

1

Photography Jolanda Flubacher Derungs, Sebastian Derungs, Eric Leleu et al.

–– There is a noticeable recovery in the Conzzeta Group’s business environment.

–– Changes in the exchange rate situation have a negative impact on revenue, result and equity.

Translation Hill Johnson Associates GmbH, Zollikon Printing Staffel Druck AG, Zurich Publishing system Multimedia Solutions AG, Zurich

–– Consolidated net revenues rise by 10.1 % and the Group result improved significantly.

–– The operating result (EBIT) and Group result both show a clear improvement compared with the previous year.

–– All industrial business units report growth in sales.

–– The Group remains very solidly financed, with an equity ratio of 76.3 %.

The annual report is published in German and English.

–– The main source of growth is Asia, where around a quarter of consolidated revenues are generated.

The German version prevails.

Changes in personnel were up-to-date at the editorial deadline of March 17, 2011.

Published on March 30, 2011.

–– In view of the improved economic situation, the Board of Directors is proposing a one-third increase in the dividend.

Ordinary result Extraordinary result Operating result (EBIT)

1 250

100

3.3

Free cash flow

CHF m

17.6

141.8

1 000

75

750

50

Shareholders’ equity

CHF m

982.7

978.3

500

25

Total assets

CHF m

1 287.6

1 254.8

76.3

78.0

250

0

%

0

– 25

46.0

Total dividend

CHF m

18.41

13.8

70.1

Number of shares on 12 / 31 bearer registered

406 000

Number

270 000

270 000

06 20

20

20

250

60

200

50

150

40

100

30

50

20

(par CHF 20)

CHF

8.001

6.00

0

10

bearer

high / low

CHF

2 000 / 1 690

1 934 / 1 135

– 50

0

year-end

CHF

1 900

1 800

CHF m

874

828

Total capitalization on 12 / 31 Group key figures per share

20

20

20

20

06

30.00

registered

20 10

40.001

09

CHF

08

(par CHF 100)

07

bearer

06

Market price per share

406 000

70

20

Gross dividend per share

Number

300

21.1

46.0

20 10

CHF m

28.0

Share capital

09

36.5

20

68.7

56.0

CHF m

Conzzeta AG

08

Net income for the year

Investments in property, plant and equipment and intangible assets (in CHF m)

Free cash flow (in CHF m)

20

300.4

49.0

324.9

07

CHF thousand

31.8

Net revenue per full-time position

17.6

3 257

141.8

28.0

3 322

– 30.8

21.1

Number

195.9

CHF m

Number of employees at year-end

20

Investments in property, plant and equipment and intangible assets

20

Shareholders’ equity as % of total assets

p. 84 et seq. for detailed five-year summary for Group

– 1.4

51.5

 See

56.9

CHF m

20 10

CHF m

Group result

09

Operating result

20

125

20 10

1 500

09

955.2

08

1 051.9

07

CHF m

06

Net revenue

08

150

20

1 750

07

175

20

2 000 Group

1 051.9

955.2

2009

EBIT and Group result (in CHF m)

1 472.5

1 273.6

2010

1 507.0

Net revenue (in CHF m)

20

Key figures

Publication details

Key facts 2010

Publisher Conzzeta AG, Zurich Concept and design Prime, Zurich

Group result

bearer

CHF

111.90

7.10

per share

registered

CHF

22.40

1.40

Cash flow from operating

bearer

CHF

164.50

313.30

activities per share

registered

CHF

32.90

62.70

Shareholders’ equity

bearer

CHF

2 136.40

2 126.70

per share

registered

CHF

427.30

425.30

As proposed by the Board of Directors

1

Photography Jolanda Flubacher Derungs, Sebastian Derungs, Eric Leleu et al.

–– There is a noticeable recovery in the Conzzeta Group’s business environment.

–– Changes in the exchange rate situation have a negative impact on revenue, result and equity.

Translation Hill Johnson Associates GmbH, Zollikon Printing Staffel Druck AG, Zurich Publishing system Multimedia Solutions AG, Zurich

–– Consolidated net revenues rise by 10.1 % and the Group result improved significantly.

–– The operating result (EBIT) and Group result both show a clear improvement compared with the previous year.

–– All industrial business units report growth in sales.

–– The Group remains very solidly financed, with an equity ratio of 76.3 %.

The annual report is published in German and English.

–– The main source of growth is Asia, where around a quarter of consolidated revenues are generated.

The German version prevails.

Changes in personnel were up-to-date at the editorial deadline of March 17, 2011.

Published on March 30, 2011.

–– In view of the improved economic situation, the Board of Directors is proposing a one-third increase in the dividend.

Conzzeta – Annual report 2010

Table of contents 6

Foreword

9 10 11 12 18 20

Business overview

27

Corporate governance

39

Financial report

Board of Directors Group Executive Board and Corporate Staff Overview of the 2010 business year Interview with the Group CEO Business units

81 Further information 82 Employee pension funds in Switzerland 84 Five-year summary 86 Information and calendar for investors

Conzzeta – Annual report 2010 Foreword

Jacob Schmidheiny, Chairman of the Board of Directors (at left) and Robert Suter, Group Chief Executive Officer (at right) 6

Conzzeta – Annual report 2010 Foreword

“

Conzzeta has emerged strengthened and is moving forward.

Ladies and Gentlemen Things are looking up! This short sentence neatly sums up the 2010 business year. The dramatic slump has given way to a marked and continuing recovery. The economic upturn is being fuelled by demand in Asia, where the Conzzeta Group has considerably strengthened its presence in recent years and now generates almost a quarter of its revenues (23 %).

However welcome this upward trend may be, it must be considered over an extended period. Consolidated net revenues are still significantly lower (– 30 %) than in the peak years, and it may be some time before that level is reached again. Measures to strengthen competitiveness and reduce operating costs, which proved necessary, led to a marked improvement in the result. However, it is not yet enough for the Group to sustain vigorous devel­ opment.

In other words, we must continue the efforts to increase our competitiveness, including continuous renewal and improvement of products and services and constant reduction of costs. This is also necessary because the strength of the Swiss franc has had a strong impact on our export-oriented Group, with its strong base in Switzerland. The shift towards growth markets such as those in Asia creates opportunities for the Group, but it also poses challenges. The need to keep pace with the competition places great demands in the areas of marketing, management, development and product pricing.

Despite numerous challenges and economic uncertainties, including geopolitical instability, we look to the future with a dose of optimism. The pressure of constant renewal and adaptation is an integral part of industrial activity, and the Conzzeta Group is well equipped to deal with it. On the one hand, the Group has a committed and loyal workforce; and on the other, it has material resources in the form of capital which make it possible to adopt a long-term approach. The Group was only able

”

to overcome the dramatic slump and respond to changes in the market because of these twin strengths. We have that in mind in expressing our recognition and gratitude to our employees all over the world.

The Conzzeta Group has emerged strengthened from the financial crisis, with the order books showing a sustained upward trend. This enables us to move forward with confidence.

Jacob Schmidheiny Chairman of the Board of Directors

Robert Suter Group Chief Executive Officer

7

Conzzeta – Annual report 2010

8

Business overview

Group

10 11 12 18

Board of Directors Group Executive Board and Corporate Staff Overview of the 2010 business year Interview with the Group CEO

Business units

20 21 22 23 24 25 26

Sheet Metal Processing Systems Glass Processing Systems Automation Systems Foam Materials Sporting Goods Graphic Coatings Real Estate

Conzzeta – Annual report 2010 Business overview / Group

Board of Directors

Names and functions from left to right, as in the listing below.

Philip Mosimann, Member of the Board since 2007 Robert F. Spoerry, Member of the Board since 1996 Werner Dubach, Member of the Board since 1993 Jacob Schmidheiny, Chairman since 1977 Thomas W. Bechtler, Member of the Board since 1987 Matthias Auer, Member of the Board since 1996

All Board members are elected until the 2011 Ordinary General Meeting.

> For detailed information on the Board of Directors, see page 30 et seq.

10

Conzzeta – Annual report 2010 Business overview / Group

Group Executive Board and Corporate Staff

Names and functions from left to right, as in the listing below.

Carlo Menotti, Head of Corporate Services and Secretary of the Board of Directors since 2008 Ferdi Töngi, Head of the Sheet Metal Processing Systems business unit since 2002 Kaspar W. Kelterborn, Group Chief Financial Officer since 2006 Robert Suter, Group Chief Executive Officer since 2009 Richard Jakob, Head of the Glass Processing Systems business unit since 2007 Barbara Senn, General Counsel since February 2010 Rolf G. Schmid, Head of the Sporting Goods business unit since 2004 Serge Entleitner, Head of the Graphic Coatings business unit since 2009 Ralph Siegle, Head of the Real Estate business unit since 2003 Bart J. ten Brink, Head of the Foam Materials business unit since 2009 Martin Pfister, Head of the Automation Systems business unit since 2005

> For detailed information on the Group Executive Board, see page 33 et seq.

11

Conzzeta – Annual report 2010 Business overview /O verview of the business year

Overview of the business year The Conzzeta Group records a significant improvement in the result and strong sales growth in Asia.

For the Conzzeta Group, 2010 brought a tangible improvement in the economic environment following the financial and economic crisis. The upward trend in demand led to a recovery in the markets for capital goods and industrial products. However, the demand trends showed regional variations. In Europe and the USA, the recovery was mostly slow and to some extent variable over the course of the year. In Asia and other growth markets, on the other hand, the business units benefited from a rapid economic recovery and an early return to high growth dynamics. The outdoor market and the Swiss residential property market remained stable.

Further important economic factors included the trend in raw material prices and the exchange rate sit­ uation. Higher raw material prices as a result of rising demand and increased crude oil prices had a particular impact on the industrial products market. The Group’s economic environment was also affected by changes in the exchange rate situation. The parity of the Swiss franc against the weak euro and US dollar was a particular disadvantage for companies exporting from a Swiss base, with a negative overall impact on consolidated revenues and the Group result.

Thanks to the growth in Asia and the improved cost structure, the Group was able to post a significantly improved result.

Net revenue by business unit 2010

2009

Change

CHF m

CHF m

in %

Sheet Metal Processing Systems

410.9

356.1

15.4

Glass Processing Systems

167.5

145.6

15.0

56.4

56.1

0.4

Foam Materials

127.9

116.8

9.5

Sporting Goods

221.2

215.3

2.8

Graphic Coatings

46.6

43.2

7.9

Real Estate and miscellaneous revenue

21.4

22.1

– 3.2

1 051.9

955.2

10.1

Automation Systems

Total

12

Conzzeta – Annual report 2010 Business overview /O verview of the business year

Development of Group revenues In the reporting year, the Conzzeta Group increased ­consolidated net revenues to CHF 1 051.9 million, a rise of 10.1 % over the previous year (CHF 955.2 million).

After adjustment for negative currency translation effects of 3.6 % and divestment effects of 1 %, the growth amounted to 14.7 %.

All the industrial businesses generated increased sales. The Real Estate business unit produced a stable result, taking account of the sale of two properties in the previous year. The strongest sales growth was recorded in the machinery and systems engineering businesses, which were hardest hit in the previous year by the slump in demand due to the economic crisis.

Right from the beginning of the year, sales of in­­ dustrial products (Foam Materials and Graphic Coatings business units) were on an rising trend, compared with the level a year ago. By contrast, the three business units in the machinery and systems engineering sector began 2010 with low order books. This situation improved over the course of the year, with an increasingly positive effect on sales figures. The Sporting Goods business unit also progressed over the course of the year, with sales growing by 2.8 %, despite the divestment of the Toko business (ski wax and care products) and currency translation effects.

The share of machinery and systems engineering in Group revenues again rose slightly to 60.4 % (pre­ vious year: 58.4 %). In terms of geographic markets, Asia’s importance for the Group increased further in the re­­porting year. Thanks to the Group’s long-term com­ mitment and expansion of its presence in Asia, sales in the Asia and Pacific market region increased by 53.9 % to CHF 242.1 million. The region’s share in overall Group revenues grew as a result to 23 % (previous year: 16.5 %).

Business units Sheet Metal Processing Systems The Sheet Metal Processing Systems business unit (Bystronic) increased net revenues by 15.4 % to CHF 410.9 million (previous year: CHF 356.1 million). Ad­­ justed for currency translation effects, the increase was 19.3 %. While Asia expe­rienced a strong growth trend early in the year, the re­­covery in Europe and the USA was hesitant and did not gain momentum until the second half of 2010. The gains were particularly marked in the growth markets of Asia and South America, in whose development Bystronic has invested in recent years and which generate an increasing portion of the business unit’s sales. Thanks to the improved order situation, all Bystronic Group com­panies were able to end short-time

Net revenue by geographic area 2010

2009

Change

CHF m

CHF m

in %

Switzerland

160.3

156.0

2.8

Euro area

360.2

386.3

– 6.8

Rest of Europe

140.5

130.7

7.5

Total Europe

661.0

673.0

– 1.8

North and South America

143.9

119.4

20.5

Asia and Pacific

242.1

157.3

53.9

Africa

4.9

5.5

– 10.9

Total

1 051.9

955.2

10.1

13

Conzzeta – Annual report 2010 Business overview /O verview of the business year

working. Bystronic launched important product inno­ vations, such as the first laser-cutting system with fiber laser technology (BySprint Fiber 3015), which was awarded a prize at the Euro­BLECH trade fair. Bystronic also presented a new machine aimed at the Chinese market, which was developed largely in China. In addition to product development, the business unit also invested in a new processing center for large parts, a new sales office in Saigon (Vietnam) and its marketing platform. The “Best choice.” campaign, running in 40 countries, increased awareness of Bystronic as a supplier of complete systems who is close to the customer, strengthening both the brand and employee motivation.

Glass Processing Systems The Glass Processing Systems business unit (Bystronic glass) increased sales by 15 % to CHF 167.5 million (previous year: CHF 145.6 million). Adjusted for currency translation effects, the increase was 21.1 % compared with the previous year. The growth was generated largely in the Asian market, where major orders boosted sales in the architectural glass segment. Demand for vehicle glass processing machinery from the automotive industry also recovered. But there was little growth impetus from the European and American markets, where business was partly affected by the adverse exchange rate situation.

In the Middle East and Eastern Europe, customers’ financing problems prevented the realization of some projects. In Europe, demand began to pick up towards the end of the year. The recovery was particularly apparent in the service and spare parts business. On the whole, competitive pressure in the market is still at a high level.

The business unit tightened costs and invested in prod- uct development in 2010. Bystronic glass demonstrated the strength of its innovation potential by presenting a number of new developments at glasstec, the industry’s largest trade show. These included a new generation of machinery for processing automotive glass and a machine for uninterrupted production of triple-layer insulating glass units with flexible spacers.

Automation Systems The Automation Systems business unit (ixmation) closed the reporting year with sales of CHF 56.4 million (pre­ vious year: CHF 56.1 million). When currency translation effects and the divestment of production automation activities the previous year are taken into account, this equates to sales growth of 13.9 %. In the first half of 2010, customers, particularly in the automotive sector and the USA, were reticent about committing to invest14

ments, but the situation improved in the second half. In the USA, orders were received above all in the medical technology and alternative energy segments. ixmation’s international presence enabled it to execute an increasing number of repeat orders for globally active companies.

Capacity was well utilized at the plant in Malaysia, where a new production and office building was inaugurated in September 2010. The building is equipped with solar cells manufactured by an ixmation customer. The plant in China executed a number of orders for the automotive industry which came through the intermediary of the European subsidiary in Switzerland. In Europe, ixmation entered the market with a helium leak detection system which can be used for various parts and components in different industries. The system was developed from start to finish in Malaysia, where it is also produced.

Foam Materials The Foam Materials business unit (FoamPartner) in­­ creased sales to CHF 127.9 million in 2010, an increase of 9.5 % compared with the previous year (CHF 116.8 million). Adjusted for negative currency translation ef­­ fects, the business unit posted a 13.8 % increase compared with the previous year. Technical foams (industry, packaging and automotive) generated marked sales growth, although the performance in the first half year was better than in the second. In Europe, the German market recovered well. There was also clear volume growth in China and the USA, where the customer base was expanded in the reporting year. The comfort product segment (mattress and pillow cores) closed 2010 at the same level as the previous year. The strength of the Swiss franc hindered exports from Switzerland and intensified the competitive struggle on the Swiss market, particularly in the case of simpler products. On the procurement front, FoamPartner had to absorb a price rise on key raw materials for foam production, resulting from increased demand on the one hand and higher crude oil prices on the other. The reporting year saw new products in­­ troduced and improvements in logistics. In the comfort segment, the entire foam materials offering was given a major overhaul. In the technical foams segment, a new sealant foam was presented and introduced to the market.

Sporting Goods The Sporting Goods business unit (Mammut Sports Group) increased sales in the reporting year by 2.8 % to CHF 221.2 million (previous year: CHF 215.3 million).

After adjustments to account for the sale of the Toko

Conzzeta – Annual report 2010 Business overview /O verview of the business year

ski wax and care products business to the Norwegian Swix Sport AS with effect from September 1, 2010, as well as the effects of currency translation, the growth in sales equated to 6.7 %. The Mammut Sports Group, now focused on the Mammut brand, was able to hold its own in the growing outdoor market. The company recorded particularly strong gains in the Japanese and Korean markets, as well as in Germany and Italy. Mammut continued to invest in its sales network, although in some places it is a challenge to find suitable marketing partners and affordable, well-positioned locations for the Mammut stores. Sales in the home market of Switzerland, where Mammut has a very high market share, could not be maintained at the previous year’s level. The footwear product group, the new backpack collection, climbing harnesses and the clothing lines all developed well. A patent dispute with Ortovox Sportartikel GmbH relating to avalanche rescue transceivers was settled amicably. The retail trade reacted positively to the presentation of the new Eiger Extreme collection, which goes on sale in autumn 2011, as well as to the company’s commitment to the increasingly important issue of corporate social responsibility, in which Mammut is playing a pioneering role in its industry.

Graphic Coatings The Graphic Coatings business unit (Schmid Rhyner) increased net revenues in the reporting year by 7.9 % to CHF 46.6 million (previous year: CH 43.2 million). Schmid Rhyner returned to growth in almost all its key markets, with just a few remaining at the previous year’s level. The business unit recorded above-average gains in Asia and South America, as well as some European markets. There was also healthy growth in North America. Schmid Rhyner gained above all from the launch of new products and geographic expansion in 2010, although demand in commercial and packaging printing remained well below the level prior to the crisis. One of the big challenges in the reporting year was the shortage of primary materials for varnish manufacture, resulting in a massive increase in material prices and corresponding adjustments to sales prices. Despite these developments, Schmid Rhyner was able to maintain security of supply and deliver to all customers on time. New products were successfully introduced in the dispersion varnishes as well as the UVhardening line. Production capacity for the dispersions product line was expanded in 2010.

Real Estate The Real Estate business unit (Plazza Immobilien) generated revenue of CHF 20.9 million in 2010 (previous year: CHF 21.4 million). The decline of 2.3 % was largely due to lower rental income, following the sale of two prop­ erties the previous year. Rental income remained stable in the Swiss residential property market. There is still an acute shortage of apartments, particularly near large conurbations such as Zurich. The development plan for a residential estate with around 200 apartments on a former industrial site belonging to Conzzeta in Wallisellen was made available for public inspection. The municipality will probably vote on the plan during 2011.

Earnings situation The combined effect of volume growth and the capacity adjustments undertaken the previous year enabled the Conzzeta Group to make a clear return to profit, also on an operational level. The operating result (EBIT) im­­ proved by CHF 58.3 million to CHF 56.9 million (pre­ vious year: CHF – 1.4 million). Operating profit rose in the second half of the year on the strength of the higher volume of deliveries. Overall, the result was ­significantly affected by negative currency effects. The operating margin for the year as a whole was 5.3 %, significantly higher than in 2009, though it did not return to the pre-crisis level (8.8 % in 2007). The Group result includes an extraordinary profit of CHF 5.4 million from the sale of business activities and properties. The Conzzeta Group closed the 2010 business year with a Group result of CHF 51.5 million (previous year: CHF 3.3 million).

Investments and divestments Investment activity in 2010 was marked by caution in view of the partly uncertain economic environment. In­­ vestments in property, plant and equipment and in­­ tangible assets amounted to CHF 21.1 million (previous year: CHF 28.0 million). The most significant investments in fixed assets were a new production and office building for the Automation Systems business unit in Penang (Malaysia) and a processing center for large parts at the Sheet Metal Processing Systems facility in Niederönz (Switzerland). Investments in intangible assets included further development of the ERP systems within the various business units. The Sporting Goods business unit 15

Conzzeta – Annual report 2010 Business overview /O verview of the business year

sold the business activities of Toko, specialist in ski wax and care products, with effect from September 1, 2010.

Free cash flow, financing and liquidity In 2010, the Conzzeta Group recorded a cash flow from operating activities of CHF 75.7 million (previous year: CHF 144.1 million). The increase in volume again tied up more capital in the reporting year. However, it was possible to maintain systematic management of net working capital. The cash flow from operating and investment activities (free cash flow) generated by the Conzzeta Group was CHF 17.6 million (previous year: CHF 141.8 million). Apart from investments in property, plant and equipment and intangible assets of CHF 21.1 million, there were net investments in securities of CHF 54.9 million, as well as divestments of business activities amounting to CHF 9.7 million.

Cash, cash equivalents and securities held by the Group increased by CHF 54.9 million to CHF 510.9 million (previous year: CHF 456.0 million).

The Group is solidly financed, with an equity ratio of 76.3 % (previous year: 78.0 %).

Dividends Continuing the flexible dividend policy, and in view of the improved economic situation, the Board of Directors is proposing an increase in the dividend. Its proposal to the Annual General Meeting of Shareholders will be for a dividend of CHF 40.00 (previous year: CHF 30.00) per bearer share and CHF 8.00 (previous year: CHF 6.00) per registered share.

Employees In 2010, the Conzzeta Group created 65 new posts. At the end of the year, the worldwide workforce stood at 3 322 employees (previous year: 3 257). Most of the new jobs were created in Asia.

Employees by geographic area 2010

Staff changes In February 2010, Barbara Senn joined the Group as General Counsel. She succeeded Thomas Emch who retired at the end of June 2010. The Board of Directors and Group Executive Board would like to thank Thomas Emch for his work in developing the post over the last four years and wish him all the best for the future.

Trends and outlook

Switzerland 1 145 Germany 875 Rest of Europe 344 North and South America 323 Asia and Pacific 635 Total Europe 2 364 Total Group 3 322

16

In spite of the prevailing uncertainties in the business environment, Conzzeta can look forward to 2011 with some confidence, partly thanks to the sustained level of demand from customers. The risks and uncertainties include the monetary imbalances and high level of in­­ debtedness affecting various countries, as well as the political instability in key regions. The economic impact of the devastating earthquake in Japan on March 11, 2011, are still unclear. Regarding the currency situation, it is to be expected that the Swiss franc will maintain its strength against the euro and US dollar in 2011.

Conzzeta – Annual report 2010 Business overview /O verview of the business year

Overall, there has been a significant recovery in the Group’s market environment. This applies to industrial products as well as machinery and systems engineering, where incoming orders continued to rise over the course of the 2010 business year, creating a stronger starting position for 2011. The outdoor market and the Swiss residential property market are also expected to benefit from a favorable development in the current year.

Conzzeta aims to take advantage of growth op­­ portunities. However, despite all the positive signs, the economic environment is still fragile and Conzzeta will continue to proceed with caution when it comes to costs and investments in expansion projects. The goal is to increase the competitiveness in international markets and strengthen the Group’s presence in emerging markets.

17

Conzzeta – Annual report 2010 Business overview / Group

“Significant gains in innovation” Conzzeta successfully overcame the effects of the financial crisis in the 2010 business year and is back in operating profit. In this interview, Group Chief Executive Officer Robert Suter ­ explains why Conzzeta is in better shape to face the future.

Mr. Suter, where does the Conzzeta Group stand today, compared with a year ago?

We are in much better shape now. We have come through the financial crisis. Revenues are at the planned level and we are back in operating profit. There are several reasons for this positive turn of events: first, the global economic situation has improved; and second, our employees have shown tremendous commitment in seizing whatever opportunities presented themselves.

How have the Group’s main markets developed?

The economic recovery has been variable – with one exception, Asia, where we were able to achieve doubledigit growth in all areas of activity. Conzzeta established a foothold in Asia early on, so we can now reap the benefits of this development. On the other hand, America and our main market in Europe remain very important for us and the recovery in these regions is only just taking off.

What impact has the weaker euro and US dollar had on the run of business?

Like many export-oriented businesses, the Conzzeta Group has been hard hit by the weakness of the dollar and the euro against the Swiss franc – a significant portion of our production and value-creating activities are located in Switzerland. But there have always been pe­riods of currency fluctuation in the past; they force us to be even more innovative and productive in Switzerland. That isn’t such a bad thing. However, the speed with which competitiveness has to be ramped up is very demanding.

18

Conzzeta resolved to emerge “stronger from the crisis”.

Did you achieve that goal?

Yes, we did. We expanded our businesses in Asia, carefully planned our capacities and developed and launched numerous new products. One example is a new machine for cutting flat sheet metal with a fiber laser, for which we won a high-profile innovation prize. Other important innovations are a new sealant foam and a machine for uninterrupted production of triple-layer insulating glass units with flexible spacers. We also used last year to strengthen other competitive strengths, such as soft factors, for example the “Bystronic: Best choice.” program launched by Bystronic (Sheet Metal Processing Systems) with the aim of strengthening the brand internationally.

Finally, I should again mention the strong growth of the Asian business. During the crisis, we have taken on personnel, built up the first development center in China, opened a new factory in Malaysia, and made clear progress with our Sporting Goods business in Japan and Korea.

Conzzeta employees know you for your question: “Why do people buy from us?” Now a question in return: What added value does Conzzeta offer its business units?

It is the people in a company that really make the dif­ ference. Conzzeta has a big influence in this respect, because it determines the basic values and culture of the Group. Innovation is one of our basic values. As a rule, good ideas will always get backing in our company. We want to offer employees an environment in which they feel at ease and able to develop their potential. Our basic values also include reliability and a long-term perspec-

Conzzeta – Annual report 2010 Business overview / Group

“

Work is only fun if you get the human interaction right!

tive. That builds trust with employees, managerial staff and, ultimately, with our customers and business partners, too.

”

tion with employees and with colleagues in the Executive Board and the Board of Directors. Work is only fun if you get the human interaction right!

What are your goals for 2011?

My primary objective is to secure healthy profitability for the company. To achieve that, I want to ensure that the strategies of our business units are more focused and building on existing strengths. We want to continue developing our business in Asia and also to pursue a more active strategy in the Real Estate business unit.

More generally, balancing risks and diversifying our portfolio remain important. And a further central concern is the need to secure skilled personnel and managerial talent.

And personally?

I am fully committed, with head, hands and heart, to my work and like everybody else I have to make sure I get the work-life balance right. That’s why I engage in sports on a regular basis and attach great importance to relaxed days on vacation. Very important to me is open coopera19

Conzzeta – Annual report 2010 Business overview / Business units

Sheet Metal Processing Systems – Bystronic Bystronic is a world-leading supplier of solutions for the processing of sheet metal and other sheet materials.

Important events in 2010 –– Bystronic launches its first cutting system based on fiber laser technology, for which it receives a Euro­ BLECH award. The system achieves perfect cutting results and maximum part yield, especially with thin sheets.

–– Bystronic advertising has a new tagline added to its name: “Best choice”. This represents the company’s commitment to being the partner of choice for customers. The campaign strengthens the international brand as well as the motivation of employees.

Net revenue in CHF m

2008 2009 2010

20

–– The first laser cutting machine developed for the most part in China is presented in Beijing, indicating Bystronic’s focus on the requirements of the growing Asian markets.

Overview Bystronic – Head: Ferdi Töngi – Presence: worldwide, over 20 sales and service companies; three development and production sites in Switzerland, Germany and China www.bystronic.com

Investments in property, plant and equipment and intangible assets in CHF m 745.1

26.9

356.1 410.9

11.7 5.8

Number of employees

1 627 1 389 1 393

Conzzeta – Annual report 2010 Business overview / Business units

Glass Processing Systems – Bystronic glass Bystronic glass offers high-quality system solutions for the processing of architectural and automotive glass.

Important events in 2010 –– Bystronic glass receives the “Crystal Achievement Award” of the American glass industry magazine ­“Window & Door” for the most innovative machine in the glass processing category. The award went to the sash’line assembly system, a line for the fully automated manufacture of glazed casements.

–– Delivery of the 1 000th insulating glass press underlines the company’s long years of experience in the field of insulating glass manufacture.

Overview Bystronic glass – Head: Richard Jakob – Presence: worldwide sales and service network, with six subsidiaries and several representative offices; three technology centers (development and production) in Germany and Switzerland; one production site in China www.bystronic-glass.com

–– Bystronic glass launches the champ’speed line onto the market, a completely new generation of machines for processing automotive glass. The line offers cutting, breaking, polishing and drilling of automotive glass, with the greatest precision and flexibility.

Net revenue in CHF m

Investments in property, plant and equipment and intangible assets in CHF m

2008 2009 2010

244.6

11.0

145.6 167.5

Number of employees

4.4 1.7

801 675 670

21

Conzzeta – Annual report 2010 Business overview / Business units

Automation Systems – ixmation ixmation is an international supplier of customized automation systems for assembly and quality assurance in mass production.

Important events in 2010 –– ixmation enters the market in Europe with a helium leak detection system made in Asia. The system can be used for leak detection on a wide variety of parts and components (for example, condensers, evaporators and compressors).

–– In Malaysia, ixmation inaugurates a new production and office building with a surface area of 4 000 m2. The flat roof is fitted with solar cells which were assembled by a customer on an ixmation system.

Net revenue in CHF m

Overview ixmation – Leitung: Martin Pfister – Presence: five locations in China, Malaysia, the USA and in Switzerland www.ixmation.com

Investments in property, plant and equipment and intangible assets in CHF m

2008

73.6

2009

56.1

2010

56.4

22

–– Globally active customers benefit from the advantages of ixmation’s international presence. For example, technical consultation is provided in Europe and the solutions developed are installed at production centers in the USA or in Asia.

Number of employees

1.0

399

0.9

305 4.4

353

Conzzeta – Annual report 2010 Business overview / Business units

Foam Materials – FoamPartner FoamPartner manufactures high-quality foam materials and offers customized solutions for the Industry and Comfort business segments.

Important events in 2010 –– In the mattress core product segment, FoamPartner replaces all cold foams with a new generation of foam material which is both highly elastic and climateresistant. Yet again, FoamPartner sets milestones in foam material technology.

–– New customers were gained in China, while sales trebled compared with the previous year.

–– FoamPartner introduces a new sealant foam to the market. This material has winning characteristics which include a low compression ratio, remarkable hydrolytic stability and excellent density.

Net revenue in CHF m

Investments in property, plant and equipment and intangible assets in CHF m

2008 2009 2010

Overview FoamPartner – Head: Bart J. ten Brink – Presence: nine production, processing and sales locations in Europe, Asia and the USA; worldwide marketing through a partner sales network www.foampartner.com

146.3 116.8 127.9

9.6 2.3

Number of employees

495 444

3.4

450

23

Conzzeta – Annual report 2010 Business overview / Business units

Sporting Goods – Mammut Sports Group Mammut Sports Group develops, manufactures and markets innovative mountaineering, climbing and winter sports equipment.

Important events in 2010 –– Mammut sells the Toko business to the Norwegian ski wax manufacturer Swix, allowing it to concentrate on the strong Mammut brand and the growing outdoor sports business.

–– An analysis of 76 companies as part of the Clean Clothes Campaign confirms Mammut’s role as a pioneer in its industry on the issues of corporate social responsibility.

–– 200 key account customers and journalists test the new Eiger Extreme collection in real alpine conditions over a two-day period. The program proves a great success and ranges from spending the night in a sleeping bag at 3 600 m to abseiling from the north wall of the Eiger.

Net revenue in CHF m

2008 2009 2010

24

–– “Mammut Alpine Underwear”, the functional line of underwear introduced in 2008, takes first place in a test on “Kassensturz”, Swiss Television’s popular consumer affairs program.

Overview Mammut Sports Group – Head: Rolf G. Schmid – Presence: worldwide sales network in over 80 countries; head offices, product development and rope manufacture in Seon (Switzerland); numerous production partners in Europe and Asia www.mammut.ch

Investments in property, plant and equipment and intangible assets in CHF m 192.6

5.4

215.3 221.2

4.5 3.7

Number of employees

368 369 376

Conzzeta – Annual report 2010 Business overview / Business units

Graphic Coatings – Schmid Rhyner Schmid Rhyner develops and manufactures environmentally friendly print varnishes and laminating adhesives for the graphical industry.

Important events in 2010 –– Schmid Rhyner intensifies its business activities in Asia and the USA, achieving above average growth in both markets.

–– At the beginning of the year, there is a shortage of main raw materials for the manufacture of varnish, leading to supply bottlenecks. Schmid Rhyner is able to guarantee security of supply for its customers and deliver on time.

Net revenue in CHF m

2008 2009 2010

–– Schmid Rhyner launches a new generation of userfriendly dispersions of consistently reliable quality and doubles its production capacity for water-based dispersion varnishes.

Overview Schmid Rhyner – Head: Serge Entleitner – Presence: worldwide sales network in over 100 countries; one production site in Adliswil (Switzerland); one subsidiary in New Jersey (USA) www.schmid-rhyner.ch

Investments in property, plant and equipment and intangible assets in CHF m 47.5 43.2 46.6

1.0

Number of employees

39

1.1

45 1.5

47

25

Conzzeta – Annual report 2010 Business overview / Business units

Real Estate – Plazza Immobilien Plazza Immobilien manages the Conzzeta Group’s portfolio of properties.

Important events in 2010 –– All Plazza Immobilien’s residential properties are fully let.

–– In Brunnenthal (canton Solothurn) approximately 42 500 m2 of recultivated agricultural land is sold to the former leaseholders.

–– The plans for the redevelopment of an industrial site in Wallisellen are made available for public inspection.

It is planned to build around 200 attractive apartments on this urban site. The next milestone in the project is the vote on the plan at the municipal assembly, probably during the course of 2011.

Overview Plazza Immobilien – Head: Ralph Siegle – Presence: properties throughout Switzerland www.plazza-immobilien.ch

Net revenue in CHF m

2008

Investments in property, plant and equipment and intangible assets in CHF m 22.0

2009

21.4

2010

20.9

26

1.0

16 3.0

0.1

Number of employees

15 16

Corporate governance 28 29 30 33 35 35 36 36 37 37

Group structure and shareholders Capital structure Board of Directors Group Executive Board Content and method of determining compensation Shareholders’ participation rights Change of control and defensive measures Auditors Information policy Significant events since the balance sheet date

Conzzeta – Annual report 2010 Corporate governance

Corporate governance The Conzzeta Group attaches importance to a transparent management structure and open ­dialogue. The Group is guided by the principles of the Swiss Code of Best Practice for Corporate ­Governance, which it implements in accordance with its size and structure. It always acts in ­compliance with legal requirements and urges its employees to do likewise.

The following report is based on the SIX Swiss ­Exchange AG Directive on Information relating to Corporate Governance, valid on December 31, 2010, in so far as applicable to Conzzeta AG.

1 Group structure and shareholders Group structure The Conzzeta Group is organized in seven business units: Sheet Metal Processing Systems, Glass Processing Systems, Automation Systems, Foam Materials, Sporting Goods, Graphic Coatings and Real Estate. At Group level, Corporate Staff supports the activities of the holding company, Conzzeta AG, and the operational units.

Conzzeta AG, with its registered offices in Zurich, has direct or indirect equity holdings in the companies listed on page 66 et seq. Conzzeta AG is the only company that is listed. The Conzzeta bearer share (Swiss security number 265 798, ISIN CH0002657986) is listed on the SIX Swiss Exchange AG. The market capitalization (bearer shares) as of December 31, 2010, was CHF 771 400 000; the total capitalization (registered and bearer shares) amounted to CHF 874 000 000.

Significant shareholders Percentage of shares represented

TEGULA AG, Zurich

Percentage of nominal capital

in %

in %

81.8

74.2

No disclosures were received in the reporting year.

This corporate governance report does not include issues which correspond to legal norms. In certain selected cases, so-called negative declarations are given.

28

Conzzeta – Annual report 2010 Corporate governance

2 Capital structure Capital and shares The share capital is fully paid-up. There was no authorized or conditional capital as of December 31, 2010.

Number of shares Share capital in CHF

Bearer shares par CHF 100

Registered shares par CHF 20

Total

406 000

270 000

676 000

40 600 000

5 400 000

46 000 000

Each share has one vote at the General Meeting of Shareholders. The dividend rights of the registered and bearer shares are proportional to the par value of the two share categories.

Changes in share capital The share capital of Conzzeta AG has not changed in the last three reporting years.

Limitations on transferability and nominee registrations The registered shares are not subject to any transferability limitations. Accordingly, nominees are listed in the share register.

29

Conzzeta – Annual report 2010 Corporate governance

3 Board of Directors

1

2

3

4

5

6

Guiding principle The Board of Directors provides a personnel and or­­ ganizational framework for the company’s leadership to exercise its responsibilities. The Board of Directors assesses the progress made toward achieving targets as well as the financial results. In strategic decisions, it seeks

30

to strike a balance between opportunities and risks in the context of financial sustainability. It delegates the responsibility for management, with comprehensive powers, to the members of the Group Executive Board, en­­ abling the executives to strive proactively for business success.

Conzzeta – Annual report 2010 Corporate governance

Members of the Board of Directors 1 Jacob Schmidheiny – Lic. oec. publ. – born 1943 – Chairman of the Board of Directors – Member of the Board of Directors since 1977 – In 1976, he became a member of the Executive Board of Zürcher Zie- geleien, today Conzzeta AG. From 1978 to 2001, he was President and Chief Executive Officer. The transition from the construction materials group to the present-day industrial holding company took place under his leadership. – Jacob Schmidheiny has been Chairman of the Board of Directors of TEGULA AG, Zurich, since 1984.

2 Matthias Auer – Dr. iur. – born 1953 – Member of the Board of Directors since 1996 – He has practiced as a lawyer and notary public in Glarus since 1981. He is a member of the Cantonal Council in Glarus. – ­Matthias Auer is a member of the Board of Directors of TEGULA AG, Zurich.

3 Thomas W. Bechtler – Dr. iur., LL.M. – born 1949 – Member of the Board of Directors since 1987 – Since 1982, he has been a member of the Board of Directors and CEO of Hesta AG, Zug. From 1975 to 1982, he held various managerial positions at Luwa AG. – Thomas W. Bechtler is Vice-Chairman of the Board of Directors of Sika AG, Baar, and a ­member of the Board of Directors of Bucher Industries AG, Niederweningen.

5 Philip Mosimann – Dipl. Ing. ETH – born 1954 – Member of the Board of Directors since 2007 – He joined Bucher Industries AG, Niederweningen, in 2001, becoming Chief Executive Officer in 2002.

Between 1980 and 2001, Philip Mosimann held a number of managerial positions with the Sulzer Group, Winterthur, including Sulzer Innotec AG (1980 –1992), as Head of Division Sulzer ­Therm­tec (1992 –1996) and as Head of Division Sulzer Textil, Rüti (1997 – 2000).

6 Robert F. Spoerry – Dipl. Masch.-Ing. ETH, MBA – born 1955 – Member of the Board of Directors since 1996 – He is Chairman of the Board of Directors of Mettler-Toledo International Inc., Greifen- see, which he also led as CEO from 1993 to 2007.

– ­Robert F. Spoerry is a member of the Board of ­Directors of Holcim Ltd, Jona, Sonova Holding AG, Stäfa, Geberit AG, Jona, and Schaffner Holding AG, Luterbach.

All members of the Board of Directors are Swiss nationals.

No member is actively involved in the executive man­ agement of the Conzzeta Group, nor has been in the last three years. Apart from the role of shareholder, no member has significant business relations with the Group.

4 Werner Dubach – Dipl. Ing. Chem. ETH, MBA – born 1943 – Member of the Board of Directors since 1993 – Since the sale of the beverages and real estate segments of Eichhof Group in 2008, he has headed Datacolor AG, Lucerne (formerly Eichhof Holding AG) as Chairman of the Board. From 1998 to 2008, he was Chairman of the Board of Directors and Chief Executive Officer of Eichhof Holding AG, Lucerne. In 1983 he became CEO and a member of the board of Brauerei Eichhof. Between 1970 and 1983, he held various managerial posts within the Eichhof Group. – Werner Dubach is a board member of a number of start-up enterprises.

31

Conzzeta – Annual report 2010 Corporate governance

Election and term of office In accordance with the Articles of Incorporation, the Board of Directors comprises at least four and no more than eight members. It is elected for a term of three years.

The next total renewal is due to take place at the Annual General Meeting of Shareholders in 2011. There are no limitations on terms of office.

Internal organization The Board of Directors acts as an integral body and does not appoint special committees. The Chairman is involved in and supervises the preparation of the bases for decision of the Board of Directors and the implementation of its decisions. The substantive preparation and operational implementation of the Board’s decisions are the re­­sponsibility of the Group Chief Executive Officer. This applies in matters of strategy, financing, personnel appointments and important individual transactions.

The Group Chief Executive Officer, the Group Chief Financial Officer, the General Counsel and the Secretary of the Board attend Board meetings, unless the Board of Directors decides otherwise. In ad­­dition, heads of business units, senior executives from Group companies, and, on occasions, external consultants are also called upon to take part in Board meetings, depending on the specific topic to be discussed. Annually, the Board of Directors holds four or five ordinary half- to full-day sessions. Five such meetings were held in 2010.

Risk assessment: the Group has methodical procedures which serve the Board of Directors as a basis for its assessment of the business situation, as well as strategic, financial and operational risks. In addition to the financial reports and analyses (see “Instruments of information and control”), these include the internal control system as well as strategic and operative risk management.

Competences The Board of Directors has delegated responsibility for management of the Group’s business to the members of the Group Executive Board, in accordance with the powers set forth in the Articles of Incorporation.

The members of the Group Executive Board and the managements of the individual business units have extensive competences in regard to the strategic and operational management of the units assigned to them. It is their task, through the careful development of human, material and organizational resources, to deliver a competitive per­ formance in future-oriented industries as well as robust financial results. Decision-making competences are graded according to their significance and financial magnitude.

32

The Board of Directors has the following main responsibilities: –– determination of the Group organization –– appointment of the members of the Group Executive Board –– supervision of Group management and evaluation of prospects and results –– determination of the Group’s strategic and financial goals –– ratification of the main features of the business unit strategies –– decisions on important investments, divestments, proj- ects and financial obligations, the decision-making competence being limited to sums exceeding thresholds between CHF 3 million and CHF 10 million –– determination of the principles of accounting, financial planning, internal controlling and reporting –– assessment of the risk situation of the Group, evaluating the opportunities and the sustainability in terms of human and financial resources.

Instruments of information and control The Conzzeta Group has a well-developed planning and information system. It is built from the base up, becoming increasingly concentrated towards the top.

The Board of Directors is oriented verbally and in writing about the strategies, plans and results of all business units. The Board of Directors receives monthly written reports comprising the main key figures and a commentary on important events. Every three months, the Board of Directors receives a detailed report with the complete financial statements of the business units and the Group and comprehensive management reports. On an annual basis, the Board of Directors is presented with the medium-term and annual planning as a basis for its decisions on these matters. The Board of Directors also receives a report on the risk situation (see also page 65), the management letter of the auditors and the report on the employee pension funds.

The Board of Directors meets in a rotating cycle for an in-depth review of key strategic questions at Group and business unit level. At the invitation of the Board of Directors, the individual business units present their situation and plans. A special documentation is produced for important individual transactions and presented at Board meetings by those responsible.

The Chairman of the Board of Directors takes part in the strategy meetings of the business units, as well as in some closing discussions and project meetings.

Conzzeta – Annual report 2010 Corporate governance

4 Group Executive Board

1

2

3

4

5

6

7

8

9

1 Robert Suter – Dipl. Ing. ETH, MBA – born 1958 – Group Chief Executive Officer since 2009 – Starting in 1995, Robert Suter worked for ABB in a number of management positions. Most recently, as a member of management in the Transformersbusiness unit, with worldwide responsibility for the Small Power and Traction Transformers product group. Between 2000 and 2005, he was head of the High Voltage Products business unit and also served as head of ABB operations in Korea. From 1995 to 1999, Robert Suter was CEO at Micafil.

Before 1995, he worked at Cellpack AG (as division head in Canada and Switzerland) and at Oerlikon Contraves AG as a development engineer in the aerospace field.

2 Bart J. ten Brink – Dipl. Ing. VAT Tilburg, Neth­er­ lands – born 1964 – Head of the Foam Materials business unit since 2009 – From 1991, he served in various management and senior management ­positions within the international foam manufac­ turing group Recticel N. V., for the last ten years as head of two strategic business units, composite foams and acoustical products, with worldwide responsibility. From 1995 to 1998, he was as Tech- nical Director and Industrial Manager responsible for the Nordflex Group Scandinavia (joint venture of Recticel Int. and Shell Scandinavia). Between 1992 and 1995, he served as Plant Manager of Recticel Industry Buren. Bart J. ten Brink is a Dutch citizen.

33

Conzzeta – Annual report 2010 Corporate governance

3 Serge Entleitner – Mag. rer. soc. oec. – born 1964 – Head of the Graphic Coatings business unit – He joined Schmid Rhyner AG as chief executive in 2005.

Since 2009 an autonomous business unit of the Conzzeta Group, the company was previously man- aged as Other Industrial Activities. From 2000 to 2005, he was a member of divisional management of Sefar AG in Thal. As Assistant Vice-President, he was responsible for distribution, marketing and the branches in Europe, Latin America and Africa.

Prior to that, he held various management positions in the textile machinery industry. Serge Entleitner is an Austrian citizen.

4 Richard Jakob – Dipl. El.-Ing. ETH – born 1950 – Head of the Glass Processing Systems business unit since 2007 – He served in various positions within the Schindler Group, most recently heading the corporate task force. From 2000 to 2005, he was Senior Vice-President in charge of the Eastern Europe market region and later Northern Europe.

Before that, as a member of executive management of Schindler Switzerland, he was responsible for the profit center new installations and assembly, at Schindler France for the homemarket business and as General Manager for various ­market regions in Switzerland.

5 Kaspar W. Kelterborn – Lic. oec. HSG – born 1964 – Group Chief Financial Officer since 2006 – From 2003 until mid-2005, he was CFO and a member of the Executive Board of Unaxis Group. From 1996 to 2002, he held various international senior man­ a­gement positions in the area of finance at Clariant Group; between 1992 and 1995, he worked for Sandoz International AG in Switzerland and abroad.

– Kaspar W. Kelterborn is a member of the Board of Directors of Similasan Holding AG, Sarnen.

6 Martin Pfister – Engineer FH, BSc in economics, MBA – born 1966 – Head of the Automation Systems business unit since 2005 – He joined the Conzzeta Group in 2004 as CEO of the former Seckler AG. From 2002 to 2004, he was CEO of Feintool Auto- mation AG, Aarberg. Between 1996 and 2001, he served in various leading and ­management functions in the machine industry.

34

7 Rolf G. Schmid – Lic. oec. HSG – born 1959 – Head of the Sporting Goods business unit – He joined the Conzzeta Group in 1996 as Head of the sports division of Arova Mammut AG. He took over as CEO of today’s Mammut Sports Group AG in 2000.

Between 1985 and 1995, he held leading positions in the pharmaceutical industry as well as in the watch and tourist industries. – Rolf G. Schmid is a member of the Executive Board of economie­suisse and a member of the Board of Directors of CF Holding AG, St. Gallen, and Kuhn Rikon AG, Zell.

8 Ralph Siegle – Fed. dipl. in real estate management – born 1959 – Head of the Real Estate business unit since 2003 – From 2002 to 2003, he was in charge of portfolio management at Mobimo AG, Zollikon.

Between 1993 and 1998, he was a team leader at Livit Immobilien Management AG, Zurich, becoming head of property management and a member of management in 1999.

9 Ferdi Töngi – Engineer FH, MBA – born 1951 – Head of the Sheet Metal Processing Systems busi- ness unit since 2002 – He joined the Conzzeta Group in 2000 as Head of the Machinery and Sys- tems Engineering business unit. From 1997 until 1999, he was Head of division Europe North and a member of Group management at AGIE Charmilles Group, Losone and Geneva. Between 1992 and 1996, he was a member of Group management at AGIE Group, Losone, with responsibility for marketing, sales and customer services. From 1974 to 1989, he held various management positions in the precision instrument and machine industry.

With the exception of Serge Entleitner and Bart J. ten Brink, all members of the Group Executive Board are Swiss nationals.

Conzzeta – Annual report 2010 Corporate governance

5 Content and method of determining compensation The amount of compensation received by the members of the Board of Directors and of the Group Executive Board is reported in the notes to the financial statements of Conzzeta AG (page 73).

In accordance with the Articles of Incorporation, the members of the Board of Directors determine their own compensation on an annual basis, taking account of the personal contribution that each has made and the financial situation of the company.

The members of the Group Executive Board receive a salary comprising a fixed and a variable part. In deter­ mining the fixed salary, the individual responsibility and experience of the person concerned is taken into con­ sideration. The variable part (bonus) is between 15 and 45 % of the gross compensation and is based on the achievement of the individual management targets which are reviewed and agreed annually and which contain quantitative as well as qualitative elements. The bonus reflects the overall situation and the extent to which objectives have been achieved; it is determined by fair consideration at the end of the financial year and paid out in a single cash sum.

A proposal regarding the compensation packages for the members of the Group Executive Board is submitted by the Group Chief Executive Officer to the Chairman of the Board of Directors for approval. The Chairman of the Board of Directors determines the compensation to be paid to the Group Chief Executive Officer and informs the Board of Directors once a year about all compen­sation packages. No formalized calculation models are used to determine compensation packages, as appropriate ap­­ praisal of performance is considered to be a management re­­sponsibility.

There are no share or option participation programs for or loans to members of the Board of Directors or the Group Executive Board.

6 Shareholders’ participation rights Restriction of voting rights and representation Every bearer share and every registered share has one vote at the General Meeting of Shareholders. The registered shares of Conzzeta AG are not subject to restrictions of voting rights.

Statutory quora (Article 10 of the Articles of Incorporation) A resolution of the General Meeting of Shareholders which carries at least two-thirds of the represented votes and an absolute majority of the par value of the represented votes is required for: 1 – changes to the Articles of Incorporation 2 – changes to the share capital 3 – the limitation or annulment of subscription rights 4 – the liquidation of the Company Subject to Article 704 CO, the General Meeting of Shareholders passes all other resolutions and decides its elections by an absolute majority of the votes cast, excluding blank and invalid ballots.

Convocation of the General Meeting of Shareholders (Article 7 of the Articles of Incorporation) The Articles of Incorporation have no rule which differs from applicable legal standards. The invitation to Annual and Extraordinary General Meetings is issued by the Board of Directors, or by the auditors as the case may be, no later than 20 days before the date of the meeting. The invitation, which sets out an agenda of matters for discussion, the proposals of the Board of Directors and – where applicable – of shareholders who have demanded the convocation of the General Meeting or the tabling of an item on the agenda, is published in the Swiss Official Gazette of Commerce.

Agenda (Article 7 of the Articles of Incorporation) Shareholders who represent shares with a par value of at least CHF 1 million can demand the inclusion of an item on the agenda. The request must be submitted to the Company at least 40 days before the General Meeting of Shareholders.

35

Conzzeta – Annual report 2010 Corporate governance

Registrations in the share register (Article 4 of the Articles of Incorporation) From the date of invitation to a General Meeting of Shareholders up to the day after the General Meeting itself, no registrations will be accepted in the share register.

7 Change of control and defensive measures Duty to make an offer (Article 5 of the Articles of Incorporation) Opting out: persons or companies acquiring shares in the Company are not under obligation to make an offer in accordance with the Federal Act on Stock Exchanges and Securities Trading.

8 Auditors Duration of the mandate and term of office of the auditor in charge The statutory auditors of Conzzeta AG and group auditors since 1939 are KPMG AG in Zurich, or its legal predecessor. The auditor in charge, Hanspeter Stocker, has held this position since the 2010 business year.

Auditing fees and additional fees In the reporting year, the auditors responsible for the Group’s annual financial statements and some of the Group companies’ annual financial statements submitted accounts for the following fees: Auditing fees: CHF 384 108 Additional fees: CHF 159 228 Informational instruments pertaining to the auditors The Chairman represents the Board of Directors vis-à-vis the auditors. After hearing the auditors and the Group Chief Financial Officer, the Chairman determines the main points the Company wishes to be covered by the audit.

He discusses the audit results with the auditors, along with the Group Chief Executive Officer and the Group Chief Financial Officer, and assesses the results. The Group Chief Financial Officer adopts the recommended improvements. The Board of Directors takes note of the auditors’ reports which are commented upon by the head auditor at an ordinary meeting of the Board of Directors.

The Chairman and the Group Chief Financial Officer brief the Board of Directors about their assessment and the measures adopted. They inform the Board of Directors about the auditing costs and give their opinion of the quality of the audit services provided. Unless there is a compelling reason to do so, the Board of Directors makes no further assessment.

36

Conzzeta – Annual report 2010 Corporate governance

9 Information policy The Company publishes an annual report as of December 31 and an interim report as of June 30. Interested parties are informed about the financial statements and other important events in writing. A conference is held for media representatives and financial analysts in con­ junction with the publication of the annual report as of December 31. The consolidated financial statements in accordance with Swiss GAAP FER give a true and fair view of the actual circumstances.

10 Significant events since the balance sheet date Serge Entleitner, Head of the Graphic Coatings business unit, has given notice and will leave the Group in July 2011.

This and other information about the Company, calendar dates and contacts can be found at http://www.conzzeta.ch

37

Conzzeta – Annual report 2010

38

Financial report

Consolidated financial statements

41 42 43 44 45 66 68

Income statement Balance sheet Cash flow statement Statement of changes in shareholders’ equity Notes to the consolidated financial statements List of consolidated companies by business unit Statutory auditor’s report

Financial statements of Conzzeta AG

70 71 72 75 77 78

Income statement Balance sheet Notes to the financial statements Additional information on the financial statements Proposed appropriation of available earnings Statutory auditor’s report

Conzzeta – Annual report 2010 Financial report

Conzzeta – Annual report 2010 Financial report

Consolidated income statement – Group 2010

2009

Notes

CHF m

CHF m

Net revenue

3

1 051.943

955.166

Changes in inventory and own work capitalized

4

Total revenue

25.916

– 50.675

1 077.859

904.491

Cost of materials

5

– 531.674

– 421.391

Personnel expenses

6

– 269.216

– 286.691

Other operating expenses

7

– 185.539

– 159.704

16, 17

– 31.524

– 32.386

18

– 3.020

– 5.674

56.886

– 1.355 0.608

Depreciation on property, plant and equipment, and financial assets Depreciation on intangible assets Operating result Financial result

8

– 2.605

Result from unconsolidated investments

9

0.123

0.150

54.404

– 0.597

Ordinary result before taxes Extraordinary result

10

Result before taxes Taxes

5.400

10.138

59.804

9.541

– 8.228

– 6.199

Minority interests

– 0.117

– 0.071

Group result

51.459

3.271

11

41

Conzzeta – Annual report 2010 Financial report

Consolidated balance sheet at December 31 – Group

Notes

2010

2009

CHF m

CHF m

404.008

403.284

Assets Cash and cash equivalents Securities

12

106.903

52.700

Trade receivables

13

167.704

166.030

5.088

4.282

14

18.109

14.668

8.799

7.829

15

204.430

204.967

915.041

853.760

Prepayments to suppliers Other receivables Prepaid expenses and accrued income Inventories Current assets Property, plant and equipment

16

320.330

349.886

Financial assets

17

45.044

44.075

Intangible assets

18

7.152

7.084

Fixed assets

372.526

401.045

Total assets

1 287.567

1 254.805

89.386

59.170

34.293

24.995

6.592

5.484

Liabilities and shareholders’ equity Trade payables Advance payments from customers

19

Short-term financial liabilities Other short-term liabilities

20

10.433

10.533

Accrued expenses and deferred income

21

66.232

69.028

Short-term provisions

22

24.532

28.905

231.468

198.115

Short-term liabilities Long-term financial liabilities

8.876

8.510

Other long-term liabilities

0.084

0.126

Pension fund liabilities

0.435

0.860

Long-term provisions

23

22

Long-term liabilities Share capital Capital reserves Retained earnings Shareholders’ equity excluding minority interests Minority interests Shareholders’ equity including minority interests Total liabilities and shareholders’ equity

42

24

63.973

68.925

73.368

78.421

46.000

46.000

1.600

1.600

934.834

930.491

982.434

978.091

0.297

0.178

982.731

978.269

1 287.567

1 254.805

Conzzeta – Annual report 2010 Financial report

Consolidated cash flow statement – Group 2010 Notes

Group result Minority interests in net income Depreciation Impairments

2009

CHF m

CHF m

51.459

3.271

0.117

0.071

32.817

36.969

1.727

1.091

Gain on disposal of fixed assets and business activities

– 7.389

– 14.323

Change in provisions and pension fund liabilities

– 7.462

– 4.843

Other non-liquidity-related positions

– 2.189

1.717

Cash flow from operating activities before change in working capital

69.080

23.953

Change in inventories

– 18.036

82.807

Change in trade receivables

– 15.638

67.159

Change in prepayments to suppliers

– 0.906

3.121

Change in other receivables, prepaid expenses and accrued income

– 5.659

15.345

Change in trade payables

33.161

– 17.475

Change in advance payments from customers

12.198

– 9.301

Change in other liabilities, accrued expenses and deferred income Cash flow from operating activities Investment in property, plant and equipment Divestment of property, plant and equipment Investment in financial assets and securities

1.470

– 21.495

75.670

144.114

– 18.034

– 25.878

2.367

20.362

– 72.978

– 32.711

Divestment of financial assets and securities

23.896

38.060

Investment in intangible assets

– 3.097

– 2.160

Divestment of business activities

25

Cash flow from investing activities Cash flow from operating and investing activities (free cash flow) Dividend paid to holding company shareholders

26

9.748 – 58.098

– 2.327

17.572

141.787

– 13.800

– 27.600

Change in short-term financial liabilities

1.035

2.000

Change in long-term financial liabilities

0.614

1.355

Change in other long-term liabilities

– 0.038

– 0.691

– 12.189

– 24.936

– 4.659

0.241

0.724

117.092

Cash and cash equivalents at 1 / 1

403.284

286.192

Cash and cash equivalents at 12 / 31

404.008

403.284

Cash flow from financing activities Effect of currency translation on cash and cash equivalents Change in cash and cash equivalents

43

Conzzeta – Annual report 2010 Financial report

Consolidated statement of changes in shareholders’ equity at December 31 – Group Share capital

Agio / capital reserves

Retained earnings Currency translation effects

At 12 / 31 / 2008

Total excl. minority interests

Other retained earnings

Minority interests

Total incl. minority interests

Value fluctuation financial instruments

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

46.000

1.600

– 47.110

998.229

2.027

1 000.746

0.114

1 000.860

0.071

3.342

Group result 2009

3.271

3.271

Dividend payment

– 27.600

– 27.600

– 27.600

– 1.223

– 1.223

– 1.223

2.897

– 0.007

2.890

0.804

978.091

0.178

978.269

0.117

51.576

Change to market value of financial instruments Currency translation effects At 12 / 31 / 2009

2.897 46.000

1.600

– 44.213

973.900

Group result 2010

51.459

51.459

Dividend payment

– 13.800

– 13.800

– 13.800

1.362

1.362

1.362

– 34.678

0.002

– 34.676

2.166

982.434

0.297

982.731

Change to market value of financial instruments Currency translation effects At 12 / 31 / 2010

44

– 34.678 46.000

1.600

– 78.891

1 011.559

Conzzeta – Annual report 2010 Financial report

Notes to the consolidated financial statements General principles The consolidated financial statements comprise the audited financial statements of the Group companies of Conzzeta AG at December 31, using accounting policies which are consistent throughout the Group and in accordance with Swiss GAAP FER. For the 2010 consolidated financial statements, the historical costs have been reported using the same valuation policies and basis as in the previous year.

The principle of individual valuation has been applied to assets and liabilities.

Consolidation principles Scope and method of consolidation The consolidated financial statements include the financial statements of Conzzeta AG and of all companies directly or indirectly controlled by Conzzeta AG, through investments with more than 50 % of the votes or by another means, and uniformly managed. These investments are fully consolidated. The share of the minority shareholders in the net assets and net result is disclosed separately. Investments with 50 % of the voting rights are consolidated on a pro rata basis in accordance with the share in the capital. Intragroup receivables and payables as well as expenses and income are offset against each other, and intragroup profits have been eliminated. The assets and liabilities of companies included in the consolidation for the first time are valued at current values. Goodwill arising from this revaluation is capitalized and amortized to the income statement. First-time consolidations are included from the date on which control is acquired; deconsolidations from the date on which control is relinquished. Investments in associates (at least 20 %, but less than 50 % of the voting rights) are accounted for under the equity method. Other minority interests are valued at acquisition cost, less any necessary provisions for diminution in value.

A list of the consolidated companies and the associated companies can be found on page 66 et seq.

Foreign currency translation The financial statements of foreign Group companies are prepared in their respective functional currencies and translated into CHF as follows: –– balance sheets at year-end exchange rates –– income statements at annual average rates –– cash flow statements at annual average rates The resulting translation differences, as well as foreign currency gains and losses on long-term, equitylike loans to Group companies, are taken directly to the consolidated shareholders’ equity.

All gains and losses resulting from transactions in foreign currencies as well as adjustments to foreign currency balances at the balance sheet date are recognized in the income statement.

45

Conzzeta – Annual report 2010 Financial report

Accounting and valuation policies Cash and cash equivalents Cash and cash equivalents include cash on hand, postal checking and bank account balances as well as fixed-term deposits with a maximum residual term of 90 days.

Securities The securities are marketable, readily realizable monetary and capital investments (including structured financial products). They are shown at market value.

Receivables Trade receivables and other receivables are shown at invoiced amounts, less appropriate provisions for debtors’ risks. Specific provisions for bad debts are accounted for where required.

Inventories Inventories are shown at the lower of acquisition or production cost and fair value less cost to sell.

Production cost is calculated without imputed interest. Discounts are recognized as purchase price ­r eductions. Provisions are made for inventories that are difficult to realize or slow-moving.

Property, plant and equipment Land has been valued at acquisition cost less impairment adjustments. Other tangible fixed assets are valued at acquisition or production cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the asset. Estimated useful lives are as ­f ollows:

Properties for rent

30 to 45 years

Factory buildings

30 to 40 years

Plant and machinery

5 to 12 years

Tools, fixtures and fittings, vehicles

2 to 8 years

IT hardware and office machinery

3 to 5 years

As a result of the Group’s diversified business activities, it has a broad range of fixed assets, and the useful lives of property, plant and equipment vary. In the estimated useful lives of properties for rent and factory buildings, the loss in value of short-lived components is also taken into account.

46

Conzzeta – Annual report 2010 Financial report

Financial assets Financial assets are valued at acquisition cost, less appropriate provisions for value adjustments. Also recognized in the financial assets are employer contribution reserves not subject to renounced use.

Intangible assets Intangible assets include goodwill arising from the acquisition of business activities as well as of formulas, licenses, trademarks and software. Goodwill and other intangible assets are generally amortized to the income statement over their estimated useful life using the straight-line method. Normally, this is five years for goodwill and between three and five years for software and licenses.

Impairment of assets The value of assets is assessed at regular intervals. Where there are signs of loss of value, the realizable value is reassessed. If the book value exceeds the realizable value, an additional depreciation adjustment is made.

Liabilities Liabilities are usually recognized in the balance sheet at invoiced amounts.

Provisions Provisions are formed when an event likely to give rise to an obligation occurs prior to the balance sheet date, and the amount involved and / o r the settlement date are uncertain, but can be estimated. This obligation can have legal or factual grounds. In the case of land which contains waste or noxious materials, there is a legal obligation to undertake measures for remediation or decontamination. An appropriate provision is made for such cases.

Deferred taxes Deferred income tax is provided for all temporary differences arising between the tax bases of assets and liabilities and their carrying value for reporting purposes, using the currently enacted tax rates on an entity level. Movements in the deferred tax provision are included in the tax position in the income statement. Deferred taxes for loss carry-forwards are only capitalized when in all probability future taxes on profits can be offset.

47

Conzzeta – Annual report 2010 Financial report

Employee pensions The pension obligations of Group companies in respect of retirement, death and disability benefits are based on local rules and customs in each country. Regular contributions are paid to government bodies, autonomous pension funds or insurance companies. The pension and benefit payments and outstanding benefits during the accounting period and the regular contributions to the various pension funds are charged to the income statement. The private pension plans in Switzerland are defined contribution schemes for the creation of retirement assets for conversion into fixed pensions, with additional risk benefits. Certain foreign Group companies have defined benefit schemes. These are valued and presented in accordance with the standards of Swiss GAAP FER 16. Any actual economic impact of the pension funds on the company is calculated at the balance sheet date. An economic benefit is only capitalized when this is to be used for the future service cost of the company. An economic obligation is recognized as a liability when the requirements for the formation of a provision are met. Freely available employer contribution reserves are shown as assets. The difference between the annually determined economic benefits and obligations and the change in the employer contribution reserves are included in the income statement.

The summarized statement for the autonomous pension funds in Switzerland is valued in accordance with Swiss GAAP FER 26 and shown on page 82 et seq. Actuarial reviews are undertaken on a regular basis.

Research and development Research and development costs are fully charged to the income statement.

Derivative financial instruments Forward exchange contracts and options are used to hedge against some currency risks arising from business operations. Hedge transactions, like the underlying transactions, are shown at market value and recognized in the balance sheet as accrued income or expense. Value changes on hedge trans­ actions against future currency risks will be shown directly in equity until completion of the underlying transaction.

48

Conzzeta – Annual report 2010 Financial report

Additional notes to the consolidated financial statements 1 Changes in the scope of consolidation Company closures and internal mergers: Bystronic Slovakia s.r.o. in Bratislava (Slovakia) was liquidated with effect from March 12, 2010.

Bystronic Solution Centre Inc. in Ottawa (Canada) was liquidated with effect from December 31, 2010.

Swilac Immobilien AG and Prebe AG in Zurich (Switzerland) were merged with Plazza Immobilien AG in Zurich (Switzerland) with effect from January 1, 2010.

The present structure of the Group companies is shown on page 66 et seq.

2 Currency translation rates Year-end exchange rates 2010

Year-end exchange rates 2009

Annual average rates 2010

Annual average rates 2009

CHF

CHF

CHF

CHF

Euro area

1 EUR

1.25

1.48

1.38

1.51

USA

1 USD

0.94

1.03

1.04

1.08

Great Britain

1 GBP

1.45

1.67

1.61

1.69

Sweden

100

SEK

13.95

14.50

14.48

14.20

China

100 CNY

14.17

15.10

15.39

15.90

South Korea

100 KRW

0.08

0.09

0.09

0.09

Japan

100

JPY

1.15

1.11

1.19

1.16

Malaysia

100 MYR

30.53

30.10

32.35

30.80

49

Conzzeta – Annual report 2010 Financial report

Consolidated income statement 3 Net revenue

Net revenue 2009

CHF m

%

955.2

100.0

– 34.3

– 3.6

– 9.5

– 1.0

Changes in Group revenue 2010 due to: – currency translation effects – divestments – acquisitions – changes in quantity and price Total change Net revenue 2010

140.5

14.7

96.7

10.1

1 051.9

The divestment effect is due to the disposal of the Toko product line, with effect from September 1, 2010, and the disposal of ixmation AG, Pieterlen (Switzerland), with effect from September 1, 2009.

2010

2010

2009

2009

CHF m

%

CHF m

%

Sheet Metal Processing Systems

410.9

39.1

356.1

37.3

Glass Processing Systems

167.5

15.9

145.6

15.3

56.4

5.4

56.1

5.9

Foam Materials

127.9

12.2

116.8

12.2

Sporting Goods

221.2

21.0

215.3

22.5

Graphic Coatings

46.6

4.4

43.2

4.5

Real Estate and miscellaneous revenue

21.4

2.0

22.1

2.3

1 051.9

100.0

955.2

100.0

Net revenue by business unit

Automation Systems

Total

2010

2010

2009

2009

CHF m

%

CHF m

%

Switzerland

160.3

15.2

156.0

16.3

Euro area

360.2

34.2

386.3

40.4

Net revenue by geographic area

50

Rest of Europe

140.5

13.4

130.7

13.7

Total Europe

661.0

62.8

673.0

70.4

North and South America

143.9

13.7

119.4

12.5

Asia and Pacific

16.5

242.1

23.0

157.3

Africa

4.9

0.5

5.5

0.6

Total

1 051.9

100.0

955.2

100.0

Conzzeta – Annual report 2010 Financial report

4 Changes in inventory and own work capitalized 2010

2009

CHF m

CHF m

Change in inventory

25.6

– 50.7

Own work capitalized

0.3

-

25.9

– 50.7

Total

The change in inventory is due to the change in inventories of semifinished products, work in progress and finished products.

5 Cost of materials Cost of materials summarizes the overall cost of raw materials, intermediates and supplies, as well as merchandise held for resale and expenses for third-party manufacturing, handling or processing of the Group’s products (external services).

Changes in inventories of semifinished products, work in progress and finished products have a significant influence on the cost of materials in relation to total revenue.

6 Personnel expenses 2010

Wages and salaries Social security benefits Other personnel expenses Total

2009

CHF m

CHF m

224.7

233.2

41.3

45.3

3.2

8.2

269.2

286.7

In addition to contributions to state pension plans, social security benefits include the contributions to pension funds described in note 27 on page 63.

7 Other operating expenses Other operating expenses include the cost of repairs and maintenance on property, plant and equipment, sales provisions, expenses for guarantees, assembly, transport and energy, as well as sundry ­e xpenses for production, development, sales and administration.

51

Conzzeta – Annual report 2010 Financial report

8 Financial result

Financial income

2010

2009

CHF m

CHF m

3.2

4.2

Financial expenses

– 5.8

– 3.6

Total

– 2.6

0.6

Income from securities fell by CHF 0.6 million. Interest income rose owing to the increased level of CHF bond holdings, though it was not quite sufficient to offset the currency losses. The gain on the investments of the employer contribution reserves also showed a decrease, being CHF 0.4 million lower. ­F inancial expenses comprise the interest expense arising, inter alia, from the financing of sites abroad, currency losses on the valuation of liquid assets, on short-term or repaid loans between Group companies, and on other financial assets.

9 Result from unconsolidated investments The result from unconsolidated investments comprises gains and losses from associated companies.

10 Extraordinary result The extraordinary result amounting to CHF 5.4 million comprises CHF 4.3 million from the sale of a product line in the Sporting Goods business unit and CHF 1.1 million from the sale of land as well as of production buildings no longer required for production. The previous year’s figure of CHF 10.1 million included proceeds from the sale of land and a production building in Switzerland, as well as a loss on the divestment of a company by the Automation Systems business unit.

11 Taxes

Current taxes on income Deferred taxes Total

2010

2009

CHF m

CHF m

8.8

8.8

– 0.6

– 2.6

8.2

6.2

Current taxes on income include taxes paid and owed on taxable income of the individual companies in accordance with local tax laws. The taxable results of subsidiaries belonging to the tax group in ­G ermany are transferred to the controlling company, Conzzeta Holding Deutschland AG. Deferred taxes are calculated individually per tax subject using the actual expected tax rate. The deferred tax income is due to the net reversal of temporary differences. Current taxes on income were reduced by CHF 4.4 million by recognizing tax-loss carryforwards to offset taxable income

52

Conzzeta – Annual report 2010 Financial report

Consolidated balance sheet 12 Securities The securities are fixed-interest bonds denominated in CHF and shares in a CHF money-market fond.

13 Trade receivables

Trade receivables

2010

2009

CHF m

CHF m

186.6

187.5

Provision

– 18.9

– 21.5

Total

167.7

166.0

For doubtful accounts, individual and overall value adjustments have been deducted. The overall provision is based on the experience of the respective company.

14 Other receivables Other receivables consist mainly of recoverable value-added tax and other tax credits.

15 Inventories 2010

2009

CHF m

CHF m

Raw materials and supplies

69.0

64.7

Merchandise for resale

33.3

52.3

Semifinished products and work in progress

46.5

38.3

Finished products Total

55.6

49.7

204.4

205.0

Most of the decrease in merchandise for resale is attributable to the Sporting Goods business unit. The rising level of orders in Machinery and Systems Engineering resulted in an increase in inventories of semifinished products and work in progress. Overall, the value adjustments on inventories amounted to CHF 38.1 million (previous year: CHF 41.2 million).

53

Conzzeta – Annual report 2010 Financial report

16 Property, plant and equipment Assets under construction, payments on account

Total property, plant and equipment

Undeveloped real estate

Properties for rent

Factory buildings

Plant and machinery

Fixtures and fittings, vehicles

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

9.2

230.0

261.7

198.0

57.4

8.2

764.5

– 0.4

– 0.9

0.1

0.3

– 0.9

Cost At 12 / 31 / 2008 Currency translation effects Changes in scope of consolidation Additions

5.5

Disposals

– 0.5

Reclassifications

0.2

– 0.5

– 1.4

9.3

3.2

6.0

– 4.0

– 28.9

– 3.6

– 1.9 1.6

25.8 – 37.0

1.0

4.7

– 6.7

10.3

– 0.7

– 8.7

– 0.1

Cost at 12 / 31 / 2009

15.2

234.9

259.9

181.2

57.8

1.4

750.4

Currency translation effects

– 0.4

– 14.4

– 10.8

– 3.6

– 29.2

– 0.1

– 0.2

– 0.3

Changes in scope of consolidation Additions Disposals

– 0.2

– 1.6

3.1

8.1

5.5

– 1.0

– 3.1

– 4.3

1.3

18.0 – 10.2

Reclassifications

– 0.2

– 0.6

– 0.2

2.2

– 0.5

– 1.1

– 0.4

Cost at 12 / 31 / 2010

14.4

232.7

247.4

177.5

54.7

1.6

728.3

2.1

116.4

101.6

143.3

38.9

-

402.3

– 0.2

– 0.4

Accumulated depreciation At 12 / 31 / 2008 Currency translation effects Changes in scope of consolidation Ordinary depreciation

5.6

Extraordinary depreciation Disposals

– 0.3

Reclassifications Accumulated depreciation at 12 / 31 / 2009

1.8

– 1.2

– 1.6

7.3

11.4

7.0

31.3

0.8

0.1

– 1.1

– 27.2

– 3.1

– 31.7

– 1.9

0.6

– 0.7

– 0.1

123.9

106.5

127.4

40.9

– 4.1

– 7.4

– 2.6

– 14.1

– 0.1

– 0.1

– 0.2

10.6

6.7

29.5

Changes in scope of consolidation

– 0.2

400.5

6.9 0.8

0.9

– 1.6

– 0.6

– 2.8

– 3.9

– 9.1

– 0.6

0.6

– 0.3

– 0.3

Reclassifications Accumulated depreciation at 12 / 31 / 2010

-

5.3

Extraordinary depreciation Disposals

0.9

1.9

Currency translation effects Ordinary depreciation

– 0.6

– 0.4

1.7

1.6

127.6

108.9

129.2

40.7

-

408.0

Net book value of property, plant and equipment at 12 / 31 / 2009

13.4

111.0

153.4

53.8

16.9

1.4

349.9

Net book value of property, plant and equipment at 12 / 31 / 2010

12.8

105.1

138.5

48.3

14.0

1.6

320.3

54

Conzzeta – Annual report 2010 Financial report

The fire insurance value of property, plant and equipment amounts to CHF 906.2 million (previous year: CHF 950.8 million). Of this, CHF 628.6 million comprises building insurance values (CHF 653.9 million).

Additions under factory buildings include a new building in Penang (Malaysia), with offices and an assembly facility, for the Automation Systems business unit. The additions under plant and machinery comprise significant investments in a large-part machining center at the production site in NiederĂśnz (Switzerland) in the Sheet Metal Processing Systems business unit, as well as capacity expansion and process optimization in Adliswil (Switzerland) in the Graphic Coatings business unit. The figure for fixtures, fittings and vehicles includes major expenditure on monobrand stores and shop-in-shop concepts at various locations in Europe and Asia, as well as on replacement of vehicles in the Sporting Goods business unit.

Extraordinary depreciation relates to revaluation of the intrinsic value of a production building and production plant.

55

Conzzeta – Annual report 2010 Financial report

17 Financial assets Nonconsolidated investments

Long-term receivables and loans

Securities held as fixed assets

Employer contribution reserves held as assets

Active deferred taxes

Total financial assets

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

0.4

15.2

0.4

26.3

4.9

47.2

Cost At 12 / 31 / 2008 Currency translation effects Additions

0.1 0.1

Disposals Cost at 12 / 31 / 2009

0.5

0.1

6.6

0.5

1.1

8.3

– 3.3

– 4.7

– 2.0

– 10.0

22.1

4.0

45.6 – 1.1

18.6

0.4

Currency translation effects

– 0.8

– 0.3

Additions

12.5

1.1

13.6

Disposals

– 10.3

– 1.0

– 0.4

– 11.7

Cost at 12 / 31 / 2010

0.5

20.0

0.4

21.1

4.4

46.4

-

1.1

0.3

-

-

1.4

Accumulated depreciation At 12 / 31 / 2008 Ordinary depreciation Disposals Accumulated depreciation at 12 / 31 / 2009

-

Currency translation effects Ordinary depreciation

0.2

0.2

– 0.1

– 0.1

1.2

0.3

-

-

– 0.1 0.1

Disposals

1.5 – 0.1

0.2

0.3

– 0.3

– 0.3

Accumulated depreciation at 12 / 31 / 2010

0.1

1.0

0.3

-

-

1.4

Net book value of financial assets at 12 / 31 / 2009

0.5

17.4

0.1

22.1

4.0

44.1

Net book value of financial assets at 12 / 31 / 2010

0.4

19.0

0.1

21.1

4.4

45.0

56

Conzzeta – Annual report 2010 Financial report

The additions and disposals in long-term receivables and loans are due to long-term hire-purchase business with customers, loans to third parties and deposits for rents and securities for old environmental liabilities.

The disposal in the employer contribution reserves held as assets comprises the debited employer contributions from the Conzzeta welfare institution amounting to CHF 1.1 million (previous year: CHF 4.7 million) and the financial gain of CHF 0.1 million (CHF 0.5 million).

The evaluation of active deferred taxes using current income tax rates is based on temporary differences in individual companies. The active deferred taxes from recognized loss carry-forwards as well as temporary valuation differences amount to CHF 4.5 million (CHF 4.0 million). As a precautionary mea­ sure, and because of uncertainties regarding the future scope for offsetting, the tax effects from loss carry-forwards amounting to CHF 13.1 million (CHF 16.8 million) were not capitalized. This evaluation is based on the average projected Group tax rate of 20.2 % (20.5 %).

57

Conzzeta – Annual report 2010 Financial report

18 Intangible assets Goodwill

Software and licenses

Total intangible assets

CHF m

CHF m

CHF m

77.0

30.8

107.8

1.8

– 0.1

1.7

– 0.8

– 0.8

Cost At 12 / 31 / 2008 Currency translation effects Changes in scope of consolidation Additions

2.2

2.2

Disposals

– 0.4

– 0.4

Reclassifications

0.1

0.1

Adjustment of goodwill

– 51.7

0.1

– 51.6

Cost at 12 / 31 / 2009

27.1

31.9

59.0

Currency translation effects

– 1.8

– 1.4

– 3.2

3.1

3.1

Additions Disposals

– 9.4

Reclassifications Cost at 12 / 31 / 2010

– 9.4 0.4

0.4

34.0

49.9

74.9

22.4

97.3

1.7

– 0.1

1.6

– 0.8

– 0.8

3.8

5.5

15.9

Accumulated depreciation At 12 / 31 / 2008 Currency translation effects Changes in scope of consolidation Ordinary depreciation

1.7

Extraordinary depreciation Disposals Reclassifications

0.2

– 0.4

– 0.4

0.1

0.1

– 51.7

0.1

– 51.6

Accumulated depreciation at 12 / 31 / 2009

26.6

25.3

51.9

Currency translation effects

– 1.9

– 1.2

– 3.1

0.3

2.7

Adjustment of goodwill

Ordinary depreciation Disposals

– 9.4

Reclassifications

3.0 – 9.4

0.3

0.3

15.6

27.1

42.7

Net book value of intangible assets at 12 / 31 / 2009

0.5

6.6

7.1

Net book value of intangible assets at 12 / 31 / 2010

0.3

6.9

7.2

Accumulated depreciation at 12 / 31 / 2010

58

0.2

Conzzeta – Annual report 2010 Financial report

The goodwill disposals are fully depreciated values which can no longer be assigned a measurable value.

They are removed the year following complete write-off, usually after expiry of the useful life of five years.

Additions in asset values for software and licenses include costs for significant investments in the further development and rollout of new, unit-specific ERP solutions in the Glass Processing Systems and Foam Materials business units. Also included in the additions are significant investments in computeraided product development and purchasing, and in the development of B2B solutions in the Sporting Goods business unit.

19 Advance payments from customers Customer payments on account originate from the companies in the Machinery and Systems Engineering business area.

20 Other short-term liabilities The other short-term liabilities consist mainly of taxes owed and social security contributions.

21 Accrued expenses and deferred income 2010

2009

CHF m

CHF m

Accruals and deferrals for taxes

12.1

15.2

Accruals and deferrals for personnel expenses

22.8

20.1

Other accruals and deferrals

31.3

33.7

Total

66.2

69.0

Accrued expenses and deferred income show all expenses and income determined on an accrual basis.

Other accruals and deferrals contain commissions, volume discounts, assembly and maintenance ser­ vices, as well as goods and services obtained from third parties and not yet invoiced.

59

Conzzeta – Annual report 2010 Financial report

22 Provisions Deferred taxes

Environmental commitments

Guarantees

Restructuring

Other provisions

Total provisions

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

22.4

28.7

33.4

0.2

22.1

106.8

0.4

– 0.1

0.3

– 0.4

– 2.8

– 3.2

Provisions At 12 / 31 / 2008 Currency translation effects Changes in scope of consolidation Additions Amounts used

2.8

1.7

13.8

13.3

2.4

34.0

– 0.6

-

– 24.3

– 0.2

– 1.9

– 27.0

Amounts reversed

– 5.9

– 0.2

– 2.9

-

– 4.1

– 13.1

Provisions at 12 / 31 / 2009

18.7

30.2

20.0

10.4

18.5

97.8

1.0

16.1

10.4

1.4

28.9

– 1.6

– 0.6

– 0.6

– 2.9

of wich short-term Currency translation effects Additions

– 0.1 2.6

Amounts used

1.8

15.6

4.2

4.5

28.7

– 4.5

– 14.1

– 3.9

– 1.0

– 23.5

Amounts reversed

– 2.4

– 0.9

– 1.4

– 5.7

– 1.2

– 11.6

Provisions at 12 / 31 / 2010

18.8

26.6

18.5

4.4

20.2

88.5

4.6

14.5

4.4

1.0

24.5

of wich short-term

60

Conzzeta – Annual report 2010 Financial report

The expected timing of the outflow of funds is the basis for the separate disclosure of short- and longterm provisions. Provisions are classified as short-term when the payment of the liability covered is likely to arise within a year.

There are land holdings from previous operating activities and landfill sites which contain waste or noxious materials and are shown in the register of polluted sites. The liability status and the necessary measures were assessed by an expert, but uncertainties attach to some of the findings regarding the nature and extent of the liability. Where liability-related, future-based costs arise on legal or factual grounds, an appropriate provision is formed to cover the estimated costs. Provisions of CHF 1.8 million for environmental commitments were booked for monitoring and removal of newly identified residual liabilities relating to divested and existing industrial sites. The cost of the remediation measures carried out amounted to CHF 4.5 million and the reversal of CHF 0.9 million relates to the expiry of residual pollution risks. More detailed investigations and remediation measures are in progress at various sites.

The guarantee provisions are held mainly in the Sheet Metal Processing Systems and Glass Processing Systems business units.

The restructuring measures announced in 2009 were implemented. Of the provisions added, CHF 3.9 million was used and CHF 5.7 million reversed. The addition of CHF 4.2 million contains provisions for restructuring in various business units.

Additions to other provisions are principally for pending legal cases.

23 Long-term financial liabilities The long-term financial liabilities comprise bank loans for financing two foreign production facilities.

24 Share capital The share capital of CHF 46.0 million is divided into 406 000 bearer shares with a nominal value of CHF 100 each and 270 000 registered shares with a nominal value of CHF 20 each.

61

Conzzeta – Annual report 2010 Financial report

Consolidated cash flow statement 25 Divestment of business activities 2010 Disposal

2009 Disposal

CHF m

CHF m

Current assets

3.7

6.2

Fixed assets

0.1

Short-term liabilities

0.3 – 5.3

Long-term liabilities

– 0.3

Net assets divested

3.8

0.9

Result from disposal of business activities

5.9

– 0.9

Net cash flow

9.7

-

26 Operational free cash flow 2010

2009

CHF m

CHF m

75.7

144.1

Investment in property, plant and equipment

– 18.0

– 25.8

Divestment of property, plant and equipment

2.4

20.4

Investment in financial assets without securities

– 2.6

– 6.7

Divestment of financial assets without securities

8.4

3.3

Cash flow from operating activities

Investment in intangible assets

– 3.1

– 2.2

Operational free cash flow

62.8

133.1

– 70.4

– 26.1

Sale and redemption of securities

15.5

34.8

Divestment of business activities

9.7

Purchase of securities

Free cash flow

62

17.6

141.8

Conzzeta – Annual report 2010 Financial report

Further information 27 Employee pension funds Balance sheet 12 / 3 1 / 2 009

Result in personnel expenses 2010

Result in personnel expenses 2009

Result in financial income 2010

Result in financial income 2009

CHF m

CHF m

CHF m

CHF m

CHF m

CHF m

21.1

22.1

– 1.1

– 4.7

0.1

0.5

Change to prior year Contributions affecting result in to be allocated to reporting reporting period period

Current service cost in personnel expenses 2010

Current service cost in personnel expenses 2009

CHF m

CHF m

CHF m

8.2

8.2

9.5

0.7

0.4

1.0

Nominal value 12 / 3 1 / 2 010

Renounced use 12 / 3 1 / 2 010

Balance sheet 12 / 3 1 / 2 010

CHF m

CHF m

25.2

– 4.1

Employer contribution reserves Employee pension fund

In the previous year, the nominal value of the employer contribution reserves was CHF 26.2 million and the renounced use amounted to CHF 4.1 million.

The result in personnel expenses comprises the debited employer contributions from the Conzzeta welfare institution amounting to CHF 1.1 million (previous year: CHF 4.7 million) in favor of the Group companies. The financial result amounted to CHF 0.1 million (CHF 0.5 million).

Surplus / deficit 12 / 3 1 / 2 010

Economic benefit / obligation 12 / 3 1 / 2 010

Economic benefit / obligation 12 / 3 1 / 2 009

CHF m

CHF m

CHF m

CHF m

Economic benefit /o bligation and current service cost Employee pension fund

3.5

Pension funds without surplus / deficit Pension funds with surplus

0.3

Pension funds without own assets Total

3.8

– 0.3

– 0.3

– 0.4

– 0.5

0.1

– 0.4

– 0.8

– 0.2

0.1 8.9

8.7

10.5

In the previous year, the surpluses amounted to CHF 3.2 million, the year-on-year change affecting result was CHF 0.5 million and the contributions to be allocated to the reporting period were CHF 10.0 million.

It is not planned to use the free reserves of the employee’s pension fund for the economic benefit of the Group. The surplus of CHF 0.3 million in relation to the pension funds with a surplus concerns a defined benefit scheme abroad and cannot be used for contributions. This was calculated using a ­d ynamic model in accordance with international accounting standards.

63

Conzzeta – Annual report 2010 Financial report

28 Contingent liabilities In connection with customer financing, there are repurchase obligations against leasing companies for machinery amounting to CHF 33.5 million (previous year: CHF 41.4 million). Assets to the value of CHF 5.1 million (CHF 7.5 million) are held with retention of title as security for remediation of residual environmental liabilities and for loans.

29 Other commitments Commitments not recognized in the balance sheet comprise operational leasing contracts with a period of notice longer than one year.

Maturity of operational leasing contracts at 12 / 3 1

2010

2009

CHF m

CHF m

Under 1 year

5.4

7.1

1 to 5 years

8.3

12.0

Over 5 years

0.9

1.9

14.6

21.0

Total

In addition, there are long-term purchase commitments of CHF 1.0 million (CHF 1.4 million) to secure exclusive supplies.

30 Derivative financial instruments Values at 12 / 3 1

Contract values Replacement value, positive Replacement value, negative

2010

2009

CHF m

CHF m

24.4

28.0

2.6

0.7 0.1

The contracts were entered into as a hedge against exchange risks on future cash flows in USD and EUR. The change in value of derivative instruments still outstanding as of the balance sheet date is recognized in the shareholders’ equity.

64

Conzzeta – Annual report 2010 Financial report

31 Related-party transactions Transactions with related parties consist of normal business transactions under normal market conditions, with associated companies acting as commercial agents and distributors.

2010

2009

CHF m

CHF m

Trade receivables

1.7

2.2

Financial assets

0.1

0.1

Trade payables

0.8

1.7

Net revenue

4.0

4.7

Commission expenses

3.0

3.5

32 Risk assessment In addition to assessing strategies, projects and monitoring the course of business on an ongoing basis, the Board of Directors has conducted a comprehensive risk assessment. This is based on detailed management reporting and a separate Group risk report, describing the risk management process and the top-level risks. The risk management process has been implemented throughout the Group and encompasses the identification, evaluation and qualitative appraisal of operational, financial and strategic risks. It is supported by risk monitoring, a plan of action and standardized risk reporting. The control and management of risks are considered a management responsibility.

33 Compensation and shareholdings The compensation paid to members of the Board of Directors and the Group Executive Board, as well as their investments in Conzzeta AG, are reported in the notes to the financial statements of Conzzeta AG on pages 73 et seq.

65

Conzzeta – Annual report 2010 Financial report

List of consolidated companies by business unit Company, domicile

Company capital in local currency

Investments in % direct

CHF

50 000

100

Notes Country

Investments in % indirect

Sheet Metal Processing Systems Bystronic Laser AG, Niederönz

CH

Bystronic Maschinenbau GmbH, Gotha

DE

EUR

3 400 100

100

Bystronic (Tianjin) Machinery Co. Ltd, Tianjin

CN

USD

6 095 600

100

Bystronic, Inc., Hauppauge NY

US

USD

250 000

100

Bystronic Scandinavia AB, Arlandastad

SE

SEK

200 000

100

Bystronic France SAS, Les Ulis

FR

EUR

2 500 000

100

Bystronic Italia S.r.l., Bovisio Masciago

IT

EUR

900 000

100

Regional sales and service companies:

Bystronic Deutschland GmbH, Heimsheim

DE

EUR

52 000

100

Bystronic Co. Ltd, Shanghai

CN

USD

1 000 000

100

Bystronic Iberica S.A., San Sebastián de los Reyes

ES

EUR

262 000

100

MX

MXN

2 500 000

100

Bystronic Austria GmbH, Linz

AT

EUR

300 000

100

Bystronic do Brasil Ltda., São José dos Pinhais PR

BR

BRL

5 000 000

100

Bystronic Pte. Ltd, Singapore

SG

SGD

2 500 000

100

Bystronic Benelux B.V., Hardinxveld-Giessendam

NL

EUR

18 151

100

Bystronic UK Ltd, Coventry

GB

GBP

1 200 000

100

Bystronic Sales AG, Niederönz

CH

CHF

2 000 000

100

Bystronic Korea Ltd, Anyang-si

KR

KRW

6 000 000 000

100

Bystronic Polska Sp. z o.o., Raszyn

PL

PLN

1 000 000

100

Bystronic Mexico S.A. de C.V., Guadalajara

Bystronic Slovakia s.r.o., Bratislava

1

SK

Bystronic Czech Republic s.r.o., Brno

CZ

CZK

6 000 000

100

Bystronic Laser India Private Ltd, Pune

IN

INR

34 130 000

100

Bystronic Lazer ve Su Isinlari Makineleri Sanayi ve Ticaret Limited Sirketi, Istanbul

TR

TRY

660 000

100

Hämmerle Ltd, Ichikawa City

JP

JPY

10 000 000

100

Bystronic Canada Ltd, Mississauga ON

CA

CAD

100 000

100

OOO Bystronic Laser, Moscow

RU

RUB

30 000 000

100

S.C. Bystronic Laser S.R.L., Brasov

RO

RON

1 000 000

100

Bystronic Maschinen AG, Bützberg

CH

CHF

100 000

Bystronic Lenhardt GmbH, Neuhausen-Hamberg

DE

EUR

2 045 168

100

Bystronic Armatec GmbH, Gunzenhausen

DE

EUR

300 000

100

EUR

1 500 000

100

Glass Processing Systems

Bystronic Solution Centre Inc., Ottawa Bystronic Glass Machinery (Shanghai) Co. Ltd, Shanghai

2

100

CA CN

Regional sales and service companies: Bystronic Glass UK Ltd, Telford

GB

GBP

3 400 000

100

Bystronic Asia Pte. Ltd, Singapore

SG

SGD

1 000 000

100

Bystronic Glass do Brasil Maquinas para Vidros Ltda., Indaiatuba SP

BR

BRL

3 494 779

100

OOO Bystronic Steklo RUS, Moscow

RU

RUB

64 975 930

100

Bystronic Glass (Shanghai) Co. Ltd, Shanghai

CN

USD

1 900 000

100

Bystronic Glass, Inc., Aurora CO

US

USD

250 000

100

66

Conzzeta – Annual report 2010 Financial report

Company, domicile

Notes Country

Company capital in local currency

Investments in % direct

100 000

100

Investments in % indirect

Automation Systems ixmation AG, Burgdorf

CH

CHF

ixmation, Inc., Roselle IL

US

USD

100

100

ixmation (Asia) Sdn. Bhd., Penang

MY

MYR

900 003

100

ixmation (Suzhou) Co. Ltd, Suzhou

CN

USD

750 000

100

ixmation (Tianjin) Co. Ltd, Tianjin

CN

CNY

1 000 000

100

Foam Materials Fritz Nauer AG, Wolfhausen

CH

CHF

5 000 000

Reisgies Schaumstoffe GmbH, Leverkusen

DE

EUR

1 000 000

100

Frina Mousse France S.à r.l., Wittenheim

FR

EUR

117 386

100

Büttikofer AG, Gontenschwil

CH

CHF

250 000

100

Swisstex, Inc., Greenville SC

US

USD

2 023 640

100

Foampartner-Bock AG, Zug

CH

CHF

1 000 000

50

USD

600 000

50

100

Foampartner-Bock Trading (Shanghai) Ltd, Shanghai

CN

Foampartner-Bock Polyurethane Materials (Changzhou) Co. Ltd, Changzhou

CN

USD

11 500 000

50

Woodbridge FoamPartner Company, Chattanooga TN

US

USD

2 000 000

51

Kureta GmbH, Stadtallendorf

DE

EUR

100 000

100

Mammut Sports Group AG, Seon

CH

CHF

25 000 000

Mammut Sports Group GmbH, Memmingen

DE

EUR

500 000

100

Mammut Sports Group, Inc., Shelburne VT

US

USD

51

100

Ajungilak AS, Oslo

Sporting Goods 100

NO

NOK

2 000 000

100

Mammut Sports Group Japan Inc., Tokyo

JP

JPY

30 000 000

80

Mammut UK Ltd, Macclesfield

GB

GBP

1 000

100

Schmid Rhyner AG, Adliswil

CH

CHF

1 200 000

Schmid Rhyner (USA), Inc., Marlton NJ

US

USD

800 000

CH

CHF

5 000 000

100

100

Graphic Coatings 100 100

Real Estate Plazza Immobilien AG, Zurich Swilac Immobilien AG, Zurich

3

CH

Prebe AG, Zurich

3

CH

Holding and Management Companies Conzzeta Holding Deutschland AG, Leverkusen

DE

EUR

6 000 000

Conzzeta Grundstücksverwaltungs GmbH, Leverkusen

DE

EUR

50 000

100

Conzzeta Vermögensverwaltungs GmbH & Co. KG, Leverkusen

DE

EUR

1 000

100

Conzzeta Management AG, Zurich

CH

CHF

100 000

Mammut Sports Group Austria GmbH, Steyr

AT

EUR

363 400

25.1

Mammut Nederland B.V., Benthuizen

NL

EUR

18 000

36

100

Associated Companies

Notes: 1 Liquidation at 3 / 12 / 2010 2 Liquidation at 12 / 31 / 2010 3 Merger with Plazza Immobilien AG at 1 / 1 / 2010

67

Conzzeta – Annual report 2010 Financial report

Statutory auditor’s report Report of the Statutory Auditor on the Consolidated Financial Statements to the General Meeting of Conzzeta AG, Zurich As statutory auditor, we have audited the consolidated financial statements of Conzzeta AG on pages 41 to 67, which comprise the balance sheet, income statement, cash flow statement, statement of changes in equity and notes for the year ended December 31, 2010.

Board of Directors’ Responsibility The Board of Directors is responsible for the preparation and fair presentation of the consolidated ­f inancial statements in accordance with Swiss GAAP FER and the requirements of Swiss law. This ­R esponsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from ­m aterial 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 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. Those stan­ dards require that we plan and perform the audit to obtain reasonable assurance 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 the effectiveness of the entity’s internal control system.

An audit also includes evaluating the appropriateness of the accounting policies used and the reason­ ableness of accounting estimates made, as well as evaluating the overall presentation of the consol­i­ dated financial statements. We believe that the audit evidence we have obtained is sufficient and ­a ppropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements for the year ended December 31, 2010, give a true and fair view of the financial position, the results of operations and the cash flows in accordance with Swiss GAAP FER 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.

68

Conzzeta – Annual report 2010 Financial report

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated ­f inancial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG Hanspeter Stocker

Markus Ackermann

Licensed Audit Expert

Licensed Audit Expert

Auditor in Charge

Zurich, March 17, 2011

69

Conzzeta – Annual report 2010 Financial report

Income statement – Conzzeta AG 2010

2009

CHF m

CHF m

65.000

31.449

Income Income from investments Interest income and income from securities

7.143

10.187

72.143

41.636

Personnel expenses

– 0.547

– 0.708

Operating expenses

– 2.394

– 2.641

Financial expenses

– 0.838

– 1.408

Total income Expenses

Taxes

70

0.334

– 0.404

Total expenses

– 3.445

– 5.161

Net income

68.698

36.475

Conzzeta – Annual report 2010 Financial report

Balance sheet at December 31 – Conzzeta AG 2010

2009

CHF m

CHF m

Cash and cash equivalents

349.299

352.842

Securities

Assets

106.903

52.700

Accounts receivable

0.618

0.176

Prepaid expenses and accrued income

3.824

0.853

460.644

406.571

Investments

176.710

176.710

Receivables from Group companies

142.415

152.316

Fixed assets

319.125

329.026

Total assets

779.769

735.597

Short-term payables

0.036

0.023

Accrued expenses and deferred income

2.597

0.799

Short-term liabilities

2.633

0.822

78.050

79.124

Current assets

Liabilities and shareholders’ equity

Payables to Group companies Provisions

8.888

20.350

Long-term liabilities

86.938

99.474

Share capital

46.000

46.000

Legal reserves

33.406

33.406

Special reserve

400.000

350.000

Retained earnings

210.792

205.895

Shareholders’ equity

690.198

635.301

Total liabilities and shareholders’ equity

779.769

735.597

71

Conzzeta – Annual report 2010 Financial report

Notes to the financial statements – Conzzeta AG Contingent liabilities

Sureties and guarantee obligations for subsidiaries Effective obligations

2010

2009

CHF m

CHF m

133.580

117.829

44.674

27.505

2010

2009

Investments See overview on page 66 et seq.

Significant shareholders

TEGULA AG, Zurich

72

%

%

Capital

74.2

74.2

Votes

81.8

81.8

Conzzeta – Annual report 2010 Financial report

Compensation for members of the Board of Directors and the Group Executive Board

Gross compensation 2010

Gross compensation 2009

Benefits in kind / s ocial security benefits 2010

Benefits in kind / s ocial security benefits 2009

Total compensation 2010

Total compensation 2009

CHF thousand

CHF thousand

CHF thousand

CHF thousand

CHF thousand

CHF thousand

Board of Directors J. Schmidheiny, Chairman

504.0

518.8

36.2

47.2

540.2

566.0

M. Auer, Member

69.2

53.2

2.9

2.2

72.1

55.4

Th. W. Bechtler, Member

69.2

53.2

2.9

2.2

72.1

55.4

W. Dubach, Member

67.6

51.8

-

-

67.6

51.8

Ph. Mosimann, Member

69.2

53.2

2.9

2.2

72.1

55.4

R. F. Spoerry, Member

69.2

53.2

2.9

2.2

72.1

55.4

848.4

783.4

47.8

56.0

896.2

839.4

Gross compensation 2010

Gross compensation 2009

Benefits in kind / s ocial security benefits 2010

Benefits in kind / s ocial security benefits 2009

Total compensation 2010

Total compensation 2009

CHF thousand

CHF thousand

CHF thousand

CHF thousand

CHF thousand

CHF thousand

Total

5 196.2

5 898.3

653.9

706.2

5 850.1

6 604.5

Highest single amount: R. Suter, CEO

1 000.0

826.7

114.8

94.1

1 114.8

920.8

Total

Group Executive Board

Gross compensation includes cash compensation paid in the business year. See corporate governance, page 35, for details of the method of determination.

Total compensation relates to all members of the Board of Directors and the Group Executive Board active in the 2010 business year. The reduction in compensation paid to members of the Group ­E xecutive Board compared with the previous year is due largely to overlaps and one-off payments in 2009.

Benefits in kind and social security benefits comprise employer contributions to state and private schemes (Swiss AHV and company pension plans) to establish or augment benefit provisions, as well as private usage of a company car.

There are no share or option plans for members of the Board of Directors and the Group Executive Board.

73

Conzzeta – Annual report 2010 Financial report

Shareholdings of the members of the Board of Directors and the Group Executive Board of Conzzeta AG Bearer shares 12 / 3 1 / 2 010

Bearer shares 12 / 3 1 / 2 009

Registered shares 12 / 3 1 / 2 010

Registered shares 12 / 3 1 / 2 009

Number

Number

Number

Number

230

230

-

-

Board of Directors J. Schmidheiny, Chairman M. Auer, Member Th. W. Bechtler, Member W. Dubach, Member

-

-

25

25

90

90

-

-

140

140

-

-

J. Schmidheiny and M. Auer sit as shareholders on the Board of TEGULA AG. The shareholding of TEGULA AG in Conzzeta AG comprises 288 302 bearer shares with a par value of CHF 100 each and 264 874 registered shares with a par value of CHF 20 each.

Bearer shares 12 / 3 1 / 2 010

Bearer shares 12 / 3 1 / 2 009

Registered shares 12 / 3 1 / 2 010

Registered shares 12 / 3 1 / 2 009

Number

Number

Number

Number

R. Jakob

1

1

-

-

M. Pfister

10

-

-

-

Group Executive Board

Risk assessment The Board of Directors has conducted a comprehensive risk assessment for the Group. This is based on detailed management reporting and a separate Group risk report, describing the risk management pro­ cess and the top-level risks. The risk management process has been implemented throughout the Group and encompasses the identification, evaluation and qualitative appraisal of operational, financial and strategic risks. It is supported by risk monitoring, a plan of action and standardized risk reporting.

Conzzeta AG is an integral part of this process.

74

Conzzeta – Annual report 2010 Financial report

Additional information on the financial statements – Conzzeta AG Income statement Income The investment income for the year amounted to CHF 65.0 million (previous year: CHF 31.4 million).

The dividend payments by the Group companies were determined in relation to available retained earnings and liquidity requirements.

The interest income and income from securities amounted to CHF 7.1 million (CHF 10.2 million) and comprise the interest income on accounts receivable from Group companies of CHF 5.2 million (CHF 7.7 million), the interest income from third parties amounting to CHF 0.6 million (CHF 0.7 million) and gains on securities of CHF 1.3 million (CHF 1.8 million).

Expenses Personnel and operating expenses include current administration expenses, the cost of organizing the Annual General Meeting, the production of the annual report, fees to the Board of Directors, project costs and taxes on capital.

The financial expenses of CHF 0.8 million (CHF 1.4 million) result from interest on intragroup payables of CHF 0.6 million (CHF 0.8 million) and currency losses on liquid assets and on receivables from Group companies of CHF 0.2 million (CHF 0.6 million).

Taxes comprise income taxes. The reversal of an accrual for income tax in the previous year resulted in a gain of CHF 0.3 million.

75

Conzzeta – Annual report 2010 Financial report

Balance sheet Current assets The liquid assets of CHF 349.3 million (previous year: CHF 352.8 million) consist of bank balances in CHF, EUR, USD and GBP, as well as fixed-term deposits in CHF. Securities of CHF 106.9 million (CHF 52.7 million) comprise fixed-interest investments in CHF and shares in a money-market fund in CHF. Accounts receivable are made up of withholding tax claims on interest income of CHF 0.5 million (CHF 0.2 million) and recoverable input tax of CHF 0.1 million. Prepaid expenses and accrued income comprise, in addition to deferred expenses, mainly accrued interest of CHF 1.1 million (CHF 0.8 million), as well as accruals for balances from exchange rate hedges of CHF 2.6 million (CHF 0.1 million).

Fixed assets The figure for investments in the balance sheet is CHF 176.7 million (CHF 176.7 million). In the reporting year, Swilac Immobilien AG and Prebe AG in Zurich (Switzerland) were merged with Plazza Immo­ bilien AG in Zurich (Switzerland). Most Group financing is handled by the holding company. Accounts receivable from Group companies decreased in the reporting year by CHF 9.9 million and now amount to CHF 142.4 million.

Liabilities The short-term liabilities consist of trade payables and unpaid dividends. Accrued expenses and ­d eferred income consists of liabilities arising from exchange rate hedges of CHF 2.6 million (CHF 0.1 million). In the previous year, this figure also contained accruals and deferrals for outstanding taxes of CHF 0.7 million.

Long-term liabilities of CHF 86.9 million (CHF 99.5 million) include CHF 78.1 million (CHF 79.1 million) in outstanding payables to subsidiaries and provisions of CHF 8.9 million (CHF 20.4 million). In the ­r eporting year, provisions of CHF 11.5 million were used to cover currency losses on receivables from Group companies in EUR and USD.

Shareholders’ equity The share capital of CHF 46.0 million consists of 270 000 registered shares and 406 000 bearer shares.

As the result of a transfer to the special reserves, the special reserves balance sheet item increased in the reporting year by CHF 50.0 million to CHF 400.0 million.

76

Conzzeta – Annual report 2010 Financial report

Proposed appropriation of available earnings – Conzzeta AG 2010

2009

CHF

CHF

The Board of Directors proposes to the Annual General Meeting on April 28, 2011, that the retained earnings at December 31, 2010, consisting of: Net income for the year Retained earnings carried forward from previous year Available retained earnings

68 697 635

36 474 584

142 094 609

169 420 025

210 792 244 205 894 609

be appropriated as follows: Dividend of CHF 40.00 per bearer share (previous year: CHF 30.00)

16 240 000

Dividend of CHF 8.00 per registered share (previous year: CHF 6.00) Transfer to the special reserve Retained earnings to be carried forward

12 180 000

2 160 000

1 620 000

50 000 000

50 000 000

142 392 244

142 094 609

If this proposal is approved, the dividend distribution for the 2010 reporting year will be:

Gross dividend

35 % withholding tax

CHF

CHF

CHF

40.00

14.00

26.00

8.00

2.80

5.20

Per bearer share Per registered share

Net dividend

The dividend on bearer shares will be paid out against submission of coupon No. 12.

The registered shareholders or their custodian banks will be sent a dividend credit or dividend order, according to their instructions.

Coupon No. 12 and the dividend order can be redeemed free of charge from May 5, 2011, at all Swiss branches of the banks listed below: CREDIT SUISSE UBS AG Zürcher Kantonalbank

77

Conzzeta – Annual report 2010 Financial report

Statutory auditor’s report – Conzzeta AG Report of the Statutory Auditor on the Financial Statements to the General Meeting of Conzzeta AG, Zurich As statutory auditor, we have audited the financial statements of Conzzeta AG on pages 70 to 76, which comprise the balance sheet, income statement and notes for the year ended December 31, 2010.

Board of Directors’ Responsibility The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements 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 ­f inancial statements that 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 ­m aking accounting estimates that are 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 plan and 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 the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks 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 purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the ­a ccounting 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 we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements for the year ended December 31, 2010, comply with Swiss law and the 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.

78

Conzzeta – Annual report 2010 Financial report

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG AG Hanspeter Stocker

Markus Ackermann

Licensed Audit Expert

Licensed Audit Expert

Auditor in Charge

Zurich, March 17, 2011

79

Conzzeta – Annual report 2010

80

Further information 82 Employee pension funds in Switzerland 84 Five-year summary 86 Information and calendar for investors

Conzzeta – Annual report 2010 Further information

Employee pension funds in Switzerland The number of currently employed fund participants decreased in the reporting year from 1 164 to 1 129, while the number of persons drawing retirement benefits fell from 886 to 876. The dedicated fund capital decreased by 0.2 % to CHF 363.1 million, of which 52.4 % comprised annuities, 44.5 % fund capital and 3.1 % technical provisions.

The participating companies and their employees made contributions of CHF 13.6 million. These include allocations from employers in the form of one-off contributions amounting to CHF 0.3 million (previous year: CHF 1.2 million).

The marked strength of Swiss franc and the resulting decreases in foreign investments in the reporting year had an adverse impact on the financial result of the pension funds. The return on the assets was 1.9 %, which was not quite sufficient to cover the costs. The asset value fluctuation reserves decreased

by CHF 1.3 million to CHF 41.1 million, which is 62 % of the defined target value.

However, the consolidated funding ratio, not including the employer contribution reserves, was quite stable at 112.3 % (112.6 %). This computation is based on a technical interest rate of 3 %.

Marc Sutter Manager of employee pension funds in Switzerland

82

Conzzeta – Annual report 2010 Further information

2010

2009

CHF m

CHF m

363.706

374.911

Fluctuation reserves

42.391

14.625

Employer contribution reserves

26.149

30.350

Net fund assets at 1 / 1 Fund capital

Free reserves

3.547

3.680

435.793

423.566

Company contributions

7.997

9.967

Employee contributions

5.571

6.387

Departure benefits brought into the fund

7.791

5.889

Total net fund assets at 1 / 1

Investment income

7.989

35.659

Contributions and income

29.348

57.902

Payments to insured persons

– 29.721

– 39.407

Provisions /v aluation adjustments

– 1.729

– 5.502

Administrative expenses

– 0.787

– 0.766

– 32.237

– 45.675

Payments and expenses Net fund assets at 12 / 31 Fund capital

363.104

363.706

Fluctuation reserves

41.119

42.391

Employer contribution reserves

25.156

26.149

Free reserves Total net fund assets at 12 / 31

3.525

3.547

432.904

435.793

83

Conzzeta – Annual report 2010 Further information

Five-year summary 2010

2009

2008

2007

2006

410.9

356.1

745.1

793.5

632.0

Net revenue by business unit Sheet Metal Processing Systems

CHF m %

39.1

37.3

50.6

52.7

49.6

Glass Processing Systems

CHF m

167.5

145.6

244.6

237.3

219.2

%

15.9

15.3

16.6

15.7

17.2

Automation Systems

CHF m

56.4

56.1

73.6

76.7

49.6

%

5.4

5.9

5.0

5.1

3.9

Foam Materials

CHF m

127.9

116.8

146.3

156.5

147.5

%

12.2

12.2

9.9

10.4

11.6

Sporting Goods

CHF m

221.2

215.3

192.6

177.1

164.7

%

21.0

22.5

13.1

11.7

12.9

Graphic Coatings

CHF m

46.6

43.2

47.5

44.1

36.5

%

4.4

4.5

3.2

2.9

2.9

Real Estate and miscellaneous revenue

CHF m

21.4

22.1

22.8

21.8

21.9

%

2.0

2.3

1.6

1.5

1.7

Revenue from discontinued activities

CHF m

2.2

%

0.2

Total

CHF m

1 051.9

955.2

1 472.5

1 507.0

1 273.6

Net revenue

CHF m

1 051.9

955.2

1 472.5

1 507.0

1 273.6

Operating result

CHF m

56.9

– 1.4

97.8

132.1

80.6

Extraordinary result

CHF m

5.4

10.1

3.9

56.5

9.6

Group result

CHF m

51.5

3.3

78.8

161.4

71.1

Current assets

CHF m

915.1

853.8

914.5

970.0

799.0

Fixed assets

CHF m

372.5

401.0

418.4

413.7

418.2

Short-term liabilities

CHF m

231.5

198.1

247.7

318.3

286.2

Long-term liabilities

CHF m

73.4

78.4

84.3

74.5

78.2

Shareholders’ equity

CHF m

982.7

978.3

1 000.9

990.9

852.8

Total assets

CHF m

1 287.6

1 254.8

1 332.9

1 383.7

1 217.2

%

76.3

78.0

75.1

71.6

70.1

Consolidated income statement

Consolidated balance sheet

Shareholders’ equity as % of total assets Investment in fixed assets / employees Investments in property, plant and equipment and intangible assets Employees at year-end Ø Employees in full-time positions

CHF m

21.1

28.0

56.0

49.0

31.8

Number

3 322

3 257

3 760

3 444

3 273

Number

3 238

3 180

3 509

3 267

3 008

Net revenue per full-time positions

CHF thousand

324.9

300.4

419.6

461.3

423.4

Personnel expenses per full-time position

CHF thousand

83.1

90.2

96.1

99.7

99.2

84

Conzzeta – Annual report 2010 Further information

2010

2009

2008

2007

2006

CHF m

46.0

46.0

46.0

46.0

46.0

Bearer shares (par CHF 100)

Number

406 000

406 000

406 000

406 000

406 000

Registered shares (par CHF 20)

Number

270 000

270 000

270 000

270 000

270 000

Share information Share capital Number of shares issued at 12 / 31

Market prices of the bearer shares High / low

CHF

Year-end

CHF

Total dividend

CHF m

2 000 / 1 690 1 934 / 1 135 2 850 / 1 450 2 925 / 2 170 2 349 / 1 650 1 900 18.41

1 800

1 540

2 777

2 165

13.8

27.6

32.2

20.7

Key indicators per share (on capital entitled to dividend) Group result

per bearer share

CHF

111.90

7.10

171.20

350.90

154.60

per registered share

CHF

22.40

1.40

34.20

70.20

30.90

Cash flow from

per bearer share

CHF

164.50

313.30

141.70

370.20

121.20

operating activities

per registered share

CHF

32.90

62.70

28.30

74.00

24.20

Shareholders’ equity

Gross dividend

per bearer share

CHF

2 136.40

2 126.70

2 175.80

2 154.20

1 853.80

per registered share

CHF

427.30

425.30

435.20

430.80

370.80

per bearer share

CHF

40.001

30.00

60.00

70.00

45.00

per registered share

CHF

8.001

6.00

12.00

14.00

9.00

As proposed by the Board of Directors

1

85

Conzzeta – Annual report 2010 Further information

Information and calendar for investors 2011

Thursday, April 28

Ordinary General Meeting at the Lake Side, Zurich

Thursday, May 5

Payment of dividends

Thursday, August 18

Interim report as at June 30, 2011

2012

Wednesday, March 28

Year-end results as at December 31, 2011

Thursday, April 26

Ordinary General Meeting at the Lake Side, Zurich

Investor Relations

Ticker Symbols

Carlo Menotti

Swiss security

Further information about the company,

Phone + 41 44 468 24 84

no. 265 798

calendar dates and contacts can be found

Fax

ISIN CH0002657986

at www.conzzeta.ch.

+ 41 44 468 24 81

investor@conzzeta.ch

SIX Swiss Exchange CZH Reuters CZH.S Bloomberg CZH:SW

86

Ordinary result Extraordinary result Operating result (EBIT)

1 250

100

3.3

Free cash flow

CHF m

17.6

141.8

1 000

75

750

50

Shareholders’ equity

CHF m

982.7

978.3

500

25

Total assets

CHF m

1 287.6

1 254.8

76.3

78.0

250

0

%

0

– 25

46.0

Total dividend

CHF m

18.41

13.8

70.1

Number of shares on 12 / 31 bearer registered

406 000

Number

270 000

270 000

06 20

20

20

250

60

200

50

150

40

100

30

50

20

(par CHF 20)

CHF

8.001

6.00

0

10

bearer

high / low

CHF

2 000 / 1 690

1 934 / 1 135

– 50

0

year-end

CHF

1 900

1 800

CHF m

874

828

Total capitalization on 12 / 31 Group key figures per share

20

20

20

20

06

30.00

registered

20 10

40.001

09

CHF

08

(par CHF 100)

07

bearer

06

Market price per share

406 000

70

20

Gross dividend per share

Number

300

21.1

46.0

20 10

CHF m

28.0

Share capital

09

36.5

20

68.7

56.0

CHF m

Conzzeta AG

08

Net income for the year

Investments in property, plant and equipment and intangible assets (in CHF m)

Free cash flow (in CHF m)

20

300.4

49.0

324.9

07

CHF thousand

31.8

Net revenue per full-time position

17.6

3 257

141.8

28.0

3 322

– 30.8

21.1

Number

195.9

CHF m

Number of employees at year-end

20

Investments in property, plant and equipment and intangible assets

20

Shareholders’ equity as % of total assets

p. 84 et seq. for detailed five-year summary for Group

– 1.4

51.5

 See

56.9

CHF m

20 10

CHF m

Group result

09

Operating result

20

125

20 10

1 500

09

955.2

08

1 051.9

07

CHF m

06

Net revenue

08

150

20

1 750

07

175

20

2 000 Group

1 051.9

955.2

2009

EBIT and Group result (in CHF m)

1 472.5

1 273.6

2010

1 507.0

Net revenue (in CHF m)

20

Key figures

Publication details

Key facts 2010

Publisher Conzzeta AG, Zurich Concept and design Prime, Zurich

Group result

bearer

CHF

111.90

7.10

per share

registered

CHF

22.40

1.40

Cash flow from operating

bearer

CHF

164.50

313.30

activities per share

registered

CHF

32.90

62.70

Shareholders’ equity

bearer

CHF

2 136.40

2 126.70

per share

registered

CHF

427.30

425.30

As proposed by the Board of Directors

1

Photography Jolanda Flubacher Derungs, Sebastian Derungs, Eric Leleu et al.

–– There is a noticeable recovery in the Conzzeta Group’s business environment.

–– Changes in the exchange rate situation have a negative impact on revenue, result and equity.

Translation Hill Johnson Associates GmbH, Zollikon Printing Staffel Druck AG, Zurich Publishing system Multimedia Solutions AG, Zurich

–– Consolidated net revenues rise by 10.1 % and the Group result improved significantly.

–– The operating result (EBIT) and Group result both show a clear improvement compared with the previous year.

–– All industrial business units report growth in sales.

–– The Group remains very solidly financed, with an equity ratio of 76.3 %.

The annual report is published in German and English.

–– The main source of growth is Asia, where around a quarter of consolidated revenues are generated.

The German version prevails.

Changes in personnel were up-to-date at the editorial deadline of March 17, 2011.

Published on March 30, 2011.

–– In view of the improved economic situation, the Board of Directors is proposing a one-third increase in the dividend.

Conzzeta at a glance Conzzeta is an internationally active Swiss holding company with broadly diversified businesses. Its activities are in the areas of machinery and systems ­engineering, foam materials, sporting goods, graphic coatings and real estate. In the interests of customers, employees and shareholders, Conzzeta develops its businesses with a long-term perspective.

Sheet Metal Processing Systems Bystronic: Solutions for the processing of sheet metal and other sheet materials

Glass Processing Systems Bystronic glass: Systems for processing flat glass

Automation Systems ixmation: Systems for automation of assembly and testing

Foam Materials FoamPartner: Foam products for industry and comfort applications

Sporting Goods Mammut Sports Group: Mountaineering, climbing and winter sports equipment

Graphic Coatings Schmid Rhyner: Print varnishes and laminating ­adhesives for the graphical industry

Conzzeta

www.conzzeta.ch

Annual Report 2010

Annual Report 2010

Real Estate Plazza Immobilien: Management of the Conzzeta Group’s portfolio of properties