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Financial reporting Kardex Group
47
48
Consolidated income statement
49
Consolidated balance sheet
50
Consolidated cash flow statement
51
Consolidated statement of changes in equity
52
Notes to the consolidated financial statements
52
General information
52
Significant accounting policies
60
Notes to the consolidated financial statements
80
Report of the statutory auditor on the consolidated financial statements
Financial reporting Kardex Group
Consolidated income statement
EUR millions
Net revenues
Notes
2012
Proportion (%)
2011
Proportion (%)
1
484.4
100.0 %
459.2
100.0 %
Cost of goods sold and services provided
– 366.0
– 75.6 %
– 361.3
– 78.7 %
Gross profit
118.4
24.4 %
97.9
21.3 %
Marketing and sales expenses
– 58.2
– 12.0 %
– 55.2
– 12.0 %
Administrative expenses
– 29.6
– 6.1 %
– 29.1
– 6.3 %
– 5.4
– 1.1 %
– 5.2
– 1.1 %
5.2
1.1 %
4.5
1.0 %
Development expenses Other operating income
5
Other operating expenses
5
Operating result (EBIT) Financial result, net
7
Result for the period before tax Income tax expense
8
Result for the period Earnings per share (EUR)¹: 1
17
– 2.8
– 0.6 %
– 2.5
– 0.5 %
27.6
5.7 %
10.4
2.3 %
– 3.1
– 0.6 %
– 6.4
– 1.4 %
24.5
5.1 %
4.0
0.9 %
– 3.1
– 0.6 %
– 1.0
– 0.2 %
21.4
4.4 %
3.0
0.7 %
2.77
0.48
No dilutive effect occurred in 2012 and 2011, the diluted result per share is the same as the basic result per share (net result/average number of outstanding shares).
Consolidated balance sheet EUR millions
Property, plant and equipment Intangible assets Financial assets
Notes
31.12.2012
31.12.2011
9
51.5
57.3
9
5.0
5.5
11
7.0
7.3
63.5
70.1
Non-current assets Inventories and work in progress
12
30.0
41.4
Trade accounts receivable
13
92.3
91.3
Other receivables
14
11.0
9.9
4.9
2.9
34.1
36.9
Current assets
172.3
182.4
Assets
235.8
252.5
59.9
59.9
Prepaid expenses Cash and cash equivalents
15
Share capital
16
Capital reserves Retained earnings incl. translation differences Treasury shares
16
Equity
83.8
83.9
– 57.8
– 79.2
– 0.5
– 0.1
85.4
64.5
Non-current financial liabilities
18
15.3
41.9
Non-current provisions
20
21.4
21.1
Non-current liabilities
36.7
63.0
Trade accounts payable
52.6
55.7 10.6
Current financial liabilities
18
6.4
Current provisions
20
7.4
6.4
25.3
27.2
22.0
25.1
Accruals Other current liabilities
21
Current liabilities
113.7
125.0
Liabilities
150.4
188.0
Equity and liabilities
235.8
252.5
Financial reporting Kardex Group
Consolidated cash flow statement
EUR millions
Notes
2012
2011
21.4
3.0
9
10.1
10.3
9
–
0.8
1.2
2.1
Result for the period Depreciation on property, plant and equipment and amortization on intangible assets Impairment of assets Changes in provisions and pension liabilities Other non-cash items
– 0.8
–
Cash flow before change in net current assets
31.9
16.2
Change in accounts receivables
– 0.5
– 17.4
Change in inventories and work in progress
11.6
– 11.0
Change in other receivables and prepaid expenses
– 1.8
– 1.0
Change in accounts payables
– 3.4
3.1
Change in other current liabilities and accruals
– 6.4
6.7
Net cash flow from operating activities
31.4
– 3.4
Purchase of property, plant and equipment
9
– 3.7
– 4.2
Sale of property, plant and equipment
9
1.4
0.2
– 1.4
– 0.7
0.2
0.3
Purchase of intangible and financial assets Sale of intangible and financial assets
0.5
–
Net cash flow from investing activities
– 3.0
– 4.4
Free cash flow
28.4
– 7.8
– 0.7
–
Acquisition of companies1
Acquisitions of treasury shares
27
16
Disposals of treasury shares Repayment of convertible bond Currency swap on convertible bond Changes in current financial liabilities Changes in non-current financial liabilities Capital increase Net cash flow from financing activities Effect of foreign currency translation differences on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents at 1 January
15
Cash and cash equivalents at 31 December
15
Net change in cash and cash equivalents, Group 1
0.2
0.2
–
– 40.7
–
10.0
– 4.2
– 1.3
– 26.6
8.7
–
25.4
– 31.3
2.3
0.1
– 0.4
– 2.8
– 5.9
36.9
42.8
34.1
36.9
– 2.8
– 5.9
Reduction of purchase price for the acquisition of Mlog Logistics GmbH due to compensation payment by sellers.
Consolidated statement of changes in equity EUR millions
Notes
Opening balance 1 January 2011
Share capital
39.4
Capital Retained reserves earnings
79.3
Result for the period
Hedging reserves
Translation differences
Total reserves
Treasury shares1
Equity
0.4
0.6
– 2.7
– 0.6
36.1
3.0
3.0
0.2
0.2
0.2
– 83.0 3.0
Foreign currency translation differences 2 Hedging transaction
– 0.4
Disposals of treasury shares3
16
Capital increase
16
4
– 0.4
– 0.3
– 0.3
– 0.4 0.5
0.2
20.5
4.9
Closing balance 31 December 2011
59.9
83.9
– 80.0
–
0.8
4.7
– 0.1
64.5
Opening balance 1 January 2012
59.9
83.9
– 80.0
–
0.8
4.7
– 0.1
64.5
Result for the period Acquisitions of companies5
27
Foreign currency translation differences Disposals of treasury shares
16
Closing balance 31 December 2012
21.4
0.5
0.5
0.5
– 0.5
– 0.5
– 0.5 16
– – 0.1 59.9
83.8
25.4
21.4
2
Acquisition of treasury shares 3
4.9
– 58.1
–
0.3
21.4
– 0.7
– 0.7
– 0.1
0.3
0.2
26.0
– 0.5
85.4
1
Number of treasury shares held as of 31 December 2012: 21 500 (3149).
2
This item also includes the exchange rate differences arising from net investments in foreign operations less deferred tax.
3
As part of share-based remuneration, treasury shares were allocated in the amount of EUR 0.3 million (EUR 0.5 million).
4
On 2 September 2011, the Board of Directors of Kardex AG increased the share capital.
5
Reduction of purchase price for the acquisition of Mlog Logistics GmbH due to compensation payment by sellers.
Notes to the consolidated financial statements
Notes to the consolidated financial statements 1. General information The consolidated financial statements of the Kardex Group include Kardex AG and its subsidiaries (referred to collectively as the “Group” and individually as the “Group companies”). Kardex AG is the Group’s parent company, a limited company under Swiss law, which is registered and domiciled in Zurich, Switzerland. Kardex AG is listed on the SIX Swiss Exchange. The Group’s consolidated financial statements were prepared in compliance with the provisions of Swiss company law and are in accordance with Swiss GAAP FER (FER) in their entirety.
2. Significant accounting policies Basis of preparation
Consolidation is based on the individual Group companies’ audited financial statements, prepared on a consistent basis. Balance sheet date for all Group companies is 31 December. The consolidated financial statements are prepared on a historical cost basis with the exception of derivative financial instruments, which might be stated at fair value.
Principles of consolidation
The consolidated financial statements include Kardex AG as well as all domestic and foreign subsidiaries in which Kardex AG holds a direct or indirect ownership. Acquisitions are accounted for using the purchase method. All subsidiaries in which the Group holds more than 50 % of the voting power or is able to exercise a controlling influence on the Company’s operating or financial policies are accounted for using the full consolidation method, which incorporates assets and liabilities as well as revenues and expenses in their entirety. IntraGroup balances, transactions and profits not realized through third parties are eliminated in the consolidation process. Kardex AG currently has no investments with a voting power less than 20 %, no investments in associated companies nor is it participating in joint ventures.
Foreign currency translation
Group currency The consolidated financial statements are presented in million euros. Foreign currency transactions Foreign currency transactions are translated using the exchange rates prevailing at the dates of the transactions. Gains and losses resulting from transactions in foreign currencies and adjustments of foreign-currency items as at the balance sheet date are recognized in the income statement. Financial statements of subsidiaries in foreign currency The assets and liabilities of subsidiaries whose financial statements are prepared in currencies other than the euro are converted for consolidation purposes as follows: – Assets and liabilities are translated on balance sheet date at the exchange rate prevailing on that date. – Revenues and expenses as well as cash flows are translated at the average exchange rate. – Equity is translated at historical rates. All resulting translation differences are shown separately under equity (cumulative translation differences). Foreign currency impacts on long-term intra-Group loans with equity characteristics are recognized in equity.
Derivative financial instruments and hedging transactions
The Group uses derivative financial instruments exclusively to hedge its exposure to foreign exchange and interest rate risks arising from operational, financing and investment activities. Derivative financial instruments for the hedging of assets and liabilities are measured initially and also subsequently in accordance with the same valuation principle as the hedged item. This means that if the hedged item is measured at fair value, the derivative financial instrument is also measured at fair value. If the lower of cost or market value is applied to the hedged item, a loss in value on the derivative financial instrument does not need to be recognized if, based on the application of lower of cost or market value, no increase in value is possible on the hedged item. The changes in value of the derivative financial instrument are recognized in the income statement, i. e. in the same way as the hedged item. The gain/loss on the derivative is neutralized by the loss/gain on the hedged item. A derivative is eliminated as soon as the end of the term has been reached or as soon as there is no further claim to future payments following disposal or default by the counterparty. At derecognition the difference between the carrying amount and the consideration received or given is recognized in the result of the period.
Notes to the consolidated financial statements
Property, plant and equipment
Owned assets Items of property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation and impairment losses. Acquisition and construction cost includes all expenses directly attributable to the acquisition and necessary to bring the asset to working condition for its intended use. Interest expenses during the construction phase of property, plant and equipment are not capitalized. Leased assets Leasing agreements under which the Group company essentially assumes all the risks and rewards associated with the acquisition are treated as finance leases. These assets are stated at an amount equal to the lower of cost of acquisition/net fair value or present value of the future lease payments at the start of the agreement, less accumulated depreciation and impairment loss. Obligations arising from finance leasing are recognized as liabilities. Subsequent costs Major renovation or modernization work, as well as expenses that significantly increase fair value or value in use, and expenditure that extends the estimated useful life of property, plant and equipment, are capitalized. Repairs and maintenance costs are recognized directly under operating expenses. Depreciation Depreciation is charged to the income statement on a straight-line basis over the following estimated useful lives: Buildings
25 to 50 years
Machinery and production tools
4 to 10 years
Equipment and vehicles
6 to 12 years
Information technology (hardware)
3 years
Depreciation of an item of property, plant or equipment begins when actual operational use commences. Property, plant and equipment under construction is not depreciated, but is regularly assessed for indication of a need to take im pairment charges. Depreciation expenses are included in “Cost of goods sold and services provided”, “Marketing and sales expenses”, “Administrative expenses” and “Development expenses”. The residual value and the useful economic life of the property, plant and equipment are reviewed annually and adjusted where necessary. Gains and losses arising from the sale of property, plant and equipment are recognized in the income statement.
Intangible assets
Goodwill Goodwill, the difference between the cost of acquisitions and the fair value of the net assets acquired, results from the purchase of subsidiaries. Any goodwill that arises is offset against equity (retained earnings) at the time of acquisition. In case of the disposal of a subsidiary, acquired goodwill offset against equity at an earlier date is stated at original cost to determine the profit or loss recognized in the income statement. The effects of a theoretical capitalization of goodwill with scheduled depreciation and any value adjustment to balance sheet and income statement during a useful life of five years are disclosed in the notes. Internally generated intangible assets Expenditure on development activities related to new technologies or know-how is recognized in the income statement in the period in which it is incurred. Capitalized development costs prior to conversion to FER in 2010 are depreciated over the remaining useful life. Acquired intangible assets Acquired intangible assets are capitalized where they will generate measurable benefits for the Group over several years. Acquired intangible assets are stated at cost of production or acquisition less accumulated depreciation and impairment loss. Subsequent costs Subsequent expenditure on existing intangible assets is capitalized only when it increases the future economic benefits of the assets concerned to at least the same extent. All other expenditure is expensed at the time incurred. Amortization Amortization of intangible assets is charged to the income statement on a straightline basis over their estimated useful lives. Amortization of intangible assets begins at the date they are available for use. The estimated useful lives are as follows: Capitalized development costs
3 years
Licences and patents
5 years
Trademark rights
5 years
Capitalized software
5 years
Other intangible assets
5 years
Amortization is included in “Cost of goods sold and services provided”, “Marketing and sales expenses”, “Administrative expenses” and “Development expenses”. The residual value and the useful economic life of the intangible assets are reviewed annually and adjusted where necessary. Profits and losses arising from the sale of intangible assets are recognized in the income statement.
Notes to the consolidated financial statements
Financial assets
Impairment of assets
Financial assets are normally measured at acquisition cost less any impairments.
Property, plant and equipment and other non-current assets are tested as at each balance sheet date to determine whether any events or changes in circ*mstances have occurred that might indicate an impairment. Where such indications exist, an impairment test is conducted. If the carrying amount of the asset exceeds the recoverable amount, an impairment loss is recognized. The recoverable amount is the higher of net fair value and value in use of the asset. The recoverable amount is normally determined for each asset. If the asset in question does not generate any separate cash flows, the smallest possible group of assets that generate separate cash flows is taken. Where the impairment exceeds the residual carrying amount, a provision amounting to the remaining difference is made. On each balance sheet date, impairments recorded are checked to establish whether the reasons that led to the impairment still apply to the same extent. If the reasons for an impairment no longer apply, the value will be reinstated up to a maximum of the carrying amount as adjusted according to scheduled depreciations. The reverse booking is recognized in the income statement.
Trade accounts receivable and other current assets
Accounts receivable are stated at nominal value less any impairments. The value adjustment consists of individual allowances for specifically identified positions for which there are objective indications that the outstanding amount will not be received in full and of a collective allowance for other long-overdue positions.
Inventories
Inventories are stated at the lower of acquisition/production cost or net fair value. Net fair value is defined as the value of the sales proceeds less the remaining costs of production, sale and administration incurred until the time of sale. Inventories are valued on a weighted-average basis. The acquisition and production cost also includes the cost of purchase and transport of inventories. In the case of inventories manufactured by the Group, production costs also include an appropriate share of overhead. Discounts are treated as financial income. Adjustments are made for items lacking marketability and for slow-moving items.
Construction contracts
Provided contractual performance by the customer is highly probable and income and expenses arising from long-term construction contracts can be reliably estimated, the resulting revenues are reported using the percentage-of-completion method: the revenues and expenses are recognized in the income statement proportionately to the stage of completion. The stage of completion is determined using the cost-to-cost method, i. e. by calculating the ratio between the project costs incurred to date and the estimated overall costs of the project. Expected losses from construction contracts are immediately recognized in the income statement at the date of detection.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, postal and bank account balances and other liquid investments with a maximum total maturity of three months from the balance sheet date.
Repurchase of treasury shares
Dividend
Liabilities
If the Group repurchases its own shares, the payments, including directly related costs, are deducted from equity. Any gains or losses arising from transactions with treasury shares are recognized in equity (capital reserves).
Dividends are recognized as a liability in the period in which they are approved.
Liabilities are normally shown at their nominal value. The 2.25 % convertible bond with a nominal value of CHF 55.0 million was repaid to bondholders on schedule on 29 June 2011. No currency loss was incurred as the currency risk against the EUR had been hedged. From the hedging transaction, EUR 0.4 million from shareholders’ equity was reclassified as financial income of the income statement.
Employee benefits
Pension plans There are several employee pension plans within the Group, each of which complies with legal requirements for the country in question. A majority of employees are insured against retirement, death and disability, whether through a defined benefit or defined contribution plan. These plans are funded by contributions from employees and employers. Actual economic impacts of employee pension plans on the Group are calculated on the balance sheet date. The pension plans’s financial position is relevant to the measurement of pension assets and pension liabilities. In the case of Swiss pension plans, the financial statements prepared in accordance with FER 26 “Accounting of pension plans” constitute the basis. An economic obligation is carried as a liability if the conditions for the formation of a provision are met. An economic benefit is capitalized if it is used for the Group’s future employee benefit expenses. Freely disposable employer contribution reserves are capitalized. The economic impacts of pension fund surpluses and shortfalls and the change in any employer contribution reserves are recognized in the income statement together with the amounts accrued over the same period. These same principles are applied in the case of foreign pension plans. Share-based payments Share-based payments are recognized at fair value at the moment of granting and, until such time as entitlement is asserted, are charged to the corresponding positions in the income statement as personnel expenses. Since these remunerations are settled with equity capital instruments, the counter-entry is recognized in equity.
Notes to the consolidated financial statements
Provisions
Provisions are made – insofar as the Group has, or may have, an actual or possible obligation (legal or constructive) due to past events, – insofar as it is probable that settlement of this obligation will lead to an outflow of resources, – insofar as the extent of the obligation can be reliably estimated. If the time effect is significant, long-term provisions at the present value of probable future cash outflows will be made. Warranties The provision for warranty risks from the sale of products and services is based on information about warranties from earlier periods. Restructuring Restructuring costs are provided for in the period in which an official, detailed restructuring plan is available to the Group and is announced. No provision is made for future operating losses.
Revenues from goods sold and services provided
Net revenues include all revenues from products sold and services provided less items such as rebates, other agreed discounts and value-added tax. Early payer discounts are reported in the financial result. Revenue from the sale of goods is recognized when the risks and rewards of ownership have transferred to the buyer which is most frequently after finalized installation or based on an accepted incoterm such as EXW, FOB or DDP. Provided that the conditions are met (see “Construction contracts”), the revenues resulting from construction contracts are reported using the percentage-of-completion method. Revenues from services are recognized according to the stage of completion. No revenue is recognized if there is significant uncertainty regarding recovery of the consideration due, associated costs or the possible return of goods.
Government grants
Operating lease payments
Finance lease payments
Asset-related subsidies are deducted from the carrying amount of the asset.
Payments made under operating leases are recognized in the income statement on a straight-line basis over the term of the lease.
Lease payments are allocated between the financing costs and repayment of the principal. The finance costs are allocated to each period during the lease term to produce a constant rate of interest over the term of the liability.
Funding
Net financing costs comprise interest expense on borrowings and finance leasing, interest earned on investments, earnings and expenses from discounts, gains and losses from foreign currency translation, as well as gains and losses from derivative financial instruments used for exchange rate hedging, all of which are recognized in the income statement. Interest income and expense as well as gains or losses from interest rate hedging are recognized in the income statement as they accrue.
Income tax
Income tax comprises current and deferred tax. Income tax is recognized in the income statement unless it relates to items recognized in equity. Current tax is the expected tax payable on the taxable income for the year and any adjustment to tax payable related to previous years. Income tax is calculated using tax rates already in force or substantially enacted at the balance sheet date. Deferred tax is calculated using the balance sheet liability method on the basis of tax rates already in force or substantially enacted at the balance sheet date and is based on temporary differences between FER carrying amounts and the tax base. Deferred income tax assets and liabilities are netted only if they relate to the same taxable entity. Tax savings due to tax loss carryforwards on future taxable income are not recognized.
Earnings per share
Earnings per share are calculated by dividing the consolidated net result attributable to the shareholders of Kardex AG by the weighted average number of shares outstanding during the reporting period. The diluted earnings per share figure additionally includes the shares that might arise following the exercising of option rights.
Notes to the consolidated financial statements
Notes to the consolidated financial statements 1. Segment reporting
The Kardex Group comprises three business segments. Kardex Remstar develops, produces, sells and services dynamic storage, retrieval and distribution systems worldwide. Kardex Stow develops, produces and sells static storage systems in Europe and China, while Kardex Mlog develops, produces, sells and services stacker cranes, conveyor technology, as well as automated warehouse and materials handling systems, primarily in Germany.
Segment reporting 2012/Income statement Operating segments EUR millions
Kardex Remstar
Kardex Stow
Kardex Kardex AG Mlog Zurich
Eliminations
Kardex Group
409.9
Net revenues, third party – Europe, Middle East and Africa
177.9
162.6
69.4
–
–
– Asia/Pacific
16.3
13.6
–
–
–
29.9
– Americas
41.9
1.2
1.5
–
–
44.6
236.1
177.4
70.9
–
–
484.4
Total net revenues, third party Net revenues, with other operating segments Net revenues Cost of goods sold and services provided Gross profit
0.6
4.2
0.4
–
– 5.2
–
236.7
181.6
71.3
–
– 5.2
484.4
– 154.1
– 151.1
– 66.0
–
5.2
– 366.0
–
–
82.6
30.5
5.3
34.9 %
16.8 %
7.4 %
Marketing and sales expenses
– 36.7
– 16.6
– 4.9
–
Administrative expenses
Gross profit margin
118.4 24.4 %
– 58.2
– 18.7
– 5.9
– 3.5
– 4.0
2.5
– 29.6
Development expenses
– 4.8
– 0.3
– 0.3
–
–
– 5.4
Other operating income
2.7
1.9
0.7
2.6
– 2.7
5.2
– 2.0
– 0.5
– 0.3
– 0.2
0.2
– 2.8
– 1.6
–
Other operating expense Operating result (EBIT)
23.1
9.1
– 3.0
EBIT margin
9.8 %
5.0 %
– 4.2 %
5.8
3.6
0.6
0.1
–
– 1.5
–
Depreciation, impairment and amortization EBITDA EBITDA margin
Eliminations concern intra-Group transactions.
28.9
12.7
– 2.4
12.2 %
7.0 %
– 3.4 %
27.6 5.7 %
10.1 37.7 7.8 %
Segment reporting 2011/Income statement Operating segments EUR millions
Kardex Remstar
Kardex Stow
Kardex Kardex AG Mlog Zurich
Eliminations
Kardex Group
393.8
Net revenues, third party – Europe, Middle East and Africa
169.0
151.7
73.1
–
–
– Asia/Pacific
13.4
15.2
–
–
–
28.6
– Americas
36.7
0.1
–
–
–
36.8
219.1
167.0
73.1
–
–
459.2
Total net revenues, third party Net revenues, with other operating segments Net revenues Cost of goods sold and services provided Gross profit
0.2
1.7
0.3
–
– 2.2
–
219.3
168.7
73.4
–
– 2.2
459.2
– 153.0
– 144.4
– 66.1
–
2.2
– 361.3
–
–
66.3
24.3
7.3
30.2 %
14.4 %
9.9 %
Marketing and sales expenses
– 35.3
– 14.4
– 5.5
–
–
– 55.2
Administrative expenses
Gross profit margin
97.9 21.3 %
– 18.1
– 5.6
– 4.1
– 5.2
3.9
– 29.1
Development expenses
– 3.6
– 1.3
– 0.3
–
–
– 5.2
Other operating income
1.6
1.7
1.2
3.9
– 3.9
4.5
– 0.4
– 1.1
– 1.0
–
–
– 2.5
– 1.3
–
Other operating expense Operating result (EBIT)
10.5
3.6
– 2.4
EBIT margin
4.8 %
2.1 %
– 3.3 %
6.6
3.7
0.7
0.1
–
– 1.2
–
Depreciation, impairment and amortization EBITDA
17.1
7.3
– 1.7
EBITDA margin
7.8 %
4.3 %
– 2.3 %
Eliminations concern intra-Group transactions.
10.4 2.3 %
11.1 21.5 4.7 %
Notes to the consolidated financial statements
2. Foreign currency translation
The main exchange rates for currency translation are: Average rates in EUR
2012
2011
31.12.2012
31.12.2011
1 CHF
0.830
0.812
0.828
0.818
1 CNY
0.123
0.111
0.120
0.120
1 GBP
1.233
1.152
1.219
1.197
1 USD
0.778
0.718
0.755
0.765
EUR millions
3. Long-term construction contracts
Year-end rates
2012
2011
81.5
84.2
EUR millions
2012
2011
Salaries and wages
– 93.2
– 93.6
Social security contributions
– 21.2
– 21.5
– 2.2
– 2.4
Revenues from construction contracts (POC)
4. Personnel expenses
Retirement and pension plan costs Other personnel expenses
– 6.5
– 7.2
Total personnel expenses
– 123.1
– 124.7
2012
2011
Gains from the sale of non-current assets
0.7
0.1
Settlement of legal cases
0.7
–
Sales of discarded metal
2.2
2.5
Reversal of provision
0.6
0.5
Other income
1.0
1.4
Total other operating income
5.2
4.5
EUR millions
5. Other operating income and expenses
Other operating expenses include losses from tangible assets sold, severance payments, indemnities, taxes other than income taxes, provisions for onerous contracts and other positions.
6. Restructuring expenses
Restructuring expenses totalling EUR 3.3 million (EUR 3.1 million) were recognized in the income statement in the year under review. EUR 1.2 million (EUR 1.8 million) thereof was stated in the cost of goods sold and services provided, EUR 1.2 million (EUR 0.2 million) in marketing and sales expenses, EUR 0.2 million (EUR 1.1 million) in administrative expenses and EUR 0.7 million in development expenses.
EUR millions
2012
2011
Interest income
0.2
0.5
Exchange gains (net)
0.1
–
Other financial income1
0.1
0.3
7. Financial result, net
Total financial income Interest expense Exchange losses (net)
1
0.4
0.8
– 2.3
– 4.4
–
– 0.6
Other financial expenses1
– 1.2
– 2.2
Total financial expenses
– 3.5
– 7.2
Total financial result, net
– 3.1
– 6.4
Including early payer discounts
The financial expenses decreased by EUR 3.7 million due to the early repayment of the non-current bank loans, reduction of the risk premium of the syndicated loan, generally lower interest rate level and the repayment of the convertible bond in June 2011.
8. Income tax expense and tax losses carryforward
8.1 Income tax expense EUR millions
Current income tax Deferred income tax Total income tax expense
2012
2011
– 3.8
– 2.1
0.7
1.1
– 3.1
– 1.0
The low effective tax rate of 12.7 % (25.4 %) is largely attributable to the usage of tax losses carryforward. The expected average tax rate for the year under review is 25.2 % (24.3 %) which is also applied for the deferred tax calculation. Deferred tax assets from tax losses carryforward are not capitalized. The tax losses carryforward expire as follows: 8.2 Tax losses carryforward EUR millions
31.12.2012
31.12.2011
Tax losses carryforward by expiration Until 2013 2014 until 2017
0.7
0.6
14.3
16.0
After 2017
48.8
53.2
Total tax losses carryforward
63.8
69.8
Tax losses carryforward mainly relate to Germany, Switzerland and the US. On 31 December 2012, the non-capitalized tax effects on losses carryforward amounted to EUR 16.4 million (EUR 18.7 million).
Notes to the consolidated financial statements
9. Property, plant, equipment and intangible assets
Undeveloped properties
Land and buildings
Machinery and production tools
Equipment and vehicles
Information technology
Plant under construction
Total property, plant and equipment
9.1 Property, plant and equipment 2012
3.3
38.3
81.8
8.7
7.4
0.1
139.6
Additions
–
–
2.8
0.3
0.6
–
3.7
Disposals
–
–
– 3.3
– 0.9
– 0.6
–
– 4.8
Other reclassifications
–
– 0.2
–
0.2
–
– 0.1
– 0.1
Exchange rate differences
–
–
– 0.1
–
–
–
– 0.1
3.3
38.1
81.2
8.3
7.4
–
138.3
– 13.6
– 57.7
– 4.9
– 6.1
– 82.3
Additions – depreciation
– 1.0
– 5.7
– 0.5
– 0.8
– 8.0
Disposals – depreciation
–
1.5
0.7
0.6
2.8
Disposals – impairment
–
0.5
0.1
–
0.6
0.1
–
– 0.1
–
–
EUR millions
Acquisition cost, 1 January
31 December Accumulated depreciation and impairment, 1 January
Other reclassifications Exchange rate differences 31 December
–
–
–
0.1
0.1
– 14.5
– 61.4
– 4.7
– 6.2
– 86.8
Net carrying amount, 1 January
3.3
24.7
24.1
3.8
1.3
0.1
57.3
Net carrying amount, 31 December
3.3
23.6
19.8
3.6
1.2
–
51.5
–
5.7
3.0
–
0.1
–
8.8
–
5.6
2.0
–
–
–
7.6
Carrying amount of fixed assets held under finance leases, 1 January Carrying amount of fixed assets held under finance leases, 31 December
The insurance value of property, plant and equipment amounts to EUR 196.8 million. Amortization of property, plant and equipment is included in the items “Cost of goods sold and services provided” (EUR 6.4 million), “Marketing and sales” (EUR 0.2 million), “Development expenses” (EUR 0.1 million) and “Administrative expenses” (EUR 1.3 million).
Information technology
Plant under construction
Total property, plant and equipment
0.5
138.7
0.5
0.7
1.1
4.2
– 1.0
– 0.7
–
– 3.2
–
0.1
– 1.5
– 0.6
0.1
–
–
0.5
8.7
7.4
0.1
139.6
– 52.4
– 5.2
– 5.8
Machinery and production tools
7.3
Land and buildings
9.1
Undeveloped properties
Equipment and vehicles
9.2 Property, plant and equipment 2011
3.3
38.0
80.5
Additions
–
0.1
1.8
Disposals
–
–
– 1.5
Other reclassifications
–
–
0.8
Exchange rate differences
–
0.2
0.2
3.3
38.3
81.8
– 12.6
EUR millions
Acquisition cost, 1 January
31 December Accumulated depreciation and impairment, 1 January Additions – depreciation
– 76.0
– 1.0
– 5.7
– 0.6
– 0.8
– 8.1
Additions – impairment
–
– 0.8
–
–
– 0.8
Disposals – depreciation
–
1.5
0.8
0.7
3.0
Other reclassifications
–
–
–
– 0.1
– 0.1
Exchange rate differences 31 December
–
– 0.3
0.1
– 0.1
– 0.3
– 13.6
– 57.7
– 4.9
– 6.1
– 82.3
Net carrying amount, 1 January
3.3
25.4
28.1
3.9
1.5
0.5
62.7
Net carrying amount, 31 December
3.3
24.7
24.1
3.8
1.3
0.1
57.3
–
5.9
3.7
–
–
–
9.6
–
5.7
3.0
–
0.1
–
8.8
Carrying amount of fixed assets held under finance leases, 1 January Carrying amount of fixed assets held under finance leases, 31 December
The insurance value of property, plant and equipment amounts to EUR 174.0 million. Amortization of property, plant and equipment is included in the items “Cost of goods sold and services provided” (EUR 7.4 million), “Marketing and sales” (EUR 0.4 million) and “Administrative expenses” (EUR 1.1 million).
Notes to the consolidated financial statements
Patents, licences and other intangible assets
Total intangible assets
Acquisition cost, 1 January
Capitalized software
EUR millions
Capitalized development costs
9.3 Intangible assets in 2012
4.7
13.7
0.9
19.3
Additions
–
1.2
0.2
1.4
Disposals
– 0.3
– 0.3
–
– 0.6
Other reclassifications
–
– 0.3
0.4
0.1
Exchange rate differences
–
–
0.1
0.1
4.4
14.3
1.6
20.3
Accumulated amortization, 1 January
– 4.4
– 8.7
– 0.7
– 13.8
Additions
– 0.3
– 1.6
– 0.2
– 2.1
31 December
Disposals 31 December Net carrying amount, 1 January Net carrying amount, 31 December
0.3
0.3
–
0.6
– 4.4
– 10.0
– 0.9
– 15.3
0.3
5.0
0.2
5.5
–
4.3
0.7
5.0
Amortization of intangible assets is included in the items “Cost of goods sold and services provided” (EUR 0.4 million) and “Administrative expenses” (EUR 1.7 million).
Patents, licences and other intangible assets
Total intangible assets
Acquisition cost, 1 January
Capitalized software
EUR millions
Capitalized development costs
9.4 Intangible assets in 2011
4.7
13.0
0.8
18.5
Additions
–
0.5
0.1
0.6
Disposals
–
– 0.5
–
– 0.5
Other reclassifications
–
0.6
–
0.6
Exchange rate differences
–
0.1
–
0.1
4.7
13.7
0.9
19.3
31 December Accumulated amortization, 1 January
– 3.9
– 7.7
– 0.6
– 12.2
Additions
– 0.5
– 1.6
– 0.1
– 2.2
Disposals
–
0.5
–
0.5
Other reclassifications
–
0.1
–
0.1
– 4.4
– 8.7
– 0.7
– 13.8
Net carrying amount, 1 January
0.8
5.3
0.2
6.3
Net carrying amount, 31 December
0.3
5.0
0.2
5.5
31 December
Amortization of intangible assets is included in the items “Cost of goods sold and services provided” (EUR 0.8 million) and “Administrative expenses” (EUR 1.4 million).
Notes to the consolidated financial statements
10. Treatment of goodwill
Goodwill is offset against retained earnings at the time of acquisition. The resulting impacts on equity and the net result, taking into account a goodwill amortization period of five years, are documented below. Effects of a theoretical amortization of goodwill on balance sheet and income statement: EUR millions
2012
2011
Declared result for the period
21.4
3.0
Theoretical annual amortization of goodwill
– 6.6
– 6.5
Theoretical exchange rate differences
– 0.1
– 0.1
Theoretical result for the period
14.7
– 3.6
Acquisition value of goodwill, 1 January
61.7
61.7
–
–
– 0.5
–
Additions Reduction of purchase price Mlog Logistics GmbH Exchange rate differences Acquisition value of goodwill, 31 December Theoretical accumulated amortization, 1 January
0.2
–
61.4
61.7
– 41.4
– 34.8
Theoretical annual amortization of goodwill
– 6.6
– 6.5
Theoretical exchange rate differences
– 0.1
– 0.1
– 48.1
– 41.4
Theoretical net book value goodwill, 31 December
13.3
20.3
Declared equity, 31 December
85.4
64.5
Theoretical effect of recognition of goodwill, 1 January
20.3
26.9
Theoretical accumulated amortization, 31 December
Theoretical effect of recognition of goodwill in reporting period
– 7.0
– 6.6
98.7
84.8
EUR millions
31.12.2012
31.12.2011
Investments
0.1
0.1
Pension assets
1.9
2.0
Other financial assets
1.2
1.4
Deferred tax assets
3.8
3.8
Total financial assets
7.0
7.3
Theoretical equity, 31 December
11. Financial assets
EUR millions
12. Inventories and work in process
31.12.2012
31.12.2011
17.4
19.9
Finished goods
4.2
6.9
Spare parts
7.3
7.2
Work in process
21.9
27.0
Allowances
– 7.4
– 6.2
– 16.2
– 17.5
Raw materials, supplies and other consumables
Advance payments by customers Advance payments to suppliers Total inventories and work in process
EUR millions
13. Trade accounts receivable
Trade accounts receivable
2.8
4.1
30.0
41.4
31.12.2012
31.12.2011
84.8
86.7
Construction contracts with amounts due from customers (underfinanced)
9.8
6.7
Allowances for doubtful accounts
– 2.3
– 2.1
Total trade accounts receivable
92.3
91.3
Trade accounts receivable are distributed over a widely scattered customer base. Management does not expect any further material losses on receivables. Allowances on trade accounts receivable are made mainly on a case-by-case basis; a collective allowance is also made on long-overdue positions.
EUR millions
31.12.2012
31.12.2011
Income tax receivables
1.0
1.2
VAT, withholding and other refundable tax
3.6
3.0
Guarantees
0.4
0.5
Advance payments
3.1
2.2
14. Other receivables
Other receivables Total other receivables
EUR millions
15. Cash and cash equivalents
Cash, postal and bank current accounts Time deposits Total cash and cash equivalents
2.9
3.0
11.0
9.9
31.12.2012
31.12.2011
33.6
35.8
0.5
1.1
34.1
36.9
Of cash and cash equivalents, EUR 1.9 million (EUR 0.7 million) are currently held in countries with specific formalities and request procedures for transfers abroad. By complying with these requirements, the Group has these funds at its disposal.
Notes to the consolidated financial statements
16. Share capital Nominal value per share (CHF)
Share capital in EUR millions
Number of shares
2012
2011
2012
2011
2012
2011
1 January
11.00
11.00
7 730 000
5 627 453
59.9
Additions
–
–
–
2 102 547
–
Disposals
–
–
–
–
11.00
11.00
7 730 000
7 730 000
31 December
Number of treasury shares
Treasury shares in EUR millions
2012
2011
2012
2011
39.4
3 149
15 364
0.1
0.6
20.5
34 659
–
0.7
–
–
–
– 16 308
– 12 215
– 0.3
– 0.5
59.9
59.9
21 500
3 149
0.5
0.1
Kardex AG’s share capital is denominated in EUR. When Kardex AG’s functional currency was changed from CHF to EUR, the share capital was historically converted; therefore, there are no currency translation effects on the share capital. As at 31 December 2012, there were 7 730 000 (7 730 000) fully paid up registered shares with a nominal value of CHF 11.00 (CHF 11.00) outstanding. At the General Meeting of 24 April 2012 shareholders approved to abandon the remaining authorized capital. The capital reserves comprise premiums as well as gains/losses from transactions with treasury shares. In the period under review, the Executive Committee drew as part of their compensation for the 2011 financial year 6709 (2010: 1891) shares from the Company’s holdings of treasury shares. In the period under review, the Board of Directors drew as part of their compensation for the 2012 financial year 9599 (2011: 10 324) shares from the Company’s holdings of treasury shares. As of 31December 2012, Kardex AG held 21 500 (3149) treasury shares, which were purchased at an average share price of CHF 26.24 each. In 2011, the Board of Directors conducted a capital increase and issued 2 102 547 registered shares with a par value of CHF 11.00 each, thereby raising the share capital by CHF 23 128 017 to CHF 85 030 000.
2012
2011
7 726 851
5 612 089
–
2 102 547
17. Earnings per share Number of outstanding shares at the beginning of the financial year Issue of new shares Purchases of treasury shares
– 34 659
–
16 308
12 215
7 708 500
7 726 851
7 720 905
6 309 090
21 370 000
3 005 000
Basic earnings per share (EUR)
2.77
0.48
Diluted earnings per share (EUR)¹
2.77
0.48
Disposals of treasury shares Number of outstanding shares at the end of the financial year Weighted average number of outstanding shares Net result Group (EUR)
1
No dilutive effect occurred in 2012 and 2011, the diluted result per share is the same as the basic result per share (net result to average number of outstanding shares).
18. Financial liabilities
Non-current financial liabilities EUR millions
Banks
31.12.2012
31.12.2011
14.7
40.9
Finance lease liabilities
0.6
1.0
15.3
41.9
EUR millions
31.12.2012
31.12.2011
2 to 5 years
13.5
37.0
Total non-current financial liabilities
Non-current financial liabilities with banks by due date
Over 5 years Total non-current liabilities with banks by due date
1.2
3.9
14.7
40.9
31.12.2012
31.12.2011
Current financial liabilities EUR millions
Current bank loans
5.5
7.1
Current portion of finance lease liabilities
0.4
0.5
Current portion of non-current financial liabilities
0.5
3.0
Total current financial liabilities
6.4
10.6
On 17 August 2011, Kardex AG took out a syndicated loan in the total amount of EUR 50 million, arranged by UBS AG (42.86 %), Credit Suisse AG (35.71 %) and Zürcher Kantonalbank (21.43 %). This facility is divided into a credit line totalling EUR 20 million (tranche A), which has to be amortized, and a revolving, working capital credit line of EUR 30 million (tranche B). The credit line subject to amortization can be drawn in EUR and is subject to annual ordinary amortization of EUR 5.0 million payable on 30 April each year. Tranche B is for the financing of working capital and non-current operating assets and can be drawn in EUR and CHF or other freely convertible currencies acceptable to all lenders. The interest rate for tranche A as at 31 December 2012 was 1.607 % and is based on the Euribor rate of 0.107 % plus a margin of 1.50 % to cover Company-specific risk. Tranche B was not utilized as at 31 December 2012. The interest margin on the syndicated loan may decrease if the net debt/EBITDA ratio improves accordingly. Both tranches mature on 30 April 2015. The commitment fee for tranche B is 35 % of the respective current interest margin for the calculation period, calculated on the average undrawn amount. Compliance with the covenants agreed with the banks must be confirmed quarterly. The covenants include key financial figures relating to the leverage factor and equity ratio. All covenants were complied with as at 31 December 2012. Financial liabilities at year-end in all currencies had an average interest rate of 3.01 % (4.89 %). The market-dependent interest component of the syndicated loan depends on the development of the Euribor rate, on the one hand, and the chosen interest period, on the other; it is fixed for one to six whole months, depending on the choice of interest period.
Notes to the consolidated financial statements
19. Employee pension plans
Current employee benefits EUR millions
31.12.2012
31.12.2011
2.8
1.4
Employee claims in other current liabilities Employee claims in accruals Total employee claims
9.6
10.6
12.4
12.0
Social security and pension plan liabilities Total employee claims and pension plan liabilities
1.8
1.7
14.2
13.7
Employee entitlements include bonuses, holiday and overtime. The liability towards the pension institutions amounted to EUR 0.2 million (EUR 0.1 million). EUR millions
31.12.2012
31.12.2011
1.9
2.0
12.4
12.2
4.0
5.2
Total pension assets Provisions Pension liabilities relating to defined benefit plans Other non-current employee benefit obligations Non-current provisions
16.4
17.4
Current pension liabilities
0.5
0.2
Other current employee benefit obligations
2.2
1.1
Current provisions
2.7
1.3
19.1
18.7
Total provisions
Employees and former employees receive different employee benefits and retirement pensions, which are determined in accordance with the legislative provisions in the countries concerned. All Swiss companies in the Group are members of collective foundations, which are not direct risk-takers. These pension plans are funded by contributions from employer and employee. The private pension plans in Switzerland are structured for the purpose of building up retirement assets with conversion into fixed retirement pensions and supplementary risk benefits. Some of the pension plans abroad are made into independent schemes. Measure-
–
– 1.7
– 1.7
– 1.7
– 10.5
– 0.5
–
– 0.5
– 0.7
Total
–
– 11.0
– 10.5
– 0.5
– 1.7
– 2.2
– 2.4
Pension benefit expenses within personnel expenses 2011
–
– 11.0
Pension benefit expenses within personnel expenses 2012
Contributions concerning the business period
–
–
Economic part of the Group 31.12.2011
–
Pension institutions without own assets
EUR millions
Economic part of the Group 31.12.2012
Pension plans without surplus/deficit
Pension institutions
Surplus/deficit 31.12.2012
Change to prior period or recognized in the result of the period, respectively
ment and recognition comply with FER 16.
Economic benefit/(economic obligation) and pension expenses
Deferred tax liabilities
Legal disputes and contractual penalties
Warranties
Retirement and other employee benefit obligations
Restructuring
Others
2012 Total
2011 Total
20. Provisions
1 January
1.0
2.1
2.9
18.7
1.4
1.4
27.5
28.7
Additions
–
2.2
1.7
3.7
0.3
3.0
10.9
7.9
– 0.3
– 0.2
– 1.3
– 3.3
– 1.0
– 2.4
– 8.5
– 6.7
–
– 0.6
– 0.1
–
–
– 0.1
– 0.8
– 2.4
–
– 0.3
–
–
–
1.9
28.8
27.5
EUR millions
Utilization Reversal Reclassifications
– 0.3
–
–
–
–
–
–
–
–
–
31 December
0.4
3.5
3.2
19.1
0.7
Non-current provisions
0.4
2.3
1.9
16.4
–
0.4
21.4
21.1
–
1.2
1.3
2.7
0.7
1.5
7.4
6.4
Exchange rate differences
Current provisions
Deferred tax liabilities are shown net after offsetting them against deferred tax assets. Netting takes place at individual company level. The provisions for legal disputes and contractual penalties relate to ongoing proceedings. They include provisions for contractual obligations as well as warranties from the sale of an operating segment no longer retained. The provision for warranties covers the cost for guarantee claims. The actual amount is based on current sales and available data. Experience shows that the provisions will be used in the following one to two years. For employee benefit obligations, see note 19. Provisions for restructuring relate to measures to adjust cost structures in Kardex France SASU (FR) and the finalization of the closure of the plant in Lewistown (USA). Provisions for restructuring include severance payments and are only be charged to the balance sheet once the restructuring decision has been announced. Normally the expenses would fall due within the course of one year. Additions in “Others” and also partially in “Legal disputes” were mainly booked in order to cover estimated losses in project business. Other provisions also contain various individual positions that are essentially connected with maintenance and service agreements. Additional details of the other provisions will not be given as these details may impair the position of the Group in ongoing proceedings.
Notes to the consolidated financial statements
EUR millions
31.12.2012
31.12.2011
6.9
6.2
21. Other current liabilities VAT, withholding tax and other tax liabilities Construction contracts with amounts due 6.9
7.6
Advances received (POC)
to customers (overfinanced)
0.3
0.4
Social security and pension plan liabilities
1.8
1.7
Employee claims
2.8
1.4
Other current liabilities
3.3
7.8
22.0
25.1
31.12.2012
31.12.2011
0.5
3.3
–
0.1
Total other current liabilities
EUR millions
22. Derivative financial instruments
Currency derivatives (hedging) Contract volumes Fair value (negative)
The currency derivatives (cash flow hedge) are used to hedge the Polish zloty and UK pound. The currency contracts are recognized in the balance sheet at replacement (i. e. market) value. Any gains and losses accruing are recognized directly in the income statement.
EUR millions
31.12.2012
31.12.2011
11.2
11.1
Up to 1 year
7.8
7.5
1 to 5 years
14.3
15.2
23. Operating leases Expense for operating leases for the year Future minimum payments for non-cancellable lease agreements:
Over 5 years Total future minimum payments for operating leases
5.6
13.7
27.7
36.4
Operating leases apply mainly to vehicles and rents on buildings. Leasing contracts are agreed at current market conditions.
24. Contingent liabilities
The Group is currently involved in various litigations arising in the course of business. The Group does not anticipate that the outcome of these proceedings, either individually or in sum, will have a material effect on its financial or income situation. The total amount of guarantees in favour of third parties is EUR 43.7 million at 31 December 2012 (EUR 38.1 million).
EUR millions
25. Assets pledged or of restricted disposability
31.12.2012
31.12.2011
Property, plant and equipment
13.2
16.7
Trade accounts receivable
–
8.1
Inventories
–
5.1
1.3
1.7
14.5
31.6
Cash and cash equivalents Total assets pledged or of restricted disposability
26. Related parties
Related parties (natural person or legal entity) are defined as any party directly or indirectly able to exercise significant influence over the organization as it makes financial or operational decisions. Organizations that are in turn directly or indirectly controlled by the same related parties are also deemed to be related parties. With the exception of the pension plans (see note 19), there were no outstanding receivables from or liabilities towards these parties. No transactions were carried out with related parties during the year under review or the previous year. Disclosures of compensation and shareholdings in accordance with the Swiss Code of Obligations may be found in the notes to the financial statements of Kardex AG.
27. Acquisition of subsidiaries
No acquisitions took place during the period under review. Due to a compensation payment by the sellers based on tax litigations, the purchase price for the acquisition of Mlog Logistics GmbH, DE-Neuenstadt reduced, which is shown as a negative acquisition of subsidiaries.
28. Disposals of subsidiaries
No disposals took place during the period under review whereas the following subsidiaries were liquidated in 2012: – Mlog Logistics, AT-Anthering – Kardex Office GmbH, DE-Oberursel/Taunus – Kardex Holdings Ltd., UK-Epping The company Storage Solution Iberica S.L., ES-San Fernando de Henares, Madrid, has been merged with Kardex Sistemas S.A., ES-San Fernando de Henares, Madrid, in 2012.
Notes to the consolidated financial statements
Share capital in local currency
Percentage holding
EUR
585 000
100
2
Kardex Remstar
16
AUD
1 300 000
100
1
S.A. Kardex nv, Forest/Brussels
Kardex Remstar
15
EUR
507 895
100
1
Stow International nv, Spiere-Helkijn
Kardex Stow
246
EUR
11 375 939 100.0 0.0
1
Kardex Systems AG, Volketswil
Kardex Remstar
42
CHF
1 000 000
100
1
KRM Service AG, Zurich
Kardex Remstar
16
CHF
500 000
100
1
*
Kardex Logistic System (Beijing) Co. Ltd., eijing
Kardex Remstar
35
EUR
200 000
100
1
*
Shanghai Stow Storage Equipment Co. Ltd., Shanghai
Kardex Stow
157
CNY
78 707 143
100
2
CY
*
Kardex Systems Ltd., Limassol
Kardex Remstar
13
EUR
418 950
100
1
CZ
*
Kardex s.r.o., Prague
Kardex Remstar
23
CZK
500 000
100
1
*
*
Stow Ceska Republika s.r.o., Prague
Kardex Stow
115
CZK
500 000
100
2
*
*
Kardex Produktion Deutschland GmbH, Neuburg/Kammel
Kardex Remstar
402
EUR
6 919 568 84.48 15.52
3
Kardex Software GmbH, Wörth a. Rh.
Kardex Remstar
33
EUR
26 000
100
5
*
Kardex Germany GmbH, Bellheim/Pfalz
Kardex Remstar
30
EUR
511 292
100
1
*
Kardex Megamat Beteiligungs GmbH, Kardex Remstar Neuburg/Kammel
–
EUR
5 113 431
100
5
127
EUR
1 386 310
26.2 73.8
3
AUS
*
BE *
*
CH
*
Kardex Austria GmbH, Vienna
Kardex Remstar
*
Stow GmbH Austria, Vienna
Kardex Stow
*
Kardex VCA Pty Ltd, Wodonga
* * * *
CN *
DE
*
*
2 3 4 5 6 7 8 9
*
9
4
Kardex Deutschland GmbH, Neuburg/Kammel
Kardex Remstar
*
Mlog Logistics GmbH, Neuenstadt am Kocher
Kardex Mlog
254
EUR
50 000
100
5
*
Stow Deutschland GmbH, Wiesbaden
Kardex Stow
24
EUR
511 400
100
2
ES
*
Kardex Sistemas S.A., San Fernando de Henares, Madrid
Kardex Remstar
23
EUR
142 900
100
1
FI
*
Kardex Finland OY, Jyväskylä
Kardex Remstar
19
EUR
134 550
100
1
*
1
*
Held by:
Currency
9
Division
1
Company, domicile
100
AT
Distribution, service
300 000
Development, production
EUR
Finance, property, services
17
Country
Headcount
29. Subsidiaries
*
Kardex AG, Zurich, CH Stow International nv, Spiere-Helkijn, BE Kardex Megamat Beteiligungs GmbH, Neuburg a. d. K., DE Kardex Deutschland GmbH, Neuburg/Kammel, DE Kardex Germany GmbH, Bellheim, DE Kardex Production USA Inc., Westbrook (Maine), USA KRM Service AG, Zurich, CH Kardex Systems Ltd., Limassol, CY Kardex Systems AG, Volketswil, CH (1 share out of 2 429 989 shares)
5
Currency
Share capital in local currency
Percentage holding
1
*
Stow France S.A.S., Saint Pierre du Perray
Kardex Stow
29
EUR
684 000
100
2
HU
*
Kardex Hungaria Kft., Budaörs
Kardex Remstar
7
HUF
2 514 000
100
1
IE
*
Kardex Systems Ireland Ltd., Dublin
Kardex Remstar
4
EUR
300 000
100
1
IN
*
Kardex India Storage Solutions Private Kardex Remstar Ltd., Bangalore Kardex Stow
22 3
INR
26 143 500
99.0 1.0
1
Held by:
Headcount
100
Division
1 835 000
Company, domicile
EUR
Distribution, service
73
Development, production
Kardex Remstar
Finance, property, services
Kardex France SASU, Neuilly-Plaisance Cedex
Country
*
FR
8
IT
*
Kardex Italia S.p.A., Opera (Mi)
Kardex Remstar
31
EUR
310 000
100
7
NL
*
Kardex Systems bv, Woerden
Kardex Remstar
33
EUR
90 756
100
1
*
Stow Nederland bv, Breda
Kardex Stow
15
EUR
18 152
100
2
NO
*
Kardex Norge AS, Skedsmokorset
Kardex Remstar
13
NOK
2 500 000
100
1
PL
*
Kardex Polska Sp.z.o.o., Warsaw
Kardex Remstar
6
PLN
200 000
100
1
*
Stow Polska Sp.z.o.o., Warsaw
Kardex Stow
28
PLN
500 000
100
2
RU
*
OOO Kardex Moscow
Kardex Stow
–
RUB
10 000
100
1
SE
*
Kardex Scandinavia AB, Bromma
Kardex Remstar
25
SEK
100 000
100
1
SG
*
Kardex Far East Private Ltd., Singapore
Kardex Remstar
6
SGD
1 550 000
100
1
SK
*
Kardex Slovensko s.r.o., Bratislava
Kardex Remstar
–
EUR
6 639
100
1
*
Stow Slovensko s.r.o., Bratislava
Kardex Stow
–
EUR
33 194
100
2
*
Kardex Turkey Depolama Sistemleri Ltd. Sti., Istanbul
Kardex Remstar
8
TRY
5 000
99.5 0.5
1
*
Kardex Systems (UK) Ltd., Hertford
Kardex Remstar
*
Stow U.K. Co. Ltd., Swindon
Kardex Stow
*
Kardex Remstar LLC, Westbrook (Maine)
*
Kardex Production USA Inc., Westbrook (Maine)
TR UK
US *
7
62
GBP
828 000
100
1
9
GBP
220 000
100
2
Kardex Remstar
53
USD
100
100
6
Kardex Remstar
15
USD
1 000
100
1
Notes to the consolidated financial statements
30. Risk management
As part of its duty to supervise the Company, the Board of Directors performs at least once in a year a systematic risk assessment. The risk assessment was based on a company-specific risk universe and on information obtained from interviews with division and Group management. Risks were recorded according to likelihood, reputational risk and potential financial impact. This process is supported by a risk matrix that describes and values the substantial risks valid for the Group according the following categories: external environment, strategy, management and leadership, production, market and sales, information technology and finance and compliance. Measures in order to cope with these risks are also contained in the risk matrix. The Board of Directors has noted the report of the Executive Committee on the Group-wide risk management at the meeting on 13 December 2012 and approved the measures contained therein.
31. Release for publication and approval of the financial statements
32. Events after the balance sheet date
The Board of Directors approved these financial statements on 13 March 2013 and released them for publication. They must also be approved by the Shareholders General Meeting.
No events have taken place between 31 December 2012 and 13 March 2013 that would require an adjustment of the carrying amounts of assets and liabilities of the Group or need to be disclosed here.
Report of the statutory auditor on the consolidated financial statements
Report of the statutory auditor on the consolidated financial statements To the General Meeting of Shareholders of Kardex AG, Zurich Zurich, 13 March 2013 As statutory auditor, we have audited the accompanying consolidated financial statements of Kardex AG, presented on pages 48 to 78, which comprise the income statement, balance sheet, cash flow statement, statement of changes in equity and notes for the year ended 31 December 2012.
Board of Directors’ Responsibility The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Swiss GAAP FER and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further re sponsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circ*mstances. 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 standards 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 circ*mstances, 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 reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated 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 consolidated financial statements for the year ended 31 December 2012 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 circ*mstances incompatible with our independence. 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 financial statements according to the instructions of the Board of Directors. We recommend that the consolidated financial statements submitted to you be approved.
KPMG AG
Thomas Schmid
Roman Wenk
Licensed Audit Expert
Licensed Audit Expert
Auditor in Charge
Financial reporting Kardex AG (Holding) 84
Income statement of Kardex AG
85
Balance sheet of Kardex AG
86
Notes to the financial statemens of Kardex AG
94
Report of the statutory auditor on the financial statements
Financial reporting Kardex AG
Income statement of Kardex AG
CHF millions
Notes
Income from investments Licensing income Financial income
3
Other income Release of impairment on investments and loans to Group companies
5
Total income Administrative expenses
2
Licensing expenses Trademark amortization Financial expenses
3
Income tax Additions of impairment on investments and loans to Group companies
5
Extraordinary expenses
1
2012
2011
4.8
3.2
7.9
7.5
2.9
15.9
3.2
4.8
3.0
–
21.8
31.4
– 4.6
– 6.5
– 0.2
– 0.2
– 0.1
–
– 2.3
– 6.6
– 0.1
– 0.1
–
– 3.4
–
– 45.7
Total expenses
– 7.3
– 62.5
Result for the period
14.5
– 31.1
Balance sheet of Kardex AG
CHF millions
Property, plant and equipment Loans to Group companies Investments
Notes
31.12.2012
31.12.2011
4
0.4
0.5
1, 5
20.4
37.4
5
Non-current assets Receivables from Group companies
174.2
172.3
195.0
210.2
12.7
22.8
Other short-term receivables
0.1
–
Prepaid expenses
1.6
0.3
0.5
–
Securities
6
Cash and cash equivalents
16.2
29.9
Current assets
31.1
53.0
226.1
263.2
85.0
85.0
73.6
73.6
0.6
0.2
20.0
20.0
Assets Share capital General (legal) reserves – Reserve from capital contribution – Reserve for treasury shares
6
Unrestricted reserve Retained deficit/earnings and release of reserves for treasury shares Result for the period Equity
– 29.9
1.5
14.5
– 31.1
163.8
149.2
Non-current financial liabilities
12.1
42.8
Non-current financial liabilities
12.1
42.8
41.5
62.3
0.1
0.2
Payables to Group companies Other short-term payables
7
Accrued expenses
0.7
0.7
Provisions
1.9
1.9
Current portion of non-current financial liabilities Current liabilities Liabilities Equity and liabilities
6.0
6.1
50.2
71.2
62.3
114.0
226.1
263.2
Notes to the financial statements Kardex AG
Notes to the financial statements of Kardex AG
1. Accounting principles
The financial statements of Kardex AG comply with the requirements of the Swiss Code of Obligations. The accounts of Kardex AG are kept in euros as functional currency. As at 31 December, the annual financial statements are translated into Swiss francs: – Assets and liabilities are translated at closing rates. – The income statement and movements in equity capital are translated at average year-end rates. – Equity capital is translated at historic rates. – Translation differences are taken to income in accordance with the imparity principle (provisioning of unrealized gains). Since 2011 Kardex AG adopted the closing rate method also for shareholdings and loans to Group companies which resulted in an unrealized price loss of CHF 45.7 million in 2011. In former years historic rates were applied for those positions.
CHF millions
2. Administrative expenses
3. Financial expenses and income
2012
2011
Personnel expenses
3.1
4.1
Other expenses
1.5
2.4
Total administrative expenses
4.6
6.5
The financial income of previous year was affected by exchange rate gains on financial debts, mostly held in euros. Financial expenses have decreased because of the amortization of financial debts and decreased interest rates.
4. Fire insurance for property, plant and equipment
5. Investments and loans to Group companies
The fire insurance value of property, plant and equipment of Kardex AG amounts to CHF 0.6 million (CHF 0.7 million).
Holdings in subsidiaries of Kardex AG are listed on pages 76 and 77 of this report. Provision for impairment on loans to subsidiaries were released by CHF 3.0 million. In prior year impairment charges on loans to subsidiaries caused expenses of CHF 3.4 million.
6. Securities
Securities are made up entirely of equity shares. Treasury shares underwent the following movements: Number
Price per share in CHF
Total CHF 1 000
31 December 2008
60 796
30.00
1 824
Disposals 2009
– 3 223
49.53
– 160
–
2.50
– 144
57 573
33.45
1 926
– 42 209
49.53
– 2 091
15 364
30.30
466
– 12 215
49.53
– 605
3 149
11.95
38
Purchase 2012
34 659
22.41
777
Disposals 2012
– 16 308
22.60
– 369
21 500
24.40
525
31.12.2012
31.12.2011
–
0.1
31.12.2012
31.12.2011
Par value reduction Valuation adjustments
406
31 December 2009 Disposals 2010 Valuation adjustments
630
31 December 2010 Disposals 2011 Valuation adjustments
177
31 December 2011
Valuation adjustments
79
31 December 2012
CHF millions
7. Liabilities towards pension funds
Liabilities towards pension funds
CHF millions
8. Authorized capital
Total authorized capital
Value
–
7.8
Units
–
711 179
At the General Meeting of 26 April 2011 shareholders approved the creation of authorized capital in the amount of CHF 30 950 986 (2 813 726 shares with a par value of CHF 11.00). Following the capital increase carried out in September 2011 in the amount of CHF 23 128 017 and the payment of 2 102 547 shares, the company only had CHF 7 822 969 (number of shares 711 179) in authorized capital as at 31December 2011. At the General Meeting of 24 April 2012 shareholders approved to abandon the remaining authorized capital.
Notes to the financial statements Kardex AG
9. Significant shareholders as defined by Art. 663c of the Swiss Code of Obligations
The following shareholders owned more than 3 % of the share capital of CHF 85.0 million as at 31 December:
Buru Holding and Philipp Buhofer LB (Swiss) Investment AG¹
31.12.2012
31.12.2011
22.6 %
22.0 %
4.4 %
Stancroft Trust Limited¹
4.0 %
¹ As soon as the stake falls below the threshold of 3 % the stake is not reported anymore.
CHF millions
31.12.2012
31.12.2011
0.2
0.3
0.3
0.3
10. Operating leases Expense for operating leases for the year Future minimum payments for non-cancellable lease agreements: Up to 1 year 1 to 5 years
0.7
1.0
Total future minimum payments for operating leases
1.0
1.3
Operating leases apply mainly to vehicles and rents on buildings. Leasing contracts are agreed at current market conditions.
11. Securing of liabilities
In view of the group taxation principle, all Swiss companies bear unlimited joint and several liability for value-added tax (in accordance with Art. 15, par. 1c of Swiss VAT legislation). Kardex AG has joint responsibility for all liabilities arising from the cash-pooling agreement.
CHF millions
12. Contingent liabilities
31.12.2011
4.3
10.1
0.2
–
Contingent liabilities in favour of subsidiaries and third parties Subordinated loans to subsidiaries
13. Risk management
31.12.2012
As the ultimate parent company of the Group, Kardex AG is fully involved in the Group-wide risk management process. As part of its duty to supervise the Company, the Board of Directors performs at least once in a year a systematic risk assessment. The Board of Directors has noted the report of the Executive Committee on the Group-wide risk management at the meeting on 13 December 2012 and approved the measures contained therein.
14. Events after the balance sheet date
No events have taken place between 31 December 2012 and 13 March 2013 that would require an adjustment to the book value of Kardex AG’s assets, liabilities or equity or that are required to be disclosed here.
15.1 Compensations
15. Compensations and shareholdings
Board of Directors 2012 Board of Philipp Directors Buhofer total Chairman
CHF 1 000
Cash payments3
388
133
Walter T. Vogel
Felix Thöni
Jakob Bleiker1
Ulrich Looser1
Leo Steiner2
Martin Wipfli2
65
61
43
43
16
27
Payments in shares with retention period 4, 5
Value
129
50
24
24
16
9
6
–
Units
9 599
3 673
1 781
1 781
1 188
693
483
–
Payments for the work in the Executive Committee3, 6 Total
518
32
–
486
–
–
–
–
1 035
215
89
571
59
52
22
27
Board of Directors 2011 Board of Directors total
CHF 1 000
Cash payments3
407
Philipp Buhofer Chairman Felix Thöni7
111
Leo Steiner
Walter T. Vogel
Martin Wipfli
Dave Schnell 8
86
61
59
34
56
Payments in shares with retention period 4, 5
Value
120
39
17
20
23
21
–
Units
10 324
3 406
1 437
1 710
1 961
1 810
-
Payments for the work in the Executive Committee3 Total
338
93
245
–
–
–
–
865
243
318
106
84
80
34
1
Since Annual General Meeting 2012
2
Till Annual General Meeting 2012
3
Employer contributions to state social insurance schemes (AHV, ALV etc.) are included.
4
Valuation of the shares is based on the average share price for the month preceding the date of distribution which was CHF 16.05 per share (CHF 13.82/share). As all shares distributed to members of the Board of Directors are subject to a three-year vesting period, they are dispensed at 16 % (16 %) below the relevant average share price.
5
The fixed minimum portion of the director’s fee drawn in shares is 20 % (20 %).
6
The remuneration to Felix Thöni contains a variable payment of CHF 81 740 (CHF 0) which depends from the result of the Group.
7
Since Annual General Meeting 2011
8
Till Annual General Meeting 2011
No severance payments, credits or other emoluments of any kind were granted to members of the Board of Directors or related parties.
Notes to the financial statements Kardex AG
Executive Committee 2012 Executive Highest Committee compensation total1 Jens Fankhänel²
CHF 1 000
Cash payments (fixed) Cash payments (variable)
2011
4
Executive Committee total1
Highest compensation Jos De Vuyst 3
1 576
444
1 703
572 95
833
300
238
Payments in shares with retention period (variable) 4, 5 Value
–
–
83
32
Units
–
–
6 709
2 563
31
8
53
20
240
124
356
30
–
–
751
–
2 680
876
3 184
749
Payments in kind 6 Occupational pension expenses
7
Severance payments 8 Total 1
Payments to executive members of the Board of Directors are included in the payments to the Board of Directors.
2
Jens Fankhänel is heading the Kardex Remstar Division
3
Jos De Vuyst is heading the Kardex Stow Division since 15 February 2011 and was CEO of the Group until 31 May 2011.
4
The Executive Committee receives compensation consisting of a fixed base salary plus a variable component. If targets are met, depending on individual rank, this variable component may be up to 100 % of the fixed base pay. At least 20 % and at most 100 % of the variable component is paid in shares. In 2012 the variable component was paid fully in cash.
5
Distributed shares are priced 16 % (16 %) below the share price at granting date and are subject to a three-year vesting period.
6
Rent and vehicles.
7
Employer contributions to state social insurance schemes (AHV, ALV etc.) are included.
8
In the financial year 2011, two members of the Executive Committee have retired. A severance payment in the amount of CHF 751 465 was agreed. Furthermore, no credits or other emoluments of any kind were received by the members of the Executive Committee or by related parties.
15.2 Shareholdings of members of the Board of Directors, the Executive Committee and related parties Related parties and companies comprise family members and individuals or companies subject to significant influence. All transactions with related parties and companies are conducted at arm’s length. Other than payment of compensation and ordinary contributions to the various pension plans for members of the Board of Directors and Executive Committee, no significant transactions with related parties and companies have taken place. Board of Directors
Board of Directors
Philipp Buhofer Chairman1
1 772 017
1 745 955
12 067
12 114
1 770 556
1 702 282
10 286
10 333
Walter T. Vogel Felix Thöni2
Jakob Bleiker3
Ulrich Looser3 Leo Steiner4
Martin Wipfli4
Shares held 31 Dec. 2012
1 188
693
Shares held 31 Dec. 2011 1
Including shares held by Buru Holding.
2
Since Annual General Meeting 2011
3
Since Annual General Meeting 2012
4
Till Annual General Meeting 2012
18 715
28 940
Executive Committee
Executive Committee1
Gerhard Mahrle CFO
Jens Fankhänel Head of Kardex Remstar Division
Jos De Vuyst Hans-Jürgen Heitzer Head of Kardex Head of Kardex Stow Division Mlog Division
44 269
2 937
11 000
29 505
827
37 560
2 291
7 500
26 942
827
Shares held 31 Dec 2012 Shares held 31 Dec 2011 1
The shares of the executive members of the Board of Directors are listed above.
Since 24 April 2012 the Executive Committee is headed by the Executive Director Felix Thöni.
Notes to the financial statements Kardex AG
Proposal of the Board of Directors to the Annual General Meeting 1. Appropriation of retained deficit The Board of Directors is proposing to the General Meeting to approve the carryforward of accumulated losses: CHF millions
Balance brought forward Creation of reserves of treasury shares Result for the period
31.12.2012
– 29.6 – 0.3 14.5
Net result
– 15.4
Net result at the disposal of the General Meeting
– 15.4
Balance to be carried forward
– 15.4
2. Distribution of a dividend from the reserve from capital contribution The Board of Directors is proposing to the General Meeting to distribute a dividend of CHF 1.20 per share on the share capital entitled to dividends funded by a withdrawal from the reserve from capital contribution. The share capital entitled to dividends amounts to CHF 84 793 500 (7 708 500 shares). As of the end of the period 21 500 treasury shares, which are intended to be used for the benefit of the Company, are not entitled to dividends. The use of those lies within the competence of the Board of Directors. CHF millions
Distribution of dividend from the reserve from capital contribution
31.12.2012
9.3
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