Burckhardt Compression Annual Report 2020

FY2020 Annual Report · Burckhardt Compression

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ANNUAL REPORT 2020 AT A GLANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

AT A GLANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

FURTHER IMPROVEMENT
IN PROFITABILITY

Despite the coronavirus pandemic, 2020 was characterized by higher sales, a
further improvement in operating income, and a clear year-on-year increase
in net income. Order intake also went up in spite of the challenges.

CHF mn

700

600

500

400

300

200

ORDER INTAKE

SALES

OPERATING INCOME (EBIT)

CHF
676.6 MN

CHF
658.6 MN

CHF
60.8 MN

100
NET INCOME

0
CHF
47.2 MN

CHF mn

700

600

500

400

300

200

100

CHF mn

MILESTONES IN 2020

CHF mn

COMPLETE TAKEOVER OF
SHENYANG YUANDA
COMPRESSOR
On March 2016, Burckhardt Compression took
a 60% stake in Shenyang Yuanda Compressor,
based in Shenyang, China. In February 2021
it acquired the remaining 40% as planned.
The leading Chinese manufacturer of recipro-
cating compressors has extended Burckhardt
Compression’s local presence to new market
segments, has broadened its product port-
folio so it can address a wider range of mar-
ket needs, and has been providing immediate
access to a well-established local supply
19
chain.

160
140
120
100
80
60
40
20
0
–20
–40
–60
–80
–90
–100

100

SPI

–20

BCHN

Apr 20

May 20 Jun 20 Jul 20

10-YEAR SERVICE CONTRACT
FOR 9 LNG TANKERS
International company BW LNG has signed a
ten-year service contract with Burckhardt
Compression for nine liquefied natural gas
(LNG) tankers with Laby®-GI compressors.
This marks a real milestone for Burckhardt
Compression as it seeks to offer life-cycle
solutions tailored to customer needs. The
contract covers on-board services that will
add value to the operation of the vessels,
including lower life cycle costs, operational
efficiency and preventive maintenance.

Aug 20

Sep 20

NEW SERVICE
CENTER IN
SWEDEN
The Service Center in Sweden,
which was originally opened
in partnership with Kompres-
sorteknik is now a Burck-
hardt Compression-owned
subsidiary. This allows us to
provide faster and better
service to customers in Swe-
den and the other Nordic
countries.

BOIL-OFF GAS COMPRESSORS
REDUCE SULFUR DIOXIDE
AND CO2 EMISSIONS FROM
CONTAINER SHIPS
Burckhardt Compression received an order for
eight low-pressure compressor systems for
the management of boil-off gas (BOG). The
systems are destined for two container ships,
each with a capacity of 14,000 TEU (20-foot
standard containers) and two container ships,
each with 690 FEU (40-foot standard con-
tainers). All these ships are equipped with
low-pressure systems and are being built at a
Chinese shipyard, with an option for a further
16 ships.

HYDROGEN LIQUE-
FACTION PLANT IN
SOUTH KOREA
67.9%
Burckhardt Compression won
the order to build compres-
sors for a new hydrogen
liquefaction plant in South
Korea. The two BCS API 618
23.8%
process gas compressors will
be used to compress hydro-
gen as part of the liquefac-
tion process. The new lique-
faction plant is part of South
Korea’s strategy to maintain
its position as a world leader
in the development of hydro-
gen as a clean energy
source. Scheduled to start
production in 2023, the plant
will be able to produce five
tons of liquefied hydrogen
per day to supply the
country’s hydrogen filling
stations.

Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21

COMPRESSOR SYSTEM
FOR NETWORK OF HYDROGEN
FILLING STATIONS IN
CALIFORNIA
US company First Element Fuel Inc. is
developing a network of hydrogen filling
stations in collaboration with the state of
California and various industry partners.
To this end, the company placed an order with
Burckhardt Compression to supply a com-
pressor system for a hydrogen refilling plant
in Northern California, which will extend
periods between service intervals. The
system is being built in Pune, India, with a
shortened delivery time to fit with the overall
project timetable.

700

600

500

700

600

500

CHF mn

700

600

CHF mn
400

500

400

300

200

100

16
17

17
18

18
19

19
20

80
300

70
200
60
100
50

0
40

16
19

80
300

70
200
60
100
50

0
40

17
20

0
CHF mn

10
NET FINANCIAL POSITION
0
CHF mn
CHF
350
-82.4 MN

17
350

300

50
19
16

20
17

250

CHF mn
200

16
17

17
18

18
19

19
20

70
CHF mn

CHF mn

60
700

700

600
50
500
40
400

600

500

400

30
300

300

200

100

200
20
100
10
0

16
17

17
18

19
20

18
19
0

CHF mn

16
17

17
18

18
19

19
20

350

300

250

200

150

100

17
20

16
19

17
20

19
16

20
17

CHF mn

350

CHF mn

160
140
120
100
80
60
40
20
0
–20
–40
–60
–80
–90
–100

FISCAL YEAR 2020
+67.9%

16
17

17
18

18
19

19
20

300

100

150

200

CHF mn

CHF mn
250
250

TOTAL SHAREHOLDER RETURN
CHF mn
SINCE IPO
20
200
160
160
+380.6%
150
140
140
120
120
100
100
100
50
80
80
0
60
60
40
40
20
20
0
0
–20
–20
–40
–40
–60
–60
%
–80
–80
600
–90
–90
–100
–100
500

160
140
120
100
80
60
18
19
40
20
0
–20
–40
–60
–80
–90
–100

100

500

600

16
17

17
18

19
20

380.6%
16
19

380.6%
17
20

80
18
60

80
16
19
60

300

BCHN

200

100

141.1%

20
SPI

SPI

(100)

SPI

–20

BCHN

600

500

400

300

200

100

BCHN

380.6%

141.1%

67.9%

(100)

SPI

Jun 06
23.8%

23.8%

Jun 13

Jun 20

17
20

400

17
20

700

600

500

700

600

500

CHF mn

400

CHF mn
400

700

300

600

200

500

100

400

700
300

600
200

500
100

400
0

700

600

500

400

300

200

100

300

16
19

17
20
300

17
20

200

100

CHF mn

200

100
SHAREHOLDERS’ EQUITY
0
CHF mn
CHF mn
CHF
18
17
20
80
219.6 MN

300

350

19
16

20
17

CHF mn

50
CHF mn

40
350

30
300
20
250
10

200
0

CHF mn

700

600

500

400

300

200

100

700

600

500

400

300

200

100

700

600

500

400

300

200

100

350

300

250

200

100

600

500

400

300

200

100

600

500

400

200

100

250

200

150

100

160
150
140
120
100
100
80
50
60
40
0
20
0
–20
–40
–60
–80
–90
–100

16
19

160
150
140
120
100
100
80
50
60
40
0
20
0
–20
–40
–60
–80
–90
–100

17
20

150

16
19

17
20
150

17
20

100

19
16

20
17

19
16

20
17

Jun 06

Jun 13

Jun 20

Apr 20

May 20 Jun 20 Jul 20

Aug 20

Sep 20

Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21

600

500

400

600

500

400

600

500

400

100

380.6%

380.6%
80

300

300
BCHN

BCHN

200

100

200

100

200

(100)
20

100

67.9%

23.8%

300

BCHN

380.6%

100

80
380.6%

(100)

40
Jun 06

100

141.1%
100

141.1%

SPI

67.9%

SPI

67.9%

SPI

(100)

SPI
(100)

SPI

–20

BCHN

–20

BCHN

–20

BCHN

40
Jun 06
Jun 13

141.1%

SPI

(100)

SPI

(100)

SPI

–20

BCHN

–20

BCHN

Jun 06

Jun 13

Jun 20

Apr 20

Jun 20

May 20 Jun 20 Jul 20

Apr 20

May 20 Jun 20 Jul 20

Aug 20

Sep 20

Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21

Aug 20

Sep 20

Jun 06

Jun 13

Jun 20

Jun 13

Apr 20

Jun 20

May 20 Jun 20 Jul 20

Apr 20

May 20 Jun 20 Jul 20

Aug 20

May 20 Jun 20 Jul 20

Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21

Aug 20

Sep 20

Apr 20

Jun 20

23.8%

ABOUT US | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

ALWAYS CLOSE TO OUR CUSTOMERS

Burckhardt Compression is the worldwide
market leader for reciprocating compressor
systems and the only manufacturer and service
provider that covers a full range of reciprocating
compressor technologies and services.

GLOBAL MARKET
LEADER FOR
RECIPROCATING
COMPRESSORS
AND SERVICES

34
SUBSIDIARIES
WORLDWIDE

MORE THAN
2’500 EMPLOYEES
IN OVER
80 COUNTRIES
WORLDWIDE

Agents

Burckhardt Compression
Manufacturing/Assembly Locations

1844
Burckhardt Compression
ESTABLISHED
Manufacturing/Assembly Locations
IN SWITZER-
LAND

Burckhardt Compression
Subsidiaries, Associates and Service Centers

Burckhardt Compression
Manufacturing/Assembly
Locations

Burckhardt Compression

Subsidiaries, Associates and
Service Centers

CHF
658.6 MN
SALES
IN 2020

REPRESENTED
ON ALL
CONTINENTS

3
MANUFACTURING
SITES
5
ASSEMBLY
LOCATIONS

Its customized compressor
systems are used in the gas
gathering and processing,
gas transport and storage,
refinery, chemical, petro-
chemical as well as in the
industrial gas/hydrogen
mobility and energy sectors.
Burckhardt Compression’s
leading technology, broad
portfolio of compressor

components and full range
of services help customers
around the world find the
optimized solution for their
reciprocating compressor
systems. Since 1844 its
highly skilled workforce has
crafted superior solutions
and set the benchmark in the
gas compression industry.

VISION

MISSION

GUIDING PRINCIPLES

CUSTOMERS

We are our customers’ first
choice for gas compression
solutions across the entire
product life cycle.

Systems Division: We provide
optimum gas compression
solutions for every customer.

Services Division: We love to
provide services that matter.
Hands-on.

In response to the Group’s
substantial growth in recent
years and its ongoing interna-
tionalization, Burckhardt
Compression has developed a
uniform “Values and Behav-
iors” document. This sets out
the basic principles of our
corporate culture and takes
into account the intensified

virtual way that our various
global subsidiaries and sites
collaborate with each other.
In this context it is vital that
all our employees share a
common understanding of
the values and principles that
guide our actions.

Our customer base includes
some of the largest, most
famous, and most innovative
companies in the world. We
serve
– energy companies,
– natural gas transportation
and storage companies
(onshore and offshore)
– customers in the marine

sector

– H2 processing industries
– petrochemical/chemical

companies

– industrial gas companies
– general engineering compa-
nies that design and con-
struct production lines or
entire plants for our end
customers

CONTENTS | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

CONTENTS

FURTHER
IMPROVEMENT IN

PROFITABILITY

3 MILESTONES IN 2020

ALWAYS CLOSE TO

OUR CUSTOMERS

TO OUR

SHAREHOLDERS

11 FIGURES

16 OUR COMPANY

18
20

History, Burckhardt Compression
brand
Product development and
innovation, Main application
areas
Compressor systems
Service and components
business

OUR STRATEGY

Integrated business model,
Resilience
Mid-Range plan for 2018 to 2022,
Energy mix and megatrends,
Brand managment, Customers
Employees, Acquisitions,
Capacity, Research and
development

30 SYSTEMS DIVISION:
REVIEW OF THE

FISCAL YEAR

31
32

Markets
Distribution, Infrastructure,
Outlook

SERVICES DIVISION:
REVIEW OF THE
FISCAL YEAR

Markets, Sales further
strengthened
New service centers, Outlook

47
48
52
54

SUSTAINABILITY
REPORT

Commitment, Stakeholders and
risk management
Economic sustainability
Social sustainability
Environmental sustainability
Enhanced focus on sustainability

CORPORATE
GOVERNANCE

57
58
64
67

Group structure and
shareholders
Capital structure
Board of Directors
Executive Management
Compensation, shareholdings
and loans, Shareholders’
participation rights,
Changes of control and
defensive measures, Auditors
Information Policy

COMPENSATION
REPORT

Basis, Compensation policy,
Organization, duties, and
powers, Compensation system
Compensation paid with
comparative figures for the
previous year
Overview of shareholdings and
distributed shares
Transactions with the Board
of Directors, the Executive
Management, and related
parties, Motions for the Annual
General Meeting, Evaluation of
the compensation system
Report of the statutory auditor
on the compensation report

FINANCIAL
STATEMENTS OF
BURCKHARDT
COMPRESSION
HOLDING AG,
WINTERTHUR

112

Report on the statutory auditor
on the audit of the financial
statements

116

IMPRINT

FINANCIAL REPORT

106

81
82

102

Comments on financial report,
Sales and gross profit, Operating
income
Financial income and
tax expenses, Net income,
Balance sheet, Cash flow
Consolidated income
statement
Consolidated balance sheet
Consolidated cash flow
statement
Consolidated statement
of changes in equity
Notes to the consolidated
financial statements
Report on the statutory auditor
on the audit of the consolidated
financial statements

TO OUR SHAREHOLDERS | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

TO OUR SHAREHOLDERS

DEAR SHAREHOLDERS

Despite the coronavirus pandemic, 2020 was characterized by
higher sales, a further improvement in operating income and a
clear year-on-year increase in net income. Order intake also
went up in spite of the challenges. The company was quick to
activate a comprehensive crisis management program, allow-
ing it to counter the effects of the coronavirus pandemic effec-
tively. Its highest priority at all times has been to safeguard the
health of its employees and their families, as well as that of its
customers and business partners.

Markets recover at different speeds
Temporary lockdowns in all parts of the world dominated the
entire 2020 fiscal year. Asian markets, especially China, but
also Central Asia, recovered the fastest. European business
also regained ground and produced interesting contracts for us.
The USA was comparatively hard hit by the pandemic-related
economic downturn and only slowly began to recover toward
the end of the 2020 fiscal year.

Group:
further improvement in profitability
Despite the coronavirus pandemic, Group order intake in 2020
rose 11.4% year-on-year to CHF 676.6 mn – or 8.5% before the
acquisitions of Arkos Field Services (Arkos) and the compressor
business of The Japan Steel Works (JSW). Sales for the 2020
fiscal year amounted to CHF 658.6 mn, an increase of 4.6% on
the previous year (1.6% before acquisitions). Gross profit
increased by 10.9% to CHF 166.2 mn, giving a higher gross profit
margin of 25.2% (previous year 23.8%).

Consolidated operating profit (EBIT) rose to CHF 60.8 mn
(previous year CHF 54.8 mn), representing an EBIT margin of 9.2%
(previous year 8.7%). Group net income came to CHF 47.2 mn,
beating the prior-year figure of CHF 39.9 mn by a substantial
18.4%. Owing to the improved financial results and the acquisi-
tion of all the remaining shares of Shenyang Yuanda Compres-
sor in January 2021, earnings per share for shareholders in
Burckhardt Compression Group increased significantly from
CHF 9.56 to CHF 13.00.

Selling, marketing and general administrative expenses
amounted to CHF 93.1 mn (14.1% of sales). Despite the inclusion
of a full year of Arkos Field Services (previous year only four
months), this is CHF 0.1 mn less than in fiscal year 2019. Research
and development expenses rose by CHF 4.8 mn to CHF 15.4 mn
due to the higher number of ongoing projects, including those
involving innovative applications such as new marine solutions
and H2 mobility and energy. Other operating income came to
CHF 3.1 mn. This reduction of CHF 5.6 mn compared to the pre-
vious year is largely attributable to currency translation effects
and lower state subsidies in China.

Total assets at the end of March 2021 amounted to CHF 797.5
mn, which is 9.7% lower than at the end of March 2020 (close of
the 2019 fiscal year). This reduction was mainly due to a reduc-
tion of property, plant and equipment as well as inventories.

The net financial position at the end of the 2020 fiscal year
amounted to CHF –82.4 mn (CHF –91.7 mn at the close of the
2019 fiscal year). Work in progress pre-financed by customer
advance payments improved to CHF 11.5 mn from CHF –47.0 mn
at the end of March 2020. The equity ratio lowered to 27.5%
(previous year: 36.0%) mainly as a result of the derecognition of
minorities from the acquisition of the remaining 40% of
Shenyang Yuanda and the goodwill offset from the acquisition
of the JSW compressor business.

Systems Division:
Higher order intake, increased sales and significantly
higher EBIT
After a weak first half, order intake at the Systems Division
increased significantly in the second half of the year to reach
CHF 404.6 mn (+12.0%, no impact from acquisitions). This will
lead to much higher capacity utilization in the second half of
the 2021 fiscal year. Owing to the high backlog in recent years,
sales during the 2020 fiscal year increased by 5.5% (no impact
from acquisitions) to CHF 409.8 mn. Gross profit went up 38.1%
to CHF 59.1 mn, resulting in a gross profit margin of 14.4% (pre-
vious year 11.0%, incl. final additional costs incurred in the
LNGM business). The division more than doubled its EBIT mar-
gin from 1.7% in the previous year to 3.9% for the 2020 fiscal
year. As expected, the figure was much lower in the second half
of the year than in the first.

Services Division:
Higher order intake and sales, slightly lower EBIT
Order intake at the Services Division rose to CHF 272.1 mn,
which is 10.5% higher compared to the previous year (increase
of 3.1% before acquisitions). The prior-year figure does not
include the compressor business of JSW and only includes four
months of Arkos. As already mentioned in the half-year report,
the order intake figure includes several major orders in the
engineering/revamp/repair sector, as well as one order for a
10-year service partnership in the marine business. Pandemic-
related travel restrictions had a significant impact, especially
in the first quarter of the financial year. They had a particularly
strong effect on the field services business and on the Service
Centers, some of which had to be closed temporarily. In the
USA, the unfavorable business environment was made even
worse by the coronavirus, leading to a significant drop in
demand in segments traditionally targeted by Arkos. Their
downstream business, by contrast, expanded slightly.

Sales in the Services Division grew by 3.1% (–5.1% before
acquisitions) to CHF 248.8 mn. As expected, profit margins in
the second half of 2020 were higher than in the first half but
could not match the previous year’s figures. Gross profit
remained almost unchanged at CHF 107.1 mn (previous year
CHF 107.0 mn). The division’s gross profit margin slipped from
44.3% to 43.0%, mainly because of margin dilution resulting
from the Arkos consolidation. EBIT fell by CHF 3.5 mn and
includes a negative contribution from Arkos of CHF –2.0 mn. The
EBIT margin decreased from 22.7% to 20.6%, mainly due to

lower sales in the wake of the coronavirus pandemic, especially
in Field Services, and to the temporary closure of some Service
Centers. This inevitably led to lower gross profit as well as
reduced capacity utilization.

Acquisitions
The organizational integration of Arkos Field Services is on
track despite corona-related restrictions. In addition to struc-
tural adjustments, two underutilized and unprofitable sites were
closed. Arkos will continue to expand its downstream business
in order to improve profitability. The results of the subsidiaries
in the US include a contribution from corona-related government
support programs.

Following the completion on schedule at the end of Septem-
ber 2020 of Shenyang Yuanda Compressor’s new factory in
Shenyang, China, we acquired the remaining shares of Shenyang
Yuanda Compressor in February 2021, so the company is now a
wholly-owned subsidiary. The change of management went
smoothly, as did further operational integration of the business
into the Chinese and global management structures.

On April 21, 2020 we completed the acquisition of JSW’s
global compressor business, and we are now in the final phase
of its integration.

Main application areas and innovations
Business with the petrochemical/chemical industry, gas trans-
port and storage, and industrial gas has recovered and returned
to pre-pandemic levels. We also took further orders in the LNGM
and LPGM maritime sector and achieved initial successes with
our newly developed compact marine compressor.

Hydrogen Mobility and Energy – an application area that is
growing in importance for us – saw a substantial increase in
activity during the 2020 fiscal year. Some orders have already
been taken for H2 mobility and energy applications.

Accelerated digitalization
The pandemic has given further impetus to the process of digi-
talization. Customer acceptance test for example took place
over video for the first time. Owing to the travel restrictions,
our engineers conducted all the required tests on compressors
in the workshop. Acceptance inspectors then assessed the
results over video. Burckhardt Compression also developed
Remote Support service that was put into practice with a first
customer. The service will be fully integrated into the service
portfolio from 2021. It allows customers to request support
from our experts via Hololens – augmented reality smart-
glasses – or tablets, and is ATEX-compliant in environments
where there is a risk of explosion. The experts direct local main-
tenance crews and issue precise instructions for each subse-
quent stage in the process. This is another facility that helps us
provide customers with access to our expert knowledge any-
time and from anywhere. Demand for digital services is growing
all the time, and we will continue to expand these.

Expanded focus on sustainability and ESG
Burckhardt Compression has a consistent and comprehensive
commitment to sustainability, which is reflected in its strategic
objectives as well as in its operating business. We are aware of
our economic, social, and environmental responsibilities. We
are further developing a sustainability strategy for the coming
years. Based on a materiality analysis, we have augmented and
expanded our previous goals, which focused mainly on improv-
ing the product portfolio, services, and our attractiveness as an
employer. The next annual report will be the first to include a
Sustainability Report that will be revised and structured in
accordance with international standards and that takes account
of various ESG (environmental, social and governance) ratings.

Outlook for the 2021 fiscal year as a whole
Based on expected delivery dates for orders received in fiscal
years 2019 and 2020, we currently expect group sales of
between CHF 620 mn and CHF 650 mn for fiscal year 2021 as a
whole, as well as slightly higher profit margins compared with
the previous year. This is based on the assumptions that there
is no further major outbreak of the coronavirus in markets rele-
vant to Burckhardt Compression and that the economic recovery
continues.

Due to the distribution of order intake in the Systems Divi-
sion in fiscal year 2020, sales in 2021 will be second-half loaded.
Since the coronavirus impacted the order intake in the first half
of fiscal year 2020 significantly, sales for the same period in
2021 will be lower.

We expect the Services Division to record greater order
intake as well as higher sales in the 2021 fiscal year following
the easing of travel restrictions. The field service business and
our Service Centers in particular will see better capacity utili-
zation, while profitability at Arkos will continue to improve.

Mid-Range Plan 2018–2022
Under the assumptions that there is no further major outbreak of
the coronavirus in markets relevant to Burckhardt Compression
and that the economy will continue to recover, Burckhardt Com-
pression is confirming its sales target for the 2022 fiscal year
of CHF 700 mn and its EBIT margin target of between 10% and
15%. We expect the sales split between the two divisions to shift
from our original expectation, with the proportion contributed
by the Systems Division overtaking that of the Services Division.

Dividend
The Board of Directors will propose a dividend of CHF 6.50 per
share (CHF 6.00 in the previous year) at the annual general
meeting. This corresponds to a payout ratio of 50.0% of net
income per share (previous year: 62.8%). Due to the desire to
strengthen the future equity ratio the payout ratio is at the
lower end of the target range of 50% to 70%.

TO OUR SHAREHOLDERS | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

Thanks
Above all we would like to say a big thank you to our employees
around the world. The coronavirus pandemic meant that the
2020 fiscal year presented exceptional challenges over and
above our normal day-to-day business. Our employees had to
show great flexibility as they continued to serve our customers
with the least possible disruption. We would also like to thank
all of our shareholders and customers for their continued trust.

With best wishes

Ton Büchner
Chairman of the Board of
Directors

Marcel Pawlicek
CEO

Winterthur, June 1, 2021

Ton Büchner

Marcel Pawlicek

Sales

Gross profit

in % of sales

Sales

Gross profit

in % of sales

Sales

Gross profit

in % of sales

Operating income (EBIT)

in % of sales

Operating income (EBIT)

in % of sales

Operating income (EBIT)

in % of sales

FIGURES

in CHF mn

Order intake:
– Systems Division

– Services Division

Total

Sales and gross profit:

– Systems Division

– Services Division

Total

Operating income (EBIT):

– Systems Division

– Services Division

Total

Net income

in % of sales

Depreciation and amortization

Cash flow:

– from operating activities

– from investing activities

– from financing activities (incl. translation differences)

Total

Total balance sheet assets

Non-current assets

Current assets

Shareholders’ equity

in % of total balance sheet assets

Net financial position (in CHF mn)

Headcount as per end of fiscal year (full-time equivalents)

Total remuneration Board of Directors (in TCHF)

Total remuneration Executive Management (in TCHF)

Share price as per end of fiscal year (in CHF)

Market capitalization (in CHF mn)

Market capitalization/shareholders’ equity (ratio)

Net income per share (EPS) (in CHF)

Dividend per share (in CHF)

Number of issued shares

1 Motion to the Annual General Meeting

2019

2020

Change
2019/2020

361.2

246.1

607.3

388.3

42.8

11.0%

241.3

107.0

44.3%

629.6

149.8

23.8%

6.4

1.7%

54.7

22.7%

54.8

8.7%

39.9

6.3%

20.5

50.7

–49.7

6.3

7.3

883.0

234.1

648.9

317.5

36.0%

–91.7

2’621

573

2’893

192.40

654.2

2.1

9.56

6.00

404.6

272.1

676.6

409.8

59.1

14.4%

248.8

107.1

43.0%

658.6

166.2

25.2%

16.2

3.9%

51.2

20.6%

60.8

9.2%

47.2

7.2%

21.1

132.2

–40.4

–106.7

–14.9

797.5

211.0

586.5

219.6

27.5%

-82.4

2'538

610

3’147

315.00

1’071.0

4.9

13.00

6.501

3’400’000

12.0%

10.5%

11.4%

5.5%

38.1%

3.1%

0.1%

4.6%

10.9%

151.2%

–6.3%

11.0%

18.4%

2.7%

160.7%

–9.7%

–9.9%

–9.6%

–30.8%

–3.2%

6.5%

8.8%

63.7%

136.7%

36.0%

8.3%

SUSTAINABLE
VALUE CREATION,
DRIVING INNOVATION
FORWARD

MORE PROJECTS SUCCESSFULLY COMPLETED WITHIN THE SCOPE
OF THE MID-RANGE PLAN

Hydrogen mixtures must be compressed oil-free
for many industrial applications to avoid conta-
minating the gas. However, the absence of oil
lubrication reduces the service life of wearing
parts and shortens the maintenance cycle.
This year, Burckhardt Compression proved that
new sealing technologies can solve this issue,
thus overcoming an important challenge in the
compression of hydrogen mixtures. A compressor
with this sealing technology achieved 27’000
trouble-free operating hours at the customer’s
site, which corresponds to more than three years
of operation.

OUR COMPANY | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

OUR COMPANY

HISTORY

The history of our company begins 177 years ago. Company
founder Franz Burckhardt lays the cornerstone of Burckhardt
Compression’s success on January 9, 1844 with the purchase of
a commercial site for the company in Basel. During the found-
ing years, his mechanical workshop makes machines for the
textile industry. As the years go by, Franz Burckhardt expands
the scope of the company’s operations, becoming a general
builder of machinery. In 1856, the company starts producing
steam-powered machines. Its first reciprocating compressor is
designed in 1878 and enters the market in 1883. In 1890, August
Burckhardt, the son of the now-deceased company father Franz
Burckhardt, establishes “Maschinenfabrik Burckhardt” as a
joint stock company to raise capital for the construction of a
new factory on Dornacherstrasse in Basel.

Another milestone is achieved in 1913 with the sale of the
company’s first compressor for producing ammonia synthesis
gas. This compressor has a discharge pressure of 300 bar and
is delivered to BASF in Ludwigshafen, Germany – a customer
that purchased one of Burckhardt’s first compressors back in
1885. In 1935, the Swiss company Sulzer delivers its first Sulzer
Labyrinth Piston Compressor to the Hürlimann Brewery in
Zurich and in 1951 the company receives an order from Imperial
Chemical Industries (ICI) for 11 ultra-high-pressure compressors
with a discharge pressure of 1,500 bar that will be used to pro-
duce low-density polyethylene (LDPE). After years of collabora-
tion between Burckhardt and Sulzer, Maschinenfabrik Burck-
hardt is acquired by Sulzer in May 1969 and becomes a subsidiary
of Sulzer Group. In 1982, in the wake of their greater collabora-
tion, the reciprocating compressor activities of the Sulzer
Group are transferred to a single legal entity called Maschinen-
fabrik Sulzer-Burckhardt AG. In 1994, the merged entity cele-
brates its 150th anniversary. In 1999, as part of a Group-wide
restructuring program, Sulzer decides to consolidate Sulzer-
Burckhardt’s Swiss activities at the site in Winterthur. The oper-
ations in Basel are moved to Winterthur and the building on
Dornacherstrasse in Basel is sold.

In 2000, Sulzer decides to focus its activities on four divi-
sions. Sulzer-Burckhardt is put up for sale because it does not
fit with the new strategy. Together with the financial investor
Zurmont Finanz AG, five members of the Executive Manage-
ment of Maschinenfabrik Sulzer-Burckhardt AG buy out the
company on April 30, 2002. In the wake of the management buy-
out, Sulzer-Burckhardt’s name is changed to Burckhardt Com-
pression in May 2002. In 2006, Zurmont decides to sell its
shares in Burckhardt Compression by means of an IPO. The
company is listed on the SIX Swiss Exchange on June 26, 2006
and it ranks among the 100 largest listed companies in Switzer-
land by market capitalization at the end of 2019.

In 2015, Burckhardt Compression purchases a 40% interest
in Arkos Field Services, a provider of compressor services in the
US, followed by the acquisition of the remaining shares in
November 2019. This transaction makes Burckhardt Compres-
sion the only independent provider of compressor systems and
compressor services serving customers in every segment of the
US market – upstream, midstream and downstream.

In May 2016, the Group acquires a 60% majority interest in
Shenyang Yuanda Compressor, the number one manufacturer of
reciprocating compressor systems in China, followed by the
acquisition of the remaining shares in February 2021, giving it
100% ownership.

In June 2016, Burckhardt Compression introduces a divi-
sional organizational structure with two divisions, Systems and
Services, with the aim of addressing customer needs even bet-
ter than before. In December 2017, Burckhardt Compression
adopts a Mid-Range Plan for fiscal years 2018 to 2022. It serves
as a strategic road map over the five-year period and lays out
the company’s goals. In January 2019, Burckhardt Compression
celebrates its 175th anniversary with guests from the worlds of
business and politics as well as science and technology. Special
events are organized at Burckhardt Compression’s sites around
the world during the 2019 fiscal year to thank employees for
their dedication and commitment. All employees and their fam-
ilies join in the anniversary celebrations.

In April 2020, Burckhardt Compression acquires the com-
pressor business of The Japan Steel Works (JSW) to further
strengthen its global market reach, especially in Japan.

BURCKHARDT COMPRESSION BRAND

Burckhardt Compression and its umbrella brand stand for qual-
ity and worldwide leadership in innovative reciprocating com-
pressor systems and technologies. Cutting-edge technology, a
vast portfolio of compressors and components and a full range
of services make Burckhardt Compression an ideal partner for
customers around the world who want highly reliable, custom-
tailored solutions for their reciprocating compressor systems.
Our collaboration with external and internal customers is dedi-
cated, solutions-oriented, and distinguished by genuine enthu-
siasm for our reciprocating compressors. The umbrella brand
and its corresponding logo in the form of the red-blue, stylized
compressor valve plate have been internationally registered for
many years.

When making acquisitions, Burckhardt Compression decides
during the integration process whether a brand is to be retained
or integrated into an existing house brand.

Other brands that belong to Burckhardt Compression Group are:
– Shenyang Yuanda Compression, one of the largest manufac-
turers of reciprocating compressors in China, whose products
are mostly sold in its domestic market

– BCS Compressor, products made by Shenyang Yuanda Com-
pressor for export markets that leverage Burckhardt Com-
pression’s global processes, supply chains and service organi-
zation, and cost-effective engineering capabilities

– Arkos Field Services, our exclusive services provider in the US
– CSM, together with Burckhardt Compression Canada, our ser-

vices provider in Canada

– Prognost, the world’s leader in compressor monitoring and

diagnostic systems

– SAMR, a French manufacturer of sliding bearings

Burckhardt Compression’s brand and patent attorneys will vig-
orously and steadfastly defend the company against any imita-
tions, counterfeiting, or patent infringements. There are clear
rules governing the use of Burckhardt Compression brands and
their perception is developed and promoted through active
usage in our corporate and marketing communication activities.

PRODUCT DEVELOPMENT AND
INNOVATION

Innovation management and systematic product development/
management serve to strengthen our competitive position and
enable us to optimally address new applications for reciprocat-
ing compressors by developing and delivering customer-ori-
ented solutions. Burckhardt Compression’s prime objective is to
develop reciprocating compressors and components that
address customer needs and ensure its technology leadership
in the market for reciprocating compressors. Quality, technol-
ogy, materials, and design specifications are geared towards
high operational reliability, optimal service intervals, and easy

maintenance – the overall aim being to achieve the lowest pos-
sible operating costs. Burckhardt Compression’s product devel-
opment activities have been guided by a stage-gate process for
many years. This process is first applied in the idea generation
and screening phase and continues during the initial evaluation
of product viability and market attractiveness, followed by the
elaboration of product performance specifications, market
analysis, and then the actual development and subsequent
launch of the product. After a product has been successfully
developed and placed into operation, a concluding review of the
development project is conducted. All stage-gate milestones
are subject to approval by the “Innovation Board”, which is
headed by members of the Executive Management.

MAIN APPLICATION AREAS

Gas gathering and processing
The production of marketable, transportable natural gas begins
with pre-processing at the gas field itself using high-speed
compressors. These remove condensates, acid gas, mercury,
and water from the gas (regeneration gas compressors). Typi-
cally such processes produce the corrosive gases carbon diox-
ide (CO2) and hydrogen sulfide (H2S), which are then removed
from the process using reciprocating compressors by means of
injection into high-pressure disposal wells.

Burckhardt Compression also provides onshore and offshore
solutions for various applications associated with gas gathering
and processing. Natural gas is transported over long distances
to different consumers, which requires compressors to help raise
the gas pressure in the pipeline and thereby reduce the volume.

Gas transport and storage
Thanks to its high availability, cost-effectiveness, and relatively
low CO2 emissions when burnt, increasing demand for natural
gas is expected in the medium term. If natural gas were used
to replace coal in electricity generation, and to replace liquid
fossil fuels (diesel, gasoline, and oil), global CO2 emissions
would be reduced by around 25%. More stringent emissions reg-
ulations (e.g. on sulfur emissions), especially in the maritime
industry currently, provide additional incentives to switch to
natural gas as a fuel. Liquid natural gas is increasingly being
used as propulsion fuel for LNG (liquefied natural gas) carriers,
merchant ships, and cruise ships. Growing demand and the
development of new sources of natural gas are increasing the
volume of international trade in natural gas, so transport and
storage volumes are rising as well. This is especially evident in
the non-pipeline mode of gas transportation via LNG carriers,
which offers greater flexibility and avoids the geostrategic
risks associated with gas pipeline infrastructure.

OUR COMPANY | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

More than 40% of total natural gas transport volumes
traded and transported worldwide is liquefied, which reduces
gas transport volumes by a factor of 600. The LNG process
chain begins with the extraction, purification, and liquefaction
of the natural gas, followed by ship loading, transportation, and
subsequent off-loading, then storage and re-gasification, and,
ultimately, injection into a gas distribution grid. Burckhardt
Compression offers unique solutions for compressing and reli-
quefying boil-off gas (BOG) from liquid gases, for gas injection
systems for two- or four-stroke marine diesel engines, and for
recovering or storing natural gas and other hydrocarbons at
onshore or offshore installations.

Refinery
Crude oil is processed into products such as gasoline, kerosene,
diesel, heating oil, liquefied petroleum gas (LPG), and solvents
and lubricants for a wide range of applications. Despite the
electrification of cars, worldwide demand for these products is
expected to continually grow over the medium term and most
of the growth in demand will mainly come from non-OECD
countries, especially in Asia. Additional factors encouraging
investment in the refining industry are more stringent environ-
mental regulations, cost-cutting pressure, plant expansion
trends, the need to process both lower-quality grades of crude
oil, and, in technologically more advanced processes, heavy
petroleum by-products. New refineries are being built in areas
where additional processing capacity is needed. For state-
owned refineries, strategic issues regarding location and supply
security are also of considerable importance. Burckhardt Com-
pression offers Process Gas Compressors with the highest pos-
sible availability and lowest life cycle costs for all relevant oil
refining processes that require gas (mostly hydrocarbon gas/
hydrocarbon mixtures).

Petrochemical/chemical industry
The production of a vast range of petrochemical and chemical
products such as polyolefins (polymers), lacquers, synthetic
rubbers, adhesives and dyes, solvents, paints, fertilizer, deter-
gents, and textiles entails, among other things, the processing
of oil, natural gas, and even coal. Demand for petrochemical
and chemical products, especially for polyolefins, is expected
to steadily increase worldwide over the long term. Chemical
recycling, which breaks petrochemical products down into the
original gas, will not significantly affect our sales markets, as
reciprocating compressors are still needed to make recycled
petrochemical products. In this application area, too, compa-
nies will continue their efforts to reduce costs by replacing
smaller scale plants with larger ones, establishing strategic
production sites, and extending value-added chains. An addi-
tional source of growth is the growing production of natural gas

from shale formations worldwide. In terms of potential, the
USA is the leading market in this segment. Burckhardt Com-
pression offers several product lines with individual, reliable
and benchmark-setting reciprocating compressor solutions for
a broad spectrum of applications.

Industrial gas/H2 mobility and energy
Industrial gases such as argon, helium, carbon dioxide, carbon
monoxide, oxygen, nitrogen, and hydrogen are produced in air
separation or hydrogen generation plants. The end market for
industrial gases is quite broad, encompassing industries as
diverse as metalworking and metallurgy, chemical companies,
energy technology, food manufacturing, green technology,
glass, pulp and paper manufacturing, electronics, construction,
rubber and plastics processing, and healthcare. Growth drivers
are regional growth and industry-specific growth. The produc-
tion of hydrogen for the energy (refineries) and transportation
sectors is presumably a particularly fast-growing section of
this market. Demand for ultra-pure high-pressure hydrogen for
fuel cells is increasing rapidly. Burckhardt Compression, with
its oil-free compressors, offers great experience and a wide
product range in precisely this area.

COMPRESSOR SYSTEMS

Burckhardt Compression’s reciprocating compressors lie at the
heart of the compressor systems used in large-scale process-
ing plants.

Laby® – Labyrinth Piston Compressors
The Labyrinth Piston Compressor offers unrivalled reliability
and availability thanks to the unique labyrinth sealing system
on its piston and piston rod gland, which enables oil-free and
contact-free compression.

The result is a longer service life, which has a positive
impact on overall reliability and operating costs. This prevents
piston ring debris from contaminating the gas as well as fric-
tion-induced hot spots. The Laby® Compressor is designed to
compress bone-dry, dirty, abrasive and other gases. The gas-
tight casing reduces gas emissions and losses to the environ-
ment to virtually zero. The Laby® Compressor easily manages
the compression of LNG boil-off gas at suction temperatures
down to minus –160 °C (–250 °F).

Laby®-GI Compressors
The Laby®-GI Compressor has a fully balanced design that
eliminates unbalanced moments and forces, so it can be used
on offshore vessels and installations. Strict guidelines on max-
imum allowable vibration levels on deck structures must be

observed for such applications. The Laby®-GI Compressor is
mainly used for the compression of LNG boil-off gas. The unique
combination of labyrinth seal design and tried-and-tested ring
seal technology makes Laby®-GI Compressors the solution of
choice for both low-temperature and high-pressure applica-
tions. The proven technology guarantees maximum efficiency
and lowest life cycle costs. Depending on the operating condi-
tions, Laby®-GI Compressors can be engineered for lubricated
or non-lubricated compression applications.

Process Gas Compressors per API 618

Process Gas Compressors built by Burckhardt Compression are
synonymous with unrivaled availability and long operating
lives. Optimal sizing and the use of top-quality compressor
components ensure low operating and maintenance costs. The
design, the advanced Swiss technology, and superb quality
together with the robust construction translate into excellent
reliability and very low life cycle costs.

Our Process Gas Compressors are built to customer-spe-
cific application requirements in accordance with the API 618
guidelines. Burckhardt Compression offers non-lubricated and
lubricated Process Gas Compressors, horizontal and vertical.

They are especially suited to the high-pressure compression of
hydrogen, hydrocarbon, and corrosive gases.

In order to satisfy the demanding processes in refineries,
Burckhardt Compression has extended its range and now offers
a complete portfolio of Process Gas Compressors for refineries.
In addition to our premium product line, which focuses on lower-
ing operating costs through optimized design and high-quality
components, we now also offer a robust, modular and CAPEX-
optimized product line. Burckhardt Compression has global
engineering and service organizations, and the Group’s own cen-
ters of excellences leverage those resources to offer compre-
hensive solutions that are entirely focused on the needs of the
customer.

We have many years of experience with hydrogen compres-
sion systems for the refining industry and can now also offer
hydrogen compression solutions for the mobility marketplace.
These Process Gas Compressors, with lubricated or non-lubri-
cated designs, can be operated at standard fuel pressures of up
to 500 bar.

Hyper Compressors
The Hyper Compressor is a high-pressure reciprocating com-
pressor for low density polyethylene (LDPE) plants with a dis-
charge pressure of up to 3,500 bar. Burckhardt Compression has
established an outstanding track record with nearly 60 years of
experience in building this type of compressor. They are char-
acterized by a long operational life and high safety standards,
which can be traced to their unique construction design and
Burckhardt Compression’s global one-stop maintenance and
service capabilities.

The most powerful compressor in the world, driven by a
33,000 kW electric motor and compression capacity of
400,000 metric tons of ethylene a year, was built by Burckhardt
Compression in 2016. Burckhardt Compression is the world
market leader for Hyper Compressors.

Standard High-Pressure Compressors
Burckhardt Compression’s Standard High-Pressure Compres-
sors are extremely robust and reliable reciprocating compres-
sors with a compact design and low weight. They are delivered
skid-mounted with structural supports that dampen vibrations,
so there is no need for a special foundation. Due to the low-pres-
sure conditions per compressor speed range, greater piston dis-
placement can be achieved at lower compression temperatures.
The result is high compression efficiency, low wear and less
maintenance expense. The air- and water-cooled compressors
are used to compress air, hydrogen, nitrogen, helium, argon, nat-
ural gas, and other non-corrosive gases and gas mixtures at land
facilities and on ships. The standard high-pressure compressors
are smaller than the other compressors in Burckhardt Compres-

OUR COMPANY | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

sion’s portfolio of reciprocating compressors, with a maximum
power of 220 kW, maximum discharge pressure of 400 bar and
suction volumes of up to 1,500 Nm3/h.

High-Speed Compressors
High-speed compressors are basically process gas processors
with shorter strokes and higher rotational speeds (1000–1800
RPM). These compressor systems are used for standardized nat-
ural gas production and transport applications, and they are
often powered by gas engines instead of electric motors. Due to
the short-term nature of planning decisions in this industry,
there is a strong desire to keep initial investment costs at a min-
imum. With this in mind, Shenyang Yuanda Compressor launched
compressors especially for natural gas production and transport
companies. It is now marketed to selected other industries
through Burckhardt Compression’s distribution channels. Initial
project wins in Europe attest to this product’s great potential.

Diaphragm Compressors
Diaphragm compressors compress gas by means of a flexible
membrane. These membranes are usually metallic and have a
limited stroke so tend to be used for smaller quantities. The
advantage of this technology is that the gas is hermetically
sealed by the membrane during compression, so very high lev-
els of gas purity can be achieved. The technology allows to
compress the gas absolutely oil-free up to very high pressures.
Burckhardt Compression’s diaphragm compressors are pro-
duced by Shenyang Yuanda Compressor and are used for small
hydrogen fueling stations as well as for the compression of
small quantities of pure gas for medical and other purposes.

SERVICE AND COMPONENTS BUSINESS

The Services Division operates as a holistic provider of service
expertise for reciprocating compressors and the associated
system technology. Its comprehensive range of services is
backed by OEM parts with high supply readiness and vast engi-
neering know-how, from simple modifications to extensive ret-
rofit and revamp projects, as well as turnkey solutions. Experi-
enced field service technicians ensure close interaction with
the customer and rapid response. Service Centers around the
world also handle repairs of all kinds. Depending on the size of
the project and site, Burckhardt Compression also offers
24/7 shift operation, so production systems can be put back
into operation even faster. We also provide reliable, expert mon-
itoring and diagnostic solutions as well as advisory services, all
from a single source.

Comprehensive engineering, revamp and repair expertise
The reliability, availability and cost-effectiveness of reciprocat-
ing compressor systems, and their compliance with current and
foreseeable environmental and emission regulations are cru-
cial, which is why operators of these systems appreciate part-
ners who can offer them know-how and sound advice. Burck-
hardt Compression stands out from other manufacturers and
service providers because of its comprehensive in-house exper-
tise. A wide range of complementary services are offered indi-
vidually for all brands of reciprocating compressors and their
auxiliary systems. Our internal specialists come from various
technical fields and use proprietary, advanced software tools
to model, calculate, and optimize reciprocating compressor
performance, regardless of make or brand. They are capable of
resolving even highly complex technical problems cost-effec-
tively and efficiently. A highly motivated team carries out
revamp projects of any complexity to the full satisfaction of
customers and can prolong the operating life of older compres-
sors by retrofitting them with the latest technology. This range
of services also includes a valve service, overhaul of compres-
sors and repairs to the current best practice level. This work is
done by 50 service workshops around the world.

Original spare parts for optimal compressor operation
Original spare parts backed by Burckhardt Compression’s full
warranty as an OEM stand for superior quality and ensure low
life cycle costs as well as the optimal operation of compressor
systems. These top-quality compressor components are tai-
lored to specific system requirements. Compressor compo-
nents such as valves, seals, and packings are subject to wear
and tear, so these parts largely determine the duration of ser-
vice intervals and operational availability and, ultimately, the
overall life cycle costs of reciprocating compressors. Besides
operational availability, Burckhardt Compression stands by its
commitment to supply compressor parts and components over
the long term. This business is being methodically expanded in
close collaboration with numerous operators of reciprocating
compressors.

Monitoring and diagnosis for superior operational
reliability
Preventive services and rapid response times, based on online
diagnostic data and analyses, play a vital role in optimizing
compressor availability. Reliable condition monitoring and diag-
nostic systems for reciprocating compressors and equipment,
integrated within the top-level systems for monitoring an entire
production facility, are effective tools for enhancing the operat-
ing safety and prolonging the service intervals of a compressor
system. Continuous machine diagnosis detects potential and
actual anomalies at an early stage and thus helps to avoid

costly and unexpected downtime. Other advantages include
optimization of operating parameters and the central control
and monitoring of compressors operating at different sites. The
diagnostic systems made by our subsidiary PROGNOST Sys-
tems GmbH are designed for use with all types of reciprocating
compressors as well as with many other types of rotating
machinery. They are backed by unrivaled technology and reli-
ability and deliver value day after day in the oil, gas, and chem-
icals industries.

Field Service – close to the customer
Geographic proximity, being close to wherever the compressor
systems are installed, and cultivating relationships built on trust
are likewise vital to Burckhardt Compression’s success. More
than 300 experts in field service, from engineers to local site
managers, provide a rapid response capability that covers all the
necessary skills and is notable for a pronounced service mental-
ity. Having a local presence simplifies interaction with the cus-
tomer, shortens the supply chain, and reduces field service
hours. This service network will continue to grow going forward.

Customer training
The objective of our ever-growing range of customer training
and learning programs is to foster regular technical exchange
with our customers on compressors and their operation, and to
pass on Burckhardt Compression’s engineering expertise. Theo-
retical and practical training programs for various types of
compressors and for our own and third-party components are
offered at the modern training center we have set up in Winter-
thur, as well as at locations in Korea, China, India, and the USA;
we also provide on-site training at customer sites for the sys-
tems they have. As part of the digitalization strategy, online
training has recently been accelerated to the point that it is
already more important than physical face-to-face training.
This trend will continue in coming years.

OUR STRATEGY | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

OUR STRATEGY

INTEGRATED BUSINESS MODEL

RESILIENCE

Integrated business model as the key to our success
Burckhardt Compression’s two divisions, Systems and Services,
cooperate with each other closely, and between them cover the
entire life cycle of reciprocating compressor systems. This
means that customers get help and support throughout the
whole life of their systems. The company’s wide portfolio of
services ranges from the supply of new equipment, ongoing ser-
vicing and spare parts to complete system overhauls and even
repurposing conversions.

Most compressors function as critical components of a
larger system with an average life span of 40 years or more, so
it is vital to have the support of a large organization that offers
expertise in all aspects and has very well trained employees.
The key to success for both divisions is a profound knowledge
of the requirements of numerous different application areas,
and a technical understanding of the systems and individual
components.

Resilience confirmed in coronavirus pandemic
Burckhardt Compression’s business model, based on two strong
divisions, proved its worth once again in the exceptional situa-
tion caused by the coronavirus pandemic and contributed to the
firm’s stability. Travel restrictions placed constraints mainly on
the Services Division, while the markets in which the Systems
Division operates recovered relatively quickly.

The company’s deliberate decision to diversify geographi-
cally in recent years has also proved correct. Because the Sys-
tems Division has production facilities on different continents,
the impact of local lockdowns on logistical supply chains and
on production itself could be mitigated. The Services Division
also benefited from a broad regional presence during the 2020
fiscal year. The effects of travel restrictions remained within
bounds thanks to the global network of Service Centers that
has been built up and continuously expanded in recent years.

The graphic below shows the entire life cycle of a compres-
sor project, including all project phases and decision-makers. It
also displays the interaction between the two divisions and the
long-term nature of a compressor project.

BREAKING DOWN THE LIFE CYCLE OF A TYPICAL PROJECT

Duration

1–3 Years

10–22 Months

1–12 Months

1–2 Months

2 Years (avg)

40 Years (avg)

PHASE

DECISION
MAKER

PROJECT
PROGRESSION

DIVISION IN
CHARGE

REVENUE
RECOGNITION

COSTS

CAPEX

NWC

Evaluation and
start of construction

Manufacturing of
compressor system

Compressor
installation

Compressor start-up

Warranty period

Post-warranty

End customer/
EPC/Licensor

End customer/
EPC

Decision to build
plant and
purchase order

Compressor shipped &
transfer of ownership

End customer

Product acceptance

Repair & main tenance;
structural machine
build

Systems Division

Systems Division and Services Division

Services Division

Systems at shipping (depending on incoterms);
Services at completion of start-up

Ad hoc

Selling & marketing
expenses

Cost of goods sold
(COGS)

Selling & marketing
expenses & COGS

CAPEX relatively stable, not directly linked to projects

Fluctuating NWC

Stable NWC

MID-RANGE PLAN FOR 2018 TO 2022

Burckhardt Compression works with a Mid-Range Plan that is
updated every five years. The current Mid-Range Plan covers
fiscal years 2018 to 2022. The main objective of both divisions
is to further strengthen Burckhardt Compression’s market lead-
ership through organic growth and selective acquisitions.

The Systems Division is aiming to improve its profitability
while maintaining its global market leadership. Its sales target
for 2022 is CHF 340 mn with an EBIT margin of 0% to 5%. We
regularly exceeded this sales figure in the years between 2017
and 2020. The postponement of orders in the 2020 financial
year will lead to a lower sales figures in fiscal year 2021. Thanks
to the good order intake of recent years, Burckhardt Compres-
sion believes that sales by the Systems Division in fiscal year
2022 will exceed the target set out in the Mid-Range Plan. The
division should also diversify its presence in the various market
segments and introduce new applications.

The 2022 sales target for the Services Division, including
Arkos Field Services, is CHF 360 mn, but will presumably not
quite reach the specified sales number. The target range for its
EBIT margin is 20% to 25%. Our focus areas for organic growth
are the increasing installed base of own equipment and the ser-
vice business for compressors made by other manufacturers,
primarily of manufacturers that have left the market. Conse-
quently, Burckhardt Compression will launch further opera-
tional initiatives, including implementation of global processes,
continued expansion of its local and regional presence, and a
build-up of its maritime services network.

As set out in the Letter to Shareholders, Burckhardt Com-
pression currently expects sales of between CHF 620 mn and
CHF 650 mn in fiscal year 2021 as well as slightly higher profit
margins compared with the previous year. This is based on the
assumptions that there is no further major outbreak of the
corona virus in relevant markets for Burckhardt Compression
and the economic recovery continous.

Burckhardt Compression continues to confirm the targets
set for the fiscal year 2022 of total sales in the region of CHF
700 million and an EBIT margin for the Group of 10% to 15%. The
divisional margins assumed in the Mid-Range Plan remain
unchanged; we expect sales in the Systems Division to be higher
in fiscal year 2022 than in the Services Division.

ENERGY MIX AND MEGATRENDS

Growth potential supported by megatrends
Various global trends speak in favor of Burckhardt Compres-
sion’s business model. The transformation of the global energy
mix toward natural gas and renewables is being supported by a

huge range of applications and innovations. Sustainable ener-
gies and natural gas applications already account for around
half of Group sales.

With the global population rising, demand for industrial
gases for applications such as fertilizers, medical usage, and
food and beverage packaging will also continue to grow. Global
demand for petrochemical and chemical products continues to
go up, with sustainability aspects such as recycling and the use
of alternative raw materials becoming increasingly important
to customers. Demand for natural gas as a fuel for mobility,
heating, and cooking is rising as the middle class expands in
countries all round the world. Hydrogen is becoming more and
more important for applications in the mobility and energy sec-
tors, a trend that was confirmed by strong demand in the 2020
fiscal year. Ever stricter environmental regulations for fuels in
the marine sector require expensive new production processes.
The tightening of emission targets calls for solutions using liq-
uefied natural gas and, increasingly, hydrogen. Burckhardt
Compression is very well placed to meet the challenges that lie
ahead with new and innovative solutions.

BRAND MANAGEMENT

Burckhardt Compression constantly strives to optimize and
strengthen its established brand internationally. Our corporate
identity and long-term brand strategy express the organiza-
tion’s values and principles and highlight Burckhardt Compres-
sion’s position as a unique, long-term partner with a strong
Swiss tradition.

The BCS Compressor brand, referring to our Chinese manu-
factured compressors sold abroad, was further developed dur-
ing 2020. Digital applications and solutions were presented
under the label name “Up! Solutions” and will continuously be
developed further.

CUSTOMERS

Burckhardt Compression works hard to nurture customer rela-
tionships based on partnership. Both divisions regularly con-
duct customer surveys in a bid to understand customer needs
even better, and such surveys were carried out while preparing
the latest Mid-Range Plan. Insights from the surveys and the
resulting projects and initiatives were integrated into the Plan.
In 2020, the Services Division conducted a customer survey
in 14 languages, which showed a further increase in customer
satisfaction. 73% of respondents see Burckhardt Compression
as a leading service provider, and for 60% the company is not
only the preferred service partner for compressors made by

OUR STRATEGY | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

national regulations on emissions and exhaust fumes, new
freight and cruise ships are increasingly being fitted with LNG-
based engines. These vessels need small, reliable compressors
to process relatively small amounts of vaporizing fuel. Two
standardized compressor solutions were brought to the market,
both of which have already met with an excellent response.

New solutions for hydrogen applications
Burckhardt Compression refined its solutions for hydrogen as a
fuel. Further improvements were made to the sealing systems
for oil-free compression of hydrogen at pressures of up to 500
bar. Numerous tests were conducted on these sealing systems,
allowing systematic analysis and improvement of the test com-
pressors. Investments were also made to standardize solutions
in the various application areas.

Online monitoring and condition-based maintenance
A technical platform was created during the 2020 fiscal year
for the online monitoring of customers’ compressors, which
means that we will be able to offer new service and mainte-
nance concepts.

Improved performance of products for the petrochemical
industry
Several successful products were overhauled during the 2020
fiscal year with a view to even greater customer benefits.
Thanks to targeted design adjustments, the Hyper Compressor
was made even more efficient, for example. Specific improve-
ments have also been made to large Laby compressors in order
to address new market requirements. Improvements like this
help Burckhardt Compression maintain and strengthen the
competitiveness of the relevant products on an ongoing basis.

Burckhardt Compression itself, but also for those made by
other brands.

EMPLOYEES

The number of employees at the end of the fiscal year stood at
2,538, a reduction of 83 from the previous year’s figure of 2,621
(full-time equivalents).

At the end of March 2021, 760 employees (30%) were based
in Switzerland, 1,119 (44%) in BRIC countries, and 659 (26%) in
other countries.

ACQUISITIONS

In April 2020 Burckhardt Compression took over the compres-
sor business of The Japan Steel Works, based in Tokyo, Japan.
In doing so, Burckhardt Compression further strengthened its
market presence in Japan and globally.

In February 2021, Burckhardt Compression acquired the
remaining 40% of Shenyang Yuanda Compressor, the leading
manufacturer of reciprocating compressors in China. Burck-
hardt Compression acquired a 60% stake in the company in
2016, allowing it to enlarge its portfolio of reciprocating com-
pressors and their areas of application, tap into additional sup-
ply chains, and reinforce its presence in the important Chinese
market.

CAPACITY

In 2020, Shenyang Yuanda Compressor’s new factory in Shenyang,
China, was completed as planned at the end of September. The
new production facility is around 60% larger and replaces the
two previous locations. In Sweden, the Service Center originally
developed together with our partner Kompressorteknik was
completely integrated and is now a subsidiary of Burckhardt
Compression. The planned official opening of a new site in Indo-
nesia had to be postponed owing to the coronavirus. The site in
Japan was expanded, while component manufacture was
strengthened in Shanghai and Canada.

RESEARCH AND DEVELOPMENT

Compressor systems for marine use
In addition to the successful Laby-GI for use on large LNG tank-
ers, Burckhardt Compression launched further solutions for
LNG-powered ships during the 2020 fiscal year. Owing to inter-

SYSTEMS DIVISION

At the end of September 2020, Shenyang Yuanda Compressor’s
new plant in Shenyang, China, was completed as planned and in
February 2021 Burckhardt Compression acquired the remaining
shares in the company. As a result of the investment in Shenyang
Yuanda Compressor, additional market segments could be
developed, the product portfolio was expanded to cover different
market needs, and Burckhardt Compression gained direct access
to a well-established local supply chain.

SYSTEMS DIVISION: REVIEW OF THE FISCAL YEAR | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

SYSTEMS DIVISION
REVIEW OF THE FISCAL YEAR

ORDER INTAKE

CHF mn

500

400

300

200

100

OPERATING INCOME (EBIT)

CHF mn

–10

FIGURES

in CHF mn

Order intake
Sales and gross profit

Operating income (EBIT)

in % of sales

SALES

CHF mn

500

400

300

200

100

GROSS PROFIT

CHF mn

100

Sales

Gross profit

in % of sales

2018

2019

2020

Change
2019/2020

428.0

361.2

404.6

12.0%

375.4

30.5

8.1%

–8.7

–2.3%

388.3

42.8

11.0%

+6.4

+1.7%

409.8

59.1

14.4%

+16.2

+3.9%

5.5%

38.1%

151.2%

Headcount at end of fiscal year (full-time equivalents)

1’506

1’517

1’429

–5.8%

After a weak first half, order intake at the Systems Division
increased significantly in the second half of the year, resulting
in a clear year-on-year rise for 2020 as a whole. This is mainly
due to the strong recovery of the Chinese market, as well as the
performance of the Petrochemical/Chemical Industry and Gas
Transport and Storage sectors. Despite the significantly lower
capacity utilization resulting from the temporary drop in order
intake, the overall gross profit margin increased more than
3 percentage points compared to the previous year. Sales
increased for the year as a whole and the EBIT margin more
than doubled. This improved profitability is the result of opera-
tional improvements, a favorable product mix with higher mar-
gin projects, and the fact that the final additional costs incurred
in the LNGM business were lower than in the previous year.

MARKETS

Burckhardt Compression offers compressor system solutions
in the following application areas:
– Gas gathering and processing
– Gas transport and storage
– Marine
– Refinery
– Petrochemical/chemical industry
– Industrial gases/H2 mobility and energy

Despite continued tough competition and the impact of the
coronavirus pandemic, Burckhardt Compression kept its lead-
ing market position in the 2020 fiscal year. The company won
major orders for LDPE lines and LNG terminals in China. In South
Korea, we gained a large contract for a hydrogen liquefaction
plant. A customer from Singapore ordered eight low-pressure
compressor systems for new container ships in order to reduce
its sulfur dioxide and CO2 emissions. In the refinery sector an
order was acquired for a hydrocracking plant in North Africa.

Gas gathering and processing
Investment levels continued to fall in this application area
owing to lower crude oil and natural gas prices.

Gas transport and storage
The LNG (liquefied natural gas) market continued its positive
trend, opening up further potential market opportunities for
Burckhardt Compression. The increasing importance of large
LNG tankers reflects growing global demand for cleaner and
cost-efficient energy. Operators of both freight and cruise ships
are having to meet ever more stringent environmental stan-
dards. Much stricter limits were introduced last year on emis-
sions of nitric oxide and sulfur, for example. Burckhardt Com-

pression has carved out a large market share in the LNG-fueled
ship sector in recent years: alongside solutions for ME-GI
engines, the company has been providing products for X-DF
engines for some time now. Both systems allow ship operators
to switch between diesel fuel injection, and injection of the boil-
off gas that is already produced on board. The new products we
launched for marine applications during the 2020 fiscal year –
for LNG tankers as well as for commercial and cruise ships –
were very well received by the market.

Refinery
Lower oil consumption prompted numerous companies in this
sector to review expansion plans and postpone previously
announced projects. Towards the end of the year, however,
some companies launched projects to help them comply with
stricter environmental standards. The pressure on margins
among refinery operators is favoring the trend towards inte-
grated production concepts along the whole value chain. Major
nations are also planning to reduce their dependency on
imported refinery products by increasing the proportion of
local value creation. This will benefit the compressor business.

Chemical and petrochemical industry
The dominant factor in this application area is the growing
worldwide demand for products made of industrial plastic,
which is driving an expansion of production capacities, com-
bined with a trend towards greater local value creation, not
least in China. This should mean that order intake will rise in
coming years. The lower consumption resulting from increased
recycling of everyday products is more than offset by greater
demand for high-end plastic products.

Industrial gas/H2 mobility and energy
Experience shows that the various client industries in this sec-
tor grow more or less in line with global GDP. Plans to reduce
CO2 emissions and the desire to switch to greener energy led to
growing interest in the use of hydrogen as a fuel. Hydrogen
could potentially make a large contribution to the decarboniza-
tion of the economy, impacting everything from transport to
steel production. Accordingly, researchers and practitioners
have launched numerous initiatives and specific projects aimed
at the further development of this energy carrier. Compressors
play a key role in the hydrogen logistics chain. Burckhardt Com-
pression has decades of experience in hydrogen compression
and has been offering specific solutions for this type of applica-
tion since 2019. It is not yet a mature market, but the long-term
potential is enormous.

SYSTEMS DIVISION: REVIEW OF THE FISCAL YEAR | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

over the coming years as demand grows for industrial plastic
products. The Industrial Gases/H₂ Mobility and Energy sector is
diverse, but ultimately it is heavily influenced by global eco-
nomic growth, which should rise again once the coronavirus
pandemic is under control. Hydrogen solutions for mobility and
energy, which Burckhardt Compression also offers, are set to
become increasingly important.

The lower order intake of the Systems Division in the first
half of fiscal year 2020 will create significantly weaker first
half-year sales in fiscal year 2021. The higher second-half order
intake in the fiscal year 2020 of the Systems Division will only
materialize in sales for the second-half of fiscal year 2021 and
beyond.

DISTRIBUTION

The switch three years ago to selling new machines through a
decentralized structure with regional responsibility for cus-
tomer relationships and project negotiations (Front Sales),
combined with regional centers for the preparation of technical
offers (Application Engineering), has continued to prove suc-
cessful. With growing interest in solutions for H2 mobility,
Burckhardt Compression significantly intensified its sales
activities during the 2020 fiscal year, particularly in Western
Europe and North America.

INFRASTRUCTURE

Shenyang Yuanda Compressor’s new factory in Shenyang, China,
was completed as planned at the end of September 2020 despite
a six-week break prompted by the coronavirus pandemic. It
replaces the two previous sites and is around 60% larger. The
new factory is an investment in the future of our systems busi-
ness. It allows us to structure our workflows and processes in
accordance with the latest standards, thus making our opera-
tions even more efficient.

OUTLOOK

The Systems Division defended its leading market position in
the 2020 fiscal year. There were various new compressor devel-
opments – including an oil-free high pressure Laby compressor
for LNG tankers with high pressure systems, and a new com-
pact Laby compressor for low pressure systems on LNG tank-
ers, freighters, and cruise ships – which helped us to improve
our leading position in the marine sector still further. The
increasing standardization and modularization of different
products allows us to further optimize costs. Thanks to its
many years of experience with hydrogen and its wide range of
products, Burckhardt Compression is able to take a leading role
in the rapidly growing market for H₂ mobility and energy.

Viewed by area of application, the Gas Gathering and Pro-
cessing sector should see somewhat higher levels of invest-
ment now that crude oil and natural gas prices are up again and
consumption is rising. Within the Gas Transport and Storage
sector, the continuing, and recently even stronger, trend toward
more environmentally friendly and cost-effective energy should
ensure a positive performance. With projects deferred in the
fiscal year 2020, the Refinery business is likely to experience
some catch-up demand this year, supported by efforts to com-
ply with stricter environmental standards. Turning to the Pet-
rochemical/Chemical Industry, order intake is expected to rise

SERVICES DIVISION

Digitalization took a major step forward in the 2020 fiscal year.
For the first time, customer acceptance tests were carried out
over video, as the acceptance inspectors were unable to be on site
due to travel restrictions. A Remote Support service was also
developed and put into operation for a first customer.

SERVICES DIVISION: REVIEW OF THE FISCAL YEAR | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

SERVICES DIVISION
REVIEW OF THE FISCAL YEAR

ORDER INTAKE

CHF mn

250

200

150

100

OPERATING INCOME (EBIT)

SALES

CHF mn

250

200

150

100

GROSS PROFIT

CHF mn

120

100

CHF mn

FIGURES

in CHF mn

Order intake
Sales and gross profit

Operating income (EBIT)

in % of sales

Sales

Gross profit

in % of sales

2018

2019

2020

Change
2019/2020

230.7

246.1

272.1

10.5%

223.9

105.2

47.0%

58.2

26.0%

241.3

107.0

44.3%

54.7

22.7%

248.8

107.1

43.0%

51.2

20.6%

3.1%

0.1%

–6.3%

Headcount at end of fiscal year (full-time equivalents)

830

1’093

1’095

0.2%

Order intake was up significantly at the Services Division during
the 2020 fiscal year, primarily as a result of the Arkos acquisi-
tion, while sales were at the same level as the prior year. The
EBIT margin was slightly lower, mainly because of reduced
capacity utilization in the Field Services sector in the wake of
the coronavirus, and the partial closure of various Service Cen-
ters because of the pandemic, as well as the dilutive effect
from the Arkos acquisition.

MARKETS

The acquisition of the global compressor business of The Japan
Steel Works Ltd. (JSW) was completed in April, and integration is
currently in the final phase. The acquisition significantly strength-
ens Burckhardt Compression’s market presence in Japan and
reinforces its global leadership position. Several orders were
gained in Japan and neighboring regions.

Despite the great challenges created by the coronavirus, the
integration of Arkos Field Services and the structural and orga-
nizational changes are on track. Arkos will continue to optimize
its mid-stream business and grow the downstream business,
thus improving profitability. Results in the USA include a con-
tribution from corona-related government support programs.

Some more new long-term service contracts were won dur-
ing the 2020 fiscal year; these will impact positively on sales in
the years to come and increase planning certainty. Particular
mention should be made of a contract signed with BW LNG for
a 10-year service partnership covering nine LNG tankers. Burck-
hardt Compression is benefiting here from a clear trend among
customers to seek out not just a supplier but a competent part-
ner that can offer a full range of services. Our service portfolio
and customer care offering were further optimized to meet cus-
tomer requirements, resulting in a positive order intake.

Spare Parts
The Spare Parts business posted further growth, with demand
increasing for spare parts for compressors made by Burckhardt
Compression as well other brands. One trend seen for some
time now is certainly good news for Burckhardt Compression:
spare parts for its own compressors as well as those made by
other manufacturers are increasingly purchased together with
service packages. The market continues to respond favorably to
the strengthening of our business with third-party products,
especially when this is combined with the offer of additional
services.

Engineering/Revamp/Repair
Burckhardt Compression won several major orders, leading to
a significant rise in order intake. However, pandemic-related
travel restrictions had a clear negative impact on capacity uti-
lization. Long-term service orders, which provide a solid plat-
form for the further strengthening of the entire service busi-
ness, are increasingly significant in this sector, as are complex
engineering solutions for turnaround (TAR) projects. The repair
business in our Service Centers around the world will also be-
nefit from the recently completed standardization of repair
standards across the group.

Field Service
Inevitably, this area also suffered from coronavirus-related
mobility restrictions, resulting in underutilization of capacity.
In the USA, the unfavorable business environment caused by the
pandemic, allied with marked price falls in the energy sector, led
to significantly reduced demand in the traditional midstream
business at Arkos, though it slightly expanded its downstream
business.

Monitoring/Diagnostics
2020 saw the launch of new monitoring systems that allow pre-
ventive service interventions based on the condition of the sys-
tem rather than on time intervals. The Monitoring/Diagnostics
sector of Prognost also saw orders deferred because of the
pandemic.

SALES FURTHER STRENGTHENED

As in 2019, the ongoing drive to increase the efficiency of mar-
keting processes by developing regional marketing structures
remained a priority in 2020. The highly qualified local Field Ser-
vice Representatives and local Repair Centers are responsible
both for customer care and for evaluating local market oppor-
tunities.

The aim of the partnership model introduced in the previous
year is to offer service capabilities close to customers, espe-
cially in small but fast-growing markets, while limiting the
amount of investment required. Regional and global Enginee-
ring Services offer substantial support for local service provisi-
on, which allows Burckhardt Compression to be a service part-
ner for the entire service portfolio.

SERVICES DIVISION: REVIEW OF THE FISCAL YEAR | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

tunities are in the Asia-Pacific region, but also in Europe thanks
to the large number of marine customers domiciled there. In
North America, Burckhardt Compression will benefit from the
expansion in service activities brought by the integration of
Arkos.

Preventive maintenance combined with monitoring solu-
tions will also generate promising growth opportunities. New
impetus is also expected to come from support solutions in the
natural gas and hydrogen sector. Digitalization will be har-
nessed systematically for new services and applications. The
main aims here are to make further progress on the availability
and use of operational and customer data, to make communica-
tion more transparent, and to optimize business processes.
During the year under review, for example, the range of services
was successfully enhanced by a “Remote Assist Service”. Thanks
to state-of-the-art technology, customers can use this service
to request support from Burckhardt Compression experts, who
will analyze the issue and give instructions to our local crew.
The electronic customer portal was also improved during the
year under review.

The successes achieved so far show that the Services Divi-
sion is on the right track. The expansion of our service pres-
ence, engineering, and project management capabilities has
been particularly well received.

NEW SERVICE CENTERS

In Sweden, the Service Center originally developed together
with Kompressorteknik has been a subsidiary of Burckhardt
Compression since the 2020 fiscal year. The planned official
opening of a new site in Indonesia had to be postponed owing to
the coronavirus. The site in Japan was expanded while compo-
nent manufacture was strengthened in Shanghai and Canada.

OUTLOOK

The Services Division continued to expand its service capabili-
ties as well as reducing its response times for service provision
even further by improving processes and focusing rigorously on
customers. This was confirmed during the fiscal year 2020 by
our latest customer survey, which also indicated that customer
satisfaction in general continues to rise. In 2020, the Services
Division was also able to sign new long-term service agree-
ments for ships, thus further expanding its service business in
the marine sector.

The underlying attractive growth prospects for the Service
business remain unchanged:
– more and more customers are outsourcing their service oper-
ations. Suppliers are increasingly becoming service partners.
– The inventory of installed compressor systems made by

Burckhardt Compression continues to grow.

– Customers are seeking efficiency gains to make themselves
more competitive. This requires retrofitting and conversions,
not least driven by the need to comply with environmental reg-
ulations (efficiency improvements and emissions reduction)
– Preventive maintenance based on continuous monitoring of

systems is growing in importance.

We believe, therefore, that demand for comprehensive services
from a single source will grow more strongly than the direct
spare parts business. Customers increasingly expect engineer-
ing solutions, competent advice on site and tailor-made main-
tenance strategies, even for older installations.

Our focus areas for organic growth are the increasing
installed base of own equipment and the service business for
compressors made by other manufacturers, primarily of manu-
facturers that have left the market.

The large number of LNG ships commissioned in recent
years now require increasing amounts of servicing and spare
parts, which creates additional potential business for Burck-
hardt Compression. The most interesting potential lies in the
provision of long-term service agreements tailored to the whole
compressor life cycle. Geographically, the best growth oppor-

SUSTAINABILITY

In the 2020 fiscal year, activities in the field of hydrogen increased
substantially and this application area is expected to play an increa-
singly important role. A number of orders have already been received
for hydrogen mobility and energy applications, such as compressors
for a hydrogen filling station network in California, US.

SUSTAINABILITY REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

SUSTAINABILITY REPORT

COMMITMENT

Burckhardt Compression has made a long-term commitment to
the economy, society, and the environment. The aim is to create
the framework at all levels to continue the company’s 177-year
history of success. This can only be achieved if a balance is found
between the different interests of individual stakeholders.

For Burckhardt Compression, the 2020 fiscal year marked
the start of a systematic evolution in its sustainability approach.
Sustainability activities are being expanded and focused more
strategically. A materiality analysis involving the most impor-
tant stakeholders was conducted as part of this process. The
results and an outlook are presented at the end of this Sustain-
ability Report. One milestone in this evolution will be a more
comprehensive Sustainability Report that follows international
standards and will be published for the first time alongside the
2021 Annual Report.

Burckhardt Compression adjusted and recertified its health
and safety system while also evolving its environmental man-
agement system. In addition, findings from the employee survey
were translated into workshops, initiatives and projects
designed to further improve employee satisfaction.

Burckhardt Compression’s sustainability credentials are
evaluated by an external specialist (GAM) on a regular basis.
During the latest assessment in 2018 we again achieved our
goal of exceeding the average rating for a selected group of
comparable Swiss companies.

STAKEHOLDERS AND
RISK MANAGEMENT

Burckhardt Compression aims for a prudent and holistic
approach. The appropriate involvement of the different stake-
holder groups plays a central role here, as does integrated risk
management. In addition to the specific involvement of the indi-
vidual groups, in the 2020 fiscal year Burckhardt Compression
began to establish a Speak Up channel (grievance channel) for
all internal and external stakeholders. This complaints system
can be used to report violations of our values and behavioral
guidelines and is hosted by a third party. The system will be
launched in the following reporting year.

Investors
Burckhardt Compression maintains open and transparent dialog
with its investors and interested parties. The aim of Investor
Relations is to accurately portray the company and its markets
to enable a fair valuation of Burckhardt Compression stock. The
company’s third Investor Day was held in Winterthur in Novem-
ber 2020. Among other things, the company presented its focus

points for sustainable value creation for all stakeholders within
the current Mid-Range Plan period and beyond.

Burckhardt Compression’s investor relations activities are
evaluated by independent firms and receive consistently very
good ratings considering the size of the company. Leading Swiss
business newspaper “Finanz und Wirtschaft” gives it an A– rat-
ing (A being the highest rating) for investor relations and trans-
parency and a B– rating for growth.

In the yearly ranking of annual reports conducted by Har-
bourClub and business magazine “Bilanz”, Burckhardt Compres-
sion’s 2019 annual report came in at a very good 37th (out of a
total of 241 companies) in the “Value Reporting Print” category,
and 57th for “Value Reporting Online”.

In the 2020 survey of company boards carried out by zRating
in collaboration with the newspaper “Finanz und Wirtschaft,”
Burckhardt Compression scored 28 points and ranked 21st among
the 172 Swiss listed companies covered by the survey. This rank-
ing is based on criteria pertaining to board organization, inde-
pendence, transparency, compensation, and sustainability.

Customers

Burckhardt Compression seeks long-term customer relations.
The average useful life of its compressors is 30–50 years. Fol-
lowing the project phase, the company provides its customers
with the services and components they need throughout the
entire compressor system life cycle. The longest-standing cus-
tomer relationship dates back to 1885, when the company sup-
plied BASF in Ludwigshafen with one of the first compressors
ever built.

Customer satisfaction is measured using various tools. A
distinction is drawn between direct and indirect key perfor-
mance indicators (KPIs). Findings are discussed during the
claims and warranties meetings that form part of the manage-
ment process with the leadership team. Action is initiated and

implemented in accordance with the results. In 2020, customer
satisfaction surveys were focused on the Services Division.

Employees
Open dialog with employees is a central priority for Burckhardt
Compression and is carried out in all sorts of different ways. In
addition to employee surveys and continuous exchange with
line managers, employees are informed online several times a
year in person by members of the Executive Management about
the state of the business and other matters, with opportunities
to have questions answered. In Switzerland, France, and India,
various other instruments of dialog are used within collective
bargaining and workers’ representation arrangements.

Suppliers
A smoothly functioning, comprehensive supply chain ensures
well-ordered development and manufacturing processes.
Burckhardt Compression buys its inputs from various global
and regional suppliers. The company works closely with these
suppliers right from the development phase and seeks to estab-
lish long-term partnerships. The principles set out in the Burck-
hardt Compression's own Code of Conduct are systematically
implemented in all dealings with suppliers. In 2020, these prin-
ciples evolved into a specific Code of Conduct for Business
Partners. Suppliers are qualified using a set process and are
evaluated through the measurement of key performance indi-
cators. Exchanges and performance review take place on a reg-
ular basis via on-site visits, virtual meetings, audits or virtual
inspections.

Strategic procurement is an integral part of Burckhardt
Compression’s strategic management cycle. The relevant pro-
curement managers report at regular intervals on the most
important changes in the global procurement market, such as
price trends for raw materials and finished products. The nec-
essary decisions are made together with divisional manage-
ment teams to ensure a smooth supply chain. We reward the
best suppliers in the various categories each year to encourage
them to achieve even more.

Risk management
As the world’s leading manufacturer of reciprocating compres-
sors, Burckhardt Compression is exposed to a number of risks.
The company has developed a comprehensive risk management
system, which is integrated into the planning and leadership
process.

The Executive Management's assessment of risks is dis-
cussed with the Audit Committee and Board of Directors twice
a year. A distinction is made between operational, strategic,
legal and financial risks.

The aim of risk management is:
– to systematically detect special risks;
– to establish processes for monitoring, reducing, and, ideally,

preventing risks;

– to achieve a balance between risks and rewards.

ECONOMIC SUSTAINABILITY

Long-term success
The Group’s ultimate goal is the long-term success of Burck-
hardt Compression. This requires a stable operating environ-
ment and the achievement of financial goals.

As part of the effort to maintain economic sustainability,
Burckhardt Compression regularly produces a Mid-Range Plan,
usually covering a period of five financial years. This is periodi-
cally reviewed and adjusted in line with the economic, political
and technological environment.

Process improvement
The quest for continuous improvement by Burckhardt Compres-
sion’s executives and employees lies at the very heart of the
company.

Every year, the personal objectives of executives and
employees include the implementation of continuous and sus-
tainable improvement projects. These projects are implemented
using a method developed by Burckhardt Compression and
evaluated by its executives.

The company also works with suppliers, universities, insti-
tutions, and advisors worldwide to develop and improve prod-
ucts or processes in areas where it does not have the necessary
expertise. Cooperation with external experts and specialists
also fosters new ideas and maximizes creative potential within
the company.

Capital expenditure
Burckhardt Compression has invested CHF 112.3 mn over the
past five years (excluding acquisitions). Most of its capital
expenditure during the period under review was spent in Win-
terthur and at Shenyang Yuanda Compressor. Shenyang’s new
factory was completed and stated work in September 2020.

Acquisitions
Over the past five years, Burckhardt Compression acquired the
following businesses: Shenyang Yuanda Compressor Co. Ltd.
(China), IKS Industrie- und Kompressorenservice GmbH (Ger-
many), CSM Compressor Supplies & Machine Word Ltd. (Can-
ada), Arkos Group LLC (USA), Compressor Business of the
Japan Steel Works Ltd. (Japan). Acquisitions always have to
meet the following three pre-defined criteria.

SUSTAINABILITY REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

ACTUAL WARRANTY COSTS
AS A PERCENTAGE OF SALES

11
12
13
14
15
16
17
18
19
20

1.0

0.8

0.7

0.8

0.6

0.8

1.0

1.4

1.9

1.1

NET INCOME PER SHARE

CHF

08
09
10
11
12
13
14
15
16
17
18
19
20

21.46

16.68

13.56

15.22

16.42
15.87

16.93
16.34

9.12
8.51
8.15

9.56

13.00

Acquisitions must always generate additional financial
value for the company, strengthen the local presence or further
expand the product range, and be able to integrate due to sim-
ilar corporate culture or values.

Promoting fair competition
Burckhardt Compression is committed to fair competition and
has zero tolerance for price fixing, cartels, or any other activi-
ties that distort competition. This is also clearly stated in the
company’s own Code of Conduct. Burckhardt Compression is
protective of its operational and business expertise and works
systematically to prevent the loss of, or unauthorized access
to, its technical and commercial knowledge.

Value-based management
Added value generated for shareholders is measured by two key
metrics:
– Return on net operating assets (RONOA)
– Earnings per share (EPS)

Return on net operating assets for the period under review
amounted to 14.0% (previous year 12.0%). Net income per share
attributable to the shareholders of Burckhardt Compression for
the period under review amounted to CHF 13.00 (previous year:
CHF 9.56). The aim is to increase this still further.

Warranty costs
The effective warranty costs decreased in the 2020 fiscal year.
In the fiscal years 2017 to 2019 extraordinary additional costs
were incurred for the LNGM business.

SOCIAL SUSTAINABILITY

Corporate culture
A well-founded and sound corporate culture forms the founda-
tion for a company’s competitiveness. A comprehensive values
program called “Values and Behaviors” ensures that employees
in the Group’s different locations and companies share and
actively uphold the same corporate values and principles. The
internal Code of Conduct sets fundamental standards and prin-
ciples for how employees should behave in relation to each
other and to partners, stakeholders, and the environment. The
code is reviewed and updated at regular intervals, most recently
in the 2020 fiscal year. This shared understanding makes col-
laboration between teams and across borders much easier. A
Speak Up channel hosted by a third party, will be implemented
in fiscal year 2021 and can be used to report violations of the
values and behavioral guidelines.

VALUES AND BEHAVIORS

Our values

Partnership

Cooperation

Performance

Dedication

Our success factors and behaviors

Think Customer

– Build relationship
– Demonstrate quality focus
– Live service orientation

Take Ownership

– Show initiative
– Focus on results
– Create lasting solutions

Act Decisively

– Take considered risks
– Demonstrate agility
– Persist without fear of failure

Build Engagement

– Align goals
– Develp self and others
– Inspire people

Break Barriers

– Promote collaboration
– Embrace diversity
– Transfer knowledge

Champion Change

– Remain adaptable
– Support people
– Adopt new practices

All employees are trained in the company’s values and
behaviors, which also form a compulsory part of the induction
program for new employees. Members of the Executive Manage-
ment have also stressed the importance of these common val-
ues and behaviors in video podcasts. This ensures that the
entire staff are aware of the corporate culture and act accord-
ing to the defined values. Company executives are important
role models in this regard.

Sustainable HR policy
Only satisfied employees will go the extra mile to meet the
needs of our customers, so Burckhardt Compression is commit-
ted to a sustainable personnel policy, as well as diversity in
workforce and structures. High levels of employee loyalty and
identification with the company are confirmed by the fact that
the typical employee has been with the company for 8.5 years.

Before the beginning of the year under review, the company
conducted another worldwide employee survey. The impressive
response rate of 91% reflects a high level of employee engage-
ment. It was also pleasing to see the improvement in almost all
the survey values at Group level. The findings were systemati-
cally evaluated and resulted in the implementation of mea-
sures designed to improve satisfaction even more in the main
areas. Account was taken of the specific local needs of employ-
ees at individual subsidiaries. The employee survey is carried
out every two years in order to identify any changes and then
respond accordingly. The next employee survey is planned for
the fiscal year 2021.

The employee turnover rate remained at 9.5%. This figure
includes all departures, plus fixed-term employment contracts
that came to an end. 4.3 percentage points of this are accounted
for by voluntary departures, which is under the defined maxi-
mum value of 6%. For the coming fiscal year, we have set our-
selves a maximum value of 5%. The proportion of employees
who changed jobs because of employment conditions or salary
was lower than in the previous year. The most common reasons
for departures were related to personal or family factors.

20% of the Board of Directors was female. 20% of the Exec-
utive Management and 14.9% of the worldwide staff are women.
Burckhardt Compression has a fundamental belief that mixed-
gender teams perform better.

Modern employment conditions
Employment conditions at Burckhardt Compression are always
being adapted to the latest requirements, and the coronavirus
pandemic lent even more impetus to this process during the
2020 fiscal year. The health of employees and their families has
always been a priority during this time. The company has always
ensured that the workforce at production plants could rely on
appropriate protective measures. A strategy was quickly devel-

SUSTAINABILITY REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

oped for office-based workers so that they could work from
home with all the necessary infrastructure. Regular communi-
cation through various channels ensured that the most press-
ing issues could be sorted out quickly at any time. Thanks to the
committed cooperation of all employees, the company coped
well with the challenges presented by the coronavirus pan-
demic. Some innovations, such as large-scale home-working,
were a new experience for Burckhardt Compression and proved
positive for employees in some respects. The option to work
from home more will therefore be retained in future, providing
greater flexibility in the way people’s working life is organized.

Attractive employer
Burckhardt Compression ranked as one of the most attractive
Swiss employers in 2021. This ranking is based on an indepen-
dent survey of employees carried out by data analysts Statista
via an online access panel, combined with input from the read-
ers of “Handelszeitung” and “Le Temps”. More than 1,500 employ-
ers with 200 or more employees in Switzerland were identified
for the survey. In the overall ranking, Burckhardt Compression
achieved an impressive 26th place, while within the mechanical
engineering sector it ranked third.

Employee development
Burckhardt Compression appreciates its employees’ expertise
and promotes knowledge sharing. Employee orientation pro-
grams ensure that new hires are familiarized with their area of
work and our corporate culture. Personal training and develop-
ment is part of the annual appraisal and performance review
process and is financed by the company. To ensure the ongoing
development of technological expertise and management skills
within the company, employees around the world participate in
internal technical, product, and leadership training modules,
which are conducted across the Group several times a year.

Burckhardt Compression conducts an annual appraisal and
performance review with every employee (MyPerformance@
BC), which includes personal development goals and suggesti-
ons for continuous improvement. Periodic reviews of progress
made toward performance goals, formal meetings with emplo-
yees and goal-setting are also part of our evaluation system.

GEOGRAPHIC BREAKDOWN OF THE WORKFORCE, 2020
100% = 2’538

Employees (full-time equivalents)

Other
26.0%

BRIC
countries
44.1%

Switzerland
29.9%

GLOBAL WORKFORCE BY GENDER

Employees (full-time equivalents)

872

939

1’072

1’217

1’257

111

139

160

168

175

277

302

324

379

Men
Women

EMPLOYEE TURNOVER RATIO

Others
2.4%

Involuntary
2.8%

2016: 10.2%
2017:
9.8%
2018:
9.8%
2019:
9.5%

2020: 9.5%

Voluntary
4.3%

1’830

1’912

2’022

2’242

2’158

GLOBAL WORKFORCE BY AGE, 2020
100% = 2’538

Employees (full-time equivalents)

< 30
12.4%

> 50
24.6%

30 – 50
63.0%

GLOBAL WORKFORCE BY DIVISION, 2020
100% = 2’538

Employees (full-time equivalents)

Corporate
8.4%

Services
39.8%

Systems
51.8%

Promoting new talent and career development
Burckhardt Compression promotes and supports new talent at
all levels and is committed to the Swiss system of apprentice
training. The company currently has 42 apprentices in Switzer-
land and 17 in India receiving vocational training in eight differ-
ent trades. Burckhardt Compression is a founding member of
the initiative launched under the auspices of the Swiss Federal
Office for Professional Education and Technology and the
Swiss-Indian Chamber of Commerce to establish an apprentice-
ship system in India based on the Swiss model; the company is
also a corporate sponsor of the AZW Training Center in Winter-
thur for vocational career pathways. Apprentices with a good
performance record are generally retained by Burckhardt Com-
pression upon completion of their apprenticeship. Approximately
CHF 1.5 mn is spent on apprenticeships each year (cash out).

An internal talent review process is in place to identity
potential new managers and specialists at an early stage and
guide them through selective talent development programs.
Vacant job positions at all levels are also advertised internally.
External and internal candidates must go through a proprietary
screening process. The systematic evaluation and development
of the company’s future managers, which has taken place inter-
nally with success for many years, enabled the company once
again to fill various management vacancies during the past year
with internal candidates. Because it is well known and has a
positive external reputation, Burckhardt Compression can
recruit very good external candidates when there are no inter-
nal candidates for open leadership positions.

Burckhardt Compression runs an Internal Management
Development Program (IMDP) every three years, most recently
in 2019. Promising mid- and upper-management talents from
around the world receive training through this program. This is
composed of various modules that deliberately take partici-
pants beyond their normal field of activity in order to give them
a comprehensive understanding of the company. As part of the
program, participants also work in multinational project teams
with a strategic focus on the Mid-Range Plan.

Occupational health and safety
Occupational safety is a high priority at Burckhardt Compres-
sion. Every employee should be made aware of potential work-
place risks and accident prevention measures, so regular train-
ing sessions are held on these topics, supplemented by annual
audits conducted by external experts. Internal safety inspec-
tions are performed to identify and mitigate hazards. Action is
taken on the basis of the inspections’ findings.

The health and well-being of employees is another high prior-
ity. Burckhardt Compression knows that physical and mental
health is closely linked to performance, which is why it launched
the Dr BeWell program in 2019. Implemented locally, this includes

SUSTAINABILITY REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

a varied range of physical exercises as well as preventative mea-
sures and special topics. The program is just one of the ways in
which Burckhardt is improving employee satisfaction, health,
and motivation is improved and and reducing absences.

In the fiscal year 2020, the health and safety system at all
Burckhardt Compression locations was certified under the new
ISO 45001 standard (replaces OHSAS 18001). The only excep-
tions were the subsidiaries SAMR, Prognost, Arkos, and
Shenyang Yuanda, all of which have their own health and safety
systems. Numerous measures ranging from detailed risk
assessments and safety inspections accompanied by manage-
ment to workplace safety training and mandatory protective
footwear requirements for certain employees have led to a fur-
ther improvement in the relevant key performance indicators.

In Switzerland the number of illness-related absences per
employee amounted to 9.3 days for the reporting year (previous
year 9.2 days). Due to a more comprehensive survey method,
the figures in this report are not comparable with those from
previous annual reports.

Social environment
Burckhardt Compression is well embedded in its social environ-
ment and works actively with the local community and author-
ities in all its locations. The company supports employees who
are committed to doing good for the community. This applies in
particular to executives and employees who become involved
with politics and industry associations in order to help solve
social challenges.

Burckhardt Compression supports community and cultural
projects at different locations in order to strengthen local
social cohesion. Employees are encouraged to become person-
ally involved in such projects. Personnel in India, for example,
are helping to mitigate the impact of the pandemic on poorer
sections of the population by making donations of goods and
money and taking on voluntary work.

ENVIRONMENTAL SUSTAINABILITY

“We are a company that cares about the environment and that
strongly supports responsible and prudent consumption of
energy and our planet’s finite natural resources. By exercising
foresight and prudence, we help to minimize the use of energy,
water, and chemicals of all kinds, and reduce harmful emis-
sions.” (Code of Conduct)

Product design and innovation
Environmental protection starts with product design and devel-
opment. Here, the focus is on sustainable and efficient develop-
ment, taking into account the entire life cycle of a product. This

is indispensable since Burckhardt Compression’s compressor
systems have an average service life of 30 to 50 years. When-
ever it makes sense, customers are included early on in the
development stage of new products, in order to find joint inno-
vative solutions and verify ideas.

In a pilot project currently underway in India, a life cycle
analysis (LCA) is being conducted to determine the environmen-
tal impact from raw material extraction to the decommission-
ing and disposal of a compressor to derive targeted measures
to improve the overall impact.

Areas of application
The high functionality of the products made by Burckhardt
Compression allows optimal operation of compressor systems
in many different processes. In numerous application areas,
compressors play a critical role in reducing environmental
damage and facilitating sustainable energy provision, for exam-
ple with renewable fuels.

The following products and solutions developed in recent
years promise to bring greater customer benefits while improv-
ing the environmental footprint.
– Compressor systems for marine applications: The dual-fuel
propulsion system developed for LNG carriers can be powered
by environmentally friendly natural gas instead of marine die-
sel oil. The Laby®-GI fuel gas compressors by Burckhardt
Compression compress the boil-off gas from the LNG tanks,
which is then injected directly into a diesel engine. The dual-
fuel propulsion system for LNG carriers reduces CO2, SOX and
NOX emissions by up to 30% when powered by natural gas.
– Process gas compressors for hydrogen fueling applications:
Innovative ring geometries enable process gas compressors
to be operated without oil lubricants in fueling applications
for hydrogen-powered trains, trucks, or buses, with pressures
of up to 500 bar. The technological advantages of reciprocat-
ing compressors for this market are unrivaled efficiency and
long service lives.

– Process gas compressors per API 618: These compressors are
used specifically in industrial processes for the desulfuriza-
tion of fuels.

– PROGNOST®-SILver: Systems for monitoring and diagnosing
the condition of reciprocating compressors are key tools for
increasing operational reliability, extending service intervals,
and preventing failures.

Procurement
Burckhardt Compression uses its suppliers’ experience to con-
tinuously improve its products, because an important part of
the value creation is provided by them. They are therefore held
to the same high standards as Burckhardt Compression itself
by a newly developed Code of Conduct for Business Partners

ELECTRICITY CONSUMPTION

MWh

11
12
13
14
15
16
17
18
19
20

3’707

4’136

3’672

5’305
5’385

6’773

6’933
7’029

7’231

6’736

WATER CONSUMPTION

11
12
13
14
15
16
17
18
19
20

WASTE

11
12
13
14
15
16
17
18
19
20

35’040

28’251

14’851

17’792
18’865

29’157

24’310

29’019
30’311

24’800

246

197

235

280

326

284

321

343
352

341

Figures without Shenyang Yuanda Compressor

and are they are also integrated into the Burckhardt Compres-
sion's environmental and quality policy. Checks are made on
site or when goods arrive to ensure adherence to specifications
and are verified by reviewing the required audit reports.

Manufacturing and logistics
In our efforts to transfer knowledge and production know-how
between our various production and engineering centers, we
are also transferring safe, efficient, and environmentally
friendly production and engineering processes. The fundamen-
tal improvement program PULL@BCAG facilitates optimization
of internal logistics processes and transportation, as well as
reducing transport runs by consolidating deliveries and con-
tainers. PULL@BCAG does far more than traditional projects
because it expresses Burckhardt Compression’s underlying phi-
losophy of work. Procuring equipment locally helps the company
keep close to customers – as well as reducing transportation.

Environmental management
In fiscal year 2018, all Burckhardt Compression locations were
certified in accordance with ISO 14001, with the exception of
the SAMR, Prognost, Arkos, and Shenyang Yuanda subsidiaries,
which have their own environmental management systems. In
addition to compliance with the applicable standards, activities
here were primarily focused on environmentally relevant
aspects, with the aim of reducing energy consumption. A com-
prehensive chemicals concept was also developed; harmful
chemicals were substituted by less harmful ones, and their
storage was optimized.

The Winterthur site has launched
a comprehensive program to
reduce greenhouse gas emissions
as part of the target agreement
with the canton of Zurich.

A multi-year project to save energy in our offices and work-
shops is underway at the Winterthur site. Associated measures
form part of a comprehensive 10-year program under a target
agreement made with Canton Zurich to reduce greenhouse gas
emissions. Emissions are measured regularly at the site in Win-
terthur. They were reduced by 44% in the fiscal year 2020, with
most of the reduction attributable to the current coronavirus
pandemic. Travel restrictions meant that many business trips
were replaced with virtual meetings, which had a substantial
impact on greenhouse gas emissions.

SUSTAINABILITY REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

BURCKHARDT COMPRESSION MATERIALITY MATRIX

e
c
n
a
v
e
l
e
r

r
e
d
l
o
h
e
k
a
t
S

Shenyang Yuanda Compressor’s new factory in Shenyang
takes much of the energy it needs from district heating sys-
tems. It also has very effective insulation for its exterior walls.
Insulated sandwich wall panels reduce the amount of energy
required for heating. Employees’ work and safety clothing is
washed at a central laundry rather than in separate washing
machines for each department. This saves both water and en-
ergy. A new sand mixer was installed for Shenyang Yuanda
Compressor’s foundry in 2019. The sand that is used for the
casting molds can now be reprocessed and reused.

The factory in Pune won the GreenCo Star Performer Award
again. GreenCo is a rating system established by the Confed-
eration of Indian Industry (CII), which takes a holistic approach
to measuring the results of companies’ environmental initia-
tives. The prize was awarded because the factory managed to
cut its energy consumption by 22% compared with the base
year of 2015/16, as well as achieving a 38% year-on-year reduc-
tion in fresh water consumption. This latter achievement was
made possible in part by a rainwater collection system with an
average collection potential of around 80%. Washing rather
than disposing of oily cotton cleaning rags used in manufactur-
ing processes saved 660 kg of cotton.

Recycling and disposal
Hazardous goods and chemicals are transported, stored and
disposed of in accordance with applicable laws and regulations.
Internal collection points help employees sort and dispose of
waste correctly and allow recycling of most waste materials.
Specialized companies are used to dispose of specific materials
(e.g. metals) properly and environmentally.

The waste management concept introduced in collaboration
with external consultants in Winterthur was continued and
expanded and will lead to even greater separation of waste in
the future. The replacement of conventional lighting with LEDs
in Winterthur continued. Burckhardt Compression also further
optimized its chemicals concept at the Winterthur site. Com-
bustible chemicals were replaced by less combustible ones, and
all container labelling was amended. Oil storage tanks were ret-
rofitted with spill containment systems and special transport
tanks, which improves chemical safety practices and process
efficiency. The substitution of hazardous chemicals further
reduced consumption of VOC gases (Volatile Organic Com-
pounds), which are harmful to the environment. These and other
measures are part of the EOHS system that has been introduced
at all Group sites in compliance with ISO 14001 and 45001.

ENHANCED FOCUS ON SUSTAINABILITY

During the 2020 fiscal year, Burckhardt Compression carried
out a materiality assessment to underpin its commitment to
sustainability and take its strategy forward. The aim was to
identify the most important sustainability topics for the Burck-
hardt Compression Group as a whole.

Materiality assessment
The standards set out in the Global Reporting Initiative (GRI)
served as a framework for identifying these issues. The first
step was to consolidate potentially relevant topics in an
expanded list. This list was compiled after analyzing selected
sustainability standards, investor assessments (ESG ratings),
competitors, customers, and other relevant companies in the
industrial sector. The second step was to evaluate these topics
from the perspective of stakeholders and from an impact per-
spective. Burckhardt Compression did this by surveying the
assessments and expectations of the various stakeholder
groups online and in personal conversations. Impact on the
environment, society, and the economy was determined by
means of a structured assessment based on OECD due dili-
gence guidance for responsible business conduct.

Results
The analysis resulted in a materiality matrix in which 8 of 29
topics were identified as material to Burckhardt Compression.
This materiality matrix helps to guide and focus decisions
on the further integration of sustainability into Burckhardt
Compression’s business activities. It is reviewed at regular
intervals and adjusted if required. Topics identified as material
form the strategic core of Burckhardt Compression’s future
approach to sustainability. More relevant topics are continu-
ously integrated into operational business activities. The
remaining topics are dealt with as part of the normal course of
business, taking stakeholder expectations into account.

From fiscal year 2021, Burckhardt Compression will gradu-
ally integrate key sustainability topics into its business activi-
ties and align them more closely with the Sustainable Develop-
ment Goals. Future reporting will also be updated to include
key figures that meaningfully document progress made on sus-
tainability.

Material topics

Operational topics

Other topics

Sales & project
implementation
practices

Economic
contribution

Greenhouse gas
emissions &
climate change

Energy use &
efficiency

Business conduct

Working
conditions

Resource / material
efficiency

Product health &
safety

Occupational
health & safety

Diversity, inclusion &
equal opportunity

Data security & privacy

Environmental impacts
of application purpose

Longevity & cyclability

Intellectual property &
access to knowledge

Biodiversity

Forced labor /
child labor

Conflict &
security

Training &
development

Waste &
hazardous
substances

Non-greenhouse
gas air emissions

value chain impacts

supply
chain

own
operations

use /
end-of-life

Land degradation

Political
accountability

Corporate citizenship &
community impacts

Tax contribution &
allocation

Water &
wastewater

Asset & process
integrity

Social impacts of
application purpose
Noise, vibration, odor &
electromagnetic radiation

Land rights / indigenous rights

Impacts on society, environment, and economy

MATERIAL TOPICS

Greenhouse gas emissions
& climate change

Impacts on climate change, including greenhouse gas emissions along
the value chain, and mitigation of climate change risks.

Energy use & efficiency

Energy consumption, efficiency, and sources for the production,
provision, and operation of Burckhardt Compression’s products and
services.

Longevity & cyclability

Fostering a long life cycle and the circularity of materials and products
in Burckhardt Compression’s business activities, including maintenance
and repair services.

Environmental impacts of
application purpose

Environmental impacts of the use case of Burckhardt Compression’s
products and services, including contributing towards a sustainable
energy transition.

Working conditions

Employment terms including working hours, compensation, and
labor-management relations as well as the satisfaction of employees
with those terms.

Occupational
health & safety

Maintaining and promoting a safe and healthy working environment
for workers involved in the production and provision of Burckhardt
Compression products and services.

Product health & safety

Maintaining and promoting the safe and healthy operation of Burckhardt
Compression products and maintained products of other brands.

t
n
e
m
n
o
r
i
v
n
E

y
t
e

i
c
o
S

y Business conduct
m
o
n
o
c
E

Ensuring and promoting that Burckhardt Compression’s business
activities are conducted in compliance with regulations, standards,
and ethical principles.

CORPORATE GOVERNANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

CORPORATE GOVERNANCE

Burckhardt Compression is committed to responsible corpo-
rate governance. The company adheres to the Directive on In-
formation Relating to Corporate Governance (DCG) issued by
SIX Swiss Exchange, where applicable to Burckhardt Compres-
sion, and the “Swiss Code of Best Practice for Corporate Gover-
nance” issued by economiesuisse.

In the 2020 fiscal year, Burckhardt Compression has set-up
a new Code of Conduct for business partners. In this fiscal year,
Burckhardt Compression started to refresh the Code of Con-
duct for its employees, which will be released in the next fiscal
year. In addition, a Speak Up channel for all internal and exter-
nal stakeholders of Burckhardt Compression will be launched
in the next fiscal year as well.

1.1.2. Listed Group companies
Burckhardt Compression Holding AG, a corporation organized
under the laws of Switzerland with legal domicile in Winterthur,
is the only listed Group company. Burckhardt Compression reg-
istered shares (BCHN) are listed on the SIX Swiss Exchange in
Zurich (ISIN: CH0025536027; security number 002553602). Its
market capitalization as of March 31, 2021 amounted to
CHF 1’071’000’000.

1.1.3. Unlisted Group companies
Information on the unlisted companies included in the scope of
consolidation of Burckhardt Compression Holding AG is given in
the financial report on page 107, Note 102, “Subsidiaries”.

This report is structured in accordance with the DCG’s out-
line and numbering. Unless otherwise noted, the information
presented reflects the situation on March 31, 2021.

With the exception of Burckhardt Compression Holding AG,
none of the companies included in the scope of consolidation
hold any BCHN shares.

1. GROUP STRUCTURE AND
SHAREHOLDERS

1.1. Group structure
1.1.1. Management structure
Burckhardt Compression is managed through a divisional orga-
nizational structure consisting of two divisions, the Systems
Division (compressor manufacturing business) and the Services
Division (compressor services and components). The manage-
ment structure of the Burckhardt Compression Group is given
in the organizational chart below:

CEO

M. Pawlicek

CHRO

S. Pitt

President
Systems Division

F. Billard

CFO

R. Brändli

President
Services Division

R. Dübi

1.2. Significant shareholders
According to information available to the company from the
disclosure notifications of the SIX Swiss Exchange AG, the
shareholders listed in the following table reported sharehold-
ings of at least 3% of the voting rights as per March 31, 2021. In
accordance with the company’s Bylaws, the voting rights of
NN Group N.V. and Atlantic Value General Partner Limited (Mon-
drian) are limited in each case to 5.0% of the total number of
BCHN registered shares recorded in the share register:

Name

Country

%
of shares

MBO Aktionärsgruppe (Valentin Vogt,
Harry Otz, Leonhard Keller, Martin Heller,
Ursula Heller, Marcel Pawlicek)
NN Group N.V.

CH
NL

Atlantic Value General Partner Limited (Mondrian) GB

BlackRock, Inc.

UBS Fund Management (Switzerland) AG

FEDERATED HERMES, INC.

12.4
10.3

5.0

3.0

More detailed information on the disclosure notifications is
available on the website of the SIX Swiss Exchange’s Disclosure
Office (https://www.ser-ag.com/de/resources/notifications-
market-participants/significant-shareholders.html#/).

1.3. Cross-shareholdings
Burckhardt Compression Holding AG has no cross-sharehold-
ings with any other company or group of companies.

tion is also valid if shares are acquired through the exercise of
subscription, option, or conversion rights, with the exception of
shares acquired through inheritance, division of an estate or
marital property law.

Legal entities and partnerships associated with each other
by uniformly managed capital or votes or in any other way, as
well as private and legal entities or partnerships which form an
association to evade registration restrictions, are regarded as
one person.

Individual persons who have not expressly declared in their
registration application that they hold the shares for their own
account (nominees) will be entered in the Share Register with
voting rights if the nominee concerned provides proof that he is
subject to supervision by an accredited bank and financial mar-
ket regulator and if he has concluded an agreement with the
Board of Directors concerning his status. Nominees holding up
to 2% of the issued shares will be entered in the Share Register
with voting rights without having to sign an agreement with the
Board of Directors. Nominees holding more than 2% of the
issued shares will be entered in the Share Register with 2% vot-
ing rights and, for the remaining shares, without voting rights.
Above this 2% cap, the Board of Directors may have nominees
entered in the Share Register with voting rights if they disclose
the names, the addresses, the nationalities, and the sharehold-
ings of the persons for whom they hold more than 2% of the
issued share capital.

2.7. Convertible bonds and options
The company does not have any outstanding convertible bonds
and has not issued any option rights.

2. CAPITAL STRUCTURE

2.1. Capital
The issued share capital of Burckhardt Compression Holding AG
amounts to CHF 8’500’000, comprising 3’400’000 fully paid
registered shares with a nominal value of CHF 2.50 each.

2.2. Details on authorized and conditional capital
The Board of Directors is empowered to increase the company’s
share capital by a maximum of CHF 1’275’000 at any time until
July 6, 2021 by issuing a maximum of 510’000 fully paid regis-
tered shares with a nominal value of CHF 2.50 each (authorized
share capital). The date and amount of the issuance, the time
of dividend entitlement, and, if applicable, the type of contribu-
tion will be determined by the Board of Directors. Partial
increases in capital are permitted. The transferability of the
shares shall be subject to the registration restrictions set forth
in the Bylaws, if any. The Board of Directors is authorized to
exclude shareholders’ subscription rights, in part or whole, in
favor of third parties if the new shares are used to i) acquire
companies through an exchange of shares or ii) to finance the
purchase of companies in whole or part. The Board of Directors
is also authorized to exclude subscription rights of sharehold-
ers if the newly created shares are issued by means of a public
offering. Shares for which subscription rights have been granted
but not exercised will be allotted by the Board of Directors at
its own discretion. Apart from the above, Burckhardt Compres-
sion Holding AG has no other authorized and/or conditional
share capital.

2.3. Changes in capital
There has been no movement in share capital since the IPO in
June 2006.

2.4. Shares and participation certificates
Voting rights may only be exercised after the shareholder has
been registered in the Share Register. All shares are entitled to
full dividend rights. Voting rights per shareholder are restricted
to 5% of the total number of the registered shares recorded in
the commercial register. This does not apply to shareholders
who were in possession of more than 5% of the shares of Burck-
hardt Compression Holding AG before the Initial Public Offering
(IPO). The voting rights of treasury shares – held by Burckhardt
Compression Holding AG – will be suspended. The company has
not issued any participation certificates.

2.5. Dividend-right certificates
The company has not issued any dividend-right certificates.

2.6. Limitations on transferability and nominee
registrations
No person or entity will be registered as a shareholder in the
Share Register for more than 5% of the issued share capital.
This entry restriction is also applicable to persons whose
shares are held, in whole or in part, by nominees. This restric-

CORPORATE GOVERNANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

3. BOARD OF DIRECTORS

From left: David Dean, Dr. Stephan Bross, Ton Büchner, Dr. Monika Krüsi, Urs Leinhäuser

3.1. Members and
3.2. Other activities and interests
The Bylaws stipulate that the Board of Directors consists of a
minimum of three and a maximum of seven members. Since the
Annual Shareholder Meeting 2020, all members are non-execu-
tive and independent members of the Board of Directors in the
context of the Swiss Code of best Practice for Corporate Gov-
ernance from economiesuisse. The composition of the Board of
Directors is as follows:

Name

Nationality

Function

First elected

Term expires

Ton Büchner¹
Urs Leinhäuser

Dr. Monika Krüsi

Dr. Stephan Bross

David Dean¹

Valentin Vogt²

CH/NL
CH

CH/IT

AC = Audit Committee
NCC = Nomination and Compensation Committee
SSC = Strategy and Sustainability Committee

1 From July 4, 2020
2 Until July 3, 2020

Chairman, non-executive; Chairman SSC
Member, non-executive; member AC

Member, non-executive; member SSC, Chair NCC

Member, non-executive; member NCC

Member, non-executive; Chairman AC

Chairman, non-executive; Chairman SSC

2020
2007

2012

2014

2019

2002

2021
2021

2021

2020

Valentin Vogt was CEO of Burckhardt Compression Group from
the year 2000 until March 31, 2011. No Board member has served
as a member of the Executive Management of a Burckhardt
Compression Group company. None of the directors have mate-
rial business relationships with a Burckhardt Compression
Group company.

The competencies of the Board members are depicted in the
following matrix:

Independence of the Board of Directors
Since the Annual Shareholder Meeting 2020, all members are
non-executive and independent members of the Board of Direc-
tors in the context of the Swiss Code of best Practice for Cor-
porate Governance from economiesuisse. Non-executive mem-
bers of the Board of Directors are considered independent if
they have never, or not within the last three years, worked for
Burckhardt Compression, and who have no or only relatively
minor business relationships with the company.

Ton Büchner Urs Leinhäuser Monika Krüsi Stephan Bross David Dean

Valentin Vogt

Executive competence (>200 FTEs)
Strategic competence

Competence in non-European cultures

Supply chain competence

Competence in BC markets

Technological competencies

Financial competencies

M&A competence

Board-level competencies

CEO coaching competencies

•

The company’s General Counsel, who serves as Secretary to the Board of Directors, has a degree in law (Dr. iur.).

CORPORATE GOVERNANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

Biographical details and information on
other activities and commitments of the
individual members of the Board of Di-
rectors are given below:

TON BÜCHNER (1965)

Independent Board Member since 2020

Education
Master of Business Administration,
IMD Business School, Switzerland
Master of Science in civil engineering,
Delft University of Technology,
Netherlands

Professional background
2012–2017 Chairman of the Executive
Management and CEO, AkzoNobel NV,
Netherlands
2007–2011 CEO, Sulzer AG, Switzerland
2003–2006 President, Sulzer Pumps,
Switzerland
2000–2002 President, Sulzer Turboma-
chinery Services, Switzerland
1994–2000 various management
positions, Sulzer AG, Switzerland

Duties and responsibilities as a
director of Burckhardt Compression
Holding AG
– Chairman of the Board of Directors
– Chairman of the Strategy and

Sustainability Committee

Other activities and commitments
– Member of the Board of Directors,

Novartis, Switzerland

– Chairman of the Board of Directors,
Swiss Prime Site AG, Switzerland

– Advisor, Ammega, Switzerland

URS LEINHÄUSER (1959)

DR. MONIKA KRÜSI (1962)

DR. STEPHAN BROSS (1962)

DAVID DEAN (1959)

VALENTIN VOGT (1960)

Independent Board Member since 2007

Independent Board Member since 2012

Independent Board Member since 2014

Independent Board Member since 2019

Independent Board Member until 2020

Education
Engineering degree, University of
Braunschweig, Germany

Professional background
Since 2018 Executive Management
member (CTO), KSB SE & Co. KGaA,
Germany
2017 Executive Management member,
Technology, KSB AG, Germany
2014–2017 Senior Vice President,
Pumps, KSB AG, Germany
2007–2013 Senior Vice President,
Service, KSB AG, Germany
2002–2007 Head of Product Manage-
ment and Development Engineered
Pumps, KSB AG, Germany
1997–2001 Head of Development and
Services Fluid Flow Technical Systems,
KSB AG, Germany
1996–1997 Head of Fluid Mechanics
Research, KSB AG, Germany
1993–1996 R&D Engineer, KSB AG,
Germany

Duties and responsibilities as a
director of Burckhardt Compression
Holding AG
– Member of the Board of Directors
– Member of the Nomination and

Education
Swiss certified expert for accounting
and controlling
Swiss certified accountant
Completed executive education
programs at Harvard Business School,
Boston, USA, and at the IMD, Lausanne,
Switzerland

Professional background
Since 2019 Self-employed, Switzerland
2004–2019 CEO, Bossard Group,
Switzerland
1998–2004 CFO, Bossard Group,
Switzerland
1993–1998 Deputy CFO and Corporate
Controller, Bossard Group, Switzerland

Duties and responsibilities as a
director of Burckhardt Compression
Holding AG
– Member of the Board of Directors
– Chairman of the Audit Committee

Other activities and commitments
– Board member, Bossard Group,

Education
Lic. oec. HSG St. Gallen, Switzerland

Professional background
Since 2011 Self-employed, Switzerland
2000–2011 CEO, Burckhardt Compres-
sion Group, Switzerland
1992–2000 General Manager, Sulzer
Metco AG, Switzerland
1989–1992 CFO, Sulzer Metco AG,
Switzerland
1986–1989 CFO, Alloy Metals, USA
1985–1986 Controller, Sulzer AG,
Switzerland

Duties and responsibilities as a
director of Burckhardt Compression
Holding AG
– Chairman of the Board of Directors
– Chairman of the Strategy Committee

Other activities and commitments
– Chairman of the Board, Kistler

Holding AG, Switzerland

– Board member, Bucher Industries AG,

Switzerland

– Board member, Ernst Göhner Stiftung

– Board member, Komax Group,

Beteiligungen AG, Switzerland

Switzerland

– Chairman of the Swiss Employers’

– Board member, Brugg Group,

Association, Switzerland

Compensation Committee

Switzerland

– Chairman of the Board of Directors,
Haag-Streit Group, Switzerland
(a division of Metall Zug Group)

Education
PhD. in Business Informatics, MBA
University of Zurich, Switzerland

Professional background
Since 2003 Partner, MKP Consulting
AG, Switzerland
2001–2003 Partner, Venture Incubator
Partners AG, Switzerland
1991–2001 Associated Partner,
McKinsey & Co., Inc., Switzerland
1986–1990 Credit Suisse, Switzerland

Duties and responsibilities as a
director of Burckhardt Compression
Holding AG
– Member of the Board of Directors
– Chair of the Nomination and
Compensation Committee
– Member of the Strategy and
Sustainability Committee

Other activities and commitments
– Chair of the Board of Directors,

Repower AG, Switzerland

– Chair of the Board of Directors of

Oskar Ruegg AG, Schweiz

– Board member, 360°, Switzerland
– Board member, Otto Suhner AG,

Switzerland

– Board member, Signal AG, Switzerland
– Board member, BGRB Holding AG,

Switzerland

– Board member, Technopark Luzern,

Switzerland

Education
Degree in Business Administration,
University of Applied Sciences, Zurich,
Switzerland
IMD Lausanne (SSE)

Professional background
Since 2016 Partner/Consultant
ADULCO GmbH, Switzerland
2014–2016 Self-employed, Switzerland
2011–2014 CFO and Deputy CEO,
Member of Executive Management,
Autoneum Holding AG, Switzerland
2003–2011 CFO and Head Corporate
Center, Member of Group Executive
Committee, Rieter Holding AG,
Switzerland
1999–2003 CFO, Member of Group
Executive Committee, Mövenpick
Holding, Switzerland
1997–1999 Head of Finance and
Controlling, Piping Systems Division,
Georg Fischer AG, Switzerland
1995–1997 Head of Corporate Control-
ling, Georg Fischer AG, Switzerland
1992 Managing Director, Cerberus,
Denmark
1988–1994 Group Controller, Cerberus
AG, Switzerland
1986–1988 Tax Consultant, Deputy
Head, Tax Consultancy Department,
Refidar Moore Stephens, Switzerland
1983–1986 Tax Inspector, Cantonal Tax
Department SH, Switzerland

Duties and responsibilities as a
director of Burckhardt Compression
Holding AG
– Member of the Board of Directors
– Member of the Audit Committee

Other activities and commitments
– Chairman of the Board of Directors,

Avesco AG, Switzerland

– Board member, Ammann Group

Holding AG, Switzerland

– Board member, Liechtensteinische

Landesbank AG, Liechtenstein
– Board member, VAT Group AG,

Switzerland

– Board member, PENSADOR Partner

AG, Zurich

CORPORATE GOVERNANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

3.3. Rules in the Bylaws concerning the number of per-
mitted activities
Members of the Board of Directors may not hold more than ten
(10) additional board memberships, whereof not more than four
(4) in listed companies.

3.4. Election and term of office
Each member of the Board of Directors, the Board Chairman,
and each member of the Nomination and Compensation Com-
mittee are elected annually by the Annual General Meeting. The
members of the Board of Directors shall be automatically reti-
red from the Board of Directors in the year in which they reach
the age of 70.

3.5. Internal organization
The Board of Directors has the final responsibility for the busi-
ness strategy and the management of the Burckhardt Com-
pression Group. It has final authority and defines the guidelines
regarding strategy, organization, financial planning, and ac-
counting for the Burckhardt Compression Group.

The Board of Directors has delegated executive manage-
ment responsibility to the CEO of the Burckhardt Compression
Group. The Board of Directors appoints a secretary for the
Board and for the company. The Secretary does not need to be
a member of the Board. This role is currently assigned to the
company’s General Counsel.

The Board of Directors meets as often as business requires,
but at least four times per year. In fiscal year 2020, the Board
of Directors and Board committees convened the meetings
shown in the table below.

The Board of Directors has a quorum when the majority of
the members are present. Decisions are passed by a simple
majority. In the event of a tie, the Chairman has the casting vote.
The CEO, the two Presidents of the Systems and Services
Divisions, the CFO, the CHRO, and the General Counsel, in his
role as secretary, are regularly invited to attend Board meet-
ings to report on developments in their respective business
areas.

The Board of Directors has set up the following committees:

Audit Committee The Audit Committee advises and supports
the Board in all matters related to external and internal audits,
risk management, accounting policies and practices, and com-
pliance with accounting standards issued. The CEO, the CFO,
the head of the internal audit unit, and representatives of the
external auditors also participated in the Audit Committee’s or-
dinary meetings. The members are David Dean (Chair) and Urs
Leinhäuser.

Nomination and Compensation Committee This committee
advises and assists the Board of Directors on appointing, asses-
sing and dismissing members of the Executive Management,
and draws up proposals for the appointment or dismissal of
members of the Board of Directors. Furthermore, the Nomina-
tion and Compensation Committee advises and assists the
Board of Directors on questions relating to the compensation
of the directors and the Executive Management members. The
CEO and the CHRO also attend the ordinary meetings of the
NCC. The members are Dr. Monika Krüsi (Chair) and Dr. Stephan
Bross.

Meetings

04/28/2020, BOD meeting
05/15/2020, AC meeting

05/26/2020, NCC meeting

05/27/2020, AC meeting

05/27/2020, BOD meeting

08/28/2020, BOD meeting

09/10/2020, BOD meeting

10/29/2020, NCC meeting

10/30/2020, AC meeting

10/30/2020, BOD meeting

11/12/2020, SSC meeting

12/10/2020, SSC meeting

12/11/2020, BOD meeting

02/25/2021, AC meeting

03/02/2021, BOD meeting

03/03/2021, extra. NCC meeting

BOD = Board of Directors
AC = Audit Committee
NCC = Nomination and Compensation Committee
SSC = Strategy and Sustainability Committee

Governing
body
BOD

NCC

BOD

NCC

BOD

SSC

BOD

NCC

Duration

3 hours

1.5 hours

3.5 hours

7 hours

5.5 hours

1 hour

2 hours

3 hours

6.5 hours

1 hour

3 hours

6.5 hours

3 hours

5 hours

2.5 hours

Valentin
Vogt
•

Ton
Büchner

Urs
Leinhäuser
•

•

Monika
Krüsi

Stephan
Bross

David
Dean

•

Strategy and Sustainability Committee The Strategy and
Sustainability Committee supports the CEO in developing cor-
porate strategy and advises the Board of Directors on strategic
matters such as acquisitions and divestments. It evaluates the
implementation of company strategy on a regular basis and
submits proposals to the Board of Directors if adjustments or
other measures are deemed necessary. The members are Ton
Büchner (Chair) and Dr. Monika Krüsi. In addition, the Strategy
and Sustainability Committee organizes and prepares the annu-
al strategy day in collaboration with the CEO.

Self-evaluation of the Board of Directors In fiscal year 2020,
the Board of Directors conducted a self-evaluation looking at
the work of the Board of Directors and its individual commit-
tees. The evaluation process covered purpose, scope, composi-
tion, and responsibilities and was done as an internal evaluation
only. Each of the Board members completed a questionnaire and
the detailed findings were presented back to the Board. Impro-
vement measures were defined and will be regularly reviewed.

3.6. Definition of areas of responsibility
The Board of Directors has delegated the executive manage-
ment of the company and the Group to the CEO of Burckhardt
Compression Group, with the exception of the following mat-
ters:
– Definition of the Group’s business policies and strategy
– Definition of the top-level organizational structure of the

Group

– Approval of the periodic forecasts, the annual report, and

reporting and accounting policies

– Ensuring adequate internal control systems based on the

recommendations of the Audit Committee

– Determination of the appropriate capital structure
– Appointment and dismissal of members to and from the Exec-
utive Management, as well as compensation of the Executive
Management

– Decisions on new subsidiaries, major capital expenditure proj-
ects, acquisitions, financing transactions, the insurance con-
cept, and the provision of guarantees if such decisions exceed
the powers conferred on the CEO.

The powers of the Executive Management and of the Group
company executives are listed in detail in the organization re-
gulation (https://www.burckhardtcompression.com/investors/
corporate-governance).

3.7. Information and control instruments vis-a-vis the
executive committee

Financial reporting and planning Order intake, the income
statement, balance sheet, liquidity planning and cash flow,
headcount, personnel costs, and capital expenditure are conso-
lidated and annotated on a monthly basis. A rolling forecast of
Group results for the current and coming fiscal years is also
prepared and annotated four times a year (April, July, October,

and January). Targets for the coming fiscal year are determined
based on the January forecast. The financial report and the
forecasts are distributed to the members of the Executive Ma-
nagement and all members of the Board of Directors. At every
meeting of the Board of Directors, the members of the Execu-
tive Management report on the course of business and on all
issues of relevance to the Group.

Internal Group Audit and internal control system (ICS) The
internal audit reports to the Chairman of the Audit Committee
of the Board of Directors. Management responsibility for the
unit has been delegated to the Head of Group Controlling, who
is also responsible for planning and conducting the audits. The
CFO is responsible for coordination between the Audit Commit-
tee and the head of the Internal Group Audit. The Internal Group
Audit team consists of qualified staff from the Finance and
Controlling departments of Burckhardt Compression AG and
several selected financial specialists from the Group’s subsidi-
aries. Qualified subject matter experts from other fields (e.g. IT,
Legal, or Human Resources) may be consulted, depending on
the auditing assignment. These employees perform the internal
audit duties assigned to them in addition to their regular duties
and in this additional capacity they report directly to the Head
of Internal Group Audit, who in turn reports in this function di-
rectly to the Chairman of the Board of Directors’ Audit Commit-
tee. This efficient organization is tailored to the needs and size
of the Burckhardt Compression Group and fosters an active ex-
change of information and best practice with the objective of
creating sustained added value for the Burckhardt Compression
Group by means of continual process improvement. The inter-
nal auditors undergo regular training for the performance of
their tasks. The training received is coordinated by the head of
the internal Group audit. The schedule for internal audits is de-
termined by the Audit Committee of the Board of Directors on
an annual basis and may be changed or expanded by the Audit
Committee as and when required. The internal auditors’ reports
were distributed to the management of the audited company, the
members of the Audit Committee of the Board of Directors, the
Executive Management members, and to the external company
auditors. The statutory auditor assesses the effectiveness of
the internal control system (ICS) in a written report submitted
to the Audit Committee and the Board of Directors once a year.

Risk management Burckhardt Compression has an integrated
risk management policy. In a two-stage process, key risks are
identified using an anticipatory approach and grouped under
one of three risk categories – strategic, financial, or operational
– that have been defined by the Board of Directors. The risks
are then evaluated, managed and stringently monitored, avoi-
ded, mitigated, or transferred to third parties through approp-
riate risk management measures. The first stage of risk ma-
nagement consists of a continuous risk management process,
in which the divisions and larger companies at Burckhardt Com-
pression Group systematically identify and assess the risks in
a regular rhythm, define the necessary risk mitigation measu-

CORPORATE GOVERNANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

res together with the responsible persons, and set and monitor
deadlines for implementation. Internal and external factors are
included in the evaluation of potential risks.

The second stage of the risk management process consists
of a periodic risk management review that takes place twice a
year at the meetings of the Board of Directors’ Audit Commit-
tee. To this end, the CEO prepares an overview of the main risks
faced by Burckhardt Compression Group and an assessment of
the likelihood of these risks occurring and the effects they
would have. This overview is presented to the Audit Committee
together with the risk mitigation measures, the people respon-
sible for implementing them, and an implementation timetable.
The Audit Committee then reports to the Board of Directors
about the findings of the risk management review.

4. EXECUTIVE MANAGEMENT

4.1. Members of the Executive Management and
4.2. Other activities and commitments

Name

Nationality

Function

Marcel Pawlicek
Rolf Brändli

Sandra Pitt

Fabrice Billard

Rainer Dübi

CH
CH

DE/CH

FR/CH

CEO
CFO

CHRO

President Systems Division

President Services Division

Biographical details and information on
other activities and commitments of the
members of the Executive Management:

MARCEL PAWLICEK (1963)

ROLF BRÄNDLI (1968)

Education
Degree in Business Administration, HWV
Zurich, Switzerland

Professional background
Since 2008 CFO, Burckhardt Compres-
sion Group, Switzerland
2001–2008 Head of Finance & Adminis-
tration, Sulzer Brasil S.A., Brazil;
Regional Controller, Sulzer Pumps
South America & South Africa
1997–2001 Regional Controller Asia/
Pacific, Sulzer International Ltd.;
General Manager, Sulzer Hong Kong Ltd.,
Hong Kong, SAR China
1994–1997 Management Consultant,
OBT Treuhand AG Zurich, Switzerland

Education
Degree in Mechanical Engineering, HTL
Winterthur, Switzerland, MBA Marketing
and International Business, Fordham
University, New York, USA

Professional background
Since 2011 CEO, Burckhardt Compres-
sion Group, Switzerland
2008–2011 Head of Design & Manufac-
turing, Burckhardt Compression AG,
Switzerland
2001–2008 Head of CSS, Burckhardt
Compression AG, Switzerland
1999–2001 Head Sales and Contracting
HPI, Sulzer-Burckhardt AG, Switzerland
1989–1999 Project Manager and Mar-
keting & Sales Manager for Burckhardt
compressors, Sulzer Inc., USA
1986–1989 Design Engineer, Sulzer-
Burckhardt AG, Switzerland

Other activities and commitments
– President of the Swiss-CIS/Georgia

Chamber of Commerce

– Vice President of AZW Winterthur,

Switzerland

From left: Rainer Dübi, Fabrice Billard, Marcel Pawlicek, Sandra Pitt, Rolf Brändli

CORPORATE GOVERNANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

SANDRA PITT (1971)

FABRICE BILLARD (1970)

RAINER DÜBI (1969)

Education
Degree in Business Administration/Busi-
ness Informatics, Germany, MBA
International Finance/International HR,
American University Washington, USA

Professional background
Since 2015 CHRO, Burckhardt Com-
pression Group, Switzerland
2013–2015 Head Corporate HR, AFG
Management AG, Switzerland
2012–2013 Head of HR Central Europe,
Holcim (Schweiz) AG, Switzerland
2010–2012 Head of HR, Holcim
(Schweiz) AG, Switzerland
2007–2009 Head of HR, BASF Group
Switzerland, BASF Schweiz AG,
Switzerland
2006–2007 HR Specialist Region
Europe, BASF AG, Germany
2003–2006 Internal Consultant Perfor-
mance Management, BASF AG, Germany
2002–2003 HR Coordinator Europe,
BASF AG, Germany

Education
Master of Science in Aeronautics and
Aerospace Engineering, Ecole Centrale
Paris, France

Education
Degree in Mechanical Engineering,
HTL Winterthur, MASBA School of
Management, Switzerland

Professional background
Since 2016 President Systems Division,
Burckhardt Compression Group,
Switzerland
2015–2016 Chief Strategy Officer,
Sulzer, Switzerland
2012–2015 Head Business Unit Mass
Transfer Technology, Sulzer Chemtech,
Switzerland/Singapore
2010–2012 Head Europe, Middle East,
India, Russia & Africa Business Unit,
Mass Transfer Technology, Sulzer
Chemtech, Switzerland
2008–2010 Vice President Business
Development, Sulzer Chemtech,
Switzerland
2005–2008 Head Global Customer
Services, Sulzer Pumps, Switzerland
2004–2005 Strategic Development
Manager, Sulzer Corporate, Switzerland
1999–2004 Principal, The Boston
Consulting Group, Switzerland/France

Professional background
Since 2019 President Services Division,
Burckhardt Compression Group,
Switzerland
2012–2019 Head of Design & Manufac-
turing, Burckhardt Compression AG,
Switzerland
2010–2012 Senior Sales Manager,
Burckhardt Compression AG,
Switzerland
2007–2010 Manager Sizing, Burckhardt
Compression AG, Switzerland
2003–2007 Sizing Project Engineer,
Burckhardt Compression AG,
Switzerland
2001–2003 Commissioning Lead
Engineer, Alstom, Switzerland
1999–2001 Commissioning Engineer,
ABB, Switzerland

4.3. Rules in the Bylaws concerning the number of
permitted activities
Members of the Executive Management may not hold more than
five (5) additional board memberships, whereof not more than
two (2) additional may be in listed companies.

4.4. Management contracts
There are no management contracts with third parties.

5. COMPENSATION, SHAREHOLDINGS
AND LOANS

The principles and elements of compensation paid to members
of the Board of Directors and the Executive Management as
well as the authority and the mechanisms used to determine
such compensation are explained in the Compensation Report
on pages 69 to 77.

The shareholdings of the members of the Board of Directors
and the Executive Management in Burckhardt Compression
Holding AG are listed in the Compensation Report on pages 69
to 77 and in the financial statements, note 103, “Share capital
and shareholders” on page 108.

Burckhardt Compression Group did not grant any loans,
credit or collateral to any of the members of the Board of Direc-
tors or the Executive Management in fiscal year 2020 and there
are no arrangements of this nature outstanding.

6.4. Inclusion of items on the agenda
Shareholders who together represent at least 10% of the share
capital can ask for an item to be included on the agenda of the
General Meeting. The Board of Directors must receive written
proposals for items to be included on the agenda, specifying the
issue to be discussed and the shareholders’ proposals, at the
latest 40 days before the date of the General Meeting.

6.5. Entries in the Share Register
The record date for registered shareholders to be entered in the
Share Register prior to an Annual General Meeting will be
stated in the invitation to the Annual General Meeting.

7. CHANGES OF CONTROL AND DEFEN-
SIVE MEASURES

7.1. Obligation to make an offer
Once a shareholder acquires 33⅓% of share capital and voting
rights, he/she will be under an obligation to submit a public ten-
der offer. The Bylaws contain neither an opting-out nor an opt-
ing-up clause.

7.2. Clauses on change of control
There are no provisions for special severance payments for
members of the Board of Directors or members of the Executive
Management in the event of a change of control over Burck-
hardt Compression Holding AG.

6. SHAREHOLDERS’ PARTICIPATION
RIGHTS

8. AUDITORS

6.1. Voting rights restrictions and representation of voting
rights
No person or entity will be registered as a shareholder in the
Share Register for more than 5% of the issued share capital.
This entry restriction is also applicable to persons whose shares
are held, in whole or in part, by nominees. This restriction is also
valid if shares are acquired through the exercise of subscription,
option, or conversion rights. This restriction on voting rights
does not apply to shareholders who were in possession of more
than 5% of the shares of Burckhardt Compression Holding AG
before the IPO. There is no provision for measures to remove
restrictions.

A shareholder may be represented at the Annual General
Meeting by the independent proxy holder or by another person
with legal capacity. All shares held by a shareholder can only
be represented by one person.

8.1. Duration of mandate and term of office of the auditor
in charge
PricewaterhouseCoopers AG (PwC) has been the statutory audi-
tor of Burckhardt Compression Holding AG since 2002 and is
also in charge of the audit of the consolidated financial state-
ments. The statutory auditor is elected by the General Meeting
of Shareholders for one year at a time. Burckhardt Compression
plans to tender its external audit contracts at least every
10 years and examine all bids received. The most recent invita-
tion to tender was issued during the fiscal year 2012. PwC was
awarded the contract in March 2013 as decided by the Board of
Directors and PwC was re-elected as statutory auditor by the
General Meeting of Shareholders in 2013. The auditor in charge
will be changed after a maximum period of seven years. Sandra
Böhm Uglow has served as auditor in charge since the 2020
reporting period.

6.2. Statutory quorums
A majority of at least two-thirds of the voting rights repre-
sented is required for changes to the company’s Bylaws.

8.2. Auditor’s fees
Total fees for auditing services provided by PwC worldwide dur-
ing fiscal year 2020 amounted to TCHF 354 (previous year:
TCHF 343).

6.3. Convocation of the General Meeting of Shareholders
None of the applicable rules deviate from the law.

CORPORATE GOVERNANCE | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

COMPENSATION REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

COMPENSATION REPORT

8.3. Additional fees
The additional fees for services provided by PwC worldwide
during fiscal year 2020 are in the amount of TCHF 78 (previous
year: TCHF 0). Additional services rendered by PwC outside the
audit mandate in the previous year are compatible with the
audit assignment.

8.4. Information tools of the external auditors
The Audit Committee assists the Board of Directors in monitor-
ing the Company’s accounting and financial reporting. It assesses
the internal control procedures, the management of business
risks, the audit plan and scope, the conduct of the audits, and
their results. The Audit Committee also reviews the auditor’s
fees. The statutory auditor is present during the examination of
the consolidated annual and semi-annual financial statements.
Once a year, the members of the Audit Committee receive from
the statutory auditor a summary of the audit findings and sug-
gested improvements. The Audit Committee held three regular
meetings during the 2020 reporting period, each lasting
between 1.5 and 3.5 hours. The auditor in charge and another
representative of the auditor took part in these meetings.

9. INFORMATION POLICY

1. BASIS

Burckhardt Compression Holding AG reports order intake, sales,
operating results, balance sheet, cash flow, and changes in
shareholders’ equity on a semi-annual basis, together with com-
ments on the trend of business and the outlook for the future.
Burckhardt Compression Holding AG provides price-sensitive
information in accordance with the ad hoc disclosure require-
ments set out in the Listing Rules of the SIX Swiss Exchange.
Burckhardt Compression Holding AG will send potentially price-
sensitive information to all interested parties via an email dis-
tribution list. Financial reports are available on our website
(www.burckhardtcompression.com) and will be delivered to
interested parties on request.

Key dates for 2021 and 2022
July 2, 2021
Annual General Meeting (virtual)
November 2, 2021
Results for the first half of 2021 (closing September 30, 2021)
June 8, 2022
2021 Annual Report (closing March 31, 2022)
July 1, 2022
Annual General Meeting

Details of these dates, possible changes, the company profile,
current share prices, presentations, and contact addresses can
be found at www.burckhardtcompression.com, where inter-
ested parties can also subscribe to the email distribution list.

This Compensation Report describes the policies and system in
place for the compensation of the Board of Directors and the
Executive Management of Burckhardt Compression, together
with information on their annual compensation. This report was
prepared in accordance with the provisions of the Swiss Federal
Ordinance Against Excessive Compensation in Listed Compa-
nies (OAEC), the Directive on Information relating to Corporate
Governance (DCG) issued by the SIX Swiss Exchange, and the
Bylaws of Burckhardt Compression Holding AG.

2. COMPENSATION POLICY

Burckhardt Compression has established a transparent and
long-term-oriented compensation system. The objectives pur-
sued with this system are to ensure that the compensation of
the Board of Directors and the company executives is market-
competitive competitive and to achieve a good balance between
the interests of the shareholders, the directors, and executive
management. Market-competitive pay is a basic prerequisite for
attracting well-qualified directors and executives and ensuring
that they remain with the company for the long run.

3. ORGANIZATION, DUTIES, AND POWERS

The Nomination and Compensation Committee (NCC) is com-
prised of at least two members of the Board of Directors. The
members of the NCC are elected individually and annually by
the Annual General Meeting and their term of office shall expi-
re at the end of the next Annual General Meeting. The Annual
General Meeting of July 3, 2020 elected Dr. Monika Krüsi and
Dr. Stephan Bross to the Nomination and Compensation Com-
mittee. The Board of Directors appointed Dr. Monika Krüsi Chair
of the Nomination and Compensation Committee.

The NCC meets at least twice a year. The CEO and CHRO
attend these meetings in an advisory capacity, except during
deliberation on meeting topics that pertain to themselves. The
Nomination and Compensation Committee held three meetings
during the 2020 fiscal year.

The duties and powers of the NCC are set forth in the com-
pany’s Bylaws and Organizational Regulations (www.burck-
hardtcompression.com/corporate-governance). The NCC sup-
ports the Board of Directors in the performance of its duties
pertaining to the compensation and personnel policies of the
company and the entire Group as prescribed by law or the com-
pany’s Bylaws. The most important duties and powers of the
NCC with regard to compensation are given in the table below.

The Annual General Meeting of Burckhardt Compression Hol-
ding AG casts the following votes in relation to the compensa-
tion of the Board of Directors and Executive Management:
– a prospective vote on the maximum aggregate amount of
fixed compensation for the Board of Directors and the Execu-
tive Management for the fiscal year following the Annual Ge-
neral Meeting

– a retrospective vote on the maximum aggregate amount of
variable compensation for the Executive Management for the
fiscal year preceding the Annual General Meeting.

Furthermore, the Annual General Meeting casts a consultative
vote on the Compensation Report.

4. COMPENSATION SYSTEM

Burckhardt Compression Group’s compensation system con-
sists of a mix of fixed and variable components. In accordance
with the Bylaws of Burckhardt Compression Holding AG, vari-
able compensation can be paid in whole or part in the form of
shares, conditional rights to receive shares, or in comparable
instruments of the company.

Topic

Proposal/recommendation by

Approval authority

Compensation principles and guidelines
Compensation Report

Compensation of Board of Directors

Compensation of Executive Management

Loans to members of the Executive Management

NCC
NCC

NCC

CEO

BOD
BOD

BOD

NCC

COMPENSATION REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

4.1. Compensation system for the Board of Directors
Compensation for the Board of Directors consists of a fixed
component, 80% of which is paid in cash, 20% in shares; a fixed
cash supplement for directors who serve on a formal Board
committee; and a fixed lump-sum for expenses. The number of
shares awarded is based on the average share price (daily clos-
ing price on the SIX exchange) for the period between the
announcement of the full-year results and the Annual General
Meeting.

The fixed component amounts to CHF 81’000 for members
of the Board of Directors. On July 3, 2020 the Annual General
Meeting approved the proposal to adjust the fixed component
paid to the Chairman of the Board of Directors on the basis of
a benchmark study of 13 engineering firms in Switzerland. As a
result, the fixed component was raised as per July 4, 2020 from
CHF 134’000 per year to CHF 184’000 per year. The fixed cash
supplement for directors serving on a formal Board committee
is CHF 10’000 a year. The lump sum for expenses is CHF 4’000
for members of the Board of Directors and CHF 6’000 per year
for the chairman of the Board of Directors.

4.2. Compensation system for the Executive Management
Compensation of the Executive Management consists of three
components:
– a fixed base salary
– a variable performance- and profit-related annual bonus paid

in cash

– variable performance- and profit-related long-term incentive

bonus awarded in the form of free shares.

Base salary The functions performed by members of the Exec-
utive Management are assigned to so-called Global Grades as
defined by a global functional grading system (Willis Towers
Watson Global Grading System). Market data for each Global
Grade based on Willis Towers Watson’s Global 50 Remuneration
Planning Report and the results of annual executive perfor-
mance appraisals are taken into consideration when determining
the base salary of the members of the Executive Management.

Annual Bonus The members of the Executive Management
receive a variable performance- and profit-related bonus in
addition to their base salaries. A new annual bonus plan for the
Executive Management went into effect in fiscal year 2020. The
annual bonus is calculated from the net income of Burckhardt
Compression Group – if a minimum financial threshold of 4%
return on sales at the net profit level is achieved – and a per-
centage rate determined by the Global Grade. The percentage
rate applied for the CEO is 0.28%. The percentage rate for other
members of the Executive Management – depending on their
Global Grade – ranges from 0.12% to 0.16%. The annual bonus is
limited to 50% of base salary.

Long-term incentive pay Members of the Executive Manage-
ment additionally receive long-term incentive pay awarded in
the form of free shares. The long-term bonus program is valid

for a six-year period (fiscal years 2017–2022). Long-term incen-
tive pay is based on the attainment of the targets for organic
growth (sales) and net income of Burckhardt Compression
Group for fiscal years 2018 to 2022 of the Mid-Range Plan period
as well as for the 2017 fiscal year.

The basis upon which the long-term incentive pay is calcu-
lated consists of a fixed, predefined amount per Global Grade.
If the sales and net income targets set in the Mid-Range Plan
are attained by the end of the fiscal year 2022, this fixed amount
will be multiplied by a factor of 1.0 (0.5 each for sales and net
income) and awarded in the form of shares (free shares). The
targeted amount of the long-term bonus for the entire six-year
period is CHF 900’000 for the CEO and between CHF 450’000
and CHF 600’000 for the other members of the Executive Ma-
nagement, depending on their Global Grade. The sales target in
the Mid-Range Plan (aggregate) for the six years amounts to
CHF 3’819 mn; the net income target (aggregate) is CHF 300 mn.
If the targets are only partially achieved, the factors will be re-
duced by a corresponding amount. Minimum financial targets
have been defined for both cumulative sales and for cumulative
net income. The minimum cumulative sales target is set at
CHF 3’346 mn, minimum cumulative net income at CHF 195 mn.
If cumulative sales or net income fall short of these minimum
thresholds, the corresponding factor will be reduced to zero. If
the Mid-Range Plan targets for sales or net income are excee-
ded, the corresponding factors will be increased up to a maxi-
mum amount of 0.6 each (1.2 in total).

An interim evaluation of the attained targets was conduc-
ted after three years. Members of the Executive Management
whose employment with the company had not been terminated
as of July 31, 2020 were on that date awarded a number of free
shares for the fiscal years 2017, 2018, and 2019, based on attain-
ment of the targets. These free shares were distributed at the
end of July 2020. The factors used for the multiplication of the
fixed amount in the interim evaluation are limited to 0.3 each
(total 0.6). If cumulative sales or net income fall short of the
minimum thresholds, the corresponding factor is reduced to
zero. The second allotment of free shares for the fiscal years
2020, 2021, and 2022 will be distributed at the end of July 2023,
subject to approval by the Annual General Meeting and provided
that the employment contract for the respective Executive Ma-
nagement members has not been terminated. Persons subse-
quently appointed to the Executive Management will be en-
titled to long-time incentive pay on a pro rata basis. The number
of shares awarded will be based on the average share price for
the periods from the announcement of the full-year results to
the annual general meetings for the fiscal years 2019 and 2022,
respectively.

All shares received will not be subject to any restrictions

upon the date of transfer.

Employment contract terms Employment contracts with
Executive Management members are entered into for an indefi-
nite period with a notice period of six months.

5. COMPENSATION PAID
WITH COMPARATIVE FIGURES
FOR THE PREVIOUS YEAR
5.1. Compensation paid to the Board of Directors
The following aggregate compensation was paid to the mem-
bers of the Board of Directors for the fiscal years 2020 and 2019:

in CHF 1’000

Name

Function

Members of the Board of Directors
Ton Büchner¹

Chairman

Member

Valentin Vogt²

Urs Leinhäuser

Dr. Monika Krüsi

Dr. Stephan Bross

David Dean

Total

Approved by the
2020 AGM for FY 2020

in CHF 1’000

Name

Function

Members of the Board of Directors
Valentin Vogt

Chairman

Urs Leinhäuser

Dr. Monika Krüsi

Dr. Stephan Bross

David Dean³

Hans Hess⁴

Total

Member

Deputy Chairman

Approved by the 2018 AGM
for FY 2019

1 From July 4, 2020
2 Until July 3, 2020
3 From July 7, 2019
4 Until July 6, 2019
5 This amount includes a contingency reserve of CHF 15’000.
6 This amount includes a contingency reserve of CHF 11’000.

The total fixed compensation in the fiscal year under review is
CHF 37’000 above the previous fiscal year. This increase is due
to the adjustment of the fixed component paid to the Chairman
of the Board of Directors. The Annual General Meeting of July 3,
2020 approved aggregate fixed compensation in the amount of
CHF 640’000 (gross, incl. social insurance contributions) for the
Board of Directors (5 persons) for fiscal year 2020. The amount
of compensation actually paid was CHF 30’000 less than the
approved amount.

Fees

145

101

555

Fees

144

101

518

Social insurance
contributions and
other benefits

2020

Total

159

101

111

103

610
6405

2019

Total

162

101

112

573
5806

COMPENSATION REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

5.2. Compensation paid to the Executive Management
The following compensation was paid to the members of the
Executive Management for the fiscal years 2020 and 2019:

in CHF 1’000

Name

Function

Fixed base
salary, cash

Social
insurance
contributions
and other
benefits

Total fixed
compen-
sation (gross)

Variable
annual
bonus, cash

Share-based
long-term
incentive pay

Total variable
compen-
sation (gross)

Social
insurance
contributions
and other
benefits

2020

Total

Executive Management
Marcel Pawlicek

CEO

Other members of the Executive Management

Total

Approved by the 2019 AGM
for FY 2020

in CHF 1’000

Name

Function

Executive Management
Marcel Pawlicek

CEO

Other members of the Executive Management

Total

Approved by the
2018 AGM for FY 2019

438

1’127

1’565

115

263

378

553

1’390

1’943
2’120¹

125

267

392

150

375

525

199

287

363

841

1’204

916

2’231

3’147

Fixed base
salary, cash

Social
insurance
contributions
and other
benefits

Total fixed
compen-
sation (gross)

Variable
annual
bonus, cash

Share-based
long-term
incentive pay

Total variable
compen-
sation (gross)

Social
insurance
contributions
and other
benefits

2019

Total

431

1’210

1’641

111

271

382

542

1’481

2’023
2’1203

107

285

392

231

329

104

149

250

620

870

792

2’101²

2’893

1 This amount includes a contingency reserve of CHF 200’000.
2 This amount includes Rainer Dübi’s compensation for the 2019 fiscal year and pro rata compensation for Martin Wendel until August 31, 2019.
3 This amount includes a contingency reserve of CHF 250’000.

The CEO’s fixed compensation for the period under review is
comparable to the level from the previous fiscal year. The total
amount of fixed compensation for the other members of the
Executive Management is CHF 91’000 less than in the prior-year
period. This is because fixed compensation was paid to 5 per-
sons during the reporting period, whereas in the previous year
compensation was paid to 6 persons over 5 months. The Annual
General Meeting of July 6, 2019 approved a total sum of
CHF 2’120’000 (gross, including social insurance contributions)
for the fixed compensation of the entire Executive Management
for the fiscal year 2020. The amount of fixed compensation
actually paid (gross, including social insurance contributions)
was CHF 177’000 less than the approved amount.

The annual bonus for the Executive Management in fiscal
year 2020 was the same as in the previous year. Personnel
expenses for the Executive Management’s long-term incentive
pay rose by CHF 196’000 from the previous year. The provision
made for the long-term incentive pay has been adjusted based
on the assessment of business performance over a multi-year
period. Such an adjustment is in accordance with Swiss GAAP
FER, requiring that the related expenses must be allocated over
the program’s vesting period, which can lead to adjustments
within individual fiscal years.

The total variable compensation for the individual members
of the Executive Management for the period under review
ranged from 36% to 40% of total compensation.

6. OVERVIEW OF SHAREHOLDINGS AND
DISTRIBUTED SHARES

6.1. Detailed overview of distributed shares
In the fiscal years 2019 and 2020 the following shares were dis-
tributed:

Name

Function

Members of the Board of Directors
Ton Büchner1

Chairman

Valentin Vogt2

Chairman

Urs Leinhäuser

Dr. Monika Krüsi

Member

Dr. Stephan Bross

Member

David Dean3

Hans Hess4

Total

Member

Deputy Chairman

Executive Management
CEO
Marcel Pawlicek

Other members of the Executive Management
Total5

Total

1 From July 4, 2020
2 Until July 3, 2020
3 From July 7, 2019
4 Until July 6, 2019
5 Shares are not allocated or are not distributed under the long-term incentive pay program every year.

Shares
distributed in
FY 2019

Shares
distributed in
FY 2020

104

308

146

412

1’376

3’043

4’419

4’831

COMPENSATION REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

6.2. Detailed overview of shareholdings
As of March 31, 2021, the members of the Executive Manage-
ment, and the Board of Directors (and related persons) owned
the following numbers of shares of Burckhardt Compression
Holding AG:

Name

Function

Members of the Board of Directors
Ton Büchner1

Chairman

Member

CEO

CFO

CHRO

President Systems Division

President Services Division

Valentin Vogt2

Urs Leinhäuser

Dr. Monika Krüsi

Dr. Stephan Bross

David Dean

Total

Executive Management
Marcel Pawlicek

Rolf Brändli

Sandra Pitt

Fabrice Billard

Rainer Dübi

Total

Total Board of Directors and
Executive Management
As a % of all outstanding shares

1 From July 4, 2020
2 Until July 3, 2020

31/03/2021
Total shares

31/03/2020
Total shares

5’000

n/a

1’714

1’119

349

408

8’590

41’937

2’423

908

1’300

824

47’392

55’982
1.7%

n/a

203’392

1’643

1’048

278

355

206’716

42’111

1’702

278

600

45’291

252’007
7.4%

9. EVALUATION OF THE COMPENSATION
SYSTEM

Burckhardt Compression’s compensation system is regularly
reviewed by the Nomination and Compensation Committee and
the Board of Directors and may be modified if necessary.

A compensation benchmark based on external salary sur-
veys compiled by Willis Towers Watson and presented in its
Global 50 Remuneration Planning Report is one element of the
integrated compensation system for the Executive Manage-
ment. During the 2020 fiscal year benchmarking was carried
out using this market data; account was also taken of insights
from the market benchmarking carried out in 2019 with 13 listed
Swiss industrial companies.

7. TRANSACTIONS WITH THE BOARD
OF DIRECTORS, THE EXECUTIVE
MANAGEMENT, AND RELATED PARTIES
No other payments or fees for additional services were paid to
the members of the Board of Directors or the Executive Ma-
nagement or to related parties during the fiscal year 2020. No
signing bonuses were paid during the fiscal year 2020. At the
reporting date no loans, credit lines, or pension benefits over
and above those provided by mandatory occupational pension
plans had been granted to members of the company’s boards.

8. MOTIONS FOR THE ANNUAL GENERAL
MEETING

8.1. Approval of the maximum aggregate amount of
variable compensation for the Executive Management for
fiscal year 2020
The Board of Directors proposes that an aggregate amount of
CHF 1’204’000 (gross, including social insurance contributions
and other benefits) be approved as variable compensation for
the Executive Management for fiscal year 2020.

8.2. Consultative vote on the Compensation Report for
fiscal year 2020
The Board of Directors proposes that shareholders approve the
Compensation Report for fiscal year 2020 in a consultative vote.

8.3 Approval of the maximum aggregate amount of fixed
compensation for the members of the Board of Directors
for fiscal year 2022
The Board of Directors proposes that a maximum aggregate
amount of CHF 750’000 (gross, including social insurance con-
tributions and other benefits) be approved as fixed compensa-
tion for the Board of Directors for fiscal year 2022. The propo-
sed amount includes a contingency reserve of CHF 110’000.

8.4. Approval of the maximum aggregate amount of fixed
compensation for members of the Executive Management
for fiscal year 2022
The Board of Directors proposes that a maximum aggregate
amount of CHF 2’400’000 (gross, including social insurance
contributions and other benefits) be approved as fixed compen-
sation for the Executive Management for fiscal year 2022. The
proposed sum includes a contingency reserve of CHF 375’000.

COMPENSATION REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

Report of the statutory auditor

to the General Meeting of Burckhardt Compression Holding AG

Winterthur

We have audited the remuneration report of Burckhardt Compression Holding AG for the year ended 31 March 2021.
The audit was limited to the information according to articles 14–16 of the Ordinance against Excessive Compensation in
Stock Exchange Listed Companies (Ordinance) contained in the tables on pages 71 to 72 of the remuneration report.

Board of Directors’ responsibility

The Board of Directors is responsible for the preparation and overall fair presentation of the remuneration report in accord-
ance with Swiss law and the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance).
The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration
packages.

Auditor’s responsibility

Our responsibility is to express an opinion on the accompanying remuneration report. We conducted our audit in accordance
with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the remuneration report complies with Swiss law and articles 14–16 of
the Ordinance.

An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration report with
regard to compensation, loans and credits in accordance with articles 14–16 of the Ordinance. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration
report, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value
components of remuneration, as well as assessing the overall presentation of the remuneration report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the remuneration report of Burckhardt Compression Holding AG for the year ended 31 March 2021 complies
with Swiss law and articles 14–16 of the Ordinance.

PricewaterhouseCoopers AG

Sandra Böhm Uglow

Audit expert
Auditor in charge

Winterthur, 27 May 2021

Oliver Illa

Audit expert

PricewaterhouseCoopers AG, Bahnhofplatz 17, Postfach, CH-8400 Winterthur, Switzerland
Telefon: +41 58 792 71 00, Telefax: +41 58 792 71 10, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

FINANCIAL REPORT

Burckhardt Compression Holding AG’s fiscal year 2020 com-
prises the period from April 1, 2020 to March 31, 2021.

COMMENTS ON FINANCIAL REPORT

Summary

in CHF 1’000

Order intake
Sales

Gross profit

Operating income (EBIT)

in % of sales

Net income

Total assets

Total equity

Earnings per share attributable to shareholders of
Burckhardt Compression Holding AG (in CHF)

FTEs as per end of fiscal year

1 Excluding the effects of currency translation and acquisitions: 9.9%

2020

2019

Change
2019/2020

676’631
658’580

166’157

60’816

9.2%

47’201

797’497

219’603

13.00

2’538

607’303
629’585

149’785

54’795

8.7%

39’871

883’002

317’506

9.56

2’621

11.4%1
4.6%

10.9%

11.0%

18.4%

–9.7%

–30.8%

36.0%

–3.2%

SALES AND GROSS PROFIT

OPERATING INCOME

Consolidated operating income rose by 11.0% to CHF 60.8 mn,
yielding an EBIT-margin of 9.2% (previous year: 8.7%). Selling,
marketing and general administrative expenses amounted to
CHF 93.1 mn (14.1% of sales). Despite the inclusion of a full year
of Arkos Field Services (previous year only four months), this is
CHF 0.1 mn less than in fiscal year 2019. Research and develop-
ment expenses rose by CHF 4.8 mn to CHF 15.4 mn, due to the
higher number of ongoing projects, including those involving
innovative applications such as new marine solutions and
H2 mobility and energy. Other operating income was mainly con-
sisting of the contribution from the real estate company in Win-
terthur and came to CHF 3.1 mn. This reduction of CHF 5.6 mn
compared to prior year is largely attributable to currency trans-
lation effects and lower state subsidies in China.

Sales in the 2020 fiscal year increased by 4.6% to CHF 658.6 mn.
Excluding the effects of currency translation and acquisitions,
year-on-year sales growth was 4.4%. Owing to the high order
backlog in recent years, sales at the Systems Division rose by
5.5% (no impact from acquisitions) to CHF 409.8 mn, while the
Services Division reported a 3.1% increase to CHF 248.8 mn
(excluding acquisitions: –5.1%). Sales grew mainly across the
regions Europe and Middle East, while China clearly remained
the strongest region.

Gross profit increased by 10.9% to CHF 166.2 mn, giving a
higher gross profit margin of 25.2% (previous year: 23.8%). The
gross profit at the Systems Division went up 38.1% to
CHF 59.1 mn, resulting in a gross profit margin of 14.4% (previ-
ous year: 11.0%, including final additional costs incurred in the
LNGM business), despite the low capacity utilization in the sec-
ond half of the period under review. Gross profit at the Services
Division remained with CHF 107.1 mn almost unchanged to the
previous year. The Division’s gross profit margin slipped from
44.3% to 43.0%, mainly because of margin dilution resulting
from the consolidation of Arkos Field Services as well as
reduced capacity utilization due to the temporary closure of
some service centers in the wake of the coronavirus pandemic.

FINANCIAL INCOME AND TAX EXPENSES

CASH FLOW

Cash and cash equivalents lowered by CHF 14.9 mn to
CHF 75.4 mn by the end of fiscal year 2020. Cash flow from
operating activities increased by CHF 81.5 mn to CHF 132.2 mn,
mainly due to changes in net working capital. The net cash out-
flow from investing activities was amounting to CHF –40.4 mn
(previous year: CHF –49.7 mn), including CHF 21.2 mn for the
acquisition of JSW’s compressor business. Total cash outflow
from financing activities was at CHF –109.5 mn, including the
payment of dividends amounting to CHF 30.0 mn and the pay-
ment of CHF 50.4 mn for the first installment of the acquisition
of the remaining 40% of the shares of Shenyang Yuanda Com-
pressor Co. Ltd. The net financial position (net debt) improved
to CHF –82.4 mn (prior year: CHF –91.7 mn).

Financial expenses lowered by CHF 3.1 mn to CHF 1.6 mn,
mainly as a result of positive foreign exchange impacts on inter-
company loans. Income tax expenses increased by CHF 4.3 mn
to CHF 12.0 mn. The resulting tax rate increased to 20.3%. The
very low prior year level of 16.2% was affected by a one-off
reduction of income tax expenses in Switzerland due to an
according tax reform and a higher share of taxable income in
locations with tax exemptions.

NET INCOME

Group net income increased by 18.4% to CHF 47.2 mn or 7.2% of
sales (previous year: 6.3%). Owing to the acquisition of the
remaining shares of Shenyang Yuanda Compressor Co. Ltd. per
January 2021, earnings per share attributable to shareholders
of Burckhardt Compression increased significantly from
CHF 9.56 to CHF 13.00 (+36.0%).

BALANCE SHEET

The balance sheet total lowered by 9.7% to CHF 797.5 mn. Prop-
erty, plant and equipment decreased by 11.1% to CHF 180.1 mn,
mainly due to the netting of the new real estate in Shenyang
with related government grants. Inventories lowered by 28.0%
to CHF 190.4 mn, mainly due to the lower work in progress as
per closing date. Trade accounts receivables ended the fiscal
year at CHF 260.4 mn, slightly above the previous year. 27.9% of
the accounts receivables were overdue more than 60 days as
per year-end (prior year: 37.2%). While several long-term over-
due positions could be collected in the year under review, the
majority of overdue receivables is still related to projects in
China. The balance between advance payments from custom-
ers compared to work in progress and advance payments to
suppliers ended the year at CHF 11.5 mn (previous year:
CHF –47.0 mn). The equity ratio lowered to 27.5% (previous
year: 36.0%) mainly as a result of the derecognition of minori-
ties from the acquisition of the remaining 40% of Shenyang
Yuanda Compressor and the goodwill offset from the acquisi-
tion of the JSW compressor business. Total net operating
assets ended the year at CHF 357.2 mn (previous year:
CHF 383.7 mn).

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET

Notes

2020

2019

Notes

03/31/2021

03/31/2020

in CHF 1’000

Sales
Cost of goods sold

Gross Profit
Selling and marketing expenses

General and administrative expenses

Research and development expenses

Other operating income

Other operating expenses

Operating income
Share of results of associates

Financial income and expenses

Earnings before taxes
Income tax expenses

Net income
Share of net income attributable to
shareholders of Burckhardt Compression Holding AG
Share of net income attributable to non-controlling interests

Basic earnings per share (in CHF)

Diluted earnings per share (in CHF)

658’580
–492’423

166’157
–47’997

–45’064

–15’358

21’055

–17’977

60’816
–

–1’616

59’200
–11’999

47’201

44’034
3’167

13.00

629’585
–479’800

149’785
–50’455

–42’753

–10’513

41’955

–33’224

54’795
–2’494

–4’741

47’560
–7’689

39’871

32’390
7’481

9.56

11
11

in CHF 1’000

Non-current assets
Intangible assets

Property, plant and equipment

Investment in associates

Deferred tax assets

Other financial assets

Total non-current assets

Current assets
Inventories

Trade receivables

Other current receivables

Prepaid expenses and accrued income

Cash and cash equivalents

Total current assets

Total assets

Equity
Share capital

Capital reserves

Treasury shares

Retained earnings and other reserves

Equity attributable to shareholders of Burckhardt Compression Holding AG
Non-controlling interests

Total equity

Liabilities

Non-current liabilities
Non-current financial liabilities

Deferred tax liabilities

Non-current provisions

Other non-current liabilities

Total non-current liabilities

Current liabilities
Current financial liabilities

Trade payables

Customers’ advance payments

Other current liabilities

Accrued liabilities and deferred income

Current provisions

Total current liabilities

Total liabilities

Total equity and liabilities

12’351

180’080

–

14’514

4’005

210’950

190’435

260’395

56’981

3’366

75’370

12’943

202’632

–

14’513

4’034

234’122

264’479

256’121

33’377

4’584

90’319

586’547

648’880

797'497

883’002

8’500

486

–2’206

212’324

219’104
499

219’603

133’070

11’097

14’485

3’916

8’500

435

–5’216

269’763

273’482
44’024

317’506

88’713

13’620

14’311

7’616

162’568

124’260

24’726

92’474

131’677

73’817

66’065

26’567

415’326

93’259

91’337

145’297

13’895

77’122

20’326

441’236

577’894

565’496

797’497

883’002

The enclosed notes are an integral part of the consolidated
financial statements.

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in CHF 1’000

Cash flow from operating activities
Net income

Income tax expenses

Financial income and expenses

Share of results of associates

Depreciation

Amortization

Change in inventories

Change in trade receivables

Change in other current assets

Change in trade payables

Change in customers’ advance payments

Change in provisions

Change in other liabilities

Adjustment for non-cash items

Interest received

Interest paid

Income taxes paid

Total cash flow from operating activities

Cash flow from investing activities
Purchase of property, plant and equipment

Sale of property, plant and equipment

Purchase of intangible assets

Increase in financial assets

Acquisition of group companies net of cash acquired

Total cash flow from investing activities

Cash flow from financing activities
Increase in financial liabilities

Decrease in financial liabilities

Purchase of treasury shares

Acquisition of non-controlling interests

Dividends paid

Total cash flow from financing activities

Notes

2020

2019

in CHF 1’000

47’201

11’999

1’616

–

17’476

3’632

77’305

3’906

10’902

-1’448

–17’977

4’045

–20’517

6’435

449

–2’365

–10’464

132’195

–17’425

1’226

–2’938

–

–21’227

–40’364

100’154

–126’109

–3’153

–50’400

–29’954

–109’462

39’871

7’689

4’741

2’494

17’416

3’133

–36’129

5’331

–6’544

1’180

23’494

–70

1’947

2’455

227

–2’865

–13’627

50’743

–29’484

2’555

–4’851

–2’100

–15’783

–49’663

43’010

–5’710

–3’735

–

–22’289

11’276

Share
capital

Capital
reserves

Treasury
shares

Hedge
reserve

Translation
reserve

Goodwill
offset

Other
retained
earnings

8’500

446 –1’582

–1’405

367 –103’830 399’968
32’390

–13’682

789

–3’735

–11

101

Equity
attributable
to share-
holders of
Burckhardt
Compression
Holding AG

302’464
32’390

–13’682

789

Non-
controlling
interests

Total
equity

42’570
7’481

–4’101

345’034
39’871

–17’783

789

–20’363

–1’926

–22’289

–3’735
–

–90

2’948

–9’324

–3’735

–

2’948

–9’324

8’500

435 –5’216

–616

–13’315 –121’835 405’529

273’482

44’024

317’506

–18’005

8’500

435 –5’216

–616

374

–3’153

6’163

–13’315 –121’835 405’529
44’034

10’186

273’482
44’034

10’186

374

44’024
3’167

317’506
47’201

308

10’494

374

–20’180

–9’774

–29’954

–6’214

–3’153
–

3’907

–24’872

–64’674

–24’872

–64’674

–3’153

–

3’907

–24’872

–37’226

–101’900

Balance at 04/01/2019
Result for the period

Currency translation
differences
Changes of cash flow hedges

Dividends paid

Changes in treasury shares

Share-based payments
(distributed)
Share-based payments
(provision in equity)
Revaluation of 40%
Investment Arkos1
Goodwill on acquisition1

Balance at 03/31/2020

Balance at 04/01/2020
Result for the period

Currency translation
differences
Changes of cash flow hedges

Dividends paid

Changes in treasury shares

Share-based payments
(distributed)
Share-based payments
(provision in equity)
Goodwill on acquisition1

Acquisition of non-controlling
interests1

Balance at 03/31/2021

8’500

486 –2’206

–242

–3’129 –146’707 362’402

219’104

499

219’603

1 See note 4 “Business Combinations and Other Changes in the Scope of Consolidation”

Currency translation differences on cash and cash equivalents

2’682

–5’047

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Net change in cash and cash equivalents

–14’949

7’309

90’319

75’370

–14’949

83’010

90’319

7’309

The enclosed notes are an integral part of the consolidated
financial statements.

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Burckhardt Compression is a manufacturer and service pro-
vider for a full range of reciprocating compressor technologies
and services. Its customized compressor systems are used in
the upstream oil & gas, gas transport and storage, refinery,
chemical, petrochemical and industrial gas sectors. Burckhardt
Compression’s leading technology, broad portfolio of compres-
sor components and the full range of services help customers
around the world to find their optimized solution for their recip-
rocating compressor systems.

Burckhardt Compression Holding AG is a company limited
by shares incorporated and domiciled in Switzerland. The
address of its registered office is: Franz-Burckhardt-Strasse 5,
8404 Winterthur, Switzerland. Burckhardt Compression regis-
tered shares (BCHN) are listed on the SIX Swiss Stock Exchange
in Zurich (ISIN: CH0025536027).

Burckhardt Compression Holding AG’s fiscal year 2020 com-
prises the period from April 1, 2020 to March 31, 2021. These
consolidated financial statements were authorized for issue by
the Board of Directors on May 27, 2021 and will be submitted to
shareholders for approval at the annual general meeting sched-
uled for July 3, 2021.

2. ACCOUNTING POLICIES

2.1 Basis of Preparation
The consolidated financial statements of Burckhardt Compres-
sion Holding AG have been prepared in accordance with the
entire Swiss GAAP FER accounting and reporting standards. In
addition, the provisions of the Listing Rules of the SIX Swiss
Exchange and Swiss accounting law were complied with. The
consolidated financial statements have been prepared under
the historical cost convention unless otherwise stated in the
following consolidation and accounting policies.

2.2 Use of Judgments and Estimates
These consolidated financial statements include estimates and
assumptions that affect the reported figures and related dis-
closures. Actual results may differ from these estimates. Esti-
mates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognized prospectively.

2.3 Principles of Consolidation
The consolidated financial statements include all entities
where Burckhardt Compression Holding AG has the power to
control the financial and operating policy, usually as a result of
directly or indirectly owning more than 50% of the voting rights.
All of the assets and liabilities as well as the income and

expenses of these companies are fully included. Non-control-
ling interests are presented separately in the balance sheet and
the income statement. Intercompany transactions, balances
and unrealized gains or losses on transactions between group
companies are eliminated. Group companies are disclosed in
note 34.

Acquired companies are fully consolidated from the date on
which control was effectively transferred. When a company is
acquired in a step up acquisition, the existing interest is reval-
ued at the time when the company is first consolidated. The
revaluation of shares previously owned is offset against
retained earnings. Companies which have been divested are
included in the consolidated financial statements until the date
on which control ceased. Capital consolidation is based on the
acquisition method (purchase method). At the time of the acqui-
sition, all previously recognized assets and liabilities of the
company are initially valued at fair value. Acquisition-related
costs are expensed as incurred. The net assets acquired are
compared with the purchase price, and any resulting goodwill
is directly offset against equity. In the notes to the financial
statements, the effects of a theoretical capitalization and any
impairment are shown using an amortization period of five
years. In the event of a possible subsequent sale, the goodwill
offset against shareholders' equity at the time of the acquisi-
tion is recognized in the income statement against the pro-
ceeds of the sale.

Associates are those entities in which Burckhardt Compres-
sion has significant influence, but no control, over the financial
and operating policies. Significant influence is generally pre-
sumed to exist when Burckhardt Compression holds, directly or
indirectly, between 20% and 50% of the voting rights. Associ-
ates are accounted for using the equity method. The propor-
tionate share of net income is shown in the consolidated income
statement. Associates are disclosed in note 34.

2.4 Foreign Currency Translation
The consolidated financial statements of Burckhardt Compres-
sion are prepared in Swiss francs (CHF).

Foreign Currency Translation at Company Level
Foreign currency transactions are recorded at the exchange
rate of the transaction date. Monetary assets and liabilities
which are denominated in foreign currencies are translated at
period-end exchange rates. Resulting translation differences
are recorded in the income statement.

Foreign Currency Translation for Consolidation Purposes
Assets and liabilities of foreign subsidiaries are translated into
CHF using period-end exchange rates. Average exchange rates
are used for the translation of the income statements. Transla-
tion differences arising from the consolidation of financial
statements are recorded as a separate component of equity.
Likewise, exchange differences arising on inter-company loans
with equity character are directly recorded in equity.

Major Foreign Currency Exchange Rates

Average rates

Period-end rates

2020
1.08

0.92

13.63

2019
1.10

03/31/2021 03/31/2020
1.06

1.11

0.99

14.16

0.94

14.30

0.96

13.44

1 EUR

1 USD

100 CNY

2.5. Impairment of Assets
All non-current assets are tested for impairment when indica-
tors exist that the carrying amount of the asset might exceed
its recoverable amount. Where the carrying amount of an asset
is higher than the recoverable amount, the asset is impaired to
its recoverable amount. The recoverable amount is the higher
of an asset's fair value less cost to sell and its value in use. Im-
pairment tests are performed based on discounted cash flows
at the level of the corresponding cash-generating units, repre-
senting the lowest level at which such assets are evaluated for
recoverability.

2.6 Intangible Assets and Goodwill
Acquired software licenses are capitalized on the basis of the
costs incurred to acquire and bring to use the specific software.
The estimated useful life for software generally amounts to
three to five years. Internal costs associated with developing or
maintaining software are recognized as an expense as incurred.
Other intangible assets are recorded at acquisition or pro-
duction costs less accumulated amortization. The amortization
expense is calculated on a straight-line basis over the esti-
mated useful life of the asset.

Goodwill resulting from acquisitions is offset against equity
at the date of acquisition. The consequences of a theoretical
capitalization and amortization of goodwill (using an amortiza-
tion period of five years) are disclosed in note 12.

2.7 Property, Plant and Equipment
Items of property, plant and equipment are stated at cost less
accumulated depreciation. They are depreciated on a straight-
line basis over their estimated useful lives. Land is stated at
cost and is not depreciated, except land use rights in China,
which are depreciated over their useful lives. The estimated
useful lives are as follows:
– Buildings: 20 to 50 years
– Machinery: 5 to 15 years
– Technical equipment: 5 to 10 years
– Other non-current assets: maximum 5 years

2.8 Other Financial Assets
Other financial assets include loans and long-term rental depos-
its. They are stated at cost less appropriate impairment losses.

other order-related production costs. Inventories are stated at
weighted average costs or standard costs based on their type
and use. Valuation allowances are recognized for slow-moving
and excess inventory items.

2.10 Trade and Other Current Receivables
Trade receivables and other current receivables are stated at
nominal value less valuation allowances for doubtful amounts.
Impairments are assessed case by case. An impairment loss is
recognized when there is objective evidence that Burckhardt
Compression will not be able to collect the full amount due,
such as substantial financial problems of the customer or a
declaration of bankruptcy.

2.11 Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks and other short-term highly liquid invest-
ments with original maturities of three months or less.

2.12 Financial Liabilities
Financial liabilities mainly consist of bank debts and a bond.
They are recognized at their nominal value. Borrowing related
costs are expensed as incurred in the income statement.

2.13 Provisions
Provisions are recognized for warranty obligations, unprofitable
contracts, personnel expenses and various commercial risks
where Burckhardt Compression has an obligation towards third
parties arising from past events, the amount of the liability can
be reliably measured and it is probable that the settlement will
result in an outflow of resources. The amount of the provisions
is based on the expected expenditures required to cover all obli-
gations and liabilities.

2.14 Treasury Shares
Treasury shares are stated at acquisition cost and deducted
from equity. No subsequent valuation is made. If the treasury
shares are disposed of, the resulting gain or loss is recognized
as an addition to or a reduction of capital reserves.

2.15 Transactions with non-controlling interests
Transactions with non-controlling interests that do not result
in a loss of control are treated as a transaction with sharehold-
ers of Burckhardt Compression. A change in ownership interest
results in an adjustment between the carrying amounts of the
controlling and the non-controlling interests. Any difference
between the amount of the adjustment to non-controlling
interests and any consideration paid or received is recognised
in retained earnings within the equity attributable to sharehold-
ers of Burckhardt Compression. The related cash flows are pre-
sented as financing activities in the cash flow statement

2.9 Inventories
Inventories are stated at the lower of cost or net realizable
value. The cost of work in progress and finished goods com-
prises material costs, direct and indirect production costs and

2.16 Government Grants
Grants from governments or similar organizations are recog-
nized at their nominal value when there is reasonable assurance

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION86

Credit risks of banks and financial institutions are moni-
tored and managed centrally. Generally, only independently
rated parties with a strong credit rating are accepted, and the
total volume of transactions is split among several banks to
reduce the individual risk with one bank.

Interest Rate Risks
Interest rate risks arise from fluctuations in interest rates
which could have a negative impact on the financial position of
Burckhardt Compression. Assets and liabilities at variable rates
expose Burckhardt Compression to cash flow interest rate risk.

Capital Risks
The capital managed by Burckhardt Compression is its consol-
idated equity. With regard to its capital management policies,
Burckhardt Compression seeks to secure the continuation of its
business activities, to achieve an acceptable return for the
shareholders and to finance the growth of the business to a cer-
tain extent from own cash flow. In order to achieve these objec-
tives Burckhardt Compression can adjust the dividend pay-
ments, repay share capital, issue new shares or divest parts of
the assets.

that the grant will be received, and Burckhardt Compression
will comply with all attached conditions.

Government grants related to income are deferred and rec-
ognized as income over the period necessary to match them
with the related costs which they are intended to compensate.
Government grants related to assets are deducted directly
from the carrying amount of the asset which they are intended
to compensate.

2.17 Derivative Financial Instruments
Burckhardt Compression uses derivative financial instruments
to mitigate currency risks. The risk management policy is
described in note 3. The derivative financial instruments are rec-
ognized at fair value. Where such derivative financial instru-
ments are linked to specific projected transactions and cash
flows, the hedging is deemed to be effective and documented
accordingly, changes in the fair value of the cash flow hedges
are recognized in equity as long as the hedged item has not been
recognized on the balance sheet. Otherwise, the gain or loss
relating to fair value changes of the derivative financial instru-
ments is recognized immediately in the income statement as
part of other operating income or other operating expenses.

2.18 Revenue Recognition
Burckhardt Compression recognizes revenue arising from the
sale of goods and the rendering of services upon completion of
the contract, net of sales or value-added taxes, credits, dis-
counts and rebates. Revenue and the related cost of goods sold
are recognized in the accounts when the risks and rewards have
passed to the customers subject to the conditions of sale. The
following conditions must be met in this regard:
– Deliveries have been made and/or the service as per contract

has been performed.

– A contractually-agreed sales price exists or can be reliably

estimated.

– Collection of the payment is reasonably assured.
– The costs (including those yet to be incurred) can be reliably

measured.

2.19 Research and Development
Research and development costs are expensed as incurred.

2.20 Income Taxes
Income tax expenses include all income tax on the taxable prof-
its of the group. Deferred income tax is recorded in full using
the liability method. Deferred income tax assets and liabilities
arise on temporary differences between the carrying amounts
of assets and liabilities under Swiss GAAP FER and their related
tax values. The tax rates and laws enacted or substantively
enacted at the balance sheet date are used to determine
deferred income tax. Deferred income tax assets result from
tax loss carry-forwards, tax credits as well as temporary valu-
ation differences of assets and liabilities. They are recognized
to the extent that realization through future taxable profits is
probable.

2.21 Off-Balance-Sheet Transactions
Contingent liabilities and other non-recognizable commitments
are valued and disclosed on each balance sheet date.

2.22 Share-Based Payments
Share-based payments with compensation through equity
instruments are valued at fair value at the grant date. The cor-
responding personnel expenses are distributed over the vesting
periods.

2.23 Employee Benefits
There are various pension plans within Burckhardt Compression
based on local conditions in their respective countries. An eco-
nomic obligation is recognized as a liability if the requirements
for the recognition of a provision are met under Swiss GAAP
FER. An economic benefit is capitalized provided that Burck-
hardt Compression is entitled to such benefit in the future, for
example, to offset future pension expenses.

For Swiss pension plans, economic benefits and/or eco-
nomic obligations are determined on the basis of the annual
financial statements of the pension funds prepared in accor-
dance with Swiss GAAP FER 26. Freely available employer con-
tribution reserves are recognized as financial asset. For foreign
plans, the economic impact is determined according to coun-
try-specific methods.

2.24 Alternative Performance Measures
Alternative Performance Measures are key figures not defined
by Swiss GAAP FER. Burckhardt Compression uses alternative
performance measures as guidance parameters for both inter-
nal and external reporting to stakeholders. For the definition of
Alternative Performance Measures please visit
https://www.burckhardtcompression.com/investors/
reports-financial-results/key-figures.

3. FINANCIAL RISK MANAGEMENT

Basic Principles
The goal of the group-wide risk management policy is to mini-
mize the negative impact of changes in the financing structure
and financial markets, particularly with regard to currency
fluctuations. Derivative financial instruments such as foreign
exchange contracts may be used to address the respective
risks. Burckhardt Compression pursues a conservative, risk-
averse financial policy. Financial risk management is based on
the principles and regulations established by the Board of
Directors. These govern Burckhardt Compression’s financial
policy and outline the conduct and powers of the group’s trea-
sury department, which is responsible for the group-wide man-
agement of financial risks. The financial principles and regula-
tions govern areas such as financing policy, the management of
foreign currency risk, the use of derivative financial instru-
ments and the investment policy applicable to financial
resources not required for operational purposes.

Liquidity Risks
Each Burckhardt Compression group company is responsible
for managing its liquidity so that day-to-day business can be
handled smoothly, while the group treasury is responsible for
maintaining the group’s overall liquidity. Some of the group sub-
sidiaries may secure loans from local creditors within the limits
approved by the group management. The group treasury pro-
vides the local group companies with the necessary funds or
invests their excess liquidity. The group treasury maintains suf-
ficient liquidity reserves and open credit and guarantee lines to
fulfill the financial obligations at all times.

The actual and future cash flows and cash reserves are
compiled monthly in a rolling liquidity forecast. The Executive
Board and the Board of Directors are informed about the liquid-
ity situation and outlook with the regular financial reporting.

Currency Risks
Burckhardt Compression hedges all major USD-denominated
sales transactions of its non-US entities to the extent that such
transactions are not fully or partially naturally hedged. EUR-
denominated sales and purchase transactions of the Swiss
company are fairly evenly balanced when viewed over a period
of 1–2 years and are therefore, to a certain extent, naturally
hedged at the net profit level over said period. These foreign-
exchange flows are regularly monitored by the group treasury;
if there is evidence of a sustained shift in these flows, major
sales and purchase transactions will be hedged on a case-by-
case basis. For this, the group treasury normally uses forward
exchange contracts. The other companies belonging to Burck-
hardt Compression group may, after consultation with group
treasury, hedge the foreign-exchange risks of their sales and
purchase transactions through local qualified institutions or
group treasury, the objective being the optimization of the net
profit of each group company as reported in its functional local
currency. The group management regularly monitors the
changes in the most important currencies and may adjust the
hedging policy accordingly in the future. As a globally active
corporation, Burckhardt Compression is also exposed to cur-
rency risks resulting from the translation into Swiss francs of
items in the balance sheets of the foreign group companies.
Burckhardt Compression does not hedge these translation
risks.

Credit Risks
Credit risk in respect of trade receivables is limited due to the
diverse nature and quality of the customer base. Such risk is
minimized by means of regular credit checks, advance pay-
ments, letters of credit and other tools. There is no concentra-
tion of customer-related risks within Burckhardt Compression
Group as the most important customers in the project business,
which account for a large share of Burckhardt Compression’s
overall business, vary from one year to the next. In past years
Burckhardt Compression experienced no major impairments of
receivables.

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION88

will be the only independent one-stop provider for equipment and
service in the upstream, midstream and downstream business.
The following table shows the fair value of assets and lia-
bilities acquired at the acquisition date and the goodwill arising
from this transaction.

in CHF 1’000

Property, plant and equipment

Inventories

Deferred Tax Asset

Trade receivables & Prepaid expenses

Cash and cash equivalents

Current liabilities

Non-current liabilities
Net assets acquired at fair value
(excluding pre-existing relationships)
Trade receivables & Prepaid expenses with BC

Current liabilities with BC

Non-current liabilities with BC

Net assets acquired at fair value
(including pre-existing relationships)
Shares previously owned (40%)

Goodwill

Revaluation of shares previously owned

Total
Less cash and cash equivalents acquired

Net cash outflow on acquisition

15’263

16’842

2’861

16’571

1’766

–11’901

–14’009
27’393

244

–2’664

–25’733

–760

–9’020

18’005

9’324

17’549
–1’766

15’783

A complete list of all Group companies is shown in note 34.

4. BUSINESS COMBINATIONS AND
OTHER CHANGES IN THE SCOPE OF
CONSOLIDATION

Shenyang Yuanda Compressor Co. Ltd. (China)
On February 23, 2021, Burckhardt Compression acquired the
remaining 40% of the shares of Shenyang Yuanda Compressor
Co. Ltd. Together with the already existing interest of 60%, Burck-
hardt Compression now holds 100% of the Chinese company.

The purchase price for the remaining 40% amounts to CHF
101.9 mn. The parties have agreed that the purchase price shall
be paid in two installments. CHF 50.4 mn was paid at closing
and the remaining CHF 51.5 mn will be paid 12 months after the
closing date. Burckhardt Compression recognized CHF 50.4 mn
as an acquisition of non-controlling interest in the cash flow
from financing activities. The acquisition led to a reduction of
non-controlling interests in the consolidated statement of
equity in the amount of CHF 37.2 mn. The difference of
CHF 64.7 mn between the purchase price and the carrying
value of the non-controlling interests was recognized in
retained earnings.

The Japan Steel Works Ltd. (Japan)
On April 21, 2020, Burckhardt Compression acquired the global
compressor business from the Japan Steel Works Ltd. (JSW), a
Japanese business based in Tokyo, in an asset deal.

With the acquisition of the global compressor business
from JSW, Burckhardt Compression is strengthening its market
presence in Japan.

The following table shows the fair value of assets and lia-
bilities acquired at the acquisition date and the goodwill arising
from this transaction.

in CHF 1’000

Inventories

Non-current liabilities

Current liabilities

Net assets / liabilities acquired at fair value
Goodwill from acquisition

Total purchase price
Less cash and cash equivalents acquired
Less purchase price not yet paid
(deferred consideration)

Net cash outflow on acquisition

719

–1’794

–212

–1’287
24’872

23’585
–
–2’358

21’227

Arkos Group LLC (USA)
On November 25, 2019, Burckhardt Compression acquired the
remaining 60% shares of Arkos Group LLC, a well-established
U.S. compression and equipment service provider in the field of
gas compression. Together with the already existing interest of
40%, Burckhardt Compression now holds 100% of the US com-
pany. With the acquisition of the remaining ownership of Arkos,
Burckhardt Compression together with Arkos Field Services

in CHF 1’000

Sales
Cost of goods sold

Gross profit
Gross profit as % of sales

Operating income
Operating income as % of sales

Geographic information

Sales by customer location
in CHF 1’000

Europe
Africa

North America

South America

Middle East

China

5. SEGMENT REPORTING

Systems Division
Burckhardt Compression’s Systems Division covers a complete
range of reciprocating compressor technologies. Its customized
compressor systems are used in the upstream oil & gas, gas
transport and storage, refinery, chemical, petrochemical and
industrial gas sectors. Depending on the customers’ needs,
Burckhardt Compression offers solutions to minimize life cycle
costs of the reciprocating compressor systems or solutions to
minimize the capital expenditure.

Services Division
Burckhardt Compression’s Services Division is a one-stop pro-

vider of a full range of services for reciprocating compressors
and stands for top-quality, high-performance components for
all makes of reciprocating compressors, as replacement parts,
or to repair or upgrade existing installations. Original spare
parts backed by Burckhardt Compression’s manufacturing
guarantees stand for superior quality and ensure together with
various complementary service modules both low life cycle
costs as well as the optimal operation of compressor systems.

Others
Certain expenses related to the corporate center are not attrib-
utable to a particular segment. They are reported in the column
“Others”. Furthermore, “Others” includes real estate income
and expenses as well as expenses for strategic projects.

Systems Division

Services Division

Others

2020

2019

2020

2019

2020

2019

409’793
388’256
–350’731 –345’482

248’787
241’329
–141’692 –134’318

59’062
14.4%

16’182
3.9%

42’774
11.0%

6’443
1.7%

107’095
43.0%

51’246
20.6%

107’011
44.3%

54’692
22.7%

–
–

–

–
–

–

–6’612

–6’340

–

Total

2020

658’580
–492’423

166’157
25.2%

60’816
9.2%

2019

629’585
–479’800

149’785
23.8%

54’795
8.7%

2020

2019

Capital expenditure for property,
plant and equipment
in CHF 1’000

190’129
2’834

74’507

7’206

35’782

135’434
4’121

Europe
Africa

66’609

North America

5’691

South America

20’215

Middle East

214’116

240’251

China

2020

2019

5’127
329

1’072

18’222

639

5’228
6

1’997

282

21’117

843

Other Asia & Australia

134’006

157’264

Other Asia & Australia

Total

658’580

629’585

Total

25’471

29’484

6. PERSONNEL EXPENSES

7. RESEARCH AND DEVELOPMENT
EXPENSES

in CHF 1’000

Wages and salaries
Social security and pension expenses

Other personnel expenses

Total personnel expenses

2020

2019

–155’630 –151’390
–31’469 –28’908

–13’219

–16’188

–200’318 –196’486

Research and development activities in the fiscal year 2020
focused on the development of new marine solutions for LNG-
carriers as well as for merchant ships. Furthermore, we centered
our activities to further enhance our compressor solutions for the
hydrogen economy as well as on strengthening our existing prod-
uct portfolio.

The personnel expenses contain governmental contributions
from overall six countries related to the Corona Virus situation
in the amount of CHF 8.0 mn (prior year: CHF 0.0 mn).

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

8. OTHER OPERATING INCOME
AND EXPENSES

in CHF 1’000

Currency exchange gains
Other operating income

Total other operating income

Currency exchange losses
Other operating expenses

Total other operating expenses

8’833
12’222

26’016
15’939

21’055

41’955

–8’562
–9’415

–24’863
–8’361

–17’977 –33’224

Total other operating income and expenses

3’078

8’731

Other operating income includes real estate income of
CHF 6.8 mn (prior year: CHF 6.8 mn).

Other operating expenses include real estate expenses

amounting to CHF 4.1 mn (prior year: CHF 3.3 mn).

9. FINANCIAL INCOME AND EXPENSES

in CHF 1’000

Interest expenses

Interest income
Other financial income (+) and expenses (–)

Total financial income and expenses

2020

2019

–3’274

–3’760

653
1’005

614
–1’595

–1’616

–4’741

Other financial income and expenses include the exchange rate
gains and losses on intercompany loans.

1O. INCOME TAXES

Income Tax Expenses

in CHF 1’000

Current income tax expenses
Deferred income tax income (+) and expenses (–)

–14’322
2’323

–13’468
5’779

Total income tax expenses

–11’999

–7’689

Reconciliation of Income Tax Expenses

Tax Loss Carry-Forwards

11. EARNINGS PER SHARE

2020

2019

in CHF 1’000

Earnings before taxes
Expected income tax expenses
Effect of non-recognition of tax loss
carry forwards
Effect of income tax of prior periods

Effect of changes in tax rates

Effect of Goodwill amortization for tax purposes

Effect of non-deductible expenses / income not
subject to tax

Total income tax expenses
as % of earnings before taxes

2020

2019

59’200
–13’006
–2’633

47’560
–8’333
–2’654

–1’000

–

1’058

1’591

3’049

–

2’155

–11’999
20.3%

–7’689
16.2%

in CHF 1’000

Expiring in the next 3 years
Expiring in 4 years or later

Total tax loss carry forwards
Potential deferred tax assets from
tax loss carry forwards
Effect of non-recognized tax loss
carry forwards

Effective deferred tax assets from tax
loss carry forwards

03/31/2021

03/31/2020

in CHF 1’000

2020

2019

333
42’333

42’666
9’801

595
36’049

36’644
7’690

Net income attributable to
the shareholders of Burckhardt
Compression Holding AG
Average number of outstanding shares

Earnings per share (CHF)

44’034
3’386’013

32’390
3’386’838

13.00

9.56

–5’480

–2’718

4’321

4’972

The average number of outstanding shares is calculated based
on the issued shares minus the weighted average number of
treasury shares. There are no conversion rights or option rights
outstanding; therefore, there is no potential dilution of earnings
per share.

The effective tax rate of Burckhardt Compression Group of
20.3% (prior year: 16.2%) corresponds to the weighted average
tax rate based on the profit before income taxes and the tax
rate of each group company. The higher tax rate is mainly due
to the fact that the effective income tax rate in the previous
year was influenced by the tax reform in Switzerland (STAF).
The exceptionally low tax rate in the previous year was also
affected by the higher share of taxable income in countries with
lower tax rates.

Current Income Taxes

Net current income tax liabilities
in CHF 1’000

Balance as per 04/01/2020 / 04/01/2019
Changes in the consolidation scope

Recognized in the income statement
(without withholding taxes)
Income taxes paid

Translation differences

Balance as per 03/31/2021 / 03/31/2020
thereof current tax assets

thereof current tax liabilities

2020

2019

1’944
–

13’322

2’091
166

13’468

–10’464

–13’627

–126

4’676
936

5’612

–154

1’944
829

2’773

12. INTANGIBLE ASSETS

Acquisition Costs

in CHF 1’000

Software

Other
intangible
assets

Intangible
assets under
construction

2020
Total

Software

Other
intangible
assets

Intangible
assets under
construction

Balance as per 04/01/2020 / 04/01/2019
Changes in the consolidation scope

Additions

Disposals

Reclassifications

Currency translation differences

31’992
–

285

–963

1’303

287

Balance as per 03/31/2021 / 03/31/2020

32’904

632
–

–

685

2’106
–

2’623

–

–1’303

3’431

34’730
–

2’938

–963

–

315

29’630
–

1’540

–2’473

3’698

–403

37’020

31’992

754
–

–36

–15

–77

632

2’495
–

3’305

–

–3’683

–11

2’106

Accumulated Amortization

in CHF 1’000

Balance as per 04/01/2020 / 04/01/2019
Changes in the consolidation scope

Additions

Disposals

Reclassifications

Software

Other
intangible
assets

Intangible
assets under
construction

2020
Total

Software

Other
intangible
assets

Intangible
assets under
construction

–21’297
–

–3’567

963

–

–196

–490
–

–65

–

–17

–572

–
–

–

–21’787
–

–20’993
–

–3’632

–3’050

963

–

–213

2’470

–15

291

–517
–

–83

–24’669

–21’297

–490

–
–

–

2019
Total

32’879
–

4’851

–2’509

–

–491

34’730

2019
Total

–21’510
–

–3’133

2’506

–

350

–21’787

2020

2019

Deferred Income Taxes

Net deferred income tax liabilities
in CHF 1’000

Balance as per 04/01/2020 / 04/01/2019
Changes in the consolidation scope

Recognized in the income statement

Recognized in equity

Translation differences

Balance as per 03/31/2021 / 03/31/2020
thereof deferred tax assets

thereof deferred tax liabilities

2020

2019

Currency translation differences

Balance as per 03/31/2021 / 03/31/2020

–24’097

–893
–

–2’323

–299

–3’417
14’514

11’097

6’287
–2’861

–5’779

419

1’041

–893
14’513

13’620

Net Book Value

in CHF 1’000

Software

Other
intangible
assets

Intangible
assets under
construction

2020
Total

Software

Other
intangible
assets

Intangible
assets under
construction

2019
Total

As per 04/01/2020 / 04/01/2019
As per 03/31/2021 / 03/31/2020

10’695
8’807

142
113

2’106
3’431

12’943
12’351

8’637
10’695

237
142

2’495
2’106

11’369
12’943

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

Goodwill
Goodwill from acquisitions is fully offset against equity at the
date of acquisition. The theoretical amortization of goodwill is
based on the straight-line method and an amortization period
of five years. Goodwill from new acquisitions is fixed to Swiss
francs using the closing rate at acquisition date. Therefore,
there are no exchange rate differences in the movement sched-
ules. The impact of the theoretical capitalization and amortiza-
tion of goodwill is disclosed below.

in CHF 1’000

Acquisition costs
Balance as per 04/01/2020 / 04/01/2019

Additions from acquisitions

Balance as per 03/31/2021 / 03/31/2020

in CHF 1’000

Accumulated amortization
Balance as per 04/01/2020 / 04/01/2019

Amortization expense

Balance as per 03/31/2021 / 03/31/2020

in CHF 1’000

Net book value
Theoretical net book value as per 04/01/2020 / 04/01/2019

Theoretical net book value as per 03/31/2021 / 03/31/2020

in CHF 1’000

Theoretical impact on equity
Equity as per balance sheet

Theoretical capitalization of goodwill

Theoretical equity including net book value of goodwill

in CHF 1’000

Theoretical impact on net income
Net income as per income statement

Amortization of goodwill

Theoretical net income after goodwill amortization

2020

2019

121’835

24’872

146’707

2020

–86’506

–25’083

–111’589

2020

35’329

35’118

103’830

18’005

121’835

2019

–68’290

–18’216

–86’506

2019

35’540

35’329

03/31/2021

03/31/2020

219’603

35’118

254’721

2020

47’201

–25’083

22’118

317’506

35’329

352’835

2019

39’871

–18’216

21’655

13. PROPERTY, PLANT & EQUIPMENT

Acquisition Costs

in CHF 1’000

Land
and
buildings

Machinery
and
equipment

Other
business
assets

Assets
under
con struction

2020
Total

Land
and
buildings

Machinery
and
equipment

Other
business
assets

Assets
under
con struction

2019
Total

Balance as per 04/01/2020 / 04/01/2019 168’706 129’007
–
Changes in the consolidation scope

–

30’199
–

382

2’964

2’839

20’188
–

19’286

348’100 165’526 128’508 28’568
3’234

11’285

–

8’145
745

25’471

–

3’919

3’367

15’982

Additions

Disposals

Reclassifications

Currency translation differences

Balance as per
03/31/2021 / 03/31/2020

Accumulated Depreciation

in CHF 1’000

–11’842

–7’093

–1’186

–141

–20’262

–4’439

–1’079

–3’584

–1’236

1’333

7’738

2’230

1’145

–32’972

–25’325

1’185

1’493

262

620

446

4’629

–4’851

–3’834

–1’648

–44

–3’156

–1’484

157’343 134’846

33’617

6’807

332’613

168’706 129’007 30’199

20’188

348’100

Land
and
buildings

Machinery
and
equipment

Other
business
assets

Assets
under
con struction

2020
Total

Land
and
buildings

Machinery
and
equipment

Other
business
assets

Assets
under
con struction

2019
Total

330’748
15’263

23’268

–9’146

–216

–11’817

Balance as per 04/01/2020 / 04/01/2019 –35’226 –90’727 –19’515
–
Changes in the consolidation scope

–

Additions

Disposals

Reclassifications

–4’749 –9’000

–3’727

5’081

6’363

1’028

–

Currency translation differences

–462

–1’317

–282

Balance as per
03/31/2021 / 03/31/2020

–35’356 –94’681 –22’496

–
–

–

–145’468 –34’340 –84’374 –20’846
–
–

–

–17’476

–4’751

–9’717

–2’948

12’472

2’387

1’014

3’190

–

216

–

–2’061

1’262

2’350

1’089

–152’533

–35’226 –90’727 –19’515

–
–

–

–139’560
–

–17’416

6’591

216

4’701

–145’468

Net Book Value

in CHF 1’000

Land
and
buildings

Machinery
and
equipment

Other
business
assets

Assets
under
con struction

2020
Total

Land
and
buildings

Machinery
and
equipment

Other
business
assets

Assets
under
con struction

2019
Total

As per 04/01/2020 / 04/01/2019
As per 03/31/2021 / 03/31/2020

133’480 38’280 10’684
11’121
121’987 40’165

20’188
6’807

202’632 131’186
7’722
180’080 133’480 38’280 10’684

44’134

8’145
20’188

191’188
202’632

Relocation Shenyang Yuanda Compressor Co. Ltd (SYCC)
Back in 2018, SYCC started the relocation of its manufacturing
and assembly facility, to the newly established China Germany
Equipment Manufacturing Industrial Park, which is also located
in the city of Shenyang. The relocation was completed end of
2020. In the course of this transaction SYCC has purchased and
built new PPE and at the same time has given back existing PPE
to the Chinese government. The whole transaction is subsidized
by the Chinese government. Overall SYCC in the period 2018 to
2020 invested more than CHF 30 mn for this project. With the
completion of the relocation project land use rights, buildings
and machinery that were built or acquired in the course of the
relocation have been offset with the granted subsidies by the
government (Netting of assets and liabilities; shown under
reclassifications).

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

14. INVESTMENTS IN ASSOCIATES

in CHF 1’000

Balance as per 04/01/2020 / 04/01/2019
Changes in the consolidation scope

Share of net results

Currency translation differences

Balance as per 03/31/2021 / 03/31/2020

15. OTHER FINANCIAL ASSETS

Other financial assets mainly include time deposits.

16. INVENTORIES

in CHF 1’000

Raw materials, supplies and consumables
Work in progress

Finished products and trade merchandise

Advance payments to suppliers

Valuation allowance

Total inventories

The capital invested in work in progress and advance payments
to suppliers is fully financed by advance payments from
customers, leaving a positive balance as of March 31, 2021 of
CHF 11.5 mn (prior year: CHF –47.0 mn).

17. TRADE RECEIVABLES

in CHF 1’000

Trade receivables, gross
Allowance for bad debts

Trade receivables, net

in CHF 1’000

Allowance for bad debts
Balance as per 04/01/2020 / 04/01/2019

Changes in the consolidation scope

Additions

Release

Utilization

Currency translation adjustments

Balance as per 03/31/2021 / 03/31/2020

2020

–
–

–

2019

11’539
–9’020

–2’494

–25

–

The allowance for bad debts at the end of the 2020 and 2019
fiscal years was entirely related to accounts receivables which
were more than 90 days overdue as per closing date.

in CHF 1’000

Maturity profile of trade receivables
Not due

Overdue 1–30 days

Overdue 31–60 days

Overdue 61–90 days

Overdue more than 90 days

Balance as per 03/31/2021 / 03/31/2020

03/31/2021

03/31/2020

147’068

20’165

20’334

9’957

62’871

260’395

56.5%

7.7%

7.8%

3.8%

24.2%

100.0%

129’255

17’170

14’410

9’348

85’938

256’121

50.5%

6.7%

5.6%

3.6%

33.6%

100.0%

Trade receivables overdue more than 90 days are mainly related
to projects in China.

03/31/2021

03/31/2020

18. OTHER CURRENT RECEIVABLES

in CHF 1’000

Notes receivable
VAT receivables

Derivative financial instruments

Current tax assets

Other current receivables

Total other current receivables

03/31/2021

03/31/2020

9’770
6’151

1’067

936

39’057

56’981

15’497
7’483

620

829

8’948

33’377

The increase in other current receivables is mainly attributable
to outstanding government grants in connection with the relo-
cation project of Shenyang Yuanda Compressor Co. Ltd in China
(see note 13).

36’223
100’587

51’526

19’578

–17’479

190’435

33’608
164’648

55’017

27’607

–16’401

264’479

03/31/2021

03/31/2020

271’098
–10’703

260’395

2020

–8’911

–

–2’288

934

–474

–10’703

265’032
–8’911

256’121

2019

–8’343

–

–3’195

1’614

252

761

–8’911

19. SHARE CAPITAL AND TREASURY
SHARES

03/31/2021

03/31/2020

Number of shares issued

3’400’000

The nominal value per share amounts to CHF 2.50. All shares
are registered shares and are paid in full. The breakdown of
equity into its individual components is shown in the statement
of changes in equity. The Board of Directors is empowered to
increase the company’s share capital by a maximum of
CHF 1’275’000 at any time until July 6, 2021 by issuing a maxi-
mum of 510’000 fully paid registered shares with a nominal
value of CHF 2.50 each (authorized capital).

At the upcoming annual general meeting of shareholders on
July 3, 2021, the Board of Directors of Burckhardt Compression
Holding AG will propose a dividend for the 2020 fiscal year of
CHF 6.50 (prior year: CHF 6.00).

As of March 31, 2021, non-distributable reserves amounted

to CHF 1.7 mn (prior year: CHF 1.7 mn).

03/31/2021

03/31/2020

Number of treasury shares

9’634

21’616

All treasury shares are held for the share-based long-term
incentive program within the Burckhardt Compression Group.

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

20. FINANCIAL LIABILITIES

Maturities of Non-Current Financial Liabilities

22. OTHER NON-CURRENT LIABILITIES

26. CONTINGENT LIABILITIES

03/31/2021

03/31/2020

920

14’466

100’080

199
17’405

133’070

15’693

16’267

2’395

2’106
52’252

88’713

Due within 5 years
Due beyond 5 years

Total non-current financial liabilities

On September 30, 2020, Burckhardt Compression issued a bond
for a total of CHF 100 mn with a coupon of 1.5%. The issue price
was 100% of the nominal value. It will be redeemed at par value
on September 30, 2024. The bond is listed on the SIX Swiss
Exchange.

in CHF 1’000

Non-current financial liabilities
Current financial liabilities

Total financial liabilities

03/31/2021

03/31/2020

in CHF 1’000

133’070
24’726

157’796

88’713
93’259

Due within 2 years

Due within 3 years

181’972

Due within 4 years

The average effective interest rate amounted to 2.0% in fiscal
year 2020 (prior year: 1.8%).

Some credit agreements are subject to financial covenants
such as a minimum equity ratio or net financial indebtedness to
EBITDA. None of the credit lines which are subject to financial
covenants were drawn as per March 31, 2021.

Currencies of Financial Liabilities

in CHF 1’000

03/31/2021

03/31/2020

Financial liabilities in CHF

Financial liabilities in USD
Financial liabilities in other currencies

Total financial liabilities

112’850

129’350

32’919
12’027

33’554
19’068

157’796

181’972

21. PROVISIONS

in CHF 1’000

Balance as per 04/01/2020 / 04/01/2019
Changes in the consolidation scope

Additions

Release

Utilization

Currency translation differences

Employee-
related

Warranties,
penalties,
unprofitable
contracts

Other

2020
Total

Employee-
related

8’072
–

4’497

–197

24’792
2’006

5’943

–876

1’773
–

3’317

–553

–1’003

–5’664

–1’419

139

225

–

34’637
2’006

13’757

–1’626

–8’086

364

Warranties,
penalties,
unprofitable
contracts

24’061
302

6’155

–1’314

–3’502

–910

24’792

Other

2019
Total

3’756
–

693

–2’379

–81

–216

1’773

35’186
1’074

10’514

–6’693

–3’891

–1’553

34’637

7’369
772

3’666

–3’000

–308

–427

8’072

Balance as per 03/31/2021 / 03/31/2020

11’508

26’426

3’118

41’052

Thereof non-current

Thereof current

5’514

5’994

8’784

17’642

187

14’485

2’931

26’567

4’984

3’088

9’164

15’628

163

1’610

14’311

20’326

Employee-related provisions include employee benefit obliga-
tions (see note 31), provisions for long-term service awards and
ordinary termination benefits.

Other non-current liabilities mainly consist of various govern-
ment grants in China.

23. OTHER CURRENT LIABILITIES

in CHF 1’000

Notes payable

VAT payables

Derivative financial instruments

Current tax liabilities
Other current liabilities

Total other current liabilities

03/31/2021

03/31/2020

2’128

3’859

717

5’612
61’501

73’817

2’471

1’148

421

2’773
7’082

13’895

Other current liabilities mainly consist of deferred purchase
price payments for Shenyang Yuanda Compressor Co. Ltd. and
the compressor business of the Japan Steel Works Ltd. (see
note 4). Furthermore, they also include various social securities
payables and different taxes payables such as withholding
taxes.

Guarantees
Burckhardt Compression guarantees essentially for securing
customer advance payments and for eventual warranty claims
from customers. Guarantees are issued by third-party banks or
by Burckhardt Compression Holding AG. In addition, standing
guarantees have been issued by Burckhardt Compression Hold-
ing AG to secure credit lines and guarantee limits granted by
foreign banks.

in CHF 1’000

Guarantees issued by banks for
Burckhardt Compression
Guarantees issued by
Burckhardt Compression Holding AG
Total guarantees

03/31/2021

03/31/2020

121’597
373’497

178’904
331’635

495’094

510’539

Other Contingent Liabilities
As per March 31, 2021, Burckhardt Compression does not have
any other contingent liabilities.

In the previous year, Burckhardt Compression held call
options to acquire the remaining 40% stake of Shenyang Yuanda
Compressor Co. Ltd. The call option has been exercised in fiscal
year 2020 (see note 4).

24. ACCRUED LIABILITIES AND
DEFERRED INCOME

27. COMMITMENTS

in CHF 1’000

Contract-related liabilities
Vacation and overtime

Salary and bonus payments

Miscellaneous

Total accrued liabilities and
deferred income

03/31/2021

03/31/2020

Operating Leases

44’877
3’179

11’176

6’833

66’065

57’033
3’478

10’272

6’339

77’122

in CHF 1’000

03/31/2021

03/31/2020

Operating leases due in less than 1 year
Operating leases due in 1 to 5 years

Operating leases due in more than 5 years

Total operating lease commitments

2’645
10’644

4’752

18’041

2’930
11’467

5’831

20’228

Purchase commitments
Purchase commitments for capital expenditure as per March 31,
2021 amounted to CHF 4.4 mn (prior year: CHF 11.1 mn). In the
previous year purchase commitments were mainly connected
to the relocation activities in Shenyang (see note 13).

25. DERIVATIVE FINANCIAL
INSTRUMENTS

Burckhardt Compression uses derivative financial instruments
to mitigate currency risks. The risk management policy is
described in note 3. On the balance sheet, derivative financial
instruments are shown as “Other Current Receivables” and
“Other Current Liabilities”.

in CHF 1’000

Contract value
Positive fair values

Negative fair values

03/31/2021

03/31/2020

125’932
1’067

717

85’803
620

421

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

28. PLEDGED ASSETS

31. EMPLOYEE BENEFIT OBLIGATIONS

32. IMPACTS OF COVID-19

Since the outbreak of the Covid-19 pandemic, Burckhardt Com-
pression has taken all the necessary measures to protect the
health of its employees, customers, suppliers and business
partners. Burckhardt Compression countered the temporary
weakening of its business by implementing cost-saving mea-
sures already at an early stage. These measures also include
government support in various countries and are recognized in
the corresponding expense category as cost reduction. The
pandemic had no significant impact on the valuation of assets
and liabilities in the balance sheet.

33. EVENTS AFTER THE BALANCE
SHEET DATE

There were no events between the balance sheet date and the
date these consolidated financial statements were approved by
the Board of Directors which would require additional disclo-
sures or changes in the consolidated financial statements.

As per March 31, 2021, Burckhardt Compression had pledged
assets with a carrying amount of CHF 143.2 mn (prior year:
CHF 135.5 mn) to secure mortgage loans and guarantees. The
pledged assets consisted mainly of land and buildings, and to a
lesser degree of inventories and trade receivables.

29. SHARE-BASED PAYMENTS

Since 2017, there is a long-term incentive plan for the members
of the Executive Board and certain other employees in place.
Long-term incentive pay is awarded in the form of free shares.
None of the shares are subject to any restrictions upon the date
of transfer.

In 2020, participants of the long-term incentive plan were
granted 26’982 shares at a fair value of CHF 230.50. In 2019,
383 shares at a fair value of CHF 235 were granted to partici-
pants of the long-term incentive plan.

Personnel expenses in 2020 for share-based payments

amounted to CHF 3.9 mn (prior year: CHF 2.9 mn).

30. RELATED PARTY TRANSACTIONS

Members of the Board of Directors and of the
Executive Board
Except for the remuneration as disclosed in the Compensation
Report section of this Annual Report, no further relations or
transactions existed in 2020 and 2019 with the members of the
Board of Directors and of the Executive Board.

Associated Companies
In the current year, there were no transactions with associated
companies.

In the previous year, the following transactions were carried
out with associated companies (mainly Arkos Group companies
until November 25, 2019).

in CHF 1’000

2020

2019

Sales of goods and services
Purchase of goods and services

–
–

3’285
317

Burckhardt Compression has various pension plans to which
most of its employees contribute. With the exception of com-
panies in Switzerland and Germany, these pension plans are
defined contribution pension arrangements. Under these, as a
rule, payments are made into pension funds administered by
third parties. Burckhardt Compression has no payment obliga-
tions beyond making these defined contributions.

Burckhardt Compression’s pension plans in Switzerland
consist of two independent pension funds: “Sulzer Vorsorgeein-
richtung” (SVE), a base plan for all employees, and “Johann
Jakob Sulzer Stiftung” (JJS), a plan for employees with salaries
exceeding a certain limit. The majority of the active partici-
pants in the two pension funds are employed at companies not
belonging to Burckhardt Compression. The board of trustees
for the base plan comprises ten employer representatives and
ten employee representatives of the contributing companies
and is responsible for asset allocation and risk management.
The pension plans contain a cash balance benefit formula.
Under Swiss law, the pension funds guarantee the vested ben-
efit amount as confirmed annually to members. Interest may be
added to member balances at the discretion of the board of
trustees. At retirement date, members have the right to take
their retirement benefit as a lump sum, an annuity or part as a
lump sum with the balance converted to an annuity. The pen-
sion funds may adapt the contribution and benefits at any time.
In case of underfunding, this may involve special payments
from the employer. The surplus or underfunding cannot be
determined per company. The coverage of the collective plans
as a whole as of December 31, 2020 amounted to 117.6% (SVE;
prior year: 117.1%) and 115.8% (JJS; prior year: 116.2%). The tech-
nical interest rate used by both collective plans amounted to
2.0% (prior year: 2.0%).

Employer Contribution Reserves
Burckhardt Compression does not have any employer contribu-
tion reserves.

Economic Benefits / Economic Obligations and Pension Benefit Expenses

Economic portion of the organization

in CHF 1’000

Pension plans with surplus

Unfunded pension plans

Total

03/31/2021
–

03/31/2020
–

–2’104

–1’927

Change to prior
year period recog-
nized in the current
result of the period
2020
–

–83

Currency
translation
differences

Contributions of
the fiscal year

Pension benefit expenses

2020
–

–94

2020
–8’119

–

–8’119

2020
–8’119

–83

–8’202

2019
–7’987

–7’904

FINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL REPORT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

100

34. GROUP COMPANIES AND ASSOCIATES

Company

Registered
office

Registered
capital

Interest
in capital

&
h
c
r
a
e
s
e
R

t
n
e
m
p
o
l
e
v
e
d

g
n

i
r
e
e
n

g
n
e

&
g
n

i
r
u
t
c
a
f
u
n
a
M

Burckhardt Compression AG 1

Burckhardt Compression Immobilien AG 1

Winterthur,
Switzerland

Burckhardt Compression (Deutschland) GmbH

Neuss, Germany

Burckhardt Compression (Italia) S.r.l.

Milan, Italy

Burckhardt Compression (France) S.A.S.

Cergy Saint
Christophe, France

Burckhardt Compression (España) S.A.

Madrid, Spain

Burckhardt Compression (UK) Ltd.

Bicester,
United Kingdom

Burckhardt Compression (US) Inc.

Houston, USA

Burckhardt Compression (Canada) Inc.

Mississauga,
Canada

Burckhardt Compression (Japan) Ltd.

Tokyo, Japan

Burckhardt Compression (Shanghai) Co. Ltd.

Shanghai, China

Burckhardt Compression (India) Private Ltd.

Pune, India

Burckhardt Compression (Brasil) Ltda.

São Paolo, Brazil

Burckhardt Compression (Middle East) FZE

Dubai, United
Arab Emirates

Burckhardt Compression Korea Ltd.

Seoul, South Korea

Burckhardt Kompresör San. ve Tic. Ltd.

Istanbul, Turkey

Burckhardt Compression Singapore Pte Ltd.

Singapore,
Singapore

Burckhardt Compression South Africa (Pty) Ltd. Sunnyrock,
South Africa

Burckhardt Compression Korea Busan Ltd.

Burckhardt Compression (Saudi Arabia) LLC

Burckhardt Compression
North America Service LLC

Busan,
South Korea

Dammam,
Saudi Arabia

Wilmington, USA

CSM Compressor Inc.

Edmonton, Canada

CHF
2’000’000

CHF
5’000’000

EUR
30’000

EUR
400’000

EUR
300’000

EUR
550’000

GBP
250’000

USD
18’250’000

CAD
200’000

JPY
50’000’000

CNY
14’238’000

INR
331’140’000

BRL
5’803’000

AED
2’000’000

KRW
250’000’000

TRY
800’000

SGD
700’000

ZAR
3’000’000

KRW
7’000’000’000

SAR
1’000’000

USD
1’800’000

CAD
10’000

g
n

i
t
c
a
r
t
n
o
C

•

100%

•

100%

•

100%

•

s
e
l
a
S

e
c

i
v
r
e
S

Company

Registered
office

Registered
capital

Interest
in capital

&
h
c
r
a
e
s
e
R

t
n
e
m
p
o
l
e
v
e
d

•

g
n

i
r
e
e
n

g
n
e

&
g
n

i
r
u
t
c
a
f
u
n
a
M

•

Shenyang Yuanda Compressor Co. Ltd.1

Shenyang, China

Liaoning Yuanyu Industrial Machinery Co. Ltd.

Kaiyuan, China

Shenyang Yuanda Compressor
Automatic Control System Co. Ltd.

Shunyuan Resources Recycling
Equipment Industry (Liaoning) Co. Ltd.2

Shenyang, China

Compressor Tech Holding AG 1

Zug, Switzerland

PROGNOST Systems GmbH

Rheine, Germany

PROGNOST Systems Inc.

Houston, USA

PROGNOST Machinery Diagnostics
Equipment and Services LLC

Société d’Application du Métal Rouge SAS

Abu Dhabi, United
Arab Emirates

Pont Sainte Marie
Cedex, France

CNY
100’000’000

CNY
39’000’000

CNY
5’000’000

CNY
65’000’000

CHF
200’000

EUR
200’000

USD
240’000

AED
300’000

EUR
501’000

100%

60%

40%

100%

•

101

e
c

i
v
r
e
S

•

g
n

i
t
c
a
r
t
n
o
C

•

s
e
l
a
S

•

Arkos Group LLC

Houston, USA

USD
11’752’000

100%

Arkos Field Services, LP

Houston, USA

Arkos Realty & Investments, LP

Houston, USA

–

100%

•

100%

1 Company is directly held by Burckhardt Compression Holding AG.
All other companies are indirectly held by Burckhardt Compression Holding AG.
2 Company is accounted for using the equity method.
All other companies are fully consolidated.

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102

103

Report of the statutory auditor

to the General Meeting of Burckhardt Compression Holding AG
Winterthur

Report on the audit of the consolidated financial statements

Opinion

We have audited the consolidated financial statements of Burckhardt Compression Holding AG and its subsidiaries (the
Group), which comprise the Consolidated Income Statement for the year ended 31 March 2021, the Consolidated
Balance Sheet as at 31 March 2021, Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies.

In our opinion, the consolidated financial statements (pages 80 to 101) give a true and fair view of the consolidated finan-
cial position of the Group as at 31 March 2021 and its consolidated financial performance and its consolidated cash flows
for the year then ended in accordance with Swiss GAAP FER and comply with Swiss law.

Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities under those
provisions and standards are further described in the “Auditor’s responsibilities for the audit of the consolidated financial
statements” section of our report.

We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit
profession and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our audit approach

Overview

Overall Group materiality: CHF 2’960’000

We concluded full scope audit work at five reporting units in three countries.
Our audit scope addressed over 69% of the Group’s sales.

As key audit matter the following area of focus has been identified:

Accounting for work in progress of the systems division

Materiality

Audit scope

Key audit
matters

PricewaterhouseCoopers AG, Bahnhofplatz 17, Postfach, CH-8400 Winterthur, Switzerland
Telefon: +41 58 792 71 00, Telefax: +41 58 792 71 10, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Materiality

The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable
assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due
to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall
Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial
statements as a whole.

Overall Group materiality

CHF 2’960’000

How we determined it

5% of profit before tax

Rationale for the materiality
benchmark applied

We chose profit before tax as the benchmark because, in our view, it is the
benchmark against which the performance of the Group is most commonly
measured, and it is a generally accepted benchmark.

We agreed with the Audit Committeethat we would report to them misstatements above CHF 250’000 identified during
our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.

Audit scope

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consoli-
dated financial statements as a whole, taking into account the structure of the Group, the accounting processes and
controls, and the industry in which the Group operates.

The audit strategy for the audit of the consolidated financial statements was determined taking into account the work
performed by the Group auditor and the component auditors in the PwC network. The Group auditor performed the audit
of the consolidation, the disclosures and the presentation of the consolidated financial statements. Where audits were
performed by component auditors, we ensured that, as Group auditor, we were adequately involved in the audit in order
to assess whether sufficient appropriate audit evidence was obtained from the work of the component auditors to provide
a basis for our opinion. Our involvement comprised analysing the reporting, communication with the component auditors,
communicating the risks identified at Group level and determining the materiality thresholds for the audits performed
by component auditors.

Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight Authority

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.

Accounting for work in progress of the systems division

Key audit matter

How our audit addressed the key audit matter

Burckhardt Compression Group has projects in the sys-
tems division, which are accounted for as work in progress
in accordance with Swiss GAAP FER. As at 31 March 2021,
work in progress from systems division projects in the
amount of CHF 100.6 million was recognised in the balance
sheet.

Management estimates the costs to be incurred until their
completion, possible penalties as well as net realisable
value. This involves significant scope for judgement and an

Our audit procedures regarding the accounting for work in
progress of systems division projects included in particular
the following:

• We assessed the design and the existence of the
key controls regarding the systems division
projects and tested the effectiveness of selected
controls.

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104

105

incorrect estimate could have a significant impact on the
result for the period.

Please refer to page 85 (Accounting policies – Inventories)
and page 94 (Inventories) in the notes to the consolidated
financial statements.

• We selected a sample of systems division pro-

jects, based on the contract volumes, the contri-
bution margin and changes in the margin com-
pared to the planning phase, and focused our
testing on the following:

– We assessed the contract related calculations

to determine whether the contractual terms
had been recorded appropriately.

– We discussed with the project controllers
and project managers the progress of the
projects based on the latest project reports,
the costs still to be incurred until their
completion and changes in the estimated
margin.

– We obtained written information from the

legal representatives of the Group. We in-
spected this written information with regard
to indications of potential quality deficien-
cies or penalties and assessed whether these
matters were presented appropriately in the
consolidated financial statements.

During the audit, we conducted onsite inspec-
tions of various compressors still under con-
struction.

For the systems division projects completed dur-
ing the year under review, we compared various
final parameters with the estimates made in the
planning phase in order to assess, with hindsight,
the accuracy of the estimates made by Manage-
ment.

•

The results of our audit support the accounting of work in
progress of the systems division in the 2020 consolidated
financial statements.

Responsibilities of the Board of Directors for the consolidated financial statements

The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair
view in accordance with Swiss GAAP FER and the provisions of Swiss law, and for such internal control as the Board of
Directors determines is necessary to enable the preparation of consolidated financial statements that are free from mate-
rial misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Swiss law and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is located at the website
of EXPERTsuisse: http://expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our
auditor’s report.

Report on other legal and regulatory requirements

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.

PricewaterhouseCoopers AG

Sandra Böhm Uglow

Audit expert
Auditor in charge

Winterthur, 27 May 2021

Oliver Illa

Audit expert

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106

107

FINANCIAL STATEMENTS OF BURCKHARDT
COMPRESSION HOLDING AG, WINTERTHUR

BALANCE SHEET

in CHF 1’000

Cash and cash equivalents
Other current receivables due from third parties

Other current receivables due from group companies

Total current assets

Financial assets
– Non-current loans due from group companies

– Investments in subsidiaries

Total non-current assets

Total assets

Current liabilities
Trade payables due to third parties

Other current liabilities due to third parties

Accrued liabilities and deferred income

Current provisions

Deferred payments

Current loans due to group companies

Total current liabilities
Non-current loans due to third parties

Total non-current liabilities

Share capital
Legal reserves from retained earnings

Free reserves from retained earnings

– Profit brought forward

– Net income

Treasury shares

Total equity

Total equity and liabilities

Notes

03/31/2021

03/31/2020

275
17

377

664
7

–

671

102

104’020

273’681

377’701

32’500

171’781

204’281

378’078

204’952

2’612

121

49’756

1’089

53’588
100’000

100’000

8’500
1’700

179’210

37’286

–2’206

224’490

167

155

–

300

628
–

–

8’500
1’700

168’883

30’457

–5’216

204’324

103

104

INCOME STATEMENT

in CHF 1’000

Income
Dividend income from group companies

Interest income from group companies

Income from services provided to group companies

Total income

Expenses
Operating expenses

Financial expenses

Direct Taxes

Total expenses

Net income

2020

2019

39’182

922

192

40’296

–2’026

–802

–182

–3’010

31’293

294

192

31’779

–1’262

–

–60

–1’322

37’286

30’457

NOTES TO THE FINANCIAL STATEMENTS OF
BURCKHARDT COMPRESSION HOLDING AG

101 Accounting policies
The financial statements as per March 31, 2021 are in compli-
ance with the requirements of Swiss corporate law.

All the values in the annual financial statements are
reported in thousand Swiss Francs unless otherwise indicated.
Burckhardt Compression Holding AG’s fiscal year 2020 com-

The financial statements have been prepared in accordance
with the provisions of commercial accounting as set out in the
Swiss Code of Obligations (Art. 957 to 963b CO).

The following disclosures are not being made separately in
the statutory financial statements pursuant to Art. 961d (1) CO
as Burckhardt Compression Holding AG is presenting its con-
solidated financial statements according to Swiss GAAP FER:
– Additional disclosures in the notes (auditor’s fee; disclosure

on non-current interest-bearing liabilities)

prises the period from April 1, 2020 to March 31, 2021.

102 Subsidiaries
The equity interests held directly and indirectly by Burckhardt
Compression Holding AG are shown in note 34 “Group Companies”.

378’078

204’952

– Cash flow statement
– Management report

The treasury shares are stated at acquisition cost and deducted
from equity. No subsequent valuation is made. If the treasury
shares are disposed of, the resulting gain or loss is recognized
in the profit and loss statement.

Burckhardt Compression Holding AG uses derivative finan-
cial instruments exclusively as hedges of the exposure to vari-
ability in cash flows that is attributable to a particular risk
associated with a recognized asset or liability or a highly prob-
able future transaction (cash flow hedges). At inception of the
hedge, Burckhardt Compression Holding AG documents the
hedging relationship and the effectiveness between the hedg-
ing instrument and the hedged item.

The derivative financial instruments are off-balance sheet

items.

FINANCIAL STATEMENTS OF BURCKHARDT COMPRESSION HOLDING AG, WINTERTHUR | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSIONFINANCIAL STATEMENTS OF BURCKHARDT COMPRESSION HOLDING AG, WINTERTHUR | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

108

109

Detailed overview of shareholdings
As per March 31, 2021, the members of the Executive Board and
the Board of Directors (and related persons) owned the follow-
ing numbers of shares of Burckhardt Compression Holding AG:

Shareholders

03/31/2021

03/31/2020

Function
Chairman

Chairman

Member

CEO

CFO

CHRO

President Systems Division

President Services Division

Members of the Board of Directors
Ton Büchner 1

Valentin Vogt 2

Urs Leinhäuser

Dr. Monika Krüsi

Dr. Stephan Bross

David Dean

Total

Executive Board
Marcel Pawlicek

Rolf Brändli

Sandra Pitt

Fabrice Billard

Rainer Dübi

Total

Total Board of Directors and Executive Board
As a % of all outstanding shares

1 from July 4, 2020
2 until July 3, 2020

Total shares
5'000

n/a

1'714

1'119

349

408

8'590

41'937

2'423

908

1'300

824

47'392

55'982
1.7%

Total shares
n/a

203’392

1’643

1'048

278

355

206'716

42’111

1’702

278

600

45’291

252'007
7.4%

103 Share capital and shareholders
The share capital amounts to CHF 8’500’000 and is composed
of 3’400’000 shares, each with a nominal value of CHF 2.50. All
shares are registered shares and are paid in full. The Board of
Directors is empowered to increase the company’s share capital
by a maximum of CHF 1’275’000 at any time until July 6, 2021
by issuing a maximum of 510’000 fully paid registered shares
with a nominal value of CHF 2.50 each (authorized capital).

No person will be registered in the Share Register as share-
holder with voting rights with respect to more than five percent
of the issued share capital. This entry restriction is also appli-
cable to persons whose shares are totally or partially held by
nominees. This restriction is also valid if shares are purchased
when practicing subscription, warrant and conversion rights,
with the exception of shares acquired by succession, distribu-
tion of inheritance or matrimonial regime. Legal entities and
partnerships associated with each other by uniformly managed
capital or votes or in any other way, as well as private and legal
entities or partnerships, which form an association to evade the
entry restriction, are regarded as one person.

Individual persons, who have not expressly declared in the
application of entry that they hold the shares for their own
account (Nominees), will be entered in the Share Register with
voting rights, if the Nominee concerned establishes his subor-
dination to an accredited banking supervision and securities

authority, and if he/she has concluded an agreement with the
Board of Directors of the company concerning his/her position.
Nominees holding two or less than two percent of the issued
shares will be entered in the Share Register with voting rights
without an agreement with the Board of Directors. Nominees
holding more than two percent of the issued shares will be
entered in the Share Register with two percent voting rights
and, for the remaining shares, without voting right. Above this
limit of two percent, the Board of Directors may enter in the
Share Register Nominees with voting rights if they disclose the
names, addresses, nationality, and shareholdings of the per-
sons for whom they hold more than two percent of the issued
shares.

As of March 31, 2021, there is no such declaration between

a nominee-shareholder and the board of directors.

Shareholder groups which had existed before June 23, 2006

are excluded from the voting rights restrictions.

According to information available to the company from the
disclosure notifications of the SIX Swiss Exchange Ltd., the fol-
lowing shareholders reported shareholdings of at least 3% of
the share capital and voting rights as of March 31, 2021 (accord-
ing to the statutory bylaws the voting rights of NN Group N.V.,
and Atlantic Value General Partner Ltd. (Mondrian) are limited
to 5% of the total number of the registered BCHN shares
recorded in the commercial register):

Shareholders

Name

MBO shareholder pool (Valentin Vogt, Harry Otz, Leonhard Keller, Martin Heller,
Ursula Heller, Marcel Pawlicek)
NN Group N.V.

Atlantic Value General Partner Limited (Mondrian)

BlackRock, Inc.

UBS Fund Management (Switzerland) AG

FEDERATED HERMES INC.

Ameriprise Financial Inc.

Credit Suisse Funds AG

Vontobel Fonds Services AG

The number of shares held by the members of the Executive
Board and the non-executive members of the Board of Directors
(and related persons) as per March 31, 2021 are shown under
point 6.2 within the compensation report.

03/31/2021

03/31/2020

% of
shares
12.40

10.31

5.03

3.04

3.01

< 3.00

% of
shares
12.40

10.31

5.03

3.04

3.01

< 3.00

3.49

3.24

3.05

Country

110

104 Treasury shares

Number at the beginning of the period

Purchases

Sales
Number at the end of the period

The average selling price did amount to CHF 228.57
(2019: CHF 263.63)

105 Further disclosures pursuant to Article 959c par. 2
of the Swiss Code of Obligations:

Full-time employees
Burckhardt Compression Holding AG does not employ any
employees.

Liabilities to pension funds

in CHF 1’000

Total liabilities to pension funds

Net release of undisclosed reserves

in CHF 1’000

Net release of undisclosed reserves

Derivative financial instruments

in CHF 1’000

2020

2019

21’616

15’000

–26’982
9’634

5’999

16’000

–383
21’616

03/31/2021

03/31/2020

03/31/2021

03/31/2020

03/31/2021

03/31/2020

Forward foreign exchange contracts (negative current fair value on cash flow hedge)

Guarantees

in CHF 1’000

Guarantees

03/31/2021

03/31/2020

260’045

236’662

Burckhardt Compression Holding AG issues advance payment
guarantees and performance bonds in the name of Burckhardt
Compression AG and in favor of a small number of selected cus-
tomers. In addition, standing guarantees have been given to
secure credit lines and guarantee limits granted by foreign
banks.

The credit lines and guarantee facilities extended to Burck-
hardt Compression AG by financial institutions do not require
any assets or shares of Burckhardt Compression Holding AG to
be pledged as collateral.

Remuneration of the Board of Directors and the
Executive Board
Type and amount of remuneration of the members of the Board
of Directors and the Executive Board as well as the principles
and basic elements of the company’s compensation policy are
depicted and explained in the compensation report on pages 69
to 77.

Events after the balance sheet date
There were no additional events after the balance sheet date
which affect the annual results or would require an adjustment
to the carrying amounts of Burckhardt Compression Holding
AG’s assets and liabilities.

Proposal by the Board of Directors for the appropriation
of retained earnings

in CHF 1’000

Retained earnings at the beginning of the period
Distributed dividend

Net income of the year

Retained earnings at the disposal of the Annual General Meeting

The Board of Directors proposes the following appropriation

– Gross dividend

Retained earnings carried forward

The Board of Directors will propose payment of a gross dividend
of CHF 6.50 per registered share at the Annual General Meeting
of Shareholders on July 3, 2021.

Gross dividend
Less 35% withholding tax

Net dividend

111

2020

2019

199’340
–20’180

37’286

216’446

189’247
–20’364

30’457

199’340

–22'100

–20’400

194’346

178’940

2020

2019

2018

6.50
–2.30

4.20

6.00
–2.10

3.90

6.00
–2.10

3.90

112

113

Report of the statutory auditor

to the General Meeting of Burckhardt Compression Holding AG

Winterthur

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Burckhardt Compression Holding AG, which comprise the balance sheet as
at 31 March 2021, income statement and notes for the year then ended, including a summary of significant accounting
policies.

In our opinion, the financial statements (pages 106 to 111) as at 31 March 2021 comply with Swiss law and the company’s
articles of incorporation.

Basis for opinion

We are independent of the entity in accordance with the provisions of Swiss law and the requirements of the Swiss audit
profession and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our audit approach

Overview

Overall materiality: CHF 1’500’000

Materiality

We tailored the scope of our audit in order to perform sufficient work to enable
us to provide an opinion on the financial statements as a whole, taking into
account the structure of the entity, the accounting processes and controls, and
the industry in which the entity operates.

Audit scope

Impairment testing of investments in subsidiaries

As key audit matter the following area of focus has been identified:

Key audit
matters

PricewaterhouseCoopers AG, Bahnhofplatz 17, Postfach, CH-8400 Winterthur, Switzerland
Telefon: +41 58 792 71 00, Telefax: +41 58 792 71 10, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Materiality

The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable
assurance that the financial statements are free from material misstatement. Misstatements may arise due to fraud or
error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall
materiality for the financial statements as a whole as set out in the table below. These, together with qualitative consider-
ations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to
evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.

Overall materiality

CHF 1’500’000

How we determined it

0.4% of total assets

Rationale for the materiality benchmark
applied

We chose total assets as the benchmark because, in our view, it is a relevant
benchmark for holding company, and it is a generally accepted benchmark for
holding companies.

We agreed with the Audit Committee that we would report to them misstatements above CHF 150’000 identified during
our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.

Audit scope

We designed our audit by determining materiality and assessing the risks of material misstatement in the financial state-
ments. In particular, we considered where subjective judgements were made; for example, in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As
in all of our audits, we also addressed the risk of management override of internal controls, including among other matters
consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight Authority

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Impairment testing of investments in subsidiaries

Key audit matter

How our audit addressed the key audit matter

Investments in subsidiaries is a significant asset category
on the balance sheet (CHF 273.7 million). Impairment test-
ing of investments whose book value is greater than the
book value of the underlying net assets requires Manage-
ment to consider capitalised earnings.

Doing so involves significant scope for judgement, particu-
larly to determine the assumptions to use concerning future
business results.

In identifying the potential need for impairment of invest-
ments in subsidiaries, Management uses a predefined
impairment testing process.

Please refer to page 107 (Subsidiaries) in the notes to the
financial statements.

In our audit of investments in subsidiaries, we performed
the following main audit procedures:

• We compared the book value of the investments

in the year under review with their pro-rata share
of the respective company’s equity or the company’s
valuation, based on capitalised earnings.

• We checked for plausibility the key assumptions

applied by Management (revenue and margin
growth).

We consider the valuation process and the assumptions
used to be an appropriate and adequate basis for the
impairment testing of the investments in Group companies
as at 31 March 2021.

114

Responsibilities of the Board of Directors for the financial statements

The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of
Swiss law and the company’s articles of incorporation, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Board of Directors either intends to liquidate the entity or to cease operations, or has no realistic
alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from ma-
terial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and
Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located at the website of EXPERT-
suisse: http://expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.

Report on other legal and regulatory requirements

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.

PricewaterhouseCoopers AG

Sandra Böhm Uglow

Audit expert
Auditor in charge

Winterthur, 27 May 2021

Oliver Illa

Audit expert

FINANCIAL STATEMENTS OF BURCKHARDT COMPRESSION HOLDING AG, WINTERTHUR | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

116

IMPRINT | ANNUAL REPORT 2020 | BURCKHARDT COMPRESSION

IMPRINT

The statements in this review relating to matters that are not
historical facts are forward-looking statements that are not
guarantees of future performance and involve risks and uncer-
tainties, including but not limited to: future global economic
conditions, foreign exchange rates, regulatory rules, market
conditions, the actions of competitors, and other factors beyond
the control of the company.

The Annual Report is published in German and English and is avail-
able on the internet under www.burckhardtcompression.com/
financial-reports. The English version is binding. The financial
report is available in English only.

Publisher
Burckhardt Compression Holding AG, Winterthur

Concept/Layout
Source Associates AG, Zurich

Photography
Scanderbeg Sauer Photography, Zurich
Mr. Hong Ze, Shenyang, China

PR consultant
PEPR, Oetwil am See

Burckhardt Compression Holding AGCH-8404 Winterthur, SwitzerlandTel. +41 52 262 55 00Fax +41 52 262 00 51info@burckhardtcompression.comwww.burckhardtcompression.com