Komax Annual Report 2019

FY2019 Annual Report · Komax

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SHAPING
SHAPING
SHAPING
THE
THE
THE
FUTURE
FUTURE
FUTURE
OF AUTO
OF AUTO
OF AUTO
MATION
MATION
MATION

Annual Report

2019

The Komax Group is a pioneer as well
as the market and technology leader in auto-
mated wire processing solutions. It is
aiming to consolidate this leading position
and set the pace on the trends that are
important today, such as electric mobility
and autonomous driving. To this end, it
is channeling above-average investment
into research and development.

Komax has set itself ambitious targets for
2017 to 2023 – for growth and profitability.
Through its business strategy, which is geared
to long-term success, Komax aims to create
sustainable value. This approach also benefits
shareholders – in the form of an attractive
dividend policy and corresponding stock
market valuation.

KEY FIGURES

in TCHF

Order intake

Gross profit

in % of revenues

Investments in non-current assets

Free cash flow

Net working capital1

in % of revenues

Total assets

Net debt (–) / net cash (+)

2019

2018

+/− in %

408 682

496 683

258 930

297 903

62.0

54 448

–36 886

62.1

41 340

–4 340

188 860

203 682

47.0

38.8

–17.7

–13.1

31.7

749.9

–7.3

481 236

462 904

4.0

–106 224

–39 358

169.9

m 418

Revenues in CHF
(2018: 480m)

%8.4

RONCE
(2018: 25.2%)

Operating profit (EBIT)
in TCHF

80 000

60 000

40 000

20 000

15.8

14.1

13.5

14.0

8
3
9
9
4

4
2
4
5
5

9
6
0
5
5

4
5
2
7
6

5.8

5
3
0
4
2

2015 2

2016 2

2017

2018

2019

EBIT

EBIT in % of revenues

20%

15%

10%

2 211

Headcount as at 31.12.2019
(31.12.2018: 2 006 employees)

3.44

Basic earnings in CHF
(2018: 13.52)

52.3

Payout ratio
(2018: 52.0%)

1 Net working capital: receivables plus inventories

less current liabilities.

2 Since the start of 2017, the consolidated financial

statements have been drawn up in accordance with
Swiss GAAP FER. The 2016 figures have been
revised accordingly. 2015 is reported according to
IFRS.

Shareholders’ equity
in TCHF

320 000

240 000

160 000

80 000

71.0

68.9

62.3

60.8

50.8

4
3
1
3
8
2

4
7
1
6
4
2

8
7
1
8
5
2

0
4
6
1
8
2

4
0
6
4
4
2

2015 2

2016 2

2017

2018

2019

100%

75%

50%

25%

Shareholders’ equity

Shareholders’ equity in % of total assets

Group profit after taxes (EAT)
in TCHF

50 000

40 000

30 000

20 000

10 000

10.8

9.9

10.3

9.3

5
1
2
9
2

3
0
7
8
3

1
0
1
2
4

7
8
7
1
5

3.2

1
2
2
3
1

2015 2

2016 2

2017

2018

2019

EAT

EAT in % of revenues

R&D expenditure
in TCHF

50 000

40 000

30 000

20 000

10 000

9.0

8.6

9.9

8.0

7.4

5
1
3
5
2

1
7
0
9
2

8
6
6
6
3

1
5
0
1
4

1
3
5
1
4

2015 2

2016 2

2017

2018

2019

R&D

R&D in % of revenues

15%

12%

15%

12%

CORPORATE
GOVERNANCE
57

COMPENSATION
REPORT
69

ANNUAL REPORT 2019
CONTENTS

FINANCIAL REPORT

Consolidated financial
statements
84

Financial statements of
Komax Holding AG
124

Five year overview
135

ANNUAL REPORT

Shareholders’ letter
02

Locations
04

Market and innovation
09

Interview with
Chairman and CEO
22

Global megatrends
26

Business model
and strategy
30

Board of Directors and
Executive Committee
38

Sustainability and
social responsibility
42

Information
for investors
53

ANNUAL REPORT 2019
SHAREHOLDERS’ LETTER

DEAR SHAREHOLDER

The 2019 financial year was
marked by a sluggish automo-
tive industry and the knock-on
effects for the Komax Group:
order intake, revenues, and
EBIT decreased considerably
and were well below the record
result achieved in 2018. In order
to consolidate its leading mar-
ket position over the long term,
Komax invested heavily in
research and development in
2019 too. In view of the current
assessment of developments
in the automotive market, the
Board of Directors has adapted
its mid-term targets.

2019 proved extremely challenging for Komax. Various geo-
political factors, including the trade dispute between the US
and China, have left many customers unsure, causing them
to hold back substantially on investments. This was largely
also because the transition underway in the automotive in-
dustry (e-mobility, autonomous driving) has already called for
sizeable investments and the sector overall is showing signs
of weakness. The outcome for Komax was that projects were
postponed throughout the year and the previous year’s record
result remained out of reach.

Order intake decreased by 17.7% to CHF 408.7 million
(2018: CHF 496.7 million) and revenues by 12.9% to CHF
417.8 million (2018: CHF 479.7 million). Revenues were
somewhat higher in the second half than in the first (first half
2019: CHF 203.3 million, second half 2019: CHF 214.5 million).
This was partly due to the acquisitions of Artos Engineering

and Exmore in 2019. The revenue result was attributable to a
sizeable organic decline (–13.7%), acquisition-driven growth
(+2.7%), and negative foreign currency effects (–1.9%). Order
intake was slightly weaker in the second half (first half 2019:
CHF 206.7 million, second half 2019: CHF 202.0 million).

Growth in North/South America
Komax achieves around 80% of revenues in the automotive
industry. The general phase of weakness that the latter is fac-
ing was evident in virtually all regions in 2019. The only revenue
growth reported by Komax was in North/South America. A
contributory factor was the acquisition (effective 1 April 2019)
of Artos Engineering, headquartered in Brookfield, Wisconsin,
USA. The largest drop in revenues was experienced in Asia
(–22.5%), where China accounts for the bulk of revenues. The
economic slowdown, combined with the excess capacity built
up in 2018, led to a distinct falloff in investments in automation
solutions in China. Revenues in Europe (–16.8%) and Africa
(–13.2%) were also down. The trend already in evidence in
both regions for several years continued: with personnel re-
sources becoming increasingly scarce in Eastern Europe, wire
harness manufacturers are relocating part of their production
to North Africa. Despite this shift, Europe remains Komax’s
strongest market by far, accounting for 42.7% of revenues.
North/South America ranks second, with a share in revenues
of 24.9%. Revenues were also lower in the aerospace, data/
telecom, and industrial market segments, but less significantly
so than in the automotive industry.

Profitability impacted by lower volume business and
project business
The decline in revenues was primarily a consequence of the
sharp fall in demand for wire processing machines, which
correlates directly to the number of vehicles produced. In
2019, some 89 million cars and light commercial vehicles
were manufactured worldwide. This is 5.7% or approximately
5.5 million fewer vehicles than in the previous year. Since
these machines, which are used for volume business, make a
disproportionately high contribution to Komax’s operating
profit (EBIT), it dropped 64.3% to CHF 24.0 million (2018:
CHF 67.3 million). The EBIT margin narrowed from 14.0% to
5.8%. The foreign currency impact was negative, reducing
the EBIT margin by 0.8 percentage points.
Profitability was also impacted by additional expenses in the
high single-digit millions for individual customer-specific pio-
neer projects. These major projects are predominantly con-
nected with new technologies in the automotive industry that

ANNUAL REPORT 2019
SHAREHOLDERS’ LETTER

are required for fast large-scale data transmissions in vehi-
cles. If highly automated or even autonomous driving is to
become a reality, these new developments are vital and offer
Komax considerable future growth potential. Komax com-
pleted the majority of these multiyear pioneer projects in 2019
and expects to conclude the remainder in 2020.

Down the road too, Komax will respond to changes in the
automotive industry and drive developments that secure
long-term growth. In terms of project business, the company
will focus, however, on orders with a lower risk profile. In
2019, Komax invested CHF 41.5 million (2018: CHF 41.1 mil-
lion) in research and development, equivalent to 9.9% of rev-
enues. Komax was able to showcase its technology leader-
ship to impressive effect in 2019, with numerous market
launches setting new standards in digital services, for instance,
and the automated processing of high-voltage cables for
electric vehicles.

Significant investment activity
Group profit after taxes (EAT) decreased by 74.5% to CHF
13.2 million (2018: CHF 51.8 million). The result was impacted
by the financial result of CHF –4.9 million (2018: CHF –5.2
million) and the high tax rate of 31.1% (2018: 17.0%), attri-
butable mainly to non-capitalized tax-loss carryforwards.
Over the medium term, Komax is expecting a tax rate in the
vicinity of 20%. Basic earnings per share came to CHF 3.44
(2018: CHF 13.52).

Komax’s financial base remains robust: as at 31 Decem-
ber 2019, shareholders’ equity totalled CHF 244.6 million
(2018: CHF 281.6 million), while the equity ratio stood at
50.8% (2018: 60.8%). As a result of major investments in four
new production and development buildings in Switzerland,
Germany, and Hungary as well as two acquisitions, free cash
flow amounted to CHF –36.9 million (2018: CHF –4.3 million).
Net debt stood at CHF 106.2 million (2018: CHF 39.4 million).

Payout ratio of 52.3%
The Board of Directors is proposing to the Annual General
Meeting of 21 April 2020 a dividend of CHF 1.80 per share
(2018: CHF 7.00), corresponding to a payout ratio of 52.3%
(2018: 52.0%). Komax is thus achieving its strategic target of
a payout ratio of 50%–60%. Of the CHF 1.80 per share, CHF
0.20 will be distributed from capital contribution reserves.
They are tax-free for natural persons domiciled in Switzerland
who hold shares as part of their private assets.

Board of Directors confirms strategy and adapts targets
In 2020, vehicle production is likely to stagnate at the 2019
level or even drop, depending on the severity of the impact of
the coronavirus. According to IHS Markit analyses, a return to
slight growth can be expected from 2021 on. In view of the
current assessment of developments in the automotive mar-
kets over the next few years, the Board of Directors has de-
cided to adapt its mid-term targets (2017–2021) and define a
new time horizon, namely 2023. The Board confirms the strat-
egy that has been pursued so far, and continues to expect
that Komax will not only participate in the growth of the auto-
motive market (number of vehicles produced), but will also
capture additional growth of at least 2%–3% as a result of
the trend towards automation. Komax is seeking to achieve
the following targets for 2023: revenues of CHF 450–550
and EBIT of CHF 50–80 million, as well as a payout ratio of
50%–60% of EAT. A RONCE target will not be communi-
cated in the future.

Outlook
The Komax Group’s medium- and long-term growth outlook
remains positive as customers continue to target a significant
increase in the level of automation in wire processing going
forward. What is more, trends such as autonomous driving
and e-mobility will power growth at Komax. That said, the
company will suffer over the short term as the entire automo-
tive industry comes under enormous pressure to adapt its
value chain. Komax expects 2020 to be another challenging
year. For this reason, it has already initiated measures to re-
duce costs over the long term. In addition, Komax is adapting
its structures to be even better aligned with momentum in the
markets. Since business development visibility is very low
and the implications of the coronavirus outbreak are presently
impossible to gauge, a forecast can currently not be made for
the 2020 financial year.

Yours sincerely,

Dr. Beat Kälin
Chairman of the
Board of Directors

10 March 2020

Matijas Meyer
CEO

ANNUAL REPORT 2019
LOCATIONS

AROUND
THE WORLD

The Komax Group has a presence in all key production
regions of its customers. Having had its finger on the
pulse of industry for more than 40 years, Komax is able to
develop appropriate, high-value, and innovative auto-
mation solutions for local requirements in global markets.

production

sites20

Komax produces in Europe, Asia, North
and South America, and Africa, and
provides sales and service support in
more than 60 countries through its
subsidiaries and independent agents.

ANNUAL REPORT 2019
LOCATIONS

Komax: production,
sales, and service
Komax: sales and service
Sales representative

Headquarters:
Komax Holding AG
Dierikon, Switzerland

countries with
sales and

service support60

Komax
companies

worldwide42

ANNUAL REPORT 2019
LOCATIONS

GLOBAL LOCAL

Customer proximity together with short reaction and
supply times are crucial to success. This is why Komax
has been applying the motto “global local” for many
years now – global production with a unique local sales,
engineering, and service network across all continents.
Komax produces standardized products and customer-
specific systems at 20 locations worldwide. More than
2 200 employees currently work in the 42 companies of
the Komax Group.

Komax has production sites spread across five continents: the company’s standardized (off-the-shelf)
products for wire processing are manufactured at locations in Switzerland, Belgium, Germany, France,
China, Japan, Singapore, and the US. The test systems of the TSK brand (see page 34) are manufac-
tured in Germany, Bulgaria, Turkey, the US, Mexico, Brazil, Morocco, Tunisia, and China. Customer
proximity is very important when it comes to ensuring short supply times for testing adapters. Customer-
specific systems are produced at sites in Switzerland, Belgium, Germany, France, Hungary, China, and
the US. Thanks to its production sites in all the most important market regions of the world, Komax
meets the expectations of its global customers, who require their suppliers to have a local presence.

The distribution and service network is a unique selling proposition
The Komax Group has a unique global presence that enables it to provide efficient and competent
support to its locally and globally active customers at all times. It provides sales and service support in
more than 60 countries through its subsidiaries and independent agents. Around 260 employees work
in Komax’s global service organization. Customers can also submit their orders via the e-commerce
platform Komax Direct.

Thanks to its customer proximity, Komax has its finger on the pulse of industry. This is crucial for
Komax if it is to deploy its experience of 45 years to develop high-quality, innovative automation solu-
tions for local needs in global markets. In addition, the company’s international orientation helps miti-
gate the repercussions of currency fluctuations. Komax seeks to ensure that costs and revenues are
generated or incurred in the same currencies to the greatest extent possible.

Following the establishment of its own company in Thailand and the acquisition of US enterprise
Artos Engineering, Komax strengthened its proximity to customers in Asia and North America. The new
company in Southeast Asia is responsible for Komax’s distribution and service portfolio in Thailand.
Meanwhile the Komax Group numbers five of its own companies in Asia – in Thailand, China, India,
Japan, and Singapore. The takeover of long-established enterprise Artos Engineering (see page 33)
marks a further step in the Komax Group’s efforts to bolster its position in North America too. The con-

ANNUAL REPORT 2019
LOCATIONS

clusion of an asset deal with the Application Tooling business area of TE Connectivity at the end of
2018 likewise enabled Komax to expand its proximity to its customers in North America. TE Connectivity
has distributed Komax products in the US, Canada, and Mexico for more than 15 years while also pro-
viding services. As a result of the asset deal, Komax has again assumed direct responsibility for this
distribution business, and is therefore closer to more customers.

Artos Engineering,
headquartered in
Brookfield, Wisconsin,
USA, was founded in
1911 and stands out for
its customer focus.

Expansion of production capacity at various locations
Komax has grown considerably in the past few years, pushing it to the limits of its capacity at a number
of locations. To permit further growth, Komax invests continually in the expansion of production capac-
ity – both by scaling up the infrastructure at existing locations and by opening new production sites.
Above all in order to expand the production of TSK test systems, Komax has opened a number of new
sites over the past few years, including in Yambol, Bulgaria, and Tangier, Morocco, in 2017 and 2018
respectively. The next TSK production site is scheduled to open in Ciudad Juárez, Mexico, in the early
months of 2020. This site is located in direct proximity to the numerous customers based in the region.
In response to a very strong performance since its establishment in 2017, the TSK company in
Bulgaria moved staff into a newly built extension at the existing site towards the end of 2019. TSK in
Bulgaria also benefited from the services of several software developers in the year under review, and
these developers are now responsible for software development within the entire TSK Group. Addi-
tional reinforcement for the Group came in the shape of the approximately 60 Exmore employees (see
page 34), who brought with them a wealth of experience in application development. Komax acquired
the Belgian company Exmore in autumn 2019.

Largest investment program in Komax’s history
In a drive to expand capacity, Komax has invested over CHF 90 million in four construction projects in
Switzerland, Germany, and Hungary since 2016. This volume of investment is unique in the history of
Komax to date. Komax made the largest investment in Switzerland, channelling more than CHF 70
million into the new production and development building at the headquarters in Dierikon. The extension
building is designed as a vertical factory with total floor space of more than 20 000 m², spread across
seven levels (lower ground floor, ground floor, five storeys). Each level can be used for production as

ANNUAL REPORT 2019
LOCATIONS

well as office work, and the lower ground floor accommodates a state-of-the-art, automated small-
parts storage area with an intralogistics system. Guaranteeing the automatic receipt into and removal
from storage of some 15 000 articles, the installation transports them autonomously to the respective
storey of the building for assembly into the machines. The process of stocking the warehouse began at
the end of 2019. To avoid production interruptions as far as possible, the move into the new building will
be staggered. All materials are to be installed first, with personnel following as of March 2020. When the
removal has been completed, Komax will give up the rented site in Küssnacht am Rigi and operate just
two locations in Switzerland, namely Dierikon and Rotkreuz.

Three new buildings go into service in 2019
The building projects in Germany and Hungary were completed in 2019. After a construction period of
just under one year, Kabatec employees moved into their new location in Burghaun, Germany, at the
end of March. The workforce now has a large production and assembly hall plus a three-storey office
building at their disposal for the development and production of their highly sought-after solutions in the
area of taping and assembly technology. Employees were previously spread over two locations in Hün-
feld and Burghaun.

Since mid-September, Komax Thonauer staff have been working at the newly constructed e-mobility
competence center in Budakeszi, Hungary, where the company develops and produces automation
solutions for the processing of high-voltage cables. Demand for these solutions is increasing as the
number of electric vehicles produced rises.

Employees of Komax SLE in Grafenau, Germany, moved into the new extension building in Novem-
ber following a two-year construction period. The previous space of some 5 000 m² has more than
doubled thanks to the new-build. With the rise of integrated networks in vehicles and the growing trend
towards autonomous driving, demand for the customized wire processing systems produced in
Grafenau is very high, since they cover such areas as data connectivity and high-frequency technology.

Since September 2019,
Komax Thonauer has
had ample space for
the development and
production of its
e-mobility solutions.

ANNUAL REPORT 2019
MARKET AND INNOVATION

AUTOMOTIVE
INDUSTRY IN A
STATE OF FLUX

Demand for automation solutions in the area of
wire processing weakened in 2019. By contrast,
solutions for new technologies in connection with
trends such as autonomous driving and e-mobility
remained very much in demand. Compared to
previous years, however, there were significantly
fewer orders for off-the-shelf products, which are
dependent on the number of vehicles produced.

According to IHS Markit analyses, some 89 million cars and light commercial vehicles were manufac-
tured worldwide in 2019. This is 5.7% or approximately 5.5 million fewer vehicles than in the previous
year. Production figures were already down slightly in 2018, showing a 1.0% decrease after the 2.2%
year-on-year growth seen in 2017.

The decline in production figures is largely due to developments in China, which – with 24.6 million
vehicles produced – is still by far the biggest automotive market. Production figures have been trending
downwards for two years, though. While 2018 saw a decline of around 4%, over 8% or 2 million fewer
vehicles were manufactured in 2019. The weakening economy and the trade dispute between the US
and China have had a negative impact on China’s vehicle sales. IHS Markit is expecting China to stabi-
lize at the 2019 level in 2020. It is, however, still too early to estimate the impact the coronavirus will
have on the automotive industry. Fewer vehicles were produced not only in China, but in other Asian
regions as well. Nonetheless, Asia still accounts for around 52% of all cars and light commercial vehi-
cles made. This in turn reflects a decline in vehicle production on the other continents as well.

New vehicle purchases on hold
The automotive industry currently finds itself in a state of flux. Issues such as e-mobility, digitalization,
and autonomous driving play a key role, necessitating very sizeable investments from automotive man-
ufacturers. While it is exciting for motorists to follow this trend, many are left unsure as to the conse-
quences. A great many consumers are presently uncertain about which drive technology to opt for
when buying a new vehicle and whether the time is ripe to switch to a newer technology. The selection
is large and automotive groups have announced a lot of new models for the years ahead. In addition to

ANNUAL REPORT 2019
MARKET AND INNOVATION

fuel- and diesel-powered vehicles, there are alternatives such as electric, hybrid, plug-in hybrid, natural
gas, and fuel cell vehicles. This uncertainty, combined with the economic downturn and various political
question marks, is causing countless consumers to put new vehicle purchases on hold. That is why
vehicle production volumes are down outside Asia too.

Higher production volumes from 2021 onwards
In Europe, 21.2 million cars and light commercial vehicles were produced in 2019, representing a year-
on-year decline of 3.8%. In 2018, a decrease of 1.0% was recorded. IHS Markit is assuming a decline
of 0.7% for 2020. In North America, IHS Markit is expecting an increase of 2.0% in 2020. This is after
falls in production volumes in the preceding three years: in 2017 by 3.9%, in 2018 by 0.6%, and in 2019
by 3.8%. 16.3 million vehicles were produced in North America in 2019. South America also reported a
decrease – by 2.9% to 3.3 million vehicles. With growth rates of 19.7% (2017) and 4.1% (2018), this
region witnessed very strong momentum in the previous years, attributable mainly to the Brazilian auto-
motive market. IHS Markit is projecting a return to growth for 2020 (2.3%).

The prediction from IHS Markit for 2020 is that vehicle production will generally stagnate, with the
number of cars and light commercial vehicles produced worldwide again in the vicinity of 89 million. It
is forecasting a return to higher production volumes in the subsequent years.

Substantial decrease in volume-based business
Declining production figures in the automotive industry had a considerable impact on Komax’s order
intake and revenues in 2019. Approximately one third of Komax’s revenues hinges on the number of
vehicles produced. This figure fell sharply in 2019. The year-on-year decrease in production volumes
meant that many customers already had a sufficient stock of wire processing machines at their plants
to handle their orders. The outcome for Komax was a 17.7% reduction in order intake to CHF 408.7
million and a 12.9% slide in revenues to CHF 417.8 million.

Order intake and revenues
in CHF million

500

400

300

200

100

7
.
9
4
4

5
.
8
0
4

7
.
6
9
4

7
.
9
7
4

7
.
8
0
4

8
.
7
1
4

2017

2018

2019

Order intake

Revenues

ANNUAL REPORT 2019
MARKET AND INNOVATION

If Komax were dependent entirely on the number of vehicles produced per year, the decrease in reve-
nues in 2019 would have been much more severe. Demand remained solid for solutions which are
linked to new technologies, such as autonomous driving and e-mobility, and/or which play a role in
further increasing the level of automation in wire processing. Bearing in mind that rising wage costs, a
lack of staff availability, the trend towards wire miniaturization, and the need for traceability in the indi-
vidual process steps for quality assurance purposes are decisive factors, customers will continue to
come under pressure to increase the degree of automation at their plants further (see also “Global
megatrends” beginning on page 26).

Need for automation solutions in all four market segments
Not only in the automotive industry, but also in the aerospace, data/telecom and industrial market seg-
ments, customers are striving to increase the degree of automation in wire processing. Even though
these three market segments are much smaller than the automotive sector, they nonetheless made an
important contribution to Komax’s revenues in 2019. The slowing economy is felt in these market seg-
ments as well. Komax has, however, benefited from having the broadest portfolio, which enabled it to
offer its customers a wide spectrum of automation solutions.

Marked decrease in revenues in Asia and Europe
The development of revenues varied considerably in the individual regions in 2019. While revenues were
down sharply in Asia (–22.5%) and Europe (–17.5%), Komax posted solid growth in North/South America
(+5.7%). The greater part of Asian revenues is generated in China. The economic slowdown, combined
with the excess capacity built up in 2018, led to a distinct falloff in investments in automation solutions
in China. Already facing sizeable investments in connection with new technologies in the automotive
industry, customers in Europe too adopted a cautious approach. In evidence for several years already,
the trend continued among wire harness manufacturers towards relocating part of their production to
North Africa to offset a growing lack of personnel in Eastern Europe. In North/South America, Mexico in
particular proved robust. The 2019 acquisition of Artos Engineering (see pages 6 and 7) was also a
factor in the growth in revenues witnessed by Komax in this region. As a result of this development,
Komax again sold more in North/South America than in Asia for the first time in two years.

This regional difference in revenue trends also led to a change in the breakdown of revenues by in-
dividual currency from 2018 to 2019. While, for example, the share of revenues in USD increased by
16.8% to 21.4%, in CNY it fell by 13.6% to 10.3%. The changes in the key currencies and their respec-
tive sensitivities are set out on page 108.

Revenues by region

2019

2018

+/– in %

in TCHF

Switzerland

Europe

Asia/Pacific

North/South America

Africa

Total

8 479

8 454

169 991

205 936

79 767

102 929

103 907

55 627

98 270

64 109

417 771

479 698

A percentage breakdown of revenues by region can be found on page 91.

0.3

–17.5

–22.5

5.7

–13.2

–12.9

ANNUAL REPORT 2019
MARKET AND INNOVATION

Market segments and service

Komax focuses on four market segments. The core business is the automotive market segment, which
accounts for around 80% of revenues. Komax is continuously strengthening its presence in the other
three segments – aerospace, data/telecom, and industrial – and exploiting the synergy potential with the
core business. All segments benefit from the global service network of the Komax Group and from
service offerings such as the Komax Academy.

Automotive
The automotive segment is by far the most important market
segment for Komax. There are a number of reasons for this. In
no other industry is the volume of wires to be processed so
large. With an annual production output of around 90 million
vehicles, each containing on average some 1 500 wires with
2 500 crimp contacts, the demand for automation solutions is
enormous. This is because the number of wires per vehicle is
continually rising owing to an increase in electrical functions.
Although the automotive industry has no peer when it comes to
the degree of standardization and automation in the production
process, there is still plenty of potential for additional automa-
tion steps, as wire harnesses are still manufactured by hand to
a large extent.

Aerospace
Issues such as safety, lightweight construction, and lower emissions have
been at the forefront of developments in aerospace for many years. Komax
can draw on the experience gained in these areas when it comes to its core
business too, as these themes continue to gain in importance in the automo-
tive industry. Komax secured expertise in the aerospace area in a targeted
way through its acquisition of Laselec in 2017 (see page 34). There is very
little automation of wire processing in the aerospace industry. However, as
the barriers to entry in this market are very high for suppliers, it has taken
several years for Komax to record its first major success. The breakthrough
was made in late 2017. Following years of negotiations, Komax succeeded in
winning new orders from two leading aerospace companies for several large-
scale systems, which are currently being built and since 2019 delivered in
phases.

ANNUAL REPORT 2019
MARKET AND INNOVATION

Data/telecom
The transfer of large volumes of data and the permanent networking of
people have become standard practice in the data/telecom market seg-
ment. The wiring used for these applications is being increasingly used in
vehicles too, as cars become ever more interconnected, with comprehen-
sive information systems that will facilitate autonomous driving in the
future. Komax can therefore also use the experience gained from the
data/telecom market segment in the automotive segment.

Industrial
The processing of wires for industrial applications such as control cabinets
often involves working with very small batches. To ensure that automation
is nevertheless a cost-efficient option for control cabinet manufacturers,
Komax has developed specific machines of the Zeta type. These machines
manufacture all the various wires that are needed automatically, ensuring
that they are in the right sequence and of the right length. This has the effect
of reducing manual labor to a minimum. Manual processes such as cutting,
stripping, marking, and sleeve insertion are rendered obsolete. Automation
of this kind has proven its worth in the area of wire processing in the automo-
tive industry for many years, and is now increasingly finding its way into in-
dustrial applications.

Service
In all market segments, customers benefit from Komax’s global distri-
bution and service network. Among other things, the service offering
includes the Komax Academy, which provides a modular training pro-
gram, including final certification. The training modules are aligned with
the various customer needs, e.g. those of service and maintenance
personnel, shift managers, and quality control staff. Participants receive
certification based on both theoretical and practical learning assess-
ments – involving standardized global criteria with identical quality levels.
Komax conducts On.Site training in nine countries: Brazil, China,
Germany, Mexico, Romania, Switzerland, Singapore, Tunisia, and the US.
The course languages are Chinese, German, English, French, Spanish,
and Portuguese. Since 2018, Komax has also offered a wide spectrum of
courses which are also available as On.Line training and accessible to
employees 24/7.

ANNUAL REPORT 2019
MARKET AND INNOVATION

SECURING THE
FUTURE WITH
INNOVATION

Innovation is crucial to long-term success. This is why
Komax has been channeling above-average investment
into research and development for years. Global trends
such as e-mobility, autonomous driving, and digitaliza-
tion allow Komax to develop additional unique selling
propositions and consolidate its technology leadership.

Innovation is a driver of success for Komax. In order to retain market and technology leadership over
the long term and stand out with innovative solutions, the company spends 8%–9% of Group revenues
on research and development (R&D) annually. Owing to the fact that Komax continued to work as inten-
sively as ever on its numerous innovation projects in 2019 despite lower revenues, the R&D quota in-
creased to 9.9% (2018: 8.6%). Komax invested CHF 41.5 million in the optimization of existing products
and the development of new ones. This is CHF 0.4 million more than in the previous year. The figure
includes expenditure on both internal development services (CHF 34.0 million) and the development
services of third parties (CHF 7.5 million).

R&D expenditure
in CHF million

15%

12%

8.0

7.4

9.9

9.0

8.6

3
.
5
2

1
.
9
2

7
.
6
3

1
.
1
4

5
.
1
4

2015 1

2016 1

2017

2018

2019

R&D

R&D in % of revenues

1 Since the start of 2017, the consolidated
financial statements have been drawn
up in accordance with Swiss GAAP FER.
The 2016 figures have been revised
accordingly. 2015 is reported according
to IFRS.

ANNUAL REPORT 2019
MARKET AND INNOVATION

Komax reduced external development costs by CHF 1.3 million year-on-year. Higher internal expendi-
ture, resulting in part from additional R&D investments by the companies Artos Engineering and Exmore
acquired in 2019 (see pages 33 and 34), more than compensated for this reduction. Since 2015, Komax
has spent CHF 173.7 million on R&D, securing a leading position from which to further drive forward the
automation of wire processing and actively shape the transition underway in the automotive industry.

More than 440 staff employed in research and development, and engineering
As at 31 December 2019, the Komax Group employed a total of 241 employees (2018: 217 employees)
in the research and development area. The majority of these staff (185 employees) work in Switzerland,
which is why the lion’s share of R&D expenditure is incurred there. In addition, Komax has develop-
ment units in Belgium, China, Germany, France, Japan, Singapore, and the US. The Group’s innovative
strength is further bolstered by 203 engineers (2018: 173 engineers), who make an important contribu-
tion through the development of customer-specific applications. The personnel costs of these engineer-
ing employees are not contained in research and development expenditure if the staff in question have
worked directly on customer projects.

The number of employees working in research and development has risen by around 45% since 2016.
Since the takeovers of Laselec and Practical Solution (both in 2017) as well as of Artos Engineering and
Exmore (both in 2019), Komax has had additional development teams in France, Singapore, the US, and
Belgium. In 2017, Komax increased expenditure for research and development from 7%–8% to 8%–9%
of Group revenues. This increase in headcount represents a form of investment in an opportunity to
leverage further unique selling propositions and to secure the company’s future.

Wire harness production of the future
The technological transformation of the automotive industry not only means substantial investments for
automotive companies, it also poses a challenge for suppliers, since they need to develop solutions to
meet new customer requirements. Issues such as e-mobility, autonomous driving, and digitalization will
shape the automotive industry for years to come. Wheels are already being set in motion that will have
long-term technological implications. This is why Komax is striving to play an active part in shaping this
development. The acquisition of company Exmore strengthened Komax’s position in the autonomous
driving sector. Exmore focuses on the development of applications relating to the processing of sensor
cables. Sensors are essential for making vehicles smarter. When it comes to current trends, Komax also
works together with leading companies in the automotive industry.

One such collaborative project is taking place at the ARENA2036 (Active Research Environment for
the Next Generation of Automobiles) research campus of the University of Stuttgart. ARENA2036 brings
science and business together to conduct interdisciplinary research into manufacturing the car of to-
morrow. “What does the car of the future look like?” and “How do production processes need to be
adapted?” are among the key questions.

The goal of a pre-competitive initiative launched in 2019 under ARENA2036 is to expedite automa-
tion in wire harness development and production from initial definition to installation in the vehicle. This
goal includes increasing product quality, saving costs over the long term, and reducing CO2 emissions,
for instance, by shortening transport routes between the wire harness manufacturer and the automotive
manufacturer. In order to achieve this, care must be taken from the point at which the complete wire
harness is defined to ensure that the harness can be produced on an automated basis by, for example,
breaking it down into smaller units. Komax is well aware of what is required to attain a higher level of
automation. Feeding this awareness into ARENA2036, the company cooperates with such notable auto-
motive manufacturers and suppliers as BMW, Daimler, Porsche, Aptiv, Dräxlmaier, Kromberg & Schubert,
Nexans, and Yazaki.

ANNUAL REPORT 2019
MARKET AND INNOVATION

Industry 4.0: interconnectedness thanks to a uniform language
Komax also works with leading companies in the area of digitalization. It is a member of the Open
Industry 4.0 Alliance, founded in 2019 by companies in the mechanical engineering, factory automation,
and IT industries. The Alliance’s goal is to ensure that up to 80% of machines in a smart factory can
communicate with each other. This means that all the networked units in a factory’s value chain – from
the production systems and the intralogistics to the IoT cloud – must speak a uniform language. To this
end, the Alliance does not itself develop standards, but draws up a framework which is based on existing
guidelines and facilitates compatibility between the units. Komax brings to the network its core techni-
cal competencies from the mechanical engineering sector. This Alliance gives Komax an opportunity to
actively play a part in shaping Industry 4.0 and so ensure the optimum interconnectedness of newly
developed Komax solutions. Alliance members include such companies as Beckhoff, Endress+Hauser,
Fujitsu, Kuka, Samson, and SAP.

Number of electric vehicles continually rising
Another area where Komax demonstrates its innovative strength is e-mobility. Of the 89 million vehicles
produced in 2019 “only” around two million were electric vehicles, i.e. pure battery electric vehicles
(BEVs) and plug-in hybrid electric vehicles (PHEVs). However, with volumes rising continuously, con-
sulting firm McKinsey is expecting this number to double to some four million electric vehicles by 2021.

Number of produced cars and light commercial vehicles by drive technology
in million

120

100

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Internal combustion engine (ICE)

Full hybrid (HEV)

Plug-in hybrid (PHEV)

Battery electric vehicle (BEV)

Source: McKinsey and Komax

ANNUAL REPORT 2019
MARKET AND INNOVATION

Innovative leap forward in the processing of high-voltage cables
Komax’s e-mobility center of competence in Hungary (see page 8) is already feeling an increase in de-
mand for automation solutions for the processing of orange high-voltage cables. Up until now, produc-
tion has been largely by hand, entailing complex quality controls and costly remachining. In order to
ensure the efficient and economic processing of the growing volume of shielded and unshielded
high-voltage cables, it is becoming increasingly crucial to automate processes. In 2018, Komax already
boasted a portfolio of solutions covering the entire value chain from processing high-voltage cables to
testing harnesses. Plug manufacturing called for multiple machines from the Lambda 2 series. These
are semi-automatic, with every machine needing an operator. Optimum productivity therefore requires
a team of several people to process the high-voltage cables in parallel on multiple machines.

Komax took the next innovative step forward in 2019 and presented the Lambda 440, the first ma-
chine for the automated production of high-voltage cables. The Lambda 440 is made up of process
modules from the Lambda 2 series. The system automatically manufactures the cable in a straight-
through process from preparation stage to housing assembly. The precise sequence depends on the
types of plug to be processed and is always developed in close collaboration with customers.

The Lambda 440 auto-
mates the processing of
high-voltage cables.

Komax does more than just offer solutions for processing individual high-voltage cables. Its portfolio
also contains the Omega 750 MEB, a machine capable of automatically producing complete wire har-
nesses for electric vehicles. Under a joint project with Leoni, Komax adapted its Omega 740 fully auto-
matic block loader machine to manufacture high-voltage wire harnesses. The aim of the venture was to
manufacture the wire harness for the auxiliary unit for the new modular electric drive matrix (MEB) from
Volkswagen in a process as fully automated as possible. Being used in the VW ID.3 for the first time, this
wire harness connects the battery with various systems such as air conditioning, battery heat manage-
ment or the direct current converter. In 2019, Leoni used the Omega 750 MEB to produce countless
high-voltage wire harnesses for the ID.3, which was unveiled in the year under review.

ANNUAL REPORT 2019
MARKET AND INNOVATION

SMART FACTORY by KOMAX

For decades, Komax has been renowned for its innovative products and leading market position. But
what does Komax want to achieve and accomplish with its work? And what contribution is it making to
society? Komax’s purpose can be summarized in just a few words:

As a driver of innovation and market leader in
automated wire processing, we develop and
produce intelligent, reliable, and optimally
cost-effective wiring solutions for smart mobility
and smart city applications. We work closely
with our customers to make life simpler, more
convenient, and safer.

Komax understands smart mobility to mean today’s increasingly diverse range of mobility options,
which are used in very different ways. Many of these means of transport – from e-bikes to electric cars
and trains – are increasingly powered by electricity. Where electricity is used there are wires, and where
there are wires there are fields of application for Komax. What’s more, the optimal usage of these mo-
bility options is supported by smart city solutions, be they traffic management systems or intelligent
power usage, distribution or storage systems. These solutions also need wires, for transmitting either
power or data.

The challenge: sustained high quality at low costs
The megatrends of smart mobility and smart city are increasingly becoming part of everyday life. And a
large number of products are becoming increasingly more intelligent and power-hungry. Komax’s cus-
tomers are involved in these trends and supply key components, so they have to overcome huge chal-
lenges: despite the increasing complexity, they have to deliver sustained high quality while keeping
costs as low as possible. To make this possible, Komax provides its customers with SMART FACTORY
by KOMAX, which encompasses products and solutions that substantially reduce quality costs and
significantly increase wire processing productivity. In specific terms, this means demonstrably fewer
faults and greater efficiency, even in complex production tasks. In this way, Komax – together with its
customers – is providing consumers with intelligent products that are not only continuously improving,
but also operate reliably and are affordable.

ANNUAL REPORT 2019
MARKET AND INNOVATION

SMART FACTORY by KOMAX is character-
ized by four attributes: it is intuitive to use,
it automates production as well as material
and dataflows, it is connected within a net-
work, and it self-regulates its production
processes.

What benefits does SMART FACTORY by KOMAX have to offer?
If operating Komax machinery is intuitive, human error can be largely eliminated because the system
specifies the settings and the correct operating procedure. This minimizes not only the operator’s influ-
ence and scope for decision-making, but also the need for customer training. The products are also
automated to such an extent that they can instigate and complete increasing numbers of tasks them-
selves. Once they are started up, significantly fewer human-led intermediate steps are needed. This
applies not only to material flows but also data exchanges.

Smart factory solutions are integrated into a network, with all the stages of production being linked
to each other. Connectivity standards and the use of cloud technology enable full transparency and
make it possible to achieve fact-based increases in productivity and quality. Komax is working towards
enabling its systems to adjust themselves, thereby autonomously controlling the production process.
This could be the case for simple process and monitoring tasks, but may also extend as far as optimiz-
ing entire production processes. And this could even conceivably take place across different plants.
Customers would be able to reduce bottlenecks, downtimes, scrap, and rejects. At the same time,
smart factory solutions can systematically track and register any number of production stages so they
can be traced back if problems occur with deliveries.

Smart factory solutions 2019
Komax has been developing intelligent products for years, well before the existence of terms such as
Industry 4.0, Smart Factory, and Industry 2025. SMART FACTORY by KOMAX is therefore the continu-
ation of a long tradition. It is helping Komax to continue fulfilling its role as a pioneer and technology
leader, thereby enabling its customers to benefit from an additional competitive edge. In 2019, Komax
launched several smart factory solutions onto the market. One of these is the Q1250 quality tool – the
digital eye. With its intelligent image analysis, the Q1250 module monitors crimp quality completely
automatically (intuitive and automated), thereby eliminating the need for laborious visual checks by the
machine operator. Other important new elements of the smart factory include the Komax Connect
range of products (intuitive and connected) and the Sigma 688 ST. These products feature the maxi-
mum degree of automation for manufacturing twisted-pair wires (automated). These three smart factory
solutions are described in more detail on the next two pages.
.

ANNUAL REPORT 2019
MARKET AND INNOVATION

New products

Thanks to its targeted investment in research and development, Komax succeeds in bringing a variety
of new products and product enhancements to market every year. 2019 was no different in this regard.
Komax was able to demonstrate its technology leadership impressively, setting new standards with
numerous market launches. We provide a selection of these new products below.

Sigma 688 ST
The Sigma 688 ST is the first automated solution to deliver
fully automatic wire processing with twisting and simultaneous
spot taping of both open wire ends. For UTP wires (unshielded
twisted pairs) for applications with high data transfer speeds,
vehicle manufacturers (OEMs) demand the spot taping of open
wire ends for quality reasons. This prevents the unintended
opening of the ends in downstream logistics steps or during
manual insertion processes. Marking a first, the Sigma 688 ST
provides a fully automatic solution that meets these OEM
quality requirements. The automated overall process allows
Komax customers to improve performance, productivity, and
cost effectiveness. At the same time, the integrated spot tap-
ing function simplifies logistics and guarantees the quality of
downstream work processes.

Komax Connect
The modular Komax Connect service transmits production
data from Komax machines to the Komax Cloud, where they
are processed in real time and presented in a clearly struc-
tured visual format. Customers get a snapshot of the pro-
ductivity of their machines and can react immediately if nec-
essary, so preventing a machine that has been less than
optimally set up from producing a lot of expensive scrap. A
further advantage of the cloud solution becomes relevant
when problems occur: the customer loses no time because
the Komax service technicians can analyze the production
data of the machine in question online and propose solu-
tions. Komax Connect is particularly attractive for custom-
ers manufacturing wires using Komax machines at different
plants. This is because those in charge of the machines
have global access 24/7 and can compare and systemati-
cally optimize productivity, efficiency, and quality between
the different sites.

Gamma 450
The compact, fully automatic Gamma 450 processes crimps
and seals on both sides and takes up minimum space. It
guarantees high production availability and traceable quality.
The wire processing machine has all the necessary key
functions and can also be extended for specific purposes
using an extensive range of options. High-performance
modules ensure seamless quality monitoring. Optimized
quick-change systems reduce setup and changeover times.
Handling is intuitive and ergonomic as well as easy and
error-free thanks to the Komax HMI operating software.

ANNUAL REPORT 2019
MARKET AND INNOVATION

Komax Smart Stock
Komax Smart Stock is a delivery program for spare and wear
parts that follows the consignment principle. The key compo-
nent is a vending machine set up at the customer’s facilities and
managed by Komax. The vending machine is individually con-
figured and stocked with spare and wear parts required to
maintain and repair Komax machines installed on-site. As it is
connected to the Komax Direct e-commerce platform, Komax
is always aware of the current stock levels and will replace the
relevant parts in good time. This means considerably shorter
machine downtimes because spare parts are immediately avail-
able. Parts taken from the vending machine are logged in real
time and subsequently invoiced by Komax.

Q1250
Used on Alpha series machines, the Q1250 module auto-
mates the optical inspection of the entire crimping process,
largely eliminating the need for visual checking by the oper-
ator. Since the intelligent system is far superior to the human
eye in terms of precision and speed, the quality of the mon-
itoring of the crimping process is significantly higher. This
also lightens the operator’s workload and frees up time for
other tasks. Prior to crimping, the fully automatic Q1250
checks each wire end for correct seal quality and seal inser-
tion. After crimping it inspects the quality of the crimps. The
camera system provides superior-quality traceable images
and process data. A must, for instance, when it comes to
wiring for autonomous driving.

ANNUAL REPORT 2019
INTERVIEW

2019 financial year and mid-term targets

THE ADVANCE OF AUTO-
MATION CONTINUES

In 2019, Komax witnessed a fall in revenues, battled
with declining profitability, launched a number of inno-
vative digital services, and introduced measures to cut
costs. The Board of Directors has adapted the mid-
term targets.

Beat Kälin, how would you assess the 2019 financial year?
Beat Kälin: Following the record results in 2018, the 2019
financial year represents a major setback in a form that we
did not expect. Factors such as the trade dispute between
the US and China and the emergence of economic slow-
down in a number of regions have had an increasingly nega-
tive impact on the investment behavior of our customers.
If you’re in the business of selling capital goods, you have to
be able to deal with exogenous influences that you cannot
change. Given the circumstances, we did that well. What is
unsatisfactory, however, is that our annual results were addi-
tionally impacted by a number of internal difficulties relating
to certain customer-specific projects.

Matijas Meyer, at the start of 2019 could you ever have
anticipated that revenues would decline by more than
10%?
Matijas Meyer: Right up until the end of 2018, our customers
were ordering a very large number of machines from us. We
were also anticipating further growth in 2019 on the basis of
the forecasts communicated to us. But the whole picture
suddenly changed in January and February. In particular, the
part of our business that depends on the number of vehicles
produced deteriorated dramatically. From that point onwards,
we assumed that 2019 could turn out to be a challenging
year. At the start of the year we were still hoping that our cus-
tomers would only postpone their investment projects by one
or two months. Unfortunately, as it turned out over the course

Beat Kälin, Chairman

ANNUAL REPORT 2019
INTERVIEW

of 2019, they repeatedly pushed back their projects – initially
into the second quarter, then into the second half of the year,
and finally into the following year.

Did you experience a decline in revenues in all regions?
Matijas Meyer: In North/South America we increased reve-
nues by 5.7%. That was attributable in part to the acquisi-
tion of Artos Engineering with effect from 1 April 2019.
Revenues declined in all other regions. We suffered the
strongest fall of all in the Asia/Pacific region, with a drop of
22.5%. In China, which is by far the most important market
for us in Asia, our customers had invested a great deal in
our automation solutions in 2018. As a result, we experi-
enced excess capacity in a number of plants in 2019, while
demand for additional solutions was also more modest.

Did you sell less in all product categories?
Matijas Meyer: The revenue decline was particularly pro-
nounced in what we call volume business. This essentially

“ Our customers are aware
that there is no way of
avoiding the trend towards
increasing the level of
automation going forward.”

Matijas Meyer

involves crimp-to-crimp machines, where our sales figures
rise when the number of produced vehicles rises. When pro-
duction volumes rise, our customers increase their capacity
with additional crimp-to-crimp machines in order to be able to
manufacture the wire harnesses they require. For the majority
of our other machines, sales figures declined much less sharply,
or indeed mirrored the sales level of the previous year.

Why is that?
Matijas Meyer: At the moment, the lion’s share of the wire
harness manufacturing process is still carried out manually.
Our customers are aware that there is no way of avoiding
the trend towards increasing the level of automation going
forward. Why? Because factors such as rising wage costs,
lack of personnel, the process of wire miniaturization,
seamless traceability, and higher quality demands are all
strong arguments in favor of automation solutions. For that
reason, in 2019 our customers invested above all in new
technologies that can help them increase the degree of
automation in their factories. For example, these include

Matijas Meyer, CEO

our machines from the Omega and Zeta ranges, as well as
our fully automatic twisting machines.

What strategic considerations lay behind your acquisi-
tions of Artos Engineering and Exmore in 2019?
Beat Kälin: Artos is a traditional US company with a history
dating back more than a century. Our acquisition of Artos
has brought a significant amount of additional expertise
into the Group when it comes to development of innovative
applications and allows us to strengthen our customer
proximity in North America, thanks to the local engineering
skills. From a strategic perspective, both aspects are very
important to us. The Belgian company Exmore is extremely
experienced in the development of applications relating to
the processing of sensor cables. Sensor cables are a key
element in enabling vehicles to drive autonomously – or at
least in a highly automated way – in the future. The acquisi-
tion of Exmore means that we are well positioned to take
advantage of this trend in the automotive industry.

Are you planning any further acquisitions?
Beat Kälin: If the opportunity arises to acquire a company
that represents a good fit for the Komax Group – both from
a strategic and a corporate culture perspective – we will be
open to the idea and examine it carefully. Obviously, an im-
portant element in assessing such projects is the amount
of financial and management resources available. Following
numerous acquisitions over the last years, Komax is cur-
rently first and foremost preoccupied with integrating the
new companies in the best way possible, as well as making
the most of the strengths and competencies acquired.

ANNUAL REPORT 2019
INTERVIEW

Why did EBIT fall by more than 60% when revenues slid
by “only” around 13%?
Matijas Meyer: The above-mentioned machines in the volume
business are serial production machines that give us operat-
ing leverage if we can produce a high number of units. Due
to the significant decline in 2019, EBIT suffered to a dispro-
portionate degree. Moreover, we continued to invest heavily
in R&D in 2019. The current process of upheaval that we are
witnessing in the automotive industry offers numerous oppor-
tunities to develop unique selling propositions, and that’s
what now has to be worked on. R&D expenses rose by a
total of CHF 0.4 million in 2019 – as opposed to falling by
CHF 5.3 million, which would have been the case if they had
developed in parallel with revenues. As a consequence, the
R&D ratio witnessed an increase from 8.6% to extraordinary
9.9%.

Are there any other reasons that explain the EBIT
margin of 5.8%, which is unusually low for Komax?
Matijas Meyer: We faced a number of major challenges in
certain customer-specific projects in 2019, which led to addi-
tional expenditure running into high single-digit millions. Here
I am thinking of pioneering projects in the automotive and
aerospace industries which have the potential to make a
noticeable contribution to growth for Komax. Given the poten-
tial here, we decided a few years ago to assume this entre-
preneurial risk and work together with customers to build new

“ From a strategic per-
spective, it is important
that we strike the right
balance between the de-
velopment of serial pro-
duction machines and
customer-specific projects.”

Beat Kälin

large-scale equipment for the fully automatic processing of
special cables. There’s always a likelihood that multiyear
projects like these will deviate from planned developments
on occasions. That said, we did not anticipate this magnitude
of cost consequences.

How will you be able to prevent this from recurring in
the future?
Matijas Meyer: The first thing to point out is that the various
pioneering projects that we have been pursuing simultane-
ously are now completed or on the road to completion.
In addition, in 2019 we strengthened our risk management
function, adjusted our processes, and – in an extra step –
decided to focus on projects with lower risk profiles going
forward. We have analyzed the mistakes made and learned
the corresponding lessons so that we can be successful
in the future in the project business, too.

Does it make strategic sense to continue to pursue the
project business? After all, Komax did not have a last-
ing success with its Solar and Medtech activities in the
past...
Beat Kälin: Customer-specific projects are a core compo-
nent of our strategy and an important element in continuing
to expand our technology leadership, in particular with
regard to key customers. Unlike the former activities you
mention, today’s customer-specific projects always involve
systems for automatic wire processing – which is our core
competency. The things we learn and develop on these proj-
ects often feed through into our serial production machines
further down the line. With such projects, the objective must
always be for there to be as many repeat orders as possible
and not to involve just one system. An advantage of cus-
tomer-specific projects is that we work on these together
with customers, hence we know that they meet a particular
need. In contrast, when developing a serial production
machine we conduct market appraisals several years in
advance, with the expectation that these will prove accurate
when we bring the machine to market a few years down
the line. The risk with serial production machines is thus
structured differently and, as a consequence, can be much
higher – particularly in times of radical upheaval such as
being experienced by the automotive industry currently. In
addition, we have to bear all the development costs our-
selves. This means they are a form of up-front investment.
From a strategic perspective, it is important that we strike
the right balance between the development of serial pro-
duction machines and customer-specific projects, whereby
the project business is much smaller and will remain so.

Komax has invested more than CHF 90 million in
expanding capacity at four locations in recent years.
Are you facing a problem of excess capacity at the
moment?
Matijas Meyer: We moved into two new buildings in Germany
and one in Hungary in 2019. We have long had space prob-
lems at these three locations, so it’s pleasing that we now
have more capacity here. We will move into the new build-

ANNUAL REPORT 2019
INTERVIEW

“ We once again demon-
strated our position as
technology leader in
2019.”

Matijas Meyer

ing at our headquarters in Switzerland in the first quarter of
2020, and then give up the premises that we currently lease
in Küssnacht am Rigi. In order to be able to grow further
in the future, we planned right from the start to have reserves
of space once the various construction projects were com-
plete. However, due to the current development of busi-
ness these reserves are greater than anticipated.

What measures are you taking by way of a response?
Matijas Meyer: Our 20 production sites have different levels
of capacity utilization. Where necessary and possible, we
have made preparations for short-time working, or indeed
already initiated this. In addition, we are currently reviewing
the structures of the entire Komax Group with a view to
streamlining them and increasing profitability. We will com-
plete this process in the first half of 2020. Redundancies
have been implemented at certain locations in connection
with this process. But the structural measures we take will
not have an impact on costs until the second half of the year
at the earliest.

What pleasing developments did you see in 2019?
Matijas Meyer: We launched a number of new products in
2019, once again demonstrating our position as technology
leader. We also launched a number of digital services for
the first time, thereby showing the importance we attach to
digitalization. Innovative products are obviously valuable
things in their own right, but I get particular pleasure from
seeing how well our innovations go down with customers.
I was also pleased to see how committed our employees
were to Komax throughout this difficult financial year, and
how they are adapting to what remains a challenging situa-
tion. I am extremely grateful to all of them for their dedication.

The Board of Directors is proposing to the AGM a divi-
dend of CHF 1.80 per share, after CHF 7.00 the previous
year. Why are you not distributing more?
Beat Kälin: In our strategy, we specified that we would be
distributing 50%–60% of Group profit after taxes. If this
profit figure falls, so too will the dividend. The proposed
dividend of CHF 1.80 corresponds to a payout ratio of

52.3%, which keeps us within our stated strategic band-
width. We have positioned ourselves clearly with our payout
strategy. In other words, our shareholders know that there
is no reason to expect a minimum dividend – it will be aligned
with business performance each year.

What can we expect to see from Komax in 2020?
Matijas Meyer: Making concrete forecasts from today’s
standpoint is difficult. Our visibility as regards business de-
velopment is very low, which means we cannot yet properly
appraise the first half of the year. The spread of the corona-
virus has added another layer of complication. How long
this epidemic will last and what consequences it will have
for global economic development – and for the automotive
industry in particular – is not something that can be accu-
rately predicted right now. But basically, we are assuming
that 2020 will be another very challenging year, as existing
forecasts – even prior to the outbreak of coronavirus –
assumed similar annual vehicle production figures to 2019.

What consequences will this have for the 2017–2021
strategic targets?
Beat Kälin: The Board of Directors has been scrutinizing
these targets for quite some time now. In view of the devel-
opments forecast for the automotive industry over the next
few years, it has decided to adapt the targets and define a
new time horizon – 2023 – for them. We defined the 2017–
2021 targets in the second half of 2016, and were aware at
the time that they were ambitious. Up until 2018 we were
well on track to meet them. The 2019 financial year has set
us back considerably, however, and we cannot assume that
we will make a major step forward in 2020. Consequently,
we would have to make up all this lost ground in 2021, which
appears to us to be unrealistic. For 2023 we are targeting
revenues of CHF 450–550 million and EBIT of CHF 50–80
million. These targets reflect Komax’s unchanged ambition
to outstrip growth in the market and achieve above-average
profitability. In addition, we are continuing to distribute
50%–60% of EAT.

How confident are you of achieving the targets set by
the Board of Directors?
Matijas Meyer: As I mentioned, there are still a number of rea-
sons why our customers are seeking to significantly increase
the degree of automation in their factories. Trends such as
e-mobility and autonomous driving are also important growth
drivers for us. Assuming there is no serious slowdown in global
economic growth to the point where our customers become
even more reticent about investing, I’m confident we can
meet the targets set. With our product portfolio and unique
sales, service, and engineering network, we are extremely well
positioned to harness any pent-up demand that emerges.

ANNUAL REPORT 2019
GLOBAL MEGATRENDS

GLOBAL
MEGATRENDS

Environmental awareness, safety, as well as networked
and affordable vehicles are global megatrends, and
will act as key drivers of the steady rise in demand for
automation solutions in the medium and long term.
Each of these trends is resulting in more and new types
of wire being installed in vehicles, and automated pro-
cessing is increasingly required for reasons of quality,
efficiency, complexity, cost, miniaturization, and
traceability.

Global megatrends will support Komax’s business in the long term. These include growing environmen-
tal awareness on the part of consumers and the associated goal of emission-free vehicles. A key role
will be played in this respect by e-mobility (see page 16). Another megatrend is increasing interconnect-
edness. Info tainment systems in vehicles are becoming increasingly comprehensive and complex,
while integrated information systems are laying the basis for the future: autonomous driving. The need
for greater road traffic safety represents a further megatrend. Here the emphasis is now no longer just
on protection in the event of an accident, but above all on avoiding accidents. As a consequence, the
number of sensors in vehicles will continue to rise. Finally, a global megatrend towards affordable vehi-
cles is emerging. This requires greater cost efficiency in manufacturing, which in turn is increasing the
pressure to automate wire processing further.

More wires per vehicle
These megatrends are leading to an increase in the number of electronic functions in vehicles. Accord-
ingly, the number of wires that need to be assembled per vehicle is on the rise. The electrical systems
in today’s compact passenger cars comprise as many as 1 300 wires, 2 300 crimp contacts, and 250
plug housings. Full-size vehicles require as many as 1 800 wires, 3 200 crimp contacts, and 350 plug
housings. Innovations in vehicle construction, new functionalities, and an ever-rising fit-out level in all
vehicle classes are leading to a further increase in demand for wires and crimp contacts. This trend,
which has been perceptible for a number of years now, will strengthen further in the future.

ANNUAL REPORT 2019
GLOBAL MEGATRENDS

Low degree of automation
A large part of the wire harness manufacturing process is still done by hand, but rising wage costs and
an increasing lack of personnel are driving the trend towards automation solutions. As systems become
increasingly complex, the potential sources of error in manual wire processing and assembly become
more numerous. Manual processes are becoming less capable of meeting these demands. Furthermore,
the end-to-end traceability of the individual process steps cannot be ensured with the same degree of
reliability that comes with automation solutions. For example, in the absence of automation, the retro-
spective search for a source of error is more complicated. Intelligent automation solutions, quality as-
surance tools, and systems for testing harnesses before they are installed in vehicles help to guarantee
and increase the efficiency and reliability of the production process. This has been recognized by auto-
motive manufacturers, who are therefore increasingly calling on their suppliers to further automate their
production processes.

Simplifying wire harnesses and miniaturization
The individual subsystems and assemblies in vehicles – and wire harnesses in particular – are becoming
increasingly complex, which throws up challenges for automatic production. To counter this, various
automotive manufacturers are seeking to radically simplify the wire harness. The aim is a zonal electrical
system with several smaller wire harnesses rather than one big, complex one. This reduces wire length,
but not necessarily the number of wires used, and this is the key element for Komax. Simpler wire har-
nesses with shorter wires will help significantly increase the degree of automation in processing.

Another factor driving automation is the ongoing miniaturization of wires, a development that has
been around for some years now. Wire cross sections are becoming ever smaller, which makes manual
processing difficult or even impossible.

Growth opportunities for Komax
The automotive industry suffered in all geographical regions in the year under review, and this is re-
flected in lower production figures (see page 9). Consequently, Komax customers did not invest in
capacity expansion. The aforementioned factors that are driving a higher degree of automation in wire
processing – such as rising wage costs, a lack of personnel, the ongoing process of miniaturization,
seamless traceability, and higher quality and efficiency demands on the part of automotive manufac-
turers – nevertheless had an impact. Customers are aware that there is no way of avoiding the trend
towards automation. They therefore invested in automation solutions in 2019, too, albeit to a lesser
extent, with lower investment volumes, given the economic backdrop. This momentary snapshot does
not change the fact that global megatrends will lead to a step-by-step increase in the degree of auto-
mation in wire processing over the next few years. The current projects of various automotive manufac-
turers and suppliers that aim to simplify wire harness topology are also designed to increase the degree
of automation significantly. Komax is involved in some of these projects, and is demonstrating what
changes are needed to wire harnesses in order to facilitate a greater degree of automation in the pro-
duction process. Modern wiring concepts (e.g. for infotainment systems or electric vehicles) also present
opportunities for Komax to establish further unique selling propositions and thereby create additional
sales potential.

The rapid proliferation of the zero-error tolerance principle means there is an increasing need for the
kind of test systems produced by TSK, for example. Test systems of this kind guarantee the 100%
functionality of wire harnesses and electronic assemblies installed in vehicles.

Komax possesses a broad spectrum of solutions that provides its customers with convincing an-
swers to the current global megatrends. Komax is also seeing a number of trends from the automotive
industry gain momentum in other market segments in which it is active. Thanks to its expertise and the
market proximity of its product range, Komax is in a very good position to generate growth outside the
automotive industry, too.

ANNUAL REPORT 2019
GLOBAL MEGATRENDS

GLOBAL MEGATRENDS

Safety

Environmental
awareness

Affordable
vehicles

Integrated
vehicles

GROWTH DRIVERS

Number of wires

Complexity of
vehicle power
supply systems

Quality and
efficiency
demands

Miniaturization

New types of
wires and
new materials

ADVANTAGES OF KOMAX

Technology
leader

Broadest solution
portfolio

High degree of
innovation

Global sales and
service network

ANNUAL REPORT 2019
GLOBAL MEGATRENDS

NUMBER OF VEHICLES PRODUCED
WORLDWIDE 1

per year

39
million

49
million

58
million

78
million

89
million

1980

1990

2000

2010

2019

1 Passenger cars and light commercial vehicles (source: IHS Markit).

INCREASE IN ELECTRICAL FUNCTIONS

Compact

1300

2 300

250

Wires

Crimp contacts

Plug housings

Wire length
(total)

Full-size

1800

3 200

350

2 000 m

4 000 m

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

BUSINESS
MODEL AND
STRATEGY

Developing solutions for automated wire processing
in four market segments is Komax’s strength.
Here Komax is a pioneer, as well as a market and
technology leader, and is looking to further
consolidate this leading global position. To this end,
it pursues four key strategic priorities. Above-
average profitability and further sustainable growth
are important objectives here. This goes hand in
hand with environmentally conscious, socially aware,
and responsible conduct towards all stakeholder
groups.

Komax specializes in innovative solutions for all wire processing applications and for the testing of wire
harnesses. The emphasis is on processes such as measuring, cutting, stripping, crimping, taping
wires, and block loading. Komax offers its customers fully automated and semi-automated serial
production models as well as customer-specific systems (for all degrees of automation and individual-
ization), which optimize processes while at the same time increasing productivity. These are supple-
mented by an extensive range of quality assurance modules, testing devices, and networking solutions
for the reliable and efficient production of wire harnesses. Digital services that increase the availability
of installed systems and test their productivity also form part of the range, as does intelligent software.
All of this provides ideal conditions for Komax’s customers to consolidate and increase their compet-
itive advantage.

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

Four key strategic priorities

Komax has 45 years’ experience in the development of customer-oriented solutions for wire process-
ing. The company is both the technology and market leader in its field, with a market share more than
twice that of its nearest competitor. In order to further strengthen this global leadership position, Komax
pursues a growth strategy that involves four key priorities:

Solutions along the value
chain

Innovative production
concepts

Global customer proximity

Development of
non- automotive markets

Solutions along the value chain
Thanks to many decades of experience and its proximity to its customers, Komax understands their
needs and offers them a comprehensive range of innovative and reliable automation solutions. The of-
fering covers the most capital-intensive and critical processes of customer value chains – from mea-
suring and cutting wires to the taping process and finally the testing of the completed wire harness (see
pages 36 and 37). Komax relies not only on its proprietary developments, but also on the expertise of
established partners. As a result, customers receive solutions for the key wire processing applications
from a single source. This approach is unique in the world. Thanks to a number of acquisitions in recent
years, Komax has succeeded in closing the existing gaps in its spectrum of products and solutions, with
the result that it can now offer its customers end-to-end solutions. Komax has the broadest portfolio of
solutions, which means that it can address a whole range of customer needs in a targeted way. To en-
able its customers to continue to increase productivity in the future, Komax works with a number of
partners in the field of software, among others. Komax strives to network and manage the individual
processes in the value chain, such as through Komax MES (Manufacturing Execution System) and
Komax Cloud MES, a form of production control software for the wire processing industry 4.0, launched
in collaboration with iTAC Software.

Innovative production concepts
For a market leader like Komax, innovations are of maximum strategic importance. Komax has therefore
been investing in innovations to optimize its existing product range, as well as in new developments,
for many years (see pages 20 and 21). Every year, Komax channels some 8%–9% of revenues into
research and development. All activities are systematically geared to customer needs and expectations.
That is why Komax typically employs interdisciplinary teams – consisting of marketing experts, product
managers, and development engineers – on innovation projects. For example, skillfully combining dif-
ferent processes and technologies reduces interfaces and lead times. At the same time, processing
reliability is increased.

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

Global customer proximity
Komax has 20 production sites located in Europe, Asia, North
and South America, and Africa. The company provides sales and
service support in more than 60 countries through its subsidi-
aries and independent agents, which gives it a unique global
presence. It has set itself the goal of being close to its customers
so that it can provide outstanding service combined with the
shortest possible response and supply times.

R&D expenditure accounts for
%

of revenues8 –9

To remain competitive, Komax’s customers need to be flexi-
ble and select the optimal economic locations for their produc-
tion processes – in other words, set up operations wherever their
end customers are. This is also true for Komax. To ensure that it
stays close to its customers, including when these customers choose to relocate, Komax likewise has
to show flexibility. For this reason, Komax seeks to expand its global reach in a targeted way, be it
through acquisitions – as described in the section entitled “Selective acquisitions” – or through the
establishment of new sites (see pages 6 and 7). Komax’s strong global presence is also reflected in the
percentage breakdown of its revenues by region. The individual regions – Europe (including Africa),
Asia/Pacific, and North/South America – each generated between 19% and 56% of Komax’s revenues
in 2019.

Development of non-automotive markets
Komax now generates around 80% of its revenues through customers in the automotive industry. Market
estimates indicate that some 60% of globally processed wiring is used in automotive manu facturing.
This high proportion is explained by the fact that the automotive industry is peerless when it comes to
standardization and automation. The high volume of wires needed for large-batch processing and the
stringent requirements in place with regard to finish quality are key arguments in favor of automated
solutions.

In addition to the automotive industry, there are countless other markets in which numerous wires
are processed. Komax focuses predominantly on three additional market segments (see pages 12 and
13), all of which have synergy potential with the core business: aerospace, data communication and
telecommunication (data/telecom), and industrial applications (industrial). As these offer attractive long-
term growth opportunities, Komax is seeking to increase its penetration of these markets. If this is to be
achieved, targeted investment in marketing and sales are essential. The success of this approach over
many years is bearing fruit, as is evident from the fact that a first major order was received towards the
end of 2017 from the aerospace industry, for example. Thanks to the large installations that Komax
began supplying to the client in 2019, the automation of wire processing will be raised to a level that has
never been seen before in the aerospace industry.

The megatrends evident in the automotive sector are influencing these three market segments in
different ways. However, the potential for synergies with the existing core business in the automotive
industry is considerable. The three other market segments are already addressing issues such as safety,
lightweight construction, multimedia, small-batch production, and integrated production/Industry 4.0,
and have been doing so for years. Moreover, Komax uses the experience gained in these areas in the
development of automation solutions for the automotive industry. Conversely, the aerospace, data/
telecom, and industrial market segments benefit from Komax’s great expertise in the core business: in
particular, Komax can adapt existing automotive solutions and, where necessary, specifically develop
new products for particular segments.

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

Selective acquisitions

The primary goal of the Komax Group is to grow organically. In addition, potential candidates and op-
portunities for acquisitions are carefully examined as part of a clearly defined acquisition strategy that
revolves around its four key strategic priorities. Komax pursues this strategy as it intends to strengthen
its leading market position, also making use of acquisitions and equity stakes.

The acquisitions made in recent years have played a significant role in the implementation of the
strategic priorities. Examples of such acquisitions include the TSK Group (2012; solutions along the
value chain), SLE quality engineering (2014; innovative production concepts), Thonauer Group (2016;
increase in global reach), Laselec (2017; innovative production concepts and development of non-auto-
motive markets), Artos Engineering (2019; increase in global reach and innovative production concepts),
and Exmore (2019; innovative production concepts).

Komax Group brands

The acquisitions of recent years mean that the Komax Group is present in the market with six further
brands in addition to the Komax brand itself.

Komax manufactures innovative serial production machines as well as customer-specific systems for
automated wire processing. These are used for the automation of various processes, such as cutting,
stripping, labelling, crimping, and twisting, but they can also be used for the fully automatic production
of entire wire harnesses. Komax’s customers are active primarily in the automotive, aerospace, datacom/
telecom, and industrial market segments.

When it was founded by Max Koch in 1975, Komax was just a three-man operation. But even in
these very early days, the company was noted for its pioneering spirit. It launched the first cutting and
stripping machine with a stepping motor drive after just one year, and would go on to develop the
world’s first microprocessor-controlled fully automatic crimping machine in 1982. Expansion abroad
likewise started at an early stage – with the foundation of Komax USA in 1981.

Komax’s headquarters and largest production site are located in Dierikon, Switzerland. Outside of

Europe, Komax has production sites in Asia.

Artos Engineering, headquartered in Brookfield, Wisconsin, USA, is a leader in the automation of wire
processing in North America. The company, which was founded in 1911, has a subsidiary in France and
develops serial production machines for wire processing automation. In addition, Artos Engineering has
considerable experience of optimizing its machines to accommodate innovative applications tailored to
customers’ specific needs.

Artos Engineering has been part of the Komax Group since April 2019 and primarily serves customers

in the industrial applications, automotive, and aerospace market segments.

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

Founded in 1993, Exmore specializes in developing customer-specific solutions for automatic wire
processing. In keeping with its motto “making industrial standards work,” Exmore develops sophisticat-
ed applications with which it optimizes serial production machines and thereby meets its customers’
specific requirements. In doing so, the company focuses on the development of applications relating to
the processing of sensor cables. These cables are a key element in vehicles that drive on a highly auto-
mated or even autonomous basis.

Exmore has been part of the Komax Group since October 2019 and has its headquarters in Beerse,
Belgium. The technology company predominantly supplies customers from the automotive, consumer
electronics, industrial applications, aerospace, and medical technology market segments.

Kabatec is a global market leader in the field of taping technology systems. This leading technology
company, which is headquartered in Burghaun, Germany, specializes in taping, bundling, and fixing of
holding parts to wire harnesses. Founded in 2008 by Heinz Billing and Markus Reisinger, its core exper-
tise involves the development and production of semi-automatic and fully automatic machines for pro-
cessing adhesive and non-adhesive tapes. It mainly serves customers in the automotive supply industry,
offering them both serial production machines and customized systems.

Kabatec has been part of the Komax Group since 2016. The two companies had enjoyed a strategic

partnership for several years prior to that.

Headquartered in Toulouse, France, Laselec develops laser-based solutions for stripping and marking
wires as well as intelligent assembly boards for wire harness manufacturing. These are used mainly in the
aerospace industry. The company was founded in 2001 and has a subsidiary in the US.

Laselec is one of the leading companies in the world for the development and production of serial
production machines and customized solutions for laser-based wire processing. The company meets
all significant international quality standards in the aviation industry and counts renowned aircraft
manufacturers among its customers.

Laselec has been part of the Komax Group since 2017. Komax acquired a 20% stake in Laselec
back in 2015, and the two companies have been working successfully together on various projects
since then. Thanks to this partnership, Laselec’s solutions have increasingly found their way into the
automotive industry.

Thonauer was founded in 1988 by Friedrich Thonauer in Austria, and is headquartered in Vienna. In ad-
dition to Austria, Thonauer is also represented in Romania, the Czech Republic, Hungary, and Slovakia.
The main focus of its activities is the sale of machines for wire processing, particularly for the automo-
tive, electric systems, and electronics industries.

The Thonauer Group has been part of the Komax Group since 2016. Prior to this acquisition, the two
companies had been working together very successfully as partners for decades. Thonauer has been
Komax’s representative in seven countries in Central and Eastern Europe right from the start.

TSK develops and sells test systems and adaptation units for testing wire harnesses and further electrical-
electronic assemblies and components. TSK products are used predominantly in the automotive sup-
plier industry and wherever the functionality of complex assemblies needs to be tested in order to rec-
ognize errors within the manufacturing process at an early stage.

TSK has decades of experience in quality assurance in wire assembly. The company was founded in
1983 by Helmut Kahl as Test Systeme Kahl, or TSK for short, and has its headquarters in Porta West-
falica, Germany. The TSK Group manufactures in Europe, North and South America, Africa, and Asia. It
has been part of the Komax Group since 2012.

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

Mid-term targets

The Komax Group is distinguished by its robust equity base and strong profitability. This solid founda-
tion enables Komax to systematically pursue opportunities to develop the company further. As an ad-
ditional benefit, it offers security in challenging times.

For the current strategy period, Komax has set itself ambitious targets for growth and profitability.
Given IHS Markit’s current assessment of developments in the automotive market over the next few
years, the Board of Directors has decided to adapt the mid-term targets (2017–2021) and define a new
time horizon – 2023. Up to 2023 the following targets are in place:

450–
550

50
–
80

50–
60

Revenues 2023 in CHF million

EBIT 2023 in CHF million

Payout ratio in % of EAT

The targeted revenues figure of CHF 450–550 million by 2023 is to be achieved mainly through organic
growth. Komax is expecting two factors to contribute to annual market growth of 3%–5% from 2021
onwards: the annual increase in the number of vehicles produced globally (CAGR: 1%–2%) and the
steady rise in the degree of automation in wire processing (CAGR: 2%–3%). Komax is expecting to
generate annual organic revenue growth at least in line with the growth of the market.

Komax has the broadest portfolio of solutions, and benefits from its global presence in growth phas-
es. Rising revenue figures and an advantageous product mix enable Komax to deliver disproportionately
high increases in profitability. It is seeking to achieve EBIT of CHF 50–80 million by 2023.

Thanks to a business strategy that is geared to long-term success, Komax creates sustainable value
that benefits investors too. Komax remains committed to its payout ratio and has thus set itself the goal
of distributing 50%–60% of Group profit after taxes (EAT) to its shareholders every year until 2023.

Revenues (in CHF million)

EBIT (in CHF million)

Payout ratio (in % of EAT)

2019

417.8

24.0

52.3

2018

479.7

67.3

52.0

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

SOLUTIONS ALONG THE
VALUE CHAIN

Komax automation
solutions at work
Komax MES –
Manufacturing
Execution System

Order

Planning

Drawing

Production data

Omega 750

Taping

Pre-assembly line

Cutting area

Raw material

Supply

Alpha 550

bt 722

KTR 160

Final assembly

Testing

Final product

Delivery

TS1500 HV

ANNUAL REPORT 2019
BUSINESS MODEL AND STRATEGY

The majority of Komax customers are wire harness manufacturers whose business consists of process-
ing the individual wires – predominantly by hand – into wire harnesses and delivering these to vehicle
manufacturers (OEMs). Komax offers its customers a wide range of solutions and systems for the auto-
mated and efficient processing of wires and for the taping and testing of wire harnesses. These are used
in the cutting room, at the pre-assembly stage, and when taping and testing. In addition, Komax sup-
ports its customers along the entire value chain – from planning through to delivery – with the Komax
MES. This software automates the planning, controlling, monitoring, and analysis of all resources and
production processes. This has the effect of optimally deploying machines, materials, and employees,
so that wire harnesses can be completed to deadline, as well as to the requisite quality.

Cutting, stripping, crimping, block loading
With the Omega 750, the cutting, stripping, crimping, and
loading of terminals is undertaken with just one machine.
The end product is a wire harness fitted with contact housings
on both sides, produced in a fully automated way.

Cutting, stripping, crimping
Fully automatic crimping (crimp to crimp) and twisting machines
can be found in the cutting room. For the double-sided crimping
and fitting of seals, Komax customers use the fully automated
Alpha 550 crimping machine, which can twist and tinplate the
braids, among other things.

Semi-automatic crimping
In order to be able to process individual lines at the pre-assembly
stage, customers use a machine like the bt 722 benchtop crimp-
ing press. The programmable crimp height, integrated crimp
force analysis, and bad-crimp cutter ensure a final product of
top quality.

Taping
In order to reduce sources of noise and prevent electromagnetic
disruptions, wire harnesses are taped, as with the KTR 160
from Kabatec. The act of bundling wires or attaching clips to
wire harnesses is likewise covered by this section of the value
chain.

Testing
Before Komax customers deliver the completed wire harnesses
to the OEM, they subject every single wire harness to a connec-
tion test (electrical test). For this they resort to the test systems
of TSK, such as the TS1500 HV for high-voltage cables.

ANNUAL REPORT 2019
BOARD OF DIRECTORS

BOARD OF DIRECTORS

Beat Kälin (1957)
Non-executive, independent member
and Chairman of the Board of Directors
since 2015, elected until 2020, Swiss
citizen, resident in Birmensdorf (CH).

Member of the Board of Directors of listed
company Huber + Suhner AG, Pfäffikon
ZH, Chairman of the Board of Directors of
Sevensense Robotics AG, Zurich, and
member of the Board of Directors of
CabTec Holding AG, Rotkreuz.

Beat Kälin holds a master’s degree and
a doctorate in engineering from ETH Zurich.
He also holds an MBA from INSEAD.
From 1987 to 1997 he held various manage-
ment positions in the Elektrowatt Group,
Stäfa and Zug; from 1998 to 2004 he was a
member of the Group Executive Board of
SIG Schweizerische Industrie-Gesellschaft
Holding AG, Neuhausen am Rheinfall; from
2004 to 2006 he was a member of the
Board of Management responsible for the
Packaging Technology Division at Robert
Bosch GmbH, Stuttgart (DE). He was COO
of the Komax Group from 2006 to 2007,
and CEO from 2007 to 2015. In the last
three years, Beat Kälin has not been a
member of the Executive Committee or
had any material business relationships
with the Komax Group.

David Dean (1959)
Non-executive, independent member
of the Board of Directors since 2014,
Vice Chairman since 2019, elec ted
until 2020, Swiss citizen, resident in
Penang (MY).

Member of the Board of Directors of listed
company Agta Record Ltd, Fehraltorf,
Bossard Holding AG, Zug, and Burckhardt
Compression Holding AG, Winterthur; he
is also a member of the Board of Directors
of the Brugg Group AG, Brugg, and
Haag-Streit Holding AG, Köniz, as well
as a member of the USA Chapter Board
of the Swiss-American Chamber of
Commerce, Zurich.

David Dean is an expert in accounting and
controlling. He holds a federal diploma and
is a certified accountant. Furthermore, he
has also completed management training
at Harvard Business School and IMD
Lausanne. From 1980 to 1990 he worked
for PricewaterhouseCoopers AG in various
management functions in auditing and
business consulting. Between 1990 and
1992 he was corporate controller and a
member of the Executive Committee of an
international logistics group. He then started
working for Bossard Group, Zug – first as
Corporate Controller, from 1998 to 2004 as
CFO and from 2005 to 2019 as CEO. In the
last three years, David Dean has not been
a member of the Executive Committee or
had any material business relationships
with the Komax Group.

Andreas Häberli (1968)
Non-executive, independent member of
the Board of Directors since 2017, elec ted
until 2020, Swiss citizen, resident in
Bubikon (CH).

Member of the Industrial Advisory Board,
ETH Zurich, and the Swissmem Research
Commission, Zurich.

Andreas Häberli holds a master’s degree
in electrical engineering from ETH Zurich.
He then went on to obtain a doctorate
(Dr. sc. tech.) at ETH Zurich’s Laboratory
for Physical Electronics. Since 2003,
he has held various management roles at
the dormakaba Group (formerly Kaba
Group), where he has been Chief Tech-
no logy Officer (CTO) and a member of
the Executive Committee since 2011. He
was a member of the Executive Board of
Sen sirion AG in Stäfa from 1999 to 2003,
and worked for Invox Technology (USA)
from 1997 to 1999. In the last three years,
Andreas Häberli has not been a member
of the Executive Committee or had any
material business relationships with the
Komax Group.

As at 31 December 2019

ANNUAL REPORT 2019
BOARD OF DIRECTORS

Kurt Haerri (1962)
Non-executive, independent member of
the Board of Directors since 2012, elected
until 2020, Swiss citizen, resident in
Birrwil (CH).

Mariel Hoch (1973)
Non-executive, independent member of
the Board of Directors since 2019, elected
until 2020, Swiss and German citizen,
resident in Zurich (CH).

Roland Siegwart (1959)
Non-executive, independent member of
the Board of Directors since 2013, elected
until 2020, Swiss citizen, resident in
Schwyz (CH).

Member of the Board of the Swiss-
Chinese Chamber of Commerce (Head
of the MEM Industry Chapter), Zurich,
and President of Gemeindienststiftung
Emmen.

Kurt Haerri holds a degree in mechanical
engineering from Lucerne University of
Applied Sciences as well as an Executive
MBA HSG from the University of St. Gallen.
He has worked for Schindler since 1987.
From 1996 to 2003 and from 2017 to 2019,
he was based in China for Schindler.
Since 2019 he has been Head of New
Installations and Modernization of Europe
North. Kurt Haerri was the President of the
Swiss-Chinese Chamber of Commerce
from 2006 to 2013. He was also responsi-
ble for the Asia module of an Executive
MBA program at ETH Zurich. In the last
three years, Kurt Haerri has not been a
member of the Executive Committee or
had any material business relationships
with the Komax Group.

Member of the Board of Directors of listed
company SIG Combibloc Group AG,
Neuhausen am Rheinfall, and of Comet
Holding AG, Flamatt; in addition, she is
a member of the Board of Directors of
MEXAB AG, Lucerne, as well as a
member of the Foundation Board of
The Schörling Foundation, Lucerne,
and Co-Chair of the Zurich committee of
Human Rights Watch.

Mariel Hoch obtained a PhD (Dr. iur.) from
the University of Zurich and was admitted
to the Zurich Bar in 2005. Since 2002 she
has been with the law firm Bär & Karrer AG
in Zurich, where she specializes in M&A
transactions and advises listed companies
on corporate and regulatory matters. Mariel
Hoch has been a partner since 2012. In the
last three years, Mariel Hoch has not been
a member of the Executive Committee or
had any material business relationships
with the Komax Group.

Member of the Board of Directors of
Evatec Holding AG, Trübbach, of NZZ
Media Group (AG für die Neue Zürcher
Zeitung), Zurich, and of Sevensense
Robotics AG, Zurich; he is also Chairman
of the Board of Trustees of Gebert Rüf
Stiftung, Basel, member of the Foundation
Board of the BlueLion Foundation, Zurich,
and a member of the Thematic Equity
Advisory Board of Credit Suisse Asset
Management, Zurich.

Roland Siegwart holds a master’s degree
in mechanical engineering as well as a
doctorate from ETH Zurich. He was Pro-
fessor of Microrobotics at EPFL Lausanne
from 1996 to 2006, and Vice President of
Research and Corporate Relations at ETH
Zurich from 2010 to 2014. He has been
Professor of Robotics at ETH Zurich since
July 2006 and Co-Director of the Wyss
Translational Center Zurich, a joint research
center of ETH Zurich and the University of
Zurich, since 2015. In the last three years,
Roland Siegwart has not been a member of
the Executive Committee or had any mate-
rial business relationships with the Komax
Group.

ANNUAL REPORT 2019
EXECUTIVE COMMITTEE

EXECUTIVE COMMITTEE

Matijas Meyer (1970)
Chief Executive Officer (CEO) since 2015,
member of the Executive Committee
since 2010, at Komax since 2007,
Swiss citizen, resident in Ebikon (CH).

Andreas Wolfisberg (1958)
Chief Financial Officer (CFO) since 1996,
member of the Executive Committee
since 1996, at Komax since 1991,
Swiss citizen, resident in Adligenswil (CH).

Marc Schürmann (1971)
Executive Vice President, member of
the Executive Committee since 2019,
at Komax since 1995, Swiss citizen,
resident in Zug (CH).

Matijas Meyer holds a degree in engi-
neering from ETH Zurich and an MBA from
Cranfield University (UK). From 1998 to
2004, he was active in product develop-
ment at OC Oerlikon/ESEC, Cham,
and from 2005 to 2006 in product man-
agement at Tornos SA, Moutier. He joined
the Komax Group in 2007, heading up
the French pro duction and development
site in Rousset until 2010. He then took
over as Head of the Wire business unit and
was appointed member of the Komax
Exec utive Com mittee. He has been CEO
of the Komax Group since 2015.

Chairman of the Board of Directors of
Kowema AG, Rotkreuz, and of its subsidiary
CabTec Holding AG, Rotkreuz.

Andreas Wolfisberg is a Swiss Certified
Expert in Accounting and Controlling.
Before joining the Komax Group, he
worked in finance at von Moos Stahl AG
in Lucerne. He joined the Komax Group
in 1991, initially as Department Head
in finance and accounting and since 1996
as CFO and, thus, member of the Execu -
tive Committee.

Marc Schürmann graduated as a busi -
ness technician and has an Executive MBA
through the Rochester-Bern executive
program. He joined the Komax Group in
1995, initially as a service technician
and then in various management positions
in Switzerland and abroad. Among his
various positions, Marc Schürmann worked
for Komax France for five years and was
Managing Director of Komax China in
Shanghai for two years. From 2010 to
2017, he was a member of the Executive
Committee of the Wire business unit of the
Komax Group, latterly as Head of Marketing,
Sales & Service. He has headed up a unit
focusing on wire processing since 2018
and is Managing Director of Komax AG in
Switzer land.

As at 31 December 2019

ANNUAL REPORT 2019
EXECUTIVE COMMITTEE

Marcus Setterberg (1978)
Executive Vice President, member of
the Executive Committee since 2019,
at Komax since 2007, Swedish citizen,
resident in Bäch (CH).

Günther Silberbauer (1971)
Executive Vice President, member of
the Ex ecutive Committee since 2019,
at Komax since 2014, Swiss citizen,
resident in Grafenau (DE).

Marcus Setterberg has a master of science
in industrial engineering & management
from the KTH Royal Institute of Technology
in Stockholm, as well as a master of
science in business administration and
economics from the University of Stock-
holm. From 2004 to 2007, he was a project
manager and process engineer for SIG
Pack/Bosch Packaging in Neuhausen am
Rheinfall in post-merger projects and
projects aimed at developing the service
business. Marcus Setterberg joined the
Komax Group in 2007, working first
in Switzerland for the global service unit.
He then spent around five years in China,
three of which as Managing Director of
Komax China in Shanghai. Since August
2016 he has headed up a unit that focuses
on testing systems for wire processing,
and he is responsible for the TSK compa-
nies. In both these functions, he was a
member of the Executive Committee of the
Wire busi ness unit of the Komax Group
until the end of 2017.

Günther Silberbauer has a degree in me-
chanical engineering and business technol-
ogy, as well as an Executive MBA through
the Rochester-Bern executive program.
From 1997 until 2010, he worked for Müller
Martini in Zofingen and then until 2013 for
the Bystronic Group in Niederönz. He was
a member of executive management at
both these companies, and held manage-
ment positions in development and global
distribution. Günther Silberbauer has been
with Komax since 2014. He heads a unit
that addresses automation along the value
chain whose primary focus is on customer -
specific solutions for wire processing; his
roles include that of Managing Director of
Komax SLE in Grafenau (Germany). He was
a member of the Executive Committee of
the Wire business unit of the Komax Group
until the end of 2017.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

SUSTAINABILITY
AND SOCIAL
RESPONSIBILITY

Sustainability and social responsibility are core
elements of Komax’s corporate strategy. They are
incorporated not only into the Group’s long-term
targets, but also into its operating activities. Komax
is determined to develop its competencies in
questions of sustainability and social responsibility
on an ongoing basis – for the benefit of its stake-
holders and the environment.

The way Komax is perceived by its customers, business partners, shareholders, and other stakeholders
depends to a significant extent on the conduct of its employees. For this reason, Komax has a Code of
Conduct that is binding for all employees of the Group and reviewed on a regular basis. In 2018, it was
completely revised and published in 15 languages.

The Code of Conduct builds on the ethical principles Komax has been applying for many years. It
defines general rules of conduct and addresses issues such as equality of opportunity, conflicts of in-
terest, health and safety, and sustainability. In addition, it defines the five core values – innovation,
customer focus, success, quality, and responsibility – that constitute a key component of the Komax
Group’s identity. All employees are given training on the Code of Conduct when they join the company.
Violations of this code are not tolerated, and will have the corresponding consequences for the employ-
ees concerned. Anyone becoming aware of a violation may report this to their line manager, to the HR
department, or to the independent external whistleblowing service (codeofconduct@ssrlaw.ch).

In its commercial relationships, Komax sets great store by respect, decency, social responsibility,
and consistent adherence to international guidelines. For this reason, Komax has drawn up codes of
conduct for both suppliers and business partners, and where possible makes compliance with these
codes a contractual obligation.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

OF THE KOMAX GROUP

5 CORE VALUES

INNOVATION
As a pioneering and visionary company, we
ensure that our business activity has a long-term
focus. We are always open to new ideas and
regularly re-examine our approach. This includes
looking beyond our immediate concerns. We
are willing to take risks – on the basis of knowl-
edge and understanding – in order to reinforce
our leadership in terms of innovation. Following
new paths can lead to mistakes. We realize
and tolerate this because it gives us an oppor-
tunity to become even better. We are increas-
ing our lead by continuing to press ahead
with innovations proactively, quickly, and deter-
minedly while remaining committed to our
usual high quality standards.

CUSTOMER FOCUS
The varying needs of our customers are at
the center of our activities. We listen to them
carefully and ask the right questions. Under-
standing their requirements enables us to keep
on improving. We strive to ensure that our
solutions offer our customers added value, so
that they can increase their efficiency and pro-
ductivity and thus gain a competitive advan-
tage. We are close to our customers, commu-
nicate actively, and foster friendly, long-term
relationships and partnerships based on respect
and esteem.

SUCCESS
We pursue ambitious targets and make an effort
to achieve them every day. As a market and
technology leader we make high demands of
ourselves and strive to find the best solution
for our customers. Our long history of success
encourages us to continue the success story
and create sustainable value. This benefits our
customers, employees, and investors. We want
all these stakeholders to share equally in our
success. We nurture competent, committed
employees who enable us to retain loyal, satis-
fied customers.

QUALITY
Our day-to-day work is driven by quality and
a willingness to examine what we do critically.
We provide our customers with solutions
that fully meet our quality requirements and
supply what we have agreed. This commit -
ment lies at the heart of our long-term, trusting
customer relationships. Our efforts to keep
on getting better include always delivering the
agreed quality and actively asking customers
how we can improve further. It is clear to us that
this creates trust, which is of inestimable value.

RESPONSIBILITY
We take our responsibility towards our custom-
ers, employees, and investors seriously and
act as a reliable, trustworthy partner. Our integ-
rity and ability to keep to our agreements and
meet our deadlines make us stand out from the
crowd. We keep our word and ensure that our
partners and colleagues do so too. A strong
sense of shared responsibility is important to
us and we are careful to foster it. We take
responsibility for our actions, make decisions,
and carry them out. If we pass our responsi-
bility on to others, we do so deliberately and
ensure that they assume it in turn.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Product sustainability

The machines developed by Komax are characterized by their
exceptionally high quality and longevity. The Group’s own global
service network and its collaboration with partners ensure that
these machines are professionally maintained. This has a posi-
tive impact on their performance, value retention, and life span,
and it saves resources generally. Komax also ensures servicing
and the availability of upgrades and replacement parts years be-
yond its contractual obligations. Thanks to their modular con-
struction, the machines can usually be adapted to new techno-
logical developments or changing needs. As a result, numerous
products have been used by customers for decades.

%10

fewer occupational
accidents since
2016/2017

Reduction in consumption of resources
When developing new machines, Komax goes to great lengths to ensure that the consumption of re-
sources is continuously reduced – both in the production process and during the life cycles of the ma-
chines at the factories of its customers. For example, in the past few years, Komax has paid particular
attention to electricity consumption in new machine models. Thanks to the optimization of specific ele-
ments, such as ventilation for cooling a control cabinet, Komax has been successful in reducing energy
consumption of individual machine models. Extrapolated to the level of annual production of these
models, this results in a saving of hundreds of megawatt hours of electricity each year.

Declining consumption of fuel and materials
The wire processing solutions delivered by Komax do not contain any environmentally harmful compo-
nents. In the automotive supply industry, these solutions are used to process wiring for new fuel-saving
propulsion concepts such as electric and hybrid vehicles, among other things. Moreover, the innovative
technologies mean that ever smaller wire cross-sections and innovative materials such as aluminum can
be machine-processed, thereby contributing to a reduction in vehicle weight and, as a result, fuel con-
sumption. In addition, the automated taping solutions, for example, help Komax’s customers to use less
adhesive tape then they would in the case of manual taping.

Komax commissions independent market research companies to carry out customer satisfaction
analyses on a regular basis. These evaluate the degree of customer loyalty and the extent to which
Komax meets customer expectations, for example. Komax sets particular store by customer feedback
on improvement potential.

In 2011, Komax launched its “Oekomax” program in Switzerland with the aim of continually optimiz-
ing environmental protection. Ever since, a team comprising employees from various areas of the com-
pany has been looking at sustainability issues. The spectrum of themes ranges from campaigns that
motivate employees to be sparing in the use of resources through to ideas as to how the energy effi-
ciency of newly developed machinery can be increased.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Sustainability in procurement

reduction in
consumption of
electricity and
drinking water by
2021

The company believes in long-term partnerships, and selects sup-
pliers which demonstrate an environmentally aware approach and
whose products conform to sustainability criteria. This is ascer-
tained with the assistance of a supplier evaluation questionnaire,
which evaluates new as well as existing partners on the basis of
uniform criteria. These criteria include the status that suppliers at-
tach to sustainability, quality, price, supply chain, delivery reliabil-
ity, and production technology. Furthermore, in a code of conduct
drawn up specially for suppliers, Komax obliges its suppliers to
comply with legislation and to act in an environmentally aware and
ethical way. Compliance with agreed guidelines and indicators is
reviewed in regular supplier audits. If violations are uncovered, a
supplier partnership may be immediately terminated as a result.
In addition to the investment volume, key criteria when evaluating and selecting new production sys-
tems include energy efficiency, environmental friendliness, and the economical use of resources.

Sustainability in production

A large proportion of Komax Group’s value creation consists of engineering services. The majority of
components are manufactured and supplied by third parties, which means that actual production at
Komax primarily comprises the assembly of components. Accordingly, Komax generates relatively few
emissions compared to other industrial companies.

Operational Excellence
Highly automated, state-of-the-art production systems are used for strategically important components
that Komax manufactures in-house. These are based on lean management concepts, the aims of which
include the avoidance of errors and minimization of rejects. The careful and efficient use of resources
has top priority: wherever possible, waste materials and wastewater are recycled or disposed of appro-
priately, while the volume of waste is reduced continuously thanks to optimization programs. Wherever
possible, Komax uses renewable energies such as solar or hydroelectric power. For example, in Swit-
zerland – the country in which Komax has the highest production volume – the company obtains natural
energy from Central Switzerland’s RegioMix scheme, and has its own photovoltaic power plant on the
roof of its production building in Rotkreuz.

A photovoltaic power plant was also installed at the new production and development building in
Dierikon (see page 7). This plant is able to cover the electricity requirement of the new building for
around one month. In order to save resources, Komax is sparing in its use of technical solutions, such
as artificial ventilation, illumination, and motorized shading. The internal courtyard plays a key role here,
as it brings plenty of light to the inner zone. In addition, as a vertical flue it dissipates warm air and
thereby stimulates natural ventilation via the external facade. When it comes to the heating of the new
building, Komax has opted for district heating. Komax will also heat the other existing buildings in
Dierikon on a CO2-neutral basis in the future: the transition will be made from oil heating to district heat-
ing in the first quarter of 2020.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Key factors in Komax’s pursuit of Operational Excellence include safety and the protection of its em-
ployees’ health. Management attaches high priority to this issue, which is why internal processes are
regularly reviewed for safety and health risks. Furthermore, employees are sensitized to possible risks
in the workplace at the individual production sites in a targeted way. The low number of occupational
accidents over a period of many years is testimony to the success of initiatives in this area. In 2019, the
number of occupational accidents across the Komax Group as a whole increased somewhat, from 25
to 30. Komax has set itself the target of reducing occupational accidents by 10% (compared with the
average for 2016 and 2017, namely 33 work-related accidents) by 2021. Although Komax has more
production sites and 20% more employees than in 2016/2017, the number of occupational accidents
has decreased by 10% in this time frame. Komax is keen to see this positive trend persist, and is look-
ing to exceed the target it has set for 2021 thanks to the implementation of various measures.

Certification status and integrated management system
The key production locations of the Komax Group, namely in Brazil, China, Germany, France, Switzer-
land, Tunisia, Turkey, Hungary, and the US, are all ISO 9001-certified. In addition, Komax AG’s sites in
Dierikon, Rotkreuz, and Küssnacht am Rigi, as well as Komax SLE in Grafenau, TSK in Porta Westfalica,
and SC Thonauer Automatic in Bucharest all have ISO 14001 certification. These six sites employ
around 950 people. All have integrated management systems that encompass all company processes,
the environment, health protection, and workplace safety.

Country

Company

Certification

Brazil

China

TSK do Brasil Ltda.

Komax Shanghai Co. Ltd.

Germany

Komax SLE GmbH & Co. KG

France

Austria

TSK Prüfsysteme GmbH

Laselec SA

Thonauer Gesellschaft m.b.H.

Romania

SC Thonauer Automatic s.r.l.

Switzerland

Komax AG

Czech Republic

Thonauer spol. s.r.o.

Tunisia

Turkey

TSK Tunisia s.a.l.

TSK Test Sistemleri Ltd. Şti.

Hungary

Komax Thonauer Kft.

USA

Artos Engineering Company

Komax Corporation

TSK Innovations Co.

ISO 9001

ISO 14001

DE AEOC 104360

ISO 14001

OHSAS 18001

ISO 14001

ISO 45001

Resource and energy savings targets
In collaboration with the Energy Agency for the Economy (Energie-Agentur der Wirtschaft, EnAW),
Komax has established resource and energy savings targets for the Swiss sites in Dierikon and Rot-
kreuz. For example, by the end of 2021, per head electricity consumption is to be reduced by 3% versus
the 2018 level (2 923 MWh or 4.7 MWh per employee). This follows on from a reduction in per head
electricity consumption of approximately 20% between 2014 and 2018. Komax took its first step to-
wards attaining its target in 2019. A total of 2 870 MWh of electricity was consumed at both locations,
corresponding to per head consumption of 4.5 MWh or a reduction of over 4% versus the prior year.
Electricity consumption is expected to increase in 2020 as the new additional building in Dierikon is
occupied, which means that the reduction target of 3% remains ambitious.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Even though it could result in a slight increase in electricity consumption, Komax is promoting e-mobility
at its sites in Dierikon and Rotkreuz. Since February 2019, a total of six charging stations at the two
locations are available for use by employees and customers for electric vehicles. The mobility bonus
introduced in 2017 is helping to cut carbon emissions: all employees in Switzerland who forego motor-
ized private transport on their journey to and from work will receive CHF 100 a month.

Komax is successively expanding its reporting on sustainability issues. To give just one example,
Komax now reports electricity consumption figures for all its production sites – whereby these sites
encompass the consumption of more than 80% of the Komax Group’s workforce. Up to 2017, only
around half of the production sites were covered for reporting purposes. Komax has set itself the target
of reducing electricity and drinking water consumption by 5% in each case compared to 2017. The
Group’s per head electricity consumption has fallen significantly since 2017 – by 7.7% or 3.9 MWh to
3.6 MWh. Per head consumption of drinking water at the Swiss locations witnessed an even more sub-
stantial drop since 2017, down 18.4%, or from 7.6 m³ to 6.2 m³.

Sustainability: key figures

Consumption/accidents1

Electricity in MWh

Electricity per head in MWh

Number of occupational accidents

Number of occupational accidents
for every 1 000 employees

Consumption/waste2

Drinking water in m³

Drinking water per head in m³

Paper in kg

Paper per head in kg

Refuse in kg

Refuse per head in kg

2019

2018

6 696

6 088

3.6

3.7

16.0

15.1

4 233

6.2

5 655

8.3

5 359

8.0

6 799

10.2

32 784

46 889

48.0

70.0

1 Covering all production sites of the Komax Group.
2 Covering the production sites in Dierikon (CH), Rotkreuz (CH), Küssnacht am Rigi (CH).

Contribution to regional development

Komax has been firmly rooted in the Canton of Lucerne, Switzerland, since 1975, where it is one of the
region’s biggest employers. The Group is committed to Switzerland as a business location because it
offers a good environment, facilitates very high productivity, and has a large pool of highly qualified labor.
As well as being an important employer in the region, Komax is also committed to advancing young
people in a number of different areas (including education, sport, the arts, and social involvement).

The production and distribution sites that the Group has established around the world since 1975
remain in their original locations, which generates a strong sense of identification with local areas.
Among other things, this manifests itself in the fact that a large number of employees can be recruited
regionally and preference can be given to local suppliers wherever this is feasible and makes commer-
cial sense.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

“ As the driving force in the
market, Komax gives its em-
ployees the opportunity to
shape the industry and take
control of their success.”

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Attractive employer

At the end of 2019, Komax employed 2 211 staff worldwide (2018: 2 006 staff). Average headcount in
2019 worked out at 2 125 employees (2018: 1 936 employees). This increase is essentially related to the
acquisition of Artos Engineering and Exmore, plus an increased headcount in companies in North Africa,
which have reported a marked growth in orders. Personnel expenses in the year under review amounted
to CHF 161.0 million (2018: CHF 157.4 million).

2019

Production

Research and development

Engineering

Marketing and sales

Service

Administration 2

Total headcount as at 31 December 2019

2018

Production

Research and development

Engineering

Marketing and sales

Service

Administration 2

Total headcount as at 31 December 2018

CH 1

Europe 1

Americas 1

Asia 1

Africa 1

Total

224

159

191

683

336

121

135

822

806

241

203

462

257

242

297

271

138

2 211

Europe

Americas

Asia

Africa

Total

241

149

181

677

309

116

717

250

264

757

217

173

423

236

200

2 006

1 The individual companies and their locations are listed on page 112.
2 Including management and IT.

The companies of the Komax Group ensure that their employees enjoy equal opportunities, equal treat-
ment, and fair employment conditions, receive pay that is in line with the market, and benefits that are
in line with national and industry standards. Participation in the pay comparison survey conducted by
industry association Swissmem showed that pay at the Swiss production sites is in line with market
averages and that men and women receive equal pay. The proportion of women in the Group’s global
workforce was 20.2% in 2018 (2018: 20.4%). Komax is not alone within the industry in having a relatively
low proportion of women in its workforce. The main reason for this phenomenon is the large number of
technical positions within the company, for which the recruitment potential among women is limited.

The Group’s staff turnover rate has been gratifyingly low for many years. In 2019, it amounted to 8.3%

(2018: 6.9%).

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Active employee development
Komax has a very good reputation as an attractive employer, which is partly explained by its corporate
culture. This is characterized by mutual respect, trust, and awareness of the paramount importance of
quality. In addition, the needs of employees themselves are not neglected, despite ambitious targets.
As part of an active staff development policy, Komax organizes regular management seminars and
training for its employees, as well as providing financial support for individual training activities. Each
year, Komax spends some 1% of its personnel budget on training. Moreover, Komax also encourages
international exchanges to allow its staff to gain new experiences and expand their career perspectives.
As the world’s leading company in automated wire processing, Komax gives its employees the op-
portunity to shape the industry and take control of their careers. Here Komax relies on three principles:
the scope to create change, responsibility, and togetherness.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Responsibility

Commitment builds trust
Room to maneuver requires
commitment and shared
responsibility. We challenge
our employees. Everyone
takes responsibility.

We take and delegate
responsibility, which forms
commitment between us.

Scope to create change

Room for ideas
We give our employees the
room to maneuver to pursue
their tasks and develop as
individuals. Everyone counts.

We facilitate development.

Togetherness

Inspiration through community
We maintain a valued working
atmosphere with interna -
tio nal character and sense of
to getherness. Everyone is
part of the whole.

We maintain an inspiring
to getherness.

Young Community @Komax
In order to better understand the needs of our younger employees (those under 30) and thereby provide
them with more targeted support, Komax founded the Young Community in Switzerland in 2018. The
Young Community is a network comprising some 60 young Komax employees, and is organized like an
association. It offers its members a platform on which they can communicate their needs relating to
their employer and working environment, and develop any necessary measures and solutions. Once
a year, the Young Community’s steering committee discusses with the CEO the themes that it has
addressed; it is also responsible for maintaining a direct line of communication between younger em-
ployees and their employer throughout the year. A multifaceted program involving workshops, special-
ist talks, and events to strengthen the Community is spread across the year. A further core component
is the promotion of knowledge exchange and an understanding of the different activities pursued at
Komax. This is achieved, for example, by two members of the Young Community exchanging roles for
half a day. Komax is convinced that it can continue to develop as an employer with the help of the
Young Community, as well as making itself attractive to talented young employees.

ANNUAL REPORT 2019
SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Major investment in tomorrow’s workforce
Komax is committed to the training of tomorrow’s professional specialists as a way of safeguarding its
global market and technology leadership. In 2019, 51 apprentices (2018: 47) were undergoing training in
10 professions at the Group’s Swiss sites, and 57 apprentices (2018: 43) were being trained in Germany
(Grafenau, Porta Westfalica, and Burghaun). Komax has steadily increased the number of apprentice-
ships on offer since 2016 – from 74 to 108.

Komax offers its apprentices a wide-ranging training experience. The young professionals are right
at the heart of the action, actively following every step of a machine’s development from inception
through to production readiness. During their training, they get an insight into the various departments’
activities and thus gain an understanding of the numerous processes that take place in a company.
Komax has state-of-the-art workstations as well as well-equipped mechanical workshops and assem-
bly areas for the specific apprenticeship subjects. The budding professionals are supervised by a moti-
vated team of trainers who not only possess strong technical and teaching skills, but also sensitivity to
the social needs of the young people in their charge.

In addition to professional training, Komax also offers apprentices a number of interesting benefits
such as language courses, cultural events, preventive health measures, and its own team building
events. Once apprentices have completed their training, Komax helps them make the transition to full
professional life, either at the site where they trained or at one of the company’s locations abroad. More-
over, the company supports the people it has trained in their professional development and further
vocational training.

Satisfied and healthy employees
Employee satisfaction is systematically measured and evaluated in the course of annual performance
review meetings. Komax uses the results of regular employee surveys as a valuable basis for developing
and implementing improvement measures. The results of the surveys conducted in conjunction with
external partners in recent years have for the most part been very positive, and in many places far above
the industry average. No employee surveys were carried out in 2019. Employee surveys are planned at
a number of companies in 2020.

It goes without saying that Komax satisfies all legal requirements with respect to working conditions
in the countries it operates in. Furthermore, it actively promotes the health of its staff at the various
locations by means of various measures. In Switzerland, for example, staff benefit from the occupational
health management scheme fit@work. The focal points of the fit@work initiative are movement, nutrition,
and relaxation. Komax helps its employees to improve their physical and mental fitness with a multi-
faceted offering that encompasses free sports offers, fruit initiatives, workshops, and specialist talks.
Another key element of fit@work is the employee health survey, which is conducted every three years.
As a further measure to promote the health of its workforce, Komax also takes part in the “bike to
work” initiative that takes place in Switzerland every year. This involves Komax encouraging its employ-
ees to commute by bike as often as possible in the month of June. In 2019, 112 employees (2018: 100
employees) participated in this initiative, racking up more than 26 000 kilometers (2018: more than
30 000 kilometers) in the saddle.

ANNUAL REPORT 2019
INFORMATION FOR INVESTORS

INFORMATION
FOR
INVESTORS

Komax cultivates a policy of open and transparent
communication with its investors. It allows sharehold-
ers to participate in the company’s success through
its attractive, sustainable dividend policy (payout ratio
50%–60%).

Over the course of 2019, the daily closing price of the Komax share ranged between CHF 165.10 and
CHF 264.00. The year-end closing price was CHF 236.40. This represents an increase of 2.8% on the
2018 year-end closing price (CHF 230.00). The very positive stock market environment seen in Switzer-
land in 2019 prompted a substantially stronger increase in the SPI Extra – up 30.4%. As a result, the SPI
Extra outperformed the Komax share on a five-year comparison as well. While the value of the Komax
share rose by around 60% in the last five years, the SPI Extra gained approximately 69% in the same
period.

Share price development (5 January 2015 – 31 December 2019)

in CHF

350

300

250

200

150

100

2015

2016

2017

2018

2019

2020

Komax
SPI Extra TR

ANNUAL REPORT 2019
INFORMATION FOR INVESTORS

Listing

Komax is listed on SIX Swiss Exchange. The market capitalization of the Komax Group at the end of
2019 was CHF 910.1 million.

ISIN

Security number

Bloomberg code

Thomson Reuters code

CH0010702154

1070215

KOMN SW

KOMN.S

Geographical distribution of shareholdings

The majority of shares not held in Switzerland are held in Germany, the United Kingdom, Luxembourg,
and the United States.

28% Cleared shares

9% Other countries

63% Switzerland

Breakdown of shareholders by number of registered shares held

1–100

101–1 000

1 001–10 000

10 001–100 000

> 100 000

31.12.2019

31.12.2018

4 325

2 493

276

3 787

1 964

247

As in the two preceding years, the shareholder base widened significantly in 2019. At the end of 2019,
7 120 shareholders were entered in the share register. This represents an increase of 1 093 shareholders
compared to the end of 2018. Over the last three years the company’s shareholder base has more than
doubled (3 150 shareholders as at 31 December 2016).

Free float

The free float as defined by SIX Swiss Exchange stands at 100%.

ANNUAL REPORT 2019
INFORMATION FOR INVESTORS

%52

payout ratio

Disclosure of shareholdings /
significant shareholders

Under Art. 120 of the Financial Market Infrastructure
Act, FinMIA, anyone who acquires or sells equity se-
curities on their own account and thereby attains, falls
below, or exceeds the threshold of 3%, 5%, 10%,
15%, 20%, 25%, 331∕3%, 50%, or 66²∕3% of the voting
rights in a company (whether or not such rights may
be exercised) is subject to a reporting obligation. In-
formation on these significant shareholders can be
found on page 58 of this report.

The reporting obligation applies to anyone who directly, indirectly, or in concert with third parties
acquires or disposes of shares in a company incorporated in Switzerland whose equity securities are
listed in whole or in part in Switzerland. It also applies to anyone who can exercise the voting rights
attached to such equity securities at their own discretion. Disclosure must be made to the company and
stock exchanges on which the equity securities in question are listed.

Dividend policy

The Board of Directors has defined an attractive dividend policy with a payout ratio of 50%–60% for the
current strategy period. It is proposing to the Annual General Meeting of 21 April 2020 a dividend of
CHF 1.80 per share (2018: CHF 7.00), corresponding to a payout ratio of 52.3% (2018: 52.0%). Accord-
ingly, Komax continues to achieve it strategic target. CHF 0.20 per share (2018: CHF 0.80) will be dis-
tributed from capital contribution reserves, and will therefore be tax-free for natural persons domiciled
in Switzerland who hold the shares as part of their private assets. Following this distribution, the capital
contribution reserves will be practically used up, allowing no further distribution from these reserves.

Financial calendar

Annual General Meeting

Dividend payment

Half-year results 2020

Investor Day

Preliminary information on 2020 financial year

Annual media and analyst conference on the 2020 financial results

Annual General Meeting

21 April 2020

27 April 2020

18 August 2020

23 October 2020

26 January 2021

16 March 2021

14 April 2021

ANNUAL REPORT 2019
INFORMATION FOR INVESTORS

Komax registered share: key data

Share capital as at 31 Dec.

Number of shares as at 31 Dec.

Average number of outstanding shares

in TCHF

No.

2019

385

2018

2017

20161

20151

385

383

377

369

3 850 000

3 847 510

3 834 482

3 774 148

3 691 651

3 843 352

3 830 864

3 810 276

3 741 364

3 652 728

Key data per share

Par value

Basic earnings

EBITD

EBIT

Shareholders’ equity

Distribution

Payout ratio

Dividend yield as at 31 Dec.

Share price development

Highest price

Lowest price

Closing price as at 31 Dec.

Average daily trading volume

P/E (price-earnings ratio) as at 31 Dec.

Total return per share

Distribution from prior-year profit

Change in value

Total (total return)

Annual return 3

CHF

No.

CHF

0.10

3.44

9.58

6.25

63.53

1.80 2

52.3 2

0.8 2

264.00

165.10

236.40

16 802

0.10

13.52

20.52

17.56

73.20

7.00

52.0

3.0

0.10

11.05

17.35

14.45

67.33

6.50

59.2

2.0

0.10

10.34

17.22

14.81

65.23

6.50

63.4

2.6

0.10

8.00

16.19

13.67

76.70

6.00

75.0

3.1

329.00

319.50

251.25

194.90

223.00

243.50

180.10

122.90

230.00

319.50

251.25

194.90

13 342

12 274

68.7

17.0

28.9

8 191

24.3

7 881

24.4

7.00

6.40

13.40

5.83

6.50

–89.50

–83.00

–25.98

6.50

68.25

74.75

29.75

6.00

56.35

62.35

31.99

5.00

50.40

55.40

38.34

1 Since the start of 2017, the consolidated financial statements have been drawn up in accordance with Swiss GAAP FER. The 2016 figures

have been revised accordingly. 2015 is reported according to IFRS.

2 Proposal of the Board of Directors of Komax Holding AG: distribution of CHF 1.80 per registered share.
3 Change on prior-year-end closing price.

Further information on the Komax registered share can be found on the internet at
www.komaxgroup.com.

CORPORATE GOVERNANCE 2019
CONTENTS

CORPORATE
GOVERNANCE

Corporate structure
and shareholders
58

Shareholder
participation rights
66

Changes of control
and defense measures
67

Auditors
67

Information policy
68

Capital structure
59

Board of Directors
61

Executive Committee
65

Compensation,
shareholdings, and
loans
66

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

Ensuring good corporate governance is very important to Komax. Objectives in this area include safe-
guarding company value and success in the interest of customers, shareholders, staff, creditors, sup-
pliers, and the public, as well as the provision of transparent, rapid, and simultaneous information to all
stakeholder groups. Komax takes as its starting point the principles and regulations of the “Swiss Code
of Best Practice” of Economiesuisse and the Directive on Information Relating to Corporate Gover-
nance (Directive Corporate Governance, DCG) of SIX Exchange Regulation, and gives account of devel-
opments in this area each year in the Annual Report. The key elements are laid down in the Articles of
Association, the Organizational Regulations, and the Regulations on the Remuneration Committee and
the Audit Committee. In addition, the Board of Directors regularly looks at the issue of corporate gov-
ernance and initiates the corresponding adjustments where appropriate.

1 Corporate structure and shareholders

Corporate structure
The Group structure and subsidiaries belonging to the Group are set out on pages 112 and 113 of the
Annual Report. With the exception of Komax Holding AG, no companies with listed participation secu-
rities form part of the scope of consolidation.

Komax Holding AG, the holding company of the Komax Group, has its headquarters in Dierikon,
Switzerland. Details on the place of listing, market capitalization, security, and ISIN numbers are set out
on page 54 (“Information for investors”).

Major shareholders
Shareholders whose share of the company’s share capital exceeds or falls below the thresholds of
3%, 5%, 10%, 15%, 20%, 25%, 33¹∕3%, 50%, and 66²∕3% have a reporting obligation under the Finan-
cial Market Infrastructure Act (FinMIA). According to the disclosure reports submitted, the company had
the following major shareholders holding more than 3% of the votes as at 31 December 2019:

Shareholder / Shareholder group

Max Koch, Meggen, Switzerland

BlackRock, Inc., New York, USA

Leo Steiner, Steinhausen, Switzerland

Number of shares
31.12.2019

Share in %
31.12.2019 1

190 285 2

145 963 3

126 954 4

4.946

3.794

3.300

1 The calculation is based on the 3 847 510 registered shares listed in the Commercial Register as at 31 December 2019.
2 Notification of position falling below 5% threshold on 13 March 2018.
3 Notification of breach of 3% threshold on 26 June 2019.
4 Notification of breach of 3% threshold on 19 December 2007.

All shareholdings reported to Komax Holding AG and the Disclosure Office of SIX Swiss Exchange
during the 2019 financial year as per Art. 120 of the Financial Market Infrastructure Act have been
published on SIX Swiss Exchange AG’s electronic publication platform, and can be viewed at
www.six-exchange-regulation.com/en/home/publications/significant-shareholders.html.

Cross-shareholdings
There are no cross-shareholdings.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

385 000.00

0.00

2 Capital structure

Capital

in CHF

Ordinary capital

Conditional capital

Authorized capital

Further details are provided in the sections below.

Authorized and conditional capital in particular
For details on conditional capital, please see page 107 of the consolidated financial statements of Komax
Holding AG as well as Art. 3.2 of the Articles of Association.

The Annual General Meeting of 13 May 2009 approved the creation of new conditional capital up to
a maximum of CHF 18 000, thereby allowing the share capital of the company at that time to rise by up
to CHF 46 248 to cover the exercising of option or subscription rights issued as part of the Executive
and Employee Participation Programs of Komax Holding AG. The subscription and advance subscrip-
tion rights of the remaining shareholders in the company are excluded.

The allocation of options was undertaken in a framework determined by the Remuneration Commit-
tee. The option plan of Komax Holding AG was authoritative. The individual allocation of options was at
the discretion of the Board of Directors and senior management. These options had a duration of five
years and were subject to a three-year lock-in period. The predetermined exercise price of the option
corresponds to the lower of the following two values: the average price of the fourth quarter of the
preceding year, or the average price in March of the year the option was issued. In 2015, the allocation
of share options was discontinued and replaced by share-based programs. The most recently allocated
options, i.e. those allocated in 2014, were convertible into shares up to 31 December 2018 at the latest.
Further information on the Komax Group’s employee participation programs can be found on pages 76
and 77 and 115 to 117 of the Annual Report.

In 2010, 13 360 options were converted into shares with a par value of CHF 0.10. In 2011, no options
were exercised, and in 2012, 42 909 options were exercised. The number of options exer cised in 2013
amounted to 79 991; the figure for 2014 was 81 321, for 2015 86 550, 2016 82 497, 2017 60 334, and
for 2018 13 028. In 2019, 2 490 new shares were created from the conditional capital remaining as at
31 December 2018 (CHF 249.00). There was thus no conditional capital as at 31 December 2019.

The new capital created in 2019 was reported within the deadline stipulated under Art. 635h of the

Swiss Code of Obligations (CO).

Komax Holding AG has no authorized capital.

Capital changes
Details of capital changes in 2018 and 2019 can be found on page 86 of the financial section of this
Annual Report. The corresponding information for 2017 can be found on page 82 of the financial section
of the 2018 Annual Report.

Shares, participation certificates, and bonus certificates
As at 31 December 2019, Komax Holding AG had fully paid-up capital of CHF 385 000.00 and distributed
over 3 850 000 registered shares with a par value of CHF 0.10 each. Each registered share entitles the
holder to vote at the Annual General Meeting as long as the shareholder is listed in the share register as
a “voting shareholder” (see also “Restrictions on transferability of shares and nominee registrations” on
page 60). Registered shares are fully entitled to receive dividends. Komax Holding AG has not issued
any participation certificates or bonus certificates.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

Restrictions on transferability of shares and nominee registrations
The Komax Holding AG share register is divided into the categories of “non-voting shareholders” and
“voting shareholders.” “Non-voting shareholders” may exercise all property rights, but not the right to
vote or rights associated with that of voting. “Voting shareholders” may exercise all rights associated
with the share (Articles of Association, Section 6 para. 2).

Registration of an acquirer of shares as a “voting shareholder” may be refused under Komax Holding
AG’s Articles of Association (Section 6 para. 4) if, as a result of such recognition, the acquirer would
directly or indirectly hold more than 15% of the total number of shares recorded in the Commercial
Register. Legal entities and groups with joint legal status which are connected through capital, voting
rights, management, or in some other manner, along with all natural persons, legal entities, and groups
with joint legal status which act in concert by virtue of agreement, syndicate, or in some other manner,
are regarded as a single acquirer for the purposes of this provision. This limitation also applies in the
case of the acquisition of registered shares through the exercising of subscription rights, option rights,
or conversion rights. No requests for an exception were made in the year under review. This restriction
does not apply to the acquisition of shares through inheritance, division of an estate, or joint marital
property.

Komax Holding AG’s Articles of Association (Section 6 paras. 5 and 6) also empower the Board of
Directors to refuse entry in the share register if the acquirer does not expressly declare, at the request
of the Board, that the shares were acquired in his/her own name and for his/her own account. Nominees
are listed in the share register as “non-voting shareholders.” After hearing the affected party, Komax
Holding AG may delete entries in the share register if such entries occurred in consequence of false
statements by the acquirer. The acquirer must be informed of the deletion immediately.

Convertible bonds and options
Komax Holding AG has no outstanding convertible bonds. Details on employee options can be found
on the previous page under “Authorized and conditional capital in particular” as well as on page 115 of
the Annual Report.

Management transactions
The Listing Rules of SIX Swiss Exchange stipulate a disclosure obligation for management transactions.
The Board of Directors has issued a set of regulations to comply with these provisions. Members of the
Board of Directors and Executive Committee have a disclosure obligation towards the company in this
respect. A total of three notifications were submitted in the 2019 financial year (2018: 19 notifications).
At www.six-exchange-regulation.com/en/home/publications/management-transactions.html (website of
SIX Swiss Exchange) published notifications can be found.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

3 Board of Directors

The Board of Directors comprised six individuals as at 31 December 2019. No member of the Board of
Directors was a member of the Executive Committee in the three financial years prior to the reporting
period, and no member of the Board of Directors has any material business relationship with any Group
companies.

Members of the Board of Directors

Beat Kälin, Chairman

David Dean, Vice Chairman

Andreas Häberli

Kurt Haerri

Mariel Hoch

Roland Siegwart

AC: Audit Committee
RC: Remuneration Committee

Appointed

Term expires

Committees

2015

2014

2017

2012

2019

2013

2020

RC (Chairman)

AC (Chairman)

There are no cross-involvements among the Board of Directors. Biographies of the individual Board
members and details of their other activities and interests are provided on pages 38 and 39 of the
Annual Report.

Statutory regulations with respect to the number of permissible activities
as per Art. 12 para. 1 point 1 ERCO
According to Section 21 para. 3 of the Articles of Association, the number of permissible mandates of
members of the Board of Directors in the highest management or administrative bodies of legal entities
which are obliged to have themselves entered in the Commercial Register or in a corresponding foreign
register and which are not controlled by the company or do not control the company shall be
– four additional mandates for listed companies,
– five additional mandates for non-listed companies, and
– five additional mandates for charitable organizations,
as long as this does not involve any breach of statutory provisions and in particular the due diligence
obligations of the Board of Directors. Mandates with different companies that belong to the same cor-
porate group count as a single mandate. Mandates undertaken by a member of the Board of Directors
at the behest of a Group company or to exercise an office under public law are not covered by the re-
striction on additional mandates described above.

The assumption of mandates other than those stipulated above is permissible without numerical
restriction, as long as these mandates are unremunerated and do not interfere with the Board member’s
fulfilment of his/her obligations in respect of the company. The reimbursement of expenses does not
count as compensation.

Election and term of office
According to the Articles of Association (Section 14 para. 1), the Board of Directors consists of three to
seven members. It is predominantly composed of independent, non-executive members, who are elect-
ed individually by the Annual General Meeting for a term lasting until the end of the next Annual Gener-
al Meeting. The Annual General Meeting also elects the Chairman. Members may be re-elected. There
is no restriction on the length of a member’s term of office. The Articles of Association provide no reg-
ulations regarding the appointment of the Chairman and the members of the Board of Directors that
deviate from statutory provisions.

The Chairman and all other members of the Board of Directors will be proposed for re-election at the

next Annual General Meeting on 21 April 2020.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

Internal organization
The Board of Directors consists of the Chairman and a maximum of six other Board members. With the
exception of the Chairman, who is elected by the Annual General Meeting unless that position becomes
vacant during the year, the Board of Directors organizes itself. If the office of Chairman becomes vacant
during the period of office, the Board of Directors will nominate a new Chairman for the remaining peri-
od of office, whereby this person must be an existing member of the Board of Directors.

The Chairman is responsible for chairing meetings. The Board of Directors additionally appoints a
Secretary, who does not need to be a member of the Board of Directors. The Board of Directors meets
as often as business requires, but no less than four times per year. It convenes at the invitation of the
Chairman. Each member of the Board of Directors is also entitled to demand that a meeting be called
to discuss a particular topic. In this case, the Chairman convenes the meeting within 14 days of receiv-
ing the request.

The Board of Directors is deemed to have a quorum if an absolute majority of its members are pres-
ent in person. The resolutions of the Board of Directors are adopted by an absolute majority of votes
present. In the event of a tie, the Chairman casts the deciding vote. All resolutions are minuted. In cas-
es of urgency, a meeting of the Board of Directors may be held by telephone or other appropriate me-
dium. Resolutions by circular letter are permissible provided no Board member calls for verbal discus-
sion.

Five ordinary meetings of the Board of Directors were held in 2019. All Board members were present
at all meetings. On average, these meetings lasted around eight hours. However, these average times
pertain to the actual duration of the meetings themselves, and do not take into account the preparatory
and follow-up work done by the individual members. Within the Board of Directors, there are two com-
mittees that are exclusively made up of non-executive Board members.

Every year, the Board of Directors undertakes an evaluation of its own work as well as that of its

committees. In addition, it regularly scrutinizes the composition of the Board.

– Remuneration Committee
This Committee amalgamates the tasks of a remuneration and nomination committee. The Remunera-
tion Committee consists of a maximum of three non-executive members. The Committee is elected
by the Annual General Meeting. Members’ term of office ends with the conclusion of the next Annual
General Meeting. Re-election is permissible. The current members are Beat Kälin (Chair), Andreas
Häberli, and Roland Siegwart. The Board of Directors is proposing to the Annual General Meeting of
21 April 2020 that the three existing members be re-elected.

The Articles of Association provide no regulations regarding the appointment of Committee mem-
bers that deviate from statutory provisions. If a member leaves the company prior to completing his
term of office, the Board of Directors will appoint a replacement from among its number for the remain-
ing period of office.

The Remuneration Committee meets as often as business requires, but at least twice a year. The
invitation, which contains details of the agenda items, is issued in writing at least ten days prior to the
meeting. The CEO and other members of the Executive Committee may attend these meetings in an
advisory capacity. However, they do not take part in discussions concerning their own compensation.
The Committee Chairman reports to the Board of Directors on the activities of the Committee after every
meeting. The minutes of Committee meetings are made available to members of the Board of Directors.
In 2019, the Committee held two ordinary meetings; in each case, all members were present. On
average, these meetings lasted a good four hours. These average times do not include the preparatory
and follow-up work done by the individual members.

The tasks of the Remuneration Committee include supporting the Board of Directors in the fulfilment
of the compensation and staff policy duties assigned to it by current legislation and the Articles of As-
sociation. In particular, the Remuneration Committee puts forward proposals on remuneration policy
and prepares all relevant decision-making material for the Board of Directors with respect to the ap-
pointment and remuneration of members of the Board of Directors and the Executive Committee. The

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

detailed tasks and competencies of the Remuneration Committee are formulated in a set of Regulations
for the Remuneration Committee. Further details on the Remuneration Committee can be found in the
Compensation Report on pages 69 to 81.

– Audit Committee
The members of the Audit Committee are David Dean (Chair), Kurt Haerri, and Mariel Hoch. The Com-
mittee meets at least twice a year. Two ordinary meetings took place in 2019, with all members being
present on both occasions. On average, these meetings lasted four hours. These average times do not
include the preparatory and follow-up work done by the individual members.

The tasks of the Audit Committee include the overall supervision of the external and internal auditors,
as well as financial reporting. The Audit Committee sets out the scope and schedule of the audits to be
carried out by the two auditing bodies and also coordinates their work.

Both the external and internal auditors draw up a report on their audit work, and the Audit Committee
monitors implementation of the audit findings. Furthermore, the Audit Committee evaluates the reliabil-
ity of the internal control system and risk management, and acquires a picture of the extent to which
statutory and internal regulations are being adhered to (compliance).

The CEO and the CFO both attend meetings of the Audit Committee. The external auditor is invited
to attend. The CFO represents the internal audit unit. Both bodies have access to the minutes of the
meetings of the Board of Directors and Executive Committee. The detailed tasks and competencies of
the Audit Committee are set out in the Organizational Regulations for the Audit Committee.

Definition of areas of responsibility
According to Art. 716a para. 1 CO and Section 19 of the Articles of Association, the Board of Directors
must fulfil the following tasks:
– Overall management of the company and issuance of the necessary directives
– Defining the company’s organizational structure
– Determining the principles of accounting, financial controlling and financial planning,

insofar as this is necessary for the management of the company

– Appointing and removing the persons entrusted with managing and/or representing the

company

– Ultimate supervision of the persons entrusted with managing the company, specifically

with respect to prevailing legislation, the Articles of Association, regulations, and directives

– Producing the Annual Report, making preparations for the Annual General Meeting, and

executing the resolutions passed by the Annual General Meeting

– Drawing up the Compensation Report
– Informing the courts in the event of excessive indebtedness
– Passing resolutions on supplementary contributions for shares not fully paid in
– Resolutions for the approval of capital increases and the resulting amendments to

the Articles of Association

The tasks, obligations, and powers of the Board of Directors, its Chairman, and the Committees are set
out in detail in the Articles of Association, the Organizational Regula tions of Komax Holding AG, and the
Regulations for the Remuneration Committee and the Audit Committee. These also define the rights,
obligations, and competencies of the CEO and Executive Committee. The relevant regulations are re-
viewed on a regular basis and amended where necessary. The most recent adjustments have been in
force since 13 June 2019.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

To the extent permitted by law and by the Articles of Association, the Board of Directors has delegated
operational management of the company to the CEO of the Komax Group. The Executive Committee is
made up of the CEO, CFO, and three further members. The members of the Executive Committee are
appointed by the Board of Directors at the proposal of the Remuneration Committee.

Information and control instruments in respect of the Executive Committee
The CEO informs the Board of Directors at each ordinary meeting about the course of business, the
Group’s most important transactions, and the status of the tasks delegated to the Executive Commit-
tee. In addition, the key data generated by the management information system (MIS) is discussed at
length with the CEO and CFO at these meetings. The Board of Directors is provided with full details of
the current course of business and the financial situation of the Group between each meeting. In addi-
tion, the Chairman of the Board of Directors and the CEO are in regular contact to discuss important
questions of company policy.

The risks associated with the Group’s commercial activities are systematically identified, ana lyzed,
monitored, and managed through an institutionalized risk management function. These risks are amal-
gamated into groups according to their nature, namely general external risks, business risks, financial
risks, risks arising in connection with corporate governance, trade compliance, and IT risks. The Ex-
ecutive Committee is responsible for the operational side of risk management, whereby specially ap-
pointed process owners are assigned responsibility for the management of key individ ual risks. These
process owners take specific measures and monitor their implementation. Every year, the Executive
Committee informs the Audit Committee of the risks identified and measures taken as part of risk man-
agement activities.

The MIS of the Komax Group is organized as follows: each subsidiary’s key balance sheet and prof-
it and loss figures are compiled and consolidated once a month. The subsidiaries’ balance sheets,
income statements, cash flow statements, and various indicators are compiled and consolidated on a
quarterly, half-yearly, and yearly basis. A comparison is then made with the previous year and the
budget. The budget forecast is checked for attainability against the quarterly statements for each indi-
vidual company and on a consolidated basis.

Using key controls, the internal control system (ICS) ensures proper and efficient management, safe-
guards assets, prevents and identifies offences and errors, and ensures accurate and complete
accounting records as well as timely preparation of reliable financial information. A report setting out the
results of these investigations and the corresponding measures taken is submitted to the Audit Com-
mittee.

The internal audit function evaluates the effectiveness of the ICS as well as management and moni-
toring processes. It also supports the Executive Committee in the risk management process. Internal
audit duties are performed by the Finance & Accounting unit of Komax Management AG, Dierikon. This
unit scrutinizes the individual operating units of the Group and the various business areas of the parent
entity at regular intervals, and on the basis of an annually updated audit plan. The internal auditors
report the results of their investigations to the Audit Committee. The Audit Committee reviews and
approves the scope of the audit, the audit plan, and the corres ponding responsibilities. It also decides
on any measures to be implemented as a result of internal audit findings.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

4 Executive Committee

The Executive Committee is made up of the CEO, CFO, and three further members.

Matijas Meyer, CEO

Andreas Wolfisberg, CFO

Marc Schürmann

Marcus Setterberg

Günther Silberbauer

Function exercised since

2015

1996

2019

The Executive Committee was expanded from two to five members with effect from 1 January 2019.
Previously, it consisted of the CEO and CFO. Biographies of the members of the Executive Committee
are provided on pages 40 and 41. Jürgen Hohnhaus is replacing Günther Silberbauer on the Executive
Committee with effect from 1 January 2020.

Other activities and interests
Aside from the mandates listed on pages 40 and 41, the members of the Executive Committee did not
exercise any activities on management or supervisory bodies of significant Swiss and foreign corporate
entities, institutions, or foundations under private or public law outside the Komax Group as at 31 De-
cember 2019.

Statutory regulations with respect to the number of permissible activities
as per Art. 12 para. 1 ERCO
According to Section 26 para. 1 of the Articles of Association, the number of permissible mandates of
members of the Executive Committee in the highest management or administrative bodies of legal
entities which are obliged to have themselves entered in the Commercial Register or in a corresponding
foreign register and which are not controlled by the company or do not control the company shall be
– two additional mandates for listed companies,
– two additional mandates for non-listed companies, and
– five additional mandates for charitable organizations,
as long as this does not involve any breach of statutory provisions and in particular the applicable due
diligence obligations and the duty of loyalty. Mandates with different companies that belong to the same
corporate group count as a single mandate. Mandates undertaken by a member of the Executive Com-
mittee at the behest of a Group company are not covered by the additional mandate restriction.

Executive Committee members may not accept any of the above-mentioned mandates without the
prior written approval of the Board of Direct ors. The assumption of mandates other than those stipulat-
ed above is permissible without numerical restriction, as long as these mandates are unremunerated
and do not interfere with the Executive Committee member’s fulfilment of his obligations regarding the
company. The reimbursement of expenses does not count as compensation.

Management contracts
No management agreements exist with companies or natural persons outside of the Group in relation
to transferred management responsibilities.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

5 Compensation, shareholdings, and loans

Details of compensation, shareholdings, and loans are set out in the Compensation Report on pages 69
to 81 of this Annual Report.

6 Shareholder participation rights

The fundamental participation rights of shareholders are set out in the Swiss Code of Obligations
(CO) and supplemented by the provisions of the company’s Articles of Association. There are no
regulations on participation in the Annual General Meeting that deviate from statutory provisions.
The Articles of Association of Komax Holding AG are available in electronic form on the website
www.komaxgroup.com/articles-of-association.

Voting rights and representation restrictions
Shareholders registered in the Komax Holding AG share register are entitled to vote; each share is
entitled to one vote. Treasury shares do not confer the right to vote. No single shareholder may directly
or indirectly exercise the votes of more than 15% of the total number of shares recorded in the Com-
mercial Register for his/her own registered shares and shares voted by proxy. Legal entities and groups
with joint legal status which are connected through capital, voting rights, management, or in some other
manner, along with all natural persons, legal entities, and groups with joint legal status which act in
concert by virtue of agreement, syndicate, or in some other manner, are regarded as one person for the
purposes of this provision. Representation by the independent proxy remains reserved.

Shareholders may be represented at the Annual General Meeting by another shareholder with voting
rights on the basis of a written power of attorney, and by the independent proxy on the basis of elec-
tronic or written power of attorney. The Chairman of the Annual General Meeting shall decide on the
permissibility of representation. The independent proxy is elected by the Annual General Meeting up
until the end of the next Annual General Meeting. The Articles of Association provide no regulations
regarding the appointment of the independent proxy that deviate from statutory provisions. The statu-
tory voting rights limitation may be removed by a resolution by the Annual General Meeting. Such a
resolution must be carried by an absolute majority of voting shares represented.

Statutory quorums
The Annual General Meeting votes and passes its resolutions with the absolute majority of votes repre-
sented, unless prevailing legislation or the Articles of Association contain mandatory provisions under
which resolutions have to be passed in a different way. In addition to the resolutions specified in CO Art.
704, under the Articles of Association of Komax Holding AG, a two-thirds majority of votes cast and an
absolute majority by value of shares voted is required to dismiss members of the Board of Directors.

Convocation of the Annual General Meeting of shareholders and agenda
The convocation of the Annual General Meeting is governed by applicable law. Shareholders rep-
resenting at least 1% of the share capital can request that items be placed on the agenda for discussion
by submitting the proposed motions in writing by the deadline published by the company.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

Entries in the share register
Any person acquiring shares is listed as a “shareholder with voting rights” up to a maximum of 15% of
the total number of shares published in the Commercial Register. Any person owning more than 15%
of the published shares will be entered as a “non-voting shareholder” for the portion in excess of 15%
(Komax Holding AG Articles of Association, Section 6 para. 4; see also “Restrictions on transferability
of shares and nominee registrations” on page 60).

Invitation to the Annual General Meeting of 21 April 2020
All shareholders registered in the Komax Holding AG share register as at 5:00 p.m. on 14 April 2020 are
entitled to vote in respect of the number of shares registered in their name at the Annual General Meeting
of 21 April 2020. Shareholders registered on 11 March 2020 will receive an invitation indicating the
proposals of the Board of Directors together with a reservation and entry ticket coupon. Shareholders
who acquire shares later and whose registration application is re ceived by the Komax Holding AG share
register no later than 14 April 2020 will receive the invitation at that time, or ballot materials will be wait-
ing for them at the front desk of the Annual General Meeting. Shareholders who dispose of their shares
before the Annual General Meeting are not entitled to vote. In the event of a partial sale or purchase of
additional shares, the entry ticket received should be exchanged at the front desk on the date of the
Annual General Meeting.

7 Changes of control and defense measures

Duty to make an offer
Upon reaching or exceeding a threshold of 33¹∕3, a shareholder must submit an offer to all shareholders
for the purchase of their shares (Art. 135 FinMIA). The Articles of Association do not contain any opting-
out or opting-up regulations.

Clauses on change of control
At the Komax Group, change-of-control clauses are not included in employment contracts. However,
the members of the Board of Directors, Executive Committee, and middle management are entitled to
exercise their share-based remuneration in part or in full, without regard to the applicable time limits, in
the event of a change in control.

8 Auditors

Duration of the mandate and term of office of the lead auditor
PricewaterhouseCoopers AG, Basel, has been the statutory auditor of Komax Holding AG and the
Komax Group’s consolidated financial statements since 1994. Pursuant to the provisions of the Swiss
Code of Obligations, the lead auditor is replaced after a maximum term of seven years. The lead auditor
has been responsible for the audit mandate since 2017.

Audit fee
PricewaterhouseCoopers invoiced the Komax Group CHF 737 079 in the 2019 financial year for services
in connection with auditing the annual statements of Komax Holding AG and the Group companies, as
well as the consolidated statements of the Komax Group.

Additional fees
During the 2019 financial year, PricewaterhouseCoopers invoiced additional fees amounting to a total
of CHF 74 515. This breaks down into fees of CHF 48 964 for tax and legal advice and CHF 25 551 for
transaction services and other consultancy fees.

ANNUAL REPORT 2019
CORPORATE GOVERNANCE

Information instruments of the external audit
The Audit Committee is responsible for evaluating the external auditors, who submit an audit report to
the Board of Directors and senior management. At least two consultations are held each year between
the external auditors and the Audit Committee, at which the material findings for each company (man-
agement letters) and the consolidated financial statements covered by the audit report are discussed in
detail. The auditors also explain the audits conducted (audit and review) for each company along with
recent changes in Swiss GAAP FER standards and their impact on the Komax Group’s consolidated
annual statements.

The ser vices provided by the statutory auditors are evaluated by the Audit Committee on the basis
of the quality of reporting and the audit reports, the implementation of the audit plan, and the level of
cooperation with the internal audit team. The independence of the auditors is verified by comparing the
fee for additional services charged by the external auditors with the audit fee, taking into account the
scope of these additional services.

Information policy

Komax Holding AG informs all stakeholders transparently, rapidly, and simultaneously. The CEO, CFO,
and the Head of Investor Relations/Corporate Communications are available as contact partners for
information purposes.

The consolidated financial statements are compiled in conformity with Swiss GAAP FER standards.
Komax Holding AG publishes comprehensive financial results twice a year, for the first half and the full
year. In addition to the financial results, shareholders and the financial markets are also regularly in-
formed of significant changes and developments.

Komax Holding AG publishes facts relevant to its share price in conformity with the disclosure poli-
cies of SIX Swiss Exchange Ltd. (ad hoc publicity, Art. 53 of the Listing Rules). The Listing Rules can be
downloaded at www.six-exchange-regulation.com. The official publication for company notices is the
“Swiss Official Gazette of Commerce” (“Schweizerisches Handelsamtsblatt”).

Information on share price trends, annual and half-year reports, the financial calendar, the minutes
of the most recent Annual General Meeting, media releases, and Komax Holding AG’s Articles of Asso-
ciation and Organizational Regulations are available at www.komaxgroup.com. Media and analyst con-
ferences are held at least once a year. Anyone who wants to receive all media releases of Komax
Holding AG by e-mail should sign up to the mailing list on the Komax website.

Contact
Komax Holding AG
Roger Müller
Vice President Investor Relations/Corporate Communications
Industriestrasse 6
6036 Dierikon
Switzerland

Phone +41 41 455 04 55
roger.mueller@komaxgroup.com

COMPENSATION REPORT 2019
CONTENTS

COMPENSATION
REPORT

Introduction by the
Chairman of the
Remuneration Committee
70

Tasks and competencies
of the Remuneration
Committee
71

Provisions of the
Articles of Association
on compensation
72

Compensation and
shareholdings of
the Board of Directors
in 2019 (audited)
78

Compensation and
shareholdings of
the Executive Committee
in 2019 (audited)
79

Report of the auditors
81

Principles of
compensation policy
73

Structure of the
compensation system
74

This Compensation Report provides an overview of the compensation policy and compensation
systems of Komax Holding AG, as well as the principles used to determine the compensation of the
Board of Directors and the Executive Committee. In addition, the compen sation paid in 2019 is
disclosed in detail. The Compensation Report has been drawn up in accordance with the provisions
of the Ordi n ance against Excessive Remuneration in Listed Companies Limited by Shares (ERCO),
the Directive Corporate Governance (DCG) of SIX Swiss Exchange, and the principles of the
“Swiss Code of Best Practice for Corporate Governance” of Economiesuisse.

ANNUAL REPORT 2019
COMPENSATION REPORT

Introduction by the Chairman of the Remuneration Committee

Dear Shareholder,

Komax generates around 80% of its revenues through customers in the automotive industry. Since this
industry is currently encountering difficulties, 2019 was a very challenging year for Komax. After the
record result in 2018, revenues declined by 12.9% in the year under review, while EBIT contracted by
64.2%. This Compensation Report reflects this development. The Komax compensation system is
structured in such a way that, in a year in which financial performance is unsatisfactory, the cash bonus
decreases accordingly. The amount of the cash bonus awarded annually to the Executive Committee is
linked to the development in revenues and EBIT, as well as the degree to which individual objectives
are attained in the year under review. As you can see in the Compensation Report (see page 79), this
has resulted in the Executive Committee receiving a cash bonus for 2019 that is significantly lower than
that for 2018.

2019 was a demanding year for Komax, and it was a year in which the Remuneration Committee
addressed various personnel and organizational issues. On behalf of the Remuneration Committee,
I would like to provide you with more detail on this over the following paragraphs.

One of the topics facing the Remuneration Committee in 2019 was appointing a replacement on the
Executive Committee for Günther Silberbauer, who will focus exclusively on his role as Managing Director
of Komax SLE in Grafenau, Germany, from 2020. In Dr. Jürgen Hohnhaus, who holds a degree in me-
chanical engineering, Komax has recruited a successor with many years’ experience in executive roles
as general manager, business unit head, and CTO in the mechanical engineering and automation sectors.
He was appointed to the Komax Executive Committee on 1 January 2020. The Board of Directors also
witnessed a change – as announced in 2018 – in the year under review. Daniel Hirschi did not stand for
re-election at the 2019 Annual General Meeting. Dr. Mariel Hoch, partner at the law firm Bär & Karrer AG
in Zurich, was elected to the Board of Directors with an outstanding result. She now sits on our Audit
Committee.

To withstand a difficult market environment, being able to react swiftly to changes is vital. Two im-
portant elements of this are an agile organization and a flexible workforce that knows the market well
and can implement effective measures at the right time. Consequently, in 2019 the Remuneration Com-
mittee focused intensively on the topic of agile organizational structures. Another area looked at in
connection with this was talent management. As a market and technology leader, it is imperative that
Komax is an attractive employer for both internal and external talent.

As in past years, you will have the opportunity at the Annual General Meeting, to be held on 21 April
2020, to vote on this Compensation Report and thereby formally register your opinion on our compen-
sation system. Your vote is important to us, too, because it is an important part of the Annual General
Meeting’s approval of the maximum possible total compensation for the Board of Directors and the
Executive Committee for the 2021 financial year. I can assure you that we remain unwaveringly commit-
ted to our restrained compensation policy and are aware of our responsibilities. You can find detailed
information on our compensation model and the compensation granted to the Board of Directors and
the Executive Committee in 2019 on the following pages.

Yours sincerely,

Dr. Beat Kälin
Chairman of the Remuneration Committee

ANNUAL REPORT 2019
COMPENSATION REPORT

2 Tasks and competencies of the Remuneration Committee

Under the Articles of Association, Organizational Regulations and Regulations of the Remuner ation
Committee of Komax Holding AG, the Remuneration Committee is the supervisory body for staff and
compensation policy within the Komax Group. The Committee amalgamates the tasks of a remunera-
tion and nomination committee.
It has the following responsibilities and competencies:
– Development and regular review of staff policy and compensation policy, including the

principles of variable compensation and shareholding program

– Annual review and determination of the maximum total compensation amounts payable to
the Board of Directors and the Executive Committee, as well as preparation of the related
proposals to the Annual General Meeting

– Proposal on the individual compensation payable to members of the Board of Directors and

the CEO within the limits approved by the Annual General Meeting

– Resolutions on the compensation payable to the other members of the Executive Committee

within the limits approved by the Annual General Meeting

– Succession planning for the Board of Directors, Executive Committee, and other key functions
– Annual assessment of the independence of the members of the Board of Directors
– Annual assessment of the performance of the CEO and the members of the Executive

Committee

– Preparation of the Compensation Report
The Committee monitors and regularly discusses trends and developments in the area of compensation,
including any changes to statutory provisions or changes to provisions on corporate governance.

Delineation of competencies

Compensation policy, including the principles of variable compensation and
participation program

Maximum total compensation for the Board of Directors and
the Executive Committee

Individual compensation of the members of the Board of Directors

Evaluation of the performance of the CEO

Compensation of the CEO

Evaluation of the performance of the other members
of the Executive Committee

CEO

Committee

BoD

AGM

proposes

approves

proposes

submits

proposes

approves

proposes

approves

proposes

approves

approves
(binding vote)

proposes

approves

Individual compensation of the other members of the Executive Committee

proposes

approves

Compensation Report

proposes

approves

confirms
(advisory
vote)

Under the Articles of Association, the Remuneration Committee consists of a maximum of three
non-executive members of the Board of Directors. The Committee is elected by the Annual General
Meeting. Members’ term of office ends with the conclusion of the next Annual General Meeting. Re-
election is permissible. The 2019 Annual General Meeting elected Beat Kälin (Chairman), Andreas
Häberli, and Roland Siegwart to the Committee.

The Remuneration Committee meets as often as business requires, but at least twice a year, gener-
ally in March and December. Compensation issues are discussed at the March meeting. These discus-
sions include the assessment of the individual performance of the CEO and other members of the
Executive Committee for the previous year, the determination of the individual compensation payable
to members of the Board of Directors and the Executive Committee, and the approval of the Compen-
sation Report. At the December meeting, staffing questions are discussed, along with corporate gov-
ernance issues. In addition, the performance targets for the CEO and the other members of the Execu-

ANNUAL REPORT 2019
COMPENSATION REPORT

tive Committee are set for the following year. In the reporting year, the Committee held two ordinary
meetings; in each case, all members were present. The Chairman of the Committee may invite the CEO
and other members of the Executive Committee to meetings in an advisory (non-voting) capacity. How-
ever, they do not take part in discussions concerning their own performance and compensation. The
Committee Chairman reports to the Board of Directors on the activities of the Committee after every
Committee meeting. The minutes of Committee meetings are made available to all members of the
Board of Directors.

Furthermore, the Committee may call in external consultants and draw on their assistance when

fulfilling its duties.

3 Provisions of the Articles of Association on compensation

In compliance with the Ordinance against Excessive Remuneration in Listed Companies Limited
by Shares (ERCO), the Articles of Association contain provisions relating to remuneration which are
reproduced below in abbreviated form (as an excerpt) and set out in detail in sections 13 and 25 of
the Articles of Association:

Principles for the
compensation of
members of the
Board of Directors

Principles for the
compensation of
members of the
Executive Committee

– Members of the Board of Directors receive fixed compensation in cash as well as in

shares under the company’s employee participation program.

– The calculated value (fair value) of the shares at the time of allocation may not exceed

the amount of compensation paid in cash.

– The Board of Directors determines the conditions that apply to shares.
– The lock-in periods are at least three years.

– Members of the Executive Committee receive a fixed base salary, variable performance-

related compensation, and shares under the company’s employee participation
program.

– The Board of Directors determines the conditions for the performance-related com-

pensation component on an annual basis. These are linked to the attainment of one
or more performance criteria, whereby these criteria are either company-related or
individual in nature.

– The target amount may not exceed 50% of the annual fixed compensation. If targets
are not attained, the performance-related compensation may fall to zero. If all targets
are significantly exceeded, it may go up to a maximum of 100% of the annual fixed
compensation.

– The Board of Directors determines the conditions that apply to shares. The calculated
value (fair value) of the shares at the time of allocation may not exceed 100% of the
annual fixed compensation.

– The lock-in periods are at least three years.

Binding vote on the
compensation paid to
the Board of Directors
and Executive Committee

– The Annual General Meeting holds a separate vote each year on the total amount of
compensation payable to the Board of Directors and to the Executive Committee.
– The vote has binding effect, and applies for the coming financial year to the relevant

total maximum amounts that may be paid to members of the Board of Directors and
the Executive Committee.

Additional sum for pay-
ments to members of
the Executive Committee
appointed after the
binding vote of the AGM

– The additional amount for the compensation of members of the Executive Committee

appointed after the Annual General Meeting may not exceed 30% of the approved total
amount of compensation payable to the Executive Committee.

Pension benefits

– The pension benefits of members of the Executive Committee are only paid within

occupational domestic and foreign pension plans provided by the company or its Group
companies.

– The benefits and the employer contributions are solely drawn from the above-men tioned

occupational plans.

– Retirement benefits are provided solely within the context of the company’s ordinary

pension plans.

The Articles of Association of Komax Holding AG can be found at
www.komaxgroup.com/articles-of-association.

ANNUAL REPORT 2019
COMPENSATION REPORT

4 Principles of compensation policy

Board of Directors
The members of the Board of Directors only receive fixed compensation. This ensures that they are
independent in their supervision of the Executive Committee. Their compensation is paid in cash and
restricted shares, thereby ensuring alignment with the long-term interests of shareholders. The amount
of compensation reflects the importance of the mandate in question, and is generally based on the
typical levels of compensation paid to board members of other listed Swiss industrial companies of
comparable size and complexity.

Executive Committee
The compensation policy for members of the Executive Committee is determined by the Board of
Directors. It is geared to key principles that take into account the corporate strategy of the Komax
Group, which aims for profitable growth, as well as the company’s wider values with respect to sustain-
ability and social responsibility. The compensation system is intended to provide an incentive to create
and preserve value for shareholders. It is also designed to motivate top managers to achieve exception-
al performance and to retain them in the long term. The amount of compensation awarded reflects the
company’s long-term financial success.

Performance
orientation

A significant proportion of compensation is directly linked to the operating and financial
performance of the company and the attainment of individual objectives.

Alignment with
shareholder interests

A proportion of compensation consists of Performance Share Units, which are intended
to align the interests of management more closely with the long-term interests of
the shareholders. Furthermore, there is a direct correlation between the amount of
compensation paid and the long-term success of the company.

Market comparability

The compensation rates are in line with the market when compared with similar
positions in comparable companies.

Fair compensation

The compensation reflects the job profile, the responsibility, the capabilities, and the
experience of the function holder.

Transparency

The compensation system is straightforward and transparent.

The compensation paid to the Executive Committee is determined on the basis of the following
key factors:

Practice of competitors

Performance

Available financial re -
sources of the company
and market situation

Compensation paid by other international Swiss industrial companies listed on the
SIX Swiss Exchange and included in the SPI Extra. These are companies of comparable
complexity, size and geographic reach to Komax from the sectors systems and
mechanical engineering, automation, chemicals, electrical engineering, logistics, and
supply engineering.
The sources used for the benchmark comparison are publicly accessible data such as
compensation reports and the Ethos study on remuneration in Swiss companies. With
no benchmark comparison having been undertaken in 2018, various specific bench-
mark studies were conducted in 2019, on the basis of which the compensation of the
members of the Executive Committee was reviewed. The results of the studies indicate
that certain target amounts for compensation needed to be increased.

The financial performance of the company and its relevant business areas, and the
attainment of individual targets agreed as part of the annual performance management
process.

Budget-related considerations, inflation, and wage trends in the local market.

ANNUAL REPORT 2019
COMPENSATION REPORT

5 Structure of the compensation system

Board of Directors

5.1
The members of the Board of Directors only receive fixed compensation. To strengthen the alignment
of their interests with the long-term interests of shareholders, their compensation is paid partly in cash
and partly in restricted shares.

The amount of compensation depends on the responsibilities of the individual as well as the time

taken up by their mandate, and is based on the following structure:

in CHF

Basic annual
fee

Attendance
fee

Chairman of the Board of Directors

Vice Chairman of the Board of Directors

Board member

Chairman of a committee

Member of a committee

187 500

75 000

5 000

2 500

5 000

2 500

Annual
allocation of
restricted
shares1

60 000

30 000

25 000

1 Fixed amount in CHF: is divided by the share price as per allocation date (average closing price over the last 40 trading days

prior to allocation) and rounded up to the nearest number of full shares.

The basic annual fee in cash (incl. expense allowance) and attendance fees are paid out in April and
December for the current calendar year. Restricted shares are allocated at the end of the member’s
period of office shortly before the Annual General Meeting; the lock-in period is three years. In the event
of retirement, death, or disability, the entitlement to restricted shares is calculated on a pro rata tempo-
ris basis. In such cases, the lock-in period may be either continued or rescinded at the discretion of the
Board of Directors. In the event of a change in company control, the lock-in period is automatically
rescinded.

Additional compensation may be paid for exceptional efforts that cannot be considered part of the

ordinary Board of Directors activity. No such additional compensation was paid in 2019.

The Compensation granted to members of the Board of Directors is subject to the standard social
security deductions. The members of the Board of Directors do not participate in the staff pension plans
of Komax.

ANNUAL REPORT 2019
COMPENSATION REPORT

Executive Committee

5.2
In keeping with the principles of performance orientation and alignment with the long-term interests of
shareholders, the CEO and the other members of the Executive Committee receive a fixed salary com-
ponent, a variable, performance-related cash bonus, a long-term incentive component in the form of
Performance Share Units, and occupational benefits.

Fixed compensation

Attract, retain,
motivate

Function, market
comparability

–

Ongoing

Monthly cash
payments

Purpose

Driver

Performance criterion

Period

Instrument

Cash bonus

Long-term
incentive system

Pay for performance

Align with
shareholder interests,
pay for performance

Financial
and individual
performance

Revenues, EBIT,
individual objectives

One year

Yearly cash payment

Function

RONCE

Three years

Performance Share
Units (PSUs)

Retirement savings /
insurance plan

Occupational benefits

Protect against risks

Market comparability –

Ongoing

a) Fixed compensation
The fixed compensation component consists of a fixed base salary and a fixed company car allowance,
to which members of the Executive Committee are entitled according to the current expense regula-
tions. Expense allowances are not included, as these are not considered compensation. The fixed
salary component and the cash bonus for 100% target attainment form the so-called target salary. The
target salary is determined on the basis of the following factors:
– the tasks and responsibilities of the individual functions
– the standard market compensation rate for the function in question (external benchmark)
– an internal peer comparison (internal benchmark)
– the individual profile of the function holder, e.g. skills, capabilities, experience, and

performance

– the company’s available financial resources

b) Cash bonus
The cash bonus depends on the financial performance of the company and the attainment of the indi-
vidually agreed objectives in the year under assessment. The target amount (target bonus) may not
exceed 50% of the annual fixed basic salary for the CEO and all other members of the Executive Com-
mittee. The cash bonus is generally paid out in April of the following year.

CEO and CFO
The cash bonus payable to the CEO and CFO is calculated as follows: 75% on the basis of the financial
performance of the Komax Group and 25% on the basis of individual performance. The reference val-
ues relevant to the 2019 financial year were Group revenues and Group EBIT. The Board of Directors
determines the performance achievement level and the amount of the cash bonus payable to the CEO
annually on the recommendation of the Remuneration Committee. This also forms the basis for deter-
mining the performance achievement level and cash bonus of the CFO, which is likewise determined by
the Remuneration Committee. If performance objectives are not attained, the cash bonus may fall to
zero. If all objectives are significantly exceeded, the cash bonus may amount to a maximum of 175% of
the target bonus, but no more than 100% of annual fixed compensation.

ANNUAL REPORT 2019
COMPENSATION REPORT

Other members of the Executive Committee
The cash bonus payable to the other members of the Executive Committee is calculated as follows:
25% on the basis of the financial performance of the Komax Group and 75% on the basis of individual
performance. The reference value relevant to the 2019 financial year was Group EBIT. The performance
achievement level and corresponding bonuses are determined by the Remuneration Committee on the
recommendation of the CEO. If performance objectives are not attained, the cash bonus may fall to
zero. If all objectives are significantly exceeded, the cash bonus may amount to a maximum of 175% of
the target bonus, but no more than 100% of annual fixed compensation.

Target attainment
The attainment of financial targets is evaluated after the end of the financial year; it may fall anywhere
within a bandwidth of 0% to 200%.

The individual performance component is based on the attainment of personal objectives agreed as
part of the annual performance management process. These objectives may be both quantitative and
qualitative (above all strategic) in nature. Strategic objectives may encompass, for example, the opening-
up of new markets, the development of new products, the further development of a center of compe-
tence, and the management of key projects or management targets. Attainment of personal objectives
is evaluated after the end of the financial year and may fluctuate within a range of 0% to 100%.

Financial performance

CEO and CFO

25% revenues (Group)
50% EBIT (Group)

Other members of
the Executive Committee

25% EBIT (Group)

Individual performance

25% individual objectives

75% individual objectives1

Payout bandwidth

0%–175%

1 Attainment of individual quantitative targets can fall anywhere within a bandwidth of 0% to 200%.

To ensure that the Komax Group does not suffer any competitive disadvantage, the Board of Directors
has resolved not to disclose the financial and individual objectives in detail. Any detailed communica-
tion of these objectives would allow competitors to acquire an in-depth insight into Komax’s strategy,
which could in turn jeopardize implementation of this strategy. The annually defined objectives are
generally very ambitious, and are designed to help the Komax Group achieve its medium-term financial
targets.

c) Long-term incentive system
To ensure that the interests of the Executive Committee are aligned with long-term shareholder inter-
ests, the Komax Group has a long-term incentive system linked to the company’s financial performance.
This plan comprises Performance Share Units (PSUs) with a three-year vesting period that are depen-
dent on the attainment of a performance target (average RONCE figure over three years) and the con-
tinuation of the employment relationship. The Board of Directors determines the allocation amounts in
CHF, taking account of the importance of the function and its impact on corporate results.

Calculation of PSU allocation
The number of PSUs allocated is calculated by dividing a fixed CHF amount by the average closing
share price during the 60 days preceding the start of the vesting period. The allocation may amount to
a maximum of 66²∕3% of fixed base salary. The actual payout at the end of the vesting period takes the
form of shares, and is dependent on the average RONCE figure over three years compared to the target
determined in advance by the Board of Directors. The payout factor may range between 0% and 150%.
The actual value of the allocation at the end of the vesting period depends therefore on the payout
factor and the development of the share price over the course of the vesting period.

ANNUAL REPORT 2019
COMPENSATION REPORT

Shares are definitively issued according to the following vesting rule:
– RONCE figure below threshold value: 0% of PSUs are converted into shares

(forfeiture rate of 100%)

– RONCE figure achieved: 100% of PSUs are converted into shares
– RONCE figure at maximum performance level: 150% of PSUs are converted

into shares (cap)

The payout factor between the threshold value, the target level, and the cap is obtained by linear inter-
polation.

Number of shares allocated at
time of vesting

Number of PSUs originally
granted to the individual
in question

Vesting factor
(0%–150%)

Duration of plan

Plan period (2019–2021)

2019 plan year

2020 plan year

2021 plan year

Average RONCE figure

1 January 2019
allocation of PSUs

31 December 2021
end of the vesting period
(payout factor between 0% and 150%)

In the event of any termination of employment, pro rata vesting applies at the ordinary vesting date. The
calculation is based on the number of whole months that have elapsed within the vesting period until
the departure date. Dismissals for cause are excluded from this regulation; in such cases, all unvested
PSUs are immediately forfeited and become worthless.

In the event of a change in control, accelerated pro rata vesting applies. The calculation is based on
the number of whole months that have elapsed until the date of change in control. This date is deter-
mined at the discretion of the Board of Directors.

d) Occupational benefits
Members of the Executive Committee are insured under Komax’s ordinary staff pension scheme in
Switzerland. The amount insured is the annual fixed base salary multiplied by a factor of 1.2 in order to
additionally insure at least a proportion of the variable compensation. Contributions are graduated by
age, and are shared equally between the insured and the employer. The benefits of the plan go beyond
the statutory requirements of the Swiss Federal Law on Occupational Retirement, Survivors’ and
Disability Pension Plans, and are in line with the market practice of other industrial companies in
Switzerland.

e) Other provisions in employment contracts
The employment contracts of members of the Executive Committee are concluded for an inde finite
period and stipulate a maximum notice period of twelve months. They do not contain any severance
agreement or change of control provisions.

ANNUAL REPORT 2019
COMPENSATION REPORT

6 Compensation and shareholdings of the Board of Directors in 2019

Section 6 of the Compensation Report was audited by the company’s external auditor.

Compensation

6.1
In 2019, members of the Board of Directors received total compensation of CHF 933 589 (2018:
CHF 940 687), of which CHF 687 500 was paid out in cash (2018: CHF 692 500), CHF 192 500 in the
form of restricted shares (2018: CHF 190 000), and CHF 53 589 as social benefit contributions (2018:
CHF 58 187). Contributions to pensions plans amounted to CHF 0 (2018: CHF 0).

in CHF

Basic annual fee1

Beat Kälin

David Dean

Andreas Häberli

Kurt Haerri
Daniel Hirschi 4
Mariel Hoch5

Roland Siegwart

Chairman

222 500

Member

97 500

92 500

30 000

60 000

92 500

Allocation
restricted
shares2

Social
benefits3

Total
compensation
2019

Total
compensation
2018

60 000

28 750

25 000

10 000

18 750

25 000

10 646

9 147

8 473

2 696

5 681

8 473

293 146

135 397

125 973

42 696

84 431

125 973

296 564

132 059

126 668

123 973

132 059

n.a.

129 364

Total Board of Directors

687 500

192 500

53 589

933 589

940 687

1 Basic annual fee in cash (incl. expense allowance) and attendance fees.
2 Fixed amount in CHF: is divided by the share price as per allocation date (average closing price over the last 40 trading days prior to allocation) and rounded

up to the nearest number of full shares. The share price applied in 2019 was CHF 239.65.

3 Includes mandatory employer contributions to social insurance. This amount entitles members of the Board of Directors to draw the maximum insured

pension benefits in the future.

4 Member of the Board until 16 April 2019.
5 Member of the Board since 16 April 2019.

No compensation was paid to former members of the Board of Directors for the 2018 and 2019 financial
years. Komax Group companies had not granted any guarantees, loans, advances, or credits to mem-
bers of the Board of Directors or parties closely linked to such persons as at 31 December 2019. No
members of the Board of Directors or persons closely linked to them are or were involved in Komax
Group transactions outside their normal duties.

Holdings of shares as at 31 December 2019

6.2
As at the end of 2018 and 2019, members of the Board of Directors had the following holdings of shares
in the company:

Chairman

Member

Assets in units

Beat Kälin

David Dean

Andreas Häberli

Kurt Haerri
Daniel Hirschi 1
Mariel Hoch2

Roland Siegwart

Total Board of Directors

1 Member of the Board until 16 April 2019.
2 Member of the Board since 16 April 2019.

31.12.2019

9 972

1 128

188

2 987

n.a.

2 128

16 403

31.12.2018

9 722

1 024

2 883

4 730

n.a.

2 024

20 467

ANNUAL REPORT 2019
COMPENSATION REPORT

7 Compensation and shareholdings of the Executive Committee in 2019

Section 7 of the Compensation Report was audited by the company’s external auditor.

Compensation at grant value

7.1
In 2019, members of the Executive Committee received total compensation of CHF 2 491 180 (2018:
CHF 1 608 759). Of this amount, CHF 1 509 274 was paid as fixed compensation (2018: CHF 751 820) and
CHF 186 830 as cash bonuses (2018: CHF 458 670), CHF 510 000 was granted as Performance Share
Units (2018: CHF 260 000), and CHF 285 076 comprised social security and pension fund contributions
(2018: CHF 138 269).

in CHF

Matijas Meyer 5

Total other members of
the Executive Committee6

Fixed
compensation1

Cash bonus2

Allocation PSU
(plan period
2019 – 2021)3

Social
benefits4

Total
compensation
2019

Total
compensation
2018

CEO

458 395

52 350

200 000

81 196

791 941

985 494

1 050 879

134 480

310 000

203 880

1 699 239

623 265

Total Executive Committee

1 509 274

186 830

510 000

285 076

2 491 180

1 608 759

1 Expense allowances are not included in the fixed compensation as these are not considered as compensation.
2 Bonus for 2019, to be paid in April 2020.
3 Fixed amount in CHF: is divided by the share price as per allocation date (average closing price over the last 60 trading days prior to allocation) and rounded

up to the nearest number of full shares. The share price applied in 2019 was CHF 265.51.

4 Includes mandatory employer contributions to social insurance of CHF 70 157 as well as contributions to occupational benefits (BVG). This amount entitles

members of the Executive Committee to draw the maximum state-insured pension benefits in the future.

5 Highest compensated member of Executive Committee in 2019.
6 Additional three members were appointed to the Executive Committee in 2019.

Notes on the compensation overview
In 2019, the CEO’s cash bonus amounted to 11% of fixed compensation (2018: 68%). This payout
level is due to the development of revenues and EBIT and the attainment of individual objectives. For
the other members of the Executive Committee, the cash bonus amounted to 13% of fixed compensation
(2018: 52%).

The PSUs granted to the CEO in the year under review corresponded to 44% of annual fixed com-

pensation (2018: 42%) and 29% for the other members of the Executive Committee (2018: 25%).

The overall variable compensation of the CEO in 2019 therefore amounted to 55% of the annual
fixed compensation (2018: 109%) and that of the other members of the Executive Committee to 42%
(2018: 77%). This is in line with the provisions of the company’s Articles of Association, which allows for
a maximum level of 100% of annual fixed base salary for each element of variable compensation. Fur-
ther details on the participation plans can be found in the notes to the consolidated financial statements,
on pages 115 to 117 of the Financial Report 2019.

No compensation was paid to former members of the Executive Committee for the 2018 and 2019
financial years. Komax Group companies had not granted any guarantees, loans, advances, or credits
to members of the Executive Committee or parties closely linked to such persons as at 31 Decem-
ber 2019. No members of the Executive Committee or persons closely linked to them are or were
involved in Komax Group transactions outside their normal duties.

ANNUAL REPORT 2019
COMPENSATION REPORT

Realized compensation

7.2
The annually allocated Performance Share Units are paid out to the members of the Executive Committee
in the form of shares after a three-year vesting period. For the plan period 2016–2018, members of the
Executive Committee received shares with a total value of CHF 503 544 (allocation amount on 1 January
2016: CHF 340 000, relevant share price: CHF 175.19) in 2019. In 2018, when the Executive Committee
consisted of two members, shares with a total value of CHF 483 567 were remunerated.

The total compensation figure for 2019 of CHF 2 484 724 (2018: CHF 1 832 326) is significantly below
the maximum amount of CHF 4 230 000 (2018: CHF 2 150 000) approved by the 2018 Annual General
Meeting.

in CHF

Fixed
compensation1

Cash bonus2

Compensation
amount PSU
plan period
(2016 – 2018)

Social
benefits3

Total
compensation
2019

Total
compensation
2018

Matijas Meyer 4

Total other members of
the Executive Committee5

CEO

458 395

52 350

224 070

81 196

816 011

1 113 916

1 050 879

134 480

279 474

203 880

1 668 713

718 410

Total Executive Committee

1 509 274

186 830

503 544

285 076

2 484 724

1 832 326

1 Expense allowances are not included in the fixed compensation as these are not considered as compensation.
2 Bonus for 2019, to be paid in April 2020.
3 Includes mandatory employer contributions to social insurance of CHF 70 157 as well as contributions to occupational benefits (BVG).

This amount entitles members of the Executive Committee to draw the maximum state-insured pension benefits in the future.

4 Highest compensated member of Executive Committee in 2019.
5 Additional three members were appointed to the Executive Committee in 2019.

Holdings of shares as at 31 December 2019

7.3
As at the end of 2018 and 2019, members of the Executive Committee had the following holdings of
shares in the company:

Assets in units

31.12.2019

31.12.2018

Matijas Meyer

Andreas Wolfisberg

Marc Schürmann1

CEO

CFO

Executive Vice President

Marcus Setterberg1

Executive Vice President

Günther Silberbauer1

Executive Vice President

Total Executive Committee

1 Member of the Executive Committee since 1 January 2019.

4 000

500

200

137

4 837

4 534

500

n.a.

5 034

ANNUAL REPORT 2019
COMPENSATION REPORT

Report of the statutory auditor to the Annual General Meeting of Komax Holding AG, Dierikon

Report on the audit of the compensation report

We have audited the accompanying compensation report (Art. 6 and 7) of Komax Holding AG for the year ended 31 Decem-
ber 2019.

Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the compensation report in accor-
dance with Swiss law and the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordi-
nance). The Board of Directors is also responsible for designing the remuneration system and defining individual remuner-
ation packages.

Auditor’s responsibility
Our responsibility is to express an opinion on the accompanying compensation report. We conducted our audit in accor-
dance 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 compensation 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 compensation 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 compensation
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 compensation 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 compensation report of Komax Holding AG for the year ended 31 December 2019 complies with Swiss
law and articles 14–16 of the Ordinance.

PricewaterhouseCoopers AG

Thomas Brüderlin
Audit expert
Auditor in charge

Sebastian Gutmann
Audit expert

Basel, 16 March 2020

This page has been intentionally left blank.

CONSOLIDATED
FINANCIAL
STATEMENTS

Consolidated
income statement
84

Consolidated
balance sheet
85

Consolidated statement
of shareholders’ equity
86

Consolidated
cash flow statement
87

Notes
General information
88

Performance
90

Operating assets
and liabilities
97

Capital and financial
risk management
105

Group structure
109

Other information
114

Report of the auditors
120

FINANCIAL REPORT 2019
CONTENTS

FINANCIAL
STATEMENTS OF
KOMAX HOLDING AG

Balance sheet
124

Income statement
125

Notes
126

Proposal for the
appropriation of profit
131

Report of the auditors
132

Consolidated income statement

in TCHF

Net sales

Other operating income

Revenues

Change in inventory of unfinished and finished goods

Cost of materials

Gross profit

Personnel expenses

Depreciation on property, plant, and equipment

Depreciation on intangible assets

Other operating expenses

Operating profit (EBIT)

Financial result

Ordinary profit

Non-operating result

Group profit before taxes (EBT)

Income taxes

Group profit after taxes (EAT)

Of which attributable to:

– Shareholders’ of Komax Holding AG

– Non-controlling interest

Basic earnings per share (in CHF)

Diluted earnings per share (in CHF)

Notes

2019

2018

414 968

2 803

417 771

–2 434

–156 407

258 930

–160 957

–8 981

–3 821

–61 136

24 035

–4 851

19 184

–5 963

13 221

3.44

3.43

1.2

1.3

2.3

2.4

1.3

1.4

1.5

1.6

1.7

100.0

62.0

5.8

4.6

3.2

477 819

1 879

479 698

1 061

–182 856

297 903

–157 355

–8 108

–3 252

–61 934

67 254

–5 225

62 029

392

62 421

–10 634

51 787

13.52

13.48

100.0

62.1

14.0

12.9

13.0

10.8

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSNotes

31.12.2019

31.12.2018

Consolidated balance sheet

in TCHF

Assets

Cash and cash equivalents

Securities

Trade receivables

Other receivables

Inventories

Accrued income and prepaid expenses

Total current assets

Property, plant, and equipment

Intangible assets

Deferred tax assets

Other non-current receivables

Total non-current assets

Total assets

Liabilities

Current financial liabilities

Trade payables

Other payables

Current provisions

Accrued expenses and deferred income

Total current liabilities

Non-current financial liabilities

Other non-current liabilities

Deferred tax liabilities

Total non-current liabilities

Total liabilities

Share capital

Capital surplus

Treasury shares

Retained earnings

Equity attributable to shareholders’ of Komax Holding AG

2.1

2.2

2.3

2.4

1.6

2.5

3.1

2.6

3.1

1.6

3.2

47 454

102 786

22 911

110 831

4 872

288 867

163 758

16 721

11 221

669

50 965

124 890

29 008

103 433

5 294

313 605

120 229

15 379

12 830

861

60.0

192 369

40.0

149 299

481 236

100.0

462 904

17 188

20 720

31 964

3 263

19 993

93 128

136 504

2 185

4 815

143 504

236 632

385

22 113

–1 656

223 762

244 604

25 187

33 903

2 975

22 529

84 594

90 338

1 167

5 165

96 670

181 264

385

24 569

–2 311

258 997

281 640

19.4

29.8

49.2

50.8

Total liabilities and shareholders’ equity

481 236

100.0

462 904

67.7

32.3

100.0

18.3

20.9

39.2

60.8

100.0

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSConsolidated statement of shareholders’ equity

in TCHF

Notes

Share
capital

Premium

Treasury
shares

Goodwill
offset

Currency
differences

Other
retained
earnings

Total
retained
earnings

Share-
holders’
equity of
Komax
Holding AG

383

28 649

–4 054

–72 026

1 724

303 502

233 200

258 178

3.2

1 665

–5 745

–254

1 997

Purchase of treasury shares

3.2

2.4

–241

385

24 569

–2 311

–72 267

–4 402

335 666

258 997

281 640

–6 126

385

24 569

–2 311

–72 267

–4 402

335 666

258 997

281 640

51 787

1 667

–5 745

–19 149

–474

–254

1 523

13 221

620

–3 076

–23 838

–1 010

–882

783

3.2

620

–3 076

–1 010

1 665

Purchase of treasury shares

3.2

2.4

–18 352

385

22 113

–1 656

–90 619

–9 786

324 167

223 762

244 604

–5 384

Balance as at
1 January 2018

Group profit after taxes

Capital increase from
exercise of options

Distribution out of
reserves from capital
contributions

Dividend paid

Share-based payments

Goodwill offset with
shareholders’ equity

Currency translation
differences recorded in
the reporting period

Balance as at
31 December 2018

Balance as at
1 January 2019

Group profit after taxes

Capital increase from
exercise of options

Distribution out of
reserves from capital
contributions

Dividend paid

Share-based payments

Goodwill offset with
shareholders’ equity

Currency translation
differences recorded in
the reporting period

Balance as at
31 December 2019

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS
Consolidated cash flow statement

in TCHF

Cash flow from operating activities

Group profit after taxes

Adjustment for non-cash items

− Taxes

− Depreciation and impairment of property, plant, and equipment

− Depreciation and impairment of intangible assets

− Profit (–) / loss (+) from sale of non-current assets

− Expense for share-based payments

− Net financial result

− Other non-cash items

Interest received and other financial income

Interest paid and other financial expenses

Taxes paid

Increase (+) / decrease (–) in provisions

Increase (–) / decrease (+) in trade receivables

Increase (–) / decrease (+) in inventories

Increase (+) / decrease (–) in trade payables

Increase (–) / decrease (+) in other net current assets

Total cash flow from operating activities

Cash flow from investing activities

Investments in property, plant, and equipment

Sale of property, plant, and equipment

Investments in intangible assets
Investments in Group companies and participations1
Sale of Group companies2

Increase in granted loans

Decrease in granted loans

Total cash flow from investing activities

Free cash flow

Cash flow from financing activities

Decrease in current financial liabilities

Decrease in non-current financial liabilities

Increase in current financial liabilities

Increase in non-current financial liabilities

Capital increase (share-based payments)

Distribution out of reserves from capital contributions

Dividend paid

Purchase of treasury shares

Total cash flow from financing activities

Effect of currency translations on cash and cash equivalents

Increase (+) / decrease (–) in funds

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

1 Less cash and cash equivalents acquired.
2 Less cash and cash equivalents sold.

Notes

2019

2018

13 221

51 787

1.6

2.3

2.4

1.4

2.3

2.4

3.2

5 963

8 981

3 821

−186

783

4 851

264

−3 333

−7 878

−11

24 137

−2 295

−8 426

1 393

41 287

−49 210

927

−5 238

−22 410

−2 242

–78 173

–36 886

−1 687

−765

17 174

47 216

620

−3 076

−23 838

−1 010

34 634

−1 259

–3 511

50 965

47 454

10 634

8 108

3 252

−1 210

1 523

5 225

1 115

−3 311

−9 939

670

−28 065

−14 755

3 366

1 223

29 629

−37 118

8 365

−4 222

−4 298

2 000

1 304

–33 969

–4 340

−533

21 431

1 667

−5 745

−19 149

−254

–2 583

−1 403

–8 326

59 291

50 965

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements

General information
Headquartered in Dierikon, Switzerland, Komax Holding AG (parent company), together with its subsid-
iary companies (the Komax Group), is a pioneer and market leader in the field of automated wire pro-
cessing, providing clients with innovative, future-oriented solutions in any situation that calls for precise
contact connections.

The present consolidated financial statements were adopted by the Board of Directors of Komax Hold-
ing AG on 10 March 2020 and released for publication. Their approval by the Annual General Meeting,
scheduled for 21 April 2020, is pending.

Accounting policies
The consolidated financial statements of the Komax Group are based on the individual financial state-
ments of the Group companies, compiled in accordance with uniform standards, as at 31 December
2019. The consolidated financial statements have been drawn up in accordance with the entire existing
guidelines of Swiss GAAP FER (Swiss Accounting and Reporting Recommendations). Furthermore, the
provisions of the Swiss company law have been complied with. The consolidated financial statements
are based on the principle of historic acquisition cost (with the exception of securities and derivative
financial instruments, which are recorded at their fair values), and have been drawn up under the “going
concern” assumption.

The accounting and valuation principles relevant to an understanding of the annual financial statements
are described in the relevant explanatory notes.

Key recognition and measurement assumptions

Preparation of the consolidated financial statements requires the Board of Directors and Group Management to
make estimates and assumptions, whereby such estimates and assumptions have an effect on the accounting
principles applied and are reflected in the amounts stated under assets, liabilities, income, expenses, and related
disclosures. Their estimates and assumptions are based on past experience and on various other factors deemed
applicable in the current situation. These form the basis for reporting those assets and liabilities that cannot be
measured directly from other sources. The actual values may differ from these estimates. The following material
estimates are included in the consolidated financial statements:

Recognition of revenue according to POC method

Current and deferred income taxes

Impairment of property, plant, and equipment

Impairment of intangible assets and goodwill

Contingent consideration

Provisions

Page

103

104

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSKey events of the reporting period
As mentioned on pages two and three of the Shareholders’ letter, 2019 was marked by a sluggish au-
tomotive industry and its knock-on effects. Order intake and revenues decreased considerably and
were well below the record result achieved in 2018. Due in part to the continuing high level of future-ori-
ented investment in research and development, operating profit and profit after taxes were well below
the previous year’s figures.

Profit after taxes was reduced by the negative financial result (CHF –4.9 million) and the high tax rate.
Whereas the financial result was largely attributable to unrealized currency losses, the high tax rate is
primarily explained by the fact that a number of companies generated tax losses that were not capital-
ized by Komax in the consolidated financial statements. The acceptance of the tax reform package by
the Swiss electorate on 19 May 2019 is not expected to have any material impact on the future tax rate
in Switzerland. Canton Lucerne, the place of domicile of Komax’s headquarters, pre-empted a key
measure of the tax reform back in 2012 when it reduced the tax rate on earnings. It is clear that Canton
Lucerne is only intending to implement the replacement measures (e.g. patent box and additional de-
duction for research and development) of the tax reform to a minimal degree.

In addition to the unsatisfactory development of business, the 2019 financial year was characterized
by a high level of investment. On the one hand two companies were acquired (Artos Engineering and
Exmore), while on the other further investment was channelled into capacity expansion. Accordingly,
Komax recorded a higher negative free cash flow in the reporting year of CHF –36.9 million (2018: CHF
–4.3 million), while net debt rose from CHF 39.4 million as at 31 December 2018 to CHF 106.2 million as
at 31 December 2019. In order to secure financing for the future, the existing syndicated loan facility in
the amount of CHF 160 million was increased to CHF 190 million in the first quarter of 2020.

Events after the balance sheet date
Komax generates around 20% of its revenues in Asia, the majority of which in China. It is currently dif-
ficult to predict how the coronavirus will affect the result for the 2020 financial year.

No other significant events occurred between the balance sheet date and the approval of the consoli-
dated financial statements by the Board of Directors on 10 March 2020 which might adversely affect the
information content of the 2019 consolidated financial statements or which would require disclosure.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSPerformance

1
In this section, we provide details of the 2019 result of the Komax Group. In addition to earnings per
share, we also provide details on revenues, expenses, the financial result, and taxes.

The operating profit (EBIT) of the Komax Group decreased from CHF 67.3 million in 2018 to CHF 24.0
million in 2019. The chart below illustrates the year-on-year change between the current reporting
period and the prior year.

in CHF million

67.3

– 39.0

– 3.6

–1.5

+0.8

24.0

EBIT 2018

Gross
proﬁt

Personnel
expenses

Depreciation

Operating
expenses

EBIT 2019

Segment information

1.1
The Komax Group is a global technology company that focuses on markets in the automation sector.
As a manufacturer of innovative and high-quality solutions for the wire processing industry, Komax
helps its customers implement economical and safe manufacturing processes, especially in the auto-
motive supply sector. All Group companies are active in wire processing, have a uniform client base,
and are centrally managed. The Board of Directors and the Group Executive Committee, which make
the key strategic and operating decisions, manage the Komax Group primarily on the basis of the finan-
cial statements of the individual companies, the Management Information System, and the consolidated
financial statements. Due to the commercial similarity and interconnections of the Group companies,
Komax presents its business in amalgamated form as a single segment, in accordance with Swiss
GAAP FER 31.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSRevenues
Revenues by region

1.2
a)
The percentage breakdown of revenues by region is as follows:

2019

2.0% Switzerland

19.1% Asia/Pacific

24.9% North and
South America

13.3% Africa
40.7% Europe

2018

1.8% Switzerland

21.4% Asia/Pacific

20.5% North and
South America

13.4% Africa
42.9% Europe

Construction contracts

b)
In the current reporting period, revenues of CHF 1.5 million (2018: CHF 17.2 million) were recorded from
long-term construction contracts on the basis of the POC method.

Other operating income

in TCHF

Own work capitalized

Government grants

Gains from the disposal of non-current assets

Other income

Total other operating income

2019

1 791

576

379

2 803

2018

436

284

1 085

1 879

Key recognition and measurement assumptions

Automated assembly and production contracts are measured according to the POC method, provided the as-
sessment meets the requirements of Swiss GAAP FER 22 “Long-term contracts.” Although projects are assessed
monthly and in good faith in accordance with comprehensive project management guidelines, subsequent cor-
rections may be required. These corrections are made in the following period and may have a positive or negative
impact on revenue in this period.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSRecognition and measurement

Revenue recognition: The Komax Group’s consolidated income statement is compiled using the nature of expense
method. Net sales comprise the fair value of considerations received or receivable for the sale of goods and services in
the course of ordinary business activities after deducting VAT, returns, discounts, and price reductions, and eliminating
intragroup sales. Revenues are recognized as described below. For any intermediated transactions, only the value of
services provided by Komax itself is reported. Transactions with a number of individually identifiable component parts
are recorded and valued separately.

Sale of goods: Revenue from the sale of goods is recognized when risk and rewards of ownership have been trans-
ferred to the buyer. All expenses connected with sales are recognized on an accrual basis.

Sale of services: Revenue from the sale of services is recognized in accordance with progress on the service accord-
ing to the ratio of completed to still outstanding services to be performed during the financial year in which the services
are rendered.

Manufacturing contracts: Manufacturing contracts in the automated assembly and production business units, in-
volving the customer-specific manufacture of systems, are valued according to the “percentage of completion method”
(POC method) in accordance with Swiss GAAP FER 22. On the balance sheet, these are reported either under “Trade
receivables” or “Other payables,” depending on the degree to which they are underfinanced or overfinanced. The
percentage of completion is calculated according to the “cost-to-cost method” (costs incurred in relation to overall
estimated costs of the contract). Anticipated project losses are recognized in full in the income statement. Any costs of
debt capital are capitalized provided debt capital is raised for the purpose of financing the project and its costs can be
directly attributed to a manufacturing contract.

Leases with Komax as lessor: Contractual relationships in which Komax acts as lessor are reported as financial
leases if all risks and returns associated with ownership are essentially transferred to the lessee. At the beginning of
the lease, lease payments are recognized in the balance sheet in the amount of the net investment value arising from
the lease. Revenue is recorded in the same way as the direct sale of goods. Financial income is spread over the term
of the lease.

Assets that are the subject of operating leases are reported in the balance sheet in accordance with their character-
istics, and are written down at the normal rates that apply to assets of that type. Lease income is recognized in the
income statement on a linear basis over the term of the lease.

Leases with Komax as lessee: Only in exceptional cases does Komax act as lessee in financial lease agreements. A
financial lease arises when the lessor transfers virtually all the risks and benefits associated with ownership of the leas-
ing object to the lessee. At the beginning of the contract term, the object in question is recorded on the balance sheet
as both an investment asset and a liability at its fair value or (if lower) at the net cash value of future leasing payments.
Every lease instalment is broken down into financing costs on the one hand and repayment of the residual debt on
the other, so that the interest rate remains constant for the residual liability. Financing costs are booked directly to the
income statement as an expense. Capitalized leasing objects are depreciated over their estimated economically useful
life, or (if lower) over the contractual period in question.

An operating lease agreement arises when a substantial proportion of the risks associated with ownership remain with
the lessor. Payments for operating leasing agreements are booked to the income statement as an expense in a linear
way for the entire duration of the agreement.

Government grants: Government grants are recognized if it is likely that the payments will be received and Komax can
fulfil the conditions attached to such subsidies. These are recognized in “Other operating income,” regardless of when
payment is received, and on a pro rata basis in the period in which the associated costs are incurred, and charged to
the income statement as an expense. Grants relating to an asset are deducted from the carrying amount.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS1.3
a)

Expenses
Personnel expenses

in TCHF

Wages and salaries

Share-based payments settled with equity instruments

Share-based payments settled in cash

Social security and pension contributions

Other personnel costs (in particular training and development)

2019

2018

−129 505

−126 340

−738

−224

−25 480

−5 010

−1 294

−32

−24 070

−5 619

Total personnel expenses

−160 957

−157 355

Other operating expenses

in TCHF

2019

2018

Expenditure on operating equipment and energy

Rental expenses

Repair and maintenance expenses

Third-party services for development expenses

Representation and marketing expenses

Legal and consultancy expenses

Shipping and packaging expenses

Expenditure on administration and sales

Other expenditure

−2 587

−3 727

−15 448

−7 507

−13 784

−5 127

−7 148

−3 306

−2 502

−2 299

−3 804

−15 105

−8 786

−13 101

−4 850

−8 363

−3 368

−2 258

Total other operating expenses

−61 136

−61 934

1.4

Financial result

in TCHF

Interest result (net)

Exchange rate translation differences (net)

Total financial expenses

Result from associated companies

Total financial result

Recognition and measurement

2019

−1 776

−3 075

2018

−1 434

−3 791

−4 851

−5 225

−4 851

−5 225

Interest: Interest income and expenses are accrued using the effective interest rate method.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSNon-operating and extraordinary result

1.5
No non-operating expense/income items were incurred/received in the current reporting period. In the
corresponding prior-year period, an income item of CHF 0.4 million was booked in connection with the
sale of the non-operating property in York, USA.

No extraordinary expenses were incurred and no extraordinary income was generated in either the
current reporting period or during the previous reporting period.

Recognition and measurement

Non-operating result: Non-operating result is expense and income which arise from events or transactions that
clearly differ from the usual business activities of the organization.

Extraordinary result: Expense and income which arise extremely rarely in the context of the ordinary operations and
which are not predictable are considered as extraordinary.

1.6
a)

Taxes
Income taxes

in TCHF

Current income taxes

Deferred tax income (+) / tax expenses (–)

Total income taxes

Analysis of the tax rate

in TCHF

Group profit before taxes (EBT)

Expected tax expenses

Impact of non-capitalized
tax-loss carry forwards

Utilization of non-capitalized
tax-loss carry forwards

Effect of changes in tax rate

Tax credits / charges from prior years

Effect of non-deductible expenses

Effect of non-taxable income

Non-reclaimable withholding taxes

Others

Effective tax expenses

2019

−5 269

−694

2018

−10 508

−126

−5 963

−10 634

2018

21.1

9.0

−4.3

−0.9

3.3

1.8

−0.7

1.8

−0.0

31.1

62 421

−10 922

−978

1 421

−177

417

−337

119

−258

−10 634

17.5

1.6

−2.3

0.3

−0.7

0.5

−0.2

0.4

−0.1

17.0

2019

19 184

−4 042

−1 723

823

163

−641

−338

133

−343

−5 963

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSAs the Group is internationally active, its income taxes are dependent on a number of different tax juris-
dictions. The expected income tax rate is equivalent to the weighted average of tax rates of those
countries in which the Group is active. Due to the composition of the taxable income of the Group, as
well as changes in local tax rates, this Group tax rate varies from year to year.

The expected tax rate based on the ordinary result was at 21.1% (2018: 17.4%).

Deferred tax assets and liabilities

in TCHF

31.12.2019

31.12.2018

Property, plant, and equipment / intangible assets

Trade receivables and inventories1

Provisions

Other items

Total deferred tax assets (gross)

Offset against deferred tax liabilities

Balance sheet deferred tax assets

Property, plant, and equipment / intangible assets

Trade receivables and inventories

Provisions

Other items

Total deferred tax liabilities (gross)

Offset against deferred tax assets

Balance sheet deferred tax liabilities

Net deferred tax assets (+) / tax liabilities (–)

1 Including unrealized intragroup profit.

7 850

3 735

1 530

1 081

14 196

−2 975

11 221

3 226

2 992

826

746

7 790

8 714

4 036

1 719

466

14 935

−2 105

12 830

2 928

3 589

665

7 270

−2 975

−2 105

4 815

6 406

5 165

7 665

The non-capitalized and unused tax-loss carry forwards expire as follows:

in TCHF

Expiry of unutilized tax-loss carry forwards

31 December 2019

31 December 2018

Within 5 years

After more than
5 years

4 513

5 450

68 095

62 019

Total

72 608

67 469

This results in a deferred tax claim (not recognized in the balance sheet) for as yet unutilized tax-loss
carry forwards of CHF 19.5 million (31 December 2018: CHF 18.6 million) as well as CHF 3.6 million
(31 December 2018: CHF 3.4 million) in not recognized tax credits.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSKey recognition and measurement assumptions

In determining the assets and liabilities from current and deferred income taxes, estimates must be made on
the basis of existing tax laws and ordinances. Numerous internal and external factors may have favorable and
unfavorable effects on the assets and liabilities from income taxes. These factors include changes in tax laws
and ordinances, as well as the way they are interpreted, in addition to changes in tax rates and the total amount
of taxable income for the particular location. Any changes may affect the assets and liabilities from current and
deferred income taxes carried in future reporting periods.

Recognition and measurement

Deferred taxes: Deferred and future tax expenses are calculated on the basis of the comprehensive liability meth-
od. This method is based on the tax rates and tax regulations applicable on the balance sheet date or which have
in essence been enacted and are expected to apply at the time the deferred tax claim is realized or the deferred tax
liability is settled. Deferred and future taxes are calculated on the basis of the temporary differences in value between
the individual balance sheets and balance sheets for tax purposes. Such differences primarily exist in the case of non-
current assets, inventories, and some provisions. Deferred tax assets are recognized in the amount corresponding to
the probability that the Group companies in question will generate sufficient future taxable income to absorb the rele-
vant positive differences in the tax assets.

Loss carry forwards: Future tax savings from offsettable tax-loss carry forwards are not capitalized. The use of these
tax-loss carry forwards is recorded upon realization.

Temporary differences on investments in subsidiaries and associates: Deferred tax liabilities are provided on
temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal
of the temporary difference cannot be determined by the Group and it is consequently probable that the temporary
difference will not reverse in the foreseeable future.

1.7

Earnings per share (EPS)

in CHF

2019

2018

Group profit (attributable to shareholders’ of Komax Holding AG)

13 220 766

51 786 663

Weighted average number of outstanding shares

Basic earnings per share

3 843 352

3 830 864

3.44

13.52

Group profit (attributable to shareholders’ of Komax Holding AG)

13 220 766

51 786 663

Weighted average number of outstanding shares

3 843 352

3 830 864

Adjustment for dilution effect of share-based compensation plans

5 765

10 437

Weighted average number of outstanding shares for
calculating diluted earnings per share

Diluted earnings per share

3 849 117

3 841 301

3.43

13.48

Recognition and measurement

Earnings per share: Basic earnings per share are calculated by dividing the consolidated net earnings by the average
number of shares outstanding during the fiscal year, excluding treasury shares. Diluted earnings per share are calcu-
lated by adding all option rights and non-vested equity rights which would have had a dilutive effect to the average
number of shares outstanding.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSOperating assets and liabilities

2
In this section we describe the current and non-current operating assets and liabilities. Among other
things, this includes further details on receivables, inventories, tangible assets, and intangible assets.

2.1
a)

Current receivables
Trade receivables

in TCHF

Trade receivables

less provision for impairment

Accruals for construction contracts

less prepayments for construction contracts

Receivables arising from POC

31.12.2019

31.12.2018

98 452

−244

10 887

−6 309

4 578

112 759

−90

21 087

−8 866

12 221

Total

102 786

124 890

Overdue trade receivables that had not been written down amounted to CHF 29.3 million on 31 Decem-
ber 2019 (31 December 2018: CHF 29.5 million). Their maturity structure is set out in the following table:

in TCHF

Number of days

As at 31 December 2019

As at 31 December 2018

1–30

31–60

61–90

91–120

15 062

15 394

6 119

5 102

2 411

3 633

1 166

1 467

>120

4 513

3 890

Total

29 271

29 486

Other receivables

b)
In addition to prepayments to suppliers of CHF 0.8 million (31 December 2018: CHF 1.1 million), other
receivables mainly comprise credits due from government organizations (tax authorities) and bills
receivable.

Recognition and measurement

Current receivables: Receivables are recorded at nominal value. Impaired receivables are value-adjusted on an indi-
vidual basis; no flat-rate value adjustments are calculated for the remaining portfolio.

For manufacturing contracts of systems, the inventory includes all costs associated with the systems as well as the
production costs. The order costs comprise all costs attributable to the contract from the date the order is received until
the balance sheet date. The order proceeds per manufacturing contract are recorded as at 31 December according
to the POC.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS2.2

Inventories

in TCHF

Manufacturing components and spare parts

Semi-finished goods / work in process

Finished goods

Gross value inventories

less impairment

Inventories

Recognition and measurement

31.12.2019

31.12.2018

73 291

16 091

33 964

64 482

16 889

31 642

123 346

113 013

−12 515

−9 580

110 831

103 433

Inventories: Inventories are valued at the lower of acquisition/production costs and net market value. Acquisition/
production costs encompass all direct and indirect expenses incurred in bringing inventories to their current location or
state (full costs). Discounts are treated as acquisition price reductions. For all inventory components, the ascertainment
of value is undertaken for the most part in accordance with the FIFO method. The current market price in the sales
market in question is assumed when determining net market value.

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS2.3

Property, plant, and equipment

in TCHF

Costs

Undeveloped
property

Land

Buildings Machines and
equipment

Other tangible
fixed assets

Assets under
construction

Total
property, plant,
and equipment

As at 31 December 2017

1 635

14 949

80 215

40 462

10 323

15 985

163 569

Additions

Disposals

Reclassifications

Currency differences

−494

752

494

−174

As at 31 December 2018

1 141

16 021

1 370

−265

551

−1 083

80 788

12 619

−5

4 611

12 451

−1 308

3 406

−2 166

1 310

−816

2 181

−846

−50

−270

42 196

11 338

5 097

−1 434

1 280

1 118

−546

2 468

−498

1 034

−25

−301

109 156

47 711

14 016

29 409

−1 811

−376

43 207

29 026

−13 544

−184

58 505

300

1 444

1 008

−129

16 900

–41 287

–22 598

–5 965

−2 631

−3 675

−1 802

102

2 103

288

768

206

–43 787

–23 882

–6 793

−2 967

−4 048

−1 966

−814

117

874

−791

212

317

−667

218

–47 448

–27 635

–8 891

1 635

1 141

1 444

14 949

16 021

16 900

38 928

37 001

61 708

17 864

18 314

20 076

4 358

4 545

5 125

15 985

43 207

58 505

Additions

Disposals

Change in scope of consolidation

Reclassifications

Currency differences

As at 31 December 2019

Depreciation

As at 31 December 2017

Additions

Disposals

Currency differences

As at 31 December 2018

Additions

Disposals

Change in scope of consolidation

Currency differences

As at 31 December 2019

Book values

As at 31 December 2017

As at 31 December 2018

As at 31 December 2019

Key recognition and measurement assumptions

Property, plant, and equipment are tested for impairment at least once a year. To determine whether impairment
exists, estimates are made of the expected future cash flows arising from use. Actual cash flows may differ from
the discounted future cash flows based on these estimates.

37 118

−3 277

−2 719

194 691

49 210

−1 937

8 233

−2 465

247 732

–69 850

−8 108

2 900

596

–74 462

−8 981

1 194

−2 272

547

–83 974

93 719

120 229

163 758

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSRecognition and measurement

Property, plant, and equipment: Property, plant, and equipment are accounted for at historical acquisition or pro-
duction cost less accumulated depreciation. Borrowing costs that incurred during the construction phase through the
financing of assets under construction are part of the acquisition cost if they are material. Depreciation is linear over
the expected service lifetime.

Depreciation period

Asset category

Machinery

Tools

Measuring, testing, and controlling devices

Operating installations

Warehouse installations

Vehicles

Office equipment

Information technology

Solar systems

Factory buildings

Office buildings

Land

Years

7–10

10–14

5–8

3–10

3–5

no depreciation

100

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSSoftware

Patents and
customer base

Software in
implementation

Total
intangible assets

2.4
a)

Intangible assets
Movements in the intangible assets

in TCHF

Costs

As at 31 December 2017

Additions

Disposals

Reclassifications

Currency differences

27 031

2 603

−358

371

−192

4 063

1 238

−12

As at 31 December 2018

29 455

5 289

Additions

Disposals

Change in scope of consolidation

Reclassifications

Currency differences

As at 31 December 2019

Depreciation

3 132

−52

641

−229

33 027

−14

5 316

As at 31 December 2017

–12 969

–4 063

Additions

Disposals

Currency differences

As at 31 December 2018

Additions

Disposals

Change in scope of consolidation

Currency differences

As at 31 December 2019

Book values

As at 31 December 2017

As at 31 December 2018

As at 31 December 2019

−3 252

350

143

–15 728

–4 051

−3 568

−637

160

−253

−18

–19 721

–4 316

14 062

13 727

13 306

1 238

1 000

418

414

2 415

418

381

−371

−14

414

2 106

−80

−25

2 415

31 512

4 222

−370

−206

35 158

5 238

−52

682

−268

40 758

–17 032

−3 252

362

143

–19 779

−3 821

−655

166

–24 037

14 480

15 379

16 721

101

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS
Goodwill

b)
Goodwill is offset against Group shareholders’ equity upon the acquisition of a subsidiary or the interest
in an associated company. Assuming a useful life of five years for trading companies acquired and ten
years for production operations acquired plus depreciation on a straight-line basis, the theoretical cap-
italization of goodwill would have the following impact on the consolidated balance sheet:

in TCHF

Historical costs as at 1 January

Additions

Currency differences

Historical costs as at 31 December

Theoretical accumulated depreciation
as at 1 January

Theoretical depreciation

Currency differences

Theoretical accumulated depreciation
as at 31 December

Theoretical net book value
as at 31 December

2019

72 238

18 352

−167

90 423

–31 856

−8 357

2018

72 064

241

−67

72 238

–24 366

−7 499

–40 157

–31 856

50 266

40 382

The capitalization and depreciation of goodwill would have the following theoretical impacts on share-
holders’ equity and Group profit after taxes:

in TCHF

Shareholders’ equity according to balance sheet

Theoretical capitalization of net book value of goodwill

Theoretical tax impacts

Theoretical shareholders’ equity

in TCHF

Group profit after taxes (EAT) according to income statement

Theoretical goodwill depreciation

Theoretical tax impacts

Theoretical Group profit after taxes (EAT)

31.12.2019

31.12.2018

244 604

50 266

780

281 640

40 382

737

295 650

322 759

2019

13 221

−8 357

4 914

2018

51 787

−7 499

44 310

102

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSKey recognition and measurement assumptions

Intangible assets and goodwill are tested for impairment if indicators reflect a possible impairment. To determine
whether impairment exists, estimates are made of the expected future cash flows arising from use. Actual cash
flows may differ from the discounted future cash flows based on these estimates.

Recognition and measurement

Software: Purchased software licenses are capitalized at acquisition or production cost plus costs incurred in readying
them for use. The total acquisition cost is amortized on a linear basis over three to eight years. Costs associated with
the development or maintenance of software are recorded as expenses at the time they are incurred.

Patents: Patents are recognized at historical acquisition cost less cumulative amortization. Acquisition costs are writ-
ten down in a linear way over patent life.

Customer base: Customer bases are recognized at historical acquisition cost less cumulative amortization. Acquisi-
tion costs are written down in a linear way over five to ten years.

Research and development: Research and development expenditure is fully charged to the income statement. These
costs are contained in the positions “Personnel expenses” and “Other operating expenses.”

Goodwill: Companies acquired over the course of the year are revalued and consolidated at the point of acquisition in
keeping with standardized Group principles. The difference between the acquisition cost (including material transaction
costs) and the prorated fair value of the net assets acquired is described as goodwill. Any potentially existing but not
previously capitalized intangible assets taken over as part of the acquisition – such as brands, technology, rights of use,
or client lists – are not separately recognized, but remain subsumed under goodwill. Goodwill can also arise from invest-
ments in associated companies, whereby this amounts to the difference between the acquisition cost of the investment
and the prorated fair value of the net assets acquired. The goodwill resulting from acquisitions is directly offset against
Group shareholders’ equity. If the purchase price contains components that are dependent on future results, these
components are estimated as accurately as possible at the point of acquisition and then capitalized. In the event of
deviations when the purchase price is definitively settled at a later date, the goodwill offset against shareholders’ equity
is adjusted accordingly. In case of disposal, acquired goodwill offset with equity at an earlier date is to be considered
at original cost to determine the profit or loss recognized in the income statement.

Other non-current receivables

2.5
As at 31 December 2019, as in the corresponding period of the previous year, the other non-current
receivables include almost exclusively paid rent deposits.

103

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS2.6
a)

Other liabilities
Other payables

in TCHF

Prepayments by customers

Contingent consideration

Current income tax liabilities

Prepayments for construction contracts

less accruals for construction contracts

Liabilities arising from POC

Other positions

Total other payables

31.12.2019

31.12.2018

14 952

853

3 420

7 197

−6 167

1 030

11 709

31 964

13 084

1 427

6 125

2 408

−2 400

13 259

33 903

Key recognition and measurement assumptions

For the determination of the fair value of a contingent consideration, profit and revenue forecasts as well as the
current exchange rates are used that might result in a higher or lower fair value measurement. In addition, the
continued employment of certain selling shareholders was assumed.

Current provisions

in TCHF

Total as at 1 January

Additional provisions

Change in scope of consolidation

Amounts utilized during the year

Unused amounts reversed

Currency differences

Total as at 31 December

2019

2 975

2 618

340

−1 966

−662

−42

3 263

2018

2 359

2 631

−1 183

−778

−54

2 975

Current provisions are warranty provisions that include material and personnel costs in relation to war-
ranty work.

Key recognition and measurement assumptions

In relation to machines and systems already delivered, Komax calculates the necessary warranty provisions on the
balance sheet date on the basis of analysis and estimates. The actual costs may differ from the provisions stated.
Any differences may affect the provision carried for warranty events in future reporting periods and therefore the
reported result for the period.

Recognition and measurement

Provisions: Provisions are formed if the Group has a current legal or constructive obligation arising from an event in
the past, if it appears probable that the asset base will be negatively impacted by settlement of the obligation, and if the
amount of the provision can be reliably determined. Provisions for warranties are based on past payments, revenues in
prior years, and current contracts. Komax normally gives a one-year warranty on machines and systems.

104

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSCapital and financial risk management

3
In addition to details on shareholders’ equity, details are also provided on financial risk management at
the Komax Group.

3.1

Financial liabilities

in TCHF

Bank liabilities

Currency

31.12.2019

31.12.2018

CHF

EUR

USD

121 000

27 792

4 900

59 000

24 408

6 930

Total financial liabilities

153 692

90 338

Komax Holding AG finalized an agreement with a bank syndicate for a credit line amounting to CHF
160.0 million (31 December 2018: CHF 160.0 million). Additionally, there are further local credit lines for
subsidiaries available amounting to CHF 26.3 million, up to a maximum of CHF 30.0 million (31 Decem-
ber 2018: CHF 19.6 million, up to a maximum of CHF 30.0 million). As at 31 December 2019 the Group
has drawn on this credit limit to the amount of CHF 156.0 million (31 December 2018: CHF 98.5 million).

Credit lines Komax Group
in CHF million

200

160

120

6
8
1

6
5
1

0
8
1

8
9

31.12.2019

31.12.2018

Total credit lines

Utilized credit lines

The maturities of the financial liabilities (without interest) are as follows:

in TCHF

less than 1 year

1–5 years

over 5 years

Total

As at 31 December 2019

As at 31 December 2018

18 103

734

133 881

86 823

1 708

2 781

153 692

90 338

Recognition and measurement

Financial liabilities: Financial liabilities comprising bank loans, mortgages, and bonds are valued at amortized cost.
Financial liabilities are recorded as current liabilities in the balance sheet unless the Group has the unconditional right to
defer settlement of the liability to a point in time at least twelve months after the relevant balance sheet date.

105

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS

Shareholders’ equity

3.2
This section shows the change in shareholders’ equity compared to the prior year.

Shareholders’ equity
in CHF million

600

450

300

150

50.8

60.8

100%

75%

50%

25%

1
8
4

5
4
2

3
6
4

2
8
2

31.12.2019

31.12.2018

Balance sheet total

Shareholders’ equity

Shareholders’ equity in % of total assets

Share capital

Balance sheet date

31 December 2019

31 December 2018

31 December 2017

Number of
shares

3 850 000

3 847 510

3 834 482

Par value
in CHF

0.10

Par value
in CHF

385 000

384 751

383 448

All registered shares are fully paid up. The share capital increased due to the exercise of options com-
pared to the prior year.

Treasury shares

Total as at 1 January

Purchases

Transfer
(share-based compensation)

2019

Number

Average
price
in CHF

Purchase
costs (avg.)
in TCHF

Number

9 303

4 490

248.44

224.88

2 311

1 010

16 364

1 000

Average
price
in CHF

247.75

254.22

2018

Purchase
costs (avg.)
in TCHF

4 054

254

−6 672

249.54

−1 665

−8 061

247.75

−1 997

Total as at 31 December

7 121

232.55

1 656

9 303

248.44

2 311

Both at the end of the reporting year and at the end of the prior-year period, all treasury shares were
envisaged for share-based compensation programs. All treasury shares are held by Komax Holding AG.
Neither the other Group companies nor the staff pension scheme of Komax AG hold any shares of
Komax Holding AG.

106

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSc)

Conditional capital

Total as at 1 January

Exercise of options

Total as at 31 December

2019

Number

2 490

−2 490

Par value
in CHF

Conditional
share capi-
tal in CHF

Number

Par value
in CHF

0.10

249

15 518

−249

−13 028

2 490

0.10

2018

Conditional
share capital
in CHF

1 552

−1 303

249

There was no increase in conditional capital either in 2018 or in 2019. Conditional capital was created
for management and employee share ownership schemes.

Reserves

d)
The non-distributable reserves amounted to CHF 5.2 million as at 31 December 2019 (31 December
2018: CHF 7.8 million).

Recognition and measurement

Treasury shares: Treasury shares are recognized at the average weighted cost of acquisition, including the trans-
action costs assignable to them, and are then offset against shareholders’ equity. When treasury shares are sold or
issued, the consideration received is credited to shareholders’ equity.

Issuance of shares: Costs that are directly assignable to the issuance of new shares are recognized in shareholders’
equity in net form as a deduction from the issue proceeds.

Preferred shares: No preferred shares have been issued to date.

Financial risk management

3.3
The Komax Group is exposed to various financial risks, for example currency, credit, liquidity, and inter-
est rate risks, through its business activities. The Group’s overall risk management strategy is focused
on the unpredictability of developments in the financial markets and is intended to minimize the poten-
tial negative impact on the Group’s financial position. The Group uses derivative financial instruments
to protect itself against interest rate, currency, and credit risks. Risk management is conducted by the
finance department of Komax Holding AG in conformity with the guidelines issued by the Board of Di-
rectors. These guidelines set out procedures for the use of derivatives as well as dealing with foreign
currency, interest rate, and credit risks. The guidelines are binding for all subsidiaries of the Komax
Group.

107

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSCurrency risk

a)
The Komax Group operates internationally and is therefore exposed to a variety of foreign exchange
risks. Foreign currency risks arise from future cash flows, assets, and liabilities recognized in the bal-
ance sheet, and investment in foreign companies. Komax Group generates its revenues in the following
currencies:

2019

11.3% CHF

11.4% Others

10.3% CNY

21.4% USD

2018

13.1% CHF

10.4% Others

13.6% CNY

16.8% USD

45.6% EUR

46.1% EUR

The most important year-end and average exchange rates were as follows:

Currency

USD

EUR

CNY

Year-end rate
31.12.2019

Average rate
2019

Year-end rate
31.12.2018

Average rate
2018

0.980

1.100

0.140

1.000

1.130

0.146

0.990

1.140

0.145

0.990

1.170

0.150

Komax is mainly exposed to currency risks relating to the USD, the EUR, and the CNY. Assuming that
the average rates against the CHF had been 10% lower or higher and that all other parameters re-
mained largely unchanged, the EBIT margin would have been changed as follows:

EUR/CHF average rate +/– 10%

USD/CHF average rate +/– 10%

CNY/CHF average rate +/– 10%

Change EBIT margin 2019

Change EBIT margin 2018

+/– 0.8%-pt.

+/– 0.9%-pt.

+/– 0.5%-pt.

+/– 1.0%-pt.

+/– 0.8%-pt.

+/– 0.7%-pt.

Credit risk

b)
Credit risks may exist with regard to bank account balances, derivative financial instruments, and re-
ceivables from customers. Komax regularly reviews the independent ratings of financial institutions.
Moreover, all risks pertaining to cash and cash equivalents are further minimized by using a variety of
banks rather than one single bank.

108

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSCapital risk

c)
In the management of its capital, the Komax Group pays special attention to ensuring that the Group is
able to continue to operate, that shareholders receive an appropriate return for their risks, and that fi-
nancial ratios are optimized, taking the cost of capital into account. To achieve these targets, Komax
may adjust its dividend payment, issue new shares, or sell assets in order to scale back its debt.

Liquidity risk

d)
Prudent liquidity risk management involves maintaining sufficient reserves of cash and cash equivalents
and liquid securities as well as financing capacity through an adequate volume of approved lines of
credit. The amount of cash required for operations is reviewed annually and monitored on a monthly
basis by the finance department. Given the business environment in which Komax operates, it is also
essential for the Group to maintain the necessary flexibility in financing by maintaining sufficient unused
lines of credit.

Interest rate risk

e)
Neither at 31 December 2019 nor at the prior year’s balance sheet date did the Komax Group possess
any assets that were subject to any material rate of interest. The Group’s financial risk policy is to fi-
nance long-term investments with long-term liabilities, which gives rise to an interest rate risk. If there is
a significant interest rate risk, the related cash flow risks are hedged through interest rate swaps.

Group structure

4
This section contains details on the scope of consolidation, including any changes (acquisitions, busi-
ness areas to be discontinued). The list of investments additionally contains all directly and indirectly
held investments as at 31 December 2019.

Scope of consolidation

4.1
The consolidated financial statements incorporate the individual financial statements of Komax Hold-
ing AG, Dierikon, and its subsidiaries.

In addition to the acquisitions of Artos Engineering and Exmore listed under Note 4.2, a further subsid-
iary was founded in the first half of 2019 in the form of Komax Distribution (Thailand) Co., Ltd., which
commenced operating activity in the second half of 2019. In the prior-year period, another subsidiary
was founded in the form of Komax TSK Maroc Sàrl., Morocco. In addition, the no longer operationally
active subsidiary company TSK Test Systems (Shanghai) Co. Ltd., China, was liquidated in 2018.

Recognition and measurement

Subsidiaries: Subsidiaries are fully consolidated if Komax Holding AG exercises control over their financial and busi-
ness policies. As a rule, this is the case if Komax Holding AG directly or indirectly holds more than 50% of the subsid-
iary’s voting capital.

Date of consolidation: Subsidiaries are included in the consolidated financial statements from the date on which the
Group assumes control. They are deconsolidated from the date on which control is ceded.

Intragroup eliminations: Intragroup transactions, intragroup balances, and unrealized gains or losses from transac-
tions between Group companies are eliminated from the scope of consolidation.

109

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS4.2
a)

Business combinations
Acquisitions 2019

in TCHF

Acquired net assets at fair value

Cash and cash equivalents

Trade receivables

Other receivables

Inventories

Accrued income and prepaid expenses

Property, plant, and equipment

Intangible assets

Deferred tax assets

Other non-current receivables

Total assets

Current financial liabilities

Trade payables

Other payables

Current provisions

Accrued expenses and deferred income

Non-current financial liabilities

Deferred tax liabilities

Total liabilities

Acquired net assets

Acquisition costs

Goodwill

Total consideration

Contingent consideration

Transferred consideration

less acquired cash and cash equivalents

Net cash out 2019

Exmore

Artos
Engineering

3 235

2 127

248

3 360

178

3 392

12 624

−37

−2 593

−2 364

−325

−1 527

−31

−437

286

1 710

4 029

2 569

673

9 418

−1 652

−1 566

−523

−15

−602

−2 242

−88

Total

3 521

3 837

283

7 389

261

5 961

756

22 042

−1 689

−4 159

−2 887

−340

−2 129

−2 273

−525

−7 314

−6 688

−14 002

5 310

156

2 730

145

8 040

301

10 835

7 216

18 051

16 301

10 091

26 392

16 301

−3 235

13 066

1 889

8 202

−286

7 916

1 889

24 503

−3 521

20 982

Exmore
Komax acquired a 100% stake in Exmore NV, Belgium, as per 1 October 2019. The acquired company
generated revenues of CHF 3.4 million from 1 October 2019. The repercussions of this acquisition for
Group profit after taxes are negligible.

Artos Engineering
Komax acquired a 100% stake in Artos Engineering Company, USA, and its subsidiary Artos Engineering
France S.à.r.l., France, as per 1 April 2019. The acquired company generated revenues of CHF 9.4
million from 1 April 2019. The repercussions of this acquisition for Group profit after taxes are negligible.

110

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSAcquisitions 2018

b)
In December 2018 the newly founded company Komax TSK Maroc Sàrl., Morocco, took over the assets
as well as all employees of TX Mechatronics Sàrl., Morocco. With this asset deal Komax strengthend its
testing business in North Africa. Previously, production for Moroccan customers had taken place at the
Komax companies in Tunisia and Turkey. Komax Morocco had also worked on an ad hoc basis with TX
Mechatronics, which manufactured testing systems in Morocco. The repercussions of this acqui sition for
the presentation of the consolidated financial statements were not significant.

Investments in associates

4.3
As at 31 December 2018, Komax still held a stake in Xcell Automation Inc., York, USA, which was ac-
counted for as an associated company. The company was liquidated in 2019. The stake was valued at
CHF 0.0 million as at 31 December 2018.

Recognition and measurement

Investments in associates: Companies in which the Komax Group holds at least 20% of voting rights but in which it
has a stake of less than 50% or on which it exerts a key influence in other ways are recognized by the equity method,
and initially recorded at the corresponding acquisition cost.

111

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS4.4

Equity holdings

Direct and indirect equity participation of Komax Holding AG as at 31 December 2019

Company

Switzerland

Komax Management AG

Komax AG

Europe

Artos Engineering France S.à.r.l.

Exmore NV

Kabatec GmbH & Co. KG

TSK Test Systems Bulgaria Ltd.

Komax Consult Deutschland GmbH

Komax France Sàrl.

Komax Kabelverarbeitungs-Systeme Deutschland GmbH

Komax Kabatec Verwaltungs GmbH

Komax Portuguesa S.A.

Komax SLE GmbH & Co. KG

Komax SLE Verwaltungs GmbH

Komax Thonauer Kft.

Laselec SA

SC Thonauer Automatic s.r.l.

Thonauer Gesellschaft m.b.H.

Thonauer spol. s.r.o.

Thonauer s.r.o.

TSK Beteiligungs GmbH

TSK Prüfsysteme GmbH

TSK Test Sistemleri San. Ltd. Şti.

TSK Test Systems SRL

Africa

Komax Maroc Sàrl.

Komax TSK Maroc Sàrl.

TSK Tunisia s.a.l.

North/South America

Artos Engineering Company

Komax Comercial do Brasil Ltda.

Komax Corp.

Komax de México S. de R.L. de C.V.

Komax Holding Corp.

Komax York Inc.

Laselec Inc.

TSK Sistemas de Testes do Brasil Ltda.

TSK Test Systems Mexico, S. de R.L. de C.V.

TSK Innovations Co.

Asia

Komax Automation India Pvt. Ltd.

Komax Distribution (Thailand) Co., Ltd.

Komax Japan K.K.

Komax Shanghai Co. Ltd.

Komax Singapore Pte. Ltd.

112

Place

Dierikon, Switzerland

Treillières, France

Beerse, Belgium

Burghaun, Germany

Yambol, Bulgaria

Nuremberg, Germany

Domont, France

Nuremberg, Germany

Burghaun, Germany

Alcabideche, Portugal

Grafenau, Germany

Budakeszi, Hungary

Toulouse, France

Bucharest, Romania

Vienna, Austria

Brno, Czech Republic

Bratislava, Slovakia

Porta Westfalica, Germany

Ergene/Tekirdağ, Turkey

Bistrita, Romania

Mohammédia, Morocco

Tangier, Morocco

Tunis, Tunisia

Brookfield, Wisconsin, USA

São Paulo, Brazil

Buffalo Grove, Illinois, USA

Irapuato, Mexico

Buffalo Grove, Illinois, USA

Grand Prairie, Texas, USA

Colombo, Brazil

Irapuato, Mexico

El Paso, Texas, USA

Gurgaon, India

Bangkok, Thailand

Tokyo, Japan

Shanghai, China

Singapore

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSPurpose

Participation

Consolidation

Ordinary capital

Group services and management

R&D, engineering, production, marketing, sales

Sales

R&D, engineering, production, marketing, sales

Engineering, production, marketing, sales

Regional services

Sales

Administration

Sales

R&D, engineering, production, marketing, sales

Administration

R&D, engineering, production, marketing, sales

Sales

Holding of equity interests

R&D, engineering, production, marketing, sales

Engineering, production, marketing, sales

Sales

Engineering, production, marketing, sales

R&D, engineering, production, marketing, sales

Sales

Holding of equity interests

Administration

Sales

Engineering, production, marketing, sales

Production

Engineering, production, marketing, sales

Sales

R&D, production, marketing, sales

R&D, production, sales

100%

Full consolidation

CHF

EUR

BGN

EUR

HUF

EUR

100 000

5 000 000

182 939

60 760

100 000

600 000

30 000

1 500 000

400 000

25 000

750 000

5 700 000

25 000

10 000 000

545 280

Full consolidation

RON

2 200 000

Full consolidation

EUR

CZK

EUR

TRY

36 336

200 000

6 639

4 000 000

1 764 700

14 950 000

Full consolidation

RON

110 152

Full consolidation

MAD

10 000 000

Full consolidation

EUR

TND

USD

BRL

USD

MXN

USD

BRL

MXN

USD

INR

THB

JPY

USD

SGD

300 000

366 000

330 905

200 000

1 000 000

3 000

8 160 000

150

362 500

3 000

1 000 000

10 000 000

33 000 000

90 000 000

12 210 000

8 600 000

113

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSOther information

5
This section contains all the information not addressed in the previous sections, e.g. information on
employee benefits and share-based compensation.

5.1

Employee benefits

in TCHF

2019

2018

Pension plans with surplus cover

Total

in TCHF

Surplus cover
as per FER 26

Economic share
within the Group

269

Change compared
to prior year /
expense of
reporting period

Contributions accrued
for the period

Employee benefits
expenditure in
personnel expenses

2019

2018

Pension plans with
surplus cover

Total

4 881

4 536

The employee benefits expenditure stated only comprises contributions made to the benefit schemes
at the expense of the company.

The pension plans with surplus cover are related to the staff pension scheme of Komax AG in Switzer-
land. The coverage rate amounted to 115.8% as at 31 December 2019 (31 December 2018: 111.4%).
The actuarial calculations are based on a technical interest rate of 2.0% (31 December 2018: 2.5%)
as well as the technical basis of BVG 2015 (31 December 2018: BVG 2015).

There were no material employer contribution reserves as at 31 December 2019 or as at 31 Decem-
ber 2018.

Recognition and measurement

Employee benefits: The key companies are based in Switzerland, where employee benefits are amalgamated in a
legally independent foundation regulated by the Federal Law on Old-Age, Survivors’ and Disability Insurance (BVG). No
significant pension plans are managed abroad. The ascertainment of any surplus or shortfall in respect of Swiss pension
plans is undertaken on the basis of the annual financial statements of the corresponding pension schemes in accor-
dance with Swiss GAAP FER 26. Any benefit arising from employer contribution reserves is recognized as an asset. The
capitalization of an additional economic benefit (as a result of a pension scheme having surplus cover) is not intended,
nor are the prerequisites for such a step met. An economic obligation is carried as a liability if the prerequisites for the
creation of a provision are met.

114

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSShare-based compensation

5.2
The Komax Group had the following share-based compensation agreements:

Share option plan of the Komax Group

a)
The share option plan took the form of share-based compensation settled in equity instruments by
means of a capital increase (equity-settled plan) for the Board of Directors and the Komax Group man-
agement. The number of options allocated depended on the individual performance of the entitled
employee. The options granted entitled holders to subscribe one Komax Holding AG share per option
and were valid for five years. They had a predetermined exercise price and were subject to a three-year
lock-in period. The allocation of share options was discontinued at the end of 2015. In the prior year
period 2018, 15 128 options were exercised and 3 361 options expired.

Komax Performance Share Unit Plan (PSU)

b)
The plan (equity-settled plan) for the executive management comprises PSUs with a three-year vesting
period which are dependent on the attainment of a performance target and the continuation of the em-
ployment relationship. The number of PSUs allocated is calculated by dividing a fixed amount by the
average closing share price during the 60 days preceding the start of the vesting period. The actual
payout at the end of the vesting period takes the form of shares, and is dependent on the average EBIT
margin or RONCE over three years compared to the target determined in advance by the Board of
Directors. The payout multiplier may range between 0% and 150%. The actual value of the allocation at
the end of the vesting period is therefore dependent on the payout multiplier and the development of
the share price over the course of the vesting period. In the event of any termination of the employment
relationship, pro rata vesting applies at the ordinary vesting date.

Terms of outstanding rights as at 31 December 2019

Number of outstanding rights

Vesting period

Allocation

Fair value on the day of granting

Total fair value at allocation

2017–2019

2018–2020

2019–2021

1 236

3 years

2020

241.98

299

1 187

3 years

2021

295.00

350

960

3 years

2022

265.51

255

CHF

TCHF

115

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSKomax Long-term Share Incentive Plan

c)
The plan (equity-settled plan) for managers is currently not linked to profitability conditions, and con-
tains a three-year vesting period. The number of shares allocated is calculated by dividing a fixed
amount by the average closing share price during the 60 days preceding the start of the vesting period.
The actual payout at the end of the vesting period takes the form of shares. In the event of any termina-
tion of the employment relationship, pro rata vesting applies at the ordinary vesting date.

Number of rights

Total as at 1 January

Granted 1 January

Forfeited

Transferred to participants

Total as at 31 December

2019

7 245

1 935

2018

9 111

1 660

−3 090

−3 526

6 090

7 245

The fair value on the day of granting amounted to CHF 265.51 (2018: CHF 295.00).

Komax Long-term Cash Incentive Plan

d)
The plan (cash-settled plan) for managers is currently not linked to profitability conditions, and contains
a three-year vesting period. The actual payout at the end of the vesting period is determined at the end
of the performance period, and is based on a multiplication of the allocation amount by the share price
performance factor (ratio of final share price to starting share price).

Number of rights

Total as at 1 January

Granted 1 January

Forfeited

Transferred to participants

Total as at 31 December

2019

3 694

1 432

−181

2018

4 268

1 189

−15

−1 343

−1 748

3 602

3 694

The fair value on the day of granting amounted to CHF 265.51 (2018: CHF 294.60).

116

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSKomax Restricted Share Plan

e)
Restricted shares are allocated to Board members at the end of their period of office shortly before the
Annual General Meeting (equity-settled plan); the lock-in period is three years. In the event of resigna-
tion from office as a result of retirement, death, or disability, the entitlement to restricted shares is cal-
culated on a pro rata temporis basis. In such cases, lock-in periods may be either continued or rescind-
ed at the discretion of the Board of Directors. In the 2019 financial year, 791 shares (2018: 640 shares)
with a fair value of CHF 210.00 (2018: CHF 270.00) on the date of granting were allocated to the Board
of Directors.

Recognition and measurement

Share-based compensation: All share-based compensation granted to staff is estimated at fair value as per the date
it is granted, and is charged evenly across the vesting period to the corresponding income statement positions within
the operating result. In the case of compensation plans involving remuneration in the form of equity instruments, the
expense of the granted compensation is booked as an increase in shareholders’ equity, and any funds received from
the exercise of this compensation following the vesting period are booked as a change in shareholders’ equity. The
fair value of the amount that is to be paid to employees in respect of share appreciation rights and settled in the form
of cash is booked as an expense with a corresponding increase in debt over the period in which employees acquire
unrestricted access to these payments.

5.3

Related party transactions

Transactions with associated companies

in TCHF

Sale of goods and services

Interest income

Other receivables (current and non-current) as at 31 December

2019

2018

Related party transactions include members of the Board of Directors, members of the Executive Com-
mittee, pension funds, and key shareholders, as well as companies controlled by the same. In the year
under review, no transactions were entered into with closely linked persons in connection with the sale
and purchase of goods and services (2018: none). With the exception of the regular employer contribu-
tions to the pension fund, no transactions were effected with related parties (2018: none).

117

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSOff-balance-sheet transactions
Contingent liabilities

5.4
a)
Aside from a service performance guarantee of CHF 0.3 million (31 December 2018: CHF 0.7 million),
there were other guarantees of CHF 2.4 million (31 December 2018: CHF 8.1 million) granted; these al-
most exclusively comprise guarantees granted to customers for advance payments. In addition to the
above-mentioned guarantees, there were other contingent liabilities associated with the sale of busi-
ness units that could protect the buyer against potential tax, legal, and/or other imponderables in con-
nection with the acquired business unit. On the basis of its current risk appraisal, Komax does not ex-
pect any cash outflows in connection with the above-mentioned contingent liabilities.

Ownership restrictions for own liabilities

in TCHF

Book value real estate

Lien on real estate

Utilization

31.12.2019

31.12.2018

18 867

7 280

6 283

8 106

5 472

5 358

The pledged assets will be used to secure own liabilities.

Contractual obligations

c)
As at 31 December 2019, contractual obligations of CHF 15.6 million were existing in respect of the
acquisition of property, plant, and equipment (31 December 2018: CHF 36.5 million). Future liabilities
arising from operating lease agreements amount to CHF 2.7 million due in 2020 and CHF 3.0 million due
in 2021–2024 (31 December 2018: CHF 2.5 million due in 2019 and CHF 3.8 million due in 2020−2023).

Other key accounting principles
Key figures not defined under Swiss GAAP FER

5.5
a)
By stating its free cash flow in the cash flow statement, the Komax Group is reporting an item that is not
in conformity with Swiss GAAP FER but is nonetheless a key figure for Komax, as well as being widely
used and recognized in the financial sector. This key figure is an amalgamation of cash flow from oper-
ating activities and cash flow from investing activities. In the income statement, Komax discloses the
revenues as an additional subtotal that is not defined under Swiss GAAP FER. This subtotal includes
other operating income in addition to net sales and is used for the calculation of important key figures.
As gross profit is an important key figure for Komax, the corresponding interim total is reported sepa-
rately in the income statement. Gross profit comprises revenues (net sales and other operating income)
minus the cost of materials and changes in inventory of unfinished and finished products.

118

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSb)

Currency conversion

Recognition and measurement

Functional currency and reporting currency: Items included in the financial statements of each entity are measured
using the currency that best reflects the economic substance of the underlying events and circumstances relevant to
that entity (the functional currency). The consolidated financial statements are presented in CHF, which is the functional
currency of the parent company, Komax Holding AG.

Transactions and balances: Foreign currency transactions are translated into the functional currency at the rate
prevailing on the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such trans-
actions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in
the income statement.

Group companies: The earnings and balance sheet figures of foreign business units with a functional currency other
than the Swiss franc are translated to Swiss francs as follows:
a) Assets and liabilities are translated at the exchange rate on the balance sheet date for each such date.
b) Revenues and expenses are translated at the weighted average exchange rate for each income statement.
c) All exchange rate gains and losses are recognized in shareholders’ equity and reported on a separate line within

the retained earnings.

Exchange rate differences arising from the translation of net investments in foreign business units are recognized under
comprehensive income. When a foreign company is sold, these exchange rate differences are reported in income as
part of the gain or loss from the sale.

Other important accounting policies

Recognition and measurement

Cash and cash equivalents: Cash and cash equivalents includes banknotes, sight deposits, and other current, highly
liquid financial assets with an original maturity of no greater than three months. Utilized current account overdrafts are
shown on the balance sheet as payables to credit institutions under current financial liabilities.

Trade payables: Trade payables are valued initially at fair value, which is normally the amount originally invoiced, and
subsequently measured at amortized cost.

Non-operating properties: Investment property encompasses land and buildings held with a view to generating rental
income or for purposes of capital appreciation, and not for internal production purposes, the delivery of goods, or the
provision of services, administrative purposes, or sales in the context of ordinary business activity. Investment property
is valued at acquisition or construction cost less cumulative depreciation.

Transactions with minorities: Changes in ownership interests in subsidiaries are recognized as equity capital trans-
actions provided control remains intact.

Impairment of non-monetary assets: Assets subject to planned amortization are also tested for impairment if events
or changes in circumstances create a presumption that the carrying value can potentially no longer be realized. An
impairment is recorded in the amount by which the asset’s carrying value exceeds its realizable value. The realizable
value is the greater of the asset’s fair value less disposal costs and its use value. In determining impairments, assets
are grouped according to the smallest separately identifiable cash-generating units.

119

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSReport of the statutory auditor to the General Meeting of Komax Holding AG, Dierikon

Report on the audit of the consolidated financial statements

Opinion
We have audited the consolidated financial statements of Komax Holding AG and its subsidiaries (the Group),
which comprise the consolidated income statement, the consolidated balance sheet as at 31 December 2019, the
consolidated statement of shareholders’ equity and the consolidated cash flow statement 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 on pages 84 to 119 give a true and fair view of the consoli-
dated financial position of the Group as at 31 December 2019 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 consoli-
dated 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 2 400 000

We concluded full scope audit work at eight reporting units in six countries. Our audit scope addressed
58% of the Group's net sales. In addition, an audit of account balances was performed at one other Group com-
pany, which addressed a further 14% of net sales of the Group. We obtained additional assurance through the
audits of the statutory financial statements of a further eight companies (five different countries). These addressed
a further 13% of net sales of the Group.

As key audit matter, the following area of focus was identified:

–

Revenue recognition in the appropriate period

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reason-
able 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.

Materiality

Audit scope

Key audit
matters

120

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSOverall Group
materiality

CHF 2 400 000

How we determined it

0.6% of net sales, rounded

Rationale for the
materiality benchmark
applied

We chose net sales as the benchmark for determining materiality. This benchmark
takes into account the volatility of the business environment and is a generally accept-
ed benchmark for materiality considerations.

We agreed with the Audit Committee that we would report to them misstatements above CHF 170 000 identified
during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qual-
itative reasons.

Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the consoli-
dated financial statements. 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.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the
consolidated financial statements as a whole, taking into account the structure of the Group, the accounting pro-
cesses and controls, and the industry in which the Group operates.
The consolidated financial statements include within their scope 42 entities. We identified eight Group companies
for which, in our opinion, an audit of the complete financial information was necessary on the grounds of their size
or risk characteristics. For one other Group company, an audit of account balances was performed to address sig-
nificant items adequately. We obtained additional assurance from the timely performance of audits of the statutory
financial statements of eight Group companies.
All of the Group companies in the described audit scope were audited by local national PwC firms. None of the
Group companies excluded from our audit of the consolidated financial statements accounted individually for
more than 6% of Group net sales.
To provide appropriate guidance to and monitor the work of the auditors of the Group companies, the Group audit
team performed selected reviews of the audit working papers and held telephone conferences with the auditors
of the Group companies.

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.

Revenue recognition in the appropriate period

Key audit matter

How our audit addressed the key audit matter

We consider revenue recognition in the appropriate
period to be a key audit matter because of the scope
for judgement involved in determining, as required,
exactly when the risks and rewards associated with
goods delivered and services rendered are transferred
in accordance with the Swiss GAAP FER accounting
requirements.
On the basis of the agreed delivery terms (Incoterms),
the expected average delivery times until the effective
transfer of the risks and rewards of ownership to the
customer and taking into account special cases (e.g.
delivery delays), Komax realises revenue from sales of
goods in the period in which it transfers the risks and
rewards of ownership.
Please refer to page 92 of the notes to the consolidated
financial statements.

We checked on a sample basis that revenue was recog-
nised in the correct period for the months of December
2019 and January 2020. For the selected samples, we
assessed the underlying Incoterms and in critical cases
checked the average delivery times. In some cases, we
interviewed the persons responsible, including those
from other departments.
We concluded that the criteria for revenue recognition
in the appropriate period in accordance with the Swiss
GAAP FER requirements were complied with in the
consolidated financial statements for the year ended
31 December 2019.

121

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSResponsibilities 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 material 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 con-
solidated financial statements.
As part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise professional judgment
and maintain professional scepticism throughout the audit. We also:

–

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material mis-
statement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, for-
gery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made.
Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.

122

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTSWe communicate with the Board of Directors or its relevant committee regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation pre-
cludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.

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

Thomas Brüderlin
Audit expert
Auditor in charge

Basel, 16 March 2020

Sebastian Gutmann
Audit expert

123

FINANCIAL REPORT 2019CONSOLIDATED FINANCIAL STATEMENTS

Balance sheet of Komax Holding AG

in TCHF

Assets

Cash and cash equivalents

Other current receivables third parties

Other current receivables Group

Other current receivables associates

Financial loans Group

Accrued income / prepaid expenses

Total current assets

Financial investments Group

Investments in subsidiaries

Total non-current assets

Total assets

Liabilities and shareholders’ equity

Trade payables

Current interest-bearing liabilities third parties

Other current liabilities third parties

Other current liabilities Group

Accrued expenses / deferred income

Provisions

Total current liabilities

Non-current interest-bearing liabilities third parties

Total non-current liabilities

Total liabilities

Share capital

Capital contribution reserves

Other statutory capital reserves

Statutory profit reserves

Profit reserves determined by resolution

Retained earnings

Profit after taxes

Treasury shares

Total shareholders’ equity

31.12.2019

31.12.2018

216

168

4 460

131 262

136 185

93 674

231 612

325 286

719

2 690

82 804

685

87 021

82 467

215 075

297 542

29.5

70.5

461 471

100.0

384 563

249

17 150

297

350

18 048

3.9

28.2

32.1

130 200

148 248

385

814

2 000

100

271 403

693

39 484

−1 656

313 223

386

990

317

462

2 155

83 030

85 185

385

3 270

2 000

100

257 903

551

37 480

−2 311

22.6

77.4

100.0

0.6

21.6

22.2

77.8

100.0

67.9

299 378

Total liabilities and shareholders’ equity

461 471

100.0

384 563

124

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AGIncome statement of Komax Holding AG

in TCHF

Dividend income

Other financial income

Other operating income

Total income

Financial expenses

Compensation

Other operating expenses

Direct taxes

Total expenses

Profit after taxes

2019

40 355

8 955

645

49 955

−6 960

−860

−2 494

−157

−10 471

39 484

2018

37 622

8 099

690

46 411

−5 349

−786

−2 520

−276

−8 931

37 480

125

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AGNotes to the 2019 financial statements of Komax Holding AG

Principles
General

1
1.1
These annual financial statements were drawn up according to the provisions of Swiss accounting law
(Section 32 of the Swiss Code of Obligations). The key valuation principles applied other than those
prescribed by law are described below. Here it should be remembered that use has been made of the
option to create and release hidden reserves for the purpose of securing the company’s lasting
prosperity.

As Komax Holding AG draws up a set of consolidated financial statements in line with a recognized
accounting standard (Swiss GAAP FER), it has elected not to include in these financial statements – in
keeping with statutory guidelines – explanatory notes on interest-bearing liabilities and audit fees, as
well as the presentation of a cash flow statement.

Financial investments

1.2
Financial investments comprise non-current financial loans. Granted loans are valued at the respective
balance sheet date, whereby unrealized losses are accounted for but unrealized gains are not (imparity
principle).

Investments

1.3
Investments are initially recognized at cost. The valuation of investments is reviewed annually on an
individual basis and if necessary adjusted to a lower recoverable amount.

Treasury shares

1.4
Treasury shares are recorded at the time they are acquired as minus items in shareholders’ equity, at
acquisition cost. In the event of a later resale, the profit or loss is recognized in the income statement
as financial income or financial expense.

Share-based compensation

1.5
If treasury shares are used for the share-based compensation of Board members, the difference be-
tween the acquisition cost and the actual payment to Board members when the shares are allocated is
booked to compensation.

126

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AGInformation on balance sheet and income statement positions
Assets

2
2.1
Other current receivables from Group companies increased by a total of CHF 1.8 million. This balance
sheet item contains open interest receivables in respect of subsidiary companies.

The Group’s current financial loans increased by a total of CHF 48.5 million. This balance sheet item
likewise encompasses the current account loan of Komax Holding AG to Komax AG, Switzerland.

Financial investments Group comprise non-current financial loans and participation loans. The Group’s
financial investments have increased as a result of newly granted loans.

Liabilities

2.2
The “Current interest-bearing liabilities third parties” item comprises current financial loans reported by
banks.

The provisions relate to taxes on earnings as well as open tax claims in respect of corporation tax to be
paid on the holdings in Germany.

Komax Holding AG and a syndicate of banks led by Credit Suisse have a valid credit agreement for a
credit limit of CHF 160.0 million. The credit agreement is valid until 31 January 2022. In addition, there
is an option to extend the credit agreement by one year to 31 January 2023. The credit line provides the
Group with the necessary entrepreneurial flexibility, guarantees the financing of commercial operations,
and ensures the continued implementation of corporate strategy. As at 31 December 2019, the Group
had drawn on this credit limit to the amount of CHF 111.0 million, USD 5.0 million, and EUR 13.0 million
(total drawing: CHF 130.2 million).

In accordance with the applicable capital contribution principle, capital contributions (share premiums)
made after 31 December 1996 are disclosed in the separate equity item “Statutory capital reserves.”
Repayments to shareholders from this account are treated in the same way as the repayment of nominal
capital and are not subject to withholding tax.

Income

2.3
Dividend income amounted to CHF 40.4 million in the year under review (2018: CHF 37.6 million).

Other financial income contains interest income on granted loans as well as realized and unrealized
exchange rate gains on cash and cash equivalents, and loans in foreign currency.

Other operating income comprises billed amounts for holding fees and licences, as well as incidental
revenues of third parties and the Group.

127

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AGExpenses

2.4
The “Financial expenses” item comprises, among other things, interest expenses and commissions,
securities losses, and unrealized and realized exchange rate losses on cash and cash equivalents, and
loans in foreign currency.

Compensation comprises compensation paid to the Board of Directors.

The “Other operating expenses” item includes patents and licence costs, advisory and legal expenses,
investor relations expenses, representation expenses, insurance premiums, and other operating expendi-
ture items.

Direct taxes contain expenses for taxes on earnings and corporation tax.

Company and legal form, registered office

3
Company:
Legal form:
Registered office: Dierikon, Canton Lucerne, Switzerland

Komax Holding AG
Aktiengesellschaft (company limited by shares)

Full-time employees

4
Komax Holding AG does not have any employees.

Participations

5
The direct and indirect participations of Komax Holding AG are set out in the consolidated financial
statements on pages 112 and 113.

Treasury shares

6
Details of the treasury shares of Komax Holding AG are provided in the consolidated financial state-
ments on page 106.

Contingent liabilities

in TCHF

Joint liability for Group taxation value-added tax

31.12.2019

31.12.2018

p.m.

Guarantees

in EUR

in USD

in CHF

Total

1 288

291

1 579

2 147

743

2 763

5 653

From the total contingent liabilities of CHF 1.6 million (31 December 2018: CHF 5.7 million), CHF 1.3
million (31 December 2018: CHF 4.9 million) are contingent liabilities in favor of subsidiaries.

128

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AGConditional capital

8
Details of the conditional capital of Komax Holding AG are provided in the consolidated financial state-
ments on page 107.

Major shareholders

9
As at 31 December 2019 and 31 December 2018 the company had no major shareholders holding more
than 5% of the votes.

Externally regulated capital requirements (covenants)

10
The Group’s financial liabilities are subject to the following externally regulated capital requirement
(covenant) as per the syndicated loan agreement:

The gearing factor may not exceed 3.25 either at 31 December 2019 or thereafter at each quarter-end
balance sheet date.

The Komax Group has complied with all capital requirements since the contract signing date as well as
at 31 December 2019. Within the scope of the syndicated loan agreement, Komax Holding AG guaran-
tees for the liabilities of any member of the Komax Group.

129

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AG11

Holdings of shares

Assets in units

Board of Directors

Beat Kälin

David Dean

Andreas Häberli

Kurt Haerri

Daniel Hirschi1

Mariel Hoch2

Roland Siegwart

31.12.2019

31.12.2018

Chairman

Member

9 972

1 128

188

2 987

n.a.

2 128

9 722

1 024

2 883

4 730

n.a.

2 024

Total Board of Directors

16 403

20 467

Executive Committee

Matijas Meyer

Andreas Wolfisberg

Marc Schürmann3

Marcus Setterberg3

CEO

CFO

Executive Vice President

Günther Silberbauer3

Executive Vice President

Total Executive Committee

1 Member of the Board of Directors until 16 April 2019.
2 Member of the Board of Directors since 16 April 2019.
3 Member of the Executive Committee since 1 January 2019.

4 000

500

200

137

4 837

4 534

500

n.a.

5 034

Net release of hidden reserves

12
The total amount of the net released hidden reserves amounted to CHF 0.0 million (2018: CHF 1.0
million).

130

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AG
FINANCIAL REPORT 2019
PROPOSAL FOR THE APPROPRIATION OF PROFIT

Proposal for the appropriation of profit

The Board of Directors proposes the following appropriation of profit, payout from the capital contribu-
tion reserves (which is not subject to withholding tax), and dividend:

in CHF

Balance carried forward from previous year

Profit after taxes

Transfer from capital contribution reserves

31.12.2019

31.12.2018

692 879

550 809

39 483 951

37 480 320

770 000

3 078 008

Total available for distribution

40 946 830

41 109 137

Payout from capital contribution reserves of CHF 0.20 per
registered share (2018: CHF 0.80) which is not subject to withholding tax1

Dividend of CHF 1.60 gross per registered share (2018: CHF 6.20)1

Allocation to free reserves

Profit carried forward

Total

770 000

3 078 008

6 160 000

23 854 562

34 000 000

13 500 000

16 830

676 567

40 946 830

41 109 137

1 The proposed distribution is based on all registered shares issued as at 31 December 2019. No distribution is made on treasury

shares held by Komax Holding AG. The distributed amount is reduced accordingly at the time of the distribution.

131

Report of the statutory auditor to the General Meeting of Komax Holding AG, Dierikon

Report on the audit of the financial statements

Opinion
We have audited the financial statements of Komax Holding AG, which comprise the balance sheet as at 31 De-
cember 2019, income statement and notes for the year then ended, including a summary of significant accounting
policies.
In our opinion, the financial statements as at 31 December 2019 on pages 124 to 131 comply with Swiss law and
the company’s articles of incorporation.

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 financial
statements” section of our report.
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

Key audit
matters

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

–

Valuation of investments in subsidiaries

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reason-
able 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 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 financial
statements as a whole.

Overall materiality

CHF 1 550 000

How we determined it

0.5% of net assets, rounded

Rationale for the
materiality bench-
mark applied

We chose net assets as the benchmark for materiality considerations because the
Company primarily holds investments and grants loans to Group companies.

We agreed with the Audit Committee that we would report to them misstatements above CHF 155 000 identified
during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qual-
itative reasons.

132

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AGAudit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial
statements. In particular, we considered where subjective judgements were made; for example, in respect of sig-
nificant 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 mis-
statement 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.

Valuation of investments in subsidiaries

Key audit matter

How our audit addressed the key audit matter

The shares of the capital of subsidiaries held by the Ko-
max Holding AG are recognised in the financial state-
ments under “Investments in subsidiaries” (CHF 231.6
million).
Investments in subsidiaries are valued individually and
stated at acquisition cost less necessary impairment
charges.
The company tests these investments for impairment
by comparing the book value of the investment with the
shareholders’ equity according to Swiss GAAP FER. If
the book value exceeds the shareholder’s equity, the
value in use of the subsidiary is considered. To deter-
mine the value in use, an indepth valuation analysis is
performed using cash flow forecasts based on the busi-
ness plans approved by Management and the Board of
Directors.
This valuation analysis is based on Management’s as-
sumptions, which involve significant scope for judge-
ment. For this reason, we deemed the impairment
testing of investments in subsidiaries to be a key audit
matter.
Please refer to note 1.3 (Investments).

Where a book value was higher than the recorded
shareholders’ equity, we performed a detailed analysis
of the valuation analysis performed by the client.
This included:

–

Discussion with Management of the results and fu-
ture prospects of specific subsidiaries.
Assessment of the correctness and mathematical
accuracy of the applied valuation methods.
Plausibility check of the assumptions applied by
Management concerning the discount rate, long-
term growth rates and margins.
We compared the results of the year under review
with the forecasts made in the prior year and as-
sessed the appropriateness of the prior year’s as-
sumptions.

We consider the valuation process and the assump-
tions applied by Management to be adequate and a
sufficient basis for assessing the valuation of invest-
ments in subsidiaries.

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 pro-
visions 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 con-
tinue 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
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. Misstate-
ments can arise from fraud or error and are considered material if, individually or in the aggregate, they could rea-
sonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

133

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AGAs part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise professional judgment
and maintain professional scepticism throughout the audit. We also:

–

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffi-
cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, inten-
tional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made.
Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or condi-
tions that may cast significant doubt on the entity’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related dis-
closures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our con-
clusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the entity to cease to continue as a going concern.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors or its relevant committee, we determine those mat-
ters that were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

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 in-
ternal 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 compa-
ny’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

PricewaterhouseCoopers AG

Thomas Brüderlin
Audit expert
Auditor in charge

Basel, 16 March 2020

Sebastian Gutmann
Audit expert

134

FINANCIAL REPORT 2019FINANCIAL STATEMENTS OF KOMAX HOLDING AG

FIVE YEAR OVERVIEW

FURTHER INFORMATION 2019
FIVE YEAR OVERVIEW

in TCHF

Income statement

Revenues

Gross profit

in % of revenues

EBITD

in % of revenues

Operating profit (EBIT)

in % of revenues

Group profit after taxes (EAT)

in % of revenues

Depreciation

Research and development

in % of revenues

Balance sheet

Non-current assets

Current assets
Shareholders’ equity2

in % of total assets

Share capital

Total liabilities

in % of total assets

Non-current financial liabilities

Current financial liabilities

Net cash (+) / net indebtedness (−)

Total assets

Cash flow statement

Cash flow from operating activities

Investments in non-current assets

Free cash flow

Employees

Headcount as at 31 December
Revenues per employee3
Gross value added per employee3
Net value added per employee3

Share details
Shares4

Par value

Highest price

Lowest price

Closing price as at 31 December

2019

2018

2017

20161

20151

417 771

258 930

62.0

36 837

8.8

24 035

5.8

13 221

3.2

12 802

41 531

9.9

192 369

288 867

244 604

50.8

385

236 632

49.2

136 504

17 188

−106 224

481 236

41 287

54 448

−36 886

2 211

197

3 850

0.10

264.00

165.10

236.40

479 698

297 903

408 509

256 476

391 820

247 943

315 093

205 941

62.1

78 614

16.4

67 254

14.0

51 787

10.8

11 360

41 051

8.6

149 299

313 605

281 640

60.8

385

62.8

66 115

16.2

55 069

13.5

42 101

10.3

11 046

36 668

9.0

123 356

291 102

258 178

62.3

383

63.3

64 420

16.4

55 424

14.1

38 703

9.9

8 996

29 071

7.4

125 181

231 879

246 174

68.9

377

65.4

59 123

18.8

49 938

15.8

29 215

9.3

9 185

25 315

8.0

160 940

238 027

283 134

71.0

369

181 264

156 280

110 886

115 833

39.2

90 338

−39 358

462 904

29 629

41 340

−4 340

2 006

248

120

114

3 848

0.10

329.00

223.00

230.00

37.7

69 856

−10 544

414 458

26 767

22 201

−7 582

1 841

238

118

112

3 834

0.10

319.50

243.50

319.50

31.1

31 445

17 008

357 060

36 906

22 827

441

1 633

255

122

116

3 774

0.10

251.25

180.10

251.25

29.0

16 518

34 365

398 967

49 612

18 850

24 519

1 347

248

128

121

3 692

0.10

194.90

122.90

194.90

No.

No. 1 000

CHF

1 Since the start of 2017, the consolidated financial statements have been drawn up in accordance with Swiss GAAP FER. The 2016 figures have been revised

accordingly. 2015 is reported according to IFRS.

2 Equity attributable to equity holders of the parent company.
3 Calculated on the basis of the average headcount.
4 Changes resulting from the exercising of option rights.

135

Komax Holding AG
Investor Relations/Corporate Communications
Roger Müller
Industriestrasse 6
6036 Dierikon
Switzerland

Phone +41 41 455 04 55
komaxgroup.com

Financial calendar

Annual General Meeting

Dividend payment

Half-year results 2020

Investor Day

21 April 2020

27 April 2020

18 August 2020

23 October 2020

Preliminary information on 2020 financial year

26 January 2021

Annual media and analyst conference
on the 2020 financial results

Annual General Meeting

16 March 2021

14 April 2021

Forward-looking statements
The present Annual Report contains forward-looking statements in relation
to Komax which are based on current assumptions and expectations.
Unforeseeable events and developments could cause actual results to
differ materially from those anticipated. Examples include: changes
in the economic and legal environment, the outcome of legal disputes,
exchange rate fluctuations, unexpected market behavior on the part
of our competitors, negative publicity, and the departure of members of
management. The forward-looking statements are pure assumptions,
made on the basis of information that is currently available.

This Annual Report is available in English and German. The original German
version is binding.

136

Imprint

Published by:
Komax Holding AG, Dierikon

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www.linkgroup.ch

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Komax Holding AG
Industriestrasse 6
6036 Dierikon
Switzerland

Phone +41 41 455 04 55
komaxgroup.com