Notes to the financial statements

1Principles

1.1 General

These annual financial statements were prepared in accordance with the provisions of the Swiss accounting law (Title 32 of the Swiss Code of Obligations). The main valuation principles applied that are not prescribed by law are described below.

Georg Fischer Ltd, Schaffhausen (Switzerland), reports its consolidated financial statements on the basis of a recognized standard (Swiss GAAP FER) and has therefore, in accordance with the legal provisions, decided not to provide notes on the audit fees, to issue a cash flow statement or report on the business situation.

1.2 Securities with market price

Short-term securities are valued at the market price on the balance sheet date. No equalization reserve has been created. 

1.3 Loans to Corporate Companies and other financial assets

Loans to Corporate Companies and other financial investments in foreign currencies are valued at the market rate on the actual closing date. Unrealized currency losses are recognized, whereas unrealized gains are not recognized (imparity principle). The valuation is carried out at nominal values, taking into account any value adjustments required.

1.4 Investments

Investments are valued according to the principle of individual valuation. In addition, further flat-rate value adjustments can be made.

1.5 Dividend income

Dividend income is recognized when paid out.

1.6 Share-based compensation

More information about share-based compensation is available in the Compensation Report as well as in note 6.

1.7 Long-term interest-bearing liabilities

Interest-bearing liabilities are recognized at nominal value.

1.8 Treasury shares

Treasury shares are recognized at cost and deducted from shareholder’s equity. The gain or loss from the sale or transfer of treasury shares is recognized in shareholder’s equity as an increase or reduction in retained earnings.

2Information on the income statement

2.1 Dividend income

The dividend income for the year under review was CHF 174 million (previous year: CHF 156 million).

2.2 Income from services provided to Corporate Companies

The income from Corporate Companies consisted primarily of licensing income for the use of the corporate brand +GF+ as well as income for services provided. 

2.3 Financial income

The financial income includes interest income on the loans granted to Corporate Companies and related parties.

2.4 Commission income from Corporate Companies

This position contains commission income from Corporate Companies for issued guarantees.

2.5 Value adjustment on investments

This position includes value adjustments of investments held by Georg Fischer Ltd. The principles for the valuation of investments are found in note 1.4.

2.6 Financial expenses

This position includes interest expense for the bond of CHF 200 million issued in the previous year as well as losses on foreign currencies. More information on the bond can be found in note 3.8.

2.7 Other operating expenses

The main expense items related to external consulting services, marketing expenses, fees for the Board of Directors, and IT costs.

2.8 Direct taxes

This position includes the income taxes of Georg Fischer Ltd, but also the corporation taxes of Georg Fischer BV & Co KG, Singen (Germany), acting as the German fiscal unity parent of GF. Georg Fischer Ltd, as the associate of Georg Fischer BV & Co KG, is liable for German corporation taxes.

3Information on balance sheet items

3.1 Cash and cash equivalents and short-term investments with a quoted market price

This balance sheet item consists of bank balances.  In the previous year, securities in the amount of CHF 3.1 million were included.

3.2 Other current receivables due from Corporate Companies

This balance sheet item includes short-term receivables and loans to Corporate Companies and items from cash pooling with Corporate Companies. These are reported as a gross amount under “Other current receivables due from Corporate Companies” and “Short-term interest-bearing liabilities due to Corporate Companies”.

3.3 Loans to Corporate Companies

The activities of Corporate Companies are, whenever possible and suitable, financed by loans from the Corporation instead of credit facilities from local banks.

3.4 Other financial assets

Other financial assets include loans to related parties of CHF 66 million (previous year: CHF 0 million). CHF 47 million of these loans to related parties are subordinated loans.

3.5 Investments

Direct and indirect investments in Corporate Companies of Georg Fischer Ltd include the companies listed in note 4.2 in the consolidated financial statements.

3.6 Short-term interest-bearing liabilities due to Corporate Companies

This balance sheet item includes short-term liabilities and loans from Corporate Companies and items from cash pooling with Corporate Companies. These are reported as a gross amount under “Other current receivables due from Corporate Companies” and “Short-term interest-bearing liabilities due to Corporate Companies”.

3.7 Accrued expenses and deferred income

Accrued expenses and deferred income comprises variable compensation for employees and fees for the Board of Directors as well as other deferred items.

3.8 Long-term interest-bearing liabilities

On 20 April of the previous year, Georg Fischer Ltd issued a bond of CHF 200 million on the Swiss capital market. The bond has a duration of 10 years and carries a coupon of 1.05%.

3.9 Long-term provisions

This provision mainly concerns currency risks.

3.10 Share capital

As of 31 December 2019, the share capital amounted to 4’100’898 registered shares at a par value of CHF 1, unchanged from the previous year.

Conditional capital: As of 31 December 2019, the conditional capital amounted to CHF 0.6 million and can be created by exercising conversion or option rights granted in connection with debenture loans or similar bonds of Georg Fischer Ltd or its Corporate Companies that were issued on the capital markets.

Authorized capital: In accordance with the resolution of the Annual General Meeting of 18 April 2018, the Board of Directors is authorized to increase the share capital, until no later than 17 April 2020, by a maximum amount of CHF 0.6 million, by issuing a maximum of 600’000 fully paid-in registered shares with a nominal value of CHF 1 each. The increase may be made in partial amounts.

The maximum amount of the authorized or conditional capital is reduced by the amount that authorized or conditional capital is created through the issue of bonds or similar debt instruments or new shares.

3.11 Treasury shares

Georg Fischer Ltd held 7’173 own shares (previous year: 7’568 own shares) on the balance sheet date. The principles for the valuation of treasury shares are found in note 1.8.

4Additional information

4.1 Full-time equivalents

As of 31 December 2019, Georg Fischer Ltd employed 78 people including trainees (previous year: 76).

4.2 Contingent liabilities

Tabelle anzeigen Tabelle ausblenden
Show table Hide table

CHF 1'000

 

2019

 

2018

 

 

 

 

 

Guarantees and pledges to Corporate Companies in favor of third parties

 

1'633'445

 

1'490'080

Guarantees to related parties in favor of third parties

 

74'433

 

125'251

Guarantees to third parties

 

4'740

 

 

Guaranteed maximum amount

 

1'712'618

 

1'615'331

Thereof utilized

 

721'532

 

811'479

In addition, Georg Fischer Ltd bears joint liability with regard to the Swiss Federal Tax Administration for the amounts due of value-added tax of all the Swiss Corporate Companies.

4.3 Pension fund obligations

At year-end 2019, pension fund obligations amounted to CHF 1.1 million (previous year: CHF 4.2 million).

4.4 Significant shareholders

An overview can be found in the chapter Corporate Governance (GF share and shareholders).

4.5 Shareholdings of members of the Board of Directors, Executive Committee, or persons related to them

Information on the shareholdings of members of the Board of Directors, Executive Committee, or persons related to them is provided in note 4.3 in the consolidated financial statements.

5Events after the balance sheet date

There were no events between 31 December 2019 and 20 February 2020 that would require an adjustment to the carrying amounts of assets and liabilities and equity or would need to be disclosed under this heading.

6Compensation and shareholdings

Board of Directors

The Members of the Board of Directors received cash compensation of CHF 1.143 million in the year under review (previous year: CHF 1.159 million). In addition, a total of 1’501 GF registered shares with a total market value of CHF 1.472 million were allocated (previous year: 1’500 GF shares with a market value of CHF 1.180 million). Together with other benefits, the total compensation paid to the Board of Directors in 2019 amounted to CHF 2.735 million (previous year: CHF 2.449 million).

The detailed disclosure of compensation to the Board of Directors is as follows:

Compensation of the members of the Board of Directors 2019

Tabelle anzeigen Tabelle ausblenden
Show table Hide table

 

 

Compensation

 

 

 

 

 

 

 

 

Cash compensation

 

Share-based compensation

 

 

 

 

 

 

 

 

Basis fee 1

 

Committee fees

 

Number of shares

 

Share-based compensation 2

 

Other benefits 3

 

Total compensation 2019 4

 

Total compensation 2018 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Andreas Koopmann

 

70

 

200

 

300

 

295

 

24

 

589

 

528

Chairman Board of Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chairman Nomination Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hubert Achermann

 

70

 

80

 

150

 

147

 

12

 

309

 

279

Chairman Audit Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gerold Bührer 5

 

21

 

16

 

45

 

44

 

3

 

84

 

251

Vice Chairman Board of Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Audit Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Roman Boutellier

 

70

 

20

 

150

 

147

 

9

 

246

 

216

Member Compensation Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Riet Cadonau

 

70

 

20

 

150

 

147

 

12

 

249

 

219

Member Nomination Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Roger Michaelis

 

93

 

30

 

150

 

147

 

14

 

284

 

254

Member Audit Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eveline Saupper

 

70

 

40

 

150

 

147

 

13

 

270

 

240

Chairwoman Compensation Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yves Serra 6

 

49

 

21

 

106

 

104

 

7

 

181

 

-

Vice Chairman Board of Directors 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Audit Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jasmin Staiblin

 

70

 

20

 

150

 

147

 

12

 

249

 

219

Member Compensation Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zhiqiang Zhang

 

93

 

20

 

150

 

147

 

14

 

274

 

243

Member Nomination Committee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

676

 

467

 

1’501

 

1’472

 

120

 

2’735

 

2’449

(all in CHF 1'000 and stated in gross amounts, except column "Number of shares")

1 The basis fees include reimbursements for international travel amounting to CHF 22'500 for Mr. Roger Michaelis and for Mr. Zhiqiang Zhang.

2 The share-based compensation consists in the allocation of a fixed number of shares. The amount of the share-based compensation is calculated based on the share value on 31 December 2019, i.e. CHF 983.00.

3 Other benefits represent employer contributions to social insurance funds.

4 The total compensation includes the cash compensation, the share-based compensation and the contribution to social insurance funds.

5 Board of Director until 17 April 2019

6 Board of Director as of 18 April 2019

7 As of 18 April 2019, the additional fee for Board Vice-Chairmanship was discontinued

The compensation paid to the Board of Directors for the year 2019 was higher compared to previous year. The increase results from the difference in the value of the shares (CHF 983.00 on 31 December 2019 compared to CHF 786.50 on 31 December 2018) only. The compensation system for the Board of Directors remained unchanged compared to previous year.

At the 2018 Annual Shareholders’ Meeting, shareholders approved a maximum aggregate compensation amount of CHF 3.750 million (based on a share value of CHF 1’600.00) for the Board of Directors for the compensation period from the 2018 Annual Shareholders’ Meeting until the 2019 Annual Shareholders’ Meeting. For this period, the effective compensation amounted to CHF 2.540 million (based on a share value of CHF 786.50 for the period in 2018 and CHF 983.00 for the period in 2019) and is thus within the approved limits.

At the 2019 Annual Shareholders’ Meeting, shareholders approved a maximum aggregate compensation amount of CHF 3.750 million for the Board of Directors for the compensation period from the 2019 Annual Shareholders’ Meeting until the 2020 Annual Shareholders’ Meeting. This compensation period is not yet completed, a conclusive assessment will be provided in the 2020 Compensation Report.

In the reporting year, no further compensation was paid to Members of the Board of Directors and no compensation was paid to parties closely related to Members of the Board of Directors.

Executive Committee

The Members of the Executive Committee received cash, share-based compensation, social security and pension contributions amounting to CHF 7.488 million for the year under review (previous year: CHF 8.417 million) compared to a total amount of CHF 10.531 million approved by the shareholders at the 2018 Annual Shareholders’ Meeting.

Under the LTI plan, 1’644 performance shares with a total value at grant of CHF 1.628 million were granted to Members of the Executive Committee for the year under review (previous year: 1’752 performance shares with a total value of CHF 1.378 million).

The detailed disclosure of compensation to the Executive Committee in accordance with the Swiss “Ordinance against excessive pay in stock exchange listed companies” is as follows:

Compensation of the members of the Executive Committee 2019

Tabelle anzeigen Tabelle ausblenden
Show table Hide table

 

 

Fixed salary in cash

 

Short-term incentive (STI) in cash 2

 

EPS dependent performance shares PS(EPS)

 

rTSR dependent performance shares PS(rTSR)

 

Share-based remuneration (LTI) 3

 

Social insurance funds 4

 

Pension funds 5

 

Total compensation 2019 6

 

Total compensation 2018 7

Executive Committee 1

 

2’788

 

1’858

 

822

 

822

 

1’628

 

395

 

819

 

7’488

 

8’417

Of whom Andreas Müller, CEO (highest individual compensation) 6

 

673

 

547

 

248

 

248

 

488

 

110

 

188

 

2’006

 

3’197

(all in CHF 1'000 and stated in gross amounts, except columns "EPS dependent performance shares" and "rTSR dependent performance shares")

1 The compensation of the Executive Committee includes the compensation for Yves Serra as Member of the Executive Committee until 17 April 2019. His compensation as Member of the Board of Director, since 18 April 2019, is disclosed in the table Compensation Members of the Board of Directors 2019. The compensation of the Executive Committee also includes the compensation for Mads Joergensen (Executive Committee member since 18 April 2019).

2 The STI is based on the STI plan. The STI for the 2019 business year was approved by the Board of Directors on 20 February 2020. Payment will be made in March 2020.

3 The share-based compensation is based on the LTI plan. The disclosed value corresponds to the grant value of the 2019 LTI (that is granted on 1 January 2020) and is calculated based on the share value on 31 December 2019, i.e. CHF 983.00. The value of the share-based compensation for Yves Serra as CEO is calculated based on the share value on the date of his retirement from the Executive Committee (17 April 2019), i.e. CHF 1'036.00.

4 The social insurance funds expenses represent employer contributions to social security. The amounts indicated are based on the compensation amounts disclosed in the table (including the value at grant of the share-based remuneration).

5 The pension funds expenses represent employer contributions to pension funds.

6 The total compensation includes the fixed salary, the STI, the share-based compensation, as well as social and pension contributions.

7 Total compensation 2019 indicates total compensation for Andreas Müller as acting CEO in 2019. Total compensation 2018 indicates total compensation for Yves Serra as acting CEO in that year.

The total compensation for the CEO and the other Members of the Executive Committee in 2019 was lower than in 2018, which can be explained by the following factors:

  • Fixed salary: The changes in the composition of the Executive Committee, with the appointment of Andreas Müller as the new CEO (replacing Yves Serra), and of Mads Joergensen as the new CFO (replacing Andreas Müller) as of 18 April 2019, lead to a decrease of the fixed salary amounts.
  • STI: The financial performance of the Corporation and the divisions was lower in 2019 than in 2018, which resulted in a lower STI payout (see details in chapter Performance in 2019).
    For the year under review, the STI payout for Andreas Müller was CHF 547’000 which corresponds to 89% of target and 59% of the maximum STI (STI for the CEO in 2018 was CHF 1.247 million which corresponds to 131% of target and 87% of maximum STI).
    For the other Members of the Executive Committee, the STI ranged from 64% to 130% of target (93% to 139% in 2018).
  • LTI: The number of PS granted to the CEO was reduced from 750 to 600 per year compared to previous year. The number of PS granted to each other Member of the Executive Committee remained unchanged compared to previous year.
    Despite a lower number of PS granted to the CEO, the increase in the share price from CHF 786.50 in 2018 to CHF 983.00 in 2019 resulted in an increase in the compensation amount disclosed.
  • Please note that a significant portion of the social security payments of the employer to the Swiss social security system represents a solidarity payment as the individuals will never get any return or benefit due to these payments.

The ratio between fixed and awarded variable compensation in 2019 was as follows:

CEO Compensation 2019

Amounts in CHF 1’000

Executive Committee Compensation 2019

Amounts in CHF 1’000

For a former Executive Committee member a compensation amounting to CHF 543’323 was paid in the year 2019, reflecting the compensation for the remainder of the notice period (not included in the figures above).

No compensation was paid to parties closely related to Members of the Executive Committee.

Performance in 2019

Short-term incentive 2019

The achievement of the business objectives for the 2019 short-term incentive is as follows:

Tabelle anzeigen Tabelle ausblenden
Show table Hide table

 

 

Strategic goal

 

Hurdle 1

 

Achievement/ payout factor 2

Business Objectives

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporation level

 

 

 

 

 

73%

Organic sales growth

 

3-5%

 

1%

 

0%

EBIT margin

 

9-10%

 

6%

 

96%

ROIC

 

20-24%

 

14%

 

86%

 

 

 

 

 

 

 

Division level

 

 

 

 

 

 

Organic sales growth

 

Not disclosed 3

 

Not disclosed 3

 

0%-9%

EBIT margin

 

Not disclosed 3

 

Not disclosed 3

 

70%-148%

ROIC

 

Not disclosed 3

 

Not disclosed 3

 

0%-150%

1 Achievements below the hurdle result in zero payout for the respective business objective; for the organic sales growth objective, the payout for reaching the hurdle starts at 0%, while it starts at 50% for reaching the hurdle for the objectives EBIT margin and ROIC.

2 Adjusted for items relating to structural measures in the division GF Casting Solutions

3 Those targets and hurdles are not disclosed as they are considered commercially sensitive and confidential

Shareholdings of members of the Board of Directors, Executive Committee, or persons related to them

Related persons and companies are defined as family members and persons or companies over which a significant influence can be exercised. Transactions with related persons and companies must be settled on prevailing market terms.

Apart from the compensation paid to the Board of Directors and the Executive Committee and the regular contributions to the various pension fund institutions, no transactions with related persons or companies took place.

Shareholdings Board of Directors

Tabelle anzeigen Tabelle ausblenden
Show table Hide table

 

 

 

 

 

Number of Georg Fischer registered shares as of 31 Dec. 2019

 

Number of Georg Fischer registered shares as of 31 Dec. 2018*

 

 

 

 

 

 

 

 

Andreas Koopmann

 

Chairman Board of Directors Chairman Nomination Committee

 

 

3’059

 

2’759

Yves Serra 1

 

Vice Chairman Board of Directors Member Audit Committee

 

 

8’488

 

 

Hubert Achermann

 

Chairman Audit Committee

 

 

856

 

706

Roman Boutellier

 

Member Compensation Committee

 

 

3’388

 

3’238

Riet Cadonau

 

Member Nomination Committee

 

 

555

 

405

Roger Michaelis

 

Member Audit Committee

 

 

1’156

 

1’006

Eveline Saupper

 

Chairwoman Compensation Committee

 

 

1’217

 

1’067

Jasmin Staiblin

 

Member Compensation Committee

 

 

1’334

 

1’184

Zhiqiang Zhang

 

Member Nomination Committee

 

 

2’376

 

2’226

Total Directors

 

 

 

 

22’429

 

12’591

* The number of Georg Fischer registered shares amounted to 15'752 in 2018 and included the number of registered shares of Gerold Bührer (Vice Chairman Board of Directors and Member Audit Committee until 17 April 2019) of 3'161.

1 Vice Chairman Board of Directors and Member Audit Committee since the Annual Shareholders' Meeting 2019 (since 18 April 2019).

Shareholdings Executive Committee

Tabelle anzeigen Tabelle ausblenden
Show table Hide table

 

 

 

 

 

Number of Georg Fischer registered shares as of 31 Dec. 2019

 

Number of Georg Fischer registered shares as of 31 Dec. 2018*

 

 

 

 

 

 

 

 

Andreas Müller

 

CEO, Head of Corporate Development

 

 

410

 

410

Mads Joergensen 1

 

CFO, Head of Corporate Finance & Controlling

 

 

410

 

0

Joost Geginat

 

President of GF Piping Systems

 

 

100

 

100

Carlos Vasto

 

President of GF Casting Solutions

 

 

112

 

63

Pascal Boillat

 

President of GF Machining Solutions

 

 

750

 

1’000

Total Executive Committee

 

 

 

 

1’782

 

1’573

* The number of Georg Fischer registered shares amounted to 8'758 in 2018 and included the number of registered shares of Yves Serra (Member Executive Committee until 17 April 2019) and Josef Edbauer (Member Executive Committee until 31 August 2018) of 5'003 and 2'182.

1 Member Executive Committee since 18 April 2019.

The registered shares transferred as part of share-based compensation to the Executive Committee are blocked for at least five years.

As of 31 December 2019, members of the Senior Management registered a total of 20’781 shares of Georg Fischer Ltd. A total of 44’992 Georg Fischer shares were held by the Board of Directors, the Executive Committee, and the Senior Management as of 31 December 2019, corresponding to 1.10% of issued shares.

Neither Georg Fischer Ltd nor its Corporate Companies granted any guarantees, loans, advances, or credit facilities to members of the Executive Committee or the Board of Directors or related parties.

Compensation has not involved the allocation of options to current or past members of the Executive Committee or Board of Directors. Neither they nor any related persons possess option rights allocated by GF. As of 31 December 2019, the members of the Executive Committee held no option rights for Georg Fischer registered shares.

In 2019, GF did not make any severance payments to members of the Board of Directors or Executive Committee who left the company in the period under review or earlier.

In order to give you a better experience GF uses cookies. Use of cookies & Disclaimer

https://annual-report.georgfischer.com/19/wp-json/wp/v2/posts/