Annual Report 2004 - Walter Meier

WMH Annual Report 2004
Shared Values

The beginning
In 1937 Walter Meier established a company for tools and machine
tools which has since become an industry leader.
Development
In 1972 the second generation took over managerial responsibility.
With great initiative, Dr. Reto E. Meier subsequently
led the company's expansion into an internationally active
group. In 1976 WMH was established, whose shares have
been listed on the Swiss Exchange since 1985.
Activities
The activities of WMH focus on three areas: tools, air conditioning,
and heating. The main emphasis is on manufacturing and
distributing leading-edge tools, machine tools, and systems
for woodworking and metal processing, air conditioning, and
heating. In all fields of activity the company holds, or strives
for, positions of international market leadership (for heating
systems, in Switzerland only).
WMH operating companies
WMH Tools
WMH Tool Group, Walter Meier, Mato
WMH Air Conditioning
Axair, Axair Far East, Axair Nortec, Nordmann, Novasina,
Axair Climate UK, Axair DE, Axair FR, Axair Kobra CH,
Charles Hasler, AxEnergy, Draabe
WMH Heating
Vescal, Oertli Service, Oertli Induflame
Leading brands
WMH Tools
Chiron, Columbian, DC Swiss, Jet, Kennametal, Mitsubishi,
Nakamura, Powermatic, Toyoda, Waxmaster, Wilton
WMH Air Conditioning
Airwell, Alco, Axair, Blue Box, Bock, Carrier, Condair,
Copeland, Defensor, Draabe, Fujitsu, Hitachi, Nordmann,
Nortec, Novasina, Sanyo, Stulz
WMH Heating
Danfoss, De Dietrich, Elcalor, Grundfos, Metalplast,
Oertli, Oertli Induflame, tabs

WMH Annual Report 2004
WMH Group and
WMH Walter Meier Holding AG

Contents
Chairman’s report 1
Key figures at a glance 2
Group structure 4
Organization 5
WMH Tools Solid: Work which benefits the customer 8
Improved results for WMH Tools 10
WMH Air Conditioning Professional: Aligned to processes and goals 12
Successful year for WMH Air Conditioning 14
WMH Heating Dynamic: Fast, faster, fastest? 16
Pleasing performance by WMH Heating 18
Corporate Governance Corporate Governance 22
Group structure and shareholders 22
Capital structure 22
Board of Directors 23
Group Management 26
Compensation, participation programs, and loans 28
Shareholders’ rights of participation 29
Change of control and defense measures 29
Auditors 30
Information policy 30
Addresses 31

Chairman’s report
I have to report another bad year for WMH. The targets for the
year were substantially underachieved, as were also the strategic
plans. This is both unpleasant and annoying, especially vis-à-vis
our stakeholders, not least the shareholders. Responsibility for this
unsatisfactory situation again lay with the WMH Tools sector.
Both other sectors, WMH Air Conditioning and WMH Heating,
delivered pleasing performances. Seen from this point of view, the
diversification we have pursued – but which has also been challenged
– has proved its worth. Diversification must, above all,
mean spreading the risks and thereby improving our solidity. But it
should, and must, also increase our opportunities. On balance,
WMH has unfortunately not yet achieved this.
So far, the investments which led to the formation of WMH Tool
Group in the USA have drastically failed to fulfill the expectations
to an inexcusable degree. The opportunities were constantly overand
the risks underestimated. Hand in hand with this situation
went management incompetence which was often concealed.
So in the reporting year, decisive corrective action was taken.
Fortunately in the circumstances, we could appoint a competent
successor as CEO of WMH Tool Group from within the company.
The main problems of WMH Tool Group were still in the Retail
Division. It is these approximately 17% of WMH total net sales
that bring substantial losses. This fact can also be seen positively,
in that it demonstrates how healthy the other activities are. The
unsatisfactory side of this interpretation is that a relatively small
proportion of sales could overshadow our other activities to such
an extent. Especially in this division (Retail), WMH had high
goodwill. The WMH Board decided to write off all of this goodwill,
as well as part of the goodwill arising from the engagement
in Axair Climate. In addition, the receivables of a large US customer
had to be extensively revalued. Although these measures had
no effect on liquidity or cash flow, they caused WMH to report
another loss. On the one hand, this is painful and disappointing.
On the other hand, the way has thereby been cleared for WMH
to act with greater flexibility again in the future.
There were also other areas of WMH Tools, for example in Switzerland,
where the level of business was inadequate. There were,
nonetheless, also bright spots and successes in this sector, for
example with Jet woodworking machines, and machine tools at
Mato. Very pleasing were the successes and growth of Jet and
Wilton outside of the USA, especially in Europe.
As already stated, the WMH Air Conditioning and WMH Heating
sectors are performing well, even though the economic environment
remains tough. Numerous notable successes and events
could be marked up. I will mention four which have particularly
impressed me. Thanks to Axair (Condair air humidification) the
new A380 Airbus can be built; thanks to Draabe air humidification,
more than 2 million Energizer batteries are produced every day in
Switzerland for export all over the world; numerous orders, both
large and small, brought substantial growth to Axair in China; and
by acquiring further activities such as those of Strebelwerk AG,
Oertli Service was able to expand its leading position in Switzerland's
heating service market.
1
WMH Annual Report 2004
Many WMH goals and mottos of the past have unfortunately
deteriorated into mere clichés. But now they definitely have to be
taken seriously, and we want to reactivate these still-valid goals.
In particular, this means long-term, sustainable generation of
added value. Our basic SPD values of solid, professional, and
dynamic are more relevant than ever before, and must and will
now be gradually given substance again. It is for this reason that
our Annual Report also bears the title “Shared Values”.
In 2004, WMH generated Group net sales of 707.9 million CHF
(693.3 million CHF). There was a pleasing improvement in EBITA
to 26.8 million CHF (17.7 million CHF) and in free cash flow to
36.9 million CHF (12.4 million CHF). As a consequence of writing
off the goodwill already mentioned, there is again a loss of
9.1 million CHF (9.9 million CHF). The Board of Directors proposes
to the Annual General Meeting – hopefully for the last time
far into the future – to forego payment of a dividend.
In the reporting year Heinz Rüegg, CEO for many years, retired
and relinquished his membership of the Board of Directors. With
effect from March 1, 2004, Hans-Peter Diener, Dipl. Ing. ETH,
MBA, was appointed new CEO of WMH, and Dr. Jacques Sanche
and Martin Scholl, MBA, were made members of WMH Group
Management.
As always, I especially wish to thank our stakeholders most
sincerely. First and foremost, of course, this still means our real
employers, our customers. Then our employees, and all others
who are in any way dependent on us, as well as our providers of
capital.
WMH Walter Meier Holding AG
Dr. Reto E. Meier
Chairman of the Board of Directors

Key figures at a glance
WMH Group
mil. CHF 2001 2002 2003 2004
Net sales 614.5 756.4 693.3 707.9
Operating income (EBITA) 33.7 38.1 17.7 26.8
Net income/loss 19.2 20.6 -9.9 -9.1
Cash flow from operating activities 33.0 36.0 19.8 47.3
Cash flow from investing activities -53.3 -30.3 -7.4 -10.4
Free cash flow/cash drain (-) -20.3 5.7 12.4 36.9
Current assets 253.5 312.5 263.2 267.6
Long-term assets 115.5 141.0 110.9 78.6
Liabilities 231.3 289.1 236.0 223.6
of which interest-bearing 100.0 113.3 80.2 67.5
Shareholders’ equity 137.7 164.4 138.1 122.7
Return on shareholders’ equity (ROE) % 14.4 13.6 -6.5 -6.7
Return on total assets used for operations (ROA) % 11.9 11.9 5.5 8.1
Return on net sales (ROS) % 3.1 2.7 -1.4 -1.3
Number of employees (year-end) 1400 1903 1779 1834
Key figures in USD and EUR
(All figures are converted at the year-end exchange rate) 2003 2004 2003 2004
mil. USD mil. USD mil. EUR mil. EUR
Net sales 560.5 625.5 444.6 458.6
Operating income (EBITA) 14.3 23.7 11.3 17.4
Net income -8.0 -8.1 -6.3 -5.9
Cash flow from operating activities 16.0 41.8 12.7 30.7
Cash flow from investing activities -6.0 -9.2 -4.7 -6.7
Free cash flow/cash drain (-) 10.0 32.6 8.0 23.9
Current assets 212.8 236.5 168.8 173.4
Long-term assets 89.7 69.5 71.1 51.0
Liabilities 190.8 197.6 151.3 144.9
of which interest-bearing 64.8 59.7 51.4 43.7
Shareholders’ equity 111.6 108.4 88.6 79.5
Year-end exchange rate USD 1.2370 1.1316
Year-end exchange rate EUR 1.5595 1.5434
WMH Walter Meier Holding AG
2001 2002 2003 2004
Dividend income mil. CHF 25.5 24.0 11.5 17.1
Net income mil. CHF 9.0 7.0 2.0 2.9
Share price year-end (adjusted) CHF 60.00 59.45 63.25 64.00
Dividend per registered share (adjusted) CHF 3.00 3.25 0.00 0.00

Net sales
mil. CHF
800
700
600
500
400
300
200
100
0
Net income
mil. CHF
30
25
20
15
10
5
0
-5
-10
1999 2000 2001 2002 2003 2004
1999 2000 2001 2002 2003 2004
Breakdown of net sales by business sector
mil. CHF
WMH Tools 310.5 (43.9%)
WMH Air Conditioning 234.5 (33.1%)
WMH Heating 162.9 (23.0%)
Breakdown of net sales by geographical region
mil. CHF
Switzerland 290.3 (41.0%)
Other Europe 137.2 (19.4%)
North America 261.4 (36.9%)
Other markets 19.0 (2.7%)
Operating income (EBITA)
mil. CHF
50
40
30
20
10
0
2 3
WMH Annual Report 2004
1999 2000 2001 2002 2003 2004
Cash flow from operating activities
mil. CHF
50
40
30
20
10
0
1999 2000 2001 2002 2003 2004
Distribution of value added
Share of net sales revenue 2003 2004
mil. CHF mil. CHF
Input (purchases of raw materials, components, supplies, etc.) 559.5 563.1
Depreciation/amortization 21.7 37.0
Employees 153.8 151.0
Shareholders 9.6 2.4
Government 15.5 23.3
Creditors 5.9 5.7
Company (including share of minority interests in net income) -19.5 -11.6
Net sales revenue 746.5 770.9

Group structure
WMH Tools
WMH Tool Group
Hand tools, power tools, and machines
for woodworking and metalworking
Walter Meier
Tools and machine tools
WMH Air Conditioning
Axair Products
Humidification systems
Axair Distribution
Systems for air conditioning
and refrigeration
Axair Engineering
Adiabatic humidification and
cooling systems
WMH Heating
Vescal
Components for heating systems
Oertli
Maintenance of heating systems
Oertli Induflame
Industrial burners
WMH Tools Dr. Jacques Sanche
WMH Tool Group Dr. Jacques Sanche
Industrial (USA) Hardy Hamann
Retail (USA) Dr. Jacques Sanche
Europe (CH) Marcel Baumgartner
Walter Meier
Machines (CH) Hans Schaad
Tools (CH) Hans Peter Jost
Mato (CH) Bruno Rieser
WMH Air Conditioning Hans-Peter Diener
Axair Products Raimund Baumgartner
Axair (CH) Raimund Baumgartner
Axair Nortec (CA) Urs X. Schenk
Axair Far East (CN) Lawrence Tse
Novasina (CH) Moritz Hänsli
Nordmann (CH) Christian Werro
Axair Distribution Martin Scholl
Axair (D) Hans Joachim Socher
Axair (F) Denis Haton
Axair Kobra (CH) Ueli Grossenbacher
Axair Climate (UK) Paul Kingswell
Charles Hasler (CH) Karl Baumann
Axair Engineering Rolf Padrutt
AxEnergy (CH) Rolf Padrutt
Draabe (D) Tomas Kleitsch
WMH Heating Martin Scholl
Vescal (CH) Martin Scholl
Oertli Service (CH) Martin Kaufmann
Oertli Induflame (CH) Max Hauswirth

Organization
Board of Directors
Group
Management
Auditors
Name and nationality Year of birth Position Elected Term of office ends
Dr. Reto E. Meier 1943 Chairman of the 1976 2005
Swiss Board of Directors
(non-executive)
Prof. Dr. Kurt Schiltknecht 1941 Vice Chairman of the 1990 2005
Swiss Board of Directors
(non-executive)
Gottlieb Knoch 1942 Member of the Board of Directors 2001 2007
Swiss (non-executive)
Werner Kummer 1947 Member of the Board of Directors 2003 2006
Swiss (non-executive)
Name and nationality Year of birth Position
Hans-Peter Diener 1955 CEO, WMH Air Conditioning
Swiss
Dr. Jacques Sanche 1965 WMH Tools
Swiss/Canadian
Martin Scholl 1961 WMH Heating
Swiss
Werner Staub 1945 CFO
Swiss
Statutory auditors/Group auditors Duration of mandate Auditor in charge Assumption of office of auditor in charge
Ernst & Young AG 1979–2004 Willi Holdener 2003
Zurich
4
5
WMH Annual Report 2004
At the Annual Meeting of Shareholders on May 2, 2005, Heinz Roth, Uitikon, will be proposed as a new member of the Board of Directors.

Michele Peretta wires an “Mk5” resistance steam humidifier from Axair

Shared values – A common value system
is a source of great strength which contributes
decisively to entrepreneurial success.

WMH Tools Solid Professional Dynamic
“We strive for sustainable profitability through
generation of cash flow – while maintaining
a balanced spread of risks.”

8
9
WMH Annual Report 2004
Solid:
Work which benefits the customer
Staying in business in the long term is certainly not made easier
by the rapid pace of developments in the global market. Continuous
change brings a never-ending stream of new opportunities,
but also many risks. For this reason our motto must be: “Don't
jump on every bandwagon, but grasp the right opportunities!”
This calls for solid management which constantly strives to
improve value creation while spreading the risks.
In both products and services, the demand is still for quality.
WMH Tools, WMH Air Conditioning, and WMH Heating offer
leading-edge products: the result of solid work from development
through production to on-site installation – where appropriate,
in collaboration with proven partners. Quality manifests itself not
only in impressive technology but also in care for the environment;
and beyond that, in good contacts with customers, partners,
and employees. Quality is the basis for long-term relationships
with all categories of stakeholder.
Quality, but not at any price
It is acceptable for quality to cost something, but the price must
still be right. Which is why one objective is always to optimize costs.
A further contribution to improved value creation is obtained
from a well-considered geographical expansion of the business.
Especially in the newer markets of Eastern Europe and Asia, it is
vital not to jump on every bandwagon, but to weigh up the risks
carefully.
“Recognizing risks promptly and assessing them skillfully is just
as vital as it is demanding. To keep track of the market properly,
you have to have the right instruments. So in Supply Chain
Management we’ve set up early warning systems, standardized
the processes, and interlinked them. Even so, we still have to use
our intuition from time to time.”
Bruno Rieser, President, MATO CNC Machines AG, Switzerland
Manage the risks
Risk management at WMH includes systematic diversification. It is
also reflected in the structure of the Group. However, diversification
must always be related to the core businesses. Risk management
means always knowing what the competition is doing, what is
happening in the market, and the trends that are developing.
It also includes the need to know our own strengths and weaknesses,
and where we stand. Reporting is therefore required which
is tailored to the different levels of management.
Top right and bottom right: Nakamura-Tome Super NTJ from Walter Meier:
CNC of the latest generation
Middle: Kennametal modular quick-change system on the Super NTJ

WMH Tools
WMH Tools: Improved results
For WMH Tools the focus lay on initiating the turnaround of
WMH Tool Group in the USA. While the Group's Industrial
Division made good progress, higher prices for raw materials
negatively impacted margins in the Retail Division, causing it
to make a loss. In view of the still weak income situation, the
goodwill of this division was fully written off.
Numerous measures taken by WMH Tool Group enabled it to
successfully initiate the turnaround in the American market. The
company reached break-even, but the expectations were far from
fulfilled. This was mainly due to the massive increases in prices for
raw materials, which could not be passed on to retail customers
to the anticipated extent, as well as to value adjustments on
inventories and receivables. Restructurings stabilized the logistics
processes, improved service to customers, and reinforced the
market presence – resulting in the good market position of the
Industrial Division being strengthened further.
Walter Meier and Mato strove for continuous improvements in
a difficult market environment. Thanks to these efforts, Mato
succeeded in surpassing its targets for the year. Walter Meier did
not quite meet them, not least because of changes in its product
portfolio.
Multifaceted market development in the USA
WMH Tool Group faced a variety of developments in its home
market in the USA. Whereas the Industrial Division (specialty distributors)
fulfilled expectations in spite of the tough conditions,
the Retail Division (home centers) remained disappointing. There
was increased demand in the product segments of metalworking
and holding systems. Woodworking lagged behind expectations.
Despite the stagnant market, WMH Tool Group was able to
expand its share of the woodworking market in the USA, and
even outpaced the performance of the market leader. With innovative
products and strong brands it strengthened its solid number
two position. The upswing in the market for holding systems
benefited the WMH Tool Group. The metalworking sector also
developed much better than in the preceding years.
New market shares in Europe
In Eastern Europe, the markets are still very much in a startup situation.
This allowed WMH Tool Group to penetrate successfully
into new countries. Sales growth was especially strong in Russia.
However, existing markets such as Germany, the UK, and France
were also successfully expanded. The demand in Europe was
mainly for woodworking machines.
Top: Tommy Tran, WMH Tool Group, at a Jet combination disk/belt sander
Bottom: Jet wood lathe with copying attachment
Price spike in raw materials
The worldwide transfer of production to China caused shortages
of energy and metal resources in China and Taiwan at the beginning
of the year, which consequently led to supply problems for
WMH Tool Group. The drastic price increases for raw materials
were also felt on the purchasing side. In the Retail Division particularly,
the price increases could only be passed on to customers
with delay.
Uneven demand in Switzerland
While Mato, the leading supplier of Taiwanese machine tools, was
able to add to its market shares again in Switzerland, Walter Meier
was confronted with difficult conditions for sales of its high-quality
products. The company was faced with slow demand and the
effects of postponed investments.
Improved customer satisfaction
A survey of customers at the start of the year caused WMH Tool
Group to analyze its customer service and its supply delays.
Improved logistics processes and training of customer service
staff contributed substantially to raising the performance level. In
Europe, new customer relationships were formed and existing
ones intensified. Actions included inviting European customers to
Asia to meet suppliers locally and observe the processes where
they occur.

Proven products, new products
WMH Tool Group presented its expanded product range at the
most important American and European exhibitions for woodworking
and metal processing. The positive response at the
exhibitions, as well as various product tests by American industry
journals, were witness of the success. A Powermatic planer won
the coveted “Innovative Tool Award” of the “Workbench” woodworking
magazine. Walter Meier and Mato presented new tools
and machines at Prodex 2004, the largest trade fair in Switzerland.
Customer benefits and performance were increased yet
again. All three companies pay great attention to safety aspects
when developing or selecting new products.
Strengthening the organization
Organizational development was a major issue in the reporting
year, especially for WMH Tool Group. Its management crew
defined new responsibilities and organizational units in the USA.
In addition, collaboration between the subsidiaries in the USA,
Asia, and Europe was intensified and the business processes were
stabilized.
Improved financial results
WMH Tools achieved better results than in the previous year, but
was still unable to fulfill the expectations. Despite external factors
such as higher costs for raw materials and transport, WMH Tool
Group earned good income in its Industrial Division. In the Retail
Division, in addition to losses because the price increases could
not be passed on to customers to the extent which was envisaged,
further value adjustments also had to be made on inventories
and receivables. In view of the still inadquate income
situation, the goodwill of the Retail Division amounting to
15.8 million CHF was fully written off. As expected, the business
of WMH Tool Group being built up in Europe made encouraging
progress and produced good results. Mato exceeded expectations
and Walter Meier also delivered satisfactory results.
WMH Tools closed the reporting year with net sales of 310.5 million
CHF (-2.8%, net of exchange and consolidation effects +3.2%).
The weak dollar had a strongly negative impact on the development
of net sales. Operating income (EBITA) at 2.2 million CHF
was substantially higher than last year (-0.3 million CHF).
Business year 2005 will also present challenges to WMH Tool
Group. Conditions in the retail channel will continue to be tough.
On the other hand, the company expects further progress on
income in the Industrial Division. Walter Meier and Mato can
assume that the positive signals from Prodex 2004 will be confirmed.
However, the market conditions for both companies
remain difficult. In the year ahead, their customers will continue
to exercise a certain degree of restraint with regard to replacements
and new investments.
Key figures
mil. CHF 2001 2002 2003 2004
Net sales 284.9 394.6 319.6 310.5
Operating income (EBITA) 16.0 13.6 -0.3 2.2
EBITA margin (%) 5.6 3.4 -0.1 0.7
ROA (%)
*incl. goodwill
10.6 7.5 -0.2 1.2*
Number of employees
2001 2002 2003 2004
Average 364 733 604 569
Change Y-on-Y (%) -14.6 101.4 -17.6 -5.8
Net sales 2001–2004
mil. CHF
01
02
03
04
0
Net sales by geographical sectors
mil. CHF
10
WMH Annual Report 2004
Switzerland 56.0 (18.0%)
Other Europe 9.4 (3.0%)
North America 237.4 (76.5%)
Other markets 7.7 (2.5%)
11
40 80 120 160 200 240 280 320 360 400

WMH Air Conditioning Solid Professional Dynamic
“We plan thoroughly and make well-founded
decisions which we implement efficiently and
consistently.”

12
13
WMH Annual Report 2004
Professional:
Aligned to processes and goals
Underlying every successful product is a successful process.
The goal is approached step by step. The better the planning,
the smoother the implementation; the clearer the communication,
the easier the coordination. Through professional work
our employees create added value for our customers and shareholders
as well as a good image for our company.
While a certain amount of disorder is necessary to generate an
idea, when evaluating its marketability and practicality a systematic
procedure is called for. A convincing idea must be followed by
a thorough planning process. Responsibilities must be defined
clearly and milestones set realistically. The project leaders must
ensure that everyone involved in the project is working with the
same information and pursuing a common goal. Planning means
looking ahead, making decisions promptly, but also anticipating
what else could happen and being appropriately prepared.
Decisive action
A decision without action is of little value. Good decisions which
are successfully implemented usually result from processes in which
everyone affected was involved. Before decisions are made, adequate
time must be allowed for discussion of opinions, questions,
and possible fears. This ensures a better solution, greater understanding,
and higher acceptance. But once the direction has been
decided, the goal is pursued jointly and consistently.
“Today, constant presence in the market is decisive. The demand
is for reliable and innovative products. We place strong emphasis
on customer proximity. Our sales teams work tirelessly at deepening
customer relationships. As a result, we can communicate the
benefits of our products effectively.”
Heiko Grasse, Head of Air Conditioning Systems, Axair GmbH, Germany
Knowledge and information
Anyone wishing to make well-founded decisions must have the
right information. Knowledge management and information
gathering are therefore given great importance at all levels of
the company. Handling information calls for a strong sense of
responsibility – no matter whether decisions are being prepared or
results communicated. Even in difficult situations, important
information should not be delayed or watered down – either
internally or externally. And needless to say, words and actions
must coincide. Only if they do can the company maintain credibility
with all its stakeholders.
Left: Romy Blöchlinger, Axair AG, Moritz Hänsli, Novasina
Middle: Sadat Hida installs an Axair steam humidifier
Right: Heating elements of an “Mk5” resistance steam humidifier from Axair

WMH Air Conditioning
WMH Air Conditioning: Successful year
WMH Air Conditioning largely achieved the year's targets and
clearly surpassed the results of the previous year in spite of the
weak dollar. The sector successfully invested in new markets
and innovative products.
WMH Air Conditioning implemented the corporate strategy on
schedule and according to level in the reporting year. The focus
was on further expansion of the core business fields of Axair
Distribution (components for air conditioning and refrigeration
systems), Axair Engineering (systems for adiabatic humidification
and cooling), and Axair Products (air humidification units and
systems). The product portfolios of the distribution companies
were thereby optimized and Axair's own brand strengthened.
Axair Products initiated global sourcing. Parallel to this, Axair and
Axair Nortec prepared for joint development of the next generations
of products.
Stable market position
Development of the markets of WMH Air Conditioning was varied.
Whereas the demand for unit air conditioners rose above the previous
year despite relatively cool temperatures in the summer, the
market for air humidification stagnated. Humidification for the
printing industry in Germany had still not recovered from the low
point of the preceding year. Demand in the energy sector collapsed
almost completely.
With few exceptions, WMH Air Conditioning could maintain its
market shares or even expand them. An increase was achieved in
the still-growing market in China. Presence was also strengthened
in France, Switzerland, and the Netherlands. Recently, these markets
are also being successfully exploited by Draabe.
Unfavorable currency and price development
Currency exchange rate movements in the second half of the year
were again mostly to the disadvantage of WMH Air Conditioning.
Axair Nortec was unable to compensate for the fall in value of the
US dollar even though it purchased components in the American
region. The increases in world market prices for raw materials
such as steel and plastic were initially offset by the WMH companies
boosting their efficiency and moderately adjusting their
prices. However, the scope for flexibility is now exhausted. Further
increases will reduce margins.
Satisfied customers
WMH Air Conditioning could take pleasure in having satisfied
customers. The customer surveys produced a generally good score,
but also indicated potential for improvement. Services will be
correspondingly optimized in 2005.
Product range expanded
Axair Distribution expanded the range of small unit air conditioners
under its own brand name of Axair. Thanks to high quality and
central purchasing, good margins were obtained. The introduction
of Axair Dehumidification in Germany proceeded successfully. Its
own program of dehumidification products will therefore also be
launched in France and Switzerland. Corresponding preparations
have been made. In addition, Axair Distribution continued to promote
transnational concentration on the core brands.
Successfully innovative
Axair Products maintained its innovation cycle. The Mk5 steam air
humidifier captured market shares in Germany. The product also
made good progress in the NAFTA region following its introduction
the previous year. The latest generation of gas steam humidifiers
confirmed the expectations. Its range of application will be
expanded in 2005. At Axair Engineering, Draabe presented the
renewed TurboFog CFB 3200 product assortment and the LS400
high-purity water atomization, an innovation in this product
group.
Top: Keypad of an “Mk5” Visual from Axair: easy to operate
Bottom: Steam distribution pipe from Axair

Environmental activities
WMH Air Conditioning is leader in the deployment of environmentally
compliant adiabatic humidification systems. The Axair
Group works with suppliers who are committed to environmentally
compliant refrigerants and pioneers in the use of the environmentally
friendly R410A refrigerant. Ecologically efficient
WMH products include the Condair Dual air humidifier from
Axair and the DK heat exchanger from Charles Hasler. WMH Air
Conditioning is active on various specialist committees for environmentally
compliant refrigerants and hygiene in the ventilation
and air conditioning area.
Developing people
Internal education programs complemented by external training
ensure a high level of competence and satisfied employees. Training
measures are based on a solidly grounded survey and assessment
system. Strong emphasis is placed on the training of future
specialists. Apprenticeships are therefore not reduced even when
times are difficult.
WMH Air Conditioning offers training opportunities to partners
and customers. In addition to workshops and seminars, factory
visits are organized to suppliers in Europe, China, and Japan. Also
during the reporting year a second roadshow mobile went into
operation so that even more customers can be given information
at their own location.
To increase efficiency, implementation of the “Parallel” project
continued. Its aim is to introduce best-practice processes and
standardize them across the individual companies. Along with the
striven-for IT optimization, the project will last several more years.
Good financial results
With few exceptions, WMH Air Conditioning succeeded in attaining
its targets for the year and exceeding the previous year's values.
Especially notable are the increased sales of Axair, Axair Kobra,
and Axair Climate, although the latter did not yet complete the
turnaround despite reduced costs. Axair Nortec improved sales
but suffered again under the weak US dollar. Draabe held income
at the previous year's level. Pleasing news is the good result of
Charles Hasler.
In fiscal year 2004, sales by WMH Air Conditioning amounted to
234.5 million CHF, which is an increase of 8.7% relative to 2003.
Operating income (EBITA) at 18.5 million CHF was 35.0% above
the previous year.
WMH Air Conditioning strengthened its basis for successful
business. With unique innovations the company created the
basis for penetration of new market segments in the future.
Axair Engineering achieved first successes with products of
Draabe in the NAFTA market. Development of this market will
continue in 2005.
14
15
WMH Annual Report 2004
Key figures
mil. CHF 2001 2002 2003 2004
Net sales 176.2 205.0 215.7 234.5
Operating income (EBITA) 12.8 18.4 13.7 18.5
EBITA margin (%) 7.3 9.0 6.4 7.9
ROA (%)
*incl. goodwill
16.5 22.7 15.6 18.8*
Number of employees
2001 2002 2003 2004
Average 519 624 663 693
Change Y-on-Y (%) 2.8 20.2 6.3 4.5
Net sales 2001– 2004
mil. CHF
01
02
03
04
0
Net sales by geographical sectors
mil. CHF
25 50 75 100 125 150 175 200 225 250
Switzerland 75.7 (32.3%)
Other Europe 123.7 (52.7%)
North America 23.8 (10.2%)
Other markets 11.3 (4.8%)

WMH Heating Solid Professional Dynamic
“We take action appropriate to the market and
according to the situation. Changes and needs are
recognized promptly. We systematically exploit
opportunities.”

WMH Annual Report 2004
Today, everything has to go fast. The rate of change in technology
and innovation is especially rapid. No sooner is a new
product on the market than its even more sophisticated
successor is being launched. This is the challenge which
market leaders more than any others face anew every day. But
speed alone still does not determine everything.
In the race for ever increasing speed, WMH is a successful competitor
and in many areas sets the pace as market leader. This calls
for a good sense of speed and timing at all levels of the company.
Urgency demands clear priorities. What must be done immediately,
what later today, and what can equally well wait till tomorrow?
No matter whether a service is being provided or a new
strategy developed, the effort must be in proportion to the results,
since time is an important economic resource.
Interested and active
Quickly and promptly into the market is the motto – but with the
right product, please! For WMH, this requires outstanding knowledge
of the market and great technological expertise. Although
employees already possess valuable knowledge, they must also
expand it. An inquiring mind brings success, not only in gaining
new knowledge both personally and in the team, but also in skillfully
exploiting the opportunities presented by the market.
“I enjoy keeping in touch with our customers, and I also make an
effort to get to know other employees in the company. If people
come to me with ideas or suggestions for improvement, I pass
them on to the President.”
Mirjam Philipp, Assistant to the President, Oertli Service AG, Switzerland
16
Flexible and communicative
“What do our customers want? What does the person speaking
to me need? What is important for the shareholders?” – Although
someone approaches their work dynamically and contributes new
ideas, they are only successful if by doing so they respond to a
need. Communicating with our business partners, finding out
what our customers want and their opinions of our products and
services, are absolutely crucial. But asking questions sometimes
prompts answers which are less pleasing to hear. That is healthy,
and demands flexibility as well as tolerance.
17
Dynamic:
Fast, faster, fastest?
Left: Oertli PURN 150 compact heating system: longer service life
thanks to professional maintenance
Middle: Control panel of an Oertli heat pump: state-of-the-art control technology
Right: Jakob Wirth and Christian Mosbeck, Oertli Induflame

WMH Heating
WMH Heating: Pleasing performance
WMH Heating can look back on another successful business
year. Thanks to focused market exploitation and impressive
services, market shares were consolidated, pleasing sales
figures generated, and operating profit boosted to a high level.
Vescal continued to pursue its strategy of strengthening its market
position with professional services and a rounded-out product
assortment. The three segments of heat generation, heat distribution,
and components were systematically expanded.
Oertli Service, whose opportunities for growth in a contracting
maintenance market are limited, was able to expand successfully
by acquiring the activities of smaller service companies. Thanks to
its diverse offerings – ranging from servicing gas appliances and
heat pumps through maintenance of combined heating/power
generation plants to cleaning boilers – the company successfully
reduced its dependence on pure oil-burner servicing.
Oertli Induflame, which focuses on burners for industrial largescale
and asphalt plants, was able to expand its position as European
market leader in road construction. First successes are showing in
China.
Strong market position
Vescal and Oertli Service operate in saturated markets. Both
companies stood up well to the predatory competition. Vescal
defended its leading position in western Switzerland as well as in
the underfloor heating segment. The market position in Germanspeaking
Switzerland was expanded, thanks partly to new sales
management. Oertli Service added to its portfolio of heating
maintenance contracts. This was achieved by acquiring the
service business of Strebelwerk AG and Neutherm AG on the one
hand, and concluding new service contracts on the other.
Development of the different market segments of Oertli Induflame
was varied. Whereas equipment construction for large industrial
plants did not match expectations, the European market leadership
position for asphalt plants was strengthened further.
A successful market entry was accomplished in China.
Fulfilling customers' wishes
WMH Heating defines itself by a strong customer orientation.
The level of customer satisfaction is systematically measured and
evaluated by means of surveys. Very good marks were received
for the handling of offers and complaints and the reliability of
deliveries.
Also in the reporting year Vescal optimized the organization of its
branches and thereby improved delivery times. Some cash-andcarry
stores were converted to self-service and, through having
their own transportation service, were able to take account of
individual customer needs. Oertli Service reduced the frequency
of faults on installations with maintenance contracts to a minimum.
Impressive products
Field trials of the new ThermMix oil burner turned out promisingly
for Vescal. By contrast, “tabs” thermoactive building systems
suffered a setback in the reporting year since only a handful of
large projects for office buildings were realized. This product line
is being augmented with a full range of cooling ceilings. It is also
planned to expand the offerings with wood-piece and pellet
boilers, fan heaters, and floor convectors. Oertli Service extended
its services to include maintenance contracts for heat pumps and
also began cleaning hot-water boilers.
Oertli Induflame achieved a breakthrough with the new generation
of compact industrial burners (cib). The coal-dust burner,
which was developed under contract from a customer, also
gained impressive acceptance as a consequence of the higher oil
prices.
Top: Oertli PURN 150 compact heating system
Bottom: Robert Kürsteiner: inspection service on an Oertli heat pump

Caring for the environment
WMH Heating takes care to adhere to ecological principles.
Whenever possible, goods are transported by rail, and transfer of
products between logistics centers is avoided. All drivers of company
owned vehicles are given training in environmentally aware
driving at special courses. Eco-balances are drawn up annually for
every company.
Vescal promotes eco-efficient products as, for example, heat
pumps, solar systems, and combined heating/power generation
plants. Oertli Induflame has set new standards with its development
of the “Burner Gen Pack”. With its combined micro
gas-turbine for electric power and heat production, this burner
substantially reduces emissions by comparison with conventional
systems.
Managing risks
The business activities of WMH Heating are directed toward sustainable
generation of cash. Risks are managed by constantly
analyzing the quality of the services and products and adapting
them to the prevailing conditions.
Moving forward
In the reporting year Vescal received the new ISO 9001/2000
certification. At Oertli Service the new information and reporting
system proved itself in the daily work of the service technicians;
the efficiency of the system was improved further. Integration of
the acquired service organizations was accomplished smoothly
and without loss of customer relationships. Both Vescal and Oertli
Service had low levels of employee turnover. This is partly attributable
to the heavy investments that are being made in internal
and external education and training.
Oertli Induflame entered into a cooperation partnership with a
Chinese manufacturer of large boiler systems for the production
and installation of burners. The quality of the products already
meets the requirements of the European customers who will
deploy the burners in the Chinese market.
Excellent financial results
WMH Heating exceeded its targets and again achieved a good
result. The largest contribution to the increased result in the
reporting year came from Vescal.
At the end of the 2004 business year, WMH Heating reported
net sales of 162.9 million CHF, representing an increase of 3.1%
over 2003. Operating income (EBITA) at 13.5 million CHF was
10.7% above the previous year.
WMH Heating will continue to give priority to continuous improvement
of efficiency in its core business and systematically
expand into related growth markets. With new products and
services a moderate increase in the performance indicators should
be possible.
18
19
WMH Annual Report 2004
Key figures
mil. CHF 2001 2002 2003 2004
Net sales 153.4 156.8 158.0 162.9
Operating income (EBITA) 10.8 11.5 12.2 13.5
EBITA margin (%) 7.0 7.3 7.7 8.3
ROA (%)
*incl. goodwill
16.6 19.5 23.1 24.6*
Number of employees
2001 2002 2003 2004
Average 525 528 527 519
Change Y-on-Y (%) 0.6 0.6 -0.2 -1.6
Net sales 2001– 2004
mil. CHF
01
02
03
04
0
Net sales by geographical sectors
mil. CHF
25
50
75
100
125
150
175
Switzerland 158.6 (97.3%)
Other Europe 4.2 (2.6%)
Other markets 0.1 (0.1%)
200

Responsible management is transparent.

Patrizia Altenburger, Bruno Amherd,
Marco Cau, Moritz Hänsli, Axair Group

Corporate Governance
The following information regarding Corporate Governance
complies with the requirements of the SWX Swiss Exchange. For
clarity, some individual paragraphs have been combined under
one heading.
1. Group structure and shareholders
Where relevant, reference is made to other information regarding
Corporate Governance contained in this Annual Report or in the
Financial Report. Unless stated otherwise, all information relates
to the status on December 31, 2004.
1.1 Group structure
Operational structure of the Group See page 4
Information on the company's share See Financial Report, page 5
Consolidated companies See Financial Report, page 25
1.2 Significant shareholders
Information on significant shareholders See Financial Report, page 4
There are no stockholder retainer contracts, or other similar agreements, between significant shareholders regarding the registered
shares of WMH held by them, or regarding the exercise of shareholders’ rights.
1.3 Cross shareholdings
WMH has not entered into any cross shareholdings with other companies regarding shares or voting rights.
2. Capital structure
2.1 Capital
Information on capital See Financial Report, page 4
2.2 Authorized and conditional capital
On December 31, 2004, WMH had no authorized or conditional
capital.
2.3 Changes in capital
As in previous reporting years, there was again no change in the
total amount of share capital.
2.4 Shares and participation certificates
Information regarding the share capital is shown on page 4 of the
Financial Report. All registered shares carry equal voting rights,
irrespective of their nominal value. Bearer-reserved shares carry
no voting or dividend rights. WMH has not issued any participation
certificates.
2.5 Bonus certificates
WMH has not issued any bonus certificates.
2.6 Restrictions on transferability and nominee registrations
All shareholders who are entered in the register of shareholders
are entitled to vote. There are no restrictions on the acquisition or
sale of shares. Registration of a registered share requires evidence
of its acquired ownership or entitlement to a beneficial interest.
2.7 Convertible bonds and options
WMH has not issued any convertible bonds. Information regarding
options for managerial employees is contained in the Financial
Report, page 17.

3. Board of Directors
Werner Kummer Dr. Reto E. Meier Prof. Dr. Kurt Schiltknecht Gottlieb Knoch
Dr. Reto E. Meier, non-executive member
22
23
WMH Annual Report 2004
3.1– 3.2 Members of the Board of Directors, their activities and business interests
A list of members of the Board of Directors with their nationality, age, position, and term of office is contained in the table on page 5.
Education/qualifications Doctor of Economics (Business Administration)
Former positions included Chairman of the Board of Directors of Walter Meier AG
Chairman of the Board of Directors of a mountain railway group
Member of the Board of Directors of an industrial group
and a bank
Board member of the Swiss Association of Employers,
Zurich Chamber of Commerce, Zurich Association of Employer
Organizations
Chairman of the Zurich Association of Commercial Companies
Vice Chairman of the Swiss Technorama Science Center&
Association for Technology&Business
Present positions Chairman of the Board of Directors of Greentec AG
Chairman of all WMH companies in Switzerland
Chairman of the WMH Pension Foundation
Executive Board Member, German-Swiss Chamber of Commerce

Corporate Governance
Professor Dr. Kurt Schiltknecht, non-executive member
Education/qualifications Doctor of Economics
Former positions included Research at the Swiss Federal Institute of Technology, Zurich,
OECD
Director of the Swiss National Bank
Chairman of the management committee of Nordfinanzbank
Chairman of the Board of Directors of Bank Leu
Member of the Governing Board of the Swiss National Bank
Present positions Member of the Boards of Directors of BZ Group, BZ Bank,
BZ Trust, Klosterfrau
Chairman of the Board of Directors of Intershop
Honorary professor, University of Basel
Gottlieb Knoch, non-executive member
Education/qualifications Master of Engineering, Swiss Federal Institute of Technology
MBA, Stanford University
Former positions included McKinsey&Co.
CEO Bachem
Chairman of the Board of Directors and CEO Tecan
Present positions Member of the Board of Directors of Bachem AG
Member of the Board of Directors of Rothschild Bank AG
Werner Kummer, non-executive member
Education/qualifications Master of Engineering, Swiss Federal Institute of Technology
Doctor of Engineering, Milan Polytechnic
MBA, INSEAD
Former positions included Partner with Braxton Associates Management Consultants,
Boston, London, and Paris
Management positions with Pelikan Corp., Zug,
and Feintool AG, Lyss
CEO Schindler Elevator Ltd. (Switzerland)
Executive Vice President Schindler Asia/Pacific
CEO Forbo Holding AG
Present positions Senior Advisor for M& A, Schindler Management AG
Member of the Board of Directors and Chairman of the Audit
Committee of Bâloise Holding
Board Member, Zurich Chamber of Commerce
Heinz Rüegg, who was elected to the Board of Directors in 1979,
retired at the General Meeting of Shareholders held on May 4, 2004.
At the Annual Meeting of Shareholders on May 2, 2005,
Heinz Roth, Uitikon, will be proposed as a new member of the
Board of Directors.
No members of the Board of Directors were in the last three years
members of WMH Group Management or of the management of
a WMH company.

3.3 Cross-involvement
There are no cross-memberships between the Board of Directors
of WMH Walter Meier Holding AG and any other listed company.
3.4 Elections and terms of office
The Board of Directors comprises at least three members, who are
each elected for three years by the General Meeting of Shareholders
in different years. On expiry of their term of office, members
are eligible for re-election provided that they have not yet
reached the age limit of 70 years. Information regarding the date
of first election and remaining term of office of the present members
is shown on page 5.
All members of the Board of Directors must be shareholders,
or representatives of a legal entity or company which is a shareholder
of WMH Walter Meier Holding AG.
3.5–3.6 Internal organization and regulation of authorities
The Board of Directors determines its organization autonomously.
In particular, it determines its Chairman and its secretary, who
minutes the meetings. The secretary need not be a member of the
Board of Directors.
The Board of Directors directs and supervises the management of
the company, represents the company externally, and determines
who is authorized to sign on the company's behalf. The Board of
Directors definitively resolves all matters which are not specifically
defined by the law or statutes as being the responsibility of any
other governing body.
According to the WMH Organizational Regulations, and subject
to compliance with applicable laws, the Board of Directors may
delegate management in whole or in part, and/or representation
of the company, to one or more members of the Group Management
or to third parties.
The most important non-transferable and inalienable responsibilities
of the Board of Directors are the following:
– ultimate direction of the company and issuance of necessary
instructions
– definition of the form of organization
– establishment of systems and procedures for accounting,
financial control, and financial planning, to the extent
necessary for management of the business
– appointment and discharge of persons charged with
managing and representing the business
– ultimate supervision of the persons charged with managing
the business, especially with regard to their compliance
with the law, statutes, bylaws, and instructions
– preparation of the Annual Report, and preparation of General
Meetings of Shareholders and execution of their resolutions
– notification of the legal authorities in case of insolvency.
24
25
WMH Annual Report 2004
Resolutions by the Board of Directors are determined by simple
majority of the members present. Should voting for and against
be equal, the Chairman has the casting vote. In the reporting
year, the Board of Directors met five times. Further business was
handled by correspondence.
In view of the small Board of Directors, the formation of special
standing committees was so far not appropriate. On the other
hand, certain special responsibilities are held by the Chairman
of the Board alone. The Board of Directors has delegated the
management of ongoing business to the Group Management
under the Chairmanship of the CEO. Group Management provides
regular information to the Board of Directors regarding the
state of business of WMH. In case of need, the members of the
Board of Directors may request all available information about the
company. By tradition, the members of Group Management and,
if necessary, other representatives of management, are invited
to meetings of the Board of Directors. The Board of Directors
of WMH usually visits one WMH company each year.
3.7 Information and control instruments vis à vis
the Group Management
The Board of Directors bases its information on the standardized
reporting which has been introduced throughout the Group, and
on the associated Group instructions. The information published
in the Annual Report is also based on this reporting. The auditors
report to the Board of Directors any weaknesses detected while
performing the annual audit of the financial statements.

Corporate Governance
4. Group Management
Hans-Peter Diener Werner Staub Martin Scholl Dr. Jacques Sanche
4.1– 4.2 Members of Group Management, their activities and business interests
A list of the members of Group Management, with their nationality and function, is contained in the table on page 5.
Hans-Peter Diener, executive member (CEO)
Education/qualifications Master of Engineering, Swiss Federal Institute of Technology
MBA, Harvard Business School
Former positions included Jacobs Suchard
Member of the Management Committee of Distral
Member of the Management Committee of Saurer
Present positions Since 1995 member of WMH Group Management
Since 2004 CEO of WMH
Board member of various WMH companies
Executive board member of the Harvard Club

Heinz Rüegg, formerly CEO of WMH, retired from the Group
Management on February 29, 2004.
4.3 Management contracts
Neither WMH nor its Group companies have entered into any
management contracts with third parties except for a fee contract
with Greentec AG. The corresponding payments are included in the
compensation amounts to members of governing bodies shown on
the next page.
26
27
WMH Annual Report 2004
Dr. Jacques Sanche, executive member
Education/qualifications Doctor of Information Management, University of St.Gallen,
Switzerland
Former positions included IMG, Boston Consulting Group
Company President of Novasina, Stäfa Wirz, Oertli Service,
Vescal
Present positions Since 2004 member of WMH Group Management
Member of the Board of Directors,
Stäfa Wirz Ventilator AG, Bern
Board member of various WMH companies
Martin Scholl, executive member
Education/qualifications MBA, GSBA and SUNY
Former positions included Swiss Bank Corporation (now UBS)
Company President of Axair Kobra
Head of Axair Distribution Division
Present positions Since 2004 member of WMH Group Management
Vice Chairman of the WMH Pension Foundation
Member of the Investment Committee,
WMH Pension Foundation
Board member of various WMH companies
Werner Staub, executive member (CFO)
Education/qualifications Diploma in Business Administration;
Swiss Certified Public Accountant
Former positions included Management Consulting
Auditing (Fides)
Present positions Since 1982, Chief Financial Officer (CFO) of WMH
Since 1988, member of WMH Group Management
Member of the Investment Committee,
WMH Pension Foundation
Board member of various WMH companies
Secretary of the WMH Board of Directors
Member of the governing board, Zurich University of Applied
Science, Winterthur

Corporate Governance
5. Compensation, participation programs, and loans
5.1 Content and method of determining compensation
and participation programs
Decisions regarding compensation, participation programs, and
loans to the Board of Directors, the remuneration of the Chairman
of the Board, and fees payable to Greentec AG, are made by the
Board of Directors.
The Chairman of the Board of Directors approves the salaries
of the members of Group Management and informs the Board of
Directors accordingly.
On April 2, 2002, the Board of Directors enacted a new target
option plan for managerial employees and the Board of Directors.
5.2 Compensation of active members of governing bodies
The total compensation paid to the members of Group Management
for their services in reporting year 2004 was 1.8 million
CHF. The total compensation paid to the members of the Board
of Directors in the same period was 1.1 million CHF. Of this
total, 0.9 million CHF was paid to the Chairman of the Board of
Directors in his active function.
No severance payments were made in the reporting year.
5.3 Compensation of former members of governing bodies
No compensation was paid to former members of governing
bodies.
5.4 Allocation of shares in the reporting year
No shares were allocated in the reporting year to members of the
Board of Directors, Group Management, or parties related to
them.
5.5 Share ownership
On December 31, 2004, the members of Group Management
and parties related to them held a total of 560 -A- registered
shares. The members of the Board of Directors and parties related
to them held either directly or indirectly a total of 477 605 -A-
registered shares and 3 300 000 -B- registered shares.
5.6 Options
The target option plan enacted by the Board of Directors on
April 24, 2002, allows purchase during the period from April 1,
2005, to March 31, 2006, of WMH -A- registered shares at a
price of CHF 82.50 each, provided that the price of the share on
March 31, 2005, is at least CHF 125.00. Taking into account the
share split of 2003, one option gives entitlement to purchase
20 shares.
In 2002, a total of 2050 options were allocated to the members
of Group Management. A further total of 600 options were
allocated in 2002 to the members of the Board of Directors. All
these options are backed by 53000 shares owned by the company.
5.7 Additional fees and remuneration
Neither the members of the Board of Directors or Group
Management, nor any persons related to them, received during
the reporting year any fees or other remuneration for additional
services to WMH or any of its subsidiary or affiliated companies.
5.8 Loans to members of governing bodies
No loans or guarantees in favor of members of governing bodies
were made or promised during the reporting year.
5.9 Highest total compensation
The highest total remuneration to any single member of the
Board of Directors was 1.0 million CHF. This was paid to the
Chairman of the Board of Directors who, in addition to his fee
of 55 000 CHF as Chairman, also received compensation for his
active function in managing the company.

6. Shareholders’ rights of participation
6.1 Restrictions on voting rights and representation
There are no restrictions on voting rights. Regulations concerning
evidence of share ownership and issuance of voting cards are
determined by the Board of Directors.
Shareholders who do not attend the General Meeting in person
may only be represented at the meeting by written proxy to
another shareholder. To allow voting by proxy, the company proposes
to its shareholders the choice of a member of its governing
bodies, or another person dependent on the company (representative
of a governing body), or an independent third party.
6.2 Statutory quorums
The General Meeting of Shareholders may only approve the
annual financial statements, and decide on the appropriation
of available earnings, if it is presented with an audit report and
an auditor is present at the meeting. By unanimous resolution
of the General Meeting, the requirement for the presence of an
auditor can be waived.
There are no other statutory quorums which deviate from the law.
6.3 Notification of General Meetings of Shareholders
An invitation to the General Meeting is published once at least
twenty days before the date of the meeting in the “Swiss Official
Gazette of Commerce”. In addition, shareholders entered in the
share register are invited by normal mail.
7. Change of control and defense measures
7.1 Duty to make an offer
There is a statutory regulation regarding opting out, according to
which a purchaser of shares in the company need not make a
public offer according to articles 32 and 52 of the Swiss Securities
Exchanges.
7.2 Clauses on changes of control
There are no clauses on change of control in favor of members of
the Board of Directors or Group Management, or other managerial
employees of WMH.
28
29
WMH Annual Report 2004
6.4 Agenda
The Board of Directors must include on the agenda of the
General Meeting of Shareholders all proposals received in writing,
at least four weeks before the invitation to the meeting is sent,
from shareholders who alone or together represent at least one
tenth of the share capital, or shares with a nominal value of
one million Swiss francs. No resolutions can be made on any
matters not notified in advance according to this rule, except a
proposal for holding an Extraordinary General Meeting or performing
a special audit.
No prior notice is required for proposals to be made in relation
to items on the agenda, or of business not requiring a resolution.
6.5 Entries in the share register
Entries in the share register will be made up to April 19, 2005.
Further entries can only be made after the Annual Shareholders’
Meeting of May 2, 2005.

Corporate Governance
8. Auditors
8.1 Duration of mandate and term of office of the head auditor
For information regarding the duration of mandate and term of
office of the head auditor, see page 5.
8.2 Audit fees
The fees charged by Ernst & Young AG for their services in auditing
the annual financial statements were 1.0 million CHF. In addition,
WMH employed other auditors, whose fees are not disclosed here.
8.3 Additional fees
Ernst & Young AG also invoiced further fees of 0.8 million CHF for
consulting services.
8.4 Supervisory and control instruments vis à vis the auditors
There are no supervisory or control instruments vis à vis the auditors.
9. Information policy
WMH provides shareholders, financial markets, and the public
with regular information regarding important events. In particular,
annual and semi-annual results are announced in press releases.
A media conference and an analyst conference are held at least
once per year.
The most important information about the company, press
releases, the current share price, and the Annual Report can be
accessed at any time on the internet at www.wmh.ch.
Important dates
Financial year closes December 31
Announcement of sales,
forecast of results Beginning of February
Publication of the Annual Report End of March
Annual shareholders' meeting Beginning of May
First half-year closes June 30
Announcement of first-half results Mid-August

Addresses
WMH Walter Meier Holding AG
Laubisrütistrasse 24
8712 Stäfa
Switzerland
Phone +41 44 928 15 15
Fax +41 44 928 15 00
direct@wmh.ch
www.wmh.ch
WMH Tools
WMH Tool Group Inc.
2420 Vantage Drive
Elgin, IL 60123
USA
Phone +1 847 851 10 00
Fax +1 847 851 10 45
wmh@wmhtoolgroup.com
www.wmhtoolgroup.com
WMH Tool Group AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 47 48
Fax +41 44 806 47 58
info@wmhtoolgroup.ch
www.wmhtoolgroup.ch
WMH Tool Company (Shanghai) Ltd.
135 Guang Hua Road
Zhuanqiao
Shanghai, 201108
China
Phone +86 216 489 01 47
Fax +86 216 489 53 74
wmh@wmhtoolgroup.com
www.wmhtoolgroup.com
WMH Tool Group Ltd.
212 A Wilkinson Road
Brampton, ON L6T 4M4
Canada
Phone +1 905 792 97 69
Fax +1 905 792 76 70
wmh@wmhtoolgroup.com
www.wmhtoolgroup.com
Walter Meier AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 46 46
Fax +41 44 806 47 47
info@waltermeier.ch
www.waltermeier.ch
MATO CNC-Maschinen AG
Auerstrasse 32
9442 Berneck
Switzerland
Phone +41 71 722 99 90
Fax +41 71 722 99 92
info@matoag.ch
www.matoag.ch
WMH Air Conditioning
Axair AG
Talstrasse 35–37
8808 Pfäffikon SZ
Switzerland
Phone +41 55 416 61 11
Fax +41 55 416 62 62
axair@axair.ch
www.axair.ch
Axair (Far East) Limited
Room 1411, 14/F
C C Wu Building
302-308 Hennessy Road
Wan Chai
Hong Kong
Phone +852 2154 1022
Fax +852 2578 8525
admin@axair.com.hk
www.axair.com
Axair (Beijing)
Air Humidification Co., Ltd.
Area C, No. 3, Guang Lian Industry
Park
Guang Ji Dian Yi Ti Hua Chan Ye Ji Di
Tong Zhou District
Beijing 101111
China
Phone +86 10 815 030 08/51/52
Fax +86 10 815 038 70
mail@axair.com.cn
www.axair.com.cn
Axair Nortec Ltd.
2740 Fenton Road
Ottawa, Ontario K1T 3T7
Canada
Phone +1 613 822 03 35
Fax +1 613 822 79 64
nortec@humidity.com
www.humidity.com
Nordmann Engineering AG
Bruggfeldweg 11
4147 Aesch
Switzerland
Phone +41 61 467 76 66
Fax +41 61 467 76 77
info@nordmann-engineering.com
www.nordmann-engineering.com
Charles Hasler AG
Komponenten für Kälte und Klima
Althardstrasse 238
8105 Regensdorf
Switzerland
Phone +41 44 843 93 93
Fax +41 44 843 93 99
kaelteklima@charles-hasler.ch
www.charles-hasler.ch
Axair GmbH
Systeme für die
Luftkonditionierung & Co. KG
Carl-von-Linde-Strasse 25
85748 Garching-Hochbrück
Germany
Phone +49 89 326 70 0
Fax +49 89 326 70 140
info@axair.de
www.axair.de
www.klimaplus.de
Axair S.à.r.l.
100, Bld Louis Armand
Z.l. des Chanoux
93331 Neuilly-sur-Marne
France
Phone +33 820 824 817
Fax +33 143 001 928
axair@axair.fr
www.axair.fr
Axair Kobra AG
2, route des Barges
1680 Romont
Switzerland
Phone +41 26 651 77 77
Fax +41 26 651 77 70
office@axairkobra.ch
www.axairkobra.ch
Axair Climate Limited
Highlands Road, Shirley, Solihull
West Midlands B90 4NL
United Kingdom
Phone +44 121 705 76 01
Fax +44 121 704 13 71
response@axairclimate.co.uk
www.axairclimate.co.uk
AxEnergy Ltd.
Talstrasse 35–37
8808 Pfäffikon SZ
Switzerland
Phone +41 55 416 66 70
Fax +41 55 416 62 62
axenergy_ch@ctfog.com
www.ctfog.com
Draabe Industrietechnik GmbH
Schnackenburgallee 18
22525 Hamburg
Germany
Phone +49 40 85 32 77 0
Fax +49 40 85 32 77 79
draabe@draabe.de
www.draabe.de
www.draabe.com
30
31
WMH Annual Report 2004
WMH Heating
Vescal SA
Z.I. de la Veyre, St-Légier
Case postale 1224
1800 Vevey 1
Switzerland
Phone +41 21 943 02 22
Fax +41 21 943 02 33
info@vescal.ch
www.heizen.ch
Oertli Service AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 41 41
Fax +41 44 806 41 00
info@oertli-service.ch
www.heizen.ch
Oertli Induflame AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 45 45
Fax +41 44 806 45 55
info@oertli-induflame.ch
www.oertli-induflame.com

WMH Walter Meier Holding AG
Laubisrütistrasse 24
8712 Stäfa
Switzerland
Phone +41 44 928 15 15
Fax +41 44 928 15 00
direct@wmh.ch
www.wmh.ch

WMH Financial Report 2004
WMH Group and
WMH Walter Meier Holding AG

Annual Financial Statements
WMH Group
Summary of the reporting year 2004 3
Information for investors 4
Income statement 6
Balance sheet 7
Cash flow statement 8
Statement of changes in shareholders’ equity 9
Notes to the financial statements 10
Information by sector 18
Report of the Group auditors 20
Annual Financial Statements WMH Walter Meier Holding AG 21
Addresses 28

Important dates
Annual shareholders’ meeting May 2, 2005
First-half results 2005 August 11, 2005
Full-year results 2005 (press release) February 9, 2006
Media conference annual results 2005 March 28, 2006
Annual shareholders’ meeting April 25, 2006
Investor relations
Werner Staub, CFO
Member of Group Management
Phone: +41 44 928 15 15
direct@wmh.ch
Website
www.wmh.ch
The website contains up-to-date information about WMH and links to individual
group companies.
Annual report
The annual report is published in German and in English. Copies may be ordered
from the Group’s headquarters (e-mail address: direct@wmh.ch).

Summary of the reporting year 2004
Income statement
WMH Tool Group again overshadows Group progress on income
The success of the WMH Air Conditioning and WMH Heating sectors was again
overshadowed by the unexpectedly poor performance of WMH Tool Group. In view
of the inadequate level of income from sales through home centers (Retail), additional
goodwill relating to this business had to be written off.
Sales: Substantial exchange impact of weaker US dollar
The rise in Group net sales was more than halved by the weaker US dollar to 707.9
million CHF or 2.1%. Real growth net of exchange and consolidation effects was
4.7%.
The highest rate of growth was realized by WMH Air Conditioning with 8.7%, while
in the saturated Swiss market WMH Heating attained a good increase of 3.1%
(including rounding-out acquisitions). Net sales of WMH Tools in local currencies
increased by 3.2%, but after translation into Swiss francs this turned into a decline of
2.8%. Except for the negative impact of exchange rates, the expectations at the net
sales level were largely fulfilled. Unfulfilled, however, were the expectations at the
level of EBITA.
EBITA: 50% higher but still inadequate
Although Group operating income (EBITA) jumped by more than an impressive
50%, the target was not reached. The underachievement – as already stated – was
attributable to WMH Tool Group. The result of WMH Tool Group was a break even,
with a range of internal and external factors preventing a stronger improvement.
This applied particularly to the Retail Division: In addition to losses that were incurred
through being unable to pass higher prices for raw materials on to customers, greater
progress on the result was also hindered by further internal corrections such as higher,
and in some cases substantial, value adjustments on inventories and receivables.
By contrast with this weak performance, WMH Air Conditioning and WMH Heating
excelled with increases in EBITA of more than one-third and 10% respectively.
Additional 16.9 million CHF goodwill amortization burdens income statement
Valuation of the individual divisions at WMH Tool Group showed clearly inadequate
asset backing in the Retail Division, so the goodwill of this business amounting to
15.8 million CHF was completely written off. There was also additional amortization
of goodwill at Axair Climate (1.1 million CHF).
Net loss caused by additional goodwill amortization
While interest expenses remained unchanged, taxes increased. Combined with the
additional amortization of goodwill, the result was a net loss of 9.1 million CHF.
Balance sheet
Less bank debt and more cash
Conspicuous changes in the balance sheet relate to cash (+25.4 million CHF) and
capitalized goodwill (-30.4 million CHF). On the liabilities side, bank debt was further
reduced after the syndicated loan was extended until 2006 (-13 million CHF).
Current assets: Higher cash level
Only part of the cash could be used to repay bank loans at the end of the year.
In some cases, repayment was not possible because of different expiry dates and
currencies.
Despite the higher level of cash, and after the effects of exchange rates, net current
assets fell by approximately 20 million CHF.
Non-current assets: Goodwill practically halved
By means of additional amortization of 16.9 million CHF and reversal of the provision
for the residual acquisition price of WMH Tool Group, goodwill was radically reduced
to 33.2 million CHF. Slightly less than half of this amount applies to WMH Tool
Group (15.2 million CHF). The remainder (12.9 million CHF) relates mainly to WMH
Air Conditioning.
2
3
WMH Financial Report 2004
Non-current liabilities: Extension of the syndicated loan to July 20, 2006
In summer 2004, the option to extend the syndicated loan was exercised. Since the
start of the year, bank debt had fallen by nearly 14 million CHF including exchange
differences. Part of the 30 million USD of the loan which has been appropriated has
been hedged up to the expiry date.
Provision for residual acquisition price reversed through goodwill
The reduction in provisions is mainly attributable to the provision for the purchase
price of the warrant being reversed to account for the low enterprise value of WMH
Tool Group. This reversal was made through goodwill without affecting the income
statement.
Shareholders’ equity 35.4%; minority interests repurchased in 2005
Shareholders’ equity including minority interests closed at 35.4% (36.9%) of the
balance sheet value despite an absolute decline of 15.4 million CHF. The gearing
ratio – net interest-bearing loans in relation to shareholders’ equity including minority
interests – is now only 20% (45%).
The minority interests of 20 million USD were repurchased on January 7, 2005.
Consolidated cash flow
High free cash flow
Cash flow from operating activities more than doubled by comparison with the
previous year to 47.3 million CHF. With net investments of 10.4 million CHF a free
cash flow of 36.9 million CHF was generated. This was almost entirely used to reduce
loans (10.6 million CHF) and increase cash (+25.4 million CHF).

Information for investors
Capital structure
2000 2001 2002 2003 2004
Share capital mil. CHF 60.8 60.8 60.8 60.8 60.8
Adjusted aggregated market value of shares at 12/31 mil. CHF 228.5 145.9 144.5 153.8 155.6
as % of shareholders’ equity % 178.4 105.9 106.2 135.9 155.8
Bearer shares of 500.00 CHF nom., listed Shares 62 040 62 040 62 040
Bearer reserved shares of 500.00 CHF nom., listed 1) Shares 10 000 10 000 10 000
Registered shares of 100.00 CHF nom., unlisted Shares 247 500 247 500 247 500
Registered shares -A- of 25.00 CHF nom., listed Shares 1 570 800 1 570 800
Registered reserve shares -A- of 25.00 CHF nom., listed 1) Shares 200 000 200 000
Registered shares -B- of 5.00 CHF nom., unlisted Shares 3 300 000 3 300 000
1) Without dividend and voting rights
Significant shareholders
Registered shares of 100.00 CHF nom.
– Greentec AG (owned by Dr. Reto E. Meier) Shares 165 000 165 000 165 000
– Jürg W. Meier Shares 82 500 82 500 82 500
Registered shares -A- CHF 25.00 CHF nom.
– Jürg W. Meier Shares 535 000 536 400
– Dr. Reto E. Meier Shares 427 711 426 711
Registered shares -B- of 5.00 CHF nom.
– Greentec AG (owned by Dr. Reto E. Meier) Shares 3 297 800 3 297 800
– Dr. Reto E. Meier Shares 2 200 2 200
Under a lockup agreement, Jürg W. Meier will refrain from placement in the market
of the converted voting registered shares (330 000 -A- registered shares) until May
2007, unless a joint capital-market placement with WMH takes place before then.
Dividends (years 2000 to 2002 adjusted)
On December 31, 2004, the free float was 499 660 shares or 28.22% (calculation:
number of listed shares less the shares held by significant shareholders and less own
reserved shares/shares for option plans held by WMH divided by the number of
listed shares).
Gross dividend per registered share -A- of 25.00 CHF nom. CHF 3.75 3.00 3.25 0.0 0.0
Dividend yield p.a.
– maximum % 5.5 6.0 5.9 0.0 0.0
– minimum % 3.2 3.1 3.6 0.0 0.0
Total dividends paid mil. CHF 8.4 6.7 7.3 0.0 0.0
Payout ratio % 33.7 35.0 35.4 0.0 0.0

Data per share of 25.00 CHF nom. (years 2000 to 2002 adjusted)
Ticker symbols
Listed at: SWX; Currency: CHF
Security number: 1594024
ISIN number: CH0015940247
Reuters: WMHN.S
Bloomberg: WMHN
4
5
WMH Financial Report 2004
2000 2001 2002 2003 2004
Net income/loss CHF 11.38 8.92 9.67 -4.67 -4.29
Diluted net income/loss CHF 11.38 8.92 9.67 -4.67 -4.29
Shareholders’ equity CHF 52.66 64.36 64.13 53.30 47.04
Cash flow from operating activities CHF 16.46 15.36 17.94 8.30 22.30
Price
– Highest CHF 116.00 97.95 90.00 83.50 72.00
– Lowest CHF 68.75 50.00 55.00 58.75 55.00
– Year-end CHF 94.00 60.00 59.45 63.25 64.00
Price/earnings ratio
– Highest 10.2 11.0 9.3 n.a. n.a.
– Lowest 6.0 5.6 5.7 n.a. n.a.
– Year-end 8.3 6.7 6.1 n.a. n.a.
Development of WMH share price
in CHF
90
85
80
75
70
65
60
55
50
45
40
1st quarter 2004 2nd quarter 2004 3rd quarter 2004 4th quarter 2004 1/27/05
WMH SPI Small Cap Index Swiss Performance Index (SPI) Source: Bloomberg
Performance
The year-end prices of WMH registered shares resulted in a performance for 2004
of 1.2%.

WMH Group
Income statement
Note 2004 2003 + / -
mil. CHF % mil. CHF % mil. CHF
Net sales 4/5 707.9 100.0 693.3 100.0 14.6
Cost of goods sold/services provided 6 -524.6 -514.5 -10.2
Other operating income 7 1.8 0.7 1.2
Gross profit 185.1 26.2 179.5 25.9 5.6
Administration -38.5 5.4 -40.5 5.8 2.0
Sales and marketing -90.9 12.8 -91.3 13.2 0.4
Advertising and promotion -17.6 2.5 -17.7 2.6 0.1
Research and development -11.3 1.6 -12.3 1.8 1.0
Total 6 -158.3 22.4 -161.8 23.3 3.5
Operating income (EBITA) 4 26.8 3.8 17.7 2.6 9.1
Amortization of goodwill 8 -26.3 -9.6 -16.6
Restructuring 0.0 -9.8 9.8
Operating income/loss(EBIT) 0.6 0.1 -1.7 0.2 2.2
Financial income/expense, net 9 -5.0 -5.0 0.1
Share in profit of associated companies 0.2 0.1 0.1
Net lossbefore income taxes -4.1 0.6 -6.6 1.0 2.5
Income taxes 10 -5.1 -3.4 -1.7
Net loss -9.2 1.3 -10.0 1.4 0.8
Minority interests 0.1 0.1 0.0
Net loss after minority interests -9.1 1.3 -9.9 1.4 0.8
Net loss per share (CHF) 11 -4.29 -4.67
Diluted net loss per share (CHF) -4.29 -4.67

Balance sheet
WMH Financial Report 2004
Note 12/31/04 12/31/03 + / -
mil. CHF % mil. CHF % mil. CHF
Cash 42.7 17.2 25.4
Marketable securities 0.0 1.0 -1.0
Receivables 13 106.2 129.6 -23.4
Inventories 14 118.7 115.4 3.3
Total current assets 12 267.6 77.3 263.2 70.3 4.4
Property, plant and equipment 15 27.6 30.4 -2.8
Investments 16 15.2 15.3 -0.1
Deferred tax assets 20 2.6 1.6 1.0
Intangible assets 17 33.2 63.6 -30.4
Total non-current assets 12 78.6 22.7 110.9 29.7 -32.3
Total assets 346.2 100.0 374.1 100.0 -27.9
Short-term liabilities 18 125.3 161.8 -36.4
Short-term tax liabilities and provisions 7.5 7.7 -0.2
Long-term liabilities 19 66.8 37.1 29.7
Deferred tax liabilities 20 10.9 10.7 0.2
Long-term provisions 21 13.1 18.7 -5.7
Total liabilities 12 223.6 64.6 236.0 63.1 -12.4
Share capital 60.8 60.8 0.0
Treasury shares -13.9 -13.8 0.0
Group reserves 53.0 66.1 -13.2
Shareholders’ equity excluding minority interests 22 99.9 28.8 113.1 30.2 -13.2
Minority interests 23 22.8 6.6 25.0 6.7 -2.2
Shareholders’ equity including minority interests 122.7 35.4 138.1 36.9 -15.4
Total liabilities and shareholders’ equity 346.2 100.0 374.1 100.0 -27.9
6
7

WMH Group
Cash flow statement
mil. CHF Note 2004 2003
Net loss after minority interests -9.1 -9.9
Minority interests -0.1 -0.1
Income from investments -0.2 0.0
Depreciation on property, plant, equipment and amortisation on
intangible assets, and write-down on investments 37.0 21.6
Income taxes 5.1 3.4
Financial income/expense, net 5.0 5.0
Increase(-)/decrease in net current assets
excluding cash 1) 19.5 8.1
Increase (-)/decrease in deferred tax assets -1.0 0.0
Increase/decrease(-) in long-term provisions 1.2 2.7
Taxes paid -5.0 -6.7
Interest paid -4.9 -4.3
Cash flow from operating activities 47.3 19.8
Expenditures for property, plant and equipment -9.2 -9.3
Expenditures for investments 0.0 -2.8
Expenditures for intangible assets 24 -1.8 0.0
Total investments -11.0 -12.1
Proceeds from the sale of property, plant and equipment 0.6 3.3
Proceeds from the sale of investments 0.0 1.4
Total divestments 0.6 4.7
Cash flow from investing activities -10.4 -7.4
Free cash flow 2) 36.9 12.4
Increase/decrease(-) in short-term bank loans -42.4 43.0
Increase/decrease(-) in long-term liabilities 31.8 -71.8
Total debt financing -10.6 -28.8
Dividend payments, including to minorities -2.5 -9.6
Purchase/sale of own shares 0.0 -0.1
Total equity financing -2.5 -9.7
Cash flow from financing activities -13.1 -38.5
Exchange rate effect on cash 1.6 3.2
Total increase/decrease(-) in cash 25.4 -22.9
Balance cash as of 1/1 17.2 40.1
Balance cash as of 12/31 42.7 17.2
1) Change in net current assets excluding cash
Increase(-)/decrease marketable securities 1.0 0.1
Increase(-)/decrease receivables 19.0 -6.6
Increase(-)/decrease prepayments to suppliers -0.2 0.5
Increase(-)/decrease inventories -7.9 18.0
Increase/decrease(-) short-term liabilities 7.3 -3.5
Increase/decrease(-) prepayments from customers 0.3 -0.4
Total increase(-)/decrease 19.5 8.1
2) Cash flow/drain(-) from operating activities plus cash flow/drain(-) from
investing activities

Statement of changes in shareholders’ equity
8
9
WMH Financial Report 2004
mil. CHF Share capital 1) Additional Treasury Retained Unrealized Exchange Total
paid in capital 2) shares earnings fluctuations in differences
value of financial
instruments
Balance as of 1/1/03 60.8 30.9 -13.7 64.8 -0.8 -6.0 136.0
Dividend payment (incl. to minorities) -9.6 -9.6
Purchase/sale of own shares -0.1 -0.1
Net gain from market valuation
of financial instruments 0.2 0.2
Net loss after minority interests -9.9 -9.9
Exchange differences -3.5 -3.5
Balance as of 12/31/03 60.8 30.9 -13.8 45.3 -0.6 -9.5 113.1
Dividend payment to minorities -2.5 -2.5
Purchase/sale of own shares -0.1
Net gain from market valuation
of financial instruments 0.2 0.2
Net loss after minority interests -9.1 -9.1
Exchange differences -1.8 -1.8
Balance as of 12/31/04 See note 22 60.8 30.9 -13.9 33.8 -0.4 -11.4 99.9
1) On May 19, 2003, the former listed bearer shares were converted into -Aregistered
shares and a 20-for-1 split in the nominal value effected.
2) Including reserve for treasury shares of 13.9 (13.8) million CHF.

WMH Group
Notes to the financial statements
1 Principles of consolidation
The consolidated financial statements of WMH Walter Meier Holding AG have
been prepared using the historical cost convention in accordance with International
Financial Reporting Standards (IFRS) (formerly IAS) issued by the International
Accounting Standards Board (IASB), and were approved by the Board of Directors
on February 21, 2005. All relevant standards of the IASB and interpretations of the
International Financial Reporting Interpretations Committee (IFRIC) which were
effective for the respective periods were applied.
No new, or revised, IFRS standards were introduced in the reporting year.
Consolidation
All companies which are controlled by WMH, and in which in most cases WMH
directly or indirectly owns more than 50% of the share capital, are consolidated.
Goodwill
Acquisitions are accounted for using the purchase method. The cost of the investment
in a company is eliminated against the Group’s share of the company’s revalued
equity at the time of acquisition. The difference between the acquisition cost of
a company and its revalued equity (i.e. goodwill) is capitalized and amortized on a
straight-line basis over a period not exceeding 10 years. Negative goodwill arising
on acquisitions is recorded as a liability and released on a straight-line basis over a
period also normally not exceeding 10 years. The amortization period of goodwill or
negative goodwill is determined based on the anticipated profitability of the respective
subsidiary company.
Foreign currency translation
Receivables and payables denominated in foreign currencies are recognized in the
individual financial statements at the year-end closing rates. Exchange differences
on these positions are charged or credited to income. Exchange differences on
intercompany long-term loans which are of an equity nature are adjusted directly
to shareholders’ equity (exchange differences). For the purpose of inclusion in the
consolidated financial statements, balance sheet accounts of foreign subsidiaries
are translated into Swiss francs at the closing rates on the balance sheet date, while
income statement amounts are translated at the average of the monthly rates in
effect during the fiscal year. Translation differences arising from the application of
these principles are recorded directly in shareholders’ equity (exchange differences),
thereby having no effect on income.
The following table shows the exchange rates applied in these consolidated financial
statements.
Average rate
Year-end closing rate income statement/
balance sheet cash flow statement
2004 2003 2004 2003
CHF CHF CHF CHF
1 CAD 0.9413 0.9575 0.9551 0.9619
1 CNY 0.1366 0.1493 0.1498 0.1615
1 EUR 1.5434 1.5595 1.5445 1.5220
1 GBP 2.1803 2.2059 2.2746 2.2018
1 HKD 0.1455 0.1593 0.1593 0.1719
1 USD 1.1316 1.2370 1.2410 1.3383
2 Consolidated companies
The consolidation encompasses WMH Walter Meier Holding AG and its domestic
and foreign subsidiaries. A list of the main consolidated companies is shown on
page 25.
The following transactions occurred in the reporting year:
In the reporting year there were minor acquisitions of assets and liabilities amounting
in total to 2.4 million CHF. The scope of the consolidation was unchanged.
In the reporting year, a results-related payment of 0.9 million CHF was made in
relation to an acquisition which took place in previous years. A final payment of
approximately 0.8 million CHF is still outstanding.
The following transactions took place in the previous year:
No acquisitions or divestitures of companies having an effect on cash flow took
place in 2003.

3 Significant accounting policies
Preparation of the consolidated financial statements requires management to make
evaluations and estimates which influence the measurement of assets, liabilities,
contingencies, income, and expenses at the time when they were recorded. Assets
and liabilities are recorded at the time when the future economic benefit to, or obligation
for, the Group becomes probable, and the related amounts can be measured
reliably. If, at a later point in time, such evaluations and estimates, which were made
by management based on their best knowledge and belief, turn out to change, they
will be adjusted in the reporting period in which the underlying facts changed.
Net sales
Income from the sale of products or services is recorded net of sales deductions,
bad debt, and value added tax at the time when the related products are delivered or
services rendered. Income from long-term contracts is insignificant.
Research and development
All research and development costs arising during the year are expensed wherever
the restrictions contained in IAS 38 for recognition of development costs in the
balance sheet are not fulfilled in all respects.
Cash
Cash includes cash on hand, postal accounts, and cash in banks.
Marketable securities
Marketable securities are recorded at market value.
Receivables
Within receivables, individually recognized risks are covered by appropriate allowances.
General and other risks are covered by an additional lump sum allowance,
whose value is based on historical information.
Inventories
Inventories are stated at the lower of cost or net realizable value, with cost being
determined by either the average or standard cost method. Production costs comprise
materials, labor, and overhead. Allowances are provided for obsolete inventories
and slow-moving items.
Property, plant, and equipment
Except for land, which is recorded at historical cost, all fixed assets are recorded at
purchase or production cost less accumulated depreciation. Expenditures for repairs
and maintenance (as well as for the acquisition of fixed assets of insignificant value)
are charged directly to the income statement. Larger expenditures which serve to
increase the value of a tangible asset are capitalized and depreciated over the remaining
useful life of the improved asset. Depreciation on fixed assets is taken on a
straight-line basis over their estimated useful lives, as determined at the time of
acquisition. This amortization is periodically reviewed for any potential impairment of
the related asset. The depreciation periods for the Group’s most important categories
of fixed assets are:
Buildings 40 – 66 years
Production equipment 6 – 10 years
Tools 2 – 5 years
Office furniture and IT equipment 3 – 10 years
Vehicles 4 – 10 years
10
11
WMH Financial Report 2004
Investments
Companies in which WMH Walter Meier Holding owns between 20% and 50% of
the share capital are accounted for under the equity method.
Investments of less than 20% are valued at market prices. Any resulting unrealized
gains are credited to shareholders’ equity (net after tax).
Long-term loans are carried at cost or face value; any impairment is recognized by
means of a corresponding revaluation. Financial investments held to maturity are
recorded in the balance sheet at amortized cost.
All other financial investments (available for sale) are valued at market values.
Short-term financial investments available for sale are reported in other receivables.
Any unrealized gains are credited to shareholders’ equity (net after tax) and shown in
a separate column in the statement of changes in equity.
Intangible assets
Intangible assets include capitalized goodwill from the acquisition of subsidiaries or
their net assets respectively. Goodwill is amortized on a straight-line basis over the
expected lifetime with a maximum of 10 years. This amortization is periodically
reviewed for any potential impairment of the related intangible asset.
Short-/long-term liabilities
Short-term liabilities comprise amounts due within less than twelve months, as well
as prepayments from customers in association with service contracts. Long-term
liabilities relate to financing arrangements with maturities in excess of one year.
Long-term provisions
When establishing provisions, all known risks and uncertain obligations are taken
into consideration.
Pension benefit plans
Most of the Group’s employees are eligible to participate in autonomous definedcontribution
or defined-benefit pension plans. These pension plans are generally
funded by equal payments from participating employees and the relevant Group
companies, which take account of periodic recommendations by independent
qualified actuaries.
For defined-benefit plans, the pension accounting costs are calculated using the
projected unit credit method. Under this method, the cost of providing pensions is
charged periodically to the income statement so as to spread the regular cost evenly
over the service lives of the employees. The pension obligation is measured as the
present value of the estimated future cash outflows using interest rates of longterm
Swiss government bonds. Any potential actuarial gains and losses are spread
forward over the average remaining service lives of insured employees. The
Group’s contributions to defined-contribution pension plans are charged to the
income statement in the year to which they relate.
Leasing
Equipment acquired under a capital lease is carried in the balance sheet at the net
present value of the future lease payments and depreciated along with other fixed
assets. The related liabilities are included with the respective long-term and shortterm
liabilities. Payments made under operating leases are charged to the income
statement as incurred.
Deferred taxes
When calculating deferred taxes, all differences between tax-based values and
accounting values are valued according to the comprehensive liability method at the
respective local tax rates and corresponding provisions made in the balance sheet.
Changes in the provisions for deferred taxes are reflected in the consolidated income
statement. Deferred tax benefits on tax loss carry forwards are capitalized, provided
there is reasonable expectation that they can be recovered by means of a reduction of
future taxable income. Deferred taxes on non-distributed earnings of subsidiaries are
provided for to the extent that such earnings are not viewed as being permanently
reinvested in the subsidiary.

WMH Group
Financial risk management/derivative financial instruments
Foreign currency risks
Foreign currency risks due to translation differences result from transactions which
are executed in foreign denominations and paid in local currencies. The risks associated
with such transactions are partially hedged by the Group companies using
forward exchange contracts within the scope of the defined hedging policy.
Foreign currency risks also result from differences which arise when Group companies
with foreign reporting currencies are translated into Swiss francs during
consolidation. Currency translation affects net income and shareholders’ equity.
The most significant risk to the Group in relation to currency translation differences
relates to the United States dollar. Potential translation risks from the most significant
net investments in US dollars are partially hedged through loans payable in
the same currency.
Interest rate risks
As a result of the Group’s net liability position, increases in interest rates have a negative
effect on net income. For this reason, some long-term liabilities are hedged with
interest-rate derivatives.
Derivative financial instruments held in association with financial risk management
such as, for example, interest rate swaps, exchange contracts, and certain derivative
financial instruments embedded in underlying contracts are recognized in the balance
sheet as either short-term or long-term financial investments or liabilities at market
values. Changes in market values are recognized in either the income statement or
shareholders’ equity, depending on the purpose for which these financial instruments
are used.
In the case of fair-value hedges (hedging of the amortized purchase value), the
change in market value of the effective part of both the financial instrument and
the hedged underlying transaction are expensed immediately.
In the case of cash-flow hedges, the change in market value of the effective part of
the financial instrument is recognized in shareholders’ equity until the hedged
underlying transaction is expensed.
In the case of derivative financial instruments which are not classified as, or do not
qualify as, accounting hedges in the sense stated above, the change in market value
is recognized as a component of financial income/expense. This also applies to
fair-value hedges and cash-flow hedges handled in the manner stated above, from
the point in time at which they no longer qualify as accounting hedges.
Sector reporting
Sector reporting is presented by economic sectors (primary segmentation) and by
geographical sectors (secondary segmentation). For further information about the
products and services of the individual business sectors, reference should be made to
the respective comments on pages 18 and 19.
Related parties
Transactions with related parties are executed at market conditions.
4 Effects of currency translation and changes in Group composition
The effects of currency translation and changes in Group composition were as follows:
mil. CHF Net sales Operating income
Total deviation 14.6 9.1
Currency translation 18.8 0.1
Adjusted deviation 33.4 9.2
in % 4.8 52.1
5 Net sales
Net sales by economic sector were as follows:
mil. CHF 2004 2003
Production services 98.7 115.8
Distribution 537.0 513.6
Customer service 72.2 63.9
Total net sales 707.9 693.3
6 Operating expenses
The production costs of goods sold and services provided, as well as administrative,
sales, marketing, research, and development costs, comprised the following expense
categories:
mil. CHF 2004 2003
Materials 430.5 412.7
Personnel (including benefits) 151.0 153.8
Other operating expenses 90.8 98.0
Depreciation and amortization 10.6 11.8
Total operating expenses 682.9 676.3
Average number of employees 1 796 1 811
Fringe benefits and social security costs amounted to 18.4% (17.1%) of gross pay.

7 Other operating income
Other operating income relates mainly to gains on the sale of property, plant, and
equipment, including buildings.
8 Goodwill amortisation
mil. CHF 2004 2003
Goodwill amortisation 9.3 9.6
Impairment 16.9 0.0
Rounded off 0.1 0.0
Total goodwill amortisation 26.3 9.6
9 Financial income/expense, net
mil. CHF 2004 2003
Interest income 0.8 0.9
Interest expense -5.7 -5.9
Rounded off -0.1 0.0
Total financial income and expense, net -5.0 -5.0
10 Income taxes
Income tax expense includes all taxes accrued or paid by the consolidated companies
on the results of operations for the reporting year, and deferred taxes due to changes
in the revaluations made in the course of the consolidation.
mil. CHF 2004 2003
Current taxes on income from
normal business operations -6.0 -4.3
Deferred taxes on
changes in revaluations 0.9 0.9
Total income taxes -5.1 -3.4
The tax rate applicable to the Group is 25% which represents the tax rate expected
to be applied to income of the individual Group companies in the respective areas of
tax jurisdiction.
The table below shows how the Group tax rate and actual taxes are calculated from
the income taxes and deferred taxes.
mil. CHF 2004 2003
Net loss before income taxes -4.1 -6.6
Income taxes based on expected
average income tax rate -1.0 -1.7
Effect of uncapitalized losses carried forward 6.9 9.9
Offset of uncapitalized losses carried forward -0.7 -1.4
Retroactive capitalisation of losses carried forward
from earlier periods -0.9 0.0
Taxes at other taxation rates 0.6 -3.5
Other, individually immaterial charges 0.2 0.0
Rounded off 0.0 0.1
Total income taxes per income statement 5.1 3.4
11 Net loss per share
12
13
The net loss per share was determined as follows:
WMH Financial Report 2004
2004 2003
Net loss after minority interests (mil. CHF) -9.1 -9.9
Weighted average number of shares 2 430 800 2 430 800
Less: unissued shares -200 000 -200 000
Less: treasury shares (average) -108 362 -109 148
Weighted average number of shares
outstanding during the fiscal year 2 122 438 2 121 653
Net loss per share (CHF) -4.29 -4.67
Diluted net loss per share (CHF) -4.29 -4.67
12 Effects of currency translation and changes in composition of Group
Deviations to prior year Current Long-term
mil. CHF assets assets Liabilities
Total deviation 4.4 -32.3 -12.4
Currency translation 10.3 2.5 6.8
Adjusted deviation 14.7 -29.8 -5.6
13 Receivables
mil. CHF 12/31/04 12/31/03
Trade accounts receivable, gross 108.5 125.2
less allowance for doubtful accounts -9.3 -6.0
Trade accounts receivable, net 99.2 119.2
Prepayments to suppliers 0.4 0.2
Other receivables 4.3 8.0
Prepaid expenses and accrued income 2.3 2.2
Total receivables 106.2 129.6
In addition to the fixed allowance for doubtful accounts, an allowance for certain
individual risks at WMH Tool Group of 3.6 (3.1) million CHF was recognized.
14 Inventories
mil. CHF 12/31/04 12/31/03
Raw materials and supplies 12.3 12.9
Work in process 6.0 6.7
Finished goods (including items purchased for resale) 133.3 126.5
Allowances -32.9 -30.7
Total inventories 118.7 115.4
The inventories include spare parts valued at 11.4 (11.3) million CHF. 2.7 (2.0) million
CHF of the increase in the allowance relates to inventories of WMH Tool
Group.

WMH Group
15 Property, plant and equipment
Land Machinery,
and fixtures, Total Total
mil. CHF buildings motor vehicles 2004 2003
Gross value as of 1/1 7.3 87.5 94.9 97.9
Additions 0.5 8.6 9.2 9.3
Disposals -0.7 -8.3 -9.0 -10.5
Exchange differences -0.2 -2.3 -2.5 -1.9
Rounded off 0.1 0.1 0.0 0.1
Gross value as of 12/31 7.0 85.6 92.6 94.9
Accumulated depreciation as of 1/1 1.7 62.8 64.5 61.1
Additions 0.2 10.4 10.6 11.8
Disposals -0.2 -8.2 -8.4 -7.2
Exchange differences -0.1 -1.7 -1.7 -1.3
Rounded off 0.1 0.0 0.0 0.1
Accumulated depreciation as of 12/31 1.7 63.3 65.0 64.5
Net property, plant and equipment
as of 12/31 5.3 22.3 27.6 30.4
Insured value 6.5 57.1 63.6 65.5
Capital leases 0.0 0.1 0.1 0.4
16 Investments
Prepaid Loans Investment
pension to third in Total Total
mil. CHF cost 1) parties associates 2) Other 2004 2003
Balances as of 1/1 12.4 0.0 2.4 0.5 15.3 14.5
Additions 0.2 0.1 0.3 2.8
Reductions 0.0 -1.4
Write-downs -0.1 -0.1 -0.2
Exchange differences -0.3 -0.1 -0.4 -0.3
Rounded off
Investments
0.1 -0.1
as of 31/12 12.4 0.0 2.3 0.4 15.2 15.3
1) For more details for prepaid pension cost see page 16.
2) WMH has a holding of 33 1 /3% in Pexca International Limited (“Pexca”) with
headquarters in Hong Kong. Pexca is a holding company which owns 100% of the
tool manufacturing company Laizhou Hongyuan Bench Vice Manufacture Co. Ltd
with headquarters in China. Pexca is included in the Group result according to the
equity method. WMH exercises certain control over the business activities of Pexca
through having two members on its board of directors.
17 Intangible assets
Total Total
mil. CHF 2004 2003
Gross value as of 1/1 88.0 104.5
Additions 1.5 0.0
Reductions -25.4 -9.7
Exchange differences -3.0 -6.8
Gross value as of 12/31 61.1 88.0
Accumulated amortization as of 1/1 24.4 16.9
Additions 26.3 9.6
Reductions -21.2 -0.5
Exchange differences -1.6 -1.6
Rounded off 0.0 -0.1
Accumulated amortization as of 12/31 27.9 24.4
Net intangible assets as of 12/31 33.2 63.6
The balance includes unamortized goodwill from acquisitions of companies.
The net carrying amount of intangible assets fell by 30.4 million CHF from 63.6 million
CHF to 33.2 million CHF. Of this remaining amount, 18.8 million CHF relates to
the WMH Tools sector and 12.9 million CHF to WMH Air Conditioning.
The additions relate mainly to acquired service contracts and customer addresses
which will be amortized over three years.
The reductions relate mainly to derecognition of the warrant (remaining purchase
price of WMH Tool Group) at a value of zero.
The reported carrying value of the goodwill was tested for impairment according to
IAS 36 on December 31, 2004. Except for the goodwill of WMH Tool Group Retail
Division and Axair Climate, the discounted value of the estimated future cash flows
was in all cases higher than the net assets, including goodwill, of the respective companies.
The goodwill of WMH Tool Group retail division and Axair Climate was amortized
by an additional 16.9 million CHF as a consequence of the impairment test. The goodwill
of WMH Tool Group was also reduced further by derecognition of the warrants,
i.e. of the contractual remaining purchase price for the acquisition in February 2002 of
Wilton. This corresponds to 8% of the net enterprise value of WMH Tool Group. In
view of the losses incurred, the estimated enterprise value was reduced to zero. The
associated provision for the warrant could therefore be released in favor of the intangible
assets. This reduction is reported as a reduction in the table above.
By nature, the forecasts used for the impairment tests are subject to a certain degree
of uncertainty. Their fulfillment depends on attainment of the underlying forecasts of
net sales and cash flow.
18 Short-term liabilities
mil. CHF 12/31/04 12/31/03
Bank overdrafts 0.6 43.0
Service contracts, prepayments from customers 22.7 20.7
Trade accounts payable 46.1 44.7
Benefits and social security taxes payable 1.4 1.8
Other liabilities 14.9 16.7
Current portion of warranties 4.6 4.3
Current portion of long-term liabilities 0.1 0.2
Accrued liabilities 34.9 30.4
Total short-term liabilities 125.3 161.8

19 Long-term liabilities
The composition of long-term liabilities, including an overview of their respective
maturities, is shown in the table below:
of which amounts due within
12/31/04 1 to more than 12/31/03
mil. CHF Total 1 year 5 years 5 years Total
Loans and mortgages 66.8 0.0 66.8 0.0 37.1
Leasing liabilities 0.1 0.1 0.2
Subtotal 66.9 0.1 66.8 0.0 37.3
Less: current portion -0.1 -0.1 -0.2
Total long-term liabilities 66.8 0.0 66.8 0.0 37.1
On July 20, 2004, the existing syndicated loan was extended until July 20, 2006,
with a limit of 134.8 million CHF. Of this total amount, 30 million USD can be used as
a fixed loan. On December 31, 2004, a total of 70.0 (86.5) million CHF of the authorized
loan was being utilized. 3.5 (7.6) million CHF of the amount are in use as bank
guarantees. Including the effect of four interest rate swap agreements which are
described on page 17, the average interest rate on the loan was 4.3% (2.7%).
20 Deferred tax assets and liabilities
This amount comprises the potential tax effects of values which are included in the
consolidated financial statements, but unrealized for accounting and tax purposes
by the subsidiaries, of 10.9 (10.7) million CHF, including deferred taxes on nondistributed
earnings of subsidiaries of 0.3 (0.2) million CHF.
The main components of the deferred tax liabilities are as follows:
mil. CHF 12/31/04 12/31/03
Undistributed earnings from Group companies 0.3 0.2
Allowance for doubtful accounts 0.2 0.1
Land and buildings 0.0 0.3
Machinery, fixtures, motor vehicles 1.5 1.8
Intangible assets 0.5 0.1
Inventories 2.3 1.8
Prepaid pension cost/pension plan obligations 2.6 2.6
Warranty provisions 0.9 1.0
Other short- and long-term provisions 2.6 2.8
Total deferred tax liabilities 10.9 10.7
Uncapitalized losses carried forward
Year of expiry/mil. CHF 12/31/04 12/31/03
2009 0.9 0.9
2010 1.8 1.8
2011 and after 19.6 14.4
Total uncapitalized losses carried forward 22.3 17.1
Deferred tax benefits on tax-loss carry-forwards are not capitalized unless there
is reasonable certainty that they can be recovered by being offset against future
taxable income.
The deferred tax assets of 2.6 (1.6) million CHF relate to tax-loss carry-forwards
which can be offset against future income.
21 Long-term provisions
14
15
WMH Financial Report 2004
Long-term provisions totaling 13.1 million CHF comprise warranties of 3.4 million
CHF, provisions of 3.7 million CHF for obligations under pension schemes, provisions
of 0.8 million CHF for earnouts, and other provisions of 5.1 million CHF. Changes to
provisions took place as follows:
Pension plan
mil. CHF Warranties obligations Earnout Other Total
Balance as of 1/1/04 7.5 4.6 6.9 4.0 23.0
Additions 7.4 3.8 11.2
Releases -2.4 -2.4
Rounded off 0.1 -0.1 -0.1
Recorded in income statement 7.5 0.0 0.0 1.3 8.7
Reduction warrant -4.8 -4.8
Additions by acquisitions 0.2 0.1 0.3
Amounts used during year -6.9 -0.9 -0.9 -0.4 -9.1
Exchange differences -0.2 -0.4 -0.5
Rounded off -0.1 0.1 0.1
Subtotal 8.0 3.7 0.8 5.1 17.7
Less current portion -4.6 -4.6
Balance as of 12/31/04 3.4 3.7 0.8 5.1 13.1
Warranties
The provisions for warranties serve to cover existing and potential losses and performance
obligations arising from product and service warranties. The provisions
are based on existing contracts and statistics of those subsidiaries which have such
potential obligations.
It is estimated that 4.6 million CHF of those obligations will be fulfilled within one year.
Pension schemes
The provisions are calculated by an independent pension fund expert. The basis for
the calculations is shown on page 16.
Earnouts
On December 23, 2004, WMH exercised its call option on the warrant. This comprised
a supplementary purchase-price payment amounting to 8% of the net enterprise
value of WMH Tool Group. In view of the negative enterprise value, the call
option was exercised at a value of zero, and the corresponding provision almost
entirely released.
The remaining earnouts of approximately 0.8 million CHF fall due for payment in 2006.
Other provisions
Other provisions comprise known obligations of 3.0 million CHF arising from the
Group’s internal captive insurance company, as well as obligations from other
contracts, legal proceedings, and miscellaneous risks. The provision for the captive
insurance is calculated by an independent actuary according to actuarial principles.

WMH Group
22 Statement of changes in shareholders’ equity
In the fiscal year, shareholders’ equity excluding minority interests decreased by a net
amount of 13.2 million CHF. The decrease in shareholders’ equity was caused by the
consolidated net loss of 9.1 million CHF as well as the dividend payment on preferred
shares of 2.5 million CHF. There was also a further decrease of 1.8 million CHF due to
negative exchange rate effects. Own shares are recognized in shareholders’ equity as
a negative amount. Changes in shareholders’ equity are summarized in the statement
on page 9.
Further information regarding the structure of the share capital is given on page 4,
and holdings of treasury shares are summarized on page 24.
23 Minority interests
The minority interests in shareholders’ equity relate mainly to preferred shares of
WMH Tool Group. These preferred shares with a value of 20 million USD were issued
to the sellers of Wilton Tool Company as partial financing of the acquisition price.
These preferred shares carry no entitlement to a share in net income, but only to a
fixed dividend. These preferred shares were repurchased on January 7, 2005.
24 Business acquisitions
The table below shows the cash drain due to acquisitions, and the resulting
intangible assets. Further details are presented under “Consolidated companies” on
page 25.
mil. CHF 12/31/04 12/31/03
Purchase price cash-effective 1.8 0.0
Purchase price not cash-effective 0.6 0.0
Fair value of net assets acquired -1.0 0.0
Rounded off 0.1 0.0
Intangible assets 1.5 0.0
The fair value of the net assets acquired comprises the following:
mil. CHF 12/31/04 12/31/03
Inventories 1.0 0.0
Fair value of net assets acquired 1.0 0.0
25 Contingent liabilities
mil. CHF 12/31/04 12/31/03
Guarantees on behalf ot others 1.0 0.2
The contingent liabilities relate mainly to securing customer prepayments and
warranty obligations on products already delivered.
26 Pension schemes
The obligations under defined-benefit pension schemes are recalculated every year
by an independent actuary using the projected unit credit method.
The amounts recognized in the consolidated balance sheet are as follows:
mil. CHF 12/31/04 12/31/03
Present value of benefit obligations
with separate assets -237.4 -238.4
Fair value of plan assets 246.4 243.2
Subtotal 9.0 4.8
Present value of benefit obligations
without separate assets -2.1 -1.9
Unrecognized actuarial
gains(-)/losses 9.3 12.4
Unrecognized defined benefit assets
according to IAS 19.58 (b) -7.5 -7.4
Attributable to Group 8.7 7.9
On December 31, 2004, actuarial losses of 9.3 (12.4) mil. CHF were unrecognized
in the consolidated income statement because the amount stated falls within the
permitted corridor of 10% (the greater of 10% of the present value of the obligations
with separate assets and 10% of the fair value of the assets).
Net periodic pension cost comprises the following components:
mil. CHF 2004 2003
Current service cost -11.4 -11.5
Interest cost -8.9 -9.0
Expected return on plan assets 12.0 11.6
Remeasurement of unrecognized assets
(financial asset remeasurement) -0.1 0.3
Amortization -0.1 -0.1
Recognition of losses according to IAS 19.58 A -0.5 0.0
Employee contributions 4.1 4.1
Total current service cost, net -4.9 -4.6
Actual return on plan assets 9.6 13.1
Movement in prepaid pension cost, recognized in the balance sheet:
mil. CHF 2004 2003
Net prepaid pension cost as of 1/1
recognized in the balance sheet -7.9 -8.1
Net periodic pension cost (as per above) 4.9 4.6
Employer’s contributions -5.6 -4.5
Exchange differences -0.1 0.1
Net prepaid pension cost as of 12/31
recognized in the balance sheet -8.7 -7.9
Investments 12.4 (12.4) mil. CHF, pension plan obligations 3.7 (4.6) mil. CHF
The principal actuarial assumptions used for accounting purposes were:
Discount rate 3.8% 3.9%
Interest on savings 5.0% 5.0%
Future salary increases 3.0% 2.9%
Future pension increases 1.0% 1.0%
In addition the Group has several defined-contribution plans. The cost of these
plans was 0.5 (1.1) million CHF.

27 Other financial commitments
Rental and leasing contracts
Obligations arising from long-term rental and leasing contracts not recognized in the
balance sheet:
Up to 1 to More than
mil. CHF Total 1 year 5 years 5 years
2004 76.2 16.6 44.8 14.8
2003 91.3 17.9 51.4 22.0
Operating leasing consists mainly of leases on buildings, information technology
equipment, and vehicles. The maximum residual life is 17 years for buildings, and
less than 3 years for the other items. The interest rates vary between 3.15% p.a. and
4.5% p.a. depending on the year in which the respective lease was concluded and its
duration.
Forward exchange contracts
The values of open forward exchange contracts to hedge transactions in foreign
currencies were:
mil. CHF 2004 2004 2003 2003
Transaction Contract Market Contract Market
currency value value value value
EUR 2.3 -0.1 8.9 0.1
YEN 6.2 0.1 0.8 -0.1
USD 38.5 -0.2 1.1 -0.1
Total forward exchange contracts 47.0 -0.2 10.8 -0.1
All forward exchange contracts mature in 2005 and 2006.
Interest rate swap agreements
On December 31, 2004, the WMH Group had open an interest rate swap agreement
for partial hedging of the interest risk on the outstanding amounts of the syndicated
loan. Under these hedging transactions, each quarter the Group paid fixed, and
received variable, amounts according to the following conditions:
2004 2003
Instrument Contract Rate Rate Market Market
Interest rate swap volume payable received value value
End date mil. (fixed) (variable) mil. CHF mil. CHF
10/12/2004 USD 10 fix 3.84% LIBOR 0.0 -0.2
10/12/2004 USD 5 fix 3.84% LIBOR 0.0 -0.1
07/20/2004 EUR 5 LIBOR +1.4% EURIBOR 0.0 -0.1
12/31/2006 (collar) USD 30 2.10–3.10% LIBOR -0.2 -0.1
Total interest rate
swap agreements -0.2 -0.5
Other
In respect of Pan-Isovit GmbH, a former subsidiary, a guarantee was given by
WMH in connection with a fine of 1.5 million EUR which was imposed as a result
of a formal inquiry by the Commission of the European Union regarding a breach
of regulations governing competition by 10 European companies in the district
heating business in October 1998. An appeal to the European Court of Justice
against this fine is still in process, after an appeal to the first-level court was rejected.
An estimate of the definite amount of the fine is not yet possible. At the end of
2004 there were appropriate provisions for possible monetary payments resulting
from the above obligation.
28 Related parties
16
17
WMH Financial Report 2004
Pexca International Ltd, Hong Kong
WMH Tool Group holds a 33 1 /3% stake in the holding company Pexca International
(“Pexca”). The investment was undertaken to secure the business relationship in
the long term. The subsidiary of Pexca with its headquarters in Laizhou, China,
manufactures vises and clamps for WMH Tool Group. There are purchase agreements
for 5 million USD annually. In 2004, products were purchased for 7.5 million
USD. At the end of the reporting year, no receivables or payables were open with
this company.
Option plan for managerial employees of WMH companies,
WMH Group Management, and the Board of Directors
On April 24, 2002, the Board of Directors enacted a new so-called target option
plan, which allows managerial employees and members of the Board of Directors to
purchase during the period from April 1, 2005, to March 31, 2006, registered shares
of WMH at a price of CHF 82.50 (adjusted), provided that the price of the registered
share on March 31, 2005, is at least CHF 125.00 (adjusted). The options were offered
to the recipients free of charge. They are backed by 82 000 shares (adjusted) in
treasury. The closing price on December 31, 2004, was CHF 64.00.
Compensation of members of the Board of Directors and Group Management
2004 2003
Board of Directors (non-executive)
Number of persons 4 4
Fees paid (mil. CHF)
Group Management (executive)
1.1 1.4
Number of persons 4 3
Salaries paid (mil. CHF) 1.8 1.7
Total fees/salaries paid (mil. CHF) 2.9 3.1
Other
There is a leasing contract with the Chairman of the Board of Directors for offices
used by a WMH company. The annual rental is 0.3 million CHF.
29 Events after the balance sheet date
As in the previous year, and in accordance with the appropriation of available earnings
shown on page 26, the Board of Directors proposes to the Annual General Meeting of
May 2, 2005, to forego payment of a dividend.
On January 7, 2005, the minority interests of 20 million USD in WMH Tool Group were
purchased from third parties and the call option on the warrant was exercised.

WMH Group
Information by sector
a) Based on economic sectors
Net sales %
mil. CHF
mil. CHF
Operating income/loss (EBITA) %
Not allocatable mil. CHF
Operating income/loss (EBITA) mil. CHF
Share in profit of associated companies mil. CHF
mil. CHF
Assets %
Not allocatable mil. CHF
Total assets as per balance sheet mil. CHF
mil. CHF
Liabilities %
Not allocatable mil. CHF
Total liabilities as per balance sheet mil. CHF
Net additions/disposals(-) to property,
plant, equipment and intangible assets mil. CHF
Not allocatable mil. CHF
Total net additions/disposals(-) to property,
plant, equipment and intangible assets mil. CHF
Depreciation of property, plant,
equipment and intangible assets mil. CHF
Not allocatable mil. CHF
Total depreciation and amortization mil. CHF
Additional information:
Orders received mil. CHF
Order inventory mil. CHF
Research and development mil. CHF
Intangible assets mil. CHF
Employees (year-end)
%
Not allocatable
Total
R O A %
b) Based on geographical sectors Switzerland
2004 2003
Net sales (based on location of customer) mil. CHF 290.3 277.5
Net sales (based on location of Group company) mil. CHF 331.0 335.4
Operating income/loss (EBITA) mil. CHF 21.0 15.5
Income from associates mil. CHF 0.0 0.0
Assets (based on location of asset) mil. CHF 155.0 137.7
Liabilities mil. CHF 116.3 113.5
Net additions/disposals(-) to property,
plant, equipment and intangible assets mil. CHF -0.9 2.8
Depreciation of property, plant, equipment and intangible assets mil. CHF 6.6 7.2
Employees (year-end) 906 924

18
19
WMH Financial Report 2004
WMH Tools WMH Air Conditioning WMH Heating Total
2004 2003 2004 2003 2004 2003 2004 2003
310.5 319.6 234.5 215.7 162.9 158.0 707.9 693.3
43.9 46.1 33.1 31.1 23.0 22.8 100.0 100.0
2.2 -0.3 18.5 13.7 13.5 12.2 34.2 25.6
6.4 -1.2 54.1 53.5 39.5 47.7 100.0 100.0
-7.4 -7.9
26.8 17.7
0.2 0.1 0.0 0.0 0.0 0.0 0.2 0.1
156.2 199.2 99.4 100.6 57.9 54.4 313.5 354.2
49.8 56.2 31.7 28.4 18.5 15.4 100.0 100.0
32.7 19.9
346.2 374.1
78.2 94.1 41.5 36.6 69.7 69.0 189.4 199.7
41.3 47.1 21.9 18.3 36.8 34.6 100.0 100.0
34.2 36.3
223.6 236.0
-2.0 3.2 4.3 2.8 -1.4 1.1 0.9 7.1
5.3 0.3
6.2 7.4
26.4 11.8 7.4 6.7 3.0 3.0 36.8 21.5
0.2 0.1
37.0 21.6
309.1 318.0 235.5 222.7 165.2 157.6 709.8 698.3
20.6 24.4 16.1 16.1 3.2 2.1 39.9 42.6
3.5 3.9 5.1 5.4 2.7 3.0 11.3 12.3
18.8 46.6 12.9 16.0 1.5 1.0 33.2 63.6
585 546 705 689 523 527 1 813 1 762
32.3 31.0 38.9 39.1 28.8 29.9 100.0 100.0
21 17
1 834 1 779
1.2 -0.2 18.8 15.6 24.6 23.1 8.1 4.7
Other Europe North America Other or not allocatable Total
2004 2003 2004 2003 2004 2003 2004 2003
137.2 125.7 261.4 280.7 19.0 9.4 707.9 693.3
104.8 94.0 268.8 281.9 3.3 -18.0 707.9 693.3
4.4 3.2 4.0 1.2 -2.6 -2.2 26.8 17.7
0.0 0.0 0.0 0.0 0.2 0.1 0.2 0.1
52.1 46.2 139.8 187.4 -0.7 2.8 346.2 374.1
30.7 24.1 70.0 88.0 6.6 10.4 223.6 236.0
1.8 1.2 -1.7 3.1 7.0 0.3 6.2 7.4
4.3 3.1 26.1 11.1 0.0 0.2 37.0 21.6
234 223 568 567 126 65 1 834 1 779

WMH Group
Report of the Group auditors

Annual Financial Statements
WMH Walter Meier Holding AG
Income statement and notes 22
Balance sheet and notes 23
Notes to the financial statements 24
Consolidated companies
and list of significant investments 25
Proposal of the Board of Directors concerning
appropriation of available earnings 26
Report of the statutory auditors 27
Addresses 28
20
21
WMH Financial Report 2004

WMH Walter Meier Holding AG
Income statement and notes
2004 2003
Income mil. CHF mil. CHF
Dividend income 17.1 11.5
Financial income 1.7 1.5
Release of provisions no longer required 0.0 0.2
Total income 18.8 13.2
Expenses
Financial expenses 2.2 1.8
Administrative expenses 1.5 0.8
Depreciation of investments and loans to subsidiaries 12.1 8.5
Income and capital taxes 0.1 0.1
Total expenses 15.9 11.2
Net income for the year 2.9 2.0
Higher dividend income and financial income caused the total income of WMH Walter
Meier Holding AG to increase by 5.6 million CHF. On the expense side of the income
statement, all expense categories were higher. The increase in administrative expenses
resulted partly from tax regulations concerning the disclosure of certain costs relating to
the holding of the Group. The amortization of investments in subsidiaries relates mainly
to a sub-holding containing the activities of WMH Tool Group.
Net income rose by 0.9 million CHF.

Balance sheet and notes
22
23
WMH Financial Report 2004
12/31/04 12/31/03
Assets mil. CHF mil. CHF
Cash in banks 13.1 3.3
Marketable securities 12.0 11.9
Receivables from subsidiaries 4.6 2.1
Other receivables 0.0 0.1
Prepaid expenses 0.0 0.1
Total current assets 29.7 17.5
Investments in subsidiaries 120.1 132.2
Long-term loans to subsidiaries 33.1 30.8
Other non-current assets 0.0 0.1
Total non-current assets 153.2 163.1
Total assets 182.9 180.6
Liabilities
Payable to subsidiaries 10.5 9.6
Other current liabilities 0.0 0.1
Accrued expenses 3.8 3.3
Other short-term provisions 1.0 2.5
Total current liabilities 15.3 15.5
Loans from third parties 11.1 12.4
Loans from subsidiaries 29.4 28.6
Total non-current liabilities 40.5 41.0
Total liabilities 55.8 56.5
Share capital 60.8 60.8
General legal reserve 15.0 15.0
Reserve for treasury shares 13.9 13.8
Unrestricted reserve 26.2 26.2
Retained earnings
Carried forward from prior year 8.3 6.3
Net income for the current year 2.9 2.0
Total retained earnings 11.2 8.3
Total shareholders’ equity 127.1 124.1
Total liabilities and shareholders’ equity 182.9 180.6
There were few noteworthy changes in the individual items of the balance sheet, and
the total balance sheet value remained essentially unchanged.
Total current assets (+12.2 million CHF) increased, mainly reflecting higher levels
of cash and receivables. On the other hand, the amortization of investments in subsidiaries
reduced the value of total long-term assets (-9.9 million CHF) at the same
time as long-term loans to subsidiaries slightly increased.
On the liabilities side, there were minor decreases in both current and long-term liabilities.
The net income for the year brought shareholders’ equity up to 127.1 million CHF.

WMH Walter Meier Holding AG
Notes to the financial statements
Contingent liabilities
12/31/04 12/31/03
mil. CHF mil. CHF
Credit limits available to subsidiaries (syndicated credit facility) 134.8 150.0
Guarantees on behalf of subsidiaries 15.4 11.1
In association with the contract for the syndicated credit, guarantees were issued:
The Company has entered into a guarantee on behalf of most subsidiaries, in each
case for the amount of the respective equity less share capital and statutory reserves,
defined on the date of the balance sheet as the freely disposable equity according
to Swiss law, maximum 165 million CHF (165). Conversely, also in association with
this contract, most subsidiaries guarantee the obligations of WMH Walter Meier
Holding AG.
Guarantees on behalf of subsidiaries relate mainly to guarantees to lessors for real
estate sold and leased back by subsidiaries, as well as guarantees in relation to interest
hedging and leasing transactions affecting some subsidiaries.
Pension plan liabilities
12/31/04 12/31/03
mil. CHF mil. CHF
Short-term liabilities to the WMH AG pension fund 0.0 0.1
Marketable securities
This line item contains reserved shares, treasury shares, and other marketable securities.
Reserved shares are valued at nominal value. Shares for which there are option
and similar plans and other marketable securities are valued at market prices.
Repurchased treasury shares
Quantity Purchase price
mil. CHF
Balance at December 31, 2003 308 695 13.8
Additions 6 840 0.6
Disposals -7 506 -0.5
Balance at December 31, 2004 308 029 13.9
Additions and reissues are recorded at market values.
Share capital
Information relating to the composition of the share capital is presented on page 4.

Consolidated companies
and list of significant investments
24
25
WMH Financial Report 2004
Company Share capital Percentage of equity held
WMH Tools
WMH Tool Group Inc., Elgin, USA USD 30 180 000 100%
WMH Tool Group (Shanghai) Ltd., Shanghai, China CNY 8 292 000 100%
WMH Tool Group AG, Schwerzenbach, Switzerland CHF 2 000 000 100%
Walter Meier AG, Schwerzenbach, Switzerland CHF 1 150 000 100% 1)
Mato CNC-Maschinen AG, Berneck, Switzerland CHF 1 500 000 100% 1)
WMH Air Conditioning
Axair AG, Pfäffikon, Switzerland CHF 2 150 000 100% 1)
AxEnergy AG, Pfäffikon, Switzerland CHF 500 000 100% 1)
Axair Nortec Ltd., Ottawa, Canada CAD 200 100 100%
Axair Nortec Inc., Ogdensburg, USA USD 10 100%
Axair (Far East) Ltd., Hong Kong, China HKD 2 060 000 70% 1)
Axair (Shanghai) Ltd., Shanghai, China CNY 1 655 000 70%
Axair (Beijing) Air Humidification Co. Ltd., Beijing, China CNY 11 000 000 70%
Nordmann Engineering AG, Aesch, Switzerland CHF 800 000 100% 1)
Axair Kobra AG, Romont, Switzerland CHF 1 480 000 100% 1)
Axair GmbH, Garching, Germany EUR 280 200 100%
Axair (France) S.à.r.l., Neuilly-sur-Marne, France EUR 1 677 000 100%
Axair Climate Ltd., Solihull, United Kingdom GBP 50 000 100%
Draabe Industrietechnik GmbH, Hamburg, Germany EUR 77 300 100%
Charles Hasler AG, Regensdorf, Switzerland CHF 1 050 000 100% 1)
WMH Heating
Vescal S.A., Vevey, Switzerland CHF 1 000 000 100% 1)
Oertli Service AG, Schwerzenbach, Switzerland CHF 7 300 000 100% 1)
Oertli Induflame AG, Schwerzenbach, Switzerland CHF 500 000 100% 1)
Finance and Financial Services
Exploitatie Maatschappij Vierlo B.V., Amsterdam, Netherlands EUR 11 345 100% 1)
Nivek Beleggingen N.V., Curaçao, Netherlands Antilles EUR 158 900 100% 1)
WMH Interholding AG, Stäfa, Switzerland CHF 10 000 000 100% 1)
WMH Walter Meier Holdings Corp., Wilmington, USA USD 48 500 000 100%
WMH Walter Meier Holding Deutschland GmbH, Garching, Germany EUR 2 045 168 100% 1)
WMH Walter Meier Holding Insurance Ltd., Hamilton, Bermuda USD 300 000 100% 1)
WMM Walter Meier Management AG, Stäfa, Switzerland CHF 100 000 100% 1)
1) Direct investment of WMH Walter Meier Holding AG

WMH Walter Meier Holding AG
Proposal of the Board of Directors concerning
appropriation of available earnings
The Board of Directors proposes to the Annual Shareholders’ Meeting that the
retained earnings of 11.2 million CHF be carried forward to the new fiscal year.
2004 2003
mil. CHF mil. CHF
Net income for the fiscal year 2.9 2.0
Earnings brought forward from the prior year 8.3 6.3
Retained earnings 11.2 8.3
Earnings carried forward to the new fiscal year 11.2 8.3

Report of the statutory auditors
26
27
WMH Financial Report 2004

Addresses
WMH Walter Meier Holding AG
Laubisrütistrasse 24
8712 Stäfa
Switzerland
Phone +41 44 928 15 15
Fax +41 44 928 15 00
direct@wmh.ch
www.wmh.ch
WMH Tools
WMH Tool Group Inc.
2420 Vantage Drive
Elgin, IL 60123
USA
Phone +1 847 851 10 00
Fax +1 847 851 10 45
wmh@wmhtoolgroup.com
www.wmhtoolgroup.com
WMH Tool Group AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 47 48
Fax +41 44 806 47 58
info@wmhtoolgroup.ch
www.wmhtoolgroup.ch
WMH Tool Company (Shanghai) Ltd.
135 Guang Hua Road
Zhuanqiao
Shanghai, 201108
China
Phone +86 216 489 01 47
Fax +86 216 489 53 74
wmh@wmhtoolgroup.com
www.wmhtoolgroup.com
WMH Tool Group Ltd.
212 A Wilkinson Road
Brampton, ON L6T 4M4
Canada
Phone +1 905 792 97 69
Fax +1 905 792 76 70
wmh@wmhtoolgroup.com
www.wmhtoolgroup.com
Walter Meier AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 46 46
Fax +41 44 806 47 47
info@waltermeier.ch
www.waltermeier.ch
MATO CNC-Maschinen AG
Auerstrasse 32
9442 Berneck
Switzerland
Phone +41 71 722 99 90
Fax +41 71 722 99 92
info@matoag.ch
www.matoag.ch
WMH Air Conditioning
Axair AG
Talstrasse 35–37
8808 Pfäffikon SZ
Switzerland
Phone +41 55 416 61 11
Fax +41 55 416 62 62
axair@axair.ch
www.axair.ch
Axair (Far East) Limited
Room 1411, 14/F
C C Wu Building
302-308 Hennessy Road
Wan Chai
Hong Kong
Phone +852 2154 1022
Fax +852 2578 8525
admin@axair.com.hk
www.axair.com
Axair (Beijing)
Air Humidification Co., Ltd.
Area C, No. 3, Guang Lian Industry Park
Guang Ji Dian Yi Ti Hua Chan Ye Ji Di
Tong Zhou District
Beijing 101111
China
Phone +86 10 815 030 08/51/52
Fax +86 10 815 038 70
mail@axair.com.cn
www.axair.com.cn
Axair Nortec Ltd.
2740 Fenton Road
Ottawa, Ontario K1T 3T7
Canada
Phone +1 613 822 03 35
Fax +1 613 822 79 64
nortec@humidity.com
www.humidity.com
Nordmann Engineering AG
Bruggfeldweg 11
4147 Aesch
Switzerland
Phone +41 61 467 76 66
Fax +41 61 467 76 77
info@nordmann-engineering.com
www.nordmann-engineering.com
Charles Hasler AG
Komponenten für Kälte und Klima
Althardstrasse 238
8105 Regensdorf
Switzerland
Phone +41 44 843 93 93
Fax +41 44 843 93 99
kaelteklima@charles-hasler.ch
www.charles-hasler.ch
Axair GmbH
Systeme für die
Luftkonditionierung & Co. KG
Carl-von-Linde-Strasse 25
85748 Garching-Hochbrück
Germany
Phone +49 89 326 70 0
Fax +49 89 326 70 140
info@axair.de
www.axair.de
www.klimaplus.de
Axair S.à.r.l.
100, Bld Louis Armand
Z.l. des Chanoux
93331 Neuilly-sur-Marne
France
Phone +33 820 824 817
Fax +33 143 001 928
axair@axair.fr
www.axair.fr
Axair Kobra AG
2, route des Barges
1680 Romont
Switzerland
Phone +41 26 651 77 77
Fax +41 26 651 77 70
office@axairkobra.ch
www.axairkobra.ch
Axair Climate Limited
Highlands Road, Shirley, Solihull
West Midlands B90 4NL
United Kingdom
Phone +44 121 705 76 01
Fax +44 121 704 13 71
response@axairclimate.co.uk
www.axairclimate.co.uk
AxEnergy Ltd.
Talstrasse 35–37
8808 Pfäffikon SZ
Switzerland
Phone +41 55 416 66 70
Fax +41 55 416 62 62
axenergy_ch@ctfog.com
www.ctfog.com
Draabe Industrietechnik GmbH
Schnackenburgallee 18
22525 Hamburg
Germany
Phone +49 40 85 32 77 0
Fax +49 40 85 32 77 79
draabe@draabe.de
www.draabe.de
www.draabe.com
28
WMH Financial Report 2004
WMH Heating
Vescal SA
Z.I. de la Veyre, St-Légier
Case postale 1224
1800 Vevey 1
Switzerland
Phone +41 21 943 02 22
Fax +41 21 943 02 33
info@vescal.ch
www.heizen.ch
Oertli Service AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 41 41
Fax +41 44 806 41 00
info@oertli-service.ch
www.heizen.ch
Oertli Induflame AG
Bahnstrasse 24
8603 Schwerzenbach
Switzerland
Phone +41 44 806 45 45
Fax +41 44 806 45 55
info@oertli-induflame.ch
www.oertli-induflame.com

WMH Walter Meier Holding AG
Laubisrütistrasse 24
8712 Stäfa
Switzerland
Phone +41 44 928 15 15
Fax +41 44 928 15 00
direct@wmh.ch
www.wmh.ch