THE ANNUAL REPORT 2002 - Oerlikon Barmag

Index 

2 Financial highlights 

3 Introduction 

4 The 2002 financial year 

13 Financial report 2002 

21 Consolidated financial statements 

49 Financial report of Saurer Ltd. 

56 Corporate Governance 

67 Addresses 

71 Share statistics 

THE ANNUAL REPORT 2002

FINANCIAL HIGHLIGHTS 

Key data 

(CHF 000) 2002 2001 

Change 

in % 

Sales 2 490 391 2 405 919 3.5 

Operating profit before impairment charge 101 291 24 171 319.1 

% of sales 4.1% 1.0% 

Impairment charge – 76 786 

Operating profit (loss) 101 291 –52 615 

Net profit (loss) 48 643 –76 026 

% of sales 1.9% –3.2% 

Depreciation and amortization 116 860 127 081 –8.0 

% of sales 4.7% 5.3% 

EBITDA 218 151 151 252 44.2 

Cash flow (Net cash from operating activities) 212 728 176 097 20.8 

% of sales 8.5% 7.3% 

Capital expenditure 72 726 96 686 –24.8 

Employees (year end) 10 760 11 520 –6.6 

Total assets 1 909 906 2 065 251 –7.5 

Shareholders’ equity 643 671 625 212 3.0 

% equity financing 33.7% 30.3% 

Stock market capitalization (year end) 474 472 462 900 2.5 

Share summary (CHF) 

Nominal value 12.50 12.50 

Shareholders’ equity 45.81 44.02 

Earnings (loss) per share 3.45 –5.35 

Cash flow (Net cash from operating activities) 15.07 12.40 

Capital repayment1) 1.00 – 

1) Proposal of the Board of Directors to the General Meeting of Shareholders. 

2

LIKE THIS: 

76 PAGES, STAPLED, TWO- 

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Dear Reader 

TEMPUS is the project with which we intend to gear Saurer business 

processes and Saurer culture consistently to the benefit of 

our customers. However, TEMPUS should be more than just a project 

– it should also be a new mental outlook of employees with a 

focus on customer benefit and efficiency, creativity and teamwork. 

This radical attitude does not, of course, completely bypass the 

annual report and we have conversed with “customers” of the 

annual report, namely our shareholders, business partners and 

media representatives, about what benefit they would wish to 

gain from the annual report. The desire for an honest, unadorned 

and comprehensible view of where the company stands in the 

market, financially and in terms of technology and how it is 

managed was clearly at the centre. 

The result lies before you. We hope we have met your wishes, 

too. We would be very pleased to receive your feedback to 

info@sgm.saurer.com. It will help us to satisfy our customers’ 

requirements even better in the next annual report. 

3

THE 2002 

FINANCIAL 

YEAR 

DEAR SHAREHOLDERS 

The 2002 financial year developed in general positively for Saurer. 

Further significant measures to reduce costs in the textile sector 

in Germany, as well as in surface technology, enabled lowering of 

the targeted break-even point. Recovery in sales of textile machines 

in the second half of the year, in combination with lower 

annual costs, led to an improvement in operating results for this 

division. The reported result was, however, curtailed by additional 

restructuring expenditure in Germany. The transmission systems 

division continued its robust performance. Graziano Trasmissioni 

was able to increase sales and operating results, thanks to strict 

management of costs, new products in the automobile sector, 

and integration and consolidation of the acquisitions made last 

year. Integration of the complete textile business under a com- 

4 

mon management in the middle of 2002, systematic re-engineering 

of all business processes and a dynamic corporate culture, will 

lead to further progress in Saurer’s profitability. 

The group’s order income increased by 21% to CHF 2 628 million 

(adjusted for acquisitions and currency 20%), and sales increased 

by 4% to CHF 2 490 million (adjusted for acquisitions and currency 

by 3%). The operative improvement is a consequence of 

systematic and sustained reduction in costs realized over past 

years. Earnings before interest and tax (EBIT) increased from CHF 

–53 million in the previous year to CHF 101 million. Restructuring 

costs of CHF 43 million (CHF 46 million restructuring costs and 

CHF 77 million goodwill impairment charge in the previous year), 

are included in this. The EBITDA (earnings before interest, tax, 

depreciation and amortization) increased from CHF 151 million to

amortisation) increased from CHF 151 million to CHF 219 million. 

Net profit improved from a loss of CHF 76 million in the previous 

year to a profit of CHF 49 million. The cash flow from operating 

activities amounted to CHF 213 million. Net debt was reduced by 

CHF 145 million to CHF 154 million. The degree of equity financing 

amounts to 34% (30% in the previous year). 

Strong capital investment was made in the transmission systems 

division – 41% of Saurer’s total investment, with 52% made in 

the textile division and 7% in surface technology. 

We regularly examine the value of capitalized goodwill using discounted 

cash flow analysis, to comply with the requirements of 

IFRS financial reporting rules. On the basis of our present mediumterm 

planning, there is no impairment of goodwill. 

FAVOURABLE DEVELOPMENT 

IN THE TEXTILE AND TRANS- 

MISSION SYSTEMS DIVISIONS. 

The increasingly cyclical nature of textile machine business made 

itself felt once more in the past year. Following a revival at the 

end of 2000 and the decline in the second half of 2001, business 

in the natural fiber sector revived again quicker than expected in 

the second quarter of 2002. Order intake rose by 20% to CHF 

1’910 million and sales by 2% to CHF 1’777 million (adjusted for 

currency). Asian markets in particular, led by China and India and 

also Turkey, developed a strong demand for technically advanced 

products, more than expected. In contrast to this, demand in 

Europe and America persisted at the expected low level, apart 

from a few exceptions. The satisfactory volume of orders on hand 

at the end of the year as well as advanced negotiations for further 

projects, promise a good utilisation of production capacity for 

most plants until well after mid-2003. Business units in the natural 

fiber sector are in a position to cushion these short cycles with 

up to 30% fluctuation in utilisation of facilities from quarter to 

quarter and to adjust themselves correspondingly, thanks to a 

higher level of flexibility and discipline with costs, worked out 

over the past few years. First-class products with high customer 

benefit and after-sales service available world-wide, combined 

with continually reducing production costs, have allowed margins 

in most areas to improve further despite continuing pressure on 

prices. 

The order intake for synthetic fiber plants, at CHF 658 million was 

only slightly above the extremely low figure for the previous year, 

which with sales of CHF 642 million (CHF 693 million in the previous 

year) led to an increase in the volume of orders on hand at 

the close of the year. 

Developments in the business for synthetic fiber plants were not 

uniform. Neumag developed positively with machinery for production 

of carpet yarn and synthetic staple fiber, not only in 

respect of orders received and sales, but also in profit margins. 

On the other hand, Barmag’s business with filament spinning and 

texturing machines is still under enormous volume and price pressure. 

For this reason, additional restructuring measures were necessary, 

far beyond those introduced in the middle of 2001. They 

include a further reduction in structure costs as well as an accelerated 

re-orientation of production and logistical structures with 

an even stronger focus on the locations in China and the Czech 

Republic. Fortunately, demand in the synthetic fiber segment also 

revived significantly in the second half of the year. This was, 

however, by no means sufficient to compensate for the heavy losses 

suffered in the first half of the year. Even though the second 

half of the year produced an almost break even operating result 

in the synthetic fiber segment, still greater efforts lie ahead for 

Barmag to achieve sustained healthy results again. 

Despite the improved market conditions at present in the textile 

machine business, our structural adjustments in Germany are 

being pursued with greater intensity. Programs for outsourcing 

and for further lowering of fixed costs are at the fore in all business 

units. These measures are well advanced and the costs for 

the programs are provided for. In 2002, capacity adjustment in 

the textile segment led to a cutback of 851 jobs as against the 

previous year (–12%). 

All of Saurer’s textile activities in the “Saurer Textile Solutions” division 

were combined under one management structure from 

June 1st , 2002. “Saurer Textile Solutions” comprises nine strategic 

business units and the overlapping functions of Marketing & 

Sales, Technology, Administration and Human Resources. With 

the establishment of the new organisation, the joint “TEMPUS” 

program for systematic simplification and radical alignment to 

customer benefits of all business processes was initiated. The target 

is to reduce costs during the course of the next three years by 

a further CHF 50 million while simultaneously improving customer 

satisfaction. This ambitious program will have a lasting impact 

on Saurer’s corporate culture and will lead to more entrepreneurial 

spirit at all levels. 

Klaus Moll and Heinz Bachmann have retired from operational 

management of Saurer in the wake of this re-organisation. The 

Board of Directors and the Group management express their sincere 

thanks for their extensive commitment. The second stage of 

expansion of the new assembly and logistics centre in Suzhou 

(China) was put into operation in June 2002, from where primarily 

the Chinese market is to be supplied in close contact with 

customers. It is also planned to use this location increasingly for 

the world-wide supply of components, in a later phase. 

The transmission systems division reports an increase in sales of 

31% (12% adjusted for currency and acquisitions) through new 

projects in the automotive sector and the integration of the Carr 

5

Magnetto’s transmission engineering, while maintaining operative 

profit performance and cash flow margins at a satisfactory 

level. It is a measure of Graziano’s strategically successful position 

in the market that this result has been achieved despite 

considerable integration costs, continuing low turnover in the 

traditional markets for agricultural and construction vehicles, as 

well as the flagging worldwide economic situation in the automobile 

industry. 

Surface Technology, with its main focus of operations in the USA, 

was again subjected to the weakness of the American economy 

and in particular, the consequences of strong decline in industrial 

production. Sales fell by a further 12% whereby the supply of 

plastification components (Xaloy) to plastic injection machine 

manufacturers was particularly badly hit. This led to a continuing 

low utilization of the already reduced capacity as well as a correspondingly 

lower absorption of fixed costs. The consolidations 

completed at the beginning of 2002 have led to a worldwide 

6 

Saurer Textile Solutions 

reduction of 240 jobs and the closing of factories in Switzerland 

and the USA. 

Both business units of the surface technology division (Xaloy and 

IonBond) are intended to be sold and accordingly are disclosed 

separately in this report as discontinuing operations. 

SAURER TEXTILE SOLUTIONS – 

INCREASE IN FLEXIBILITY AND 

COST REDUCTION WITH NO- 

TICEABLE MARKET RECOVERY 

Saurer’s synthetic fiber plant operations (Barmag) were reorganized 

into the three strategic business units of Neumag, Texturing 

and Spinning during the course of consolidating Saurer’s activities 

in the textile sector, each of which addresses a specific product/

market segment. The developments in the three business units in 

2002 were varied. 

Neumag: strong staple fiber business and entry into spunbond 

market Neumag showed a positive development not only 

in installations for the manufacture of synthetic staple fibers but 

also with carpet yarn plants. Sturdy demand as well as an increase 

in market share led to sales lying within the scope of 

expectations and a good intake of new orders. Neumag closed 

with a clearly positive result and started the new year with a high 

order backlog. The Asian markets, and China in particular, displayed 

considerable demand for new staple fiber capacity. Neumag has 

successfully established itself here in the past few years as a supplier 

of complete systems. In the carpet yarn business, where the 

integration of Barmag operations into Neumag has been successfully 

completed, the American market was well to the fore. A 

holding in the small American engineering company ASON, active 

in spunbond equipment business, was acquired in mid-2002. 

Patents and specialized know-how of ASON, combined with market 

access and wide experience in Neumag’s plant business, 

should allow Saurer a targeted and cost-efficient entry into the 

demanding segment of the spunbond plant market in the next 

three years, and thus bring about broader support of the volatile 

industrial plant business. The healthy order book at the end of 

the year, attractive products and services, as well as improved 

measures to optimize processes and costs further, will lead to a 

further positive development of business in 2003. 

First fruits from restructuring texturing business First fruits 

from Barmag’s restructuring efforts are recognizable in the texturing 

business. The re-engineering of processes aimed at a 

reduction in manufacturing costs, as well as the rapid relocation 

of production to China and the Czech Republic in order to increase 

flexibility and reduce costs, made it possible to exploit opportunities 

in the reviving markets in Asia and the Middle East during 

the second half of the year. Completion of relocation activities 

and further reduction of fixed costs in Germany will continue to 

have top priority. As a consequence of relocated production the 

factory in Bergisch-Born has been completely vacated and is available 

for sale. Development of a new highly flexible texturing machine, 

which is to be launched in the second half of 2003, is well 

advanced. The joint venture in China, with about 180 employees, 

which has existed since 1996, was dissolved in the mid-year and 

the business transferred to 100% subsidiaries of Barmag in Wuxi 

and Suzhou. 

Pressure on volumes and prices in the synthetic fiber spinning 

machine business The situation in Barmag’s spinning 

machine business remains very unsatisfactory. The continuing 

weak demand, which revived only slightly toward the end of the 

year, severe price competition for the few large-scale projects 

with corresponding squeeze on profit margins, keep eroding the 

improvement in costs which has been achieved through hard 

work and is running according to plan. A further acceleration in 

relocating production to China, introduced in the third quarter of 

2002, has scheduled the program completion for the fourth quarter 

of 2003, 15 months ahead of time. It includes all important 

spinning machine components. The joint venture in China with 

Shanghai Erfangji was terminated at the end of 2002 and transferred 

to the extended activities of Saurer in Suzhou. The first 

smaller plant design projects were acquired and delivered in the 

year under review not only in the technical yarn field but also in 

the textile field. The new spinning plant “VARIOFIL”, which because 

of its compact method of construction and modular form 

sets a new standard for small and medium-sized plants, also 

achieved first market success. The first orders for 10- and 12- fold 

spinning machines, which enable significantly increased productivity 

in a small space, were obtained and delivered according to 

plan in the year under review. 

ACO 312 – the standard for rotor spinning machines Business 

developed on the whole positively in the staple fiber segment. 

Business in rotor spinning machines moved slightly above 

the level of the previous year. The order intake in particular from 

China and Turkey increased again starting in the second quarter 

of the year and allowed a continuous increase in volumes in the 

second half of the year. The new ACO 312 rotor spinning machine 

introduced last year met our customers’ high expectations in 

respect of yarn quality, productivity and flexibility, and sets the 

global standard for rotor spinning machines. 

CompACT3 – for broader range of application Business also 

distinctly revived in the second half of the year in the ring spinning 

business unit. Profit margins were slightly increased thanks 

to continual improvement in costs. Markets particularly in Turkey, 

the Middle East and South East Asia regained something of their 

earlier dynamism in ringspinning. The American markets on the 

other hand continued at the low level of the previous year. Zinser 

Textile Systems Private Ltd. was established in India during 2002, 

and is to manufacture and market the technically advanced Zinser 

roving frame for the Indian market. The introduction of Zinser 

CompACT3 compression spinning machines is proceeding according 

to schedule. In the year under review, the first machines in 

the long staple segment (wool) were sold in Italy and Japan, and 

the first large orders were obtained in the cotton segment. The 

CompACT3 system excels over the competition through its considerably 

wider range of application and its high degree of resistance 

to choking. 

Winding machines successful in Asia Business in winding 

machines profited from pressure on spinning mills in developing 

countries to renew their outdated winding machine capacity 

which can no longer meet quality expectations for export. In Asia, 

mainly China and India, but also other markets such as Pakistan, 

Bangladesh and Vietnam continue to be buoyant, so that in 2003 

a good level of business may again be expected. The continuing 

7

pressure on prices in China was successfully countered by the 

launch of a machine configuration specially tailored to the Chinese 

market. Two new types of modules with a new splicing unit 

for core yarns and with “ECOPACK”, an exact measuring of yarn 

length going down to thousandths resulting in a reduction of 

waste in subsequent processes, were launched during the past 

year; these demonstrate once again our role as technology leaders. 

Recovery in the twisted yarn market Business in twisting 

machines which collapsed at the end of 2000 recovered markedly 

in the most important markets. Carpet yarn and tyre cord machines 

in the American market, the Compact Twister in the staple 

fiber twisted threads in Europe and Asia, and the machines built 

in Suzhou (China) for the local market, all showed a positive 

development. Likewise well-received by the market was the Fashionator, 

a highly flexible machine for the manufacture of fancy 

yarns. Production of twisting machines by Hamel in Arbon was 

closed down and integrated into Volkmann in Krefeld at the end 

of 2002. A project for further integration of the twisted yarn unit 

and increased co-operation between the factories of Allma in 

Kempten and Volkmann in Krefeld, with a corresponding reduction 

in costs, was commenced in the year under review and is 

expected to be completed in 2003. 

AMAYA – the embroidery machine which can be configured 

Business in large-scale embroidery machines was above the 

level of the previous year in terms of volumes. The price level 

improved somewhat during the course of the year but overall was 

still unsatisfactory. Melco, located in the USA, suffered from the 

continuing weak economic situation in the USA and in South 

America. In the year under review, Melco concentrated on completing 

the development and market introduction of AMAYA, the 

world’s first completely modular single and multi-head embroidery 

machine. Its ability to be configured in any manner within 

seconds makes highly flexible production concepts possible for 

embroidery for the first time. Following successful introduction to 

the market and test trials which were carried out extensively from 

the middle of 2002 in the USA, product launching is being prepared 

at present in the two large embroidery markets, namely 

Turkey and China. 

CONTINUALLY PROFITABLE 

GROWTH IN TRANSMISSION 

TECHNOLOGY 

Transmission Systems continued on a good level over the whole 

of 2002. Orders received and sales increased by 31% (12% adjusted 

for acquisitions and currency). Integration of the Carr Hill 

factory in Doncaster (GB) taken over from CNH (Case New Holland) 

is proceeding according to schedule and has, in the main, 

newed decline in sales by reason of continuing weak industrial production 

in the USA since the middle of 2001. The effect was a halving 

in demand for machines for plastics in the USA, which, with the 

very modest recovery of demand among customers in Europe and 

Japan, led at Xaloy to 14% fewer sales of bimetallic plastification 

components such as screws and barrels. Another American subsidiary, 

IonBond, Inc., also suffered a clear decline in sales in the coatings 

business, whilst business in the European companies in 

Switzerland and UK appeared gratifyingly sturdy and was slightly 

above the figures for the previous year. Adjustment of capacity in 

the USA and Switzerland led to a reduction of 240 jobs as well as 

centralization or closing of three factories in the USA and 

Switzerland. For this reason the operational break-even point could 

again be brought under the present low sales level, in the second 

half of 2002. 

SAURER STRATEGY – TWO 

FOOTHOLDS IN DIFFERENT 

BUSINESS CYCLES 

Saurer’s business will in future include the two strategic divisions 

of “Saurer Textile Solutions” and “Transmission Systems”. The 

preparatory work for the divestment of Surface Technology has 

been completed, so that a sale can be made quickly, following a 

revival in business prospects. 

The flexible supplier of transmission components in niche 

markets In Transmission Systems Saurer aims to exploit opportunities 

for growth in the three segments of agricultural vehicles, 

four-wheel drive vehicles and gears for sports cars, in collaboration 

with the new engineering partner PRODRIVE, and through 

complementary acquisitions. The continuing trend of vehicle 

manufacturers to outsource activities which do not belong to 

core business and the increasing specialization of component 

suppliers are continually opening up fresh opportunities. In developing 

countries such as India and China, additional opportunities 

are offered for robust technologies, and these will be exploited 

through the further development of the factory in New Delhi 

(India). 

The leading supplier of complete solutions for textile machine 

construction In the textile machine division, Saurer has 

a very strong market position with sound worldwide customer 

connections and innovative products. The problems of the past 

were predominantly a consequence of operational insufficiencies, 

low level of flexibility and high costs in the German production 

plants. The improvements in structural costs we have attained 

over the past few years will be consolidated further. Our ability to 

generate a significant cash flow will be further strengthened at 

the same time. The resulting funds will be channelled mainly to 

ally in spring, and in summer a presentation of a selected business 

unit at its location. In common with most European industrial 

companies, our interim reporting will focus on the half-yearly 

report as at June 30, as well as on details of orders received and 

sales for the first and third calendar quarters. 

OUTLOOK 

Overall, Saurer expects a further improvement in results for the 

year 2003. The outlook for a good course of business in the textile 

segment extending beyond the middle of the year exists by 

reason of the satisfactory order book at the end of the year. The 

continuing program to raise flexibility levels and reduce costs are 

showing results and will enable Saurer to react quickly to changes 

in the market. In the Transmission Systems division, we do not 

expect any organic growth (above that of the market level) for 

2003. Further improvements here will derive mainly from full integration 

of the recent acquisitions. 

SPECIAL THANKS TO OUR 

EMPLOYEES 

The 2002 financial year demanded from employees a high level of 

commitment and flexibility. The Board of Directors and Senior 

Management sincerely thank all employees for their contribution. 

Yours faithfully 

Prof. Dr. Giorgio Behr 

Chairman of the Board 

Heinrich Fischer 

CEO and Board Delegate 

12

FINANCIAL 

REPORT 2002 

15 Management’s discussion of results 

CONSOLIDATED FINANCIAL 

STATEMENTS 

23 Consolidated income statement 

24 Consolidated balance sheet 

25 Consolidated cash flow statement 

26 Consolidated statement of shareholders’ equity 

27 Accounting principles 

30 Notes to the consolidated financial statements 

44 Principal companies and investments 

46 Report of the group auditors 

47 Multiple year comparison 

FINANCIAL REPORT 

OF SAURER LTD. 

51 Income statement 

52 Balance sheet 

53 Notes to the financial statements 

54 Proposal to the General Meeting 

55 Report of the statutory auditors 

13

Overview of the business year 2002 

Despite the unfavorable economic environment in the USA and 

Europe, the business year 2002 developed positively. 

The company had to face additional restructuring costs at 

Schlafhorst and Barmag, however, a significant reduction of 

the textile break even volume as well as a recovery in textile 

machinery sales in the second half of the year led to an 

improvement in operating results. In the important Asian markets 

a favorable trend towards high-end products could be 

observed. During the year the project TEMPUS, covering the 

whole textile segment, was started in order to reengineer all 

business processes. The aim of this project is to increase the 

customer value of Saurer products and services and at the 

same time to reduce fixed costs by another CHF 50 m by the 

year 2005. 

Order intake 

Management’s discussion of results 

Despite a partly sluggish demand, Transmission Systems, 

Saurer’s second major business area, further increased sales 

and profit in its traditional markets for agricultural and construction 

machines. The integration of the business areas 

acquired in 2001 was continued successfully and new projects 

were gained in the automotive sector. 

Further preparatory measures were taken concerning the sale 

of Surface Technology. The whole business, especially the plastification 

systems business (Xaloy), suffered from the continuing 

recessive climate in the US economy. The restructuring 

projects in this area were to a great extent finished in 2002 

and helped to bring the business to a good starting position 

for an expected market recovery. 

In 2002, the restructuring projects initiated by the various 

Saurer business segments reduced the overall number of 

employees by 760. 

Change Adjusted Change 

(CHF 000) 2002 2001 in % in % 1) 

Saurer Textile Solutions 1 909 989 1 574 329 21.3% 24.4% 

Natural Fibers 1 252 437 953 734 31.3% 25.8% 

Europe 248 781 232 752 6.9% 

North and South America 234 240 262 203 –10.7% 

Middle/Far East, Rest of World 769 416 458 779 67.7% 

Synthetic Fibers 657 552 620 595 6.0% 9.3% 

Europe 107 566 185 604 –42.0% 

North and South America 75 694 62 364 21.4% 


Transmission Systems 557 751 426 245 30.9% 11.5% 

Europe 438 286 344 333 27.3% 



Discontinuing Operations (Surface Technology) 160 449 168 919 –5.0% –0.2% 

Europe 63 433 60 656 4.6% 


Middle/Far East, Rest of World 12 235 13 690 –10.6% 

Total Saurer 2 628 189 2 175 818 20.8% 19.8% 

Europe 858 066 829 670 3.4% 


Middle/Far East, Rest of World 1 269 012 855 724 48.3% 

1) Adjusted for currency effects and acquisitions. 

Order intake during the business year 2002 closed CHF 452 m 

above prior year and, with a book-to-bill ratio of 1.06, well 

above the sales realized during the same period. An increase 

of CHF 99 m was caused by the first full year consolidation 

effect in 2002 of the acquisitions made in 2001 by Transmission 

Systems. 

Orders from Asia, Middle and Far East together rose by about 

47%, order intake from Europe and the USA was slightly 

above prior year’s order levels. Good order volumes were realized 

throughout the business year. 

In the staple fiber business a further shift of demand from 

Europe and the USA towards Asia and the Middle East was 

observed. The share of Asia and the Middle East was about 

61%. Adjusted for currency effects, order intake in the manmade 

fiber business was 9% above prior year, 66% of it coming 

from the Middle East. 

15


Transmission Systems further increased its order volume. 

Adjusted for currency and acquisition effects, order income 

rose by 11% which is above the organic growth of the 2001 

financial year. 78% of all Transmission Systems orders came 

from European countries. 

Sales 

16 

Despite an already low starting position, in the Surface 

Technology business order income decreased by another 5%. 

Nevertheless, a book-to-bill ratio of 1.03 was realized for the 

whole year. 



Saurer Textile Solutions 1 777 422 1 796 460 –1.1% 2.3% 

Natural Fibers 1 135 800 1 103 419 2.9% 6.3% 

Europe 221 161 262 113 –15.6% 



Synthetic Fibers 641 622 693 041 –7.4% –3.8% 

Europe 147 354 170 890 –13.8% 



Transmission Systems 557 751 426 245 30.9% 11.5% 

Europe 438 285 344 096 27.4% 



Discontinuing Operations (Surface Technology) 155 218 176 889 –12.3% –7.8% 

Europe 58 058 61 728 –5.9% 


Middle/Far East, Rest of World 12 362 16 569 –25.4% 

Total Saurer 2 490 391 2 405 919 3.5% 3.2% 

Europe 864 858 845 152 2.3% 


Middle/Far East, Rest of World 1 131 838 987 635 14.6% 


Supported by significant sales in China and Turkey, total sales 

in 2002 were increased by CHF 84 m. The shift of business 

activities towards Asia and Middle East which started in 1999 

is still continuing. The assembly and logistic center in Suzhou 

(P.R. China) was expanded to exploit this development. 

Order Backlog 

Throughput time in Transmission Systems usually is below one 

month. Sales in this segment developed according to the 

changes in order income described above. 



Saurer Textile Solutions 656 483 545 763 20.3% 24.6% 

Natural Fibers 342 751 236 865 44.7% 49.3% 

Synthetic Fibers 313 732 308 898 1.6% 5.6% 

Transmission Systems – – 

Discontinued Operations (Surface Technology) 21 646 17 448 24.1% 30.3% 

Total 678 129 563 211 20.4% 24.8% 


The positive development of Saurer’s order income led to an 

increase in order backlog of CHF 115 m. The majority of this 

increase originated in the staple fiber business. The synthetic 

fiber and surface technology businesses could only slightly 

raise their orders on hand.

Development of Operating Result (before impairment charge) 


(CHF 000) Jan–Apr May–Aug Sep–Dec Total 

2002 3 186 37 866 60 239 101 291 

2001 38 968 12 012 –26 809 24 171 

In 2002, the operating result before impairment charge was 

CHF 77 m above the prior year result. The cyclical business 

recovery in the market for textile machines, the reduction in 

fixed cost, as well as the improved flexibility of cost structures 

were the main factors responsible for this positive develop- 

Results Saurer Textile Solutions 

ment during the year. For the current reporting period, the 

regular analysis of reported goodwill positions did not lead to 

any impairments. The operating results as shown above also 

include exceptional operating income (such as proceeds from 

sale of property) and expense (such as restructuring cost). 

(CHF 000) 2002 % 2001 % 

Natural Fibers (continuing operations) 

Sales 1 121 541 100.0% 1 090 263 100.0% 

Operating profit (loss) before impairment charge1) 98 909 8.8% 57 575 5.3% 

Depreciation and amortization 33 362 3.0% 35 403 3.2% 

EBITDA 132 271 11.8% 92 978 8.5% 

Natural Fibers (discontinuing operations – Parsys) 

Sales (to third parties) 14 259 100.0% 13 156 100.0% 

Operating profit (loss) before impairment charge1) –7 800 –54.7% –20 904 –158.9% 


EBITDA –4 832 –33.9% –18 231 –138.6% 

Synthetic Fibers 

Sales 641 622 100.0% 693 041 100.0% 

Operating profit (loss) before impairment charge1) –41 440 –6.5% –46 824 –6.8% 


EBITDA –16 019 –2.5% –12 878 –1.9% 

Total Saurer Textile Solutions 

Sales 1 777 422 100.0% 1 796 460 100.0% 

Operating profit (loss) before impairment charge1) 49 669 2.8% –10 153 –0.6% 


EBITDA 111 420 6.3% 61 869 3.4% 

Capital expenditure 38 408 2.2% 43 566 2.4% 

Employees (year end) 6 929 7 632 

1) Including non-recurring income and expense (e.g. restructuring). 

The natural fiber business (staple fiber machines) as a whole 

developed very well; especially Asian markets benefitted from 

a favorable business climate. 

In 2001, rotorspinning introduced the new ACO 312 machine 

to the market. It was well accepted by our customers and triggered 

a sales success in 2002. 

The innovative ringspinning machine CompACT3 gained its 

first large projects. 

The quality and investment pressure which the spinning mills 

in the developing countries are currently facing had a positive 

impact on the winding business. Innovations at the module 

level as well as machine configurations specifically tailored to 

the needs of Asian customers helped Saurer to further consolidate 

its market leader position in this area. 

In 2002, the twisting business was characterized by a significant 

market recovery. The first internal reorganizations were 

successfully finalized by integrating Hamel (Arbon) into 

Volkmann (Krefeld) and further measures were initiated. 

Low margins and sales volumes comparable to prior year characterized 

the business for large embroidery machines. The new 

fully modular single- and multihead machine AMAYA developed 

by Melco was successfully launched in the market. 

After several years of restructuring, the Parsys production 

plant will be shut down in 2003. Outsourcing of the compo- 

17


nents produced there is being finalized. The 2002 operating 

result includes costs related to this shut down. 

The synthetic fiber business (Barmag & Neumag) showed 

continuing low order income and sales. Nevertheless, the different 

businesses developed very differently. Whereas 

machines for carpet yarns and synthetic staple fibers (Neumag) 

realized favorably high sales and margins, volume and price 

pressure continued unabated in the filament and texturing 

machines area (Barmag). Especially in the markets for large 

scale spinning plants, realized cost reductions were eroded by 

shrinking margins. As a result, further emphasis was placed on 

the structural cost reduction already initiated in the prior year 

as well as on the shift of production facilities to China and the 

Czech Republic. An investment in the American engineering 

company ASON by Neumag laid the foundations for accessing 

the highly attractive spunbond market and its future potential. 

Also in the spinning and texturing businesses a good number 

Results Transmission Systems 

18 

of innovative products were further developed and in some 

instances introduced to the market. 

Outlook 

Order backlog as of the end of 2002 as well as orders currently 

being negotiated raise expectations for a good business climate 

well into the second half of 2003. Outsourcing of production 

will be stepped up, fixed costs will be reduced further 

and Saurer’s ability to generate significant free cash flow will 

be strengthened. Systematic reengineering projects and a 

stronger focus on shared values, common directions and corporate 

culture will help to support this process among employees 

(TEMPUS project). In the future, Saurer Textile Solutions 

will continue to focus on activities in Asia and Eastern Europe, 

as the division seeks to position itself as unchallenged market 

leader for full service solutions. 


Sales 557 751 100.0% 426 245 100.0% 

Operating profit1) 53 543 9.6% 46 587 10.9% 


EBITDA 91 414 16.4% 78 551 18.4% 


Employees (year end) 3 021 3 006 


In 2002, the transmission systems business again realized 

valuable organic growth and profits. The Carr Hill and 

Magnetto businesses, acquired in 2001, are shown with their 

full year consolidation effect for the first time, which led to a 

certain dilution of margins. On the other hand, the profitability 

of the traditional business was slightly improved. 

In the markets for agricultural and construction machines, 

especially for tractors, Graziano consolidated its market position. 

Tractor manufacturers increased their outsourcing of certain 

subassemblies. 

Demand for automotive transmission components also showed 

favorable development and continuing good margins. The 

increasing demand for four-wheel-drive vehicles as well as the 

increasing market for high-torque transmission systems for 

luxury sports cars resulted in new orders and projects. A synergistic 

cooperation with the anglo-american engineering 

company PRODRIVE was signed in 2002. 

Outlook 

In the short term, for the next two years, we expect reduced 

organic growth. Nevertheless, in the tractor business of various 

developing countries there is significant potential that the 

technology level currently used there will lead to further 

organic growth for Graziano. An Indian plant already operating 

to high quality standards enables us to be close to our customers 

and to meet local demand. This plant will be further 

developed as a low cost production facility for global markets. 

The most important growth area for the transmission business 

will be the automotive sector. The integration of transmission 

activities acquired from the Magnetto Group will be continued 

in 2003. The target will be to raise productivity to Graziano 

standards.

Results Discontinuing Operations (Surface Technology) 



Sales 155 218 100.0% 176 889 100.0% 

Operating profit (loss) 1) –5 527 –3.6% –11 821 –6.7% 


EBITDA 10 867 7.0% 8 545 4.8% 


Employees (year end) 786 857 


For the surface technology business in 2002 the continuing 

weak industrial production in the USA again caused an unsatisfactory 

low order income and sales volume. This had a negative 

impact on the results of the plastification systems (Xaloy) 

and coating (IonBond) businesses. 

Restructuring projects which were started in 2000 were completed 

in early 2002, with a reduction of 240 jobs in total, 71 of 

them in 2002. In 2002, the closure of production facilities in the 

USA and in Switzerland was finalized as planned. Due to these 

programs, results were improved despite the lower sales volumes. 

Financial and Group Results 

Outlook 

During 2002, Surface Technology’s break-even point was 

adjusted to the current market situation and the foundations 

for a profitable future were laid. Preparations to sell Surface 

Technology are at an advanced stage. As soon as a cyclical 

recovery occurs in the markets an early sale of the business 

can be expected. 


Operating result, before impairment charge 101 291 24 171 

Financial result –26 381 –29 744 

Income taxes –24 585 8 029 

Group profit before impairment charge and minority shares 50 325 2 456 

Financial expense was approximately at the same level as in 

the prior year. In accordance with IAS 32, interest expense 

amounting to CHF 8.1 m was charged to the income statement 

for the 21 ⁄4% convertible bond although only an amount 

of CHF 4.3 m is actually paid. Due to a continuous reduction 

in net debt, interest expenses were lowered, but the full effect 

of this reduction will occur in the year 2003. 

In comparison with last year, despite a significantly higher 

income before taxes, the current tax expense was reduced. On 

the other hand, the relief from deferred taxes was significantly 

lower than in the prior year. In the consolidated financial 

statements this resulted in an overall higher tax expense. Due 

to active measures taken, significant tax loss carryforwards 

were eliminated and transferred to asset positions available for 

tax deductible depreciation. This increased the value of tax 

assets. 

19


Key Ratios 


Net Debt –153 877 –298 857 

Liquid assets 146 459 198 613 

Other financial assets – 9 438 

Short-term debt –65 062 –221 427 

Convertible bond –151 979 –194 875 

Other long-term debt –83 295 –90 606 

Net Tangible Worth (equity minus goodwill) 444 446 413 649 

Shareholders’ equity 643 671 625 212 

Goodwill –199 225 –211 563 

EBITDA 218 151 151 252 

Operating profit before impairment 101 291 24 171 

Depreciation and amortization 116 860 127 081 

Ratios 

Debt-Equity-Ratio 23.9% 47.8% 

Net Debt / Net Tangible Worth 34.6% 72.2% 

Equity in % of Total Assets 33.7% 30.3% 

Net Tangible Worth in % of Total Assets 23.3% 20.0% 

Net Debt / EBITDA 70.5% 197.6% 

Compared to last year, net debt was reduced by CHF 145 m. 

The cash flows generated during the year as well as short-term 

cash were predominantly used to pay back debt. Some debt 

reduction was realized by buying back part of the 21 ⁄4% convertible 

bond stock at an attractive rate. 

The sum of these measures as well as the increase in equity 

from the current period’s earnings resulted in a significant 

Cash Flow 

20 

increase in the equity financing ratio to 33.7% as well as in 

a reduction of the debt-equity-ratio to 23.9%. Without the 

impact of foreign currency translation in 2002 (strengthening 

of the Swiss Franc), these percentages would have been slightly 

improved. 


Cash flow from operating activities 212 728 176 097 

Capital expenditure for tangible fixed assets –72 726 –96 686 

Proceeds from sale of fixed assets 22 618 14 993 

Free Cash Flow 162 620 94 404 

Acquisition of investments and intangible assets –5 686 –37 186 

The CHF 213 m operating cash flow is a record breaking result 

for Saurer. This result also contains advance payments from 

customers which are about CHF 30 m above usual levels. 

However, even without this high level of advance payments 

still a record result would have been realized. Flexibility in 

component purchasing, which was improved in recent years, 

shows positive effects on the cash flow during the growth 

period 2002. At the same time, fixed asset management was 

tightened. 

Distribution 

Due to the improved course of business in 2002, at the annual 

General Meeting of Shareholders to be held in May 2003 

a distribution amounting to CHF 1.00 per share in the form 

of a capital repayment will be proposed by the Board of 

Directors. This proposal corresponds to a total payment of 

about CHF 14 m.

CONSOLIDATED 

FINANCIAL 

STATEMENTS

Consolidated income statement for the years ended December 31, 

(CHF 000) Note* 2002 % 2001 % 

Sales 1 2 490 391 100.0 2 405 919 100.0 

Cost of goods sold -1 904 509 –76.5 –1 858 478 –77.2 

Gross profit 585 882 23.5 547 441 22.8 

Selling and distribution –190 401 –7.6 –215 364 –9.0 

Research and development –113 365 –4.6 –120 069 –5.0 

Administration and other 3 –180 825 –7.2 –187 837 –7.8 

Operating expenses before impairment charge –484 591 –19.4 –523 270 –21.8 

Operating profit before impairment charge 4 101 291 4.1 24 171 1.0 

Impairment charge 12 – – –76 786 –3.2 

Operating profit (loss) 101 291 4.1 –52 615 –2.2 

Financial income (expense) 5 –26 381 –1.1 –29 744 –1.2 

Profit (loss) before taxes 74 910 3.0 –82 359 –3.4 

Income taxes 6 –24 585 –1.0 8 029 0.3 

Profit (loss) before minorities 50 325 2.0 –74 330 –3.1 

Minority interests 16 –1 682 –0.1 –1 696 –0.1 

Net profit (loss) 48 643 1.9 –76 026 –3.2 

* For details see the notes to the consolidated financial statements, pages 30–43. These are an integral part of the consolidated financial statements. 

Earnings per share (CHF) 

Basic earnings (loss) per share 3.45 –5.35 

Diluted earnings (loss) per share 3.44 –5.35 

See Note 7, page 34. 

23

Consolidated balance sheet as at December 31, 

(CHF 000) Note* 2002 % 2001** % 

Assets 

Cash 132 502 190 486 

Marketable securities 13 957 8 127 

Liquid assets 146 459 7.7 198 613 9.6 

Accounts receivable, trade 8 409 338 387 323 

Inventories 9 318 512 362 396 

Current income taxes 3 631 2 951 

Prepayments and accrued income 6 772 16 591 

Other receivables 90 943 61 690 

Current assets 975 655 51.1 1 029 564 49.9 

Financial assets 10 30 502 35 530 

Deferred income taxes 6 73 228 76 111 

Property, plant and equipment 11 626 073 709 103 

Intangible assets 12 204 448 214 943 

Non-current assets 934 251 48.9 1 035 687 50.1 

Total assets 1 909 906 100.0 2 065 251 100.0 

Liabilities and shareholders’ equity 

Short-term debt 13 26 625 189 529 

Short-term portion of long-term debt 13 38 437 31 898 

Accounts payable, trade 240 292 245 864 

Accruals and deferred income 127 205 108 510 

Current income taxes 13 493 15 435 

Short-term provisions 14 128 621 122 587 

Other current liabilities 129 545 95 292 

Current liabilities 704 218 36.9 809 115 39.2 

Long-term debt 13 235 274 285 481 

Long-term provisions 14 27 249 30 747 

Deferred income taxes 6 20 784 22 075 

Long-term employee benefits 15 254 686 264 438 

Other non-current liabilities 20 468 11 784 

Non-current liabilities 558 461 29.2 614 525 29.7 

Total liabilities 1 262 679 66.1 1 423 640 68.9 

Minority interests 16 3 556 0.2 16 399 0.8 

Share capital 17 192 875 192 875 

Group reserves 538 033 637 604 

Treasury shares –135 880 –129 241 

Net profit (loss) for the period 48 643 –76 026 

Shareholders’ equity 643 671 33.7 625 212 30.3 

Total liabilities and shareholders’ equity 1 909 906 100.0 2 065 251 100.0 

* For details see the notes to the consolidated financial statements pages 30–43. These are an integral part of the consolidated financial statements. 

** The balance sheet is presented in greater detail than in the prior year. The prior year’s figures have therefore been reclassified accordingly. 

24

Consolidated cash flow statement for the years ended December 31, 

(CHF 000) 

Cash flow from operating activities 

Note* 2002 2001** 

Profit (loss) before taxes 74 910 –82 359 


Impairment of assets – 76 786 

Interest (income) expense 25 349 25 786 

Other non-cash items and changes in net working capital 15 238 64 011 

Interest received 6 281 10 738 

Interest paid –18 368 –22 746 

Income taxes paid –7 542 –23 200 

Cash flow from operating activities 212 728 176 097 

Cash flow from investing activities 

Acquisition of investments (net) 18 –2 256 –37 001 

Loans (granted) repaid (net) 3 036 –271 

Capital expenditure for tangible fixed assets –72 726 –96 686 

Additions to intangible assets –3 430 –185 

Sale (purchase) of marketable securities –5 845 12 352 

Proceeds from the sale of fixed assets 22 618 14 993 

Cash flow from investing activities –58 603 –106 798 

Cash flow from financing activities 

Increase (decrease) in debt financing (net) –151 904 39 445 

Repurchase of 21 ⁄4% convertible bond 2000–2005 –42 906 –12 782 

Dividends and net capital repayments to minority shareholders –3 415 –1 653 

Sale (purchase) of treasury shares –7 202 656 

Capital repayment to the shareholders of Saurer Ltd. – –12 344 

Cash flow from financing activities –205 427 13 322 

Foreign exchange differences on cash –6 682 –3 132 

Net increase (decrease) in cash –57 984 79 489 

Cash as at January 1 190 486 110 997 

Cash as at December 31 132 502 190 486 

* For details see the notes to the consolidated financial statements pages 30–43. These are an integral part of the consolidated financial statements. 

** The cash flow statement is presented in greater detail than in the prior year. The prior year’s figures have therefore been reclassified accordingly. 

25

Consolidated statement of shareholders’ equity 

Foreign Retained 

Capital currency earnings and 

Share and legal translation Hedging Treasury net income 

(CHF 000) capital reserves reserve reserve shares for the period Total 

Balance as at 1.1.2001 205 219 210 494 –10 202 –999 –131 150 448 132 721 494 

Capital repayment –12 344 –12 344 

Net loss –76 026 –76 026 

21 ⁄4% convertible bond 2000–2005 –1 558 1 558 – 

Movements in cash flow hedges –1 079 –1 079 

Foreign currency translation –7 489 –7 489 

Change in treasury shares –1 600 1 909 347 656 

Balance as at 31.12.2001 192 875 207 336 –17 691 –2 078 –129 241 374 011 625 212 

Net profit 48 643 48 643 

21 ⁄4% convertible bond 2000–2005 –4 885 4 885 – 

Movements in cash flow hedges 4 409 4 409 


Change in treasury shares 10 300 –6 639 –10 863 –7 202 

Balance as at 31.12.2002 192 875 212 751 –45 082 2 331 –135 880 416 676 643 671 

The presentation of shareholders’ equity has been adapted for 

greater clarity. Prior year figures have been reclassified; total 

equity is unchanged. 

The total amounts booked to equity in 2002 excluding capital 

transactions and profit (loss) for the period were CHF –30 184 

(2001: CHF –7 912). 

The capital and legal reserves may not be freely distributed. 

Distribution of the retained earnings is subject to certain restrictions, 

since the retained earnings of the subsidiaries have 

first to be distributed to Saurer Ltd. in accordance with statutory 

and fiscal regulations, before they are at the disposal of 

the shareholders’ meeting of Saurer Ltd. 

Foreign currency translation adjustments arise from changes in 

the exchange rates used to translate the opening equity and 

26 

net result of group companies that report in currencies other 

than the Swiss Franc, as well as foreign exchange differences 

on long-term intercompany loans of an investment nature. 

The cumulative foreign currency translation reserve represents 

the effect of the devaluation of the net worth of foreign subsidiaries 

due to the strengthening of the Swiss Franc. 

The proposal of the Board of Directors for the appropriation of 

the retained earnings of Saurer Ltd. is presented on page 54. 

Details of the movement in the hedging reserve are shown in 

Note 22. 

For share statistics see page 75. 

For details of treasury share transactions see Note 17.

Organization and business activity 

Saurer Ltd. is a corporation organized under the laws of Switzerland 

with legal domicile in Arbon. The main activities of Saurer Textile 

Solutions are the development, manufacture and sale of textile systems 

and of Transmission Systems the development, manufacture 

and sale of transmission systems. Surface Technology is to be divested 

in the near future and for that reason is shown as Discontinuing 

Operations. Saurer operates worldwide. 

Organizational changes within the scope of consolidation 

During the year under review the companies American Barmag 

Corporation and Saurer Textile Systems Charlotte, Inc. were 

merged into Saurer, Inc. (formerly Schlafhorst, Inc.). In China, 

Shanghai Barmag Machinery Ltd. was liquidated and Wuxi 

Barmag Hongyuan Machinery Co. Ltd., formerly a joint venture, 

was bought out and is now fully owned by Barmag AG under 

the new name Barmag Textile Machinery (Wuxi) Co. Ltd. Two 

further Barmag subsidiaries were formed in China, Barmag Textile 

Machinery (Suzhou) Co. Ltd. and Barmag Beijing Machinery 

Co. Ltd. 

Principles for the consolidated financial statements 

General principles and accounting standards The consolidated 

financial statements are based on the financial statements of the 

individual group companies which have been drawn up in accordance 

with standardized accounting principles. The accounts are, in 

general, based on the historical cost convention. The consolidated 

financial statements and the individual financial statements of all 

companies are prepared in accordance with International Financial 

Reporting Standards, including International Accounting Standards 

and Interpretations issued by the International Accounting 

Standards Board (IASB). 

Change in accounting principles 

There has been no change in the accounting principles in 2002. 

Principles of consolidation 

Scope of consolidation The consolidated financial statements of 

Saurer Ltd. include all subsidiaries in which Saurer Ltd. directly or 

indirectly controls more than 50% of the votes and the share capital. 

Companies acquired during the year under review are included 

in the consolidation as from the date of acquisition. 

Investments of between 20% and 50% (associated companies), in 

which the group exercises a significant influence, are included in the 

consolidated financial statements in accordance with the equity 

method. 

Intercompany receivables, payables, transactions and cash flows are 

eliminated. 

Full consolidation In the case of consolidated subsidiaries with 

minority interests, 100% of all balance sheet and income statement 

Accounting principles 

items are included in the consolidated financial statements. The 

interests of third-party minority shareholders are shown separately 

in the balance sheet and income statement. 

Capital consolidation The capital consolidation is based on the 

Anglo-Saxon purchase method. The assets and liabilities of newly 

acquired subsidiaries are included at their fair values in the consolidated 

financial statements as from the date of acquisition. In the 

case of companies acquired during the year, the income earned 

prior to the acquisition is not included in the consolidated income 

statement. 

Intercompany profits Profits resulting from intercompany sales are 

eliminated insofar as the products and services concerned were not 

delivered to third parties on the balance sheet date. 

Valuation and accounting principles 

Foreign currency translation Business transactions in foreign currencies 

are translated into the respective local currency at the 

exchange rate ruling on the day of transaction, and monetary 

assets and liabilities at the year-end balance sheet rate. The resulting 

profits and losses are included in the income statement, with the 

exception of exchange differences on intercompany loans of an 

investment nature, which are taken direct to shareholders’ equity. At 

year-end the balance sheets of foreign subsidiaries are translated into 

Swiss Francs at the year-end exchange rate, whilst the income statements 

and cash flow statements are translated into Swiss Francs at 

annual average rates. Any difference arising thereon is not included 

in the income statement, but taken direct to shareholders’ equity. In 

the event of divestment of a subsidiary, the relevant cumulative 

exchange rate differences from the sale are included in the income 

statement. 

Financial risk management Saurer’s international activities expose 

it to a variety of market risks, including currency risks. An overall risk 

management programme coordinated by central corporate treasury 

staff seeks to minimize the effects of unpredictable financial markets 

on the financial results of the group. 

Currency risks, which due to the group’s activities mainly arise in 

Euro and U.S. Dollar, are hedged by using forward contracts. 

Foreign currency risks which arise from the translation of income 

statement and balance sheet items of foreign consolidated companies 

are not hedged. 

Interest risks The group’s liquid assets are invested on a short-term 

basis. The group’s income and operating cash flows are substantially 

independent of changes in market interest, and interest exposures 

are not hedged. 

Credit risks Liquid assets are placed short-term with first-class 

banks only. The credit risk pertaining to accounts receivable is limited 

by the wide spread of customers, both geographically and by 

business activity. International accounts receivable, mainly in the 

textile business, are to a large extent secured by letters of credit and 

government export credit guarantees. 

27


Commodity price risks The price risks related to commodities used 

in Saurer products are low. 

Composition and valuation of balance sheet items 

Cash includes cash in hand, balances in postal and bank accounts, 

as well as short-term money market funds. 

Marketable securities are shown at year-end market value. 

Changes in value are included in the income statement. 

Accounts receivable, trade and other receivables are included at 

face value, less specific provisions where appropriate. 

Inventories Raw materials are valued at the lower of cost and 

market, using the FIFO or weighted average cost method. Finished 

goods and work in process are valued at production cost, 

reduced to net realizable value should this be lower than cost. 

Provisions are made for items of reduced salability and excess 

stocks. Customer payments on account are deducted from inventories. 

Financial assets are included at cost less provisions for permanent 

impairment of value. 

Financial Instruments Derivative financial instruments are recorded 

at cost and are subsequently adjusted to fair value. With the 

exception of financial instruments which hedge a forecasted transaction 

(cash flow hedges), all adjustments in fair values are included 

in income. 

The purpose of hedge accounting is to match the impact of the 

hedged item and the hedging instrument in the income statement. 

To qualify for hedge accounting, the hedging relationship must 

meet several strict conditions concerning documentation, hedge 

effectiveness and reliability of measurement. If these conditions are 

not met, the transaction does not qualify as a hedge for accounting 

purposes. In this event fair value adjustments to the value of the 

derivative and the hedged item are made through the income statement. 

Saurer uses hedge accounting exclusively for cash flow hedges. 

These are used to secure future cash flows which have a high 

probability of occurring. The hedge instrument is recorded on the 

balance sheet at fair value (replacement cost) and any subsequent 

adjustments are booked in the hedging reserve in shareholders’ 

equity. If the hedge relates to a transaction which will subsequently 

be recorded on the balance sheet, the adjustments cumulated 

under shareholders’ equity at that time will be included in 

the initial book value of the asset or liability. In all other cases the 

cumulative changes in fair value of the hedging instrument that 

have been recorded in equity are included as a charge or credit to 

income when the forecasted transaction is recognized. 

Property, plant and equipment is carried at purchase or production 

cost less appropriate depreciation. In the case of an impairment 

loss the appropriate charge is made to income. 

Depreciation is charged on a straight-line basis over the following 

periods: 

28 

Furniture, fittings and equipment 

Years 

5–12 

IT, office equipment 3–7 

Vehicles, tools 4–6 

Machinery 6–10 

Buildings: – exterior constructions 30–60 

– interior constructions 12–25 

Repair and maintenance costs are expensed directly to the income 

statement. Costs which give rise to an increase in value are capitalized 

and depreciated over the remaining useful life of the 

assets. 

Financing costs incurred in respect of the construction of property, 

plant and equipment are taken directly to the income statement. 

Leased equipment Property, plant and equipment financed 

through long-term financial leasing contracts, and for which the 

company bears the major risks (financial leasing), is capitalized and 

depreciated like other fixed assets. The present value of the corresponding 

lease obligations is included as a liability under long-term 

liabilities. 

Rental costs for short-term operational leases are charged directly to 

the income statement. Operating leases are not included in the balance 

sheet; the corresponding obligations are fully reported in the 

notes. 

Goodwill is the excess of the acquisition price of investments over 

the related equity value at the date of acquisition and is amortized 

to the income statement over a maximum period of 20 years. 

Amortization periods in excess of 5 years are only used in the case 

of strategic acquisitions where a sustainable expansion of market 

share can be expected. In the case of the purchase of a foreign company, 

goodwill is converted and fixed in Swiss Francs at the time of 

acquisition. The amortization of goodwill is included in administration 

and other expenses. 

The carrying value of goodwill is reviewed at least annually for all 

investments and, if a risk of impairment is seen, a detailed valuation 

is performed using Discounted Cash Flow analysis over a five-year 

period. If required, adjustments are then made to reduce the carrying 

values of goodwill for the investments affected. 

Where an acquisition gives rise to negative goodwill this is released 

to income over a period calculated to match any related costs. The 

release to income is recorded together with goodwill amortization 

in administration and other expense. 

Patents, licenses and trademarks are capitalized at cost and are 

written off on a straight-line basis over their useful life, not exceeding 

10 years. 

Provisions are set up for current legal and actual liabilities which 

are attributable to events in the past. The amount of the provisions 

is based on the expected use of funds for covering the liabilities. 

Retirement benefits Saurer companies operate various plans for 

providing employees with retirement benefits, which conform to

local circumstances and practice in the countries concerned. These 

include defined benefit and defined contribution plans, under which 

benefits are provided through separate funds, insurance plans or 

unfunded arrangements. For defined benefit plans, the amount 

charged to the income statement consists of current service cost 

which includes the normal cost of financing benefits in respect of 

future years of service as well as net interest on the assets or obligations. 

Contributions to defined contribution pension schemes are 

charged to the income statement as incurred. 

For funded plans, plan assets are held separately from those of the 

group in independently administered funds. The group’s liability to 

pay future retirement benefits is determined using the “projected 

unit credit method” in accordance with IAS 19 (revised), and is provided 

in the group’s balance sheet. Actuarial gains and losses are 

amortized over the average remaining period of employment, insofar 

as they exceed 10 % of the higher amount of the present value 

of the benefits and of the plan assets. 

The additional costs for early retirement and reduced working hours 

are provided for at the time of the respective agreement. 

Employee stock options are issued with exercise prices equivalent 

to market prices at the date of issue and therefore no charge is 

made to income at the date of issue. On the exercise of the option, 

the difference between the exercise and market prices is offset by 

an equivalent gain on the sale of treasury shares. 

Convertible bond The convertible bond includes a liability and an 

equity component. At the time of issue the equity component is 

booked directly to shareholders’ equity. The difference between the 


liability and the nominal value is treated as interest expense over the 

duration of the loan. 

Other assets and liabilities are reported at their nominal or market 

value. 

Composition of items in the income statement 

Sales Revenues from products sold or services rendered are stated 

without turnover or value added tax, net of allowances, and are recognized 

when title is passed to the customer, which is generally on 

shipment. 

Research and development Research and development costs are 

charged to the income statement insofar as the conditions for capitalization 

in accordance with IAS 38 are not fulfilled. Only the costs 

for the development of new products and the further development 

of existing products are included. 

Income taxes Liabilities for taxes on income are calculated and provided 

for, irrespective of their maturity, on the basis of the expected 

tax rates of the relevant companies. Deferred taxes on differences 

between group and tax valuations as well as eliminations with an 

effect on the income statement are accounted for in accordance 

with the liability method. Deferred tax assets and liabilities are offset 

insofar as this is legally permissible. 

Tax effects from tax loss carry forwards are taken into account if it 

can be reasonably expected that they will be realized. 

Provisions for non-recoverable withholding taxes are set up in 

respect of retained earnings at group companies, as soon as a distribution 

of profits is planned. 

29

Notes to the consolidated financial statements 

Except where otherwise noted, currency amounts are stated in CHF 000. 

1 Segment information 

Saurer Textile Solutions is active in development and manufacture 

of yarn-making solutions for the natural and synthetic 

fiber industry; Transmission Systems is engaged in development 

and manufacture of transmission systems for motor vehicles. 

Surface Technology is to be divested and is therefore 

shown as Discontinuing Operations. This and Transmission Systems 

made up the former Components Division, together 

30 

with a small real estate holding which has been reallocated to 

Corporate and Other. Prior year figures have been adjusted 

accordingly. The difference between the segment operating 

result and the net profit (loss) for the group is shown in the 

consolidated income statement. There are no significant sales 

transactions between the divisions. 

By division: 

Saurer Textile Solutions 2002 % 2001 % 

Sales 1 777 422 100.0 1 796 460 100.0 

Operating profit (loss) before impairment charge 49 669 2.8 –10 153 –0.6 

Research and development 101 989 5.7 108 632 6.0 

Capital expenditure for tangible fixed assets 38 408 43 566 



Segment assets 1 163 038 1 184 456 

Segment liabilities 726 961 687 190 

Transmission Systems 

Sales 557 751 100.0 426 245 100.0 

Operating profit (loss) before impairment charge 53 543 9.6 46 587 10.9 




Segment assets 557 640 570 972 


Discontinuing Operations (Surface Technology) 

Sales 155 218 100.0 176 889 100.0 

Operating profit (loss) before impairment charge –5 527 –3.6 –11 821 –6.7 






Corporate and Other 

Sales – 6 325 

Operating profit (loss) before impairment charge 3 606 –442 

Capital expenditure for tangible fixed assets 85 982 

Depreciation and amortization 844 2 729 


Segment liabilities 18 303 3 266

By division (continued): 


Total Saurer 2002 % 2001 % 

Sales 2 490 391 100.0 2 405 919 100.0 

Operating profit (loss) before impairment charge 101 291 4.1 24 171 1.0 





Segment assets 1 898 818 1 950 766 

Unallocated assets/eliminations 11 088 114 485 

Total assets 1 909 906 2 065 251 

Segment liabilities 1 159 670 1 182 826 

Unallocated liabilities/eliminations 103 009 240 814 

Total liabilities 1 262 679 1 423 640 

By geographical region: 

Sales (by location of customer) 2 490 391 2 405 919 

Europe 864 858 845 152 

NAFTA 417 651 481 951 

South America 76 044 91 181 

Africa, Middle East 467 543 252 115 

Far East, Asia 664 295 735 520 


Europe 56 998 81 490 

NAFTA 4 398 6 678 

South America 91 327 

Africa, Middle East – – 

Far East, Asia 11 239 8 191 

Total assets 1 909 906 2 065 251 

Europe 1 466 033 1 560 963 

NAFTA 339 293 382 628 

South America 3 409 6 349 

Africa, Middle East – – 

Far East, Asia 101 171 115 311 

31


2 Discontinuing Operations – Surface Technology 2002 2001 

Order Income 160 449 168 705 

Sales 155 218 176 889 

Operating profit (loss) –5 527 –11 821 

Financial income (expense) –6 740 –9 090 

Profit (loss) before taxes –12 267 –20 911 

Taxes 4 318 11 017 

Net profit (loss) –7 949 –9 894 

Total assets 155 494 182 619 

Total liabilities 71 009 73 241 

Cash flow from operations 6 249 18 162 

Cash flow from investing activities –2 511 –8 594 

Cash flow from financing activities –2 008 4 658 

Employees as at December 31 786 857 

By Resolution dated October 4, 2002, the Board of Directors of Saurer confirmed its intention to divest Surface Technology. This 

is expected to occur during 2003. 

3 Administration and other 

Administration and other includes the following items: 

Amortization of goodwill –9 643 –13 980 

Gain on sale of real estate 10 774 5 149 

Gain on sale of business – 6 214 

Restructuring costs –42 940 –46 224 

4 Operating profit before impairment charge 

The operating profit before impairment charge is stated after deducting the following: 

Wages and salaries –599 230 –629 889 

Social expenses and other personnel expenses –154 560 –167 524 

Personnel expenses –753 790 –797 413 

Cost of materials –1 036 102 –1 000 547 

Depreciation and amortization –116 860 –127 081 

Payments made under operating leases –11 514 –18 249 

Rental expense – non-cancellable rental contracts –9 097 –9 101 

32


5 Financial income (expense) 

Income (expense) from marketable securities 

2002 2001 

Realized gains (losses) 200 –1 386 

Unrealized gains (losses) 188 –87 

Total income (expense) from marketable securities 388 –1 473 

Interest expense from 21 ⁄4% convertible bond 2000–2005 (Note 13) –8 066 –9 367 

Interest expense from unfunded pension plans –9 226 –10 246 

Other interest expense –14 311 –15 227 

Interest income 6 254 9 054 

Income (expense) from investments 119 –1 652 

Expenses from foreign exchange differences (net) –6 265 –2 300 

Gain on repurchases of convertible bond (Note 13) 4 819 2 227 

Other financial income (expense) net –93 –760 

Total financial income (expense) –26 381 –29 744 

Interest expense relating to the 21 ⁄4% convertible bond 

2000–2005 is shown as for an equivalent loan without conversion 

rights, in accordance with IAS 32. The gain on repurchase 

of convertible bond represents the difference between 

the liability value repurchased and the cash price paid (see 

details in Note 13). Interest expense from unfunded pension 

plans is included as a financial expense above, whereas interest 

expense from funded plans, net of income earned from 

plan assets, is included with all other pension costs in operating 

expense. 

6 Income taxes 

Current income taxes –22 473 –25 023 

Deferred income taxes –2 112 33 052 

Total income taxes –24 585 8 029 

Using the maximum tax rate of 24.2% (2001: 23.6%) at the 

company’s headquarter location (Saurer Ltd., Arbon, Switzerland) 

applied to the profit (loss) before tax of CHF 74.9 million 

(2001: CHF –82.4 million), an expected tax (charge) relief of 

CHF –18.1 million (2001: CHF 19.4 million) results. The effective 

tax charge differs from the expected tax charge for the following 

reasons: 

Profit (loss) before taxes 74 910 –82 359 

Maximum tax rate 24.2% 23.6% 

Expected tax (charge) relief –18 128 19 437 

Variance due to differing local tax rates –7 185 12 355 

–25 313 31 792 

Effect of expenses not accepted for tax (including amortization of goodwill) –13 493 –22 614 

Prior year taxes –2 016 –1 580 

Effect of tax losses 25 587 –7 183 

Effect of changes in tax rate 720 –325 

Change in tax law – Italy – 4 230 

Other influences –10 070 3 709 

Effective tax (charge) relief –24 585 8 029 

Effective tax rate 32.8% 9.7% 

33


Deferred tax assets and liabilities arise due to differences between the group and tax valuations in the following balance sheet 

items: 

31.12.02 31.12.01 

Tax Tax Tax Tax 

assets liabilities assets liabilities 

Assets 

Accounts receivable 3 414 3 895 5 135 15 936 

Inventories 8 314 1 891 51 217 2 878 

Financial assets 2 998 24 802 6 486 4 171 

Property, plant and equipment 13 963 51 380 7 941 59 950 

Intangible assets 

Liabilities 

66 220 – 4 757 15 

Accounts payable 710 – 755 78 

Other short-term liabilities 8 816 3 491 5 365 34 664 

Long-term provisions including pension liabilities 26 010 2 672 32 695 5 327 

Other long term liabilities 7 153 3 436 2 023 11 455 

Deferred tax assets deriving from tax loss carryforwards 84 269 – 176 483 – 

Valuation allowances –77 856 – –104 347 – 

Offset of deferred tax assets and liabilities –70 783 –70 783 –112 399 –112 399 

Total deferred taxes 73 228 20 784 76 111 22 075 

As at December 31, 2002 the company had tax loss carryforwards 

totalling CHF 240 million (2001: CHF 523 million) with 

a tax value of CHF 84 million (2001: CHF 176 million). Of 

these, CHF 11 million expire by the year 2005 and a further 

CHF 25 million by the year 2009. The remaining CHF 204 million 

may be utilized after 2009. The active management of 

local statutory accounts allowed a significant reduction of tax 

34 

loss carryforwards, while creating net deferred tax assets from 

timing differences with an increased realizable value (on 

inventories, property, intangible assets and short-term liabilities). 

These transactions brought about a significant reduction 

in the tax assets deriving from tax loss carryforwards and in 

the related valuation allowance. 

7 Earnings per share 2002 2001 

Net profit (loss) attributable to shareholders 48 643 –76 026 

Average number of ordinary shares 15 430 000 15 430 000 

less: treasury shares (average) –1 318 298 –1 225 600 

Average number of shares in circulation 14 111 702 14 204 400 

Dilutive effect of employee stock options 37 696 – 

Dilutive effect of convertible bond 

Average number of shares outstanding 

– – 

for the calculation of diluted earnings 14 149 398 14 204 400 

Basic earnings (loss) per share (CHF) 3.45 –5.35 

Diluted earnings (loss) per share (CHF) 3.44 –5.35 

8 Accounts receivable, trade 31.12.02 31.12.01 

Total accounts receivable, trade 409 338 387 323 

of which bills of exchange 9 512 10 137 

9 Inventories 

Raw materials 149 770 163 703 

Work in process 154 559 162 019 

Finished goods 118 939 144 618 

Total 423 268 470 340 

Customer payments on account –104 756 –107 944 

Total inventories (net) 318 512 362 396


10 Financial assets 31.12.02 31.12.01 

Non-consolidated investments 5 871 7 597 

Loans 6 427 9 438 

Capitalized pension surplus (Note 15) 14 000 14 000 

Other financial assets 4 204 4 495 

Total financial assets 30 502 35 530 

11 Property, plant and equipment 2002 2001 

Land and Machinery and Prepayments, assets 

buildings equipment under construction Total Total 

Cost 

Balance as at January 1 614 379 1 143 312 13 368 1 771 059 1 751 825 

Additions 10 349 46 306 16 071 72 726 96 686 

Disposals –23 165 –65 209 – –88 374 –100 435 

Transfers 1 673 7 532 –9 205 – – 

Change in scope of consolidation –4 804 418 – –4 386 66 065 

Foreign currency translation –19 542 –55 865 –934 –76 341 –43 082 

Balance as at December 31 578 890 1 076 494 19 300 1 674 684 1 771 059 

Accumulated depreciation 

Balance as at January 1 –287 599 –774 357 – –1 061 956 –1 075 061 

Depreciation –13 767 –92 178 – –105 945 –112 032 

Disposals 17 454 56 186 – 73 640 91 019 

Change in scope of consolidation 1 100 –630 – 470 4 565 

Foreign currency translation 6 657 38 523 – 45 180 29 553 

Balance as at December 31 –276 155 –772 456 – –1 048 611 –1 061 956 

Property, plant and equipment, net 

Balance as at January 1 326 780 368 955 13 368 709 103 676 764 

Balance as at December 31 302 735 304 038 19 300 626 073 709 103 

Value of leased assets 39 503 2 878 – 42 381 7 610 

Insured values 985 103 1 916 610 – 2 901 713 3 233 088 

Assets pledged as collateral 122 396 81 738 

Saurer owns a number of industrial sites and office buildings, their fair value. However, based on market estimates, the pro- 

which are no longer necessary for its operations. The value of ceeds from the possible sale of these properties are expected 

these properties is largely dependent on their future use, and 

for this reason it is not possible to make a reliable estimate of 

to be in excess of their book values. 

35


12 Intangible assets 2002 2001 

36 

Goodwill Patents etc. Total Total 

Cost 

Balance as at January 1 364 289 10 663 374 952 351 327 

Additions –2 462 3 430 968 24 275 

Disposals – –371 –371 –616 

Foreign currency translation – –930 –930 –34 

Balance as at December 31 361 827 12 792 374 619 374 952 

Accumulated amortization 

Balance as at January 1 –145 476 –7 283 –152 759 –56 753 

Amortization –14 226 –1 272 –15 498 –19 399 

Impairment charge – – – –76 786 

Disposals – 249 249 188 

Foreign currency translation – 737 737 –9 

Balance as at December 31 –159 702 –7 569 –167 271 –152 759 

Negative goodwill – at cost 

Balance as at January 1 –11 600 – –11 600 – 

Arising on acquisition –233 – –233 –11 600 

Balance as at December 31 –11 833 – –11 833 –11 600 

Negative goodwill – amortization 

Balance as at January 1 4 350 – 4 350 – 

Recognised as income in period 4 583 – 4 583 4 350 

Balance as at December 31 8 933 – 8 933 4 350 

Intangible assets, net 

Balance as at January 1 211 563 3 380 214 943 294 574 

Balance as at December 31 199 225 5 223 204 448 214 943 

The negative goodwill of CHF 11 600 arose on the acquisition 

of Graziano Trasmissioni CH Ltd. in 2001 and will be recognized 

as income over three years on a degressive scale. This 

will match the expected timing of costs required to restructure 

the company. The release to income is set off against goodwill 

amortization in other expense. 

The negative addition to goodwill in 2002 relates to the reduction 

of the purchase price paid for DEMM Group, acquired 

in 2001. 

The impairment loss of CHF 76 786 in 2001 derived from 

adverse market development affecting the Barmag Group, and 

included a minor amount from another group company in 

Saurer Textile Solutions. 

13 Debt 31.12.02 31.12.01 

Loans, mortgages and leasing liabilities secured over land and buildings 57 229 23 575 

Unsecured loans 64 503 98 929 

21 ⁄4% convertible bond 2000–2005 151 979 194 875 

Total long-term debt 273 711 317 379 

Short-term debt 26 625 189 529 

Total debt 300 336 506 908 

The book values of the assets pledged to secure the loans was carried out with a view to tax savings and to restructuring 

amount to CHF 122 396 (2001: CHF 81 738). The increase in debt from short-term to long-term. The sale and leaseback 

secured loans and value of assets pledged relates to a sale and transaction is treated as a financial lease and consequently has 

leaseback of real estate in Graziano Trasmissioni S.p.A., which no effect on the income statement.


31.12.02 31.12.01 

Finance Convertible 

Maturities of long-term debt Bank loans Mortgages leases bond Total Total 

Within 1 year (short-term portion) 30 245 3 447 4 745 – 38 437 31 898 

1 to 2 years 14 786 5 447 4 643 – 24 876 64 374 

2 to 5 years 19 916 4 245 15 428 151 979 191 568 218 999 

After 5 years 1 462 1 324 16 044 – 18 830 2 108 

Total long-term portion 36 164 11 016 36 115 151 979 235 274 285 481 

Total long-term debt 66 409 14 463 40 860 151 979 273 711 317 379 

Short-term and long-term debt by currency 

EUR 106 261 199 745 

USD 21 237 48 370 

GBP – 228 

CHF 157 452 222 876 

Other currencies 15 386 35 689 

Total 300 336 506 908 

Conditions of the 21 ⁄4% convertible bond 2000–2005 with an 

original issued amount of CHF 230 million: 

Each bond with a nominal value of CHF 5 000 each can be 

converted from June 26, 2000 up to maturity on June 26, 

2005 or at an earlier repayment date, free of charge into 

39.68254 registered shares of Saurer Ltd. with a nominal value 

of CHF 12.50 each. The conversion price is CHF 126 per registered 

share. For fulfillment of the conversion right 1 825 400 

registered shares of Saurer Ltd. with a nominal value of 

CHF 12.50 each have been reserved from conditional capital 

(resolution of the General Meeting of Shareholders of May 17, 

2000). In accordance with IAS 32 the conversion right is 

valued separately and reported in shareholders’ equity. 

In subsequent periods the liability component continues to be 

presented on the amortized cost basis, until extinguished on 

conversion or maturity of the bonds. The equity conversion 

component was determined on the issue of the bond and is 

not changed in subsequent periods. 

The convertible bond is reported as follows in the balance sheet: 31.12.02 31.12.01 31.12.00 

Nominal value 230 000 

Conversion rights (equity component), net of deferred taxes –22 150 

Deferred taxes –568 

Original valuation of the liability as at June 26, 2000 207 282 

Issue costs –5 421 

Valuation of the liability as at January 1 194 875 204 583 – 

Bond stock repurchased –47 725 –15 008 – 

Amortization of issue costs 1 084 1 079 542 

Interest expense (Note 5) 8 066 9 367 4 767 

Interest at 21 ⁄4% –4 321 –5 146 –2 587 

Valuation of the liability as at December 31 151 979 194 875 204 583 

The market value of the convertible bond stock was 97.75% 

of the nominal value as at December 31, 2002. The calculation 

of interest expense for the convertible bond is based on the 

effective market yield and the relative coupon of an equivalent 

bond without conversion right at the time of issue. 

During 2002, bond stock with a nominal value of CHF 50 720 

was repurchased (2001: CHF 16 180). The value of the con- 

version rights, shown separately in shareholders’ equity, was 

reduced in proportion to the nominal value of bond stock 

repurchased. The transaction resulted in a gain of CHF 4 819 

(2001: CHF 2 227) (Note 5). The nominal value of the outstanding 

convertible bond at December 31, 2002 was CHF 

163 100 (2001: CHF 213 820). 

37


14 Provisions 2002 2001 

Warranty Restruc- 

costs turing Other Total Total 

Short-term provisions 38 496 42 843 41 248 122 587 105 807 

Long-term provisions 5 429 19 432 5 886 30 747 18 985 

Balance as at January 1 43 925 62 275 47 134 153 334 124 792 

Charge to income 22 589 36 028 15 917 74 534 90 463 

Utilization –12 311 –31 490 –9 466 –53 267 –49 128 

Release to income –10 707 – –6 855 –17 562 –12 945 

Reclass within provisions and (to) from other liabilities – –12 331 15 208 2 877 – 

Change in the scope of consolidation – – – – 4 368 

Foreign currency translation –1 151 –1 542 –1 353 –4 046 –4 216 

Balance as at December 31 42 345 52 940 60 585 155 870 153 334 

Short-term provisions 38 510 47 870 42 241 128 621 122 587 

Long-term provisions 3 835 5 070 18 344 27 249 30 747 

Warranty provisions are calculated on the basis of current year 

sales volumes, adjusted for individual claims and experience of 

warranty costs in prior years. Restructuring provisions are made 

only for significant one-time projects which have been detailed, 

documented and communicated in accordance with IAS 37. 

38 

Major restructuring projects were initiated in 2001 within Saurer 

Textile Solutions, and further restructuring measures have been 

launched during 2002. Restructuring projects are also in process 

in Transmission Systems and Surface Technology. The total cost 

of restructuring charged to the income statement amounts to 

CHF 42 940 (2001: CHF 46 224). 

15 Long-term employee benefits 31.12.02 31.12.01 

Retirement and other post-employment benefits 228 239 193 082 

Other long-term employee benefits 26 447 71 356 

Total long-term employee benefits 254 686 264 438 

Obligations for retirement and other post-employment benefits 

Present value of funded obligations 414 871 444 694 

Present value of unfunded obligations 162 241 131 874 

Fair value of plan assets –401 513 –428 937 

Underfunding net 175 599 147 631 

Unrealized actuarial gains 17 073 5 838 

Pension surplus not capitalized 21 567 25 613 

Underfunding recognized in the balance sheet 214 239 179 082 

thereof as pension liabilities 228 239 193 082 

thereof included in financial assets (Note 10) –14 000 –14 000 

Income statement 

Current service cost 15 980 13 987 

Interest cost 27 153 28 192 

Expected net return on plan assets –19 031 –20 552 

Amortization of funded status –687 23 

Employee contributions –2 835 - 2 397 

Unrecognized actuarial gains 3 543 1 472 

Total charged to income 24 123 20 725 

Service cost for defined contribution plans 1 954 1 693 

Actual return on plan assets 21 915 20 244


Development of balance sheet obligations 31.12.02 31.12.01 

Balance as at January 1 193 082 192 765 

Transfer from other long-term employee benefits (“TFR”) 44 563 – 

Curtailments and settlements –10 622 – 

Total pension expense as above 24 123 20 725 

Employer’s contributions –5 543 –6 046 

Pensions paid from unfunded plans –13 381 –8 101 


Balance as at December 31 228 239 193 082 

Assumptions used in actuarial calculations (weighted average) 

Discount rate 4.7% 4.8% 

Expected return on plan assets 4.7% 5.0% 

Future salary increases 2.6% 2.5% 

Future pension increases 1.3% 1.8% 

Other long-term employee benefits 


Change in the scope of consolidation – 18 963 

Transfer to post-employment benefits (“TFR”) –44 563 – 

Service cost 7 671 12 492 

Benefits paid –5 771 –7 739 



Pension costs are included with personnel costs in the relevant 

income statement captions. The interest cost from unfunded 

pension plans is shown as a financial expense (Note 5). The 

Italian accounting profession has determined that the 

16 Minority interests 2002 2001 


Minority share of profit 1 682 1 696 

Dividends and net capital repayments –3 415 –1 653 

Other changes in structure –9 718 –916 

Foreign currency translation –1 392 –13 


Other changes in structure relate to the restructuring of the textile operations in China, where joint venture projects have been 

liquidated or converted to majority shareholdings through capital reduction. 

17 Consolidated share capital 31.12.02 31.12.01 

Share capital of Saurer Ltd. 192 875 192 875 

The share capital comprises 15 430 000 fully paid registered shares 

with a nominal value of CHF 12.50 each. The shares outstanding 

are entitled to one vote each. 

Details concerning the shareholders are shown in Section 1.2 on 

page 56 of the Corporate Governance Report. 

Authorized Capital 

The Board of Directors is authorized to increase the share capital up 

to May 16, 2004 through the issue of a maximum of 3 000 000 

fully paid up registered shares with a nominal value of CHF 12.50 

each, up to the maximum amount of CHF 37 500 000. Increases 

“Trattamento di fine rapporto” (“TFR”) – the staff leaving 

indemnity – should be treated as a post-employment benefit; 

it has therefore been reclassified accordingly. 

through firm underwriting or in partial amounts are approved. The 

issue price, the period of the entitlement to dividends and the type 

of consideration or the contribution or underwriting in kind shall 

be determined by the Board of Directors. The Board of Directors is 

authorized to exclude the subscription right of the shareholders 

and to allocate them to third parties in the event of the use of shares 

for the purpose of the acquisition of companies, parts of companies 

or investments, for mergers and exchange of investments as 

well as in the case of a share placement for the financing of such 

transactions. Subscription rights not exercised shall be sold by the 

Board of Directors at market conditions. 

39


Conditional Capital 

The share capital of the company shall be increased by the maximum 

amount of CHF 53 125 000 through the issue of 4 250 000 

fully paid up registered shares with a nominal value of CHF 12.50 

each, of which 

a) up to an amount of CHF 37 500 000, representing 3 000 000 

registered shares with a nominal value of CHF 12.50 each, will be 

issued through the exercise of option and conversion rights, which 

will be granted in connection with loans or other bonds of the 

company or of group companies or through the exercise of option 

rights granted to the shareholders; 

b) up to an amount of CHF 15 625 000, representing 1 250 000 

registered shares with a nominal value of CHF 12.50 each, which 

are granted to the employees of the company or of group companies 

as a result of the exercise of stock option rights. 

The subscription right of the shareholders is excluded. 

40 

Shareholders’ preferential subscription rights may be limited or suspended 

in respect of options and convertible bonds by decision of 

the Board of Directors (1) to finance acquisitions, participations or 

other new investments or (2) where options or convertible bonds 

are issued in international capital markets. 

When shareholders’ rights are suspended (1) the related bonds 

must be placed in the public domain at prevailing market conditions 

and (2) the exercise price for the new shares on conversion 

must be equal to the market price for shares when the bonds are 

issued. 

Conditions for authorized and conditional capital 

The number of the new shares to be issued on the basis of Articles 

6 and 7 of the Articles of Incorporation of Saurer Ltd. may not 

exceed a total of 5 000 000. 

Number of Movements at 

Purchase and sale of treasury shares registered shares transaction values 

Balance as at 1.1.2001 1 229 110 

Purchase 35 160 2 315 

Sale –21 200 –1 573 

Sale from employee option programs (at exercise prices) –17 000 –872 

Balance as at 31.12.2001 1 226 070 

Purchase 203 617 9 718 

Sale –43 707 –1 487 

Sale from employee option programs (at exercise prices) –7 000 –297 

Balance as at 31.12.2002 1 378 980 

Treasury shares are held by Saurer Ltd. and also by a subsidiary company. 435 550 treasury shares are reserved for employee 

stock option plans (see Note 19). 

18 Acquisition/divestment of investments 

Consolidated investments 


Current assets – 91 410 

Non-current assets – 70 630 

Liabilities and deferred income – –124 092 

Net assets acquired – 37 948 

Acquisition price – –52 291 

Paid in the year under review –1 653 –39 150 

Less liquid assets acquired – 2 318 

Acquisition of consolidated investments –1 653 –36 832 

Acquisition of non-consolidated investments –990 –405 

Acquisition of investments –2 643 –37 237 

Divestment of non-consolidated investments 387 236 

Total cash flow –2 256 –37 001 

Acquisitions in 2001 were Graziano Trasmissioni CH Ltd. (UK) was divested. In 2002 a refund was received in respect of the 

and DEMM Group – Officine Meccaniche S.p.A., Aprilia DEMM acquisition, and a further payment was made for the 

Ingranaggi S.p.A. (Italy). Saurer & Horeschy GesmbH (Austria) Graziano Trasmissioni CH Ltd. (UK) acquisition.

19 Stock options 

Saurer maintains a long-term program for employee stock options. 

The shares required to cover this program were purchased on the 

market. As at December 31, 2002 the total number of treasury 

shares reserved for this purpose was 435 550. The conditional capital, 

which is also available for this program (Note 17), has not been 

used to date. The options granted as at December 31, 2002 have 

At December 31, 2002 the following options were outstanding: 


exercise prices between CHF 24.25 and CHF 106.50. The exercise 

prices correspond to the market prices at the time of issue. They are 

not adjusted (no repricing), except for reductions equal to the reductions 

of the nominal share value (dilution protection). The options 

are blocked for between 2 and 5 years and are valid for 5 to 6 years. 

Year Exercise Senior Board of 

Number of options granted price1) Employees2) Management2) Directors2) Total 

Options held 2002 24.25 76 000 45 500 27 000 148 500 

2000 76.60 23 000 33 000 28 500 84 500 

1999 74.50 34 900 41 000 37 500 113 400 

1998 106.50 74 680 3 000 – 77 680 

1997 50.50 3 220 – – 3 220 

1994 37.50 5 250 3 000 – 8 250 

Total number of options outstanding 217 050 125 500 93 000 435 550 

1) Exercise prices have been and will be adjusted over the years parallel to changes in nominal value of the stock (dilution protection). 

2) Including former members and employees. 

Movements in the number of options outstanding are shown in the following table: 

Senior Board of 

Employees1) Management1) Directors1) Total 

Options outstanding as at 1.1.2001 228 230 193 500 147 000 568 730 

Options granted – – – – 

Options exercised – –2 000 –15 000 –17 000 

Options expired –37 500 –43 000 –16 000 –96 500 

Options outstanding as at 31.12 2001 190 730 148 500 116 000 455 230 

Options granted 77 500 45 500 27 000 150 000 

Options exercised – –7 000 – –7 000 

Options expired –51 180 –61 500 –50 000 –162 680 

Options outstanding as at 31.12.2002 217 050 125 500 93 000 435 550 

Value of options granted in 2002 (CHF 000) 2) 340 200 119 659 

Net earnings from exercising options in 2001 (CHF 000) 3) – 48 280 328 

Net earnings from exercising options in 2002 (CHF 000) 3) – 65 – 65 

1) Including former members and employees. 

2) Valued with Black-Scholes option pricing model. Options were issued on February 8, 2002 with an exercise price of CHF 24.25. 

3) Net earnings for recipient: market value minus exercise price minus transaction fees. 

41


20 Related parties 

In the years 2002 and 2001 there were no transactions or balances with related parties, except as noted in Section 5 on pages 62 to 

64 of the Corporate Governance Report. 

21 Contingent liabilities 31.12.02 31.12.01 

Discounted notes 364 798 

Guarantees in favor of third parties 19 686 14 025 

Others 1 533 4 343 

Total contingent liabilities 21 583 19 166 

The management and employees of Saurer are committed to 

complying with local laws and regulatory requirements in the 

course of their business activities. As of the date of this 

22 Financial instruments 

At December 31, the following types of financial instruments were held: 

31.12.02 31.12.01 

Contract Positive Negative Contract Positive Negative 

Currency related instruments amount fair values fair values amount fair values fair values 

Forward foreign exchange rate contracts 107 472 5 684 –231 47 759 607 –1 062 

Over the counter currency options 3 750 – –107 17 106 271 –1 891 

Cross currency swaps 12 007 – –639 12 077 – –1 073 

Total of currency related instruments 123 229 5 684 –977 76 942 878 –4 026 

The positive and negative fair values are included in the balance 

sheet in other receivables and payables respectively. 

All of the instruments mature within one year, with the exception 

of several forward contracts, with contract amounts total- 


Balance at January 1 –2 078 –999 

Changes in fair value 3 971 –1 312 

Realized gains or losses transferred to the income statement 2 078 233 

Deferred tax effect –1 640 – 

Balance at December 31 2 331 –2 078 

42 

report, Saurer is not involved in any litigation and is not aware 

of any pending litigation which could have a material impact 

on the consolidated financial statements. 

ling approximately CHF 1.5 million, which mature in 2004. The 

contract amount indicates the volume of business outstanding 

at the balance sheet date and does not represent amounts at 

risk. 

The table below shows the movements in the hedging reserve in shareholders’ equity in respect of cash flow hedges:


23 Other financial obligations 

As at December 31, 2002 obligations for future capital expenditure amounted to CHF 18 286 (2001: CHF 13 678). 

Due within: Due after 

Future obligations from: 1 year 2–5 years 5 years 

Operational leasing 9 724 7 336 – 

Rental contracts 8 079 19 023 4 882 

Total financial obligations 17 803 26 359 4 882 

24 Events subsequent to the balance sheet date 

No events occurred between the balance sheet date and the date of this report which could have a significant impact on the 

consolidated financial statements for 2002. 

25 Currency rates applied 2002 2001 

Income Balance Income Balance 

Currency statement sheet statement sheet 

1 EUR 1.47 1.45 1.51 1.48 

1 USD 1.56 1.39 1.69 1.67 

1 GBP 2.33 2.22 2.43 2.43 

These financial statements were authorized for issue by the Board of Directors of Saurer Ltd. on March 11, 2003. A resolution to approve the 

financial statements will be proposed at the General Meeting of Shareholders on May 14, 2003. 

43

Principal companies and investments 

44 

Share % share- Consol- 

Company Location Currency capital holding idation Function 

Saurer Ltd. Arbon, CH CHF 192 875 000 C 

Aktiengesellschaft Adolph Saurer Arbon, CH CHF 100 000 100 C 

S.B. Holding, Inc. Panama, Rep. of Panama 1) 100 C 

Saurer Group Investments Ltd. George Town, Grand Cayman CHF 474 469 301 100 C 

Saurer Management AG Winterthur, CH CHF 100 000 100 C 

Saurer Holding, Inc. Denver, CO, USA USD 5 058 000 100 C 

SAC Saurer Automotive Components BV Rotterdam, NL EUR 11 344 505 100 C 


Barmag AG2) Remscheid, D EUR 34 104 664 99 C 

Barmag Beijing Machinery Co. Ltd. Beijing, China CNY 6 619 000 60 C 

Barmag do Brasil Ltda. Sao Leopoldo, Brazil BRL 18 585 000 99 C 

Barmag Far East Ltd. Hong Kong, HK HKD 100 000 100 C 

Barmag India (Private) Ltd. Mumbai, India INR 50 000 000 100 C 

Barmag Textile Machinery (Wuxi) Co. Ltd. Wuxi, China CNY 58 059 000 100 C 

Barmag Textile Machinery Suzhou Co. Ltd. Suzhou, China CNY 17 452 000 100 C 

Barmag-Spinnzwirn GmbH Chemnitz, D DEM 4 000 000 100 C 

Melco Industries, Inc. Denver, CO, USA USD 2 407 000 100 C 

Neumag GmbH & Co. KG Neumünster, D EUR 5 000 000 100 C 

PARSYS Produktionstechnik GmbH Mönchengladbach, D DEM 50 000 100 C 

Saurer (Japan) Co. Ltd. Osaka, J JPY 30 000 000 83 C 

Saurer Czech a.s. Cerven´y Kostelec, CZ CZK 127 074 000 96 C 

Saurer Hamel AG Arbon, CH CHF 14 160 000 100 C 

Saurer, Inc. Charlotte, NC, USA USD 3 000 000 100 C 

Saurer Textile Systems Far East Ltd. Hong Kong, HK HKD 250 000 100 C 

Saurer Twisting Systems (Suzhou) Co. Ltd. Jiangsu, China CNY 14 906 000 100 C 

Saurer-Allma GmbH Kempten, D DEM 19 000 000 100 C 

Schlafhorst Aktiengesellschaft Mönchengladbach, D DEM 500 000 49 P 

Schlafhorst Asia Ltd. Hong Kong, HK HKD 275 000 100 C 

Schlafhorst Autocoro GmbH Mönchengladbach, D DEM 50 000 100 C 

Schlafhorst Customer Support GmbH Mönchengladbach, D DEM 50 000 100 C 

Schlafhorst Electronics GmbH Mönchengladbach, D EUR 1 050 000 51 C 

Schlafhorst Winding Systems GmbH Mönchengladbach, D DEM 50 000 100 C 

Texparts GmbH Fellbach, D DEM 50 000 100 C 

Volkmann GmbH Krefeld, D EUR 5 500 000 100 C 

W. Reiners Verwaltungs GmbH Mönchengladbach, D DEM 75 000 000 100 C 

W. Schlafhorst AG & Co. Mönchengladbach, D DEM 80 000 000 100 C 

Zinser Textilmaschinen GmbH Ebersbach, D DEM 34 000 000 100 C 


APRILIA Ingranaggi S.p.A. Aprilia, I EUR 1 500 000 100 C 

DEMM Officine Meccaniche S.p.A. Porretta Terme, I EUR 4 650 000 100 C 

Graziano Trasmissioni CH Ltd. Doncaster, UK GBP 40 000 100 C 

Graziano Trasmissioni India Ltd. New Dehli, India INR 280 000 000 100 C 

Graziano Trasmissioni North America, Inc. Duluth, GA, USA USD 1 100 C 

Graziano Trasmissioni S.p.A. Cascine Vica Rivoli, I EUR 44 300 000 100 C 

Graziano Trasmissioni UK Ltd. Cambridge, UK GBP 40 000 100 C 

I.T.T. S.r.l. Cervere, I EUR 2 600 000 100 C

Share % share- Consol- 

Company Location Currency capital holding idation Function 

Surface Technology (Discontinuing Operations) 

IonBond AG Olten, CH CHF 850 000 100 C 

IonBond LLC Madison Heights, MI, USA USD 1 100 C 

IonBond Ltd. Consett, UK GBP 1 150 000 100 C 

Xaloy AG Olten, CH CHF 3 000 000 100 C 

Xaloy Asia (Thailand) Ltd. Chonburi, Thailand THB 100 000 000 100 C 

Xaloy, Inc. Pulaski, VA, USA USD 1 000 100 C 

1) Shares without par value. 

2) Barmag AG is quoted on the Stock Exchanges of Düsseldorf, Frankfurt, Hamburg and Stuttgart. The share price at December 31, 2002 was EUR 13.50. The stock 

market capitalization was, therefore, EUR 180 million (CHF 262 million). 

Consolidation: Financial companies 

C = Full consolidation Services 

P = Proportional consolidation Research and development 

Principal companies and investments 

Production 

Marketing and sales 

45

Report of the group auditors 

Report of the group auditors 

to the general meeting of Saurer Ltd., Arbon 

As auditors of the group, we have audited the consolidated 

financial statements (income statement, balance sheet, statement 

of cash flows, statement of changes in shareholders’ 

equity and notes to the consolidated financial statements, on 

pages 23 to 45) of Saurer Ltd. for the year ended December 

31, 2002. 

These consolidated financial statements are the responsibility 

of the board of directors. Our responsibility is to express an 

opinion on these consolidated financial statements, based on 

our audit. We confirm that we meet the legal requirements 

concerning professional qualification and independence. 

Our audit was conducted in accordance with auditing standards 

promulgated by the Swiss profession and with the 

International Standards on Auditing, which require that an 

audit be planned and performed to obtain reasonable assurance 

about whether the consolidated financial statements are 

free from material misstatement. We have examined on a test 

basis evidence supporting the amounts and disclosures in the 

consolidated financial statements. We have also assessed the 

46 

accounting principles used, significant estimates made and the 

overall consolidated financial statement presentation. We believe 

that our audit provides a reasonable basis for our opinion. 

In our opinion, the consolidated financial statements give a 

true and fair view of the financial position, the results of operations 

and the cash flows in accordance with the International 

Financial Reporting Standards (IFRS) and comply with Swiss law. 

We recommend that the consolidated financial statements 

submitted to you be approved. 

PricewaterhouseCoopers AG 

Urs Honegger Beat Inauen 

St. Gallen, March 11, 2003

Multiple year comparison 

Income statement (CHF 000) 2002 2001 2000 1999 1998 

Sales 

Natural fibers 1 135 800 1 103 419 1 199 630 918 615 1 226 131 

Synthetic fibers 641 622 693 041 460 091 – – 

Saurer Textile Solutions 1 777 422 1 796 460 1 659 721 918 615 1 226 131 

Transmission Systems 557 751 426 245 333 345 271 157 296 081 

Discontinuing Operations – Surface Technology 155 218 176 889 223 179 190 711 191 918 

Other – 6 325 7 568 7 373 13 669 

Total sales 2 490 391 2 405 919 2 223 813 1 387 856 1 727 799 

Gross profit 585 882 547 441 551 715 290 748 429 333 

Operating expense before impairment charge –484 591 –523 270 –429 530 –347 450 –348 277 

Impairment charge – –76 786 – – – 

Operating profit (loss) 101 291 –52 615 122 185 –56 702 81 056 

of which Saurer Textile Solutions 49 669 –86 939 74 852 –82 658 34 927 

of which Transmissions Systems 

of which Discontinuing Operations – 

53 543 46 587 39 183 24 371 31 024 

of which Surface Technology –5 527 –11 821 9 620 4 732 15 853 

Net financial income (expense) –26 381 –29 744 –27 243 5 156 20 976 

Profit (loss) before taxes 74 910 –82 359 94 942 –51 546 102 032 

Taxes –24 585 8 029 –22 143 –18 694 –15 193 

Minority interests –1 682 –1 696 –1 631 –1 450 –1 538 

Net profit (loss) 48 643 –76 026 71 168 –71 690 85 301 

EBITDA (operating profit before depreciation and amortization) 

Total 218 151 151 252 235 573 36 760 165 015 

of which Saurer Textile Solutions 111 420 61 869 140 466 –28 629 83 255 

of which Transmission Systems 


91 414 78 551 65 390 45 351 50 558 

of which Surface Technology 10 867 8 545 30 061 22 168 30 750 

Depreciation and amortization 

Total 116 860 127 081 113 388 93 462 83 959 

as % of sales 4.7% 5.3% 5.1% 6.7% 4.9% 

of which Saurer Textile Solutions 61 751 72 022 65 614 54 029 48 328 



37 871 31 964 26 207 20 980 19 534 


Order intake, order backlog 

Order intake 2 628 189 2 175 818 2 373 558 1 419 026 1 509 381 

Order backlog 678 129 563 211 793 315 268 233 237 063 

Cash flow (CHF 000) 

Net cash from operating activities 212 728 176 097 170 837 –14 545 135 126 

as % of sales 8.5% 7.3% 7.7% –1.0% 7.8% 

Capital expenditure 72 726 96 686 114 832 101 207 139 105 




29 219 44 186 48 497 33 343 39 159 


47

Multiple year comparison 

Balance sheet (CHF 000) 31.12.02 31.12.01 31.12.00 31.12.99 31.12.98 

Assets 

Liquid assets 146 459 198 613 132 950 253 572 289 570 

Accounts receivable, trade 409 338 387 323 427 772 313 379 294 058 

Inventories 318 512 362 396 352 810 289 198 288 914 

Prepayments, other receivables 101 346 81 232 74 726 52 570 50 633 

Current assets 975 655 1 029 564 988 258 908 719 923 175 

Financial assets, deferred taxes 103 730 111 641 85 430 39 756 20 345 

Property, plant and equipment 626 073 709 103 676 764 572 741 544 909 

Intangible assets 204 448 214 943 294 574 56 718 69 124 

Non-current assets 934 251 1 035 687 1 056 768 669 215 634 378 

Total assets 1 909 906 2 065 251 2 045 026 1 577 934 1 557 553 

Liabilities and shareholders’ equity 

Short-term debt 65 062 221 427 133 913 154 369 181 290 

Accounts payable 240 292 245 864 246 182 131 213 117 438 

Provisions, accruals and deferred income 269 319 246 532 258 610 197 157 196 603 

Other current liabilities 129 545 95 292 82 054 47 037 78 554 

Current liabilities 704 218 809 115 720 759 529 776 573 885 

Long-term debt 

Provisions, deferred taxes, 

235 274 285 481 288 579 219 384 76 680 

other non-current liabilities 323 187 329 044 295 910 173 495 148 079 

Non-current liabilities 558 461 614 525 584 489 392 879 224 759 

Total liabilities 1 262 679 1 423 640 1 305 248 922 655 798 644 

Minority interests 3 556 16 399 17 285 3 169 4 484 

Shareholders’ equity 643 671 625 212 722 493 652 110 754 425 

Total liabilities and shareholders’ equity 1 909 906 2 065 251 2 045 026 1 577 934 1 557 553 

Equity financing ratio 33.7% 30.3% 35.3% 41.3% 48.4% 

Employees (full-time equivalents) 

Number of employees (year end) 10 760 11 520 11 219 7 774 8 319 




3 021 3 006 1 826 1 581 1 613 

of which Surface Technology 786 857 1 025 1 041 997 

Europe 8 936 9 823 9 230 6 077 6 665 

of which Switzerland 437 522 546 534 560 

NAFTA 747 804 1 070 1 078 1 200 

Asia 1 077 893 920 619 454 

Personnel expenses (CHF 000) 2002 2001 2000 1999 1998 

Wages and salaries 599 230 629 889 570 720 429 495 447 696 

Social security and other personnel expenses 154 560 167 524 143 982 114 747 118 164 

Total personnel expenses 753 790 797 413 714 702 544 242 565 860 

48

FINANCIAL 

REPORT OF 

SAURER LTD.

Saurer Ltd. – Income statement for the years ended December 31, 

Revenues (CHF) 2002 2001 

Revenues from investments 8 705 891 9 663 340 

Interest income 11 272 385 14 591 461 

Other income 5 050 047 2 165 256 

Taxes 42 252 – 

Extraordinary income – 25 017 588 

Total revenues 25 070 575 51 437 645 

Expenses 

Administration expense –1 448 888 –535 172 

Finance expense (including value adjustments) –1 088 262 –1 095 241 

Interest expense –6 881 490 –6 254 289 

Taxes – –170 283 

Other expenses –590 177 –1 000 969 

Write-down of investments – –47 000 000 

Total expenses –10 008 817 –56 055 954 

Net profit (loss) 15 061 758 –4 618 309 

51

Saurer Ltd. – Balance sheet as at December 31, 

Assets (CHF) Note* 31.12.2002 31.12.2001 

Cash 3 409 096 20 887 608 

Marketable securities 

Current accounts receivable 

15 825 20 200 

Third parties 332 965 573 060 

Group companies 69 742 645 20 620 549 

Accrued income 4 133 440 6 108 005 

Current assets 

Loans 

77 633 971 48 209 422 


Group companies 

Investments 

203 693 056 199 703 027 

Third parties – 4 142 

52 


Non-current assets 860 476 693 823 137 614 

Total assets 938 110 664 871 347 036 

Liabilities 

Short-term debt 


Banks – 20 000 000 


Short-term provisions 180 000 125 000 

Accruals and deferred income 1 10 845 562 3 059 061 

Current liabilities 

Long-term debt 

71 901 503 24 874 835 

21 ⁄4% convertible bond 2000–2005 163 100 000 230 000 000 

Group companies 72 125 786 550 584 

Long-term provisions 50 324 030 50 324 030 

Non-current liabilities 285 549 816 280 874 614 

Total liabilities 357 451 319 305 749 449 

Share capital 192 875 000 192 875 000 

General legal reserves 61 904 473 61 904 473 

Reserve for treasury shares 135 140 000 124 840 000 

Unappropriated retained earnings 190 739 872 185 978 114 

Shareholders’ equity 2 580 659 345 565 597 587 

Total liabilities and shareholders’ equity 938 110 664 871 347 036 

* For details see notes to the financial statements, page 53.

Explanation to the financial statements 

Saurer shareholders participate legally in Saurer Ltd., which controls 

the companies listed on pages 44 and 45. The consolidated 

financial statements are of primary importance economically. 

Notes (CHF) 

2 Development of shareholders’ equity 

Saurer Ltd. – Notes to the financial statements 

The statutory financial statements of Saurer Ltd. are in this context 

to be viewed as a supplement. 

1 Accruals and deferred income 

In 2002 the accruals and deferred income include CHF 7.7 m gains from the repurchase of the 21 ⁄4% convertible bond, which 

have been deferred for statutory purposes. 

General Reserve for Unappropriated 

Share capital reserves treasury shares retained earnings Total 

Balance as at 1.1.2001 205 219 000 61 904 473 126 440 000 188 996 423 582 559 896 

Net loss for the year 2001 –4 618 309 –4 618 309 

Capital repayment –12 344 000 –12 344 000 

Transfer from reserve for treasury shares –1 600 000 1 600 000 – 

Balance as at 31.12.2001 192 875 000 61 904 473 124 840 000 185 978 114 565 597 587 

Net income for the year 2002 15 061 758 15 061 758 

Transfer to reserve for treasury shares 10 300 000 –10 300 000 – 

Balance as at 31.12.2002 192 875 000 61 904 473 135 140 000 190 739 872 580 659 345 

3 Authorized and conditional capital 

See Note 17 on pages 39 and 40. 

4 Contingent liabilities 31.12.02 31.12.01 

Guarantees 

The guarantees are given in favor of Saurer subsidiary companies. 

447 811 000 511 451 000 

5 Treasury shares 

Treasury shares are held by Saurer Ltd. and a subsidiary company. Details of treasury shares (including purchases and sales) are 

shown in Note 17 on page 40. 

6 Significant shareholders 

See Section 1.2 on page 56 of the Corporate Governance Report. 

7 Investments 

See pages 44 and 45. 

8 Convertible bond 

See Note 13 on pages 36 and 37. 

53

Saurer Ltd. – Proposal to the General Meeting of Shareholders 

Appropriation of retained earnings (CHF) 

Retained earnings brought forward 185 978 114 

Net income for the financial year 2002 15 061 758 

Transfer reserve for treasury shares –10 300 000 

Unappropriated retained earnings 190 739 872 

The Board of Directors proposes to the General Meeting of Shareholders that the unappropriated retained earnings be carried 

forward to new account. 

Instead of a dividend, the Board of Directors proposes a capital repayment of CHF 1.00 per registered share. 

54

Report of the statutory auditors 

to the general meeting of Saurer Ltd., Arbon 

As statutory auditors, we have audited the accounting records 

and the financial statements (income statement, balance sheet 

and notes on pages 51 to 54) of Saurer Ltd. for the year ended 

December 31, 2002. 

These financial statements are the responsibility of the board 

of directors. Our responsibility is to express an opinion on 

these financial statements, based on our audit. We confirm 

that we meet the legal requirements concerning professional 

qualification and independence. 

Our audit was conducted in accordance with auditing standards 

promulgated by the Swiss profession, which require that 

an audit be planned and performed to obtain reasonable assurance 

about whether the financial statements are free from 

material misstatement. We have examined on a test basis evidence 

supporting the amounts and disclosures in the financial 

statements. We have also assessed the accounting principles 

used, significant estimates made and the overall financial sta- 

Saurer Ltd. – Report of the statutory auditors 

tement presentation. We believe that our audit provides a reasonable 

basis for our opinion. 

In our opinion, the accounting records and the financial statements 

and the proposed appropriation of available earnings 

comply with Swiss law and the company’s articles of incorporation. 

We recommend that the financial statements submitted to you 

be approved. 

PricewaterhouseCoopers AG 

Urs Honegger Beat Inauen 

St. Gallen, March 11, 2003 

55

CORPORATE 

GOVERNANCE. 

1. GROUP STRUCTURE AND 

SHAREHOLDERS 

1.1 Group structure Saurer Ltd. is a corporation organized under 

the laws of Switzerland with legal domicile in Arbon. The activities 

of the group are divided into two main operating divisions: 

Saurer Textile Solutions and Transmission Systems. The Board of 

Directors intends to divest the Surface Technology activities and 

these are consequently disclosed separately as discontinuing operations. 

Tab. The group structure is as follows on Page 57. 

The major companies in the Saurer Group are set out in the list 

of principal companies and investments on page 43 and 44. 

56 

1.2 Significant shareholders At the end of 2002 the following 

shareholders were registered: 

Shareholders Number of shares Number of shareholders 

Individuals 12.65% 89.19% 

Corporate entities 46.24% 10.81% 

Treasury shares 8.94% – 

Shares in the process 

of transfer 32.17% – 

According to information available to the company, there is no 

shareholder with a beneficial ownership exceeding 5%. 

1.3 Cross-shareholdings There are no cross-shareholdings.

2. CAPITAL STRUCTURE 

2.1 Capital The issued share capital of Saurer Ltd. is CHF 192 875 000, 

comprising 15 430 000 fully paid registered shares with a nominal 

value of CHF 12.50 each. 

2.2 Authorized and conditional capital Details of the authorized 

and conditional capital are set out in Note 17 on pages 39 

and 40. 

2.3 Changes of capital Information on movements in the capital 

structure for 2002 and 2001 are set out in the consolidated 

statement of shareholders’ equity on page 26. The movements 

for the year 2000 are set out in the consolidated statement of 

shareholders’ equity on page 55 of the Annual Report 2001, 

which is available on the group’s homepage, www.saurer.com. 

Group Structure 

*Member of Senior Management. 

Corporate Governance 

2.4 Shares and participation certificates Each registered 

share is entitled to one vote at the General Meeting of Shareholders. 

Voting rights may only be exercised after the shareholder 

has been registered in the share register. All shares are entitled to 

full dividend rights. The voting rights of treasury shares held by 

the company or its subsidiaries are suspended. In the event of a 

capital increase through the issue of new shares, the existing shareholders 

have subscription rights in proportion to their existing 

shareholding, unless the General Meeting of Shareholders 

restricts or excludes such rights for important reasons, especially 

in connection with the acquisition of investments or employee 

participation. 

Saurer Ltd. has not issued (non-voting) participation certificates. 

2.5 Bonus certificates Saurer Ltd. has not issued bonus certificates. 

57


2.6 Limitations on transferability and nominee registrations 

There are no restrictions either for Swiss or for non-Swiss 

investors with regard to registration in the share register. Similarly 

there are no limits regarding the number of shares eligible for 

voting rights to be registered. However, in accordance with the 

articles of incorporation, supported by the law, there is an obligation 

to report participations which exceed or fall below 5, 10, 

20, 331 ⁄3, 50 and 662 ⁄3 percent respectively. In the event that a 

participation of 331 ⁄3 is attained, the holder of this participation 

is obliged to submit a public tender offer (according to the bylaws 

of the company as well as the Swiss Federal Act on Stock Exchanges 

and Securities Trading – “SESTA” – of 1995, Article 20 

and 32). 

Registered shares not physically in existence, including the rights 

associated therewith, may only be transferred by assignment. 

Saurer Ltd. must be notified for assignments to be valid. If registered 

shares not physically in existence are managed by a bank on 

the instruction of a shareholder, such registered shares may only 

be transferred with the cooperation of the bank. 

2.7 Convertible bonds and options Details of the convertible 

bond are set out in Note 13 on page 37, and details of stock 

options are set out in Note 19 on page 41. 

3. BOARD OF DIRECTORS 

3.1 Members The Board of Directors consists of a minimum of 

three and a maximum of nine members. 

3.2 Education, professional background, other activities and 

functions None of the non-executive members of the Board was a 

member of Saurer management in the three financial years preceding 

the current year. None of the non-executive members of the 

Board has important business connections with Saurer, except as 

noted in 5.1 below. None of the members of the Board exercises 

official functions or holds political posts. 

58 

Members of the Board of Directors 

Prof. Dr. Giorgio Behr 

Education: Law School University of Zurich, Swiss Certified Public 

Accountant, Attorney, Visiting Scholar University of Washington. 

Professional background: After ten years with KPMG, he joined 

the industrial group Hesta. In 1984 he started his own consulting 

company Behr Deflandre & Snozzi BDS. In 1991 he took control 

of the Bircher Reglomat Group together with the management, 

and in 2001 of the Cellpack Group. 

Activities in governing and supervisory bodies: Professor at the 

University of St. Gall Business School. Member of the Board of 

the Hilti Group, Liechtenstein. Co-founder and member of the 

Board of the Bellevue Group. Management of Bircher Reglomat 

Group and Cellpack Group. Member of the Supervisory Board of 

the European Financial Reporting Advisory Group EFRAG. Previously 

chairman of the standard setter Swiss GAAP FER and the 

group of experts in accounting of the SWX Swiss Exchange. 

Permanent management and consultancy functions for Swiss and 

foreign interest groups: None. 

Special Board assignments: Chairman. 

Prof. Dr. Manfred Timmermann 

Education: Study of economics at the Universities of Frankfurt 

and Kiel, Dr. sc. Pol. University of Kiel. 

Professional background: Lectureships and professorships at 

various universities, including Kiel, Berlin, Mannheim, Constance, 

Shanghai, University of St. Gall Business School. From 1984 until 

1989 Secretary of State in Federal Ministry of Defence, Bonn. 

Various positions in industry, more recently (1994 until 2000) 

member of the Group Management of Deutsche Bank AG, Frank- 

Name Nationality Position Date of first appointment 

Prof. Dr. Giorgio Behr Swiss Chairman, non-executive June 6, 1995 

Prof. Dr. Manfred Timmermann German Deputy chairman, non-executive June 6, 1995 

Heinrich Fischer Swiss Delegated member, executive member May 18, 1998 

Alexis Fries Swiss Non-executive member May 16, 2002 

Hans-Georg Härter German Non-executive member May 16, 2002 

Dr. Mohamad Khouja USA/Lebanese Non-executive member June 15, 1994 

Ulrich Schmidt German Non-executive member May 16, 2000 

Prof. Dr. Günter Schuh German Non-executive member May 16, 2002 

furt. Since 2000 economic consultant in legal practice Dr. Lindt 

and Partners, Kreuzlingen. 

Activities in governing and supervisory bodies: Member of the 

Board of Arbonia-Forster Group, Arbon. Member of the Supervisory 

Board of Krupp-Thyssen-Stainless GmbH, Würzburg, and 

Messe GmbH, Berlin. Chairman of the University Council of the 

University of Constance.


foreign interest groups: Chairman of the Supervisory Board of the 

Centre for European Economic Research, Mannheim. Member of 

the Board of Trustees of the Thurgau Science and Research Trust, 

Frauenfeld. Rector of the European Business School in Wiesbaden. 

Special Board assignments: Deputy chairman. Chairman of the 

Audit Committee. 


Education: Master of Applied Physics & Electrical Engineering 

(ETH, Zurich), MBA (University of Zurich). 

Professional background: Four years R&D in electronics after obtaining 

Masters Degree. From 1980 to 1990 Balzers Division of 

Unaxis Group: Director of Staff, Technology and Vice President, 

Business Unit Coating Equipment. From 1991 to 1996 Unaxis (formerly 

Oerlikon Bührle Holding AG): Executive Vice President, Corporate 

Development. 


Board of: ESEC SA, Schweiter AG, ISE AG. 



Special Board assignments: Delegated member and Chief Executive 

Officer Saurer (since April 1, 1996). 

Alexis Fries 

Education: Degree in Physics ETH Zurich. 

Professional background: From 1980 various positions with ABB 

(formerly BBC Brown Boveri) in Switzerland, Philippines, Japan and 

Hong Kong. Executive Vice President, ABB Zurich, and member of 

the Group Executive Committee of ABB (1993 to 1998), Head of 

Power Generation Division (1998 to 1999). Executive Vice President, 

ABB ALSTOM Power, Brussels, Manager of Gas Turbines Division 

(1999 to 2001). Since 2001 President, ALSTOM Power, Paris, 

member of the Group Management of ALSTOM. 


Group Management of ALSTOM. 



Hans-Georg Härter 

Education: Training in mechanical engineering, State Technician’s 

Certificate in machine design, construction and assembly at the 

Technicians’ Day School, Berlin, degree in engineering from the 

Meersburg Academy. 

Professional background: From 1973 various management functions 

within the ZF Group. Member of Board of Management ZF 

Group. From 2002 Chief Executive Officer, ZF Sachs AG, Schweinfurt. 

Activities in governing and supervisory bodies: Chief Executive 

Officer, ZF Sachs AG, Schweinfurt. 




Dr. Mohamad Khouja 

Education: Ph.D. Economics (University of California, Berkeley), 

M.A. Economics (Indiana University, Bloomington), B.S. Business 

Administration (Indiana University) 

Professional background: Associate Professor, Oklahoma State 

University (1966 to 1971). Economic Advisor to a number of 

organizations, including Kuwait Fund for Arab Economic Development 

and Kuwait Real Estate Investment Consortium (1969 to 

1987). Member of Development Committee Task Forces (IMF- 

World Bank) (1979 to 1982). Director, Banque Arabe et International 

d’Investissement (1988 to 1991). Director and Chief Executive 

Officer, Wafra Investment Advisory Group, Inc., New York 

(since 1991). President and Chief Executive Officer, Saif Advisors, 

Inc., New York (since 1987). 

Activities in governing and supervisory bodies: Director and Chief 

Executive Officer, Wafra Investment Advisory Group, Inc., New 

York (since 1991). President and Chief Executive Officer, Saif Advisors, 

Inc., New York (since 1987). President, Director-General of 

Comigestion, Paris. Member of the Board of Finanfrance, Paris. 

Member of the Board of SIRE, Cayman Islands. 


foreign interest groups: Member of the Advisory Board of the 

Middle East Institute. Former member of the Arab-American Chamber 

of Commerce, Washington. 

Special Board assignments: Member of the Audit Committee. 

Ulrich Schmidt 

Education: Degree in Engineering, Technical University of Hannover. 

Professional background: Head of Development, Imperial-Werke 

Bünde (1967 to 1972). Head of Development, AEG, Nuremberg 

(1972 to 1980). Head of Production, Cooling and Freezing, AEG, 

Nuremberg (1981 to 1986). Head of Drilling Division, Hilti AG, 

Schaan (1986 to 1993). Member of the Executive Board, Hilti AG, 

Schaan (1994 to 1999). Since 2000 consultant. 


Board of Plaston AG, Widnau and Hilcona AG, Liechtenstein. 



Prof. Dr. Günter Schuh 

Education: Dr.-Ing., Dipl.-Wirt. Ing., RWTH Aachen. Postdoctoral 

lectureship qualification, University of St. Gall Business School. 

Professional background: Lectureships and professorships at University 

of St. Gall. From 2002 fully tenured Professor for Production 

Engineering, RWTH Aachen University, Aachen. Member of 

the Board of Directors of the Laboratory for Machine Tools and 

Production Engineering (WZL) of RWTH Aachen University and 

member of the Board of Directors of the Fraunhofer IPT Aachen. 


Board of Gallus Holding AG, St. Gall, Schott Zwiesel AG, Zwiesel, 

Peiniger Röro GmbH, Gelsenkirchen, Barmag AG, Remscheid- 

Lennep and Schuh Holding GmbH, Würselen. Chairman of the 

Board of Virtuelle Fabrik AG, St. Gall, and GPS AG, St. Gall. 

59



foreign interest groups: Designated Director of the Kühne Institute 

for Logistics at the University of St. Gall (HSG). 

3.3 Cross-involvement There is no cross-involvement among the 

Boards of Directors of listed companies. 

3.4 Elections and terms of office The members of the Board 

of Directors are generally elected for the period of one year, 

which is defined as the period between one Annual General 

Meeting of the Shareholders and the following Annual General 

Meeting. Members may continue to be re-elected until they reach 

the age of 70. 

3.5 Internal organizational structure The Board of Directors 

of Saurer Ltd. (the “company”) has adopted written “Internal 

Regulations” for the management of the company and of its subsidiaries 

pursuant to article 716b of the Swiss Code of Obligations 

(Company Law), the rules of the SWX Swiss Exchange and 

the company’s Articles of Association. 

3.5.1 Allocation of tasks within the Board of Directors The 

Board elects a chairman and a deputy chairman. Until such election 

or in the absence of the chairman and deputy chairman the 

longest serving Director presides over the Board. 

The chairman of the Board is also chairman of the “Committee of 

the Board” if this is appointed (see 3.5.2). 

The Board also elects the chairman of the Audit Committee. He 

must not be chairman of the Board at the same time. The head 

of Internal Audit and Risk Management reports to him. 

The delegated member of the Board is at the same time CEO of 

the company. 

The Board elects a secretary to the Board and the company who 

need not be a Board member. Normally this function is assigned 

to the CFO. 

3.5.2 Committees 

Audit Committee The members of the Audit Committee are: 

Prof. Dr. Manfred Timmermann, Chairman 

Dr. Mohamad Khouja, Member 

Günther Schultz, external consultant, who is not a member of the 

Board of Directors, but has a contractual consulting relationship. 

Mr. Schultz, Swiss Certified Public Accountant, is a retired partner 

of KPMG, Zurich. He was previously head of Auditing Services of 

KPMG Switzerland and Chairman of the Swiss Institute of Certified 

Public Accountants. 

60 

The Audit Committee advises and supports the Board in all matters 

related to external audit, internal audit, risk management, 

accounting policies and practices and compliance with adopted 

accounting standards. 

Committee of the Board A Committee of the Board, consisting 

of three members, can be appointed if the Board has seven or 

more members and if the Board so decides. The Board can delegate 

certain functions to this committee. While the Committee of 

the Board is defined in the internal regulations, in the past it has 

not been appointed. 

Other Committees Given the small size of the Board, important 

matters such as nomination, compensation and management 

development are discussed by the full Board of Directors. 

If fast and decisive action is required, the Board has on rare 

occasions in the past appointed ad-hoc committees for certain 

limited tasks. For several months at the end of 2001 and early 

2002 the Board established a committee to review restructuring 

projects. 

3.5.3 Work methods of the Board The Board meets as often as 

the business requires, but no fewer than four times per fiscal year. 

Board meetings last from one to two days. 

A quorum of a majority of the Directors is required for resolutions 

to be valid. Resolutions are adopted by simple majority, with the 

chairman casting the decisive vote in case of a tie. 

The Audit Committee normally meets three times a year, but not 

less than twice. Meetings last usually for half a day. The chairman 

of the Audit Committee reports about issues and decisions to the 

full Board at the next Board meeting. 

The CEO as delegated member regularly attends Board meetings, 

as does the CFO who has been elected as secretary. 

Heads of strategic business units and business unit managers are 

regularly invited to present their budgets and strategic plans to 

the full Board. 

3.6 Definition of areas of responsibility While the Board of 

Directors has delegated the executive management of the company 

and the group to the CEO and to the Senior Management, 

the following decisions remain with the Board: 

> Define the ultimate direction and strategy of the group. 

> Determine the top level organizational structure of the group. 

> Approve the yearly budgets and annual reports, reporting and 

accounting policies. 

> Based on recommendations of the Audit Committee and the 

work of Internal Audit, ensure that internal control systems of 

the group are adequate. 

> Determine the appropriate capital structure.

Appoint and remove members of the Senior Management, assess 

the next lower level of Senior Management. Discuss on an 

annual basis as part of a strategic management development 

process (SMD) the reviews of upper management levels. The focus 

is on key management positions of Saurer and its business 

units. 

> Elect the chairman and vice chairman as well as the chairman 

of the Audit Committee. 

> Decide about the establishment of a Committee of the Board 

(see 3.5.2). 

> Decide about subsidiaries, investments, acquisitions, financial 

market transactions, financing, assuming liabilities and 

granting of guarantees if they exceed certain limits that have 

been delegated to the CEO. While the limit for raising external 

financing on an aggregate basis below CHF 50 million has 

been delegated to the CEO, all other limits of delegation to the 

CEO are CHF 15 million or lower. 

3.7 Information and control instruments Saurer’s reporting 

system uses professional consolidation software. Income statements 

and full balance sheets are reported and consolidated on a 

monthly basis, including other information pertinent to an up-todate 

controlling system, such as sales and margin details, headcount 

and capital spending. 

While a yearly budget is established and approved in the period 

of October to December of the prior year, updated year-end projections 

are reported three times a year. 

Members of Senior Management 

Specific treasury information is reported on a weekly and monthly 

basis. 

Business unit leaders report trends and developments in business, 

revenues, costs and financial positions on a monthly basis. 

The Saurer reporting system supports value management with a view 

to compensation programmes (see Section 5). For all business units 

operating profit and net operating assets must be reported, which 

allows the determination of asset turns and return on operating assets. 

In cases of specific initiatives, such as restructuring, the Board in 

the past has asked for special ad-hoc reporting. 

Risk management has been conducted with a variety of instruments, 

such as strategic business planning, regular business reviews, 

financial planning and reporting at multiple levels within 

the organization, with the Board of Directors maintaining the 

oversight role. 

For all business units, specific risk maps have been established. 

These risk maps will be updated on a regular basis as a result of 

internal audits, risk reporting and periodic and systematic reviews 

with the management. 

The head of Internal Audit and Risk Management, Mr. Hans 

Beumer, reports directly to the Audit Committee of the Board of 

Directors. Mr. Beumer is a Dutch Registeraccountant, who trained 

with Arthur Andersen. He previously worked in Internal Audit and 

Finance Management at Boehringer Mannheim Group, Amsterdam, 

was head of Internal Audit and head of Group Reporting at adidas-Salomon, 

Herzogenaurach, and latterly CFO of Dutch Broadcasting 

Services, Hilversum. 

4. SENIOR MANAGEMENT 

4.1 Members 

Name Nationality Function 

Heinrich Fischer Swiss CEO Saurer, Delegated Member of the Board of Directors, 

CEO Saurer Textile Solutions 

Peter Stiefenhofer Swiss CFO Saurer, CFO Saurer Textile Solutions 

Walter Cox USA CEO Xaloy Group 

Dr. Marcello Lamberto Italian CEO Transmission Systems 

Dr. Marco Marchetti Swiss Member of Senior Management of IonBond, CFO Xaloy Group 

Josef Steiger Swiss Corporate Development Saurer, CEO Texparts 


4.2 Education, professional background, other activities 

and functions None of the members of the Senior Management 

is a member of governing and supervisory bodies of important 

Swiss or foreign organizations outside of Saurer, with the exception 

of Heinrich Fischer, as noted in 3.2 above. None of the members 

holds permanent management or consultancy functions for 

important Swiss or foreign interest groups, and none of the members 

has official functions or holds political posts. 

61



See 3.2 above. 

Peter Stiefenhofer 

Education: University of Zurich – degree in Economics and Business 

Administration. Swiss Certified Public Accountant. Advanced 

Executive Course (Northwestern University – Kellogg). 

Professional background: Auditor and systems consultant with 

KPMG. Group Controller, Zellweger Group. Vice President Finance 

and Operations, Zellweger Analytics, Inc., USA. 

Tasks previously carried out for Saurer: None. 

Walter Cox 

Education: B.A., Economics, DePauw University, USA. 

Professional background: Controller, Operations Manager, and 

Treasurer, Virginia Transformer Corporation, USA. Joined Xaloy, 

Inc., in 1983. CFO and later President of Xaloy, Inc. 

Tasks previously carried out for Saurer: President, Xaloy, Inc. 

Dr. Marcello Lamberto 

Education: Doctor in Mechanical Engineering from Politechnico 

Torino. 

Professional background: Metallurgist within the Product Development 

Dept. at Fiat Cars. Chief metallurgist and quality manager 

at Rockwell CVC (joint-venture between Rockwell International 

and Iveco, manufacturing axles for trucks). From October 

1984 various positions at Graziano Trasmissioni (Quality Manager, 

Operations Manager, assistant to the Managing Director, General 

Manager and CEO). 


Dr. Marco Marchetti 

Education: Master’s degree in economics, University of Milan. PhD 

(Milan and Zurich). Advanced management program, Harvard 

Business School. Swiss Certified Public Accountant. 

Professional background: Audit Manager, Price Waterhouse. M&A 

Manager/Division Controller Rieter Automotive Systems, CFO, 

Rhodia Industrial Yarns. 


Josef Steiger 

Education: Degree in Engineering, ETH Zurich. Degree in business 

administration from HSG (University of St Gall business school). 

Professional background: Relationship Manager for Corporate 

finance for Swiss MNC at Chase Manhatten Bank, Zurich. Managing 

Director of Multirac Export AG, Baar. Head of Sales at Rieter, 

Winterthur. 


4.3 Management contracts Saurer does not have management 

contracts with third parties. 

62 

5. COMPENSATION, SHARE- 

HOLDINGS AND LOANS TO 

DIRECTORS AND SENIOR 

MANAGEMENT 

5.1 Content and method of compensation For the Board of 

Directors, the following forms of compensation apply: 

> Board fees cash 

> Other cash compensations (expense allowances, company cars) 

> Consulting fees for special projects* 

> Saurer employee stock option program 

* Board members of Saurer have special experience in the areas 

of finance, process management, innovation management, Asian 

markets or textile and automotive industry. In order to make use 

of this experience beyond the limited framework of Board meetings, 

Saurer occasionally extends consulting and review assignments 

to board members. These assignments in the past were 

limited to projects with an effort from 5 to 40 workdays. Consulting 

assignments are compensated with fees comparable to market. 

Board fees and other cash compensations have been decided by 

the full Board. 

The chairman and the CEO decided the allocation of stock 

options to Board members. 

The following methods of compensation are applied on the level 

of Senior Management: 

> Base salary cash 

> Cash bonuses, also including payments under the stock option 

program for employees of Graziano (transmission systems) 

> Other cash compensations (expense allowances, company cars, 

etc.) 

> Pension fund and other benefit allocations 

> Saurer employee stock option program 

Saurer does not issue stock to employees or Board members, unless 

acquired through the stock option programs. 

The Graziano stock option program pertains to Graziano stock. On 

a consolidated group level, the result in substance amounts to a 

phantom stock program resulting in cash compensation, since no 

Graziano stock is issued without being purchased back immediately. 

The basic philosophy of compensation for Senior Management 

can be summarized as follows: 

While the overall compensation over the midterm must be in line 

with the market, the yearly compensation should clearly reflect 

the financial results of the group or of the unit of responsibility.

Variable elements (cash bonus and return from stock options) 

should constitute a significant portion of the total compensation. 

All cash bonuses are related to elements of profit (operating profit, 

net income) and of assets and cash management (net debt, 

return on net operating assets, selected assets). 

Saurer measures operating profit and net operating assets for all 

business units on a worldwide consolidated basis, which allows 

5.2 Compensation in detail 

compensation for key figures such as asset turns and returns on 

net operating assets. 

All senior managers and managers of business units have several 

yearly objectives with predefined ranges of cash bonuses. The 

minimum of cash bonuses is zero. 

Compensation and objectives of Senior Management and business 

unit managers are defined between CEO and chairman, and 

approved by the full Board of Directors once a year. 

Summary table – 2002 compensation 

All amounts in CHF 

Salaries & Cash 

Other cash 

payments Total Contribution 

Annual compensation Board fees bonuses 1) and fees 2) cash to pensions 

Non-executive members of the Board 643 531 – 187 668 831 199 – 

Members of the Senior Management 1 797 575 403 527 241 463 2 442 565 529 770 

Former members of the Board – – 490 167 490 167 – 

Former members of the Senior Management 48 000 – – 48 000 22 692 

Highest compensation (CEO) 611 667 – 30 000 641 667 250 000 

Chairman of the Board 185 000 – 26 668 211 668 – 

Number of Number of Number of Number of Value of 

options options options shares loans 

Long term compensation issued 3) held 4) exercised held 5) outstanding 

Non-executive members of the Board 27 000 88 000 – 77 000 – 

Members of the Senior Management 45 500 99 500 – 16 000 – 

Former members of the Board – 5 000 – – – 

Former members of the Senior Management – 26 000 7 000 8 200 – 

Highest compensation (CEO) 20 000 60 000 – 15 000 – 

Chairman of the Board 7 000 27 000 – 76 000 – 

1) Cash bonuses paid in 2002 refer to the performance in the prior year. This can also include payments under the Graziano stock option plan. 


2) In 2002 no severance payments were included in this amount. 

The cash payments to a former member of the Board are compensation for a Board membership at a subsidiary, combined also with significant legal consulting 

work. 

3) A total of 150 000 options where issued, of which 77 500 with a value of CHF 340 225 were allocated to non-executive employees. 

The share options granted provide the right to purchase one share per option. The closing price at the grant date was CHF 24.25 per share, the exercise price is 

also CHF 24.25 per share. These options will vest 50% two years after the date of grant and 100% three years after grant. They will expire five years after grant 

on February 8, 2007. These options are not tradeable, and had a tax value as of the date of grant of CHF 4.39, calculated based on the Black-Scholes method. 

Strike prices have a dilution protection, they are adjusted in line with changes of the nominal value of the shares. 

63


4) Options held 

6. SHAREHOLDERS’ 

PARTICIPATION RIGHTS 

6.1 Voting rights restrictions and representation Each issued 

registered share has one voting right. However, the voting rights 

of treasury shares are suspended while they are under the control 

of Saurer Ltd. or its subsidiaries. 

A shareholder may be represented only by another shareholder 

with a written proxy. 

6.2 Statutory quorums In general the shareholders’ meeting 

passes its resolutions and conducts its votes by simple majority of 

the voting rights represented, without regard for the number of 

shareholders present or the share capital represented, unless the 

requirements of the law or the articles of incorporation are contrary. 

A requisite majority of at least two-thirds of the voting rights represented 

is required for the following resolutions: 

> Change in the company’s purpose. 

> Introduction of voting shares or a restriction in voting rights. 

> Restriction on the transferability of registered shares (“Vinkulierung”). 

> Authorized or conditional increase of capital. 

> Increase of capital from reserves, in exchange for contributions 

in kind or the granting of special privileges. 

64 

Year issued Options held Exercise price Duration (years) 

Non-executive members of the Board 2002 27 000 24.25 5 

2000 28 500 76.60 5 

1999 32 500 74.50 5 

Total 88 000 

Members of the Senior Management 2002 45 500 24.25 5 

2000 20 000 76.60 5 

1999 26 000 74.50 5 

1999 2 000 74.50 6 

1998 3 000 106.50 6 

1994 3 000 37.50 open 

Total 99 500 

Former members of the Board 1999 5 000 74.50 5 

Former members of the Senior Management 2000 13 000 76.60 5 

1999 13 000 74.50 5 

Total 26 000 

5) Saurer does not issue shares to Board members or Senior Management, except if acquired under the stock option program. Shares owned were therefore 

either acquired on the market or through exercising options. 

> Restriction or exclusion of subscription rights. 

> Transfer of the domicile of the company. 

> Dissolution of the company. 

A requisite majority of at least two thirds of the whole share capital 

is required for the following resolutions: 

> Change or removal of the requirement to report participations 

in the company above certain thresholds, and the obligation to 

submit a public tender offer. 

> Change or removal of the regulation concerning minimum 

and maximum number of members of the Board of Directors 

and their period of office, as well as the voting out of a 

majority of the members of the Board of Directors, if the 

resolution is proposed or supported by a shareholder or 

group of shareholders who have not reported their participations 

in the company in accordance with the requirement 

mentioned in 2.6 above, and have not submitted a public 

tender offer. 

6.3 Convocation of the general meeting of shareholders 

The convocation of the general meeting of shareholders occurs at 

least 20 days before the general meeting in the official publication 

organ of the company (“Swiss Official Gazette of Commerce”). 

In addition the Board of Directors sends an invitation by mail to 

the shareholders and beneficiaries of shares registered in the 

share register.

6.4 Agenda The invitation to the general meeting of shareholders 

mentions all business to be discussed as well as proposals of 

the Board of Directors or of shareholders who have asked for an 

item to be placed on the agenda. No resolution can be passed 

unless the business to be discussed and the related proposals 

have been properly announced, except for the convocation of an 

extraordinary general meeting or the proposal for a special audit. 

Shareholders representing share capital of one million Swiss Francs 

nominal value may ask for an item to be placed on the agenda. 

The request must be submitted in writing at least twenty days 

before the invitation to the meeting of shareholders is issued. 

6.5 Registrations in the share register The company maintains 

a share register in which the details of the owners and beneficiaries 

of the registered shares are recorded. No entries may be 

made in the share register and no share certificates may be issued 

from the date on which the invitation to the general meeting is 

issued until the day after the general meeting. 

7. CHANGES OF CONTROL 

AND DEFENCE MEASURES 

7.1 Duty to make an offer If an investor acquires a minimum 

of 331 ⁄3 of the capital and voting rights of Saurer Ltd., there is an 

obligation to submit a public tender offer. 

7.2 Clauses on changes of control Under a change of control 

provision, some executives have provisions whereby their normal 

contractual severance of 12 months is extended by 6 months. 

Severance of executives in Italy according to the law can be as 

long as 24 months. 

8. AUDITORS 

8.1 Mandate and term of office. The group auditors PricewaterhouseCoopers 

AG, St. Gall, were first appointed as group 

auditors for the financial year 1990. The auditor-in-charge, Mr 

Urs Honegger, first took up office for the financial year 1996. 

Under the rules about rotation of auditors-in-charge, Mr Honegger 

will hand over responsibility to another partner of PricewaterhouseCoopers 

after the annual general meeting of shareholders 

on May 14, 2003. 

8.2 Audit fees The total audit fee charged by Pricewaterhouse- 

Coopers worldwide for the financial year 2002 amounts to CHF 

1 875 000. The audit fees charged by other auditors for the 

financial year 2002 amount to CHF 137 000. 


8.3 Other fees Fees charged by PricewaterhouseCoopers in respect 

of non-audit work for the financial year 2002 amount to 

CHF 222 000. 

8.4 Supervisory and control instruments The Board of Directors 

monitors the work and audit results of the external auditors 

through the Audit Committee (see 3. above), which meets at 

least twice a year with the external auditors. The Audit Committee 

further reviews the level of the external audit fees. Internal 

Audit also coordinates its work programme with the external 

auditors. 

9. INFORMATION POLICY 

For the financial year 2003 Saurer will publish information on 

sales and order income on a quarterly basis and comprehensive 

interim financial information for the first half of the fiscal year; 

previously financial information was published three times a year. 

The financial information is published in the form of a letter to 

shareholders, which is also available on the group’s homepage, 

www.saurer.com. The group also provides price sensitive information 

in accordance with the ad-hoc publicity requirements of 

the Listing Rules of the SWX Swiss Exchange. Details are available 

on the group’s homepage, www.saurer.com (under the Investor 

Relations and News Center pages). For information, please contact 

Dr. Carole Ackermann, Corporate Communications, Phone +41 (0) 

79 358 87 57, Fax +41 (0) 52 264 09 10. 

Important dates for 2003 are as follows 

Publication of first quarter orders and sales: April 17, 2003 

Annual General Meeting of Shareholders: May 14, 2003 

Publication of half-year results: July 28, 2003 

Publication of third quarter orders and sales: October 20, 2003 

65

ADDRESSES

Addresses 

Company Address Telephone/fax Internet/e-Mail Management 

Saurer 

Saurer Ltd. Textilstrasse 2 T +41 71 447 52 91 www.saurer.com 

CH-9320 Arbon F +41 71 447 52 88 info@sgm.saurer.com 

Saurer Management AG Bahnhofplatz 12 T +41 52 264 09 11 www.saurer.com 

CH-8401 Winterthur F +41 52 264 09 10 info@sgm.saurer.com 

Saurer Group Investments Ltd. Campbell Corporate Services Ltd T +1 809 949 26 48 

The Bank of Nova Scotia Building F +1 809 949 86 13 

P.O. Box 268, George Town T +377 97 70 40 43 

Grand Cayman, Cayman Island F +377 97 70 40 44 

British West Indies 


Barmag AG Leverkuser Strasse 65 T +49 2191 67 0 www.barmag.com Klaus Karrasch 

D-42897 Remscheid F +49 2191 67 1204 info@barmag.de Winfried Popp 

Martin Stillger 

Barmag Beijing Machinery Co., Ltd. 18, Tian Shui Yuang Dong Jie T +86 01 6501 8821 www.barmag.com Dieter Abele 

Chaoyang District F +86 01 6501 9014 jingma@barmag.com.cn 

PRC-100026 Beijing 

PR China 

Barmag Czech Republic s.r.o. U Veze 8 T +420 48 24 278 41 Herbert Rönchen 

CZ-46107 Liberec F +420 48 24 278 45 

Bratislavska 2939 

CZ-69002 Breclav 2 

Barmag do Brasil Ltda. Av. São Borja No. 2266 T +55 51 579 8500 www.barmag.com.br Heinz-Bodo Günther 

BR-93032-000 São Leopoldo F +55 51 588 1363 barmag@barmag.com.br Volker Lübke 

Rio Grando do Sul (RS), Brazil 

Barmag Elektro CZ, spol. s.r.o. Obornik 31 T +420 583 412 836 www.barmag.com Josef Tempir 

CZ-78901 Zabreh F +420 583 412 838 barmag@raz-dva.cz 

Barmag Far East Ltd. Units 3806B–3807 T +852 2827 4314 www.barmag.com Tony Yung 

38th Floor, Wu Chung House F +852 2827 5250 barmaghk@netvigator.com Mathias Rudolph 

213 Queen’s Road East 

PRC-Wanchai, Hong Kong, PR China 

Barmag GmbH Sumpfstrasse 3 T +41 41 748 80 12 www.barmag.com Heinrich Bernhard Dreyer 

CH-6300 Zug F +41 41 748 80 19 

Barmag India Private Ltd. 306–309 Dalamal Tower, Nariman Point T +91 22 2838455 Khurshed M. Thanawalla 

State of Maharashtra F +91 22 2044322 bilind@bom2.vsnl.net.in 

Mumbai-400 021 

India 

Barmag-Spinnzwirn GmbH Zwickauer Strasse 247 T +49 371 2388 0 www.barmag.com Christoph Kückels 

D-09116 Chemnitz F +49 371 2388 349 info@barmag-chemnitz.de 

Barmag Textile Machinery (Suzhou) 35, Baiyu Road T +86 512 67630 701 www.barmag.com Joachim Diezl 

Co., Ltd. Suzhou Industrial Park F +86 512 67630 799 

PRC-215021 Suzhou, Jiangsu Province, 

PR China 

Barmag Textile Machinery (Wuxi) Standard Factory Building Land Lord. T +86 510 5342 866 www.barmag.com Joachim Diezl 

Co., Ltd. No. 100 F +86 510 5342 799 

PRC-214028 Wuxi New District 

Wuxi, Jiangsu Province 

PR China 

Melco Industries Inc. 1575 West, 124th Avenue T +1 303 457 1234 www.melco.com Jürg Henz 

USA-Denver, CO 80234 F +1 303 252 0508 info@melco.com 

Neumag GmbH & Co. KG Christianstrasse 168–170 T +49 4321 305 0 www.neumag.de Carsten Voigtländer 

D-24536 Neumünster F +49 4321 305 212 Joachim Brenk 

PARSYS Produktionstechnik GmbH Blumenberger Strasse 143–145 T +49 2161 28 0 www.schlafhorst.de Günter Lehrenfeld 

D-41061 Mönchengladbach F +49 2161 28 3028 info@schlafhorst.de 

Postfach 100459 

D-41004 Mönchengladbach 

Saurer-Allma GmbH Leonhardstrasse 19 T +49 831 688 0 www.allma.saurer.com Rolf-Dieter Weber 

D-87437 Kempten F +49 831 688 320 info@allma.saurer.com 

Postfach 2580 

D-87415 Kempten 

Saurer Czech a.s. Lhota 261 T +420 41 469 526 www.czech.saurer.cz Daniel Svrcina 

CZ-54941 Cerven ´y Kostelec, Nachod F +420 41 469 527 sales@czech.saurer.com 

68


Saurer Hamel AG Textilstrasse 2 T +41 71 447 51 11 www.saurerhamel.com Jürg Gygax 

CH-9320 Arbon F +41 71 447 54 11 info@saurerhamel.com (until April 30, 2002) 

Jürg Henz 

(as of May 1, 2002) 

Saurer Inc. 8801 South Boulevard T +1 704 554 08 00 www.saurerinc.com Dan Loftis 

P.O. Box 240828 F +1 704 554 73 50 info@saurerinc.com 

USA-Charlotte, NC 28224 

Saurer (Japan) Co. Ltd. Room No. 201, Nakai Building 2F, T +81 6 6474 5006 saurer@mail.ne.jp Akihiro Doike 

1-10, 3-Chome, Kashiwazato F +81 6 6474 1818 

Nishiyodogawa-Ku, Osaka-Shi 

555-0022 Osaka-Fu 

Saurer México S.A de C.V. Av. Sor Juana Inés de la Cruz T +52 55 5565 6200 labsdm@axtel.net Luis F. Mayoral 

No.14–7° piso F +52 55 5565 6305 

Col. San Lorenzo C.P. 

MEX-54000 Tlalnapantla, 

Estado de México 

Saurer Textile Systems Units 3806B–3807 T +852 286 603 08 info@stsfe.saurer.com Sindy Wong 

Far East Ltd. 38th Floor, Wu Chung House F +852 286 605 09 William Yau 

No. 213 Queen’s Road East 


Saurer Twisting Systems No. 165 Jinjihu Road T +86 512 6763 0086 info@suzhou.saurer.com Shen Wei 

(Suzhou) Co. Ltd. Suzhou Industrial Park F +86 512 6763 0586 

PRC-215021 Jiangsu, PR China 

W. Schlafhorst AG & Co. Blumenberger Strasse 143–145 T +49 2161 28 0 www.schlafhorst.de Martin Börger 

D-41061 Mönchengladbach F +49 2161 28 2645 info@schlafhorst.de John Cundill 

Postfach 100435 Stefan Kroß 


Schlafhorst Units 3806B–3807 T +852 2866 35 01 wscasia@compuserve.com Heinz W. Kampf 

Asia Ltd. 38th Floor, Wu Chung House F +852 2861 27 15 Jan Röttgering 

No. 213 Queen’s Road East 


Schlafhorst Blumenberger Strasse 143–145 T +49 2161 28 0 www.schlafhorst.de John Cundill 

Autocoro GmbH D-41061 Mönchengladbach F +49 2161 28 2803 info@schlafhorst.de Wolfram Flatow 



Schlafhorst Blumenberger Strasse 143–145 T +49 2161 28 0 www.schlafhorst.de Hagen B. Heitmann 

Customer Support GmbH D-41061 Mönchengladbach F +49 2161 28 3351 customer-support@schlafhorst.de Uwe Groiss 

Postfach 100405 Karl Höhne 


Schlafhorst Calle 14 No. #30–144 T +57 4 268 6969 schlafhorst@sdcol.com Manuel Herrero 

de Colombia Ltda. COL-Barrio El Poblado/Medellin F +57 4 318 1855 Dominguez 

Colombia 

Schlafhorst Rua Domingos Afonso 460-térreo T +55 11 6101 2010 schlafhorst@schlafhorst.com.br Günter Bammer 

do Brasil Ltda. Vila Santa Clara F +55 11 6916 6680 

BR-03161-090 São Paulo-SP, Brazil 

Schlafhorst Waldnieler Strasse 73 T +49 2161 28 0 www.schlafhorst.de Knut Richter 

Electronics GmbH D-41068 Mönchengladbach F +49 2161 28 3575 info@schlafhorst-electronics.de Manfred Tillmann 

Schlafhorst Jyoti Studios Compound T +91 22 238 60 350 smclbom@bom3.vsnl.net.in Soumitri Mohan Sen 

Marketing Company Ltd. K.B.A. Irani Bridge (Ken. Br.) F +91 22 238 78 439 

Mumbai 400 007, India 

Schlafhorst Room 1405 New Town Center T +86 21 6236 977 ssro@public4.sta.net.cn Guang Cai 

Shanghai Repr. Office 83 Lou Shan Guan Road F +86 21 6236 8029 

PRC-200336 Shanghai, PR China 

Schlafhorst Carlstrasse 60 T +49 2161 28 0 www.schlafhorst.de Gerard Küsters 

Winding Systems GmbH D-52531 Übach-Palenberg F +49 2161 28 5302 info@schlafhorst.de Helmut Spätgens 

Postfach 1260 

D-52527 Übach-Palenberg 

S + G Industrieschreinerei GmbH Bahnstrasse 9 T +49 2161 28 2827 www.industrieschreinerei.de Jakob Gielessen 

D-41069 Mönchengladbach F +49 2161 35 4555 info@industrieschreinerei.de 

Volkmann GmbH Weeserweg 60 T +49 2151 717 01 www.volkmann.saurer.com Dirk Burger 

D-47804 Krefeld F +49 2151 717 478 info@volkmann.saurer.com Wolfgang H.G. Leupers 


D-47723 Krefeld 

Zinser Textilmaschinen GmbH Hans-Zinser-Strasse 1–3 T +49 7163 14 0 www.zinser-texma.com Heinz Wilhelm Kamp 

D-73061 Ebersbach F +49 7163 14 250 info@zinser-texma.com Harald Fraessle 

Postfach 1480 

D-73058 Ebersbach 

Addresses 

69

Addresses 



Aprilia Ingranaggi S.p.A. Via Nettunense, 250 T +39 06928651 www.grazianotrasmissioni.it Alberto Prono 

I-04011 Aprilia (LT) F +39 069269678 info@grazianotrasmissioni.it 

DEMM S.p.A. Via Mazzini, 230 T +39 053420111 www.grazianotrasmissioni.it Salvatore Pugisi 

I-Porretta Terme (BO) F +39 069269678 info@grazianotrasmissioni.it 

Graziano Trasmissioni CH Ltd. Baldy, Doncaster T +44 1302 733 617 www.grazianotrasmissioni.it Gianni Sarti 

GB-DN48DW South Yorkshire F +44 1302 367 017 info@grazianotrasmissioni.it 

Graziano Trasmissioni India Ltd. Plot no. 14, Udyog Kendra T +91 120 435 0820 www.grazianotrasmissioni.it Marcello Lamberto 

Greater Noida, Gautam Budh Nagar F +91 120 435 0830 gtindia@grazianotrasmissioni.it 

Uttar Pradesh 201 304, India 

Graziano Trasmissioni 2222 Northmont Parkway, Suite 300 T +1 770 476 0496 www.grazianotrasmissioni.it Dave McPherson 

North America Inc. USA-Duluth, GA 30096 F +1 770 623 3290 info@grazianotrasmissioni.it 

Graziano Trasmissioni S.p.A. Via Cumiana 14 T +39 011 957 01 www.grazianotrasmissioni.it Marcello Lamberto 

I-10090 Cascine Vica Rivoli (TO) F +39 011 959 4803 info@grazianotrasmissioni.it 

Graziano Trasmissioni UK Ltd. 9, Harley Industrial Park, Paxton Hill T +44 1480 403 453 www.grazianotrasmissioni.it Mike Finnigan 

St. Neots-Huntingdon F +44 1480 403 454 enquiries@grazianouk.com 

GB-Cambs PE19 6AT 

I.T.T. S.r.l. Frazione Grinzano T +39 0172 474 504 www.grazianotrasmissioni.it Marcello Lamberto 

I-12040 Cervere/Cuneo F +39 0172 474 601 info@grazianotrasmissioni.it 

Surface Technology 

IonBond AG Industriestrasse 211 T +41 62 287 86 86 www.ionbond.com a.i. Marco Marchetti 

CH-4600 Olten F +41 62 287 87 93 info@ch.ionbond.com 

IonBond LLC 1598 East Lincoln Avenue T +1 248 398 91 00 www.ionbond.com Rajiv Ahuja 

USA-Madison Heights, MI 48071 F +1 248 398 21 10 info@us.ionbond.com 

IonBond Ltd. Unit 36, No. 1 Industrial Estate T +44 1 207 500 823 www.ionbond.com John Alan Stevenson 

Medomsley Road F +44 1 207 590 254 info@uk.ionbond.com 

GB-Consett, Durham DH8 6TS 

Xaloy AG Industriestrasse 211 T +41 62 287 87 87 www.xaloy.com Walter Cox 

CH-4600 Olten F +41 62 287 87 90 info@ch.xaloy.com 

Xaloy Asia (Thailand) Ltd. 700/446 Moo Amata Nakorn T +66 38 717 084 www.xaloy.com Tim Farley 

Industrial Estate 4 F +66 38 458 177 info@th.xaloy.com 

Donhuaroh 

TH-Muang Chonburi 2000 

Xaloy Inc. 102 Xaloy Way T +1 540 980 7560 www.xaloy.com Walter Cox 

USA-Pulaski, VA 24301 F +1 540 980 5670 info@us.xaloy.com 

Xaloy Inc. 72 Stard Rd T +1 603 929 8200 www.xaloy.com Walter Cox 

USA-Seabrook, NH 03874 F +1 603 929 8331 info@us.xaloy.com 

70

SHARE 

STATISTICS

Share statistics 

Saurer registered share (CHF) 2002 2001 2000 1999 1998 

Symbol SWX: SAUN, Security No.1 234 514 nom. CHF 12.50 nom. CHF 12.50 nom. CHF 13.30 nom. CHF 13.30 nom. CHF 15.00 

(Shares were split ten-for-one in August 2001. The prior years have been restated.) 

Nominal share capital 

Number of shares 15 430 000 15 430 000 15 430 000 15 430 000 15 430 000 

Nominal share capital 192 875 000 192 875 000 205 219 000 205 219 000 231 450 000 

Conditional capital* 

Number of shares (for convertible bond) 3 000 000 3 000 000 3 000 000 – – 

Nominal value 37 500 000 37 500 000 39 900 000 – – 

Number of shares (for stock option plans) 1 250 000 1 250 000 1 250 000 1 250 000 1 250 000 

Nominal value 15 625 000 15 625 000 16 625 000 16 625 000 18 750 000 

Authorized capital* (for capital market transactions) 


Nominal value 37 500 000 37 500 000 39 900 000 16 625 000 18 750 000 

Shares issued (year-end) 


Shares with rights to dividends (year-end) 


Treasury shares (year-end) 


Distributions (in respect of the financial year shown) 

Capital repayment per share 1.00 – 0.80 – 1.70 

(2002: proposal to the General Meeting of Shareholders) 

Total distributions (shown for year of payment) – 12 344 000 – 26 231 000 38 575 000 

Stock market capitalization 

Year end 474 472 500 462 900 000 1 157 250 000 1 186 567 000 1 265 260 000 

Key data per share 

Earnings (loss) per share 3.45 –5.35 5.00 –5.01 5.87 

Cash flow (Net cash from operating activities) 15.07 12.39 12.01 –1.02 9.30 

Shareholders’ equity 45.81 44.02 50.79 45.55 51.92 

Stock market prices 

High 40.75 79.00 114.00 89.30 172.00 

Low 22.50 21.00 70.00 62.20 60.00 

Year end 30.75 30.00 75.00 76.90 82.00 

* The total of new shares issued must not exceed 5 000 000. See also Note 17 on page 40. 

73

Imprint 

Publisher: 

Saurer Ltd. 

Text: 

Saurer Corporate Communications 

Concept/Design: 

New Identity Ltd. 

© Saurer Ltd. 2003 

Saurer Ltd. 

Textilstrasse 2 

CH-9320 Arbon 

Phone +41 71 447 52 91 

Fax +41 71 447 52 88 

www.saurer.com

THE ANNUAL REPORT 2002 - Oerlikon Barmag

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