PDF, 4MB - Panalpina Annual Report 2012

Annual Report 2012
www.panalpina.com/ar2012

Panalpina at a glance
The Panalpina Group is one of the world’s leading providers
of supply chain solutions. The company combines its core
products of Air Freight, Ocean Freight, and Logistics to deliver
globally integrated, tailor-made end-to-end solutions.
Drawing on in-depth industry know-how and customized IT
systems, Panalpina manages the needs of its customers’
supply chains, no matter how demanding they might be.
The Panalpina Group operates a global network with some
500 offices in more than 80 countries, and it works with
partner companies in a further 80 countries. Panalpina
employs around 15,000 people worldwide who deliver a
comprehensive service to the highest quality standards -
wherever and whenever.
Vision
We deliver reliable supply chain solutions that provide value
to our customers – every time.
Core values
Performance – is our continuous commitment to long-term
sustainable development and financial success: We aspire
to out-play competition.
Integrity – is the compass which drives our behavior and
attitude towards each other and our customers: We keep
our promises and comply with the rules.
Professionalism – is how we create value for our customers
through our solutions and by anticipating their business
needs: We know our business and create value for our
stakeholders.

Contents
1
Facts and Figures 2
Investing in Panalpina 4
Letter to Shareholders 6
Group Report
Strategy and Results 8
Regions 18
Product Divisions 20
Value Creation and Sustainability
Global Network 22
Industry Verticals 24
Compliance and Corporate Culture 27
Employees 28
Information Technology 30
Procurement 31
Quality, Health, Safety and Environment 32
Security 36
Corporate Governance and Responsibilities
Social Commitments 37
Corporate Management 38
A Passion for Solutions 52
Financial Report
Consolidated Financial Statements 68
Annual Financial Statements 138
GRI 146
Imprint 147
Annual Report 2012

2
Facts and Figures
Key figures Net forwarding revenue of CHF 6,617
million Gross profit of CHF 1,465 million Net working
capital intensity of 1.7% Forwarding volumes:
801,000 tons in Air Freight (–6% year on year) and
1,388,000 TEU in Ocean Freight (+6% year on year)
Logistics: more than 1.2 million square meters warehousing
space under management
Net forwarding revenue per region
2012
Net forwarding revenue per product division
2012
47 %
Europe, Middle
East, Africa
and CIS
18 %
Asia Pacific
35 %
Americas
47 %
Air Freight
14 %
Logistics
39 %
Ocean Freight
Energy balance by energy category
Gigajoule
CO2 emission by scope and activity
Tons of CO2 equivalent
280,000
240,000
200,000
160,000
120,000
80,000
40,000
242,000
81,000
171,000
40,000
30,000
25,000
20,000
15,000
10,000
5,000
32,023
5,297
12,362
0
Electricity
Heating
Owned vehicles
0
Electricity
Heating
Owned vehicles
Indirect renewable energy
Indirect energy
Direct energy
Direct CO2 emission
Indirect CO2 emission
Annual Report 2012

Facts and Figures
3
Five-year development
Net forwarding revenue
Million CHF
Gross profit
Million CHF
9,000
7,500
6,000
4,500
8,878
5,958
7,164
6,500
6,617
1,900
1,750
1,600
1,450
1,742
1,377
1,480
1,477
1,465
3,000
1,300
1,500
1,150
0
08
09
10
11
12
1,000
08
09
10
11
12
EBIT
Million CHF
Consolidated profit
Million CHF
200
160
193
174
160
120
114
127
120
80
80
40
40
30
0
10
– 26
– 70
0
15
– 37
– 40
– 40
08
09
10
11
12
– 80
08
09
10
11
12
Shareholders’ equity
Million CHF
900
750
871
864
812
915
750
600
450
300
150
0
08
09
10
11
12
Annual Report 2012

4 Investing in Panalpina
Solid and secure – With its robust financial health,
Panalpina is able to cope with this moderate business
year. Thanks to its asset-light business model and its
worldwide network, Panalpina can quickly react to customer
needs with first-class, customized supply chain
solutions. Panalpina stands for value-creating continuity
and can optimistically face the challenges in the global
logistics market.
Share
information
Share symbol
PWTN
Reuters
PWTN.S
Bloomberg
PWTN SW
Trading exchange
SIX
Fiscal year ends December 31
Valoren-Nr. 000216808
ISIN
CH0002168083
Share register
SIS Aktienregister AG, Olten, Switzerland
Share price
development
in comparison
to SPI
120 %
110 %
100 %
90 %
80%
Dec 31,
2011
Mar 1 May 1 Jul 1 Sep 1 Nov 1 Dec 31,
2012
Panalpina World Transport
Swiss Performance Index (SPI)
Financial
calendar
January 1 to December 31
May 7, 2013
May 15, 2013
July 26, 2013
October 25, 2013
Financial year
First-quarter results
Annual General Meeting
Half-year results
Third-quarter results
Annual Report 2012

Investing in Panalpina
5
Key figures
2012 2011 Change %
Net forwarding revenue million CHF 6,617 6,500 + 1.8
Gross profit million CHF 1,465 1,477 – 0.8
EBITDA million CHF 37 212 – 82.8
EBIT million CHF – 37 174 –121.5
Consolidated profit million CHF – 70 127 –155.1
Cash generated from operations million CHF – 40 229 –117.3
Returns
2012 2011
Return on equity (ROE) % – 8.5 14.9
Return on capital employed (ROCE) % –19.1 43.2
Earnings
per share
2012 2011 Weighted average
of outstanding shares
Basic EPS CHF 2.98 5.34 23,638
Diluted EPS CHF 2.98 5.33 23,666
Share price
development
2012 2011
Last day of trading previous year CHF 96.20 120.50
High CHF 109.50 132.00
Low CHF 78.90 70.90
Last day of trading current year CHF 92.85 96.20
Average trading volume CHF 40,917 51,764
Total shareholder return % 0.6 –16.9
Market capitalization as per Dec 31 million CHF 2,205 2,405
Ordinary
gross dividend
payments
2012 2011
Amount million CHF 47.3 47
Per share CHF 2.00* 2.00**
* Proposal to the Annual General Meeting.
** In addition to the dividend of CHF 2.00, CHF 1.90 per share were paid to shareholders through
a reduction of the nominal value per share from CHF 2.00 to CHF 0.10.
Annual Report 2012

6
Letter to Shareholders
A challenging year – The volatile economy, the weakening
air freight industry and some significant market
changes marked Panalpina’s business development in
the reporting year. Moreover, high costs due to investments
and various nonrecurring charges significantly
impacted the results. Nevertheless, Panalpina plans a
dividend payout to its shareholders as it pursues its
strategy of sustainable, profitable growth in an industry
with good long-term prospects.
Panalpina closed the year under review with a gross profit
of CHF 1,465 million and a consolidated loss of CHF 70 million.
In the Ocean Freight division, transport volume grew
by 6 %, in comparison to the year before, to a record volume
of 1,388,000 TEU, while in Air Freight volumes decreased
by around 6 % to a total of 801,000 tons in the same period.
Investments in Logistics proved to be successful and led to
numerous new assignments.
All in all, the business result 2012 is disappointing. The goal
to grow faster than the market was not achieved because
progress in Ocean Freight and Logistics could not compensate
setbacks in Air Freight. On the cost side, adaptations
to the new market conditions have not been achieved fast
enough and could only be recognized in the fourth quarter.
The consolidated profits were additionally impacted by
fines imposed by the European Union and Switzerland due
to anti-competitive activity prior to 2008, the goodwill
write-off for Grieg Logistics and provisions for termination
benefits.
Going forward, Panalpina will adjust its sales focus to benefit
from changes in world trade where traditional trade lanes
between Europe and Asia as well as between North America
and Asia do no longer show the accustomed growth
rates and some industries are rapidly changing their supply
chains at the expense of air freight.
Panalpina has a carefully crafted corporate strategy in place
which is built on the principles of performance, integrity
and professionalism. Our most crucial assets include our
in-depth know-how in key industries, an extensive global
network comprising some 500 offices on six continents, a
highly qualified and committed workforce, process-optimized
information technology, outstanding compliance
standards, and efficient and transparent procurement.
Using these assets we have formed a global company which
is no longer a pure freight forwarding company delivering
air and ocean freight. Today, value-added logistic services
complemented by supply chain services are the third pillar
of our business. By expertly combining these products and
services, Panalpina offers door-to-door products closely
geared to our customers’ supply chains. Thanks to our
world-spanning network, these solutions can be implemented
in all corners of the globe.
We are absolutely convinced that our corporate strategy
together with continuous and proactive adjustments to the
current structural changes in world trade will pay off again.
Therefore we won’t stop to invest in our corporate platform
– especially in value-added logistics and in customer-facing
IT tools – to improve our service offerings.
Not only our high-quality and competitive service offerings
but also our financial soundness reflected in a healthy
balance sheet provides security and confidence for customers,
employees and shareholders. Our Swiss roots
stand for value-generating continuity on a solid and secure
basis. These qualities enable us to look confidently into
the future. Therefore – despite the consolidated loss – the
Board of Directors is going to propose an unchanged dividend
payment of CHF 2.00 per share to the Annual General
Meeting. This is equivalent to an amount of CHF 47.3 million
and a dividend yield (based on 2012 year-end share price)
of 2.2 %. This proposal reflects our conviction to attain the
objectives set in our strategy.
The continual adaptations of our business to the fast-changing
economic environment demand a great deal from Panalpina’s
employees. They deserve the highest recognition of
the entire Board of Directors and the Executive Board. We
thank our customers and suppliers for their trust in us and
we thank our shareholders for their loyalty.
Monika Ribar
Chief Executive Officer
Rudolf W. Hug
Chairman of the Board of Directors
Annual Report 2012

Letter to Shareholders
7
Monika Ribar (CEO) and Rudolf W. Hug (Chairman of the Board of Directors)
Annual Report 2012

8
Group Report
Strategy and Results
Disappointing results despite progress in Ocean
Freight and Logistics – In a challenging market environment,
Panal pina kept its focus on delivering superior endto-end
solutions to its customers. Business growth failing to
meet management’s expectations along with a further expanded
cost base resulted in pressure on operating margins
and overall unsatisfying profitability. In line with its strategy
of sustainable, profitable growth, Panalpina commits to
further improving productivity and operating margins.
Market development
The growth of the global economy and world trade further
slowed in the latest reporting year. The International Monetary
Fund (IMF) estimates that global trade volumes rose
approximately 3 % in 2012 – only half of the 6 % growth rate
posted the year before, which in turn was only half of the
12 % growth rate achieved in 2010. Those forces pulling
growth down in advanced economies are fiscal consolidation
and a still-weak financial system. Low growth and
uncertainty in advanced economies are also affecting
emerging-market and developing economies. Growth is estimated
to have weakened appreciably in developing Asia,
as activity in China slowed sharply with the economy growing
at the weakest rate since 1999, owing to a tightening of
credit conditions and weaker external demand. Real GDP
(gross domestic product) growth also decelerated in Latin
America, largely due to Brazil. With inflation pressures on
the decline all year in most countries, central banks around
the globe responded to the slowing macroeconomic environment
by further easing their monetary policies. There
have been additional rounds of fresh stimulus every month
of the year, with 40 countries embracing easier policy in
2012. In the United States, this was one of the main drivers
behind the long-awaited housing recovery that emerged
this year, with homebuilders’ confidence starting to rise in
the year’s second half after years of stagnation.
With a negative growth rate of approximately 2 %, the
amount of international cargo moved by air freight in 2012,
measured in tons, declined for the second year in a row. In
fact, the air freight market developed significantly worse
than global GDP in both years, an untypical situation which
Panalpina believes is reflective of mainly three, partly structural,
changes occurring in the market during this period.
Firstly, after the restocking boom in 2010, manufacturers
around the globe began to minimize inventories again in the
wake of the general economic uncertainties. Secondly, the
widespread endeavor to lower supply chain costs led to
certain product categories traditionally transported in the
air shifting to other freight modes. While such a modal
shift per se is not a new phenomenon, the trend appears to
have gathered pace over the last two years. Thirdly – and
presumably with the biggest impact on Panalpina’s business
– the trend to smaller and lighter shipments greatly
accelerated in 2012, particularly in the technology sector
where the Company in the year before still generated more
than a third of its Air Freight tonnage. While the Company in
2012 handled almost the same number of Air Freight shipments
than in the year before, the flown tonnage – according
to which customers are primarily invoiced – contracted by
almost 6 %.
1,388,000 TEU
were transported by Panalpina in 2012.
In comparison, 2012 marked a new record for the global
ocean freight market with some 170 million TEU transported
on the ocean globally, although with an increase of less
than 3 %, growth was hardly inspiring. Nevertheless, the
Company managed to grow its Ocean Freight volumes by
6 %. Similar to Air Freight, volume performance varied greatly
by geography, with the far east westbound – the Company’s
largest trade lane – showing particular weakness with
shrinking volumes for both the market and Panalpina. At
the same time, the Company recorded double-digit growth
in its second-, third-, fourth- and fifth-largest Ocean Freight
trade lanes, namely on the transpacific eastbound, intra-
Asia, the far east eastbound and the transatlantic westbound.
Annual Report 2012

Group Report
Strategy and Results
9
Executive Board: Robert Erni (CFO), Alastair Robertson (Chief Human Resources Officer), Karl Weyeneth (COO),
Monika Ribar (CEO) and Christoph Hess (Chief Legal Officer and Corporate Secretary)
Annual Report 2012

10 Group Report
Strategy and Results
Serving customers effectively with
second-to-none solutions
Panalpina’s strategy – which was reviewed and refined in
2011 – remains largely unchanged and stipulates that the
Company provides comprehensive end-to-end supply chain
solutions tailored to its customers by combining intercontinental
Air and Ocean Freight with Value-Added Logistics
Services and Supply Chain Services. As a consequence,
the Company kept its focus throughout the year on delivering
superior solutions to its customers and hence continued
to invest in its corporate platform. To facilitate the execution
of the corporate strategy, the Group complemented
its organizational structure by setting up three regional centers
(effective July 1, 2012), each staffed with a regional CEO
and a small team of dedicated regional resources with respective
responsibility for Asia-Pacific, Europe and Middle
East, and the Americas. With the new setup, a part of the
decision-making power shifted from the corporate headquarter
closer to where decisions are made by the customer
base, facilitating exploitation of regional and local growth
opportunities in the various markets where Panalpina operates.
As a consequence of the regional setup, the Company
also merged its regional reporting of “North America” and
“Central and South America” to “Americas.” The final milestone
in complementing the Group’s organizational structure
was achieved with the appointment of a Chief Information
Officer, who took office in September. One of the most
important tasks inherent to this new and central role will
be to define and roll out the variety of industry-specific customer-
facing IT solutions that the Company is planning to
introduce in the years to come with the goal to enhance
connectivity to customers.
On a product level, all three product divisions (Air Freight,
Ocean Freight, Logistics) saw significant progress in terms
of customer orientation through the introduction of a number
of innovative new products and services. In its biggest
division, Air Freight, Panalpina extended its cool chain network
which has been established in the past few years and
which ensures a seamless door-to-door proactive monitoring,
control and documentation for temperature-sensitive
cargo. The Company’s new flagships, two brand new wetleased
Boeing 747-8 freighters, mark the latest and most
apparent investment in building a global state-of-the-art
cool chain network. Apart from providing double-digit
improvements in fuel efficiency and CO 2 emissions and a
noise footprint reduction of 30 %, the planes can maintain
different determined temperature ranges at the same time.
Panalpina also introduced SmartView technology, a RFID
(radio-frequency identification) based temperature control
system and award-winning solution for cool chain optimization,
which the Company uses within its own-controlled
Air Freight network. The cool chain solution provides an integrated
control center to manage temperature-sensitive
shipments throughout the supply chain. Furthermore,
Panal pina continued to obtain GDP (Good Distribution Practice)
certifications at strategic airports in 2012. With pharmaceutical
companies facing increasing challenges to comply
with official and country-specific rules for storing and
transporting their temperature-sensitive products, GDP
ensures that medicinal products are distributed to retail
pharmacists and other persons entitled to sell medicinal
products to the general public without any alteration of
their properties. In 2012, the Company became the first
and only officially GDP-certified logistics service provider
at Amsterdam’s Schiphol Airport, and later in the year was
747-8F stands for the two new
Boeing freighters exclusively on duty
in Panalpina’s air freight network.
also officially GDP certified at Brussels Airport. Panalpina
currently operates 14 facilities (Centers of Excellence)
worldwide and expects to have 22 by the end of 2014 where
it is fully GDP compliant. The ongoing certification efforts
are part of the Company’s strategy to service its growing
customer base in the healthcare industry, which today
accounts for around 5 % of Group revenues.
In Ocean Freight, in line with the corporate strategy to
aggressively expand its Less than Container Load (LCL)
business and to focus on emerging markets, Panalpina
launched approximately 40 new LCL point-to-point services
in 2012, bringing the total number to more than 400. The
new guaranteed weekly services mainly run out of Asia and
Latin America and represent a reliable and cost-efficient
option to Full Container Loads for smaller customer orders.
Panalpina operates its own global LCL network consisting
of numerous direct LCL services and strategically located
Annual Report 2012

Group Report
Strategy and Results
11
hubs allowing to cut customers’ transit times and CO 2
emissions. The Company provides to customers seamless
door-to-door services with the highest level of schedule
integrity increasing the flexibility and reliability within the
end-to-end supply chain.
In the third product division, Logistics, the Group continued
to invest in people and software and further broadened the
Logistics offering into Value-Added Services (VAS). VAS is
the collective term for Panalpina’s inbound, warehousing,
1.2 million m 2 of warehousing
space are managed by Panalpina.
production, distribution and aftermarket activities. The
objective is to build strategic, long-lasting relationships
that bring added value to the customer. Some of the services
that the Group offers include Inbound to Manufacturer,
Line Side Feeding, Vendor Managed Inventory, Fulfillment,
Postponement, Re-Packing, Transformational Cross Docking,
Kitting, Light Assembly, Technical Services, Service
and Spares Management and Reverse Logistics. Panalpina
opened several new logistics centers in 2012, including two
10,000 m 2 state-of-the-art facilities near Moscow (Russia)
and São Paulo (Brazil), bringing total warehousing space
under management to more than 1.2 million m 2 . In 2012,
Panalpina also established four new Logistics Competence
Centers (LCCs) in Prague (Czech Republic), Singapore,
Buenos Aires (Argentina) and New Jersey (USA) as well as a
Supply Chain Solutions Center in Frankfurt (Germany).
Local Panalpina teams can resort to the Logistics experts in
the LCCs for support from pre-sales through implementation
to continuous improvement. The experts support the
deployment of the best-in-class tools and techniques in
terms of tender and bid management, logistics solutions
design, operations modelling and optimization and lean
logistics excellence. In this context, the Company also
entered into a strategic partnership with RedPrairie as its
standardized global logistics platform, which is just one of
the growing number of applications to drive automation and
efficiency within Panalpina’s Logistics product division.
While the LCCs specifically look at finding and implementing
the best solution for warehousing, the newly established
Supply Chain Solutions Center in Germany acts as an
extension of the customers’ supply chain management for
improving their supply chain end-to-end. The objective is
not just about providing customers with strategic guidance
in regards to supply chain design and execution but to put
the identified optimization potential into practice.
The progress achieved in enhancing the products, the various
investments in the business – particularly in the expansion
of the Logistics know-how and footprint – and the implementation
of the new regional setup during the year led
to an expansion of the cost base which has not been met by
a corresponding growth of the business for a number of
reasons, including the economic factors outlined above.
Operating margins thus saw an adverse development and
the overall profitability was unsatisfying in the reporting
year. To counteract, the Group started to take corrective
actions during the year’s second half, including a selective
reduction of staff.
Outlook
The IMF expects output in 2013 to remain sluggish in advanced
economies but still relatively solid in many emerging-market
and developing economies. Also, the organization
sees the crisis in the euro area as the most obvious
threat to the global outlook. For the medium term, important
questions remain about how the global economy will operate
in a world of high government debt and whether emerging-
market economies can maintain their strong expansion
while shifting further from external to domestic sources of
growth. Regardless of the economic environment and in line
with its strategy of sustainable, profitable growth, Panalpina
remains committed to further improving productivity and
operating margins while continuing to invest selectively in
the business platform, particularly in IT and Value-Added
Logistics Services competence. To further increase sales
effectiveness, the Company will adapt its sales strategy
by shifting emphasis from an industry-focused to a tradelane-focused
sales approach, the exe cution of which will be
managed and driven by the three regional centers given
their physical proximity to the customer base. The Company
will also undertake a thorough review of its customer portfolio
in Air Freight given its relatively high exposure to cyclical
industries and the trend to lighter shipments in certain product
categories. Moreover, the Company is firmly committed
to adjusting its cost base further and aligning it faster to
Annual Report 2012

12
Group Report
Strategy and Results
Net forwarding revenue per region
Million CHF
Net forwarding revenue per product division
Million CHF
4,000
3,500
3,000
2,500
2,000
1,500
1,000
3,091
3,170
2,288
2,104
1,238
1,225
4,000
3,500
3,000
2,500
2,000
1,500
1,000
3,106
3,281
2,615
2,313
896
906
500
500
0
12 11
Europe,
Middle East,
Africa and CIS
12 11
Americas
12 11
Asia
Pacific
0
12 11
Air
Freight
12 11
Ocean
Freight
12 11
Logistics
Net forwarding revenue per region
2012
Net forwarding revenue per product division
2012
47 %
Europe, Middle East,
Africa and CIS
18 %
Asia Pacific
35 %
Americas
47 %
Air Freight
14 %
Logistics
39 %
Ocean Freight
changes in gross profit, which will be facilitated by the introduction
of a new forecasting process with a focus on shortterm
business planning.
Overall, Group management expects world trade and the
outsourcing of logistics services to expand further in the
years to come, although the dynamics of growth will vary
strongly by geography and with a bias towards the emerging
economies – particularly in Asia, Latin America and Africa,
which will continue to gain in relative importance. With its
global and asset-light network, coupled with the ability to
react swiftly to changing customer needs and to offer its
clients first-class, tailor-made, end-to-end supply chain
solutions, Panalpina is well prepared to take advantage of
the growth opportunities ahead and to further enlarge its
footprint in the global logistics market.
Net forwarding revenue (NFR)
Net forwarding revenue in 2012 amounted to CHF 6,617
million, an increase of 2 % compared to the CHF 6,500 million
the year before. One part of this slight increase can be
attributed to an overall positive volume effect (more volumes
handled in Ocean Freight and Logistics, partly offset
by fewer volumes handled in Air Freight). On the other hand,
significantly higher average freight rates in ocean freight,
although partly offset by lower air freight rates, also had an
overall positive effect on net forwarding revenue.
Overall, in 2012, the translation of foreign currencies into
the reporting currency (CHF) had no material impact on the
Group’s financial results.
At regional level, net forwarding revenue in Europe, Middle
East, Africa and CIS (EMEA) – the Group’s largest region in
terms of turnover – decreased 2.5 % from CHF 3,170 million
to CHF 3,091 million, suffering mainly from import weakness
in many European economies. In North, Central and
South America (Americas), NFR increased by 9 % from CHF
2,104 million to CHF 2,288 million, a result which is largely
attributable to the performance of the U.S. business and
rela tively healthy growth in many Latin American countries.
Compared to 2011, Panalpina’s NFR in 2012 in Asia Pacific
increased 1 % from CHF 1,225 million to CHF 1,238 million.
Weak exports to Europe were slightly more than offset by
growth on the intra-Asian and transpacific trade lanes.
In 2012, the Panalpina Group generated 47 % of its net
forwarding revenue in EMEA, 35 % in the Americas and 18 %
in Asia Pacific.
On a divisional level, lower volumes in combination with falling
carrier freight rates led to a net forwarding revenue in
Air Freight declining by 6 % from CHF 3,281 million to CHF
3,106 million. In contrast, in the Ocean Freight division, the
Company increased its NFR by 13 % from CHF 2,313 million
to CHF 2,615 million, driven by the new volume record
Annual Report 2012

Group Report
Strategy and Results
13
Gross profit per region
Million CHF
Gross profit per product division
Million CHF
800
700
600
717
730
800
700
600
627
688
500
400
300
444
432
304
315
500
400
300
460
439
378
350
200
200
100
100
0
12 11
Europe,
Middle East,
Africa and CIS
12 11
Americas
12 11
Asia
Pacific
0
12 11
Air
Freight
12 11
Ocean
Freight
12 11
Logistics
Gross profit per region
2012
Gross profit per product division
2012
49 %
Europe, Middle East,
Africa and CIS
21%
Asia Pacific
30 %
Americas
43 %
Air Freight
26 %
Logistics
31%
Ocean Freight
achieved in 2012, as well as sharply higher freight rates
which ocean freight carriers implemented during the year.
In the third product division, Logistics, NFR saw a slight
decrease of 1 % from CHF 906 million to CHF 896 million
due to the end of the life cycle of certain projects during the
year.
In 2012, the Panalpina Group generated 47 % of its net forwarding
revenue with Air Freight, 39 % with Ocean Freight
and 14 % with Logistics.
Gross profit (GP)
Panalpina considers gross profit a better measure of performance
than net forwarding revenue as the former is less
distorted by external factors such as significant movements
in carrier freight rates and oil prices, which can materially
inflate or deflate revenues although the impact on the
Group’s business may be limited.
Gross profit of the Group declined slightly less than 1 % to
CHF 1,465 million in 2012 (2011: CHF 1,477 million).
With respect to regional performance, EMEA is also the
most important region for Panalpina in terms of gross profit
generation, representing nearly half of the Group’s gross
profit. In 2012, gross profit generated in the region decreased
by 2 % from CHF 730 million to CHF 717 million.
While imports to Europe were weak throughout the year,
European exports and Middle East traffic were holding up
well. In the Americas, gross profit grew by 3 % from CHF 432
million to CHF 444 million. Traffic into and out of Latin
America and North American imports were able to outpace
slowing exports out of North America. Asia Pacific recorded
a decrease of 3 % in GP from CHF 315 million to CHF 304
million, which management primarily attributes to the weakness
in Air Freight exports in this region to the mature
economies in Europe and North America in 2012.
In 2012, the Panalpina Group generated 49 % of its gross
profit in EMEA, 30 % in the Americas, and 21 % in Asia Pacific.
In Air Freight, the market was affected by a general move to
lean inventories and an accelerated and mostly cost-driven
shift to alternative freight modes. Moreover, a rapidly
declining weight per shipment was observed, particularly in
technology-related industries to which Panalpina is highly
exposed. This led to an adverse effect on the Group’s transported
tonnage, which declined by nearly 6 % to a total of
801,000 tons. Increasing competitive pressure led to gross
profit per ton of Air Freight decreasing by 4 %, which together
with the described volume effect resulted in a 9 % decline
of gross profit realized through Air Freight forwarding
services (CHF 627 million in 2012 versus CHF 688 million
the year before). In the Ocean Freight division, GP saw an
expansion of 5 % from CHF 439 million to CHF 460 million.
With growth of almost 6 %, Panalpina’s volumes grew
Annual Report 2012

14
Group Report
Strategy and Results
Overall development
Million CHF
EBITDA per region*
Million CHF
250
212
212
16 %
14 %
14.4 %
14.4 %
90
80
90
200
12 %
70
60
63
150
121
10 %
8 %
8.3 %
50
40
38
100
6 %
30
24
50
36
4 %
2 %
2.5 %
20
10
0
– 2
2
0
0
–10
2012 2011
2012 2011
12 11
EBITDA
EBITDA/GP margin
Europe,
Middle East
EBITDA excluding
EBITDA/GP margin
Africa
non-recurring items
excluding non-recurring
and CIS
items
12 11
Americas
12 11
Asia
Pacific
* Regional numbers do not add up to the adjusted Group
result due to the omission of the corporate segment.
approximately twice as fast as the market and reached
a new all-time high of 1,388,000 TEU. Gross profit per TEU
came in at roughly the same level as last year, despite
several rounds of carrier freight rate increases during the
year. Gross profit generated through the Logistics division
increased by 8 % from CHF 350 million in 2011 to reach a
total of CHF 378 million in 2012. The improved GP result
was mainly driven by the Group’s further expansion and
profit restoration in the Warehousing & Distribution activities
and Value-Added Logistics Services.
In 2012, the Panalpina Group generated 43 % of its gross
profit with Air Freight, 31 % with Ocean Freight and 26 % with
Logistics.
Earnings before interest, taxes,
depreciation and amortization
(EBITDA)
A useful measure for assessing the Group’s operating performance
is earnings before interest, taxes, depreciation
and amortization (EBITDA). The Group’s EBITDA was substantially
hit by a charge of CHF 59.2 million (contained in
the category “other operating expenses”) which the Company
recognized to cover fines imposed by the EU Commission
and the Swiss Competition Commission for alleged
antitrust violations related to isolated air freight surcharges
for certain European trade lanes during limited periods of
time prior to 2008. In addition, the Company expensed
extra ordinary provisions of CHF 25.4 million during the
reporting period related to accrued salaries for leaving employees
(contained in the category “personnel expenses”).
The Group’s EBITDA in 2012 amounted to CHF 36 million
(2011: CHF 212 million), which resulted in an EBITDA/GP
margin of 2.5 % (2011: 14.4 %). Excluding the two extraordinary
charges above, Panalpina achieved an EBITDA before
non-recurring items of CHF 121 million and an EBITDA/GP
margin before non-recurring items of 8.3 % in the reporting
year. Overall, the various investments in the business
and sales structures during the reporting year were not
compensated by corresponding increases in business.
Moreover, the implementation of the regional structure led
to cost increases which were not directly offset by related
organizational cost synergies elsewhere in the reporting
year. In light of the unsatisfying development of EBITDA and
the EBITDA/GP margin, going forward, the Company is firmly
committed to adjusting its cost base further and aligning
it faster to changes in gross profit, which will be facilitated
by the introduction of a new forecasting process focusing
on short-term business planning.
Annual Report 2012

Group Report
Strategy and Results
15
The two main items included in operating expenses – personnel
expenses and other operating expenses – developed
as follows:
– Personnel expenses increased approximately 7 % to CHF
955 million in 2012 (2011: CHF 892 million). Excluding
the aforementioned extraordinary provisions, personnel
expenses increased 4 %.
– Other operating expenses amounted to CHF 473 million in
2012 (2011: CHF 372 million), equivalent to an increase of
27 % which was mainly driven by a further expansion of the
Logistics footprint. Excluding the antitrust fines of CHF
59.4 million mentioned above, which have been paid to
the respective authorities during the reporting year, other
operating expenses increased 11 %.
Regional development
The segmental EBITDA provided in the financial accounts
developed as follows in the reporting period:
– EMEA: EBITDA in this region declined from CHF 38 million
in 2011 to a loss of CHF 2 million in 2012. The main reasons
for this negative development were the difficult
macroeconomic conditions in many European economies
resulting in declining imports and a simultaneous growth
of the cost base relating to investments in the new regional
structure.
– Americas: This region recorded a decline in EBITDA from
CHF 24 million in 2011 to CHF 2 million in 2012. While
good progress was achieved in further growing Panalpina’s
business in many Latin American countries, this
region was impacted from the slowing U.S. economy.
Moreover, apart from the rollout of the new regional
structure, various investments in logistics facilities were
made during the reporting period in order to appropriately
position this region to take advantage of future business
opportunities.
– Asia Pacific: EBITDA recorded a contraction from CHF 90
million in 2011 to CHF 63 million in 2012. Exports from
Asia to the mature markets in Europe and North America
were declining throughout most of the year, and intra-
Asian demand also stayed weak, particularly in Air Freight.
At the same time, the cost base in Asia Pacific increased
as new investments in personnel were undertaken and
the new regional structure was implemented.
Note that the exceptional items mentioned in the preceding
paragraph (totalling CHF 84 million) are excluded from
the regional EBITDA results above as these charges were
not allocated to any particular region.
Balance sheet
Current assets
Panalpina’s cash and cash equivalents amounted to CHF
393 million on December 31, 2012 and thus decreased by
CHF 181 million from the year before (December 31, 2011:
CHF 574 million). The cash reduction can mainly be attributed
to dividends paid to shareholders (CHF 47 million), an
additional payment to shareholders totalling CHF 45 million
through a reduction of the nominal value of the registered
shares from CHF 2.00 to CHF 0.10, as well as various fines
related to old and concluded legal cases totalling CHF 73
million paid to European and U.S. authorities during the
reporting period.
Trade receivables and unbilled forwarding services
increased by CHF 56 million, from CHF 1,062 million at the
end of 2011 to CHF 1,118 million at the end of 2012. The
increase can be mainly attributed to the increase of turnover.
The net working capital intensity (defined as net working
capital as a percentage of gross forwarding revenue) at
the end of 2012 remained at a low level of 1.7 %, although it
increased from the record-low level of 1.1 % achieved a year
earlier due to the increasing pressure from customers for
longer payment terms.
Noncurrent assets
Panalpina’s noncurrent assets decreased by CHF 28 million
and amounted to CHF 362 million on December 31, 2012
(December 31, 2011: CHF 390 million). The decline can
mainly be attributed to the decrease in investments as a
result of the sale of the Company’s shares in Luxair SA and
the afore mentioned impairment charges recognized during
the reporting year.
Trade payables and accrued cost of services
Panalpina’s trade payables and accrued cost of services at
year-end stayed unchanged at CHF 773 million.
Annual Report 2012

16
Group Report
Strategy and Results
Total assets
Million CHF
2,250
Total liabilities and equity
Million CHF
2,250
2,000
2,000
1,750
1,500
362
84
390
109
1,750
1,500
750
915
1,250
1,250
1,000
1,118
1,062
1,000
434
447
750
750
500
500
250
393
574
250
773
773
0
0
12 11
12 11
Noncurrent assets
Other current assets
Trade receivables and unbilled
forwarding services
Cash and cash equivalents
Equity
Other liabilities
Trade payables and accrued
cost of services
Other liabilities
Panalpina’s other liabilities decreased by CHF 13 million from
CHF 447 million at year-end 2011 to CHF 434 million at
year-end 2012 and can be mainly attributed to a reduction in
provisions and a further reduction of borrowings to a nearly
debt-free level of CHF 2 million.
Total equity
Total equity decreased by CHF 165 million during the
reporting period, from CHF 915 million on December 31,
2011, to CHF 750 million on December 31, 2012. The
decrease in shareholders’ equity on one hand reflects
the aforementioned reduction of the nominal share capital
which decreased from CHF 50 million at year-end 2011 to
CHF 2 million at year-end 2012. On the other hand, retained
earnings and reserves declined from CHF 1,053 million at
year-end 2011 to CHF 748 million at year-end 2012 primarily
due to the payment of the dividend and the negative
development of the Group’s net result.
Net cash
CHF million
Dec
31,
2012
Dec
31,
2011
Change
%
Cash and cash equivalents 393.0 573.6 – 31.5
Other current financial assets 0.0 20.0 –100.0
Short-term debt –1.6 – 7.3 – 78.1
Long-term debt – 0.2 – 0.2 0.0
Net cash 391.2 586.1 – 33.3
Net cash decreased by CHF 181 million during the year
under review to CHF 393 million on December 31, 2012
(December 31, 2011: 574 million).
Cash flow
Net cash from operating activities
Panalpina’s net cash from operating activities in the reporting
period amounted to CHF – 72 million (2011: CHF 193
million). Major contributors to this adverse development
were the negative net result for the period and the
simultaneous increase of the net working capital caused
by an increasing pressure from customers for longer payment
terms. The net result also includes the outflow of CHF
73 million during the reporting year related to the payment
of aforementioned fines.
Cash flow from investing activities
Expenditures on property, plant and equipment increased
by CHF 20 million during the reporting year to CHF 51 million
(2011: CHF 31 million) as the Company ramped up its
investments in IT infrastructure and technical equipment
in certain facilities it operates. Also, the Group received
inflows of CHF 57 million due to the repayment of money
market and time deposits and a further CHF 28 million
mainly due to the sale of its investment of 12 % of Luxair
SA’s shares. No cash was spent on acquisitions during the
reporting year (2011: CHF 60 million). Overall, the net cash
Annual Report 2012

Group Report
Strategy and Results
17
outflow from investing activities decreased substantially
from CHF 152 million in 2011 to CHF 10 million in 2012.
Capital expenditures in 2012 amounted to 1.3 % of net forwarding
revenue (2011: 0.8 %).
Free cash flow
As a result of aforementioned developments, the free cash
flow, calculated as net cash from operating activities minus
net cash flow from investing activities, decreased from CHF
42 million in 2011 to CHF – 82 million in 2012.
Cash flow from financing activities
The net cash used in financing activities increased significantly
from CHF 4 million in 2011 to CHF 97 million in 2012.
The largest part of this increase was related to the payment
of a dividend to shareholders in the amount of CHF 47 million
(2011: nil) and an additional payment to shareholders
totalling CHF 45 million (2011: nil) via a reduction of the
nominal value of the registered shares.
Annual Report 2012

18
Group Report
Regions
Major changes in all three regions – The varied economic
development in the regions confirms the decentralization
measures taken in 2012 and the implementation
of three regional CEOs. In this way, Panalpina
reacted to the regionally differentiated needs of customers.
All regions aligned their new organizational structure
essentially.
Americas
Areas: 5
Andina, Canada, Mercosur, Middle America, USA
Market situation
The volatile market conditions in the key markets, USA,
Canada, Mexico and Brazil, significantly impacted the
regional results. Brazil, nevertheless, managed to develop
into the world’s sixth-largest economy. Meanwhile, the
Andean countries with Chile posted the greatest market
growth in the region. Restrictive import and trade policies
dampened foreign investment. The gross national product
drop ped in comparison to the previous year and remained
below expectations.
Highlights
– Panalpina gained three large, global accounts in the USA
with top-ten freight volume.
– Panalpina USA and Brazil completed development of
tailored end-to-end services on the highest complexity
level and with future-oriented information technology for
the aerospace industry.
– A large Healthcare customer honored Panalpina USA with
awards, including “Most innovative carrier of the year”
and “International forwarder of the year.”
– The Healthcare vertical developed very well in the USA.
Cool-chain capabilities were significantly expanded in
Chicago and San Juan, Puerto Rico through further investments.
– Panalpina decisively grew its market share in automobile
spare parts logistics in Brazil. A technologically state-ofthe-art,
10,000 m 2 logistics center was set up in Cajamar
near São Paulo.
– Panalpina Mexico expanded the Consumer and Retail
segment in its logistics business. The business units also
profited from the prospering automobile industry, which
grew by 20 % year on year.
Outlook
Volatility in the marketplace will remain in 2013, which will
primarily impact the air freight business. Panalpina remains
cautiously optimistic because its regional structure will
bring improved focusing and better regional coordination.
The Company sees great growth potential for ocean freight
in the key markets, USA, Mexico, Columbia, Brazil and
Chile, as well as for logistics in developing markets such as
Mexico and Brazil. In these areas, the challenges involving
infrastructure and regulatory compliance offer logistics
service providers numerous business opportunities.
Asia Pacific
Areas: 4
India, North Asia, Oceania, Southeast Asia
Market situation
The year 2012 was particularly difficult for the air freight
industry in Asia. Both the generally low export volume and
the switch to more inexpensive ocean freight increased
pressure on air freight margins. Air freight rates dropped
accordingly throughout the year. Many customers seized
the opportunity and renewed their contracts with signi ficant
rate reductions.
Highlights
– Panalpina completed introduction of the entire ocean
freight SAP Transport Management System in Singapore.
In addition, the “Less than Container” hub in Singapore
was reorganised, which boosted its throughput by 30 %.
– The Asia Pacific Logistics Competence Center in Singapore
opened to provide warehouse lean management
support and driving logistics excellence in the region.
– In India, Panalpina broadened its market presence in the
automobile and pharmaceutical industries.
– A new supplier invoice handling system was implemented
Annual Report 2012

Group Report
Regions
19
in India and Thailand, which will bring substantial improvements
delivering increased visibility.
– The Panalpina Service Center in Wuhan, China centralized
ocean freight document processing for Chinese business,
which resulted in cost savings and productivity improvements.
– The Chinese authorities granted Panalpina China a Wholly-Foreign-Owned
Enterprise status for the office in Xi’An.
– Panalpina Logistics (Shanghai) Ltd. was awarded as an
A-class company by the Chinese customs authorities,
which simplifies and accelerates various customs procedures
for Panalpina.
– Panalpina launched 24 new “Less than Container” services
ex Asia.
Outlook
The Asian market is becoming ever more volatile and uncertainties
are growing. Air freight volumes for exports from
Asia to Europe will probably continue to decline in 2013,
which will increase pressure on the airlines to increase
rates or adjust their capacities. Panalpina optimistically
views development of volumes on the Asia–America trading
routes as well as for the intra-Asian market. The Company
will concentrate more on the business potential of these
two markets, both in the air freight and ocean freight
sectors.
Europe, Middle East, Africa and CIS
Areas: 9
Black and Caspian Sea, Central Europe, France and
Maghreb, Iberia, Middle East, Northern Europe, Northwest
Europe, Southwest Europe, Sub-Saharan
– Panalpina Norway restructured itself in order to integrate
Grieg Logistics.
– Panalpina recorded above market growth in the region in
logistics and increased its market share in ocean freight.
– The newly implemented road freight concept is functioning
smoothly, whereby the distribution network was
expanded to Poland and the Baltic states.
– New ocean freight products were implemented successfully.
– The region integrated the flights of the two new Boeing
747-8 aircraft in the Luxembourg hub structure and the
European freight market.
– Panalpina steadily expanded its network in the Middle
East – with positive business development results.
– Panalpina increased its presence in the relevant markets
in the oil and gas industry.
– Panalpina grew further in Turkey and established its logistics
range in Gebze with a 12,000 m 2 warehouse.
– Driven by continuously growing customer interest in business
in Africa, Panalpina Sub-Saharan further expanded
its long-term commitment on the continent.
Outlook
The Panalpina Europe, Middle East, Africa and CIS region
will concentrate on growth in its markets in the Middle East,
CIS, Turkey and Norway. The Company anticipates a
further increase in productivity with the introduction of the
first component of SAP TM and with an air freight network
and gateway optimization. Greater cooperation between
the areas should result in further synergies across national
boundaries.
Market situation
Pressure on the margins and high volatility of rates made
business difficult, primarily for ocean freight, but also for air
freight. The generally poor economic situation and a drop in
consumption led to negative development in air freight
volumes with regard to the European routes. The only increase
in market volume was recorded for air freight export,
primarily through Panalpina’s own air freight products.
Demand for warehousing and logistics remains strong.
Highlights
– The region’s new marketing and sales strategy recorded
its first successes.
Annual Report 2012

20 Group Report
Product Divisions
Three products, one solution – In order to offer integrated
door-to-door solutions, Panalpina combines the
intercontinental transport of air and ocean freight with
comprehensive value-generating logistics. The three
product divisions end the year 2012 with mixed results,
since the economic conditions were very volatile and the
freight market developed unfavorably.
Air Freight
Market situation
The Air Freight division felt the poor economic conditions
most strongly and was unable to increase its freight volume.
Meanwhile, the growing supply of new cargo planes
led to an imbalance of supply and demand. The cargo units
sent grew steadily smaller, while fluctuating fuel prices
negatively impacted air freight costs. Panalpina felt the
decrease in turnover without exception on all main trade
routes.
Highlights
– Panalpina replaced both Atlas Air operated Boeing 747-
400 cargo planes with two of the latest 747-8 generation
planes, which are more environmentally-friendly and integrated
them into its own air freight network.
– Panalpina solidified its industry leadership for temperature-controlled
freight for the pharmaceutical industry
with proactive door-to-door monitoring, control and documentation.
Additional central locations were certified for
GDP (Good Distribution Practice) in 2012.
– The division equipped itself with its own screening facility
to enable it to seamlessly handle air freight for the USA.
– Panalpina’s air freight division developed new markets
such as the aerospace industry or orders from the public
sector.
– Adaptations to the main systems now facilitates paperless
handling in line with the e-Freight initiative. At the
same time, Panalpina attained top-ten e-Freight carrier
status.
– The requirements for the Cargo-2000 certification have
been further increased.
Outlook
Since the global economy is not expected to recover in
2013, the prospects for the air freight business are sluggish.
The overcapacities will continue to exist and the load
factors will remain low. The Air Freight division will therefore
pursue focussed diversification, meet the challenges
on the main trading routes and seek sales opportunities in
emerging markets such as Southeast Asia, Southern Asia,
the Middle East, Africa and Latin America. It will also focus
on agile industries such as the high-tech or automotive
industries, which seek shorter procurement channels. The
cold-chain service range will be further expanded in order
to more widely serve pharmaceutical industry customers.
Ocean Freight
Market situation
The uncertainty and volatility in the major east–west trading
routes continue unabated. The global demand for ocean
freight was growing by approximately 2–3 % to an anticipated
6–7 %. Capacities were also growing accordingly by
6–7 %. Noteworthy was the strong drop in the movement of
goods westwards from Asia (to Europe) by 9 % year on year.
This trading route has experienced continuous growth for
the past 20 years.
Highlights
– With a 6 % increase, ocean freight volume growth was well
above average market growth of 2–3 % in 2011.
– For the Asia–Latin America trading route, Panalpina
increased volume by 24 % in comparison to the previous
year. The intra-Asian connections developed extremely
positively.
– Panalpina increased its volumes for LCL (Less than Container
Load) and FCL (Full Container Load) services from
Europe, particularly to destinations in Asia and North
America.
– Panalpina launched over 40 new LCL services worldwide
in 2012.
Annual Report 2012

Group Report
Product Divisions
21
– The Ocean Freight division is making inroads into niche
markets such as the transport of recycling materials from
Europe to Asia.
– The LCL hub in Singapore was vastly enlarged.
Outlook
Market growth of 3–4 % is anticipated for ocean freight,
compared to a 9 % increase in capacity. The volatility in tariffs
shall continue to exist. The intra-Asian and Asia–Latin
America trading routes, which grew strongly in 2012, will
grow further. Panalpina generally anticipates a shifting from
air freight to ocean freight, particularly in terms of shipments
for the health and pharmaceutical industry. Panalpina
will continue to focus on and further develop the field
of secondary raw materials.
Highlights
– New warehouses in Brazil, France, Poland, Singapore, Turkey
and the United Kingdom offer additional logistics
space.
– Panalpina established four Logistics Competence Centers
across the globe. Their experts support the deployment
of best-in-class tools and techniques in terms of tender
and bid management, logistics solutions design, operations
modeling and optimization and lean logistics excellence.
– Furthermore, Panalpina has a strategic partnership with
Red Prairie as its standardized global logistics platform,
including a warehouse management system.
– The application of the warehouse optimization tool set
improved efficiency and ultimately reduced total cost of
ownership.
– Logistics division introduced a global continuous improvement
process called Logex and rolled out its operational
excellence program which ensures that all staff is trained
in the latest processes and legislative requirements.
– Vendor managed inventory and post-sales services has
extended its offers.
Outlook
As the logistics market is expected to grow, Panalpina is
steadily increasing its footprint as a global provider of logistics
services. The Logistics division is further developing
its products and emphasizes continuous improvements to
existing operations.
Logistics
Market situation
The outsourcing of manufacturing and logistics operations
continues to grow across a broad set of industries. Faced
with increasing competition and a difficult economic environment,
companies are increasingly turning to logistics
providers as a key driver of both supply chain innovation
and risk mitigation. And the benefits of outsourcing are
convincing: it reduces operational costs, allows organizations
to focus on their core competencies, and enables
fast-growing companies to scale more easily.
Annual Report 2012

22
Value Creation and Sustainability
Global Network
Globally local – Panalpina operates a world-spanning
network embracing some 500 branches. The comprehensive
service is backed by the expertise of local teams
who apply their up-to-the-minute insights on local conditions
to deliver any time door-to-door solutions tailored
to Panalpina’s customers.
Americas
Net forwarding revenue: CHF 2,288 million
Full-time equivalents: 4,823
Annual Report 2012

Value Creation and Sustainability
Global Network
23
Panalpina branches and partner companies in over 160 countries
Europe, Middle East, Africa and CIS
Net forwarding revenue: CHF 3,091 million
Full-time equivalents: 6,852
Asia Pacific
Net forwarding revenue: CHF 1,238 million
Full-time equivalents: 3,492
Annual Report 2012

24
Value Creation and Sustainability
Industry Verticals
In partnership with the customers – Thorough industry
know-how and a cooperative exchange with the customer
are crucial for the provision of integrated end-toend
solutions for the customers supply chain. Panalpina
has pooled this expertise in nine core industry sectors
and meets the special demands of industrial projects
with Panprojects.
Panprojects
Panprojects meets the project forwarding requirements of
the energy and resources sector, which often involves the
transportation of very heavy and oversized loads. Panprojects
entered 2012 with several mature petrochemical and
liquefied natural gas projects in hand, but saw little real
growth in this sector until later in the year. The Oil and Gas
vertical was further boosted with the signing of two global
agreements with major oil multinationals, which now places
Panalpina on a good footing to proceed into 2013 and beyond.
Business in the mining sectors remained firm. The
power sector also stayed strong with new contracts awarded
in Bangladesh and Australia being most noteworthy, plus
renewable energy projects being undertaken in Brazil.
Panprojects also enjoyed success in the transport and
infrastructure sectors in Brazil with major train deliveries
for the local metro. The key to much of this success is close
cooperation within Panalpina’s network, a strong and committed
compliance program and the benefit of having its
own internal transport engineering team.
Oil and Gas
Panalpina’s work focuses on the supply of goods and services
for the upstream sector, also known as exploration
and production. That sector involves the search for potential
underground or underwater oil and gas fields, drilling
exploratory wells, and operating wells that recover and
bring crude oil or raw natural gas to the surface. Over the
decades, Panalpina has developed industry-leading infrastructure
and processes to cover the entire oil and gas
exploration, development and production cycle. It not only
handles shipments of all kinds, but offers complete endto-end
supply chain solutions, from supplier and purchase
order management to customs clearance. The latter, in
particular, is very complex when it comes to moving equipment
for the oil and gas industry, especially into increasingly
remote areas. Panalpina Oil and Gas managed to expand
their market position despite a flat international exploration
and production market in terms of global rig counts and
projects . Panalpina’s values and the industry leadership in
compliance, HSE and security are being recognized by the
market as a clear differentiator to the competition. Service
quality and on-time delivery in difficult environments
will also continue to be crucial in the future, as oil and gas
clients are engaged in a fierce battle in all markets.
Telecom
The growing importance of mobile high-bandwidth services,
being connected anytime and anywhere, video communication,
as well as media-driven entertainment, have
stimulated and will continue to stimulate significant investments
in wireless telecommunications infrastructure. In
developing and emerging markets, thousands of mobile
subscribers are registered every day and drive basic mobile
infrastructure investments, as well as sales of multimedia
devices. Panalpina provides telecom customers with lean,
effective and secure supply chain solutions that are flexible
and dependable. Considering the highly vulnerable nature
of telecom products, Panalpina has developed industryspecific
solutions. Experienced security teams assess and
improve transportation routes on a daily basis. This set-up
guarantees low-risk exposure with regard to theft or damage
to their valuable products combined with an unmatched
time-to-market performance. Nevertheless, revenue decreased
in 2012 compared to the prior year as the industry
wrestled with challenges of economic difficulties in key
markets, impacting investment in infrastructure.
Annual Report 2012

Value Creation and Sustainability
Industry Verticals
25
Hi-tech
For many high-tech companies, supply chain services and
logistics have become essential parts of the manufacturing
and sales process. Considering the highly vulnerable nature
of high-tech products, Panalpina serves companies operating
in this area through its Hi-tech Center of Expertise.
Panalpina combines freight and logistics services between
suppliers, manufacturers and distribution channels. Panalpina
is also increasingly handling activities such as reverse
logistics and vendor managed inventory for its high-tech
clients. The ever-shortening product life cycle requires fast
and highly flexible supply chains that are able to evolve with
changing market requirements. Hi-tech is Panalpina’s biggest
center of expertise in terms of turnover, accounting for
approximately 17 % of the Company’s revenues. Panalpina
continues to leverage its global footprint in this customer
group.
position is very comfortable in this vertical because the big
players are very open to new ideas and concepts. Therefore
Panalpina developed specific industry value propositions
focussing the aftermarket of its clients. All the traditional
manufacturing markets are rather strong, particularly Latin
America, with a primary focus on Brazil, while activities in
Asia remain weak. In South America Panalpina strengthened
its footprint with several ample contracts. For instance,
Panalpina is handling the distribution in and out of
Brazil and Argentina for one of the largest providers of
equipment for agriculture. The market conditions do not
change very quickly in this segment, therefore the outlook
will not change for the years to come. Panalpina has noticed
a strong tendency to bring manufacturing back to the
USA and to source domestically, but that is a slow process.
Moreover, indications for the agriculture segment show
very positive development over the next few years, especially
in emerging markets such as Africa.
Healthcare
Healthcare remains one of the Company’s fastest-growing
business sectors, serving both pharmaceutical companies
and medical device manufacturers. In addition to fast delivery,
customers in the healthcare industry want assured
security and, for many shipments, continuous temperature
control. New Good Distribution Practice (GDP) regulations
were designed and came into effect in 2013, leading to
greater regulatory control, particularly for temperaturesensitive
products in all temperature ranges. Special internal
training programs and investments in infrastructure
ensure that Panalpina is GDP compliant wherever healthcare
shipments are handled. Furthermore, the Healthcare
vertical launched new products, including the Control
Tower set-up and the PanCoopetition initiative, which
brings customers in the healthcare industry together to
save costs in their supply chains through cooperation, such
as by sharing transport space.
Manufacturing
Panalpina provides transportation and logistics services
that enable manufacturing companies to make their supply
chains leaner and more agile. In return, the customers
achieve the necessary flexibility to effectively manage their
clients’ complex supply and demand. Panalpina’s market
Automotive
Panalpina’s operations in the automobile industry include
the shipment of production materials and finished products
across the globe. The vast majority of cargo is transported
by sea, but the industry continues to rely on regular air
freight services to handle special loads, spikes in demand
or urgent shipments. In 2012, a sluggish economy and
declining vehicle sales in Europe were compensated for by
strong growth in Asia, Latin and North America, resulting in
record profits for most of the major automobile companies.
Most auto manufacturers and suppliers have optimized
their supply chains through previous capacity adjustments,
which entailed moving more products via ocean freight and
reducing air freight costs. Rate volatility, especially in
ocean freight, was successfully mitigated for the most part
through proactive negotiations with key clients avoiding
negative exposure per shipped unit. Brazil, Mexico, China,
India, Japan, Korea and Russia will remain growth markets
and drivers of the automobile industry with increased
investments in additional production plants and capacity.
Chemicals
In the chemicals business environment, customers require
dependable, on-time delivery from their suppliers. The
chemical goods supply chain is very complex, leading to
Annual Report 2012

26
Value Creation and Sustainability
Industry Verticals
increased logistics and transport spending due to a tightening
of the security controls, environmental aspects, as well
as increasing regulatory requirements. Customers are
generally price sensitive and only switch their focus onto
solutions once low prices are secured. This characteristic
continued strongly in 2012. The chemical industry began
to slow down at the end of 2012 and freight volumes
decreased significantly. This decline was particularly felt in
Europe and could not be offset by slight increases in North
America and Asia. While Panalpina was able to slightly increase
sea freight and substantially increase its logistics
services, this combined growth was barely able to offset
the significant drop in air freight. In addition, the lengthy
six sigma implementations across multiple chemical
com panies are having a significant impact by reducing air
shipments.
Consumer and Retail
The fashion industry has sophisticated and demanding
consumers who require multichannel offers, a brand experience,
personalization and increased product differentiation.
This leads to shorter product life and an increased
need for innovation, flexibility and enhanced order fulfilment
certainty. Market growth in the fashion vertical was
slow in all regions in 2012. Less impact was seen on the
high-end fashion brands. Multichannel development also
enables consumers to more easily access consumption
opportunities. High-end fashion is still dominated by timeto-market
requirements, which is why air freight is still
strong and growing. The diversity of retail channels has led
to less loyal customers and therefore a complex environment
for retailers in which to balance supply and demand.
The general transition from ocean to air freight continues,
but quite a few fashion retailers have started to use air
freight more strategically to achieve better time-to-market.
Panalpina supported its fashion clients through all these
challenges with appropriate solutions, which resulted in a
slightly improved year-end result.
The consumer and retail industry is facing different challenges:
sourcing has become global, distances longer and
the economy more fragile. Furthermore, the industry is
characterized by new ways of channeling commodity, such
as e-commerce, resulting in increasingly demanding and
better informed consumers. In line with the multichannel
retail development, visibility and ability to take early and
fast decisions in the supply chain becomes critical. Existing
e-commerce companies are starting to consider moving
towards retail outlet environments and retailers are looking
increasingly in the direction of online shopping. This tendency
will open new business opportunities for Panalpina to
offer sophisticated order management solutions. Market
growth in the consumer and retail sector was more or less
slow in all regions in 2012. Fast-moving consumer goods
companies experienced slower growth and efforts were
made to drastically decrease expensive transportation.
Furthermore, global consumer goods companies are beginning
to review their global air freight spend more often. By
offering innovative solutions, Panalpina managed to achieve
significant business win in this segment and achieved a
modest growth of its overall Consumer and Retail volume.
Fashion
www.panalpina.com/iv
Annual Report 2012

Value Creation and Sustainability
Compliance and Corporate Culture
27
Performance, integrity and professionalism – The
journey to fully realize Panalpina’s values has revealed
that its culture is strong, unique, and differentiates the
Company from its competition. Panalpina’s employees
are proud to be a part of the Company’s mission and
continually demonstrate their willingness to go above
and beyond for both the good of the Company and its
customers.
Panalpina’s corporate culture embodies shared values,
cross-cultural understanding, and ethical behavior based
on fairness, respect and responsibility in all dealings within
and outside the Company. Its Code of Conduct is central
to Panalpina’s business success and enhances its reputation
as a company that is taking ethics and compliance
seriously.
Established Code of Conduct
Recognizing the importance of employees understanding
how their actions contribute to the success of the Company
and the condition of their workplace, Panalpina
extended its Code of Conduct in 2012 with the intention of
making this document more representative of the premium
it places on its employees always representing the highest
standards of ethical conduct and acceptable behavior. This
new version has been instrumental in supporting the goal
to fully integrate Panalpina’s values across the Company
and influence the actions of Panalpina’s employees. With
an emphasis on commitments to performance, integrity
and professionalism, the Code focuses not only on laws
and regulations, but also on expectations of personal
conduct. The Code covers detailed information on fostering
a positive work environment through valuing diversity,
rejecting discrimination and harassment, ensuring fair
employment practices, and upholding health and safety
measures. Additional chapters of the Code provide guidance
on avoiding conflicts of interest, on conducting business
with integrity (including information on anti-corruption
practices), on ensuring financial integrity, on managing
the Company’s assets and information, and on protecting
the environment.
Training for compliance
Available in 27 languages, the Code is accessible to all
employees through the intranet and on the corporate
website. Additionally, each employee is trained on the
Code of Conduct through a face-to-face session with their
supervisor. Upon completion of this review, it is requested
that each employee provide a signature to affirm their understanding
and commitment to adhere to the standards
therein. This structured training program was initiated in
2012 to guarantee all Panalpina employees were provided
with adequate training on how to handle difficult situations.
When such circumstances arise, employees are
encouraged to report breaches of the Code of Conduct
to their Human Resources managers or to the Corporate
Ethics and Compliance Department. Alternatively, employees
are free to report concerns to the Ethics and Compliance
Hotline, which is a secure and confidential option
for submitting reports at any time or at any location, either
by phone or the internet.
Leading the industry with integrity
Adhering to strict corporate ethics is a cornerstone to
Panalpina’s organizational structure. The Ethics and Compliance
Officer reports to the CEO and the Ethics and Compliance
Committee of the Board of Directors. A program
that was initiated in 2008 and continued in 2012 conducts
training at various Panalpina locations on anti-corruption,
trade regulation and anti-trust matters. As supplements,
e-learning modules are available for quick and easy referencing.
To ensure that these trainings and materials are
making an impact, the Ethics and Compliance Department
assessed Panalpina sites across 25 countries in 2012. In
addition, Panalpina also strives to engage key suppliers
in these matters. This effort to ensure honest practices
throughout all aspects of the business is complemented
by Panalpina’s involvement in the World Economic Forum
Partnering Against Corruption Initiative (PACI) as a signatory
member for the third consecutive year in 2012.
www.panalpina.com/culture
Annual Report 2012

28
Value Creation and Sustainability
Employees
Recruiting, retaining and developing talent –
Pan alpina is committed to a transparent and respectful
relationship with its employees. Through a culture of
open communication, responsiveness and continuous
improvement, the Company will continue to recruit,
retain and develop the best and most capable team of
employees in the logistics industry.
A the end of 2012, Panalpina had 15,224 employees in over
80 countries. Its global human resources function is
responsible for enabling organizational development to
secure the ongoing engagement and effectiveness of
Pan alpina’s employees.
Keeping its four strategic priorities set in 2007, the core
of the Human Resources transformation 2.0 strategy is
currently being formulated to:
1 Create a more partnering role for Human Resources
within Panalpina
2 Achieve flawless administration of HR services
across the Company
3 Connect the organization to drive greater alignment
and collaboration across boundaries
4 Measure HR performance in terms of effectiveness
and efficiency
Efficient human resource management
In 2012, the implementation of PanLink as the integrated
human resources information system solution continued
for Panalpina. The system supports all standard human
resource processes in the area of performance and talent
management, and helps to align people to the Group’s strategy
and goals. There are several other key elements to the
PanLink system, such as the recruiting module that helps to
quickly identify the best candidates for an open position,
and the succession planning tool, which helps support the
development and retention of Panalpina’s employees. In the
upcoming year, to complement the recruiting modules, a
job marketing platform will be deployed and the employee
development programs will be supported by a Learning
Management System (LMS). It is expected that by end of
2013 approximately 6,000 employees will be using the
complete PanLink suite of tools and all employees will have
access to some modules of the system.
Committed to employee engagement
In 2012, the Employee Engagement Survey results helped
identify areas where Panalpina’s employees are generally
satisfied, as well as areas where additional programming
and resources may need to be allocated. Overall, there was
an excellent response rate (84 %) to the survey, an increase
of two points since 2009, demonstrating that a representative
sample of Panalpina’s employees participated.
Employees reported improved views on management’s
ability to state objectives clearly, establish priorities, make
decisions promptly, provide leadership and communicate
with people. Employees reported being better informed of
the Company’s strategy and performance. Management
was seen to be doing a better job in communicating to people
and employees reported that more effort was made to
obtain their views. In the area of learning and development,
more employees reported satisfaction with available training
opportunities, and they are more positive about Panalpina
doing a good job in developing talent and promoting
colleagues based upon performance and merit.
It is also important to acknowledge where improvements
need to be made. For example, employees reported a
slightly lower willingness to stay with the organization.
This was attributed to perceived shortcomings in the performance
and succession programs, in addition to some
concerns in the areas of learning and development and
people management. Other categories highlighted in the
survey where improvements are needed include operating
conditions and efficiency, particularly on process efficiency,
organization of work and physical working conditions.
These have been highlighted as key areas for which Action
Plans have been established company-wide. The management
of Panalpina as well as the human resource teams
take this feedback quite seriously, and are committed to
seeking such feedback. Great strides have been made in
recent years, but there is still much work remaining.
Annual Report 2012

Value Creation and Sustainability
Employees
29
Cultivating new leaders
The Company invests a great deal of time and resources in
the development of its managers and leadership teams. Because
of its global nature and the demanding requirements
for its management, Panalpina continually seeks the best
possible candidates, either internal or external, for management
and line roles, and thus does not have a policy to
preferentially hire people who are living locally. Because of
this, it has developed a strong commitment to leadership
development to most efficiently leverage this investment
and provide long-term employment opportunities to its
employees. This is particularly true for its management and
leadership development programs.
In 2012, 35 more participants graduated from the Navigating
Our Future Program, Panalpina’s global program on
collaborative strategic leadership skills. This program is
offered to high-potential employees in mid-senior positions
who are willing to pursue an international career. An additional
35 candidates were selected to participate in 2013.
Over 350 department heads, team leaders and supervisors
participated in three modules of the Steering Success global
leadership and managerial skills program. This program is
offered in Mandarin, German, French, Portuguese, Spanish,
Italian, and English. The program has been strengthened
with fresh content and a more refined focus to hone performance
management skills.
Four new learning and development programs covering
communications, empowerment, performance management
and skills to help new managers were introduced in
2012: these programs fill a critical vacuum in the current
portfolio and focus on skills building to support the development
of management and leadership capability within
middle management – a subject once again clearly highlighted
in the latest Employee Engagement Survey.
The virtual campus: PanAcademy
There are a variety of training opportunities in place for the
staff, and all employees are encouraged to take advantage
of these programs. In 2012, PanAcademy, Panalpina’s
e-learning platform, expanded to include 50 learning units
offered in over 15 languages. These learning units cover
subjects such as the Company’s strategic environmental
PanGreen initiative as well as operations, product competence,
compliance, and through the “core values journey,”
refresher courses on anti-corruption.
Fair and transparent compensation
In 2012, compensation and reward schemes for all management
positions were evaluated and benchmarked over
dozens of countries. All senior and many mid-level management
positions were reevaluated and benchmarked
against global data, and the rewards policies and practices
were fine-tuned. Additionally, the grading and assessment
framework has been extended to include employees at
lower levels in the organization in an effort to gradually
standardize the grading framework across the entire corporation.
The intent of the exercise was to have better market
insight and improve the human resources knowledge database
to guide business and hiring decisions.
In order to align and improve the focus of Panalpina’s sales
force, the key performance indicators used globally to measure
sales performance were evaluated, and a global framework
was defined to which sales incentives schemes will be
gradually aligned. The goal is to ensure that the sales force
is incentivized and rewarded for achieving results that
are in line with business objectives and that encourage
behavior that is consistent with Panalpina’s values.
Employees
Full-time equivalents
(FTE)*
www.panalpina.com/jobs
December 31,
2012
Europe, Middle East, Africa and CIS 6,852
Americas 4,823
Asia Pacific 3,492
Corporate 441
Total 15,608
* Full-time equivalents include also part-time assignments
and employees provided by labor agencies.
Number of employees 15,224
Annual Report 2012

30
Value Creation and Sustainability
Information Technology
IT is key – Modern, robust information technology
systems are critical elements of modern businesses.
The ability to collect, process, analyze and present
large amounts of information quickly and accurately,
helps Panalpina maximize its revenue, keep costs low,
and most importantly provide world class service to its
customers.
The information technology landscape is continuously and
rapidly evolving. Ultimately however, information technology
needs are driven by the needs of customers and what
is required to deliver the level of service they expect. Therefore,
Panalpina’s IT team will focus on three core concepts
over the next few years. First, IT resources will be deployed
strategically to support the value proposition made to customers,
which ultimately drives long term customer loyalty.
Second, IT must be a tool that is used to drive improved
efficiency and productivity across the business. Lastly,
the IT infrastructure must enable constant innovation to
support the development of the products and services that
will drive future revenue growth and efficiencies.
Improving performance through IT
The IT team is in the process of completing the implementation
of a state-of-the-art and robust backbone of core information
systems. Completing this program will enable the
high-speed flow of information through the organization,
facilitating decision making, innovation and revenue generation.
A key component is the ongoing implementation of the
Air and Ocean Freight Transportation Management system
which is expected to be completed in 2016. However, the
first benefits will be seen during the course of 2013. In
addition, Panalpina is investing to support the growth in its
Logistics business through the deployment of advanced
Warehouse Management systems. This project has made
significant progress with implementations in Latin and
Central America, Europe and Asia Pacific, and continued
global rollout expected over the next few years.
Hit the road with information security
Information Security is an issue that is taken very seriously.
In recent years, the IT infrastructure has been further
strengthened by replacing and upgrading security technology
and by updating the Panalpina Information Security
Policy. A critical element in this effort is that Panalpina employees
are required to read and adhere to the IT security
policy, and a program of awareness campaigns and mandatory
e-learning modules supports these efforts.
Panalpina also has invested considerably in the strategic
upgrading of the datacenter facilities to significantly
strengthen resilience and disaster recovery capabilities.
Progress can be reported in the implementation of this
“dual site” approach in the Asia Pacific, European and
Americas regions.
Meeting customer’s expectations
Another key element of Panalpina’s IT strategy is to improve
the customer-facing systems to meet the information and
data-related needs of today’s customers. This effort will
initially focus on specific segments, including Oil and Gas,
but ultimately will extend throughout the business. In addition
to this, Panalpina’s IT group is working to deploy an
enhanced strategic Order Management solution, allowing
substantially quicker and richer implementations of customer
facing initiatives
In 2013, Panalpina will continue its strategy of investing in
its IT systems to increase efficiency, support the needs of
customers, and drive innovations. The deployment of the
Transportation Management system is a central element in
this effort, as is the development of the capacity to meet
customers’ demands for data. Managing costs will be a
focus in the coming year to ensure that the IT systems are
operating as efficiently as possible. Lastly, the role of social
media will be considered moving forward. In this era of
increased connectivity and instantaneous communication,
social media may provide new and exciting opportunities to
connect with customers.
Annual Report 2012

Value Creation and Sustainability
Procurement
31
Growing business through partnerships – The partnerships
Panalpina develops with suppliers is a crucial
element of the Company’s overall success. Maintaining
a collaborative, respectful relationship with its suppliers
provides opportunities for continued knowledge exchange
and provides the capacity to readily identify solutions to
challenges that arise in an extremely dynamic industry.
Panalpina’s strong relationships with its partners directly
impact its ability to maintain the competitive advantages it
enjoys and to provide the highest value to its customers.
Therefore the selection and management of subcontractors
is a carefully managed process, to ensure that these relationships
reflect Panalpina’s own values, and will ultimately
support the strategic objectives and growth of the Company.
Setting high standards
As subcontractors play a crucial role in Panalpina’s day-today
business, it is imperative that they represent Panalpina
well and meet the Company’s high expectations regarding
quality and ethical business practices. Therefore finding
trustworthy partners who are technically qualified to meet
the needs of Panalpina’s customers in a cost-effective manner
is a high priority. Subcontractors must have a proven
track record in ocean, air and logistics operations and have
exceptional reputations for service and quality. Panalpina
assesses potential suppliers based on strict criteria that
reflect the Company’s expectations in the areas of ethics
and compliance, credibility, pricing, quality of service,
consistency and performance. Coupled with these distinct
selection criteria, Panalpina also recognizes the right of
subcontractors to be treated with complete fairness. To this
end, the Company conducts its selection practices such
that all subcontractors are provided an equal opportunity to
be awarded contracts, regardless of nationality. Panalpina
also does not have a policy to preferentially hire suppliers
that are local to its operations. Regardless of a supplier’s
location, its expected that all the Company’s rules and policies
are adhered to so that they may remain compliant with
all applicable laws and regulations.
services. These partnerships hold significant potential to
uncover opportunities that can lead to streamlining processes
and leveraging shared experience in this fast-paced
industry. One example of how these relationships present
opportunities to grow together is the PanGreen program
that Panalpina has been implementing since 2010. Part of
this sustainability initiative assesses the energy and environmental
impacts of subcontractors and calculates the
carbon footprint of cargo shipments. The results of these
calculations provide a source of data that may be used as
reference for subcontractors considering their environmental
performance and weighing options for improving efficiency.
Actively engaging suppliers in this way has fostered
a culture grounded in collaboration and shared interests
in improving overall performance and offering customers
superior services.
Leading by example
Panalpina considers compliance with all applicable laws
and regulations as non negotiable for itself and for those
with whom it does business. This is especially relevant in
terms of national and international laws and regulations
related to anti-corruption, environmental protection, and
other legal conditions. Panalpina takes all necessary
precautions to ensure full compliance with all laws, including
conducting internal audits and compliance audits of
subcontractors to ensure that there are no unknown legal
risks or liabilities and that there are no actual or perceived
violations of any laws or regulations where Panalpina does
business.
Growing together
As part of Panalpina’s commitment to hire the best partners,
it is expected that these subcontractors are highly
knowledgeable about the business and are capable of
suggesting improvements to the Company’s products and
Annual Report 2012

32
Value Creation and Sustainability
Quality, Health, Safety and Environment
Commitment to sustainability management – A core
element of Panalpina’s approach to driving customer
satisfaction is based upon its commitment to employ
disciplined and structured management systems for
quality, health, safety and environmental issues. Such an
approach facilitates continuous improvement efforts,
allowing Panalpina to regularly assess its performance
and make adjustments where necessary.
Panalpina’s robust quality, health, safety and environmental
control processes greatly increase the value of its services
and ultimately the satisfaction of its customers. These
efforts, which extend throughout the organization, are the
responsibility of the Corporate Quality, Health, Safety and
Environmental team and are central to maintaining its
culture of responsibility. Quality, health, safety and environment
issues are also an important part of Panalpina’s
Integrated Management System (IMS), where all relevant
organizational and operational aspects of Panalpina are
documented. This system reflects all of the aspects of the
international standard ISO 9001, ISO 14001, OHSAS 18001
and complies with and reflects specific national or international
legal requirements, such as C-TPAT, GDP (Good Distribution
Practice for pharmaceutical products), CSI/AMS
and Aviation Security legislation. All of this is carried out
with the goal of measuring and ensuring the quality of the
operational service delivered to customers.
Global certification for Panalpina facilities
Panalpina recognizes the value that structured management
systems and certification schemes bring to a large company.
They provide a common framework for training, auditing
and assessment, and facilitate communication across wide
geographic regions and cultural differences. The Company
is delighted to have achieved in 2012 global certification according
to the health and safety standard OHSAS 18001,
the first logistics company to achieve this. Comprehensive
and systematic environmental mana gement is also key to
Panal pina’s success and credibility. To support this, Panalpina
has achieved certification for all offices worldwide
according to the Environmental Management Standard ISO
14001:2004. This required integrating the Environmental
Global Standards in compliance into the Panal pina IMS and
subsequently applying this framework to all facil ities worldwide.
In addition, all countries are required to identify all
relevant local environmental legislation and ensure these
laws are implemented and checked for com pliance.
Focused programs to mitigate risks
As part of its global health and safety certification process,
Panalpina underwent an extensive global risk assessment
to identify areas where risks existed, and to plan appropriate
mitigation measures. Based on this, a number of targeted
programs were implemented to support healthy working
conditions and hygienic workplaces, reduce risk exposure
associated with the handling, storage and transportation of
cargo, and enforce the use of personal protective equipment
where conditions require it. Other topics covered by
Panalpina’s health and safety programs include ensuring
that qualified and competent personnel and appropriate
equipment are safely deployed in potentially dangerous
working conditions, enabling fast and appropriate responses
to any sort of emergency situations, and a behavioral
safety program that seeks to reduce incidents and mistakes
caused by human error.
Quality, health, safety and environment in all levels
Employees at all levels of the Panalpina Group are responsible
for upholding the quality, health, safety and environmental
policies, principles, and objectives of Panalpina and
its clients. The Quality, Health, Safety and Environmental
Manager – Panalpina’s global Quality, Health, Safety and
Environment (QHSE) representative – ensures the implementation
and maintenance of all processes needed for
the QHSE system globally and reports the performance of
the system to the Executive Board. Panalpina Management
defines the overall goals of the HSE plan, appoints responsibilities,
provides the authority and necessary resources
for implementation, assesses performance against the
goals, and takes corrective actions as appropriate.
No fatal accidents
In 2012, Panalpina significantly expanded its health and
safety data collection activities as part of its global OHSAS
18001 certification process. In 2012, zero fatal accidents
and 365 nonfatal accidents which required some sort of
Annual Report 2012

Value Creation and Sustainability
Quality, Health, Safety and Environment
33
medical treatment were reported. As part of the Behavioral
Safety Program, employees are also encouraged to report
events with “near misses.” Here, 307 were reported compared
to 73 in the previous year. The significant increase is
attributable to more complete datasets and the inclusion of
many additional facilities in the data collection process.
79 lost time injuries were reported, corresponding to a rate
of 0.55 per 200,000 total working hours. Globally, there are
more than 40 Health, Safety and Environment representatives
in place at Panal pina, who provide guidance and
assistance to the senior management on HSE issues. Internal
audits are performed by more than 100 trained
auditors and 1,665 on-site inspections were carried out in
2012. All areas passed the ongoing surveillance audits completed
by an external certification firm.
Regular audits support performance
In 2012, 220 QHSE internal and external audits were performed
at Panalpina facilities. This willingness to submit to
rigorous assessments of our performance on an ongoing
basis helps to keep all staff members constantly alert to
quality, health, safety and environmental issues. At the
same time, Panalpina will be continuing to enhance its own
skills regarding performing self-audits. While internal audits
can be cumbersome and time consuming, they are an essential
ingredient in effectively managing the wide range of
issues under consideration.
Well-trained employees
Panalpina’s employees are the focal point of all quality,
health, safety and environment initiatives. Therefore their
training is central to the success of these programs. Building
on Panalpina’s culture of training and development,
three new e-learning modules were launched in 2012:
Warehouse Safety, Office Safety and Health at Work. In
addition to this, all Area QHSE Managers around the world
were trained on OHSAS 18001, Work Site In spection, Risk
Assessment and Accident Investigation. Two additional
e-learning modules were deployed in 2012, one focused
on increasing employee awareness of Panal pina’s IMS and
the other regarding Incident Handling Awareness.
Awarded performance
In 2012, Panalpina was recognized with several awards. At
the 8th Annual SCM Logistics World Panalpina was presented
with the coveted Asia Pacific 3PL excellence award. In
the 11th competition of The Logistics Provider of the Year
2012 Panalpina Poland has received the special award of
“basing the supply chain on the most flexible and best quality
service in the air and ocean freight forwarding market.”
Panalpina Houston has achieved the rating of bronze status
under the prestigious global continuous improvement process
called LOGEX. From customer side Johnson & Johnson
Pharmaceuticals honored Panalpina with the prestigious
award as International Provider of the Year and from the
healthcare company Covidien Panalpina was named 2012
Ocean Provider of the Year. The Chinese Construction machinery
manufacturer LiuGong has awarded Panalpina the
Excellent FCL Ocean Freight Forwarder Award, and Panalpina
received again the Logistics Supplier of the Year award
from Huawei.
Environmental initiatives
Panalpina’s global environmental program, PanGreen, continued
its activities in 2012. These initiatives, which ori g-
inate from the Panalpina Executive Board and include all
business units and departments, form the basis for Panalpina’s
ongoing commitment to reducing its environmental
impacts worldwide. PanGreen is organized into four key
areas: ISO certification, internal data collection and monitoring,
supplier outreach, and greenhouse gas calculations.
In addition to this, Panalpina’s efforts are supported by the
Eco-Transport and Eco-Consumption programs. Eco-Transport
is an effort to provide customers with ways that they
can reduce the environmental impacts of the forwarding
and logistics operations that Panalpina performs on their
behalf, in order to continuously reduce and eliminate
releases into the air, water and soil. The primary elements
of this program are:
– Modal Shift, a lower-emission distribution program that
promotes the combined use of alternative transportation
modes with optional shifts from truck to more energy-efficient
modes of transportation, such as rail and vessel;
– Cargo Consolidation, a program for eco-efficient cargo
forwarding established by means of co-loading, joint
delivery, full-load round trips and the efficient use of hubs
and warehouses;
– HazMat (hazardous material) Handling, a program that ensures
compliance with international standards regarding
hazardous material transport, including the ADR (European
Agreement concerning the International Carriage of
Dangerous Goods by Road), the IATA Dangerous Goods
Regulations and the IMDG Code.
Annual Report 2012

34
Value Creation and Sustainability
Quality, Health, Safety and Environment
Eco-Consumption is a portfolio of waste reduction, alternative
resource and other environmental initiatives designed
to promote efficient and environmentally responsible performance
of Panalpina and reinforce a resource-conserving,
reuse-oriented and recycling-based philosophy within
the Company. In the coming years, these programs will be
extended to include Panalpina’s primary subcontractors in
order to understand more fully the various environmental
impacts across its supply chain.
Environmental performance in 2012
Panalpina has established a sophisticated and comprehensive
process for the timely collection of energy, environment,
waste generation and material usage data from
across the organization. By using an enterprise data collection
tool to measure and monitor key environmental data,
the QHSE team is able to monitor a range of data on an annual,
quarterly and monthly basis. Such data includes:
– Electricity consumption
– Fuel consumption
– Heating consumption
– Water consumption
– Spillages
– Business travel
– Paper consumption
– Toner cartridge consumption
Compared to the previous year, total electricity consumption
increased by 3 %, heating energy fell by 27 % and vehicle
fuel consumption fell by 20 %. Overall CO 2 emissions decreased
by 8 %, direct (Scope 1) CO 2 emissions decreased
by 23 % while indirect (Scope 2) emissions, mostly resulting
from the generation of electricity, increased by 4 %. Scope 3
data relevant to business travel by air has been collected
and showed a 15 % decrease over 2011 figures. In 2012,
there were 3.9 tons of CO 2 equivalent emissions per fulltime
equivalent. As discussed above, many of these changes
can be primarily attributed to fluctuations in business
due to the global economic situation, weather and other environmental
factors at Panalpina facilities and the improved
data collection efforts. Panalpina is committed to improving
even further on its environmental monitoring and will
continue to improve the coverage and quality of its data collection
efforts in 2013.
The table on the next page gives an overview of the environmental
performance figures collected in 2012 across Panalpina’s
global internal operations.
In 2012, Panalpina continued its efforts to collect, compile,
and monitor progress against key environmental impact indicators
in a harmonized manner across all countries where
it operates. With this commitment came the realization that
in order to establish robust and credible goals for environmental
performance improvements, it is necessary to have
clear baseline data from which to measure and monitor impacts.
Over the past few years, significant fluctuations in the global
economy have made acquiring clear baseline environmental
performance numbers difficult. However, with the
global economic situation stabilizing, it is expected that
clear and reliable trends will become apparent. In early
2013, Panalpina will establish new corporate-wide goals for
various key performance indicators. These will include
goals for materials (such as paper) consumption, electricity
usage and fuel consumption by Panalpina’s fleet of vehicles.
These goals will form the basis of company-wide
greenhouse gas emission goals.
www.panalpina.com/qhse
Annual Report 2012

Value Creation and Sustainability
Quality, Health, Safety and Environment
35
Energy balance by energy category
Gigajoule
CO2 emission by scope and activity
Tons of CO2 equivalent
280,000
240,000
242,000
40,000
30,000
32,023
200,000
160,000
171,000
25,000
20,000
120,000
80,000
81,000
15,000
10,000
12,362
40,000
5,000
5,297
0
0
Electricity
Heating
Owned vehicles
Electricity
Heating
Owned vehicles
Indirect renewable energy
Indirect energy
Direct energy
Direct CO2 emission (Scope 1)
Indirect CO2 emission (Scope 2)
Activities*
Performance indicator Unit 2012
Energy and CO 2
Electricity Consumption Terajoule 242
Heating Overall consumption Terajoule 81
– District heat Terajoule 9
Vehicle fuel Consumption (Panalpina-owned and lease vehicles only) Terajoule 171
CO 2 emissions** Total emissions Tons 58,756
– Direct (Scope 1) Tons 16,510
– Indirect (Scope 2) Tons 33,172
– Indirect (Scope 3, business air travel) Tons 9,074
Relative emissions per FTE Tons 3.9
Materials
Paper Consumption Tons 1,048
Water Consumption m 3 /1000 366
* For each number, data accuracy from many contributing countries was improved compared to the previous year. There are some locations for which no data
was available. For more details, see the GRI content index.
** CO2 emissions were calculated according to the guidelines of the Greenhouse Gas Protocol. Emission factors for direct emissions were taken from IPCC,
2006. Emission factors for indirect emissions were taken from the International Energy Agency (IEA) and the UKDepartment for Environment, Food and
Rural Affairs (DEFRA). For more details please refer to the GRI content index.
Annual Report 2012

36
Value Creation and Sustainability
Security
Enhanced security systems – To meet rapidly evolving
security challenges, Panalpina deploys a globally
experienced team of security professionals equipped
with state-of-the art tools and well-versed in international
best practices for safe and secure logistics. This is
a crucial component of Panalpina’s efforts to meet the
exacting requirements of its customers and deliver reliable
and secure logistics services in an efficient manner.
In 2012, Panalpina strengthened its supply chain security
efforts through a variety of process and technological enhancements.
These included proactive reviews of contracts
and tender offers for security-related issues, in-depth
supply chain network analyses, and increased scrutiny to
subcontractor management processes. Additionally, Panalpina
introduced updates to its security-focused technology
resources with a new incident management tool that
streamlines the reporting, recording, and tracking of security
incidents on a global basis, while also updating
the Company’s intranet and public websites with valuable
security resources and information. The Company also enhanced
its risk-based approach to security management
by investing in commercial, industry, and governmental security
data resources to ensure its supply chain network,
employees, and customers’ products are safe and secure.
Together these upgrades were aimed at integrating security
into routine business, operational, and marketing/sales
efforts, and are indicative of the commitment Panalpina has
made to state-of-the-art security practices.
Global certifications
This past year, Panalpina maintained, as well as expanded,
its participation and certification in various global government
customs and security programs, which include the
Authorized Economic Operators (AEO) program in Europe,
and the US Department of Homeland Security’s - US Customs
(CBP) Trade Partnership Against Terrorism (C-TPAT),
and US Transportation Security Administration (TSA) cargo
security initiatives. The Company increased the number of
AEO certifications to 16, and continued its track record of
100% screening of cargo shipped via passenger aircraft
from the US through its network of Certified Cargo Screening
Facilities (CCSF) and added X-ray screening capabilities
at three locations.
Department of Homeland Security’s Air Cargo Advanced
Screening (ACAS) pilot program, which targets and preclears
cargo, providing an added layer of supply chain security
by assessing security risks for air cargo to the US. This
acceptance to participate in the pilot will allow Panalpina to
offer feedback to the US Government and assist in steering
future ACAS program developments. Panalpina also continues
to actively participate with industry associations
focused on protecting the supply chain, such as the Pharmaceutical
Cargo Security Coalition (PCSC).
To ensure the Company’s presence and interests are well
served, representatives from Panalpina’s Corporate Security
team presented at industry conferences and participated
in working groups throughout the year with the ACAS
pilot program, the World Economic Forum’s Supply Chain
and Transport Risk Initiative, and at various related industrysponsored
conferences throughout the world.
Cooperations for further improvements
Looking forward, the Panalpina Security team will explore a
wide variety of measures to further expand its capabilities
and services. A central element to this effort is to build
upon existing collaborations with customers and government
entities on enhancing supply chain security using
effective and feasible security approaches. Possible measures
include deploying new technologies to automate
existing risk assessment processes, providing security
updates to training and existing security procedures, and
continued cooperation and engagement with other Pan alpina
functions in supporting the integration of security
consid erations into contract management, customer meetings/negotiations,
operational initiatives, and subcontractor
oversight.
Sharing experience and best practices
Other measures include proactive participation in the US
Annual Report 2012

Corporate Governance and Responsibilities
Social Commitments
37
Corporate responsibility to society – Panalpina honors
its social responsibility at different levels. Panalpina
has supported the Swiss Red Cross Vision First program
for ten years. The program was set up in Ghana to combat
preventable blindness through simple means. On top
of this, Panalpina’s business units are involved in many
local projects.
Regional commitment
Panalpina and its employees seek to make a difference.
Their social commitment takes different forms, ranging
from participation in fundraising drives to volunteer work at
social facilities. A total of 1,600 employees participated in
Earth Hour 2012, organized by the World Wide Fund for
Nature (WWF), and for a full hour switched off all unnecessary
lamps and electronic devices. With its “One Transport,
One Dollar” fundraising campaign, Panalpina China collected
funds to rebuild a school in Gansu province that was
destroyed by an earthquake. The students moved into the
new, earthquake-proof facilities in September 2012. On the
school opening day, the Panalpina employees also surprised
the students with lesson materials they collected.
Ten years of successful partnership
with the Red Cross
In addition to regionally sponsored projects, Panalpina has
been involved in a long-term partnership since 2003 with
the Swiss Red Cross to combat poverty-related blindness
in Northern Ghana. The organizations provide patients
with access to basic eye care treatment, which prevents
blindness in many cases. Cataracts are endemic in Ghana
and throughout the region of West Africa on the southern
edge of the Sahara. Eye disorders are rife due to vitamin
defi ciencies, sandy desert wind and challenging hygienic
con ditions. Poverty, coupled with a shortage of eye care
professionals, makes it difficult for sufferers to find suitable
treatment locally.
Vision First: combating preventable blindness
With its Vision First program, the Red Cross set up 16 eye
clinics in regions where none existed. A mobile team performs
cataract operations in particularly remote villages,
through which vision is restored for around 2,000 blind
people each year. However, prevention is also important.
Towards this end, the program relies on a network of volunteers
who examine school children for early detection of
eye disease. Children with vision impairments receive a pair
of eyeglasses, which enable them to learn to read and write.
In this way, the Red Cross helps make an important contribution
to building a civil society.
Transition to independence
Panalpina’s annual contribution to the Vision First program
runs to CHF 200,000, equivalent to a quarter of the project
costs. Panalpina has been involved throughout its pilot and
on-the-ground implementation phases. The project has
now entered the completion stage. The Swiss Red Cross
will hand over the facilities to the local organization in 2013.
Results of Vision First program
2012
Patients treated 181,966
Operations performed 2,371
Patients issued vision aids 1,395
Clinics/hospitals in operation 16
Persons provided with health education 486,922
Number of project participants
2012
Opticians and ophthalmologists 3
Nurses (trained to treat minor eye disorders) 28
Schoolteachers (with special training in
healthcare issues) 345
Active Red Cross volunteers 1,120
www.panalpina.com/society
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38
Corporate Governance and Responsibilities
Corporate Management
Corporate Governance and Compensation Report –
Panalpina is committed to a transparent management
struc ture that is governed by international principles.
This Corporate Governance Report complies with the
Directive of the SIX Swiss Exchange and therefore provides
investors with according key information. Section 5
of this report also serves as a Compensation Report as
recommended by economiesuisse in its Swiss Code of
Best Practice for Corporate Governance.
1 Group structure and shareholders
1.1 Group structure
1.1.1 Operational group structure
Panalpina’s business activities are primarily regionally
oriented. The operating structure is divided into
the following three regional segments:
– EMEA (Europe, Middle East, Africa and CIS)
– Americas (North, Central and South America)
– Asia Pacific
Secondary, the business activities are subdivided
into the following business segments:
– Air Freight
– Ocean Freight
– Logistics (road, rail and warehousing)
Supplementary information can be taken from the
segmental reporting section of the Consolidated
Financial Statements (pages 89–91).
1.1.2 Listed companies within the scope
of consolidation
Panalpina World Transport (Holding) Ltd. (PWT), the
ultimate holding company of the Panalpina Group, is
the only listed company within the scope of consolidation.
PWT has its registered office in Basel, Switzerland.
The PWT shares are exclusively listed on the
SIX Swiss Exchange. The market capitalization on
the closing date amounted to CHF 2.2 billion
(23,750,000 registered shares at CHF 92.85 per
share).
The PWT shares are traded under Valor no. 216808,
ISIN CH0002168083, symbol PWTN.
1.1.3 Nonlisted companies within the scope
of consolidation
The main subsidiaries and associated companies are
disclosed in the Consolidated Financial Statements
(pages 128–130) itemized by registered office, nominal
capital, equity interest in percent, investment
and method of consolidation.
1.2 Significant shareholders
Major percentage increases/changes are related to
the capital reduction as explained under 2.1.
The Ernst Göhner Foundation, Zug, Switzerland, is
the main shareholder of PWT, with an equity participation
of 45.9 %.
Cevian Capital II Master Fund LP held a share capital
of 11.97 % on closing date. Other significant shareholders
according to their most recent disclosure
notices are Artisan Partners Limited Partnership
(5.28 %) and Bestinver Gestión, S.G. SGIIC (5.32 %).
With regard to other significant shareholders, during
the reporting year no disclosures were made on the
SIX online publication platform.
1.3 Cross-shareholdings
No cross-shareholdings exist between PWT and any
other company.
2 Capital structure
2.1 Capital
On the closing date, the ordinary share capital of
PWT amounted to CHF 2,375,000 and is divided into
23,750,000 registered shares, with a nominal value
of CHF 0.10 each.
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39
2.2 Authorized and conditional share capital
The extraordinary Shareholders’ Meeting of PWT
held on August 23, 2005 agreed with the Board of
Directors’ proposal to create an authorized share
capital up to a maximum aggregate amount of CHF
6,000,000 by issuing a maximum of 3,000,000 registered
shares with a nominal value of CHF 2.00
each. At the Shareholders’ Meeting of May 10, 2011
the authorized share capital was renewed at the
same value until May 2013. At the Shareholders’
Meeting of May 8, 2012, the authorized share capital
was reduced in conjunction with the reduction of the
share capital (see section 2.3 below) to a maximum
aggregate amount of CHF 300,000 by issuing a
maximum of 3,000,000 registered shares with a
nominal value of CHF 0.10 each.
The Board of Directors is authorized to exclude the
preemptive rights of shareholders and to convey
them to third parties, provided that such new shares
are to be used for the takeover of entire enterprises,
divisions or assets of enterprises or participations or
for the financing of such transactions. The Board of
Directors has not yet made use of this authorization.
No decision has been made regarding the creation of
conditional capital.
2.3 Change in capital over the past three years
In August 2007, the Board of Directors initiated a
share buyback program. Under this program, shares
amounting to 5 % of the share capital (1,250,000
shares) have been repurchased. The buyback program
was concluded on September 2, 2008. At the
Annual General Meeting of May 8, 2012, the share
capital was reduced from CHF 50,000,000 to CHF
2,375,000 by way of cancellation of the repurchased
1,250,000 shares and further reduction of the nominal
value per share from CHF 2.00 to CHF 0.10 each.
2.4 Shares and participation certificates
On the closing date, 23,750,000 fully paid-in PWT
registered shares with a nominal value of CHF 0.10
each were issued. On this date, no participation certificates
were issued.
2.5 Dividend-right certificates
On the closing date, no dividend-right certificates
had been issued.
2.6 Limitations on transferability and
nominee registrations
2.6.1 Limitations on transferability for each share
category; indication of statutory group clauses
and rules for granting exceptions
Acquirers of PWT shares are entered into the share
register as shareholders with voting rights upon provision
of proof of the acquisition of the shares and provided
that they expressly declare that they hold the
shares in their own name and for their own account.
The Articles of PWT specify that any shareholder
may exercise voting rights to a maximum of 5 % of the
total number of shares recorded in the commercial
register. This limitation for registration in the share
register shall also apply to persons who hold shares
fully or in part through nominees within the meaning
of the Articles. Furthermore, this limitation for registration
in the share register also applies to registered
shares that are acquired through the exercising
of preemptive rights, warrants and conversion
rights. The Board of Directors is empowered to allow
exemptions from the limitation for registration in the
share register in particular cases.
The Articles make provision for group clauses.
The limitations on transferability do not apply to the
shares held by the Ernst Göhner Foundation because
it held PWT shares prior to the implementation of the
limitations (so-called grandfathering).
2.6.2 Reasons for granting exceptions in the
year under review
No exceptions were granted during the reporting
year.
2.6.3 Admissibility of nominee registrations;
indication of any percent clauses and
registration conditions
The Articles of PWT specify that the Board of Directors
may register nominees with voting rights in the
share register up to a maximum of 2 % of the share
capital recorded in the commercial register. Nominees
are persons who do not expressly declare in
their application that they hold the shares for their
own account and with whom the Company has
entered into an agreement to this effect.
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Corporate Governance and Responsibilities
Corporate Management
The Board of Directors is empowered to register
nominees with voting rights exceeding 2 % of the
share capital recorded in the commercial register as
long as the respective nominees inform PWT of the
names, addresses, nationalities (registered office in
the case of legal entities) and the shareholdings of
those persons for whose account they hold 2 % or
more of the share capital recorded in the commercial
register.
The Articles make provision for group clauses.
2.6.4 Procedure and conditions for cancelling
statutory privileges and limitations on
transferability
A resolution of the General Shareholders Meeting of
PWT on which at least two-thirds of the voting
shares represented agree is required for any abolition
or change of the provisions relating to transfer
limitations.
2.7 Convertible bonds, warrants and options
There were no convertible bonds outstanding on the
closing date.
The only issued options relate to the share and option
participation program (Management Incentive
Plan, MIP) are for currently 511 senior managers of
Panalpina. As of 2009, the Board of Directors and
the Executive Board have been excluded from participation
in this program. As of 2011, the options
under the MIP program have been replaced by a free
share ratio scheme. For further details please refer
to section 5.1.
3 Board of Directors
3.1 Members of the Board of Directors
At the Annual General Meeting of May 8, 2012,
Rudolf W. Hug, Beat Walti, Lars Förberg, Chris E.
Muntwyler, Roger Schmid, Hans-Peter Strodel and
Knud Elmholdt Stubkjær were reelected to the Board
of Directors for a one-year term.
On the closing date, the Board was composed of
seven persons.
Three members of the Board of Directors (Rudolf W.
Hug, Roger Schmid and Beat Walti) are also members
of the Board of Trustees (Stiftungsrat) of PWT’s
main shareholder, the Ernst Göhner Foundation.
Lars Förberg is a member of the Board of Directors
of Cevian Capital, the second-largest PWT shareholder.
The biographies of the members are as follows:
Rudolf W. Hug, Chairman. Swiss citizen. Born in
1944. Reelected in 2012 (until 2013).
Rudolf W. Hug holds a PhD in law from the University
of Zurich and a MBA from INSEAD, Fontainebleau
(France). In 1985, he participated in the Executive
Program of the Graduate School of Business at
Stanford University. From 1977 to 1997, he worked
in several positions for Schweizerische Kreditanstalt
(today Credit Suisse). During the period from 1987 to
1997, he ran the international division and served as
a member of the Executive Board of Credit Suisse
and Credit Suisse First Boston. Since 1998, Rudolf W.
Hug has been active as an independent management
consultant.
Rudolf W. Hug has been a member of the Board of
Directors since 2005 and was appointed Chairman
of the Board of Directors on May 15, 2007 following
the retirement of his predecessor.
Beat Walti, Member of the Board of Directors since
2010. Swiss citizen. Born in 1968. Reelected in 2012
(until 2013).
Beat Walti holds a PhD in law from the University of
Zurich. From 1998 to 2001 he was working as a consultant
and engagement manager with McKinsey &
Company in Zurich. In 2001, he was a co-founder
and project manager of a start-up company in the
healthcare sector. Since 2002, Beat Walti is a lawyer
with Wenger & Vieli in Zurich specializing in corporate,
commercial, contract, competition and antitrust
law. He became partner with Wenger & Vieli in
2007 and is the firm’s managing partner since 2012.
Annual Report 2012

Corporate Governance and Responsibilities
Corporate Management
41
Lars Förberg, Member of the Board of Directors
since 2011. Swedish citizen. Born in 1965. Reelected
2012 (until 2013).
Lars Förberg studied economics in Stockholm and
Michigan and holds a M.Sc. in Economics and Business
Administration from the Stockholm School of
Economics. He started his career as an investment
manager and partner at the private equity company
Nordic Capital in Sweden. At the end of 1997 he
moved to the former AB Custos, one of Sweden’s
largest public limited investment companies, where
he worked until September 2001, most recently as
Chief Investment Officer. Since October 2001, Lars
Förberg has been managing partner in Cevian Capital,
an investment company specializing in public
limited companies, which he cofounded.
Chris E. Muntwyler, Member of the Board of Directors
since 2010. Swiss citizen. Born in 1952.
Reelected in 2012 (until 2013).
Chris E. Muntwyler attended the School of Commerce
in Zurich and completed various executive
programs at Harvard University, IMD in Lausanne
and at the Wharton University. From 1972 to 1999 he
held several positions at Swissair, until 1981 in various
leadership functions in the Marketing Division,
in 1982 as General Manager Marketing and Sales
Scandinavia and from 1986 for North America. In
1990, he took over the responsibility for the global
Price and Distribution Policy and was then leading
the development and introduction of the new Group
IT strategy. Before leaving Swissair at the beginning
of 1999, he was Vice President Global Distribution.
From 1999 to 2008, Chris E. Muntwyler held several
executive positions at DHL Express, in 1999 as Managing
Director Switzerland, in 2002 as Managing
Director Germany, in 2003 as Chief Executive Central
Europe, and in 2005 as Chief Executive United
Kingdom.
Today Chris E. Muntwyler is President and CEO of
the management consulting company Conlogic AG.
Roger Schmid, Member of the Board of Directors
since 2003. Swiss citizen. Born in 1959. Reelected in
2012 (until 2013).
Roger Schmid holds a university degree in law as
well as a PhD in law from the University of Zurich.
From 1991 to 1995, he was Legal Counsel and Director
at Bank Leu (today Credit Suisse). Roger Schmid
works as an Executive Director of the Ernst Göhner
Foundation.
Hans-Peter Strodel, Member of the Board of Directors
since 2010. Swiss citizen. Born in 1943.
Reelected in 2012 (until 2013).
Hans-Peter Strodel holds a PhD in economics from
the University of St. Gallen. From 1969 until 1974 he
was an executive assistant at Maschinenfabrik Benninger
und Heberlein AG. From 1975 until 1994, he
held several positions at the Oerlikon-Bührle Group,
in 1975 as Head of Planning and Marketing in Italy,
and from 1980 as Head of Finance at Werkzeugmaschinenfabrik
Oerlikon-Bührle AG and Oerlikon-Contraves.
From 1995 until 2008, Hans-Peter Strodel
was CFO at Schweizerische Post.
Knud Elmholdt Stubkjær, Member of the Board of
Directors since 2011. Danish citizen. Born in 1956.
Reelected in 2012 (until 2013).
Knud Elmholdt Stubkjær holds a shipping degree
from the Mærsk International Shipping Academy,
supplemented with various executive programs, e.g.
from IMD and INSEAD. From 1977 through 2007, he
held various positions within the A.P. Møller-Mærsk
Group, including a number of postings in Asian and
European countries. This included positions as Head
of Mærsk Line United Kingdom, President of Mærsk
K.K. Japan, CEO A.P. Møller-Mærsk Singapore and
Regional Manager A.P. Møller Group Asia/Oceania/
Middle East. In 1999, he became Head of Mærsk
container business worldwide, based in Copenhagen,
and the same year became one of five partner
in the A.P. Møller-Mærsk Group. In 2008, he became
partner in the E.R. Capital Holding Group in Hamburg,
serving as CEO of one of its subsidiaries,
E.R. Schiffahrt GmbH, a leading maritime service
pro vider within container, bulk and offshore shipping.
Since July 30, 2012, Knud Elmholdt Stubkjær
is acting as CEO and CSO of Carrix Inc., Seattle,
Washington.
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42
Corporate Governance and Responsibilities
Corporate Management
All the members of the Board are nonexecutive
members and do not actively perform any managerial
functions at PWT or any of the Group companies.
Nor have they held any executive positions within
the past three years prior to this reporting year.
None of the members of the Board of Directors has a
substantial business relationship with PWT or any of
its group companies.
3.2 Other activities and vested interests
Rudolf W. Hug, Member of the Board of Trustees
(Stiftungsrat) of the Ernst Göhner Foundation,
Zug (Switzerland), Vice Chairman of the Board of
Di rectors of Deutsche Bank (Schweiz) AG, Geneva
(Switzerland) and Member of the Board of Directors
of Allreal Holding AG, Baar (Switzerland).
Beat Walti, Chairman of the Board of Trustees of the
Ernst Göhner Foundation, Zug (Switzerland).
Lars Förberg, Chairman of the Board of Directors
of Cevian Capital AG, Pfäffikon (Switzerland), member
of the Board of Directors of Cevian Capital Ltd.,
Jersey (Channel Islands) and Alent plc., Woking
(UK), and member of the Nomination Committees of
Metso, Helsinki (Finland), Tieto, Helsinki (Finland),
Volvo, Gothenburg (Sweden).
Chris E. Muntwyler, Member of the Board of Di rectors
of Austrian Post in Vienna (Austria) and of National
Express Group PLC, London (United Kingdom).
Roger Schmid, Member of the Board of Trustees
and Executive Director of the Ernst Göhner Foundation,
Zug (Switzerland).
Hans-Peter Strodel, Member of the Board of Directors
of Skyguide, Meyrin (Switzerland).
Knud Elmholdt Stubkjær, Member of the Board of
Directors of Unifeeder A/S, Aarhus (Denmark).
Other than these, the members of the Board of
Directors do not hold other material offices, nor
do they carry out any other principal activities that
affect the Group.
3.3 Elections and terms of office
3.3.1 Principles of the election procedure and
limitations on the terms of office
The Articles of PWT do not make provision for the
general renewal of office for the Board of Directors.
The members of the Board of Directors are elected
at each General Meeting of Shareholders with a oneyear
period of office. They may be reelected at any
time. The Organizational Regulations of PWT specify
an age limit of 72 years for the members of the Board
of Directors.
3.3.2 The first election and remaining term of office
for each member of the Board of Directors
The timing of the first election and the remaining
term of office for each member of the Board of Directors
is specified under section 3.1.
3.4 Internal organizational structure
The Board of Directors is responsible for the ultimate
management of the Company and monitoring of the
Executive Board. It represents the Company externally
and is responsible for all matters which have
not been transferred to another executive body of
the Company by the Swiss Code of Obligations or
the Articles. In line with the Articles, the Board of Directors
has established Organizational Regulations
that transfer certain management responsibilities to
the Executive Board.
3.4.1 Allocation of tasks within the Board of Directors
The Board of Directors self-constitutes and appoints
its Chairman and Vice Chairman. The Chairman (in
his absence the Vice Chairman) directly supervises
the business affairs and activities of the Executive
Board and is entitled to regularly attend Executive
Board meetings. The Corporate Auditor as well as
the Corporate Secretary, in his capacity as secretary
to the Board of Directors, are directly subordinated
to the Chairman of the Board of Directors.
3.4.2 Member list, tasks and areas of responsibility
for each committee of the Board of Directors
Three committees exist under the Board of Directors.
The Audit Committee consists of the following members
of the Board of Directors: Hans-Peter Strodel
(Chairman), Lars Förberg and Roger Schmid. The Au-
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Corporate Governance and Responsibilities
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43
dit Committee supports the Board of Directors with
the review of the Company’s financial statements, the
supervision of the financial accounting standards and
reporting, the review of the effectiveness of the Internal
Control System and with the efficiency of external
and internal audit procedures, including risk management.
The Audit Committee reviews the consolidated
annual financial statements as well as the published
interim financial statements and submits an application
to the Board of Directors for approval. It regularly
maintains contact with the Group Auditors and the
Corporate Auditor. On this basis, it adopts the detailed
reports of the Group Auditors and semi-annual
reports of Corporate Audit. It is therefore in the position
to audit the quality, effectiveness and interaction
between the control systems, to determine the audit
priorities, to introduce proposed measures and to
monitor their implementation. The Audit Committee
determines the organization of Corporate Audit,
adopts the internal audit charter and approves the annual
planning and scope of internal audit.
In the field of risk management, the Audit Committee
approves the detailed and weighted risk map of
the Executive Board, adopts the necessary measures
for risk control and risk mitigation and reports
the respective outcome to the Board of Directors on
a yearly basis. The risk map itself covers any strategic,
financial, operational, legal and compliance risks
that could significantly impact the Company’s ability
to achieve its business goals and financial targets.
Identified risks are weighted and prioritized by the
Executive Board according to their significance and
likelihood of occurrence. For each risk, specific risk
mitigation measures – including their current status
– are defined and responsibilities are allocated. The
risk map, which is compiled by the Risk Review Committee,
chaired by the Corporate Secretary, for review
by the Executive Board and subsequent approval
by the Audit Committee, contains risks identified
and assessed by the respective corporate functions,
Regional management, Corporate Audit and the
Group Auditors. The Group’s key risks are annually
reported to the Board of Directors.
During the reporting year the Audit Committee held
five half day meetings. During Audit Committee
meetings, direct discussions took place with representatives
of the Group Auditors and Corporate
Audit. Representatives from the Group Auditors
were present at three of these meetings and the
Corporate Auditor (being a permanent participant at
the Audit Committee Meeting since August 2010)
attended all of the above-mentioned meetings. At
these meetings, the Executive Board was regularly
represented by the CEO, the CFO/interim CFO and
the Corporate Secretary.
The Compensation and Nomination Committee consists
of the following members of the Board of Directors:
Rudolf W. Hug (Chairman), Chris E. Muntwyler
and Knud Elmholdt Stubkjær. It monitors the selection
process for members of the Board of Directors,
the Executive Board and other selected senior management
positions, determines the overall remuneration
and terms of employment for members of the
Board of Directors and the Executive Board as well
as remuneration bands for highly compensated employees.
Regarding the compensation of the members
of the Executive Board (overall remuneration,
including target bonus), the Committee makes a decision
subject to the final approval of the Board of
Directors; applications for the compensation of the
Board members are decided by the Committee and
shared with the Board of Directors. Each year the
Committee decides on the bonus compensation for
the CEO and the other members of the Executive
Board for the previous year, based on recommendations
of the Chairman (for the CEO) and the CEO (for
other Executive Board members). Furthermore, the
Committee regularly reviews the Board Stock Award
Plan, the Executive Board Mid-Term and Long-Term
Incentive plans and the Group’s Management Incentive
Plan and submits proposals for final approval to
the Board of Directors. Moreover, it approves concepts
and policies for the Group’s management performance
assessment, succession planning and expat
programs.
During the reporting year, the Compensation and
Nomination Committee held three meetings of approximately
two hours each and two telephone conferences.
The Executive Board was regularly represented
at these meetings by the CEO, the Chief HR
Officer and the Corporate Secretary.
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The Ethics and Compliance Committee (former Legal
and Compliance Committee) consists of the following
members of the Board of Directors: Rudolf W.
Hug (Chairman), Roger Schmid and Beat Walti. It
oversees the Company’s Business Ethics Program
and monitors Panalpina’s adherence to both, the
Deferred Prosecution Agreement (DPA) with the US
Department of Justice and the Administrative Agreement
with the US Department of the Air Force. It
further monitors the handling of major legal matters,
including the pending anti-trust investigations and
related proceedings as well as the development of
the Company’s compliance policies and procedures.
During the reporting year, the Committee has held
four meetings and two telephone conferences. The
Executive Board was represented at these meetings
by the CEO and the Corporate Secretary.
The Committees generally meet prior to Board of
Directors meetings. The chairmen of the committees
inform and update the Board of Directors on the topics
discussed and decisions made during such meetings.
They submit proposals for approval related to
decisions that fall within the scope of the Board of
Directors.
Objectives, organization, duties and the cooperation
with the Board of Directors are defined in the Terms
of Reference of the respective committees which are
reviewed and adopted by the Board of Directors.
The overall responsibility of the Board of Directors
is not affected by these committees.
3.4.3 Working methods of the Board of Directors
and its committees
During the reporting year, the Board of Directors
held three full-day meetings, one two-day meeting
and one telephone conference. The Executive Board
was represented by all its members at these meetings.
In urgent cases, telephone conferences are
organized in order for decisions to be taken.
At every meeting, the Executive Board updates the
Board of Directors on business and key financial
developments and main regional and segment developments.
On a quarterly basis, detailed consolidated
financial statements on the Group, regional and business
segment levels are reported to the Board of Directors
in accordance with International Financial
Reporting Standards (IFRS). The Board of Directors
is furnished in time with an agenda, detailed meeting
documentation related to topics on the agenda and
minutes.
3.5 Definition of areas of responsibility
In line with the law and the Articles, the Board of Directors
has transferred the responsibility to develop
and implement the Group strategy, as well as the
responsibility to supervise business and financial
development of the Group’s subsidiaries, to the
Executive Board.
The Organizational Regulations adopted by the
Board of Directors govern the cooperation between
the Board of Directors, the Chairman and the Executive
Board. They contain a detailed catalogue of duties
and competencies which determine the financial
thresholds within which the Board of Directors and
the Executive Board can efficiently execute their daily
business. The Organizational Regulations, which
are accessible on Panalpina’s website, also outline
the reporting duties of the Executive Board on Group
and Holding level.
The main responsibilities of the Board of Directors
on Group level include the determination of the business
strategy on the basis of the proposals of the Executive
Board, the approval of major Group policies
and organizational structures, including topics related
to Corporate Governance and Compliance, the
approval of the annual operational and investment
budgets, the approval of any extraordinary addi tional
investment applications as well as financial planning.
Further responsibilities include decisions regarding
mergers and acquisitions and major human resources
and remuneration decisions following recommendations
and preparatory work of its Compensation
and Nomination Committee.
3.6 Information and control instruments vis-à-vis
the senior management
The Executive Board informs the Board of Directors
of business developments in a written format on a
monthly basis and a detailed update is provided at
each Board of Directors meeting. Elements of this
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reporting include monthly financial reports, consolidated
quarterly regional and business segment
results according to IFRS (with actual figures, previous
years’ figures, quarter results and budget figures
as well as a comparison with the financial guidance),
the reporting of business development in all regions
and business segments (including focus on problematic
organizations), the development of shipments,
volumes and tonnages, the debtors’ and creditors’
reports (including DSO and DPO) as well as the net
working capital.
Further information regarding personnel and organizational
changes, extraordinary events and the
activities of analysts, investors and competitors
form part of the regular reporting. Moreover, the
Board of Directors annually reviews and approves
the Group’s targets for the individual regions and
business segments and adopts the respective report
of the Executive Board.
During the reporting year, the Chairman of the Board
of Directors partly attended four Executive Board
meetings and regularly receives the minutes of the
Executive Board meetings. The members of the
Executive Board regularly join meetings of the Board
of Directors. In addition, individual senior executives
attend specific topic discussions pertaining to their
particular field of expertise when required. Furthermore,
specific meetings of the Board of Directors
are dedicated to a detailed review of major markets,
business segments and the Group’s strategy according
to predefined schedule. For further details please
refer to sections 3.4.2 and 3.4.3.
The Audit Committee of the Board of Directors monitors
and assesses the activities of the Corporate
Auditor as well as his cooperation with the Group
Auditors.
The Audit Committee receives the Corporate Auditor’s
half-year reports and also adopts the comprehensive
annual risk map of the Executive Board. The
Audit Committee approves the proposed risk control
and risk mitigation measures as well as the annual
planning and scope of the internal audit, which is
also based on the Risk Map. For further details
please refer to section 3.4.2.
4 Executive Board
4.1 Members of the Executive Board
On the closing date, the Executive Board was composed
of five persons.
Monika Ribar, Chief Executive Officer, ad interim
CFO (August 1 until December 31, 2012), Swiss citizen.
Born in 1959. Member of the Executive Board
since 2000 and CEO since October 2006. Apart
from her CEO function, Monika Ribar has special
responsibilities for Corporate and Regional Development,
Agent Relations, Corporate Ethics and
Compliance, Corporate Information Technology (as
of August 1, 2012), Corporate Communications and
Panprojects.
Monika Ribar joined the Group in 1991. She held
several positions within the Group’s controlling, IT
and global project management departments. From
2000 to 2005, she held the position of the CIO
(Chief Information Officer) of the Group and was
member of the Executive Board. In 2005, Monika
Ribar was appointed as CFO of the Group and her
appointment as CEO was announced in June 2006.
She officially took office as CEO in October 2006.
She holds a university degree in Finance and Controlling
from the University of St. Gallen. She participated
in the Executive Program of the Graduate
School of Business at Stanford University, Palo Alto,
California in 1999.
Marco Gadola, Chief Financial Officer until July 31,
2012, Swiss citizen. Born in 1963. Joined Panalpina
as a member of the Executive Board in September
2008. Responsible for Corporate Finance, Controlling,
Investor Relations, Strategic Finance and
Projects, Indirect Purchasing and Information
Technology. As of August 1, 2012 Marco Gadola has
taken over the role of Regional CEO Asia Pacific.
Marco Gadola is a finance and economics expert
with many years’ experience in international companies.
Before joining Panalpina he was Group CFO
and Executive Vice President Operations of Straumann
Holding, a world-leading Swiss-based dental
and oral technology company; prior to that he was
Group CFO of the Swiss-based international con-
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sumer foods company Hero. He also held leading
management positions at the Hilti Group, which
manufactures and sells products for the construction
and building industries. Furthermore, both at
Straumann and at Hero Marco Gadola oversaw production,
logistics, investor relations and information
technology worldwide, and played a leading part in
the acquisition and integration of companies. Marco
Gadola has a Masters Degree in Business Administration
and Economics from the University of Basel
(Switzerland). He also completed the Accelerated
Management Development Program at the London
School of Economics.
Christoph Hess, Chief Legal Officer and Corporate
Secretary, Swiss citizen. Born in 1955. Member of
the Executive Board since October 2006. Responsible
for Corporate Legal Services and Insurance.
Christoph Hess joined the Group’s head office in
1994 as Secretary of the Board of Directors and the
Executive Board. In this capacity he also manages
both the Group’s Legal and Insurance departments.
He also managed Corporate Communications until
August 2008. Christoph Hess holds a degree in law
from the University of Basel and has been admitted
to the bar in Switzerland.
Alastair Robertson, Chief Human Resources Officer,
British citizen. Born in 1960. Member of the
Executive Board since April 2008. Responsible for
Human Resources.
Alastair Robertson joined the Group in 2007 as Head
of Global Human Resources. Before joining Panalpina,
he had been a Vice President at Tetra Pak since
1996, where he held various positions in the field of
Human Resources: between 1999 and 2001 as Vice
President Human Resources Americas and from
2002 to 2004 as Vice President Human Resources
Europe and Africa. From 1992 to 1996, he worked for
W.H. Smith in the field of Personnel, Development
and Training and between 1989 and 1992 he was
with Graham Builders Merchants as Manager Human
Resources Management, Training and Development.
He previously served in the military, where he attained
the rank of major and served in numerous
countries. Alastair Robertson holds an MBA in Strategy
and Marketing from the University of Huddersfield,
Bradford (United Kingdom). He also attended
the Royal School of Military Engineering and the
Royal Military Academy in the United Kingdom.
Karl Weyeneth, Chief Operating Officer, Swiss citizen.
Born in 1964. Member of the Executive Board
since April 2008. Responsible for Air Freight, Ocean
Freight, Logistics, Marketing and Sales, Quality and
Operations Transformation.
Karl Weyeneth joined the Group in 2007 as Regional
CEO for North America, where he was responsible
for the development and results of the subsidiaries
in USA and Canada. He is a professional with profound
leadership and management experience in
logistics, including freight management, 3PL and
contract logistics. Before joining Panalpina, he was
President and CEO Americas of Hellmann Worldwide
Logistics, Inc. (USA) and prior to this he was Executive
Vice President and CFO of Danzas Management
Latin America (USA), where he attained profound experience
in all finance matters. He holds a Bachelor
in Economics and Business Administration from the
University of Berne, Switzerland.
4.2 Other activities and vested interests
Monika Ribar: Member of the Board of Directors
of Logitech International SA, Romanel/Morges
(Switzerland), Sika AG, Baar (Switzerland) and Swiss
International Air Lines AG, Basel (Switzerland).
Marco Gadola: Member of the Board of Directors of
Calida Holding AG, Sursee (Switzerland).
4.3 Management contracts
No management contracts exist with any third party
outside the Group.
5 Compensation, shareholdings
and loans
5.1 Content and method of determining the compensation
and the share-ownership programs
The compensation and principles governing the
Board of Directors Stock Award Plan, the Executive
Board and Executive Committee mid- and long-term
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incentive plans and the Management Incentive Plan
for other senior management (excluding the Executive
Board and Executive Committee) are determined
and approved by the Board of Directors based
on the proposal of the Compensation and Nomination
Committee. Further, the Committee regularly
updates the Board of Directors during the Board of
Directors meetings, applies for changes in the remuneration
system as required and annually reports the
bonus allocation of individual Executive Board members.
Members of the Executive Board do not attend
respective discussions regarding decisions related
to their own remuneration.
Remuneration of Executive Board members is
benchmarked against regular market data surveys
compiled through leading Executive Compensation
consultants. The benchmark custom peer group is
consisting of some of Panalpina’s main competitors
completed with some Swiss multinational companies
with comparable size and geographical network
reach in order to make the sample substantial
enough.
The members of the Board of Directors receive a
fixed annual compensation. Moreover and introduced
in 2009, part of each Board member’s remuneration
is in free shares of the Company to the
value of CHF 50,000. The corresponding number of
shares is based on the share’s closing price on April
30, and has a one-year restriction period.
The salary package for the members of the Executive
Board consists of a fixed basic salary, lump sum vehicle
and general expense allowances, additional
pension contributions and a target bonus. 50 % of the
target bonus depends on budgeted Group EBITDA
and the achievement of the external financial guidance
for the respective business year, whereas 50 %
depends on the achievement of measurable individual
performance targets. Individual performance
targets are defined for the CEO by the Chairman and
for other Executive Board members by the CEO.
Each Executive Board member is subject to a formal
performance appraisal process. For each reporting
year, performance targets are jointly determined and
a year-end performance assessment is carried out.
The maximum target bonus of the CEO equals 100 %
of the annual basic salary, whereas maximum target
bonuses of other Executive Board members equal
between 67 % and 80 % of their respective annual
basic salaries depending on their function. Bonus
payments are cut if the respective Group or individual
performance targets have not been reached.
The Compensation and Nomination Committee
annually reports to the Board of Directors on bonus
payments to the members of the Executive Board.
In 2009, the bonus scheme for Executive Board
members was adjusted to focus on the Company’s
sustainable mid- and long-term success. Only 60 %
of the bonuses – which continue to be set by the
achievement of annually reviewed Group KPIs and individual
performance targets as outlined above – are
paid out in cash, whereas the remainder is converted
into PWTN shares with a one-year restriction period.
The applicable share price for such deferred bonus
shares is the PWTN closing price on April 30, in the
first year of a three-year cycle (2012 to 2014) which
was CHF 88.50. The deferred bonus share price will
thus be redefined on April 30, 2015. In addition, the
number of such allocated deferred bonus shares
is matched by the Company after twelve months
(qualifying period during which the Executive Board
member must remain with the Company) with a free
PWTN share award which also has a one-year
restriction period.
Furthermore, each Executive Board member is participating
in a Long-Term Incentive Plan Pool which
rewards long-term value creation measured by economic
profit. Under this plan, each year (as of 2009)
5 % of the year on year change in economic profit is
added to the pool, whereas negative economic profit
is deducted from the pool. At the end of a five-year
plan cycle (2013) each Executive Board member is
entitled to be paid out in cash an equal share of such
pool. Vesting of this plan occurs after three years at
25 %, after four years at 50 % and 100 % after five
years.
Due to the introduction of a new share program for
the members of the Board of Directors and the Executive
Board in 2009, neither the members of the
Board of Directors nor the members of the Executive
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Board are eligible to participate in the Company’s
Management Incentive Plan.
Employment agreements with Executive Board members
stipulate a notice period (in case of termination
by the Company) of twelve months. They do not contain
“golden parachutes” in case of a change of control
nor severance payments after termination of
employment.
Further information related to both overall and individual
remuneration of the Board of Directors and
Executive Board members as well as shares and
options held by these persons at the closing date
including a comparison with the previous year are
reflected in the audited Notes to the Consolidated
Financial Statements (pages 94–99 and 122–124)
according to article 663b bis of the Swiss Code of
Obligations.
Total remuneration of the Board of Directors decreased
compared to the previous year due to the
fact that the Restricted Stock Award was not applied
for business year 2012.
In the reporting year overall remuneration of the
CEO decreased due to the bonus cut and also compensation
for the other Executive Board members
significantly declined compared to the previous year
due to reduced bonus/share based payments as a
result of missed financial targets. Further a former
Executive Board member has taken over a new position
during the reporting year which also impacted
annual salaries.
6 Shareholders’ participation
6.1 Voting rights and representation restrictions
Each share carries one vote at the General Meeting
of Shareholders. The Articles state that when exercising
voting rights, no shareholder may directly or
indirectly represent more than 5 % of the total shares
issued by the Company for own and represented
shares.
The Articles provide for group clauses.
The voting right restrictions are not applicable to
representatives of the corporate body (Organvertreter)
as well as the independent proxy holder of
voting rights (unabhängiger Stimmrechtsvertreter).
In order to facilitate the exercise of voting rights of
deposited shares, the Board of Directors is entitled
to enter into agreements with banks which deviate
from the voting restrictions.
The voting restrictions do not apply to the shares
held by the Ernst Göhner Foundation, because it
held PWT shares prior to the introduction of the voting
restrictions (grandfathering).
Any abolition or change of the provisions relating to
the restrictions on voting rights requires a resolution
of the General Meeting of Shareholders on which at
least two-thirds of the voting shares represented
agree.
A written proxy entitles a shareholder to be represented
at the General Meeting of Shareholders by
his or her legal representative, or by another shareholder
with the right to vote, or by the representative
of the corporate body (Organvertreter), or by the independent
proxy holder of voting rights (unabhängiger
Stimmrechtsvertreter) or by the proxy holder of
deposited shares (Depotvertreter).
6.2 Statutory quorums
In principle, the legal rules on quorums apply. Supplementary
to the quorums legally listed, a twothirds
majority of the shares represented at the General
Meeting of Shareholders is required for the
following resolutions:
– any abolition or change of the provisions relating to
transfer restrictions;
– any abolition or change of the provisions relating to
the restriction of voting rights;
– the transformation of registered shares into bearer
shares;
– the dissolution of the Company by way of liquidation;
– the removal of two or more members of the Board
of Directors;
– the abolition of the respective provision in the Articles
as well as the repeal or relief of the stated
quorum. A resolution to increase the quorum as
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set forth in the Articles must be based on the
consent of the increased quorum.
6.3 Convocation of the General Meeting
of Shareholders
There are no provisions deviating from the law.
6.4 Agenda
Shareholders who individually or together with other
shareholders represent shares in the nominal value
of CHF 1 million or at least 10 % of the ordinary share
capital may request that an item be placed on the
agenda. Such a request must be made in writing to
PWT at least 60 days prior to the General Meeting of
Shareholders.
6.5 Inscriptions into the share register
Registered shares can only be represented by shareholders
(or nominees) who have been entered into
the PWT share register. Shareholders (or registered
nominees) who cannot personally attend the General
Meeting of Shareholders are entitled to nominate
a representative according to the provisions in the
Articles, who represents them by written proxy.
For the purpose of determining voting rights, the
share register is closed for registration from the date
upon which the General Meeting of Shareholders
has been called (date of invitation) until the day after
the General Meeting of Shareholders has taken
place.
7 Changes of control and defense
measures
7.1 Duty to make an offer
No opting-out or opting-up provisions exist.
7.2 Clauses on changes of control
Neither the contracts of the members of the Board
of Directors nor of the Executive Board have a
change-of-control clause.
8 Auditors
8.1 Duration of the mandate and term of office of
the lead auditor
The mandate to act as statutory and Group Auditors
is assumed by KPMG, Zurich on a yearly basis. The
lead auditor, Regula Wallimann, took up office on
May 6, 2008 for a seven-year term.
8.2 Auditing fees
According to financial accounting, invoices for auditing
fees for the financial year amounted to CHF
3,396,000. Further KPMG invoiced CHF 61,000 for
audit-related services.
8.3 Additional fees
The auditors KPMG were compensated with an additional
amount of CHF 962,000 for further services
rendered in the financial year. KPMG was mandated
in the reporting year in particular for tax consulting
(CHF 868,000) and other non-audit related work
(CHF 94,000).
8.4 Informational instruments pertaining to
the external audit
The Group Auditors are supervised and controlled by
the Audit Committee. The Group Auditors report to
the Audit Committee and periodically the auditors
participates in the meetings. During these meetings,
the Group Auditors present a detailed audit plan for
the current year including risk-based audit priorities,
the audit scope, proposals regarding audit fees, organization
and timing as well as updates and status of
the results of the Internal Control System. In subsequent
meetings they present interim audit findings
with respective statements and recommendations
later followed by a detailed audit report. Presentations
also contain references to upcoming changes
in legislation and IFRS. The main criteria for the
selection of Group Auditors include independence,
network capabilities, industry and IT experience of
the audit team, a risk-based audit approach, a central
process management as well as the integration
of Corporate Audit and risk management functions.
The Audit Committee annually assesses the performance
of the Group Auditors and determines the
audit fees (refer to section 3.5).
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9 Information policy
Panalpina regularly updates its website at www.
panal pina.com, informing the public of any major
events, organizational changes and (quarterly) financial
results. Press releases are accessible to all
visitors to the website; alternatively, subscriptions
can be made so that the latest press releases are
automa tically forwarded via e-mail. Furthermore, all
publications such as the Annual Report (including
the Corporate Governance and Compensation Report),
customer magazine and sales brochures are
available online. The dates of the General Meeting of
Shareholders as well as dates of publication of the
quarterly financial results are printed in the Annual
Report and appear in the Financial Calendar on the
website (under Investor Relations). The minutes of
shareholder meetings are available online.
www.panalpina.com/corpgov
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51
Group Management Structure
Corporate Audit
Board of Directors
Chairman Rudolf W. Hug
Vice Chairman Beat Walti
Lars Förberg, Chris E. Muntwyler, Roger Schmid,
Hans-Peter Strodel, Knud Elmholdt Stubkjær
Compensation and
Nomination Committee
Audit Committee
Ethics and Compliance
Committee
Chief Executive Officer
Monika Ribar
Corporate Development,
Agent Relations
Corporate Communications
Corporate Information
Technology
Corporate Ethics
and Compliance
Chief Operating Officer
Karl Weyeneth
Chief Financial Officer
Marco Gadola (until 31/7/12)
Monika Ribar (until 31/12/12)
Rober t Er ni (since 1/1/13)
Chief Human Resources
Officer
Alastair Robertson
Chief Legal Officer /
Corporate Secretary
Christoph Hess
Air Freight
Corporate Accounting
HR Processes and Projects
Corporate Legal Services
Ocean Freight
Logistics
Marketing and Sales
Quality and Operations
Transformation
Corporate Taxes
Corporate Controlling
Investor Relations
Indirect Purchasing
Strategic Finance
and Projects
International Compensation
and Benefits
HR Operations
Capability Development
and PanAcademy
Corporate Insurance
Management
Group Treasury
Regions
Panprojects
www.panalpina.com/organization
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A Passion for Solutions
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In the increasingly connected and globalized economy, it
is no longer enough to deliver the right goods at the right
time and in the right place. That is why Panalpina goes
far beyond the industry standard. Three things make
Panalpina into one of the world’s most advanced lo gistics
service providers: first, the consulting skills of
Panalpina’s staff in its globe-spanning network with
unique tools and technology for efficiency enhancement
throughout the entire value chain; second, its customized
value-adding logistics services, and third, its assetlight
strategy in the freight business.
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Overview Panalpina solutions
A global network, presence in over 80 countries,
customer-oriented industry know-how,
local experts and a “passion for solutions”: these
form the core of Panalpina’s market services.
Supply chain services
A think tank for customers. Value chain diagnoses
and analyses with an evaluation of improvement
potential for direct and indirect costs. Use
of the latest technologies and innovative tools for
the improvement of processes and structures.
What’s more, skilled customer- and industryoriented
consultation as a distinctive feature of
Panalpina’s market services.
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Industry verticals
Expertise through focussing. Panalpina concentrates
its industry know-how on nine clearly defined
core industries: Automotive, Consumer and
Retail, Fashion, Chemicals, Hi-tech, Manufacturing,
Oil and Gas, and Telecom. It brings together
customers’ industry experts with those at Panalpina
in the process.
Value-added logistics services
Warehouse, inbound, packaging, production, distribution
and after-sales services customized to
meet industry, production and customer requirements:
here is where optimization potential is
realized for the customer and added value generated,
so that the customer can concentrate on
the core business that leads to success.
Air and ocean freight
Air and ocean freight including overland transport,
industry projects and standard warehousing:
Panalpina combines a global logistics network
with value-generating logistics services.
With the proven collaboration of best-of-class
partners and its own air freight network, Panalpina
offers available capacities at any time and at
the best conditions. Panalpina is, and makes its
customers flexible: globally, regionally and locally.
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Far more than logistics
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58
A Passion for Solutions
Far more than logistics
Beyond Logistics
The aim of any company that uses logistics services is
to achieve delivery reliability with maximum efficiency
and profitability. The outsourcing of non-core business
activities is growing increasingly important in the course
of the global networking of markets and ongoing globalization.
Success comes to those who can respond
quickly, in a focussed manner and with lean structures.
That is precisely where Panalpina focuses: with its supply
chain services for optimization of the value chain. With
industry-specific know-how and innovative diagnosis
tools, Panalpina provides comprehensive insights into
the entire delivery chain process and cost structure,
identifies the optimization potential and then develops
customized solutions for its customers. The result:
lean processes and maximum value creation through the
understanding of customer needs and industries, but
most of all, through the expertise of its staff. Panalpina is
logistics, supported by people who are passionate and
enthusiastic.
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20 % lower
costs
These are the average cost-savings achieved
through implementation of the optimization scenarios
identified through the end-to-end diagnosis
of the value chain. With Panalpina Supply
Chain Services, logistics become not only more
efficient, but also measurably less expensive.
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Far more than service
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A Passion for Solutions
Far more than service
Industry and more
Panalpina offers customized and market-specific logistical
value-added services to its customers worldwide for
the optimization of process and cost efficiencies.
From complex warehousing to value-generating services
such as repacking, kitting, assembly, packaging, controlling,
returns and spare parts handling to door-to-door
transport via air or ocean freight. In addition, Panalpina
offers a comprehensive IT platform for planning and cargo
flow management with real-time traceability and 3D
models of warehouses. In this way, Panalpina ensures
high merchandise circulation and low storage costs.
Panalpina’s logistics value-added services provide enhanced
efficiency, greater transparency, shorter time-tomarket
and optimized operating costs. These are market
advantages that can be decisive for customers.
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A Passion for Solutions
Far more than service
63
New Jersey
Prague
Everywhere
and anytime
Buenos Aires
Singapore
Panalpina customers profit from valued-added logistics
services thanks to the proven experts in the
Panalpina Competence Centers for Logistics, which
are situated in strategically important locations
around the globe.
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64
Far more than freight
Annual Report 2012

Annual Report 2012
65

66
A Passion for Solutions
Far more than freight
Freight and more
Panalpina is the world’s fourth-largest ocean and air
freight service provider. Whether air or ocean freight, a
combination of both or supplemented with road or rail
cargo, Panalpina offers the right transport solution:
time-, cost-, industry- and needs-oriented.
Punctuality, security and efficiency are our top priorities.
Customized services ensure comprehensive flexibility.
Full, less than, or non-container load, door-to-door, portto-port,
airport-door deliveries are all options that optimize
the ratio between transport time and costs. Added
to this are services to cover all the necessary formalities
and, last but not least, everything that valuable, temperature-sensitive,
dangerous, sensitive or oversized goods
need in terms of special handling. Panalpina focuses on
nine industry segments with experts who are specialized
in those areas to undertake the most complex assignments:
we understand our customers because we understand
both their business and ours, and can combine the
best state-of-art practices on both sides.
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A Passion for Solutions
Far more than freight
67
More freight,
less fuel
Panalpina’s two new Boeing 747-8F are among
today’s most advanced cargo planes. Despite
their larger freight capacity, they feature the lowest
fuel usage in their class and are far quieter:
their noise footprint is 30 % smaller. The two cargo
planes represent an additional element of the
PanGreen program, which is aimed at a continuous
reduction of the environmental impact of the
entire operation.
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68
Financial Report
Consolidated Financial Statements 2012
Annual Report 2012

Financial Report
Consolidated Financial Statements
69
Consolidated Income Statement 70
Consolidated Statement of Comprehensive Income 71
Consolidated Statement of Financial Position 72
Consolidated Statement of Changes in Equity 73
Consolidated Statement of Cash Flows 75
Notes to the Consolidated Financial Statements 76
Principal Group Companies and Participations 128
Report of the Group Auditor 131
Key Figures in CHF (five-year review) 132
Consolidated Statement of Financial Position in CHF (five-year review) 134
Key Figures in EUR (five-year review) 135
Consolidated Statement of Financial Position in EUR (five-year review) 137
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70 Financial Report
Consolidated Financial Statements
Consolidated Income Statement
for the years ended December 31, 2012 and 2011
in thousand CHF Notes 2012 2011
Forwarding services 8,065,745 7,925,993
Customs, duties and taxes (1,449,115) (1,426,345)
Net forwarding revenue 5 6,616,630 6,499,648
Forwarding services from third parties 5 (5,151,586) (5,022,599)
Gross profit 5 1,465,044 1,477,049
Personnel expenses 6 (955,011) (892,421)
Other operating expenses 9 (473,437) (372,438)
(Losses) on sales of non-current assets 10 (114) (106)
EBITDA 36,482 212,084
Depreciation of property, plant and equipment 14 (31,151) (28,484)
Amortization / impairment of intangible assets 15 (24,694) (9,383)
Goodwill impairment 15 (18,034) 0
Operating result (EBIT) (37,397) 174,217
Finance income 11 14,665 6,268
Finance costs 11 (19,178) (11,903)
(Loss)/profit before income tax (EBT) (41,910) 168,582
Income tax expenses 12 (28,275) (41,169)
Consolidated (loss)/profit (70,185) 127,413
Consolidated (loss)/profit attributable to:
Owners of the parent (70,456) 126,294
Non-controlling interests 24 271 1,119
Earnings per share (in CHF per share)
Basic 13 (2.98) 5.34
Diluted 13 (2.98) 5.33
The notes on pages 76 to 130 are an integral part of these consolidated financial statements.
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71
Consolidated Statement of Comprehensive Income
for the years ended December 31, 2012 and 2011
in thousand CHF Notes 2012 2011
Consolidated (loss)/profit (70,185) 127,413
Other comprehensive income
Available-for-sale financial assets 16 (478) 3,994
Amounts recognized in equity for defined benefit post-employment plans
– Actuarial gains (losses) 7 (1,649) (23,297)
– Exchange difference 7 86 1,163
Exchange difference on translations of foreign operations (2,773) (11,238)
Income tax on components of other comprehensive income 12 981 5,296
Other comprehensive income for the period, net of tax (3,833) (24,082)
Total comprehensive income for the period (74,018) 103,331
Attributable to owners of the parent (74,223) 102,416
Attributable to non-controlling interests 24 205 915
The notes on pages 76 to 130 are an integral part of these consolidated financial statements.
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72 Financial Report
Consolidated Financial Statements
Consolidated Statement of Financial Position
as at December 31, 2012 and 2011
Assets
in thousand CHF Notes 2012 2011
Non-current assets
Property, plant and equipment 14 130,209 113,180
Intangible assets 15 134,135 141,743
Investments 16 31,636 72,256
Derivative financial instruments 21 0 459
Deferred income tax assets 27 65,792 62,313
Total non-current assets 361,772 389,951
Current assets
Other receivables and other current assets 19 81,052 84,997
Unbilled forwarding services 85,227 77,346
Trade receivables 20 1,032,995 984,404
Derivative financial instruments 21 2,948 5,045
Other current financial assets 22 0 20,000
Cash and cash equivalents 22 393,061 573,579
Total current assets 1,595,283 1,745,371
Total assets 1,957,055 2,135,322
Equity and liabilities
in thousand CHF Notes 2012 2011
Equity
Share capital 23 2,375 50,000
Treasury shares 23 (10,018) (197,278)
Retained earnings and reserves 748,221 1,053,086
Total equity attributable to owners of the parent 740,578 905,808
Non-controlling interests 24 9,241 9,082
Total equity 749,819 914,890
Non-current liabilities
Borrowings 25 257 231
Provisions 26 73,081 85,032
Post-employment benefit liabilities 7 49,629 47,151
Deferred income tax liabilities 27 16,211 14,492
Total non-current liabilities 139,178 146,906
Current liabilities
Trade payables 572,825 588,104
Other payables and accruals 149,459 144,354
Accrued cost of services 200,226 184,519
Borrowings 25 1,611 7,296
Derivative financial instruments 21 1,256 4,648
Provisions and other liabilities 28 124,479 125,420
Current income tax liabilities 18,202 19,185
Total current liabilities 1,068,058 1,073,526
Total liabilities 1,207,236 1,220,432
Total equity and liabilities 1,957,055 2,135,322
The notes on pages 76 to 130 are an integral part of these consolidated financial statements.
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73
Consolidated Statement of Changes in Equity
for the year ended December 31, 2012
Attributable to the owners of the parent
Noncontrolling
interests
Total
equity
in thousand CHF
Notes
Share
capital
Treasury
shares
Other
reserves
Translation
reserve
Retained
earnings
Total
Balance on January 1, 2012 50,000 (197,278) (121,706) (162,103) 1,336,895 905,808 9,082 914,890
Consolidated loss (70,456) (70,456) 271 (70,185)
Available-for-sale financial assets 16 (478) (478) (478)
Amounts recognized in equity for
defined benefit post-employment plans
– Actuarial gains (losses) 7 (1,649) (1,649) (1,649)
– Exchange difference 7 86 86 86
Exchange difference on translations
of foreign operations (2,707) (2,707) (66) (2,773)
Income tax on components
of other comprehensive income 12 981 981 981
Total comprehensive income
for the period 0 0 (1,060) (2,707) (70,456) (74,223) 205 (74,018)
Dividends paid 23, 24 (47,239) (47,239) (46) (47,285)
Capital repayment 23 (45,125) (45,125) (45,125)
Share-based payments
employee share plan 8 1,946 1,946 1,946
Share-based payments
option plan 8 263 263 263
Changes in treasury shares, net 23 2,299 (651) 1,648 1,648
Annihilation of shares repurchased 23 (2,500) 184,961 (184,961) (2,500) (2,500)
Balance on December 31, 2012 2,375 (10,018) (122,766) (164,810) 1,035,797 740,578 9,241 749,819
The notes on pages 76 to 130 are an integral part of these consolidated financial statements.
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74 Financial Report
Consolidated Financial Statements
Consolidated Statement of Changes in Equity
for the year ended December 31, 2011
in thousand CHF
Notes
Share
capital
Attributable to the owners of the parent
Treasury
shares
Other
reserves
Translation
reserve
Retained
earnings
Total
Noncontrolling
interests
Total
equity
Balance on January 1, 2011 50,000 (196,003) (108,862) (151,070) 1,210,214 804,279 7,890 812,169
Consolidated profit 126,294 126,294 1,119 127,413
Available-for-sale financial assets 16 3,994 3,994 3,994
Amounts recognized in equity for
defined benefit post-employment plans
– Actuarial gains (losses) 7 (23,297) (23,297) (23,297)
– Exchange difference 7 1,163 1,163 1,163
Exchange difference on translations
of foreign operations (11,034) (11,034) (204) (11,238)
Income tax on components
of other comprehensive income 12 5,296 5,296 5,296
Total comprehensive income
for the period 0 0 (12,844) (11,034) 126,294 102,416 915 103,331
Dividends paid 24 0 0 (46) (46)
Share-based payments
employee share plan 8 1,255 1,255 1,255
Share-based payments
option plan 8 662 662 662
Changes in treasury shares, net (1,275) (1,530) (2,805) (2,805)
Acquired non-controlling interests 24 0 0 323 323
Balance on December 31, 2011 50,000 (197,278) (121,706) (162,103) 1,336,895 905,808 9,082 914,890
The notes on pages 76 to 130 are an integral part of these consolidated financial statements.
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75
Consolidated Statement of Cash Flows
for the years ended December 31, 2012 and 2011
in thousand CHF Notes 2012 2011
Consolidated (loss)/profit (70,185) 127,413
Income tax expenses 12 28,275 41,169
Depreciation of property, plant and equipment 14 31,151 28,484
Amortization / impairment of intangible assets 15 24,694 9,383
Goodwill impairment 15 18,034 0
Impairment of financial assets 11 4,691 0
Finance income and dividend on available-for-sale financial assets 11 (4,754) (6,268)
Interest expenses 11 1,958 5,932
Exchange differences 11 7,380 2,840
Loss on sales of property, plant and equipment 10 114 106
Gain on sales of financial assets 11 (9,890) 0
Share-based payment transactions 8 45 2,936
Other non-cash expenses 176 (869)
31,689 211,126
Working capital adjustments:
(Increase)/decrease receivables and other current assets (17,212) (21,893)
Increase/(decrease) payables, accruals and deferred income (33,847) 89,262
(Decrease)/increase long-term provisions (3,643) (15,508)
(Decrease)/increase short-term provisions and other liabilities (16,631) (33,915)
Cash generated from operations (39,644) 229,072
Interest paid (1,958) (2,577)
Income taxes paid (29,945) (32,996)
Net cash from operating activities (71,547) 193,499
Interest received 4,181 4,695
Dividends received 11 573 172
Proceeds from sales of property, plant and equipment 1,077 1,633
Proceeds from investments 27,937 12
Repayments of loans and receivables 56,570 1,148
Repayments of other financial assets 798 1,927
Purchase of property, plant and equipment (50,715) (30,715)
Acquisition of subsidiary, net of cash acquired 30 0 (59,986)
Purchase of intangible assets and other assets (34,291) (19,648)
Purchase of investments (9,275) (13,840)
Purchase of other financial assets (7,226) (36,954)
Net cash used in investing activities (10,371) (151,556)
Free cash flow (81,918) 41,943
Proceeds of short- and long-term borrowings 0 142
Repayment of short- and long-term borrowings (2,120) 0
Dividends paid (47,239) 0
Dividends paid to non-controlling interests 24 (46) (46)
Share capital paid back 23 (45,125) 0
Purchase of treasury shares 23 (3,981) (8,617)
Sale of treasury shares 1,873 4,685
Net cash used in financing activities (96,638) (3,836)
Effect of exchange rate changes on cash and cash equivalents (1,962) 6,536
Net increase (decrease) in cash and cash equivalents (180,518) 44,643
Cash and cash equivalents at the beginning of the year 22 573,579 528,936
Cash and cash equivalents at the end of the year 22 393,061 573,579
The notes on pages 76 to 130 are an integral part of these consolidated financial statements.
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76 Financial Report
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1 General information
Panalpina World Transport (Holding) Ltd. (referred to hereafter as the Company) and its subsidiaries is one of the world’s leading providers of
supply chain solutions, combining intercontinental Air and Ocean Freight with comprehensive Value-Added Logistics Services and Supply
Chain Services. Thanks to its in-depth industry know-how and customized IT systems, Panalpina provides globally integrated end-to-end
solutions tailored to its customers’ supply chain management needs.
Panalpina World Transport (Holding) Ltd. is a limited company incorporated and domiciled in Basel. The registered address is Viadukt strasse 42,
4002 Basel, Switzerland. The Company shares are publicly traded and are listed on the SIX Swiss Exchange in Zurich.
The consolidated financial statements for the year ending December 31, 2012, were authorized for issuance in accordance with a resolution
by the Board of Directors on March 1, 2013.
2
Summary of significant accounting policies
Basis of preparation of the consolidated financial statements
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. The consolidated
financial statements of the Company as at and for the year ended December 31, 2012, comprise the Company and its affiliates (together
referred to as the Group and individually as Group entities).
Statement of compliance
The consolidated financial statements are based on the accounts of the individual subsidiaries on December 31, which have been drawn up
according to uniform Group accounting principles. The consolidated accounts have been prepared in accordance with the International
Financial Reporting Standards (IFRS) and comply with Swiss law.
Basis of measurement
The consolidated financial statements have been prepared under the historical cost basis, except for available-for-sale financial assets,
financial assets and financial liabilities (including derivative instruments) at fair value through profit and loss and liabilities for cash-settled
share-based payment arrangements which have been measured at fair value. Defined benefit assets are recognized at the net total of the
plan assets plus unrecognized past-service costs and unrecognized actuarial losses and the present value of the defined benefit
obligation.
The methods used to measure fair values are discussed further in note 3.
Presentation currency
The consolidated financial statements are presented in Swiss francs (CHF) which is the functional currency of the Company and all values
are rounded to the nearest thousand except where otherwise indicated.
Use of estimates and judgments
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and
assumptions that affect application of accounting policies and the reported amounts of assets, liabilities, income and expenses. It requires
management to exercise its judgments and assumptions in the process of applying the Group’s accounting policies. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Deviations from estimates are recognized in the period in which
the estimates are revised and in any future periods affected.
The areas involving a higher degree of judgment or complexity, or areas in which assumptions and estimates are significant to the consolidated
financial statements, are disclosed in note 4.
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77
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements,
and have been applied consistently by Group entities, unless otherwise stated. If necessary, comparative amounts have been reclassified to
conform with the current year’s presentation.
Effective from January 1, 2012, the Group adopted the amendments to IFRS 7 “Disclosures – Transfer of Financial Assets” as well as the
amendments to IAS 12 “Deferred Tax – Recovery of Underlying Assets”.
IFRS 7 (amendment) “Disclosures – Transfer of Financial Assets”
In October 2010 the IASB issued “Disclosures – Transfer of Financial Assets” (amendments to IFRS 7) with an effective date of July 2011.
The adoption of this amendment did no have any impact on the consolidated financial statements of the Group.
IAS 12 (amendment) “Deferred Tax – Recovery of Underlying Assets”
In December 2010 the IASB issued Deferred Tax: “Recovery of Underlying Assets” – Amendments to IAS 12. The Amendment offers a
partial clarification of the treatment of timing differences arising in connection with the application of the fair-value model of IAS 40. In the
case of real estate held for investment purposes, it is often difficult to assess whether existing differences will reverse through continued
use or as a result of a sale. The amendment to IAS 12 provides that reversal in principle occurs as a result of a sale. As a consequence
of the amendment, SIC 21 “Income Taxes – Recovery of Revalued Depreciable Assets” shall no longer be effective for real estate held
for investment purposes measured at fair value. The adoption of this amendment did not have any impact on the consolidated financial
statements of the Group.
The following new or revised standards, amendments to standards and interpretations that have been published are mandatory for the future
accounting periods but the Group has not early adopted them:
IFRS 9 “Financial instruments: Measurement and Classification”, IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements”,
IFRS 12 “Disclosure of interests in other entities”, IFRS 13 “Fair value measurement” as well as IAS 1 (amended) “Presentation of Financial
Statements”, IAS 27 “Consolidated and Separate Financial Statments”, IAS 28 (amended) “Investments in Associates”, IAS 32 (amended)
“Financial Instruments – Presentation” and IFRS 7 “Financial Instruments – Offsetting of Financial Assets and Financial Liabilities”, IFRIC 20
“Stripping Costs in the Production Phase of a Surface Mine” as well as IAS 19 “Employee benefits”.
Appart of IAS 19 there are no other new or revised standards, amendments to the standards and interpretations that are not yet effective
that would be expected to have a material impact on the Group.
IAS 19 “Employee benefits” was amended in June 2011. As the Group already eliminated the corridor approach and recognized all actuarial
gains and losses in Other Comprehensive Income (OCI) as they occured and already recognized all past services cost the impact on Group
level will be the replacement of interest costs and the expected return on plan assets with a net interest amount that is calculated by applying
the discount rate to the net defined benefit liability (asset). The management expects that, by using the net interest cost the costs will
increase by approximately CHF 3 million. In addtion the amendments require additonal disclosures at year end.
In additon in May 2012, the IASB issued amendments to its standards, primarily with a view to remove inconsistencies and clarifying the
wording. The transitional provisons for each standard are different. The Group has not yet analyzed in detail the changes to the accounting
policies and the impact on the financial position or performance.
Basis of consolidation
Consolidation policy
The subsidiaries are those companies controlled, directly or indirectly, by Panalpina World Transport (Holding) Ltd., where control is defined as
the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. This control is normally
evidenced when the Group owns, either directly or indirectly, more than one half of the voting rights or currently exercisable potential voting
rights of a company’s share capital. The existence and effect of potential voting rights that are currently exercisable or convertible are considered
when assessing whether the Group controls another entity. The Group also assesses existence of control where it does not have more
than 50% of the voting power but is able to govern the financial and operating policies by de-facto control.
Defacto control may arise in circumstances where the size of the Group’s voting rights relative to the size and dispersion of holdings of other
shareholders give the Group the power to govern the financial and operating policies.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and they are de-consolidated from the date that
control ceases.
The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition
of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity
interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-byacquistion
basis, at fair value of the recognized amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date, any gains or losses arising from such re-measurement are recognized in profit
or loss.
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78 Financial Report
Consolidated Financial Statements
Any contingent consideration to be transferred by the Group is recognized at fair value at the acquisition date. Subsequent changes to the
fair value of the contingent consideration that is deemed to be an asset or liability is recognized in accordance with IAS 39 in profit or loss.
Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest
over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognized in profit or loss.
Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses
resulting from intercompany transactions that are recognized in assets are also eliminated.
Changes in ownership interest in subsidiaries without change of control
Transactions with non-controlling interest that do not result in loss of control are accounted for as equity transactions - that is, as transactions
with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired
of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interest are also
recorded in equity.
Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is remeasured to its fair value at the date when control is lost,
with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other
comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities.
Amounts previously recognized in other comprehensive income are reclassified to profit or loss.
Operating segment information
Management has determined the operating segments based on the reports reviewed by the Exceutive Board that are used to make strategic
decisions. The Executive Board considers the business from a geographic perspective, as the Group’s operations are predominantly managed
by the geographical location. In the period under review, the regional management as well as the new reporting structure became
effective. Since July 2012 North as well as Central and South America are no longer reported separately. To be in line with the internal reporting
structure, the operating segment reporting now shows only combined figures for Americas.
The Executive Board assesses performance of the operating segments based on a measure of adjusted EBIT. This measurement basis
excludes the effect on non-recurring expenditure from the operating segments such as restructuring costs and related legal expenses, reorganization
costs as well as fines recognized. The measurement also excludes the unrealized gains and losses on financial instruments as
well as interest income and expenditure, as this type of activitiy is driven by the central treasury function, which manages the cash position
of the Group. Income tax expenses are not assessed by segment.
Headquarter activities are reported as Corporate. These consist of corporate headquarters, including the Corporate Executive Committee,
Corporate Communications, Corporate Operations, Corporate Human Resources, Corporate Finance including Treasury, Taxes and Pension
Fund Management.
Transfer prices between operating segments are set out at arm’s-length basis. Operating assets and liabilities consist of property, plant
and equipment, goodwill and intangible assets, trade receivables/payables, other assets and liabilities such as provisions and current
income taxes, which can be reasonably attributed to the reported operating segments. Non-operating assets and liabilities mainly include
deferred income tax balances, post-employment benefit assets/liabilities and financial assets/liabilities such as marketable securities and
investments.
Foreign currency
Functional currency
Most Group companies use their local currency as their functional currency. Certain Group companies use other currencies (such as US dollars
or Euros) as their functional currency where this is the currency of the primary economic environment in which the entity or branch
operates.
Transactions and balances
Local transactions in other currencies are initially reported using the exchange rate at the date of the transaction or reporting date. Gains
and losses from the settlement of such transactions and gains and losses on transactions of monetary assets and liabilities denominated in
other currencies are included in the income statement, except when they arise on monetary items that, in substance, form part of the
Group’s net investment in a foreign entity. In such cases the gains and losses are deferred into other comprehensive income.
Nonmonetary items that are measured in terms of historical cost in foreign currency are translated using the exchange rate as of the dates
of the initial transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates on the date
on which the fair value is determined.
Changes in fair value of securities denominated in foreign currency classified as available-for-sale are split into components resulting from
changes in the amortized cost of the security and other changes in the carrying amount of the security. Foreign exchange remeasurement
differences related to changes in amortized cost are recognized in profit or loss, and other changes in the carrying amount are recognized
in equity.
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79
Presentation currency
Upon consolidation, assets and liabilities of Group companies using functional currency other than Swiss francs are translated into Swiss
francs using a year-end rate of exchange. Income, expenses and net income and cash flows are translated at the average rates of
exchange for the year. Translation differences due to the changes in exchange rates between the beginning and the end of the year and
the difference between net incomes translated at the average and year-end exchange rates are recognized as a separate component of
other comprehensive income.
On disposal of a foreign entity, the identified cumulative currency translation differences within equity relating to that foreign entity are recognized
in the income statement as part of the gain or loss on divestment.
Any goodwill arising on the acquisition is treated as assets and liabilities of the foreign operation and translated at the closing rate.
The most important exchange rates used in the reported financial statements are:
2012 2011
1
Year-end rate
2
Average rate
Statement of
financial
position 1
Income
statement 2
Statement of
financial
position 1
Income
statement 2
EUR 1.20795 1.20525 EUR 1.21628 1.23080
USD 0.91435 0.93821 USD 0.94082 0.88478
HKD 0.11796 0.12095 HKD 0.12114 0.11366
CNY 0.14658 0.14869 CNY 0.14950 0.13690
CAD 0.91906 0.93851 CAD 0.92165 0.89488
GBP 1.47523 1.48651 GBP 1.45278 1.41844
BRL 0.44698 0.48190 BRL 0.50413 0.52987
Revenue recognition
Net forwarding revenue includes amounts received, receivables and unbilled services for forwarding and logistics services performed for
customers after deducting trade discounts and volume rebates and excluding sales taxes and value-added taxes less charges for customs
and duty.
Trade discounts and volume rebates are recorded on an accrual basis consistent with recognition of the related revenue recorded as a
deduction for accounts receivable or as accrued liabilities. Such estimates are based on analyses of existing contractual obligations, historical
trends and the Group’s experience.
Net forwarding revenue is recognized at the time the services are performed. Logistics projects with a longer period of delivery are recognized
at the stage of completion of the services on the reporting date. The stage of completion is assessed in reference to completion of the
specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided. Where necessary,
single transactions are split into separately identifiable components to reflect the substance of the transaction. Conversely, two or more transactions
may be considered together for revenue recognition purposes, where the commercial effect cannot be understood without reference
to the series of transactions as a whole.
Gross profit includes net forwarding revenue from services rendered less related expenses for services provided by third parties net of customs,
duty and taxes.
Interest income is recognized as interest accrued using the effective interest method. Interest income is included in finance income in the
income statement.
Dividends are recognized when the Group’s right to receive the payment is established.
Forwarding services from third parties
Forwarding services from third parties include the corresponding direct services costs and related services costs rendered by a third party.
Trade discounts and volume rebates are recorded on an accrual basis consistent with the recognition of the related services.
Employee benefits
Wages, salaries, social security contributions, paid annual leave, sick leave and other benefits are paid or accrued undiscounted in the year
in which the associated services are rendered by employees of the Group. Legal or constructive obligations such as bonus or profit-sharing
plans are recognized for the amount expected to be paid in the year in which the services are provided.
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Termination benefits are recognized as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to
a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an
offer made to voluntary redundancy. Termination benefits for voluntary redundancies are recognized as expenses if the Group has made
an offer of voluntary redundancy and it is probable that the offer will be accepted. If benefits are payable more than twelve months after the
reporting date, then they are discounted to their present value.
Pension obligation
Group companies operate various pension schemes. The schemes are generally funded through payments to insurance companies or
trustee-administered funds, determined by periodic actuarial calculations. The Group has both defined benefit and defined contribution
plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no
legal or contractual obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating
to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan.
Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation.
The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation
at the end of the reporting period less the fair value of plan assets, together with adjustment for unrecognized past-service costs. The
defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the
defined benefit obligation is determined by discounting the estimated future cash outflows using interest rate of high-quality corporate bonds
that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the
related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in
other comprehensive income in the period in which they arise.
Past service costs are recognized immediately in income, unless the changes to the pension plan are conditional on the employees remaining
in service for a specified period of time. In this case, the past-service costs are amortized on a straight-line basis over the vesting period.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory,
contractual or voluntary basis. The Group has no further payment obiligations once the contributions have been paid. The contributions are
recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash
refund or a reduction in the future payments is available.
Other long-term employee benefits
Net obligation in regard to long-term employee benefits other than pension plans is the amount of future benefits that employees have
earned in return for their service in the current and/or prior periods. Benefits are discounted to determine their present value and the fair
value of any related asset is deducted. The expected costs of these benefits are accrued over the period of employment using the same
method of valuation that is used for defined benefit pension plans. Any actuarial gains or losses which consist of differences between
assumptions and actual experiences and the effects of changes in actuarial assumptions are recognized in the income statement in the
period in which they arise.
Share-based compensation
The Group operates a number of equity-settled, share-based compensation plans under which the entity receives services from employees as
consdideration for equity or equity instruments (options) of the Group. The fair value of the employee services received in exchange for the
granting of the options and the discount on the shares granted is estimated at the grant date and recorded as an expense over the vesting
period. The expense is recognized as other employee benefits in the income statement within the operating result of Corporate. For equitysettled
plans, an increase in equity is recorded for this expense and any subsequent cash flows from exercises of vested awards are recorded
as changes in equity. For cash-settled plans, a liability is recorded, which is measured at fair value at each reporting date with any movements
in fair value being recorded in the income statement. Any subsequent cash flows from exercise of vested awards are recorded as
a reduction of the liability.
Other operating expenses
Other operating expenses primarily include administrative expenses, communication expenses, rent and utilities expenses, travel and
promotion expenses, insurance expenses and claims, changes in provisions from impairments of trade receivables and collection
expenses and other operating expenses necessary to render forwarding revenue to third parties. The expenses are recognized when the
expenses recorded on an accrual basis have been incurred.
Finance income and costs
Finance income comprises interest income on funds invested, dividend income from investments, cash discounts, gains on disposals of
available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, and gains on derivatives that
are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, cash discounts, changes in the fair
value of financial assets at fair value through profit or loss, impairment losses recognized on financial assets, losses on hedging instruments
that are recog nized in profit or loss, bank charges and bank guarantee fees. All borrowing costs are recognized in profit or loss using the
effective interest method.
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Current and deferred income tax expenses
The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent
that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the
countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the
initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply
when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that is probable that future taxable profit will be available against which the
temporary differences can be utilized.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income
tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when the income taxes are levied by the same taxation authority and when there is a
legally enforceable right to offset them. Deferred income tax is measured based on the currently enacted tax rates applicable in each tax
jurisdiction where the Group operates.
Property, plant and equipment
Property, plant and equipment are measured at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Initially
property, plant and equipment are recorded at cost of purchase or construction and include all costs directly attributable to bringing the asset
to the location and condition necessary for it to be capable of operating in the manner intended by management. Interest and other borrowing
costs for long-term construction projects are capitalized and included in the carrying value of the assets. All other repair and maintenance costs
of the day-to-day servicing are recognized in the income statement as incurred. The present value of the expected cost for the decommissioning
of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. When components of
an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Gains and losses on a disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with
the carrying amount of property, plant and equipment, and are recognized net within gains or losses on sales of non-current assets in the
income statement.
Land and buildings are carried at cost less depreciation and/or accumulated impairment losses.
Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property,
plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of the lease term. Land and construction in progress are not depreciated.
The estimated useful lives for the current and comparative periods are as follows:
Years
Warehouse and office buildings 25 – 40
Warehouse and transportation equipment 3 – 10
Office furnishings and equipment 5 – 10
EDP hardware 3
Trucks, trailers and special vehicles 3 – 10
Automobiles 3 – 5
The assets’ residual value and estimated useful lives are regularly reviewed and adjusted. If appropriate, the future depreciation charge is
accelerated.
Leases
Where the Group is the lessee, leases of property, plant and equipment where the Group has substantially all of the risks and rewards of
ownership are classified as finance leases. Financial leases are capitalized at the start of the lease at fair value, or the present value of the
minimum lease payments, if lower. Assets acquired under finance leases are depreciated in accordance with the Group’s policy on property,
plant and equipment. If there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is
depreciated over the shorter of the lease term and useful life. Leases where substantially all of the risks and rewards of ownership are not
transferred to the Group are classified as operating leases. Payments made under operating leases are charged against the income statement
on a straight-line basis over the period of the lease.
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The corresponding leasing obligations, net of finance charges, are included in borrowings. The interest element of the finance cost is
charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Intangible assets
Business combination and goodwill
Business combinations are accounted for using the acquisition method of accounting. The consideration transferred in a business combination
is measured at fair value at the date of acquisition and includes the cash paid plus the fair value at the date of exchange of assets given,
liabilities incurred or assumed and equity instruments issued by the Group. The fair value of the consideration transferred also includes contingent
consideration arrangements at fair value. Directly attributable acquisition-related costs are expensed in the income statement. At the
date of acquisition the Group recognizes the identifiable assets acquired and the liabilities assumed at fair value. Where the Group does not
acquire 100 % ownership of the acquired business, non-controlling interests are recorded as the proportion of the fair value of the acquired
net assets attributable to non-controlling interest. Goodwill is recorded as the surplus of the consideration transferred over the Group’s
interest in the fair value of acquired net assets. Any goodwill and fair value adjustments are recorded as assets and liabilities of the acquired
business in the functional currency of that business. When the initial accounting for a business combination is incomplete at the end of a
reporting period, provisional amounts are used. During the measurement period, the provisional amounts are retrospec tively adjusted and
additional assets and liabilities may be recognized, to reflect new information obtained about the amounts recognized at that date, had they
been known. Goodwill is not amortized but assessed for possible impairment at each reporting date and is additionally tested annually for
impairment. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Group’s cashgenerating
units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units. Changes in ownership interest in subsidiaries are accounted for as equity transactions if they occur
after control has already been obtained and if they do not result in a loss of control.
Trademarks and licenses
Separately acquired trademarks and licenses are shown at historical cost. Trademarks and licenses acquired in a business combination
are recognized at fair value at the acquisition date. Trademarks and licenses have a finite useful life and are carried at cost less accumulated
amortization and accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of trademarks
and licenses over their estimated useful lives of five to ten years.
Customer relationships
Customer relationships acquired in a business combination are recognized at fair value at the acquisition date. Customer relations have a
finite useful life and are carried at cost less accumulated amortization and/or accumulated impairment losses. Amortization is calculated
using the straight-line method over the expected life of the customer relationship of three to five years.
Computer software
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the
Group are recognized as intangible assets when the following criteria are met:
• it is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated how the software product will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the software product are available;
and
• the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalized as part of the software product include software development costs, employee costs and an
appropriate portion of relevant overhead costs. Other development expenditures that do not meet these criteria are recognized as an
expense as incurred. Development costs previously recognized as expenses are not recognized as an asset in a subsequent period. Costs
associated with maintaining computer software programs are recognized as an expense as incurred. Computer software development costs
recognized as assets are amortized over their estimated useful life, which does not exceed three to eight years.
Other intangible assets
Other intangible assets that are acquired by the Group that have finite useful lives are measured at cost less accumulated amortization and
accumulated impairment losses.
Impairment of property, plant and equipment and intangible assets
An impairment assessment is carried out when there is evidence that an asset may be impaired. In addition, intangible assets that are not
yet available for use are tested for impairment annually. If any such indication exists, or when annual impairment testing for an asset is
required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or
cash-generating unit’s fair value less costs to sell, and its value in use, and is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or asset groups. Where the carrying amount of an asset
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use,
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the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. An appropriate valuation model is used to determine fair value less costs to sell.
These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
Impairment losses are recognized in the income statement. When an impairment loss arises, the useful life of the asset in question is
reviewed and, if necessary, the future depreciation/amortization charge is accelerated.
Impairment of goodwill
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstance indicate a potential impairment.
When the recoverable amount of the cash-generating units, being the higher of its fair value less costs to sell or its value in use, is less,
then the carrying value of the goodwill is reduced to its recoverable amount. The reduction is reported in the income statement as an
impairment loss. The methodology used in the impairment testing is further described in note 15.
Financial assets
Financial assets, including cash and marketable securities, short- and long-term deposits, trade and other receivables, loans and other
receivables, quoted and unquoted financial instruments and derivative financial instruments, are classified either as fair value through profit
or loss, loans and receivables, available-for-sale, or in exceptional cases, as held to maturity. The classification depends on the purpose for
which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. All financial
assets are initially recognized at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction
costs. All purchases and sales are recognized on the settlement date.
Subsequent measurement
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition
at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in
the near term. This category includes derivative financial instruments entered into by the Group that do not meet the hedge accounting criteria.
Derivatives, including separately embedded derivatives, are also classified as held for trading unless they are designated as effective hedging
instruments. Financial assets at fair value through profit or loss are carried on the statement of financial position at fair value with gains or
losses recognized in the income statement.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such
financial assets are normally carried at amortized cost using the effective interest rate method. Gains and losses are recognized in the
income statement when the loans and receivables are derecognized or impaired, as well as through the amortization process.
Trade receivables originated by the Group are financial assets that are created by providing money or services directly to the debtor. Such
receivables are not quoted and are not originated with the intention to be sold immediately or in the near term. Receivables are presented in
current assets for maturities up to twelve months (accounting treatment of trade receivables is outlined in more detail in the section:
Trade receivables).
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held to maturity when the Group
has the positive intention and ability to hold them until maturity. After initial measurement, held-to-maturity investments are measured at amortized
cost using the effective interest method. This method uses an effective interest rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Gains and losses are recognized in the
income statement when the investments are derecognized or impaired, as well as through the amortization process. The Group did not have
any held-to-maturity investments during the periods under review.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the
three preceding categories. After initial measurement, available-for-sale financial assets are measured at fair value with unrealized gains or
losses recognized in comprehensive income until the investment is derecognized, at which time the cumulative gain or loss recorded in comprehensive
income is recognized in the income statement, or determined to be impaired, at which time the cumulative loss recorded in comprehensive
income is recognized in the income statement.
Fair value of financial instruments
Fair value is the amount for which a financial asset, liability or instrument could be exchanged between knowledgeable and willing parties in
an arm’s-length transaction. It is determined by reference to quoted market prices or by the use of established valuation techniques such as
option pricing models and the discounted cash flow method if quoted prices in an active market are not available. Valuation tech niques
will incorporate observable market data about market conditions and other factors that are likely to affect the fair value of a financial instrument.
Valuation techniques are typically used for derivative financial instruments. The fair values of financial assets and liabilities at the
reporting date are not materially different to their reported carrying value unless specifically mentioned in the notes to the consolidated financial
statements. Information on fair value hierarchy is included in note 18 on risk management.
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Amortized cost of financial instruments
Amortized cost is computed using the effective interest method less any allowance for impairment and principal repayment or reduction. The
calculation takes into account any premium or discount on acquisition and includes transaction costs that are an integral part of the effective
interest rate.
Impairment of financial assets
Financial assets are individually assessed for possible impairment at each reporting date. An impairment charge is recorded where there is
objective evidence of impairment, such as where the issuer is in bankruptcy, default or other significant financial difficulty. In addition, any
available-for-sale equity securities that have a market value of more than 25 % below their original cost, net of any previous impairment, will
be considered as impaired. Any available-for-sale equity securities that have a market value below their original cost, net of any previous
impairment, for a sustained six-month period will also be considered as impaired. Any decreases in the market price of less than 25 % of
original cost, net of any previous impairment, which are also for less than a sustained six-month period are not by themselves considered as
objective evidence of impairment. Such movements in fair value are recorded in equity until there is objective evidence of impairment or until
the asset is sold or otherwise disposed of. For financial assets carried at amortized cost, any impairment charge is the difference between
the carrying value and the recoverable amount, calculated using estimated future cash flows discounted using the original effective interest
rate. For available-for-sale financial assets, the original cost, net of any previous impairment charge, is the amount currently carried in equity for
the difference between the original cost, net of any previous impairment, and at fair value. An impairment loss is reversed if the reversal can
be related objectively to an event occurring after the impairment loss was recognized. For debt securities measured at amortized cost that are
available-for-sale, the reversal is recognized in income statement. For equity held available-for-sale, the reversal is recognized directly in equity.
Derecognition of financial assets
A financial asset is derecognized when:
• the Group’s rights to receive cash flows from the asset have expired; or
• the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows
in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially
all the risks and rewards of the asset or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
Derivatives
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Derivative financial instruments
are initially recognized and subsequently carried at fair value on the date a derivative contract is entered into. Apart from those derivatives
designated as qualifying cash flow hedging instruments in the “hedging” policy below, all changes in fair value are recorded as financial
income in the period in which they arise. Embedded derivatives are recognized separately if not closely related to the host contract and
where the host contract is carried at amortized cost. Attributable transaction costs are recognized in the income statement when incurred.
Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The fair value of forward currency contracts is the difference between the forward exchange rate and the contract rate. The forward exchange
rate is referenced to current forward exchange rates for contracts with similar maturity profiles. The fair value of interest swap contracts is
determined by reference to market value for similar instruments.
Hedge accounting
For the purpose of hedge accounting, hedging relationships may be of three types. A fair value hedge is a hedge of the exposure to changes in
fair value of a recognized asset or liability, or an unrecognized commitment, or an identified portion of such an asset, liability or commitment
that is attributable to a particular risk and could affect profit or loss. A cash flow hedge is a hedge of the exposure to variability in cash flows
that is attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction and could affect
the income statement. A “hedge of a net investment in a foreign operation” is a hedge of the foreign currency exposure on a net investment
in a foreign operation.
To qualify for hedge accounting, the hedging relationship must meet several strict conditions on documentation, probability of occurrence
(for cash flow hedges), hedge effectiveness and reliability of measurement. If these conditions are not met, then the derivative instrument does
not qualify for hedge accounting. In this case, the hedging instrument and the hedged item are valued independently of one another. The
derivative hedging instrument is reported at fair value with the changes in fair value included in the income statement. Where the Group will hold
a derivative as an economic hedge for a period beyond twelve months after the statement of financial position date, the derivative is classified
as non-current consistent with the classification of the underlying item.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes
to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes
identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will
assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flow attributable
to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and
are assessed on an ongoing basis to determine whether they actually have been highly effective throughout the financial reporting periods
for which they were designated.
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Hedges that meet the strict criteria for hedge accounting are accounted for as follows:
Fair value hedges
The change in the fair value of hedging derivatives is recognized in the income statement. The change in the fair value of the hedged item
attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognized in the income statement.
For fair value hedges relating to items carried at amortized cost, the adjustment to carrying value is amortized through the income statement
over the remaining term to maturity. Amortization may begin as soon as an adjustment exists and shall begin no later than when the hedge item
ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedge item is derecognized, the unamortized
fair value is recognized immediately in the income statement.
When an unrecognized firm commitment is designated as a hedged item, subsequent cumulative change in the fair value of the firm commitment
attributable to the hedged risk is recognized as an asset or liability with a corresponding gain or loss recognized in the income statement.
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognized directly in equity, while any ineffective portion is recognized in
the income statement. Amounts taken to equity are transferred to the income statement when the hedged transaction affects profit or loss,
such as when the hedged financial income or financial expense is recognized or when a forecast sale occurs. Where the hedged item is the
cost of a non-financial asset or non-financial liability, the amounts taken to equity are transferred to the initial carrying amount of the nonfinancial
asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized in equity are transferred to the
income statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as
a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast transaction or firm commitment occurs.
Hedges of a net investment
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net investment,
are accounted for in a manner similar to cash flow hedges. Gains or losses on the hedging instrument relating to the effective portion of the
hedge are recognized directly in equity while any gains or losses relating to the ineffective portion are recognized in the income statement.
Upon disposal of the foreign operation, the cumulative value of any such gains or losses recognized directly in equity is transferred to the
income statement.
Hedging activities and derivative financial instruments
The Group uses foreign-currency-denominated borrowings and forward contracts to manage its transaction exposures. These currency forward
contracts are not designated as cash flow, fair value or net investment hedges and are entered into for periods consistent with currency
transaction exposure (generally one to six months). Such derivatives do not qualify for hedge accounting.
At year-end, the contract value is calculated on the total volume of individual contracts using the fair value at this time. The positive
replacement value represents the theoretical profit if the open currency contracts were closed out as of December 31. Correspondingly, the
negative replacement value represents the theoretical loss on closing the currency transactions open as of December 31.
Trade receivables
Trade receivables are carried at the original invoice amount less valuation adjustments for impairment, trade discounts, volume rebates and
similar allowances. Subsequently, accounts receivable are measured at amortized cost using the effective interest method. An allowance for
doubtful accounts trade receivables is recorded when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or
financial reorganization, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade
receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated
future cash flows. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognized
in the income statement within other operating expenses. When a trade receivable is uncollectible, it is written off against the allowance
account for trade receivables. Subsequent recoveries of amounts previously written off or 100 % impaired are credited against operating
expenses in the income statement. Trade discounts, volume rebates and similar allowances are recorded on an accrual basis consistent
with the recognition of the related sales, using estimates based on existing contractual obligations, historical trends and the Group’s
experience. Long-term accounts receivable are discounted to take into account the time value of money.
Unbilled forwarding services
Unbilled forwarding services represent the gross unbilled amount expected to be collected from customers for forwarding services in progress
for which costs are incurred but not yet invoiced. For logistics projects and other services with a longer period of delivery, recognized
profits are included.
Cash and cash equivalents and other current financial assets
Cash and cash equivalents included in the statement of financial position and statement of cash flows represent cash on hand, bank
and postal checks, bills of exchange net, current balance with banks and similar institutions less bank overdraft as well as time deposits and
highly liquid money market papers with a maturity period of less than three months from the date of acquisition. Such balances are only
reported as cash if they are readily convertible to known amounts of cash and are subject to insignificant risk of change in value.
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Other current financial assets include time deposits and highly liquid money market papers with a maturity period between three months
and one year.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are recognized in equity
as a deduction, net of tax effects, from the proceeds.
Treasury shares
When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, is
net of any tax effects and is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented
as a deduction from total equity. Where such shares are subsequently reissued, any consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects, the resulting surplus or deficit on the transaction is transferred to
retained earnings.
Retained earnings and other reserves
Retained earnings and other reserves contain legal reserves which are not distributable to the shareholders pursuant to Swiss law, cumulative
translation adjustments of all foreign currency differences arising from the translation of the financial statements of foreign operations as
well as cumulative actuarial gains and losses from defined benefit post-employment plans net of taxes and accumulated difference in
available-for-sales assets.
Financial liabilities
Financial liabilities are either classified as financial liabilities at fair value through profit or loss, financial liabilities at amortized cost or as
derivatives designated as hedging instruments in an effective hedge as appropriate. The Group determines the classification of its financial
liabilities at initial recognition. Financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, directly attributable
transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings and derivative financial
instruments.
Subsequent measurement
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition
as at fair value through profit or loss. This category includes derivative financial instruments entered into by the Group that do not
meet the hedge accounting criteria. Gains or losses on liabilities at fair value through profit or loss are recognized in the income statement.
Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost. Any discount between the net
proceeds received and the principal value due on redemption is amortized over the duration of the debt instruments and is recognized as
part of financing costs using the effective interest rate method.
Derecognition of financial liabilities
Financial liabilities are derecognized when the obligation under the liability is discharged or cancelled or expired. Where a financial liability is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability. The recognition of a new liability and the difference in the
respective carrying amounts is recognized in the income statement.
Provisions
Provisions are recognized where a legal or constructive obligation has been incurred and if an outflow of resources is probable and can be
estimated reliably. Provisions are recorded for the estimated ultimate liability that is expected to arise, taking into account foreign currency
effects arising from their translation from their functional currency into Swiss francs and the time value of money where material, determined
by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. Provisions are established in particular
for accrued costs of services, freight forwarding claims, short-term employee benefits, termination and other long-term employee benefits,
post-employment benefit liabilities and decommissioning provisions. Provisions for restructuring are recognized only when the Group has
approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future
operating costs are not provided for.
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4 Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Critical accounting estimations and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liablilities within the next financial year are addressed below.
Impairment of goodwill
The Group tests periodically whether goodwill has suffered any impairment in accordance with the Group’s accounting policy and details are
disclosed in note 15 – Intangible assets, section: Impairment test for goodwill. The recoverable amounts of cash-generating units (CGUs)
have been determined based on value-in-use calculations. The underlying calculations require the use of estimates.
An impairment charge of CHF 18.0 million arose in the Norwegian CGU during the course of the year 2012, resulting in the carrying amount
of the CGU being written down to its recoverable amount. If the estimated cost of capital used in determining the pre-tax discount rate for
the CGU Norway had been 2.5 % higher than management’s proposal, the group would have recognized further impairment against goodwill
of CHF 12.8 million.
Pension and other post-employment benefits
The expense of defined benefit pension plans and other post-employment medical benefits as well as the present value of the pension obligation
are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates
of return of assets, future salary increases, mortality rates and future pension increases. All assumptions are reviewed at each reporting
date. When determining the appropriate discount rate, management considers the interest rates on high-quality corporate bonds (with an
AAA or AA rating) in the respective country and appropriate duration. The mortality rate is based on publicly available mortality tables for
the specific country. Future salary increases and pension increases are based on expected future inflation rates for the specific country.
Such differences are recognized in full directly in other comprehensive income in the period in which they occur without affecting the income
statement. At December 31, 2012 the Group had a deficit of the fair value of plan assets below the present value of funded obligations of CHF
4.3 million (2011: CHF 9.5 million) for funded plans and a negative present value of unfunded plans of CHF 45.3 million (2011: CHF 37.7 million).
The actuarial assumptions used may differ materially from actual results due to changes in market and economic conditions, higher or
lower withdrawal rates, longer or shorter life spans of participants and other changes in the factors assessed. These differences could impact
the assets or liabilities recognized in the statement of financial position in future periods. Additional information is disclosed in note 7.
Provisions
A number of subsidiaries are subject to litigation arising from the normal conduct of their businesses, as a result of which claims could be
raised against them.
The Group has established a captive reinsurance company that insures a dedicated risk portion of its errors and omissions, transporter
operator and commercial general liability programs. The exposure of its captive reinsurance company is limited by a third-party insurer that
covers losses exceeding an amount of CHF 1 million on a single-case basis and a total aggregate limit of CHF 9 million annually for claims
exceeding CHF 50,000 per incident. In a consolidated view, the Group, through its captive reinsurance company, bears the risks insured
with its captive reinsurance company up to the limit as if such risks were not insured at all. Furthermore, as third-party coverage is subject to
a considerable deductible and a total aggregated limit per year, the Group, in effect, bears the risk of damages, losses and claims that are
above such aggregated limits as well. The Group used for the above-mentioned provision an actuarial calculation method, which
requires for the calculation of the “incurred but not reported reserves” (IBNR), among other estimations, the overall circumstances which may
impact the future losses, such as the growth of business. At December 31, 2012 the recognized liability for claims amounts to CHF 35.6
million (2011: CHF 33.0 million). If the management decided to use the optimal actuarial calculation method, which only takes into consideration
the linear loss development according to historical figures, the carrying amount of claim provisions would be approximately CHF 5.1
million lower (2011: CHF 2.3 million). Using a more conservative percentile, the carrying amount of claim provisions would be approximately
CHF 1.9 million higher (2011: CHF 1.7 million).
The Group is also subject to legal and regulatory proceedings and government investigations in various jurisdictions. These proceedings
are related to the area of competition law. Such proceedings may result in criminal or civil sanctions, penalties or damages against the Company.
Regulatory and legal proceedings, as well as government investigations, involve complex legal issues, the outcome of which is difficult
to predict. Accordingly, management’s judgment is affected in determining whether it is more likely or not that such a proceeding will
result in an outflow of resources and whether the amount of the obligation can be reliably estimated. These judgments are subject to
change as new information becomes available. Upon resolution of any legal or regulatory proceeding or government investigation, the
Group may incur a provision for such matters. It cannot be ruled out that the financial condition or results of operations of the Group will be
materially affected. For additional information see note 31 – Additional inforamtion, section Pending legal claims. Related legal costs are
recognized when incurred.
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Deferred income tax assets
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which
the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized,
based on the likely timing and level of future taxable profits.
The carrying value of recognized tax loss carry-forwards amounts to CHF 97.7 million (2011: CHF 98.0 million) and unrecognized tax loss
carry-forwards to CHF 191.1 million (2011: CHF 100.1 million). Further details are provided in note 27.
If the Group were able to recognize all unrecognized deferred tax assets, consolidated profit would increase by CHF 59.3 million (2011:
CHF 31.6 million). If the Group failed to achieve the expected future taxable profits, the consolidated profit would decrease by CHF 33.3
million (2011 CHF 31.9 million) but the management believes that the full amount of the recognized deferred tax assets are recoverable in
the foreseeable future.
Income taxes
At December 31, 2012, the net liability for current income taxes amounts to CHF 18.2 million (2011: CHF 19.2 million). As the Group is subject
to income taxes in numerous jurisdictions, significant judgments are required in determining worldwide provisions for income taxes.
Some of these estimates are based on interpretations of existing tax laws or regulations. Management believes that the estimates are reasonable
and that the recognized liabilities for income-tax-related uncertainties are adequate. Various external factors may have favorable
or unfavorable effects on income taxes. These factors include, but are not limited to, changes in tax law regulations and/or rates, changing
interpretation of existing tax laws or regulations and changes in management estimations. Such changes that arise could affect the assets
and liabilities recognized in the statement of financial position in future periods.
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5 Operating segment information
Management has determined the operating segments based on the reports reviewed by the Executive Board that are used to make strategic
decisions. The Executive Board considers the business from a geographic perspective, as the Group’s operations are predominantly managed
by the geographical location. The Executive Board assesses performance of the operating segments based on a measure of adjusted
EBIT. This measurement basis excludes the effects on non-recurring expenditure from the operating segments such as restructuring
expenses, reorganization costs as well as fines recognized and related legal expenses. The measurement also excludes the unrealized
gains / losses on financial instruments as well as interest income and expenses, as this type of activity is driven by the central treasury function,
which manages the cash position of the Group. Income and deferred income taxes are not assessed by segment.
In the period under review, the regional management as well as the new reporting structure became effective. Since July 2012 North as well
as Central and South America are no longer reported separately. To be in line with the internal reporting structure, the consolidated segment
reporting shows only combined figures for Americas. For comparative analysis the previous year operating segment has been aligned to
conform to the current period’s presentation.
2012 (in thousand CHF)
Europe,
Middle
East,
Africa, CIS
Americas
Asia
Pacific
Total
operating
segment
Eliminations
Corporate
Total
Group
External forwarding services 3,091,314 2,287,734 1,237,582 6,616,630 0 6,616,630
Intra-group forwarding services 1,518,635 637,758 1,494,733 3,651,126 (3,651,126) 0
Net forwarding revenue 4,609,949 2,925,492 2,732,315 10,267,756 (3,651,126) 0 6,616,630
Forwarding services from third parties (3,893,203) (2,481,743) (2,427,766) (8,802,712) 3,651,126 (5,151,586)
Gross profit 716,746 443,749 304,549 1,465,044 0 0 1,465,044
Personnel expenses (451,227) (266,490) (139,880) (857,597) (71,974) (929,571)
Other operating expenses (267,161) (175,665) (101,973) (544,799) 130,480 (414,319)
Adjusted EBITDA (1,642) 1,594 62,696 62,648 0 58,506 121,154
Depreciation, amortization and impairment (29,855) (9,586) (6,665) (46,106) (9,739) (55,845)
Goodwill impairment (18,034) 0 0 (18,034) 0 (18,034)
Adjusted operating result (Segment EBIT) (49,531) (7,992) 56,031 (1,492) 0 48,767 47,275
Fines EU and WEKO (see note 9) 0 0 0 0 (59,232) (59,232)
Termination benefits (see note 6) (11,165) (6,294) (4,138) (21,597) (3,843) (25,440)
Reported EBIT (60,696) (14,286) 51,893 (23,089) 0 (14,308) (37,397)
Financial result
– Finance income 14,665
– Finance costs (19,178)
Loss before income tax (EBT) (41,910)
Income tax expenses (28,275)
Consolidated loss (70,185)
Information about segment assets and liabilities:
2012 (in thousand CHF)
Europe,
Middle
East,
Africa, CIS
Americas
Asia
Pacific
Total
operating
segment
Nonsegment
assets
Nonsegment
liabilities
Total
Group
Segment assets 723,406 480,433 342,874 1,546,713 410,342 1,957,055
Segment liabilities 532,683 271,469 219,076 1,023,228 184,008 1,207,236
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Net forwarding revenue and segment assets from the country of domicile (Switzerland) and major countries within afore-mentioned segments:
2012 (in thousand CHF) Switzerland Germany
United
States of
America
Brazil
Republic
of
China
Net forwarding revenue 860,291 1,282,793 1,545,194 427,496 1,102,812
Segment assets 59,767 175,515 207,732 95,008 116,459
2011 (in thousand CHF)
Europe,
Middle
East,
Africa, CIS
Americas
Asia
Pacific
Total
operating
segment
Eliminations
Corporate
Total
Group
External forwarding services 3,169,935 2,104,281 1,225,432 6,499,648 0 0 6,499,648
Intra-group forwarding services 1,573,571 645,319 1,547,501 3,766,391 (3,766,391) 0 0
Net forwarding revenue 4,743,506 2,749,600 2,772,933 10,266,039 (3,766,391) 0 6,499,648
Forwarding services from third parties (4,013,993) (2,317,217) (2,457,780) (8,788,990) 3,766,391 0 (5,022,599)
Gross profit 729,513 432,383 315,153 1,477,049 0 0 1,477,049
Personnel expenses (444,681) (245,847) (125,341) (815,869) 0 (76,552) (892,421)
Other operating expenses (246,778) (162,225) (99,602) (508,605) 0 136,061 (372,544)
Adjusted EBITDA 38,054 24,311 90,210 152,575 0 59,509 212,084
Depreciation, amortization and impairment (16,976) (8,570) (5,883) (31,429) 0 (6,438) (37,867)
Adjusted operating result (Segment EBIT) 21,078 15,741 84,327 121,146 0 53,071 174,217
Financial result
– Finance income 6,268
– Finance costs (11,903)
Profit before income tax (EBT) 168,582
Income tax expenses (41,169)
Consolidated profit 127,413
Information about segment assets and liabilities:
2011 (in thousand CHF)
Europe,
Middle
East,
Africa, CIS
Americas
Asia
Pacific
Total
operating
segment
Nonsegment
assets
Nonsegment
liabilites
Total
Group
Segment assets 755,385 456,264 371,554 1,583,203 552,119 2,135,322
Segment liabilities 542,139 263,952 233,979 1,040,070 180,362 1,220,432
Net forwarding revenue and segment assets from the country of domicile (Switzerland) and major countries within above-mentioned
segments:
2011 (in thousand CHF) Switzerland Germany
United
States of
America
Brazil
Republic
of
China
Net forwarding revenue 905,425 1,375,681 1,446,271 412,544 1,182,612
Segment assets 70,659 188,624 194,664 85,426 130,898
Neither in 2012 nor 2011 the Group did have sales in excess of 10 % of the total net forwarding revenues to any single external customer.
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Information by business
The Group’s business can be divided into three divisions: Air Freight, Ocean Freight and Logistics.
2012 (in thousand CHF) Air Freight
Ocean
Freight Logistics Total Group
Net forwarding revenue 3,105,334 2,615,024 896,272 6,616,630
Forwarding services from third parties (2,478,361) (2,155,165) (518,060) (5,151,586)
Gross profit 626,973 459,859 378,212 1,465,044
2011 (in thousand CHF) Air Freight
Ocean
Freight Logistics Total Group
Net forwarding revenue 3,280,851 2,313,158 905,639 6,499,648
Forwarding services from third parties (2,592,750) (1,873,935) (555,914) (5,022,599)
Gross profit 688,101 439,223 349,725 1,477,049
6
Personnel expenses
in thousand CHF 2012 2011
Wages and salaries 739,268 695,473
Compulsory social security contributions 91,968 84,421
Contributions to defined contribution plans 53,654 49,166
Expenses related to defined benefit plans (note 7) 8,072 987
Staff training 9,446 8,823
Share-based compensation (note 8)
Equity-settled compensation plan 2,209 1,917
Cash-settled compensation plan (2,164) 1,019
Other personnel-related expenses 52,558 50,615
Total personnel expenses 955,011 892,421
Number of employees 15,224 15,051
thereof in Switzerland 759 775
During the period under review, the Group recognized CHF 25.4 million termination benefits within wages and salaries. The termination benefits
concern headcount reductions in all three regions and on a corporate level (see note 28 provisions and other liabilities).
7
Post-employment benefit obligations
Panalpina’s objective is to provide attractive post-employment benefits to employees, while at the same time ensuring that the various plans
are appropriately financed, while managing any potential impacts on the Group’s long-term financial position. The nature of such plans
varies according to legal regulations and fiscal requirements in the countries in which the employees are employed. Other post-employment
benefits consist mostly of post-retirement schemes. Post-employment benefit plans are classified for IFRS as “defined contribution plans” if the
Group pays fixed contributions in a separate fund or to a third-party financial institution and will have no further legal or constructive obligation
to pay further contributions. All other plans are classified as defined benefit plans. The Group’s major defined benefit plans are located in
Switzerland, Germany, Japan, Taiwan and France. Plans are usually established as trusts independent of the Group and are funded by
payments from the Group and by employees. In some cases, notably for the major defined benefit plans in Germany and Japan, the plans are
unfunded and the Group pays pensions to retired employees directly from its own financial resources.
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92 Financial Report
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Current and past services as well as expected returns on plan assets and interest expenses are charged to the income statement as personnel
expenses. Actuarial gains and losses are recorded directly in other comprehensive income. The recognition of pension assets is
limited to the total of the present value of any future refunds from the plans or reduction in future contributions to the plans and any cumulative
unrecognized past service costs. Adjustments arising from the limit on the recognition of assets for defined benefit plans are recorded
directly in other comprehensive income.
Qualified independent actuaries carry out valuations on a regular basis and for major plans annually as at the reporting date. For funded
plans, which are usually trusts independent of the Group’s finances, the net asset / liability recognized on the Group’s statement of financial
position corresponds to the over-/underfunding of the plan, adjusted for unrecognized past service costs. For unfunded plans, where
the Group meets the pension obligations directly from its own financial resources, a liability for the defined benefit obligation is recorded in
the Group’s statement of financial position. Pension assets and liabilities in different defined benefit plans are not offset.
The amounts recognized in the statement of financial position are determined as follows:
in thousand CHF 2012 2011
Fair value of plan assets 231,706 211,525
Present value of funded obligation (236,030) (221,002)
Surplus (deficit) (4,324) (9,477)
Present value of unfunded obligations (45,305) (37,674)
(Net liability) net asset recognized in statement of financial position (49,629) (47,151)
thereof recognized as liability (49,629) (47,151)
The following amounts relating to defined benefit pension plans were recorded in the income statement:
in thousand CHF 2012 2011
Net pension costs for year ending
Current service costs (16,322) (13,488)
Recognized past service costs 0 3,448
Interest expenses (6,564) (7,232)
Expected return on plan assets 8,489 10,226
Employee contribution 5,148 4,960
Settlements 961 922
Curtailments 216 177
Expenses for defined benefit plans (8,072) (987)
The movement in the defined benefit obligation over the year is as follows:
in thousand CHF 2012 2011
Changes in defined benefit obligation (DBO)
DBO at beginning of year (258,676) (248,015)
Current service costs (16,322) (13,488)
Recognized past service costs 0 3,448
Interest expenses (6,564) (7,232)
Actuarial (losses) gains recognized in OCI (11,133) (10,777)
Benefits paid 10,672 16,196
Curtailments 216 177
Liabilities extinguished on settlement 0 29
Currency impact 472 986
DBO at end of year (281,335) (258,676)
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93
The movement in the fair value of plan assets of the year is as follows:
in thousand CHF 2012 2011
Changes in fair value of plan assets
Fair value at beginning of year 211,525 217,656
Employer contributions 6,018 6,167
Employee contributions 5,148 4,960
Expected return on plan assets 8,489 10,226
Actuarial gains (losses) recognized in OCI 9,484 (12,520)
Benefits paid (8,962) (14,943)
Currency impact 4 (21)
Fair value at end of year of plan assets 231,706 211,525
The fair value of the plan assets includes none of the Group’s shares for either 2012 or 2011.
An analysis of the amounts recognized in other comprehensive income is shown in the table below:
in thousand CHF 2012 2011
Analysis of amounts recognized in other comprehensive income
Recognized in other comprehensive income on January 1 126,735 104,601
Actuarial (gains) losses plan assets (9,484) 12,520
Actuarial losses (gains) DBO 11,133 10,777
Currency impact (86) (1,163)
Recognized in other comprehensive income on December 31 128,298 126,735
Plan assets are comprised as follows:
in thousand CHF 2012 2011
in CHF in % in CHF in %
Major categories of plan assets
Cash and cash equivalents 1,186 0.51 % 3 0.0088 %
Equity investments 80,941 34.93 % 61,021 28.85 %
Bonds 115,857 50.00 % 117,765 55.68 %
Hedge funds and private equity 0 0.00 % 6,500 3.07 %
Real estate funds 27,120 11.71 % 22,893 10.82 %
Others 6,602 2.85 % 3,343 1.58 %
Total 231,706 100.00 % 211,525 100.00 %
Actuarial assumptions
Actuarial assumptions are unbiased and mutually compatible estimates of variables that determine the ultimate cost of providing past
employment benefits. They are set on an annual basis by local management and actuaries and are subject to approval by corporate management.
Actuarial assumptions consist of demographic assumptions on matters such as mortality and employee turnover, and financial
assumptions on matters such as salary and benefit level, interest rates and return on investments. The Group operates defined benefit plans
in many countries and the actuarial assumptions vary based upon local economic and social conditions.
Demographic assumptions
The most significant demographic assumptions relate to mortality rates. The Group’s actuaries use mortality tables which take into account
historic patterns and expected changes, such as further increases in longevity. The mortality tables used for the major schemes are:
Switzerland: BVG 2010 Periodic table and adjustment
Germany: tables 2005 G from Klaus Heubeck
France: table INSEE TV / TD 2008 / 2010
Rates of employee turnover, disability and early retirement are based on historical behavior within the Group companies.
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94 Financial Report
Consolidated Financial Statements
Financial assumptions
These are based on market expectations for the period over which the obligations are to be settled. The assumptions used in the actuarial
valuations with stable currencies and interest are shown below:
2012 2011
Discount rate 2.01 % 2.57 %
Expected return on pension plan assets 1.75 % 3.99 %
Future salary increase 1.75 % 1.75 %
Future pension increase 1.15 % 1.25 %
Discount rates, which are used to calculate the discounted present value of the defined benefit obligation, are determined with reference to
market yields on high-quality corporate bonds.
Expected returns on plan assets are based on market expectations of expected returns on the assets in funded plans over the duration of
the related obligation. This takes into account the split of the plan assets between equities, bonds, properties and other investments. The
calculation includes assumptions concerning expected dividend and interest income and realized and unrealized gains on plan assets. Due
to the long-term nature of the obligations, the assumptions used for matters such as returns on investments may not necessarily be consistent
with recent historical patterns. The expected return on plan assets included in the income statement is calculated by multiplying the
expected rate of return by the fair value of plan assets. The difference between the expected return and the actual return in any twelvemonth
period is an actuarial gain/loss and recorded directly in other comprehensive income. In 2012, the actual return on plan assets was
CHF 18.0 million (2011: CHF – 2.3 million).
Expected rates of salary increases, which are used to calculate the defined benefit obligation and the current service cost included in the
income statement, are based on the latest expectation and historical behavior within Group entities.
A five-year summary of the Group’s defined benefit plans is shown in the table below:
in thousand CHF 2012 2011 2010 2009 2008
DBO 281,335 258,676 248,015 232,899 256,441
Plan assets (231,706) (211,525) (217,656) (208,217) (213,520)
Net liability recognised in statement of financial position 49,629 47,151 (30,359) (24,682) (42,921)
Experience adjustments arising on:
plan liability (2,007) 8,974 (2,858) 3,149 (7,692)
plan asset 9,484 (12,510) 1,042 20,539 (40,859)
8
Share and option ownership program
The Group operates several share and option ownership programs. The members of the Board of Directors, the members of the Executive
Board as well as selected preferential employees had the option of voluntarily participating in the share and option ownership program introduced
in 2005 and continued in a modified program in the following years.
Management Incentive Program II (MIP II)
In June 2006, the Group introduced the Management Incentive Program II. Participants in this program had the right to purchase shares
with a discount of 25 % based on the share price corresponding to the average closing price of one share at the SIX Swiss Exchange during
the months January to May in the respective year of purchase. The difference between the discounted share price on the grant date
and the share price paid by the participants is recognized as personnel expenses on the date of the issue of the shares. The shares are
subject to a one-year lock-up period. For every purchased share under this plan, the Group granted one option free of charge to the participant.
The options have a contractual term of six years and a vesting period of one to three years. Each option entitles the participant to
obtain one share of Panalpina World Transport (Holding) Ltd. at a predetermined strike price which equals the average closing price of one
share at the SIX Swiss Exchange during the months January to May in 2006. The share options cannot be settled in cash. In May 2007, the
Board of Directors decided to divide the Management Incentive Program II into an “International Management Incentive Plan” and a “United
States Management Incentive Plan.” Beneficiaries of the “United States Management Incentive Plan” are selected preferential employees of
the subsidiary in the United States of America and members of the Board of Directors with residence in the United States of America. The
conditions of this plan do not differ from those of the “International Management Incentive Plan” except for the strike price, which equals the
closing price of one share at the SIX Swiss Exchange on the date of disbursement. Under this changed program, beneficiaries of the “United
States Management Incentive Plan” holding options to purchase shares of the Group’s capital stock were given the opportunity to exchange
their existing options for new options to purchase an equal number of shares. 3,550 options with a strike price of CHF 111.30 were tendered
pursuant to the “United States Management Incentive Plan.” In May 2007, those options were accepted and cancelled by the Group. The
Group undertook to grant new options on a one-for-one basis, in lieu of the tendered options, to the affected employees. The new options,
which totaled 5,350, were granted with a strike price of CHF 114.00.
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The following table lists the parameters based on which the option valuation of both plans was performed:
in CHF
International
Management
Incentive
Plan II
United States
Management
Incentive
Plan II
Market price of share 114.00 114.00
Exercise price of option 111.30 114.00
Expected volatility (in %) 30.00 30.00
Option life (in years) 5 5
Dividend yield (in %) 1.78 1.78
Risk-free interest rate based on Swiss government bonds (in %) 2.670 2.670
Strike price adjustment
In accordance with the decision of the Annual General Meeting 2012, in July 2012 Panalpina reduced the nominal value of its shares by
CHF 1.90 to new CHF 0.10. According to the calculation of SIX this reduction in nominal value had an effect of CHF 0.97976571 on the
share price. Therefore the share price after this transaction sank to 97.976571 % of the share price directly before the reduction of the
nominal value. As the granted free options of the Management Incentive Plans had not anticipated the nominal value reduction in the
moment of their subscription, the Executive Board of Panalpina decided to reduce the strike price of the related options by the same factor
97.976571 %. The strike price reduction was applied for MIP III, IV, 08/09 and 09/10 and is already included in the following plans:
Management Incentive Program III (MIP III)
The third share and option program was introduced in June 2007, which conceptually completely mirrors the modified program of 2006. Participants
of the “International Management Incentive Plan III” subscribed for 38,921 options with a strike price of CHF 197.05. Participants
in the “United States Management Incentive Plan III” subscribed for 4,096 options with a strike price of CHF 245.90. The difference between
the discounted share price on the grant date and the share price paid by the participants is recognized as personnel expenses on the date
of the issue of the shares.
The following table lists the parameters based on which the option valuation of both plans was performed:
in CHF
International
Management
Incentive
Plan III
United States
Management
Incentive
Plan III
Market price of share 90.40 90.40
Exercise price of option 197.05 245.90
Expected volatility (in %) 28.11 28.11
Option life (in years) 5 5
Dividend yield (in %) 3.53 3.53
Risk-free interest rate based on Swiss government bonds (in %) 0.490 0.490
Management Incentive Program IV (MIP IV)
A fourth share and option program was introduced in June 2008. The conditions of this share and option program are identical to the Management
Incentive Program II of the Group except for the purchase price of the shares, which equals 75 % of the closing price of one share
at the SIX Swiss Exchange on April 30, 2008. The difference between the discounted share price on the grant date and the share price paid
by the participants is recognized as personnel expenses on the date of the issue of the shares. The plan is also divided into an “International
Management Incentive Plan” and a “United States Management Incentive Plan.” The exercise price of options of the “International Management
Incentive Plan” is equal to the closing price of one share at the SIX Swiss Exchange on April 30, 2008. The exercise price of options of
the “United States Management Incentive Plan” is equal to the share price at the SIX Swiss Exchange on the grant date. Participants in the
“International Management Incentive Plan IV” subscribed for 32,436 options with a strike price of CHF 129.35. Participants in the “United
States Management Incentive Plan IV” subscribed for 4,689 options with a strike price of CHF 119.90.
Annual Report 2012

96 Financial Report
Consolidated Financial Statements
The following table lists the parameters based on which the option valuation of both plans was performed:
in CHF
International
Management
Incentive
Plan IV
United States
Management
Incentive
Plan IV
Market price of share 90.40 90.40
Exercise price of option 129.35 119.90
Expected volatility (in %) 28.11 28.11
Option life (in years) 5 5
Dividend yield (in %) 3.53 3.53
Risk-free interest rate based on Swiss government bonds (in %) 0.490 0.490
Management Incentive Plan 08 / 09 (MIP 08 / 09)
In 2009, management introduced a new plan. The terms of this share and option program are identical to the Management Incentive Program
IV as described above apart from the strike price of the “International Management Incentive Plan,” which equals the closing price of
the share on the cut-off day at the SIX Swiss Exchange. Under this program participants of the “International Management Incentive Plan”
received 65,921 options with a strike price of CHF 61.25 and participants of the “United States Management Incentive Plan” received
5,132 options with a strike price of CHF 81.35.
The following table lists the parameters based on which the option valuation of both plans was performed:
in CHF
International
Management
Incentive
Plan 08/09
United States
Management
Incentive
Plan 08/09
Market price of share 90.40 90.40
Exercise price of option 61.25 81.35
Expected volatility (in %) 28.11 28.11
Option life (in years) 5 5
Dividend yield (in %) 3.53 3.53
Risk-free interest rate based on Swiss government bonds (in %) 0.490 0.490
Management Incentive Plan 09 / 10 (MIP 09 / 10)
In 2010 an additional management incentive plan was set up. Apart from the strike price of the “International Management Incentive Plan”
which equals the closing price of the share on the cut-off day at the SIX Swiss Exchange, the terms of this share and option program are
identical to the Management Incentive Program 08/09. Under this program participants of the “International Management Incentive
Plan” received 12,099 options with a strike price of CHF 95.65 and participants of the “United States Management Plan” received 1,354
options with a strike price of CHF 87.75.
The weighted average fair value of the share options granted during the reporting period is determined using the binominal valuation model,
applying the following significant inputs into the model:
in CHF
International
Management
Incentive
Plan 09/10
United States
Management
Incentive
Plan 09/10
Market price of share 90.40 90.40
Exercise price of option 95.65 87.75
Expected volatility (in %) 28.11 28.11
Option life (in years) 5 5
Dividend yield (in %) 3.53 3.53
Risk-free interest rate based on Swiss government bonds (in %) 0.490 0.490
Annual Report 2012

Financial Report
Consolidated Financial Statements
97
The following table summarizes the movements in the number of share options outstanding and their related average exercise prices:
Average exercise
price
per share
(in CHF)
2012 2011
Options
(number)
Average exercise
price
per share
(in CHF)
Options
(number)
Options outstanding on January 1 119.80 148,452 115.72 173,692
Exercised 65.40 (14,621) 74.52 (16,065)
Forfeited 90.27 (1,844) 71.62 (3,367)
Expired 117.28 (34,337) 150.92 (5,808)
Options outstanding on December 31 126.74 97,650 119.80 148,452
Options exercisable on December 31 127.75 93,166 132.57 115,799
During the reporting year the following numbers of options were exercised with the respective exercise prices:
Exercise
price
of option
(in CHF)
2012 2011
Number of
exercised
options
Exercise
price
of option
(in CHF)
Number of
exercised
options
International Management Incentive Plan II 0.00 0 111.30 3,435
International Management Incentive Plan 08/09 62.50 11,156 62.50 11,781
International Management Incentive Plan 08/09 61.25 1,974 0.00 0
United States Management Incentive Plan 08/09 83.05 476 83.05 226
International Management Incentive Plan 09/10 97.60 949 97.60 501
United States Management Incentive Plan 09/10 89.55 66 89.55 122
Weighted average exercise price of options exercised
during the year 65.40 74.52
The average exercise prices and the expiry date of the outstanding options at period-end are as follows:
2012
Average exercise
price per share (in CHF)
Number of options
expiring at year-end
2013 202.61 28,312
2014 127.95 29,636
2015 63.91 29,640
2016 94.77 10,062
Total 126.74 97,650
Management Incentive Plan 10 / 11 (MIP 10 / 11)
In 2011 a new management incentive plan was set up. Participants in this program had the right to purchase shares with a discount of
10 % based on the share price equal to the closing price on the SIX Swiss Stock Exchange at the cut-off day. The difference between the
discounted share price on the grant date and the share price paid by the participants is recognized as personnel expenses on the date of
the issue of the shares. The shares are subject to a one-year lock-up period. For every purchased share under this plan, the Group granted a
number of free shares according to a “Free Share Ratio” which is annually set by the Compensation and Nomination Committee. For the
current year the ratio was set to 1:4 (one free share per four shares bought). The free shares have a vesting period of one to three years. On
non-vested free shares, no dividends are paid and there is no entitlement for dividends. The shares cannot be settled in cash. The fair value
of the free shares corresponds to the market price of the shares at the grant date.
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98 Financial Report
Consolidated Financial Statements
2012
Management
Incentive
Plan 10/11
2011
Management
Incentive
Plan 10/11
Fair value of free share (in CHF) 119.30 119.30
Outstanding free shares on January 1 6,961 0
Granted free shares 0 7,124
Vested free shares (3,230) (138)
Forfeited free shares (392) (25)
Free shares outstanding on December 31 3,339 6,961
Management Incentive Plan 11 / 12 (MIP 11 / 12)
As in previous years an additional management incentive plan was set up in 2012. Participants in this program had the right to purchase
shares with a discount of 10 % based on the share price equal to the closing price on the SIX Swiss Stock Exchange at the cut-off day. The
difference between the discounted share price on the grant date and the share price paid by the participants is recognized as personnel
expenses on the date of the issue of the shares. The shares are subject to a one-year lock-up period. For every purchased share under this
plan, the Group granted a number of free shares according to a “Free Share Ratio” which is annually set by the Compensation and Nomination
Committee. For the current year the ratio was set to 1:4 (one free share per four shares bought). The free shares have a vesting period of
one to three years. On non-vested free shares, no dividends are paid and there is no entitlement for dividends. The shares cannot be settled
in cash. The fair value of the free shares corresponds to the market price of the shares at the grant date.
2012
Management
Incentive
Plan 11/12
Fair value of free share (in CHF) 87.30
Granted free shares 2,816
Vested free shares (75)
Forfeited free shares (179)
Free shares outstanding on December 31 2,562
The Group holds its own shares in order to meet its obligations under the Management Incentive Programs. These own shares are deducted
from equity (note 23).
The members of the Executive Board and the Boards of Directors did not participate in the above-mentioned incentive plans.
Executive Board Mid-Term Incentive Plan
The Mid-Term Incentive Plan has been set up such that only 60 % of the bonuses, which continue to be set by the achievement of annually
reviewed Group key performance indicators (KPIs) and individual performance targets, are paid out in cash, whereas the remainder is paid
out in shares with a restriction period of one year. This number of shares will be matched by the Company after this restriction period. In
addition, the members of the Executive Board will receive the corresponding number of shares, based on the share’s closing price on April 30
of CHF 88.52 (previous year: CHF 62.50). These shares will thereafter be subject to a further one-year restriction period. In the reporting
period under review Executive Board members received 40 % of the bonus in Company shares totaling 11,930 shares (previous year:
13,528 shares) with a restriction period of one year. This number of shares will, additionally, be matched by the Company after this restriction
period. These additional shares are also subject to a further one-year restriction period.
During the period under review management received matched shares totaling 13,528 (2011: 4,155) shares reflecting the 40 % bonus
paid in the previous year.
Executive Board Long-Term Incentive Plan
The Long-Term Incentive Plan rewards long-term value creation measured by economic profit. Under this plan, which has a five-year
cycle, the individual Executive Board member is entitled to an equal share of the respective pool after the expiry of the five-year plan period.
This plan can be cash-settled. The carrying amount of the liability at December 31, 2012 amounts to CHF 363 thousand (2011: CHF 2,527
thousand), which is also the intrinsic value.
Annual Report 2012

Financial Report
Consolidated Financial Statements
99
Board of Directors Restricted Stock Award Plan
The Restricted Stock Award Plan for the Board of Directors was introduced in 2009. Part of the remuneration of each Board member is
settled in free shares of the Company. The corresponding number of shares per member will be based on the share’s closing price at the
assignment date. The shares have a one-year restriction period. During the period under review the Board of Directors received 3,948
shares (2011: 2,562 shares).
Costs of share-based compensation
Recognized costs of share-based compensation were as follows:
in CHF 2012 2011
Employee share plan (217,945) 2,273,801
Option plan 263,101 662,587
Total cost of share-based payments 45,156 2,936,388
Share-based compensation expenses are not reported in operating segments. They are reported under Corporate.
9
Other operating expenses
in thousand CHF 2012 2011
Administrative expenses 37,694 37,905
Communications expenses 71,238 64,949
Rent and utilities expenses 214,253 183,294
Travel and promotion expenses 38,749 42,717
Insurance expenses and claims 15,529 6,352
Fines EU and WEKO 59,232 0
Bad-debt and collection expenses 10,086 6,558
Other 26,656 30,663
Total other operating expenses 473,437 372,438
Rent and utilities expenses include rentals amounting to CHF 123.5 million (2011: CHF 103.6 million) and lease of machinery, equipment and
vehicles of CHF 22.9 million (2011: CHF 20.2 million). Bad-debt and collection expenses include CHF 1.5 million (2011: CHF 1.4 million)
of credit insurance premiums.
10
Gains and losses on sales of non-current assets
in thousand CHF 2012 2011
Gains on sales of property, plant and equipment 899 618
Losses on sales of property, plant and equipment (1,013) (724)
Total net (losses) on sales of non-current assets (114) (106)
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100 Financial Report
Consolidated Financial Statements
11 Finance income and costs
in thousand CHF 2012 2011
Interest income
Interest income on current bank accounts 3,624 3,986
Interest income on financial assets at fair value through profit or loss 10 11
Interest differential on forwards and swaps 127 1,741
Interest income on loans 2 7
Cash discount income 418 351
Subtotal interest income 4,181 6,096
Guarantee fees income 21 0
Dividend on available-for-sale financial assets 573 172
Gain on sale of financial investments 9,890 0
Total finance income 14,665 6,268
Interest expenses
Interest expenses on loans (78) (242)
Interest expenses on current bank accounts (750) (760)
Interest differential on forwards and swaps (566) (4,345)
Interest expenses on financial leasing (68) (71)
Cash discount expenses (496) (514)
Subtotal interest expenses (1,958) (5,932)
Bank charges (2,703) (2,277)
Exchange differences (7,380) (2,840)
Guarantee fees expenses (852) (529)
Other financial expenses (422) (303)
Impairment on financial assets (4,691) 0
Fair value adjustments on financial assets (1,172) (22)
Total finance costs (19,178) (11,903)
Net finance costs (4,513) (5,635)
In 2012, Panalpina sold its 12 % of Luxair SA’s shares to the state of Luxembourg with a gain on sale of assets of CHF 9.9 million.
During the period under review the Group assessed the recoverable amount of another financial asset with the conclusion that the recoverabiliaty
is no longer given. Therefore an impairment charge in the amount of CHF 4.7 million was recognized in the financial result.
12
Income tax expenses
in thousand CHF 2012 2011
Current income taxes
Current period 30,521 37,064
Adjustments for prior periods 252 1,566
Total income taxes 30,773 38,630
Deferred income taxes (note 27)
Origination and reversal of taxes on temporary differences and on tax loss carry forwards (2,423) 1,931
Effect of changes in the tax rate on temporary differences (0) 980
Utilization of non-recognized tax loss carry-forwards (75) (372)
Total deferred income taxes (2,498) 2,539
Total income tax expenses 28,275 41,169
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Financial Report
Consolidated Financial Statements
101
Management decided to calculate the applicable standard tax rate as in the previous year based on the standard tax rate in its Basel headquarters’
domicile.
The Group’s effective tax rate can be reconciled to the Group’s average expected tax rate as follows:
in thousand CHF 2012 2011
(Loss)/profit before income tax (41,910) 168,582
Tax at the applicable tax rate of 22.48 % (2011: 23.37 %) (9,421) 39,398
Effect of differing national tax rates 5,448 (17,375)
Utilization of not yet recognized tax loss carry-forwards (75) (372)
Recognition of deferred tax assets from previous periods 0 (2,835)
Not yet recognized tax loss carry-forwards 28,365 13,510
Adjustment of previous year tax provision 252 1,566
Effect of changes in the tax rate on temporary differences (70) 980
Withholding tax on dividends received 2,657 3,339
Expenses not deductible for tax purposes and non-taxable income 690 1,840
Miscellaneous 429 1,118
Actual tax charge 28,275 41,169
The following table shows the reconciliation for 2012 in percent:
2012 2011
Tax at the applicable tax rate of 22.48 % (2011: 23.37 %) 22.48 % 23.37 %
Effect of differing national tax rates 13.00 % (10.31 %)
Utilization of not yet recognized tax loss carry-forwards (0.18 %) (0.22 %)
Recognition of deferred tax assets from previous periods 0.00 % (1.68 %)
Not yet recognized tax loss carry-forwards 67.68 % 8.01 %
Adjustment of previous year tax provision 0.60 % 0.93 %
Effect of changes in the tax rate on temporary differences (0.17 %) 0.58 %
Withholding tax on dividends received 6.34 % 1.98 %
Expenses not deductible for tax purposes and non-taxable income 1.65 % 1.09 %
Miscellaneous 1.02 % 0.66 %
Actual tax charge 67.47 % 24.42 %
Income tax recognized in the consolidated statement of comprehensive income:
2012 2011
in thousand CHF
Before tax
Tax benefit
(expense) Net of tax Before tax
Tax benefit
(expense)
Net of tax
Translation and exchange differences (2,773) (2,773) (11,238) 0 (11,238)
Available-for-sale financial assets (478) (478) 3,994 0 3,994
Other taxes directly recognized in equity 0 (130) (130) 0 (123) (123)
Actuarial gains/(losses)
on defined benefit plans (1,563) 1,111 (452) (22,134) 5,419 (16,715)
Total (4,816) 981 (3,835) (29,378) 5,296 (24,082)
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102 Financial Report
Consolidated Financial Statements
13 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding (total shares less treasury shares) during the period.
in thousand CHF 2012 2011
Consolidated (loss)/profit attributable to owners of the parent (70,456) 126,294
Weighted average number of ordinary shares outstanding 23,638 23,639
Basic earnings per share (in CHF) (2.98) 5.34
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. The Group only has share options outstanding that can be categorized as dilutive potential ordinary shares.
For the share options, a calculation is made to determine the number of shares that could have been acquired at fair value based on the monetary
value of the subscription rights attached to outstanding share options. The number of shares calculated as above is com pared with the
number of shares that would have been issued assuming the exercise of the share options.
in thousand CHF 2012 2011
Consolidated (loss)/profit attributable to owners of the parent (70,456) 126,294
Weighted average number of ordinary shares outstanding 23,638 23,639
Adjustments for share options 10 17
Adjustments for share ownership program 18 20
Weighted average number of ordinary shares for diluted earnings per share 23,666 23,676
Diluted earnings per share (in CHF) (2.98) 5.33
At December 31, 2012, 66,884 options (2011: 103,125 options) were excluded from the diluted weighted average number of ordinary shares
calculation as their effect would have been anti dilutive.
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Financial Report
Consolidated Financial Statements
103
14 Property, plant and equipment
During the period under review, the Group acquired mainly machinery and equipment.
2012 (in thousand CHF)
Land and
buildings
Machinery
and
equipment
Vehicles
Construction
in progress
Total
Acquisition costs
Balance on January 1 134,660 230,286 36,309 37 401,292
Translation differences (1,009) (2,005) (442) 0 (3,456)
Additions 12,189 32,121 3,394 2,290 49,994
Disposals (1,519) (22,545) (904) 0 (24,968)
Reclassifications 187 222 (409) 0 0
Balance on December 31 144,508 238,079 37,948 2,327 422,862
Accumulated depreciation
Balance on January 1 74,592 184,967 28,553 0 288,112
Translation differences (649) (1,752) (432) 0 (2,833)
Additions 7,132 21,121 2,898 0 31,151
Disposals (1,409) (21,655) (713) 0 (23,777)
Reclassifications 187 222 (409) 0 0
Balance on December 31 79,853 182,903 29,897 0 292,653
Net book value on January 1 60,068 45,319 7,756 37 113,180
Net book value on December 31 64,655 55,176 8,051 2,327 130,209
Of which net book value of assets
acquired under finance leases 2,101 36 838 230 3,205
2011 (in thousand CHF)
Land and
buildings
Machinery
and
equipment
Vehicles
Construction
in progress
Total
Acquisition costs
Balance on January 1 130,222 215,619 39,669 5 385,515
Translation differences (1,962) (4,008) (326) 0 (6,296)
Acquisition of subsidiaries, net of cash acquired 39 258 147 0 444
Additions 8,874 20,902 1,512 37 31,325
Disposals (2,518) (2,485) (4,693) 0 (9,696)
Reclassifications 5 0 0 (5) 0
Balance on December 31 134,660 230,286 36,309 37 401,292
Accumulated depreciation
Balance on January 1 70,694 170,418 30,570 0 271,682
Translation differences (894) (2,926) (277) 0 (4,097)
Additions 6,344 19,280 2,860 0 28,484
Disposals (1,552) (1,805) (4,600) 0 (7,957)
Balance on December 31 74,592 184,967 28,553 0 288,112
Net book value on January 1 59,528 45,201 9,099 5 113,833
Net book value on December 31 60,068 45,319 7,756 37 113,180
Of which net book value of assets
acquired under finance leases 245 51 1,138 0 1,434
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104 Financial Report
Consolidated Financial Statements
15 Intangible assets
2012 (in thousand CHF) Goodwill Software
Brands/
Customer
lists
Other
intangible
assets
Total
Acquisition costs
Balance on January 1 82,717 88,919 37,518 708 209,862
Translation differences 1,009 (630) 1,521 (16) 1,884
Additions 0 33,900 0 260 34,160
Disposals 0 (2,045) 0 (15) (2,060)
Balance on December 31 83,726 120,144 39,039 937 243,846
Accumulated amortization and impairment losses
Balance on January 1 1,338 44,878 21,290 613 68,119
Translation differences 553 (557) 948 (20) 924
Additions (including impairment losses) 18,034 9,671 14,848 175 42,728
Disposals 0 (2,045) 0 (15) (2,060)
Balance on December 31 19,925 51,947 37,086 753 109,711
Net book value on January 1 81,379 44,041 16,228 95 141,743
Net book value on December 31 63,801 68,197 1,953 184 134,135
2011 (in thousand CHF) Goodwill Software
Brands/
Customer
lists
Other
intangible
assets
Total
Acquisition costs
Balance on January 1 44,549 72,724 22,763 656 140,692
Translation differences (2,701) (901) (1,172) (54) (4,828)
Acquisition of subsidiaries, net of cash acquired 40,869 0 15,927 0 56,796
Additions 0 19,731 0 106 19,837
Disposals 0 (2,635) 0 0 (2,635)
Balance on December 31 82,717 88,919 37,518 708 209,862
Accumulated amortization and impairment losses
Balance on January 1 1,598 41,499 18,891 613 62,601
Translation differences (260) (670) (250) (50) (1,230)
Additions 0 6,684 2,649 50 9,383
Disposals 0 (2,635) 0 0 (2,635)
Balance on December 31 1,338 44,878 21,290 613 68,119
Net book value on January 1 42,951 31,225 3,872 43 78,091
Net book value on December 31 81,379 44,041 16,228 95 141,743
The net book value of software is comprised of accumulated, internally generated, capitalized software development costs of CHF 47.2 million
(2011: CHF 33.4 million). All intangible assets with estimable useful lives are amortized over the period of their respective estimated useful
lives to their estimated residual values, and reviewed for impairment. Due to the loss of a major customer in Norway, the Group reviewed
the goodwill and customer lists acquired with Norwegian-based Grieg Logistics in 2011. Based on the expected business development in
Norway over the coming years, the Group considers that the intangible assets of its Norwegian operations have to be partially written off.
In the period under review the Group recognized an impairment charge of CHF 11.6 million on the customer lists acquired and a goodwill
impairment charge of CHF 18.0 million (2011: none).
Impairment test for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the country of operation. The recoverable amount of
a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets ap proved
by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated
below. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates.
Annual Report 2012

Financial Report
Consolidated Financial Statements
105
A summary of the goodwill allocation per CGU is presented below:
in thousand CHF 2012 2011
Air Freight division (CGU Airfreight) 31,151 31,151
Grampian International Freight Aberdeen & Beverwijk (CGU Grampian) 6,492 6,393
Panalpina World Transport (Singapore) Pte. Ltd. (CGU Janco) 4,104 3,981
Panalpina World Transport (Pty) Ltd. (CGU Australia) 3,584 3,606
Grieg Logistics AS (CGU Norway) 18,470 36,248
Total goodwill 63,801 81,379
The following key assumptions have been used for the value-in-use calculations of each CGU:
2012
CGU
Norway
CGU
Australia
CGU
Airfreight
CGU
Grampian
CGU
Janco
Growth rate 1 10.38 % 5.30 % 3.25 % 5.31 % 4.00 %
Operating expenses in % of forwarding revenues 2 99.00 % 99.40 % 98.03 % 91.63 % 97.46 %
WACC 3 7.76 % 11.32 % 8.15 % 9.72 % 8.59 %
2011
CGU
Norway
CGU
Australia
CGU
Airfreight
CGU
Grampian
CGU
Janco
Growth rate 1 9.25 % 6.75 % 3.50 % 7.25 % 4.50 %
Operating expenses in % of forwarding revenues 2 97.62 % 98.73 % 98.19 % 99.83 % 98.73 %
WACC 3 7.57 % 11.18 % 6.65 % 8.08 % 6.85 %
1
Weighted average growth rate used to extrapolate cash flows beyond the one year budgeting period
2
Budgeted operating expenses in % of forwarding revenues
3
Pre-tax discount rate applied to the cash flow projections
The management determined budgeted growth rates based on past performance and its expectations of market development. The operating
expenses, as a percentage of forwarding revenues, are consistent with the forecasts and past experience. The weighted average
cost of capital (WACC) used are pre-tax and reflect specific risks relating to the relevant CGUs. For the impairment testing procedure the
planning assumptions of prior years were critically reviewed. The impairment testing procedure assumes that the CGU would achieve sales
growth at market growth for the planning period. It was also assumed that the percentage of operating expenses as a percentage of forwarding
revenue will remain stable.
For the CGU Norway a decrease in the assumptions of the growth rate of the gross profit by yearly 5 percentage points would cause the
carrying value of goodwill to exceed the recoverable amount to CHF 10.4 million. The same applies for CGU Australia for which a change in
the assumptions of the growth rate of the gross profit (1.2 percentage points) or the WACC (0.9 percentage points) would also cause the
carrying value of goodwill to exceed the recoverable amount.
For other CGUs the carrying value of goodwill would only exceed the recoverable amount if following changes in the key assumptions gross
profit growth or WACC would occur:
CGU Airfreight
Gross profit growth rate
WACC
CGU Janco
Gross profit growth rate
WACC
CGU Grampian
Gross profit growth rate
WACC
CGU Australia
Gross profit growth rate
WACC
CGU Norway
Gross profit growth rate
WACC
– 47.9 percentage points
+ 34.0 percentage points
– 56.0 percentage points
+ 16.5 percentage points
– 17.0 percentage points
+ 9.4 percentage points
– 1.2 percentage points
+ 0.9 percentage points
– 0.0 percentage points
+ 0.0 percentage points
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106 Financial Report
Consolidated Financial Statements
16 Investments
in thousand CHF 2012 2011
Available-for-sale investments 2,025 19,670
Fair value through profit or loss investments 8,574 775
Loans receivable 213 311
Long-term receivables 15,857 47,975
Other 4,967 3,525
Total investments 31,636 72,256
Long-term receivables primarily include rental and guarantee deposits of CHF 15.9 million (2011: CHF 13.7 million).
Available-for-sale investments – unquoted equity shares
in thousand CHF 2012 2011
Balance on January 1 19,670 15,625
Translation differences 115 (13)
Additions 94 69
Disposals (17,840) (5)
Fair value adjustments recognized in statement of comprehensive income (14) 3,994
Balance on December 31 2,025 19,670
Less: non-current portion 2,025 19,670
Current portion 0 0
In 2012, disposals include an amount of CHF 464 thousand which has been recycled from comprehensive income to the income statement
due to the sale of Luxair SA shares.
Fair value through profit or loss investments
in thousand CHF 2012 2011
Balance on January 1 775 816
Translation differences (3) (12)
Additions 9,180 0
Disposals (206) (7)
Fair value adjustments recognized in profit or loss (1,172) (22)
Balance on December 31 8,574 775
Less: non-current portion 8,574 775
Current portion 0 0
17
Group risk management
In the field of risk management, the Audit Committee approves the detailed and weighted risk map of the Executive Board. It adopts the
necessary measures for risk control and risk mitigation and reports the respective outcome to the Board of Directors on an annual basis. The
risk map itself covers any strategic, financial, operational, legal and compliance risks that could significantly impact the Company’s ability
to achieve its business goals and financial targets. Identified risks are weighted and prioritized by the Executive Board according to their significance
and likelihood of occurrence. For each risk, specific risk-mitigation measures – including their current status – are defined and
responsibilities are allocated. The risk map, which is compiled by the Risk Review Committee, chaired by the Corporate Secretary, for review
by the Executive Board and the Audit Committee and subsequently approved by the Audit Committee, contains risks iden tified and assessed
by the respective corporate functions, selected country management, Corporate Audit and the Group auditors. The annual risk map also features
risks which have increased or decreased in the course of the reporting year. Financial risk management specifically is described in further
detail below.
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107
18 Financial risk management
The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose
of these financial liabilities is to raise funds for Group operations. The Group has trade and other receivables, loans, cash, short- and longterm
deposits that arise directly from its operations. The Group also holds available-for-sale investments and enters into derivative transactions.
The Group is exposed to market risk, credit risk, liquidity risk and capital risk. The Group’s senior management oversees the management of
these risks. It is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework
for the Group. The financial risk committee provides assurance to the Group’s senior management that the Group’s financial risk-taking
activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance
with Group policies and Group risk appetite. All derivative activities for risk management purposes are carried out by specialist teams
that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes
shall be undertaken.
The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarized below.
Financial risk factors
Carrying amount and fair value of financial assets by asset classes
2012 (in thousand CHF) Cash
Availablefor-sale
Fair value
through
profit or
loss held
for trading
Loans
and
receivables
Carrying
amount
Total
(fair value)
Trade receivables and other receivables 1,044,487 1,044,487 1,044,487
Unbilled forwarding services 85,227 85,227 85,227
Accrued interest income 18 18 18
Cash and cash equivalents 1,081 391,980 393,061 393,061
Derivative financial instruments 2,948 2,948 2,948
Investments:
Bonds and debentures 398 398 398
Shares 2,025 8,176 10,201 10,201
Third-party loans 237 237 237
Rental and guarantee deposits 15,857 15,857 15,857
Other 4,967 4,967 4,967
Total on December 31, 2012 1,081 2,025 11,522 1,542,773 1,557,401 1,557,401
2012 (in thousand CHF)
Financial
liabilities at
fair value
through
profit or
loss
Financial
liabilities
measured
at amortized
cost
Carrying
amount
Total
(fair value)
Payables and accruals 922,510 922,510 922,510
Borrowings 1,395 1,395 1,395
Finance lease liabilities 473 473 473
Derivative financial instruments 1,256 1,256 1,256
Provisions and other liabilities 124,479 124,479 124,479
Total on December 31, 2012 1,256 1,048,857 1,050,113 1,050,113
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108 Financial Report
Consolidated Financial Statements
2011 (in thousand CHF) Cash
Availablefor-sale
Fair value
through
profit or
loss held
for trading
Loans
and
receivables
Carrying
amount
Total
(fair value)
Trade receivables and other receivables 1,002,163 1,002,163 1,002,163
Unbilled forwarding services 77,346 77,346 77,346
Accrued interest income 757 757 757
Cash and cash equivalents 1,693 571,886 573,579 573,579
Other current financial assets 20,000 20,000 20,000
Derivative financial instruments 5,504 5,504 5,504
Investments:
Bonds and debentures 171 171 171
Shares 19,670 379 20,049 20,049
Other investments 225 225 225
Third-party loans 373 373 373
Rental and guarantee deposits 47,975 47,975 47,975
Other 3,525 3,525 3,525
Total on December 31, 2011 1,693 19,670 6,279 1,724,025 1,751,667 1,751,667
2011 (in thousand CHF)
Financial
liabilities at
fair value
through
profit or
loss
Financial
liabilities
measured
at amortized
cost
Carrying
amount
Total
(fair value)
Payables and accruals 915,529 915,529 915,529
Borrowings 6,921 6,921 6,921
Finance lease liabilities 606 606 606
Derivative financial instruments 4,648 4,648 4,648
Provisions and other liabilities 50,852 50,852 50,852
Total on December 31, 2011 4,648 973,908 978,556 978,556
Fair value hierarchy
The table below analyzes financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (ie, as prices)
or indirectly (ie, derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
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109
2012 (in thousand CHF) Level 1 Level 2 Level 3 Total
Available-for-sale financial assets 0 1,885 0 1,885
Financial assets at fair value through profit or loss held for trading 8,574 0 0 8,574
Derivative financial assets 0 2,948 0 2,948
Available-for-sale financial assets at cost 140
Total 13,547
Derivative financial liabilities 0 1,256 0 1,256
Total 1,256
2011 (in thousand CHF) Level 1 Level 2 Level 3 Total
Available-for-sale financial assets 0 1,715 17,640 19,355
Financial assets at fair value through profit or loss held for trading 663 112 0 775
Derivative financial assets 0 5,504 0 5,504
Available-for-sale financial assets at cost 315
Total 25,949
Derivative financial liabilities 0 4,648 0 4,648
Total 4,648
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial position date.
A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing
service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. The
quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by
using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely, as little as
possible, on entity-specific estimates. If all significant inputs required to fair-value an instrument are observable, the instrument is included in
level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The Group used the discounted cash flow method to determine the fair value of level 3 financial instruments.
The following table presents the changes in level 3 instruments for the year ended December 31, 2012:
in thousand CHF
Availablefor-sale
financial assets
Total
Balance on January 1 17,640 17,640
Sale of availiable-for-sale financial assets (18,104) (18,104)
Fair value adjustments recognized in income statement 464 464
Balance on December 31 0 0
Total gains or losses for the period included in the statement of comprehensive income for assets held
at the end of the reporting period 0 0
In 2012, CHF 464 thousand have been recycled from comprehensive income to the income statement due to the sale of Luxair SA shares.
Neither in 2012 nor in 2011 did the Group transfer financial instruments into another level.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market price. Market
prices entail three types of risk: foreign currency risk, interest rate risk and other price risk such as equity risk.
The Group’s activities expose it primarily to financial risk due to changes in foreign currency exchange rates.
Annual Report 2012

110 Financial Report
Consolidated Financial Statements
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily in regard to
the US dollar, the Euro and the Hong Kong dollar. Foreign exchange risk arises from future commercial transactions, recognized assets and
liabilities as well as net investments in foreign operations.
Management has set up a policy to require Group companies to manage their foreign exchange risk against their functional currency. The
Group companies are required to hedge their entire foreign exchange risk exposure with the Group Treasury, if possible. To manage foreign
exchange risks arising from future commercial transactions or recognized assets and liabilities, entities in the Group use forward contracts. Foreign
exchange risk arises when future commercial transactions or recognized assets and liabilities are denominated in a currency that is
not the Group entity’s functional currency. The Group Treasury is responsible for managing the net position using external derivative contracts.
For segment reporting purposes, each subsidiary designates contracts with the Group Treasury as fair value hedges. External foreign
exchange contracts are designated at the Group level as hedges of foreign exchange risk on specific assets and liabilities on a gross
basis.
At December 31, 2012, the Group’s net foreign currency risk exposure amounted to CHF 161.9 million (2011: CHF 9.4 million). The following
table demonstrates the sensitivity to a reasonable possible change of 10 % in the USD, EUR and HKD exchange rate, with all other
variables held constant, of the Group’s profit before income tax (due to changes in the fair value of monetary assets and liabilities).
Profit before income tax
Effect in thousand CHF 2012 2011
US dollar 23,871 (105)
Euro (5,211) (1,648)
Hong Kong dollar (3,398) (947)
Total effect 15,262 (2,700)
The movement in the pre-tax effect results from the change in the fair value of derivative financial instruments not designated in a hedging
relationship and monetary assets and liabilities denominated in USD, EUR and HKD, in which the functional currency of the entity is a cur rency
other than USD, EUR or HKD. Although the derivatives have not been designated in a hedge relationship, they act as a commercial hedge
and will offset the underlying transactions should they occur. If the exchange rates of all currencies changed by 10 %, the total maximum net
effect would amount to CHF 16.2 million (2011: CHF – 0.9 million).
Interest rate risk
The Group has a clear funding policy that prohibits affiliates from borrowing in foreign currency and has a clear preference for intragroup
financing. Affiliates are also required to repatriate their excess cash. Liquidity is mainly managed at the corporate level by using money market
products. Derivative instruments are used to manage the duration of financial instruments in a prudent manner.
As the Group generally has no significant interest-bearing liabilities, and given their short-term nature, the Group has a limited exposure to interest
rate risk. Consequently the Group’s expense and operating cash flows are substantially independent of changes in market interest rates.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial
loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities,
including deposits with banks and other financial institutions, foreign exchange transactions and other financial instruments.
Credit risk related to trade receivables
Customer credit is managed by each business unit and subject to the Group’s established policy, procedures and control relating to customer
credit risk management. Credit limits are established for all customers based on external ratings or, if not available, according to
internal rating criteria. The customer’s credit quality is assessed based on an extensive credit rating scorecard. Outstanding customer
receivables are regularly monitored. The objective of the management of trade receivables is to sustain the growth and profitability of the
Group by optimizing asset utilization while maintaining risks at an acceptable level. There is no significant concentration of counterparty credit
risk due to the Group’s large number of customers and their wide geographical spread. Risk limits and exposures are continuously monitored
by country and by the nature of counterparties. Additionally, the Group obtains credit insurance and similar enhancements when appropriate
to protect the collection of trade receivables.
Credit risk related to financial instruments and cash deposit
Credit risk from balances with banks and financial institutions is managed by the Group Treasury in accordance with the Group’s policy.
Investments of surplus funds are made only with approved counterparties and with credit limits assigned to each counterparty with a minimum
rating of A. Counterparty credit limits are reviewed by senior management on a regular basis. The limits are set to minimize the
concentra tion of risks and therefore mitigate financial loss through potential counterparty failure.
Annual Report 2012

Financial Report
Consolidated Financial Statements
111
The table below shows the Group’s maximum exposure to credit risk:
in thousand CHF 2012 2011
Cash and cash equivalents (without cash in hand) 391,980 571,886
Derivative financial instruments 2,948 5,504
Trade receivables and other receivables 1,169,404 1,106,317
Loans and other financial assets 29,635 49,123
Total financial assets shown in statement of financial position subject to credit risk 1,593,967 1,732,830
Guarantees 537,605 242,045
Total credit risk 2,131,572 1,974,875
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group’s approach to
managing liquidity is to ensure, to the extent possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts, bank loans,
de bentures, finance leases and hire purchase contracts. The Group’s liquidity is reported to the management on a monthly basis.
To secure liquidity, the Group holds a net cash position of CHF 391.2 million (2011: CHF 586.1 million) and credit lines with various finan cial
institutions totaling CHF 621.5 million (2011: CHF 515.9 million). Of this total, CHF 201.7 million (2011: CHF 179.8 million) is allocated to
bank guarantees and foreign exchange lines.
The table below summarizes the maturity profile of the Group’s financial liabilities on December 31, 2012/2011 based on contractual
un discounted payments.
2012 (in thousand CHF)
between
1 and 3 months
between
3 months and
1 year
between
1 and 5 years
Total remaining
contractual
payments
Borrowings (note 25) 1,442 169 257 1,868
Trade and other payables 465,441 188,941 0 654,382
Accruals 214,641 52,409 0 267,050
Other liabilities 6,656 26,569 0 33,225
Foreign exchange contracts
Cash inflow 314,945 9,854 0 324,799
Cash outflow (162,728) (5,496) 0 (168,224)
Total 840,397 272,446 257 1,113,100
2011 (in thousand CHF)
between
1 and 3 months
between
3 months and
1 year
between
1 and 5 years
Total remaining
contractual
payments
Borrowings (note 25) 2,838 4,457 232 7,527
Trade and other payables 633,436 29,545 0 662,981
Accruals 223,462 29,086 0 252,548
Provisions and other liabilities 21,193 8,051 0 29,244
Foreign exchange contracts
Cash inflow (800,997) (15,204) (6,115) (822,316)
Cash outflow 765,705 15,558 5,723 786,986
Total 845,637 71,493 (160) 916,970
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112 Financial Report
Consolidated Financial Statements
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern so as to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debts.
Capital is monitored on the basis of the equity ratio, which is calculated as equity (including non-controlling interests) as a percentage of total
assets. This is reported to the management as part of the Group’s regular internal management reporting.
The Group’s capital and equity ratio is shown in the table below:
in thousand CHF 2012 2011
Capital and reserves attributable to Panalpina shareholders 740,578 905,808
Equity attributable to non-controlling interests 9,241 9,082
Total equity 749,819 914,890
Total assets 1,957,055 2,135,322
Equity ratio 38.3% 42.8%
The Group is not subject to regulatory capital adequacy requirements.
19
Other receivables and other current assets
in thousand CHF 2012 2011
Taxes (VAT, withholding tax) 50,651 41,949
Accrued income 3,288 6,092
Accrued interest income 18 757
Personnel advances 2,506 1,405
Social security and payroll taxes 20 0
Prepaid rent expenses 4,983 5,371
Prepaid communication and IT expenses 3,370 3,325
Supplier rebates 10,612 16,912
Short-term loans 880 847
Others 4,724 8,339
Total other receivables and other current assets 81,052 84,997
Annual Report 2012

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113
20 Trade receivables
in thousand CHF 2012 2011
Commercial clients 1,041,681 990,839
Agents 17,162 17,684
Total trade receivables (gross values) 1,058,843 1,008,523
Individual allowance (219) (282)
Overall allowance (25,629) (23,837)
Total trade receivables (net) 1,032,995 984,404
Europe, Middle East, Africa, CIS 489,763 479,358
thereof European Union 197,299 380,646
thereof Switzerland 40,313 42,185
Americas 360,312 335,168
Asia Pacific 182,920 169,878
Total trade receivables (net) 1,032,995 984,404
There is no concentration of credit risk with regard to trade receivables as the Group has a large number of customers that are dispersed
internationally.
Provisions for impaired trade receivables are collectively assessed and represent the impairment that has been incurred but not identified.
Panalpina establishes its provisions for doubtful trade receivables based on its historical loss experiences. Significant financial difficulties of the
debtor are individually impaired. The maximum exposure to credit risk on the reporting date is the carrying amount of net trade receivables
mentioned above. Based on past experience, the Group does not anticipate writing off not-past-due nor unprovided trade receivables. The
creation and usage of provisions for impaired trade receivables have been included in other operating expenses in the income statement.
The following table summarizes the movement in the provision for impairment of trade receivables:
in thousand CHF 2012 2011
Balance as of January 1 24,119 27,313
Receivables written off during the year as uncollectible (5,550) (7,470)
Changes in provision for doubtful accounts 7,279 4,276
Balance as of December 31 25,848 24,119
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114 Financial Report
Consolidated Financial Statements
The following table provides details about the aging of trade receivables that are not overdue as the payment terms specified in the terms and
conditions established with Panalpina customers have not been exceeded, as well as an analysis of overdue amounts and related provisions
for doubtful trade receivables:
in thousand CHF 2012 2011
Commercial clients 1,041,681 990,839
Agents 17,162 17,684
Total trade receivables (gross values) 1,058,843 1,008,523
Allowance for bad debt (25,848) (24,119)
Total trade receivables (net) 1,032,995 984,404
of which:
Not overdue 745,579 734,894
Past due not more than 30 days 201,118 182,956
Past due more than 30 days up to 180 days 102,776 83,667
Past due more than 180 days up to 360 days 16,525 12,932
Past due more than 360 days 6,903 10,137
Prepayment (14,058) (16,063)
Total trade receivables (gross) 1,058,843 1,008,523
Allowance for bad debt (25,848) (24,119)
Total trade receivables (net) 1,032,995 984,404
21
Derivative financial instruments
Contract value
Positive
replacement value
Negative
replacement value
in thousand CHF 2012 2011 2012 2011 2012 2011
Forward foreign exchange contracts 492,876 728,316 2,948 5,504 (1,256) (4,648)
Forward trading hedges 492,876 728,316 2,948 5,504 (1,256) (4,648)
Contract value
Positive
replacement value
Negative
replacement value
in thousand CHF 2012 2011 2012 2011 2012 2011
Terms of the forward foreign
exchange contracts 492,876 728,316 2,948 5,504 (1,256) (4,648)
0 – 3 months 492,876 675,587 2,948 4,540 (1,256) (3,945)
4 – 12 months 0 46,614 0 505 0 (703)
13 – 18 months 0 6,115 0 459 0 0
Annual Report 2012

Financial Report
Consolidated Financial Statements
115
Derivative financial instruments are spread over the following currencies:
Forward foreign
exchange contracts
in thousand CHF 2012 2011
EUR 290,009 214,650
HKD 45,242 7,511
CNY 36,810 0
USD 21,286 443,673
CHF 19,950 520
MXN 19,024 2,353
SGD 8,972 24,222
MYR 6,875 0
BRL 6,230 0
TWD 6,179 0
KRW 5,774 0
VND 4,161 0
JPY 3,984 0
CAD 3,293 6,452
SEK 3,098 2,261
CZK 2,594 6,456
ZAR 1,776 0
PEN 1,513 0
UYU 1,019 0
GBP 0 10,618
NZD 0 4,725
NOK 0 2,342
Other 5,087 2,533
Total 492,876 728,316
22
Cash and cash equivalents
in thousand CHF 2012 2011
Cash on hand 1,081 1,693
Cash at bank 391,252 569,983
Checks and bills of exchange in transit 728 1,903
Total cash and cash equivalents 393,061 573,579
Net cash (debt) is comprised as follows:
in thousand CHF 2012 2011
Cash and cash equivalents 393,061 573,579
Other current financial assets 0 20,000
Short-term borrowings (1,611) (7,296)
Long-term borrowings (257) (231)
Net cash 391,193 586,052
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116 Financial Report
Consolidated Financial Statements
23 Share capital and treasury shares
in thousand CHF
Outstanding
number of shares
(numbers)
Ordinary
shares
Treasury
shares
Total
Balance on January 1, 2012 23,631,908 50,000 (197,278) (147,278)
Capital repayment 0 (45,125) 199 (44,926)
Treasury shares
Purchased (42,000) 0 (3,981) (3,981)
Sold under employee share plan 17,578 0 1,787 1,787
Sold under employee option plan 26,238 0 2,679 2,679
Bonus settled with own shares 15,878 0 1,615 1,615
Annihilation of shares repurchased 0 (2,500) 184,961 182,461
Balance on December 31, 2012 23,649,602 2,375 (10,018) (7,643)
The share capital is presented by 23,750,000 issued shares of CHF 0.10 par value (2011: 25 million of CHF 2.00 par value), fully paid in.
On December 31, 2012, the number of outstanding shares amounted to 23,649,602 shares (2011: 23,631,908) and the number of treas ury
shares to 100,398 (2011: 1,368,092). Treasury shares have been deducted from equity attributable to owners of the parent. All shares
issued by the Company were fully paid in.
The Shareholders’ Meeting held on May 8, 2012 approved a dividend of CHF 2.00 per share that will be distributed in respect of the business
year 2011. The total dividend paid in 2012 amounted to CHF 47.2 million (2011: none). In addition to the dividend payment the shareholders
approved the cancellation of the 1,250,000 repurchased shares. This resulted in a total remaining share capital of CHF 47.5 million
(23,750,000 shares). Furthermore, the Annual Meeting of Shareholders approved a reduction of the nominal value of the remaining
23,750,000 shares by CHF 1.90 per share. Therefore, the share capital further decreased by CHF 45.125 million to CHF 2.375 million.
The Shareholders’ Meeting also authorized the Board of Directors to create authorized capital to the maximum amount of CHF 0.3 million by
issuing a maximum of 3,000,000 registered shares with a nominal value of CHF 0.10 each at any time until May 10, 2013. The Board of
Directors has not made use of this au thorization. The Company has no conditional share capital.
The amount available for dividend distribution is based on the available distributable retained earnings of Panalpina World Transport (Holding)
Ltd. determined in accordance with the legal provisions of the Swiss Code of Obligations. The Board of Directors has proposed dividends
for the fiscal year 2012 of CHF 2.00 per share. This is subject to approval at the Annual Meeting of Shareholders on May 15, 2013.
Annual Report 2012

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117
24 Non-controlling interests
in thousand CHF 2012 2011
Balance on January 1, (net) 9,082 7,890
Translation differences (66) (204)
Interest in profit 271 1,119
Dividend paid (46) (46)
Acquisition Grieg 0 279
Capital increase Panalpina Vietnam 0 44
Total net non-controlling interests 9,241 9,082
In 2011, non-controlling interest increased by CHF 44 thousand due to the capital increase of Panalpina World Transport (Vietnam) Company
Ltd. In addition, the Grieg acquisition included non-controlling interests of CHF 279 thousand for the participation in Grieg Triangle
Logistics B.V., Netherlands.
Annual Report 2012

118 Financial Report
Consolidated Financial Statements
25 Borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured at
amortized cost. For more information about the Group’s exposure to foreign currency and liquidity risk, see note 18.
in thousand CHF 2012 2011
Current liabilities
Overdraft 1,395 2,681
Current portion of secured bank loans 0 4,233
Unsecured bank facility 0 4
Current portion of finance lease liabilities 216 378
Total current liabilities 1,611 7,296
Non-current liabilities
Non-current portion of finance lease liabilities 257 228
Other loans 0 3
Total non-current liabilities 257 231
Terms and repayment schedule
2012 2011
in thousand CHF
Currency
Nominal
interest rate
Year of
maturity
Carrying
amount
Fair value
Carrying
amount
Fair value
Current liabilities
Secured bank loan USD 2.74% 2012 0 0 4,233 4,233
Unsecured bank facility COP 8.48% 2012 0 0 4 4
Total current liabilities 0 0 4,237 4,237
Non-current liabilities
Other loans SGD n / a 2013 0 0 3 3
Total interest-bearing
liabilities 0 0 4,240 4,240
Finance lease liabilities
2012 2011
in thousand CHF
Future
minimum
lease
payments
Interest
Present value
of minimum
lease
payments
Future
minimum
lease
payments
Interest
Present value
of minimum
lease
payments
Less than 1 year 222 6 216 429 51 378
Between 1 and 5 years 263 6 257 255 27 228
Total interest-bearing liabilities 485 12 473 684 78 606
The weighted average interest rate of bank borrowings and other financing liabilities is 5.80 % (2011: 3.90 %). The carrying amounts of
short-term bank borrowings approximate their fair value.
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119
The maturity of the Group’s long-term financial debts (excluding lease liabilities) is shown in the following table:
2012 2011
in thousand CHF
2013 0 3
Total 0 3
The carrying amounts of the Group’s borrowings are denominated in the following currencies:
in thousand CHF 2012 2011
EUR 1,393 2,741
PLN 380 250
GBP 34 296
COP 2 4
USD 1 4,179
Others 58 57
Total 1,868 7,527
26
Long-term provisions
2012 (in thousand CHF)
Employee
benefits
Claims
and other
provisions
Total provisions
Balance on January 1 37,869 47,163 85,032
Translation differences (316) 1,226 910
Addition 6,636 13,154 19,790
Reversal of unused amount (8,637) (4,231) (12,868)
Charged in income statement (2,001) 8,923 6,922
Utilization (1,455) (1,215) (2,670)
Transfers 0 (17,113) (17,113)
Balance on December 31 34,097 38,984 73,081
2011 (in thousand CHF)
Employee
benefits
Claims
and other
provisions
Total provisions
Balance on January 1 34,450 78,129 112,579
Translation differences (587) 14 (573)
Change in scope of consolidation 267 414 681
Addition 8,904 5,086 13,990
Reversal of unused amount (1,948) (14,778) (16,726)
Charged in income statement 6,956 (9,692) (2,736)
Utilization (3,217) (5,106) (8,323)
Transfers 0 (16,596) (16,596)
Balance on December 31 37,869 47,163 85,032
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120 Financial Report
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Employee provisions mostly relate to certain employee benefit obligations, such as “anniversary” benefits, termination payments and long
service benefits, mainly in Switzerland, Germany, Austria, Italy, France and the USA. The timings of these cash outflows can be reasonably
estimated based on past performance. In addition, employee provisions include the liability of CHF 363 thousand (2011: CHF 2,527
thousand) for the cash-settled compensation plan. Significant provisions are discounted by using the corresponding discount rate applicable
in the respective countries where the obligation occurs.
The balance for claims represents a provision for certain claims brought forward against the Group by customers and forwarding agents.
The balance as of December 31, 2012 is expected to be utilized within the next two to five years. Long-term claims include an additional provision
for probable potential future payments in connection with transport damages of CHF 5.3 million (2011: CHF 1.5 million). In addition CHF
7.7 million was recognized for personnel tax exposure in 2012. Furthermore, in 2010, a long-term provision in the amount of CHF 38.0 million
was recorded to cover the fines, legal penalties and compliance consultancy fees relating to the settlement of the US Foreign Corrupt Practices
Act (FCPA). In the period under review the current portion of CHF 17.1 million (2011: CHF 16.6 million) has been reclassified to provisions
and other liabilities as it is expected to be utilized within one year. The management determined the provision based on past performance
and its expectation of the funds needed for the future settlement of the claims which are not yet reported (see also note 4 Critical
accounting estimates and judgments).
The current portion of employee provisions and claim provisions are disclosed in note 28.
27
Deferred income taxes
Deferred taxes are related to the following statement of financial position items:
in thousand CHF
Balance
January 1,
2011
Recognized
translation
differences
Recognized
in income
statement
Recognized
in OCI
Balance
December
31,
2011
Recognized
translation
differences
Recognized
in income
statement
Recognized
in OCI
Balance
December
31,
2012
Deferred tax assets
Receivables 1,263 (4) 1,278 0 2,537 16 726 0 3,279
Fixed assets 3,195 (10) 180 0 3,365 22 260 0 3,647
Provisions 18,673 (56) 1,195 (410) 19,402 123 2,047 (2,264) 19,308
Other statement of
financial position captions 11,456 (35) (6,305) 0 5,116 33 1,079 0 6,228
Deductible loss carryforwards
31,284 (94) 703 0 31,893 204 1,233 0 33,330
Total deferred tax assets 65,871 (199) (2,949) (410) 62,313 398 5,345 (2,264) 65,792
Deferred tax liabilities
Receivables (509) 0 104 0 (405) (1) (806) 0 (1,212)
Fixed assets (9,738) 7 (2,152) 0 (11,883) (20) (3,507) 0 (15,410)
Provisions (2,107) 1 (5,563) 5,829 (1,840) (3) 3,147 1,153 2,457
Other statement of financial
position captions (8,391) 6 8,021 0 (364) (1) (1,681) 0 (2,046)
Deductible loss carryforwards
0 0 0 0 0 0 0 0 0
Total deferred tax liabilities (20,745) 14 410 5,829 (14,492) (25) (2,847) 1,153 (16,211)
Net deferred tax assets
(liabilities) 45,126 (185) (2,539) 5,419 47,821 373 2,498 (1,111) 49,581
Annual Report 2012

Financial Report
Consolidated Financial Statements
121
The gross movement in the deferred income tax account is as follows:
in thousand CHF 2012 2011
Balance January 1 47,821 45,126
Translation differences 373 (185)
Income statement charge 2,498 (2,539)
Tax charged to equity due to IAS 19 (1,111) 5,419
Balance December 31 49,581 47,821
In 2012, temporary differences in the amount of CHF 0.5 million (2011: CHF 3.6 million) were not capitalized because it was not probable
that they could be offset against future profits.
Year of expiry of unrecognized tax loss carry-forwards (in thousand CHF) 2012 2011
2012 – 16,702
2013 13,499 15,399
2014 7,523 7,884
2015 15,709 768
2016 3,785 674
2017 0 –
Later 150,534 58,672
Total unrecognized tax loss carry-forwards 191,050 100,099
The total increase of CHF 91.0 million (2011: increase of CHF 19.8 million) derived mainly from unrecognized tax loss carry-forwards in
Austria, Brazil, the Netherlands and the USA . During the period under review, tax loss carry-forwards expired mainly in Finland and Denmark,
Angola and Venezuela. Tax loss carry-forwards of CHF 0.2 million (2011: CHF 13.4 million) were utilized mainly in China. During the
period under review the Group reassessed the recoverability of the deferred tax assets. As a result the Group derecognized capitalized
deferred tax assets amounting to CHF 7.1 million mainly in the USA, the Netherlands and Austria.
28
Provisions and other liabilities
2012 (in thousand CHF)
Employee
benefits and
others
Outstanding
vacation
entitlement
Claims
Restructuring
Total
Balance on January 1 73,107 22,420 29,244 649 125,420
Translation differences (695) (404) (1,094) (7) (2,200)
Addition 65,864 2,260 70,692 23,352 162,168
Reversal of unused amounts (40,269) (922) (7,722) (1,836) (50,749)
Charged in income statement 25,595 1,338 62,970 21,516 111,419
Utilization (46,422) (1,116) (75,008) (4,727) (127,273)
Transfers 0 0 17,113 0 17,113
Balance on December 31 51,585 22,238 33,225 17,431 124,479
Annual Report 2012

122 Financial Report
Consolidated Financial Statements
2011 (in thousand CHF)
Employee
benefits and
others
Outstanding
vacation
entitlement
Claims
Restructuring
Total
Balance on January 1 64,737 19,449 56,028 839 141,053
Translation differences (1,001) (571) (177) (20) (1,769)
Change in scope of consolidation 259 1,004 0 0 1,263
Addition 66,003 6,348 11,917 0 84,268
Reversal of unused amounts (15,043) (3,075) (23,399) 0 (41,517)
Charged in income statement 50,960 3,273 (11,482) 0 42,751
Utilization (41,848) (735) (31,721) (170) (74,474)
Transfers 0 0 16,596 0 16,596
Balance on December 31 73,107 22,420 29,244 649 125,420
Apart from outstanding vacation entitlement and the current portions of provisions as disclosed in note 26, provisions and other liabilities
include personnel profit participation and related social security costs and payroll taxes as well as compliance consultancy fees. During the
period under review, CHF 62.9 million of personnel profit participation was made, thereof CHF 39.8 million was reversed again in
December. In 2012, CHF 41.7 million of personnel profit participation (2011: CHF 30.8 million) was paid out. For the current year, a
total amount of CHF 32.0 million (2011: CHF 51.2 million) including related social security costs and payroll taxes was recognized for
personnel profit participation.
As disclosed in notes 3 and 26, claim provisions include the current portion of certain claims brought forward against the Group by customers
and forwarding agents as well as a short-term provision of approximately CHF 17.1 million to cover the fines, legal penalties and
compliance consultancy fees relating to the settlement of both the US Foreign Corrupt Practices Act (FCPA) and the US anti-trust investigations.
The addition for claim provision includes CHF 59.2 million to settle the penalties from WEKO and EU anti-trust claim provision. The
CHF 56.0 for the EU anti-trust claim was paid within the third quarter 2012 whereas the CHF 3.2 million for WEKO are still included in the
total claim provision. The expenses for the WEKO and EU anti-trust claim provision are incuded in other operating expenses. During the
period under review, the provision for FCPA recognized in previous year within long-term provisions was reclassified to provisions and
other liabilities and paid out.
The balance as of December 31 is expected to be utilized within one year.
The restructuring provision newly added in 2012 concerns headcount reductions in all functions mainly in marketing and sales and in
operations in various countries with the largest amount incurred in Europe and North America as well as on corporate level. The previous
year’s balance was initially recognized for the restructuring plan announced 2009. The timings of these cash outflows are expected to occur
within one year.
29
Related parties
Key management personnel compensation
Key management personnel consists of the Board of Directors and the Executive Board. The members of the Board of Directors receive a
fixed annual compensation and participate in certain equity compensation plans (see note 8). In 2012, there were 7 (2011: 7) members of
the Board of Directors.
The compensation of the Executive Board consists of a fixed portion and a variable portion, which depends on the course of business and
the individual manager’s performance. In addition, members of the Executive Board receive indirect benefits and are able to participate in
certain equity compensation plans (see note 8). In 2012, there were 5 (2011: 5) members of the Executive Board.
Annual Report 2012

Financial Report
Consolidated Financial Statements
123
The following table shows the compensation of key management personnel:
2012 (in thousand CHF)
Annual
salary 1
Bonus
Termination
benefits
Other
benefits 2
Sharebased
payment 3
Social
security
contribution
Total
compensation
2012
Board of Directors
Rudolf W. Hug, Chairman 453 60 513
Beat Walti, Vice Chairman 153 28 181
Lars Förberg, Member 154 25 179
Chris E. Muntwyler, Member 153 28 181
Roger Schmid, Member* 167 0 167
Hans-Peter Strodel, Member 155 24 179
Knud Elmholdt Stubkjær, Member 153 0 153
Total remuneration of Board of Directors 1,388 0 0 0 0 165 1,553
Executive Board
Monika Ribar, Chief Executive Officer 950 0 44 373 205 1,572
Members of the Executive Board 1,620 216 257 616 438 3,147
Executive Management leaving 325 0 21 204 95 645
Total remuneration of Executive Board 2,895 216 0 322 1,193 738 5,364
Total remuneration of key management personnel 4,283 216 0 322 1,193 903 6,917
2011 (in thousand CHF)
Annual
salary 1
Bonus
Termination
benefits
Other
benefits 2
Sharebased
payment 3
Social
security
contribution
Total
compensation
2011
Board of Directors
Rudolf W. Hug, Chairman 453 50 63 566
Beat Walti, Vice Chairman 153 50 22 225
Lars Förberg, Member 79 50 11 140
Chris E. Muntwyler, Member 153 50 22 225
Roger Schmid, Member* 155 50 205
Hans-Peter Strodel, Member 155 50 17 222
Knud Elmholdt Stubkjær, Member 77 50 12 139
Board of Directors leaving
Günter Rohrmann 102 102
Total remuneration of Board of Directors 1,327 0 0 0 350 147 1,824
Executive Board
Monika Ribar, Chief Executive Officer 913 570 125 380 145 2,133
Members of the Executive Board 2,246 1,014 144 1,157 555 5,116
Executive Management leaving 113 9 16 138
Total remuneration of Executive Board 3,272 1,584 0 278 1,537 716 7,387
Total remuneration of key management personnel 4,599 1,584 0 278 1,887 863 9,211
1
Salaries incl. fixed remuneration, salary and discount on shares granted
2
Other benefits incl. expense allowance and fringe benefits
3
This disclosure item has been amended to reflect current year treatment to disclose benefits to the Board of Directors
*
Remuneration respectively shares have been transferred to Ernst Göhner Stiftung (employer of respective board member)
During the period under review Panalpina Welttransport GmbH in Germany leased from an affiliate of Ernst Göhner Stiftung two buildings
one in Stuttgart and one in Nuerenberg. The lease paid in the fiscal year 2012 amounts to CHF 3.6 million. There were no contributions or
donations to close members of the families of the key management.
Annual Report 2012

124 Financial Report
Consolidated Financial Statements
The following table shows the equity holdings in Panalpina World Transport (Holding) Ltd. (PWT) of key management personnel and their
related parties in line with article 663b bis and 663c of the Swiss Code of Obligations.
Number of PWT
nominal shares
Number of options
(End of vesting period)
2013 2014
Board of Directors
Rudolf W. Hug, Chairman 8,926 1,325 2,020
Beat Walti, Vice Chairman 991 0 0
Lars Förberg, Member 564 0 0
Chris E. Muntwyler, Member 991 0 0
Roger Schmid, Member* 9,375 1,325 0
Hans-Peter Strodel, Member 991 0 0
Knud Elmholdt Stubkjær, Member 564 0 0
Total on December 31, 2012 22,402 2,650 2,020
Executive Board
Monika Ribar, Chief Executive Officer 35,596 1,325 2,020
Christoph Hess, General Counsel and Corporate Secretary 5,423 600 1,000
Karl Weyeneth, Chief Operating Officer 4,922 497 303
Alastair Robertson, Chief Human Resources 5,314 0 200
Total on December 31, 2012 51,255 2,422 3,523
Total on December 31, 2012 73,657 5,072 5,543
Number of PWT
nominal shares
Number of options
(End of vesting period)
2012 2013 2014
Board of Directors
Rudolf W. Hug, Chairman 8,362 1,200 1,325 2,020
Beat Walti, Vice Chairman 427 0 0 0
Lars Förberg, Member 0 0 0 0
Chris E. Muntwyler, Member 427 0 0 0
Roger Schmid, Member* 9,375 1,800 1,325 0
Hans-Peter Strodel, Member 427 0 0 0
Knud Elmholdt Stubkjær, Member 0 0 0 0
Total on December 31, 2011 19,018 3,000 2,650 2,020
Executive Board
Monika Ribar, Chief Executive Officer 26,183 1,800 1,325 2,020
Christoph Hess, General Counsel and Corporate Secretary 4,208 600 600 1,000
Karl Weyeneth, Chief Operating Officer 9,044 0 497 303
Marco Gadola, Chief Financial Officer 3,858 1,800 1,325 2,020
Alastair Robertson, Chief Human Resources 4,050 0 0 200
Total on December 31, 2011 47,343 4,200 3,747 5,543
Total on December 31, 2011 66,361 7,200 6,397 7,563
*
Remuneration respectively shares have been transferred to Ernst Göhner Stiftung (employer of respective board member)
Shareholders, pension funds, associated companies and all subsidiaries are defined as parties related to the Group. Apart from the transactions
with related parties mentioned above, we refer to notes 7 and 8.
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125
30 Business combinations/disinvestments
In 2012 there were no business combinations, nor were any significant subsidiaries sold.
In 2011, Panalpina World Transport (Pty) Ltd. in Sydney announced the purchase of defined tangible and intangible assets and the business
of Apollo Forwarding in Perth. Apollo and Panalpina have been close partners for more than ten years. During that time, Apollo Perth
has acted as an agent of Panalpina. The purchase enables Panalpina to further enlarge the geographical office coverage in Oceania and
widen the customer base. In addition to being a well-established customs broker, Apollo Perth also provides international freight forwarding
services to its Australia-based customers who now gain access to Panalpina’s global network. The acquisition has been settled for a final cash
consideration of CHF 2.9 million.
As per April 1, 2011 the Group acquired 100 percent of the issued share capital of Grieg Logistics AS, a company today encompassing freight
forwarding, domestic transportation, warehousing, distribution and customs clearance with operations in fourteen locations. Grieg Logistics,
established in 1969, is a leading logistics provider to the Norwegian oil and gas, shipping and maritime industries. It has a broad product
portfolio including logistics, freight forwarding and project development. In Norway, Grieg Logistics serves the national market with offices
throughout the country. Businesses will add approximately NOK 400 million (CHF 67.0 million) to the Panalpina Group’s annual turnover. Grieg
Logistics, with its strategic locations throughout Norway, has built up a strong reputation for providing customers with tailor-made services
to meet their needs. The acquisition was settled for a final cash consideration of CHF 60.3 million. The acquired business contributed net
forwarding revenue of CHF 49.4 million and net profit of CHF 0.2 million to the Group for the period from April 1 to December 31, 2011.
Tangible assets acquired in 2011 include mainly office equipment and vehicles. Intangible assets include customer relationships.
Details of net assets acquired and goodwill are as follows:
in thousand CHF 2011
Purchase consideration
– Cash paid 63,160
Total purchase consideration 63,160
Fair value of net assets acquired (22,570)
Non-controlling interest 279
Goodwill 40,869
The goodwill is attributable to market knowledge and experience of the acquired employees, the profitability of the acquired business and
the synergies expected to arise after the Group’s acquisition.
The assets and liabilities arising from the acquisition are the following:
in thousand CHF
Fair value
2011
Cash and cash equivalents 3,174
Property, plant and equipment 444
Intangible assets 15,927
Other non-current assets 279
Trade receivables 10,322
Other current assets 357
Total acquired assets 30,503
Payables (2,501)
Provisions (333)
Other current liabilities (5,099)
Total acquired liabilities (7,933)
Net assets acquired 22,570
Non-controlling interests (279)
Less acquired liquidity (3,174)
Goodwill 40,869
Total cash used in acquisition of businesses 59,986
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126 Financial Report
Consolidated Financial Statements
31 Additional information
Contractual commitments on non-cancellable operating lease contracts 2012 2011
in thousand CHF
Less than one year 185,965 139,128
Between one and five years 382,343 261,044
More than five years 102,558 99,459
Total residual commitments 670,866 499,631
Pledged assets
As of the statement of financial position date 2012 and 2011, the Group does not have any pledged assets.
Pending legal claims
Introduction
In addition to the matters discussed in note 4, section Provisions, from time to time the Group is involved in legal proceedings in the ordinary
course of its business. Other than as noted below, the Group is not a party to any legal, administrative or arbitration proceedings which could
significantly harm the Group’s business, financial condition and results of operations taken as a whole, and it does not know of any such proceedings
which may currently be contemplated by governmental or third parties.
Claim against Pantainer Ltd.
In a case which originated in 2004, it is alleged that a fire occurred on a container vessel due to containers shipped under Pantainer bills
of lading containing chemicals that were not declared as hazardous cargo. As a consequence the vessel has declared general average.
Claimants may seek compensation of general average contributions, damage and loss of cargo and potential damages to the vessel.
Formal legal proceedings were launched in Tokyo in 2005 against the shipper which, in turn, commenced third-party proceedings against
Pantainer Ltd. and other companies of the Group. Neither Pantainer nor any other Panalpina Group companies are named defendants
in the Tokyo litigation. In July 2010, the court dismissed all claims of the plaintiffs and plaintiffs have appealed the judgment. The value in
dispute amounts to approximately CHF 25 million.
Business practices investigation
In November 2010, Panalpina entered into a Deferred Prosecution Agreement (DPA) with the US Department of Justice (DOJ) to resolve
claims against it arising from an investigation by the DOJ and the US Securities and Exchange Commission (SEC) for violations of the US
Foreign Corrupt Practices Act (FCPA). Under the DPA, the DOJ has agreed to defer any criminal prosecution for three years. Panalpina has
accepted certain obligations under the DPA, such as further strengthening its compliance policies and procedures and providing regular
reports to the DOJ on the Company’s progress. If Panalpina satisfies its obligations under the DPA, the DOJ has agreed to release the
Company from criminal liability at the end of the three-year term.
Freight forwarding antitrust investigation
In October 2007, Panalpina’s headquarters in Switzerland and the USA were visited by the respective competition authorities. Further, a
request for information was served by the New Zealand Commerce Division and a document retention notice by the Competition Bureau
Canada.
In April 2008, the Australian Competition and Consumer Commission served a notice on the Australian subsidiary requesting information
and documents and in June 2008, Panalpina’s UK subsidiary was the recipient of a request for information issued by the European Commission
requesting certain information and records relating to alleged antitrust violations in the freight forwarding industry.
In August 2010, Brazilian authorities announced preliminary investigations against the freight forwarding industry.
These activities were part of an investigation of several competition authorities against various major freight forwarding companies for
alleged anti-competitive behavior.
In 2009, the Competition Bureau Canada closed its investigation into alleged anti-competitive activity due to a lack of evidence substantiating
an undue lessening of competition. In January 2010, the Australian Competition and Consumer Commission also discontinued its
investigation.
In October 2010, Panalpina announced a settlement with the DOJ over violations of the Sherman Antitrust Act related to the sale of international
air freight forwarding services. Under the terms of the settlement, which has been approved by the competent court, Panalpina has
agreed to pay a fine of approximately USD 12 million.
In 2011 Panalpina completed settlement negotiations with the New Zealand Commerce Commission and the agreed penalty has been
approved by the competent court.
Annual Report 2012

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127
In February 2010, Panalpina was served with a Statement of Objections by the European Commission, alleging anti-competitive behavior in
the freight forwarding industry. In March 2012, the EU Commission has fined various major freight forwarding companies for anti-trust violations
prior to 2008 related to isolated air freight surcharges on certain European trade lanes. Panalpina was ordered to pay a penalty of EUR
46.5 million. Panalpina has appealed the European Commission’s decision to the European General Court. Nevertheless the penalty was
paid in the period under review.
Further Panalpina has signed a settlement agreement with competition authorities in Switzerland, which was formally approved by the Swiss
Competition Commission in December 2012. A provision for the respective penalty and related costs of CHF 3.2 million was booked in
2012.
Regarding the Brazilian proceedings, Panalpina’s Holding company has in the reporting year been served with a preliminary investigation
notice by the Brazilian competition authority (SDE) alleging anti-trust violations.
In November 2012 Panalpina received a notice from the Competition Commission Singapore requiring the provision of specified information
related to the airfreight surcharges which have been subject of the previous and meanwhile completed investigations by other competition
authorities. Panalpina has provided this information in December 2012.
It is not possible to predict the outcome of the pending anti-trust proceedings in Brazil and Singapore at this stage. They may, however,
result in penalties being imposed on Panalpina. As Panalpina is not yet in a position to assess its exposure and the potential financial consequences
in these proceedings, no related provisions have been made as of December 31, 2012.
Furthermore, in 2008 a civil class action lawsuit was filed in the USA against Panalpina and a number of its major competitors as a direct
consequence of these investigations, alleging a conspiracy in the pricing of freight forwarding services. In July 2009, plaintiffs filed an
amended complaint adding additional defendants and claims. In November 2009, the Company, along with other defendants, filed motions
to dismiss the amended complaint for failure to state a claim and for lack of subject matter jurisdiction. Oppositions to the motions were filed
in January 2010. In August 2012 the judge dismissed the claims with leave for plaintiffs to replead. A third amended complaint was filed in
November 2012. In February 2013 Panalpina jointly with other defendants filed a motion to dismiss the complaint with prejudice. Defendants
in particular argue that plaintiffs have again failed to allege facts showing they have antitrust standing. At this stage, Panalpina is unable to
express an opinion as to the probable outcome of this litigation and thus to estimate the potential payments, if any.
Subsequent events
Since the statement of financial position date, no events have become known for which a disclosure is required.
Annual Report 2012

128 Financial Report
Consolidated Financial Statements
32 Principal Group companies and participations
Company Registered Currency
Nominal
capital
in 1,000
Equity
interest
in %
Investment
Method
of consolidation
Europe
Panalpina World Transport (Holding) Ltd. Basel CHF 2,375 K
Panalpina Management Ltd. Basel CHF 2,500 100 1 K
Panalpina Ltd. Basel CHF 600 100 1 K
Pantainer Ltd. Basel CHF 100 100 1 K
Panalpina Insurance Broker Ltd. Basel CHF 100 100 1 K
Panalpina International Ltd. Basel CHF 1,000 100 1 K
Hausmann Transport Ltd. Basel CHF 100 100 1 K
Panalpina Air & Ocean Ltd. Basel CHF 2,700 100 1 K
Panalpina Global Employment Services Ltd. Basel CHF 100 100 1 K
Panalpina Welttransport (Deutschland) GmbH Mörfelden EUR 10,226 100 1 K
Panalpina Welttransport GmbH Vienna EUR 36 100 1 K
Panalpina Welttransport GmbH Höchst EUR 36 100 1 K
Panalpina France Transports Internationaux S.A.S. Paris-Roissy EUR 2,000 100 1 K
Panalpina Trasporti Mondiali S.p.A. Milan EUR 2,000 100 1 K
Panalpina Transportes Mundiales S.A. Madrid EUR 451 100 1 K
Panalpina Transportes Mundiais Lda Lisbon EUR 50 100 1 K
Panalpina World Transport Ltd. London GBP 12,350 100 1 K
Panalpina World Transport (Ireland) Ltd. Dublin EUR 25 100 1 K
Panalpina World Transport N.V. Antwerp EUR 19,050 100 1 K
Panalpina Luxembourg S.A. Luxembourg EUR 31 100 1 K
Panalpina World Transport B.V. Amsterdam EUR 4,091 100 1 K
Grieg Triangel Spijkenisse EUR 50 51 1 K
Grampian International Freight B.V. Beverwijk EUR 18 100 1 K
Panalpina Czech Sro. Prague CZK 1,000 100 1 K
Panalpina Croatia d.o.o. Rijeka HRK 400 100 1 K
Panalpina Slovakia S.R.O. Bratislava EUR 23 100 1 K
Panalpina Magyarorszag Kft. Budapest HUF 528,000 100 1 K
Panalpina Romania S.R.L. Oradea RON 72 100 1 K
Panalpina Polska Sp. z o.o. Wroclaw PLN 1,500 100 1 K
Panalpina AB Gothenburg SEK 1,000 100 1 K
Panalpina A / S Oslo NOK 75,060 100 1 K
Panalpina World Transport Nakliyat Ltd. Srk. Istanbul TRY 7,408 100 1 K
Panalpina World Transport ZAO Moscow RUB 2,100 100 1 K
Panalpina CIS Helsinki OY Vantaa EUR 8 100 1 K
Panalpina Logistics LLC Moscow RUB 240 100 1 K
Panalpina World Transport Ltd. Kiev UAH 376 100 1 K
Annual Report 2012

Financial Report
Consolidated Financial Statements
129
Company Registered Currency
Nominal
capital
in 1,000
Equity
interest
in %
Investment
Method
of consolidation
North, Central and South America
Panalpina Inc. Jersey USD 83,000 100 1 K
Panalpina FMS, Inc. (Washington) Jersey City USD 1 100 1 K
International Claims Handling Services Inc. Miami USD 1 100 1 K
Panalpina Inc. Toronto CAD 100 100 1 K
Panalpina Transportes Mundiales, S.A. de C.V. Mexico City MXN 35,834 100 1 K
Panalpina S.A. Panama City USD 1,250 100 1 K
Almacenadora Mercantil S.A. Panama City USD 25 100 1 K
Panalpina S.A. de C.V. San Salvador SVC 100 100 1 K
Panalpina Transportes Mundiales S.A. San José CRC 2,500 100 1 K
Las Fronteras S.A. San José CRC 1,590 100 1 K
Panalpina Uruguay Transportes Mundiales S.A. Montevideo UYU 4,093 100 1 K
Panalpina S.A. Santa Fé de Bogotá COP 7,450,838 100 1 K
DAPSA Depositos Aduaneros Panalpina S.A. Santa Fé de Bogotá COP 2,815,208 100 1 K
Panalpina C.A. Caracas VEF 7,299,297 100 1 K
Panalpina Ecuador S.A. Quito USD 1 100 1 K
Panalpina Aduanas S.A. Lima PEN 732 100 1 K
Panalpina Transportes Mundiales S.A. Lima PEN 4,008 100 1 K
Panalpina Ltda São Paulo BRL 127,317 100 1 K
Panalpina Chile Transportes Mundiales Ltd.a Santiago CLP 1,593,521 100 1 K
Panalpina Transportes Mundiales S.A. Buenos Aires ARS 25,050 100 1 K
Panalpina Logistics S.R.L. Buenos Aires ARS 16,662 100 1 K
Panalpina Transportes Mundiales S.A. de C.V. Santo Domingo DOP 1,000 100 1 K
Mondi Reinsurance Ltd. Hamilton CHF 1,000 100 1 K
Asia and Australia
Panalpina World Transport (Singapore) Pte. Ltd. Singapore SGD 2,500 100 1 K
PT Panalpina Nusajaya Transport Jakarta IDR 1,500,000 100 1 K
Panalpina China Ltd. Hong Kong HKD 1,000 100 1 K
Panalpina World Transport (PRC) Ltd. Shanghai CNY 13,500 100 1 K
Panalpina Logistics (Shanghai) Ltd. Shanghai CNY 5,000 100 1 K
Panalpina Logistics (Wuhan) Ltd. Wuhan CNY 10,000 100 1 K
Panalpina Logistics (Chengdu) Limited Chengdu CNY 5,000 100 1 K
Panalpina Asia-Pacific Services Ltd. Hong Kong HKD 500 100 1 K
Panalpina World Transport Ltd. Hong Kong HKD 500 100 1 K
Pantainer (H. K.) Limited Hong Kong HKD 100 100 1 K
International Claims Handling Services Ltd. Hong Kong HKD 10 100 1 K
Panalpina Taiwan Ltd. Taipei TWD 15,500 100 1 K
Panalpina IAF (Korea) Ltd. Seoul KRW 500,000 100 1 K
Panalpina World Transport (Thailand) Ltd. Bangkok THB 27,000 100 1 K
Panalpina Asia-Pacific Services (Thailand) Ltd. Bangkok THB 10,000 100 1 K
Panalpina Macao Ltd. Macao HKD 1,000 100 1 K
Panalpina World Transport (Vietnam) Company Ltd. Ho Chi Minh City VND 6,360,145 49 2 K
Panalpina Transport (Malaysia) Sdn. Bhd. Kuala Lumpur MYR 4,215 100 1 K
Panalpina World Transport (Japan) Ltd. Tokyo JPY 50,000 100 1 K
ASB Air Japan Ltd. Tokyo JPY 10,000 100 1 K
Panalpina World Transport (India) Pvt. Ltd. Delhi INR 100,050 100 1 K
Panindia Cargo Private Ltd., Delhi Delhi INR 100 100 1 K
Panalpina World Transport (Philippines) Inc. Manila PHP 10,000 100 1 K
Panalpina World Transport (Pty) Ltd. Sydney AUD 15,000 100 1 K
Panalpina World Transport LLP Almaty KZT 1,252,395 100 1 K
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130 Financial Report
Consolidated Financial Statements
Company Registered Currency
Nominal
capital
in 1,000
Equity
interest
in %
Investment
Method
of consolidation
Middle East and Africa
Panalpina Gulf LLC Dubai AED 1,000 49 2 K
Panalpina Jebel Ali Ltd. Jebel Ali AED 100 100 1 K
Panalpina World Transport (Dubai) DWC-LLC Dubai AED 300 100 1 K
Panalpina World Transport (Kuwait) WLL Kuwait KWD 20 49 2 K
Panalpina (Bahrain) WLL Manama BHD 20 100 1 K
Panalpina Central Asia EC Manama USD 17,020 100 1 K
Alpha for General Transportation LLC. Baghdad IQD 11,000 100 1 K
Panalpina Georgia LLC Tbilisi GEL 11 100 1 K
Panalpina Azerbaijan LLC Baku AZN 1 100 1 K
Panalpina Turkmenistan LLC Turkmenbashi TMT 62 100 1 K
Qatar Shipping Company (Panalpina Qatar) WLL Doha QAR 200 49 2 K
Panalpina World Transport (Saudi Arabia) Ltd. Al Khobar SAR 500 100 1 K
Panalpina Transports Mondiaux Cameroun S.A.R.L. Douala XAF 150,000 100 1 K
Panalpina Transports Mondiaux Algérie EURL Hassi Messaoud DZD 128,039 100 1 K
Panalpina Transports Mondiaux Congo S.A.R.L. Pointe-Noire XAF 70,000 100 1 K
Panalpina Transports Mondiaux Gabon S.A. Port-Gentil XAF 50,000 90 1 K
Panalpina (Ghana) Ltd. Accra GHS 10 100 1 K
Panalpina Transportes Mundiais Navegãçao
e Trânsitos S.A.R.L. Luanda AOA 18 92 1 K
K = fully consolidated
1 = capital participation 50 – 100 %
2 = controlling influence over management
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Consolidated Financial Statements
131
Report of the Statutory Auditor on the Consolidated
Financial Statements to the General Meeting
of Shareholders of
Panalpina World Transport (Holding) Ltd., Basel
As statutory auditor, we have audited the accompanying consolidated financial statements of Panalpina World Transport (Holding) Ltd.,
which comprise the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial
position, consolidated statement of changes in equity, consolidated statement of cash flows and notes on pages 70 to 130 for the year
ended December 31, 2012.
Board of Directors’ Responsibility
The board of directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with
International Financial Reporting Standards (IFRS) and the requirements of Swiss law. This responsibility includes designing, implementing and
maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate
accounting policies and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in
accordance with Swiss law and Swiss Auditing Standards as well as International Standards on Auditing. Those standards require that
we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control
system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting
estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements for the year ended December 31, 2012 give a true and fair view of the financial position,
the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728
CO and article 11 AOA) and that there are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists,
which has been designed for the preparation of consolidated financial statements according to the instructions of the board of directors.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG AG
Regula Wallimann
Licensed Audit Expert
Auditor in Charge
Martin Rohrbach
Licensed Audit Expert
Zurich, March 1, 2013
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132 Financial Report
Consolidated Financial Statements
Key Figures in CHF
Five-year review
in million CHF 2012 2011 2010 2009 2008
Forwarding services 8,066 7,926 8,676 7,340 10,597
Change in % 1.77 (8.64) 18.19 (30.73) 0.47
Net forwarding revenue 6,617 6,500 7,164 5,958 8,878
Change in % 1.80 (9.27) 20.25 (32.89) 2.74
Gross profit 1,465 1,477 1,480 1,377 1,742
Change in % (0.81) (0.21) 7.49 (20.94) (3.43)
in % of net revenue 22.14 22.72 20.66 23.11 19.62
Consolidated (loss)/profit (70.2) 127.4 (26.0) 10.4 113.8
Change in % (155.10) (590.06) (348.94) (90.82) (45.98)
in % of gross profit (4.79) 8.63 (1.76) 0.76 6.53
EBITDA 36.5 212.1 62.4 79.7 240.7
Change in % (82.79) 240.09 (21.78) (66.88) (33.29)
in % of gross profit 2.49 14.36 4.21 5.79 13.82
EBITA 5.3 183.6 23.5 42.5 204.7
Change in % (97.11) 682.11 (44.77) (79.23) (34.13)
in % of gross profit 0.36 12.43 1.59 3.09 11.75
EBIT (37.4) 174.2 15.4 29.9 193.0
Change in % (121.47) 1,033.97 (48.64) (84.50) (35.54)
in % of gross profit (2.55) 11.79 1.04 2.17 11.08
Cash generated from operations (39.6) 229.1 75.3 311.8 274.5
Change in % (117.29) 204.35 (75.86) 13.58 (1.58)
in % of gross profit (2.70) 15.51 5.09 22.64 15.76
Net cash from operating activities (71.5) 193.5 37.0 259.8 193.2
Change in % (136.95) 422.45 (85.74) 34.45 (7.78)
in % of gross profit (4.88) 13.10 2.50 18.87 11.09
Free cash flow (81.9) 41.9 6.2 225.9 170.2
Change in % (295.47) 570.94 (97.24) 32.73 (23.20)
in % of gross profit (5.59) 2.84 0.42 16.41 9.77
Net working capital 134.1 85.2 143.0 132.2 351.6
Change in % 57.39 (40.42) 8.20 (62.42) (27.92)
Capital expenditure on fixed assets 84.2 51.2 40.0 41.8 58.4
Change in % 64.45 27.87 (4.31) (28.34) 14.90
in % of gross profit 5.75 3.47 2.71 3.04 3.35
Net capital expenditure on fixed assets 83.9 108.7 28.5 29.4 25.6
Change in % (22.79) 281.81 (3.24) 14.81 (43.56)
in % of gross profit 5.73 7.36 1.92 2.14 1.47
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in million CHF 2012 2011 2010 2009 2008
Depreciation and amortization 73.9 37.9 47.0 49.8 47.8
Change in % 94.99 (19.37) (5.65) 4.33 (22.33)
in % of gross profit 5.04 2.57 3.18 3.62 2.74
Personnel expenses 955.0 892.4 890.9 879.1 992.5
Personnel
Number of employees at year-end (world) 15,224 15,051 14,136 13,570 14,804
Number of employees at year-end (Switzerland) 759 775 749 737 778
Productivity ratios (CHF)
Net sales per average employee 434,643 425,226 503,703 429,864 582,867
Gross profit per average employee 96,229 96,624 104,062 99,343 114,356
Personnel expenses per average employee 62,730 58,380 62,641 63,430 65,163
Personnel cost in % of gross profit 65.19 60.42 60.20 63.85 56.99
Leverage (liabilities / equity) 1.63 1.35 1.46 1.24 1.27
Net interest-bearing liabilities (391) (591) (546) (535) (381)
Gross gearing (interest-bearing liabilities / equity) 0.00 0.01 0.01 0.02 0.02
Net gearing (net interest-bearing liabilities / equity) (0.53) (0.65) (0.68) (0.63) (0.44)
ROCE (EBIT less tax / capital employed) in % (19.10) 43.22 (5.40) 6.14 23.03
Current cash debt coverage ratio
(net operating cash flow / average current liability) (0.05) 0.19 0.04 0.27 0.19
Cash debt coverage ratio
(net operating cash flow / average total liability) (0.06) 0.16 0.03 0.24 0.16
Return on equity in % (8.5) 14.9 (3.1) 1.2 12.1
Change in % (157.05) (575.95) (360.88) (89.97) (42.92)
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Consolidated Financial Statements
Consolidated Statement of Financial Position in CHF
Five-year review
in million CHF 2012 2011 2010 2009 2008
ASSETS 1,957 2,135 1,989 1,925 1,971
Change in % (8.36) 7.34 3.36 (2.35) (13.48)
Current assets 1,595 1,745 1,686 1,599 1,679
Change in % (8.60) 3.50 5.48 (4.78) (12.64)
Liquid funds 393 599 555 548 401
Change in % (34.39) 7.77 1.30 36.69 12.00
Receivables and other current assets 1,202 1,147 1,131 1,050 1,278
Change in % 4.80 1.41 7.66 (17.80) (18.28)
Non-current assets 362 390 303 326 292
Change in % (7.18) 28.72 (7.04) 11.66 (18.00)
Property, plant and equipment 130 113 114 141 148
Change in % 15.04 (0.57) (19.42) (4.35) (11.89)
Financial assets 97 135 111 113 70
Change in % (28.15) 21.62 (1.53) 60.07 (31.29)
Intangible assets 134 142 78 72 74
Change in % (5.63) 81.51 8.65 (2.52) (14.06)
LIABILITIES AND EQUITY 1,957 2,135 1,989 1,925 1,971
Change in % (8.32) 7.34 3.36 (2.35) (13.48)
Liabilities 1,207 1,220 1,177 1,061 1,100
Change in % (1.08) 3.68 10.93 (3.50) (12.18)
Payables, accruals and deferred income 1,008 1,002 914 878 912
Change in % 0.60 9.71 4.05 (3.69) (13.65)
Borrowings 2 8 10 13 20
Change in % (75.00) (22.70) (24.43) (36.49) (39.38)
Provisions 197 210 254 170 167
Change in % (6.19) (17.02) 49.17 1.54 2.91
Non-controlling interests 9 9 8 7 8
Equity 741 906 804 857 864
Change in % (18.19) 12.62 (6.10) (0.83) (15.25)
Share capital 2 50 50 50 50
Change in % (96.00) 0.00 0.00 0.00 0.00
Treasury shares (10) (197) (196) (193) (198)
Change in % (94.93) 0.65 1.78 (2.62) 95.03
Translation reserves (165) (162) (151) (136) (146)
Change in % 1.85 7.30 10.70 (6.51) 96.03
Retained earnings and other reserves 914 1,215 1,101 1,136 1,157
Change in % (24.77) 10.34 (3.02) (1.89) 1.09
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Key Figures in EUR
Five-year review
in million EUR 2012 2011 2010 2009 2008
Forwarding services 6,692 6,440 6,293 4,861 6,677
Change in % 3.91 2.34 29.46 (27.20) 3.99
Net forwarding revenue 5,490 5,281 5,196 3,945 5,594
Change in % 3.96 1.64 31.71 (29.48) 6.35
Gross profit 1,216 1,200 1,074 912 1,097
Change in % 1.33 11.73 17.76 (16.86) (0.09)
in % of net revenue 22.15 22.72 20.67 23.12 19.61
Consolidated (loss)/profit (58.2) 103.5 (18.9) 6.9 71.7
Change in % (156.23) (647.62) (373.91) (90.38) (44.07)
in % of gross profit (4.79) 8.63 (1.76) 0.76 6.54
EBITDA 30.3 172.3 45.2 52.8 151.7
Change in % (82.41) 281.19 (14.39) (65.19) (30.95)
in % of gross profit 2.49 14.36 4.21 5.79 13.83
EBITA 4.4 149.2 17.0 28.1 129.0
Change in % (97.05) 777.65 (39.50) (78.22) (31.78)
in % of gross profit 0.36 12.43 1.58 3.08 11.76
EBIT (31.0) 141.5 11.1 19.8 121.6
Change in % (121.91) 1,174.77 (43.94) (83.72) (33.26)
in % of gross profit (2.55) 11.79 1.03 2.17 11.08
Cash generated from operations (32.9) 186.1 54.6 206.5 172.9
Change in % (117.68) 240.84 (73.56) 19.43 (25.51)
in % of gross profit (2.71) 15.51 5.08 22.64 15.76
Net cash from operating activities (59.3) 157.2 26.9 172.0 121.7
Change in % (137.72) 484.39 (84.36) 41.33 (4.55)
in % of gross profit (4.88) 13.10 2.50 18.86 11.09
Free cash flow (68.0) 34.0 4.5 149.6 107.2
Change in % (300.00) 655.56 (96.99) 39.55 27.47
in % of gross profit (5.59) 2.83 0.42 16.40 9.77
Net working capital 111.0 70.0 114.3 89.0 236.1
Change in % 58.57 (38.76) 28.43 (62.30) (19.45)
Capital expenditure on fixed assets 69.7 42.1 32.0 28.2 39.2
Change in % 65.56 31.56 13.48 (28.06) 28.52
in % of gross profit 5.73 3.51 2.98 3.09 3.57
Net capital expenditure on fixed assets 69.5 89.4 22.8 19.8 17.2
Change in % (22.26) 292.11 15.15 15.12 (37.00)
in % of gross profit 5.72 7.45 2.12 2.17 1.57
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136 Financial Report
Consolidated Financial Statements
in million EUR 2012 2011 2010 2009 2008
Depreciation and amortization 61.3 30.8 34.1 33.0 30.1
Change in % 99.03 (9.68) 3.33 9.63 (19.52)
in % of gross profit 5.04 2.57 3.18 3.62 2.74
Personnel expenses 792.4 725.1 646.2 582.2 625.4
Personnel
Number of employees at year-end (world) 15,224 15,051 14,136 13,570 14,804
Number of employees at year-end (Switzerland) 759 775 749 737 778
Productivity ratios (in EUR)
Net sales per average employee 360,615 345,480 365,324 284,632 367,277
Gross profit per average employee 79,874 78,503 75,511 65,801 72,024
Personnel expenses per average employee 52,049 47,436 45,433 42,006 41,061
Personnel cost in % of gross profit 65.16 60.43 60.17 63.84 57.01
Leverage (liabilities / equity) 1.63 1.35 1.46 1.24 1.27
Net interest-bearing liabilities (323) (486) (436) (361) (256)
Gross gearing (interest-bearing liabilities / equity) 0.00 0.01 0.01 0.02 0.02
Net gearing (net interest-bearing liabilities / equity) (0.53) (0.65) (0.68) (0.63) (0.44)
ROCE (EBIT less tax / capital employed) in % (19.10) 43.22 (5.40) 6.14 23.03
Current cash debt coverage ratio
(net operating cash flow / average current liability) (0.05) 0.19 0.04 0.27 0.19
Cash debt coverage ratio
(net operating cash flow / average total liability) (0.06) 0.16 0.03 0.24 0.16
Return on equity in % (8.6) 14.9 (3.1) 1.2 12.1
Change in % (157.05) (575.95) (360.88) (89.97) (42.92)
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Consolidated Statement of Financial Position in EUR
Five-year review
in million EUR 2012 2011 2010 2009 2008
ASSETS 1,620 1,756 1,590 1,297 1,323
Change in % (7.74) 10.44 22.59 (1.97) (3.36)
Current assets 1,320 1,435 1,348 1,077 1,127
Change in % (8.01) 6.45 25.16 (4.44) (2.42)
Liquid funds 325 492 444 369 269
Change in % (33.94) 10.81 20.33 37.17 25.12
Receivables and other current assets 995 943 904 708 858
Change in % 5.52 4.31 27.68 (17.48) (8.72)
Non-current assets 300 321 242 220 196
Change in % (6.54) 32.64 10.00 12.24 (8.41)
Property, plant and equipment 108 93 91 95 99
Change in % 16.13 2.20 (4.21) (4.04) (1.98)
Financial assets 81 111 89 76 47
Change in % (27.03) 24.72 17.11 61.70 (24.19)
Intangible assets 111 117 62 48 49
Change in % (5.13) 88.71 29.17 (2.04) (5.77)
LIABILITIES AND EQUITY 1,620 1,756 1,590 1,297 1,323
Change in % (7.74) 10.44 22.59 (1.97) (3.36)
Liabilities 999 1,003 941 715 738
Change in % (0.40) 6.59 31.61 (3.12) (1.86)
Payables, accruals and deferred income 834 824 730 592 612
Change in % 1.09 12.88 23.31 (3.27) (3.47)
Borrowings 2 6 8 9 14
Change in % (66.67) (25.00) (11.11) (35.71) (30.00)
Provisions 163 173 203 115 112
Change in % (5.78) (14.78) 76.52 2.68 14.29
Non-controlling interests 8 7 6 5 5
Equity 613 745 643 577 580
Change in % (17.72) 15.86 11.44 (0.52) (5.23)
Share capital 2 41 40 34 34
Change in % (95.12) 2.50 17.65 0.00 13.33
Treasury shares (8) (162) (157) (130) (133)
Change in % (95.06) 3.18 20.77 (2.26) 118.03
Translation reserves (137) (133) (121) (92) (98)
Change in % 3.01 9.92 31.52 (6.12) 117.78
Retained earnings and other reserves 756 999 880 765 777
Change in % (24.32) 13.52 15.03 (1.54) 12.94
Annual Report 2012

138 Financial Report
Annual Financial Statements 2012
Panalpina World Transport (Holding) Ltd.
Annual Report 2012

Financial Report
Annual Financial Statements
139
Income Statement 140
Balance Sheet as of December 31 (before profit appropriation) 141
Notes to the Financial Statements 142
Appropriation of Available Earnings 144
Report of the Statutory Auditor 145
Annual Report 2012

140 Financial Report
Annual Financial Statements
Income Statement
for the years ended December 31, 2012 and 2011
in thousand CHF Notes 2012 2011
Income
Income from participations 1 106,887 87,737
Financial income 2 11,631 41,728
Royalties income 3 37,490 49,577
Release of valuation allowance on loans to Group companies 0 47,268
Total income 156,008 226,310
Expenses
Personnel expenses 4 11,999 13,357
Fines 5 59,232 0
Other administrative expenses 6 6,710 12,973
Financial expenses 7 13,969 10,357
Depreciation and value adjustments on investments 8 60,487 168,740
Total expenses 152,397 205,427
Taxes 839 1,817
Profit for the year 2,772 19,066
Annual Report 2012

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Annual Financial Statements
141
Balance Sheet
as of December 31 (before profit appropriation)
Assets
in thousand CHF Notes 2012 2011
Current assets
Cash 1,340 303,247
Cash pool receivables from Group companies 37,920 101,647
Receivables:
– from Group companies 224 3,340
– from third parties 64 242
Financial receivables from Group companies 9 0 167,895
Marketable securities 10 0 20,000
Prepaid expenses and deferred charges 39,029 53,176
Total current assets 78,577 649,547
Non-current assets
Participations 11 405,158 161,361
Loans to Group companies 1 308,329 161,378
Financial assets 7,721 34,234
Treasury shares 12 8,079 84,128
Total non-current assets 729,287 441,101
Total assets 807,864 1,090,648
1
Thereof subordinated CHF 0.0 million (2011: CHF 68.0 million)
Liabilities and Equity
in thousand CHF Notes 2012 2011
Current liabilities
Cash pool payables to Group companies 24,095 105,152
Payables:
– due to Group companies 264 2,528
– due to third parties 590 1,424
Financial liabilities to Group companies 42,783 79,702
Accrued expenses 13,391 11,977
Total current liabilities 81,123 200,783
Non-current liabilities
Loans due to Group companies 946 0
Provisions 3,577 4,306
Total non-current liabilities 4,523 4,306
Total liabilities 85,646 205,089
Equity
Share capital 13 2,375 50,000
Legal reserve 14 475 10,000
Reserve for own shares 10,018 197,277
Special reserve 256,107 130,573
Retained earnings:
– balance brought forward from previous year 450,471 478,643
– profit for the year 2,772 19,066
Total equity 722,218 885,559
Total liabilities and equity 807,864 1,090,648
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142 Financial Report
Annual Financial Statements
Notes to the Financial Statements
General
The Group’s consolidated financial statements must be considered for an appropriate financial and economic assessment of the Panalpina
Group. The statutory financial statements of Panalpina World Transport (Holding) Ltd. were prepared in accordance with the requirements
of the Swiss Code of Obligations (SCO).
Valuation methods and translation of foreign currencies
Treasury shares are valued at the lower of cost and market value. Marketable securities are reported at market value. All other assets
including participations are reported at cost less appropriate value adjustments. Assets and liabilities denominated in foreign currencies are
translated into Swiss francs (CHF), using year-end rates of exchange, except participations which are translated at historical rates. Resulting
exchange gains and losses are recognized in the income statement with the exception of unrealized gains which are deferred. Transactions
during the year which are denominated in foreign currencies are translated at exchange rates effective at the relevant transaction dates.
1 Income from participations
The increase of CHF 19,150 thousand compared to the prior year is mainly due to a capital gain achieved by the sale of the 12 % investment
of Luxair SA’s shares to the state of Luxembourg.
2 Financial income
The decrease of CHF 30,097 thousand compared to the prior year is attributable to lower foreign exchange gains of CHF 19,085 thousand,
less interest income of CHF 10,306 thousand and reduced income of CHF 1,576 thousand on financial assets.
3 Royalties income
Since 2009, Panalpina World Transport (Holding) Ltd. receives a fee from its subsidiaries for usage of the Panalpina network and trademark.
This fee decreased in 2012 by CHF 12,087 thousand compared to the prior year.
4 Personnel expenses
In accordance with the stipulations of the Transparency law, the compensation of the key management personnel is disclosed in note 29 of
the Group’s financial statements.
5 Fines
The amount of CHF 59,232 thousand represents the penalties from WEKO and EU anti-trust claims (see note 28 of the Group’s consolidated
financial statements).
6 Other administrative expenses
The reduction of CHF 6,263 thousand in other administrative expenses is mostly attributable to a decline in project costs (CHF 2,462 thousand)
and CHF 2,622 thousand higher settlement repayments from airlines.
7 Financial expenses
The increase in financial expenses of CHF 3,612 thousand is mainly due to higher FX losses of CHF 3,740 thousand.
8 Depreciation and value adjustments on investments
In 2012, valuation adjustments to participations in subsidiaries amounting to CHF 60,487 thousand were debited to the income statement.
9 Financial receivables and loans to Group companies
In 2012 a new Group company, Panalpina International Ltd., was established. This company ensures the financing of the whole Panalpina
Group by granting loans and establishing cash pool structures in each region. All financing activities were transferred from Panalpina World
Transport (Holding) Ltd. to Panalpina International Ltd. Therefore all related balances (cash, cash pool receivables and payables, financial
receivables and payables from group companies and loans to and from group companies) are not directly comparable with the prior year.
10 Marketable securities
In the year under review, no investment was made in fixed-term deposits.
11 Participations
The principal direct and indirect subsidiaries of Panalpina World Transport (Holding) Ltd. are listed under the heading “Principal Group companies
and participations” on pages 128 to 130.
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Annual Financial Statements
143
12 Treasury shares
In the year under review, treasury shares purchased totaled 42,000 shares (2011: 79,042 shares) with an average purchase price per share
of CHF 94.77 (2011: CHF 109.02) and treasury share sales totaled 59,694 shares (2011: 68,492 shares) with an average sale price of
CHF 34.70 (2011: CHF 68.40). All shares (2011: 118,092) are held to be used for the employee option plan.
The Annual Meeting of Shareholders held on May 8, 2012 approved the proposal of the Board of Directors to cancel the 1,250,000 repurchased
shares as well as the reduction of the nominal value of the remaining 23,750,000 shares by CHF 1.90 per share. After the cancellation
and the nominal value reduction of the shares, the share capital amounts to CHF 2.375 million.
Due to the reduction of the share capital, the Annual Meeting of Shareholders approved the proposal of the Board of Directors to adjust the
authorized capital on May 8, 2012. The Board of Directors is therefore authorized to create authorized capital to the maximum amount of
CHF 300,000 by issuing a maximum of 3,000,000 registered shares with a nominal value of CHF 0.10 each at any time until May 10, 2013.
The number of treasury shares held by Panalpina World Transport (Holding) Ltd. meets the definitions and requirements of art. 659, 659a,
663b para 10 and 671a SCO.
Number of shares 31/12/2012 31/12/2011
Movement
in year 31/12/2010
Total Panalpina World Transport (Holding) Ltd. shares
issued 23,750,000 (1,250,000) 25,000,000 0 25,000,000
Total treasury shares held by Panalpina World Transport
(Holding) Ltd. 100,398 (1,267,694) 1,368,092 10,550 1,357,542
in % 0.42 5.47 5.43
13 Share capital
The fully paid-in share capital on December 31, 2012 amounts to CHF 2.375 million consisting of 23.75 million registered shares at a par value
of CHF 0.10 each. With regard to the authorized capital increase we refer to note 23 in the Group’s financial statements.
in % 2012 2011*
Shareholders
Ernst Göhner Stiftung, Switzerland 45.94 43.58
Cevian Capital II Master Fund L.P. 11.97 11.37
Bestinver Gestión, S.G. SGIIC, Spain 5.32 5.05
Artisan Partners Limited Partnership, USA 5.28 5.01
Portfolio investment (according to the share register, there are no more shareholders
with holdings of more than 3 % or 5 %) 31.07 29.52
Panalpina World Transport (Holding) Ltd. 0.42 5.47
*
restated considering own shares of Panalpina
14 Legal reserves
The legal reserve must be at least 20 % of the share capital of Panalpina World Transport (Holding) Ltd. in order to comply with the SCO.
Panalpina World Transport (Holding) Ltd. has met the legal requirements for legal reserves under art. 671 SCO.
15 Guarantees
in thousand CHF 2012 2011
Guarantees in favor of third parties
Guarantees and indemnity liabilities, SCO, art. 663b para 1 486,529 198,780
Additionally, Panalpina World Transport (Holding) Ltd., Basel, has issued letters of awareness in favor of various banks concerning liabilities
due from subsidiaries amounting to CHF 0.1 million (previous year: CHF 2.7 million).
16 Contingent liabilities
In 2008, Panalpina World Transport (Holding) Ltd. has signed a letter of indemnity as a security for the intraday cash pool overdraft limits over
a maximum amount of CHF 64,000 thousand (2011: CHF 60,000 thousand).
Panalpina World Transport (Holding) Ltd. carries joint liability to the federal tax authorities for value-added tax of all Swiss subsidiaries.
17 Pending legal claims
The status of the proceedings are disclosed under “pending legal claims“ in the consolidated financial statements 2012 (pages 126 and 127).
18 Risk management
The detailed disclosures regarding risk management/assessment that are required by Swiss law are included in note 17 and 18 of the
Group’s consolidated financial statements on pages 106 to 112.
Annual Report 2012

144 Financial Report
Annual Financial Statements
Appropriation of Available Earnings
The Board of Directors proposes the following appropriation of available earnings of total CHF 453,242,840 at the Annual General Meeting:
in CHF 2012
Distribution of an ordinary dividend of CHF 2.00 gross per share* 47,299,204
To be carried forward 405,943,636
Total 453,242,840
*
It is not planned to pay dividends on own shares held by the Group.
Annual Report 2012

Financial Report
Annual Financial Statements
145
Report of the Statutory Auditor on the Financial
Statements to the General Meeting of Shareholders of
Panalpina World Transport (Holding) Ltd., Basel
As statutory auditor, we have audited the accompanying financial statements of Panalpina World Transport (Holding) Ltd., which comprise
the balance sheet, income statement and notes on pages 140 to 144 for the year ended December 31, 2012.
Board of Directors’ Responsibility
The board of directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and
the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant
to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The board of directors
is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable
in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s
preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness
of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of
the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements for the year ended December 31, 2012 comply with Swiss law and the company’s articles of
incorporation.
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO
and article 11 AOA) and that there are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists,
which has been designed for the preparation of financial statements according to the instructions of the board of directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of incorporation.
We recommend that the financial statements submitted to you be approved.
KPMG AG
Regula Wallimann
Licensed Audit Expert
Auditor in Charge
Martin Rohrbach
Licensed Audit Expert
Zurich, March 1, 2013
Annual Report 2012

146 GRI
Annual Report 2012

73
Panalpina World Transport
(Holding) Ltd.
Viaduktstrasse 42
P.O. Box
CH-4002 Basel
Phone +41 61 226 11 11
Fax +41 61 226 11 01
info@panalpina.com
www.panalpina.com
The Panalpina Annual Report is published
in German and English.
For additional copies please refer to the
above addresses.
An electronic version is available at:
www.panalpina.com/ar2012
Project management
Heidi Stöckli, Corporate Communication, Panalpina
Concept and design
Ramstein Ehinger Associates AG, Zurich
Portraits
Julian Salinas, Basel
Photography «A Passion for Solutions»
Peter Hebeisen, Zurich
Translations and editing
Word + Image, Zufikon and Rotstift, Basel
Lithography
Blue Horizon, Winterthur
Printed by
Neidhart + Schön AG, Zurich
Consultant on sustainability
sustainserv, Zurich and Boston
Disclaimer
Certain sections of this Annual Report may contain forward-looking
statements that are based on management’s
expectations, estimates, projections and assumptions.
These statements are not guarantees of future performance
and involve certain risks and uncertainties, which are difficult
to predict. Therefore, future developments and trends
may differ materially from what is forecast in forward-looking
statements.
All forward-looking statements speak only as of the date of
their publication or, in the case of any document incorporated
by reference, the date of that document. All subsequent
written and oral forward-looking statements attributable to
the Company or any person acting on the Company’s behalf
are qualified by the cautionary statements. The Company
does not undertake any obligation to update or publicly release
any revisions to forward-looking statements to reflect
events, circumstances or changes in expectations after the
date of this report.
Annual Report 2012

Panalpina World Transport
(Holding) Ltd.
Viaduktstrasse 42
P.O. Box
CH-4002 Basel
Phone +41 61 226 11 11
Fax +41 61 226 11 01
info@panalpina.com
www.panalpina.com