Panalpina Annual Report 2011

Annual Report 

2011 

A passion for solutions

Contents 

Letter to Shareholders 4 

Report of the Executive Board 6 

Group Management Structure 15 

Reporting Regions 16 

Product Divisions 18 

CEO Statement 30 

Success Factors 

Global Network 34 

Industry Verticals 36 

Employees 38 

Compliance and Corporate Culture 40 

Information Technology 42 

Procurement 43 

Quality, Security and HSE 44 

Responsibilities 

Social Commitment 49 

Corporate Governance 50 

Global Reporting Initiative 61 

Consolidated and 

Annual Financial Statements 2011 

Consolidated Financial Statement 64 

Annual Financial Statement 134 

Appendix 

Information for Investors 142 

Pictures 144 

Imprint 145

Five-year development 

in million CHF 

Net forwarding revenue 

10,500 

9,000 

7,500 

6,000 

4,500 

3,000 

1,500 

0 

EBIT 

320 

280 

240 

200 

160 

120 

80 

40 

0 

1,000 

875 

750 

625 

500 

375 

250 

125 

0 

8,641 

8,878 

2007 2008 2009 2010 2011 

Shareholders’ equity 

Glossary 

299 

1,026 

193 

871 

Twenty-foot Equivalent Unit (TEU) 

Unit of measurement based on a 20-foot ISO container 

(6.10 meters long) 

Full Container Load (FCL) 

This refers to containers that are fully loaded by the consignor and 

unloaded by the recipient at the destination. 

Less than Container Load (LCL) 

This refers to part-loads or small loads that are grouped together and 

transported in containers throughout the transport chain. 

5,958 

30 

864 

7,164 

15 

812 

6,500 

174 

2007 2008 2009 2010 2011 

915 

2007 2008 2009 2010 2011 

Gross profit 

2,050 

1,900 

1,750 

1,600 

1,450 

1,300 

1,150 

1,000 

1,803 

Consolidated profit 

245 

210 

175 

140 

105 

70 

35 

0 

–35 

1,742 

1,377 

1,480 

1,477 

2007 2008 2009 2010 2011 

211 

114 

10 

–26 

127 

2007 2008 2009 2010 2011 

The containers are unloaded when they reach the various recipients 

at different destinations. The term LCL is used mainly for containers 

shipped as ocean freight. 

Ocean freight and air freight: a comparison of capacity 

The capacity of a 12,000-TEU container ship is equivalent to that of 

1,000 Boeing 747 cargo planes. 

The English version takes precedence over the German version.

Panalpina at a glance 

The Panalpina Group 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-toend 

solutions tailored to its customers’ supply chain management 

needs. Panalpina operates a global network with 

some 500 branches in more than 80 countries. In a further 

80 countries, it cooperates closely with partner companies. 

Panalpina employs approximately 15,500 people worldwide. 

Panalpina’s business model: focussed to deliver end-to-end supply chain solutions 

Standard 

Warehousing 

Core Services 

Supply Chain Services 

Air and 

Ocean Freight 

Value-Added Logistics Services 

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. 

Overland

Key figures 2011 

Net forwarding revenue per product division 

Air Freight 

Ocean Freight 

Logistics 

Net forwarding revenue of CHF 6,500 million 

Currency adjusted gross profit increase by 12 % year-on-year, supported 

by organic growth across all regions and product divisions 

Consolidated profit of CHF 127 million 

Net working capital intensity at all-time low of 1.1 % 

Forwarding volumes: 848,000 tons in Air Freight (– 5 % year-on-year) and 

1,310,000 TEUs in Ocean Freight (+ 6 % year-on-year) 

Returns 

36% 

14% 

50% 

in % 2011 2010 

Return on equity (ROE) 14.9 – 3.1 

Return on capital employed (ROCE) 43.2 – 5.4 

Net forwarding revenue per region 

Europe, Middle East, Africa and CIS 

North America 

Central and South America 

19% 

13% 

49% 

Asia Pacific 19% 

Share price development in comparison to SPI 

Swiss Performance Index (SPI) 

Panalpina World Transport 

Dec 31, 

2010 

Mar 1 May 1 Jul 1 Sep 1 Nov 1 Dec 31, 


110% 

100% 

Panalpina Annual Report 2011 

90% 

80% 

70% 

60%

4 

Letter to Shareholders 

Sustainably profitable 

With a consolidated profit of CHF 127 million, Panalpina left an economically volatile 

year behind and entered a new year strengthened for the future. Concentration on 

the strategic orientation and the consistent focus on profitability are already paying off. 

Stakeholders can be paid a dividend. 

Panalpina closed the year under review with a solid business 

result. It recorded a gross profit of CHF 1,477 million and 

consolidated earnings of CHF 127 million. In comparison to 

2010, Panalpina’s ocean freight volumes grew by 6 % to 

a new record of 1,310,000 TEUs transported. Air freight 

forwarding volumes sank by 5 % to 848,000 million tons, 

but an increase in gross profit per ton of air freight compensated 

the decline in volumes. The Company acquired new 

business and expanded existing mandates in all customer 

segments. 

Clear growth strategy 

In its corporate strategy, Panalpina confirmed its role as 

one of the leading providers of global supply chain solutions 

and dedicated itself to sustainable, profitable growth. The 

focus on profitability with a product-oriented organization 

targeted towards strategic customer segments has already 

proven itself in the reporting year. The ten centers of expertise 

are targeted entirely toward the needs of customers, 

which enables to recognize and develop market niches and 

future markets. The asset-light business model has again 

proved its flexibility. It enables Panalpina to rapidly and efficiently 

react to uncertain market situations in order to take 

advantage of growth opportunities. 

To implement the corporate strategy with its ambitious 

growth objectives in the regions, Panalpina will introduce 

three regional CEOs in 2012. This places the decision 

makers closer to the customers, which enhances Panalpina’s 

clout in the markets. The three regional CEOs will belong 

to the Executive Committee, the operative management 

body. The regional management structure will be kept lean. 

Another route for generating growth is through acquisitions. 

Panalpina consistently reviews potential acquisitions for 

their value-generating and strategic potential. Panalpina 

found such a candidate in early 2011 with Grieg Logistics. 

Panalpina can expand its global presence with this Norwegian 

logistics service provider, particularly in the oil and 

gas industry, and integrate the know-how. Despite the 


constant investments in organic growth, Panalpina remains 

practically without debt. The Company is financially solid, 

with adequate cash reserves and remains open to opportunities 

for acquisitions that make a good fit. 

Board of Directors and Executive Board 

With Lars Förberg and Knud Elmholdt Stubkjær, the Annual 

General Meeting elected two new proven experts to the 

Board of Directors on May 10, 2011. The Swedish citizen 

Lars Förberg, is Managing Partner and co-founder of 

Cevian Capital. The Dane Knud Elmholdt Stubkjær, looks 

back on a long and successful career in the shipping industry, 

including as CEO of the Mærsk Line, which belongs 

to the Danish A.P. Møller-Mærsk Group. Board member 

Günter Rohrmann stood down from the Board at the Annual 

General Meeting. The composition of the Executive Board 

remained unchanged in 2011. 

Dividend payout 

Based on the solid results of the 2011 business year, the 

Board of Directors of Panalpina World Transport (Holding) 

Ltd. proposes to the Annual General Meeting a dividend 

payout of CHF 2.00 and a nominal value payback of 

CHF 1.90 per share. 

Appreciation 

Panalpina thanks the high motivation and excellent commitment 

of its employees for the success and positive development 

in 2011. They deserve the highest recognition from 

the entire Board of Directors and the Executive Board. We 

extend our thanks to our customers and suppliers for the 

partnership and the trust placed in the Company, as well as 

our valued shareholders for their loyalty and constant confidence. 

We look forward to a successful future together. 

Monika Ribar Rudolf W. Hug 

Chief Executive Officer Chairman of the Board 

of Directors

Letter to Shareholders 


5

6 

Report of the Executive Board 

Focused execution leads to solid financial results 

The year 2011 was characterized by widespread uncertainty of economic prospects, 

resulting in nervous market behavior and high volatility. Growth slowed, particularly in 

the debt-burdened economies of the eurozone and the United States, where consumer 

confidence slid to very low levels. However, robust growth continued in many emerging 

markets, led in size by China, India and Brazil. Furthermore, the Company’s reporting 

currency, the Swiss franc, appreciated significantly against all major currencies during 

the reporting year and impacted the Group’s financial results materially. In this challenging 

environment, Panalpina achieved solid organic gross profit growth and further 

solidified its position within the industry. Sticking to its focused strategy of going for 

sustainable and profitable growth, the Group managed to increase its profitability, further 

expanded its profit margins and generated a substantial amount of free cash flow. 

Market development 

After a period of strong growth in 2010, world trade and 

global freight markets were characterized by the uncertainty 

of economic prospects around the world in 2011. 

The International Monetary Fund estimates that global trade 

volumes rose approximately 7 % in 2011 – only about half 

of the 13 % growth rate posted the year before, which had 

been boosted by the restocking of inventories. In addition, 

and in contrast to 2010, growth in 2011 was relatively 

unevenly distributed across geographical trade lanes and 

transport modes. The amount of international cargo moved 

by air freight in 2011 slightly declined compared to the year 

before and thus once again fell short of the record volumes 

reached in 2007. In contrast, the global ocean freight 

market developed more robustly, growing by more than 

5 %, making 2011 a new record year with some 160 million 

TEUs transported on the ocean globally. 

Freight moved on two of Panalpina’s major trade lanes, 

the far east westbound and transpacific eastbound routes – 

jointly comprising around one quarter (Air) and one third 

(Ocean) of the Group’s volumes – developed under-proportionately 

in 2011 in comparison with cargo moved on other 

trade lanes due to relatively lackluster imports into Europe 

and North America. In Japan, the world’s fourth largest 

economy, the devastating earthquake and tsunami in March 

led to a major disruption of economic activity for several 

weeks, although, fortunately, with no major adverse consequences 

for either Panalpina employees or for the Group’s 

business. 


At the same time, above-average growth was recorded for 

trade lanes connecting some of the largest emerging 

markets, such as China, India and Brazil – markets in which 

Panalpina continued to invest and further expanded its 

presence during the year under review. As such, in 2011, 

three new offices were opened in India (Ahmedabad, 

Jaipur and Ludhiana). In China, Panalpina complemented 

its increasing footprint in the central part of the country 

through the opening of an office in Chongqing at the beginning 

of the year, adding to the two branches in Wuhan 

and Chengdu, bringing the total number of offices in the 

Greater China region to 20. In addition, Panalpina also 

opened a logistics center in Tianjin, which marked an important 

milestone in the Group’s forward strategy to extend 

its Value-Added Logistics Services capabilities. 

Strengthening of the corporate platform 

Throughout the year, notwithstanding an increasingly 

cloudy economic environment, Panalpina kept its focus on 

further strengthening its corporate platform and setting the 

ground for leveraging future growth. During the first half 

of the year, the Group also reviewed, clarified and refined 

its strategy for the years to come and, in this context, in 

June, the Group announced a mid-term target of raising the 

EBITDA-to-gross profit conversion ratio to 20 % by 2014. 

Panalpina’s ambition is to offer comprehensive end-to-end 

supply chain solutions to its customers, with the core 

service offering in Air and Ocean Freight complemented 

by Supply Chain Services and Value-Added Logistics 

Services.

Executive Board (clockwise): Monika Ribar (President and CEO), Marco Gadola (Chief Financial Officer), 

Karl Weyeneth (Chief Operating Officer), Christoph Hess (Chief Legal Officer and Corporate Secretary) and 

Alastair Robertson (Chief Human Resources Officer) 



7

8 


On a product level, all three product divisions (Air Freight, 

Ocean Freight, Logistics) were strengthened by a number 

of key divisional management hires during the reporting 

year. Moreover, Panalpina also continued its strict focus on 

restoring unit profitability, particularly gross profit per ton 

of air freight, which rose 9 % year-on-year (+ 21 % in local 

currencies). As a consequence, a number of larger, yet unprofitable 

customer contracts were not renewed, leading 

to an adverse effect on the Group’s transported air freight 

volumes, because, in a declining market, the volumes 

represented by these contracts could not be immediately 

replaced with new business. In terms of product innovation, 

Panalpina signed a new ACMI (aircraft, crew, maintenance 

and insurance) contract for two Boeing 747-8Fs with 

one of its long-term business partners. The aircraft will enter 

service in the first half of 2012 and operate in Panalpina’s 

unique own-controlled air freight network, replacing two 

Boeing 747-400Fs. Compared to the 747-400F, the industry’s 

newest freighter has 16 % additional cargo volume, 

but is expected to have the lowest carbon dioxide emissions 

in its class. With the new aircraft, Panalpina is optimally set 

up to meet industry specific requirements and the increasing 

demand for large-freighter capacity, especially in the 

Healthcare, Hi-tech, Automotive and Oil and Gas verticals. 

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 more than 50 new LCL point-to-point services 

in 2011. Most of the new regular services run out of Asia 

and meet increased customer demand for reliable LCL 

solutions on the Intra Asia and Asia-Europe trades. 

In the third product division, Logistics, the Group extended 

its product line with a range of new services which all support 

the strategic focus of offering value-added services to 

customers. In addition to launching regional centers of 

expertise on three continents, Panalpina also opened several 

new logistics centers, including a facility in Huntsville 

(USA). The 3,700 square-meter Huntsville Logistics Center 

is situated in close proximity to the Panalpina Huntsville 

hub and provides complete kitting and parts assembly as 

well as temperature-controlled storage areas. 

Out of its nine existing industry verticals where Panalpina 

has a dedicated setup in place to effectively serve its customers 

with industry-specific solutions, four focus industry 

verticals were defined, which are particularly well aligned 

with the product strategies: Consumer and Retail, Healthcare, 

Hi-tech, and Oil and Gas. In terms of gross profit 

growth, the largest advances during the reporting year 

came from Automotive, Healthcare, Hi-tech, Telecom and 


Fashion. In Oil and Gas, the signing of a strategic services 

master agreement with one of the world’s largest oil and 

gas companies marked a major milestone in the execution 

of the Group’s growth strategy. The scope of the multi-year 

agreement comprises transportation services for air, ocean, 

road and rail, industrial projects, freight management and 

other logistics services connected with the exploration and 

production of oil and gas. 

While Panalpina aims for predominantly organic growth, it 

also looks selectively into acquisition opportunities to support 

and accelerate the execution of the corporate strategy. 

One company which the Group identified as an optimal 

strategic fit and acquired in 2011 is Grieg Logistics, a leading 

logistics provider to the Norwegian oil and gas industry 

with approximately 100 staff and an annual turnover of 

roughly NOK 400 million (CHF 67 million). Through this acquisition, 

Panalpina added seven new locations in Norway 

and thus significantly expanded its presence in the country. 

Through the set of initiatives embarked on during the year, 

complemented by a new volume record in Ocean Freight, 

Panalpina achieved a solid organic (ie, expressed in local 

currencies) gross profit growth of 12 % and thus managed 

to further solidify its position within the industry. Furthermore, 

through effective cost management, profitability was 

significantly increased and profit margins further expanded 

in 2011. 

Outlook 

The economic situation in many of the developed nations – 

a majority of which are struggling with critical levels of debt 

and continuously high levels of unemployment – is set to 

remain challenging in the years ahead, while the stability of 

the financial sector yet needs to be restored. On the other 

hand, growth prospects for many of the emerging economies 

remain promising. Regardless of the short-term economic 

environment and in line with its sustainable, profitable 

growth strategy, Panalpina remains committed to further 

improving productivity while continuing to invest selectively 

and specifically in Marketing and Sales, IT and Value-Added 

Logistics Services competence and maintaining a strong 

focus on cost control – all with the aim of delivering reliable 

solutions to our customers and ensuring above-market 

growth. To facilitate implementation of the corporate strategy, 

to drive growth and increase profitability, the Panalpina 

Group will put in place (effective July 1, 2012) three regional 

CEOs (with respective respon sibility for Asia Pacific, Europe 

and Middle East, and the Americas), each supported by a 

small team of dedicated regional resources. With this lean 

regional setup, the decision-making power will shift from

Panalpina’s headquarters closer to where decisions are 

made by its customer base, facilitating exploitation of 

regional and local growth opportunities in the various markets 

where Panalpina operates. 

Overall, Group management expects world trade and 

global outsourcing to expand further in the years to come, 

albeit 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 

and offer its customers first-class, tailor-made, end-toend 

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) 

With the Swiss franc as its reporting currency, Panalpina’s 

financial results in 2011 were massively distorted by the 

strength of the Swiss franc versus all foreign currencies 

relevant to the Company. On average, the euro and the 

US dollar lost approximately 11 % and 15 %, respectively, in 

value against the Swiss franc during the reporting year. 

Net forwarding revenue amounted to CHF 6,500 million, 

a reduction of 9 % compared to the CHF 7,164 million the 

year before, yet in local currencies, NFR advanced 2 % 

versus the prior year. This slight increase can be attributed 

to a variety of factors, including a balanced volume effect 

(more shipments handled in Ocean Freight and Logistics, 

fewer shipments handled in Air Freight) as well as factors 

over which Panalpina has limited influence, such as a significant 

increase in oil prices, resulting in higher fuel surcharges, 

which were counterbalanced by sharply lower average 

freight rates prevailing in the market caused by significant 

overcapacities. 

At regional level, net forwarding revenue declined in all 

four reporting regions due to a variety of factors. In Europe, 

Middle East, Africa and CIS (EMEA), NFR decreased 13 % 

to CHF 3,171 million. This region recorded a material adverse 

translation impact from the weak euro, and was also 

affected by the import weakness of many European economies 

and falling freight rates. EMEA remains Panalpina’s 

largest region in revenue terms, contributing to almost half 

of the Group’s turnover. 

In North America, NFR fell by 10 % to CHF 1,270 million, a 

large part of which can be attributed to the depreciating 


US dollar. Moreover, persistently low consumer confidence 

resulted in lower import volumes. 

Compared to 2010, Panalpina’s NFR in 2011 in Central and 

South America declined 1 % to CHF 834 million. The Group 

recorded strong double-digit volume growth in this region 

on the import side, while the currency translation effect 

and falling freight rates both acted as a drag on turnover. 

The Asia Pacific region saw a decline in NFR of 4 % to 

CHF 1,225 million. Also here, the translation of locally generated 

turnover into Swiss francs along with severely 

depressed freight rates, particularly on the Asia-Europe 

route, overshadowed double-digit volume growth rates on 

lanes such as Asia to Latin America and Intra Asia. 

In 2011, the Panalpina Group generated 49 % of its net forwarding 

revenue in Europe, Middle East, Africa and CIS, 

19 % each in North America and Asia Pacific and 13 % in 

Central and South America. 

Net forwarding revenue per region 

2011 2010 


4,000 

3,000 

2,000 

1,000 

0 

3,171 

3,640 

Europe, Middle East, 

Africa and CIS 

1,270 

1,409 

North 

America 

834 

845 

Central and 

South America 

Net forwarding revenue per region (2011) 


North America 


19% 

13% 

49% 

Asia Pacific 19% 

1,225 

1,270 

Asia Pacific 

On a divisional level, the oversupply of carrier capacity, 

which was prevalent for a large part of the year, led to 

a substantial drop of carrier freight rates, which – together 

with the strength of the Swiss franc – adversely impacted 

the Group’s NFR in Air Freight and Ocean Freight, due to 

the pass-through character of freight rates for an asset-light 

service provider like Panalpina. These impacts were only 

partially mitigated by increasing oil prices, which in 2011 on 

average rose more than 40 % above 2010 levels, resulting 


9

10 


in distinctly higher fuel and bunker surcharges (essentially 

also items with a pass-through character) which the Group 

invoiced to its customers. 

Influenced by these developments and coupled with lower 

volumes, but improved pricing discipline per file handled, 

as described in the preceding paragraph, the Group’s NFR 

generated with Air Freight decreased by 6 % to CHF 3,281 

million. In the Ocean Freight division, NFR saw the biggest 

impact from falling freight rates and decreased by 17 % to 

CHF 2,313 million, despite an expansion of volumes. In the 

third product division, Logistics, NFR saw an increase of 

2 % to CHF 906 million, which was driven by an expansion 

of business activities particularly in distribution, valueadded 

logistics services as well as overland. 

In 2011, the Panalpina Group generated 50 % of its net forwarding 

revenue with Air Freight, 36 % with Ocean Freight 

and 14 % with Logistics. 

Net forwarding revenue per product division 



4,000 

3,500 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

0 

Air Freight 

Ocean Freight 

Logistics 

3,281 

3,503 

Air Freight Ocean Freight Logistics 

Net forwarding revenue per product division (2011) 


2,313 

2,771 

36% 

14% 

906 

50% 

890 

Gross profit (GP) 

Gross profit, a better measure of actual sales performance 

than net forwarding revenue in the forwarding industry, 

remained essentially flat at CHF 1,477 million in 2011 (2010: 

CHF 1,480 million). Organically (ie, in local currencies), 

however, GP increased by 12 %. 

With respect to regional performance, Europe, Middle 

East, Africa and CIS is also the most important region for 

Panalpina in terms of gross profit generation, representing 

approximately half of the Group’s gross profit. In 2011, 

gross profit generated in the region increased 6 % in local 

currencies, supported by higher freight volumes on all 

major export trade lanes. Translated into Swiss francs, GP 

in this region decreased by 4 % to CHF 731 million. 

In North America, gross profit translated into Swiss francs 

took a major hit due to the weak US dollar, but nevertheless 

grew by 2 % to CHF 271 million. In local currencies, gross 

profit even grew by 19 %, which is a reflection of new business 

generated in various industry verticals, higher volumes 

handled on transatlantic routes and strong growth in 

exports to Central and South America. 

Asia Pacific and Central and South America recorded 

similarly strong increases in GP, which management attributes 

to the relatively better economic development of 

these regions in 2011, which manifested itself in strong 

intraregional and import-related trade flows in and between 

these parts of the world. In Asia Pacific, gross profit rose 

5 % (+ 18 % in local currencies) to a record CHF 313 million, 

making this region the Group’s second largest in terms of 

GP, while gross profit in Central and South America 

increased 4 % (+ 19 % in local currencies) to a total of CHF 

162 million. 

In 2011, the Panalpina Group generated 50 % of its gross 

profit in Europe, Middle East, Africa and CIS, 21 % in Asia 

Pacific, 18 % in North America and 11 % in Central and 

South America. 

Gross profit per region 



800 

600 

400 

200 

0 

731 

760 



271 

266 

North 

America 

162 

156 

Central and 

South America 

313 

298 

Asia Pacific

Gross profit per region (2011) 


North America 


Asia Pacific 

18% 

11% 

50% 

21% 

In Air Freight, a number of larger, yet unprofitable, customer 

contracts were not renewed due to the Group’s focus on 

restoring unit profitability. This led to an adverse effect on 

the Group’s transported volumes, which declined by 5 % 

compared to the year before. In addition to an improved 

pricing discipline, the Air Freight division also benefited for 

the first time from a centrally managed volume tender initiative, 

which led to a reduction in the cost of goods sold. 

These efforts combined led to an increase of 9 % (+ 21 % 

in local currencies) in gross profit per ton of Air Freight, 

which more than compensated for the declining volumes. 

As a result, the Group’s gross profit realized through Air 

Freight forwarding services increased by 3 % in 2011 

(+ 15 % in local currencies), reaching CHF 688 million versus 

CHF 667 million the year before. 

In the Ocean Freight division, GP saw a slight contraction 

of 3 % to CHF 439 million, but posted growth of 9 % in local 

currencies. Panalpina’s volume growth rate amounted to 

6 % and grew approximately in line with the market, with 

market share gains in the year’s second half as the strengthening 

of divisional structures started to unfold. Gross profit 

per 20-foot equivalent unit fell 8 % (+ 3 % in local currencies) 

compared to the prior year, because the low level of 

freight rates prevailing for most of the year and the highly 

competitive environment made it difficult to maintain the 

same mark-up to customers. 

Gross profit generated through the Logistics division contracted 

by 3 % to reach a total of CHF 350 million. In local 

currencies, this product division recorded a growth of 9 %, 

which was mainly driven by an expansion in the Group’s 

Distribution, Value-Added Logistics Services and Overland 

activities. 

In 2011, the Panalpina Group generated 46 % of its gross 

profit with Air Freight, 30 % with Ocean Freight and 24 % 

with Logistics. 

Gross profit per product division 



700 

600 

500 

400 

300 

200 

100 

0 

Air Freight 

Ocean Freight 

Logistics 

688 

667 

439 

453 


350 

360 

Air Freight Ocean Freight Logistics 

Gross profit per product division (2011) 

30% 

24% 

46% 

Earnings before interest, taxes, 

depreciation and amortization (EBITDA) 

Panalpina achieved an EBITDA of CHF 212 million in the 

reporting year (2010: CHF 62 million*), which was negatively 

impacted by CHF 27 million through currency translation. 

The EBITDA-to-gross profit margin in 2011 improved 

to 14.4 % (2010: 4.2 %*). 

The two main items included in operating expenses – 

personnel expenses and other operating expenses – 

developed as follows: 

�� 

(+ 12 % currency adjusted) at CHF 892 million in 2011 

(2010: CHF 891 million). Panalpina increased its headcount 

during the reporting period by 6 % to 15,700 full-time 

equivalents (FTEs). This number includes approximately 

100 FTEs which joined Panalpina from Grieg Logistics. 

�� 

of the Group’s total operating expenses, amounted to 

CHF 372 million in 2011 (2010: CHF 527 million*), equivalent 

to a decrease of 29 % (– 20 % currency adjusted). 


11

12 


Overall development 

EBITDA Operating expenses 



2010* 

212 

62 


1,265 

1,418 

* Other operating expenses in 2010 included a charge of CHF 128 million which the 

Company recognized to cover all costs arising from the settlement of two legal 

claims in the United States and associated compliance consulting costs as well as 

from an internal reorganization project. 

Regional development 

Panalpina assesses segmental operating performance 

primarily from a geographical perspective, as the Group’s 

operations are predominantly managed by geography. 

A useful measure for assessing the operating performance 

by region is EBITDA. The segmental EBITDA provided in 

the financial accounts developed as follows in the reporting 

period: 

�� 

declined from CHF 78 million in 2010 to CHF 39 million 

in 2011. The main reasons for the decrease are the depreciation 

of the euro versus the Swiss franc, a reconditioned 

compensation scheme introduced at the beginning of 

the reporting year (reflecting compensation on a door-todoor 

shipment between the exporting and importing 

station), along with a general slowdown of business in 

Europe and Africa. 

�� 

US dollar, this region recorded a substantial improvement 

in EBITDA, from a negative result of CHF 17 million 

in 2010 to a gain of CHF 8 million in 2011, helped by the 

elimination of certain unprofitable contracts as well as 

the acquisition of new businesses with a variety of customers 

across different sectors, including oil and gas. 

Moreover, this region was also positively impacted by the 

above mentioned compensation scheme. 

�� 

decreased from CHF 19 million in 2010 to CHF 17 million 

in 2011. While the operating result also suffered from an 

adverse currency translation effect, this region made various 

investments in logistics facilities during the reporting 

period in order to appropriately position the Company to 

take advantage of future business opportunities. 

�� 

CHF 92 million in 2010 to CHF 88 million in 2011, which 

was mainly related to an adverse currency translation 

effect as well as the already mentioned compensation 

scheme. 

�� 

to CHF 60 million in 2011. The improvement was supported 

by higher royalties from Group companies and an 

adjusted renumeration model of centralized functions. 

EBITDA per region 

2011 2010* 


100 

80 

60 

40 

20 

0 

–20 

39 

78 

Europe, 

Middle East, 


8 

–17 

North 

America 

*Figures adjusted by non-recurring charges as already mentioned. 

Balance sheet 

Current assets 

17 

19 

Central 

and South 

America 

88 

92 

60 

18 

Asia Pacific Corporate 

Panalpina’s cash and cash equivalents amounted to 

CHF 573 million on December 31, 2011 and thus 

increased by CHF 45 million from the year before, which 

can be mainly attributed to the substantial amount of 

free cash flow generated during the reporting period. 

Trade receivables and unbilled forwarding services 

increased by CHF 29 million, from CHF 1,033 million at 

the end of 2010 (equivalent to 52 % of total assets) to 

CHF 1,062 million at the end of 2011 (equivalent to 50 % 

of total assets). The increase in trade receivables was 

more than compensated by an increase in trade payables. 

In total, the net working capital intensity (defined as net 

working capital as a percentage of gross forwarding revenue) 

at the end of 2011 was at a record low level of 1.1 %.

Non-current assets 

Panalpina’s non-current assets increased from 

CHF 303 million on December 31, 2010 to CHF 390 million 

on December 31, 2011. The increase is primarily a result 

of an increase in intangibles due to the acquisition of 

Grieg Logistics, a Norway-based logistics company that 

Panalpina acquired effective April 1, 2011, as well as 

various investments in money market instruments classified 

as financial assets. 

Total assets 

Cash and cash equivalents 

Trade receivables and unbilled forwarding services 



2010 

Other current assets 


573 1,062 110 390 2,135 

529 1,033 124 303 

Trade payables and accrued cost of services 

1,989 

Panalpina’s trade payables and accrued cost of services, 

which jointly comprised 63 % of total liabilities on December 

31, 2011, increased to CHF 773 million, compared to 

CHF 696 million on December 31, 2010. This favorable 

development is primarily attributable to a further improved 

payment discipline and renegotiation of payment terms 

with various vendors. 

Borrowings (short-/long-term) 

Total borrowings were further reduced from CHF 10 million 

at year-end 2010 to CHF 7 million at year-end 2011. 

Other liabilities 

Panalpina’s other liabilities declined from CHF 471 million 

at year-end 2010 to CHF 440 million at year-end 2011. 

The key reason for this decline is a decrease of provisions 

due to the payment of fines in connection with the settlement 

of the two legal claims in the United States. 

Total equity 

The increase in shareholders’ equity is almost entirely 

attributable to the change in reserves which – as a result 

of the significant improvement of the net result for the 

reporting year – rose from CHF 950 million on December 

31, 2010, to CHF 1,053 million on December 31, 2011. 

Total equity increased by CHF 103 million during the 


reporting period, from CHF 812 million on December 31, 

2010, to CHF 915 million on December 31, 2011. 

Total liability and equity 

Trade payables and accrued cost of services 

Short- and long-term borrowings 



2010 

Cash flow 

773 

696 

10 

7 

440 

471 

Net cash from operating activities 


Equity 

915 2,135 

812 1,989 

Panalpina’s net cash from operating activities in the reporting 

period amounted to CHF 193 million, CHF 156 million 

above the prior year’s figure (2010: CHF 37 million). Major 

contributors to the positive development were the substantial 

expansion of net profit for the period and the simultaneous 

decrease of the net working capital. In addition, net 

cash from operating activities includes an outflow of 

approximately CHF 30 million during the reporting year due 

to the payment of fines to US authorities for which provisions 

were taken in the prior year and which the Group is 

paying in several installments over a period of three years 

(in 2010, corresponding outflows amounted to CHF 27 million). 

The remaining payable amount totalling CHF 33 million 

will be paid in two equal installments, which are due in 

2012 and 2013. 

Cash flow from investing activities 

Expenditures on property, plant and equipment (mainly 

IT equipment) increased slightly during the reporting year 

to CHF 31 million (2010: CHF 28 million). Net investments 

into acquired subsidiaries increased from CHF 2 million in 

2010 to CHF 60 million in 2011, mainly as a result of the 

purchase of Grieg Logistics. Moreover, the Group invested, 

compared to 2010, an additional CHF 51 million of its cash 

holdings in money market instruments with a maturity of 

more than three months. Overall, the net cash outflow from 

investing activities rose substantially from CHF 31 million 

in 2010 to CHF 152 million in 2011. 

Capital expenditures in 2011 amounted to 0.8 % of net forwarding 

revenue (2010: 0.6 %). The slight increase over 

the prior year was mainly related to higher investments into 

software. 


13

14 


Free cash flow 

The free cash flow, calculated as net cash from operating 

activities minus net cash flow from investing activities, 

increased from CHF 6 million in 2010, to CHF 42 million in 

2011. Adjusted for the above-mentioned increase of investments 

in acquired companies and money market instruments, 

free cash flow even increased to CHF 153 million in 

2011 (2010: CHF 12 million). 

Cash flow development 

Free cash flow Net cash generated 

from operating activities 



6 

2010 

37 

42 

Cash flow from financing activities 

The net cash used in financing activities decreased by 

CHF 4 million in 2011 compared to the year before. A large 

portion of this improvement came from lower investments 

for the (Management Incentive Plan-related) purchase 

of treasury shares due to a lower average share price. 

Net cash 

in million CHF Dec 31 



Dec 31 

2010 

193 

% 

change 

Cash and cash equivalents 573.6 528.9 8 

Other current financial assets 20.0 6.1 228 

Short-term debt – 7.3 – 9.3 – 22 

Long-term debt – 0.2 – 0.4 – 50 

Net cash 586.1 525.3 12 

Net cash increased by CHF 61 million during the year 

under review to CHF 586 million on December 31, 2011. 

Employees 

full-time equivalents (FTEs) 

as at December 31 

Region 2011 2010 

% 

change 

Europe, Middle East, Africa 

and CIS 6,746 6,485 4 

North America 2,418 2,423 0 

Central and South America 2,474 2,294 8 

Asia Pacific 3,601 3,259 10 

Corporate 461 415 11 

Total 15,700 14,876 6 

In 2011, Panalpina continued to selectively invest and 

increased the number of FTEs by 6 %, from 14,876 on 

December 31, 2010, to 15,700 on December 31, 2011. 

An increase took place in various reporting regions in 

order to accommodate the volume growth in Ocean 

Freight and Logistics and to complement organizational 

structure.

Group Management Structure 

As at December 31, 2011 

Chief Operating Officer 

Karl Weyeneth 

Air Freight 

Ocean Freight 

Logistics 

Marketing and Sales 

Business Processes and Quality 

Corporate Audit Board of Directors 

Compensation and 

Chairman 

Rudolf W. Hug 

Nomination Committee 

Vice Chairman 

Beat Walti 

Audit Committee 

Lars Förberg, Chris E. Muntwyler, 

Roger Schmid, Hans-Peter Strodel, 

Knud Elmholdt Stubkjær 

Legal and Compliance 

Committee 

Corporate and Regional 

Development, Agent Relations 

Chief Financial Officer 

Marco Gadola 

Corporate Accounting 

Corporate Taxes 

Corporate Controlling 

Investor Relations 

Indirect Purchasing 

Strategic Finance and Projects 

Group Treasury 

Corporate Information Technology 

Chief Executive Officer 

Monika Ribar 

Areas 

Panprojects 

Chief Human Resources Officer 

Alastair Robertson 

HR Processes and Projects 

International Compensation and 

Benefits 

HR Operations 

Capability Development and 

PanAcademy 

Corporate Communications 

Corporate Compliance 

www.panalpina.com / organization 


Chief Legal Officer / 

Corporate Secretary 

Christoph Hess 

Corporate Legal Services 

Corporate Insurance Management 


15

16 


Reporting Regions 

Promising achievements in each of the four regions 



Key data 

Areas: 11 

BeNe, Central Europe, Eastern Europe, France, Iberia, 

Northern Europe, Northwest Europe, Southwest Europe, 

Sub-Saharan, Black and Caspian Sea, Arabian Belt 

Net forwarding revenue: CHF 3,171 million 

Employees in full-time equivalents: 6,746 

Market conditions 

A clear deterioration occurred in this heterogeneous 

economy. A decline in cargo to move has led to a highly 

competitive environment. Customers tried to obtain 

financing from forwarders. The Arabian Spring and the 

high oil price hurt Middle East market conditions. 

Highlights 

� Central Europe strengthened its partnerships and 

gained new logistics businesses of customers in the 

Hi-tech and Fashion verticals. 

� Panalpina was awarded with more overland transports 

in Continental Europe. 

� Norway-based Grieg Logistics was acquired and 

successfully integrated. 

� In booming Turkey, two offices (Ankara/Bursa) and 

a new warehouse in Istanbul opened. 

� A new standalone logistics facility was launched in 

Didcot, Southeast England. 

� The first Panalpina Saudi Arabia office opened in 

Dammam. 

� Dubai’s role as a distribution hub for Africa grew. 

� An office in Murmansk was opened and a state-ofthe-art 

warehouse began operations in Moscow. The 

area became a front runner in e-customs clearance. 

� Panalpina expanded to East Africa and pursued 

opportunities in the mining industry along the West 

African coast. 


Asia Pacific 

Key data 

Areas: 5 

India, East Asia, Southeast Asia, Greater China, Oceania 




Asia Pacific faced stagnating EU and US demand 

but remains a growth market. The airline industry 

experienced turbulence, with soft demand and capacity 

oversupply. Ocean freight rates were deteriorating to 

unsustainable levels for the carriers. Very competitive 

market conditions are forcing continued cost reductions. 

Highlights 

� The new Intra Asia trucking service began operations, 

connecting China with Vietnam, Laos, Thailand, 

Malaysia and Singapore. 

� Rail-air transport from Urumqi to Europe and sea-air 

moves via Los Angeles to Brazil were relaunched. 

� New business units were launched in Suzhou, 

Wuhan and Chongqing, China. Two regional distribution 

centers opened, one in Tianjin and another 

in Shanghai. 5,000 square meters of warehouse 

capacity came into service in Singapore. 

� Three consol services from Shanghai, Ningbo and 

Hong Kong to the Jebel Ali hub serving the Middle 

East region kicked off. 

� Expansion continued in India as three offices opened 

and the local sales organization was strengthened. 

� Long-time partner Apollo was integrated in Perth, 

Australia. 

� A stringent subcontractor management concept, 

designed to maintain overall margins in all trades and 

products, was implemented.


North America Central and South America 

Key data 

Areas: 2 

Canada, USA 




The growth of US economy slowed down considerably. 

High unemployment and sluggish housing markets 

remained the principal concerns. US companies focused 

more and more on growth in emerging markets. Canada 

as an import market felt a slowdown in volumes. 

Highlights 

� Both Areas began a major realignment and upgrading 

of their key organizational structures. 

� The Canada division, dedicated to the needs of the 

helicopter industry, continued to grow. 

� New, direct Less than Container Load (LCL) services 

from major ports in China to Montreal augmented the 

existing services to Vancouver and Toronto. 

� Two new business units opened: Malta (New York) 

and Indianapolis (Indiana). 

� The Healthcare vertical of Panalpina in the US flourished. 

Additional significant investments in cold-chain 

capabilities have been made. 

� In the US, Panalpina was able to strengthen major 

accounts in all vertical markets. 

� The Huntsville Logistics Center enlarged its offering of 

end-to-end solutions and value-added services along 

with Panalpina’s own-controlled network. 

� Two new Panalpina-controlled flights between Hong 

Kong and Huntsville have been filled continuously. 

Key data 

Areas: 3 

Andina, Mercosur, Middle America 

Net forwarding revenue: CHF 834 million 



Consistent economic growth has greatly enlarged a 

middle class hungry for durable goods and consumer 

products. In Brazil, future international events such as 

the 2016 Olympic Games and the FIFA World Cup in 2014 

require greater logistics capabilities and infra structure 

investments. In Middle America, rising insecurity due to 

drug-related crime affected foreign investments. 

Highlights 

� All areas strengthened customer relationships and 

gained new businesses. For example: A Brazilian 

blue chip company contracted Panalpina to distribute 

its products throughout Latin America and France. 

� Panalpina became Mercosur’s number one LCL 

provider and the leading exporter of containerized 

sugar. 

� Mercosur Area was leading in telecom distribution. 

� Warehousing activities increased as Panalpina 

added space in Mexico City and a newly finished 

20,000 square meter depot in Panama, where a 

12,000 square meter warehousing and distribution 

business in the Hi-tech vertical covering end-to-end 

supply chain needs was launched. 

� New logistics operations opened in Peru and 

Colombia. 

� The warehouse in Santiago, Chile, reached profitability 

and a new multi-customer warehouse in 

Cajamar, Brazil, opened. 


17

18 


Product Divisions 

Panalpina expands its product range in all divisions 

Air Freight Ocean Freight 

Key figures 

848,000 tons of freight moved 

Generated 50 % of Panalpina’s net forwarding revenue 


2011 started out fairly strongly but dropped off in the 

second half of the year. The air freight market stayed 

very soft in most major trade lanes until year-end. 

Highlights 

� Panalpina has become one of the world’s biggest 

Qualified Envirotainer Providers for active cooling 

solutions. In 2011 the Company offered a total of 

43 accredited locations in 27 countries. 

� Air Freight improved successfully its profitability 

per cargo unit. 

� Panalpina launched a second twice-weekly transpacific 

service between Hong Kong and Huntsville and 

between Huntsville and São Paulo (Viracopos). 

� Air Freight implemented a new centralized global procurement 

process and system. 

� The Cargo 2000 Certification and the Global Air 

Sourcing Initiative were successfully introduced to 

Panalpina’s global carriers. These credentials ensure 

efficient air cargo transport. 

� Panalpina signed contracts for the upgrade of two 

B747-8F aircraft, the latest environmentally friendly 

freighter technology from Boeing. Operated with Atlas 

Air, they will replace the two existing B747-400F by 

2012. 

Outlook 

The soft market conditions will persist into 2012, though 

with an expectation for growth in the second half. 

Panalpina’s Air Freight business will focus on growth in 

the five strategic trade lanes (Asia–Europe, Asia–North 

America, Asia–Latin America, Asia–Middle East and 

Intra Asia). 


Key figures 

1,310,000 TEUs transported 



The business faced substantial overcapacity in major 

east-west trade lines. Ocean freight rates deteriorated 

to unsustainable levels, resulting in massive losses 

for carriers, very much like in the 2009 shipping season. 

Highlights 

� Panalpina increased its worldwide footprint, recorded 

volume growth and therefore gained market share. 

In fact, 2011 marked the highest volumes ever in 

Panalpina’s Ocean Freight. 

� Ocean Freight further focused on its profitability per 

cargo unit. 

� Panalpina’s Ocean Freight business aligned its global 

strategies and established a strong focus on trade 

lane growth, niche verticals, and managed solutions. 

Integrated systems, processes and data quality are 

an essential part of the growth strategy. 

� Panalpina adjusted its global Less than Container 

Load (LCL) hub setup and launched in excess of 

50 new LCL services. Operated by the in-house carrier 

Pantainer Express Line, they support customer 

needs for simplicity and global reach through a single 

integrated LCL network. The new services reduce 

transit times and CO2 emissions. 

Outlook 

Overcapacity on the main east-west routes is expected 

to decrease in 2012 while rates will increase. Panalpina 

Ocean Freight will concentrate on five stra tegic trade 

lanes (Asia–Europe, Asia–North America, Asia–Latin 

America, Asia–Middle East and Intra Asia).

Logistics 

Key figures 



A large number of customers continued to outsource their 

logistics activities; market growth trends are continuing, 

but the competition in contract logistics remains strong. 

Highlights 

� A global Logistics strategy focusing on value-added 

services for customers was developed and the 

product line extended with inbound to manufacturing, 

aftermarket spare parts and service logistics, technical 

distribution, and postponement services. 

� Newly developed logistics tools allow optimization of 

warehousing by simulation, what-if modelling, and 

accurate activity-based cost calculation. 

� Regional centers of expertise opened in Asia Pacific, 

Europe and the Americas along with strengthened 

services. 

� Panalpina provided additional logistics space in 

Brazil, Canada, China, Colombia, France, Germany, 

Japan, Korea, Luxembourg, Mexico, Panama, Peru, 

Russia, Singapore, Sweden, Turkey, the United 

Kingdom, and the USA. 

� With its European road project, Logistics launched 

a new procurement process and a standardized 

IT platform, leading to higher utilization factors. 

Outlook 

Panalpina expects this market to grow. Logistics further 

emphasizes continuous improvements to existing 

operations while maintaining the development of strategic 

geographies, industry verticals, and corresponding 

service offerings. 



19

20 

Panalpina Annual Report 2011

Tim Bauer 

Lane Manager for Air Freight from Europe to 

the Americas and for own-controlled flight 

operations, has the capacity overview on all 

lanes out of Luxembourg 


21


Samia Guerroumi 

Procurement and Capacity Management 

Clerk for Air Freight from Europe to Central 

and South America 



Jasmine Medhora 

of Panalpina’s Pantainer Express Line 

based in Hamburg checks operational 

queries of Ocean Freight on correct 

procedures and guidelines 



Marco Parnitzke 

Booking Agent for Less than Container Load 

Ocean Freight from Hamburg to South America, 

handled 3175 shipments in 2011 



Andrea Ribaudo 

Logistic Platform Manager at Milan 

warehouse from where approximately 

15 million units have been shipped in 2011


30 

CEO Statement 

Profitability built on sustainable business model 

Despite the economic gloom and uncertainty, the Panalpina Group emerged from 2011 

with its market position strengthened. Our strategic orientation towards profitability, 

underpinned by our business model, has already proved its worth. But it is nonetheless 

set to encounter fresh challenges in the future. 

All aspects of Panalpina’s operations are guided by the 

principle of sustainable development. To progressively 

strengthen the welfare of our company, the environment 

and the population at large, equal weight is given to social, 

economic and ecological criteria in the evaluation of strategies, 

projects and innovations. Overall, this offers the 

best means for Panalpina to honor its obligations towards 

shareholders, employees, suppliers, customers and the 

general public. 


Sound business operations 

The foundation for accepting broader responsibility is laid by 

entrepreneurial success. Solid business performance and 

the efficient deployment of corporate resources are crucial 

to unlocking creative freedoms and meeting the varying 

demands of the Company’s different stakeholders. In today’s 

global logistics and forwarding markets, simply delivering 

the right goods to the right place at the right time no longer 

suffices for long-term success.

Success factors as growth drivers 

2011 saw Panalpina put in place a carefully crafted corporate 

strategy – initially for the period up to 2014 – which is 

built on the principles of performance, integrity and professionalism. 

While striving to continuously provide our customers 

with absolutely reliable logistics services that are 

tailored to their needs, our strategy targets sustainable and 

profitable growth. Our most crucial assets in the current 

business environment include our in-depth know-how in key 

industry verticals and the associated client focus, an 

extensive global network, a highly qualified and committed 

workforce, process-optimized information technology, 

outstanding compliance standards, and efficient and transparent 

procurement. 

Value-added services 

CEO Statement 

Panalpina is far more than a freight forwarding company. 

Our core air and ocean freight business is backed up 

by supply chain services and value-added logistics. The 

former includes, for instance, the optimization of supply 

chains and management of orders. The latter generally 

entails the acceptance of consignments for production or 

as part of postponement or customer service solutions. 

By expertly combining these services, we can offer our 

customers door-to-door products closely geared to their 

supply chains. Thanks to our world-spanning network 

embracing some 500 offices on six continents, these solutions 

can be implemented in all corners of the globe. 

Delivering end-to-end supply chain solutions: Panalpina’s business model with success factors 

Global Network 

Standard 

Warehousing 

Quality and Procurement 

Core Services 


Employees 

Supply Chain Services 

Air and 

Ocean Freight 

Value-Added Logistics Services 

Information Technology 

Industry Verticals 

Overland 

Compliance and 

Corporate Culture 


31

32 

CEO Statement 

We are planning a further expansion of our own logistical 

capacities in the years ahead. The focus here will be 

on value-added services rather than mere warehousing 

provision. 

Focus on specific sectors 

Crucial for the provision of tailored solutions for our customers’ 

supply chains is an intimate knowledge of the 

forwarding sector’s key target industries. Panalpina has 

pooled this expertise in nine vertical centers of expertise 

known as “customer groups” or “industry verticals.” These 

are additionally supported by the Panprojects unit, which 

is charged with handling large industrial projects. Being 

conversant with the extremely diverse needs of customers 

in the different industrial sectors, the centers’ employees 

are able to deliver the appropriate solutions. While the automotive 

trade, for instance, gives high priority to just-in-time 

delivery directly to the production line, the pharmaceutical 

industry requires temperature-controlled door-to-door shipments 

in order to safeguard the quality of active ingredients. 

All industries in which Panalpina operates contribute to the 

Group’s sustainable growth. In our bid to achieve aboveaverage 

growth in our air freight, ocean freight and logistics 

business, we will concentrate in particular on the consumer 

and retail, healthcare, hi-tech, and oil and gas sectors over 

the next few years. By 2014, we are looking to earn a place 

among the top five in all the industries served by our centers 

of expertise. 

Own-controlled air freight network 

The Panalpina’s own-controlled air freight network, widely 

acknowledged in the market as a powerful unique selling 

point, will be a major asset for future growth. It creates a 

wealth of options for the Group to deliver customized solutions 

without any reliance on airline flight schedules. Our air 

freight network is due for a further upgrade in 2012 through 

replacement of the previously deployed cargo planes by 

two new Boeing 747-8F freighters. The new aircraft consume 

less fuel, are far quieter than their predecessors, and offer 

greater freight capacity. They are also equipped with wideranging 

facilities for the transportation of temperature-sensitive 

cargo. 

Maximum flexibility thanks to asset-light business model 

The two new aircraft epitomize two of Panalpina’s key corporate 

principles: its asset-light strategy and its PanGreen 

initiative. Asset-light means that the Group does not own 

vehicles and warehousing facilities itself, but purchases 


capacity as needed from its suppliers. Accordingly, even 

the new planes will remain in the ownership of our longtime 

partner Atlas Air, while Panalpina concentrates on marketing 

and flight scheduling. This policy enables us to 

adapt more easily to fluctuations in demand than many of 

our competitors with their own vehicle fleets or warehouses. 

It also helps to minimize debt while boosting flexibility. 

Moreover, the asset-light approach is sustainable in 

that our procurement processes are highly transparent and 

help to cultivate trusting relationships with our suppliers. 

Ecological transport logistics 

The PanGreen program helps to sharpen both our own 

environmental profile and that of our customers and suppliers. 

The program makes it possible to obtain detailed 

information on the environmental impact of customers’ consignments 

as well as the options available for lower-carbon 

ocean shipments. In addition, as of mid-2012 the new aircraft 

will allow us to offer air shipments with a much smaller 

carbon footprint. The PanGreen program also benefits 

from our flexibility in that customers are able at all times to 

switch to a more ecological transport mode. 

Employee development as the path to excellence 

Our business is a people business. In other words, our 

service quality reflects the skills of our workforce. Hence 

the high priority which – in line with our corporate values – 

we attach to further training, talent management, and proactive 

succession planning. All forms of personnel development 

implemented by us worldwide are closely geared 

to promoting the organizational skills, individual competencies 

and commitment of our staff. 

Leverage through information technology 

To work efficiently and raise productivity, our highly qualified 

staff members rely on standardized processes and 

modern information technology. Greater speed, quality and 

transparency are required in the provision of data to both 

Panalpina and its customers. The immense importance 

attached to the continuous refinement of our IT platforms 

is reflected by the substantial annual investment in this 

field. One key IT project is the worldwide introduction of 

the SAP Transportation Management (SAP TM) system. 

This platform is currently being phased in, with completion 

scheduled for 2015.

Highest compliance standard 

Our corporate values, Code of Conduct and compliance 

processes govern all our actions. The principles behind 

Panalpina’s Code of Conduct are derived from the United 

Nations’ Universal Declaration of Human Rights and from 

internationally recognized environmental standards and 

labor laws. Our compliance processes are implemented 

company-wide, undergo continuous revision, and are 

deemed exemplary within our industry. As customers place 

increasing demands on the compliance procedures of 

their suppliers, Panalpina’s existing standards are steadily 

sharpening its competitive edge. 

External growth drivers 

The key drivers in our market include continuing globalization, 

the trend towards services outsourcing, the rising 

demand for value-added logistics services, and the ever 

greater market penetration of freight forwarders. In both air 

freight and ocean freight, routes between Asia and the 

Western World, between Asia and other emerging markets, 

and especially the intra-Asian lanes, are growing rapidly. 

Thanks to our business model, strategy and the commitment 

of our workforce, we are excellently equipped to 

achieve sustainable development in this environment – for 

the good of all our stakeholders. 

Monika Ribar 

Chief Executive Officer 

CEO Statement 


33

34 


Global Network 

Worldwide presence – local knowledge 

Across time zones and borders, Panalpina operates a world-spanning network 

embracing some 500 branches. With detailed knowledge of local markets 

and characteristics Panalpina’s professionals deliver every time comprehensive 

door-to-door solutions. 

North America 





Net forwarding revenue: CHF 834 million 

Employees in full-time equivalents: 2,474




As at December 31, 2011 

Asia Pacific 



Panalpina branches in over 80 countries 

Partner companies in further 80 countries 

www.panalpina.com / addresses 



35

36 


Industry Verticals 

Sharpening the focus on customer needs 

Panalpina concentrated on the special division Panprojects and nine core industry 

verticals in which it provides industry-leading expertise and tailor-made customer- 

specific solutions. In 2011 these ten centers of expertise further strengthened their 

know-how and gained new businesses. 

Healthcare 

The healthcare industry saw increasing demand for 

end-to-end supply chain solutions. In developed countries, 

there was continuing pressure on costs as well 

as on regulatory aspects and quality control. Not only 

did Panalpina become one of the world’s biggest Qualified 

Envirotainer Providers in 2011, but it is now recognized 

as one of the leading companies in terms of endto-end 

cold chain solutions. 

Customer needs: 

� Temperature-controlled services 

� Direct delivery to pharmacy, patient or hospital 

� Warehousing, distribution and packaging services 

� Zero defects in supply chain 

Telecom 

2011 saw a significant investment in telecom infrastructure, 

which resulted in positive volume growth. Orders 

from new telecom operators in emerging markets (Latin 

America, Africa, Middle East) came atop higher volumes 

in existing accounts. The outlook for 2012 remains stable 

in terms of volume but price erosion is to be expected. 


� Aftermarket and repair services 

� Enhanced and innovative last mile solutions 

� Warehousing and distribution services 

� Order management with IT integration 


www.panalpina.com / iv 

Consumer and Retail 

Growth was fueled by fast-moving global consumer 

brands and by large and medium-size retailers. Asia 

remained an important market not only from a sourcing 

point of view but also in terms of consumer demand. 

In addition, though, established markets such as North 

America or Europe will remain important, particularly 

with regard to purchase order management and end-toend 

milestone tracking. 


� Purchase order management with IT integration 

� Vendor management and integration 

� Sophisticated buyer consolidation services 

� End-to-end milestone tracking 

Panprojects 

The project business for the petrochemical and process 

sector was flat, but previously awarded contracts continued 

from prior years. The upturn in the global mining 

industry provided the bulk of the work. In a difficult 

market Panalpina achieved operational excellence while 

meeting high health, security, environmental and compliance 

standards. The goal is to expand investments, 

including into Sub-Saharan Africa. 


� Worldwide coverage 

� Integrated turn-key solutions 

� Fast and secure shipments for bulky and oversized 

goods

Automotive 

Continued growth of volume with major automotive 

manufacturers and suppliers was strongly based on 

their need for air freight services. The latest natural 

disasters have triggered alternative supply chain design 

discussions in which just-in-time is being weighed carefully 

against just-in-case inventories. As a consequence, 

effective crisis management became an integral part of 

the service portfolio. 


� Flexible and reliable supply chains with zero defects 

� Purchase order management and warning systems 

� Buyer consolidation 

Chemicals 

In the International Year of Chemistry all buyers in the 

value chain reduced their stock, decreasing further the 

volumes traded. Industry mergers and acquisitions gave 

Panalpina a stronger foothold within the top account 

landscape as cost-saving and efficiency efforts reached 

a new peak. New products on the market create numerous 

opportunities for Panalpina. 


� Product know-how and technical support 

� Key partnership programs with global coverage 

� Supply chain excellence and visibility 

� Compliance program and health, safety and 

environment (HSE) competence 

Oil and Gas 

For more than five decades, Panalpina has proven its 

commitment to the industry with a focus on servicing 

the highly demanding upstream part of the business 

(exploration and production). The vertical expanded its 

lead position with operators and oilfield service companies, 

demonstrating excellence in processes, compliance, 

HSE standards, and service innovation. 


� End-to-end supply of on- and offshore locations 

� Integrated project management for on- and offshore 

facilities, including rig moves 

� Pick and pack of hazardous material, bulk and heavy 

shipments 

Fashion 

Manufacturing 


The fashion industry performed well. This was due to 

customer growth in emerging markets. Panalpina’s 

performance was underpinned by growth in Asia and in 

the Americas. Fashion companies faced cost pressure 

but also had to address increased consumer demands. 

Panalpina will continue to support them in their continued 

trend to globalization and with its multi-channel 

solution offer. 


� High supply chain reliability and predictability 

� High security and cost focus 

� Multimodal solutions 

Thanks to full order books at most manufacturing companies 

across all segments, Panalpina was able to 

grow in its newest industry vertical (established 2010). 

In addition, Panalpina developed specific industry value 

propositions such as non-containerized cargo or 

smart air freight solutions related to the aftermarket of 

Panalpina’s client base. 


� End-to-end transport and logistics solutions 

� Special equipment management 

� Buyer and shipper consolidations 

� Aftermarket logistics 

� Packaging 

Hi-tech 

Meeting the needs of a dynamic and volatile market 

whose products exhibit a short lifecycle requires a highly 

flexible supply chain design. Panalpina leverages its 

global reach as more companies move their production 

sites to Asia and other emerging markets. This vertical 

already has a sophisticated mix of transport and logistics 

services in place to meet customer demand. 


� Lead-time reductions at low cost 

� Last-mile delivery services 

� Postponement 

� High security 

� Reverse logistics with repair services 


37

38 


Employees 

Empowering staff for service excellence 

Panalpina’s future success depends on the investment it makes now in the 

development of its employees. Attracting, screening, and selecting the right people 

for the right jobs, and retaining them through value-added training and employee 

development are central to this investment, which will pay dividends into the future. 

At the end of 2011, Panalpina had 15,051 employees in over 

80 countries. Its global human resources (HR) function is 

responsible for enabling organizational development so as 

to secure the ongoing engagement and effectiveness of 

Panalpina’s employees. The systems, processes and training 

programs that form a strong foundation for such a culture 

for these efforts are based on Panalpina’s core values 

and a pragmatic leadership competency model. These are 

continually evaluated and refined to ensure that Panalpina 

managers have a robust framework that will sustain a 

high-performance culture within the Company. 

Human Resources transformation continues 

In its fourth year, the HR transformation process remains 

focused on building on the foundation of its strategic 

priorities, namely, (1) identifying, attracting, managing, and 

deploying the talent required to perform; (2) propagating 

a sustainable high-performance organization and workforce; 

(3) developing leadership and other capability requirements; 

and (4) designing, implementing, and optimizing 

HR processes, policies and service delivery so that they 

efficiently meet the needs of our global business units and 

workforce. 

System support for talent management 

PanLink, a web-based Human Resources management 

system, was launched in late 2010 to support the implementation 

and institutionalization of the automation and 

global centralization of objective and performance management, 

talent management, succession planning, and compensation 

for Panalpina’s senior management. In 2012, the 

system will be introduced for all employees in India and 

at the head office in Basel. The scope of PanLink has also 

been expanded to include a Recruitment Module, which 

is expected to be a key tool for all hiring managers in the 

coming years. 


Organizational commitment to employee development 

The global Human Resources team continually monitors 

various indicators of training, development and engagement 

in the workforce. In 2011, Panalpina launched its 

second Employee Engagement Survey to identify areas 

where enhanced programming would be beneficial. In 

total, 84 % of employees responded, and improvement was 

noted in the following areas: Panalpina’s management 

has improved in terms of its ability to state objectives clearly, 

establish priorities, make decisions promptly, provide 

leadership, and communicate with people. Panalpina’s 

employees felt they are better informed about the Company’s 

strategy and performance, and they reported that 

greater efforts are being made to obtain their views. More 

employees noted satisfaction with the training opportunities 

available to them and stated that Panalpina is doing a good 

job in employee development and in providing deserving 

employees with opportunities for advancement. 

Nevertheless, opportunities for helping Panalpina to continue 

its development were identified. For example, the 

survey showed scope for improvement in relation to operating 

conditions and efficiency, to the integration of 

Panalpina’s core values into the corporate culture, and to 

performance review processes. 

The virtual campus: PanAcademy 

In response to the results of the 2009 survey, Panalpina 

continued to strengthen its commitment to providing 

learning opportunities for all its employees. PanAcademy, 

Panalpina’s e-learning platform, grew to include 33 learning 

units covering the Company’s strategic environmental 

PanGreen initiative as well as operations, product competence, 

and compliance. E-learning also expanded the 

coordinated launch of multi-language units – highlighted 

by the unit covering a Panalpina “core values journey” that 

includes refresher courses on anti-corruption.

Discovering and developing leadership talent 

Panalpina’s commitment to employee development and talent 

management extend to all levels of the organization. 

In 2011, the CEO personally led learning workshops focused 

on enhancing strategy execution. 44 senior managers 

spent four days in an offsite program to create a common 

understanding and alignment of the challenges linked to 

strategy execution, supply chain management from a customer’s 

perspective and high-performance leadership. 

During these four days, they participated in an intuitive tailor-made 

business simulation called Mexus that challenged 

each Panalpina manager to deliver value to customers 

consistently, collaborate across the organization, and drive 

strong financial performance. 

Tailor-made learning programs 

In 2011, the Company’s global program on collaborative 

strategic leadership skills, Navigating our Future, enrolled 

an additional 35 candidates. The program is offered to 

high-potential employees in mid-senior positions who are 

willing to pursue an international career. In its third year, 

it is augmented by the re-launched global leadership and 

managerial skills program Steering Success. In 2012, this 

includes over 609 department heads, team leaders and 

supervisors who will participate in three modules offered in 

Mandarin, German, French, Portuguese, Spanish, Italian, 

and English. 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. 

In 2012, four new training initiatives will begin to help employees 

deal with the challenges faced in the work environment 

– namely: securing success for new and first time 

leaders, performance management, empowerment and 

coaching, and effective communications. 

In parallel, Panalpina continued to build upon its internal 

assessment capabilities. Over the last two years more than 

150 assessments have been run internally with a strategic 

partner; these assessments are now well established as a 

source of sound information regarding an individual’s capabilities 

and as a means of identifying development needs. 


Benchmarking for fair, transparent, and motivational 

compensation 

Global, regional and local compensation benchmarking 

again played an important role in ensuring best competitive 

practices and maintaining a competitive edge by retaining 

and motivating employees. In 2011 the practice was 

enhanced to include reviews of global job levels and compensation 

structures against industry norms. 

Building further on the foundations for annual global cost 

transparency in relation to cross-border transfers, another 

internally developed enhancement to a global compensation 

and benefit reporting process was established in 

2012. This introduces extra transparency into comparisons 

of actual costs versus budgeted costs, thus enabling 

Panalpina to accurately track the return on investment. 

The Company expects that the continued evolution of this 

cutting-edge tool will facilitate strategic decisions that 

include cost factors. It will then be better equipped to deploy 

these high-value, high-cost resources strategically around 

the globe. 

Employees 

as at December 31, 2011 

www.panalpina.com / jobs 

Full-time 

equivalents* 

Europe, Middle East, Africa and CIS 6,746 

North America 2,418 

Central and South America 2,474 

Asia Pacific 3,601 

Corporate 461 

Total 15,700 

* Full-time equivalents include also part-time assignments and 

employees provided by labor agencies. 

Number of employees 15,051 


39

40 


Compliance and Corporate Culture 

Ethics, values and compliance 

As a global organization with operations on six continents, Panalpina is integrated into 

the cultures of many different countries. This makes cross-cultural understanding 

crucial. Furthermore, Panalpina’s strong corporate culture is based on shared values 

and ethical behavior that encompass fairness, respect and responsibility. 

A key aspect of Panalpina’s commitment to outstanding 

service is its culture of ethical behavior, rigorous compliance 

with all applicable laws, and the global experience contributed 

by its employees. Panalpina realizes that its ultimate 

success depends on its employees’ awareness of the 

Company’s long term values, and an understanding of how 

their individual work contributes to the Company’s success. 

Cultivating strong values and a healthy corporate culture 

is a long process that calls for commitment and investment 

on the part of all stakeholders. 

Global experience supports performance 

With approximately 500 of its own representative offices in 

over 80 countries and close collaboration with partner 

companies in 80 more countries, Panalpina has the global 

footprint and experience base to help its customers succeed 

and prosper in the international marketplace. To support 

this, Panalpina offers its employees an extensive 

internal exchange program through which they have the 

opportunity to spend an average of three months abroad 

within the Company. This popular program remains a priority 

for 2012 as it provides employees with multi-cultural 

and international experiences that strengthen cross-border 

understanding and collaboration. 

Panalpina’s Code of Conduct 

The Panalpina Code of Conduct encompasses binding rules 

on health, safety, and environment; on employee relations 

(including protection from discrimination and harassment); 

on ethical business conduct (including fair competition and 

antitrust and trade regulations); on the strict prohibition on 

bribery and corruption (including a ban on political contributions 

by the Company); and on responsibility for Company 

assets as well as financial integrity. Derived from the United 

Nations’ Universal Declaration of Human Rights and from 

internationally recognized environmental standards and 

labor laws, Panalpina’s Code of Conduct continues to reflect 

its commitment to integrity and responsibility across all 

operations and divisions. 


The Code of Conduct is available in 30 languages and is 

readily accessible by all employees via the intranet and on 

the Corporate website, see www.panalpina.com/culture. 

Since 2008, it is applied consistently and rigorously throughout 

the Company regardless of an employee’s status or 

tenure; all Panalpina employees are required to sign the 

Code of Conduct, indicating their commitment to adhere 

to the standards therein. Staff members are encouraged to 

report breaches of the Code of Conduct to their line or HR 

managers, or directly to the Corporate Compliance Office. 

However, if employees are unwilling or unable to do so, 

they can also contact a neutral, external hotline or file a 

confidential report via the internet. 

Resources and training for compliance 

Panalpina’s Corporate Compliance Officer reports directly 

to the CEO and to the Legal and Compliance Committee 

of the Board of Directors, and is assisted by a team of 

eight full-time Corporate Compliance Managers. In 2011, 

Panalpina expanded its corporate compliance team by 

adding a position dedicated to focusing on trade compliance, 

which includes oversight of export regulations and 

issues regarding sanctioned and embargoed countries. 

Furthermore, in the year under review, the compliance 

team visited Panalpina operations in 27 countries for one 

to two weeks each in order to ensure that Code of Conduct 

and Compliance programs were implemented fully 

and correctly. The selection of the countries was based in 

part on the Corruption Perceptions Index of Transparency 

International, a global civil society organization focused on 

the fight against corruption. 

Training has remained a focal point in Panalpina’s overall 

Compliance Program. Since 2008 it has been supported 

by an interactive e-learning platform which enables employees 

to familiarize themselves with the Code of Conduct 

and various aspects of compliance. This program was 

enhanced in 2011 by the launch of modules that focus on 

the topics of anti-trust and anti-corruption. These modules

are specifically designed for employees who may confront 

these issues in their work. 

In 2011, Panalpina conducted over 90 on-site compliance 

training sessions, with over 1000 employees participating 

worldwide. 

Sharing compliance initiatives with suppliers and 

customers 

Panalpina initiates regular face-to-face discussions, seminars 

and workshops on various aspects of compliance 

with its suppliers and customers. This is seen as a key element 

to building long-term, trusted collaboration among 

the Company’s different stakeholders. In 2011, Panalpina 

continued to engage with key suppliers, particularly those 

in countries where compliance has been seen as particularly 

important, regarding performance, necessary 

improvements, and compliance certification standards. 

Panalpina was admitted as a signatory member to the 

World Economic Forum Partnering Against Corruption 

Initiative (PACI) in 2009, and continued its support for this 

important initiative in 2011. The PACI requires CEO level 

commitment to zero tolerance for bribery as well as a commitment 

to implement a practical and effective anti-corruption 

program within the Company, benchmarked against 

the PACI Principles. 

www.panalpina.com / culture 



41

42 


Information Technology 

Drivers for efficiency excellence 

Continuous investment in the most advanced information technology (IT) systems is 

an essential part of Panalpina’s mission to offer state-of-the-art solutions to customers 

with complex transport and logistical needs. To guide this effort, Panalpina has a 

focused three-year strategic plan dedicated to streamlining data management processes 

and improving efficiency. 

The global logistics industry is becoming increasingly reliant 

on the secure and efficient processing of information. 

Therefore, having a robust, effective, and scalable IT infrastructure 

is critically important to future growth and success. 

In this era of rapid technological progress, identifying 

the latest technologies and realizing their value requires 

careful analysis of company operations as well as a clear 

understanding of customers’ needs. 

Ongoing IT advancements 

Following the worldwide rollout of a Documentation Management 

System in 2010, Panalpina began the implementation 

of a new collaboration platform in 2011 to provide a 

highly secure portal that is accessible to customers. The 

objective is to improve efficiency and quality assurance 

within the Company while providing a more streamlined 

approach to communication and documentation exchange 

between Panalpina and its customers and partners. Committed 

to providing reliable information in a timely manner, 

the collaboration platform is part of an Integrated Standard 

Business Platform which will be rolled out in its entirety by 

the end of 2012. In addition, the Event Management System 

will increase the transparency, the quality of data and the 

supply chain visibility for customers. 

Also introduced in 2011 was the SAP Transportation Management 

(TM) platform, which will be rolled out globally 

step by step. Following the 2011 implementation of the sea 

freight SAP TM application, air freight pilot installations 

will be deployed toward the end of 2012. Beginning in 2013, 

both the air and ocean freight systems will be rolled out 

on a corporate-wide basis. This comprehensive project will 

be completed by 2015. 

Outlook for 2012 

Part of Panalpina’s three-year strategic plan is an ongoing 

effort to renew legacy applications. Existing systems are 

being adapted to improve real-time automation capabilities 


and assure data quality. These advancements will simplify 

processes and positively influence internal IT organization 

and quality targets. Innovation is also a key aspect of the 

strategic plan, with an emphasis on the adoption of more 

sophisticated technologies that promise to enhance communication, 

speed, efficiency and, ultimately, productivity. 

Various platforms based on mobile communication and 

information technologies will be explored with the goal of 

improving communication between Panalpina and its 

customers and partners. Panalpina recognizes the potential 

value in emerging technologies such as tablets, smartphones 

and other mobile solutions, and is prepared to 

incorporate these devices when deemed valuable to customers, 

business partners, and employees. 

In addition to the three-year IT strategy, Panalpina will 

implement standardized procedures and templates where 

possible to streamline processes and meet the demands 

of its fast-paced market, while also ensuring efficient and 

reliable service. This will include directing its attention to its 

supply chain to meet customers’ high expectations in 

areas such as package tracking and other real-time data 

monitoring capabilities. 

In 2012, Panalpina will launch an information security 

campaign. As part of this project, Panalpina will ensure 

that the Corporate Information Security Policy is signed 

and adhered to by all employees. Security awareness will 

be reinforced through training and refresher sessions. 

Lastly, as a final step in Panalpina’s long-term effort to unify 

data centers, security levels and disaster recovery precautions 

will be strengthened by a consolidation across the IT 

infrastructure throughout 2012 and into 2013. This process 

sustains the Company’s business intelligence and mitigates 

the risk of business disruption in the event of unforeseeable 

emergencies.

Procurement 

Strong subcontractor relations as a key asset 


One of Panalpina’s ongoing strategic goals is to build long-term partnerships with 

world-class vendors. In order to effectively maintain this network, Panalpina’s 

procurement of each product division has streamlined its purchasing processes to 

ensure fair, equitable, and efficient treatment of its current and potential partners. 

Procurement is a fundamental driver for Panalpina’s 

success. The Company depends on its network of subcontractors 

to continuously improve efficiency and uphold 

Panalpina’s reputation in order to maintain a competitive 

position in the global market. This network is one of 

Panalpina’s most valuable assets, and results in significant 

dividends that are passed along to its customers. 

Therefore Panalpina is thorough and diligent in selecting 

the best possible partners with whom to do business. 

Finding and keeping the best partners 

In order to choose the most qualified subcontractors for 

ocean, air and logistics operations, Panalpina implemented 

clear criteria for assessing potential subcontractors: 

compliance, credibility, pricing, quality of service, 

consistency and performance. In addition to excelling in 

terms of these criteria, candidates must be willing to 

engage in a cooperative partnership, adhere to the Company’s 

rules and policies, and remain compliant with applicable 

laws and regulations. Panalpina is also committed 

to practicing fair selection procedures, which include 

conducting a consistent evaluation process, allowing for 

negotiations, disregarding nationality as a criterion, and 

utilizing standard contracts. Because Panalpina is a global 

company that applies high standards for its vendors, it 

does not have a policy to preferentially hire suppliers that 

are local to its operations. 

Improvements on both sides 

In its fast-paced industry, Panalpina must work with its 

partners to strengthen relationships and recognize areas 

for improvement. Panalpina’s suppliers have the opportunity 

to leverage its considerable experience in the industry to 

improve their own operations. Since 2010, the PanGreen 

program assesses the energy and environmental impacts 

of subcontractors and calculates the carbon footprint of 

cargo shipments. Results from this program provided a data 

baseline for the network of subcontractors against which 

they can measure their own environmental performance. 

It is not uncommon for Panalpina’s sub contractors to also 

be a source of innovative ideas that improve service offerings. 

By monitoring each step along the supply chain, and 

by actively engaging with its sup pliers, Panalpina can improve 

overall performance and offer its customers higherquality 

services. 

Ensuring compliance 

Panalpina must also carefully manage its exposure to 

liability from the actions of its subcontractors. There are 

numerous national and international anti-corruption laws 

and regulations, environmental regulations, and other legal 

requirements with which the Company must comply. 

Therefore, as a means of averting risk, regular audits are 

conducted to ensure subcontractor compliance with 

Panalpina’s Anti-Corruption Policies and Code of Conduct, 

as well as all applicable laws and regulations. 

Continued partnership 

Ultimately, both Panalpina and its subcontractors have 

the opportunity to benefit from these relationship-building 

and compliance assurance procedures. In support of 

Panalpina’s asset-light strategy, the Company attaches 

great importance to its growing network of trusted and 

reliable partners. As this will remain a key priority in future 

too, Panalpina intends to continue improving and securing 

its position in the market by developing new partnerships 

that meet the Company’s business demand. 


43

44 


Quality, Security and HSE 

A strong commitment to sustainable values 

To exceed its customers’ expectations, Panalpina is focused on applying outstanding 

quality and strong environmental performance. Consequently, it is steadily optimizing 

its processes and improving its services to secure long-term success. 

Panalpina’s robust business and quality control processes 

greatly increase the value of its services and ultimately 

the satisfaction of its customers. The responsibilities of the 

Business Processes and Quality team extend throughout 

the organization and are central to maintaining its culture 

of responsibility and accountability and its close cooperation 

with subcontractors. Key aspects of their efforts include 

employee training and development programs, and facilitating 

and monitoring the implementation of global standards 

for measuring and ensuring the quality of the operational 

service delivered to customers. 

Employee training for quality improvement 

In the past year, Panalpina continued its focus on quality 

services by implementing Six Sigma methodologies 

around the world. This was highlighted by the successful 

completion of the first Lean Six Sigma Green Belt Training 

at the facility in Basel, Switzerland. Fourteen Panalpina 

employees participated in the training program, which is 

based upon the PanCIP framework – the continuous improvement 

methodology designed to actively drive process 

improvement for Panalpina and its customers. In 2012, 

the Green Belt Training participants will focus on a series 

of quality improvement initiatives to address key elements 

of Panalpina’s business processes or the specific needs of 

certain customers. 

In 2011, the Panalpina Project Management program, 

PanPM, was expanded to include worldwide class room 

trainings. PanPM started in 2010 as a common, standardized 

project management methodology intended to streamline 

project management across the organization. Over 

the past year, almost 1000 Panalpina employees have participated 

in the classroom, e-learning or introductory training 

sessions on the PanPM methodology. 

Customer engagement 

Engaging with customers and obtaining feedback on 

Panalpina’s performance continued as an important 

goal in 2011. The results from previous surveys show that 


quality and speed of service are the two most important 

factors for Panalpina’s customers. Surveys such as these 

play a critical role in informing process improvement and 

customer relationship management efforts. 

Streamlining information flows 

In early 2011, the GlobaI Invoicing Speed and Quality initiative 

began at Panalpina in selected business units 

and departments. The expected benefits of this effort are 

to eliminate defects, to issue and process invoices more 

quickly and thereby to improve cash flow. Ultimately the 

lessons learned can be passed on to customers as best 

practices. This initiative is also built upon the PanCIP 

framework and utilizes the principles of the Lean Six Sigma. 

Panalpina Cargo 2000 Phase 1 certified 

In 2011, Panalpina announced that the Group is now Cargo 

2000 certified for Phase 1. Cargo 2000 is a three-phase, 

multiple stakeholder industry initiative aimed at implementing 

a quality management system for the worldwide air 

cargo industry in order to improve efficiency. Phase 1 manages 

airport-to-airport processes, and Phase 2 tackles 

door-to-door shipments. Phase 2 certification is expected 

to follow in 2013, in line with the roll-out of a strategic IT 

initiative at Panalpina. 

Recognition for outstanding performance 

In 2011, a number of different units were recognized with 

awards. During the eyefortransport’s 9th Annual 3PL 

Summit held at Antwerp, Panalpina received awards in two 

categories: Best European 3PL for Pharmaceutical, Healthcare 

and Life Sciences, and Best European 3PL for Industrial 

Supply Chain. Panalpina Greater China was named 

the Molex 2010 Supplier of the Year. This is the first logistics 

service award from Molex Chengdu and acknowledges 

Panalpina’s continuous improvement in supply chain management 

services, quality, delivery, cost control, and information 

technology. In early 2011 Panalpina Poland received 

the Market Leader in Sea and Air Freight Forwarding in

Poland award in the 9th Logistics Provider of the Year 2010 

competition. Panalpina’s agent in South Africa, Safcor 

Panalpina – in 2011 renamed Bidvest Panalpina Logistics – 

has achieved the diamond award in the latest PMR survey 

on freight forwarders. The Company reached the highest 

rating amongst 150 respondents. Panalpina Northwest 

Europe received the Best Logistics Partner 2010 award 

from Huawei and was acclaimed by Tesco for its outstanding 

customer service. In Switzerland, Panalpina ranked 

28 out of 250 of the largest Swiss companies assessed 

for their sustainability reporting (with special emphasis 

on transparency) and garnered first place in the logistics 

sector. 

Dedication to security 

In 2011, Panalpina continued to enhance its ability to provide 

solid security solutions, such as secure shipment and 

storage of valuable goods in line with its customers’ everchanging 

needs and demands. Led by the addition of a new 

Head of Security for Corporate Key Accounts, supplementing 

the existing Corporate Regional Heads of Security and 

Area Security Managers, the Panalpina team has vast experience 

accrued from years of work in the applicable fields 

of supply chain and logistics, law enforcement, military, and 

government (Department of Homeland Security). 

The tailored supply chain security measures that Panalpina 

offers its customers include Authorized Economic Operators 

(AEO), US Customs (CBP) Trade Partnership Against 

Terrorism (C-TPAT), US Transportation Security Administration 

(TSA), and the Transported Asset Protection Association 

(TAPA) security guidelines and protocols. In the past 

year, Panalpina also continued its solid compliance with 

its international regulatory responsibilities, which included 

additional AEO certifications, re-certification and validation 

in the C-TPAT program, and its record of 100 % screening 

of cargo shipped via passenger aircraft from the 

US in accordance with the TSA requirements through its 

expanding network of ten Certified Cargo Screening 

Facilities (CCSF). 

Panalpina’s Corporate Security team provides subject 

matter expertise to the supply chain security field by creating, 

reviewing, and updating industry-accepted publications 

and guidelines, participating in workshops and highlevel 

industry and government meetings, and developing 

“best practices” for supply chain security. In the past year, 

representatives from Panalpina’s Corporate Security team 

have been asked to present at the United Nations in 

Europe and to participate in working groups with CBP’s 

and TSA’s Air Cargo Advanced Screening pilot program 


in the US, as well as assisting with standards and programs 

in conjunction with the Business Alliance for Secure 

Commerce in South America. 

Moving forward, Panalpina’s Corporate Supply Chain 

Security team will remain flexible and adapt to the everevolving 

security environment: it will remain dedicated 

and committed to the needs of its customers. In 2012, some 

planned improvements include: 

�� 

Panalpina functions in supporting the integration of security 

considerations in the development of new facilities. 

�� 

technology solution, which will increase Panalpina’s 

ability to monitor and manage risk in the Company’s (and 

its industry partners’) supply chain network; it will also 

provide actual trend and statistical analysis of vulnerabilities 

in order to reduce future risk. 

�� 

to Panalpina employees through e-learning modules and 

updates to the Company’s intranet; this will highlight the 

importance of security and emphasize why all employees 

should make security a priority in their daily work functions. 

Commitment to health, safety, and the environment 

The health and safety of Panalpina’s employees is of paramount 

importance to all of Panalpina’s stakeholders. The 

Company’s efforts in this area include ensuring a safe and 

hygienic workplace, instilling a culture of responsibility and 

risk mitigation, and communicating with employees and 

contractors on issues of health risks, preventive measures, 

hygiene, and proper medical care. Employees at all levels 

of the Panalpina Group working on any client project are 

responsible for upholding the health, safety, and environmental 

policies, principles, and objectives of both the client 

and Panalpina. 

The Corporate Business Sustainability and Improvement 

Manager – Panalpina’s global Health, Safety and Environment 

(HSE) representative – ensures the implementation 

and maintenance of all processes needed for the HSE 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. 


45

46 


In 2011, Panalpina reported zero fatal accidents and 

305 nonfatal accidents which included onsite subcontractors. 

As part of the Behavioral Safety Program, employees 

are also encouraged to report events with 73 “near misses” 

reported compared to 82 in the previous year. 35 lost work 

day cases resulted in 17.1 days lost per 200,000 total working 

hours. Globally, there are more than 40 health, safety 

and environment representatives in place at Panalpina, who 

provide guidance and assistance to the senior management 

on HSE issues. Internal audits are performed by more 

than 100 trained auditors and 645 on-site inspections 

were carried out in 2011. All areas passed the ongoing surveillance 

audits completed by an external certification firm. 

Environmental initiatives 

Panalpina’s global environmental program, PanGreen, is 

organized into four key areas: ISO certification, internal data 

collection and monitoring, supplier outreach, and greenhouse 

gas calculations. These initiatives, which originate 

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. 

ISO certification 

Comprehensive and systematic environmental management 

is a key component of PanGreen. 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 with ISO 14001: 2004 

into the Panalpina Integrated Management System and 

subsequently applying this framework to all facilities worldwide. 

In addition, all countries had to identify all relevant 

local environmental legislation and ensure these laws were 

implemented and checked for compliance. On completion 

of the rollout and training, very rigorous internal audits 

were carried out, supplemented by external audits by thirdparty 

firms that specialize in such processes. 

Internal data collection 

Comprehensive and timely data collection from across the 

organization is critical in order to continually monitor and 

manage Panalpina’s environmental and sustainability related 

performance. Over the past years, a number of key performance 

indicators have been developed that form the core 

of this data collection process. By using an enterprise data 

collection tool to measure and monitor key environmental 

data, the HSE and Quality team is able to monitor a range 


of data on an annual, quarterly and monthly basis. Such 

data includes: 

�� 

�� 

�� 

�� 

�� 

�� 

�� 

�� 

This data set is continuously being assessed and 

expanded upon as new data becomes available or is seen 

as material to Panalpina’s ongoing performance. 

Calculating CO2 emissions for suppliers and customers 

With its Eco-Consumption and Eco-Transport programs, 

Panalpina emphasizes its commitment to minimizing its 

own environmental footprint and to helping its customers 

find ways to reduce the impact of their shipments. 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. 

By using a tool that calculates CO2 emissions from transportation 

via air, sea, and road, Panalpina helps its customers 

and suppliers understand their greenhouse gas emissions. 

The tool is linked to Panalpina’s operational data warehouse, 

where information regarding each shipment’s origin, 

destination, weight, and mode of transport is consolidated 

and centrally stored. The output is a concise report that 

gives Panalpina’s customers a quarterly summary of their 

total CO2 emissions by mode of transport, KPIs for the 

overall CO2 efficiency, statistics on total tonnage and transport 

performance, and analyses of the top ten lanes utilized. 

Customers may use this tool for their own carbon reporting 

requirements and to identify opportunities for reducing 

carbon emissions. 

Environmental performance in 2011 

In 2011, 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.

Previous goals included 5 % reductions in electricity, vehicle 

fuel and water usage, and – through the roll-out of paperless 

processes – a 10 % reduction in paper usage by the 

end of 2011. With the recent fluctuations in the global economy, 

and the continued improvement in the coverage and 

quality of the data collection efforts, the baseline data has 

continually shifted in the past several years. Therefore 

new goals will be established at the end of 2012 in order 

to accurately reflect the true scope of Panalpina’s environmental 

impacts. 

Compared to the previous year, total electricity consumption 

increased by 18 %, heating energy rose by 84 % 

and vehicle fuel consumption fell by 22 %. Similarly, direct 

(Scope 1) CO2 emissions increased by 15 % while indirect 

(Scope 2) emissions were up by 30 %. Scope 3 data relevant 

to business travel by air has been collected and 

showed a 31 % increase over 2010 figures. In 2011, there 

were 4.5 tons of CO2 equivalent emissions per full-time 

equivalent. As discussed above, these changes can be primarily 

attributed to fluctuations in business due to the 

global economic situation 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 2012. 

The table on the next page gives an overview of the environmental 

performance figures collected in 2011 across 

Panalpina’s global internal operations. 



47

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Activities 1 Performance indicator Unit 2011 

Energy and CO2 

Electricity Consumption Terajoule 226 

Heating Overall consumption Terajoule 169 

– District heat Terajoule 10 

Vehicle fuel Consumption (Panalpina-owned and lease vehicles only) Terajoule 208 

CO2 emissions 2 Total emissions Tons 67,779 

– Direct (Scope 1) Tons 27,352 

– Indirect (Scope 2) Tons 29,795 

– Indirect (Scope 3, business air travel) Tons 10,631 

Relative emissions per FTE 2 Materials 

Tons / FTE 4.5 

Paper Consumption Tons 1,113 

Water Consumption m3 /1000 257 

Spillages 3 Incident Number 14 

Notes: 

1 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. 

2 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 UK 

Department for Environment, Food and Rural Affairs (DEFRA). For more details please refer to the GRI content index. 

3 There were no cases causing significant damage. 

Energy balance by energy category 

Indirect 

renewable energy 

in Gigajoule 

240,000 

200,000 

160,000 

120,000 

80,000 

40,000 

0 

Indirect 

energy 

Electricity Heating Owned 

vehicles 


Direct energy 

CO2 emission by scope and activity 

Scope 1 

in tons of CO2 equivalent 

30,000 

25,000 

20,000 

15,000 

10,000 

5,000 

0 

Scope 2 

Electricity Heating Owned 

vehicles 

www.panalpina.com / quality 

www.panalpina.com / security 

www.panalpina.com / hse

Social Commitment 

Responsibility to society 


The Panalpina Group honors its social responsibility at different levels. Since 2003, 

through its support for the Vision First program in Ghana, it has helped combat 

avoidable blindness. On top of this, Panalpina’s regional business units are involved 

in many local projects. 

Engagement at regional level 

The ways in which Panalpina and its workforce underscore 

their social commitment are manifold: Examples include 

the collection of over USD 10,000 by employees who took 

part in a sponsored run for the American Heart Association, 

free-of-charge container deliveries to Haiti, the participation 

of 1500 staff members in the 2011 Earth Hour of 

the Worldwide Fund for Nature (WWF), and Greater China’s 

own “One Shipment, One Dollar” fundraising campaign, 

whose proceeds were used to reconstruct a Chinese 

school. 

Vision First: the fight against avoidable blindness 

Apart from its regional sponsorships, Panalpina has since 

2003 been involved in the Vision First program in Ghana. 

In this program, the Swiss and local Red Cross societies 

work in partnership with the Ghana Ministry of Health. 

Through the wider provision of access to eye care treatment, 

these organizations are able in many cases to prevent 

patients from becoming blind. 

It is estimated that around 1 % of Ghana’s approximately 

24 million-strong population, or about 230,000 people, are 

blind. Some 80 % of blindness cases have preventable and 

treatable causes, such as cataract, trachoma or malnutrition. 

Poverty, coupled with a shortage of eye care professionals, 

makes it difficult for sufferers to find suitable treatment. 

In Africa, there is only about one ophthalmologist 

per million inhabitants. 

Local resources as key to sustainable progress 

The Vision First program adopts a three-pronged approach: 

treating eye disorders, training specialized medical personnel, 

and expanding the infrastructure and technology 

base. This is made possible by a combination of external 

funding and local resources. To provide eye care in remote 

village communities, the program maintains a network of 

volunteers. These carry out sight checks, assist sufferers 

in obtaining glasses or treatment at the nearest clinic, 

and offer vital information on eye care that helps many to 

avoid visual impairment in the first place. 

Transition to independent framework 

Panalpina’s annual contribution to the Vision First program 

runs to CHF 200,000, equivalent to a quarter of the project 

costs. Having been sponsored by the Group throughout 

its pilot and on-the-ground implementation phases, the 

project has now entered the completion stage, which will 

see the various institutions gain autonomy. To date, over 

1.3 million people have been treated at clinics and advice 

surgeries and more than 31,000 operations performed. 

2011 results of Vision First program 

Patients treated 166,051 

Operations performed 2,144 

Patients issued vision aids 2,142 

Clinics/hospitals in operation 16 

Persons provided with health education 507,860 

Number of project participants 

Opticians and ophthalmologists 5 

Nurses (trained to treat minor eye disorders) 28 

Schoolteachers (with special training in healthcare 

issues) 

www.panalpina.com / society 

325 

Active Red Cross volunteers 1,000 


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Corporate Governance 

Corporate Governance and Remuneration Report: 

committed to a transparent management structure 

Panalpina is committed to a transparent management structure that is governed 

by international corporate governance principles. This Corporate Governance Report 

complies with the revised Directive of the SIX Swiss Exchange and therefore serves 

to provide investors with key information regarding corporate governance in an 

accessible format. 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 guidelines. 

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 

four regional units: 

�� 

�� 

�� 

�� 

In 2009, Panalpina integrated the regional management 

layer into its Head Office structure. 

Secondary, the business activities are subdivided into the 

following business segments: 

�� 

�� 

�� 

Supplementary information can be taken from the 

segmental reporting section of the Consolidated Financial 

Statements (pages 84 – 86). 

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 2.4 billion 

(25,000,000 registered shares at CHF 96.20 per share). 

The PWT shares are traded under Valor no. 216808, 

ISIN CH0002168083, symbol PWTN. 


1.1.3 Non-listed companies within the scope of 

consolidation 

The main subsidiaries and associated companies are 

disclosed in the Consolidated Financial Statements 

(pages 122–125) itemized by registered office, nominal 

capital, equity interest in percent, investment and method 

of consolidation. 

1.2 Significant shareholders 

The Ernst Göhner Foundation, Zug, Switzerland, is the main 

shareholder of PWT, with an equity participation of 43.58 %. 

Cevian Capital II Master Fund LP held 11.37 % and Panalpina 

World Transport (Holding) Ltd., held a share capital of 5.47 % 

on closing date. The respective treasury shares were purchased 

as a result of PWT’s share buyback program (referenced 

in section 2.3) and its share and option programs 

(referenced in section 5). Other significant shareholders are 

Artisan Partners Limited Partnership (5.01 %) and Bestinver 

Gestión, S.G. SGIIC (5.05 %). 

With regard to other significant shareholders, during the 

reporting year disclosures were made on the SIX online 

publication platform. The notifications (listed by shareholder 

and transaction date) are summarized as follows: 

Bestinver Gestión, S.G. SGIIC, Spain 

15. 07. 2011 increase of share capital to 3.04 % 

17. 10. 2011 increase of share capital to 5.05 % 

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 50,000,000 and is divided into 

25,000,000 registered shares, with a nominal value of 

CHF 2.00 each. 

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. 

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 

With the exception of the share split introduced at the IPO 

in August 2005, there has been no change in the share 

capital structure during the years through 2011. 

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. The proposal of the Board of Directors 

to the Annual General Meeting to reduce the share capital 

and cancel the repurchased shares has been postponed 

with the explicit consent of the Swiss Takeover Board. 

2.4 Shares and participation certificates 

On the closing date, 25,000,000 fully paid-in PWT registered 

shares with a nominal value of CHF 2.00 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 pre-emptive 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. 

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 


51

52 


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 approximately 480 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 10, 2011, Lars 

Förberg and Knud Elmholdt Stubkjær were elected 

to the Board of Directors whereas Rudolf W. Hug, Beat 

Walti, Chris E. Muntwyler, Roger Schmid and Hans-Peter 

Strodel were re-elected 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. 

Re-elected in 2011 (until 2012). 


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 

Schweize rische 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, Vice Chairman. Swiss citizen. Born in 1968. 

Re-elected in 2011, (until 2012). 

Beat Walti holds a PhD in law from the University of Zurich. 

In 1998, he became a consultant with McKinsey & Company 

in Zurich. In 2001, he was a project manager, shareholder 

and board member for the start-up ETOILE Medical. 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. 

Lars Förberg, Member of the Board of Directors. Swedish 

citizen. Born in 1965. Elected 2011 (until 2012). 

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 co-founded. 

Chris E. Muntwyler, Member of the Board of Directors. 

Swiss citizen. Born in 1952. Re-elected in 2011 (until 2012). 

Chris E. Muntwyler attended the School of Commerce 

in Zürich 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 Priceand 

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. 


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, 

a subsidiary of Credit Suisse. Roger Schmid works as 

an Executive Director of the Ernst Göhner Foundation. 

Roger Schmid has been a member of the Board of Directors 

since 2003. 

Hans-Peter Strodel, Member of the Board of Directors. 


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, Danish citizen. Born in 1956. Elected in 2011 

(until 2012). 

Knud Elmholdt Stubkjær holds a shipping degree from the 

Mærsk International Shipping Academy, supplemented with 

various executive programmes, a.o. 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 various 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 at the same time 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 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 provider within container, bulk 

and offshore shipping. 

All the members of the Board are non-executive 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), and Member of the Board of Directors of 

the following companies: Deutsche Bank (Schweiz) AG, 

Geneva (Switzerland), Allreal Holding AG, Baar (Switzerland); 

Ionbond AG, Olten (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), a member of the 

Board of Directors of Cevian Capital Ltd., Jersey (Channel 

Islands), member of the Nomination Committees of Metso, 

Helsinki (Finland), Tieto, Helsinki (Finland), and Volvo, 

Gothenburg (Sweden). 

Chris E. Muntwyler, Member of the Board of Directors of 

Austrian Post in Vienna (Austria) and of National Express 

Group PLC, London (England). 

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, Vice Chairman of E.R. Capital 

Holding, Hamburg (Germany) and member of the 

Board of Directors of Unifeeder A/S, Aarhus (Denmark) 

and FR8 Holdings Pty Ltd., Singapore. 

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. 


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54 


3.4 Elections and terms of office 

3.4.1 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 one-year period of office. 

They may be re-elected at any time. The Organizational 

Regulations of PWT specify an age limit of 72 years for the 

members of the Board of Directors. 

3.4.2 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. 

3.5 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. 

3.5.1 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. 

3.5.2 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 (since May 2011) and Roger Schmid. The 

Audit 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, 

selected country 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 of 

the Audit Committee since August 2010) attended all of the 

above-mentioned meetings. At these meetings, the Executive 

Board was regularly represented by the CEO, the 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 (since May 2011). 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. The Executive Board was regularly represented 

at these meetings by the CEO, the Chief HR Officer and 

the Corporate Secretary. 

The 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 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. Furthermore the Committee oversees 

the compliance undertakings to which the Company 

has agreed with the US Department of Justice under 

a Deferred Prosecution Agreement in November 2010. 

During the reporting year, the Committee has held four 

meetings. 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 Refer- 


ence 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. 

3.5.3 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 or decisions by circular may be 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 development. 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. 

3.6 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. It contains 

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 

additional investment applications as well as financial planning. 

Further responsibilities include decisions regarding 


55

56 


mergers and acquisitions and major human resources and 

remuneration decisions following recommendations and 

preparatory work of its Compensation and Nomination 

Committee. 

3.7 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 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 two 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 

3.5.2 and 3.5.3. 

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 3.5.2. 


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, 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, Corporate Compliance, 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, 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. 

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 

consumer 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 and Business Processes and 

Quality. 

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) and 

Sika AG, Baar (Switzerland). 

Marco Gadola: Member of the Board of Directors of 

Calida Holding AG, Sursee (Switzerland) and Luxair SA, 

Luxembourg. 

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 mid- and 

long-term incentive plans and the Management Incentive 

Plan for other senior management (excluding the Executive 

Board) 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 


57

58 


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. 

All 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 midand 

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 (2009 to 2011) which was CHF 62.50. 

The deferred bonus share price will thus be redefined on 

April 30, 2012. 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-onyear 

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 % (2011), 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 Board are eligible to participate 

in the Company’s Management Incentive Plan. 

Employment agreements with Executive Board members 

stipulate a notice period 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 89 – 93 

and 115 – 118) according to article 663bbis of the Swiss 

Code of Obligations. 

Compared to the previous year, the annual compensation 

of the Board of Directors remained unchanged. The Board 

Stock Award Plan, which was introduced in 2009, has 

been applied for the business year 2011. 

Overall compensation for the CEO increased in the reporting 

year due to a salary increase resulting in higher bonus 

potential and other related benefits. 

Compensation to other Executive Board members also 

increased due to salary increase for certain Executive Board 

functions and due to an increase of the maximum bonus 

payments to a new range of 67 % – 80 % depending on 

their function (2010: 50 % – 67 %). 

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 twothirds 

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 two-thirds majority 

of the shares represented at the General Meeting of Shareholders 

is required for the following resolutions: 

�� 

transfer restrictions; 

�� 

restriction of voting rights; 

�� 

shares; 

�� 

�� 

Directors; 

�� 

well as the repeal or relief of the stated quorum. A resolution 

to increase the quorum as 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 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-ofcontrol 

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. 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 2,999,000. 

Further KPMG invoiced CHF 49,000 for audit-related 

services. 

8.3 Additional fees 

The auditors KPMG were compensated an additional 

amount of CHF 1,204,000 for further services rendered in 

the financial year. KPMG was mandated in the reporting 

year in particular for tax consulting (CHF 1,129,000) and 

other non-audit related work (CHF 75,000). 


59

60 


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 lead auditor 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). 

9 Information policy 

Panalpina regularly updates its website at 

www.panalpina.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 automatically 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 web site (under 

Investor Relations). The minutes of shareholder meetings 

are available online. 

www.panalpina.com / corpgov 


Global Reporting Initiative 

www.panalpina.com / gri 



61

62 

Consolidated and Annual 

Financial Statements 2011 


Contents 

Consolidated Financial Statements 2011 

Consolidated Income Statement 64 

Consolidated Statement of Comprehensive Income 65 

Consolidated Statement of Financial Position 66 

Consolidated Statement of Changes in Equity 67 

Consolidated Statement of Cash Flows 69 

Notes to the Consolidated Financial Statements 70 

Principal Group Companies and Participations 122 

Report of the Group Auditors 127 

Key Figures in CHF (five-year review) 128 

Consolidated Statement of Financial Position in CHF (five-year review) 130 

Key Figures in EUR (five-year review) 131 

Consolidated Statement of Financial Position in EUR 133 

Annual Financial Statements 2011 of Panalpina World Transport (Holding) Ltd. 

Income Statement 134 

Balance Sheet as of December 31 (before profit appropriation) 135 

Notes to the Financial Statements 136 

Appropriation of Available Earnings 140 

Report of the Statutory Auditors 141 


63

64 


Consolidated Income Statement 

for the years ended December 31, 2011 and 2010 

in thousand CHF Notes 2011 2010 

Forwarding services 7,925,993 8,675,826 

Customs, duties and taxes (1,426,345) (1,511,665) 

Net forwarding revenue 5 6,499,648 7,164,161 

Forwarding services from third parties 5 (5,022,599) (5,684,084) 

Gross profit 5 1,477,049 1,480,077 

Personnel expenses 6 (892,421) (890,937) 

Other operating expenses 9 (372,438) (527,051) 

(Losses)/gains on sales of non-current assets 10 (106) 277 

EBITDA 212,084 62,366 

Depreciation of property, plant and equipment 14 (28,484) (38,891) 

Amortization of intangible assets 15 (9,383) (8,113) 

Operating result (EBIT) 174,217 15,362 

Finance income 11 6,268 6,248 

Finance costs 11 (11,903) (15,488) 

Profit before income tax (EBT) 168,582 6,122 

Income tax expenses 12 (41,169) (32,119) 

Consolidated profit 127,413 (25,997) 

Consolidated profit attributable to: 

Owners of the parent 126,294 (27,350) 

Non-controlling interests 24 1,119 1,353 

Earnings per share (in CHF per share) 

Basic 13 5.34 (1.16) 

Diluted 13 5.33 (1.16) 

The notes on pages 70 to 125 are an integral part of these consolidated financial statements. 



Consolidated Statement of Comprehensive Income 



Consolidated profit 127,413 (25,997) 

Other comprehensive income 

Available-for-sale financial assets 16 3,994 (1,828) 

Amounts recognized in equity for defined benefit post-employment plans 

– Actuarial gains (losses) 7 (23,297) (11,347) 

– Exchange difference 7 1,163 751 

Exchange difference on translations of foreign operations (11,238) (15,027) 

Income tax on components of other comprehensive income 12 5,296 5,289 

Other comprehensive income for the period, net of tax (24,082) (22,162) 

Total comprehensive income for the period 103,331 (48,159) 

Attributable to owners of the parent 102,416 (49,082) 

Attributable to non-controlling interests 24 915 923 



65

66 


Consolidated Statement of Financial Position 

as at December 31, 2011 and 2010 

Assets 



Property, plant and equipment 14 113,180 113,833 

Intangible assets 15 141,743 78,091 

Investments 16 72,256 34,843 

Derivative financial instruments 21 459 0 

Post-employment benefit assets 7 0 10,312 

Deferred income tax assets 27 62,313 65,871 

Total non-current assets 389,951 302,950 


Other receivables and other current assets 19 84,997 97,957 

Unbilled forwarding services 77,346 74,742 

Trade receivables 20 984,404 958,114 

Derivative financial instruments 21 5,045 20,454 

Other current financial assets 22 20,000 6,089 

Cash and cash equivalents 22 573,579 528,936 

Total current assets 1,745,371 1,686,292 

Total assets 2,135,322 1,989,242 

Liabilities and equity 


Equity 

Share capital 23 50,000 50,000 

Treasury shares 23 (197,278) (196,003) 

Reserves 1,053,086 950,282 

Total equity attributable to owners of the parent 905,808 804,279 

Non-controlling interests 24 9,082 7,890 

Total equity 914,890 812,169 

Non-current liabilities 

Borrowings 25 231 403 

Provisions 26 85,032 112,579 

Post-employment benefit liabilities 7 47,151 40,671 

Derivative financial instruments 21 0 539 

Deferred income tax liabilities 27 14,492 20,745 

Total non-current liabilities 146,906 174,937 

Current liabilities 

Trade payables 588,104 521,207 

Other payables and accruals 144,354 134,264 

Accrued cost of services 184,519 174,840 

Borrowings 25 7,296 9,335 

Derivative financial instruments 21 4,648 4,993 

Provisions and other liabilities 28 125,420 141,053 

Current income tax liabilities 19,185 16,444 

Total current liabilities 1,073,526 1,002,136 

Total liabilities 1,220,432 1,177,073 

Total equity and liabilities 2,135,322 1,989,242 



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 

Non- 

controlling 

interests 

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 

Total 

equity 

Available-for-sale financial assets 

Amounts recognized in equity for 

defined benefit post-employment plans 

16 3,994 3,994 3,994 

– Actuarial gains (losses) 7 (23,297) (23,297) (23,297) 

– Exchange difference 

Exchange difference on translations 

7 1,163 1,163 1,163 

of foreign operations 

Income tax on components 

(11,034) (11,034) (204) (11,238) 

of other comprehensive income 

Total comprehensive income 

12 5,296 5,296 5,296 

for the period 0 0 (12,844) (11,034) 126,294 102,416 915 103,331 

Dividends paid 

Share-based payments 

24 0 0 (46) (46) 

employee share plan 


8 1,255 1,255 1,255 

option plan 8 662 662 662 

Changes in treasury shares, net (1,274) (1,530) (2,804) (2,804) 

Acquired non-controlling interests 24 0 0 323 323 

Balance on December 31, 2011 50,000 (197,277) (121,706) (162,104) 1,336,895 905,808 9,082 914,890 



67

68 


Consolidated Statement of Changes in Equity 

for the year ended December 31, 2010 



Notes 

Share 

capital 

Attributable to the owners of the parent 

Treasury 

shares 

Other 

reserves 

Translation 

reserve 

Retained 

earnings 

Total 

Non- 

controlling 

interests 

Balance on January 1, 2010 50,000 (192,567) (101,723) (136,473) 1,237,327 856,564 7,015 863,579 

Consolidated profit (27,350) (27,350) 1,353 (25,997) 

Total 

equity 


Amounts recognized in equity for 

defined benefit post-employment plans 

16 (1,828) (1,828) (1,828) 

– Actuarial gains (losses) 7 (11,347) (11,347) (11,347) 

– Exchange difference 

Exchange difference on translations 

7 751 751 751 

of foreign operations 

Income tax on components 

(14,597) (14,597) (430) (15,027) 

of other comprehensive income 

Total comprehensive income 

12 5,289 5,289 5,289 

for the period 0 0 (7,135) (14,597) (27,350) (49,082) 923 (48,159) 

Dividends paid 


24 0 0 (52) (52) 

employee share plan 


8 676 676 676 

option plan 8 1,540 1,540 1,540 

Changes in treasury shares, net (3,436) (1,979) (5,415) (5,415) 

Reclassification non-controlling interests 24 (4) (4) 4 0 

Balance on December 31, 2010 50,000 (196,003) (108,862) (151,070) 1,210,214 804,279 7,890 812,169 

The notes on pages 70 to 125 are an integral part of these consolidated financial statements.

Consolidated Statement of Cash Flows 




Profit for the period 127,413 (25,997) 

Income tax expenses 12 41,169 32,119 

Depreciation of property, plant and equipment 14 28,484 38,891 

Amortization of intangible assets 15 9,383 8,113 

Finance income and dividend on available-for-sale financial assets 11 (6,268) (6,078) 

Interest expenses 11 5,932 5,516 

Exchange differences 11 2,840 609 

(Losses)/gains on sales of property, plant and equipment 10 106 (277) 

Equity-settled share-based payment transactions 8 2,936 2,281 

Other non-cash expenses (869) 9,791 

Working capital adjustments: 

211,126 64,968 

(Increase)/decrease receivables and other current assets (21,893) (208,859) 

Increase/(decrease) payables, accruals and deferred income 89,262 133,890 

(Decrease)/increase long-term provisions (15,508) 48,980 

(Decrease)/increase short-term provisions and other liabilities (33,915) 36,287 

Cash generated from operations 229,072 75,266 

Interest paid (2,577) (5,198) 

Income taxes paid (32,996) (33,031) 

Net cash from operating activities 193,499 37,037 

Interest received 4,695 5,206 

Dividends received 11 172 99 

Proceeds from sales of PPE 1,633 3,009 

Proceeds from investments held for trading 12 0 

Proceeds from sales of securities 0 150 

Loan and receivables repayments 1,148 7,586 

Repayment of other financial assets 1,927 1,345 

Purchase of property, plant and equipment (30,715) (28,173) 

Acquisition of subsidiary, net of cash acquired 30 (59,986) (2,384) 

Purchase of intangible assets and other assets (19,648) (13,967) 

Purchase of investments held for trading (13,840) 0 

Purchase of other financial assets (36,954) (3,663) 

Net cash used in investing activities (151,556) (30,792) 

Free cash flow 41,943 6,245 

Proceeds of short- and long-term borrowings 142 2,831 

Repayment of short- and long-term borrowings 0 (5,228) 

Dividends paid to non-controlling interests 24 (46) (52) 

Purchase of treasury shares (8,617) (10,540) 

Sale of treasury shares 4,685 4,865 

Net cash used in financing activities (3,836) (8,124) 

Effect of exchange rate changes on cash and cash equivalents 6,536 (988) 

Net increase (decrease) in cash and cash equivalents 44,643 (2,867) 

Cash and cash equivalents at the beginning of the year 22 528,936 531,803 

Cash and cash equivalents at the end of the year 22 573,579 528,936 



69

70 

1 

2 

3 


Notes to the Consolidated Financial Statements 

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 Logistic 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 Viaduktstrasse 

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, 2011 were authorized for issuance in accordance with a resolution 

by the Board of Directors on March 2, 2012. 

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, 2011 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 and 

judgments 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. 

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, 2011, the Group adopted the revised standard IAS 24 “Related Party Disclosures” as well as the amendments to 

IAS 32 “Financial Instruments: Presentation – Classification of Rights Issues” and IFRIC 14 “The Limit on a Defined Benefit Asset, Minimum 

Funding Requirements and their Interaction – Prepayments of a Minimum Funding Requirement.” 



IAS 24 (revised) “Related Party Disclosures” 

The revised standard supersedes IAS 24 “Related Party Disclosures”, issued in 2003. IAS 24 (revised) is mandatory for periods 

beginning on or after January 1, 2011. The revised standard provides a simplified definition of related parties by clarifying its intended 

meaning and eliminating inconsistencies from the definition. The adoption of the revised standard did not impact on the financial 

statements of the Group. 

IAS 32 (amendment) “Financial Instruments: Presentation – Classification of Rights Issues” 

The amendment applies to annual periods beginning on or after February 1, 2010. The amendment addresses the accounting for rights 

issues that are denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, such 

rights issues are now classified as equity regardless of the currency in which the exercise price is denominated. Previously, these issues 

had to be accounted for as derivative liabilities. The amendment applies retrospectively in accordance with IAS 8 “Accounting Policies, 

Changes in Accounting Estimates and Errors.” As Panalpina has no rights issues, the adoption of this amendment did not have any 

impact on the consolidated financial statement. 

IFRIC 14 (amendment) “The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction – Prepayment 

of a Minimum Funding Requirements” 

The amendment corrects an unintended consequence of IFRIC 14 “IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding 

Requirements and Their Interaction.” Without the amendment, entities are not permitted to recognize some voluntary prepayments 

for minimum funding contributions as an asset. With this amendment this has been revoked and should be applied retrospectively to 

the earliest comparative period presented. The adoption of this amendment did not impact on the financial statements of the Group. 

In addition, the IASB issued amendments to its standards in May 2010, primarily with a view to remove inconsistencies and clarifying 

the wording. There are separate transitional provisions for each standard. The adoption of the amendments resulted in changes to the 

accounting policies but did not have any significant impact on the financial position or performance of the Group. 

The following new or revised standards, amendments to standards and interpretations that have been published are mandatory for the 

Group’s accounting periods beginning on or after January 1, 2012 or for later periods, but the Group has not yet adopted them: 

IFRS 7 (amended) “Disclosures – Transfers of Financial Assets” 

In October 2010 the IAS issued “Disclosures – Transfers of Financial Assets” (amendments to IFRS 7) with an effective date of July 1, 2011. 

Panalpina is in the process of analyzing the impact of the amendments to IFRS 7. 

IFRS 9 “Financial instruments” 

Addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 

2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 

9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at 

amortized cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing 

its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains 

most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part 

of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, 

unless this creates an accounting mismatch. The Group is yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than 

the accounting period beginning on or after January 1, 2015. 

IFRS 10 “Consolidated Financial statements” 

The new standard creates a uniform definition regarding the concept of control thus setting a uniform basis for the existence of a 

parent-subsidiary relationship and the related definition of the scope of consolidation. The Group is yet to assess IFRS 10’s full impact 

and intends to adopt IFRS 10 no later than the accounting period beginning January 1, 2013. 

IFRS 11 “Joint Arrangements” 

IFRS 11 addresses joint arrangements distinguishing between arrangements where an entity exercises joint control over a joint venture 

or joint operation and the accounting of such. The new Standard supersedes IAS 31 “Interests in Joint Ventures” and SIC-13 “Jointly 

Controlled Entities – Non-Monetary Contributions by Venturers” as the henceforth relevant provisions addressing issues of accounting 

for jointly held entities. The Group is yet to assess IFRS 11’s full impact and intends to adopt IFRS 11 no later than the accounting 

period beginning January1, 2013. 

IFRS 12 “Disclosure of interests in other entities” 

Includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose 

vehicles and other off balance sheet vehicles. The Group is yet to assess IFRS 12’s full impact and intends to adopt IFRS 12 no later 

than the accounting period beginning on or after January 1, 2013. 


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IFRS 13 “Fair value measurement” 

The aim of the standard is to improve consistency and to reduce complexity by providing a precise definition of fair value and a single 

source of fair value measurement and disclosure requirements across all IFRS standards. The requirements, which are largely aligned 

between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where 

its use is already required or permitted by other standards within IFRS or US GAAP. The Group is yet to assess IFRS 13’s full impact 

and to adopt IFRS 13 no later than the accounting period beginning on or after January 1, 2013. 

Amendments to IAS 1 “Presentation of Financial Statements” 

In June 2011 the IASB issued Presentation of items of Other Comprehensive Income (amendments to IAS 1) “Presentation of Financial 

Statements” with an effective date of July 1, 2012. The Group is yet to assess the amendments impact. 

Amendments to IAS 12 “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 Group anticipates no impact on its financial statements in applying 

this amendment, which will become effective for accounting periods on or after January 1, 2012. 

IAS 19 “Employee benefits” 

The standard 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 occurred and already recognized all past service costs the impact on Group l 

evel will only 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). In addition the amendments require additional disclosures. 

The Group is yet to assess the full impact of the amendments. The amendments are mandatory for periods beginning on or after 

January 1, 2012. 

IAS 27 “Consolidated and Separate Financial Statements” 

IAS 27 will be renamed from “Consolidated and Separate Financial Statements” to “Separate Financial Statements” and henceforth 

shall apply only to entities preparing stand-alone financial statements in accordance with IFRS. The new standard has no impact on the 

Group as it does not prepare stand-alone financial statements in accordance with IFRS. 

IAS 28 “Investments in Associates” 

In the amendments to IAS 28, the content of the provisions governing the accounting for shares in associates and joint ventures is 

expanded. The Group is yet to assess full impact of this amendment and intends to adopt the amendment no later than the accounting 

period beginning January 1, 2013. 

Amendments to IAS 32 “Financial Instruments: Presentation” and IFRS 7 “Financial Instruments: Disclosures – Offsetting of 

Financial Assets and Financial Liabilities” 

The preconditions set out in IAS 32 regarding the set-off are set out in additional application guidelines. The Amendments to IFRS 7 

concern new disclosure requirements in connection with certain netting agreements. The Group is yet to assess full impact of these 

amendments and intends to adopt the amendments no later than the accounting period beginning January 1, 2014. 

There are no other IFRS or IFRIC interpretations that are not yet effective and would be expected to have a material impact on the Group. 

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. Inter-company balances, transactions and resulting unrealized income are eliminated 

in full. Changes in ownership interests 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. 

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition 

of a subsidiary is determined by the fair values of the assets transferred, the liabilities incurred to previous owners 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. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities assumed in a 

business combination are measured initially at their fair value at acquisition date. On an acquisition by acquisition basis, the Group recognizes 

any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s 

net assets. Investments are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from 

contingent consideration amendments. Cost also includes direct attributable costs of investment. 



The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value 

of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired are recorded 

as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of bargain purchase, the difference is 

recognized directly in the statement of comprehensive income. 

The Group treats transactions with non-controlling interests as transactions with equity owner of the Group. For purchases from-noncontrolling 

interest, the difference between 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 interests are also recorded in equity. 

When the Group ceases to have significant influence, any retained interest in the entity is re-measured to its fair value, with the change in 

carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequent accounting for 

the retained interest as an associate, joint venture or financial asset. 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. The amounts previously 

recognized in other comprehensive income are reclassified to profit or loss. 

Associates are all entities over which the Group has significant influence, but where it does not have control, generally accompanying a 

shareholding of business between 20 % and 50 % of the voting rights. Investments in associates are accounted for using the equity 

method of accounting and are initially recognized at cost. The Group’s investment in associates includes goodwill identified on acquisition, 

net of any accumulated impairment losses. 

The Group’s share of its associates’ post-acquisition profits or losses is recognized in the income statement, and its share of post-acquisition 

movements is recognized in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the 

investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured 

receivables, the Group does not recognize further losses unless it has incurred obligations or made payments on behalf of the associate. 

Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. 

Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Dilution gains 

and losses arising in investments in associates are recognized in the income statement. 

Operating segment information 

The determination of the Group’s operating segments is based on the organization units for which information is reported to the Group’s 

management. The Group is primarily organized by regions and has four reportable segments: Europe, Middle East, Africa and CIS, North 

America, Central and South America and Asia Pacific. Each reportable segment offers the same products and services. The Executive 

Board reviews monthly the Group’s internal reporting in order to assess performance and allocate resources. Performance is measured 

based on gross profit and operating result (EBIT). Income tax expenses, finance income and costs as well as special items are not 

assessed by segment. Certain 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. 

Non-monetary 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. Non-monetary 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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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. 

The income and expenses of foreign operations in hyperinflationary economies are translated to Swiss francs at the exchange rate on the 

reporting date. Prior to translating the financial statement of foreign operations in hyperinflationary economies, their financial statements 

are restated to account for changes in the general purchasing power of the local currency. The restatement is based on relevant price indices 

on the reporting date. Foreign currency differences are recognized directly in comprehensive income in the foreign currency translation 

reserve. 

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: 


Statement of 

Financial 

Position 


Income 

Statement 

Statement of 

Financial 

Position 

Income 

Statement 

EUR 1.21628 1.23080 EUR 1.25134 1.37870 

USD 0.94082 0.88478 USD 0.93670 1.04137 

HKD 0.12114 0.11366 HKD 0.12049 0.13403 

CNY 0.14950 0.13690 CNY 0.14177 0.15385 

CAD 0.92165 0.89488 CAD 0.93820 1.01107 

GBP 1.45278 1.41844 GBP 1.45170 1.60781 

Revenue recognition 

Net forwarding revenue includes amounts received, receivables and unbilled forwarding services for forwarding 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 includes 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 profitsharing 

plans are recognized for the amount expected to be paid in the year in which the services are provided.


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 

Most employees are covered by defined benefit and defined contribution post-employment plans sponsored by the Group companies. 

The schemes are generally funded through payments to insurance companies or trustee-administrated funds. The Group’s contributions to 

defined contribution plans are recognized in the income statement within the operating results when they are due. The Group has no legal 

or constructive obligation to pay further contributions. 

The asset and liability recognized in the statement of financial position in regard to defined benefit pension plans is the present value of the 

defined benefit obligation at the statement of financial position date less the fair value of plan assets, together with adjustments for unrecognized 

past-services costs. The accounting and reporting of defined benefit plans are based on recent actuarial valuations. The defined 

benefit obligations and service costs are calculated using the projected unit credit method. This reflects services rendered by employees 

to the date of valuation and incorporates actuarial assumptions primarily regarding discount rates used in determining the present value of 

benefits, projected rates of remuneration growth and long-term expected rates of return for plan assets using the interest rates of highquality 

corporate bonds that are denominated in the currency in which the benefits will be paid and which have maturity dates approximating 

the terms of the related pension liability. Past services costs are recognized immediately in the income statement, unless the changes 

to the pension plans are conditional on the employees remaining in service for a specified period of time. In this case post service costs 

are amortized on a straight-line basis over the vesting period. 

Actuarial gains and losses, which consist of differences between assumptions and actual experiences and the effects of changes in 

actuarial assumptions, are recorded in equity in other comprehensive income in the period in which they arise. 

Pension assets and liabilities in different defined benefit plans are not offset against each other unless the Group has a legally enforceable 

right to use the surplus in one plan to settle obligations in the other plan. The recognition of pension assets is limited to the present value 

of any future refunds from the plans or reductions 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 charged in equity in other comprehensive 

income. 

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 

Certain employees of the Group participate in share-based compensation plans. 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 equity-settled 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, 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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Income tax expenses 

Income taxes include all taxes based on the taxable profits of the Group, including withholding taxes payable on the distribution of 

retained earnings within the Group. Other taxes not based on income, such as capital taxes, are included within other operating expenses. 

Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively 

enacted at the reporting date, and any adjustment to tax payable in respect of previous years. 

Deferred income tax assets and liabilities are recognized on temporary differences between the carrying amounts and the tax bases of 

assets and liabilities for financial statement. Deferred income tax assets relating to the carry-forward of unused tax losses are recognized 

to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized. 

Deferred income tax is not recognized for the initial recognition of assets and liabilities in a transaction that is not a business combination 

and that affects neither accounting nor taxable profit nor loss, and differences relating to investments in subsidiaries and jointly controlled 

entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred income tax is not recognized 

for taxable temporary differences arising on the initial recognition of goodwill. 

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. 

Current income tax and deferred income tax are recognized in profit or loss except to the extent that they relate to a business combination, 

or items recognized directly in equity or in other comprehensive income. 

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 cost 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: 

Warehouse and office buildings 

Years 

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 based on the effective interest rate method. Leases where substantially all of the 

risk 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. 

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 cash-generating 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/or 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 five 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, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assess- 


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ments 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 is assessed for possible impairment at each reporting date and is additionally tested annually for 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 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. 


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. 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 profit or loss. 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 income or expenses. 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. 


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80 


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. 

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 to 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 

non-financial 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 receivable 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. 

Other current financial assets include time deposits and highly liquid money market papers with a maturity period between three months 

and one year. 

Non-current assets held for sale 

Non-current assets or disposal groups are classified as assets held for sale when their carrying amount is to be recovered principally through 

a sales transaction and a sale is considered highly probable. Before classification as held for sale, the assets or components of a disposal 

group are remeasured in accordance with the Group’s accounting policies. Thereafter, generally the assets or disposal groups are 

measured at the lower of their carrying amount and fair value less costs. Any impairment loss on a disposal group is allocated first to 

goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to financial assets, deferred tax 

assets and employee benefit assets, which continue to be measured. Impairment losses on initial classification as held for sale and 

subsequent gains or losses on remeasurement are recognized in the income statement. Gains are not recognized in excess of any cumulative 

impairment loss. 

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. 

Loans and 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. 


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Provisions 

Provisions are recognized where a legal or constructive obligation has been incurred and if an outflow of resources that 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. 

4 

Critical accounting estimates and judgments 

The preparation of the Group’s consolidated financial statements in conformity with IFRS requires management to make estimates and judgments 

that affect the application of policies and reported amounts of assets, liabilities, income, expenses and related disclosures. Estimates 

and the underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the 

circumstances. The results of which form the basis for making the judgments about carrying values of assets and liabilities that are not 

readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed 

on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate 

was based, or as a result of new information or more experience. Such changes are recognized in the period in which the estimate is revised. 

The estimations and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities 

within the next financial year are discussed below. 

Impairment of goodwill 

The Group tests periodically whether goodwill has suffered any impairment in accordance with the Group’s accounting policy and details 

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. 

Fair value of financial instruments 

Where the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from future 

markets, it is determined using the valuation technique including the discounted cash flow model. The inputs to these models are taken 

from observable markets where possible, but where this is not feasible, a degree of judgment is required to establish fair value. The judgments 

include considerations of inputs such as credit risk, liquidity risk and volatility. Changes in assumptions concerning these factors 

could affect the reported fair value of financial instruments. 

Pension and other post-employment benefits 

The cost 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 equity in the period in which they occur without affecting the income statement. At 

December 31, 2011 the Group had a deficit of the fair value of plan assets below the present value of funded obligations of CHF 9.5 million 

(2010: surplus CHF 7.6 million) for funded plans and a negative present value of unfunded plans of CHF 37.7 million (2010: CHF 37.9 

million) for unfunded plans (see note 7). 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. 



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, 2011 the recognized liability for claims 

amounts to CHF 33.0 million (2010: CHF 52.5 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 2.3 million lower (2010: CHF 0.8 million). Using a more conservative percentile, the carrying amount of claim provisions 

would be approximately CHF 1.7 million higher (2010: CHF 1.3 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 – Pending legal claims. Related legal costs are recognized when incurred. 

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 98.0 million (2010: CHF 96.0 million) and unrecognized tax loss 

carry-forwards to CHF 100.1 million (2010: CHF 80.3 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 31.6 million 

(2010: CHF 25.2 million). If the Group failed to achieve the expected future taxable profits, the consolidated profit would decrease by 

CHF 31.9 million (2010 CHF 31.3 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, 2011, the net liability for current income taxes amounts to CHF 19.2 million (2010: CHF 16.4 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 

costs, legal expenses, reorganization costs as well as fines recognized and related expenses. The measurement also excludes 

the unrealized gains / losses on financial instruments as well as interest income and expenditure, 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. 

2011 (in million CHF) 


Europe, 

Middle 

East, 

Africa, 

CIS 

North 

America 

Central 

and 

South 

America 

Asia 

Pacific 

Total 

operating 

segment 

Elimi- 

nations 

Cor- 

porate 

Total 

Group 

External forwarding services 3,171 1,270 834 1,225 6,500 0 6,500 

Intra-group forwarding services 1,574 469 177 1,547 3,767 (3,767) 0 

Net forwarding revenue 4,745 1,739 1,011 2,772 10,267 (3,767) 0 6,500 

Forwarding services from third parties (4,014) (1,468) (849) (2,459) (8,790) 3,767 (5,023) 

Gross profit 731 271 162 313 1,477 0 0 1,477 

Personnel expenses (445) (169) (77) (125) (816) (76) (892) 

Other operating expenses (247) (94) (68) (100) (509) 136 (373) 

Segment EBITDA 39 8 17 88 152 0 60 212 

Depreciation and amortization (17) (5) (4) (6) (32) (6) (38) 

Segment operating result (Segment EBIT) 22 3 13 82 120 0 54 174 

Financial result 

– Finance income 6 

– Finance costs (12) 

Profit before income tax (EBT) 168 

Income tax expenses (41) 

Consolidated profit 127 

Information about segment assets and liabilities: 


Europe, 

Middle 

East, 

Africa, 

CIS 

North 

America 

Central 

and 

South 

America 

Asia 

Pacific 

Total 

operating 

segment 

Non- 

segment 

assets 

Non- 

segment 

liabilities 

Total 

Group 

Segment assets 755 247 209 372 1,583 552 2,135 

Segment liabilities 542 170 94 234 1,040 180 1,220 

Net forwarding revenue and segment assets from the country of domicile (Switzerland) and major countries within above-mentioned 

segments: 

2011 (in million CHF) Switzerland 

Germany 

United 

States of 

America 

Brazil 

Republic of 

China 

Net forwarding revenue 905 1,376 1,445 412 1,182 

Segment assets 69 189 195 86 131 

The Group does not have sales in excess of 10 % of the total net forwarding revenues to any single external customer.

2010 (in million CHF) 

Europe, 

Middle 

East, 

Africa, 

CIS 

North 

America 

Central 

and 

South 

America 

Asia 

Pacific 

Total 

operating 

segment 


Elimi- 

nations 

Cor- 

porate 

Total 

Group 

External forwarding services 3,640 1,409 845 1,270 7,164 0 0 7,164 

Intra-group forwarding services 1,432 421 147 1,954 3,954 (3,954) 0 0 

Net forwarding revenue 5,072 1,830 992 3,224 11,118 (3,954) 0 7,164 

Forwarding services from third parties (4,312) (1,564) (836) (2,926) (9,638) 3,954 0 (5,684) 

Gross profit 760 266 156 298 1,480 0 0 1,480 

Personnel expenses (432) (181) (76) (121) (810) 0 (81) (891) 

Other operating expenses (250) (102) (61) (85) (498) 0 99 (399) 

Segment EBITDA 78 (17) 19 92 172 0 18 190 

Depreciation and amortization (25) (6) (4) (7) (42) 0 (5) (47) 

Segment operating result (Segment EBIT) 53 (23) 15 85 130 0 13 143 

Fines and related costs (112) 

Reorganisation costs 

Financial result 

(14) (2) (16) 

– Finance income 6 

– Finance costs (15) 

Profit before income tax (EBT) 6 

Income tax expenses (32) 

Consolidated profit (26) 

Information about segment assets and liabilities: 


Europe, 

Middle 

East, 

Africa, 

CIS 

North 

America 

Central 

and 

South 

America 

Asia 

Pacific 

Total 

operating 

segment 

Non- 

segment 

assets 

Non- 

segment 

liabilities 

Total 

Group 

Segment assets 728 219 168 311 1,426 563 1,989 

Segment liabilities 517 144 75 233 969 208 1,177 

Net forwarding revenue and segment assets from the country of domicile (Switzerland) and major countries within above-mentioned 

segments: 

2011 (in million CHF) Switzerland 

Germany 

United 

States of 

America 

Brazil 

Republic of 

China 

Net forwarding revenue 931 1,425 1,495 358 1,653 

Segment assets 70 176 170 58 124 


85

86 

6 


Information by business 

The Group’s business can be divided into three divisions: Air Freight, Ocean Freight and Logistics. 



Air Freight 

Ocean 

Freight 

Logistics 

Total Group 

Net forwarding revenue 3,281 2,313 906 6,500 

Forwarding services from third parties (2,593) (1,874) (556) (5,023) 

Gross profit 688 439 350 1,477 


Air Freight 

Ocean 

Freight 

Logistics 

Total Group 

Net forwarding revenue 3,503 2,771 890 7,164 

Forwarding services from third parties (2,836) (2,318) (530) (5,684) 

Gross profit 667 453 360 1,480 

Personnel expenses 

in thousand CHF 2011 2010 

Wages and salaries 695,473 694,834 

Compulsory social security contributions 84,421 85,304 

Contributions to defined contribution plans 49,166 47,649 

Expenses related to defined benefit plans (note 7) 987 4,946 

Staff training 

Share-based compensation (note 8) 

8,823 7,561 

Equity-settled compensation plan 1,917 2,216 

Cash-settled compensation plan 1,019 65 

Other personnel-related expenses 50,615 48,362 

Total personnel expenses 892,421 890,937 

Number of employees 15,051 14,136 

thereof in Switzerland 775 749 

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. 

Current and past services as well as expected returns on plan assets and interest costs are charged to the income statement as personnel 

expenses. Actuarial gains and losses are recorded directly in equity. 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 equity. 

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: 


Fair value of plan assets 211,525 217,656 

Present value of funded obligation (221,002) (210,094) 

Surplus (deficit) (9,477) 7,562 

Present value of unfunded obligations (37,674) (37,921) 

(Net liability) net asset recognized in statement of financial position (47,151) (30,359) 

thereof recognized as asset 0 10,312 

thereof recognized as liability (47,151) (40,671) 

The following amounts relating to defined benefit pension plans were recorded in the income statement: 


Net pension cost for year ending 

Current service cost (13,488) (12,259) 

Recognized past service cost 3,448 0 

Interest cost (7,232) (8,046) 

Expected return on plan assets 10,226 9,842 

Employee contribution 4,960 4,369 

Settlements 922 950 

Curtailments 177 198 

Expenses for defined benefit plans (987) (4,946) 

The movement in the defined benefit obligation over the year is as follows: 


Changes in defined benefit obligation (DBO) 

DBO at beginning of year (248,015) (232,899) 

Current service cost (13,488) (12,259) 

Recognized past service cost 3,448 0 

Interest cost (7,232) (8,046) 

Actuarial (losses) gains recognized in OCI (10,777) (12,297) 

Benefits paid 16,196 11,786 

Curtailments 177 198 

Liabilities extinguished on settlement 29 0 

Currency impact 986 5,502 

DBO at end of year (258,676) (248,015) 

The movement in the fair value of plan assets of the year is as follows: 


Changes in fair value of plan assets 

Fair value at beginning of year 217,656 208,217 

Employer contributions 6,167 5,060 

Employee contributions 4,960 4,369 

Expected return on plan assets 10,226 9,842 

Actuarial gains (losses) recognized in OCI (12,520) 950 

Benefits paid (14,943) (10,733) 

Currency impact (21) (49) 

Fair value at end of year of plan assets 211,525 217,656 

The fair value of the plan assets includes none of the Group’s shares for either 2011 or 2010. 


87

88 


An analysis of the amounts recognized in equity is shown in the table below: 


Analysis of amounts recognized in other comprehensive income 

Recognized in other comprehensive income on January 1 104,601 94,005 

Actuarial (gains) losses plan assets 12,520 (950) 

Actuarial losses (gains) DBO 10,777 12,297 

Currency impact (1,163) (751) 

Recognized in other comprehensive income on December 31 126,735 104,601 

Plan assets are comprised as follows: 


in CHF in % in CHF in % 

Major categories of plan assets 

Cash and cash equivalents 3 0.0088 % 1,016 0.47 % 

Equity investments 61,021 28.85 % 66,922 30.75 % 

Bonds 117,765 55.68 % 115,128 52.89 % 

Hedge funds and private equity 6,500 3.07 % 3,130 1.44 % 

Real estate funds 22,893 10.82 % 24,042 11.04 % 

Others 3,343 1.58 % 7,418 3.41 % 

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 and adjustment 

Germany: tables 2005G from Klaus Heubeck 

France: table INSEE TV / TD 2004 / 2006 

Rates of employee turnover, disability and early retirement are based on historical behavior within the Group companies. 

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: 



Discount rate 2.57 % 2.99 % 

Expected return on pension plan assets 3.99 % 4.74 % 

Future salary increase 1.75 % 2.97 % 

Future pension increase 1.25 % 1.24 % 

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 

twelve–month period is an actuarial gain/loss and recorded directly to equity. In 2011, the actual return on plan assets was CHF – 2.3 million 

(2010: CHF 10.8 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 2011 2010 2009 2008 2007 

DBO 258,676 248,015 232,899 256,441 268,675 

Plan assets (211,525) (217,656) (208,217) (213,520) (255,989) 

Deficit (surplus) 

Experience adjustments arising on: 

47,151 30,359 24,682 42,920 12,686 

plan liability 8,974 (2,858) 3,149 (7,692) 9,290 

plan asset (12,510) 1,042 20,539 (40,859) (8,668) 

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. 

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 

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 201.10. Participants 

in the “United States Management Incentive Plan III” subscribed for 4,096 options with a strike price of CHF 251.00. 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. 


89

90 



in CHF 


International 

Management 

Incentive 

Plan III 

United States 

Management 

Incentive 

Plan III 







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 132.00. Partici - 

pants in the “United States Management Incentive Plan IV” subscribed for 4,689 options with a strike price of CHF 122.40. 


in CHF 

International 

Management 

Incentive 

Plan IV 

United States 

Management 

Incentive 

Plan IV 







Management Incentive Plan 08 / 09 (MIP 08 / 09) 

In 2009, the 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 62.50 and participants of the “United States Management Incentive Plan” 

received 5,132 options with a strike price of CHF 83.05. 


in CHF 

International 

Management 

Incentive 

Plan 08/09 

United States 

Management 

Incentive 

Plan 08/09 






Risk-free interest rate based on Swiss government bonds (in %) 2.360 2.360



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 97.60 and participants of the “United States Management 

Plan” received 1,354 options with a strike price of CHF 89.55. 

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 







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) 


Options 

(number) 

Average exercise 

price 

per share 

(in CHF) 

Options 

(number) 

Options outstanding on January 1 115.72 173,692 114.79 179,369 

Granted 0.00 0 96.79 13,453 

Exercised 74.52 (16,065) 72.09 (11,196) 

Forfeited 71.62 (3,367) 92.70 (3,993) 

Expired 150.92 (5,808) 155.97 (3,941) 

Options outstanding on December 31 119.80 148,452 115.72 173,692 

Options exercisable on December 31 132.57 115,799 140.20 99,454 

During the reporting year the following numbers of options were exercised with the respective exercise prices: 

Exercise 

price 

of option 

(in CHF) 


Number of 

exercised 

options 

Exercise 

price 

of option 

(in CHF) 

Number of 

exercised 

options 

International Management Incentive Plan II 111.30 3,435 111.30 2,152 

International Management Incentive Plan 08 / 09 62.50 11,781 62.50 8,930 

United States Management Incentive Plan 08 / 09 83.05 226 83.05 114 

International Management Incentive Plan 09 /10 97.60 501 0.00 0 

United States Management Incentive Plan 09 /10 

Weighted average exercise price of options exercised 

89.55 122 0.00 0 

during the year 74.52 72.09 


91

92 


The average exercise prices and the expiry date of the outstanding options at period-end are as follows: 


Average 

exercise price 

per share (in CHF) 


Number of options 

expiring at year-end 

2012 111.68 29,635 

2013 206.45 30,061 

2014 130.70 32,439 

2015 64.55 44,095 

2016 96.79 12,222 

Total 119.80 148,452 


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. 


Management 

Incentive 

Plan 10/11 

Fair value of free share (in CHF) 119.30 

Granted free shares 7,124 

Vested free shares (138) 

Forfeited free shares (25) 

Free shares outstanding on December 31 6,961 

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, 2009 of 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 13,528 shares (previous year: 4,155 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 the management received matched shares totaling 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, 2011 amounts to CHF 2,527 thousand, which 

is also the intrinsic value.

9 

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 2,562 shares (2010: 0 shares) 

Costs of share-based compensation 

Recognized costs of share-based compensation were as follows: 

in CHF 2011 2010 

Employee share plan 2,273,801 740,818 

Option plan 662,587 1,540,175 

Total cost of share-based payments 2,936,388 2,280,993 

Share-based compensation costs are not reported in operating segments. They are reported under Corporate. 

Other operating expenses 


Administrative expenses 37,905 61,786 

Communications expenses 64,949 65,346 

Rent and utilities expenses 183,294 185,815 

Travel and promotion expenses 42,717 38,222 

Insurance expenses and claims 6,352 131,632 

Bad debt and collection expenses 6,558 10,353 

Other 30,663 33,897 

Total other operating expenses 372,438 527,051 

Rent and utilities expenses include rentals amounting to CHF 103.6 million (2010: CHF 100.0 million) and lease of machinery, equipment 

and vehicles of CHF 20.2 million (2010: CHF 23.9 million). Bad debt and collection expenses include CHF 1.4 million (2010: 

CHF 2.2 million) of credit insurance premiums. In last year’s period, the Group recognized fines amounting to CHF 104.0 million as claim 

expenses (2011: none). 

10 

Gains and losses on sales of non-current assets 


Gains on sales of property, plant and equipment 618 1,103 

Losses on sales of property, plant and equipment (724) (826) 

Total net (losses)/gains on sales of non-current assets (106) 277 


93

94 

11 


Finance income and costs 


Interest income 

Interest income on current bank accounts 3,986 3,795 

Interest income on financial assets at fair value through profit or loss 11 13 

Interest differential on forwards and swaps 1,741 1,750 

Interest income on loans 7 5 

Cash discount income 351 416 

Subtotal interest income 6,096 5,979 

Guarantee fees income 0 16 

Dividend on available-for-sale financial assets 172 99 

Fair value adjustments on financial assets 0 154 

Total finance income 6,268 6,248 

Interest expenses 

Interest expenses on loans (242) (642) 

Interest expenses on current bank accounts (760) (1,041) 

Interest differential on forwards and swaps (4,345) (3,493) 

Interest expenses on financial leasing (71) (86) 

Cash discount expenses (514) (254) 

Subtotal interest expenses (5,932) (5,516) 

Bank charges (2,277) (2,958) 

Exchange differences (2,840) (609) 

Guarantee fees expenses (529) (760) 

Other financial expenses (303) (886) 

Impairment on financial assets 0 (4,759) 

Fair value adjustments on financial assets (22) 0 

Total finance costs (11,903) (15,488) 

Net finance costs (5,635) (9,240) 

12 

Income tax expenses 


Current income taxes 

Current period 37,064 43,457 

Adjustments for prior periods 1,566 883 

Total income taxes 38,630 44,340 

Deferred income taxes (note 27) 

Origination and reversal of taxes on temporary differences and on tax loss carry forwards 1,931 (12,384) 

Effect of changes in the tax rate on temporary differences 980 305 

Utilization of non-recognized tax loss carry-forwards (372) (142) 

Total deferred income taxes 2,539 (12,221) 

Total income tax expenses 41,169 32,119 

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: 



Profit before income tax 168,582 6,122 

Tax at the applicable tax rate of 23.37 % (2010: 23.37 %) 39,398 1,431 

Effect of differing national tax rates (17,375) (6,479) 

Utilization of not yet recognized tax loss carry-forwards (372) (142) 

Recognition of deferred tax assets from previous periods (2,835) (259) 

Not yet recognized tax loss carry-forwards 13,510 13,434 

Adjustment of previous year tax provision 1,566 883 

Effect of changes in the tax rate on temporary differences 980 305 

Withholding tax on dividends received 3,339 4,907 

Expenses not deductible for tax purposes and non-taxable income 1,840 17,298 

Miscellaneous 1,118 741 

Actual tax charge 41,169 32,119 

The following table shows the reconciliation for 2011 in percent: 

Tax at the applicable tax rate of 23.37 % 23.37 % 

Effect of differing national tax rates (10.31 %) 

Utilization of not yet recognized tax loss carry-forwards (0.22 %) 

Recognition of deferred tax assets from previous periods (1.68 %) 

Not yet recognized tax loss carry-forwards 8.01 % 

Adjustment of previous year tax provision 0.93 % 

Effect of changes in the tax rate on temporary differences 0.58 % 

Withholding tax on dividends received 1.98 % 

Expenses not deductible for tax purposes and non-taxable income 1.09 % 

Miscellaneous 0.66 % 

Actual tax charge 24.42 % 

Income tax recognized in the consolidated statement of comprehensive income: 


Before tax 


Tax benefit 

(expense) 

Net of tax 

Before tax 

Tax benefit 

(expense) 


Net of tax 

Translation and exchange differences (11,238) 0 (11,238) (15,027) 0 (15,027) 

Available-for-sale financial assets 3,994 0 3,994 (1,828) 0 (1,828) 

Other taxes directly recognized in equity 

Actuarial gains (losses) 

0 (123) (123) 0 (123) (123) 

on defined benefit plans (22,134) 5,419 (16,715) (10,596) 5,412 (5,184) 

Total (29,378) 5,296 (24,082) (27,451) 5,289 (22,162) 


95

96 


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. 


Consolidated profit attributable to owners of the parent 126,294 (27,350) 

Weighted average number of ordinary shares outstanding 23,639 23,668 

Basic earnings per share (in CHF) 5.34 (1.16) 

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 compared 

with the number of shares that would have been issued assuming the exercise of the share options. 


Consolidated profit attributable to owners of the parent 126,294 (27,350) 

Weighted average number of ordinary shares outstanding 23,639 23,668 

Adjustments for share options 17 7 

Adjustments for share ownership program 20 4 

Weighted average number of ordinary shares for diluted earnings per share 23,676 23,679 

Diluted earnings per share (in CHF) 5.33 (1.16) 

At December 31, 2011, 103,125 options (2010: 66,946 options) were excluded from the diluted weighted average number of ordinary shares 

calculation as their effect would have been anti-dilutive. 


14 

Property, plant and equipment 


During the period under review, the Group acquired mainly machinery and equipment. The reclassification of CHF 14.3 million in 2010 

from construction in progress mainly to buildings refers to the commissioning of a new warehouse in Dubai. In 2010, the net assets of two 

barges were revalued. As the recoverable amount of these assets did not exceed the carrying amount, an impairment of CHF 4.7 million 

was recognized in 2010 (2011: CHF 0.0). 

2011 (in thousand CHF) 

Land and 

buildings 

Machinery 

and 

equipment 

Vehicles 

Construc- 

tion in 

progress 

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 


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) 


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 

2010 (in thousand CHF) 

Land and 

buildings 

Machinery 

and 

equipment 

Vehicles 

Construc- 

tion in 

progress 


Balance on January 1 133,833 239,225 41,401 15,749 430,208 

Translation differences (16,261) (20,515) (3,740) (1,418) (41,934) 

Acquisition of subsidiaries, net of cash acquired 1 68 65 0 134 

Additions 5,169 18,062 3,109 2 26,342 

Disposals (4,310) (23,068) (1,857) 0 (29,235) 

Reclassifications 11,790 1,847 691 (14,328) 0 


Accumulated depreciation 


Translation differences (9,248) (17,260) (3,133) 0 (29,641) 

Additions 6,756 20,757 11,378 0 38,891 

Disposals (3,215) (22,240) (1,048) 0 (26,503) 

Reclassifications 0 (1) 1 0 0 


Net book value on January 1 57,432 50,063 18,029 15,749 141,273 


Of which net book value of assets 

acquired under finance leases 304 44 1,236 0 1,584 

Total 

Total 


97

98 


15 

Intangible assets 



Goodwill 

Software 

Brands/ 

Customer 

lists 

Other 

intangible 

assets 



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) 


Accumulated depreciation or impairment losses 


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) 





Goodwill 

Software 

Brands/ 

Customer 

lists 

Other 

intangible 

assets 



Translation differences (1,170) (3,831) (1,732) (44) (6,777) 

Acquisition of subsidiaries, net of cash acquired 1,404 2 844 0 2,250 

Additions 0 13,677 0 21 13,698 

Disposals 0 (1,003) 0 (9) (1,012) 


Accumulated depreciation or impairment losses 


Translation differences (225) (3,453) (1,433) (45) (5,156) 

Additions 0 6,385 1,569 159 8,113 

Disposals 0 (1,003) 0 (9) (1,012) 




The net book value of software is comprised of accumulated, internally generated, capitalized software development costs of CHF 33.4 million 

(2010: CHF 22.6 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. Neither in 2011 nor 2010 there were any impairment charges 

on these intangible assets. 

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. 

Total 

Total

A summary of the goodwill allocation per CGU is presented below: 



Air freight division (CGU Airfreight) 31,151 31,151 

Grampian International Freight Aberdeen & Beverwijk (CGU Grampian) 6,393 6,388 

Panalpina World Transport (Singapore) Pte. Ltd. (CGU Janco) 3,981 4,008 

Panalpina World Transport (Pty) Ltd. (CGU Australia) 3,606 1,404 

Grieg Logistics AS (CGU Norway) 36,248 0 

Total goodwill 81,379 42,951 

The following key assumptions have been used for the value-in-use calculations of each CGU: 


CGU 

Norway 

CGU 

Australia 

CGU 

Airfreight 

CGU 

Grampian 

CGU 

Janco 

Growth rate1 9.25 % 6.75 % 3.50 % 7.25 % 4.50 % 

Operating expenses in % of forwarding revenues2 97.62 % 98.73 % 98.19 % 99.83 % 98.73 % 

WACC3 7.57 % 11.18 % 6.65 % 8.08 % 6.85 % 

2010 

CGU 

Australia 

CGU 

Airfreight 

CGU 

Grampian 

CGU 

Janco 

Growth rate1 4.50 % 2.25 % 4.63 % 3.13 % 

Operating expenses in % of forwarding revenues2 96.87 % 98.37 % 98.62 % 97.74 % 

WACC3 15.53 % 10.44 % 12.60 % 10.51 % 

1 Weighted average growth rate used to extrapolate cash flows beyond the budget 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 CGU Grampian a change in the assumptions of the growth rate of the gross profit (2.6 percentage points) or the WACC (1.8 percentage 

points) would cause the carrying value of goodwill to exceed the recoverable amount. The same applies for CGU Norway for which 

a change in the assumptions of the growth rate of the gross profit (2.9 percentage points) or the WACC (2.7 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 – 54.5 percentage points 

WACC + 34.6 percentage points 

CGU Janco 



CGU Grampian 



CGU Australia 



CGU Norway 




99

100 

16 


Investments 


Available-for-sale investments 19,670 15,625 

Fair value through profit or loss investments 775 816 

Loans receivable 311 208 

Long-term receivables 47,975 14,061 

Other 3,525 4,133 

Total investments 72,256 34,843 

Long-term receivables primarily include rental and guarantee deposits of CHF 13.7 million (2010: CHF 12.8 million) and investments in 

money market and time deposits with a maturity longer than 360 days of CHF 34.3 million (2010: CHF 0.0 million). 

Available-for-sale investments – unquoted equity shares 


Balance on January 1 15,625 17,794 

Translation differences (13) (78) 

Additions 69 5 

Disposals (5) (142) 

Fair value adjustments recognized in statement of comprehensive income 3,994 (1,702) 

Reclassifications 0 (252) 

Balance on December 31 19,670 15,625 

Less: non-current portion 19,670 15,625 

Current portion 0 0 

In 2011, no shares (2010: shares of CHF 252 thousand) were transferred from available-for-sale investments to fair value through profit or 

loss. Fair value adjustments amounting to CHF 126 thousand previously recorded in comprehensive income are recognized in the income 

statement (2011: CHF 0). 

Fair value through profit or loss investments 


Balance on January 1 816 618 


Disposals (7) (8) 

Fair value adjustments recognized in profit or loss (22) 39 

Reclassifications 0 252 

Balance on December 31 775 816 

Less: non-current portion 775 816 

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. 

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 

long-term deposits that arise directly from its operations. The Group also holds available-for-sale investments and enters into deriva-tive 

transactions. 

The Group is exposed to market risk, credit risk and liquidity 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 accor dance 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 


Cash 

Available- 

for-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 

Investments: 

5,504 5,504 5,504 

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 


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 


101

102 




Cash 

Available- 

for-sale 

Fair value 

through 

profit or 

loss held 

for trading 

Loans and 

receivables 

Carrying 

amount 

Total 

(fair value) 

Trade receivables and other receivables 1,055,438 1,055,438 1,055,438 

Unbilled forwarding services 74,742 74,742 74,742 

Accrued interest income 340 340 340 

Cash and cash equivalents 1,423 527,513 528,936 528,936 

Other current financial assets 6,089 6,089 6,089 


Investments: 

20,454 20,454 20,454 

Bonds and debentures 181 181 181 

Shares 15,625 394 16,019 16,019 

Other investments 241 241 241 

Third-party loans 354 354 354 

Rental and guarantee deposits 12,849 12,849 12,849 

Total on December 31, 2010 1,423 15,625 21,270 1,677,325 1,715,643 1,715,643 


Financial 

liabilities at 

fair value 

through 

profit or loss 

Financial 

liabilities 

measured 

at amortized 

cost 

Carrying 

amount 

Total 

(fair value) 

Payables and accruals 830,310 830,310 830,310 

Borrowings 8,858 8,858 8,858 

Finance lease liabilities 879 879 992 

Derivative financial instruments 5,532 5,532 5,532 

Provisions and other liabilities 120,451 120,451 120,451 

Total on December 31, 2010 5,532 960,498 966,030 966,143 

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).


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 

2010 (in thousand CHF) Level 1 Level 2 Level 3 Total 

Available-for-sale financial assets 0 1,074 14,228 15,302 

Financial assets at fair value through profit or loss held for trading 691 125 0 816 

Derivative financial assets 0 20,454 0 20,454 

Available-for-sale financial assets at cost 323 

Total 36,895 

Derivative financial liabilities 0 5,532 0 5,532 

Total 5,532 

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. Neither in 2010 nor in 

2011 investments have been sold. 

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, 2011: 


Available-for-sale 

financial assets 

Balance on January 1 14,228 14,228 

Fair-value adjustments in statement of comprehensive income 3,412 3,412 

Balance on December 31 

Total gains or losses for the period included in the statement of comprehensive income for assets 

17,640 17,640 

held at the end of the reporting period 3,412 3,412 

Neither in 2011 nor in 2010 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. 

Total 


103

104 


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 and the euro. 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, 2011, the Group’s net foreign currency risk exposure amounted to CHF 9.4 million (2010: CHF 31.6 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 2011 2010 

Euro (1,648) 371 

US dollar (105) (2,286) 

Hong Kong dollar (947) (896) 

Total effect (2,700) (2,811) 

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 currency 

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 0.9 million (2010: CHF 3.2 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 

finan cial 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.

The table below shows the Group’s maximum exposure to credit risk: 



Cash and cash equivalents (without cash in hand) 571,886 527,513 

Derivative financial instruments 5,504 20,454 

Trade receivables and other receivables 1,106,317 1,057,090 

Loans and other financial assets 49,123 18,547 

Total financial assets shown in statement of financial position subject to credit risk 1,732,830 1,623,604 

Guarantees 242,045 134,169 

Total credit risk 1,974,875 1,757,773 

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 586.1 million (2010: CHF 525.3 million) and credit lines with various finan cial 

institutions totaling CHF 515.9 million (2010: CHF 520.9 million). Of this total, CHF 179.8 million (2010: CHF 190.9 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, 2011/2010 based on contractual 

un discounted payments. 


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 


Foreign exchange contracts 

21,193 8,051 0 29,244 

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 


between 

1 and 3 months 

between 

3 months and 

1 year 

between 

1 and 5 years 

Total remaining 

contractual 

payments 

Borrowings (note 25) 2,884 6,451 403 9,738 

Trade and other payables 557,671 24,372 9,971 592,014 

Accruals 217,396 14,821 6,080 238,297 

Provisions and other liabilities 

Foreign exchange contracts 

80,311 40,142 0 120,453 

Cash inflow (750,894) (65,039) (7,025) (822,958) 

Cash outflow 737,807 63,495 7,541 808,843 

Total 845,175 84,242 16,970 946,387 


105

106 


Capital risk management 

The Group’s objectives when managing capital are to safeguard its ability to continue as an ongoing 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: 


Capital and reserves attributable to Panalpina shareholders 905,808 804,279 

Equity attributable to non-controlling interests 9,082 7,890 

Total equity 914,890 812,169 

Total assets 2,135,322 1,989,242 

Equity ratio 42.8% 40.8% 

The Group is not subject to regulatory capital adequacy requirements. 

19 

Other receivables and other current assets 


Office supplies 0 1,721 

Taxes (VAT, withholding tax) 41,949 42,660 

Accrued income 6,092 1,391 

Accrued interest income 757 340 

Personnel advances 1,405 2,559 

Prepaid rent expenses 5,371 6,829 

Prepaid communication and IT expenses 3,325 3,039 

Supplier rebates 16,912 21,535 

Short-term loans 847 146 

Others 8,339 17,737 

Total other receivables and other current assets 84,997 97,957 


20 

Trade receivables 



Commercial clients 990,839 962,919 

Agents 17,684 22,508 

Total trade receivables (gross values) 1,008,523 985,427 

Individual allowance (282) (1,864) 

Overall allowance (23,837) (25,449) 

Total trade receivables (net) 984,404 958,114 

Europe, Middle East , Africa, CIS 479,358 518,859 

thereof European Union 380,646 419,529 

thereof Switzerland 42,185 38,370 

North America 201,398 179,090 

Central and South America 133,770 102,248 

Asia Pacific 169,878 157,917 


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 indentified. 

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: 


Balance as of January 1 27,313 34,848 

Receivables written off during the year as uncollectible (7,470) (9,684) 

Changes in provision for doubtful accounts 4,276 2,149 

Balance as of December 31 24,119 27,313 


107

108 


The following table provides details about the age 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: 


Commercial clients 990,839 962,919 

Agents 17,684 22,508 

Total trade receivables (gross values) 1,008,523 985,427 

Allowance for bad debt (24,119) (27,313) 


of which: 

Not overdue 734,894 708,293 

Past due not more than 30 days 182,956 189,671 

Past due more than 30 days up to 180 days 83,667 82,139 

Past due more than 180 days up to 360 days 12,932 8,052 

Past due more than 360 days 10,137 10,153 

Prepayment (16,063) (12,881) 

Total trade receivables (gross) 1,008,523 985,427 

Allowance for bad debt (24,119) (27,313) 


21 


Positive 

Negative 

Contract value 

replacement value 


in thousand CHF 2011 2010 2011 2010 2011 2010 

Forward foreign exchange contracts 728,316 805,302 5,504 20,454 (4,648) (5,532) 

Forward trading hedges 728,316 805,302 5,504 20,454 (4,648) (5,532) 

Positive 

Negative 

Contract value 



in thousand CHF 2011 2010 2011 2010 2011 2010 

Terms of the forward foreign 

exchange contracts 728,316 805,302 5,504 20,454 (4,648) (5,532) 

0 – 3 months 675,587 734,333 4,540 18,579 (3,945) (4,890) 

4 – 12 months 46,614 63,428 505 1,875 (703) (103) 

13 – 18 months 6,115 7,541 459 0 0 (539) 


Derivative financial instruments are spread over the following currencies: 


Forward foreign 

exchange contracts 


USD 443,673 399,245 

EUR 214,650 278,063 

SGD 24,222 2,001 

GBP 10,618 11,178 

HKD 7,511 17,074 

CZK 6,456 998 

CAD 6,452 25,097 

NZD 4,725 1,452 

MXN 2,353 2,211 

NOK 2,342 1,361 

SEK 2,261 8,154 

CHF 520 4,100 

AUD 0 15,002 

COP 0 11,228 

Other 2,533 28,138 

Total 728,316 805,302 

22 

Cash and cash equivalents 


Cash on hand 1,693 1,423 

Cash at bank 569,983 531,658 

Checks and bills of exchange in transit 1,903 (4,145) 

Total cash and cash equivalents 573,579 528,936 

Net cash (debt) is comprised as follows: 


Cash and cash equivalents 573,579 528,936 

Other current financial assets 20,000 6,089 

Short-term borrowings (7,296) (9,335) 

Long-term borrowings (231) (403) 

Net cash (debt) 586,052 525,287 


109


110 23 Share capital and treasury shares 



Outstanding 

number of shares 

(numbers) 

Ordinary 

shares 

Treasury 

shares 

Balance on January 1, 2011 23,642,458 50,000 (196,003) (146,003) 

Treasury shares 

Sold 20,245 0 2,190 2,190 

Purchased (79,042) 0 (8,617) (8,617) 

Sold under employee share plan 32,182 0 3,462 3,462 

Sold under employee option plan 16,065 0 1,690 1,690 

Balance on December 31, 2011 23,631,908 50,000 (197,278) (147,278) 

The share capital is presented by 25 million issued shares (2010: 25 million) of CHF 2.00 par value, fully paid in. 

On December 31, 2011, the number of outstanding shares amounted to 23,631,908 shares (2010: 23,642,458) and the number of treasury 

shares to 1,368,092 (2010: 1,357,542). Treasury shares have been deducted from equity attributable to owners of the parent. All 

shares issued by the Company were fully paid in. 

The extraordinary Shareholders’ Meeting held on August 23, 2005, authorized the Board of Directors to create authorized capital to the 

maximum amount of CHF 6 million by issuing a maximum of 3,000,000 registered shares with a nominal value of CHF 2.00 each at any 

time until August 22, 2007. At the Annual General Meeting held on May 15, 2007, the shareholders approved the proposal of the Board of 

Directors to extend the authorized share capital until May 2009 with an unchanged amount. The extension of the authorized capital for 

another two years was approved at the Annual General Meeting held on May 5, 2009. On May 10, 2011, the General Meeting extended the 

resolution, with unchanged conditions until May 10, 2013. The Board of Directors has not made use of this au thorization. The Company 

has no conditional share capital. 

In 2007, the Board of Directors decided to return excess capital to the shareholders by launching a share buyback program via a second 

trading line on the SIX Swiss Exchange. Between August 13, 2007 and September 2, 2008, the Group repurchased 1,250,000 registered 

shares, totaling a value of CHF 185.0 million and representing 5 % of 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. On May 10, 2011, the shareholders 

approved that no dividends will be distributed in respect of the 2010 business year. 

The Board of Directors has proposed dividends for the fiscal year 2011 of CHF 2.00 per share. In addition to the dividend payment the 

Board of Directors has proposed to cancel the 1,250,000 repurchased shares. This would result in a total remaining share capital of 

CHF 47.5 million (23,750,000 shares). Furthermore, the Board of Directors requests a reduction of the nominal value of the remaining 

23,750,000 shares by CHF 1.90 per share. If the shareholders would approve the proposal of the Board of Directors to reduce the nominal 

value per share from currently CHF 2.00 to CHF 0.10, the share capital would further decrease by CHF 45.125 million to CHF 2.375 million. 

The proposal of the dividend payment, the cancelation of the repurchased shares and the reduction of share nominal value are subject to 

approval at the Annual Meeting of Shareholders on May 8, 2012. 

24 

Non-controlling interests 


Balance on January 1, (net) 7,890 7,015 

Reclassification of parent’s ownership interest 0 9 


Reclassification of translation difference to parent shareholders’ equity 0 (5) 

Interest in profit 1,119 1,298 

Reclassification of interest in profit to parent shareholders’ equity 0 55 

Dividend paid (46) (52) 

Acquisition Grieg 279 0 

Capital increase Panalpina Vietnam 44 0 

Total net non-controlling interests 9,082 7,890 

During the year under review, non-controlling interest increased by TCHF 44 due to the capital increase of Panalpina World Transport (Vietnam) 

Company Ltd. In addition, the Grieg acquisition included non-controlling interests of TCHF 279 for the participation in Grieg Triangle Logistics 

B.V., Netherlands. In 2010, the negative non-controlling interests of Panalpina Kuwait were reclassified to parent shareholders’ equity. 

Total

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. 



Overdraft 2,681 0 

Current portion of secured bank loans 4,233 8,855 

Unsecured bank facility 4 0 

Current portion of finance lease liabilities 378 480 

Total current liabilities 7,296 9,335 


Non-current portion of finance lease liabilities 228 399 

Other loans 3 4 

Total non-current liabilities 231 403 

Terms and repayment schedule 


Currency 

Nominal 

interest rate 

Year of 

maturity 


Carrying 

amount Fair value 

Carrying 

amount Fair value 


Secured bank loan USD 5.85 % 

DTF 

2011 0 0 6,020 6,020 

Secured bank loan COP +3.00 % 2011 0 0 4 4 

Secured bank loan COP 4.91 % 2011 0 0 2,831 2,831 

Secured bank loan USD 2.74 % 2012 4,233 4,233 

Unsecured bank facility COP 8.48 % 2012 4 4 

Total current liabilities 4,237 4,237 8,855 8,855 


Other loans SGD n/a 2013 3 3 4 4 

Total interest-bearing liabilities 4,240 4,240 8,859 8,859 

Finance lease liabilities 


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 429 51 378 542 62 480 

Between 1 and 5 years 255 27 228 450 51 399 

Total interest-bearing liabilities 684 78 606 992 113 879 

The weighted average interest rate of bank borrowings and other financing liabilities is 3.90 % (2010: 5.78 %). The carrying amounts of 

short-term bank borrowings approximate their fair value. 


111

112 


The maturity of the Group’s long-term financial debts (excluding lease liabilities) is shown in the following table: 




2011 0 4 

2013 3 0 

Total 3 4 

The carrying amounts of the Group’s borrowings are denominated in the following currencies: 


USD 4,179 6,020 

EUR 2,741 18 

GBP 296 654 

PLN 250 165 

COP 4 2,835 

AUD 0 0 

Others 57 46 

Total 7,527 9,738 

26 

Long-term provisions 


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 


Employee 

benefits 

Claims 

and other 

provisions 

Total provisions 

Balance on January 1 28,756 37,902 66,658 

Translation differences (2,513) (3,725) (6,238) 

Addition 9,492 70,923 80,415 

Reversal of unused amount (2,939) (35,449) (38,388) 

Charged in income statement 6,553 35,474 42,027 

Utilization (5,092) (514) (5,606) 

Transfers 6,746 8,992 15,738 

Balance on December 31 34,450 78,129 112,579


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 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, 2011 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. 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 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: 


Balance 

January 1 

2010 

Recog- 

nized 

translation 

differ- 

ences 

Recog- 

nized 

in income 

statement 

Recog- 

nized 

in OCI 

Balance 

Decem- 

ber 31 

2010 

Recog- 

nized 

translation 

differ- 

ences 

Recog- 

nized 

in income 

statement 

Recog- 

nized 

in OCI 

Balance 

Decem- 

ber 31 


Deferred tax assets 

Receivables 2,928 (307) (1,358) 0 1,263 (4) 1,278 0 2,537 

Fixed assets 4,060 (425) (440) 0 3,195 (10) 180 0 3,365 

Provisions 

Other statement of financial 

15,710 (1,645) 6,402 (1,794) 18,673 (56) 1,195 (410) 19,402 

position captions 

Deductible loss 

8,763 (917) 3,610 0 11,456 (35) (6,305) 0 5,116 

carry-forwards 23,878 (2,500) 9,906 0 31,284 (94) 703 0 31,893 

Total deferred tax assets 55,339 (5,794) 18,120 (1,794) 65,871 (199) (2,949) (410) 62,313 

Deferred tax liabilities 

Receivables (640) (4) 135 0 (509) 0 104 0 (405) 

Fixed assets (9,171) (57) (510) 0 (9,738) 7 (2,152) 0 (11,883) 

Provisions 

Other statement of financial 

(8,591) (54) (668) 7,206 (2,107) 1 (5,563) 5,829 (1,840) 

position captions 

Deductible loss 

(4,801) (30) (3,560) 0 (8,391) 6 8,021 0 (364) 

carry-forwards 

Total deferred 

1,288 8 (1,296) 0 0 0 0 0 0 

tax liabilities (21,915) (137) (5,899) 7,206 (20,745) 14 410 5,829 (14,492) 

Net deferred tax assets 

(liabilities) 33,424 (5,931) 12,221 5,412 45,126 (185) (2,539) 5,419 47,821 


113

114 


The gross movement in the deferred income tax account is as follows: 


Balance January 1 45,126 33,424 

Translation differences (185) (5,931) 

Income statement charge (2,539) 12,221 

Tax charged to equity due to IAS 19 5,419 5,412 

Balance December 31 47,821 45,126 

In 2011, temporary differences in the amount of CHF 3.6 million (2010: CHF 4.9 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) 2011 2010 

2011 – 2,360 

2012 16,702 18,321 

2013 15,399 15,544 

2014 7,884 2,677 

2015 768 723 

2016 674 – 

Later 58,672 40,698 

Total unrecognized tax loss carry-forwards 100,099 80,323 

The total increase of CHF 19.8 million (2010: increase of CHF 25.3 million) derived mainly from unrecognized tax loss carry-forwards in 

Angola, Belgium, Brazil and Luxembourg. During the period under review, tax loss carry-forwards expired mainly in Finland, Denmark and 

Angola. Tax loss carry-forwards of CHF 13.4 million (2010: CHF 21.9 million) were utilized mainly in Switzerland, USA and Australia. 

28 

Provisions and other liabilities 



Employee 

benefits and 

others 

Outstanding 

vacation 

entitlement 

Claims 

Restruc- 

turing 


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 


Total


Employee 

benefits and 

others 

Outstanding 

vacation 

entitlement 


Claims 

Restruc- 

turing 

Balance on January 1 45,285 21,077 32,983 4,026 103,371 

Translation differences (3,073) (2,168) (1,247) (1,144) (7,632) 

Addition 122,915 4,113 90,338 265 217,631 

Reversal of unused amounts (11,502) (1,253) (16,440) (584) (29,779) 

Charged in income statement 111,413 2,860 73,898 (319) 187,852 

Utilization (88,888) (2,320) (33,868) (1,724) (126,800) 

Transfers 0 0 (15,738) 0 (15,738) 


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 30.8 million of personnel profit participation (2010: CHF 30.7 million) was paid out. For the current year 

additional personnel profit participation of CHF 51.2 million (2010: CHF 51.2 million) including related social security costs and payroll 

taxes was recognized. 

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. In addition, in 2010 short-term provision in the amount of CHF 31.0 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) and the 

US as well as the New Zealand antitrust investigations. During the period under review the previous year recognized provision was 

paid out. 

In 2010, the management reassessed the cash outflow of claims and came to the conclusion that, based on past utilization, the duration 

until claims can be settled increased substantially. The reclassification to long-term claim provisions of CHF 15.7 million reflects this change. 

The balance as of December 31, is expected to be utilized within one year. 

Restructuring provisions arise from planned programs that materially change the scope of business undertaken by the Group or the manner 

in which business is conducted. Such provisions include only the costs necessarily entailed by the restructuring which are not associated 

with the recurring activities of the Group. In 2010, additionally recognized restructuring provisions related to adjustments of the previous 

year estimations. Neither in 2011 nor in 2010, an additional restructuring plan was approved. 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 2011, there were 7 (2010: 6) 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 2011, there were 5 (2010: 5) members of the Executive Board. 

Total 


115

116 


The following table shows the compensation of key management personnel: 



Annual 

salary 1 

Bonus 

Termi- 

nation 

benefits 

Other 

benefits 2 

Share- 

based 

payment 3 

Social 

security 

contribution 

Total 

compen- 

sation 

Option 

granted 

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 

Board of Directors leaving 

77 50 12 139 

Günter Rohrmann 102 102 

Total remuneration of Board of Directors 1,327 0 0 0 350 147 1,824 0 

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 0 

Total remuneration of key management 

personnel 4,599 1,584 0 278 1,887 863 9,211 0 

1 Salaries incl. fixed remuneration, salary and discount on shares granted 

2 Other benefits incl. expense allowance and fringe benefits 

3 According to the Executive Board Mid-term Incentive Plan (see Note 8) the members of the Executive Board received matched shares 

totaling 4,155 shares reflecting the 40 % bonus paid in the previous year 

* Remuneration respectively shares have been transferred to Ernst Göhner Stiftung (employer of respective board member)


Annual 

salary 1 

Bonus 

Termi- 

nation 

benefits 

Other 

benefits 2 

Share- 

based 

payment 3 


Social 

security 

contribution 

Total 

compen- 

sation 

Option 

granted 


Rudolf W. Hug, Chairman 454 50 46 550 

Günter Rohrmann, Vice Chairman 154 50 0 204 

Roger Schmid, Member * 155 50 0 205 



Beat Walti, Member 

Board of Directors leaving 

77 50 8 135 

Günther Casjens, Member 154 0 154 

Wilfried Rutz, Vice Chairman 127 12 139 

Yuichi Ishimaru, Member 77 7 84 

Glen R. Pringle, Member 51 0 51 

Total remuneration of Board of Directors 1,403 0 0 0 300 88 1,791 0 


Monika Ribar, Chief Executive Officer 800 730 27 633 110 2,300 

Members of the Executive Board 2,220 1,141 149 1,017 420 4,947 

Executive Management leaving 850 33 73 206 134 1,296 

Total remuneration of Executive Board 3,870 1,871 33 249 1,856 664 8,543 0 

Total remuneration of key management 

personnel 5,273 1,871 33 249 2,156 752 10,334 0 

1 Salaries incl. fixed remuneration, salary and discount on shares granted 

2 Other benefits incl. expense allowance and fringe benefits 

3 According to the Executive Board Mid-term Incentive Plan (see Note 8) the members of the Executive Board received matched shares 

totaling 4,155 shares reflecting the 40% bonus paid in the previous year 

* Remuneration respectively shares have been transferred to Ernst Göhner Stiftung (employer of respective board member) 

There were no contributions or donations to close members of the families of the key management. 


117

118 


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 


(End of vesting period) 

2012 2013 2014 


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 


Roger Schmid, Member* 9,375 1,800 1,325 0 


Knud Elmholdt Stubkjær, Member 0 0 0 0 



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 Officer 4,050 0 0 200 



Number of PWT 

nominal shares 


(End of vesting period) 

2012 2013 2014 


Rudolf W. Hug, Chairman 7,935 1,200 1,325 2,020 

Günter Rohrmann, Vice Chairman 2,820 2,020 

Roger Schmid, Member 9,375 1,800 1,325 



Monika Ribar, Chief Executive Officer 21,063 1,800 1,325 2,020 

Christoph Hess, General Counsel and Corporate Secretary 3,000 600 600 1,000 

Karl Weyeneth, Chief Operating Officer 5,315 0 497 303 

Marco Gadola, Chief Financial Officer 2,572 1,800 1,325 2,020 

Alastair Robertson, Chief Human Resources Officer 2,200 0 0 200 



* 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.

30 

Business combinations/disinvestments 


On February 1, 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: 


Purchase consideration 

– Cash paid 63,160 2,384 

Total purchase consideration 63,160 2,384 

Fair value of net assets acquired (22,570) (980) 

Non-controlling interest 279 0 

Goodwill 40,869 1,404 

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: 


Revaluation 

Acquiree’s due to purchase 

carrying amount accounting 

Fair value 


Fair value 

2010 

Cash and cash equivalents 3,174 0 3,174 0 

Property, plant and equipment 444 0 444 134 

Intangible assets 0 15,927 15,927 846 

Other non-current assets 351 (72) 279 0 

Trade receivables 10,322 0 10,322 0 

Other current assets 357 0 357 0 

Total acquired assets 14,648 15,855 30,503 980 

Payables (2,501) 0 (2,501) 0 

Provisions (681) 348 (333) 0 

Other current liabilities (5,099) 0 (5,099) 0 

Total acquired liabilities (8,281) 348 (7,933) 0 

Net assets acquired 6,367 16,203 22,570 980 

Non-controlling interests (279) 0 

Less acquired liquidity (3,174) 0 

Goodwill 40,869 1,404 

Total cash used in acquisition of businesses 59,986 2,384 


119


120 31 

Additional information 

Contractual commitments on non-cancellable operating lease contracts 2011 2010 


Less than one year 139,128 137,768 

Between one and five years 261,044 283,793 

More than five years 99,459 116,535 

Total residual commitments 499,631 538,096 

Included in the residual lease commitments is an operating lease contract for aircrafts of CHF 33.8 million (2010: CHF 76.8 million), leased 

by Panalpina Air & Ocean Ltd. The contract, with a one-year notice period, was renewed in 2010 for the first aircraft until August 31, 2012. 

In 2010, a second aircraft was leased with a period at least until September 30, 2012. 

Pledged assets 

As of the statement of financial position date 2011 and 2010, the Group does not have any pledged assets. 

Pending legal claims 

Introduction 

In addition to the matters discussed in note 4 – 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 raided 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. In December 2011, Panalpina’s 

local subsidiary received a letter from the Competition Commission Singapore to detail whether it has engaged in similar anti-competitive 

conduct. 



These activities were part of an investigation of several competition authorities against various major freight forwarding companies for 

alleged anti-competitive behavior. 

Furthermore, 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. At this stage, Panalpina is unable to express an opinion as to the probable outcome of this litigation and thus 

to estimate the potential loss, if any. 

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 February 2010, Panalpina was served with a Statement of Objections by the European Commission, alleging anti-competitive behavior 

in the freight forwarding industry. In an oral hearing before the Commission’s case team held in July 2010, Panalpina has presented its 

arguments. In January 2011, Panalpina received an additional request for information issued by the European Commission. A final decision 

is not expected prior to early 2012. 

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 twelve million. 

In the reporting year Panalpina completed settlement negotiations with the New Zealand Commerce Commission and the agreed penalty 

has been approved by the competent court. 

It is not possible to predict the outcome of the pending anti-trust proceedings at this stage. They may, however, result in material 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, 2011. 

Subsequent events 

Since the statement of financial position date, no events have become known for which a disclosure is required. 


121


122 32 

Principal Group companies and participations 

Company 


Registered 

Currency 

Nominal 

capital 

in 1,000 

Equity 

interest 

in % 

Invest- 

ment 

Method 

of con- 

solidation 

Europe 

Panalpina World Transport (Holding) Ltd. Basel CHF 50,000 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 100 100 1 K 

Hausmann Transport Ltd. Basel CHF 100 100 1 K 

Panalpina Air & Ocean Ltd. Basel CHF 2,700 100 1 K 

Jacky Maeder international forwarding Ltd. Basel CHF 300 100 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 13,050 100 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 Triangle Logistics B.V. 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 808 100 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 

Luxair S.A. Luxembourg EUR 13,750 12 3 N

Company 

Registered 

Currency 


Nominal 

capital 

in 1,000 

Equity 

interest 

in % 

Invest- 

ment 

Method 

of con- 

solidation 

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 800 100 1 K 

Panalpina Logistics S.R.L. Buenos Aires ARS 12 100 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 


123

124 


Company 


Registered 

Currency 

Nominal 

capital 

in 1,000 

Equity 

interest 

in % 

Invest- 

ment 

Method 

of con- 

solidation 

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 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

Company 

Registered 

Currency 


Nominal 

capital 

in 1,000 

Equity 

interest 

in % 

Invest- 

ment 

Method 

of con- 

solidation 

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 

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. 

Panalpina Transportes Mundiais Navegãçao 

Accra GHS 10 100 1 K 

e Trânsitos S.A.R.L. Luanda AOA 18,000 92 1 K 

K = fully consolidated 

N = not consolidated 

1 = capital participation 50 – 100 % 

2 = controlling influence over management 

3 = capital participation less than 50 % 


125

126 



Panalpina World Transport (Holding) Ltd., Basel 


Report of the Statutory Auditor on the Consolidated 

Financial Statements to the General Meeting 

of Shareholders of 

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 64 to 125 for the year 

ended December 31, 2011. 

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, 2011 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 Martin Rohrbach 

Licensed Audit Expert Licensed Audit Expert 

Auditor in Charge 

Zurich, March 2, 2012 


127

128 


Key Figures in CHF 

Five-year review 

in million CHF 2011 2010 2009 2008 2007 

Forwarding services 7,926 8,676 7,340 10,597 10,548 

Change in % (8.64) 18.19 (30.73) 0.47 13.41 

Net forwarding revenue 6,500 7,164 5,958 8,878 8,641 

Change in % (9.27) 20.25 (32.89) 2.74 11.71 

Gross profit 1,477 1,480 1,377 1,742 1,803 

Change in % (0.21) 7.49 (20.94) (3.43) 13.35 

in % of net revenue 22.72 20.66 23.11 19.62 20.87 

Consolidated profit 127.4 (26.0) 10.4 113.8 210.6 

Change in % 590.06 (348.94) (90.82) (45.98) 14.77 

in % of gross profit 8.63 (1.76) 0.76 6.53 11.68 

EBITDA 212.1 62.4 79.7 240.7 360.8 

Change in % 240.09 (21.78) (66.88) (33.29) 15.39 

in % of gross profit 14.36 4.21 5.79 13.82 20.01 

EBITA 183.6 23.5 42.5 204.7 310.7 

Change in % 682.11 (44.77) (79.23) (34.13) 11.80 


EBIT 174.2 15.4 29.9 193.0 299.4 

Change in % 1,033.97 (48.64) (84.50) (35.54) 14.70 


Cash generated from operations 229.1 75.3 311.8 274.5 278.9 

Change in % 204.35 (75.86) 13.58 (1.58) (13.20) 


Net cash from operating activities 193.5 37.0 259.8 193.2 209.5 

Change in % 422.45 (85.74) 34.45 (7.78) (13.03) 


Free cash flow 41.9 6.2 225.9 170.2 138.1 

Change in % 570.94 (97.24) 32.73 (23.20) (25.74) 


Net working capital 85.2 143.0 132.2 351.6 487.8 

Change in % (40.42) 8.20 (62.42) (27.92) 17.72 

Capital expenditure on fixed assets 51.2 40.0 41.8 58.4 50.8 

Change in % 27.87 (4.31) (28.34) 14.90 (10.84) 


Net capital expenditure on fixed assets 108.7 28.5 29.4 25.6 45.4 

Change in % 281.81 (3.24) 14.81 (43.56) (15.90) 





Depreciation and amortization 37.9 47.0 49.8 47.8 61.5 

Change in % (19.37) (5.65) 4.33 (22.33) 18.91 


Personnel expenses 892.4 890.9 879.1 992.5 1,002.5 

Personnel 

Number of employees at year-end (world) 15,051 14,136 13,570 14,804 15,301 

Number of employees at year-end (Switzerland) 775 749 737 778 769 

Productivity ratios (CHF) 

Net sales per average employee 425,226 503,703 429,864 582,867 587,344 

Gross profit per average employee 96,624 104,062 99,343 114,356 122,581 

Personnel expenses per average employee 58,380 62,641 63,430 65,163 68,138 

Personnel cost in % of gross profit 60.42 60.20 63.85 56.99 55.59 

Leverage (liabilities/equity) 1.35 1.46 1.24 1.27 1.23 

Net interest-bearing liabilities (591) (546) (535) (381) (325) 

Gross gearing (interest-bearing liabilities/equity) 0.01 0.01 0.02 0.02 0.03 

Net gearing (net interest-bearing liabilities/equity) (0.65) (0.68) (0.63) (0.44) (0.32) 

ROCE (EBIT less tax/capital employed) in % 43.22 (5.40) 6.14 23.03 34.84 

Current cash debt coverage ratio 

(net operating cash flow/average current liability) 0.19 0.04 0.27 0.19 0.20 

Cash debt coverage ratio 

(net operating cash flow/average total liability) 0.16 0.03 0.24 0.16 0.18 

Return on equity in % 14.9 (3.1) 1.2 12.1 21.2 

Change in % (575.95) (360.88) (89.97) (42.92) 4.83 


129

130 


Consolidated Statement of Financial Position in CHF 



ASSETS 2,135 1,989 1,925 1,971 2,278 

Change in % 7.34 3.36 (2.35) (13.48) 8.08 

Current assets 1,745 1,686 1,599 1,679 1,922 

Change in % 3.50 5.48 (4.78) (12.64) 8.40 

Liquid funds 599 555 548 401 358 

Change in % 7.77 1.30 36.69 12.00 (4.73) 

Receivables and other current assets 1,147 1,131 1,050 1,278 1,564 

Change in % 1.41 7.66 (17.80) (18.28) 11.94 

Non-current assets 390 303 326 292 356 

Change in % 28.72 (7.04) 11.66 (18.00) 6.06 

Property, plant and equipment 113 114 141 148 168 

Change in % (0.57) (19.42) (4.35) (11.89) 3.47 

Financial assets 135 111 113 70 103 

Change in % 21.62 (1.53) 60.07 (31.29) 42.59 

Intangible assets 142 78 72 74 86 

Change in % 81.51 8.65 (2.52) (14.06) (15.63) 

LIABILITIES AND EQUITY 2,135 1,989 1,925 1,971 2,278 

Change in % 7.34 3.36 (2.35) (13.48) 8.07 

Liabilities 1,220 1,177 1,061 1,100 1,252 

Change in % 3.68 10.93 (3.50) (12.18) 10.73 

Payables, accruals and deferred income 1,002 914 878 912 1,056 

Change in % 9.71 4.05 (3.69) (13.65) 5.33 

Borrowings 8 10 13 20 33 

Change in % (22.70) (24.43) (36.49) (39.38) 22.60 

Provisions 210 254 170 167 163 

Change in % (17.02) 49.17 1.54 2.91 61.10 

Non-controlling interests 9 8 7 8 7 

Equity 906 804 857 864 1,019 

Change in % 12.62 (6.10) (0.83) (15.25) 5.07 

Share capital 50 50 50 50 50 

Change in % 0.00 0.00 0.00 0.00 0.00 

Treasury shares (197) (196) (193) (198) (101) 

Change in % 0.65 1.78 (2.62) 95.03 575.98 

Translation reserves (162) (151) (136) (146) (74) 

Change in % 7.30 10.70 (6.51) 96.03 13.50 

Retained earnings and other reserves 1,215 1,101 1,136 1,157 1,145 

Change in % 10.34 (3.02) (1.89) 1.09 14.50 


Key Figures in EUR 



in million EUR 2011 2010 2009 2008 2007 

Forwarding services 6,440 6,293 4,861 6,677 6,421 

Change in % 2.34 29.46 (27.20) 3.99 8.92 

Net forwarding revenue 5,281 5,196 3,945 5,594 5,260 

Change in % 1.64 31.71 (29.48) 6.35 7.28 

Gross profit 1,200 1,074 912 1,097 1,098 

Change in % 11.73 17.76 (16.86) (0.09) 8.91 

in % of net revenue 22.72 20.67 23.12 19.61 20.87 

Consolidated profit 103.5 (18.9) 6.9 71.7 128.2 

Change in % 647.62 (373.91) (90.38) (44.07) 10.23 

in % of gross profit 8.63 (1.76) 0.76 6.54 11.68 

EBITDA 172.3 45.2 52.8 151.7 219.7 

Change in % 281.19 (14.39) (65.19) (30.95) 10.83 


EBITA 149.2 17.0 28.1 129.0 189.1 

Change in % 777.65 (39.50) (78.22) (31.78) 7.40 


EBIT 141.5 11.1 19.8 121.6 182.2 

Change in % 1,174.77 (43.94) (83.72) (33.26) 10.18 


Cash generated from operations 186.1 54.6 206.5 172.9 232.1 

Change in % 240.84 (73.56) 19.43 (25.51) 13.98 


Net cash from operating activities 157.2 26.9 172.0 121.7 127.5 

Change in % 484.39 (84.36) 41.33 (4.55) (16.48) 


Free cash flow 34.0 4.5 149.6 107.2 84.1 

Change in % 655.56 (96.99) 39.55 27.47 (28.68) 


Net working capital 70.0 114.3 89.0 236.1 293.1 

Change in % (38.76) 28.43 (62.30) (19.45) 14.09 

Capital expenditure on fixed assets 42.1 32.0 28.2 39.2 30.5 

Change in % 31.56 13.48 (28.06) 28.52 (13.75) 


Net capital expenditure on fixed assets 89.4 22.8 19.8 17.2 27.3 

Change in % 292.11 15.15 15.12 (37.00) (18.79) 



131

132 



Depreciation and amortization 30.8 34.1 33.0 30.1 37.4 

Change in % (9.68) 3.33 9.63 (19.52) 14.44 


Personnel expenses 725.1 646.2 582.2 625.4 610.2 

Personnel 

Number of employees at year-end (world) 15,051 14,136 13,570 14,804 15,301 

Number of employees at year-end (Switzerland) 775 749 737 778 769 

Productivity ratios (in EUR) 

Net sales per average employee 345,480 365,324 284,632 367,277 357,539 

Gross profit per average employee 78,503 75,511 65,801 72,024 74,620 

Personnel expenses per average employee 47,436 45,433 42,006 41,061 41,478 

Personnel cost in % of gross profit 60.43 60.17 63.84 57.01 55.59 

Leverage (liabilities/equity) 1.35 1.46 1.24 1.27 1.23 

Net interest-bearing liabilities (486) (436) (361) (256) (195) 

Gross gearing (interest-bearing liabilities/equity) 0.01 0.01 0.02 0.02 0.03 

Net gearing (net interest-bearing liabilities/equity) (0.65) (0.68) (0.63) (0.44) (0.32) 

ROCE (EBIT less tax / capital employed) in % 43.22 (5.40) 6.14 23.03 34.84 

Current cash debt coverage ratio 

(net operating cash flow/average current liability) 0.19 0.04 0.27 0.19 0.20 

Cash debt coverage ratio 

(net operating cash flow/average total liability) 0.16 0.03 0.24 0.16 0.16 

Return on equity in % 14.9 (3.1) 1.2 12.1 12.1 

Change in % (575.95) (360.88) (89.97) (42.92) (42.92) 



Consolidated Statement of Financial Position in EUR 



ASSETS 1,756 1,590 1,297 1,323 1,369 

Change in % 10.44 22.59 (1.97) (3.36) 14.56 

Current assets 1,435 1,348 1,077 1,127 1,155 

Change in % 6.45 25.16 (4.44) (2.42) 15.54 

Liquid funds 492 444 369 269 215 

Change in % 10.81 20.33 37.17 25.12 (7.73) 

Receivables and other current assets 943 904 708 858 940 

Change in % 4.31 27.68 (17.48) (8.72) 8.05 

Non-current assets 321 242 220 196 214 

Change in % 32.64 10.00 12.24 (8.41) 2.33 

Property, plant and equipment 93 91 95 99 101 

Change in % 2.20 (4.21) (4.04) (1.98) 0.71 

Financial assets 111 89 76 47 62 

Change in % 24.72 17.11 61.70 (24.19) 36.89 

Intangible assets 117 62 48 49 52 

Change in % 88.71 29.17 (2.04) (5.77) (19.45) 

LIABILITIES AND EQUITY 1,756 1,590 1,297 1,323 1,369 

Change in % 10.44 22.59 (1.97) (3.36) 4.39 

Liabilities 1,003 941 715 738 752 

Change in % 6.59 31.61 (3.12) (1.86) 7.01 

Payables, accruals and deferred income 824 730 592 612 634 

Change in % 12.88 23.31 (3.27) (3.47) 1.83 

Borrowings 6 8 9 14 20 

Change in % (25.00) (11.11) (35.71) (30.00) 18.30 

Provisions 173 203 115 112 98 

Change in % (14.78) 76.52 2.68 14.29 55.18 

Non-controlling interests 7 6 5 5 4 

Equity 745 643 577 580 612 

Change in % 15.86 11.44 (0.52) (5.23) 1.55 

Share capital 41 40 34 34 30 

Change in % 2.50 17.65 0.00 13.33 (6.12) 

Treasury shares (162) (157) (130) (133) (61) 

Change in % 3.18 20.77 (2.26) 118.03 5,992.36 

Translation reserves (133) (121) (92) (98) (45) 

Change in % 9.92 31.52 (6.12) 117.78 9.12 

Retained earnings and other reserves 999 880 765 777 688 

Change in % 13.52 15.03 (1.54) 12.94 10.61 


133

134 


Financial Statements 2011 

Panalpina World Transport (Holding) Ltd. 

Income Statement 



Income 

Income from participations 87,737 142,904 

Financial income 41,728 55,670 

Royalties income 49,577 34,741 

Release of valuation allowance on loans to Group companies 47,268 3,520 

Total income 226,310 236,835 

Expenses 

Personnel expenses 13,357 11,939 

Other administrative expenses 12,973 35,034 

Financial expenses 10,357 12,820 

Depreciation and value adjustments 168,740 36,336 

Total expenses 205,427 96,129 

Taxes 1,817 2,159 

Profit for the year 19,066 138,547 


Balance Sheet 

as of December 31 (before profit appropriation) 

Assets 




Cash 303,247 353,736 

Cash pool receivables from Group companies 101,647 82,140 

Receivables: 

– from Group companies 3,340 3,371 

– from third parties 242 194 

Financial receivables from Group companies 167,895 103,667 

Marketable securities 20,000 6,089 

Prepaid expenses and deferred charges 53,176 51,075 

Total current assets 649,547 600,272 

Long-term assets 

Participations 161,361 162,069 

Loans to Group companies 1 161,378 241,515 

Financial assets 34,234 0 

Own shares 84,128 82,853 

Total long-term assets 441,101 486,437 

Total assets 1,090,648 1,086,709 

1 Thereof subordinated CHF 68.0 million (2010: CHF 68.0 million) 

Liabilities and Equity 


Short-term liabilities 

Cash pool payables to Group companies 105,152 122,601 

Payables: 

– due to Group companies 2,528 5,945 

– due to third parties 1,424 1,589 

Financial liabilities to Group companies 79,702 74,469 

Accrued expenses 11,977 10,178 

Total short-term liabilities 200,783 214,782 

Long-term liabilities 

Provisions 4,306 5,434 

Total long-term liabilities 4,306 5,434 

Total liabilities 205,089 220,216 

Equity 

Share capital 50,000 50,000 

General legal reserve 10,000 10,000 

Reserve for own shares 197,277 196,003 

Special reserve 130,573 131,847 

Accumulated earnings: 

– balance brought forward from previous year 478,643 340,096 

– profit for the year 19,066 138,547 

Total equity 885,559 866,493 

Total liabilities and equity 1,090,648 1,086,709 


135

136 


Notes to the Financial Statements 

General 

The Group’s consolidated financial statements must be considered for an appropriate financial and economic assessment of the Group. 

The presented 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. All other assets, including participations, are reported at cost less 

appropriate write-downs. 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. Marketable securities are reported at market value. Transactions 

during the year which are denominated in foreign currencies are translated at exchange rates effective at the relevant transaction dates. 

Resulting exchange gains and losses are recognized in the income statement with the exception of unrealized gains which are deferred. 

Income from participations 

The decrease of CHF 55.2 million is due to the fact that Panalpina Welttransport (Holding) Ltd. received fewer dividends from subsidiaries. 

Financial income 

The drop of CHF 13.9 million compared to the prior year is predominantly attributable to lower foreign exchange gains of CHF 10.3 million 

and less interest income of CHF 3.4 million from subsidiaries. 

Royalty income 

In 2009, Panalpina World Transport (Holding) Ltd. received for the first time a fee from its subsidiaries for usage of the Panalpina network 

and trademark. This fee increased in 2011 by CHF 14.8 million. 

Release of valuation allowance on loans to Group companies 

As a result of Debt/Equity Swaps, the Company was able to release a valuation allowance amounting to CHF 47.3 million. 

Personnel expenses 

In accordance with the Transparency Act, the compensation of the key management personnel is disclosed in note 29 in the Group’s 

financial statements. 

Other administrative expenses 

The reduction of CHF 22.1 million in other administrative expenses is mostly attributable to less legal and consulting expenses in connection 

with the FCPA investigation (CHF 19.0 million) and a decline in claims expenses (CHF 4.9 million). 

Financial expenses 

The drop in financial expenses of CHF 2.5 million is mainly due to the fact that in 2011 CHF 1.0 million less losses of subsidiaries had to be 

covered and CHF 1.0 million less interest had to be paid. 

Depreciation and value adjustments 

In 2011, value adjustments to participations amounting to CHF 168.7 million were booked to the income statement in accordance with the 

Company’s practice to directly write off capital contributions to cover losses or undercapitalization in subsidiaries. 

Cash pool receivables and payables 

The cash pool receivables augmented for CHF 19.5 million and the cash pool payables declined for CHF 17.4 million, thus the net receivables 

increased for CHF 37.0 million. 

Financial receivables and loans to Group companies 

Financial receivables and loans to Group companies increased by CHF 64.2 million compared to 2010 mainly due to swap of financing structure 

of subsidiaries from long-term loans to short-term loans. 

Marketable securities 

In the year under review, investments of CHF 20.0 million were made in fixed-term deposits. 


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 122 to 125. 

Financial assets 

In 2011, for the first time investments into fix term deposits were done, the investments amount to CHF 34.2 million. 

Own shares 

In the year under review, treasury shares purchased totaled 79,042 shares (2010: 94,142 shares) with an average purchase price per 

share of CHF 109.02 (2010: CHF 111.96) and treasury share sales totaled 68,492 shares (2010: 69,123 shares) with an average sale price 

of CHF 68.40 (2010: CHF 74.14). Of these shares a total of 118,092 (2010: 107,542) are held for serving the employee option plan. 

The other 1,250,000 shares (2010: 1,250,000) are held for the share buyback program. This program was launched in 2007 by the Board 

of Directors to return excess capital to the shareholders. The share buyback program includes up to 5 % of the total share capital, which 

represents a maximum of 1,250,000 registered shares. 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 

31.12.2011 

Movement 

in year 

31.12.2010 

Movement 

in year 

31.12.2009 

Total Panalpina World Transport (Holding) Ltd. shares 

issued 

Total treasury shares held by Panalpina World Transport 

25,000,000 0 25,000,000 0 25,000,000 

(Holding) Ltd. 1,368,092 10,550 1,357,542 25,019 1,332,523 

in % 5.47 5.43 5.33 

Provisions 

An amount of CHF 1.8 million is related to the obligations Panalpina has accepted under the DPA as mentioned in note 31. 

Share capital 

As in the previous year, the fully paid-in share capital on December 31, 2011 amounts to CHF 50 million consisting of 25 million registered 

shares at a par value of CHF 2.00 each. With regard to the authorized capital increase and share buyback program we refer to note 23 in the 

Group’s financial statements. 

in % 2011 2010 

Shareholders 

Ernst Göhner Stiftung, Switzerland 43.58 43.58 

Cevian Capital II Master Fund L.P. 11.37 10.31 

Bestinver Gestión, S.G. SGIIC, Spain 5.05 – 

Artisan Partners Limited Partnership, USA 

Portfolio investment (according to the share register, there are no more shareholders 

5.01 5.01 

with holdings of more than 3 % or 5 %) 29.52 35.67* 

Panalpina World Transport (Holding) Ltd. 5.47 5.43* 

Nominees 

Chase Nominees Ltd., UK 5.23 6.02 

* restated considering own shares of Panalpina 


137

138 


General 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. 

Guarantees 


Guarantees in favor of third parties 

Guarantees and indemnity liabilities, SCO, art. 663b para 1 198,780 199,076 

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 2.7 million (previous year: CHF 0.2 million). 

Contingent liabilities 

In 2008, Panalpina World Transport (Holding) Ltd. signed a letter of indemnity as a security for the intraday cash pool overdraft limits over a 

maximum amount of CHF 60 million. 

Panalpina World Transport (Holding) Ltd. carries joint liability to the federal tax authorities for value-added tax of all Swiss subsidiaries. 

Pending legal claims 

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 raided 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. In December 2011 Panalpina’s 

local subsidiary received a letter from the Competition Commission Singapore to detail whether it has engaged in similar anti-competitive 

conduct. 

These activities were part of an investigation of several competition authorities against various major freight forwarding companies for 

alleged anti-competitive behavior. 



Furthermore, 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. At this stage, Panalpina is unable to express an opinion as to the probable outcome of this litigation and thus to estimate 

the potential loss, if any. 

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 February 2010, Panalpina was served with a Statement of Objections by the European Commission, alleging anti-competitive behavior 

in the freight forwarding industry. In an oral hearing before the Commission’s case team held in July 2010, Panalpina has presented its 

arguments. In January 2011, Panalpina received an additional request for information issued by the European Commission. A final decision 

is not expected prior to early 2012. 

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 twelve million. 

In the reporting year Panalpina completed settlement negotiations with the New Zealand Commerce Commission and the agreed penalty 

has been approved by the competent court. 

It is not possible to predict the outcome of the pending anti-trust proceedings at this stage. They may, however, result in material 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, 2011. 

Risk management 

The detailed disclosures regarding risk management/assessment that are required by Swiss law are included in the Panalpina Group’s 

consolidated financial statements on pages 100 – 106. 


139

140 


Appropriation of Available Earnings 

The Board of Directors proposes the following appropriation of available earnings of total CHF 497,709,723 at the Annual General Meeting: 

in CHF 2011 

Distribution of an ordinary dividend of CHF 2.00 gross per share* 47,263,816 

To be carried forward 450,445,907 

Total 497,709,723 

* It is not planned to pay dividends on own shares held by the Group. 


Panalpina World Transport (Holding) Ltd., Basel 


Report of the Statutory Auditor on the Financial 

Statements to the General Meeting of Shareholders of 

As statutory auditor, we have audited the accompanying financial statements of Panalpina World Transport (Holding) Ltd., which comprise 

balance sheet, income statement and notes on pages 134 to 140 for the year ended December 31, 2011. 

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, 2011 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 Martin Rohrbach 

Licensed Audit Expert Licensed Audit Expert 

Auditor in Charge 

Zurich, March 2, 2012 


141

142 

Appendix 

Information for Investors 

Share information 

Share symbol PWTN 

Reuters PWTN.S 

Bloomberg PWTN SW 

Trading exchange SIX 

Key figures 

in million CHF 2011 2010 * Change in % 

Net forwarding revenue 6,500 7,164 – 9.3 

Gross profit 1,477 1,480 – 0.2 

EBITDA 212 62 240.1 

EBIT 174 15 1,034.0 

Consolidated profit 127 – 26 590.1 

Cash generated from operations 229 75 204.4 

* Certain comparatives have been restated to conform to the current period’s presentation. 

Five-year development 


Net forwarding revenue 

10,500 

9,000 

7,500 

6,000 

4,500 

3,000 

1,500 

0 

EBIT 

320 

280 

240 

200 

160 

120 

80 

40 

0 

1,000 

875 

750 

625 

500 

375 

250 

125 

0 

8,641 

8,878 

2007 2008 2009 2010 2011 

299 

1,026 

193 

871 


5,958 

30 

864 

7,164 

15 

812 

6,500 

174 

2007 2008 2009 2010 2011 

Shareholders’ equity 

915 

2007 2008 2009 2010 2011 

Fiscal year ends December 31 

Valoren 000216808 

ISIN CH0002168083 

Share register SIS Aktienregister AG, Olten, Switzerland 

Gross profit 

2,050 

1,900 

1,750 

1,600 

1,450 

1,300 

1,150 

1,000 

245 

210 

175 

140 

105 

70 

35 

0 

–35 

1,803 

Consolidated profit 

1,742 

1,377 

1,480 

1,477 

2007 2008 2009 2010 2011 

211 

114 

10 

–26 

127 

2007 2008 2009 2010 2011

Ordinary gross dividend payments 

Financial year 

Swiss Performance Index (SPI) 


Dec 31, 

2010 

Mar 1 May 1 Jul 1 Sep 1 Nov 1 Dec 31, 


110% 

100% 

90% 

80% 

70% 

60% 

Amount 

(in million CHF) 

Per share 

(in CHF) 

2011 47 2.00 ** 

2010 0 0.00 

2009 0 0.00 

2008 45 1.90 

2007 80 3.20 

2006 75 3.00 

2005 

* Included a special one-time jubilee dividend of CHF 20 million 

50 * 2.00 

** In addition, CHF 1.90 per share are paid to shareholders through a reduction of the nominal value per share from 

CHF 2.00 to CHF 0.10. Ordinary dividend and payback are subjects to vote by the Annual General Meeting of May 8, 2012. 

Earnings per share 

Weighted average of oustanding shares 2011 2010 

Basic EPS 23,639 CHF 5.34 CHF – 1.16 

Diluted EPS 23,676 CHF 5.33 CHF – 1.16 

Share price development 

in CHF 2011 2010 

Last day of trading previous year 120.50 65.80 

High 132.00 128.50 

Low 70.90 64.65 

Last day of trading current year 96.20 120.50 

Average trading volume 51,764 77,922 

Total shareholder return (in %) – 16.9 83.1 

Market capitalization as per December 31, 2011 (in CHF million) 2,405 3,013 

Share price development in comparison to SPI 

December 31, 2010 to December 31, 2011 

Financial calendar 

Appendix 

January 1 to December 31 Financial year 

May 4, 2012 First quarter results 

May 8, 2012 Annual General Meeting 

July 31, 2012 Half-year results 

November 2, 2012 Third quarter results 

March 6, 2013 2012 full-year results 

May 8, 2013 Annual General Meeting 


143

144 

Appendix 

Pictures 

Cover A Boeing 747-400F aircraft of Panalpina’s 

own-controlled air freight network while 

loaded in Luxembourg 

Page 5 Monika Ribar (CEO) and Rudolf W. Hug 

(Chairman of the Board of Directors) 

Page 7 Executive Board 

Page 20/21 Panalpina employee Tim Bauer in front of 

a Boeing 747-400F operated by Atlas Air 

and part of Panalpina’s own-controlled 

network in Luxembourg 

Page 22/23 Panalpina employee Samia Guerroumi 

inside a Boeing 747-400F while loaded 

Page 24/25 Jasmine Medhora of Panalpina’s 

Pantainer Express Line at the port 

of Hamburg 

Page 26/27 Marco Parnitzke of Panalpina’s Ocean 

Freight division at the port of Hamburg 

Page 28/29 Andrea Ribaudo in Panalpina’s Milan 

warehouse 

Page 30 Monika Ribar (CEO) 


Imprint 


(Holding) Ltd. 

Viaduktstrasse 42 

P. O. Box 

CH-4002 Basel 

Switzerland 

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 /ar 

Editorial body 

Corporate Communications, Corporate Finance and Investor Relations 

Project management 

Heidi Stöckli, Corporate Communications 

Concept and design 

Wirz Corporate AG, Zurich 

Photography 

Scanderbeg Sauer Photography, Zurich 

Portraits 

Julian Salinas, Basel 

Translations and editing 

Text Control, Zurich 

BMP Translations AG, Basel 

Word + Image, Zufikon 

Lithography 

Wirz Medienrealisation 

Printed by 

Neidhart + Schön AG, Zurich 

Consultant on sustainability 

sustainserv, Zurich and Boston 

Appendix 

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. 


145


(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

Panalpina Annual Report 2011

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