swisslogexpertise

1997 Annual Report

Logistics for Champions

Swisslog is an international group

supporting its customers in every respect

in achieving supply chain excellence.

The goal of its activities is to reduce its

customers’ logistic costs and tied-up

capital.

Swisslog is committed to ongoing

improvement of productivity, quality and

profitability, and has a leading position in

its industry.

Regardless of their size, Swisslog custom-

ers are among the best in their industries.

Based on comprehensive consultancy,

Swisslog plans, develops, implements,

modernises and maintains mechanical and

computer-controlled materials handling

systems with state-of-the-art technology.

Swisslog is present in the market through

the well-known trade names of its group

companies Digitron, Accalon, Schierholz,

Translift, Cimcorp and Transnorm System.

Active in 19 countries through subsidiaries

and branch offices in Europe, USA, Asia

and Australia, Swisslog currently has

1,850 employees worldwide. The group’s

registered office is in Aarau, Switzerland.

Swisslog creates ergonomic working

environments to relieve its customers’

employees from jobs which are dangerous

and hazardous to health.

Swisslog is responsible in its use of natural

resources and implements environmentally

acceptable solutions.

Swisslog respects the laws, customs and

practices of the countries and communities

in which it operates.

1997 Highlights

January

Schierholz and Digitron Translift operations combined under Conveyor Systems

business segment.

February

Autefa-Certus in Germany orders 18 automated guided vehicles AGV from Digitron for

a Taiwanese customer in the textile trade.

March

Digitron Translift hands over to Land Rover in Solihull (UK) a turnkey end assembly line

for the new Freelander.

Schierholz exhibits for the first time at PROMAT in Chicago, the largest material

handling fair in North America.

Cimcorp, together with Matsushita Electronics of Esslingen (Germany), develops a fully

automatic gun sealing carousel.

April

Swisslog announces the acquisition of Transnorm System GmbH of Harsum

(Germany). Transnorm ranks among the global leaders in belt conveyor systems.

Digitron is awarded a contract to build a second major distribution centre for a leading

Australian retailer in Victoria (Australia).

May

Cimcorp delivers its first MultiPick, a fully automatic order-picking system.

Transnorm presents a new curve belt conveyor system at Hanover.

June

Accalon delivers its first stacker cranes of the type Vectura S32 and D22 to Australia

and Germany.

July

Tiger, the new configurable software platform from Digitron, passes initial trials at

Metroport Group in Pelangi (Malaysia).

Cimcorp opens a liaison office in Seoul (Republic of Korea), its first in East Asia.

August

Schierholz receives a contract from the Strauss dairy group in Israel to build a new

monorail system.

Accalon delivers its first Vectura S12 stacker crane to Taiwan.

Wo sind wir

September

Swisscom commissions Digitron to develop a new flexible order-based warehouse

management system for its central store facility.

Salvesen, a major manufacturer of dairy produce based near Milan (Italy) mandates

Digitron Italia to plan a computer-controlled fresh dairy produce storage centre.

Schierholz, in conjunction with Digitron Malaysia, receives a contract to build an

end assembly line for carmaker Proton/AMM.

Accalon delivers semi-automated guided vehicle systems for Iveco Soffim’s diesel

engine plant at Foggia (Italy).

October

Digitron is awarded a contract by Serete M.S.D. in Milan (Italy) to build a new

logistics centre.

Accalon is established as the groups’ s focus company for AGV products and

subsystems.

Accalon and Transnorm’s first joint pallet conveyor system project is successfully

completed.

November

Accalon sells its first mini-AGVs of the Cartura family.

Cimcorp expands its marketing activities for robot-based order-picking systems

beyond the Scandinavian market.

December

Swisslog reinforces its engineering and systems design expertise through the

takeover of OWL Logistik Systeme in Buchs, Aarau (Switzerland).

NTUC Fairprice, Singapore’s largest food distributor, chooses Digitron Asia Pacific

as systems design partner for its US $ 25 million central storage facility project.

Digitron Benelux successfully concludes retrofit contract with Dutch auto

manufacturer NedCar, the Swisslog Group’s biggest retrofit program to date.

.

1006

Wo sind wir

21.2

-3.54.2

Overview of the Swisslog Group

a strong

211.9

435.5 420.1

10.2

-3.9

238.1

1,097

1,323

Orders received

500 CHFm

400

300

200

100

0

1994 1995 1996 1997

Net sales

500 CHFm

400

300

200

100

0

1994 1995 1996 1997

Net income

15 CHFm

10

5

0

-5

1994 1995 1996 1997

Employees at year-end

2000

1750

1500

1250

1000

750

1994 1995 1996 1997

EBIT

30 CHFm

20

10

0

-10

1994 1995 1996 1997

272.3 255.6

388.4

474.9

13.2

2.27.2

1,121

1,709

group

Content 4 Letter to Shareholders

12 Strategies and Innovations

16 Key Account Management

18 Industry Practices

20 Lifetime Partnership

22 Systems Design

24 Special Systems and Products

26 Customer Support & Service

28 Innovative Products

30 Investor Relations

34 Organisation

36 Adresses

DIGITRON-OWL

ACCALON

SCHIE RHOLZ

CIMCORP

TRANSLIFT

TRANSNORM SYSTEM

swisslog

4

Dear Shareholder 1997 was a successful year for Swisslog.

The group reported a striking improvement in sales and

earnings. Net sales rose 22.3 percent in 1997, from

CHF 388.4 million to CHF 474.9 million. Adjusted internal

growth was 13 percent.

Earnings before interest and taxes (EBIT) were

CHF 21.2 million, almost three times the previous year’s

level of CHF 7.2 million.

All business units contributed to the net income of

CHF 13.2 million.

5

Swisslog continued the successful implementation of the

strategy introduced the previous year of reducing project risks.

New orders are systematically reviewed before acceptance

to see if the margins are compatible with the group’s business

objectives. Thanks to the growing professionalism of project

management, the throughput time of orders from receipt to

shipment has improved. There was a significant rise of the

share of modernisation and other services in group sales and

the use of special systems and products with short delivery

times. This is also relevant to the decline in orders on hand,

whose importance as an indicator continues to decrease.

Strategic pursuit of group expansion

The four strategic key areas for the group are logistics systems,

software, special systems and products, and customer

support. Swisslog intends to support customers on queries

and requests at a local level in order to achieve supply chain

excellence. The three regional units Central and Southern

Europe (Region 1), Scandinavia, the UK, Benelux (Region 2),

and Asia-Pacific (Region 3) support the Logistics Systems

business unit. The companies Accalon, Cimcorp, Schierholz,

Translift and Transnorm are grouped under the Special

Systems and Products business unit. At the start of 1998 all the

group’s software activities were consolidated and put under

single management. In 1997 Swisslog strategically expanded

its range of products and services and know-how.

Following the take-over of the Finnish Cimcorp Oy in 1996 with

its specialist robotics systems, Transnorm System GmbH,

Hanover, joined the Swisslog Group on 1 July 1997. Transnorm

is a leading supplier in Germany of unit load conveyor systems,

and the company also has specialities, e.g. systems used in

airports, which are recognised leaders worldwide. Besides well-

6

Letter to Shareholders

established subsidiaries in France, the UK and the Netherlands,

Transnorm has its own production facilities in Malaysia and

the USA, which in future will also take over the manufacture of

more group products.

In December Swisslog acquired OWL Logistik Systeme AG,

based in Buchs near Aarau, from the Georg Fischer Group.

Besides providing a welcome reinforcement in system planning

and software development, OWL brings with it a solid customer

base, including clients in the food, paper & printing and tobac-

co industries in Germany and Switzerland. This rounds out

activities of the Swisslog Group to be consolidated from March

1998 in the newly-formed Digitron-OWL AG. This company is

responsible for Swisslog’s logistics systems business in

Central and Southern Europe.

The heavily fragmented growth market for computer-controlled

materials handling systems will continue to consolidate, and

Swisslog intends to play an active role in this process.

Further development of areas of expertise

Software production methods were permanently improved by

the introduction of a comprehensive quality assurance

programme. After a development period of around one year

the first of three software platforms for plant warehouse

management went into operation in July 1997 and has been

running ever since without significant disruption. In developing

the software, Swisslog teams pull together the best solutions

and procedures from the group's decades of experience

with modular platforms, which in future will supply the design

basis for individual customer solutions. To date the market

for warehouse management software and related software

platforms is characterised by a large number of small and very

7

small businesses. This means there are attractive opportunities

here for suppliers with a reservoir of experience like Swisslog.

The year 2000 problem will also generate demand for software

specialists, and Swisslog intends to take a proactive role in this

market.

In the Special Systems and Products business unit all group

areas successfully completed a range of in-house develop-

ments. The market response to the commissioning of

the new robot generation from Cimcorp was very favourable,

resulting in a number of orders in Germany, the Far East and

Australia. The Overhead Conveyor business unit expanded its

leading position in Europe. A completely new type of inverted

2-track monorail was designed in close cooperation with a

leading automotive manufacturer. Another important develop-

ment is the Inverted Power & Free System for surface treatment

plants, which is made exclusively from standard components.

Several orders from the USA and elsewhere have already been

won for this system as well.

The new family of “Vectura” stacker cranes was successfully

launched. This new development spells a sizeable reduction in

commissioning times and can be integrated into the monitoring

component of entire logistics systems.

Swisslog intends to push ahead energetically with its activities

in Special Systems and Products in selected high-volume

niche markets, which also have significant sales potential out-

side the group.

The business segment of services and modernisations also

grew strongly and was further expanded. Many of the installed

systems currently in operation are already 15 to 20 years old.

8

Letter to Shareholders

There is a corresponding upturn in demand for replacement

and renovation worldwide, and the group expects a further

strong boost to growth in the coming years from this sector as

well.

Human resources development for employees

The internationalisation of the group made further headway in

1997. At the end of the year the Swisslog Group numbered

over 1,700 employees in 19 countries, all with highly specific

and qualified expertise. The nature of their business demands

openness and the readiness to cooperate successfully

across linguistic and cultural divides within the group and with

international customers. Swisslog intends to use special

training programmes to further hone the technical and mana-

gerial skills of its employees. This will create the foundation

for flexible project work, which will also increase the group's

ability to offset internally the fluctuation in orders which is typical

of the industry.

Stepwise increase in transparency

The reporting system introduced in the 1997 financial year

which separates “Logistics Systems” and “Special Systems

and Products” is improving the transparency of the Swisslog

Group financial statements. We intend to continue increasing

the transparency of reporting in future years.

Board of Directors

The Annual General Meeting also marks the end of René

Garo's term of office as a member of the Board of Directors.

He is standing for re-election. There are no other changes in the

board.

9

Proposal for dividend

The Board of Directors will propose to the Annual General

Meeting payment of a dividend of CHF 2 per registered share.

In future Swisslog intends to follow an income-related dividend

policy. A further consideration in setting the dividends will be

the quality of net income. The stated goal is to finance the

organic growth of Swisslog through internally generated funds.

Business in 1998 and the outlook

The aim for the current 1998 financial year is to strengthen

further Swisslog's earning power. We are convinced that

Swisslog can use its range of products and services to conso-

lidate and expand its leading position in its market segment.

The past year again made very high demands of our employ-

ees, whose individual efforts and flexibility were instrumental in

the group’s success. We wish to thank them most sincerely for

their exceptional commitment and are counting on their future

co-operation.

We also wish to thank you, our shareholders, for your confidence

in the development of the Swisslog Group.

For the Board of Directors

Truls D. Berg Juhani Anttila

Chairman Delegate of the Board

Aarau, April 1998

11

12

Strategies und Innovations

trong internal growth and strategic acquisitionsare transforming Swisslog into a world leaderin logistics. Through its entire range ofproducts and services Swisslog helps itscustomers achieve supply chain excellence.

1997:

strategically focused activities

Whereas in the previous year Swisslog

corporate activities focused on industrial

business, with corresponding orienta-

tion in the organisational structures,

1997 was the year for concentrating

group activities on four strategic areas:

logistic systems, software, special sys-

tems and products and customer

support. The basis for this was the con-

viction that increased customer value is

the only foundation for sustainable

corporate success and that there is

further income potential in the markets

served by the Swisslog Group.

Operating in young and dynamic

markets

With annual growth rates between 5 to

10 per cent in the various parts of the

world and customer segments, the key

markets of the Swisslog Group have

evolved into an attractive industrial niche

sector which has further significant

potential in both commercial and techni-

cal terms.

Typically for young industries the market

is highly fragmented. Overall there are

several hundred companies, mostly

private, active throughout the world sup-

plying their specialities to local custom-

ers. Just a few industrial groups, like

Swisslog, have a reference list of sever-

al thousand installed systems and offer

their products and services worldwide.

our s

s

13

olutions areThree powerful growth factors

Swisslog has essentially identified three

factors determining dynamic demand for

integrated solutions for supply chain

excellence from a single source.

Demands are growing in all industries for

reliability, speed and customisation of

goods and services. Companies are ac-

cordingly choosing materials handling

concepts which integrate all manufactur-

ing and distribution processes in a single

system. Such systems cover all stages

from receipt of individual orders through

co-ordination and control of manufactur-

ing, and management of internal and

third-party warehousing to optimal com-

missioning of deliveries.

Cost competition is continuing to in-

crease, strengthening pressure to cut

operating costs further through efficient

materials handling and release tied-up

capital by optimising inventories and out-

sourcing activities which are not core

activities. Besides new installations

there is growing demand here for mod-

ernisation and expansion of existing

installations (retrofitting) to optimise their

performance.

The scale and technological sophisticati-

on of materials handling installations are

rising steadily. Not all in-house logistics

and technical departments have the

specialist knowledge needed for their

design, installation, operation and devel-

opment. As a result, in-house develop-

ment and operation are mostly proving to

have little economic point, and there is a

corresponding trend towards outsourc-

ing. Intensive industrial experience, a

technologically complete range of pro-

ducts and services and a secure long-

term presence in the world markets are

the key competitive criteria today in the

market for integrated materials handling

systems.

14

Strategies und Innovations

ased on this analysis of the market and its existing strengths Swisslog has

developed and implemented a strategicpackage containing the following elements.

Entrepreneurial thinking

Key Account Management

The best solutions are based on a global

entrepreneurial view. They integrate

company-specific objectives, manage-

ment philosophies and strategies to-

gether with market characteristics and

the mentality of the various cultural areas

in which Swisslog customers are active.

Swisslog accordingly sees key account

management as managing customer

relations in the broadest sense. Con-

stant and intensive customer support at

all levels of the company and all locations

provides the basis for the Swisslog

Group’s “supply chain excellence for

champions”.

Industry Practices

Based on several thousand installations

and ties with leading companies built up

over the years Swisslog has developed

system planning expertise for the differ-

ent requirements of individual industries.

Swisslog is convinced that comprehen-

sive availability of special systems and

products together with application-spe-

cific expertise are the only way of creat-

ing solutions which are setting commer-

cial and technical standards worldwide.

Swisslog is familiar with the varying

needs of the different industries and in

1997 it created the “Industry Practice

Groups”, an internal expert network for

supply chain excellence which brings

together specialist knowledge and

experience and defines industry-typical

standards to ensure technically and

commercial optimal solutions.

Lifetime Partnership

Customers expect their logistic partners

to provide not only the most modern

technological solutions but also compre-

hensive support over the entire lifetime

of the installations. No solution can be

better than its practical performance.

For Swisslog, smooth operation of its

systems is just one aspect, with ongoing

optimisation and adjustment to new

requirements for products and services

playing an essential role in creating

above-average customer value.

tomorrow’s

b

15

Customer-oriented action

Systems Design

Efficient logistics are a strategic com

ponent for success for all Swisslog

customers. Analysis, concept design

and systems design are the technical

foundations for efficient installations.

Comprehensive review of variants and

simulations lead to optimal solutions.

State-of-the-art consultancy and plan-

ning expertise provide the key competi-

tive edge, while thirty years of experi-

ence provide the basis for successful

business.

Special Systems and Products

Modularisation of installations is increas-

ing steadily. This means that customer

solutions will in future consist of optimal

combinations of special systems which

are configured according to specific

customer requirements. Swisslog is ac-

cordingly focusing on developing pro-

duct platforms which incorporate the

status of established technology. Their

use significantly enhances the commer-

cial value of the customer applications

and also reduces installation, functional

and operating risks.

Customer Support

Technical availability and operational

reliability over the entire lifetime of the

systems directly affect income. Swisslog

guarantees need-driven maintenance,

ensuring efficient use of resources at

budgetable cost. Ongoing Swisslog sup-

port to customers also provides the

basis for early identification of and opti-

mal solutions for customer needs.

The following pages show how the SwisslogGroup consolidated its products and

services in an optimised overall packageduring the past year.

standards

16

Key Account Management

Customer satisfaction and trust were once again the

key factors behind the Swisslog Group’s success in 1997.

To create a platform to build such relation-ships, you need constant and intensive

customer management across the board. At Swisslog we call this

Key Account Management.

diverse and intertwining relationships

between Swisslog and its clients. In

this business area, senior managers pool

their broad expertise towards looking

after the needs and requirements of

Swisslog’s clientele, both on a one-to-

one basis and in teams. No matter what

the location or the type of product, they

are the ever-present liaison officers for

our key clients. The key account mana-

gers know the problems their clients face

inside out, and also know their specific

requirements.

Being ideally placed to receive input from

clients, the key account managers can

develop new solutions for system, soft-

ware and product-related problems. Let

us take two examples from the distribu-

tion and automotive segments:

Supply chain excellence – a key

success factor

The distributor clients of Swisslog come

under constant pressure to reduce costs,

speed up distribution and improve the

services they offer. They continually

monitor their distribution networks and

reengineer the logistical processes from

source via storage to delivery. For our

clients, the efficient management of ma-

terial flows is the key to success.

The buzzword here is ECR, or efficient

consumer response. ECR defines the

close collaboration between providers

and retail traders. For optimal results you

need the right IT platform, comprehen-

sive communication between distribution

points and providers, and early warning

systems to keep inventories to a minimum

throughout the material flow chain.

The systems designers of Swisslog have

risen to this challenge, and have devel-

oped a deep understanding of the pro-

cesses involved. In so doing they have

come up with a whole range of solutions,

geared towards maximising the benefit

for the clients. One such approach is the

modular distribution centre.

know

key Account Management comprises the

17

Teamwork conquers Europe, Asia

and the Pacific rim

Working closely with clients in the distri-

bution business, Swisslog has in the past

planned, developed and realised several

high-capacity distribution centres. Work-

ing up from the tried and tested basic for-

mat, we have developed a range of ware-

house modules that can be configured in

line with the client’s specific needs.

Thanks to Swisslog innovations, ware-

house costs can be cut by up to 20 to 30

per cent compared with conventional

systems.

At present Swisslog is implementing two

major retail projects in Australia. Devel-

oping the two distributing warehouses re-

quires the combined know-how of the

Swisslog Group. Digitron is providing the

concept, detailed planning and specifica-

tions, as well as project management.

Accalon is supplying the latest genera-

tion of stacker cranes and pallet conveyor

systems, Digitron Translift the electronic

monorail systems and Cimcorp the

RoboPicks. The warehouse management

software ”Eagle”, which is capable of

meeting the most stringent demands, will

be realised and implemented by Digitron.

Retrofitting means looking ahead:

NedCar, Born, Netherlands

In the summer of 1998, the Dutch car

manufacturer NedCar will start produc-

tion of the new Mitsubishi model. The

production volume is estimated at 50,000

to 70,000 cars per annum.

Swisslog has been NedCar’s partner for

automated guided vehicles AGV since

the mid-1980s. In 1997, we had to re-

vamp every single subsystem, bringing

them up to the latest standards, so that

they could meet the requirements of the

new production line. Added to this, the

new systems had to meet up to rigorous

Japanese quality standards.

NedCar contacted Swisslog in 1995. In

1996, Digitron in Partille, Sweden, built a

prototype full-scale test track where all

the system requirements could be tested,

especially energy consumption. Once all

these tests had been successfully com-

pleted, Swisslog finally received the

order to proceed with the system itself.

Swisslog delivered the system on sched-

ule in December 1997. A total of 85

AGVs were incorporated in the new

plant, which also featured a new steering

system using the cutting-edge software

platform “Fox” developed by Accalon.

A multinational Swisslog team compris-

ing Accalon and Digitron Sweden as well

as Digitron Benelux worked together

with NedCar from the very first initial dis-

cussions right through to final delivery.

The successful conclusion of this

undertaking, the largest retrofit

project in the group’s history, high-

lights the commitment of Swisslog

to the ”living system” concept.

The example of NedCar shows quite

clearly how Swisslog can work

closely with a proactive client to

develop and implement creative and

economically viable solutions,

which can significantly prolong a

system’s effective life.

your client

18

Industry Practices

Every industry speaks its own language and every industry’s requirements vary.

Specific industry practice and state-of-the-art technical standards are essential factors in

guaranteeing optimum customer solutions andrepresent the key criteria underpinning the

market success of the Swisslog Group.

he operating environment of today’s

drinks industry is shaped by increasingly

strict noise abatement regulations and

toward reusable forms of packaging. Dis-

tribution solutions are determined by the

principle of “efficient customer response”

– the ability to react swiftly to customer

demand. The pharmaceutical industry is

characterized by clean room conditions

or highly complex validation processes.

Making optimum use of knowledge

gained through experience

With a view to being able to continue to

play a part in determining the standards

of practice in selected industries, in 1997

Swisslog set up the “Industry Practice

Groups” as Group-wide networks of

experts responsible for evaluating and

focusing our accumulated specialist

technological and commercial knowledge

and developing it further in line with

specific requirements. In the first phase,

the focus is on the industries that make

up the principal markets of Swisslog.

At the same time, the further increase in

follow-on orders from clients in the target

industries witnessed in 1997 confirms

the leading position of Swisslog in the

defined key markets.

Cheese production driven by supply

and demand: Baer AG, Switzerland

In 1996, soft cheese manufacturer Baer

of Küssnacht, Switzerland, decided to

streamline its entire production, originally

a painstaking process involving intensive

manual operations. Baer’s plans revolved

around four requirements. The individual

production processes need to be adapt-

able to daily fluctuations in the quality of

the milk supplied without this resulting in

any significant delay, while at the same

time total production must cover buyers’

day-to-day demand. In addition to these

external operating conditions, at internal

level the solution has to meet the highest

of demands in terms of hygiene and com-

patibility with existing quality assurance

systems.

know your

the operating environment of today’s drinks

industry is shaped by increasingly strict

noise abatement regulations and the trend

19

Baer, a family business with a long tradi-

tion, decided to go for Digitron Translift’s

plant design, which takes full account of

the operational production requirements

for soft cheese in line with new approa-

ches to distribution and logistics in the re-

tail trade. The system installed at Baer’s

plant is based on a special cheese-mak-

ing concept which Digitron Translift had

developed in collaboration with a strate-

gic partner independently of a specific

assignment.

Digitron Translift monorails form the

centrepiece of the system. They provide

flexible links between autonomous plant

segments such as the salt bath and ac-

climatization tunnel for ripening the

cheeses. Being above ground level and

involving fewer load-bearing structures

than conventional floor-mounted con-

veyor systems, the solution designed for

Baer offers major advantages in terms of

operation and a thorough daily disinfec-

tion of the facilities and premises.

The plant automation system designed by

Digitron for cheese production controls

the core production processes on the

basis of the level of incoming orders.

Differences in the consistency of the milk

are compensated for by making adjust-

ments at specific production stages. This

flexibility guarantees a high level of inven-

tory availability, while maintaining a con-

sistent standard of quality – decisive

advantages in a competitive market.

When the plant began operations in the

summer of 1997, it acted as a signal to

the rest of the industry and Digitron

Translift has since received orders for

two monorail systems for what is current-

ly the biggest European plant project in

the soft cheese sector.

Order-driven car production: Ford

Motor Company, Cologne, Germany

For the Ford Motor Company, the grow-

ing range of optional features in today’s

cars has meant a sharp rise in the cost of

maintaining intermediate inventories of

component supplies, e.g. seats or inte-

rior trims, ready for dispatch to the final

assembly line in the correct order. Ford

asked Swisslog and a number of rival

companies to develop proposal solutions

that would cut supply times and reduce

intermediate inventory levels.

Once Digitron had analysed the situation

at the Cologne plant, working in close

collaboration with the engineers and

development planners, the various solu-

tion concepts were examined using a

simulation model. Digitron’s proposal to

set up an intermediate storage facility for

whole car bodies between the paint shop

and the final assembly line proved to be

the best solution.

Swisslog won the order as the general

contractor and equipped an intermediate

car body storage facility with all the

mechanical installations for the handling

of the car bodies, the control units for the

conveyor systems and the software for

the inventory management system. The

technical superiority of Accalon’s stacker

cranes reduces the risk of system failure,

as well as improving warehouse space

utilization and increasing throughput

times.

The efficiency of the logistics planning

was also enhanced, making for a steady

flow of production at the final assembly

stage. As a result, delivery times were

significantly reduced while increasing the

variety of model variants available to

customers.

The co-operation and the ideal integra-

tion within the plant environment in

Cologne strengthened the partnership

between Ford and Digitron. In 1997

comparable systems were installed in

Genk (Belgium), Halewood (UK) and

Valencia (Spain). A further system is

currently being installed at the Jaguar

plant in England.

technology

20

Lifetime Partnership

Swisslog and its customers:

a living system

A wealth of mutual benefits are the key

to the successful lifetime partnership

between Swisslog and its customers.

Swisslog understands its partner’s busi-

ness, is familiar with the practical ques-

tions involved in installing a new mate-

rials handling system and integrates

existing customer structures into projects.

Swisslog ensures that supported instal-

lations are always state-of-the-art. Taking

over maintenance integrates Swisslog

into daily operating procedures and

makes it responsible for maximum avail-

ability of the system. This also makes it a

natural partner in subsequent projects.

Ongoing expansion of the

distribution center: Grattan Mail

Order, Bradford, UK

Grattan is an established UK mail order

company owned by the German Otto

group. To eliminate the inefficiency

caused by having four warehouses at

four different locations Grattan decided

in 1987 to build a new distribution centre

at a green fields site. Digitron was picked

as the system supplier. The system con-

sisted of a two-part 20-metre high fully-

automatic warehouse with integrated

automated guided vehicle AGV system

and conveyor belts. In 1995 the pallet

area was expanded and equipped with

six “Vectura 22” stacker cranes from

Accalon. This increased Grattan’s capac-

ity by 133,000 storage spaces.

know your

years of trouble-free operation

The staff of the British Airport Authority are cheering a

marathon of a very special sort. The baggage transport system

at London’s Heathrow airport includes a Transnorm curve belt

conveyor which has been running for 21 years without a

change of belt or any technically-based shutdown – and this in

operation over a 16-hour day in the main conveyor section.

Ever since 1996 all the original parts of the installation have

been functioning perfectly. Transnorm has a world market share

of over 50 per cent in curve belt conveyor technology. The

London marathon performer represents just one highlight in

over 50,000 supplied curve belt conveyors, many of which have

been in daily operation for over 15 years without a single hitch.

21

21

In 1997 the system was expanded again

with 5 extra stacker cranes. The entire in-

stallation now has 43 aisles, 30 stacker

cranes, 8 AGVs and a warehouse with

607,500 spaces.

Ever since the start of the first project in

1987 Digitron service engineers have

been working full time on site. They are

responsible for both preventive and

operational maintenance work, ensuring

maximal availability of the system.

Grattan’s favourable experience with

customer support and the results of a

Digitron development study have led to

three major orders within 10 years. The

good relationship is continuing: Swisslog

is able to use the warehouse as a refer-

ence project, and Grattan is kept con-

stantly informed of the latest status of

computer-controlled materials handling

systems.

Rebuilding after the fire: Boots

The Chemist, UK

The advantages of intensive cooperation

are particularly apparent in a crisis. In

October 1997, Christmas business had

just started, a forklift caught fire in a main

Boots warehouse. The building was

destroyed, and the inventory along with

it. Supplies to 1,200 stores were threat-

ened.

Digitron responded immediately: within a

few hours of the start of the fire, all the

sections of the installation affected by the

fire were isolated and the conveyor in-

stallations were re-routed. Three weeks

later, Boots had organised alternative dis-

tribution channels for most products,

Digitron got the order to design and in-

stall a new materials handling system for

Boots within 10 months.

The partnership between Digitron and

Boots dates back to 1990, when

Digitron’s bid for the expansion of an

existing warehouse won. The second

project, to install a miniload store and

picking system, followed in 1991. Based

on the success of the two initial projects

and intensive ongoing co-operation be-

tween the two companies, Digitron was

commissioned in 1994 to construct a

7,000 pallet position store and in 1996

to construct a 30,000 pallet position

warehouse.

For the construction of a new warehouse

to replace the one destroyed by fire,

Digitron is acting as system integrator.

Besides supplying the control system

there were two reasons which made

Digitron a particularly suitable candidate

for this job: its ability to develop an opti-

mal solution for the customer which also

includes system elements from third-

party specialists, and its direct access to

the rich fund of specific know-how and

special products in the Swisslog Group.

During project development Digitron

received comprehensive support from

Swisslog Group companies. A Schierholz

chain monorail and Transnorm System

curve belt conveyors are key elements in

the new installation.

installation

“Comprehensive support over the entire lifetime of installations” is the message be-

hind lifetime partnership. By ensuringsmooth functioning of its complex systems

and through ongoing optimisation and adap-tation to new performance requirements,

Swisslog creates above-average customer value.

22

Systems Design

onsultancy for the benefit of the ust-

omer: the Swisslog service offer

The consultancy of Swisslog work covers

the full range of services, from the prep-

aration of business strategies to the

evaluation and expert appraisal of third-

party concepts and encompasses every-

thing in between, including location

studies, plant planning, overall concepts,

detailed planning, concepts for informa-

tion systems, computer simulations and

animations. Swisslog experts monitor all

processes from the draft planning stage

to the final acceptance of a project and

ensure that planning targets are put into

practice successfully.

the team in early 1995 and in 1997 the

plant was taken into service.

The new logistics centre was required to

meet high standards. Available facilities

and operating conditions had to be taken

into account, the existing high bay store

and the bottling lines had to be inte-

grated into the concept. Veltins also

expected its logistics to meet extremely

high standards in terms of coping with its

routine everyday operations. Customers

arriving to collect consignments are

served around the clock. All articles

have to be available for dispatch without

advance notification. In terms of logistics

the task to be addressed was as follows:

loading bays need to be equipped

to handle a strongly fluctuating flow of

materials as and when demanded, with

goods sorted ready for delivery and

facilities on hand to receive empties. At

peak times, 180 lorries arrive daily.

In the fine planning phase, the Digitron

team worked with the customer to find

the most economically efficient ap-

proaches. This involved using the full

panoply of system planning instruments

available: experience with comparable

anticip

The task of systems design and consultancyis to co-operate closely with the customer

in order to arrive at the most economical long-term logistics solution for production,

warehouse management or distribution – the aim always being to enhance the

customer’s competitiveness.

consultancy for the benefit of the

customer: the Swisslog

service offer

The group’s system design credentials

are founded on a number of strengths

and were further reinforced with the

integration of OWL on 1 January 1998.

Ready to deliver around the clock:

brewers C.& A. Veltins, Grevenstein,

Germany

Founded in 1824, C.& A. Veltins is one

of Germany’s biggest private brewers

and has been producing pilsner-style

beer since 1926. Its total output of

premium beer comes to some 2.4 million

hectolitres. Bottled beer makes up

roughly 73 per cent of the total, with

draught beer accounting for the remain-

ing 27 per cent. Its bottling line has a

maximum output of 180,000 bottles per

hour. Unusually, the brewery does not

have its own fleet of vehicles. All prod-

ucts are collected by customers directly

in full pallet-loads of barrels, bottles or

cans.

Faced with a period of tumultuous growth

in the early 1990s, the company had to

decide how best to expand within the

limited space available at its plant site. In

mid-1993, an in-house team made a start

on the planning process, Digitron joined

Simulation: investing without risk

New logistics systems need to

operate without a hitch from the word

go. Any planning error is an invest-

ment error. To eliminate such risks,

Swisslog makes use of computer

simulation systems. This has three

decisive advantages for the customer:

first, the simulation enables material

flows to be presented directly and

realistically. The planned plant opera-

tions are made transparent and all

functions can be defined at an early

stage. Second, the simulation shows

whether the planned system’s per-

formance can actually be achieved in

practice. And finally, the simulation

demonstrates how the system as a

whole will work. The specific oper-

ational features can be evaluated and

the behaviour of the system can be

tested under different workloads.

23

ating needsand distribution centre. The total invest-

ment came to 25 million US dollars.

NTUC needs the new centre to meet

three requirements: logistics costs must

be reduced, the system must operate

with minimum staffing levels, and its

capacity must be geared to supplying

fresh goods reliably and subject to tight

time constraints.

NTUC looked to the international market

in search of a logistics project partner

with a convincing track record in the food

and retailing sector, considerable experi-

ence in planning computer-controlled

systems, plus an in-depth knowledge of

the Asia-Pacific region. NTUC found

such a system planning partner in

Digitron Logistics Systems Pte Ltd in

Singapore. With its reference projects

in Europe and Australia, Swisslog

emerged as first choice. The project is

currently in the planning phase. Once

completed, the NTUC distribution centre

will be the most highly automated facility

of its kind in Singapore – a showpiece

project that will set new standards

throughout Southeast Asia.

systems and technologies was evaluated

and the planned performance was simu-

lated. Then the system requirements

were summarized in the specifications

for the practical implementation. Digitron

planned and implemented the entire

plant control system and the logistics

automation system, as well as being

responsible for managing the construc-

tion site. Digitron Translift supplied the

monorail.

Bigger, better and faster than the

competition: NTUC Fairprice,

Singapore

With 60 retail outlets, NTUC Fairprice is

Singapore’s biggest food distributor.

Despite massive pressure in the form of

competition from international super-

markets and despite an increasingly

price-sensitive clientele, NTUC intends

to continue to pursue a policy of double-

digit growth rates. The only way it can

achieve this is by radically improving its

logistics.

In 1997, NTUC decided to pull down its

existing 25-year old office and depart-

ment store building and build an entirely

new complex complete with warehouse

24

Special Systems and Products

tructured platforms help

applications and service

For Swisslog 1997 marked the start of a

new era. “Tiger” was the group’s first

configurable software platform for ware-

house management. These modular prod-

ucts cover all needs of modern ware-

house management at various levels of

complexity, from a simple warehouse to a

highly automated customer-specific dis-

tribution centre. “Tiger” is the middle

package with broad and configurable

warehouse functionality for automatic

and manual solutions. The family is sup-

plemented by “Shark”, the basic standard-

ised package which runs on Swisslog

hardware and covers all the basic

functionalities of warehouse manage-

ment, and the modular high-end platform

“Eagle”. This is the design base for

highly experienced software specialists

to develop customised solutions meeting

the highest demands on technology and

management.

Solution-oriented development

After just one year in development

“Tiger” faced its first operational test on

21 July 1997, when, under the manage-

ment of the Swisslog development team,

it was commissioned as a configurable

software system at Metroport Group, the

independent warehousing service pro-

vider for Procter & Gamble in Kuala

Lumpur. It has been running smoothly

ever since. In developing these platforms

Swisslog opted for a fundamentally new

approach focusing on solution-oriented

criteria. As a result, the “Tiger” team

initially reviewed the functionalities of a

range of installed systems, concentrat-

ing on the best part solutions in order to

integrate these in a final software pack-

age. The team responsible for the stan-

dardised platform “Shark”, launched on

schedule early in 1998, adopted a simi-

lar approach, confirming yet again the

strategy followed for years in upgrading

“Eagle”.

Clear strategy

The philosophy underlying the new soft-

ware family is as simple as it is demand-

ing: software expertise is the most impor-

tant criterion in competing for supply

chain excellence. Technologically, the

development of a modular software fam-

ily involved no major innovation for the

group – on the contrary: in terms of its

corporate strategy, Swisslog is demon-

strating its ability to utilise the experience

built up within the group to create cus-

creating

s

25

platformsAnother key advantage is the speed with

which individual solutions can be created.

In the case of “Tiger” for example, it takes

only a few months from receipt of the

order to delivery of a fully configured and

installed manual standard solution. And

finally, the use of the software platforms

for a very wide range of applications

generates more industry references and

lays the basis in customer support for

ongoing monitoring and adaptation to

new customer requirements.

Clear structure – customer-driven

products

The first results indicate very favourable

reception by the market. The clear struc-

ture of the products facilitates presen-

tation and subsequent installation. The

range of solutions offered by the software

packages are clearly defined in technical

and commercial terms and are geared to

customer needs: a set price for standard

applications and an extra budget for cus-

tomer-specific applications. The user-

friendly interface and openness to exist-

ing installations facilitate integration with

downstream operating procedures. In

pursuing this new concept, Swisslog

is opening up additional segments of

demand and expanding its customer

base, particularly in the field of manual

warehousing systems.

Usable in all market sectors

The integration of the software platforms

into the supply chain product range of

Swisslog has far-reaching implications,

marking a turning point in the group’s

evolution towards modular-based solu-

tions. Companies of all sizes and in all

industries are looking to Swisslog for

capable solutions which are easy to con-

figure and can be effortlessly adapted

and expanded for future applications. It is

already clear that much future business

will be in the installation and service of

applications based on modular product

packages. The number of employees in

the group’s software activities was

accordingly further increased in 1997,

and at the start of 1998 these activities

were consolidated and placed under

single management.

tomer-oriented platforms and hence antic-

ipate the growing demands of users.

Ultimately, this software development is

the result of a business-oriented group

strategy focusing in supplier terms on

repetition, standardisation and cost-

effective product platforms. In market

terms, the group is banking on key areas

of industry with comparable needs, sub-

stantially reducing the order-specific

engineering input required.

Response to market trends

The specific competitive advantages of

these software platforms can be sum-

marised in five points:

•

Standardising basic functions and

optional packages facilitates adapta-

tion to specific customer needs.

•

The clearly organised product docu-

mentation and presentation software

assist sales and distribution.

•

The Swisslog technology, which has

proved itself in numerous projects,

reduces implementation, functional

and operating risks.

•

Training new users is significantly

simplified, reducing overall the

dependence on specialists.

•

Comparatively low implementation

costs and simple upgrade facilities

enhance efficiency and hence the

commercial value of customer appli-

cations. In this way, Swisslog is

gaining access to further attractive

market segments.

26

Customer Support & Service

n order to

stay profitable in highly competitive mar-

kets companies are increasingly con-

centrating on their core competencies.

Swisslog acts as an outsourcing partner,

taking over maintenance functions for all

the logistics installations and systems

irrespective of the original suppliers. The

maintaining

irange of services runs from isolated

orders through to complete assumption

of operational servicing on site. Profes-

sional plant maintenance with preventive

maintenance and immediate correction of

any disturbances guarantee customers

optimal performance at budgetable

costs.

Thousands of active materials handling

installations throughout the world need

to be maintained and kept operational.

This is why after-sales support is as im-

portant to Swisslog as developing and

selling new installations. Customer sup-

port is lifetime partnership in action.

Swisslog’s service principle is to stay

close to our customers, wherever they

are in the world. This global service

organisation requires close co-operation

within the group.

Guaranteed delivery: Hoffmann-La

Roche, Kaiseraugst, Switzerland

In 1995 / 96 Hoffmann-La Roche AG in

Kaiseraugst commissioned a modern

warehousing and packaging system. The

general contractor was Digitron. A fully

automatic high bay and small com-

ponents store holds drugs and pack-

aging. After commissioning, goods are

forwarded to a largely automatic pack-

aging unit where they are packaged

ready for sale.

For Hoffmann-La Roche the continuous

availability of this installation is crucially

important. A decisive role here is played

by maintenance and servicing of the com-

plex logistics, robot handling, electronic

and computer installations which ensure

largely automatic supply and removal of

material.

For this reason Hoffmann-La-Roche was

in discussion with Swisslog even while

the system was being implemented on

the possibility of outsourcing technical

support to the installation. Digitron has

the optimal solution for an installation with

the required high availability: a specialist

team takes on the responsibility for maxi-

mum possible availability. Since 1995

Digitron has guaranteed permanent and

professional preventive maintenance and

fault recovery to Hoffmann-La Roche’s

total satisfaction. This approach also

ensures ongoing transfer and integration

of technological advances in the installed

system. Total costs of maintenance and

support are firmly budgetable.

27

superiority

The commercial success of an industrial plant depends on its reliability and availability and can only be ensured through a combination of first-class maintenance and continuousmodernisation.

Maximum availability: Daimler-

Benz AG, Sindelfingen, Germany

The Daimler-Benz plant in Sindelfingen

processes some 2,000 tonnes of sheet

metal a day on over 200 presses. A high

bay store with 12 aisles holds pressed

items manufactured in batches for call-off

by the body shop. The necessary trans-

port is handled by 94 automated guided

vehicles which take materials to and from

the various production areas through tun-

nels running for 5.8 kilometres, mostly

below ground.

In 1981 the contract for construction of

the high bay warehouse was awarded to

Digitron after an invitation for tenders,

and the warehouse was commissioned in

1983. In 1988 the “Sindelfingen Metro”

started operations, an automated guided

vehicle system linking the various parts of

the plant.

Even today after 10 and 15 years respec-

tively in operation the system still meets

the stringent demands of Daimler-Benz in

terms of functional reliability and avail-

ability as ensured by a full service main-

tenance contract. Digitron employees in

three-shift working ensure that electrical

or mechanical disturbances are rectified

swiftly and without loss of production.

Complex services: Lübeck Clinic,

Germany

At the central clinic of the Lübeck Medi-

cal University automated guided vehicles

handle all the transport of food, drugs,

laundry and refuse. Digitron planned,

supplied and implemented this automa-

ted material transport system, which was

commissioned in 1992 and very quickly

reached its planned performance in all

circuits. The prerequisite for smooth

AGV operation protected against all

external disturbances was the tunnel

installation. Today, 29 RoboTrailer under-

ground tractors are in use in the sub-

terranean transport system. A number of

freight lifts for individual vehicles carrying

piggy-back roller containers link the sub-

terranean transport levels with the floors

in the hospitals and supplies centre. The

system is centrally controlled, with con-

stant CCTV monitoring of all key system

areas.

The emphasis in hospital logistics is on

supplying patients, and high availability of

the system is essential. For this reason

Digitron was commissioned to provide a

local service team, which supports and

maintains the automated material trans-

port system, is responsible for holding a

stock of replacement parts and also sup-

ports other installations such as washing

machines. The specialists in the team are

experienced Digitron employees. The

service contracts also cover Digitron

suppliers, so that the customer can bud-

get exactly for the maintenance costs.

Based on the initial good experience

Digitron was commissioned in 1997 to

add a further five automated guided

vehicle systems, including lifts. The entire

control system was also upgraded to the

state of the art.

1. TS 1600 belt curve conveyor

1997 saw Transnorm launch a new generation

of belt curve conveyor systems on the market.

Conveying light goods up to 150 kg, the TS 1600

offers a long belt life and maximum performance.

2. TS 4200 belt merge conveyor

The TS 4200 from Transnorm is a key high-perform-

ance component for permanent operation. The

new belt merge conveyor can feed in and out unit

loads of up to 60kg at a speed of 3 m/s and angles

of 30° to 45°.

3. RoboPick

RoboPick, Cimcorp’s new robotic order picking

system makes up individual orders. Its grippers pick

cardboard boxes and plastic containers direct from

pallets or shelves, allowing distribution centres

to make major time savings.

4. MultiPick

MultiPick is the new overhead robotic order picking

system from Cimcorp. The fact that MultiPick

operates independently of fixed roller conveyors

makes for highly flexible warehouse management.

5. Fully automatic gun sealing carousel

In close collaboration with Matsushita Electronics

in Esslingen, Germany, Cimcorp developed a four-

phase plant with 28 processing stations. Measuring

9 meters in diameter, the plant is making a major

contribution to improving product quality.

6. Vectura stacker cranes

Accalon introduced a new family of stacker cranes

in 1997. Thanks to the modular mechanical con-

struction and system components with systematic

parameterisation of the control facilities, the new

stacker cranes can be fine-tuned to customers’

requirements.

7. Contura pallet conveyor systems

Contura from Accalon is a modular pallet conveying

system for weights up to 1.5 tonnes. Contura is also

ideal for linking different conveyor systems within

a large-scale materials handling complex.

28

Innovative Products

2

1

6

materialise

29

4

3

5

d expertise7

30

tInvestor Relations

Registration limit

Upon entry into force of the Federal Act

on Stock Exchanges and Securities

Trading (“Stock Exchange Act”) on 1 Jan-

uary 1998, the percentage limit (transfer

restriction) imposed on the entry of regis-

tered shares in the company’s share

register as stipulated in Art. 6 para. 2 of

the Articles of Association was automat-

ically rescinded. The Articles of Asso-

ciation of Swisslog Holding AG no longer

contain a percentage ceiling on the regis-

tration of shares. The Articles of Asso-

ciation have merely retained a nominee

ruling (Art. 6 para. 4) which stipulates

that no more than 5 per cent of the regis-

tered share capital may be entered in the

share register under the name of persons

holding shares on a fiduciary basis for

third parties not known to the company.

The object of this ruling is to prevent

anyone from secretly securing control

over Swisslog Holding AG.

Shareholders’ duty to disclose

holdings

The shareholders of Swisslog Holding

AG are subject to the disclosure require-

ments of the Stock Exchange Act. Under

Art. 20 of the Stock Exchange Act, any

shareholder who either directly, indirect-

ly or by joint arrangement with third par-

ties acquires or sells shares of Swisslog

Holding AG and thereby attains, exceeds

or falls below a threshold of 5, 10, 20,

33 1⁄ 3, 50 or 66 2 ⁄ 3 per cent of the voting

rights (whether enforceable or not) shall

be required to notify Swisslog Holding

AG and the Disclosure Office of the

Swiss Exchange. Address:

Swiss Exchange, Disclosure Office

P.O. Box, CH-8021 Zurich

+ 41 1 229 29 16 Phone

+ 41 1 229 29 35 Fax

Under Art. 21 of the Stock Exchange Act,

the company is for its part obliged to pub-

lish any such information that it receives.

Shareholders who as of 1 January 1998

had a holding of at least 5 per cent of the

voting rights of Swisslog Holding AG are

granted a period of 3 years within which

Investment policy

The Swisslog Group aims to expand its

presence on the world’s logistics sys-

tems markets. Customer proximity, an

comprehensive range of services and a

broad geographic base are crucial to

success.

The Swisslog Group’s affirmed goal is to

finance its organic growth through inter-

nally generated funds.

Capital structure

As of 31 December 1997, 2,752,000

registered shares at CHF 10 nominal

were outstanding and entered in the

Commercial Register.

The Group holds neither authorised nor

conditional capital.

In introducing a unitary share and

gradually reducing the nominal value to

the minimum of CHF 10 as permitted un-

der Swiss company law, the Swisslog

Group has created the conditions for a

liquid market which is also accessible to

private investors.

he Board of Directors shall propose to theAnnual General Meeting of 13 May 1998 thata dividend of CHF 2 per registered share bepaid out. Swisslog pursues an income-baseddistribution policy.

31

share in ourSwisslog at a glance: an overview for investors

Key data per registered share

(equivalent of registered shares at CHF 10 nominal) 1997 1996 1995 1994

Earnings before interest, tax,

depreciation and amortisation (EBITDA) CHF 10.4 4.5 0.3 3.2

Earnings before interest and taxes (EBIT) CHF 7.7 2.6 -1.3 1.5

Net income/registered share CHF 4.8 0.8 -1.4 3.7

Consolidated shareholders’ equity

per registered share (Net Asset Value) CHF 60.0 62.5 74.1 96.8

1995 / 96 capital repayments by reducing the nominal value per share from CHF 100 to CHF 84 and CHF 84 to CHF 50.August 1997: 1:5 share split from nominal value of CHF 50 to nominal value of CHF 10 per registered share. The figures for 1994 to 1996 were adjusted accordingly.

Dividends 1997 1996 1995 1994

Consolidated net income CHFm 13.2 2.2 -3.9 10.2

Dividend/capital repayment CHFm 5.5 18.7 8.8 8.8

Dividend payout ratio % 42 — — 86

Dividend/registered share 1 CHF 2.0 2 3.2

Capital repayment/registered share 1 CHF 6.8 3.2

1 Equivalent of registered shares at CHF 10 nominal.2 Dividend for the year under review in accordance with the proposal of the Board of Directors to the Annual General Meeting

of 13 May 1998.

32

Investor Relations

successSwisslog: the market view

Share price development of registered shares from 1993 to March 1998

1993 1994 1995 1996 1997 1998

For comparison purposes, prices for the period 1994 to 1996 in the above chart were adjusted to reflect the 1:5 share split.

1997 1996 1995 1994

Price of registered shares 1 High CHF 125 83 72 91

Low CHF 86 61 54 60

Gross return on registered shares High % 2 NA NA 4

Low % 2 NA NA 5

Market capitalisation (31.12.) CHFm 294 203 176 168

Market capitalisation as % of shareholders’ equity % 178 118 86 63

Price-earnings-ratio (PE-Ratio) (as of 31.12.) Factor 22.3 92.3 NA 16.5

1 Equivalent of registered shares at CHF 10 nominal.

50

60

70

80

90

100

110

120

140

160

III IV I II III IV I II III IV I II III IV I II III IV I

150

130

33

to make their disclosure, provided they

do not increase this holding to the next

higher threshold during this time.

Decision not to include opting-out

and opting-up clauses

Swisslog Holding AG has consciously

decided against writing into its Articles

of Association either an opting-out or an

opting-up clause which would waive or

restrict the obligation imposed on share-

holders to make an offer as stipulated un-

der Art. 32 of the Stock Exchange Act

effective 1 January 1998. Under Art. 32

of the Stock Exchange Act, a share

holder who either directly, indirectly or by

joint arrangement with third parties

acquires shares of Swisslog Holding AG

and thereby exceeds the threshold of

33 1⁄ 3 per cent of the voting rights

(whether enforceable or not) is required

to submit a purchase or exchange offer

to all shareholders of Swisslog Holding

AG. Moreover, the minimum price stipu-

lations defined in the Stock Exchange Act

will also apply to any such offer.

Own shares and management

participation plan

As of 31 December 1997, the Swisslog

Group held a total of 24,250 registered

shares of Swisslog Holding AG with

a book value of CHF 1.77 million. These

shares were acquired under a stock op-

tion plan for the group’s executive per-

sonnel and as remuneration for the Board

of Directors. These registered shares are

carried in the books of Swisslog Man-

agement AG.

Remuneration for the Board of

Directors

The remuneration paid to the Board of

Directors takes the form of an annual al-

location of registered shares of Swisslog

Holding AG.

Shareholder structure

Approximately 1,900 registered share-

holders are entered in the share register.

The shares are held by a large of individ-

ual shareholders.

Major shareholders are: Chase Nomi-

nees Ltd, London, with 13.7 per cent and

Co Nominees Ltd, Chelmsford, Essex,

with 5.4 per cent.

Listing

The registered shares of Swisslog

Holding AG are traded on the main

segment of the Swiss Exchange.

An average of 13,424 shares, adjusted

to nominal CHF 10, were traded daily in

1997, corresponding to a volume of

CHF 1.3 million.

Key dates for the investor’s diary

Annual General Meeting:

13 May 1998, Aarau

Dividend date:

20 May 1998

Publication of mid-year figures:

End August 1998

Contact

Juhani Anttila

Delegate of the Board of Directors

Swisslog Holding AG

Bahnhofstrasse 102

CH-5001 Aarau, Switzerland

+41 62 837 95 12 Phone

+41 62 837 95 56 Fax

34

Organisation

Management Committee

Juhani Anttila President and CEO

Andreas Münch Logistics Systems Region 1

Ulf Jansson Logistics Systems Region 2, from July 1, 1997

Sigvard Karlsson Logistics Systems Region 2, up to June 30, 1997

Charles Teissonnière Logistics Systems Region 3, from January 1, 1998

Göran Fredriksson Logistics Products

Uwe Eckert Overhead Conveyors

Kari Ollila Robotics

Uwe Schöning Unit Load Conveying Technology

Urs Birrer Software, from March 1, 1998

Wolfgang Maier Customer Support

Pekka Pylkäs Finance and Controlling

Martin Strobel Legal Services and Human Resources

Björn Berg Business Development

Board of Directors of Swisslog Holding AG

and Swisslog Management AG

Truls D. Berg Chairman up to 1999

Konrad Peter Vice Chairman up to 1999

Juhani Anttila Delegate up to 1999

René Garo Member up to 1998

Hans Hulsbergen Member up to 1999

Guido Patroncini Member up to 1999

Auditors

STG-Coopers & Lybrand AG, Basel

Group Auditors

STG-Coopers & Lybrand AG, Basel

committed to

Chairman

of the Board of Directors

Truls D. Berg

Delegate of the Board of Directors

President and CEO

Juhani Anttila

Customer Support

Wolfgang Maier

Software

Urs Birrer

Business Development

Björn Berg

Logistics Systems Region 1

Andreas Münch

Logistics Systems Region 2

Ulf Jansson

Logistics Systems Region 3

Charles Teissonnière

Logistics Products

Göran Fredriksson

Overhead Conveyors

Uwe Eckert

Robotics

Kari Ollila

Unit Load Conveying Technology

Uwe Schöning

Legal Services and HR

Martin Strobel

Finance and Controlling

Pekka Pylkäs

o excellence

36

Adresses

partners for

Swisslog Holding AG Swisslog Management AG

Bahnhofstrasse 102 Bahnhofstrasse 102

P.O. Box 4003 P.O. Box 4003

CH-5001 Aarau CH-5001 Aarau

+41 62 837 95 37 Phone +41 62 837 95 37 Phone

+41 62 837 95 10 Fax +41 62 837 95 10 Fax

Switzerland

Digitron-OWL AG

Bahnhofstrasse 96

CH-5001 Aarau

+41 62 834 15 00 Phone

+41 62 834 17 99 Fax

Digitron-OWL AG

Erlenstrasse 32

CH-2555 Brügg/Biel

+41 32 374 22 00 Phone

+41 32 374 24 99 Fax

Digitron-OWL AG

Webereiweg 3

CH-5033 Buchs/AG

+41 62 837 41 41 Phone

+41 62 837 41 23 Fax

Germany

Cimcorp GmbH

Monreposstrasse 53

D-71634 Ludwigsburg

+49 7141 38 360 Phone

+49 7141 38 36 10 Fax

Digitron GmbH

Monreposstrasse 53

D-71634 Ludwigsburg

+49 7141 22 600 Phone

+49 7141 22 6055 Fax

Digitron Service GmbH

Martin-Schmeisser-Weg 6

D-44227 Dortmund

+49 231 758 9500 Phone

+49 231 758 9512 Fax

Belgium

Digitron Benelux N.V.

Kernenergiestraat 47-49

B-2610 Wilrijk

+32 3 830 38 00 Phone

+32 3 828 89 26 Fax

Finland

Cimcorp Oy

Sammontie 5

FIN-28400 Ulvila

+358 2 6775 111 Phone

+358 2 6775 200 Fax

France

Digitron S.A.

151, Avenue Aristide-Briand

BP 2275

F-68068 Mulhouse-CEDEX

+33 3 89 32 65 65 Phone

+33 3 89 59 75 51 Fax

Italy

Digitron Italia S.r.l.

Via Columella 40

I-20128 Milano

+39 2 2707 111 Phone

+39 2 2707 1150 Fax

Digitron-Translift S.r.l.

Via Barbera 66, Scala B

I-10135 Torino

+39 11 34 66 66 Phone

+39 11 34 88 283 Fax

Netherlands

Digitron Benelux B.V.

Landzichtweg 66

NL-4105 DP Culemborg

+31 345 53 11 88 Phone

+31 345 53 07 36 Fax

a lifetimeDigitron-OWL Service AG

Bahnhofstrasse 96

CH-5001 Aarau

+41 62 834 17 77 Phone

+41 62 834 17 96 Fax

Digitron-OWL Service AG

Erlenstrasse 32

CH-2555 Brügg/Biel

+41 32 374 22 00 Phone

+41 32 374 24 99 Fax

Digitron-OWL Service AG

Webereiweg 3

CH-5033 Buchs/AG

+41 62 837 41 41 Phone

+41 62 837 41 23 Fax

Digitron Materialfluss System GmbH

Ziegelhüttenweg 4

D-65232 Taunusstein-Neuhof

+49 6128 97 600 Phone

+49 6128 97 6044 Fax

Louis Schierholz GmbH

Arsterdamm 110

D-28277 Bremen

+49 421 8406 0 Phone

+49 421 8406 202 Fax

Transnorm System Holding GmbH

Förster Strasse 2

D-31177 Harsum

+49 5127 402 0 Phone

+49 5127 402 119 Fax

Digitron Benelux N.V.

14, Rue des Cinq Perches

F-77645 Chellex-CEDEX

+33 1 64 21 44 33 Phone

+33 1 64 21 09 70 Fax

United Kingdom

Digitron Ltd.

Units 2/3, Regents Court, Far Moor Lane

GB-Redditch B98 OSD, Worcs.

+44 1527 517 333 Phone

+44 1527 517 344 Fax

Digitron Ltd.

706 Stirling Road, Trading Estate

GB-Slough, SL1 4SY, Berkshire

+44 1753 52 85 45 Phone

+44 1753 57 04 07 Fax

Transnorm System B.V.

Energieweg 10

NL-3641 RT Mijdrecht

+31 297 285 121 Phone

+31 297 286 221 Fax

Norway

Digitron AS

Nedre Rommen 5

N-0988 Oslo

+47 22 78 95 00 Phone

+47 22 78 95 10 Fax

Sweden

Accalon AB

Box 21

S-590 10 Boxholm

+46 142 555 00 Phone

+46 142 506 30 Fax

38

Wo sind wir

Digitron Translift AG

Rainacherstrasse 47

CH-6010 Kriens/LU

+41 41 329 88 00 Phone

+41 41 329 88 99 Fax

Transnorm System GmbH

Förster Strasse 2

D-31177 Harsum

+49 5127 402 0 Phone

+49 5127 402 102 Fax

Digitron-Translift Ltd.

Hallcroft Ind. Estate

GB-Retford DN22 7PT, Notts.

+44 1777 707 511 Phone

+44 1777 860 778 Fax

Transnorm System Ltd.

Ashchurch Industrial Estate,

GB-Tewkesbury GL20 8TD,

Gloucestershire

+44 1684 291 100 Phone

+44 1684 291 550 Fax

Digitron AB

Brodalsvägen 13

S-433 38 Partille

+46 31 336 60 00 Phone

+46 31 336 08 85 Fax

Schierholz Svenska AB

Brodalsvägen 13

S-433 38 Partille

+46 31 336 61 70 Phone

+46 31 44 27 10 Fax

Czech Republic

Schierholz Dopravni Technika s.r.o.

Repna 20

CZ-321 00 Pilsen-Litice

+420 19 78 28 272 Phone

+420 19 78 28 272 Fax

USA

Transnorm System Inc.

1906 South Great Southwest Parkway

Grand Prairie, TX 75051 USA

+1 972 606 0303 Phone

+1 972 606 0768 Fax

Australia

Digitron Logistics Pty. Ltd.

30, Cowper Street, Level 1

AUS-Parramatta NSW 2150

+61 2 9895 1000 Phone

+61 2 9895 1095 Fax

Republic of Korea

Cimcorp Representative Office

42F, KLI 63 B D. Yoìdo-dong

Yeongdeungpo-Ku, Seoul

Republic of Korea

+82 2 783 6851 Phone

+82 2 780 5802 Fax

Malaysia

Digitron Logistic Systems Sdn Bhd

54-3, 2nd Floor, Jalan USJ 9/5P

MAL-47620 UEP Subang Jaya,

Selangor Darul Ehsan

+60 3 724 4 790 Phone

+60 3 724 5 790 Fax

Transnorm System Sdn Bhd

Lot Plo 28 Kawasan Perindustrian

Kluang, 4 1⁄2 Mile Jalan Mersing

MAL-86000 Kluang/Johore

+60 7787 9990 Phone

+60 7787 9966 Fax

Singapore

Digitron Logistic Systems Pte Ltd.

215G Upper Thomson Road

Singapore 574349

+65 453 0192 Phone

+65 453 6018 Fax

39

the future

Impressum

Edited by: Swisslog Management AG, AarauConcept und production: Haussmann, Weber-Thedy

Corporate & Financial Communications, ZürichVisual design: Martina Ott, Zürich

Portrait photographs: Thomas Schuppisser, Langnau am AlbisTypesetting and lithography: Colorlith, Geroldswil

Printing: Offsetdruck Goetz AG, Geroldswil

The Swisslog 1997 Annual Report comprisestwo parts: the report on the activities and the financial overview. The annual report ispublished in German and English. The Germanversion is binding.

even more

Swisslog Holding AG

Bahnhofstrasse 102

P.O. Box 4003

CH-5001 Aarau

Switzerland

+41 62 837 95 37 Phone

+41 62 837 95 10 Fax

www.swisslog.com