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ANNUAL REPORT 2016 SWISS TXT AG

SWISS TXT AG – ANNUAL REPORT 2016 2 SWISS TXT AG – ANNUAL REPORT 2016 3

Changes to a company’s brand image and name are not always a sign of innovation and forward- looking development, but this is certainly the case for SWISS TXT.

In 2016, SWISS TXT pursued a logical and consis-tent development strategy as a multimedia service provider.

n We offer consulting and solutions for digital media, video streaming and access services, boasting a broad portfolio of services that makes big promises and big demands. n We cover major sporting events with the Event Player, the sports results center and excellent infrastructure for high-quality live streaming – such as at UEFA EURO 2016 and the 2016 Olympic Games in Rio.n The strategic partnership with Kaltura and their platform for enterprise video content management has opened up new acquisition oppor- tunities for us in a wide variety of sectors and markets. n Accessibility in moving-image information: thanks to audio description, we are breaking new ground in services for the blind and visually impaired. As a result of spoken image description, these individuals have been able to access RSI programmes since 2016. The implementation of audio description for further applications of this Access Service internally and externally is now in the pipeline at SRG.

At the start of the year, an amendment to our entry in the Commercial Register and a new logo launched our long-awaited transition from Schweizerische Teletext AG to SWISS TXT AG. This change is most visible on our website, which has now been completely redeveloped with a fresh, modern design. We now share success stories and customer testimonials on our website using care-fully crafted video messages. Our internal processes and methods are also fresh and agile. Thanks to extensive training in the agile development method SCRUM, we all work efficiently and with a clear focus on customer solutions.

Finally, our annual report has also received a facelift, meaning it now presents our latest and most exciting news with only the most interesting and important facts and figures.

This is our model for the future: efficient, innovative and always ahead of the curve. This encapsulates my vision for SWISS TXT as Chairman over the coming years, and I remain convinced that it will allow us to continue to drive change at SWISS TXT and easily overcome any challenges as they arise.

Marco DerighettiChairman of the Board of Directors SWISS TXT AG

CHAIRMAN’S FOREWORD 3

HIGHLIGHTS 4

FACTS & FIGURES 6

MARKET DATA AND FIGURES 7ACCESS SERVICES 7

COMPANY 8HUMAN RESOURCES 8ORGANIGRAM / CORPORATE BODIES 10

FINANCIAL STATEMENTS 11THE BUSINESS AT A GLANCE 11 BALANCE SHEET FOR THE YEAR ENDED 31 DECEMBER 2016 12INCOME STATEMENT 2016 14CASH FLOW STATEMENT 2016 14APPENDIX 15APPLICATION REGARDING THE APPROPRIATION OF NET INCOME 21AUDIT REPORT 22

CONTENTS CHAIRMAN’S FOREWORD

Copyright: SRG/Marcel Grubenmann


HIGHLIGHTS

JANUARY NEW YEAR, NEW IMAGE

As set out in the Commercial Register, the company name was changed from SWISS TXT Schweizerische Teletext AG to SWISS TXT AG on 1 January 2016.

FEBRUARY A FEAST FOR THE EARS OF THE VISUALLY IMPAIRED

Audio descriptions – spoken film descriptions – produced by SWISS TXT are broadcast for the first time by TV broadcaster RSI. The blind and visually impaired thus benefit from an out- standing extra service.

MARCH OUR WAY IS MULTIMEDIA

SWISS TXT repositions itself and offers companies as well as Swiss Radio and Television consulting and solutions for digital media, video streaming and access services. The website swisstxt.ch is completely redesigned.

APRIL CHEAPER WITH THE SWISS TXT CLOUD

SWISS TXT helps SRG to achieve substantial cost savings thanks to its competitive cloud services.

MAY SMALL STEPS TOWARDS ACHIEVING OUR GOALS

Agile methods constitute a paradigm shift whereby the budget received defines the scope of a project and the time al-located to it. Instead of large phases, SCRUM sees each project broken down into small steps. However, this re-quires new roles, skills, rules and processes.

JUNE A GLIMPSE BEHIND THE SPORTING SCENES

The annual Get-Together takes place on 15 June 2016. In the 2016 sports year, the European Cham-pionship is a central theme. The programme offers participants a look behind the scenes at SRF and live reporting. Everyone cheers on the national team at the Switzerland-Romania game.

JULY GOALS FROM EVERY ANGLE

SWISS TXT deploys the Event Player for the UEFA EURO 2016. The SRF, RTS and RSI TV sta-tions offer re-playable game highlights and a sports results centre for an overview of the championship.

AUGUST EVENT PLAYER MAKES A SECOND APPEARANCE

The Summer Olympic Games in Rio is a truly memorable event thanks to its multimedia presence in the Event Player.

SEPTEMBER POSITIVE AND PROFESSIONAL

SWISS TXT publishes its new HR film – an absolute must-watch: www.swisstxt.ch/de/swiss-txt/karriere. All we can say is: «the force is with you».

NOVEMBER SOFTWARE DEVELOPMENT AT EU LEVEL

The annual European Broadcasting Union Developer Conference presents a unique opportunity for the community to meet for dialogue, presentations, workshops and general discussion of the EBU mem-bers’ software development issues. SWISS TXT attends and gives two presentations.

DECEMBER CERTIFIED ACCESSIBILITY

swisstxt.ch receives a certificate for achieving the second-highest conformity level for accessibility from the Access for All foundation.

OCTOBER STRATEGIC PARTNERSHIP

With the leading video platform from Kaltura and the high-powered Media Cloud infrastructure from SWISS TXT, European customers can offer their target audiences a unique video experience in the areas of education and training, corporate communications and media.


MARKET DATA AND FIGURES

ACCESS SERVICES – SUBTITLING

Hours Proportion % Change %

SRF 1 4’229 52.9 3.1

SRF zwei 4’021 48.7 8.0

SRF info 4’565 55.8 4.8

GERMAN SPEAKING SWITZERLAND 12’815 52.4 5.2

RTS Un 4’383 53.6 -2.0

RTS Deux 4’132 49.3 6.7

FRENCH SPEAKING SWITZERLAND 8’515 51.4 2.0

RSI LA 1 4’811 57.2 0.7

RSI LA 2 3’716 43.4 1.0

ITALIAN SPEAKING SWITZERLAND 8’527 50.2 0.8

TOTAL CH 29’857 51.5 3.0

Data in hours. Proportion calculated based on airtime.

SRF RTS RSI Total

News 405 267 388 1’060

Live 1’470 1’386 1’223 4’079

Semi-live 319 103 113 535

Time code 387 492 509 1’388

TOTAL IN-HOUSE PRODUCTION 2’581 2’248 2’233 7’062

Exchanges 696 11 0 707

Purchases 268 810 504 1’582

Reruns 6’658 2’396 3’008 12’062

Night 2’283 3’033 2’782 8’098

Open subtitling 157 0 0 157

Interregional 70 0 0 70

Romansh 102 17 0 119

TOTAL 12’815 8’515 8’527 29’857

Data in hours.

2016 was a year punctuated by several major spor-ting events. This and an increase in the number of reruns in the schedule resulted in a higher subtitling rates – representing an increase of 3%. At the same time, we reduced internal costs and the costs of ex-ternal purchases by almost one third.

The introduction of audio description on RSI for the blind and visually impaired was a success. Thanks to

artificially produced speech – speech synthesis – and the awarding of scripting to third parties, we were able to add audio descriptions to programmes rela-tively economically. We have now tested pilot audio description services for SRF.

Since autumn 2016, we have also added subtitles to Bundesliga live games for Sky Deutschland.

FACTS & FIGURES

SWISS TXT CLOUD

CDN: 1 billion requests and 800 TB transferred per month

Streaming bitrate: 10 GB/s

Internet peering: 2×31 Gbit/s

66 ESX hosts with a total of 16 TB RAM

1’600 active VMs

Storage: 5.5 PB

Offices in Biel, Zurich, Geneva and Comano

Total number of employees159 (108 FTEs)

Profit CHF 0.37 million

Founded: 23 December 1983

Annual revenues CHF 21.4 million

Average age: 38 years52% men, 48% womenLanguages: DE, FR, IT, EN

SUBTITLING FOR SRG

GERMAN SPEAKING SWITZERLAND12’815 hours, corresponding to 52.4% of SRG broadcasts

FRENCH SPEAKING SWITZERLAND8’515 hours, corresponding to 51.4% of SRG broadcasts

ITALIAN SPEAKING SWITZERLAND8’527 hours, corresponding to 50.2% of SRG broadcasts

20 million viewers reached by video2.12 PB data transferred during the UEFA Euro 20162.41 PB data transferred during the Olympic Games in Rio

Owner: SRG SSRSchweizerische Radio- und Fernsehgesellschaft (Swiss Broadcasting Corporation)


COMPANY

STAFF DEVELOPMENTDECEMBER 2016 VS. DECEMBER 2015

In total, the number of full-time equivalents (FTEs) was reduced by 3 FTEs between 2015 and 2016.

Due to the closure of the SWISS TXT Interactive (SI) division at the end of 2015, 11 FTEs left the com-pany. In the remaining strategic SWISS TXT enterprise areas, the number of full-time equivalents increased by 7.80 FTEs in the same period. This increase is a direct result of the development of our company in the third market. We were able to create new jobs as shown below:

DIVISIONS FULL-TIME EQUIVALENTS

Content Solutions + 2.0

Managed Services + 3.3

Access Services + 2.0

Communication & PR + 0.5

The budget was respected in 2016 with an average of 106.60 FTEs.

NUMBER OF STAFF AT THE END OF 2016

LOCATION NUMBER OF EMPLOYEES

IN FULL-TIMEEQUIVALENTS

(FTES)

Biel 73 61.84

Zurich 38 17.45

Geneva 25 14.15

Comano 23 14.25

COMPANY

TOTAL NUMBER OF EMPLOYEES: COMPARISON OF DECEMBER 2016 VS DECEMBER 2015 (NOMINAL)

CHANGE IN % ON THE

PREVIOUS YEAR

2016 EMPLOYEES

IN % FTEs* 2015 EMPLOYEES

IN % FTEs*

EMPLOYEES -2.45 159 108 163 111

- Women -6.33 74 48 79 48

- Men +1.19 85 52 84 52

DIVISIONS

- Management and Services 22 14 15 21 13 15

- Access Services 89 56 48 88 54 47

- Multimedia Solutions 39 24 36

- Content Solutions 23 14 21

- Managed Services 21 13 20

- Media Consulting 3 2 3

- Digital Media Operations 1 1 1

- Marketing and Sales 0 0 0 15 9 14

TOTAL 159 163

Key figures

FTEs* = full-time equivalents, converted to 100%

FURTHER TRAINING

Agile methods are top of the agenda for virtually all projects today. In 2016, SWISS TXT introduced SCRUM more or less universally throughout the company. This means projects can now be conducted more flexibly using simpler, more streamlined processes. Around 50 individuals received intensive training and 80% of these received a certificate on completing their training.The average age of the company’s employees in 2016

was 38.0 years.


COMPANY FINANCIAL STATEMENTS

ORGANIGRAM

CONTENT SOLUTIONS

Patrick Lüthi

ACCESS SERVICES

Gion Linder

CONTROLLING & FINANCES

Reto Casanova

ADMINI- STRATION

Gabriele Hahn

BUSINESS DEVELOPMENT

Mike Solan

INTERIM DIRECTOR

Daniel Benninger

MEDIA HUB

Sascha Klement

MEDIA CONSULTINGBeat Schneider

MANAGED SERVICES

Sascha Quillet

COMMUNI- CATION & PR

Julien Kurt

HUMAN RESOURCES

Sandrine Chassot

EXECUTIVE BOARD

CENTRAL SERVICES

CORPORATE BODIES

BOARD OF DIRECTORS

CHAIRMAN Marco Derighetti Director of Operations, SRG SSR VICE CHAIRMAN Hansruedi Schoch Director of Programming, SRFMEMBERS Thierry Zweifel Director of Strategy and Programming, RTS Peter Schibli Director of SWI swissinfo.ch Adrian Bult Multiple Boards of Directors and Investor (external) Daniel Benninger Entrepreneur, Consultant and Lecturer (external)

EXECUTIVE BOARD

DIRECTORS Daniel Benninger Interim Director Franziska Füglistaler Director (until 30.09.2016)MEMBERS Beat Schneider Head of Media Consulting Sascha Quillet Head of Managed Services Patrick Lüthi Head of Content Solutions Gion Linder Head of Access Services Reto Casanova Head of Controlling & Finances

AUDITOR

BDO Visura As at: 31.12.2016

THE BUSINESS AT A GLANCE

In the 2016 financial year, the company achieved prof-its of CHF 0.37 million, meaning net income was CHF 1.9 million (84%) lower than in the previous year.

SWISS TXT generated operating revenues of CHF 21.4 million this year, around CHF 6.2 million (22%) below that of the previous year. The main reason for this fall in earnings is the closure of the strategic enterprise area (SEA) SWISS TXT Interactive (SI) – which was responsible for classic TV TELETEXT marketing and other vectors (online / mobile) – at the end of 2015. This caused revenues to decline by around CHF 9 million against the previous year. SRG SSR also intro-duced the cost reduction programme 16+, which led to a loss of revenues at SWISS TXT. Access Services generated CHF 0.4 million less for its central subtitling service; overall, this resulted in CHF 0.1 million (1%) lower revenues for SGF – while Managed Services returned CHF 0.2 million in revenues from the Media Playout Center (MPC) to the parent company.

The drop in revenues was partially compensated by new and residual services.

Operating expenses of CHF 20.9 million decreased by CHF 3.3 million – or 14% – against the previous year. This reduction in costs was chiefly due to the aforementioned closure of SGF SI. The cost of mate-rials and services decreased by CHF 1.8 million (24%) on the previous year, as SRG SSR no longer received payments for TELETEXT advertising space.

Due to the lower number of full-time equivalents (closure of SI) and the employer contribution re-serves from the previous year (CHF 0.5 million), staff expenses fell by CHF 1 million (8%). Other operating expenses decreased by CHF 0.6 million (29%) against the previous year. Only depreciations of fixed assets increased against the previous year, by CHF 0.19 mil-lion or 19%.

The change in the annual result is largely due to re-duced operating revenues following the closure of SI.


FINANCIAL STATEMENTS

BALANCE SHEET AS AT 31 DECEMBER 2016

ASSETS

Amount in CHF APPENDIX 31.12.2016 31.12.2015

CURRENT ASSETS

Cash and cash equivalents 3.1 5’728’107 6’577’985

Trade receivables 3.2

Third parties 736’502 891’490

- Del credere -14’733 -17’085

Stakeholders 1’956’269 3’097’564

Other short-term receivables 15’145 375

Deferred expenses 840’701 310’256

TOTAL CURRENT ASSETS 9’261’991 10’860’585

in % of total assets 80% 81%

FIXED ASSETS 3.3

Property, plant and equipment

Means of production 1’224’026 1’367’066

IT 57’684 60’357

Other fixed assets 160’227 141’705

Assets under construction 589’304 576’699

Intangible assets 271’902 393’710

TOTAL FIXED ASSETS 2’303’142 2’539’537


TOTAL ASSETS 11’565’133 13’400’122


BALANCE SHEET AS AT 31 DECEMBER 2016

LIABILITIES AND EQUITY

Amount in CHF APPENDIX 31.12.2016 31.12.2015

SHORT-TERM LIABILITIES

Trade payables 3.4

Third parties 646’731 1’336’057

Stakeholders 234’313 609’365

Other short-term liabilities 3.4

Third parties 724’651 1’277’843

Stakeholders 0 0

Deferred income 911’387 1’181’200

Provisions for liabilities and charges (short-term) 3.5 457’127 407’045

TOTAL SHORT-TERM LIABILITIES 2’974’209 4’811’510


LONG-TERM LIABILITIES

Provisions for liabilities and charges (long-term) 3.5 368’000

TOTAL LONG-TERM LIABILITIES 0 368’000


TOTAL LIABILITIES 2’974’209 5’179’510


SHAREHOLDERS’ EQUITY 3.6

Share capital 1’000’000 1’000’000

Statutory reserves 1’000’000 1’000’000

Voluntary reserves 6’590’925 6’220’612

Profit brought forward 2’112 6’057

Net income 370’313 2’321’055

Net profit 372’425 2’327’112

Other voluntary reserves 6’218’500 3’893’500

TOTAL SHAREHOLDERS’ EQUITY 8’590’925 8’220’612


TOTAL LIABILITIES AND EQUITY 11’565’133 13’400’122



INCOME STATEMENT 2016

Amount in CHF APPENDIX 2016 2015

PRODUCTION INCOME STATEMENT (TOTAL COST METHOD)

Net sales revenues 3.7 21’420’227 27’580’885

Cost of materials and services 3.8 5’773’814 7’581’659

Staff expenses 3.9 12’425’045 13’439’949

Other operating expenses 3.10 1’516’050 2’130’957

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTISATION (EBITDA) 1’705’318 4’428’320

Depreciation and value adjustments for fixed assets 3.11 1’206’674 1’016’269

EARNINGS BEFORE INTEREST AND TAX (EBIT) 498’644 3’412’051

Financial expenses 9’827 28’154

Financial income 29’698 31’498

EARNINGS BEFORE TAX (EBT) 518’515 3’415’395

Non-operating expenses 672 1’822

Non-operating revenues 45’689 49’485

Extraordinary, non-recurring and off-period expenses 3.12 95’923 508’526

Extraordinary, non-recurring and off-period revenues 12’781 8’732

ANNUAL RESULT BEFORE TAX 480’390 2’963’264

Direct taxes 110’077 642’209

NET INCOME 370’313 2’321’055

CASH FLOW STATEMENT 2016

Amount in CHF 2016 2015

Net income 370’313 2’321’055

Depreciation / value impairment of fixed assets 1’222’199 1’016’269

Changes to provisions for liabilities and charges -317’918 -683’674

Changes to short-term receivables 1’279’162 -125’296

Changes to deferred expenses -530’445 -82’825

Changes to short-term liabilities (excl. financial liabilities) -1’617’570 187’743

Changes to deferred income -269’814 331’219

OPERATING CASH FLOW 135’927 2’964’491

Investments in fixed assets -930’776 -1’731’167

Investments in intangible assets -55’029 -81’170

CASH FLOW FROM INVESTING ACTIVITIES -985’805 -1’812’338

Distribution of profit 0 0

CASH FLOW FROM FINANCING ACTIVITIES 0 0

CHANGE IN NET CASH AND CASH EQUIVALENTS -849’878 1’152’153

as at 1 January 6’577’985 5’425’832

as at 31 December 5’728’107 6’577’985

CHANGE IN NET CASH AND CASH EQUIVALENTS -849’878 1’152’153

APPENDIX AS AT 31 DECEMBER 2016

1. LEGAL BASIS

The 2016 annual financial statements for SWISS TXT AG (formerly Schweizerische Teletext AG) based in Biel were prepared according to the provisions of the Swiss Accounting Law (art. 957–963b, valid from 1 January 2013).

2. ACCOUNTING PRINCIPLES

2.1 FOREIGN CURRENCY CONVERSIONThe annual financial statements were calculated in the local currency, the Swiss Franc (CHF). Foreign exchange valuation at the end of the year was based on the exchange rate on the reporting date of 31.12.2016. Exchange rate gains and losses arising from transactions in foreign currencies are recorded as affecting net income.

2.2 ACCOUNTING AND VALUATION PRINCIPLESFor SWISS TXT AG’s annual financial statements, assets were generally valued as acquisition or pro-duction costs. This corresponds to the principle of individual valuation of assets and liabilities. The exi- stence of asset impairment indicators is assessed at each reporting date. If a value impairment exists, the book value is reduced to the recoverable value and this is recorded in the income statement. If, at a later point in time, the reason for the value impairment is (partially) removed, an appreciation is recorded as affecting net income.

2.3 RECEIVABLESThe receivables include all unmet claims against third parties and are recorded at their nominal value less any value adjustments. After deducting individual value adjustments, the remaining reserve is calculated with a fixed allowance of 2% for general credit and interest risks.

2.4 FIXED ASSETS / INTANGIBLE ASSETSThe valuation of fixed assets / intangible assets is based on acquisition and production costs less any depreciation and value adjustments deemed com-mercially necessary. The assets under construction include accumulated, capitalised project costs. Un- capitalised expenses and any interest costs are charged to the income statement as appropriate to the period. Assets worth less than CHF 5’000 are not capitalised. Instead, they are charged directly to the income statement at the time of acquisition.

Depreciation is calculated based on the acquisition or production value. All assets are depreciated on a linear basis over the estimated useful life of the as-set (three to five years). The first depreciation takes place from commissioning, completion or the date of transfer of ownership in proportion to the useful life of the asset.

2.5 PROVISIONS FOR LIABILITIES AND CHARGESProvisions for liabilities and charges are made based on probable obligations arising from an event in the past, whose amount and/or maturity is uncer-tain, but can be estimated. These obligations create a liability. Provisions for liabilities and charges are not used to make value adjustments to assets. The obligating event in the past must have taken place before the reporting date. The provisions for liabilities and charges correspond to actual obligations on the reporting date.

3. EXPLANATORY NOTES FOR THE BALANCE

SHEET AND INCOME STATEMENT

3.1 CASH AND CASH EQUIVALENTS Cash and cash equivalents amounted to CHF 5.7 mil-lion at the end of the year, representing a decrease against the previous year. As SWISS TXT AG is cur-rently making a fresh start, it is important that the company has a certain amount of financial leeway in order to arrange any investments or shareholdings.




3.2 TRADE RECEIVABLES Trade receivables dropped by around one third due to the cessation of TV TELETEXT marketing.

3.3 FIXED ASSETS At the end of 2016, fixed assets ran to CHF 2.3 million, representing a decrease of around CHF 0.2 million compared to the previous year. In the 2016 finan-cial year, SWISS TXT arranged investments in fixed and intangible assets worth around CHF 1 million. The largest investments involved replacement pur-

chases for IT infrastructure services (production resources like storage and computing, etc.) and the initialisation of a software-as-a-service (SaaS) solu-tion. In order to fully secure SWISS TXT’s position as a video specialist, the company also invested in two editing booths.

STATEMENT OF FIXED ASSETS 2016

ACQUISITION VALUE AS AT 1.1. RECLASSI- FICATIONS

ADDITIONS DISPOSALS AS AT 31.12.

PROPERTY, PLANT AND EQUIPMENT

Assets under construction 576’698 12’605 589’303

Means of production 3’469’888 794’323 427’315 3’836’896

IT 162’242 38’733 64’353 136’622

Other fixed assets 1’256’175 85’113 55’474 1’285’814

TOTAL FIXED ASSETS 5’465’003 0 930’774 547’142 5’848’635

INTANGIBLE ASSETS

Licences / rights 435’050 26’769 408’281

Software ownership 1’110’931 55’028 199’161 966’798

TOTAL INTANGIBLE ASSETS 1’545’981 0 55’028 225’930 1’375’079

TOTAL FIXED ASSETS 7’010’984 0 985’802 773’072 7’223’714

ACCUMULATED VALUE ADJUSTMENTS

AS AT 1.1. RECLASSI- FICATIONS

ADDITIONS DISPOSALS AS AT 31.12. BOOK VALUE 31.12.

PROPERTY, PLANT AND EQUIPMENT

Assets under construction 0 0 589’303

Means of production 2’102’823 937’352 427’304 2’612’871 1’224’025

IT 101’885 41’404 64’351 78’938 57’684

Other fixed assets 1’114’469 66’591 55’474 1’125’586 160’228

TOTAL FIXED ASSETS 3’319’177 0 1’045’347 547’129 3’817’395 2’031’240

INTANGIBLE ASSETS

Licences / rights 267’091 71’615 34’307 304’399 103’882

Software ownership 885’180 89’709 176’111 798’778 168’020

TOTAL INTANGIBLE ASSETS 1’152’271 0 161’324 210’418 1’103’177 271’902

TOTAL FIXED ASSETS 4’471’448 0 1’206’671 757’547 4’920’572

TOTAL BOOK VALUE 2’539’536 0 -220’869 15’525 2’303’142


STATEMENT OF SHORT-TERM PROVISIONS FOR LIABILITIES AND CHARGES

Amount in CHF PROVISION FOR PENSION

LIABILITIES

PROVISION FOR RESTRUCTURING

PROVISION FOR MISCELLANEOUS

TOTAL

Book value on 01.01.2015 0 653’350 430’369 1’083’719

Formation 140’000 140’000

Appropriation -761’305 -430’369 -1’191’674

Dissolution 0

Reclassification (short/long-term) 375’000 375’000

BOOK VALUE ON 31.12.2015 PREVIOUS YEAR ON 01.01.2016 0 407’045 0 407’045

Formation 0

Appropriation -317’918 -317’918

Dissolution 0

Reclassification (short/long-term) 368’000 368’000

BOOK VALUE ON 31.12.2016 368’000 89’127 0 457’127

STATEMENT OF LONG-TERM PROVISIONS FOR LIABILITIES AND CHARGES

Amount in CHF PROVISION FOR PENSION

LIABILITIES

PROVISION FOR RESTRUCTURING

PROVISION FOR MISCELLANEOUS

TOTAL

Book value on 01.01.2015 375’000 375’000

Formation 368’000 368’000

Appropriation 0

Dissolution 0

Reclassification (short/long-term) -375’000 -375’000

BOOK VALUE ON 31.12.2015 PREVIOUS YEAR ON 01.01.2016 368’000 0 0 368’000

Formation 0

Appropriation 0

Dissolution 0

Reclassification (short/long-term) -368’000 -368’000

BOOK VALUE ON 31.12.2016 0 0 0 0

3.4 LIABILITIESLiabilities fell by around half due to the cessation of TV TELETEXT marketing.

3.5 PROVISIONS FOR LIABILITIES AND CHARGES Provisions for liabilities and charges are divided into short and long-term provisions. At the end of 2016, short-term provisions for liabilities and charges ran to CHF 0.46 million, representing an increase of around CHF 0.05 million against the previous year.

The change is largely due to the use of provisions for the SWISS TXT Interactive (SI) social plan, which ran to around CHF 0.32 million, and the reclassification of long-term provisions as short-term provi-sions to the tune of CHF 0.37 million.

The provisions for liabilities and charges for the re-duction in the technical interest rate on the SRG SSR pension fund were reclassified as the reduction is expected to be implemented in 2017. Long-term provisions for liabilities and charges amounted to CHF 0 million at the end of the year.



Amount in CHF CAPITAL STOCK

RETAINED EARNINGS

PROFIT CARRIED

FORWARD

PROFIT PERFOR-

MANCE

TOTAL SHARE-HOLDERS’

CAPITAL

BALANCE ON 01.01.2015 1’000’000 3’785’000 1’885 1’112’672 5’899’557

Reclassification of the 2014 result 1’108’500 4’172 -1’112’672 0

Dividends 0

Company result 2’321’055 2’321’055

BALANCE ON 31.12.2015 1’000’000 4’893’500 6’057 2’321’055 8’220’612

Reclassification of the 2015 result 2’325’000 -3’945 -2’321’055 0

Dividends 0

Company result 370’313 370’313

BALANCE ON 31.12.2016 1’000’000 7’218’500 2’112 370’313 8’590’925

3.7 NET SALES REVENUESIn the 2016 financial year, operating revenues dropped by around CHF 6.2 million (22%) on the previous year. This is partly due to the closure of SWISS TXT Interactive (SI), which led to an approx-imate CHF 9 million drop in revenues, as well as to SRG SSR’s cost reduction programme 16+, which af-fected SWISS TXT revenues to the tune of CHF 0.6 million.

The strategic enterprise areas Managed Services (MGS), Content Solutions (CS) and Media Consulting (MC) were all affected by changes to the accounting logic applied (income is recorded instead of a minus expense). Almost the entire boost in MGS revenues is a result of these circumstances. At MC and CS, this accounted for CHF 0.4 million and CHF 0.3 million respectively. In addition, CS gene-rated around CHF 0.4 million lower revenues in the previous year as it worked on warranty ser-vices (provisions for liabilities and charges). Due to an increase in project orders relating to two major sporting events (European football championship and Summer Olympics), CS generated around CHF 0.4 million more in revenues this year. While Media Consulting increased revenues by CHF 0.15 million (excl. the effect of changing the accounting logic and the integration of Content Providing),

Media Hub’s revenues hovered more or less around last year’s figures due to product launch delays. The strategic enterprise area Access Services was unable to fully offset a CHF 0.4 million drop in revenues for its central subtitling service (cost reduction pro-gramme 16+) with new orders. This resulted in a CHF 0.1 million (1%) drop in revenues.


OPERATING REVENUES

SI - Advertising TELETEXT 0 2’787’187

SI - Advertising other vectors 24’231 434’309

SI - Advertising programme info

0 948’000

SI - Advertising gross total 24’231 4’169’496

SI - Content -7’662 383’850

SI - TELETEXT service mandate 0 4’800’000

Managed Services 8’515’642 7’225’279

Content Solutions 3’988’692 2’834’405

Access Services 7’892’161 7’983’514

Media Consulting 1’110’365 181’704

Media Hub 96’844 71’876

Capitalised internal services 0 95’923

GROSS SERVICE REVENUES 21’620’273 27’746’047

Revenue reductions -200’046 -89’419

Commissions 0 -75’743

NET SERVICE REVENUES 21’420’227 27’580’885

3.6 SHAREHOLDERS’ EQUITYShareholders’ equity increased to CHF 8.6 million due to the appropriation of the previous year’s prof-

its and the net income in 2016. At the end of 2016, shareholders’ equity amounted to 74%.


3.8 COST OF MATERIALS AND SERVICESThe cost of materials and services dropped by around CHF 1.8 million (24%) against the previous year. The main reason for this was third-party service expenses, which include a CHF 1.7 million drop in expenses for the purchase of TELETEXT advertising space, in direct relation to the closure of SI.


Material costs 467’548 408’518

Third-party services costs 5’306’267 7’173’142

COST OF MATERIALS AND SERVICES 5’773’815 7’581’659

3.9 STAFF EXPENSESStaff expenses declined by around CHF 1 million (8%) against the previous year. As a service-based com-pany, this is once again the single largest company expense. Staff expenses of around CHF 12.4 million represented around 59% of SWISS TXT’s total operating expenses. Wages and salaries decreased by CHF 0.4 million (4%) to CHF 10.2 million against the previous year. This reduction resulted from a decrease in the average number of full-time employees (clo-sure of SWISS TXT Interactive (SI) and development of other strategic enterprise areas). The decrease in costs associated with the employee benefits insti-tution is largely a result of the cessation of further increases in the employer contribution reserves (CHF 0.5 million in 2015).

The use of part of the provisions for the social plan was also recorded under staff expenses due to the closure of SWISS TXT Interactive (SI). Under the social plan, it is intended that each terminated employee will receive severance pay based on their years of service. In 2016, the severance pay bill ran to around CHF 0.3 million (incl. social security contributions,

etc.). The remaining staff expenses of around CHF 0.3 million came in at approximately CHF 0.05 mil-lion more than in the previous year. These expenses include travel and food allowances, recruitment costs, hired staff expenses and the cost of staff training.


Wages and salaries 10’189’663 10’586’714

Social security and allowances 925’423 941’809

Employee benefits institution 991’965 1’646’327

Other staff expenses 317’994 265’100

STAFF EXPENSES 12’425’045 13’439’949

3.10 OTHER OPERATING EXPENSESOther operating expenses decreased by CHF 0.6 mil-lion (29%) against the previous year. The main reason for this is the change in advertising and marketing costs, which was strongly influenced by the closure of SWISS TXT Interactive (SI).


Office space costs 859’720 866’841

Maintenance, repair, replace-ment and vehicle costs 27’247 110’567

Insurance premiums and duties 14’112 14’412

Administrative and IT costs 331’696 298’550

Advertising and marketing costs 282’418 838’530

Other operating expenses 857 2’058

OTHER OPERATING EXPENSES 1’516’050 2’130’958

3.11 DEPRECIATIONDepreciations ran to CHF 1.2 million due to replace-ment purchases made in 2016, representing an in-crease of CHF 0.2 million (19%) against the previous year.



3.12 EXTRAORDINARY, NON-RECURRING AND OFF-PERIOD EXPENSESAt the end of 2016, the asset under construction in 2015 included a part that could not be capitalised and that was therefore written off. In the previous year, increased provisions of CHF 0.1 million were made for the SWISS TXT Interactive (SI) social plan, while provisions of CHF 0.4 million were made for the reduction in the technical interest rate on the SRG SSR pension fund.


Extraordinary provisions for liabilities and charges 0 -508’000

Other extraordinary expenses -95’923 -526

EXTRAORDINARY, NON-RE-CURRING AND OFF-PERIOD EXPENSES -95’923 -508’526

4. OTHER DATA

4.1 LIABILITIES TOWARD THE EMPLOYEE BENEFITS INSTITUTION


LIABILITIES TOWARD THE EMPLOYEE BENEFITS INSTITUTION 2’923 517’845

4.2 NUMBER OF FULL-TIME POSITIONSIn both 2015 and 2016, the average annual number of full-time positions was between 50 and 249 FTEs.

4.3 LEASING OBLIGATIONS / LONG-TERM RENTAL AGREEMENTSAs at 31 December 2016, obligations arising from leasing and long-term rental agreements ran to CHF 1.6 million.

4.4 RISK ASSESSMENTAt its meeting on 30 November 2016, the SWISS TXT Board of Directors conducted an appropriate risk as-sessment and introduced any measures highlighted by the same to ensure that the risk of materially false accounting statements is small.

4.5 EVENTS AFTER THE REPORTING DATEAfter the reporting date and up to the approval of the annual financial statements by the Board of Direc-tors on 6 March 2017, no significant events occurred that could adversely affect the validity of the 2016 financial statements, nor did any significant events occur that must be disclosed at this time.


APPLICATION REGARDING THE APPROPRIATION OF NET INCOME

Amount in CHF 31.12.2016 31.12.2015

Profit brought forward from previous year 2’112 6’057

Annual result after tax 370’313 2’321’055

NET PROFIT 372’425 2’327’112

Dividends 0 0

Allocation to the statutory reserves 0 0

Allocation to the declared reserves -370’000 -2’325’000

PROFIT BROUGHT FORWARD TO NEW ACCOUNT 2’425 2’112


AUDIT REPORT

Phone +41 31 327 17 17 Fax +41 31 327 17 38 www.bdo.ch

BDO Ltd Hodlerstrasse 5 3001 Berne

BDO Ltd, a limited company under Swiss law, incorporated in Zurich, forms part of the international BDO Network of independent member firms.

REPORT OF THE STATUTORY AUDITOR To the General Meeting of SWISS TXT AG, Biel/Bienne

Report of the Statutory Auditor on the Financial Statements

As statutory auditor, we have audited the accompanying financial statements of SWISS TXT AG, which comprise the balance sheet as at 31. December 2016, and the income statement, statement of cash flows and notes for the year then ended.

Board of Directors’ Responsibility

The Board of Directors is responsible for the preparation of these financial statements in accord-ance with the requirements of Swiss law and the company’s articles of incorporation. This responsi-bility 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 ac-counting 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 con-ducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards re-quire 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 appropri-ateness of 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 evi-dence 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 31. December 2016 comply with Swiss law and the company’s articles of incorporation.

Other Matter

The financial statements of SWISS TXT AG for the year ended 31. December 2016, were audited by another auditor who expressed an unmodified opinion on those statements on 3. March 2016.

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

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 Code of Obligations (CO) and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a para. 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 state-ments 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 submit-ted to you be approved.

Berne, 24. February 2017

BDO Ltd

Matthias Hildebrandt

Auditor in Charge Licensed Audit Expert

Thomas Bigler

Licensed Audit Expert

Enclosures Financial statements Proposed appropriation of available earnings

SWISS TXT AG – Annual report 2015 24

SWISS TXT AGAlexander-Schöni-Strasse 40Postfach 1136CH-2501 Biel-Bienne

T: +41 32 329 29 29swisstxt.ch

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