eichhof holding ltd....3 in fiscal 2001-2002, the eichhof group improved its operating performance...
TRANSCRIPT
ANNUAL REPORT 2002
Eichhof Holding Ltd.Eichhof Holding Ltd.Eichhof Holding Ltd.
Analogous translation of the original German version of «Geschäftsbericht 2002».
In case of differences of interpretation arising in comparision to the German version, the wording of the
original German version is valid.
1
Board of Directors
Report of the Board of Directors 3
Corporate Governance
Corporate Structure 4
Management Structure 5
Key Figures
Consolidated Balance Sheet 10
Eichhof Holding Ltd. 11
Commentary to the Business Year
Eichhof Group 13
Beverage Division 18
Color Division 27
Financial Reporting
Eichhof Group 35
Eichhof Holding Ltd. 58
Overview of Key Figures 64
Eichhof Holding Ltd.
ANNUAL REPORT 2002Financial year from October 1, 2001, through September 30, 2002
3
In fiscal 2001-2002, the Eichhof Groupimproved its operating performance andsignificantly boosted profitability over theprevious year despite lower sales. This suc-cess was achieved by a strong focus oncost-cutting and efficiency-enhancing mea-sures. We deliberately accepted lower oper-ating profit due to restructuring expensesand extraordinary depreciation of intangi-ble assets. A weak stock market also unfa-vorably impacted our financial result. Never-theless, thanks to substantially improvedprofitability in all business areas, the EichhofGroup’s earnings have developed veryfavorably in this difficult economic environ-ment.
Besides the mentioned improvement in prof-itability, I would especially like to point outtwo further successes achieved by the Eich-hof Group in fiscal 2001/2002. The Bever-ages Division, thanks to its innovative imageand status as the leading independentSwiss brewery, succeeded in increasing theoutput of our Eichhof beers and once againgaining market share despite a noticeabledecline of the market. Also Datacolor’sstartup subsidiary ColorVision also stronglyreinforced its market position, achievingmore then 50% growth to meet its ambitioustargets. The “Spyder” color calibration sys-
tem for computer monitors and the user-friendly color matching software solution forprinters are already successfully introducedin the United States and Europe. ColorVi-sion’s innovative products, cutting-edgetechnologies, and strong global partnerssuch as Pantone offer excellent prospectsfor much better-than-average growth.
With its corporate structures adapted tochanging market conditions, an efficientdistribution organization, and innovative andwell-established product lines, the EichhofGroup is well-equipped to meet future chal-lenges.
On behalf of the Board of Directors, I wouldlike to thank our employees for their highdegree of flexibility and commitment in thischallenging environment. Thanks too to allof our partners for their support and coop-eration and to our shareholders for theirtrust in the Eichhof Group.
Eichhof Holding Ltd.
Werner DubachChairman of the Board of Directors
Board of Directors of Eichhof Holding Ltd.
Dear Shareholder:
4
Corporate Governance
Corporate Structure
Eichhof Holding AG, Luzern
Board of Directors
Eichhof Holding
Werner Dubach, CEORoland Kleeb, CFO
Strategy, Planing, Finance, Controlling
Real Estate
Christof Scherer, Architect
Beverages Division Color Division
Marcel Erne, CEO Terry L. Downes, CEO
Eichhof brand-name beers, wine, spirits Color management and color communication,International premium beers, non-alcoholic beverages Laboratory color instruments
Getränke Service Eichhof AG Datacolor Holding AGLuzern/CH
Brauerei Eichhof AG International Colour Management Pic.Luzern/CH Altrincham/GB
Bier-Import AG Datacolor AGZürich/CH Dietlikon/CH
Kellerei St. Georg AG Ahiba Inc.Luzern/CH Charlotte/USA
Colorvision Administrative AGLuzern/CH
Datacolor Asia Pacific Pte Ltd.Hong Kong/China
5
Board Member Term expiressince at General
Shareholders’Meeting in
Eichhof Holding Ltd.
Werner Dubach, Chairman and CEO, CH 1981 2004Diploma Degree in Chemistry ETH Zurich, MBA Wharton School U.P.
Member of the Board Conzzeta Holding, Zurich
Peter Beglinger, CH 1992 2005Dr. iur., University of Zurich
Attorney-at-Law/Law office in Zurich
Chairman Altin AG, Baar
Thomas P. Frutig, CH 1996 2005Swiss Certified Accountant
Marc Rich + Co. Holding AG, CEO
Chairman REG Real Estate Group, Zurich
Robert F. Spoerry, CH 1995 2004Diploma Degree in ME ETH Zurich, MBA U. Chicago
Chairman, President and CEO Mettler-Toledo Int. Inc., Greifensee
Member of the Board, Conzzeta Holding, Zurich;
Member of the Board, Schaffner Holding AG, Luterbach
Hans Peter Wehrli, CH 2001 2003Ph.D. in Business Administration University of Zurich
Prof. and Dean Faculty of Business Administration University of Zurich
Chairman Belimo Holding AG, Wetzikon; Member of the Board,
Swiss Prime Site AG, Olten
Members of the Board of Directors are elected by the Annual General Meetingof Shareholders for a term of three years. Newly elected members complete theterms of their predecessors. Members may remain in office indefinitely.
The Board of Directors is the supreme executive authority of the holding com-pany. It adopts resolutions which determine the company’s fundamental direc-tion and oversees the work of senior management.
The Board of Directors meets as often as business requires, but no less thanfour times per year. Committee meetings are held additionally.
The Board of Directors is responsible for determining strategy, the ExecutiveCommittee for implementing it. The company’s Articles of Association governthe division of responsibility between the Board of Directors and the ExecutiveCommittee. The Executive Committee reports monthly to the Board of Directorson current business affairs and quarterly on the balance sheet and incomestatement.
Management Structure
Board of Directors
Election and term ofoffice
Duties and meetings
Definition of areas of re-sponsibility and informa-tion instruments
Corporate Governance
6
The Board of Directors has established committees to support its work. The pri-mary role of these committees is to prepare transactions and oversee theimplementation of Board resolutions. Furthermore, the Board of Directors maydelegate the final handling of certain transactions to the committees, providedthat delegation of such tasks is not prohibited by law. At present the Board hasestablished two committees, the Finance Committee and the Human Resourcesand Compensation Committee.
Finance Committee: Thomas P. Frutig (Chairman), Werner Dubach, Roland Kleeb
HR and Compensation Committee: Dr. Peter Beglinger (Chairman), WernerDubach, Thomas P. Frutig
There are no cross-involvements.
Executive Committee
Werner Dubach, CEO, CHDipl. Ing. Chem. ETH Zurich, MBA Wharton School U.P.
Member of the Board, Conzzeta Holding, Zurich
Roland Kleeb, CFO, CH BS of Economics (FH), Swiss Certified Fiduciary
Eichhof Holding AG’s auditor and statutory auditor is KPMG Fides Peat,Lucerne. Both mandates were granted by the Eichhof Holding AG Annual Gen-eral Meeting of Shareholders for one year. The mandate was first given toKPMG in 1992. The head auditor has held that position since fiscal 2001-2002.The amount of the auditing fee is CHF 375 000.00. KPMG is also paid CHF 75 000.00 for tax consulting.
Committees
Cross-involvements
Holding company
Auditors
Corporate Governance
7
Business Units
Executive Committee
Marcel Erne, Chief Executive Officer, CHMS of Economics (University of St. Gallen)
Member of the Board, SUVA, Luzern
Alex Eigenmann, Marketing/Sales, International Branded Beers, CHBS of Economics (FH)
Erich Fuchs, Marketing/Sales Beverage Service Eichhof, CHBS of Economics (FH)
Andreas Gerichhausen, Technique, DDiploma Degree in Economical Engineering
Rolf Nüesch, Finance and Controlling, CHSwiss Chartered Public Accountant/Controller
Hans Jud, Logistics, CH
Executive Committee
Terry L. Downes, President and Chief Executive Officer, USABS of Chemistry; MBA Ryder University
Thomas W. Crooks, CFO, USABS of Finance; MBA New York University
Gary Brennan, Human Resources, USABS of Business Administration
Jaime Gómez, Business Area Pigments, USABS of Chemical Engineering; MBA Marketing and Finance, MBA Chemistry, Ph.D. Polymer
Science
Alex Kalafatides, Corporate Marketing Services, USABS of Computer Engineering and Science; MBA New York University
Brian Levey, Business Unit ColorVision, USABS of Chemistry
Steve Shaw, Business Unit Textile Solutions, TaiwanBA of Social Science, Ph.D. Textile Management
David E. Slocum, Development and Manufacturing, USABS of Management
The members of the Executive Committee have no permanent managementand consulting functions for significant interest groups and hold neither ad-ministrative nor political offices.
Beverages Division
Color Division
Other activities andfunctions
Corporate Governance
8
There are no management contracts.
Board of DirectorsCash compensation of members of Eichhof Holding AG’s Board of Directors infiscal 2001–2002 amounted to CHF 200 000. Board members also received260 stock options at an issue price of CHF 250.00 each.
Executive CommitteeThe fifteen members of the Executive Committee received total fixed salaries ofCHF 2.59 million, variable bonuses of CHF 0.77 million and 1140 stock optionsat an issue price of CHF 250.00 each in the 2001–2002 fiscal year.
Shareholdings and optionsAs at the end of September 2002, members of the Board of Directors held56,909 registered shares and 1040 Eichhof Holding AG share options, andExecutive Committee members held 563 registered shares and 4160 EichhofHolding AG share options. The share options vest in three years and convey theright to purchase registered shares in a ratio of 1:1. See Financial Report,page 55 for details. Supplementary information 3.21.
Loans granted by governing bodiesThere are no outstanding loans granted by the governing bodies.
Compensation for former members of governing bodiesNo compensation was paid to former members of governing bodies.
Additional fees and remunerationsNo additional fees or remunerations are paid to the Board of Directors orclosely linked parties in an amount equal to or greater than the regular com-pensation for the given board member.
Management contracts
Compensation, share-holdings and loans
Corporate Governance
9
Information for Investors
Shareholders in Swiss public limited companies are granted extensive statu-tory participation and protection rights. The shareholding provisions of theseparticipation rights are further supplemented by the company Articles of As-sociation. These ensure – that, pursuant to the Code of Obligations, the Annual General Meeting of Sha-
reholders may be convoked by a one-time announcement in the Swiss OfficialCommercial Gazette (Schweizerisches Handelsamtsblatt) or by a written invi-tation for orientation purposes to the registered share-holders,
– that an item may be added to the agenda of the Annual General Meeting ofShareholders until no later than 40 days before the date of the meet-ing,
– that every shareholder may, besides the independent proxy provided for bylaw, allow his or her shares to be represented at the Annual General Meetingby a shareholder with a written proxy form.
Eichhof Holding AG’s shares (security number 853 104) are listed on SWXSwiss Exchange. Share capital amounts to CHF 4 928 900.00, distributed over197 156 registered shares with a par value of CHF 25.00 each. There is noauthorized or conditional capital.
Registration of purchasers in Eichhof Holding AG’s share register is not boundby any conditions. Every shareholder registered with voting rights in the shareregister is entitled to vote. No new entries in the share register are made within30 days of the Annual General Meeting of Shareholders. There are no limita-tions on voting rights.
The company’s Articles contain no provisions regarding a duty to make an offer.
There is no clause on change of control.
There are no cross-shareholdings.
There are no shareholdings in listed companies. Percentage shareholdings inunlisted companies are given on page 56.
See Eichhof Holding AG Financial Report, page 61, Supplementary information 5.
Eichhof Holding AG publishes a semiannual report and a comprehensive an-nual report in accordance with International Financial Reporting Standards(IFRS). Additionally, shareholders and the capital market are kept informed ofcurrent changes and developments through press releases. As a companylisted on SWX Swiss Exchange, Eichhof Holding AG is especially cognizant ofits duty to disclose events relevant to its share price (ad hoc publicity/disclosureof price-sensitive information). The website www.eichhof.com is available forfurther information on the corporation.
Legal status of share-holders
Share listing
Registration and votingrights limitations
Duty to make an offer
Clauses on change ofcontrol
Cross-shareholdings
Shareholdings in com-panies
Significant shareholders
Information policy
Corporate Governance
10
Eichhof Group consolidated
Key Figures
CHF in millions 2002 2001
Income statement
Gross sales
Beverages division 196,4 -0,4% 197,1 10,2%
- Beer 108,2 -0,1% 108,3 5,8%
- Wine and spirits 22,0 3,3% 21,3 8,7%
- Non-alcoholic beverages 61,4 -1,8% 62,5 21,1%
- Other income 4,8 -4,0% 5,0 -3,8%
Color division 80,4 -10,1% 89,4 -5,8%
Real estate 4,6 76,9% 2,6 0,0%
Gross sales, consolidated 281,4 -2,7% 289,1 4,6%
Net sales, consolidated* 255,0 -2,3% 260,9 -0,3%
EBITDA* 26,1 47,5% 17,7 -33,5%
EBIT 8,2 141,2% 3,4 -77,0%
Net profit 4,6 9,5% 4,2 -35,4%
Depreciation of tangible and intangible
fixed assets 16,6 15,3% 14,4 23,1%
Cash flow from operating activities 22,7 222,2% 7,0 -57,3%
Balance sheet
Balance sheet total 293,4 100,0% 318,1 100,0%
Current assets 124,0 42,3% 139,8 43,9%
Non-current assets 169,3 57,7% 178,4 56,1%
Net investments in tangible fixed assets 6,9 2,4% 9,6 3,0%
Liabilities 185,4 63,2% 205,0 64,4%
Net debt 97,7 33,3% 98,0 30,8%
Shareholders' equity 107,9 36,8% 113,1 35,6%
Return on shareholders' equity 4,3% 3,7%
Employees
Average number of employees 700 747
*Comparative figures were adjusted due to a restatement according to IFRS.
11
Eichhof Holding Ltd.
Key Figures
CHF in millions 2002 2001
Income statement
Earnings for the year 4,8 6,5
Dividends 4,7 8,7
Balance sheet
Balance sheet total 166,7 182,7
Shareholdings and securities 131,2 132,2
Shareholders' equity 63,0 67,4
Information on Eichhof stock
Market capitalization 118,3 160,9
Name Name
CHF CHF
Earnings per share 24,9 22,7
P/E-Ratio 24,1 38,0
Dividend yield 4,0% 5,4%
Price at close of fiscal year 600 759
High 837 1.290
Low 600 601
Capital structure
Change for the last 3 years CHF
Share capital on 30.09.2000 21,2
Par value repayment on 30.4.2001 9,5
Share capital on 30.09.2001 11,7
Elimination of own reserved shares on 14.02.02 0,8
Par value repayment on 03.05.2002 5,9
Share capital on 30.09.2002 4,9
Tax value
as at 01.01.2003 585 733
Completely renovated property in Dietlikon/Zürich
13
Substantially Better ProfitabilityFiscal 2001/2002 was marked by political andeconomic developments and changes on a scaleseldom seen before. The collapse of large corpo-rations together with enormous loss of jobs andmassive destruction of capital on the stock mar-kets intensified an economic down turn which hadalready begun and contributed to a further wors-ening of consumer confi-dence. In this difficultenvironment, the Eichhof Group performedstrongly despite a moderate contraction in salesto CHF 281.4 million (2000/2001: CHF 289.1 mil-lion). Besides the state of the economy, the 2.7percent decline in sales reflected unfavorablemovement in the ex-change rates of the EichhofGroup’s key currencies, the US Dollar and Euro,as well as the effect of reducing the productassortment. Nevertheless, determined implemen-tation of cost reduction measures bore fruit duringthe year in the form of a marked improvement inprofit-ability. Operating income before deprecia-tion and amortization (EBITDA) rose by 47.5 per-cent on a comparable basis to CHF 26.1 million,while operating income (EBIT) more than doubledto CHF 8.2 million. Net profit amounted to CHF 4.6million (CHF 4.2 million), for earnings per share(EPS) of CHF 24.91 (CHF 22.73). Cash flow grewby 222.2 percent to CHF 22.7 million (CHF 7.0 mil-lion). Faced with an unfavorable economic out-look, the Board of Directors and managementresolved early on to accelerate planned structuraladjustments in order to improve efficiency andscale back costs. Both divisions have tightenedtheir management structures, strengthened mar-keting, and expanded service and support. Thecost of these successfully implemented restruc-turing measures was substantial at CHF 1.7 mil-lion, impacting net profit for fiscal 2001/2002.
Beverages Division: Further Market Share GainsThe Beverages Division again boosted unit salesof beer during the year despite a slightly contract-ing Swiss beer market, capturing additional mar-
ket share. The wine business, ac-tively built up inrecent years and with a wine selection focused onthe needs of the restau-rant trade and an excel-lent price/quality relationship, also performed well.Elsewhere in the beverage distribution business,sales figures reflect the systematic elimination oflow-margin products and removal of those distri-bution channels whose contribution margin wasinade-quate. With sales of CHF 196.4 million (CHF197.1 million) the Beverages Division boostedEBITDA by 2.9 percent to CHF 17.4 million (CHF16.9 million) and EBIT by 7.9 percent to CHF 9.3million (CHF 8.6 million).
The Eichhof Group
CHF in millions
300
250
200
150
100
50
0
Consolidated Sales
Color Division Beverages Division
Total
2000 2001 2002
Comments on Fiscal 2001/2002
14
Color Division: Strong Sales Growth for ColorVi-sionWithin Datacolor, the two-year-old ColorVisionbusiness met its ambitious targets, increasingsales of its innovative products for color calibra-tion of computer peripherals (monitors, print-ers)by more than 50 percent to CHF 6.2 million (CHF4.0 million). Behind ColorVision’s strong showingwas buoyant demand for its easy-to-use Spydercolor calibration system, which is also sold overthe Internet. Datacolor’s sales of CHF 80.4 million(CHF 89.4 million) reflect a sharp decline in theUS Dollar and Euro, the sluggish economy inEurope and the United States, and several yearsof continuing price pressures. In contrast, someAsian markets are booming and unit sales trendsthere have been very positive. Uncompromisingreorganization and far-reaching cost cuttingmeasures have substantially improved profitability.Operating income before depreciation and amor-tization (EBITDA) grew to CHF 5.7 million (CHF–0.15 million). Despite extraordinary depreciationand high levels of marketing investments for thesuccessful expansion of the ColorVision business,EBIT improved noticeably to CHF -1.3 million (CHF–5.0 million).
Real Estate: Stable RevenuesReal estate revenues held steady at CHF 2.6 mil-lion despite increased vacancy levels in buildingsslated for repurposing and renovation. Progresson the Pilatusplatz construction project during theyear allows to plan the submission of the masterplan in the spring of 2003. In Dietlikon, Zurich, thecomplete renovation of the Brandbachstrasseproperty was completed at a total cost of CHF 4.1million. The building is already nearly fully leased,mostly with long-term contracts, and is earningvery strong yields. Preliminary work continues onplans to develop reserve land on Obergrund-strasse in Lucerne and on the Grosshof in Kriensin cooperation with the authorities in the City ofLucerne, the Municipality of Kriens and the Can-ton of Lucerne. The responsible federal office hasinvestigated and approved a direct connection tothe autobahn (expressway) feeder road. The Eich-hof Restaurant building is undergoing a total reno-vation and preparation to use of the upper storiesfor office space.
For the first time, investment property is reportedthis year at market value in accordance with thenew IAS 40 standard. The discounted cash flow
in CHF70
60
50
40
30
20
10
0
1998 1999 2000 2001 2002
Dividend per Share
Comments on Fiscal 2001/2002
in CHF
800
750
700
650
600
O N D J F M A M J J A S
Development of Stock Price 2002
––– Eichhof Name ––– SPI-Index
4600
4400
4200
4000
3800
3600
3400
3200
15
method was used for revenue-earning properties,while development projects and reserve landswere valued at acquisition cost. Although theproperty portfolio still contains considerable hid-den reserves, a charge of CHF 1.3 million wastaken on a former industrial site on impairmentgrounds.
Finances: A Solid StructureConsolidated total assets declined during theyear by CHF 24.8 million to CHF 293.4 million, dueprimarily to a CHF 6.7 million reduction in nominalcapital in the spring of 2002 and the retirement ofCHF 11.4 million in short-term bank debt. Netdebt amounted to CHF 97.7 at the end of the fis-cal year, giving a debt-to-equity ratio (leverage) of90 percent. At 36.8 percent, the equity ratio isabove average for the Eichhof Group’s type ofbusiness. Inventories were again reduced thanksto improved management. Trade accounts receiv-able held steady compared to the previous yearafter the strong sales months of August and Sep-tember. Since the summer of 2002, we have takenadvantage of favorable bond market conditionsand very good liquidity to repurchase our ownbonds at favorable terms. Cash and cash equiva-lents and short-term financial investmentsamounted to CHF 36.0 million (CHF 45.9 million)as of September 30, 2002, comprising sightdeposits at banks, stocks, and bonds. Changeson the bond markets and the strong decline of theequity markets led to a drop in interest incomeand revenues from securities to CHF 0.8 million(CHF 7.4 million). With the retirement of bankdebt, interest expense declined to CHF 5.3 million(CHF 7.0 million). Other than currency hedging fornew materials contracts, no foreign exchangebusiness was undertaken during the year.Exchange rate effects on the balance sheet andfinancing structure amounted to CHF –0.4 million(CHF 7.6 million).
Eichhof Holding AG Financial StatementsEichhof Holding AG earned a profit of CHF 4.8million (CHF 6.5 million) in fiscal 2001/2002. Withan equity ratio of 37.8 percent and outstandingliquidity, its balance sheet is very solid.
OutlookWith a lean management structure, optimizedbusiness processes and enhanced cost effi-ciency, the Eichhof Group is well-placed torespond quickly and flexibly to the challenges oftoday’s highly volatile environment. With the posi-tive public image of Eichhof beers and the inno-vative Eichhof Brewery’s outstanding market posi-tion at the Beverages Division, and new, inexpen-sive and user-friendly products at Datacolor andColorVision, the Eichhof Group holds a strongposition in the beverage market. Eichhof is well-equipped to meet upcoming challenges. Providedthat the economy does not weaken further, Eich-hof is headed for sales growth and furtherenhancements in profitability.
Comments on Fiscal 2001/2002
18
Beverages Division
Beverage Unit Sales Steady in Difficult Environ-mentBeverage unit sales held steady in fiscal2001/2002 despite numerous challenges: world-wide economic and political uncertainty plaguedthe Swiss tourist industry, especially the restaurantbusiness; movements in the CHF exchange ratewere unfavorable; and the weather during thesummer months, a period that is of key impor-tance in beverage sales, was again unpleasantlywet and chilly. At 4.1 million hectoliters, beer con-sumption in Switzerland in the 2001/2002 brewingyear was approximately the same as in the previ-ous year. Per capita consumption declined slightlyby 0.6 liter to 56.6 liters. Sales of imported cannedbeers in the retail trade grew, whereas restaurantsales of Swiss brand-name beers declined. Non-alcoholic beverages, natural mineral waters againgrew significantly.
Qualitative Growth for Eichhof’s BeveragesDivisionEichhof Beverages Division sales declined in thefiscal year slightly to CHF 196.4 million (CHF 197.1million). Profitability improved substantially withEBITDA growing by 2.9 percent to CHF 17.4 mil-lion (CHF 16.9 million) and EBIT by 7.9 percent toCHF 9.3 million (CHF 8.6 million). Eichhof’s shareof the Swiss beverage market again increasedduring the year. Unit sales of Eichof’s brand-namebeers grew, as did those of Miller Genuine Draft,
which Eichhof brews under license, and of inter-national premium beer Löwenbräu München,which Eichhof exclusively distributes. This suc-cess was based on intensive marketing effortsand further expansion of the number of distribu-tors in the restaurant and retail sectors. Claus-thaler’s leading market share among non-alco-holic beers likewise expanded. Products and dis-tribution channels with inadequate contributionmargins were culled during the year of the report.As a result, gross sales of trade products, non-alcoholic beverages, and beers from third partiesdeclined from the previous year, whereas substan-tial growth was realized in the strategically impor-tant restaurant business. Kellerei St. Georg alsosaw further growth, increasing sales on the hotly-contested Swiss wine and spirits market to CHF22.0 million (CHF 21.3 million).
The Core Sales Area
Eichhof Means Genuine Beer CultureAs Switzerland’s leading independent brewery,Eichhof promotes a genuine beer culture throughwith its broad range of specialty beers and itslager beer. Sales in the retail channel in German-speaking Switzerland increased with the leadingproducts in the premium beer segment, “EichhofBraugold”, “Klosterbräu Edeltrüb”, and the tradi-tional “Eichhof Lager”. In the restaurant sector,
19
Eichhof again gained many new customers in itscore region, and increasingly in the strategicimportant Zürich/Mittelland (midland) growthregion and in Ticino as well.
A Complete Assortment of BeveragesEichhof’s complete assortment of beveragesincludes not only the company’s own beers andexclusively distributed imported beers, but alsomineral waters, soft drinks, a comprehensiveselection of popular wines from every major wine-producing region in the world, as well as a broadrange of well-known brands of spirits. With a cus-tomer-focused delivery service and strongregional roots, beverage activities are tailored tothe needs of the restaurant trade and of inde-pendent retailers and beverage dealers. In Zürich/Mittelland (midland), after integration of Zürichbeverage distributor Ulmer & Knecht and the startof operations at the efficient distribution center inthe City of Zürich, Eichhof holds a strong marketposition as provider of a full beverage assortmentwith provenstrength in beverage distribution. Thestrategic acquisition of Wehrli AG’s wine tradingactivities in Münsingen, Canton Berne will furtherstrengthen the Eichhof Group’s market position inthe first quarter of fiscal 2002/2003.
CHF in millions
200
175
160
125
100
75
50
25
0
Consolidated Sales
Wine and Spirits BeerNon-alcoholic beverages Total
2000 2001 2002
22
The National Market
Further Gains for International BeersInternational beers continued to pick up marketshare in Switzerland in fiscal 2001/2002. The twoforeign brewing groups which dominate the Swissmarket have focused marketing activities on pro-moting their international premium brands,brewed in Switzerland under license. Meanwhile,sales of inexpensive, mostly canned importedcommodity beers also continued to rise, sup-ported by aggressive low pricing and retail salespromotions. In the restaurant trade, though, thenumerous trendy imported beer brands are fac-ing intense pressure from the “alcopops” popularamong the younger set.
Continued Growth for Miller Genuine Draft andLöwenbräu MünchenThe assortment of exclusively imported premiumbeers and beer specialties distributed by TheBeer Company in cooperation with “Eichhof Bev-erages” showed a mixed performance during theyear. With strengthened marketing and salesactivities, sales of Miller Genuine Draft, brewedunder license by Eichhof’s brewery since early2001, further increased. The traditional Löwen-bräu München brand also showed impressivegains in the retail and restaurant markets, further
expanding its sales lead among German beers inSwitzerland. Unit sales of the trendy new prod-ucts Salitos and Strongbow Cider increased aswell. Well-known imported beer brands Foster’s,Pilsner Urquell, and Grolsch held their own over-all, as did Clausthaler, the Swiss market leaderamong non-alcoholic beers.
B I E R - I M P O R T A G
23
Reinach
Cham undSteinhausen
KriensStans
Erstfeld
Schöftland
OftringenWillisau
Sursee
Olten
Münsingen
Beverage Shops Kellerei St. Georg
During fiscal 2001/2002, per capita consumptionof wine in Switzerland was 41 liters. Swiss winesgained slightly in market share, while the share ofinternational wines declined somewhat. Con-sumers prefer the increased variety and higherquality of domestic vintages. Demand alsoincreasingly shifted in the course of the year towines offering good value for money. The spiritsmarket was strongly influenced by “alcopops,”blends of spirits with soft drinks popular mainlyamong younger consumers, while sales of tradi-tional spirits declined somewhat.
Rising Sales in the Restaurant TradeKellerei St. Georg again fortified its already strongposition in the hotly contested restaurant trade.The selection available has been expanded toinclude attractive new vintages from Spain, Italy,and overseas. Through close cooperation withEichhof’s highly efficient distribution organization,Kellerei St. Georg offers customers not only anappealing assortment of products, but also regu-lar, individualized delivery and a broad offering ofservices.
Retail OutletsEichhof operates its own retail outlets offering acomprehensive assortment of beverages ateleven top locations in German-speaking Switzer-land. After acquisition of the wine trading activi-ties of Berne’s Wehrli AG, the Wehrli retail outlet inMunsingen will also be integrated into the existingretail network over the upcoming fiscal year.
Wines and Spirits
27
Datacolor Holding AG, comprising all Color Divi-sion activities, experienced a decline in sales fromthe previous year to CHF 80.4 million (CHF 89.4million) while markedly improving profitability.EBITDA grew by CHF 5.9 million to CHF 5.7 million(CHF –0.15 million). EBIT, despite additionaldepreciation of CHF 2.2 million and restructuringcosts of CHF 1.7 million, grew by CHF 3.7 millionto CHF –1.3 million (CHF –5.0 million).
ColorVision Meets High ExpectationsStartup ColorVision concluded its second year ofbusiness with gross sales rising to CHF 6.2 million(CHF 4.0 million). The launch of its patented Spy-der color calibration system for color matching offlat screens (LCD) and conventional computermonitors (CRT) was a huge success. An inexpen-sive color measuring device for fast and simplecalibration of printers, launched in August 2002,has also enjoyed steadily rising sales figures. Theyear saw development of the distribution organi-zation and strong sales growth for ColorVisionproducts in Europe. The rapid penetration of Col-orVision’s products has benefited from closecooperation with Pantone, Inc., a world leader inthe definition of color standards. ColorVision hasrapidly become established among professionalphotographers and designers and in the anima-tion and printing industries. The inexpensive Spy-der calibration system has repeatedly been hon-ored in trade publications and Internet forums forits high customer value and has received awardsfor innovation at international sales fairs.
Setting the Standard in Digital Color Communi-cation in the Textile and Apparel IndustriesThe Color Information Management System(CIMS) has become the color management stan-dard in the complex supply chain of textile pro-ducers. CIMS includes Datacolor’s unique Col-orite software, which enables easy digital commu-nication of precise color values over the Internet.CIMS eliminates the time and costs inherent in theexchange of physical color swatches for qualitycontrol. CIMS was implemented during the year
Color Division
CHF in millions50%
40%
30%
20%
10%
0%
Sales Breakdown by Country Group
Europe Asia-Pacific
of which CH Others
North & South America
2000 2001 2002
28
by such international textile manufacturers andretailers as Adidas-Salomon, Wal-Mart, H&M, andVictoria’s Secret.
Bolstered by its a big success in the textile sector,Datacolor next introduced the simple CIMS con-cept in the automotive industry. Audi has becomethe first customer to use CIMS within its supplychain to exchange color data with its suppliers.
A Compelling Product LineDatacolor introduced its user-friendly ChromaCalcsoftware for customers in the paint, coatings, ink,and plastics industries in 2002. ChromaCalcmakes it possible to create even the most difficultcolor mixtures on the computer screen, to simu-late variations, and finally to incorporate a newly
defined color directly into the production process,without the time-consuming detour of physicalcolor swatches. In conjunction with Paintmakersoftware, Datacolor’s ChromaCalc covers theentire value chain in the paint and coatings indus-try. The new software was launched with greatsuccess and has been adopted by such demand-ing customers as Clariant and Sun Chemical.
With its new “X” series of color measuring instru-ments, Datacolor sets a new industry benchmarkfor reliable color control and styling in laboratoryinstruments. “X” series devices are equipped fordigital exchange of color data over the Internetand are recommended to their suppliers by suchleading retailers as Wal-Mart for digital communi-cation of precise color data.
Head Office
Distribution Network Datacolor
31
Sales by Segments 2002
Textiles Point of Sale (POS)
Paint, Plastics Others
Printing Inks
The new Ahiba Multiprecise, for use in textile labo-ratories, enables customers to dye large yarn orfabric samples directly in a laboratory device andto develop new textile dyeing processes that canbe transferred directly into production. Usedtogether with the new AutoLab Modulo laboratorydispenser, Multiprecise eliminates manual errorsand provides laboratories with much improvedefficiency, speed, and quality.
Well-positioned for Long-term GrowthDatacolor’s former regional matrix organizationwas transformed during the year into a structureof three worldwide business areas: textiles, pig-
ments (paint, coatings, and plastics) and colorcalibration (ColorVision). Color Division adminis-tration is now centralized at Datacolor headofficein Lawrenceville, New Jersey. The number ofemployees worldwide was reduced by 44 to 232.Production of the Spyder color calibration systemfor computer monitors was moved to a signifi-cantly less costly location in Asia. With its moreefficient structure, state-of-the-art technologies,and proven product range, especially the innova-tive and inexpensive ColorVision color calibrationsystems, Datacolor is well-positioned to take theleading role in systems for global communicationof precise color data over the Internet.
33
Financial year from October 1, 2001, through
September 30, 2002
Financial Report
Eichhof Group
Consolidated Balance Sheet 35
Consolidated Income Statement 36
Consolidated Statement of Changes in Equity 37
Consolidated Cash Flow Statement 38
Notes to the Consolidated Financial Statements
– Accounting Principles 39
– Valuation Principles 41
– Notes 44
Report of the Group Auditors 57
Eichhof Holding Ltd.
Balance Sheet 58
Income Statement 59
Notes 60
Proposals of the Board of Directors 62
Report of the Statutory Auditors 63
Key Figures 64
Addresses 66
35
Consolidated Balance Sheet
TCHF 30.09.02 30.09.01
Assets
Cash and cash equivalents 3.1 17 615 29 417
Current financial assets 3.7 18 373 16 496
Trade accounts receivable 3.2 47 670 46 890
Other accounts receivable 3.3 8 039 12 541
Inventories 3.4 28 933 30 522
Prepaid expenses 3 383 3 894
Current assets 124 013 42,3% 139 760 43,9%
Tangible fixed assets 3.5 112 869 117 799
Intangible assets 3.6 26 699 30 527
Non-current financial assets 3.7 29 313 29 496
Deferred tax assets 3.14 458 560
Non-current assets 169 339 57,7% 178 382 56,1%
Assets 293 352 100,0% 318 142 100,0%
Liabilities and shareholders' equity
Trade accounts payable 16 921 16 354
Current financial liabilities 3.8 54 11 363
Current tax liabilities 6 794 6 455
Other current liabilities 3.9 12 065 17 554
Accrued liabilities 12 230 9 756
Current liabilities 48 064 16,4% 61 482 19,3%
Non-current financial liabilities 3.8 115 281 116 120
Other non-current liabilities 3.9 6 038 6 210
Provisions 3.10 507 590
Deferred tax liabilities 3.14 15 517 20 602
Non-current liabilities 137 343 46,8% 143 522 45,1%
Liabilities 185 407 63,2% 205 004 64,4%
Share capital 4 929 11 660
Par value of own shares -292 -1 365
Capital reserves 7 977 9 072
Retained earnings 95 331 93 771
Shareholders' equity 107 945 36,8% 113 138 35,6%
Liabilities and shareholders' equity 293 352 100,0% 318 142 100,0%
Eichhof Group
36
Eichhof Group
Consolidated Income Statement
TCHF 2001/2002 2000/2001
Sales of goods and rendering of services 271 946 281 217
Other operating income 9 459 7 858
Gross sales 281 405 289 075
Changes in inventories -1 589 -5 499
Sales deductions -24 813 -22 708
Net sales* 255 003 100,0% 260 868 100,0%
Costs for material and goods -106 286 -111 764
Gross margin* 148 717 58,3% 149 104 57,2%
Personnel expenses 3.11 -70 925 -72 701
Sales & administration expenses 3.12 -39 639 -42 887
Other operating expenses -12 046 -15 819
EBITDA* 26 107 10,2% 17 697 6,8%
Depreciation of tangible assets 3.5 -13 136 -11 657
Amortization of intangible assets 3.6 -4 787 -2 693
EBIT 8 184 3,2% 3 347 1,3%
Financial income 3.13 4 815 24 138
Financial expenses 3.13 -11 884 -22 415
Profit before income taxes 1 115 0,4% 5 070 1,9%
Income taxes 3.14 3 517 -840
Net profit 4 632 1,8% 4 230 1,6%
CHF CHF
Earnings per share 3.26
- non diluted 24,91 22,73
- diluted 24,87 22,68
*Comparative figures were adjusted due to a restatement according to IFRS.
37
Eichhof Group
Consolidated Statement of Changes in Equity
TCHF- Total
Accumulated Total share-Share Own Capital Retained translation retained holders’
capital shares reserves earnings differences earnings equity
Balance at 01.10.2000 21 200 -2 682 7 833 90 341 3 162 93 503 119 854
Dividends -3 746 -3 746 -3 746
Reimbursement of par value -9 540 1 113 0 -8 427
Purchase of own shares -84 -861 0 -945
Sale of own shares 6 0 6
Exercise of executive stock options 288 2 094 0 2 382
Translation differences -216 -216 -216
Net profit 4 230 4 230 4 230
Balance at 30.09.2001 11 660 -1 365 9 072 90 825 2 946 93 771 113 138
Balance at 01.10.2001 beforeRestatement 11 660 -1 365 9 072 90 825 2 946 93 771 113 138
Restatement IAS 39 53 53 53
Balance at 01.10.2001 after Restatement 11 660 -1 365 9 072 90 878 2 946 93 824 113 191
Dividends -2 375 -2 375 -2 375
Reimbursement of par value -5 915 346 0 -5 569
Elimination of reserved own shares -816 816 0 0
Purchase of own shares -89 -1 095 0 -1 184
Translation differences -750 -750 -750
Net profit 4 632 4 632 4 632
Balance at 30.09.2002 4 929 -292 7 977 93 135 2 196 95 331 107 945
The total reduction in consolidated share capital due to own share holdings amounts to TCHF 7 001(previous year: TCHF 8 396).
For further details see note 5 on page 61 of Eichhof Holding Ltd..
38
Consolidated Cash Flow Statement
TCHF 2001/2002 2000/2001
Net profit 4 632 4 230
Depreciation of tangible fixed assets 3.5 13 136 11 657
Amortization of intangible assets 3.6 4 787 2 693
Non-cash sales deductions 3.1 4 284 3 844
(Gain) / loss on disposal of assets -2 133 6
Net change in value adjustments and provisions -5 090 -3 351
Other non-cash positions 1 208 0
Net change in net working capital (except cash) 1 862 -12 039
Cash flow from operating activities 22 686 7 040
Investments in - Tangible fixed assets 3.5 -9 316 -10 907
- Intangible assets 3.6 -1 401 -3 896
- Non-current financial assets -4 472 -5 402
Divestments of - Tangible fixed assets 2 439 1 291
- Intangible assets 0 349
- Non-current financial assets 0 9 833
Acquisitions / divestments (except cash) 3.1 0 -1 119
Cash flow from investing activities -12 750 -9 851
Change in liabilities - Non-current financial liabilities -12 593 -40 717
- Other non-current liabilities -172 -922
Changes in sharesholders' equity - Purchase of own shares -1 184 -945
- Sale of own shares 0 6
- Exercise of executive stock options 3.21 0 2 382
- Reimbursement of par value -5 569 -8 427
- Dividends paid -2 375 -3 746
Cash flow from financing activities -21 893 -52 369
Translation differences on cash and cash equivalents 155 -501
Change in balance of cash and cash equivalents -11 802 -55 681
Cash and cash equivalents - Beginning of period 29 417 85 098
Cash and cash equivalents - End of period 3.1 17 615 29 417
Eichhof Group
39
Notes to the Consolidated Financial Statements
1 Accounting Principles
1.1 GeneralEichhof Holding Ltd. is domiciled in Lucerne (Obergrundstrasse 110). It is the parent companyof the Eichhof Group, the number one independent brewery in Switzerland and one of the big-gest beverage distributors in Switzerland, and a leading provider of color measurementsystems. In addition to its Swiss operations, the Eichhof Group also does business with its Data-color Group in the European Union, North America, and Asia, and employed 676 persons.
1.2 Basis of preparation The consolidated financial statements of Eichhof Group comply with International FinancialReporting Standards (IFRS), and are in accordance with Swiss law.
The consolidated financial statements were prepared on an historical cost basis, except for themeasurement at fair value of derivative financial instruments and available for sale or held fortrading financial assets. Expenses and revenues were recognized on an accrual basis.
The assets and liabilities included in the consolidated financial statements are valued accordingto uniform principles.
The comparative information for prior periods were partly restated due to the first-time applica-tion of IAS 39 and IAS 40.
1.3 Changes in accounting policiesOn October 1, 2001, IAS 39 and IAS 40 were adopted involving the following changes:
– As heretofore, marketable securities were recorded at fair value. Unrealized gains and losseswere reported under financial result.
– Other long-term financial investments were held for sale and were recorded at fair value.Unrealized gains and losses were included in the financial result.
– Derivative financial instruments were now recorded at fair value and reported as currentfinancial assets or financial liabilities.
– Debenture bonds were newly measured at amortized costs using the effective interest ratemethod.
– Investment property, in accordance with IAS 40, was recorded as before at acquisition costless accumulated depreciation and any impairments. Market values were now disclosed.
The effects of the first-time application of IAS 39 amounted to TCHF 53 after deduction of defer-red income taxes and were recorded as restatement in shareholders’ equity.
1.4 Closing dateThe closing date for the financial statements of Eichhof Holding Ltd. and all subsidiaries is Sep-tember 30.
Eichhof Group
40
1.5 Scope of consolidation
GeneralThe consolidated financial statements comprise the financial statements of Eichhof Holding Ltd.and its subsidiaries that are controlled. Control is presumed to exist when the Eichhof Holdingowns, directly or indirectly through subsidiaries, more than one half of the voting power of anenterprise or otherwise exercises management control.
Changes in the scope of consolidationDuring the reporting period Ulmer & Knecht Ltd. and Getränke Service Eichhof Ltd. merged.Correspondingly, Ahiba Inc., ACS Acquisition Corp. and Applied Color Systems Inc. merged intoApplied Color Systems Inc.. Eichhof Finance Ltd. was liquidated.
Additionally, Datacolor Asia (HK) Ltd. was established.
These changes had no material effect on the consolidated financial statements. A summary ofshareholdings is given on page 56.
1.6 Principles of consolidationThe consolidated financial statements comprise the financial statements of Eichhof Holding Ltd.and its subsidiaries that are controlled. Intragroup balances and intragroup transactions andresulting unrealised profits were eliminated upon consolidation.
There are no associated companies or joint ventures.
1.7 Foreign currency translationThe financial statements of foreign subsidiaries were prepared in their respective local currencyand translated into Swiss francs (reporting currency) for consolidation purposes. Assets and liabi-lities of foreign subsidiaries were translated at the rate of exchange ruling at the balance sheetdate. The income statements of foreign subsidiaries were translated at weighted averageexchange rates for the year. The resulting exchange differences were taken directly to equity.
In the financial statements of the local subsidiaries transactions in foreign currencies were recordedat the rate ruling at the date of the transaction. Assets and liabilities denominated in foreigncurrencies were translated at the rate of exchange ruling at the balance sheet date. All resultingdifferences were recognized as exchange gains or losses in the income statement of the localsubsidiary.
1.8 Own sharesOwn shares were reported at par and presented as a deduction from equity. Cost incurred orconsiderations received in excess of par value were recognised in capital reserves.
Eichhof Group
41
2 Valuation Principles
2.1 Cash and cash equivalentsThese include cash, bank accounts, demand deposits, money market instruments as well asshort-term deposits with an initial term not exceeding 3 months.
2.2 Current financial assets and liabilitiesCurrent financial assets are investments which are classified as held for trading and comprisemarketable, easily realised securities and derivative financial instruments. They were measuredat fair value. Gains or losses on investments held for trading were recognised in financial result.Current financial liabilities include bank payables, which were recorded at nominal value, andderivative financial instruments, which were recorded at fair value. Gains or losses were inclu-ded in financial result.
2.3 Trade accounts receivableTrade accounts receivable were recognized and carried at nominal values less necessary allo-wances for individual accounts as well as an internal overall allowance based on aging.
2.4 InventoriesInventories were measured at the lower of acquisition or production cost or net realizable value,using the weighted average cost formula.
2.5 Tangible fixed assetsTangible fixed assets including investment property were reported at acquisition cost less accu-mulated depreciation and any impairments in value. Land is depreciated only if periodic apprai-sals reveal a sustained impairment in value. Expenditures which increased the useful life of anasset were capitalized. Tangible fixed assets were depreciated on a straight-line basis accor-ding to economic criteria corresponding to the estimated useful lives of the assets as set forthin the principles of valuation. Essentially, these are:
Buildings 30–40 yearsMachinery and equipment 3–20 yearsVehicles 5–12 years
2.6 Intangible assetsIntangible assets such as software development costs, goodwill, trademarks, licenses, andpatents were capitalized at acquisition or production cost and amortized on a straight-line basisover their estimated useful life, not exceeding 20 years. Special impairments were recognized asnecessary.
2.7 Impairment of assetsThe carrying amounts of non-current assets are reviewed for impairment at each balance sheetdate whether there is any indication that an asset may be impaired. If any indication exists therecoverable amount is estimated. If the carrying values exceed the estimated recoverableamounts, the assets are written down to their recoverable amounts. Impairment losses arerecognised in the income statement.
Eichhof Group
42
2.8 Non-current financial assetsNon-current financial assets consist of investments available-for-sale, prepaid employee bene-fits and non-current loans. Investments available-for-sale were measured at fair value. Gains or losses were included in financial result. Prepaid employee benefits consisting mainly ofemployer’s contribution reserves were recorded at nominal value. The third-par ty loans areintended to secure distribution channels for the Beverages Division. They were amortized in linewith sales and were recognized as deductions from revenues.
2.9 Non-current financial liabilitiesDebenture bonds and other interest-bearing loans were measured at amortised cost using theeffective interest rate method. Amortised cost was calculated by taking into account any issuecosts. Gains and losses through the amortization process were recognised in financial result.
2.10 ProvisionsProvisions were recognized for present obligations with uncertain timing or amounts as a resultof a past event and for which a future outflow of resources was probable. The amount wasbased on the best possible estimate of the expected outflow of resources.
2.11 Gross revenue and realization of proceedsGross sales include all invoiced goods deliveries and services to third parties. Revenue wererecognised when the significant risks and rewards of ownership of the goods had passed to thebuyer.
Sales deductions include sales taxes and discounts; the latter category also includes amortiza-tion of loans to secure distribution channels.
2.12 Management share option planOptions for purchase of Eichhof registered shares are granted as part of performance-basedvariable compensation for certain management personnel and members of the Board of Direc-tors. The options carry the right to purchase one share per option, vest in three years, andexpire in six years. The exercise price is determined in advance in accordance with the Black-Scholes formula.
The market value of the option is recorded on an accrual basis as a personnel expense at thetime of issuance.
2.13 TaxesIncome taxes were recognized according to economic criteria on an accrual basis. Deferredincome taxes were provided, using the liability method, on all temporary dif ferences at thebalance sheet date between the tax bases of assets and liabilities and their carrying amountsfor financial reporting purposes. No deferred income taxes were recorded in respect of temporarydifferences associated with investments in subsidiaries, as it is assumed that such differenceswill have no tax consequences in the foreseeable future. If no dividend payments are planned,withholding taxes and other taxes on potential later dividends were not recognized, since retainedearnings are generally reinvested.
Eichhof Group
43
2.14 Research and developmentSoftware development expenses incurred were only capitalized on an individual project basis if suchoutlay is likely to be covered by corresponding future income.
Capitalized software development expenditures include material and payroll expenses, depreci-ation of machinery and equipment and the overhead costs directly attributable.
2.15 Borowing costsBorrowing costs, incurring during the construction of tangible fixed assets, are recognized asan expense.
2.16 Employee benefit liabilitiesEichhof Group companies operate dif ferent employee benefit plans in accordance with localregulations and customs in the relevant countries. These plans are organized on a defined contri-bution or defined benefit basis and cover the majority of employees. They provide benefits in caseof death, disability, retirement, or termination of employment. They may be financed through acombination of employee and employer contributions or through employer contributions alone.
Assets covering existing and future benefit obligations for insured parties in the Beverages Divi-sion are held in the Eichhof Pension Fund, an autonomous, independent foundation organizedunder the Occupational Pension Act (BVG). The Eichhof Group also has three employer founda-tions in Switzerland which are likewise governed by the provisions of the BVG.
Defined contribution plansThe Color Division's benefit plans are organized through external savings banks. The EichhofGroup is not subject to further obligations beyond ongoing contributions owed and booked.
Defined benefit plansAs of October 1, 1999, actuarial calculations using the projected unit credit method were carriedout for the first time for Swiss employee pension plans classified as defined benefit plans. CHF3.447 million and CHF 3.188 million prepaid employee benefits on September 30, 2002 and Sep-tember 30, 2001 respectively were recorded under non-current financial assets. Existing prepaidemployer’s contribution reserves were also recorded here. The most recent actuarial valuation wascarried out as of September 30, 2002.
Benefit expenses resulting from employee service in the current period (current service cost) arerecognized in the income statement. Benefit expenses associated with employee services in priorperiods, resulting in the current period from the introduction of, or changes to, post-employmentbenefits (past service cost) are recognized on a straight-line basis over the average period untilthe benefits become vested. Actuarial gains and losses are recognised as income or expensewhen the cumulative unrecognised actuarial gains or losses for each individual plan exceed 10%of the higher of defined benefit obligation and the fair value of plan assets. These gains or lossesare recognised over the expected average remaining working periods of the employees participatingin the plans.
Eichhof Group
44
Notes
The figures below are stated in thousands of Swiss Francs (TCHF) unless otherwise indicated.
3.1 Cash and cash equivalents 30.09.02 30.09.01
Cash in hand, postal accounts 183 225
Cash at bank 17 432 29 101
Short-term deposits (up to 90 days) 0 91
Cash and cash equivalents 17 615 29 417
Cash flow from acquisitions / divestments 2001/2002 2000/2001
Current assets -116
Non-current assets -1 011
Liabilities 657
Net assets -470
Acquired cash & cash equivalents 0
Goodwill -649
Net cash flow -1 119
No acquisitions / divestments of subsidiaries took place in the reporting period.
Material non-cash transactions refer to the amortization of loans, intended to secure distributionchannels, as sales deductions (see note 3.7).
Interest and dividends received 1 247 3 968
Interest paid 5 165 7 162
Income taxes paid 1 127 3 197
3.2 Trade accounts receivable 30.09.02 30.09.01
Gross trade accounts receivable 49 809 100% 49 285 100%
Allowances -2 139 -4% -2 395 -5%
Net trade accounts receivable 47 670 96% 46 890 95%
3.3 Other accounts receivable 30.09.02 30.09.01
Other accounts receivable due from
– third parties 1 509 1 889
– government 351 3 373
– pension funds 6 052 6 539
Prepayments to third parties 127 740
Other accounts receivable 8 039 12 541
Eichhof Holding Ltd. gave an unsecured, always repayable loan of CHF 6 million to the pension fundat market terms for partial financing of real estate.
Eichhof Group
45
3.4 Inventories 30.09.02 30.09.01
Raw materials 6 337 19% 8 288 24%
Work-in-progress 398 1% 535 2%
Semi-finished and finished goods 8 292 25% 7 362 21%
Trading goods 17 646 55% 18 184 53%
Gross inventories 32 673 100% 34 369 100%
Allowances -3 740 -11% -3 847 -11%
Net inventories 28 933 89% 30 522 89%
3.5 Changes to tangible fixed assets
2001/2002 2000/2001Machinery, Land and buildings Total tangible Total tangible
equipment, Operating Investment fixed assets fixed assetsvehicle property property
Acquisition or production costs
as of 01.10. 150 420 83 158 62 341 295 919 287 000
Additions 5 564 458 3 294 9 316 10 907
Change in scope of consolidation 0 0 0 0 3 724
Disposals -11 937 -1 002 0 -12 939 -4 027
Translation differences -987 -949 0 -1 936 -1 685
as of 30.09. 143 060 81 665 65 635 290 360 295 919
Accumulated depreciation
as of 01.10. 116 651 42 396 19 073 178 120 168 353
Additions 8 732 2 190 858 11 780 11 657
Change in scope of consolidation 0 0 0 0 1 941
Impairment 0 0 1 356 1 356 0
Disposals -11 766 -867 0 -12 633 -2 736
Translation differences -681 -451 0 -1 132 -1 095
as of 30.09. 112 936 43 268 21 287 177 491 178 120
Net carrying amount as of 30.09. 30 124 38 397 44 348 112 869 117 799
Insurance values as of 30.09. 98 500 98 338 49 020 245 858 229 100
Net carrying amount of tangible fixed assets under finance leases as of 30.09. 0 0
Market values of investment properties were determined based on valuations performed by indepen-dent experts und amount to CHF 53,9 million. According to the valuations an impairment loss of TCHF1 356 had to be recognised for one Swiss investment property, which is included in depreciations.Income from investment property amounts to TCHF 2 620 (previous year: TCHF 2 312), expenses forinvestment property amount to TCHF 363 (previous year: TCHF 295).
In the reporting period, the result on disposal of tangible fixed assets amounts to TCHF 2 133 (previousyear: TCHF -6).
Eichhof Group
46
Eichhof Group
3.6 Changes to intangible assets
2001/2002 2000/2001Capitalized Goodwill Trade Total Total
software marks,development licenses,
Acquisition or production costs costs patents
as of 01.10. 10 934 2 499 21 243 34 676 30 983
Additions 1 401 0 0 1 401 4 237
Goodwill adjustement 0 0 0 0 308
Disposals 0 0 0 0 -349
Translation differences -660 0 0 -660 -503
as of 30.09. 11 675 2 499 21 243 35 417 34 676
Accumulated depreciation
as of 01.10. 1 782 250 2 117 4 149 1 515
Additions 2 503 250 2 034 4 787 2 693
Translation differences -171 0 -47 -218 -59
as of 30.09. 4 114 500 4 104 8 718 4 149
Net carrying amount as of 30.09. 7 561 1 999 17 139 26 699 30 527
Out of the total of TCHF 6 446 (previous year: TCHF 5 950) spent on software development costs, asum of TCHF 1 401 (previous year: TCHF 3 232) was capitalized.
3.7 Financial assets 30.09.02 30.09.01
Marketable securities 18 373 16 496
Current financial assets 18 373 16 496
Investments in third parties 628 686
Prepaid employee benefits 3 447 3 188
Non-current loans to third parties 25 238 24 992
Issue costs for bond issues 0 630
Non-current financial assets 29 313 29 496
Financial assets 47 686 45 992
Non-current loans to third parties mainly comprise interest-free loans for long-term securing of distri-bution channels for the Beverages Division. See note 3.20 regarding the prepaid employee benefits.
3.8 Financial liabilities 30.09.02 30.09.01
Bank overdrafts 4 11 363
Derivative financial instruments 50 0
Current financial liabilities 54 11 363
Non-current bank liabilities 14 886 16 120
Debenture bonds* 100 395 100 000
Non-current financial liabilities 115 281 116 120
Financial liabilities 115 335 127 483
* For details see notes on Eichhof Holding Ltd. on page 60.
47
Eichhof Group
30.09.02 30.09.01
Up to 1 year Up to 5 years Total Total
Bank liabilities 4 14 886 14 890 27 483
Derivative financial instruments 50 0 50 0
Debenture bonds 0 100 395 100 395 100 000
Financial liabilities 54 115 281 115 335 127 483
Credit lines and bank liabilities include agreements between subsidiaries and their local banks.
30.09.02 30.09.01
Credit lines available 51 886 53 120
Credit lines not drawn on 36 996 25 637
There are no material debt covenants. All credit terms entered into in order to maintain the credit lineswere met at the balance sheet date.
3.9 Other liabilities 30.09.02 30.09.01
Other current liabilities towards
– third parties 8 495 13 019
– government bodies 833 1 610
– pension funds 16 318
Prepayments from third parties 2 721 2 607
Other current liabilities 12 065 17 554
Other non-current liabilities towards third parties 6 038 6 210
Other non-current liabilities 6 038 6 210
Other liabilities 18 103 23 764
Other non-current liabilties towards third parties include "Deposits on containers".
3.10 Provisions
2001/2002 2000/2001As of As of As of
01.10. Utilized Dissolved 30.09. 30.09.
Guarantees 473 -22 0 451 473
Other provisions 117 -3 -58 56 117
Provisions 590 -25 -58 507 590
Provisions for guarantee claims refer to the Color Division. It is expected that most of these costs willbe incurred within the first year after the delivery of the product.
48
Eichhof Group
3.11 Personnel expenses 2001/2002 2000/2001
Wages and salaries 58 253 57 797
Social security costs 3 458 3 643
Pension costs
– for defined benefit plans 3.20 2 304 3 008
– for defined contribution plans 3.20 4 080 4 288
Other personnel expenses 2 830 3 965
Personnel expenses 70 925 72 701
One-time expenses in the amount of TCHF 1 210 incurred in 2000/2001 for changes in defined bene-fit plans. In contrast to this, an income from settlements of plans of TCHF 452 was recorded in thereporting period.
3.12 Sales and administration expenses 2001/2002 2000/2001
Sales expenses 27 991 29 410
Administration expenses 11 648 13 477
Sales and administration expenses 39 639 42 887
3.13 Financial result 2001/2002 2000/2001
Interest income 568 1 371
Income from securities 250 6 002
Exchange gains 3 997 16 765
Financial income 4 815 24 138
Interest expenses -5 330 -7 001
Expenditure relating to securities -1 951 -6 135
Exchange losses -4 442 -9 118
Amortization of issue costs -161 -161
Financial expenses -11 884 -22 415
Financial result -7 069 1 723
In the previous year, income from securities included capital gains of TCHF 2 540 due to a revaluationof the Real Estate Group shares.
3.14 Income taxes 2001/2002 2000/2001
Current income taxes -1 466 -2 440
Deferred income taxes 4 983 1 600
Effective tax income / (expense) 3 517 -840
The effective tax expense, calculated by multiplying the local statutory tax rate with local taxable profitor loss, differs from expected tax expense as follows:
49
2001/2002 2000/2001
Profit before income taxes 1 115 5 070
Expected taxes (22 %; previous year 27%) 245 1 369
Effect on deferred tax liabilities due to reduction in income tax rates -6 186 0
Non-deductible expenses and other effects 2 424 -529
Effective tax (income) / expense -3 517 840
The income tax rate applicable was changed from a group-wide to an country-specific tax rate in thereporting period. This reduced the deferred tax liabilities and led to a recognition of a non-reoccuringtax income.
Changes in deferred taxes were calculated as follows:
2002 2001
Deferred tax assets
– As of 01.10. 560 148
– (Charges) / Discharges to income statement -102 412
Deferred tax assets as of 30.09. 458 560
2002 2001
Deferred tax liabilities– As of 01.10. 20 602 21 790– (Discharges) to income statement -5 085 -1 188Deferred tax liabilities as of 30.09. 15 517 20 602
The deferred income taxes are attributable to the following balance sheet items:
2002 2001
Losses available for offset against future taxable income 116 560
Inventories 143 0
Intangible assets 199 0
Deferred tax assets as of 30.09. 458 560
2002 2001
Inventories 2 328 3 160
Tangible fixed assets 9 465 14 066
Other assets 3 243 2 715
Liabilities 481 661
Deferred tax liabilities as of 30.09. 15 517 20 602
Deferred tax assets were only recognized for tax losses carried forward if they are likely to be applied in
the near future. The Eichhof Group has tax losses carried forward whose potential tax effect is roughly
CHF 6.8 million (previous year: CHF 5.2 million), of which TCHF 116 (previous year: TCHF 560) were
capitalized as deferred tax assets. These tax losses carried forward can potentially be used in Switzer-
land for seven years and abroad partly unrestrictedly.
Eichhof Group
50
30.09.02 30.09.01
Tax losses may be offset:
2002 0 214
2003 3 361 3 364
2004 1 844 1 848
2005 175 224
2006 665 665
more than five years 28 014 20 674
Total tax losses carried forward available for offsetting 34 059 26 989
3.15 Segment information
Business segments 2001/2002 2000/2001
Gross sales with third parties 281 405 289 075
Beverages Division 196 397 197 072
Color Division 80 354 89 446
Other 4 654 2 557
Depreciation of tangible fixed assetsand intangible assets 16 567 14 350
Beverages Division 8 132 8 329
Color Division 7 006 4 842
Other 1 429 1 179
Impairment 1 356 0
Beverages Division 0 0
Color Division 0 0
Other 1 356 0
EBITDA 26 107 17 697
Beverages Division 17 398 16 915
Color Division 5 738 -150
Other 2 971 932
EBIT 8 184 3 347
Beverages Division 9 265 8 586
Color Division -1 268 -4 992
Other 187 -247
Assets 293 352 318 142
Beverages Division 132 805 135 615
Color Division 69 954 75 413
Other 90 593 107 114
Eichhof Group
51
2001/2002 2000/2001
Liabilities 185 407 205 004
Beverages Division 67 622 67 297
Color Division 69 885 85 625
Other 47 900 52 082
Gross investment in fixed assets 15 189 20 205
Beverages Division 9 123 14 028
Color Division 2 401 3 182
Other 3 665 2 995
Personnel – Number of employees as of 30.09. 676 724
Beverages Division 439 442
Color Division 232 276
Other 5 6
The figures of the holding company, financial activities, investment properties and consolidationeffects are subsumed under the position "Other".
The products and business activities of the two divisions are described in the report on the businessyear. The Eichhof group accounts for inter-segment sales and transfers as if the sales or transferswere to third parties at current market prices.
Geographical segments 2001/2002 2000/2001
Gross sales with third parties 281 405 289 075
Europe 232 827 236 507
America 27 789 31 513
Asia/Pacific 20 789 21 055
Assets 293 352 318 142
Europe 260 399 282 990
America 27 157 30 474
Asia/Pacific 5 796 4 678
Gross investment in fixed assets 15 189 20 205
Europe 14 067 18 291
America 1 091 1 864
Asia/Pacific 31 50
Personnel – Number of employees as of 30.09. 676 724
Europe 519 552
America 130 146
Asia/Pacific 27 26
Eichhof Group
52
3.16 Financial instruments
Risk management and risk hedging instruments and off-balance-sheet risksTo hedge against foreign currency and interest rate risks and to improve the yield on financial assets,the Eichhof Group uses currency futures, option contracts and other financial instruments.
Management of foreign currency risksA significant portion of the Group's cash flows are denominated in foreign currencies. To hedgeagainst devaluation, future cash flows are hedged where appropriate by cost-benefit analysis.Hedging instruments include standardized foreign currency futures and options denominated invarious major currencies, generally with maturities of less than 12 months.
Management of counterparty risksCounterparty risks comprise the credit risks associated with marketable securities and claims as wellas default risk for derivative financial instruments and money market contracts. The credit risk is mini-mized by only purchasing marketable securities of companies with high ratings. The value of claims isadjusted on the basis of their anticipated recoverability. Default risk for derivative financial instrumentsand money market contracts is reduced by entering into transactions only with banks or other finan-cial institutions with a high rating at the time of closing. The counterparty risks are continually monito-red and kept within defined constraints.
Given the counterparties' high credit ratings, the Group does not anticipate any losses from default oncontracts. There are no significant concentrations of credit risk within the group.
Derivative financial instrumentsAt the balance sheet date, outstanding foreign currency futures transactions amount to TCHF 8 024(previous year TCHF 6 856) with maturities through the end of May, 2003. The related derivative finan-cial instruments were recognised in current financial assets and liabilities at fair values.
Hedge Accounting according to IAS 39 was not applied in the reporting and previous year.
On September 30, 2002, there were no currency options outstanding.
Fair valuesThe carrying values of cash and cash equivalents, trade accounts reveivable and current liabilitiesapproximate the fair values according to IFRS. Current financial assets and derivative financial instru-ments were measured at fair values.
3.17 Foreign exchange rates Year-end rates Average ratesfor balance sheet for income statement
Currency Unit 30.09.2002 30.09.2001 2001/2002 2000/2001
USD 1 1,4886 1,6121 1,6001 1,7123
EUR 1 1,4639 1,4771 1,4695 1,5195
GBP 1 2,3299 2,3702 2,3574 2,4673
DEM 1 n/a 0,7553 n/a 0,7769
FRF 1 n/a 0,2252 n/a 0,2316
ITL 100 n/a 0,0763 n/a 0,0785
BEF 100 n/a 3,6617 n/a 3,7665
SGD 1 0,8379 0,9122 0,8877 0,9647
Eichhof Group
53
3.18 Capital employed
Capital employed is calculated as follows:
30.09.2002 30.09.2001
Total assets 293 352 318 142
Investment property -44 348 -43 268
Operating assets 249 004 274 874
Non-interest bearing liabilities -70 072 -77 521
Capital employed 178 932 197 353
Average capital employed 188 142 220 879
3.19 Leasing liabilities
As in the previous year, there were no finance lease contracts at the balance sheet date.
The following overview shows future liabilities arising from non-capitalized operating lease contracts:
30.09.2002 30.09.2001
Due in reporing period + 1 year 933 1 844
Due in reporing period + 2 year 309 630
Due in reporing period + 3 year 45 190
Due in reporing period + > 4 Jahre year 6 100
Non-capitalized operating leasing liabilities 1 293 2 764
3.20 Employee benefits
Defined benefit plans
Net benefit expenses
2001/2002 2000/2001
Current service cost 4 299 4 476
Interest cost on benefit obligation 4 173 4 316
Expected return on plan assets -4 771 -5 530
Effect of curtailments / settlements -452 0
Amortization of transition cost 22 1 210
Amortization of losses 624 46
Employee contributions -1 591 -1 510
Expense recognized in the income statement 2 304 3 008
Eichhof Group
54
Eichhof Group
Net prepaid employee benefits30.09.2002 30.09.2001
Present value of pension obligations 110 151 108 919
Market value of plan assets -91 084 -98 119
Funding deficit 19 067 10 800
Benefit liabilities less plan assets 279 288
Unrecognized losses -27 418 -19 312
Unrecognized transition cost -162 -175
Unrecognized funding deficit (Art. 58, IAS 19) 4 787 5 211
Prepaid employee benefits at the end of the period -3 447 -3 188
The actual return on plan assets amounts to TCHF -3 458 in the reporting period (previous year:TCHF -9 440). The plan assets also include shares of the Eichhof Group at fair value of TCHF 2 400 atSeptember 30, 2002 (previous year: TCHF 3 036).
Movement in the net prepaid employee benefits
2001/2002 2000/2001
Prepaid employee benefits at the beginning of the period -3 188 -3 234
Net expense recognized in the income statement 2 304 3 008
Employer's contributions -2 136 -2 268
Unrecognized funding deficit (Art. 58, IAS 19) -424 -685
Translation differences -3 -9
Prepaid employee benefits at the end of the period -3 447 -3 188
Under Swiss statutory provisions, prepayments reported on the balance sheet cannot be reimbursedto the company, but in some pension schemes they are used to finance employer contributions to indi-vidual benefit plans.
The weighted actuarial assumptions can be summarized as follows:
30.09.2002 30.09.2001
Discount rate 3,72% 4,00%
Expected rate of return on assets 4,98% 4,98%
Future salary increases 2,00% 2,16%
Defined contribution plans
The company maintains various defined contribution plans for which expenses for 2001/2002 amount
to TCHF 4 080 (previous year: TCHF 4 288).
55
3.21 Management share option planOptions to subscribe Eichhof registered shares are granted to members of the Board of Directorsand to certain management personnel as part of their performance-related variable salaries. Optionholders are entitled to subscribe one share per option. Options are valid for six years and are subjectto a three-year blocking period. They have a predetermined exercise price calculated according tothe Black-Scholes formula.
Number of options As of Exercise priceYear issued Issue Repurchase Conversion 30.09.2002 (CHF)per October,1:
1998 980 -180 800 1 064,00
1999 1 560 -180 1 380 705,00
2000 1 380 -100 1 280 737,00
2001 1 400 1 400 310,00
Total 5 320 -460 0 4 860
In the reporting period, no options were converted (previous year: 2 880).
3.22 Related partiesRelated parties are members of the Board of Directors, management personnel and important share-holders. As in the previous year, no claims or liabilities exist between the company and its related par-ties. Additionally, no transactions took place except for those in the normal course of business (e.g.salary, dividends, etc.) both in the reporting and in the previous year.
3.23 Contingent liabilitiesThere were no sureties, guarantee obligations or pledges in favor of third parties either in the repor-ting period or in the previous year.
The company is involved in legal disputes, lawsuits and court cases in the ordinary course ofbusiness. As far as the company can assure such legal claims are not currently expected to have asignificant impact on its financial situation or operating result on a scale greater than its existingprovisions.
3.24 Securing of own liabilitiesNo assets were charged to secure own liabilties either in the reporting period or the previous year.
3.25 Commitment to capital expenditureAs of September 30, 2002, there were no commitments to capital expenditure.
3.26 Earnings per share (EPS)Earnings per share were calculated by dividing the net profit attributable to ordinary shareholders bythe weighted average number of ordinary shares outstanding during the year (issued shares less ownshares). In the reporting period, the number of outstanding shares averaged 185'939 (previous year:186'084). Diluted earnings per share were calculated by dividing the net profit attributable to ordinaryshareholders by the weighted average number of ordinary shares outstanding during the yearadjusted for the effects arising as a result of issuing own shares reserved for the management shareoption plan. The diluted earnings per share were calculated on the basis of an average of 186 277shares (previous year: 186 467).
Eichhof Group
56
3.27 Post balance sheet eventsThe Group Financial Statements were approved for publication by the Board of Directors on January8, 2003. They must still be approved by the Annual General Meeting.
The Eichhof Group acquired the business of the Bernese wine retailer Wehrli + Co. Ltd. as of Decem-ber 1, 2002, with a sales volume of about CHF 5 to 6 million.
No significant events have occurred since the balance sheet date which might have any influence onthe information presented in the 2001/2002 annual report or which might need to be disclosed here.
3.28 Subsidiary companies
Capital Shares
Company Location Currency in 1 000 in %
Beverages Division
Brauerei Eichhof* CH-Luzern CHF 15 000 100,0
Getränke Service Eichhof AG* CH-Luzern CHF 10 000 100,0
Kellerei St. Georg* CH-Luzern CHF 3 000 100,0
Bier-Import AG* CH-Zürich CHF 500 100,0
MABAG AG* CH-Luzern CHF 100 100,0
Lufrisca AG CH-Luzern CHF 100 100,0
Der fliegende Harass AG CH-Zürich CHF 50 100,0
Getränke Schnelldienst Schmidinger AG CH-Urdorf CHF 392 100,0
Color Division
Datacolor Holding AG* CH-Luzern CHF 7 725 100,0
CV US Inc.* USA-Ohio USD 0,0 100,0
Colorvision Administrative AG CH-Luzern CHF 3 000 100,0
Datacolor AG CH-Dietlikon CHF 4 000 100,0
Datacolor (Europe) Service AG CH-Dietlikon CHF 500 100,0
Datacolor International France SA F-Montreuil EUR 274 100,0
Datacolor GmbH D-Marl EUR 256 100,0
Datacolor Asia Pacific Pte. Ltd. Singapur SGD 3 000 100,0
Datacolor Asia Pacific (HK) Ltd. Hong Kong HKD 10 100,0
Applied Color Systems Inc. USA-Lawrenceville USD 35 808 100,0
Colorvision Inc. USA-Delaware USD 0,05 100,0
International Colour Management Plc. GB-Altrincham GBP 21 412 100,0
Datacolor International Ltd. GB-Altrincham GBP 7 500 100,0
Texicon Ltd. GB-Altrincham GBP 1 000 100,0
*) These companies are held directly by Eichhof Holding Ltd.
Eichhof Group
KPMG Fides Peat
Markus Forrer Urs WidmerSwiss Certified Accountant Swiss Certified AccountantAuditor in Charge
Lucerne, January 8, 2003
57
Report of the Group Auditors
to the General Meeting of Eichhof Holding Ltd., Lucerne
As group auditors, we have audited the consolidated financial statements (balance sheet, income state-ment, statement of changes in equity, cash flow statement and notes as set out on pages 35 to 56) of Eich-hof Holding Ltd. for the year ended Setember 30, 2002.
These consolidated financial statements are the responsibility of the board of directors. Our responsibilityis to express an opinion on these consolidated financial statements based on our audit. We confirm that wemeet the legal requirements concerning professional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession andwith the International Standards on Auditing (ISA), which require that an audit be planned and performed toobtain reasonable assurance about whether the consolidated financial statements are free from materialmisstatement. We have examined on a test basis evidence supporting the amounts and disclosures in theconsolidated financial statements. We have also assessed the accounting principles used, significant esti-mates made and the overall consolidated financial statement presentation. We believe that our audit provi-des a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, theresults of operations and the cash flows in accordance with the International Financial Reporting Stan-dards (IFRS) and comply with Swiss law.
We recommend that the consolidated financial statements submitted to you be approved.
Eichhof Group
58
Balance Sheet
TCHF 30.09.02 30.09.01
Assets
Cash and cash equivalents 4 082 23 664
Current financial assets 19 532 16 496
Other accounts receivable 1 31 312 26 726
Prepaid expenses 118 89
Current assets 55 044 33,0% 66 975 36,7%
Non-current financial investments 2 111 691 115 750
Non-current assets 111 691 67,0% 115 750 63,3%
Assets 166 735 100,0% 182 725 100,0%
Liabilities and shareholders' equity
Current financial liabilities 0 10 156
Other current liabilities 3 2 278 2 684
Accrued liabilities 1 428 1 858
Current liabilities 3 706 2,2% 14 698 8,0%
Non-current financial liabilities 4 100 000 100 646
Non-current liabilities 100 000 60,0% 100 646 55,1%
Liabilities 103 706 62,2% 115 344 63,1%
Share capital 4 929 11 660
Legal reserves 18 428 18 390
Special reserves 28 133 28 188
Retained earnings 11 539 9 143
Shareholders' equity 5 63 029 37,8% 67 381 36,9%
Liabilities and shareholders' equity 166 735 100,0% 182 725 100,0%
Eichhof Holding Ltd.
59
Income Statement
TCHF 2001/2002 2000/2001
Financial income 24 900 21 354
Income from trademarks 0 140
Financial expenses -19 990 -14 820
Administrative expenses -230 -79
Income taxes 91 -68
Net profit 4 771 6 527
Profit carried forward 6 768 2 616
Retained earnings 11 539 9 143
Eichhof Holding Ltd.
60
Notes
Additional information on the financial statements for the year ended September 30, 2002The values below are in thousands of Swiss francs (TCHF) unless otherwise indicated.
1 Other accounts receivable 30.09.02 30.09.01
Other accounts receivable
– third parties 6 128 7 385
– group companies 25 184 19 341
Other accounts receivable 31 312 26 726
2 Non-current financial investments 30.09.02 30.09.01
– Investments 67 421 67 771
– Own shares 7 001 8 396
– Loans to group companies 36 800 38 953
– Issue costs of debenture bonds 469 630
Non-current financial investments 111 691 115 750
3 Other current liabilities 30.09.02 30.09.01
Other current liabilities
– third parties 2 129 2 081
– group companies 149 603
Other current liabilities 2 278 2 684
4 Non-current financial liabilities 30.09.02 30.09.01
– Debenture bonds 100 000 100 000
– Loans from affiliates 0 646
Non-current financial liabilities 100 000 100 646
Eichhof Holding Ltd. has the following outstanding loans:
CHF 60 million loan at 4 1/4%, 1997–2005, due April 1, 2005CHF 40 million loan at 4%, 1998–2006, due March 30, 2006
Eichhof Holding Ltd.
61
5 Shareholders' equity
Share capitalThe share capital of Eichhof Holding Ltd. of CHF 4 928 900 is fully paid-in and consists of 197 156registered shares with a par value of CHF 25.– each. The shares are listed on the Zurich StockExchange under issue number 853 104.
Own sharesEichhof Holding Ltd. holds a total of 11 669 (previous year: 24 831) own shares, carried at CHF 7 001million. The voting rights for these shares are suspended. A reserve for own shares has been dulyformed for these shares.
2001/2002 2000/2001Par value Book value Par value Book value
TCHF TCHF Number TCHF TCHF Number
Balance at 01.10. 1 365 8 396 24 831 2 682 11 793 26 825
+ Shares purchased
At par of CHF 100.00 78 856 892
At par of CHF 55.00 85 1 100 1 534 6 88
At par of CHF 25.00 4 100 148
- Shares sold
At par -289 -2 886
At book value -295
Elimination of reserved own shares -816 -816 -14 844
+/- Adjustment for repayment of par value -346 -346 -1113 -1 113
+/- Market value adjustment -1 433 -2 934
Balance at 30.09. 292 7 001 11 669 1 365 8 396 24 831
The share capital entitled to a dividend amounts to CHF 4 928 900.
Significant shareholdersThe Board of Directors of Eichhof Holding Ltd. is aware of the following individual shareholders andjointly voting shareholder groups whose holdings exceed 5% of all voting shares:
Dubach family 28.6% (previous year 26.6%), Keller family 8.1% (previous year 7.6%) Marc Rich FinanceGmbH 7.5% (previous year 7.6%).
Legal reserves 30.09.02 30.09.01
- General reserves 2 332 2 332
- Reserves for own shares 16 096 16 058
Legal reserves 18 428 18 390
6 Pledges and guarantees in favour of third partiesOn September 30, 2002, Eichhof Holding Ltd. had provided pledges to a maximum amount ofTUSD 10 000 (previous year: TCHF 16 120) on behalf of group companies, of which TUSD 10 000 (pre-vious year: TCHF 16 120) were drawn on at the balance sheet date.
Eichhof Holding Ltd.
62
Eichhof Holding Ltd.
Proposals of the Board of Directors
Proposal for Appropriation of retained earnings
Profit 2001 /2002 CHF 4 770 851
Retained earnings carried forward CHF 6 768 110
Retained earnings CHF 11 538 961
The Board of Directors proposes to the General Meeting to carry forward the retained earnings ofCHF 11 538 961 of Eichhof Holding Ltd.
Proposal for reduction of share capital
The Board of Directors proposes to the General Meeting to reduce the company's share capital by thereduction of the par value of each registered share from CHF 25.– by CHF 24.– to CHF 1.– (total reductionof CHF 4 731 744) instead of a dividend, and to repay the shareholders the corresponding CHF 24.– pershare in cash.
Repayment of par value
After approval of the proposal for reduction of share capital by the General Meeting, the procedureprescribed by law for repayment of par value will be initiated. The individual steps of this procedure will beundertaken in such a way that, if no delays occur, the repayment in the amount of CHF 24.– per registeredshare will be paid out to shareholders domiciled in Switzerland without deduction of a withholding tax by the end of April, 2003. The corresponding sum will be disbursed to shareholders in accordance withapplicable regulations.
63
Eichhof Holding Ltd.
KPMG Fides Peat
Markus Forrer Urs WidmerSwiss Certified Accountant Swiss Certified AccountantAuditor in Charge
Lucerne, January 8, 2003
Report of the Statutory Auditors
to the General Meeting of Eichhof Holding Ltd., Lucerne
As statutory auditors, we have audited the accounting records and the financial statements (balance sheet,income statement and notes) of Eichhof Holding Ltd. for the year ended September 30, 2002, as set out onpages 58 to 62.
These financial statements are the responsibility of the board of directors. Our responsibility is to expressan opinion on these financial statements based on our audit. We confirm that we meet the legal require-ments concerning professional qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession,which require that an audit be planned and performed to obtain reasonable assurance about whether thefinancial statements are free from material misstatement. We have examined on a test basis evidence sup-porting the amounts and disclosures in the financial statements. We have also assessed the accountingprinciples used, significant estimates made and the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.
In our opinion, the accounting records and financial statements and the proposed appropriation of retai-ned earnings comply with Swiss law and the company's articles of incorporation.
We recommend that the financial statements submitted to you be approved.
64
Key FiguresEichhof Group
CHF in millions 1998 1999 2000 2001 2002
Gross sales
Beverages division 176,8 161,5 178,8 197,1 196,4
– Beer 97,1 97,4 102,4 108,3 108,2
– Wine and spirits 17,2 18,4 19,6 21,3 22,0
– Non-alcoholic beverages 59,3 41,8 51,6 62,5 61,4
– Other income 3,2 3,9 5,2 5,0 4,8
Color division 99,0 90,3 94,9 89,4 80,4
Other 2,0 2,4 2,6 2,6 4,6
Gross sales, consolidated 277,8 254,2 276,3 289,1 281,4
Net sales, consolidated* 256,9 238,2 261,6 260,9 255,0
EBITDA* 24,6 30,6 26,6 17,7 26,1
EBIT 17,5 18,6 14,8 3,4 8,2
Operating RoCE
(EBIT/Average capital employed) 9,5% 9,4% 6,6% 1,5% 4,3%
Net profit 16,9 14,2 6,5 4,2 4,6
RoCE
(Net Profit/Average capital employed) 9,2% 7,2% 2,9% 1,9% 2,5%
Cash flow from operating activities 31,6 7,1 16,5 7,0 22,7
Net-investments in fixed assets -36,6 -14,7 36,1 -9,9 -12,8
Free cash flow -5,0 -7,5 52,7 -2,8 9,9
Free cash flow before investing activities 19,3 -5,0 -25,3 -7,2 14,4
Average capital employed 183,4 197,9 222,7 220,9 188,1
Net debt 98,8 117,9 83,1 98,0 97,7
Shareholders' equity 117,2 116,5 119,9 113,1 107,9
Return on shareholders' equity in % 14,4% 12,2% 5,4% 3,7% 4,3%
Balance sheet total 308,6 325,9 388,5 318,1 293,4
Number of employees as at 30.09. 743 725 750 724 676
Personnel expenses 69,0 65,0 69,8 72,7 70,9
*Comparative figures were adjusted due to a restatement according to IFRS.
Eichhof Holding Ltd.
65
Eichhof Holding Ltd.
Key Figures Eichhof Holding Ltd.
1998 1999 2000 20011) 2002 2)
Nominal share capital, CHF in thousands 21 200 21 200 21 200 11 660 4 929
Par value per share, CHF 100 100 100 55 25
Number of outstanding shares 212 000 212 000 212 000 212 000 197 156
of which own shares incl. reserved shares 20 870 27 502 26 825 24 831 11 669
of which with dividend rights 192 356 194 276 197 156 197 956 197 156
Share price on 30.09., CHF 1 550 1 240 1 101 759 600
High 1 600 1 550 1 950 1 290 837
Low 906 1 085 1 070 601 600
Market capitalization,30.09., CHF in millions 328,6 262,9 233,4 160,9 118,3
P/E Ratio 19,4 18,5 36,1 38,0 25,5
Price to operating income 18,8 14,1 15,8 48,0 14,5
Data per share (based on consolidated figures)
1998 1999 2000 2001 2002
Group net income, CHF 79,7 67,0 30,5 20,0 23,5
Cash flow from operating activities, CHF 149,1 33,7 78,1 33,2 115,1
Shareholders' equity, CHF 552,8 549,5 565,3 533,7 547,5
Distribution in CHF 2) 29 32 65 42 24
Distribution in % 36,4% 47,8% 213,3% 210,5% 102,2%
Yield in % 1,9% 2,6% 5,9% 5,5% 4,0%
1) After adjustment for repayment of par value in 20012) After adjustment for repayment of par value and elimination of own reserved shares in 2002
66
Beverages Division
Brauerei EichhofObergrundstrasse 110CH-6002 LuzernTel. +41 41 319 11 11Fax +41 41 319 12 06www.eichhof.com
Getränke Service EichhofObergrundstrasse 110CH-6002 LuzernTel. +41 41 319 12 12Fax +41 41 319 12 06www.eichhof.com
Kellerei St. GeorgObergrundstrasse 110CH-6002 LuzernTel. +41 41 319 19 19Fax +41 41 319 14 41www.kellerei-st-georg.ch
The Beer CompanyFörrlibuckstrasse 178CH-8005 ZürichTel. +41 1 272 71 22Fax +41 1 272 71 26www.thebeercompany.ch
Color Division
HeadquarterDatacolor InternationalApplied Color Systems Inc.5 Princess RoadLawrenceville NJ, USATel. +1 609 924 21 89Fax +1 609 895 74 72www.datacolor.com
EuropeDatacolor AGBrandbachstrasse 10CH-8305 DietlikonTel. +41 1 835 37 11Fax +41 1 835 38 35www.datacolor.com
AsiaDatacolor Asia Pacific Pte Limited150 Cecil Street # 07-02AXA Life BuildingSingapore 069543Tel. +65 225 81 83Fax +65 225 87 30www.datacolor.com
Headquarter HoldingEichhof Holding AGObergrundstrasse 110CH-6002 LuzernTel. +41 41 319 12 42Fax +41 41 319 12 60www.eichhof.com