solutions unlimited

Solutions Unlimited2000 Annual Report

The Swisslog 2000 Annual Report comprises two parts: the report on activities and the financial overview. The annual report ispublished in German and English. The English version is binding.

Edited by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Swisslog Management AG, Buchs/Aarau

Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meiré und Meiré, Cologne

Art Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alice Weigel

Concept and text . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Haussmann, Weber-Thedy

Corporate & Financial Communications, Zurich

Photography

People: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stefan Bungert, Ahrensburg

Swisslog References: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stefan Bungert, Ahrensburg

Other: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stone, Mauritius, Imagebank

Lithography and Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schwabe & Co. AG, Basel /Muttenz

Publication

3 Letter to Shareholders

7 Supply Chain Revolution

8 Strategy

11 Supply Chain Consulting

13 Solutions Unlimited

15 Supply Chain Software

18 The Overview

25 Outsourcing & E-Fulfillment Services

29 Material Flow Expertise

32 Employees

37 Key Figures for Investors

38 Information for Investors

41 Members of the Board

42 Executive Committee

44 Management Committee

46 Addresses

49 Publication

Contents

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Dear Shareholders

In 2000, Swisslog again achieved an impressive improvement in sales and operating earnings, furtherstrengthening its position as a leading global partner for companies in all matters pertaining to supply chainoptimization solutions. In particular, Swisslog has focused on expansion in software, consulting and services.The objective is to become a leading provider of complete solutions in the early-stage, rapidly growing mar-ket for consulting, software, automation, support and operation of corporate supply chain networks.Swisslog already offers integrated supply chain solutions spanning from procurement todelivery for a multitude of business models and industries. The offering includes optionsto outsource the customer’s entire supply chain to Swisslog. Under this partnership,Swisslog assumes responsibility for the technical and financial aspects of customers’supply chains. Swisslog’s supply chain solutions offer companies a range of benefits:significantly increased flexibility, reaction capability, productivity and service, whileminimizing logistics costs and tied-up capital.

In the past year, sales from continuing operations rose by 28% from CHF 722.4 million

to CHF 925.0 million. Of this expansion, around 13% (1999: 4.8%) was organic. Order

intake was up by 37.8% year-on-year during 2000, breaking the billion-franc barrier for

the first time to total CHF 1,003.1 million.

As in recent years, the increase in operating income clearly exceeded growth in sales.

Earnings before interest, taxes, depreciation and goodwill amortization (EBITDA) from

continuing operations improved by 44.2% to reach CHF 89.1 million. Earnings before interest, taxes and good-

will amortization (EBITA) rose by virtually the same percentage (44.6%) to CHF 72.6 million. This represents

an EBITA margin of 7.9% (1999: 6.9%). Hence, Swisslog has taken another substantial step towards achiev-

ing its medium-term goal of an EBITA of 10% of sales. Europe accounted for about 70% of sales, the USA

for about 20% and the rest of the world for the remaining 10%.

Supply Chain Software and Supply Chain Systems & Products segments expanding rapidly

All segments contributed to revenue growth. Sales in the Supply Chain Software segment increased 116%

from CHF 40.5 million to CHF 87.5 million. With organic growth accounting for more than 40% of the in-

crease, this segment maintained its pattern of rapid development established in previous years, reinforcing

its presence in international markets. Growth in operating earnings (EBITA) soared by 146.9% to CHF 7.9

million, translating into an EBITA margin of 9.0%. In the Supply Chain Systems & Products segment, sales

expanded by 43.3% to CHF 492.2 million. These figures reflect, in particular, intensive efforts in research

and development and the launch of new products. Operating earnings climbed by 87.3% to CHF 45.9 mil-

lion. The EBITA margin of 9.3% is confirmation of Swisslog’s policy of focusing consistently on high-margin

activities with above-average added value, specifically in robotics. Sales in the Supply Chain Solutions seg-

ment were below the Group average in 2000, appreciating by 2.9% to CHF 391.4 million. This development

is primarily a reflection of postponed orders. Operating earnings (EBITA) of CHF 28.4 million were marginally

lower (–2.4%) year-on-year. Business picked up noticeably in the first quarter of 2001, signaling an improve-

ment in this business segment.

Truls D. Berg (left), Juhani Anttila (right)


Swisslog Headquarters in Buchs

Strategic supply chain partnership: Solutions Unlimited

The supply chain management market is a young market that has attracted a number of competing providers

from different backgrounds. As the market consolidates, however, successful companies will be those who

take the lead in packaging the five core competences of supply chain optimization into a single global

solution: consulting on inter-business value chain optimization, software for managing real-time inform-

ation flow, automation technology to efficiently manage material flow, comprehensive customer support

and technical and financial outsourcing capacities to form the basis of lifetime partnerships with customers.

Over the past five years, Swisslog has consistently focused on building expertise in these competences. As

a result, it is now an international market leader and partner of globally important companies. The first-

mover advantage is decisive for success in this competitive market. According to the situation, Swisslog

pursues this either by expanding its existing capacity or through strategic acquisitions and alliances.

The focus of its consulting strategy was a successful alliance with Wassermann AG, a consulting and soft-

ware firm in which Swisslog took an interest in fall 2000. Wassermann is Germany’s leading intra- and inter-

business supply chain optimization company. Its current team of approximately 85 employees, proprietary

supply chain planning software and implementation expertise are the perfect complement to Swisslog’s con-

sulting skills.

Gains in market share and further expansion in supply chain software

For many years, Swisslog has pursued a consistent growth strategy in its Supply Chain

Software division. In the past year, Swisslog significantly expanded its software com-

petence and geographic market presence, in particular in e-fulfillment, through both

proprietary developments and acquisitions of specialized companies. Important acquis-

itions for supply chain execution software included Sonica Software Corporation, a US

company, and the logistics division of Kewill Systems plc, a UK software firm. As a re-

sult, the number of employees in the software division jumped from about 180 to 450

in 2000.

Gains in market share confirm the stronger market position of Swisslog’s supply chain

software. For instance, Swisslog is by far the global leader in the market for warehouse

management software for automated warehouses. Swisslog has adopted a dual-track

approach to achieve its goal of extending its market leadership in its software operations:

continual enhancement of its development competence in built-to-order software and

the launch of further products for licensing and reselling.

The greatest market potential lies in combining supply chain planning with supply chain execution soft-

ware, which explains why Wassermann’s supply chain planning and optimization software and Swisslog’s

expertise in the field of supply chain execution software are a perfect fit. At the end of March 2001, the

first supply chain software products developed jointly by Wassermann and Swisslog were unveiled at the

CeBIT in Hanover, Germany.

Outsourcing: an increasingly strategic business activity

As service and supply networks become more complex, it becomes clear that in most companies supply chain

management is seldom a core competence. To satisfy a growing need, Swisslog has expanded its range of

services to include outsourcing partnerships in which Swisslog will assume responsibility for the manage-

ment and operation of its customers’ supply chains. Over the years, Swisslog has established an installed


base of several thousand solutions, many of which are maintained and upgraded by Swisslog Customer

Support. Swisslog’s unrivalled experience in automation uniquely positions it in the supply chain market. In

contrast to conventional providers of personnel-intensive logistics services, Swisslog focuses on the man-

agement and ongoing optimization of total supply chain operations, including the requisite software in-

stallation and technologically advanced equipment that Swisslog has already supplied or will supply. The

outsourcing package is rounded off with comprehensive financing solutions from Swisslog Capital, a strate-

gic alliance between Swisslog and GE European Equipment Finance, which will finance up to 100% of the

supply chain investment requirements of Swisslog customers.

Financial statements reflect strategic orientation

The shift in operational focus is now also reflected in the financial statements. In this Annual Report,

Swisslog has shortened the goodwill amortization period from 20 years to 5 years. This takes into account

market dynamics in the field of supply chain solutions.

Outlook for 2001

The year 2001 started well for Swisslog. The robust order intake has created a sound foundation for the

new financial year. There are also indications that Swisslog will receive major orders from retailers in

the USA and Europe in the first half of 2001.

Overall, uncertainty overshadows the economic outlook in the relevant key markets in the current financial

year. Particularly in periods of slowing economic activity, companies come under pressure to cut supply chain

costs wherever possible, whereas in recovery phases the emphasis is on expansion.

In many companies there is still considerable potential for cutting costs or improving performance through

the use of faster, more transparent and more flexible value chains. As a result, growth forecasts for the sup-

ply chain market are encouraging – regardless of the current stage of the business cycle. Swisslog is well

positioned in this market. Moreover, it is focusing on the dynamic, high-margin growth segments of customer

and industry-specific total supply chain solutions with higher added-value potential. Swisslog’s organiza-

tional structure that came into effect on 1 March 2001 provides the platform for optimal exploitation of

this potential.

At this point we should like to express our gratitude to our employees, who, through their competence, com-

mitment and flexibility, have been the main contributors to the success of our company.

We also thank you, our shareholders, for your continued interest and confidence in Swisslog in 2000.

For the Board of Directors Truls D. Berg Juhani Anttila

Chairman Delegate of the Board

Buchs/Aarau, April 2001


Supply Chain RevolutionChallenges of the digital economy

The supply chain revolution is well under way. Until recently, the supply chain seldom extended beyond thebilateral manufacturer–purchaser relationship. Today companies operate and communicate through aglobal supply chain network with numerous partners who are involved in the development, manufacture anddistribution of a product or service. The task of supply chain management is to coordinate the complex flowof information and materials from suppliers’ suppliers to customers’ ultimate customers.

Supply and service chains are growing more complex. There are many reasons for this, foremost among them

are computer technology, falling transport and telecommunication costs and the abolition of most trade

barriers. These changes have hugely expanded the operational radius of individual companies. Today even

small providers can compete with internationally established companies in global procurement and sales

markets. In addition, companies’ increasing specialization on a limited product range means that more and

more firms are involved in any single supply and service chain, which itself covers a continuously dimin-

ishing part of the entire value-added process. Over and above this, the life cycle of each product generation

is shrinking rapidly. Furthermore, there is a growing trend among buyers to purchase customized goods that

are finished only after the order has been placed.

Complexity and speed

In this environment, the speed factor acquires a new dimension. Today, order and delivery confirmations

often hinge on fractions of seconds. The same applies to customers’ tolerance of time and error. With a view

to keeping capital requirements and the risk of overproduction as low as possible, many companies work

with a minimum of supplies and stocks. To summarize: the business world is shrinking to a network of com-

peting chains of supply and services centered on core companies specialized in strategic supply chain

management.

Supply chain management: market of the future

These new value chain constellations are revolutionizing the flow of information and material and simul-

taneously increasing demand for specialized partners in supply chain management services. The latter func-

tion is seldom a core competence in most companies. There is a growing demand for outsourcing options

that assume responsibility for all management functions related to the supply chain – from strategic analysis,

through planning, design and implementation, to entrepreneurial-driven operations, including financing.

“Both the functioning and the perception of space and time are being reorganized.” (Philippe Gavi)


Strategy The route to global market leadership in supply chain solutions

Today Swisslog is already one of the world’s most important companies in the market for integrated supplychain solutions. Its goal is to become the global market leader by consistently developing its competencesand gaining market share in high-growth market segments. Strategic alliances with companies in relatedfields such as transport and telecommunications services are preparing the way for entry into new markets.Finally, Swisslog will continue to expand both its competence in the field of industry-specific solutions andits geographic presence in order to provide customized global solutions for its world wide operating customers.

Integrated solutions – total solutions – include consulting, software, engineering and services as well as

transport and telecommunications. In the first four fields Swisslog has already established itself as a com-

petence center in the market, a position it will selectively expand in the coming years through organic

growth and acquisitions. A strategic focus in this respect is its outsourcing business, which includes com-

prehensive financing solutions for customers. In the other two fields, transport and telecommunications,

Swisslog plans to form strategic alliances to complete its supply chain services.

New organization: platform for the next growth phases

The global supply chain market continues to consolidate. Swisslog has been actively involved in this process

for many years, and intends to continue to play a significant role in the future. Its new divisional structure

and stronger management provide the necessary conditions for growth. The Consulting division and the

E-Fulfillment & Outsourcing Services division promise to deliver strong growth with very solid margins. The

practice-driven Supply Chain Consulting division, including Logistics Consulting, enables customers to

achieve significant improvements in profitability within a short period.

Swisslog’s Supply Chain Software division plans ongoing development of its product range. The key elements

of this strategy are enhanced vertically integrated applications, expansion of products that can be licensed

and resold and a greater international presence.

“The real power of technology is not that it can make the old processes work better, but that it enables organizations tobreak old rules and create new ways of working.” (Michael Hammer & James Champy)


Apart from strong organic growth, acquisitions and strategic alliances will also help Swisslog to build up

its market position. In the field of automation technology, the Logistics Solutions, Material Flow Systems

and Robotic Systems divisions are focusing on demanding high-end system solutions. The integration of

robotic systems in particular opens up a unique opportunity for Swisslog to increase its advantage over its

competitors.

Integration of new services

In the field of services, Swisslog offers solutions for every element of supply chain management, from con-

cepts, through solution development, to operational responsibility for a customer’s complete supply chain.

For companies that want to focus on their core business, Swisslog’s Outsourcing & E-Fulfillment Services

division will assume responsibility for the functions of supply chain management. This offer can also be

combined with the financing solutions of Swisslog Capital*, which will cover up to 100% of a company’s

supply chain investments.

Industry-specific solutions

Swisslog continues to refine its expertise in industry-specific supply chain solutions as it focuses on the

highest-growth sectors of the modern economy. For instance, as part of the recently completed organizational

adjustment, separate business units have been created in the following industry segments to achieve opti-

mal utilization of growth potential: Distribution and E-Commerce, Health Care and Pharma, Automotive and

Color Logistics.

Geographic expansion

Swisslog’s customers include a large number of multinational companies that need supply chain partners

with a global presence. Swisslog already has branches in 25 countries on all continents. Over the next few

years, Swisslog will continue to expand its geographic presence, in particular in its core European and North

American markets, to ensure that it can offer its customers a truly global service.

*Financing provided by GE European Equipment Finance


In the financial year under review, Swisslog implemented a comprehensive program of strategic expansion inits range of services, particularly in the Supply Chain Consulting area. The core of this development wasSwisslog’s decision in fall 2000 to enter into an alliance with Wassermann AG, the leading supply chain con-sulting and software organization in Germany. At the time, Swisslog acquired a 20% interest in the firm,which it subsequently plans to increase to a majority holding in 2001. This move coincided with Swisslog’simplementation of the new organization. The consulting competences of the two companies were integrat-ed to form the new Swisslog Supply Chain Consulting division headed by Otto Wassermann. As a result,Swisslog is now a strategic consulting partner specialized in the optimization of local and internationalintra- and inter-business information and material flows – from the procurement of raw materials to thedelivery of the finished product.

The expectations of purchasers – both business and end customers – have changed fundamentally in recent

times. Requirements have been redefined beyond recognition, especially with respect to delivery speed and

service and to the design of products on offer. The “availability to promise” – reliable declarations about de-

livery with regard to quantity and timing –, often within seconds, is giving way to the “capability to prom-

ise”. Increasingly, such commitments are taken for granted, and not only among professionals. Today, it goes

without saying that commitments to fulfill orders will be observed. In addition, the number of firms in-

volved in the process is increasing all the time, including, for instance, manufacturers, their suppliers and

subcontractors, forwarding agents, dealers and distributors, often operating from geographically remote

locations.

Any company, regardless of size or sector, can exploit the opportunity of improving competitiveness by op-

timizing its supply chain, i.e. designing all performance and supply procedures for all partners in the com-

pany’s entire supply chain with a view to minimizing time and cost.

The first requirement is a consulting partner with years of experience in analyzing, designing, implement-

ing and operating supply chains that can advise on optimizing the entire process chain from order intake

to delivery.

The key to strategic supply chain planning

Swisslog offers integrated consulting, covering all levels of corporate decision-making. Swisslog supplies

the necessary instruments for the analysis, planning, implementation, operation and ongoing optimization

of a supply chain, including its individual components. Swisslog always develops the basic strategies for

successfully designing intra- and inter-business supply chains in close collaboration with its customers.

Supply Chain ConsultingContinual improvement in results

"We declare that a new beauty has enriched the glory of the world: the beauty of speed." (Filippo Tommaso Marinetti)


Depending on requirements, this may include an economic (wage level, currency policy), political (stability,

rule of law) or logistic (infrastructure) analysis of various alternative locations for the goods and services

in question. Perishable goods, for instance, will reduce the radius of a logistics network, whereas light goods

and high value-added processes permit a broader geographic distribution.

The analysis comprises strategic benchmarking that provides information about the performance and cost

efficiency of the individual solution proposals. Performance appraisal includes, among others, defining and

monitoring schedule reliability and availability to deliver. This alone regularly results in double-digit per-

centage improvements in productivity and schedule reliability of close to 100%. The value analyses of the

supply chain processes investigate the financial savings potential and document the concrete effects on op-

erating results, cash flow and corporate value. Over and above this, Swisslog determines the preparatory

and organizational measures the company must introduce to successfully implement a supply chain solu-

tion. Without exception, the result is clear lines of responsibility for all planning, scheduling and control

functions. The people actually involved in the process chain – manufacturers, assembly workers, dispatch-

ers, etc. – operate in a less cumbersome, more efficient structural organization, in which each takes direct

control of numerous steps.

Software analyzes, simulates and controls the supply chain

At the operational level, Swisslog Supply Chain Consulting uses WAY supply chain software to provide a

visual image of the processes to be performed, such as order and material flows. It is then possible to iden-

tify and deal with potential backlogs, bottlenecks and oversupply before they have real consequences in the

form of missed schedules and efficiency deficits that hit the bottom line.

The simulation software integrates all processes that need to be planned and harmonized between all the

companies concerned into a uniform information layout, and at the same time assumes responsibility for

the concrete control of the supply chain in everyday business. The key to optimizing inter-business supply

chains involving several partners lies in temporarily ignoring the barriers between the individual companies

in the strategic analysis and design of the value creation network. This enables Swisslog to identify and

exclude performance duplication and the costs associated with it.

Practice-driven consulting

Swisslog thus combines intelligent management philosophy and comprehensive software know-how with

a solid knowledge of logistics and experience from several thousand successful projects. This integrated ex-

pertise provides the basis for optimal consulting in all matters of supply chain design, implementation and

optimization. Landmark solutions for uninterrupted supplies and automatic order management are just as

much part of the services offered by Swisslog Supply Chain Consulting as specialized measures such as “cross-

docking” and “flow through”, which optimize material flow, thereby reducing stock levels to a minimum, or

even eliminating them entirely. Finally, Swisslog has enormous experience in the conception, design, im-

plementation and operation of warehouse management and material flow systems. Swisslog also provides

answers to fundamental questions about the necessity and the level of automation of an installation with-

in the overall context of integrated supply chain consulting. At the same time, Swisslog does not restrict its

consulting to defining tasks and functions; it also optimizes their execution and the technical and business

operations as well as their financing.

For example, Swisslog’s integrated supply chain consulting managed to shorten material flow and optimize

its design to such an extent for one consumer goods company, which had doubled its sales, that it was able

to cancel plans for a second high-bay warehouse.


Rising to the challenges of today’s supply chain revolution, Swisslog is transforming into a total solutions provider for cus-tomers independent of size and business area. Covering all segments of supply chain management, from procurement to endconsumer, Swisslog provides integrated, modular, scalable solutions. Via its consulting, software and service expertise, Swisslogis able to analyze, design, simulate, implement and maintain industry-specific solutions. The results are efficient operation, profitenhancement, increased customer satisfaction and overall optimization of the supply chain.

Solutions Unlimited

Procurement Production DistributionPlanning

Capable to PromiseSimulation

Colla-boration

E-Marketauctions

Sourcing Semi-product

Assembly FinalProduct

Storage Picking TransportExecution

Focus Costs Speed

Order Entry Point (OEP)


Supply Chain Software Dedicated footprint expansion – Swisslog sets new standards

The year 2000 proved crucial to the development of Swisslog’s Supply Chain Software competence. Originallyconcentrating on warehouse management software and warehouse management automation, Swisslog ispresently implementing a strategy of footprint expansion – developing its software competence to cover allaspects of the supply chain. Capitalizing on the current trend to outsource the management of integratedend-to-end supply chains, Swisslog has focused on developing the software expertise to provide easily inte-grated, modular, scalable solutions to manage the most challenging supply chains. The merging of SupplyChain planning and execution software along with the integration of ERP functionalities is setting industrystandards by allowing seamless operation of the conceptual and actual phases of a software-based supplychain solution. As a result of its expansion efforts, Swisslog’s Supply Chain Software division witnessedgrowth of 116% in 2000, 40% of which was organic.

Swisslog is now even better positioned to offer conventional and e-business supply chain software solutions

to customers independent of size and business area. Moreover, alliances and acquisitions have expanded its

competence, contributed to the increase of its workforce from 180 to 450 and strategically placed Swisslog

to become a leader in the fast-growing area of supply chain software. According to a recent study, conducted

by ARC Advisory Group, Swisslog is the No. 1 provider of warehouse management software for automated

warehouses with 25% of the global market.

Swisslog concludes alliances and acquisitions to broaden its software competence

Continuing its effort to offer comprehensive supply chain software, Swisslog bought Sonica Software

Corporation, an innovator of warehousing and distribution software that boasts unparalleled configurability

and scalability allowing users to constantly improve their supply chain strategies. An impressive client list

including Kodak, Cargill and Harley Davidson attests to Sonica products’ overall appeal and sustained

performance.


Following many years of cooperation, in spring 2000, Swisslog acquired Nuova C.G.A. Sistemi srl of Italy,

and Kaup & Fröhler Automatisierungstechnik GmbH in Germany reinforcing its software competence, in

particular in the health care industry and mail order industry.

The acquisition of the logistics division of Kewill Systems plc last July added over 100 employees to the Supply

Chain Software division as well as a sizable customer base and numerous service contracts. Moreover, an

alliance with the selling company Kewill Systems plc allowed Swisslog to complement its e-fulfillment so-

lutions with Kewill’s online business modules including its recent business portal.

Finally, Swisslog’s alliance and investment in September 2000 in Wassermann AG, Germany, have positioned

it to provide end-to-end intra- and inter-company supply chain planning and execution software. Currently

employing approximately 85 specialists, the Wassermann participation has

permitted Swisslog to obtain the supply chain planning, simulation and vi-

sualization expertise to enable Swisslog clients to go beyond the concep-

tual phase of a supply chain project and view its operation prior to imple-

mentation. Once the simulation of the supply chain is functioning as spec-

ified, all it takes is a click to put the solution into real motion. Such

re-engineering competence is essential to the effective implementation, ex-

ecution and optimization of any supply chain software. Swisslog’s unique

capability to merge the planning and execution phases of a supply chain

solution into one seamless process is setting standards for today’s supply

chain industry.

Continuous efforts in R&D

Swisslog has development centers in Aarau, Switzerland, High Wytombe,

UK, and Orange County, USA. During 2000, the work conducted by these

centers resulted in the launch of several new Swisslog software offerings.

The innovative products provide customers with the necessary solution

for any link in its supply chain and include the WarehouseManager,

AutomationManager and AutomationVisualizer. Swisslog Supply Chain Software is easily integrated into all

common ERP systems or may be customized with the ERP functionalities of Swisslog’s own software to meet

individual client needs.

Swisslog Supply Chain Software is also looking to generate high volume sales. To do this, it is expanding its

specialized applications, building on its customer-driven vertical competence. By enhancing its experience

with build-to-order software as well as rapid deployment processes, Swisslog plans to transform these prod-

ucts into standard software for widespread resale, adapted without difficulty for reselling in different mar-

kets that can then generate increased demand for high volumes of these products. In sum, Swisslog’s con-

tinued R&D was a substantial contributor to this segment’s organic growth of 40%.

Additionally, the year 2000 proved to be a milestone for Swisslog Supply Chain Software’s venture to be-

come a leading provider of Internet fulfillment solutions (ifs) for the many e-business players looking to

optimize the e-commerce sales channel but who have not yet mastered the fulfillment process. Swisslog

"Computers and software together build, what is in virtual reality jargon, the reality motor." (Howard Rheingold)


launched its ifs solution in March 2000 and completed its first project featuring this solution last fall for

the third party warehousing provider, Zürcher Freilager AG.

The appeal of its ISO9000 certified warehouse management software, global presence and flexible, reliable

solutions have made Swisslog supply chain solution software the choice of customers around the world;

during 2000, the division signed contracts in, among others, North America, Australia, Croatia, Switzerland,

Germany, the Netherlands and Malaysia.

How sweet it is

One of the Supply Chain Software division’s major accomplishments last year was its project to provide

software-based management and distribution services for the US confectionery manufacturer, the Jelly Belly

Candy Co.

The famous jelly bean maker, offering forty mouth-watering flavors of the confectionery delicacy, was facing

mounting challenges regarding the management of its raw materials and finished goods inventory. Its pro-

duction and distribution sites in Chicago and California have separate units for storing raw materials, manu-

facturing and distributing, with intra-company transfers taking place according to inventory and demand

in the respective markets. A comprehensive solution for storing and tracking the ingredients and finished

candies was needed to ensure tighter inventory control, no short-shipping, real-time visibility and auto-

mated data collection.

Swisslog analyzed the needs of the client and consulted them on the most cost-effective and efficient man-

ner to run its supply chain. The project was conducted in two phases. The first entailed its design – how to

communicate with the company’s existing ERP system and the integration of the necessary software. The

second phase included the implementation of Swisslog’s warehouse management software, the Jelly Belly

Candy Co.’s first ever. Both were completed during the course of 2000.

To implement and maintain the solution, Swisslog provided the following elements: software, equipment,

training specialists, customer service hotline and upgrades. Swisslog consultants, software engineers and

customer support experts contributed their knowledge to the implementation and success of the new Jelly

Belly Candy Co. supply chain solution.

In addition, Swisslog enhanced the client’s web merchandising service. Customers at the Jelly Belly world-

wide web shop now receive more efficient service thanks to Swisslog’s WarehouseManager, which controls

the release of web orders in a speedy and resourceful manner.

The project benefits have been considerable. Through the use of bar codes on all raw materials and finished

products, the client is now able to measure and track inventory in both centers. Lot control has been facil-

itated with the automatic scanning of the release and receipt of shipments. The advanced tracking and tracing

feature also provides enhanced customer service by allowing real-time visibility of order status.

The result has been more precise control of warehouse operations, efficient use of resources and

automated data collection – making it possible to have your favorite Jelly Belly flavor where you want, when

you want.


The OverviewSolutions Unlimited


Swisslog is a global provider of integrated supply chain solutions that cover the entire value creation process

from procurement and production to delivery. Swisslog’s systems optimize the intra- and inter-company

flow of information and materials, significantly increasing its customers’ flexibility, reaction capability,

productivity and quality of service while minimizing logistics costs and tied-up capital.

Swisslog’s many years of experience and broad-based expertise in consultancy, software, systems and ser-

vices enable the company to develop, implement and operate comprehensive supply chain solutions for its

customers. Swisslog offers outsourcing and e-fulfillment services at various levels of integration, spanning

from on-site customer support to operation of the entire supply chain.

Swisslog has achieved significant increases in sales and earnings in recent years. This growth is set to con-

tinue, in line with the company’s aim to become the world’s leading provider of supply chain solutions in

the coming years. In order to implement this growth strategy, on 1 March 2001 Swisslog introduced a new

corporate structure comprising seven divisions: Supply Chain Consulting, Supply Chain Software, Logistics

Solutions, Outsourcing & E-Fulfillment Services, Robotic Systems, Material Flow Systems and Swisslog North

America.

Based in Buchs/Aarau, Switzerland, Swisslog currently employs 3,700 staff in 25 countries around the globe.

The Group’s parent company, Swisslog Holding AG, is listed on SWX Swiss Exchange (Security Number:

675 227, Telekurs: SLOG, Reuters: SLOGn.S).

ProfileSwisslog – optimizing the value creation process with integrated

supply chain solutions


Key Data

435.5 420.1 557.8 727.9 1003.1

Order intake

388.4 474.9 551.0 722.4 925.0

Net sales

CHFm

1000

800

600

400

200

0

96 97 98 99 00

96 97 98 99 00

CHFm

1000

800

600

400

200

0

Rest of Europe 9%

European Union 59%North and South America 24%

Rest of World 8%

Sales Distribution


Key Data

12.6 28.5 36.8 61.8 89.1

EBITDA

7.2 21.9 28.6 50.2 72.6

EBITA

1,323 1,709 2,063 3,323 3,660

Employees (31 December)

0.8 5.1 8.8 14.3 16.3

Cash EPS* in CHF

CHFm

100

80

60

40

20

0

96 97 98 99 00

96 97 98 99 00

CHFm

80

60

40

20

0

4000

3000

2000

1000

0

96 97 98 99 00

CHF

20.0

15.0

10.0

5.0

0

96 97 98 99 00

*after share split in August 1997


The Market View

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

Share price development of registered shares, monthly averages

750

700

650

600

550

500

450

400

350

300

250

200

150

100

500

100

200

300

400

500

600

700

800

900

1000

1100

1200

200120001999199819971996

CHF


Outsourcing & E-Fulfillment ServicesFrom operators to entrepreneurs

In line with market trends for integrated, end-to-end solutions, Swisslog is rapidly expanding its range ofservice products to run entire logistics centers. The market is growing and the supply chain is getting moreand more complex. Today, the operation and management of the supply chain requires highly advanced ITsolutions and logistics know-how, a combination that is rarely a competence of most businesses but is partof Swisslog’s core competence. Therefore, a current trend toward outsourcing, “contract logistics”, is quicklygaining momentum, with estimated growth of 15–30% per annum. Interested customers can now transferdiverse tasks from full-fledged technical service packages to the entire operation of their supply chain toSwisslog, their specialized outsourcing and e-fulfillment partner. During Swisslog’s organizational adjust-ment, which took effect in early 2001, a new division, Outsourcing & E-Fulfillment Services, was created,demonstrating its commitment to satisfy the demand in this high-growth market.

For clients who do not want to be burdened with the responsibility of managing the supply chain, the op-

erational services include: consultancy, process analysis and design, maximized and integrated IT solutions,

management of transport and shipping logistics by specialized partners and facility management. By means

of its existing installed customer base, valued at several billion Swiss francs, Swisslog plans to expand its

business.

System operation and financing

Swisslog has the capability to run entire logistics centers for its customers allowing them to concentrate

on their core business. Furthermore, in March 2001, Swisslog formed an alliance with GE European Equipment

Finance called Swisslog Capital, which will allow expenditure optimization by offering to finance up to 100%

of a customer’s supply chain solution investments including equipment and products, design and engineering

costs, project management, installation and maintenance expenses.


To provide these services, several scenarios are possible. The first involves the customer owning the logis-

tics system and Swisslog operating it (“Inhouse Solution”). This is being done widely today and comprises

Swisslog’s core business while preparing for the second supply chain operations possibility where Swisslog

in partnership with GE European Equipment Finance can finance and supply the system lease (“External

Solution”). A third option, for the near future, will be to provide complete e-fulfillment via Internet-based

ordering and supply chain systems as well as space and operations. Swisslog would own the supply chain

system and make it available for customer use. This option has multi-client potential. Each facility could be

used according to requirements and availability. Optimal operation and management by Swisslog would guar-

antee that facility potential is maximized through full capacity operations and complete customer service.

Presently, system operation is a lump sum agreement where the customer pays a fixed amount for Swisslog

to carry out maintenance, upgrades, customer support and facility management. However, the development

of new solutions and e-business could lend a much more entrepreneurial aspect to contract logistics.

Additionally, customization and building to commercial, rather than technical, specifications will be valuable

features to the e-fulfillment and outsourcing services. Swisslog will then use, in addition to its main sup-

ply chain competence, its knowledge of the markets and its business expertise.

Keys to success

Several factors are needed to be successful in the contract logistics market: strength, IT expertise, interna-

tional presence for big-ticket clients, financial influence for acquisitions and flexibility.

New contracts often result in employees being engaged from a client’s existing facility to become a Swisslog

employee providing them with broader experience and more advancement opportunities. Swisslog’s team

of experts then acts as mentors for the new members of the operational team. As a result, overheads do

not grow in proportion with the number of projects. Moreover, as more contracts are concluded in a

"The best way to ensure that one is not at risk from more imaginative competitors is to be the first to conceive of alternate value-delivery mechanisms. " (Gary Hamel & C. K. Prahalad)


Expert Help Desk Swisslog Customer Support

geographical area, fewer additional resources must be allocated to these projects. On-site experts rotate

between projects to ensure guaranteed performance while at the same time decreasing costs and increasing

profitability. The overall effect is a significant increase in profit margins for Swisslog’s outsourcing business.

Complexity requires resourcefulness – outsource it

The increasing complexity of the supply chain means it is no longer a linear concept but that of a network.

A greater number of options for each link of the supply chain is necessary to optimize the process. For ex-

ample, a procurer normally has a few main suppliers (A suppliers) for its production. To facilitate and op-

timize information flow between the customer and supplier, electronic data interchange (EDI) lines are

installed. Since these lines are expensive, they are often reserved for A suppliers. However, adding other sup-

pliers (B and C suppliers) to the list of options could provide the procurer with better choices at lower costs.

Swisslog offers a solution to realize this. The Swisslog solution provides a hub for suppliers to connect into

the network via the Internet almost cost free. The hub then has an EDI line to the procurement center in-

creasing the choice of suppliers. Procurers now have access to B and C suppliers without the high cost of

establishing a separate EDI line for each supplier, and the suppliers gain access to a larger market of po-

tential customers at little or no cost.

Lifetime partnership

Customers formerly outsourced only part of their supply chain i.e. maintenance, customer support and up-

grades. Even then, Swisslog was the main provider of these solutions. Early on it established partnerships

that are now the basis for more extended cooperation to other areas of the supply chain. In response to a

general trend to concentrate on core competence, many businesses now want to delegate the entire supply

chain process to a third party. Swisslog’s wide range of services positions it perfectly to provide these cus-

tomers with the degree of outsourcing they require. Its modular solutions allow incremental implementa-

tion and high-scale flexibility to adapt to changing customer requirements. Supply chains are constantly

undergoing changes and must be adapted to satisfy new requirements. Swisslog’s strategy is to become a

lifetime partner providing supply chain optimization wherever and whenever needed.


Swisslog has traditionally provided material flow expertise and systems to enhance part or all of a customer’ssupply chain. Decades of experience in this area have resulted in Swisslog achieving leader status in materialflow handling. It is upon this solid base and established reputation that Swisslog is building a wide range ofindustry-specific comprehensive solutions for today’s increasingly complex supply chains. Swisslog’s break-down of sales by industry is: 30% distribution, 20% health care and pharmaceuticals, 10% electronics, 10%color logistics, 10% automotive and 20% other industry applications.

As a contender in the supply chain management challenge, Swisslog constant-

ly endeavors to better understand its clients’ businesses and to provide them with

the latest and most efficient solutions. Swisslog experts, highly qualified in the

technical requirements and restrictions of material flow, have repeatedly pro-

vided customers with material and information flow solutions including efficient

production, distribution, storage and transportation automation to enhance their

supply chains.

Fully aware that hardware with set requirements, specifications and qualities

would quickly become a standard product with only price as a differentiator,

Swisslog adopted a strategy to add value through high-end industry-specific so-

lutions. The challenge was not only to provide the material flow applications but

also a customized solution for each customer. To avoid the market saturation of

a standard product, Swisslog oriented its material flow systems to be perform-

ance-driven not price-driven. The objective is to satisfy commercial specifications and optimize the supply

chain. With these best practices, Swisslog has set industry standards and created lifetime partnerships with

many of its customers who repeatedly return to Swisslog for system expansions, upgrades and replacement

solutions.

Material Flow Expertise Material Flow and Industry Expertise – the building blocks to a complete solution

OTTO Versand, Haldensleben, Germany


This experience has been acquired over many years in many different industries. From the non-cyclical

healthcare industry to the fast-growing electronics industry, Swisslog is known as a reputable source for

reliable industry-specific material flow solutions. Swisslog, while expanding its services to improve overall

value chain performance, remains convinced that the basis of its success today will be highly instrumental

in its achievements tomorrow.

Health care – where time is everything

Swisslog has globally developed its expertise in the handling of health care materials – an industry where

speed and safety are of the utmost importance. Swisslog’s main strategy is to build upon the existing client

base in the health care and pharmaceutical industry and use this base as an excellent sales platform for ex-

pansion into new product areas such as the introduction of new applications and software-controlled

automated solutions for drug distribution and delivery in hospitals and clinics. The objective is to provide

comprehensive services and products to increase security and speed while also saving manpower.

Material flow is the backbone of the functioning of a health care complex. In hospitals, lab tests must be

performed quickly, blood delivered urgently to intensive care units, medication rushed from the pharmacy

and medical records retrieved for immediate assessment.

As a result of its long-standing tradition in fast, trustworthy material flow systems, many of the world’s

premier health care centers have chosen Swisslog as their partner. In particular, many of North America’s

most prestigious university hospitals have entrusted Swisslog with the task to provide a delivery service for

items urgently needed to save lives. Today Swisslog has installed and maintains 63 percent of all pneumatic

tube systems in America’s university hospitals. It has relationships with the four largest group purchasing

organizations and an exclusive contract with one that will provide new opportunities to present supply chain

solutions specifically to university hospitals.

A Swisslog tube system is operating in the world-renowned teaching health care institution, the University

of Chicago Hospital. Selected as one of the top 15 hospitals in the United States by a survey of America’s

6000+ hospitals, the University of Chicago Hospital’s tube system is one of the largest of its kind, connecting

four patient care buildings through a network of galvanized steel tubing linking approximately 100 send/

receive stations.

The hospital’s health care professionals rely heavily on the tube system to transport laboratory specimens,

pharmaceuticals, blood and numerous other patient care items. The laboratories, the heaviest users, send

an average of 3,700 specimens through the tube system every day. A recent estimate that the system han-

dles a daily average of 4,260 transactions translates into savings of $ 2,500,000 per year, as compared to

the cost of using manual transport.

Since first implementing the solution 20 years ago, the University of Chicago hospital has chosen to retain

Swisslog as a partner through system expansion, upgrades and facility growth. The Duchossois Center for

Advanced Medicine, a newly opened outpatient facility, is the latest building to be linked to the tube system.

“Speed is not a phenomenon. It is a relation between phenomena.” (Paul Virilio)


Swisslog is a key player in the health care niche. The launch of a fully-automated solution for pharmacies

in the beginning of 2001 attests to the Group’s commitment to meeting the demands from this segment.

Furthermore, Swisslog’s new company structure has introduced an industry segment for Health Care.

The fast-growing, dynamic electronics industry

Swisslog is raising its profile as the leading logistics solutions provider in the fast-moving electronics

industry. Last year, a Swisslog advanced material flow system began operating for Semikron, a well-known

manufacturer of semiconductor and electronic components in Germany.

Requiring expanded production capacity for its main plant in Nuremberg, Semikron approached Swisslog to

find the right solution. The challenge was to ensure optimal material flow between production, storage and

dispatch and to construct a new building that would be physically connected to the existing facility.

The result of extensive project analysis was a tailor-made conveying solution using the highly flexible rail-

based Multicar transport system and including a six-story building with floor space of over 6000 m2. The

major extension provided the necessary increased production capacity while also incorporating an auto-

mated warehouse and dispatch department. The storage and dispatch departments in the new building were

connected to the production area in the original facility via an underground tunnel. Material is transport-

ed through this tunnel using a Multicar system of self-powered vehicles. Furthermore, the system enables

the horizontal and vertical movement of loads on a continuous track without having to transfer them. The

Multicar solution is extremely cost-effective in terms of both system costs and building adaptation costs.

Even at the planning stage, careful consideration was given to future expansion of the transport system to

other parts of the site – for example, linking departments on the upper floors of the new building or other

production areas in the older buildings. A key benefit of the Multicar solution is that it is flexible, modular

and easily expanded to meet new demands at any time.

Reemtsma, Hannover-Langenhagen, Germany


Swisslog’s rapid growth and development has also reached its employees. As of the end of 2000, Swisslogemployed 3,660 people in 25 countries – a truly international team providing customers with around theclock service, across the globe. Aware of the important role its employees play in the company’s activities,Swisslog is investing in this valuable asset and is providing added training and education to ensure employeecompetence to satisfy any customer requirement. Swisslog is becoming a true “learning company”.

Historically, Swisslog employees have had specialized training, particularly in engineering. Today, Swisslog

employees represent a wide range of backgrounds – a team with the competence to offer consulting, soft-

ware, warehouse management and e-fulfillment capabilities to provide customers with comprehensive

supply chain solutions to fit their individual needs.

From engineers to multi-skilled entrepreneurs

As a result, the profile of a Swisslog employee has developed to encompass a variety of qualities necessary

to create these solutions. A main competence is important but the ability to acquire others is even more so.

With the supply chain management business growing at such a rapid rate, general business knowledge is

needed to understand the market trends and to harness the potential offered by this market. Analytical skills

Employees The power behind our success


to define customer and technological needs and to provide customer support are imperative. Swisslog,

therefore, hires people with many of these characteristics and then takes it upon itself to impart the others

through its management practices, daily human resource management and training programs. The integration

and training of new employees is a primary objective of Swisslog management who also welcomes the sharing

of prior experiences and ideas as valuable additions to the company’s knowledge of and strategic approach

to supply chain excellence.

A strong focus is placed on employee development to the benefit of Swisslog, the customer and the employee.

This is done in several ways. Swisslog’s worldwide presence and global projects require onsite Swisslog spec-

ialists to provide the knowledge and expertise to implement and maintain solutions. Employees, therefore,

have ample opportunity for personal advancement through international work experience on projects in a

wide variety of industries. The project and customer relationship experience gained in different geograph-

ical areas prove invaluable to employees throughout their careers at Swisslog.

"The old interest in the right moment and the corresponding markings on the calendar is overarched by the interest inacceleration and timesaving devices." (Niklas Luhmann)


Management Potential Program – future leaders at Swisslog

In addition to daily growth opportunities, some Swisslog employees participate in Swisslog’s Management

Potential Program (MPP), a training and development program to cultivate, in addition to a main area of

skill, new competences in complementary fields. After completing the program, each participant is well-

equipped to analyze, conceptualize and implement a customer’s solution.

The first MPP, completed in 2000, was an outstanding success. The experience gained and the projects com-

pleted attest to the program’s effectiveness and ability to fill an existing

need. The MPP participants were separated into finance, customer care and

global account task forces. Within each of the subgroups, projects con-

cerning e-business, customer retention, supply chain management and cor-

porate culture were completed. The results of these projects were so valu-

able that, upon presentation to management, many were judged to offer

excellent solutions and were implemented in the respective areas.

Because each working group was monitored by a Swisslog Management

Committee Member (MCM), the program provided a streamlined process for

bringing ideas and proposals directly to the decision-makers. Additionally,

the increased contact between the MCM and the MPP participants re-

inforces the Swisslog corporate culture and team spirit; a key factor to

being a global supply chain solutions partner for companies of all sizes and

activities.

The next MPP begins in spring 2001 and will focus on “competence train-

ing”. The program is structured to enhance employee understanding and

knowledge in all aspects of the supply chain business. The projects will utilize and build on each member’s

skill set focusing on instilling know-how of all elements of supply chain management including business

development, customer service, consulting and software.

Swisslog is committed to being a single source provider of supply chain solutions. Recognizing the impor-

tance of intellectual capital for achieving this task, it is creating a workforce capable of analyzing challenging

situations and designing and implementing the necessary solutions.

The success of the first MPP and the promising potential of the second have prompted Swisslog to plan a

third MPP for Q3 2001. As Swisslog establishes itself as the global leader for end-to-end solutions conceived

and implemented by a qualified team of experts, it anticipates an ever-increasing demand for people to man-

age and maintain its leading position in a competitive environment. The third MPP with the theme “new

worldwide leadership” aims to prepare Swisslog employees to meet these challenges.

A winning team

Swisslog understands the value of its employees for maintaining business activities and improving

performance on a regular basis. A complete set of skills and experience are prerequisite to providing

full-service solutions. To attain the equilibrium needed to accomplish this objective, Swisslog offers employee

training to develop existing competences and undertakes strategic acquisitions to introduce new ones.

Swisslog employees


Rest of Europe 12%

EU 61%North and South America 19%

Supply Chain Solutions 35%

Other 1%

Supply Chain Systems & Products 52%

Other 8%

Supply Chain Software 12%

Geographical Distribution

Breakdown by Segment

Employee retention is also a main objective. Personal development is encouraged and facilitated so that each

employee achieves individual satisfaction and fulfillment while working at Swisslog. The result is a unified

competent team providing the latest supply chain solutions to the satisfaction of both the customer and

the employee.

Employees


Key data per registered share (equivalent of registered shares at CHF 10 par value)

2000 1999 1998 1997 1996

Earnings before interest, tax, depreciation CHF 32.4 22.5 13.4 10.4 4.6

and amortization (EBITDA)1)

Earnings before interest, tax and amortization of goodwill (EBITA)1) CHF 26.4 18.2 10.4 8.0 2.6

Result1) CHF –5.3 11.9 8.0 4.8 0.8

Net result/registered share (EPS IAS 33) CHF –7.8 11.3 8.0 4.8 0.8

Consolidated shareholder’s equity per registered share CHF 63.5 76.6 65.5 60.1 62.5

(net asset value)

1) Based on continuing operations and after change of goodwill amortization.

The registered shares were split 1:5 in 1997.

Dividends

2000 1999 1998 1997 1996

Consolidated net income CHFm –21.6 31.2 22.1 13.2 2.2

Dividend/Capital repayment CHFm 6.92) 6.9 6.9 5.5 18.7

Dividend payout ratio % n/a 22 31 42 –

Dividend/registered share1) CHF 2.502) 2.50 2.50 2.00

Capital repayment/registered share1) CHF 6.80

1) Equivalent of registered shares at CHF 10 par value.2) Dividend for the year under review in accordance with the proposal of the

Board of Directors to the Annual General Meeting on 16 May 2001.

Key Figures for Investors

Share information

2000 1999 1998 1997 1996

Price of registered shares1) High CHF 1,130 475 186 125 83Low CHF 413 114 95 86 61

Gross return on registered shares High % 0.2 0.5 1.3 1.6 n/a

Low % 0.6 2.2 2.6 2.3 n/a

Market capitalization (31.12) CHFm 1,953.9 1,280 358 294 203

Market capitalization as % of shareholders’ equity % 1,118 607 199 178 117

Price-Earnings ratio (P/E ratio)

Factor before goodwill amortization (as of 31.12) Factor 53.8 33.9 14.8 21.2 92.3

1) Equivalent of registered shares at CHF 10 par value.


Dividend

The Board of Directors will propose to the Annual

General Meeting on 16 May 2001 that a dividend of

CHF 2.50 per registered share be paid out.

Investment Policy and Financing Growth

Swisslog aims to expand its presence as a leading

provider of total supply chain solutions, covering

consulting, software, automation, customer support

and operations on a global scale. Customer proxim-

ity, a comprehensive range of services and a broad

geographic base are crucial to success.

The Swisslog Group’s affirmed goal is to finance its

organic growth through internally generated funds.

The Annual General Meeting will have at its dispos-

al net income for the year of CHF 14.8 million, made

up of a net profit of CHF 7.7 million for the finan-

cial year 2000 of Swisslog Holding AG and CHF 7.1

million carried forward from the previous year.

Capital Structure

As of 31 December 2000, 2,752,000 registered shares

at CHF 10 nominal value were outstanding and en-

tered in the Commercial Register, which is the same

number entered as of 31 December 1999.

The Annual General Meeting of 17 May 2000 ap-

proved a conditional capital increase:

1. CHF 2.0 million (200,000 registered shares at CHF

10 nominal value) linked to the convertible bond

2000–2005 (see below).

2. CHF 752,000 (75,200 registered shares at CHF 10

nominal value) linked to a stock option plan for

employees.

The share capital can be increased by a maximum

amount of CHF 752,000 through the issue of up to

a maximum of 75,200 fully paid-up registered shares

at CHF 10 nominal value through the exercise of

subscription and option rights reserved for the em-

ployees of Swisslog Holding AG or its subsidiaries

under one or more stock option plans.

Convertible Bond 2000–2005

In 2000, Swisslog Holding AG issued a convertible

bond with the following conditions: The convertible

bond with a nominal value of CHF 150.0 million will

become payable at par on 7 July 2005 at the latest.

Interest of 2.25% will be paid yearly, for the first

time on 7 July 2001. Bonds with a nominal value of

CHF 2,500 can be converted into 2.67953 registered

shares in Swisslog Holding AG at CHF 10 nominal

value at a conversion price of CHF 933 per registered

share at any time during the conversion period

(American style). The conversion period lasts until

five stock exchange working days (SWX) before the

repayment date determined by notice of termination

or contractual maturity.

Information for Investors


Derivatives

As of 31 December 2000 the following options issued

by third parties on registered shares of Swisslog were

in circulation.

Name Type Strike Maturity

SLOVT call 975 20. 07. 2001

SLOCS call 800 21. 09. 2001

SLOGI call 850 21. 09. 2001

SLOGY call 1200 21. 09. 2001

SLOGS call 900 12. 11. 2001

SLOKB call 1000 21. 12. 2001

SLOFB call 1050 21. 12. 2001

SLOVO call 1100 21. 12. 2001

SLOGO call 1000 31. 01. 2002

Registration Limit

Upon introduction of the Federal Act on Stock

Exchanges and Securities Trading (“Stock Exchange

Act”) on 1 January 1998, the percentage limit (trans-

fer restriction) imposed on the entry of registered

shares in the company’s share register as stipulated

in Art. 6 para. 2 of the Articles of Association was

automatically rescinded.

The Articles of Association of Swisslog Holding AG

no longer contain a percentage ceiling on the regis-

tration of shares. The Articles of Association have

merely retained a nominee ruling (Art. 6 para. 4),

which stipulates that no more than 5 percent of the

registered share capital may be entered in the share

register under the name of persons holding shares

on a fiduciary basis for third parties not known to

the company.

The object of this ruling is to prevent anyone from

secretly securing control over Swisslog Holding AG.

Decision Not to Include Opting-out and Opting-up

Clauses

Swisslog Holding AG has consciously decided against

writing into its Articles of Association either an opt-

ing-out or an opting-up clause that would waive or

restrict the obligation imposed on shareholders to

make an offer as stipulated under Art. 32 of the Stock

Exchange Act, effective 1 January 1998. Under Art.

32 of the Stock Exchange Act, a shareholder who

either directly, indirectly or by joint arrangement with

third parties acquires shares of Swisslog Holding AG

and thereby exceeds the threshold of 331⁄3 percent of

the voting rights (whether enforceable or not) is re-

quired to submit a purchase or exchange offer to all

shareholders of Swisslog Holding AG. Moreover, the

minimum price stipulations defined in the Stock

Exchange Act will also apply to any such offer.

Shareholders’ Duty to Disclose Holdings

Under Art. 20 of the Stock Exchange Act, any share-

holder who either directly, indirectly or by joint

arrangement with third parties acquires or sells

shares of Swisslog Holding AG and thereby attains,

exceeds or falls below a threshold of 5, 10, 20, 331⁄3,

50 or 662⁄3 percent of the voting rights (whether en-

forceable or not) shall be required to notify Swisslog

Holding AG and the Disclosure Office of the SWX

Swiss Exchange.

SWX Swiss Exchange

Disclosure Office

PO Box

CH-8021 Zürich

Tel.: +41 1 229 29 16 or 51,

Fax: +41 1 229 29 35

E-mail: [email protected]

English disclosure forms can be downloaded from

www.swx.com/admission/disclosure_forms_en

Under Art. 21 of the Stock Exchange Act, the com-

pany is, for its part, obliged to publish any such

information that it receives.

Own Shares

As of 31 December 2000, the Swisslog Group held a

total of 8,298 registered shares of Swisslog Holding

AG with a book value of CHF 4.6 million. These reg-

istered shares are carried in the books of Swisslog

Management AG at an average price of CHF 557.


Remuneration for the Board of Directors

The remuneration paid in 2000 to the Board of

Directors for 1999 took the form of an allocation of

4,350 registered shares of Swisslog Holding AG. For

the business year 2000, the compensation was de-

cided to be a total of 350 shares. The Directors were

also entitled to participate in option programs.

Shareholder Structure

Approximately 4,000 registered shares are entered

in the share register. The shares are held by a large

number of individual shareholders. The principal

shareholders are:

• Chase Nominees Ltd., London

• Henderson Investors, London

• B.V.B.A. Group 2000 Participatie, Antwerp

• The Bank of New York Europe Ltd., London

Listing

The registered shares of Swisslog Holding AG are

traded on the main segment of the SWX Swiss Ex-

change.

The number of shares traded daily in 2000 averaged

12,272 with a mean volume of CHF 9.95 million.

Security Numbers, Ticker Symbols

Security number: 675 227

ISIN: CH0006752270

Telekurs, Dow Jones: SLOG

Reuters: SLOGn.S

Auditors

PricewaterhouseCoopers AG, Basel

Group Auditors

PricewaterhouseCoopers AG, Basel

Key Dates for Investors

Press conference and

analyst meeting: 2 April 2001

Annual General Meeting: 16 May 2001

Half-year report: 21 August 2001

Contact

Thomas Werder

Corporate Communications and Investor Relations

Swisslog Holding AG

Webereiweg 3

CH-5033 Buchs

Switzerland

Tel. (direct): +41 62 837 95 63

Fax: +41 62 837 95 56

E-mail: [email protected]


Members of the Board

Truls D. Berg, Chairman

Mr. Berg was appointed Board member and Chairman of the Board of Swisslog in 1996. Mr. Berg was CEO

of Attisholz (now Axantis Group) from 1981 to 1994 and Chairman of the Axantis Board from 1994 until

2000. He is also a member of the National Advisory Board of Credit Suisse Group, Chairman of the Board

of MicroValue AG and a member of the board at Clariant AG.

Konrad Peter, Vice-Chairman

Mr. Peter became a member of Swisslog’s Board in 1993 and was appointed Vice-Chairman in June 1994.

He has been CEO of Zellweger Luwa AG since 1994 and is Chairman of the Board of Arcont AG.

Juhani Anttila, Delegate

Mr. Anttila was appointed to the Board and named Delegate in 1996. He acted as Managing Partner for CA

Corporate Advisers in Zurich and was appointed Managing Director of Nokia GmbH, Zurich, in 1985. From

1990 to 1995 he was President of Nokia (Deutschland) GmbH, Pforzheim. In January 1996 he was named

President and CEO of Swisslog.

René Garo

A Swisslog Board member since 1995, Mr. Garo was CEO of Haag-Streit Holding AG from 1996 to 1999 and

of Mathys-Medical Group from 1992 to 1996. He is a board member of Jomed N.V., Illbruck GmbH and the

Technology Expert at MicroValue AG.

Hans Hulsbergen

Mr. Hulsbergen was appointed to the Board in 1988. He is an entrepreneur and owner of telecommunica-

tions and e-commerce companies in Scandinavia, the Netherlands, Switzerland, Great Britain and Australia.

Guido Patroncini

Mr. Patroncini was appointed to the Swisslog Board in 1996. He has been Managing Director of Zurmont

Finanz AG since 1993 and was formerly Executive Vice-President of Holvis AG in Basel. He is a member of

the boards of Baumann AG, AIC Advanced Information Company AG and Vereinigte Drahtwerke AG. He is

Chairman of the Board of Pelikan Hardcopy AG and until spring 2001, he was Chairman of the Board of

Axantis Holding AG.


Juhani Anttila, President and CEO

Mr. Anttila was named President and CEO of Swisslog in January 1996. He studied at the University of Helsinki,

Finland, where he earned Bachelor and Master Degrees in Law in 1976 and 1978 respectively. He moved to

Switzerland in 1978 and acted as Managing Partner for CA Corporate Advisers in Zurich. Mr. Anttila was ap-

pointed Managing Director of Nokia GmbH, Zurich, in 1985, and was President of Nokia (Deutschland)

GmbH, Pforzheim, from 1990 to 1995.

Pekka Pylkäs, Chief Financial Officer

Before joining Swisslog in 1996, Pekka Pylkäs held different controlling positions within Nokia, including VP

Finance & Control of Nokia Consumer Electronics. He studied at the University of Tampere in Finland.

Remco Dodde, Chief Marketing Officer

Before his appointment at Swisslog in 2001, Mr. Dodde was the leading partner of the EMEA Logistics &

Distribution network within the global Supply Chain Management Group of PricewaterhouseCoopers

Management Consultants. Prior to that, he worked for a large global logistics service provider. He graduated

from the Erasmus University in Rotterdam, Netherlands, with a degree in Business Econometrics and

Operations Research.

Urs Birrer, President Supply Chain Software Division

Before joining Swisslog in 1998, Mr. Birrer was Group Vice-President of Unisys Europe Africa Group. Prior

to that, he held several sales and marketing management positions in the IT-industry. He holds a degree in

economics.

Urban Hofström, President Outsourcing & E-Fulfillment Services Division

Prior to joining Swisslog in 2001, Mr. Hofström was Vice-President of Services at the ABB Automation seg-

ment based in Zurich, Switzerland. Prior to ABB, he worked at Digital Equipment Corporation in sales and

service functions. He is a graduate in Electrical Engineering from the Royal Institute of Technology, Stockholm,

Sweden.

Charles Kegley, President Swisslog North America Division

Mr. Kegley is President of the Swisslog North America Division which was established in 2001. After earning

a Bachelor of Sciences in Mechanical Engineering from Penn State University in 1970, Mr. Kegley gained

project and sales experience in the field of computerized conveying systems with Powers Regulator Company

and MCC Powers-Transitube. He was Vice-President from 1985–1995 and President from 1995–1999 of Trans-

Logic Corporation. After the acquisition by Swisslog, he was named President of Swisslog Translogic in 1999.

Kari Ollila, President Robotic Systems Division

Mr. Ollila was appointed President of the Robotic Systems Division of Swisslog in 2001. He began his career

in the shipbuilding industry and then moved on to robotics, gaining extensive sales and management ex-

perience in Finland and the United States before being appointed President of Cimcorp Oy in 1987, a Swisslog

company since 1996. He graduated from the Helsinki Technological University, Finland, with a Master of

Sciences in Mechanical Engineering.

Executive Committee

1

2

3

4

5

6

7


Uwe Schöning, President Material Flow Systems Division

Mr Schöning has been the President of Swisslog’s Material Flow Systems Division since 2001. He graduat-

ed from the University of Hamburg, Germany, with master degrees in engineering and business adminis-

tration and began his career at Philips B.V. In 1982, he was appointed President of Transnorm Group, a

Swisslog company since 1997.

Charles Teissonnière, President Logistics Solutions Division

Formerly President of Logistics Solutions Region 1 at Swisslog, Mr. Teissonnière is now President of the newly

formed Logistics Solutions Division. He began his career at ABB in 1978 where he worked until joining

Swisslog in 1995 as Business Unit Manager of Logistics Systems. He holds an electrical engineering degree

from the University of Marseille, France.

Otto Wassermann, President Supply Chain Consulting Division

Since 2001 Mr. Wassermann has headed the Swisslog Supply Chain Consulting Division. Upon completion

of a mechanical engineering degree, Otto Wassermann began a 20-year career in developing and imple-

menting production planning and controlling systems, which included several years as a systems engineer

at IBM. Mr. Wassermann founded his own company in 1983 and is currently President of Wassermann AG

in which Swisslog has held a majority stake since 2001.

8

9

10

3 7 4 9 1 5 8 2 6 10


Management Committee

The management committee comprises the members of the Executive Committee and the following people:

Ulf Jansson, Distribution and E-Commerce

Ulf Jansson was appointed to the Swisslog Management Committee in 1997. Formerly Managing Director

of Digitron Ltd. (UK), Digitron AB (Sweden) and CEO Region 2, he is now global market segment leader for

Swisslog Distribution and E-commerce and Vice-President Logistics Solutions Division. Ulf Jansson has over

20 years of automated logistics experience and has held several senior management positions during his

career. He earned a Master of Science in Industrial Management Engineering from Linköping Technical

University, Sweden in 1977.

Dirk Brunnengräber, Health Care

Dirk Brunnengräber is responsible for the Light Goods Conveyor Unit and leads the Health Care Industry

Segment of Swisslog. Prior to this, he was Managing Director of Telelift GmbH, member of the board of Telelift

UK and Telelift Automation Singapore. Telelift became a Swisslog company in 1999. He began his career at

Telelift as product manager for Track systems and AGV in 1991 and has an engineering degree from Munich

Technical University, Germany.

Uwe Eckert, Automotive

Uwe Eckert is responsible for the Overhead Conveyor Systems Business Unit and leader of the Automotive

Industry Segment at Swisslog. A graduate of the University of Hamburg, Germany, with a degree in Industrial

Engineering, he began his career as a consultant for McKinsey & Cie before joining Louis Schierholz GmbH

in 1996, a Swisslog company.

Umberto Marazzi, Color Logistics (not shown)

Umberto Marazzi has an electro-mechanical engineering background and leads the Color Logistics Industry

Segment of Swisslog. He has experience in marketing and sales for the robotic and automation industry.

Mr. Marazzi co-founded Corob srl. and, in 1984, became Managing Director of Corob Color Engineering. Since

1997, he has been President and CEO of the Corob Group, which was fully acquired by Swisslog in 2000.

11

12

13


Wolfgang Maier, Customer Support

Wolfgang Maier joined the Swisslog group in 1997. In addition to being head of Customer Support, he is

also responsible for divisional Customer Support activities. Before joining Swisslog, he worked for twelve

years in management positions at ABB in Customer Support and Project Management. Prior to that, he ful-

filled project management responsibilities at BBC in Germany and South America. He holds a Mechanical

Engineering degree from the University of Constance in Germany.

Martin Strobel, Corporate Services

Martin Strobel has been head of Corporate Services at Swisslog since 1997. After graduating in law from

the University of Bern, Switzerland, he worked for Credit Suisse and then as a legal counsel at Rehau GmbH

and ABB.

Thomas Werder, Corporate Communications and Investor Relations

Before joining Swisslog, Thomas Werder was Head of Corporate Communications and Investor Relations at

Day Interactive. Prior to that, he worked in communications and as a journalist for such well-known enti-

ties as Swiss National Radio, Basler Zeitung and F. Hoffmann-La Roche. He graduated from the University

of Basel, Switzerland, with a degree in German and History.

14

15

16

7 14 12 15 4 13 9 11 1 2 8 5 6 16 10


Headquarters

Swisslog Holding AG

Webereiweg 3

CH-5033 Buchs

Switzerland

Tel. +41 62 837 95 37

Fax +41 62 837 95 10

E-Mail: [email protected]

Divisions

Supply Chain Consulting

Otto Wassermann

President

Westendstrasse 195

D-80686 Munich

Germany

Tel. +49 89 578 399-0

Fax +49 89 578 399-199

otto.wassermann@

swisslog.com

Robotic Systems

Kari Ollila

President

Sammontie 5

FIN-28400 Ulvila

Finland

Tel. +358 2 6775 111

Fax +358 2 6775 200

[email protected]

Supply Chain Software

Urs Birrer

President

Bahnhofstrasse 96

CH-5001 Aarau

Switzerland

Tel. +41 62 834 15 00

Fax +41 62 834 17 95

[email protected]

Material Flow Systems

Uwe Schöning

President

Förster Strasse 2

D-31177 Harsum

Germany

Tel. +49 5127 402-0

Fax +49 5127 4400

[email protected]

Logistics Solutions

Charles Teissonnière

President

Webereiweg 3

CH-5033 Buchs

Switzerland

Tel. +41 62 837 41 41

Fax +41 62 837 44 99

charles.teissonniere@

swisslog.com

Swisslog North America

Charles Kegley

President

10825 East 47th Avenue

Denver, CO 80239-2913

USA

Tel. +1 303 371 7770

Tel. +1 800 525 1841

Fax +1 303 373 7870

[email protected]

Outsourcing

& E-Fulfillment Services

Urban Hofström

President

Webereiweg 3

CH-5033 Buchs

Switzerland

Tel. +41 62 837 95 24

Fax +41 62 837 95 10

urban.hofstrom@

swisslog.com

Addresses


Industry Segments

Distribution

and E-Commerce

Ulf Jansson

Brodalsvägen 13

S-43338 Partille

Sweden

Tel. +46 31 336 60 00

Fax +46 31 336 60 08

[email protected]

Customer Support

Wolfgang Maier

Webereiweg 3

CH-5033 Buchs

Switzerland

Tel. +41 62 837 95 37

Fax +41 62 837 95 10

wolfgang.maier@

swisslog.com

Health Care

Dirk Brunnengräber

Siemensstrasse 1

D-82178 Puchheim

Germany

Tel. +49 89 80 0010

Fax +49 89 80 0011 11

dirk.brunnengraber@

swisslog.com

Automotive

Uwe Eckert

Arsterdamm 110

D-28277 Bremen

Germany

Tel. +49 421 840 6 0

Fax +49 421 840 6 202

[email protected]

Color Logistics

Umberto Marazzi

Via Agricoltura 103

I-41038 San Felice s.P./MO

Italy

Tel. +39 0535 66 30

Fax +39 0535 66 36 00

umberto.marazzi@

swisslog.com


2000

Ann

ual R

epor

t

rought to you by Global Reports

rought to you by Global Reports

1www.swisslog.com

2 Overview of the Swisslog Group

4 2000 Consolidated Financial Statements of Swisslog Group

5 Consolidated Balance Sheet

6 Consolidated Income Statement

7 Consolidated Cash Flow Statement

8 Consolidated Changes in Shareholders’ Equity

9 Information by Segment

10 Notes to the Consolidated Financial Statements

26 Report of the Group Auditors

28 2000 Financial Statements of Swisslog Holding AG

29 Balance Sheet, Income Statement

30 Notes to the Financial Statements

31 Report of the Statutory Auditors

32 Subsidiaries and investments of the Swisslog Group

34 Key Figures for Share Capital

36 Consolidated Data for the Past Five Years

38 Key Figures and Ratios

Contents

2

Unit 2000 1999 1998 1997 1996

Order intake CHFm 1’003.1 727.9 557.8 420.1 435.5

Order backlog CHFm 480.6 393.2 277.2 204.5 249.5

Net sales CHFm 925.0 722.4 551.0 474.9 388.4

Earnings before interest, taxes, depreciation and

amortisation of goodwill EBITDA CHFm 89.1 61.8 36.8 28.5 12.6

Earnings before interest, taxes and amortisation of goodwill EBITA CHFm 72.6 50.2 28.6 21.9 7.2

Earnings before interest and taxes EBIT CHFm 14.7 43.6 26.5 21.2 7.2

Result CHFm –14.7 32.8 22.1 13.2 2.2

Total assets CHFm 854.2 700.4 420.5 398.8 375.1

Tangible fixed assets and intangible assets, excluding goodwill CHFm 139.1 138.4 98.3 85.1 77.2

Goodwill 1 CHFm 290.7 184.1 58.7 21.3 0.0

Net current assets 2 CHFm 115.4 86.4 –13.7 37.2 –1.1

Net operating assets excl. goodwill 3 CHFm 217.6 197.5 70.9 107.1 73.5

Other non-current assets CHFm 13.9 2.2 24.3 0.2 2.2

Net liquidity 4 CHFm –48.3 –24.3 42.4 50.4 104.6

Shareholders’ equity CHFm 174.7 210.7 180.3 165.5 172.0

Net investment in tangible fixed assets and intangible assets CHFm 22.4 19.7 9.8 6.0 7.1

Depreciation on tangible fixed assets and intangible assets CHFm 16.5 11.6 8.2 6.6 5.4

Amortisation of goodwill 1 CHFm 57.9 6.6 2.1 0.7 0.0

Employees (at year-end) Employees 3’660 3’323 2’063 1’709 1’323

Operating profit as % of sales (EBITA margin) % 7.8 6.9 5.2 4.6 1.9

Return on net operating assets (RONOA) 5 % 33.4 25.4 40.4 20.4 9.8

Free cash flow 6 CHFm 55.3 25.8 59.9 15.2 1.3

Shares 7 Thousands 2’752.0 2’752.0 2’752.0 2’752.0 550.4

Cash EPS 7, 8 CHF 16.3 14.3 8.8 5.1 0.8

Dividend per share 7, 9 CHF 2.50 2.50 2.50 2.00 –

Capital redemption per share CHF – – – – 34.00

All information provided relates to continuing operations.

1 General amortisation period: From 1997 to 1999 20 years; from 2000 5 years2 Net current assets = current assets (excl. cash and cash equivalents) less current liabilities and provisions for operating activities (excl. interest bearing borrowings and

taxes payable)3 Net operating assets = tangible fixed assets and intangible assets plus net current assets less other non-current liabilities4 Net liquidity = cash and cash equivalents less short-term borrowings5 RONOA = EBITA / net operating assets (excl. goodwill)6 Free cash flow = EBITA plus depreciation plus/minus changes in net current assets (impact from acquisitions adjusted)7 5 for 1 shares split in August 1997: new par value CHF 10 (formerly CHF 50), 2,752,000 registered shares (formerly 550,400); values adjusted to actual number of shares8 Cash EPS = (Result continuing operations plus goodwill amortisation plus interest expense convertible bonds IAS)/number of shares9 Proposal of the Board of Directors for the 2000 dividend is CHF 2.50 per share

Overview of the Swisslog Group

3www.swisslog.com

Overview of the Swisslog Group

1000

800

600

400

200

0

96 97 98 99 00

1000

800

600

400

200

0

96 97 98 99 00

100

80

60

40

20

0

96 97 98 99 00

80

60

40

20

0

96 97 98 99 00

4’000

3’000

2’000

1’000

0

96 97 98 99 00

20.0

15.0

10.0

5.0

0

96 97 98 99 00

1996 1997 1998 1999 2000

435.5 420.1 557.8 727.9 1’003.1 Order intake

1996 1997 1998 1999 2000

388.4 474.9 551.0 722.4 925.0 Net sales

1996 1997 1998 1999 2000

12.6 28.5 36.8 61.8 89.1 EBITDA

1996 1997 1998 1999 2000

7.2 21.9 28.6 50.2 72.6 EBITA

1996 1997 1998 1999 2000

1’323 1’709 2’063 3’323 3’660 Employees 31.12.

1996 1997 1998 1999 2000

0.8 5.1 8.8 14.3 16.3 Cash EPS 1 in CHF

1 after share split in August 1997

4

2000 Consolidated Financial Statements of Swisslog Group

5www.swisslog.com

Consolidated Balance Sheet

as at 31 December

ASSETS 2000 1999

Note CHFm CHFm

Tangible fixed assets 3 123.4 125.0

Intangible assets 3 15.7 13.4

Goodwill 3 290.7 184.1

Deferred tax assets 9 26.0 17.0

Other non-current assets 4 13.9 2.2

Non-current assets 469.7 341.7

Inventories 5 68.2 74.3

Trade and other receivables 6 281.8 240.0

Prepayments 9.4 10.5

Cash and cash equivalents 25.1 33.9

Current assets 384.5 358.7

Total assets 854.2 700.4

SHAREHOLDERS' EQUITY AND LIABILITIES

Share capital 7 27.4 27.4

Reserves 147.3 183.3

Shareholders' equity 174.7 210.7

Minority interest 1.5 18.9

Interest bearing borrowings 8 298.0 121.1

Deferred tax liabilities 9 13.0 8.7

Other non-current liabilities 10 36.9 27.4

Non-current liabilities 347.9 157.2

Provisions for operating activities 12 20.7 19.0

Trade and other payables 76.0 69.9

Advance payments from customers 59.6 75.2

Short-term borrowings 73.4 58.2

Taxes payable 12.7 17.0

Other short-term liabilities 13 52.6 36.3

Accrued expenses and deferred income 35.1 38.0

Current liabilities 309.4 294.6

Total shareholders' equity and liabilities 854.2 700.4

6

Consolidated Income Statement

2000 1999

1 January to 31 December Note CHFm CHFm

CONTINUING OPERATIONS

Net sales 925.0 722.4

Other operating income 10.6 3.6

Changes in inventories 14 4.8 –14.0

Material and service expense 14 404.9 382.7

Personnel expense 14 316.3 215.3

Depreciation on tangible fixed assets and intangible assets 16.5 11.6

Changes in provisions for operating activities –5.8 –2.9

Other operating expense 14 126.3 83.1

Operating expense 863.0 675.8

Earnings before interest, taxes and amortisation of goodwill (EBITA) 72.6 50.2

Amortisation of goodwill 3 57.9 6.6

Earnings before interest and taxes (EBIT) 14.7 43.6

Net financial result 15 –14.4 –1.8

Other income / expense 16 –0.6 2.9

Result before tax –0.3 44.7

Taxes 9 –12.0 –9.8

Result after tax –12.3 34.9

Minority interests –2.4 –2.1

Result continuing operations –14.7 32.8

DISCONTINUING OPERATIONS 17

Net sales to third parties 0.5 0.1

Net sales to Group companies 38.2 47.3


Operating expense –45.9 –47.6

Other income /expense –0.5 0.0

Result before tax –7.6 –0.1

Taxes 0.7 –1.5

Result discontinuing operations –6.9 –1.6

Net result –21.6 31.2

CHF CHF

Earnings per share 20 –7.85 11.34

Earnings per share (diluted) 20 –7.85 11.34

7www.swisslog.com

Consolidated Cash Flow Statement

1 January to 31 December 2000 1999

CHFm CHFm

CASH FLOW FROM OPERATING ACTIVITIES

Earnings before interest, taxes and amortisation of goodwill (EBITA) 72.6 50.2

Depreciations 16.5 11.6

Change in pension liabilities 0.1 0.6

Other income / expense –0.6 3.2

Taxes paid –19.5 –12.1

Minority interests –2.4 –2.1

Cash flow from operations 66.7 51.4

Increase (+) / decrease (–) from:

Inventories 9.6 –14.6

Trade and other receivables –29.8 –4.8

Prepayments 2.4 1.3

Increase (+) / decrease (–) in:

Trade and other payables 1.8 –3.1

Advance payments received from customers –22.4 –15.9

Short-term liabilities, accrued expenses and deferred income 7.0 3.9

Provisions for operating activities –2.4 –2.8

Cash flow from net current assets –33.8 –36.0

Net cash flow from operating activities 32.9 15.4

CASH FLOW FROM INVESTING ACTIVITIES

Investments in tangible fixed assets (incl. prepayments) –17.5 –14.7

Investments in intangible assets –4.9 –5.0

Investments in subsidiaries and associated companies –161.9 –142.4

Disposal of tangible fixed assets and intangible assets 1.8 1.0

Other non-current assets –12.6 22.1

Net cash flow from investments –195.1 –139.0

CASH FLOW FROM FINANCING ACTIVITIES

Changes in interest bearing borrowings 50.1 125.6

Proceeds from convertible bonds 150.0 0.0

Net financial result –14.4 –1.8

Change in other non-current liabilities 9.1 0.9

Dividends paid to shareholders of the Group –6.9 –6.9

Purchase of minority interests –16.9 0.0

Dividends paid to minority shareholders –1.0 –0.3

Purchase of treasury shares –13.8 –0.5

Proceeds from disposal of treasury shares 3.3 0.0

Net cash flow from financing activities 159.5 117.0

CASH FLOW FROM DISCONTINUING OPERATIONS

Cash flow from operating activities –8.8 –1.2

Cash flow from investing activities 3.5 –2.1

Cash flow from financing activities 0.0 0.0

Net cash flow from discontinuing operations –5.3 –3.3

Impact of currency translation –0.8 1.1

Net decrease in cash and cash equivalents –8.8 –8.8

Cash and cash equivalents at beginning of year 33.9 42.7

Cash and cash equivalents at end of year 25.1 33.9

8

Consolidated Changes in Shareholders’ Equity

CHFm Note Share Premium Retained Other Shareholders’

capital earnings equity

As at 1.1.1999 27.4 53.5 99.7 –0.2 180.4

Net result 1999 31.2 31.2

Dividend payment –6.9 –6.9

Treasury shares 7 –0.5 –0.5

Impact from first time application IAS 19, revised –4.5 –4.5

Change in determination minority interest 0.9 0.9

Currency translation difference 9.9 0.2 10.1

As at 31.12.1999 27.4 53.5 129.8 0.0 210.7

Net result 2000 –21.6 –21.6

Dividend payment –6.9 –6.9

Treasury shares 7 –10.4 –10.4

Equity component convertible bonds 8 14.6 14.6

Currency translation difference –11.7 –11.7

As at 31.12. 2000 27.4 53.5 93.8 0.0 174.7

FOREIGN CURRENCY EXCHANGE RATES Exchange rate income statement Exchange rate balance sheetCurrency Country Unit 2000 1999 2000 1999ATS Austria 100 11.3408 11.6393 11.0688 11.6749AUD Australia 1 0.9795 0.9667 0.9081 1.0431BEF Belgium 100 3.8684 3.9687 3.7757 3.9824CNY China 100 0.2038 0.1749 0.1978 0.1931CZK Czech Republic 100 4.3846 4.3681 4.3413 4.4454DEM Germany 100 79.7883 81.9008 77.8749 82.1390ESP Spain 100 0.9379 0.9622 0.9154 0.9655EUR Europe 1 1.5605 1.6015 1.5231 1.6065FIM Finland 100 26.2461 26.9255 25.6167 27.0194FRF France 100 23.7900 24.4083 23.2195 24.4909GBP UK 1 2.5631 2.4298 2.4468 2.5808HKD Hong Kong 1 0.2164 0.1936 0.2099 0.2056INR India 1 0.0375 0.0349 0.0351 0.0367ITL Italy 100 0.0806 0.0827 0.0787 0.0830KRW South Korea 100 0.1437 – 0.1294 –MYR Malaysia 1 0.4424 0.3958 0.4308 0.4207NLG Netherlands 100 70.8134 72.6751 69.1153 72.8998NOK Norway 100 19.2398 19.2295 18.4326 19.9100PLN Poland 1 0.3921 – 0.3955 –SEK Sweden 100 18.3991 18.1508 17.2082 18.7880SGD Singapore 1 0.9784 0.8892 0.9453 0.9598USD USA 1 1.6865 1.5040 1.6369 1.5985UYU Uruguay 100 0.1394 0.1329 0.1294 0.1383ZAR South Africa 1 0.2444 0.2461 0.2162 0.2597

9www.swisslog.com

2000 Supply Chain Supply Chain Supply Chain Elimina- Total Dis- Elimina- TotalSolutions Systems & Software tions/other continuing continuing tions Group

in CHFm Products operations 5 operations Order intake 454.6 496.2 98.7 –46.4 1’003.1 32.7 –32.3 1’003.5Order backlog (at year-end) 295.3 165.9 40.4 –21.0 480.6 3.3 –3.3 480.6Net sales to third parties 386.0 477.9 61.1 925.0 0.5 925.5Net sales to other segments 1 5.4 14.3 26.4 –46.1 0.0 38.2 –38.2 0.0Net sales, consolidated 391.4 492.2 87.5 –46.1 925.0 38.7 –38.2 925.5Earnings before interest, taxes, depreciationand amortisation of goodwill (EBITDA) 34.2 54.3 9.2 –8.6 89.1 –5.5 83.6Earnings before interest, taxes and amortisation of goodwill (EBITA) 28.4 45.9 7.9 –9.6 72.6 –7.1 65.5Non-current and current assets 2 141.6 283.1 32.6 328.4 785.7 0.0 785.7Operating liabilities and provisions 3 106.3 134.1 24.4 12.0 276.8 0.0 276.8Net operating assets 4 incl. goodwill 35.3 149.0 8.2 316.4 508.9 0.0 508.9Net operating assets 4 excl. goodwill 35.3 149.0 8.2 25.6 218.1 0.0 218.1Net investment in tangible fixed assets and intangible assets 6.1 11.7 3.2 1.5 22.5 4.0 26.5Depreciation 5.8 8.4 1.3 1.0 16.5 1.6 18.1Other non-monetary expense (+ = expense / – = income) –5.2 –0.6 –0.9 0.0 –6.7 –0.9 –7.6Employees (at year-end) 1’269 1’910 446 35 3’660 3’660Earnings as % of sales (EBITA margin) 7.3 9.3 9.0 7.8 NA 7.1Return in % on net operating assets excl. goodwill (RONOA) 80.5 30.8 96.3 33.3 30.0

1999Order intake 331.9 387.5 50.9 –42.4 727.9 43.9 –43.9 727.9Order backlog (at year-end) 236.0 159.0 17.9 –19.7 393.2 17.4 –17.4 393.2Net sales to third parties 377.2 328.9 16.3 722.4 0.1 722.5Net sales to other segments 1 3.0 14.5 24.2 –41.7 0.0 47.3 –47.3 0.0Net sales, consolidated 380.2 343.4 40.5 –41.7 722.4 47.4 –47.3 722.5Earnings before interest, taxes, depreciationand amortisation of goodwill (EBITDA) 32.9 31.3 3.8 –6.2 61.8 0.7 62.5Earnings before interest, taxes and amortisation of goodwill (EBITA) 29.1 24.5 3.2 –6.6 50.2 –0.1 50.1Non-current and current assets 2 181.2 252.1 6.5 178.5 618.3 27.7 646.0Operating liabilities and provisions 3 145.4 110.3 7.8 –10.7 252.8 13.0 265.8Net operating assets 4 incl. goodwill 35.8 141.8 –1.3 189.2 365.5 14.7 380.2Net operating assets 4 excl. goodwill 35.8 141.8 –1.3 5.1 181.4 14.7 196.1Net investment in tangible fixed assets and intangible assets 4.3 13.1 1.6 0.7 19.7 2.5 22.2Depreciation 3.8 6.7 0.6 0.5 11.6 0.8 12.4Other non-monetary expense (+ = expense / – = income) –2.7 3.7 –0.4 –3.6 –3.0 –3.0Employees (at year-end) 1’207 1’908 189 19 3’323 184 3’507Earnings as % of sales (EBITA margin) 7.7 7.1 7.9 6.9 NA 6.9Return in % on net operating assets excl. goodwill (RONOA) 81.3 17.3 NA 27.7 25.5

1 Internal transactions are concluded on arms-length terms.2 excluding cash and cash equivalents, deferred tax assets, other non-current assets3 Operating liabilities and provisions = Current and non-current liabilities and provisions for operating activities without interest-bearing borrowings and tax liabilities4 Net operating assets = Tangible fixed assets and intangible assets plus net current assets (current assets excl. cash and cash equivalents, current liabilities and provisions

for operating activities [excl. interest-bearing borrowings and taxes payable]) minus other non-current liabilities5 Information by segment includes all continuing operations. To arrive at consolidated net sales from continuing operations net sales to other segments are eliminated.

The result and the consolidated assets and liabilities of the continuing operations include Group costs, real estate and treasury activities.

EU Rest of Europe 6 North America Others 7

in CHFm 2000 1999 2000 1999 2000 1999 2000 1999Net sales 546.3 461.8 83.6 67.9 198.6 99.7 97.0 93.1Net operating assets 251.1 180.1 110.7 108.8 139.4 89.7 7.7 1.6Net investment in tangible fixed assets and intangible assets 14.6 13.6 7.0 5.6 2.7 2.1 2.1 0.9Employees at year-end 2’198 2’215 446 404 680 611 336 277

6 Switzerland, Norway and eastern European countries7 South America, Australia, Asia and Africa

Information by Segment

10

1. CONSOLIDATION AND ACCOUNTING PRINCIPLES

1.1 General remarks and changes to accounting principles

Swisslog’s consolidated financial statements are prepared on the basis of the individual financial statements of the group companies. These

are based on uniform guidelines which are in accordance with the standards of the International Accounting Standards Committee (IASC).

Individual items from the previous year have been reclassified in the consolidated balance sheet and income statement to ensure compa-

rability with the 2000 presentation.

1.2 Consolidated companies and principles of consolidation

The consolidated financial statements include Swisslog Holding AG and all companies in which the group holds 50% or more of the voting

rights (directly or indirectly) or where control for the operating management is established.

Group companies are included in the consolidated financial statements using the full consolidation method. Capital consolidation is based

on the purchase method. Minority interests in shareholders’ equity and results of group companies are shown separately. Intragroup

transactions and relationships are eliminated together with intragroup profits. Companies acquired or sold during the year under review

are consolidated from the date of acquisition (change of control) and eliminated from the consolidated financial statements from the date

of sale. A list of consolidated companies is shown on pages 32 and 33.

Investments in associated companies are accounted for by the equity method of accounting. These are companies where the Group

generally has between 20% and 50% of the voting rights or where the Group has significant influence.

1.3 Foreign currencies

Assets (incl. goodwill denominated in foreign currencies) and liabilities of the foreign group companies and balance sheet items in foreign

currencies are translated at the closing exchange rate on the balance sheet date, income and expense are translated at the average annual

exchange rate according to the table on page 8. Differences arising from the exchange of transactions or balance sheet items in foreign

currencies are recorded in the income statement. Unrealised differences resulting from the translation of loans to group companies are

eliminated in equity. Differences arising from the translation of foreign affiliate statements are recorded directly in equity.

1.4 Tangible fixed assets

Tangible fixed assets are shown in the balance sheet at purchase or manufacturing cost less accumulated depreciation. Land and buildings

covered by leasing agreements are shown in the balance sheet at purchase value and depreciated over their useful life. The corresponding

financial leasing liabilities are shown as non-current liabilities at their present value less repayments calculated by the annuity method.

Tangible fixed assets are depreciated over the estimated useful life using the straight line method, i.e. 25 to 50 years for buildings, 3 to 15

years for plant and machinery (mostly 5 to 8 years) and 3 to 6 years for office machinery and fittings including computer hardware. Fixed

assets are excluded from the financial statements at the time of disposal or when no further use can be expected. All profit or loss resulting

from the disposal of tangible fixed assets is shown in the income statement.

Notes to the Consolidated Financial Statements

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1.5 Intangible assets

a) Goodwill

Acquired goodwill is capitalised and amortised through the income statement over the useful life. With respect to acquisitions made in the

supply chain software, consulting and services markets the Group has adopted a shorter general goodwill amortisation period by reducing

the corresponding amortisation period from 20 years to 5 years from financial year 2000 onwards. If a shorter or longer period is justified

by commercial considerations the term for amortisation is changed on a case-by-case-basis.

b) Research and development

Expenses incurred on development projects are capitalised to the extent that such expenditure is expected to generate future economic

benefits. These assets are amortised over the period of their expected useful life not exceeding 5 years from the commencement of the

commercial use of the product. Research and other development costs are recognised as an expense as incurred.

c) Other

Licences, patents, trademarks and similar rights are shown at purchase cost less accumulated depreciation. Depreciation is calculated using

the straight-line method over the estimated useful life not exceeding 20 years. If a shorter period is justified by commercial considerations

the term for amortisation is reduced accordingly.

d) Impairment of intangible assets

Where an indication of impairment exists, the carrying amount of any intangible asset including goodwill is assessed and written down

immediately to its recoverable amount.

1.6 Non-current financial investments

Investments not consolidated are recorded at their purchase value. If the equity value of the investment is less than the capitalised value,

a valuation adjustment is made and, if necessary, a provision is formed.

Non-current financial investments are generally shown at the lower of cost or market.

1.7 Cash, cash equivalents and short-term deposits

This covers cash in hand and postal and bank balances plus money at call and term deposits shown at nominal value.

1.8 Securities

These are marketable securities and are shown at the lower of cost or market on the balance sheet date.

1.9 Inventories, work in progress

Inventories are shown at purchase or manufacturing cost or net realisable value if lower. Manufacturing costs include individual material

and production costs and production overheads. Costs are generally valued using weighted averages. Provisions required for inventories

with low turnover and non-marketable goods are made.

Long-term contracts are valued using the percentage-of-completion method. Sales, manufacturing costs and gross profit are included in

the financial statements on the basis of the proportion of cumulated manufacturing costs to the total estimated manufacturing cost up to

customer acceptance of the order (completion). Provisions are formed for project costs to the extent that manufacturing costs, including

likely warranties, guarantee work and subsequent work, up to the expiration of the warranty period exceed the contract price.


12

1.10 Trade accounts receivable

Trade accounts receivable are shown at face value net of necessary allowances for doubtful accounts.

1.11 Other receivables, prepaid expenses and accrued income

Other receivables are shown at their realisable net value, prepaid expenses and accrued income at the lower of purchase cost or realisable

value.

1.12 Liabilities

Other non-current liabilities include, among other items, liabilities under leasing agreements. Current liabilities include borrowings with a

residual term of less than one year. They are shown at nominal value. Borrowing costs are recognised as an expense in the period in which

they are incurred.

1.13 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an

outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

1.14 Recognition of sales

Sales of products and services are recognised on delivery. Sales are shown excluding sales tax and VAT and after deducting credits and

rebates. Long-term contracts are recorded according to IAS 11 using the percentage-of-completion method (see 1.9).

1.15 Income taxes

Income taxes comprise paid or accrued income taxes on the relevant earnings of the individual companies, calculated in accordance with

tax legislation in the respective countries, and deferred taxes based on temporary differences between the carrying amount of an asset or

liability in the balance sheet and the tax base according to IAS 12. Deferred tax is calculated on the basis of tax rates valid at closing date

or on the basis of already announced changes of tax rates which apply to the period when the asset will be realised or the liability will be

settled. Deferred tax assets exceeding recognised deferred tax liabilities within the same taxable entity are recognised to the extent that it

is probable that the enterprise will have sufficient taxable profit available in following periods. Deferred tax assets are recognised for the

carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against

which the unused tax losses and unused tax credits can be utilised. No deferred taxes are recognised for the temporary differences arising

from investments in subsidiaries and associates because it is probable that the temporary differences will not reverse in the foreseeable

future. Deferred taxes are reported under non-current assets and liabilities.

1.16 Employee benefits

a) Defined benefit plans

Current and former employees receive benefits and pensions based on the corresponding national and private statutory schemes. Future

liabilities are calculated using actuarial methods. For service-based pension plans the present value of the entitlement (defined benefit

obligation) is calculated based on length of service, anticipated growth in wages and salaries and adjustments to pensions (projected unit

credit). Annual pension costs calculated according to actuarial principles (net periodic costs) are shown including past pension costs (past

service costs) in the income statement. Revisions to plans are taken through the income statement over the estimated remaining service

period, corrections based on new actuarial assumptions are taken through the income statement over five years. Plan assets are shown at

market values.

b) Defined contribution plans

The Group’s contributions to defined contribution plans are charged to the income statement in the period to which the contributions

relate.


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1.17 Convertible bonds

The fair values of the liability component and the equity conversion component are determined on the issue of the bonds. The fair value of

the liability component, included in long-term borrowings, is calculated using a market interest rate for equivalent non convertible bonds.

The residual amount, representing the value of the equity conversion component, is included in shareholders’ equity in reserves, net of

deferred income taxes.

In subsequent periods the liability component continues to be presented on the amortised cost basis, until extinguished on conversion or

maturity of the bonds. The equity conversion component is determined on the issue of the bonds and is not changed in subsequent periods.

2. CHANGES IN CONSOLIDATION

In 2000 the following companies were included for the first time in the consolidated statements as a result of acquisitions:

Consolidated from Swisslog’s holding

Fully consolidated companies in the business segment Supply Chain Software

Sonica Software Corporation, Orange / USA 27. 3. 2000 100.0%

Swisslog Automatisierungstechnik GmbH, Steinhagen / Germany 1. 1. 2000 60.0%

Nuova C.G.A. Sistemi s.r.l., Maranello / Italy 1. 1. 2000 100.0%

Swisslog Software UK Ltd., Slough / UK 1. 8. 2000 100.0%

Swisslog Software USA Inc., North Billerica / USA 1. 8. 2000 100.0%

Fully consolidated companies in the business segment Supply Chain Solutions

Aircotronic Ltd., Nottingham / UK 1. 1. 2000 100.0%

Delta Com Rohrpostanlagen GmbH, Oldenburg / Germany 1. 1. 2000 100.0%

Aircotronic Rohrpostanlagen- und Kommunikationssysteme GmbH, Langenhagen / Germany 1. 1. 2000 100.0%

Fully consolidated company in the business segment Supply Chain Systems & Products

Bernd Herzog GmbH, Zeestow / Germany 1. 1. 2000 30.6%

Companies accounted for by the equity method of accounting

Wassermann AG, Munich / Germany 1. 10. 2000 20.0%

Rotzinger AG, Kaiseraugst / Switzerland 1. 7. 2000 33.3%

ClassiX Software GmbH & Co. KG, Hamburg / Germany 1. 7. 2000 19.0%


14


3. TANGIBLE FIXED ASSETS AND INTANGIBLE ASSETS

Tangible fixed assets

CHFm Land Buildings Machinery / Assets under Total tangible Total tangibleequipment construction / fixed assets fixed assets

prepayments 2000 1999

Cost at 1 January 42.7 88.6 101.7 0.8 233.8 171.0

Changes in consolidation scope 0.0 0.1 2.2 0.0 2.3 45.6

Additions 0.3 4.4 13.8 0.2 18.7 16.5

Disposals –0.5 –1.2 –21.0 –0.5 –23.2 –3.9

Currency translation differences 0.0 –0.7 1.9 0.0 1.2 4.6

Cost at 31 December 42.5 91.2 98.6 0.5 232.8 233.8

Accumulated depreciation as at 1 January 0.0 –35.1 –73.7 0.0 –108.8 –73.8

Changes in consolidation scope 0.0 0.0 0.0 0.0 0.0 –23.9

Depreciation charge 0.0 –2.9 –12.1 0.0 –15.0 –11.0

Accumulated depreciation on disposals 0.0 0.4 16.3 0.0 16.7 2.6

Currency translation differences 0.0 –0.4 –1.9 0.0 –2.3 –2.7

Accumulated depreciation as at 31 December 0.0 –38.0 –71.4 0.0 –109.4 –108.8

Total net book value

as at 31.12.1999 42.7 53.5 28.0 0.8 125.0

as at 31.12. 2000 42.5 53.2 27.2 0.5 123.4

The insurance value of the tangible fixed assets at the end of 2000 was CHF 213.3 m (1999: CHF 186.8 m).

Intangible assets

CHFm Goodwill Other intangible Total intangible Total intangibleassets assets 2000 assets 1999

Cost at 1 January 193.4 18.8 212.2 65.1

Changes in consolidation scope 0.0 0.4 0.4 9.1

Acquisitions of subsidiaries (Note 18) 161.9 0.0 161.9 122.8

Additions 3.7 7.8 11.5 12.1

Disposals 0.0 –3.8 –3.8 –0.1

Currency translation differences –2.7 –0.6 –3.3 3.2

Cost at 31 December 356.3 22.6 378.9 212.2

Accumulated amortisation/depreciation as at 1 January –9.3 –5.4 –14.7 –5.2

Changes in consolidation scope 0.0 –0.2 –0.2 –1.2

Amortisation/depreciation charge –57.9 –3.1 –61.0 –8.0

Accumulated amortisation/depreciation on disposals 0.0 0.9 0.9 0.1

Currency translation differences 1.6 0.9 2.5 –0.4

Accumulated amortisation/depreciation as at 31 December –65.6 –6.9 –72.5 –14.7

Total net book value

as at 31.12.1999 184.1 13.4 197.5

as at 31.12. 2000 290.7 15.7 306.4

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The additions to goodwill in 2000 relate to adjustments as a result of earn-out payments, purchase price reduction and correction of the

opening balance sheets of subsidiaries acquired prior to 2000.

As from 2000 goodwill is generally amortised over 5 years. Had the amortisation for the year 2000 been made in accordance with the

estimate applied prior to the year 2000 the amortisation charge would have amounted to CHF 14.7 m.

Finance leases future payments finance charges present value

Minimum lease payments per 31 December, in CHFm 2000 1999 2000 1999 2000 1999

due within one year 0.8 0.8 0.5 0.5 0.3 0.3

due after one year and before five years 8.5 3.2 1.5 1.8 7.0 1.4

due after five years 0.0 6.2 0.0 0.2 0.0 6.0

Total 9.3 10.2 2.0 2.5 7.3 7.7

The net book value of buildings under finance lease amounts to CHF 7.1 m (1999: CHF 7.5 m). One finance lease incorporates a CHF 5.7 m

(1999: CHF 5.8 m) purchase option.

Operating leases

Minimum lease payments per 31 December, in CHFm 2000 1999

due within one year 3.5 2.8

due after one and before five years 6.3 6.6

due after five years 1.0 1.5

Total 10.8 10.9

Operating leasing costs totalled CHFm 1.3 in 2000 (1999: CHFm 1.4).

4. OTHER NON-CURRENT ASSETS

2000 1999

CHFm CHFm

Investments in associated companies 1.2 0.1

Financial investments 0.3 0.2

Long-term interest-bearing loans 7.8 1.8

Other long-term receivables 4.6 0.1

Total 13.9 2.2

5. INVENTORIES

2000 1999

CHFm CHFm

Raw materials and supplies 33.1 35.0

Finished goods 12.6 11.7

Work in progress, projects 22.5 27.6

Total 68.2 74.3

16


6. TRADE AND OTHER RECEIVABLES2000 1999

CHFm CHFm

Trade receivables 239.5 206.0

Other receivables 36.1 26.7

Prepaid expenses and deferred income 6.2 7.3

Total 281.8 240.0

7. SHARE CAPITAL / TREASURY SHARES

Share capital

The share capital of Swisslog Holding AG comprises 2,752,000 registered shares at a par value of CHF 10 each.

Treasury shares 2000 1999

Number CHFm Number CHFm

Registered shares 8’298 4.6 14’350 1.8

Proceeds and outlays from transactions in treasury shares are directly recorded in equity. Details on treasury shares can be found on

page 30, Notes to the Financial Statements of Swisslog Holding AG. The fee to the Board of Directors was paid in 2000 in the form of 4’350

shares; the fee for the business year 2000 was decided to be paid in 2001 in form of 350 shares.

8. INTEREST BEARING BORROWINGS2000 1999

CHFm CHFm

Long-term bank borrowing 153.3 109.3

Convertible bonds 132.3 0.0

Long-term loans 12.3 10.4

Other long-term financial liabilities 0.1 1.4

Total 298.0 121.1

Convertible bonds

On 7 July 2000 Swisslog Holding AG issued 60’000 2.25% convertible bonds at a nominal value of CHF 150 m. The bonds mature 5 years

from the issue date at their nominal value of CHF 150 m unless converted into Swisslog Holding AG shares at the holder’s option at the

rate of 2.67953 shares per CHF 2’500 nominal value.

The convertible bond is recognised in the balance sheet as follows: CHFm

Face value of convertible bond issued on 7 July 2000 150.0

Equity conversion component, net of deferred tax liability –14.6

Deferred tax liability –4.8

Liability component on initial recognition at 7 July 2000 130.6

Interest expense (coupon interest rate 2.25%) 1.6

Interest expense (market interest rate applied) 1.7

Interest expense total 3.3

Interest paid 0.0

Total liability component 133.9

Provision for interest payment under accrued expenses and deferred income –1.6

Liability component at 31 December 2000 132.3

Interest expense on the bond is calculated on the effective yield basis by applying the coupon interest rate (5.3%) for an equivalent non

convertible bond to the liability component of the convertible bond.

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9. TAXES AND DEFERRED TAXES

Tax expense 2000 1999

CHFm CHFm

Current income taxes 12.3 8.6

Deferred taxes –0.3 1.2

Tax expense continuing operations 12.0 9.8

Tax expense discontinuing operations –0.7 1.5

Total tax expense 11.3 11.3

The effective tax expense totalled CHF 11.3 m (1999: CHF 11.3 m) or approximately 32% (1999: 25%) of profit before tax and before the

effect of the change of the goodwill amortisation period from 20 to 5 years. In 2000 CHF 0.1 m was recorded against the balance sheet

rather than as tax income in the income statement. This amount comprises CHF 2.4 m relating to assets credited to equity and CHF 2.5 m

relating to liabilities from acquisitions charged to equity. The reconciliation of the applicable to the effective tax rate based on the aggregate

of tax applicable in the different countries and before effect of higher goodwill amortisation is the following:

2000 1999

Applicable tax rate 32.4% 30.0%

Utilisation of unrecognised tax loss carryforwards 0.0% –9.2%

Changes in valuation allowances of deferred tax assets –7.3% –

Effect of different valuations between carrying amount and tax basis for which

no deferred taxes are recognised and expenses which are not tax deductible 9.7% 10.2%

Changes in tax legislation 0.0% –5.0%

Other –2.8% –0.7%

Effective tax rate 32.0% 25.3%

Had the effect of the change of the goodwill amortisation period from 20 to 5 years been considered, the effective tax rate would be

–141.0%.

The tax loss carryforwards changed as follows:

2000 1999

CHFm CHFm

Available tax loss carryforwards at 1 January 80.8 115.5

Tax losses arising from current year 24.4 9.9

Tax losses expired during current year 0.0 0.0

Tax losses utilised against current year profits –42.2 –44.6

Available tax loss carryforwards at 31 December 63.0 80.8

Deferred tax assets of CHF 12.2 m (1999: CHF 14.4 m) were recorded in respect of available tax loss carryforwards of CHF 43.9 m (1999:

CHF 67.7 m). Deferred tax assets are recognised for the carryforward of unused tax losses to the extent that it is probable that future

taxable profits will be available against which the unused tax losses can be utilised in the respective countries.

18


Unused tax loss carryforwards for which no deferred tax has been recognised will expire as follows:

2000 1999

CHFm CHFm

After 1 year 0.0 1.2

After 2 years 1.1 0.0



After more than 4 years 10.3 11.5

Total 19.1 13.1

Deferred tax assets and liabilities are reported as follows:

2000 1999

CHFm CHFm

Deferred tax assets 26.0 17.0

Deferred tax liabilities 13.0 8.7

10. OTHER NON-CURRENT LIABILITIES

2000 1999

CHFm CHFm

Long-term liabilities 18.4 9.0

Pension liabilities (Note 11) 18.5 18.4

Total 36.9 27.4

thereof due within one year 0.8 0.7

after one and before two years 0.7 1.1

after two years 35.4 25.6

Long-term liabilities contain financial leasing liabilities totalling CHF 7.0 m (1999: CHF 7.8 m).

11. EMPLOYEE BENEFITS

Liabilities recognised in the balance sheet comprise: 2000 1999

CHFm CHFm

Pension schemes 17.1 17.5

Other long-term employee benefits 1.4 0.9

Total pension liabilities 18.5 18.4

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PENSION SCHEMES

Besides the statutory social security schemes there are independent pension plans or pension insurance policies substantially covering all

employees. The related assets are primarily held outside the Group. Where this is not the case, appropriate provisions are made in the

balance sheet for pension liabilities. Most of these pension schemes are defined benefit plans. The defined obligations and related assets of

the major plans are reappraised yearly and at least every three years the obligations are reassessed by independent actuaries. The last

valuation was done at 31 December 2000. Plan assets are recorded at fair values and include mainly marketable securities and bonds.

The following is a summary of the status of the main defined benefit plans at December 31, 2000, using IAS 19 (revised) actuarial

assumptions.

2000 1999

Balance sheet reconciliation CHFm CHFm

Present value of funded obligations 113.3 121.5

Fair value of plan assets 108.7 114.1

Net funded status 4.6 7.4

Present value of unfunded obligations 7.6 9.6

Unrecognised actuarial gains (losses) 4.9 0.8

Unrecognised past service cost 0.0 0.2

Other 0.0 –0.5

Liability in the balance sheet 17.1 17.5

Movement in the liability CHFm CHFm

Liability at the beginning of the period 17.5 5.2

Effect of adopting IAS 19 (revised) 0.0 6.4

Effect of changes in consolidation scope 0.7 5.8

Exchange differences –0.5 0.2

Expense for pension schemes recognised in the income statement 3.0 3.3

Contributions paid by the company –3.6 –3.0

Other 0.0 –0.4

Liability at the end of the period 17.1 17.5

Expense for pension schemes recognised in the income statement CHFm CHFm

Current service cost 5.0 4.1

Interest cost 5.7 4.8

Expected return on plan assets –5.8 –5.6

Past service cost 0.3 0.0

Actuarial gains recognised in the period –0.7 0.0

Effect of any curtailment or settlement –1.5 0.0

Total, included in personnel expense 3.0 3.3

Plan assets CHFm CHFm

Actual return on plan assets 6.3 7.8

20


Actuarial assumptions 2000 1999

Discount rate 4.00%–7.50% 3.50%–7.75%

Expected return on plan assets 5.00%–8.50% 5.50%–8.50%

Future salary increases 2.50%–5.20% 1.50%–5.20%

Future pension benefit increases 1.50%–3.00% 1.50%–3.00%

Inflation 2.00%–5.00% 2.00%–2.50%

The total amount of contributions paid for defined contribution plans is CHF 6.7 m (1999: CHF 6.0 m).

OTHER LONG-TERM EMPLOYEE BENEFITS

CHFm CHFm

Liability at the beginning of the period 0.9 0.4

Effect of changes in consolidation scope 0.5 0.0

Paid in the period –0.3 –0.1

Increase of the liability 0.3 0.6

Liability at the end of the period 1.4 0.9

Other long-term employee benefits mainly cover long-service benefits.

SHARE OPTION PLANS

The Group offers share options to directors and employees. Movements in the number of shares are as follows:

2000 1999

At 1 January 21’550 19’000

Granted 68’970 3’600

Exercised –20’925 0

Lapsed –625 –1’050

At 31 December 68’970 21’550

Details of share options granted in 2000:

Exercise periods 17. 5. – 30. 6. 2001; 1. 7. – 30. 9. 2002; 1. 7. – 30. 9. 2003

Expiry dates 30. 6. 2001; 30. 9. 2002; 30. 9. 2003

Aggregate proceeds CHF 0.35 m

Exercise prices CHF 700

The aggregate proceeds form part of the other non-current liabilities at the end of the year 2000.

Options exercised up to 30 September 2000 resulted in treasury shares which were handed over to the beneficiaries. The excercise price

resulted in proceeds of CHF 3.3 m and expenses of CHF 10.1 m. The net expenses of CHF 6.8 m were recorded in equity. The fair value of

the shares at the exercise dates amounted to approx. CHF 16.7 m.

Share options outstanding at 31 December have the following terms:

2000 1999

Expiry date Exercise price number of number of

options options

30. 6. 2000 / 30. 9. 2000 CHF 139 21’550

30. 6. 2001 CHF 700 2’500

30. 9. 2002 / 30. 9. 2003 CHF 700 66’470

Total 68’970 21’550

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12. PROVISIONS FOR OPERATING ACTIVITIES

CHFm Projects Warranties Other Total

as at 1 January 7.0 9.7 2.3 19.0

Changes in consolidation scope 3.1 0.0 0.0 3.1

Additions 8.0 5.1 1.5 14.6

Unused reversed –1.7 –2.2 –0.3 –4.2

Used during year –5.8 –4.2 –1.2 –11.2

Currency translation differences –0.2 –0.4 0.0 –0.6

as at 31 December 10.4 8.0 2.3 20.7

13. OTHER SHORT-TERM LIABILITIES

2000 1999

CHFm CHFm

To third parties 48.7 34.0

Non-operative provisions 3.9 2.3

Total 52.6 36.3

Development of non-operative provisions:

CHFm Restructuring Other Total

as at 1 January 1.8 0.5 2.3

Changes in consolidation scope 0.0 0.0 0.0

Additions 0.6 2.6 3.2

Unused reversed –0.3 0.0 –0.3

Used during year –0.8 –0.7 –1.5

Currency translation differences 0.2 0.0 0.2

as at 31 December 1.5 2.4 3.9

14. OPERATING EXPENSE

Material and service expense 2000 1999

CHFm CHFm

Change in inventories 4.8 –14.0

Material and service expense 404.9 382.7

Total 409.7 368.7

The total amount of material and service expense can vary widely depending on the share of materials included in projects and the share

of own work.

Personnel expense 2000 1999

CHFm CHFm

Wages and salaries 254.7 171.6

Social security and other personnel costs 61.6 43.7

Total 316.3 215.3

The increase in personnel costs is mainly due to the consolidation of the acquired companies.

22


Other operating expense 2000 1999

CHFm CHFm

Other operating expense 126.3 83.1

This item includes all operating and recurring administrative, sales and development expenses from the normal business activities which

are not shown under other headings in the income statement. The year-on-year increase is mainly due to the first-time consolidation of

the acquired companies.

The 2000 result includes development expense of CHF 15.1 m (1999: CHF 11.9 m)

15. NET FINANCIAL RESULT

2000 1999

CHFm CHFm

Interest income 2.8 1.4

Interest expense for convertible bonds (coupon interest rate 2.25%) –1.6 0.0

Interest expense for convertible bonds (market interest rate applied) –1.7 0.0

Other interest expense –11.8 –3.9

Other financial income 0.1 0.7

Other financial expense –1.3 –0.2

Hedging costs –0.9 0.2

Total –14.4 –1.8

Interest income relates to interest on money market investments in foreign currencies. The increase in interest expense is attributable to

the increased financing requirements for the current year’s acquisitions and the interest on the convertible bonds (Note 8).

Financial instruments

The financial instruments are used solely for the purpose of managing foreign currency exposure. Contracts are only concluded with

first-class financial institutions. The Group neither uses any financial instruments for trading purposes nor concludes leveraged

transactions. The following table shows the open (net) forward foreign exchange rate contracts for the major currencies in CHFm:

2000 1999

AUD –1.2 2.1

DKK 0.6 5.7

EUR –36.8 44.5

GBP 0.1 19.2

NOK 1.4 2.1

SEK –2.8 7.1

SGD 1.1 3.6

USD 20.3 24.0

Other 0.0 0.1

Total –17.3 108.4

As of the year-end there were no foreign currency options open. The Group has taken actions to establish part coverage for the interest

rate risk on bank loans. To partly hedge the foreign currency exposure in 2001, forward and swap contracts were concluded with a net value

of CHF –17.3 m. If the corresponding exposure had been hedged at 31 December 2000 the resulting equivalent value would have been

CHF –17.4 m representing a loss of CHF 0.1 m. The forward and swap contracts mature over the next 18 months.

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CHFm 2000 1999

Total foreign currency contracts (liabilities) 17.3 108.4

Market value of foreign currency contracts (liabilities) –17.4 –108.2

Results –0.1 0.2

Contingent liabilities

At 31 December 2000 and 31 December 1999 the Group had no contingent liabilities at consolidated level.

16. OTHER INCOME AND EXPENSE

2000 1999

CHFm CHFm

Other income 0.7 0.1

Other expense –1.4 –0.8

Change in provisions for non-operating activities 0.1 3.6

Total –0.6 2.9

17. DISCONTINUING OPERATIONS

The Group decided to discontinue the Swedish production activities of stacker cranes, pallet conveyors and automated guided vehicles. The

production unit for stacker cranes and pallet conveyors was divested through a management buyout. The aforementioned operations which

were part of the business segment Supply Chain Systems & Products are reported in these financial statements as discontinuing operations.

Net assets of these operations were the following:

31.12.1999

CHFm

Total assets 27.7

Total liabilities 13.2

Net assets 14.5

As of 31 December 2000 the Group is no longer reporting any of the operative net assets formerly attributable to discontinuing operations.

CHFm

Net assets sold 4.8

Proceeds from sale (sales price) 4.8

Loss/Profit on disposal 0.0

Tax thereon 0.0

Loss/Profit on disposal after tax 0.0

CHFm

Proceeds from sale (sales price) 4.8

Cash and cash equivalents in operations sold 0.0

Receivable from sale 4.8

24


18. ACQUISITIONS

The following acquisitions were made in 2000:

By contract dated 10 January 2000 the Group acquired 60% of Kaup & Froehler Automatisierungstechnik GmbH, Steinhagen / Germany

(later renamed Swisslog Automatisierungstechnik GmbH) and its subsidiaries. The Group fully consolidated the acquired companies with

effect from 1 January 2000. The other shareholder’s 40% interest in earnings and equity is recorded as minority interest.

By contract dated 25 March 2000 the Group acquired 100% of Sonica Software Corporation, Orange / USA. The Group fully consolidated

the acquired company with effect from 27 March 2000.

By contract dated 19 April 2000 the Group acquired 100% of Nuova C.G.A. Sistemi s.r.l., Maranello / Italy. The Group fully consolidated

the acquired company with effect from 1 January 2000.

By contract dated 15 July 2000 the Group acquired 100% of the Logistics division of Kewill Systems plc with operations in the U.K. (now

carried in Swisslog Software (UK) Ltd., Slough/UK) and the U.S. (now carried in Swisslog Software USA Inc., Billerica/USA). The Group fully

consolidated the acquired operations with effect from 1 August 2000.

By contract dated 14 August 2000 the Group acquired 100% of the Aircotronic group. The Group fully consolidated the acquired

companies with effect from 1 January 2000.

By contract dated 17 August 2000 the Group acquired the remainig 50% interest in Corob group from the other shareholder with effect

from 1 July 2000. The group has fully consolidated these operations since 1 January 1999.

By contract dated 21 September 2000 the Group acquired a 20% interest in Wassermann AG, Munich/Germany, which is accounted for

under the equity method as from 1 October 2000.

Valuation of the assets and liabilities of the above transactions resulted in net liabilities of CHF 1.2 m. Goodwill of CHF 161.9 m has

been capitalised and is planned to be amortised over 5 years.

The assets and liabilities arising from the above acquisitions are as follows:

Non-current assets +5.1

Current assets +16.2

Cash and cash equivalents +2.5

Non-current liabilities –0.0

Current liabilities –25.0

Fair value of net liabilities –1.2

Goodwill +161.9

Total purchase considerations +160.7

less Cash and cash equivalents –2.5

Cash outflow on acquisitions 158.2

Other than for ongoing project valuations no fair value adjustments were made to the book values of net assets acquired. The companies

acquired in 2000 contributed 4% to consolidated net sales and 8% to consolidated net income before amortisation of goodwill.

25www.swisslog.com


19. CONSTRUCTION CONTRACTS

2000 1999

CHFm CHFm

Contract revenues recorded during the period 555.7 476.2

Contract costs incurred and earnings reported up to the balance sheet date 426.4 703.6

Advance payments received 145.6 71.9

Retentions 7.3 4.1

Construction contracts with balance due from customers (underfinanced) 86.8 42.1

Construction contracts with balance due to customers (overfinanced) 82.5 45.8

20. EARNINGS PER SHARE (EPS)

2000 1999

CHF CHF

Earnings per share –7.85 11.34

Earnings per share (diluted) –7.85 11.34

In order to determine the earnings per share, the Group’s average holding of 11,300 own shares in 2000 (14,600 in 1999) was deducted

from the total number of shares of 2’752’000.

As from 2000 the Group holds instruments requiring the computation of diluted earnings per share. No such computation is made as the

effect would be a reduction of the loss per share.

26

Report of the Group Auditors to the General Meeting of Swisslog Holding AG, Buchs

As auditors of the group, we have audited the consolidated financial statements (balance sheet, income statement, cash flow statement

and notes, as shown on pages 4 to 25) of Swisslog Group for the year ended 31 December 2000.

These consolidated financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on these

consolidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification

and independence.

Our audit was conducted in accordance with auditing standards promulgated by the International Standards on Auditing issued by the

International Federation of Accountants (IFAC), which require that an audit be planned and performed to obtain reasonable assurance

about whether the consolidated financial statements are free from material misstatement. We have examined on a test basis evidence

supporting the amounts and disclosures in the consolidated financial statements. We have also assessed the accounting principles used,

significant estimates made and the overall consolidated financial statement presentation. We believe that our audit provides a reasonable

basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the financial position, the results of operations and the

cash flows in accordance with the International Accounting Standards (IAS) and comply with Swiss law.

We recommend that the financial statements submitted to you be approved.

PricewaterhouseCoopers Ltd

G. Tritschler A. Villiger

Basel, 19 March 2001

28

2000 Financial Statements of Swisslog Holding AG

29www.swisslog.com

Balance Sheet, Income Statement

BALANCE SHEET 2000 1999

as at 31 December 000 CHF 000 CHF

ASSETS

Investment in Group company 20’320 20’320

Loans to Group companies 265’934 119’661

Cost for issuance of convertible bonds 3’434 0

Non-current assets 289’688 139’981

Loans to Group companies 8’740 3’504

Receivables 0 2’451

Cash and cash equivalents 11 1

Current assets 8’751 5’955

Total assets 298’439 145’936

SHAREHOLDERS’ EQUITY AND LIABILITIES

Share capital 27’520 27’520

Statutory reserves 70’687 70’687

Share Premium 53’486 53’486

General reserve 12’582 15’392

Reserve for own shares 4’619 1’809

Special reserve 33’682 33’682

Retained earnings 14’877 14’024

Brought forward from previous year 7’144 3’594

Net income 7’733 10’430

Shareholders’ equity 146’766 145’913

Convertible bonds 2000–2005 150’000 0

Non-current liabilities 150’000 0

Short-term liabilities 51 23

Accrued expenses 1’622 0

Current liabilities 1’673 23

Total shareholders’ equity and liabilities 298’439 145’936

INCOME STATEMENT 2000 1999

1 January to 31 December 000 CHF 000 CHF

INCOME

Financial income 12’128 5’201

Dividend income 0 7’000

Other income 16 265

Total income 12’144 12’466

EXPENSE

Financial expense 2’437 188

Administration expense 1’874 1’748

Total expense 4’311 1’936

Taxes 100 100

Net income 7’733 10’430

30

Notes to the Financial Statements

2000 1999

000 CHF 000 CHF

Contingent liabilities / guarantees to third parties 152'342 52'534

Significant investment

Company: Swisslog Management AG, Buchs

Objects: Operational management of the Group; administrative management

of the business of Swisslog Holding AG, under contract

Share capital: 6'880 6'880

Holding (%): 100% 100%

Information on treasury shares: Number CHF

As at 1 January 1999 15'500

Purchase March 1999 4'100 Price 119.33

Directors' fee June 1999 –5'250

As at 31 December 1999 14'350

Disposal February 2000 –2'777

Purchase February/April 2000 22'000 Price 627.76

Directors' fee June 2000 –4'350

Options group management/directors May – September 2000 –20'925

As at 31 December 2000 8'298

The shares are held by Swisslog Management AG. The book value is 000 CHF 4,618.2 (1999: 000 CHF 1,808.6).

Major shareholders: 2000 1999

Chase Nominees Ltd., London 17.1% 15.8%

Henderson Investors, London 8.0% 13.8%

B.V.B.A. Group 2000 Participatie, Antwerpen 9.1% 9.0%

The Bank of New York Europe Ltd., London 5.2% 3.8%

Convertible bonds 2000–2005

Convertible bonds of CHF 150.0 m par value will fall due at par value on 7 July 2005 at the latest. Interest of 2.25% is paid annually

beginning 7 July 2001 for the first period. During the converting period convertible bonds at par value of CHF 2’500 each can be converted

at any time (American style) into 2.67953 registered shares of Swisslog Holding AG at par value of CHF 10 each at the converting price

of CHF 933 per registered share. The converting period expires five trading days (SWX) before the date of repayment determined either by

notice or contractual terms.

Capital increase subject to conditions

The share capital can be increased by the issuance of a maximum of 200’000 fully paid-in registered shares at par value of CHF 10 each

and up to a maximum of CHF 2.0 m in total by exercise of conversion or option rights which are granted by way of convertible bonds or

similar instruments issued by the Company or one of its subsidiaries, and/or by exercise of option rights granted to the shareholders.

The share capital can be increased by the issuance of a maximum of 75’200 fully paid-in registered shares at par value of CHF 10 each and

up to a maximum of CHF 0.752 m in total by exercise of option rights which are granted to the employees of the Company or its subsidiaries

based on one or several option plans.

Appropriation of profit

With net income for the year of CHF 7.7 m and earnings brought forward from the previous year of CHF 7.1 m the Annual General Meeting

has retained earnings of CHF 14.8 m at its disposal. The Board of Directors proposes to the Annual General Meeting that a dividend of

CHF 2.50 per share be paid for the business year 2000 representing a total of CHF 6.9 m. After payment of the dividend retained earnings

of CHF 7.9 m will remain to be carried forward.

31www.swisslog.com

Report of the Statutory Auditors to the General Meeting of Swisslog Holding AG, Buchs

As statutory auditors, we have audited the accounting records and the financial statements (balance sheet, income statement and notes)

of Swisslog Holding AG for the year ended 31 December 2000.

These financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on these financial

statements based on our audit. We confirm that we meet the legal requirements 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 the financial statements are free from material misstatement. We

have examined on a test basis evidence supporting the amounts and disclosures in the financial statements. We have also assessed the

accounting principles used, significant estimates made and the overall financial statement presentation. We believe that our audit provides

a reasonable basis for our opinion.

In our opinion, the accounting records and financial statements and the proposed appropriation of available earnings comply with Swiss

law and the company’s articles of incorporation.

We recommend that the financial statements submitted to you be approved.

PricewaterhouseCoopers Ltd

G. Tritschler M. Hollenstein

Basel, 19 March 2001

32

Subsidiaries and investments of the Swisslog Group as at 31 December 2000

Subsidiary Registered office / Country Consolidated Share capital Holding

on Y/M Currency Amount direct/indirect

Fully consolidated management and financing subsidiaries

Swisslog Holding AG Buchs / Switzerland 86/01 CHF 27.52 m

Swisslog Management AG Buchs / Switzerland 86/01 CHF 6.88 m 100.0%

Relos AG Buchs / Switzerland 00/12 CHF 0.10 m 100.0%

Corob Color Robots B.V. Amsterdam / Netherlands 99/01 NLG 0.04 m 100.0%

Corob International AG Aarau / Switzerland 99/01 CHF 0.10 m 100.0%

Digitron Holdings (UK) Ltd. Slough / UK 97/12 GBP 1.01 m 100.0%

Swisslog (Deutschland) GmbH Ludwigsburg / Germany 89/01 DEM 6.50 m 100.0%

Swisslog America Inc. City of Dover / USA 99/09 USD 0.00 m 100.0%

Swisslog Holding (France) Paris / France 99/09 FRF 0.15 m 100.0%

Swisslog Holdings USA Inc. City of Dover / USA 99/09 USD 0.00 m 100.0%

Swisslog USA Inc. City of Dover / USA 99/09 USD 0.00 m 100.0%

Fully consolidated operative subsidiaries

Aircotronic Ltd. Nottingham / UK 00/01 GBP 0.10 m 100.0%

Aircotronic Rohrpostanlagen und

Kommunikationssysteme GmbH Langenhagen / Germany 00/01 DEM 0.12 m 100.0%

Bernd Herzog Steuerungstechnik GmbH Zeestow / Germany 00/01 DEM 0.05 m 30.6%

Cimcorp Oy Ulvila / Finland 96/01 FIM 15.00 m 100.0%

Corob India Pvt. Ltd. Mumbai / India 99/01 INR 7.65 m 51.0%

Corob Ltd. Hong Kong / China 99/01 HKD 0.78 m 100.0%

Corob Ltda. São Paulo / Brazil 00/12 BRL 0.05 m 100.0%

Corob North America Inc. Charlotte / USA 99/01 USD 0.45 m 100.0%

Corob Oy Ulvila / Finland 98/09 FIM 40.00 m 100.0%

Corob S.A. Color Engineering Montevideo / Uruguay 99/01 UYU 0.50 m 100.0%

Corob S.p.A. S. Felice S/P. / Italy 99/01 ITL 4’000.00 m 100.0%

Corob Scandinavia AB Askim / Sweden 99/01 SEK 0.25 m 100.0%

Corob Service Ltd. Henley / UK 99/01 GBP 0.00 m 100.0%

Delta Com Rohrpostanlagen GmbH Oldenburg / Germany 00/01 DEM 0.54 m 100.0%

Digitron AB Partille / Sweden 97/01 SEK 5.00 m 100.0%

Digitron Benelux B.V. Culemborg / Netherlands 86/01 NLG 0.04 m 100.0%

Digitron Benelux N.V. Antwerpen / Belgium 94/01 BEF 5.00 m 100.0%

Digitron Italia S.r.l. Milan / Italy 90/01 ITL 250.00 m 100.0%

Digitron Logistics Systems Corp. San Juan / Puerto Rico 99/11 USD 0.00 m 100.0%

Digitron Ltd. Slough / UK 94/01 GBP 0.25 m 100.0%

Digitron Munck AS Bergen / Norway 98/07 NOK 0.10 m 100.0%

Digitron Translift Ltd. Retford / UK 89/01 GBP 0.28 m 100.0%

Digitron Translift S.A. Marne La Vallée / France 89/01 FRF 2.00 m 100.0%

Digitron Translift S.r.L. Beinasco / Italy 89/01 ITL 20.00 m 100.0%

Digitron-OWL AG Buchs / Switzerland 98/01 CHF 5.00 m 100.0%

Digitron-OWL Service AG Buchs / Switzerland 86/01 CHF 10.00 m 100.0%

Louis Schierholz GmbH Bremen / Germany 94/10 DEM 4.60 m 100.0%

Munck Automation Technology Inc. Newport News / USA 98/07 USD 0.12 m 100.0%

Nuova C.G.A. Sistemi s.r.l. a socio unico Maranello / Italy 00/01 ITL 822.90 m 100.0%

Schierholz Dopravni Technika s.r.o. Pilsen-Litice / Czech Republic 97/12 CZK 0.10 m 100.0%

Schierholz Svenska AB Partille / Sweden 94/10 SEK 0.10 m 100.0%

Sonica Software Corporation Orange / USA 00/03 USD 0.00 m 100.0%

33www.swisslog.com

Subsidiaries and investments of the Swisslog Group as at 31 December 2000

Subsidiary Registered office / Country Consolidated Share capital Holdingon Y/M Currency Amount direct/indirect

Swisslog Australia PTY Ltd. Parramatta / Australia 96/01 AUD 0.00 m 100.0%

Swisslog Automatisierungstechnik GmbH Steinhagen / Germany 00/01 DEM 0.25 m 60.0%

Swisslog Logistik Systeme GmbH Ludwigsburg / Germany 96/01 DEM 1.00 m 100.0%

Swisslog Malaysia Sdn Bhd Selangor Darul Ehsan / Malaysia 97/01 MYR 0.10 m 100.0%

Swisslog Polska Sp.zo.o. Warsaw / Poland 00/10 PLN 0.10 m 100.0%

Swisslog Service GmbH Dortmund / Germany 97/12 DEM 1.05 m 100.0%

Swisslog Singapore Pte. Ltd. Singapore 97/01 SGD 0.10 m 100.0%

Swisslog Software (UK) Ltd. Slough / UK 00/08 GBP 0.10 m 100.0%

Swisslog Software AG Aarau / Switzerland 97/01 CHF 4.00 m 100.0%

Swisslog Software USA Inc. North Billerica / USA 00/08 USD 0.00 m 100.0%

Swisslog Translift AG Kriens / Switzerland 97/01 CHF 2.00 m 100.0%

Teledoc SA Gennevilliers / France 99/09 FRF 5.00 m 100.0%

Telelift (UK) Ltd. Emsworth / UK 99/09 GBP 0.00 m 100.0%

Telelift Automation Co. Ltd. Seoul / Korea 00/12 KRW 100.00 m 56.0%

Telelift Automation Pte. Ltd. Singapore 99/09 SGD 0.60 m 95.0%

Telelift GmbH Puchheim / Germany 99/09 DEM 1.65 m 100.0%

Telelift S.A. Koerich-Windhof / Luxembourg 00/11 EUR 0.05 m 100.0%

TransLogic Corp. Denver / USA 99/09 USD 0.31 m 100.0%

TransLogic Ltd. Mississauga / Canada 99/09 CAD 0.00 m 100.0%

Transnorm System AB Boxholm / Sweden 94/01 SEK 10.00 m 100.0%

Transnorm System B.V. Mijdrecht / Netherlands 97/07 NLG 0.10 m 100.0%

Transnorm System GmbH Harsum / Germany 97/07 DEM 2.00 m 100.0%

Transnorm System Holding GmbH Harsum / Germany 97/07 DEM 4.00 m 100.0%

Transnorm System Inc. Grand Prairie / USA 97/07 USD 0.10 m 100.0%

Transnorm System Ltd. Tewkesbury / UK 97/07 GBP 0.03 m 100.0%

Transnorm System Sdn. Bhd. Kluang / Malaysia 97/07 MYR 2.05 m 100.0%

Trans-Tele (Pty) Ltd. North Riding / South Africa 99/09 ZAR 0.00 m 100.0%

Walther Rohrposttechnik GmbH Westerstede / Germany 99/09 DEM 0.20 m 100.0%

Equity-consolidated investments

Company Registered office / Country Consolidated Share capital Holdingon Y/M Currency Amount direct/indirect

ClassiX Software GmbH & Co. KG Hamburg / Germany 00/12 DEM 0.10 m 19.0%

Rotzinger AG Kaiseraugst / Switzerland 00/07 CHF 0.75 m 33.3%

Wassermann AG Munich / Germany 00/10 EUR 0.24 m 20.0%

Not consolidated subsidiaries

Subsidiary Registered office / Country Share capital HoldingCurrency Amount direct/indirect

Digitron AS Oslo / Norway NOK 2.30 m 100.0%

Digitron Ges.m.b.H. Vienna / Austria ATS 0.50 m 100.0%

Logistica Digitron S.A. Madrid / Spain 1 ESP 20.00 m 100.0%

LS Beteiligungs GmbH Ludwigsburg / Germany 1 DEM 0.05 m 100.0%

Process Computing Ltd. Slough / UK GBP 0.05 m 100.0%

Rolotec GmbH Dortmund / Germany 2 DEM 0.25 m 100.0%

Translift Automation Ltd. Retford / UK 1 GBP 1.00 m 100.0%

Translift Hängebahnen GmbH Dortmund / Germany 1 DEM 0.05 m 100.0%

Translift Monorails and Automation Ltd. Retford / UK 1 GBP 1.00 m 100.0%

1 Non-operating companies for the purpose of name protection 2 Development company no longer operational

34

Key Figures for Share Capital

Unit 2000 1999 1998 1997 1996

Share capital CHFm 27.5 27.5 27.5 27.5 46.2

Shares Thousands 2’752.0 2’752.0 2’752.0 2’752.0 1 550.4

Dividend/registered share CHF 2.50 2 2.50 2.50 2.00 0.00

Redemption/registered share CHF 0.00 0.00 0.00 0.00 34.00 3

Dividend and capital repaid CHFm 6.9 6.9 6.9 5.5 18.7

Net result CHFm –21.6 31.2 22.1 13.2 2.2

– payout ratio % NA 22 31 42 NA

– Net result/registered share 1 CHF –7.8 11.3 8.0 4.8 0.8

– Cash EPS 1 (continuing operations) CHF 16.3 14.3 8.8 5.1 0.8

Quoted price of registered share High CHF 1’130 475 186 125 415

Low CHF 413 114 95 86 305

Gross yield per registered share High % 0.2 0.5 1.3 1.6 NA

Low % 0.6 2.2 2.6 2.3 NA

Market capitalisation (31.12.) CHFm 1’953.9 1’280.0 358.0 294.0 203.0

Consolidated shareholders’ equity CHFm 174.7 210.7 180.3 165.5 172.0

– shareholders’ equity/registered share 1 CHF 63.48 76.56 65.52 60.14 62.50

– market capitalisation in % shareholders’ equity % 1118 607 199 178 118

Price-Earnings-Ratio 4 (PE-Ratio) Factor 53.8 33.9 14.8 21.2 92.3

1 5 for 1 share split in August 1997: new par value CHF 10 (formerly CHF 50), 2,752,000 registered shares (formerly 550,400); values adjusted to actual number of shares.2 The proposal of the Board of Directors for the 2000 dividend is CHF 2.50 per share.3 1995/1996 capital repayments by reducing par value per share from CHF 100 to CHF 85 and from CHF 84 to CHF 50.4 Related to net result before amortisation of goodwill.

35www.swisslog.com

Share Capital

Financial year ending 31 December

Year incorporated 1900, Holding Company 1986

Registered office Buchs/Aarau, Switzerland

Exchange listing SWX Swiss Exchange

Bylaws latest revision of bylaws: 17 May 2000, conditional capital increase

Share capital CHF 27.52 m

2'752'000 registered shares at a par value of CHF 10.–

Registration limit As of existing law

Conditional capital CHF 2.0 m (200'000 registered shares at CHF 10.– par value) in connection with

convertible bonds

CHF 0.752 m (75'200 registered shares at CHF 10.– par value) in connection with

option programs for employees

Capital increases and repayments To Subscription right

Year CHFm

1986 34.4 Exchange for Holding Company registered shares

Split RS 1:5

Purchase right: RS (from holdings)

1:3 at CHF 225

1989 55.04 1 RS : 10 RS at CHF 495

1 BS : 20 RS at CHF 2'600

17'200 BS reserved for "later use"

placed 1989 at CHF 2'800

1993 55.04 Conversion of 1 BS in 5 RS.

RS: CHF 100 par value

BS: CHF 500 par value

1996 46.23 Repayment of CHF 16 per registered share

reducing par value from CHF 100 to CHF 84

1997 27.52 Repayment of CHF 34 per registered share

reducing par value from CHF 100 to CHF 50

Split 1:5 to par value of CHF 10 per registered share

RS: registered sharesBS: bearer shares

36

Consolidated Data for the Past Five Years

CONSOLIDATED INCOME STATEMENT 2000 1999 1998 1997 1996

1 January to 31 December CHFm CHFm CHFm CHFm CHFm

Order intake 1003.1 727.9 557.8 420.1 435.5

Order backlog 480.6 393.2 277.2 204.5 249.5

CONTINUING OPERATIONS

Net sales 925.0 722.4 551.0 474.9 388.4

Other operating income 10.6 3.6 8.6 2.6 1.1

Changes in inventories 4.8 –14.0 5.6 2.6 4.7

Material and service expense 404.9 382.7 317.6 270.2 215.1

Personnel expense 316.3 215.3 173.2 139.8 116.2

Depreciation on tangible fixed assets and intangible assets 16.5 11.6 8.2 6.6 5.4

Changes in provisions for operating activities –5.8 –2.9 –14.3 –4.3 1.8

Other operating expense 126.3 83.1 40.8 40.7 39.1

Operating expense 863.0 675.8 531.0 455.6 382.3

Earnings before interest, taxes and amortisation

of goodwill (EBITA) 72.6 50.2 28.6 21.9 7.2

Amortisation of goodwill 57.9 6.6 2.1 0.7 0.0

Earnings before interest and taxes (EBIT) 14.7 43.6 26.5 21.2 7.2

Net financial result –14.4 –1.8 0.7 –0.3 2.5

Other income / expense –0.6 2.9 –8.6 0.1 –2.4

Result before tax –0.3 44.7 18.6 21.0 7.3

Taxes –12.0 –9.8 4.4 –7.8 –5.1

Result after tax –12.3 34.9 23.0 13.2 2.2

Minority interests –2.4 –2.1 –0.9 0.0 0.0

Result continuing operations –14.7 32.8 22.1 13.2 2.2

DISCONTINUING OPERATIONS

Net sales to third parties 0.5 0.1

Net sales to Group companies 38.2 47.3


Operating expense –45.9 –47.6

Other income/expense –0.5 0.0

Result before tax –7.6 –0.1

Taxes 0.7 –1.5

Result discontinuing operations –6.9 –1.6

Net result –21.6 31.2 22.1 13.2 2.2

37www.swisslog.com

Consolidated Data for the Past Five Years

CONSOLIDATED BALANCE SHEET

2000 1999 1998 1997 1996

As at 31 December CHFm CHFm CHFm CHFm CHFm

ASSETS

Tangible fixed assets 123.4 125.0 97.1 84.1 76.4

Intangible assets 15.7 13.4 1.2 0.0 0.8

Goodwill 290.7 184.1 58.7 22.3

Deferred tax assets 26.0 17.0 6.8

Other non-current assets 13.9 2.2 24.3 0.2 2.2

Non-current assets 469.7 341.7 188.1 106.6 79.3

Inventories 68.2 74.3 27.0 32.6 33.6

Trade and other receivables 281.8 240.0 151.2 159.6 95.6

Prepayments 9.4 10.5 11.5 5.7 24.6

Cash and cash equivalents 25.1 33.9 42.7 94.4 142.1

Current assets 384.5 358.7 232.4 292.3 295.8

Total assets 854.2 700.4 420.5 398.8 375.1

SHAREHOLDERS' EQUITY AND LIABILITIES

Share capital 27.4 27.4 27.4 27.3 45.8

Reserves 147.3 183.3 152.9 138.2 126.2

Shareholders' equity 174.7 210.7 180.3 165.5 172.0

Minority interest 1.5 18.9 7.6 0.0 0.0

Interest bearing borrowings 298.0 121.1 3.4 0.3 0.0

Deferred tax liabilities 13.0 8.7 2.1 5.0 4.4

Other non-current liabilities 36.9 27.4 13.7 14.4 2.6

Non-current liabilities 347.9 157.2 19.1 19.7 7.0

Provisions for operating activities 20.7 19.0 17.9 18.8 34.4

Trade and other payables 76.0 69.9 50.0 46.6 35.7

Advance payments from customers 59.6 75.2 81.5 41.1 47.6

Short-term borrowings 73.4 58.2 0.2 44.0 37.4

Taxes payable 12.7 17.0 9.8 8.9 3.8

Other short-term liabilities 52.6 36.3 30.1 31.7 15.8

Accrued expenses and deferred income 35.1 38.0 23.9 22.5 21.4

Current liabilities 309.4 294.6 195.6 194.8 161.7

Total shareholders' equity and liabilities 854.2 700.4 420.5 398.8 375.1

Insurance value of tangible fixed assets 213.3 186.8 198.3 155.1 166.9

Contingent liabilities 0.0 0.0 0.0 0.0 0.0

Number of consolidated operating companies 71 61 37 32 20

38

Key Figures and Ratios

KEY FIGURES 2000 1999 1998 1997 1996

Unit

Net sales CHFm 925.0 722.4 551.0 474.9 388.4

Earnings before interest, taxes, depreciation

and amortisation of goodwill (EBITDA) CHFm 89.1 61.8 36.8 28.5 12.6

Earnings before interest, taxes and amortisation

of goodwill (EBITA) CHFm 72.6 50.2 28.6 21.9 7.2

Result continuing operations CHFm –14.7 32.8 22.1 13.2 2.2

Shareholders' equity CHFm 174.7 210.7 180.3 165.5 172.0

Earnings before interest and taxes as % of sales

(EBITA margin) % 7.8 6.9 5.2 4.6 1.9

Net operating assets (excl. goodwill) CHFm 217.6 197.5 70.9 107.1 73.5

Return on net operating assets (RONOA) 1 % 33.4 25.4 40.4 20.4 9.8

Return on equity (ROE) in % % –8.4 15.6 12.3 8.0 1.3

Free Cash Flow 2 CHFm 55.3 25.8 59.9 15.2 1.3

Information provided for continuing operations.

1 RONOA = EBITA / net operating assets (excl. Goodwill)2 Free Cash Flow = EBITA + depreciation +/– change in net current assets (impact from acquisitions adjusted)

INFORMATION FOR INVESTORS 2000 1999 1998 1997 1996

Registered shares Thousands 2'752.0 2'752.0 2'752.0 2'752.0 550.4

Result continuing operations / registered share 1 CHF –5.3 11.9 8.0 4.8 0.8

EBITDA / registered share 1 CHF 32.4 22.5 13.4 10.4 4.6

EBITA / registered share 1 CHF 26.4 18.2 10.4 8.0 2.6

Cash EPS 1 CHF 16.3 14.3 8.8 5.1 0.8

Listed price of registered share High CHF 1'130 475 186 125 415

Low CHF 413 114 95 86 305

Market capitalisation (31. 12.) CHFm 1'953.9 1'280.0 358.0 294.0 203.0

Price-earnings ratio (P/E) 2 (31. 12.) Factor 53.8 33.9 14.8 22.3 91.4

1 1995/1996 capital repayments by reducing the par value per share from CHF 100 to CHF 84 and from CHF 84 to CHF 50. August 1997: share split 1:5 to a par value of CHF 10 per registered share. All figures per registered share are calculated on the basis of 2,752,000 registered shares.

2 Related to net result before amortisation of goodwill

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