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Key Figures

Key Figures 2013
Key Figures 2013
million CHF 
2013 20122011

 

Sales

 

3 766

 

3 720

 

3 638

EBIT251222235
Return on sales (EBIT margin) %6.76.06.5
Return on invested capital (ROIC) %16.715.713.3
Free cash flow before acquisitions/divestitures17499103
Dividend (proposed) per registered share in CHF161515
Employees at year-end14 06613 41213 606

The figures 2011 have not been adjusted according to Swiss GAAP FER. 

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Innovation at GF

Acting on our customers' needs

 

At GF innovation processes are based on a close collaboration with customers in order to address their specific needs. GF’s quest for customer-oriented solutions is reflected in its global R&D centers, which contribute their expert knowledge to the development of well-adapted solutions – to remain our customers’ first choice. 

Innovation
  

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All about GF

Our Profile //

GF comprises three divisions GF Piping Systems, GF Automotive, and GF Machining Solutions. Founded in 1802, the Corporation is headquartered in Switzerland and is present in 32 countries, with 124 companies, 48 of them production facilities. Its approximately 14 000 employees generated sales of CHF 3.77 billion in 2013. GF is the preferred partner of its customers for the safe transport of liquids and gases, lightweight casting components in vehicles, and high-precision manufacturing technologies.

GF Piping Systems

Umsatz_Piping_en

GF Piping Systems is a leading supplier of piping systems made of plastics and metal. The division focuses on system solutions and high-quality components for the safe transport of water and gas in industry, utility, and building technology. Its product line includes fittings, valves, pipes, automation and jointing technology and covers all water cycle applications.

GF Piping Systems supports its customers in over 100 countries through its own sales companies and representatives. The division is  present in Europe, Asia and the Americas withmore than 30 manufacturing sites and research and development centers, which also support
energy-saving use of raw materials and resources.

Key figures GF Piping Systems
million CHF2013 2012

 

Sales

 

1 402

 

1 299

EBIT  141135
Return on sales (EBIT margin) %10.110.4
Invested capital (IC)621559
Return on invested capital (ROIC) %18.718.6
Employees at year-end6 0955 282

GF Automotive

Umsatz_Automotive_en

GF Automotive is a technologically pioneering development partner and manufacturer of lightweight cast components and systems made of ductile iron, aluminum and magne-sium for the global automotive industry as well as a variety of industrial applications. The highly complex lightweight com-ponents contribute to making modern vehicles lighter and reducing the CO2 emissions.

GF Automotive manufactures some 600 000 tons of lightweight components at 9 production plants in Germany, Austria, and China. In those countries as well as in Switzerland, Korea and Japan it operates sales offices. The lightweight research and development competency is in Schaffhausen (Switzerland) and Suzhou (China).

Key figures GF Automotive
million CHF2013 2012

 

Sales

 

1 498

 

1 579

EBIT  7053
Return on sales (EBIT margin) %4.73.4
Invested capital (IC)384437
Return on invested capital (ROIC) %16.112.1
Employees at year-end4 9475 188

GF Machining Solutions

Umsatz_Machining_en

GF Machining Solutions’ electrical discharge, high-speed milling and laser texturing machines, along with automation solutions, make it the world’s leading provider to the tool and mold making industry and to manufacturers of precision components. Most important customer segments are information and communication technology, aerospace, and the automotive industry.

The division has its own sales companies in more than 50 countries and production plants in Switzerland, Sweden, and China. GF Machining Solutions operates research and development centers in Meyrin, Losone, and Nidau (Switzer-
land), Vällingby (Sweden), Beijing, and Changzhou (China).

Key figures GF Machining Solutions
million CHF2013 2012

 

Sales

867842
EBIT  5145
Return on sales (EBIT margin) %5.95.3
Invested capital (IC)274273
Return on invested capital (ROIC) %15.216.4
Employees at year-end2 8732 798
  
Worldwide for you

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Highlights 2013

Innovative solutions


At the 4th GF Technology Day in October more than 60 analysts and journalists came for a presentation of several key innovations and for a glimpse at what is in store at GF regarding technology. The company invested more than CHF 100 million in research & development and registered 46 new patents last year. The three divisions showcased their latest innovations that were explained during workshops and key notes by the heads of the divisions.

Revisit on YouTube // GF is present on Social Media channels. The video of the Technology Day you can see below is also available on our YouTube channel.

4th Technology Day in Schaffhausen
Pipe at GF Tech Day 2013

Cutting-edge disinfection technology // 
GF Piping Systems presented new high performance plastic water systems, free of dead space and featuring an innovative disinfection technology to prevent potential health risks caused by legionella.

 

Lightweight components GF Tech Day 2013

Reducing weight // Among others,
GF Automotive presented an innovative structural com-ponent for car bodies (strut dome), replacing previous assemblies of ten different parts welded together.

Aero Engine atGF Tech Day 2013

Precise machining of aircraft components // 
GF Machining Solutions presented a novel way of machining key components of aircraft engines with electro-erosion machines in order to substitute the expensive broaching process. 

Guests at GF Tech Day 2013

Impressed guests // The Technology Day offered visitors a special opportunity to be better acquainted with the products and services of GF, while getting a sense of what the R&D strategy is. At the same time, making it possible to speak to management directly, guests got a lot of valuable market news, which facilitates the assessment of the financial and strategic future of the company.

GF Piping Systems
HAKAN_LR Hakan Plastik A.S., Turkey

Welcome Hakan Plastik // GF announced the acquisition of a majority stake in Hakan Plastik A.S. in Cerkezköy (Turkey) in May. Hakan Plastik is the leading provider of plastic piping systems in the building technology and water infrastructure markets in Turkey, the Middle East and Eastern Europe. Jointly, GF Piping Systems and Hakan Plastik provide a unique platform for further growth in the growth markets of those regions.

Largest pipe ever built // For the first time GF Piping Systems built a polypropylene spiral winding sewage pipe with a diameter of 3.5 meters – the largest pipe GF Piping Systems has ever produced. In the province of Haining, close to Shanghai (China), the pipes of this size are used for municipal water transfer and also serve industrial purposes.

GF Automotive
R&D center of GF Automotive, Schaffhausen (CH) The R&D center of GF Automotive, Schaffhausen (CH)

Major order for GF Automotive //
GF Automotive received a major order for over CHF 400 million from Audi in June. The light structural parts for the German car manufacturer Audi will be produced by aluminum pressure die-casting in Europe and China for several new car models. The new design features a better functionality and a lower number of components, resulting in a weight reduction of over 50%.

IMA Lightweight Design Award //
GF Automotive won the first prize at the International Magnesium Association (IMA) Lightweight Design Awards last May in China. The GF roof header forms the central part of the roof of Opel’s convertible model Cascada. It was top of the category “Cast Component Design”, an award
which the division has won for the second time. 

GF Machining Solutions
GF Machining Solutions at EMO 2013 GF Machining Solutions at EMO 2013

Inspiring at the EMO 2013 // At the EMO fair in Hanover (Germany) last September, GF Machining Solutions presented innovative products, solutions, and services and highlighted its application and process expertise. Customers visiting the divisions’ stand were impressed by the new ways in which they can enhance their businesses in fast-growing market segments and placed major orders for over 100 machines as well as numerous customer services contracts.

Renaming: GF Machining Solutions // 
On 1 January 2014, GF AgieCharmilles has been renamed GF Machining Solutions to better reflect the diversity of its present offering featuring electrical discharge machining, milling, laser texturing and auto-
mation lines. The new name also offers the division the
opportunity to communicate its far broader scope, than
merely being a supplier of machine tools.

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Letter to the Shareholders

A substantial rise in performance

Dear shareholders

GF generated sales of CHF 3 766 million in 2013 for a nominal increase of 1%. On a like-for-like basis, corrected for changes in the scope of consolidation and currency effects, growth amounted to 2%.

After a weak first quarter, sales recovered especially in the second half year, which showed growth of 4% on the back of better market conditions but also market share gains.

Operating profit (EBIT) rose 13% to CHF 251 million as plants were better loaded in the second half and overhead costs were kept at the previous year’s level.

The EBIT margin went up from 6.0% to 6.7%, and the return on invested capital (ROIC) from 15.7% to 16.7%. All three divisions contributed to the profitability increase and generated ROICs well above their cost of capital.

Free cash flow before acquisitions went up 76% to CHF 174 million thanks to the higher profit but also as net working capital was kept at previous year level and capital expenditures went slightly down.

The number of employees increased by 654 to 14 066 mainly on account of the acquisition of Hakan Plastik (Turkey) in July 2013.

Net profit grew 5%, amounting to CHF 145 million after the deduction of CHF 26 million resulting from the divestment of the gravity die-casting business of GF Automotive.

Earnings per share stood at CHF 34, after the above mentioned one-off effect. The Board of Directors will propose a dividend of CHF 16 (CHF 15 in 2012) at the Annual Shareholders’ Meeting.

Significant progress towards strategy implementation //

The acquisition in July 2013 of Hakan Plastik, a leading Turkish plastic piping systems manufacturer with annual sales of  CHF 100 million, brings GF Piping Systems a strong presence in Turkey, in the Middle East and Eastern Europe as well as a whole array of complementary products, which will be sold by the whole GF Piping Systems sales organization.

The divestment of the aluminum gravity die-casting plant of Herzogenburg (Austria) at the beginning of 2014 allows GF Automotive to focus on its core iron sand casting as well as aluminum and magnesium pressure die-casting activities.

The cost reduction program of CHF 25 million announced at the beginning of the year has been implemented in full and already supported the second-half result. It will be fully effective in 2014. 

Yves Serra, President and CEO and Andreas Koopmann, Chairman of the Board of Directors. Yves Serra, President and CEO and Andreas Koopmann, Chairman of the Board of Directors.

All three divisions increased their sales and operative profits

GF Piping Systems

GF Piping Systems increased its top line by 8% to CHF 1 402 million, of which acquisitions accounted for 5% and organic growth 3%. A long and cold winter impacted sales negatively during the first four months in Europe, compensated however by higher revenues as of May, especially in Asia.

Industrial applications recovered in the second half in all regions. Building technology went up significantly thanks to new products in Europe and a larger customer base in China. Utility-related sales remained subdued in Europe but increased significantly in the Americas and in Asia.

Thanks to the acquisition of Hakan Plastik as well as higher growth in Asia and North America, sales outside of Europe accounted for about 60% of the total.

The division increased its operating profit by 4% to CHF 141 million thanks to a better plant load factor and despite negative currency effects in Turkey, India, Japan and Brazil.

GF Automotive

GF Automotive saw a nominal 5% decrease in sales to CHF 1 498 million owing to the divestment end of 2012 of its sand casting aluminum plants in Germany. Organic growth stood at 1%.

The Chinese car industry again reported double-digit growth, and the two plants of GF Automotive in that country were fully loaded.

The passenger car industry in Europe however remained on a downwards trend especially during the first half. In the second half, however, the division significantly increased its truck-related sales in Europe as customers increased production in view of the year-end Euro 6 deadline but also thanks to significant market share gains on new generations of commercial vehicles.

The division increased its operative result by 32% to CHF 70 million, thanks to a better plant utilization in the second half and as the cost reductions implemented in the first half-year became effective.

The capacity of the two Chinese plants of GF Automotive is being increased by 50%, effective 2015. In Singen, (Germany) the construction of a cutting-edge production line for light-weight components will be started this year for completion end of 2015. It will replace two existing lines, boosting the productivity and competitiveness of this important facility. 

GF Machining Solutions

GF AgieCharmilles has been renamed GF Machining Solutions to better reflect the diversity of its present offering featuring electro-erosion, milling, laser texturing and automation lines.

The division increased sales by 3% to CHF 867 million in an overall subdued market, thanks to its success in less cyclical market segments like aeronautics, medical devices and smart phones.

Sales in Europe and the US rebounded whilst demand declined in countries affected by currency depreciations such as India or Brazil. In the important China market, the sales development was pretty uneven as tighter financing affected privately owned companies.

The operating profit of the division went up 13% to CHF 51 million thanks to better margins and higher productivity.

At the EMO 2013 in Hanover (Germany), GF Machining Solutions presented products adapted to its key market segments and in particular new solutions to replace broaching with wire-EDM for the production of key aircraft engine components.

Financing secured

GF emitted two bonds of CHF 150 million each in August 2013 with maturities of 5 and 9 years respectively and coupons of 1.5% and 2.5%. The corporation tapped the favourable market conditions in order to secure funds for the redemption of its 4.5% CHF 300 million bond due in September 2014 but also to allow for the financing of further acquisitions. The equity ratio stood at 31% end of 2013.

Accounting and objectives adapted to Swiss GAAP FER

GF has changed its accounting standard from IFRS to Swiss GAAP FER as from fiscal year 2013 on. The 2012 figures have all been adapted as follows in order to ensure a correct comparison with 2013: The change of the accounting standard had no material impact on the 2012 results. It just led to a slight EBIT rise of CHF 1 million, therefore bringing it to CHF 222 million. In the balance sheet, the major change concerns goodwill, which has been offset with equity. 

This leads together with other effects to a reduction of equity in the amount of CHF 262 million as per 1 January 2012. The ROIC objective of 15% at the horizon 2015 has been translated into a 16% to 20% range, reflecting the deduction of goodwill from the invested capital according to Swiss GAAP FER. 

Mid-term objectives confirmed

Markets remain volatile but the second half has shown an upwards trend in several markets relevant to our corporation. GF Automotive and GF Machining Solutions built up a strong order book, certainly a good sign for 2014.

Moreover, thanks to the latest transactions, a better portfolio balance will be achieved in 2014 with GF Piping Systems and GF Automotive accounting each for about 40% of total sales. This is a further milestone in the implementation of the 2015 strategy of the corporation.

The management of GF is therefore convinced, that barring unforeseen circumstances, further increases in both top and bottom lines are possible in 2014 and confirms its 2015 profitability objectives of a ROIC in the 16% to 20% range and an EBIT margin above 8%.

Articles of Association to be adapted for all listed companies
in Switzerland

The ordinance against excessive remuneration in listed companies that came into force on 1 January 2014 requires certain adaptations in the Articles of Association at all listed companies in Switzerland within two years.

Accordingly, the Board of Directors will propose at the 2014 Annual Shareholders’ Meeting the revision of a number of articles, including those related to the representation of shares, the elections of the Board of Directors and Compensation Committee members, as well as the limitation of mandates held by the members of the Board of Directors and the Executive Committee of Georg Fischer Ltd in other companies.

The revision of the Articles of Association regarding the remuneration of both Board of Directors and Executive Committee will be reviewed by the Board of Directors during 2014, upon the assessment and advice of the newly elected Compensation Committee, and submitted for approval to the 2015 Annual Shareholders’ Meeting.

Working together to serve our customers

We express our gratitude to our investors and our banks for their continuing trust as evidenced by the successful placement of our two bonds in 2013.

We also send our heartfelt thanks to our customers for their constant feedback and close collaboration which inspires and allows us to serve them better and quicker. Finally, our special thoughts go to our employees whose willingness to live up to our values and work together across borders makes all the difference. 

Signature by Andreas Koopmann

Andreas Koopmann
Chairman of the
Board of Directors

Signature by Yves Serra

Yves Serra
President and CEO


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Corporate Report 2013

Executive Committee GF Executive Committee in the R&D center of GF Automotive in Schaffhausen (from left to right): Pascal Boillat, Roland Abt, Yves Serra (CEO), Pietro Lori and Josef Edbauer

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Yves Serra, CEO interview


“Customers are a key source of inspiration for us”

“Innovations – inspired by our customers” is the title of your annual report. What do you mean by this?

Customers are a key source of inspiration for us. By noticing how they use our products, by working together on addressing their needs, we bring about innovations which have a better chance to really serve them. 

Can you provide examples of such GF innovations?

Take the three cases presented on the following pages. GF Piping Systems developed the large-size fittings and valves as well as all sensors required for the huge amount of water used at the vast water-based amusement park near Sydney. We guarantee therefore their compatibility, eliminating leaks and contamination. GF Automotive was involved in the development of the new DAF commercial vehicle at a very early stage and designed components which allow DAF to reduce the weight of each truck by 70 kilograms. This clearly helps to reduce diesel consumption and CO2 emissions. In the aeronautics sector,
GF Machining Solutions worked together with its customer MTU and adapted its high speed milling machines, inclu-ding a new CNC (Computerized Numerical Control) to fit the needs of its customer regarding the large scale produ-ction of blisks for the new aircraft engines to be mounted on the Airbus A320neo. 

GF has decentralized its R&D centers. Why?


Customers in our market sectors want to have partners who are located in their countries and therefore who can better understand their needs and quickly act upon them. That is why we have decentralized R&D operations in the major markets where we operate, in Europe, in the Americas, and in Asia.

CEO Yves Serra CEO Yves Serra

"Customers in our market sectors want to have partners who are located in their countries."

What is the role of Switzerland in this regard?


We have over the years accumulated a huge amount of expertise in Switzerland and our central R&D facilities and are therefore located in this country. In addition, we are producing the core components for our machine tools or our piping systems in Switzerland because this is where we have the know-how to do so. The R&D facilities worldwide benefit from the support of our engineers based here, for example in the transfer of technology and expertise. We also coordinate from Switzerland the worldwide R&D activities to make sure of their efficiency and avoid duplications.

All the more important to have the right talents. What are you doing to make GF attractive to them?


We continuously offer a large amount of internships to business and engineering students across the world. We collabo-rate on numerous research and development projects with the key universities located in the main markets. For example, in 2012 we started a new collaboration with the Department of Management, Technology and Economics (MTEC) at ETH Zurich, one of the world’s leading universities. The project, which will continue in 2014, offers master class students pro-jects for their theses which give them insights into an actual company environment, while we get an outside perspective and new ideas. All the above we do to make sure GF not only remains but is also regarded as an attractive employer offering interesting jobs internationally.

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Organization of GF

Georg Fischer Ltd, the Holding Company of the Georg Fischer Corporation, is organized under Swiss law, headquartered in Schaffhausen (Switzerland) and listed on the SIX Swiss Exchange.

Board of Directors //

The ten members of the Board of Directors, elected individually by the Shareholders’ Meeting, are responsible for determining the Corporation’s strategic direction, the design of accounting, the financial controlling and financial planning. It appoints the Executive Committee and has ultimate responsibility for supervising and monitoring the management of Georg Fischer Ltd. All members of the Board of Directors are non-executive.

A shared corporate culture is becoming increasingly important with the spread of internationalization.

Executive Committee //

The Chief Executive Officer is responsible for the management of the Corporation. Under his leadership, the Executive Committee addresses all issues of relevance to the Corporation, takes decisions within its remit and submits proposals to the Board of Directors. The Heads of the Divisions and the Corporate Staff Units are responsible for drafting and achieving their business objectives and for managing their units autonomously.

Corporate structure //

GF Corporation is organized in three divisions and two Corporate Staff Units. The divi-sions are GF Piping Systems, GF Automotive and GF Machining Solutions. The Corporate Staff Units are Finance & Controlling and Corporate Development. The Heads of the Divisions and the Corporate Staff Units are responsible for managing their businesses and for achieving their business objectives.

Corporate center //

The CEO and the CFO form the Corporate center in the narrower sense. The Corporate center is closely involved in management, planning, IT, communications, finance, management development, and corpo-rate culture and is supported in these tasks by a team of about 50 people. The Corporate center ensures that risk manage-ment, transparency, corporate governance, sustainability, and compliance practices meet the requirements of the owners and the public, and it supports the Board of Directors in meeting its responsibilities.

Finances //

Corporate Finance & Controlling uses powerful information systems to ensure the time-critical financial management of the Corporation. A standardized system of financial reporting is used throughout the entire Corporation, guaranteeing immediate and complete transparency. Currency, interest-rate, and credit risks are monitored and managed at Corporation level.

Management development //

Strategically important competencies and information are shared and made available throughout the Corporation. Considerable importance is attached to internal training and to the focused nurturing and development of leaders and managers. 

Communication //

The Corporation has a strong brand with GF. In 2013, the company has implemented a rebran-ding and an alignment of its brand architecture. A new Corporate Design has been adopted worldwide throughout all three divisions in October. The new Corporate Design, internal and external communications as well as investor relations (i.e. relations with the financial markets) reinforce the public perception and the image of the Corporation. 

Corporate values //

Shared corporate values are the basis for overall sustainable development and are becoming increasingly important with the spread of internationalization. The Corporate center conveys and promotes the fundamental corporate values throughout the company, thereby nurturing and fostering its corporate culture. Open, active, and timely communication with employees, customers, investors, and the public makes for both credibility and trust. 

Corporate Governance //

For detailed information about the Corporate Governance of GF see pages 40 to 49 in the Annual Report 2013.

Download Organization of GF

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Sustainability

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Corporate Governance

The Board of Directors and Executive Committee of GF attach very great importance to good Corporate Governance in the interest of shareholders, customers, business partners, and employees. The implementation and ongoing improvement of the generally accepted principles of Corporate Governance ensure the necessary transparency to enable investors to judge the quality of the Corporation. This Report provides information on structures and processes, areas of responsibility and decision-making procedures, control mechanisms as well as the rights and obligations of the various stakeholders. 

Contents //

The present publication fulfills all obligations of the relevant SIX Swiss Exchange directive on information relating to Corporate Governance in terms of content and order and is based on the Swiss Code of Best Practice for Corporate Governance of economiesuisse, the Swiss Business Federation. The Compensation Report is presented in a separate chapter on pages 50 to 57. All data and information apply to the cutoff date of 31 December 2013, unless otherwise noted. Any changes occurring before the copy deadline on 14 February 2014 are listed at the end of this chapter. Any changes occurring after the copy deadline can be found on our website. 

GF also publishes the Articles of Association of Georg Fischer Ltd, the internal Organization and Business Rules, its policies, and much more information online - Corporate Governance - Policies

More information about Corporate Governance

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Compensation Report

Contents

This remuneration report provides information about the compensation policy, the compensation programs and the process of determination of compensation applicable to the Board of Directors and to the Executive Committee of GF. It also includes details on the compensation payments related to 2013. This report is written in accordance to the transparency regulations of the Swiss Code of Obligations Art. 663b bis and 663c, the standards related to information on Corporate Governance issued by the SIX Swiss Exchange and the principles of the Swiss Code of Best Practice for Corporate Governance of Economiesuisse.

The remuneration paid in accordance with the abovementioned provisions of the Code of Obligations is listed and commented in the consolidated financial statements (Annual Report 2013, page 102) and in the statements of Georg Fischer Ltd (Annual Report 2013, pages 114 to 116). 

Compensation policy

Overarching principles //

The Corporation’s compensation policy is designed along the principles found in the Compensation Report on page 50 (see download on the right).

Compensation Governance

Compensation Committee //

The Compensation Committee consists of three Board members. Since the 2013 Annual Shareholders’ Meeting, Ulrich Graf (Chairman), Isabelle Welton and Zhiqiang Zhang are member of the Compensation Committee. The Committee supports the Board of Directors in setting the compensation policy at the highest corporate level and regularly reviews the guidelines governing compensation of the executives. The Committee also proposes the amount of compensation to be paid to the Board of Directors, to the CEO, and to the other members of the Executive Committee.

The Compensation Committee convenes as often as necessary, but at least once a year. In 2013, the Committee held three meetings of approximately one hour and a half each, according to the following schedule:

  • In the February meeting, the Committee evaluates the business performance in the past financial year against the preset objectives, and prepares a proposal to the Board of Directors on the related bonus to be paid to the Chief Executive Officer and to the Executive Committee members. In the same meeting, the Committee determines the business objectives for the following business year for the Chief Executive Officer and reviews those of the Executive Committee members, before submitting them to the Board of Directors for approval.
  • In the September meeting, the Committee reviews the overall compensation policy.
  • In the December meeting, the Committee reviews and approves the target compensation for the following business year for the members of the Executive Committee based on a proposal from the CEO. The Committee determines the target compensation of the CEO for the next business year based on a proposal from the Chairman of the Board and prepares a proposal to submit to the Board of Directors for approval. The Committee also prepares a proposal on the compensation to be paid to the members of the Board of Directors for the next business year. Finally, the Committee reviews the preliminary disclosure of compensation for the annual report.

The CEO and the Head of Corporate Human Resources attend the Committee meetings in advisory capacity. The CEO does not attend the meeting when his own compensation is discussed. In 2013, all Committee members attended all meetings.

The Committee may call in external compensation specialists to obtain independent advice and/or to get benchmarking compensation data. In the year under review, the Compensation Committee mandated CEPEC to conduct a benchmarking analysis on the compensation of the Executive Committee.

Decision-making authority and supervision //

The compensation proposals and decisions are made based on the levels of authority which can be found in the Compensation Report section on page 51 (see download on the right).

On behalf of the Board of Directors, Internal Auditing annually reviews the compliance of the compensation decision made with the compensation regulations for the Executive Committee and the Board of Directors.

Method of determination of compensation //

The elements and levels of the compensation of the Board of Directors and the Executive Committee are reviewed regularly and are tailored to the relevant sector and labor market in which GF competes for talent. For the purpose of comparison, the Compensation Committee relies on compensation surveys published by independent consulting firms and on publicly available information, such as compensation disclosures from comparable companies. Comparable companies are defined as companies with similar size in terms of sales, earnings, number of employees, and geographic scope, which operate in similar business segments and are headquartered in Switzerland. In 2013, no changes were made to the structure of compensation of the Board of Directors and of the Executive Committee. The levels of compensation have been reviewed on the basis of the benchmarking analysis provided by CEPEC and of the compensation disclosures of comparable companies.

The Compensation Committee also takes into consideration the effective business and individual performance while determining the compensation amounts to be paid to the Chief Executive Officer and the other members of the Executive Committee. Individual performance is assessed through the annual Management By Objectives (MBO) process, where individual objectives are defined at the beginning of the year and the achievement against those objectives is evaluated at the end of the year. The objective setting and the performance assessment of the members of the Executive Committee are conducted by the CEO. The Chairman of the Board determines the objectives and evaluates the performance of the CEO.

Architecture of compensation

Compensation of the Board of Directors //

The compensation regulation applicable to the Board of Directors is regularly reviewed based on competitive market practice and retains its validity for several years. The current regulation is in place since 2010. In 2013, no change was made to the structure of compensation for the Board of Directors, however the level of compensation has been reviewed based on the compensation disclosure of comparable companies.

The annual overall compensation for each member of the Board of Directors depends on the responsibilities carried out and the time effectively spent in the year under review. The compensation is partially delivered in cash (fee) and in shares.  The "Model of compensation of the Board of Directors" can be found in the Compensation Report on page 52.  

Members of the Board receive a fixed fee and additional fees for special tasks such as committee chairmanship, vice-chairmanship or membership, and any other extraordinary activities/meetings. The fees may be paid, wholly or in part, in Georg Fischer shares, at the member’s discretion. The member can also elect to voluntary block the shares for a period of five years. The value of the shares used to convert the fee cash amount into shares is the closing share price on the last  trading day of the reporting year.

In addition, each member of the Board receives a fixed number of Georg Fischer shares. The value of the share-related compensation is calculated on the basis of the closing share price on the last trading day of the reporting year. As of 2014, those shares will be blocked for a period of five years.

Finally, members of the Board also receive a lump-sum allowance to cover their business expenses. They do not receive additional reimbursements of business expense beyond actual expenditures for business travel.

The compensation of the Board of Directors is subject to regular social security contributions but is not pensionable.

Compensation of the Executive Committee //

The principles of compensation of Executive Committee members, as described above in the section “Compensation principles”, are set out in a regulation and retain their validity for several years. They were last reviewed by the Compensation Committee in 2012. 

The compensation of the Executive Committee includes the following elements:

  • fixed base salary in cash
  • performance-related bonus in cash (short-term incentive)
  • share-based remuneration (long-term incentive)
  • benefits such as pension and social insurance funds

The "Model of compensation of the Executive Committee" can be found on page 52 in the Compensation Report section (see download on the right).

Fixed base salary //

The fixed base salary is determined primarily on the basis of the following factors: 

  • scope and complexity of the role, as well as the skills required to perform the role
  • skills, experience, and performance of the individual in the role
  • external market value of the role

Fixed base salaries of the Executive Committee members are reviewed every year on the basis of those factors and adjustments are made according to market development.

Performance-related remuneration //

The performance-related remuneration is a variable incentive designed to reward the achievement of business objectives of the Corporation and its divisions, as well as the fulfillment of individual performance objectives as defined within the MBO process, over a time horizon of one year.

The business objectives are set by the Board of Directors in accordance with the long-term strategy. They include absolute financial figures and are set for a period of several years in order to ensure sustainable and long-term performance. Currently, the business objectives are: organic sales growth (excluding acquisitions and divestitures), EBIT margin (EBIT in relation to sales), Return on Invested Capital (ROIC) and asset turnover (sales in relation to average net operating assets). For each objective, the Board of Directors sets a threshold level of achievement under which there is no payout, and a ceiling above which the payout is capped. The payout factor for achievement levels between the threshold and the ceiling is calculated by linear interpolation. While the thresholds and the ceilings are valid for a period of several years, the achievement against those is measured on a yearly basis and leads to a payout factor for this portion of the variable incentive.

The individual objectives are set within the MBO process at the beginning of the year. They are clearly measurable. At the end of the year, the achievement against each individual objective is assessed and leads to a payout factor for this portion of the variable incentive.

The "Weighting of the business and individual objectives" for the CEO and the other Executive Committee members as well as the "Thresholds and ceilings for the business objectives" are described in the chart on page 54 in the Compensation Report.

The maximum variable incentive is expressed as a percentage of the annual fixed base salary and amounts to 110% for the CEO and 90% for the other members of the Executive Committee. The expected level of performance (fulfillment of the multi-year business objectives and of the individual objectives) corresponds to a bonus payout of approximately 60% of the maximum bonus. In the review year, the performance-related remuneration of the CEO was 62.5% of the fixed base salary and that of the other Executive Committee members varied between 48.4% and 52.4% of the fixed annual base salary.

Share-based remuneration (long-term incentive) //

The purpose of the sharebased remuneration is to align the interest of the Executive Committee with the shareholders’ interests. The CEO receives 750 restricted shares and each of the other Executive Committee members receives 250 restricted shares. The shares are transferred in January of the following year and are subject to a blocking period of five years. The transfer value of the share is based on the closing share price on the last trading day of the previous business year. The shares are automatically unblocked in case of liquidation or change of control.

The underlying shares of the share-based compensation program are either treasury shares or are repurchased on the market.

Benefits //

Benefits consist primarily of retirement and insurance plans that are designed to provide a reasonable retirement remuneration as well as a reasonable level of protection against risks such as death and disability. All members of the Executive Committee have a Swiss employment contract and participate in the pension fund of GF offered to all Swissbased employees, in which the fixed base salary is insured. The pension fund exceeds the legal requirement of the Swiss Federal Law on Occupational Retirement, Survivors and Disability Pension Plans (BVG) and is in line with commensurate market practice.

Members of the Executive Committee do not receive any executive benefits. They are entitled to a representation lumpsum allowance and to reimbursement of business expenses in accordance to the expense rules applicable to all employees at management levels employed in Switzerland. The expense regulation has been approved by the relevant cantonal tax authorities.

Other remuneration

The members of the Board and the Executive Committee of Georg Fischer do not receive any further compensation for these functions. In particular:

Additional fees //

No member of the Executive Committee or the Board of Directors or any person closely associated with them received any fees or other payments for additional services to Georg Fischer Ltd or its Corporate Companies in the 2012 business year.

Loans to members of governing bodies //

Neither Georg Fischer Ltd nor its Corporate Companies granted any guarantees, loans, advances or credit facilities to members of the Executive Committee or the Board of Directors or related parties.

Contractual terms //

The contractual agreements with the CEO and the Executive Committee members contain a notice period of maximum twelve months. 

Termination benefits //

Members of the Board or the Executive Committee have no contractual entitlement to severance payments.

Remuneration for the 2013 business year

Board of Directors //

The members of the Board of Directors received cash compensation of CHF 1 041 thousand in the year under review (previous year: CHF 854 thousand). Of this amount, Board members voluntarily drew 377 Georg Fischer registered shares with a par value of CHF 10, equivalent to a market value of CHF 237 thousand in 2013. In the previous year, they drew had been 524 Georg Fischer registered shares with a par value of CHF 10, equivalent to a market value of CHF 193 thousand. In addition, a total of 1 600 Georg Fischer registered shares with a market value of CHF 1 004 thousand were allocated as share-related compensation. In the previous year, the allocation had been 1 603 Georg Fischer registered shares, equivalent to a market value of CHF 590 thousand. Together with other benefits, the total compensation paid to the Board of Directors in the year under review amounted to CHF 2 224 thousand (previous year: CHF 1 585 thousand). The detailed disclosure of compensation to the Board of Directors in accordance with the transparency provisions of the Code of Obligations is to be found in the Compensation Report, page 56 (see download on the right).

The compensation paid to the Board of Directors for the year 2013 was above that of the previous year, due to the higher value of the shares and to a weeklong strategy meeting in China, for which the members of the Board of Directors were remunerated on a time-spent basis as per the compensation regulations.

Executive Committee //

The members of the Executive Committee received cash compensation and social security and pension payments amounting to CHF 5.2 million for the year under review (previous year: CHF 4.8 million). 1 750 Georg Fischer registered shares (par value of CHF 10) with a value of CHF 1 098 thousand, based on a share price of CHF 627.50 at year-end 2013, were allocated to members of the Executive Committee for the year under review (previous year: 1 750 Georg Fischer registered shares with a value of CHF 644 thousand).

The detailed disclosure of compensation to the Executive Committee in accordance with the transparency provisions of the Code of Obligations is to be found in the Compensation Report on page 57.

Total compensation for the Executive Committee and the CEO in 2013 was higher than in 2012. The increase comes predominantly from the increased value of the shares from CHF 368.00 in 2012 to CHF 627.50 in 2013 per share, whereas the number of shares granted remained unchanged. In addition, the fixed remuneration was slightly adjusted in order to reach competitive levels in line with the average of our industrial sector, based on the benchmarking survey conducted by CEPEC and on compensation disclosures from comparable companies. The variable incentive related to the financial results of the Corporation and the divisions was also slightly higher in 2013 compared to 2012.

In the 2013 business year, no severance payments were made to persons who left governing bodies in the year under review or earlier.

Total compensation paid to the Board of Directors and Executive Committee is contained in the Corporation’s total expenses. Further details on compensation can be found on pages 114 to 115 of the Annual Report.

The revision of the Articles of Association regarding the remuneration of both Board of Directors and Executive Committee will be reviewed by the Board of Directors during 2014, upon the assessment and advice of the newly elected Compensation Committee, and submitted for approval to the 2015 Annual Shareholders’ Meeting.

Contact us

Corporate Communications
Georg Fischer Ltd
Amsler-Laffon-Strasse 9
8201 Schaffhausen
Switzerland

kommunikation #at# georgfischer dot com

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