Notes to the interim consolidated financial statements

1 Principles of consolidated accounting

Accounting

The unaudited interim consolidated financial statements as of June 30, 2020, conform to the existing guidelines of Swiss GAAP FER in general and Swiss GAAP FER 31 “Supplementary recommendation for listed companies” in particular. 

The interim consolidated financial statements should be read in conjunction with the consolidated financial statements as of December 31, 2019, because they do not include all the information contained in the consolidated financial statements.

The interim consolidated financial statements relate to the period from January 1, 2020, to June 30, 2020, and were approved for publication by the Board of Directors on August 6, 2020.

Consolidation

The interim consolidated financial statements include Conzzeta AG and the companies directly or indirectly controlled by Conzzeta AG, through investments with more than 50% of the votes, directly or indirectly, or by another means, and uniformly managed. These investments are fully consolidated. The share of the minority shareholders in the net assets and Group result is disclosed separately. Intragroup receivables and payables as well as expenses and income are offset against each other, and intragroup profits have been eliminated.

The assets and liabilities of companies included in consolidation for the first time are measured at fair value. Goodwill arising from this revaluation is offset against equity. First-time consolidations are included from the date on which control is acquired; deconsolidations from the date on which control is relinquished. When companies are sold, the amount of goodwill that was offset in equity and the cumulative exchange rate effects are charged to the income statement. 

Investments in associates (at least 20%, but less than 50% of the voting rights) are accounted for under the equity method. Securities held as non-current assets are valued at acquisition cost, less any necessary value adjustments.

Significant estimates made by the management

In preparing the interim consolidated financial statements, certain assumptions must be made which affect the accounting basis to be used and the amounts reported as assets, liabilities, income and expenses and the presentation of these amounts. Management did not make any material assumptions or estimates in the interim consolidated financial statements that were new compared to those made in the consolidated financial statements as of December 31, 2019.

Coronavirus pandemic

The coronavirus pandemic had a significant impact on the business performance of the Conzzeta Group in the first half of 2020. The Group’s business units, which operate in various sectors and markets, were affected by the coronavirus pandemic to varying degrees. The Board of Directors and the Executive Committee analyzed the possible scenarios depending on the course of the pandemic and have defined and initiated corresponding measures. The situation is continuously reassessed and the implementation of the measures is systematically monitored.

2 Segment information

Definition of net operating assets

Net operating assets (NOA) include the operating current and non-current assets (not including cash, cash equivalents and securities, non-operating financial assets and deferred tax assets) less operating liabilities (not including financial liabilities and deferred tax liabilities).

Discontinued operations

Conzzeta sold the Glass Processing segment to the Finnish company Glaston Corporation effective as of April 1, 2019. The Glass Processing segment is shown under discontinued operations in below overview. Its net revenue, total revenue and operating result for 2019 comprise a 3-month period. Refer to note 3.2 for additional information on the transaction.

On December 9, 2019, Conzzeta announced that the Board of Directors of Conzzeta AG has decided that the Groupʼs future focus will be on the Bystronic business unit. The other business units are to be divested step by step within the period of a year, market conditions permitting. The segments Chemical Specialties and Outdoor are shown under discontinued operations in below overview. All companies in the business unit are affected by the sale.

Conzzeta sold the business unit Schmid Rhyner to the German specialty chemicals group Altana effective as of February 28, 2020. Its net revenue, total revenue and operating result for 2020 comprise a 2-month period, whereas the comparison period comprises a 12-month period. Refer to note 3.1 for additional information on the transaction.

Additional information on continuing and discontinued operations

The following table shows the income statement divided into continuing and discontinued operations. The discontinued operations include the business units Glass Processing and Schmid Rhyner until the divestment as well as the business units FoamPartner and Mammut Sports Group that are available for sale. The continuing operations include the business unit Bystronic and the corporate center. Transactions between discontinued operations and continuing operations are eliminated within the Group.

The gain from the disposal of the business units Glass Processing (CHF 30.6 million in 2019) and Schmid Rhyner (CHF 48.1 million in 2020) are included in “Other operating income” and allocated to discontinued operations.

3 Changes in the scope of consolidation

3.1 Acquisitions and divestments in the reporting period

Conzzeta sold the business unit Schmid Rhyner to the German specialty chemicals group Altana effective as of February 28, 2020. The transaction gave rise to a gain from disposal of CHF 48.1million (provisional) which is reported under “Other operating income”.

The business unit Bystronic acquired the business activities of Weber Laserservice BV, Heteren (Netherlands), effective as of May 1, 2020. The consideration amounted to EUR 1.8 million (CHF 1.9 million). The transaction resulted in a goodwill of EUR 1.1 million (CHF 1.2 million) which was offset in equity.

3.2 Acquisitions and divestments in the prior period

Conzzeta sold the Glass Processing segment to the Finnish company Glaston Corporation effective as of April 1, 2019. The transaction resulted in a non-taxable gain from disposal of CHF 30.6 million that was recorded under “Other operating income”.

In 2019, the remaining purchase price liability of CHF 0.2 million related to the 2018 acquired company ISAtec GmbH, Wohlenschwil (Switzerland), was settled.

4 Seasonality

Due to the fact that business is strong in the winter season, the Outdoor segment usually reports higher revenue and higher margins in the second half of the year than in the first half. The other segments are not subject to regular seasonal influences.

5 Dividends

At the Annual General Meeting on April 22, 2020, a resolution was adopted to pay a dividend of CHF 42.00  (including special distribution of CHF 24.00) per class A registered share and a dividend of CHF 8.40 (including special distribution of CHF 4.80) for each class B registered share. This distribution was made only in respect of outstanding shares and totaled CHF 86.8 million.

6 Events after the balance sheet date

There were no events after the balance sheet date which would necessitate adjustments to the book value of the Group’s assets or liabilities, or which require additional disclosure.

7 Currency translation rates