Annual Report 2014 by Bühler Management AG

2014. Passion for Growth.

Annual Report

Corporate Profile. Bühler makes a significant contribution to global food supplies with its industrial process technologies and solutions. Around 65 % of the wheat harvested worldwide is turned into flour on Bühler mills. The company’s contribution to the global production and processing of rice, pasta, chocolate, and breakfast cereals is equally substantial. Furthermore, Bühler is the leading supplier of solutions for die casting, wet grinding, and coating technology with a focus on applications in the automotive industry, optics, electronics, paints, packaging, and glass technology. As a technology group, Bühler invests up to 5 % of its turnover in research and development each year. Bühler covers the entire value creation chain, from consulting and engineering to construction and commissioning of machines and plants, right through to extensive maintenance and optimization services and training programs. Bühler is proud of the Swiss heritage that has underpinned its work from its beginnings over 150 years ago to today, when the company has become a global player operating in nearly 140 countries. With around 10,600 employees, the company generates turnover of CHF 2.3 billion and is aiming to sustain its profitable growth. As a family company, Bühler is particularly committed to sustainability. With its industrial process technologies and solutions, Bühler is helping to ensure that everyone around the world will always have access to a safe, healthy, and affordable food supply, while also setting standards with regard to energy efficiency and sustainable mobility. Bühler regards itself as a partner for industry and science, but also governments, helping to tackle global challenges resulting from population growth and climate change. Bühler places great emphasis on providing high-quality training and continuing education for its employees and currently has around 600 trainees in Switzerland, the USA, and Asia.

Cover: Airport Tianjin Beijing – Glass coating made possible thanks to Bühler Leybold Optics vacuum thin-film systems.

Global presence, close to our customers. 137 Sites worldwide *

North America

28 21 94 14 3

Sites

Production sites Engineering sites Sales & Service sites Application centers Analytical laboratories

(+ 0)

723 Employees (– 4,7 %)

Main production sites

Uzwil Switzerland (head office) Braunschweig Germany Beilngries Germany Zamberk Czech Republic Wuxi China Changzhou China Bangalore India Johannesburg South Africa Minneapolis USA Raleigh USA Joinville Brazil * As some sites are multi-functional, the total number of sites is smaller than the total number of individual positions.

South America

Sites

(+ 3)

407 Employees (– 0.3 %)

Europe

Sites

Asia

(+ 1)

4933 Employees (– 4 %)

Middle East and Africa

Sites

(+ 1)

487 Employees (+ 1.9 %)

Sites

(+ 13)

4025 Employees (+ 4.9 %)

Content.

Key Figures.

Business Areas. Close to our customers.

Chairman / CEO Statement. “Eager to continue on our growth path.”

Continuity Comes First.

The new Bühler owners and CEO Calvin Grieder talk about change, continuity, and their relationship with the company.

Technology & Solutions.

Safeguarding the future with “open innovation”.

Highlights of 2014.

36 Sustainability Report.

Creating a sustainable company step by step.

15 Present in Everyday Life.

Every day, billions of people use Bühler technologies to satisfy basic needs such as food, communication, or mobility.

Organization.

Financial Report.

Bühler Annual Report 2014

Key Figures 2014. Business. In CHF m

2014

Change in %

2013

2012

2,345

Order intake

2,582

9.3

2,363

Order backlog 31.12.

1,582

19.9

1,319

1,347

Sales revenue

2,332

0.5

2,322

2,409

EBITDA

205

–4.7

215

218

EBITDA margin in %

8.8

EBIT

145

EBIT margin in %

6.2

Net profit

121

9.3

9.1

3.7

139

168

6.0

7.0

–1.5

123

155

5.3

6.4

Net profit in %

5.2

Investments in tangible and intangible assets

– 34.7

R&D costs

– 8.9

109

104

R&D costs in % Equity ratio

4.2

4.7

4.3

45.2

44.6

41.2

Net liquidity

464

377

317

Return on Net Operating Assets in % (RONOA)

18.1

17.6

27.1

Employees as of December 31 (exclusive of temporary staff and apprentices)

10,575

–0.8

10,659

10,346

596

6.2

561

576

Apprentices as of December 31

Group.

Sales revenue ( in CHF m ) 2,409

2012

2,322

2013

Order intake 2,345

2,332

2014

2012

( in CHF m )

2,363

EBIT ( in CHF m )

2,582

2013

Net profit ( in CHF m )

168

2014

2012

139

145

2013

2014

155

2012

123

121

2013

2014

Sales.

by Business

by Region

1 Grain Milling (31%) 2 Grain Logistics (7 %)

1 North America (15 %) 5 2

3 SORTEX & Rice (9 %) 5 2 4

2 South America (9 %) 3 Europe (31 %)

4 Value Nutrition (21%)

4 Middle East & Africa (15 %)

5 Consumer Foods (12 %)

5 Asia (30 %)

6 Die Casting (12 %) 7 Grinding & Dispersion (3 %) 8 Leybold Optics (5 %)

Key Figures.

Sustainability.

Energy Consumption. Reduction of energy consumption per production hour [MJ/h] between 2010 and 2014.

– 8% Water Consumption.

Employees worldwide.

Reduction of water consumption per production hour [m³/h] between 2010 and 2014.

– 2.7%

Employees.

Research & Development.

Compliance.

Investments

Compliance questions solved worldwide.*

104

2012

( in CHF m )

109

2013

2014

Injuries and illnesses per 100 employees.

10,346 10,659 10,575

4.2 3.4

2012

2013

2014

25 * Registered in 2014 for the first time.

Bühler

Manufacturing Industry

Participants in the compliance program. 3,298 2,949 2,167

2012

2013

2014

B端hler Annual Report 2014

Calvin Grieder, Chairman of the Board and Chief Executive Officer

Chairman / CEO Statement.

Passion for Growth.

Dear Sir and Madam, In 2014, Bühler has achieved a satisfying result with noticeable growth signals. We increased our order intake organically by 9 % from CHF 2.4 billion to CHF 2.6 billion. Our consistently high investments in regional presence, in research and development, and in the expansion of our services and solutions portfolio have paid off. We are pleased to report that this upswing in our order intake was broadly based, with all business areas and all regions contributing. The business area Die Casting (aluminum die casting systems) stood out, achieving a record year. Geographically speaking, especially the emerging markets China and India, reaching growth above 20 %, came out on top. The development of our services and solutions business, which supported our positive business development, is a growing new area of our company. Bühler was thus able to master the ongoing risks of the global economy created by volatile currencies, pandemics, regional crises, and wars to successfully seize existing opportunities even under difficult conditions. For this, we owe our employees our sincere thanks. Their untiring efforts and their high level of competence form the basis of this success. The continuity of a family-owned business under a new shareholding supports our long-term and sustainable orientation. The rise in order intake started in the second half-year. Due to the long-term nature of our projects, which last up to 24 months, this growth is not yet reflected in our turnover. Revenue remained stable from a year ago at CHF 2.3 billion. On the other hand, we made perceptible headway in terms of operating profitability. EBIT grew by 4 % to CHF 145 million (EBIT margin: 6.2 %; previous year: 6.0 %). Its development was impacted by inadequate capacity utilization plus restructuring costs. Both effects impacted EBIT to an amount of about CHF 50 million. Adjusted for these factors, EBIT would be within our target band of 8 to12 %. In order to sustain our earnings power, we will systematically continue to implement the measures we have defined to optimize our global production network in order to increase efficiency. Outlook For Bühler, the current fiscal year started with the challenge to secure our competitiveness in view of a substantially strengthened Swiss franc. We are entering this severity from a position of strength: with engaged employees, a full order book, close customer relations, outstanding market and technology positions, a global setup as well as a sound financial position. In this context, we will take this challenge as an accelerator for innovation and efficiency programs we already have initiated. We look into 2015 with some optimism. Generally speaking, we are eager to continue our growth path in conjunction with a healthy profitability.

Calvin Grieder Chairman of the Board and Chief Executive Officer

B端hler Annual Report 2014

Maya B端hler, Karin B端hler, Calvin Grieder, and Jeannine B端hler.

Continuity Comes First.

“Continuity Comes First.” For Bühler, 2014 was a year marked by major changes with regard to its shareholder structure and Board of Directors: Urs Bühler, up to now the sole shareholder and the chairman of the board, transferred his shares to his three daughters Jeannine, Maya, and Karin Bühler. Each of the new owners now possesses one third of the family holding. Calvin Grieder, who has headed Bühler Group since 2001, has been appoin ted chairman of the board in addi tion to his position as CEO. The owners have one seat on the board. Urs Bühler has set up the “Urs Bühler Innovation Fund”, which he presides and which is devoted to promoting the Group’s innovation efforts. In this interview, the new shareholders and the CEO & Chair man of the Board talk about the change and the future sharing of tasks.

Why was the shareholder structure changed in the first place? Maya Bühler: Our articles of incorporation limit the age of the members of the board to 70 years. Our father has reached this age and decided to withdraw from his office as chairman. In his opinion, the family members on the board should also be the owners. Therefore, the shares were transferred to us. How did the CEO experience the change? Calvin Grieder: In a way how we use to do such things at Bühler: on the basis of long-term planning and in an orderly way. The change was effected with complete transparency and in agreement with the board and did not impact business operations. As children, you grew up as the company itself grew. What are your personal memories? Jeannine Bühler: We felt our father’s dedication and commitment to the company from our early childhood onward. This made a deep impression on us. We learned early on what it means to assume responsibility. As we grew older, we were increasingly involved in the company’s business activities. Did your family talk a lot about the company? Karin Bühler: The older we became, the more we talked about company matters. How do you see your role as owners of Bühler now? Jeannine Bühler: First of all, we are very proud of what has been achieved over the past decades. When we were young, Bühler was a Swiss mechanical engineering company. Today, the company is a global technology group with a broad solutions portfolio in fascinating markets of the future such as food production or surface coatings.

Maya Bühler: For this reason, continuity is our top priority: We want to build upon the strengths and values of Bühler. We cannot take the stability of the company and its past development for granted. We thank our father, the management team, and all Bühler employees for their trust and dedication. We owe it to them all that Bühler is what it is today – a successful and stable global group of companies. We look forward to keeping up this success story and continuing to lead the company in this spirit. Also in the future, we plan to benefit from the advantages of a family-owned company and to continue building upon the values and strengths of Bühler. … which would be? Karin Bühler: First of all, to always bear in mind that our customers’ success is the recipe for our own success. Then, to offer our motivated employees a fascinating environment promising great potential for development. And finally, to focus on the long term. All this is reflected in the Bühler core values: “We engineer customers’ success”, “The best people at Bühler”, and “Innovations for a better world”. How does the CEO translate these values into day-to-day business? Calvin Grieder: In order to foster our customers’ success, we must have a profound understanding of the market and technology trends. We then position ourselves as the leading solution provider in our markets of the future such as safe and healthy foods or sustainable mobility through cutting-edge technologies and systems. Sustainability means to offer our customers around the world an extensive services and solutions portfolio at their local sites. In order to do this with a good price-toperformance ratio, we must not only be the best in class, but also the most

Bühler Annual Report 2014

“ But we have also always been in the vanguard of social institutions such as our welfare house and dual vocational training.” Karin Bühler

Continuity Comes First.

efficient. This requires that w e attract and develop highly qualified employees and offer them highly meaningful jobs. What is your idea of role sharing between you as family sharehold ers and the executive functions of the company? Maya Bühler: By adopting a clear family orientation, we will give the company meaning and a long-term focus. Through the Board of Directors, we will influence the company’s purpose and aims and its corporate culture. It is upon these foundations that we plan to build. Jeannine Bühler: The company’s positive development over the past years was only possible on the basis of professional management in conjuntion with strict and equally professional role sharing. In this constellation, we as a family-owned company can create optimal general conditions for the company to operate in: a stable shareholder structure, a long-term orientation, steady company management even in difficult times which is not subject to the constraints of quarterly reporting – but nevertheless a management style pursuing business success. Wouldn’t the CEO like to lead a stock-listed company? Calvin Grieder: Whether a company is family-owned or publically-owned is after all not a matter of black or white. It always depends on the concrete situation. But in the case of Bühler, we can rightly say that we are taking full advantage of all the benefits that a familyowned company can offer, which reside in its long-term orientation. This is particularly important in the plant construction business. Thus, we have consistently maintained our high level of investment in innovation and new equipment even in times of crisis. This setup enables us to take an anticyclical approach in order to sustain our suc-

cess and to set a sharp focus on our employees.

“ The company must grow profit ably and sus tainably within a reasonable framework so as to generate long term v alue. This is only possi ble through satisfied custom ers and innovation leadership.” Maya Bühler

How have you organized family matters as joint shareholders? Jeannine Bühler: We are organized as a family holding. We have a clear and unified voice in relation to the company and within the Board of Directors. What values and guiding principles are you pursuing as investors? Maya Bühler: The company must grow profitably and sustainably within a reasonable framework so as to generate long-term value. This is only possible through satisfied customers and innovation leadership. Karin Bühler: But we have also always been in the vanguard of social institutions such as our welfare house and dual vocational training, allowing us to retain loyal employees who are highly committed to performance worldwide. This means for instance that we offer our workforce advanced training and continuing education opportunities. We are aware that the company would never be where it is now without the loyalty and devotion of its employees. This shows that our employees and their concerns are very important to us. Calvin Grieder: But this by no means implies that we should forgo our duty to systematically act on the basis of sound business principles. The opposite is true. As a family-owned organization, we must rely on self-financing. And today’s fierce global competition has enormously increased the flexibility and efficiency requirements. Comfort zones have simply ceased to exist. Our company must remain in a position to fin ance the necessary investments and external growth out of the cash flow generated by its business operations.

Bühler Annual Report 2014

Our employees understand that without success, the survival of our organization may be in jeopardy. Is going public a possible option at all? Jeannine Bühler: This is no option for us in a planning period of about 5 to 10 years that we can realistically grasp. And selling shares? Karin Bühler: Not either. As the owners, you might become actively involved in company management as members of the Executive Board. Would that be an option? Maya Bühler: We are placing our complete trust in our current management team. We do not have any ambitions in this respect, either. 2014 was a year of major changes for Bühler, with powerful growth signals. What operating goals is the company pursuing in the near future? Calvin Grieder: At present, we are reviewing our long-term goals. In doing so, we are aiming at ambitious targets – or, as Stirling Moss once said: “If everything is under control, you are just not driving fast enough.” Wherever we hold leading market positions, we plan to consolidate them – and wherever we are not yet holding them, we strive to attain them. Associated with this, we are reconfirming our financial targets of organic growth above market growth of at least 5 % and an EBIT margin of 8 to12 % – depending on the general economic conditions. Within this bandwidth, we can cover our investments in research and development, regional expansion, and new equipment through our cash flow. We only plan to make acquisitions to round off our portfolio and develop new growth potential.

“ Today, the com pany is a global technology group with a broad solutions portfolio in fascinating markets of the future such as food produc tion or surface coatings.” Jeannine Bühler

How are you as the owners involved in this process? Karin Bühler: The family as the owners maintain a relationship with the management team that is based on trust and has grown over the years. We provide timely and transparent information to one another and are thus able to avoid surprises in one or the other direction. We are convinced that this has always been an important success factor in the past – and that it will remain one also in the future.

Continuity Comes First.

â&#x20AC;&#x153;Wherever we hold leading market positions, we plan to consolidate them â&#x20AC;&#x201C; and wherever we are not yet holding them, we strive to attain them.â&#x20AC;? Calvin Grieder

Bühler Annual Report 2014

Highlights of 2014.

January

February

March

April

Bühler Innovation Challenge 2014. The 4th Bühler Innovation C hallenge – an in-house innovation competition under the brand of “Create the future t ogether” – started success fully. This year’s competition was again a huge success, with more than 4,000 employees involved across the world. From over 220 ideas, four teams made it to the final and all four teams received the go ahead to implement their ideas.

A giant leap forward in intelli gent optical sorting for rice: SORTEX S UltraVision™. Featuring Bühler’s brand-new SORTEX ProSort™ software and advanced proprietary inspection system, the SORTEX S UltraVision™ demonstrates a total commitment to providing the ultimate sorting solution to rice processors.

Fiscal 2013 with higher order intake – change in the Board of Directors. Bühler looks back on fiscal year 2013 with an order intake exceeding the level of the previous year. After 33 years as a member and 20 years as chairman, Urs Bühler left the Board of Directors. His successor is Calvin Grieder, who continues to act as CEO. During various events wordwide, the staff took the occasion to celebrate the success of the Bühler Group as family-owned company and at the same time to say goodbye to Urs Bühler.

ChocoMaster™ Compact. Bühler launches its new ChocoMaster™ Compact solid moulding line. The line is designed for customers who require a medium output range (<2 t/h), e.g. for making chocolate bars. This latest innovation followed the ChocoStar Compact, which was launched three years ago, and is a further addition to the portfolio of compact lines.

Highlights of 2014.

May

June

July

August

Bühler at Interpack 2014. At the world’s largest trade show for packing technology and specialty foods processing, Bühler presented a total of 11 innovations. These solutions set new standards in terms of hygienic design, efficiency, and product yield. Among the highlights were solutions such as MicroFactory, Choco Master Compact, or InfinityRoast.

Opening of new production facility in China. Bühler celebrated the opening of a new production facility in Wuxi, China, together with customers, representatives from Chinese die casting associations, and Bühler colleagues. The new facility allows Bühler to manufacture up to 300 Ecoline die casting machines annually. In addition, it offers a state-of-the-art training and technology center.

Bühler wins Food Technology Industrial Achievement Award. Bühler has received the 2014 Food Technology Industrial Achievement Award for its research to preserve the hygienic and sanitary quality of foods in order to maintain the highest food safety standards for the sake of the health of the consumer and development of the Controlled Condensation Pasteurization Process (CCP), which was designed specifically to answer requirements to maintain natural quality of raw almonds.

Second Lady Jill Biden visits Bühler. Dr. Jill Biden, the wife of US Vice President Joe Biden, paid a visit to Bühler Uzwil. Dr. Biden is an educationalist who has for years been committed on behalf of the Obama government to enhancing the possibilities of American vocational training. At the site in Uzwil, the Second Lady gained a live impression of Bühler’s vocational training program and work environment and talked with individual apprentices. Bühler offers around 600 training places worldwide.

Bühler Annual Report 2014

September

October

November

December

Bühler Wuxi Machinery Manu facturing celebrates its 20th anniversary. On September 19, 2014, B ühler Wuxi Machinery Manufacturing celebrated its 20th anniversary. Bühler Wuxi is the joint venture that emerged from the former Wuxi Grains Machinery Company and Bühler Holding in China.

Bühler wins Leonardo Award for ClassUnlimited concept. Every year, the Leonardo European Corporate Learning Award awards visionaries in the field of education. As first Swiss company, the Bühler Group was awarded in the category “Company Transformation” for its unique ClassUnlimited concept. CEO Calvin Grieder was on hand to accept the renowned award in the name of the company.

Bühler at glasstec. Bühler participated in glasstec, the world’s largest glass show held in Düsseldorf, Germany. The business area Leybold Optics used the platform to show its strengths in the architectural glass equipment market. Among the highlights was the presen tation of the eco-friendly vacuum coater Leybold Optics GLC.

Even closer to Bühler customers in the Middle East and Africa. In order to improve Bühler’s ability to respond to customers’ regional requirements in the Middle East and Africa, five new sub-regions will be managed centrally from the new headquarters in Dubai: Arabia (Dubai), Central Eurasia (Tehran), East Africa (Nairobi), North-West Africa (Casablanca), and Southern Africa (Johannesburg).

Present in Everyday Life.

Present in Everyday Life. We make a significant contribution to global food supplies and mobility: Around 65 % of the wheat harvested worldwide is turned into flour on Bühler mills, 30 % of global rice production uses Bühler plants, 20 % of cars have aluminum engine blocks produced on Bühler machines. In the following pages, we have picked a selection of examples to show just how omnipresent our products are.

B端hler Annual Report 2014

60%

of all chocolate is produced in B端hler plants. 4 million tons of cocoa beans are harvested every year.

Present in Everyday Life.

of global rice production is covered by B端hler solutions. Rice is the staple foodstuff for 3 billion people.

Bühler Annual Report 2014

of the world’s car taillamps or headlamps are getting metallized on Bühler machines.

Present in Everyday Life.

of global malt processing is covered by Bühler solutions. Numerous malthouses and breweries benefit from Bühler’s experience.

Bühler Annual Report 2014

of all cars worldwide feature die cast parts from Bühler. Around 20 % have engine blocks produced using Bühler die casting technology.

Present in Everyday Thema Life.

of global wheat production is covered by B端hler milling solutions. 4.5 billion people live on wheat.

B端hler Annual Report 2014

60%

of all offset inks are produced using B端hler processes.

Present in Everyday Life.

40%

of industrial made pasta is produced using B端hler technology.

Bühler Annual Report 2014

Business Areas: Close to our Markets.

Grain Logistics.

Grain Milling.

Bühler Grain Logistics offers storage solutions, machinery and components throughout the entire food valueadded chain – from an agricultural product’s reception through to the final stages of processing. Whether it’s a silo installation for harvesting purposes, a plant for grain trade, or a storage solution for the processing industry: Grain Logistics is a competent global partner providing individualized on-site customer service from conception to startup. With its knowledge and services, Grain Logistics sees to it that post-harvest losses, which are still occurring at an immense rate globally, are further reduced and that fewer commodities go to waste. Furthermore, with 75 % of all malt produced in plants provided by Bühler, Grain Logistics is the world-wide leading supplier of individually tailored malting systems.

The Grain Milling business area makes a significant contribution to global food supplies. Around 65 % of the wheat harvested worldwide is ground on Bühler mills. Grain Milling offers its customers state-of-the-art process technology and innovative engineering for processing wheat, maize (corn), rye, oat, barley, millet/sorghum, buckwheat, and soybean. As a solution partner for its customers, the business area covers the entire value chain from consultation to engineering, assembly, and commissioning, right through to maintenance, training, and continuing education. The business area also provides innovative plant concepts for the brewery and bakery markets. Bühler plants guarantee sensitive handling of valuable raw materials and achieve the highest product quality and yield while making it possible to optimize production and staffing costs. The business area has a presence in 140 countries and 40 of its own branches, and is active on all continents.

Key end markets

– – – – –

– – – –

Collection points/reception of agricultural products Grain handling terminals (inland and ports) Mills (flour/rice/feed/edible oil) Malting plants Seed processing plants

Grain Milling: flour and semolina Industrial bakeries: dough and predough Ingredient handling: mixes and premixes Brewing plants: grist

Business Areas.

“ With our industrial process technologies we enable food security and safety.” Stefan Scheiber, CEO Grains & Food

Sortex & Rice.

Value Nutrition.

Bühler Sortex & Rice significantly contributes to global rice and pulses nutrition and additionally ensures and safeguards food safety by unique proprietary sorting technology. As the global benchmark in optical sorting, SORTEX advanced technology ensures that many crops are sorted with exceptional accuracy and speed. Defective grains and foreign materials are rejected, while maximizing speed and yield and minimizing the loss of good grains. Our reputation for research and technology in the processing of rice byproducts helps our customers to maximize value from every grain. In pulses, sesame, and spices processing, our collaborative innovation approach aims to develop comprehensive processing solutions along the pulses value chain from farm to plate. With landmark rice mill installations in every major rice geography, a global installed sorter base of over 25,000 machines and extensive capabilities including consultation, project management, installation, and startups, Sortex & Rice is the technology partner of choice for processors who value excellence.

The Value Nutrition business area combines innovative pro cess solutions for the food and animal feed industries and pays particular attention to the ever-increasing requirements placed on valuable human and animal nutrition. As a result, Value Nutrition is the global solution partner for producers of food and animal feed: from pasta and noodles, cereals, and snacks to pet food and feed for fish, cattle, and poultry. The company’s contribution in this area is substantial: Around 40 % of global pasta production takes place on machines made by Bühler. It is also responsible for 35% of the world’s cereals and 20 % of its feedstuff. The core technologies of Value Nutrition relate to the areas of extrusion and drying, both of which are ingrained in comprehensive expertise throughout the entire process. This allows Bühler to time and again set international standards in various areas, including energy efficiency in the production process, for example.

Key end markets

– Rice processors and exporters – Processors in pulses, sesame, and spices – N ut, seed, grain, coffee, and fruit and vegetable processors and exporters – PET plastic recycling

– – – –

Feed (cattle, poultry, swine), aqua feed, pet food Pasta, Asian noodles Breakfast cereals, snacks Oil (soy, sunflower, canola)

Bühler Annual Report 2014

“ We develop new solutions for energy efficiency and sus tainable mobility.” Samuel Schär, CEO Advanced Materials

Consumer Foods.

Die Casting.

Consumer Foods contributes significantly to the worldwide production of cocoa, chocolate, coffee, and nuts. With a market share of 60 %, the business area has set standards in chocolate manufacturing and is committed to the continuous development of innovative technologies. The company is a complete product and service provider to the industry and covers every process stage with stateof-the-art produc tion systems. Bühler provides energyefficient processes with maximum raw material yield and top product quality.

Bühler Die Casting is the global leading provider of aluminum lightweight solutions to the automotive industry, supporting their efforts to reduce C0² emissions. Around 20 % of all cars drive with engine blocks made with Bühler equipment. The business area provides optimized die casting machines and cell solutions, fully integrated process controls, plant layout know-how as well as global service support and process knowledge. With a strong global service network, several application centers as well as its own production, machine revision and technology sites in Europe, Asia, and North America, Die Casting supports its customers in all phases of their investment, ensuring highest productivity and quality – from planning to startup and throughout the entire life cycle of the equipment.

Key end markets

– – – –

Cocoa Chocolate Coffee Nuts

Automotive, 2-wheelers Electronics/electrical industry Appliances/white goods Buildings

Business Areas.

Grinding & Dispersion.

Leybold Optics.

The production of inks, printed products, solar panels, or batteries for electric cars rely on equipment and solutions availabe from Bühler Grinding & Dispersion. Around 75 % of the silver paste used in solar panels is produced on Bühler equipment. Bühler Grinding & Dispersion offers comprehensive know-how and has the ability to deliver its customers tailor-made systems for complex processes. As a technology partner for process engineering, Grinding & Dispersion has not only state-of-the-art machines, but also complete solutions for the manufacture of highly advanced materials. Our continuous development enables our customers to manufacture better products and be at the forefront with market innovations.

With its vacuum deposition equipment, Bühler Leybold Optics contributes among other things to energy efficiency, comfort, and food preservation. Thin-film applied on our machines ranges from functional coatings for window glass to coatings for headlight reflectors as well as flexible packaging. Coatings for ophthalmic and precision optics products such as lenses, lasers, or high-end telescopes complete the Leybold Optics product portfolio. Buildings with coated fassade glass require up to 50 % less energy for heating and cooling. The business area combines state-ofthe-art equipment technology with comprehensive process and application know-how to offer customers complete production solutions.

Key end markets

– Offset and liquid inks – M aterials for the electronics industry (eg. lithium-ion batteries, metal pastes for semi-conductors) – High-value coatings

– – – –

Optics (precision and ophthalmic) Architectural glass Flexible packaging Automotive industry

Bühler Annual Report 2014

Open Innovation Network.

Among others, Bühler collaborates with various universities and research institutes. Strong focus on research and development. Approximately half of Bühler’s sales revenues are generated by products that are less than five years old. For this reason, the company invests an average of up to 5 % of its revenue in basic research and applied development. More than 7,500 patents stand testament to Bühler’s innovative power. Interdisciplinary research teams comprised of well over 200 employees are constantly on the search for new innovative solutions. While the majority of these are self-generated, many are also the result of close collaboration with our clients as well as in cooperation with numerous colleges and research institutes. Collaboration in research and development guarantees our position at the forefront of knowledge. Bühler works globally in conjunction with other companies, colleges, and renowned institutes with its ongoing developments as well as its improvements of existing products and solutions. Working closely together with research and development institutes is an important cornerstone for the company’s continuing advancement.

Canadian International Grain Institute, Winnipeg (CDN) Pulse Processing

Kansas State University, Manhattan (USA) Grain and Feed Processing Research

University of Arkansas, Arkansas (USA) Grain Processing Research

Technology & Solutions.

Campden BRI, Campden (ENG) Food Safety Training and Research

Imperial College, London (ENG) Sensors Research

DIL, Quakenbrück (Ger) Research on Food Safety

TU Braunschweig / IPAT, Braunschweig (GER) Comminution Technology

TUD / Institute of Lightweight Engineering and Polymer Technology, Dresden (GER) Multimaterial Lightweighting

Fraunhofer Institute for Silicate Research ISC, Würzburg (GER) Architectural Glass

Technische Universität München, Munich (GER) Research on Food Processing

Wuxi Tech, Wuxi (CHN) Research on Food Processing

HSG St.Gallen, St. Gallen (SUI) Innovation Management, Executive MBA and Business Model Innovation Think Tank

Central Food Technological Research Institute (CFTRI), Mysore (IND) Research on Food Processing

Universidad de Zaragoza, Saragossa (ESP) Research on Food Safety

EPFL Lausanne, Lausanne (SUI) Bühler Innovation office on the campus

ETH Zurich, Zurich (SUI) World Food System Centre, Manufacturing across Scales initiative, EMPA, Innovation and Entrepreneurs Lab., MTEC and the Excellence Scholarships

University of Padua, Padua (ITA) Process Modelling

Bühler Annual Report 2014

Preferred Partner for Innovation. Bühler operates an open innovation system to efficiently share expertise between employees, universities, customers, suppliers, and entrepreneurial partners. The anchoring of research and development at the level of the Executive Board and the work of the Innovation Advisory Board, comprised of of topclass experts, ensure that all areas of the company can tap the full potential of future key technologies. Bühler has a high innovation rate, generating around half of its turnover from products that are less than five years old. Once again, in 2014, the company invested around 100 million Swiss francs in fundamental research and applied development. Innovations are protected, with over 7,500 patents filed to date. When developing new products or solutions, Bühler has its own particular approach: the “open innovation model”, which is applied throughout the Group. With this model, the Group relies on collaborative innovation, whilst maintaining a strong in-house core competence in R & D in technology to ensure the successful commercialization of collaborations. This approach requires an openness which is rarely seen seen in the R & D departments of industrial companies. Employees become entrepreneurs. The Bühler Innovation Challenge was held for the fourth time in 2014. This competition uses the expertise of Bühler’s 10,600 employees around the world to develop new products or services, and inspires them to think and act in an entrepreneurial fashion. In past years, the competition has produced successful products such as the Isigayo maize mill, which is specially tailored to suit the requirements of small businesses in rural areas of Africa. In 2014, a total of 220 ideas were submitted. Eight teams were given professional coaching to help them refine their concept. On September 5, four projects were presented to members of the Executive Board. The winner was the ChocoBotic team with a process for the production of individualized chocolate products. All four projects received funding for implementation. Tapping potential at universities. A second cornerstone of innovation is working together with universities. Bühler has a strong history of partnerships with academic institutes, but in order to further unlock the creative potential of students and academics, Bühler posted an open challenge on the EPFL online platform Fusebox for the first time in 2014. Contributors were asked to submit ideas for reducing food losses. From over ninety ideas from six universities, the five best suggestions were selected, the teams trained, and prizes totaling 10,000 Swiss francs awarded. In order to further strengthen this collaboration, Bühler has also opened a permanent office on the EPFL Innovation Park.

Tapping the expertise of customers and partners. The third cornerstone is the inclusion of customers in development projects. As the example of the new Ceres hygienic dryer shows, customers are frequently involved in the development process early on. However, Bühler also applies the open innovation model to its collaboration with suppliers. The “Bühler Innovation Partners” competition, which was held for the second time in 2014, addressed general topics such as energy efficiency, but also looked for solutions to projectspecific issues for the first time.

Innovation is anchored in the Executive Board. Research and development has been represented at the level of the Executive Board since 2011, when CTO Ian Roberts became a member. The crucial task for the Corporate Technology Group is to prepare key technologies so that they can be used in all areas of the company. The Group is supported in this regard by the newly created Innovation Advisory Board, whose members include Urs Bühler, Hal Gurley (Managing Director of Cisco Cloud Solutions), Matthias Kaisers werth (Director of IBM Research, Zurich), and Ed Steinfeld (Professor of China Studies at Brown University). The board will manage the allocation of the Urs Bühler Innovation Fund (UBIF), which is to be launched at the start of 2015. With the collective wealth of expertise on the board, it will support Bühler’s innovative capacity in areas such as intelligent process optimization.

Technology & Solutions.

“ We make the most of the potential in our network. ” Ian Roberts, Chief Technology Officer (CTO) Bühler.

Current challenges such as food safety can only be overcome through collaborative work which transcends corporate boundaries, says Bühler’s CTO Ian Roberts. What makes Bühler’s innovative capacity special? Ian Roberts: We want to make the most of the expertise available in our extensive network so that we can create even better solutions for our customers. For example, we have found a way to unlock our employees’ potential with the Bühler Innovation Challenge. But we go further than that, including universities, customers, and partners in our development projects too. The implementation of the open innovation approach is unique for an industrial company. Why is open innovation a good idea? Ian Roberts: Let’s take food safety as an example. From growing crops to processing and selling, there are so many different parties involved that it would be impossible for a single market participant to develop the “silver bullet” solution. We need efficient cooperation along the entire supply chain. Innovation and life-long customer partnerships have made Bühler what it is today. This inventive spirit and longterm thinking are also reflected in our efforts with regard to open innovation.

What sort of technological challenges does Bühler face? Ian Roberts: Additive manufacturing methods such as 3D printing will have a huge impact on our business. This technology brings unprecedented possibilities for developing, producing, and adapting machines. It could be used to produce spare parts locally, or even to print out foods. Another key topic is the “Internet of Things”. Sensors are becoming less expensive, making it possible to measure the moisture content of a type of food along the entire processing chain, for example. We will see autonomous control of complex production processes in the future providing solutions for example for energy management and product quality and safety. What is the role of the Innovation Advisory Board? Ian Roberts: With Hal Gurley, Matthias Kaiserswerth, and Ed Steinfeld, combined with the experience and innovation passion of Urs Bühler, we have manned this new board with experts who can help Bühler to overcome future challenges with their experience and entrepreneurial skills. The board will also invest the Urs Bühler Innovation Fund (UBIF).

Bühler Annual Report 2014

The ultimate in rice sorting performance. All over the world, consumer standards are rising when it comes to the quality and safety of rice. Rice processors are therefore reliant on efficient solutions for finding and removing poor-quality grains and foreign particles. Based on over 65 years’ experience in the field of optical sorting and after intensive research, Bühler has developed the SORTEX S UltraVision, which has been specifically optimized for sorting rice. The new flagship of the SORTEX family was launched at the start of 2014. The intelligent system gives rice processors unprecedented control over the properties of the end product, enabling them to produce qualities that are tailored precisely to the specific requirements of different customers or markets and meet even the most exacting of export standards. This in turn improves their competitive advantage and profitability. The SORTEX S UltraVision represents a quantum leap in optical sorting technology. Previously, it was only possible to eliminate one defect – such as a particular discoloration – per sorting step when processing rice. With the new system, different defects such as discoloration, damage, or foreign particles can be detected and removed at the same time. The sensitivity can be set separately for each individual flaw.

This is made possible thanks to a high-performance detection system, which pinpoints any unwanted grains. The mul tichromatic cameras, which were specially developed by Bühler for sorting rice, can measure multiple colors at the same time, enabling them to detect even the slightest of differences in the color of the grains. The accuracy is also increased through the use of specially textured LED light and an intelligent software controller. With up to six sorting modules, the system offers the highest throughput rates ever achieved by Bühler. The SORTEX S UltraVision is incredibly easy to operate and maintain. For example, there is no complex manual setup required: The machine scans the incoming product and adjusts itself automatically. With the pre-installed settings, users can then perform a high-quality sorting process at the touch of a button. Thanks to the integrated remote maintenance access, Bühler engineers are also able to provide efficient support for customers all over the world – for e xample, to help them with the precise settings required for a specific product quality.

Technology & Solutions.

Better and more affordable inks with micro grinding beads. Bead mills have proven to be particularly efficient for dispersing printing inks in applications such as food packaging. The pigments are subjected to constant mechanical stress between moving grinding elements in order to grind them to the desired particle size. In 2014, Bühler launched the MicroMedia bead mill (see photo above), which has been specifically optimized for the use of micro grinding beads with a diameter of 20 to 800 micrometers. Using these micro grinding beads significantly increases the surface area available for grinding, which makes it possible to achieve a much finer dispersion and, therefore, a better ink quality. The extremely fine dispersion also means that fewer pigments are required, which in turn reduces the material costs for the printing ink manufacturer. The new bead mill is able to provide all of these outstanding benefits by ensuring effective activation of the micro grinding elements, whereby the entire package of beads is subjected to a particularly intensive grinding motion by means of turbulence. The grinding elements are separated effectively via centrifugal forces and the free screen surface is maximized, resulting in a maximum throughput rate of up to 4,000 liters

of ink per hour. This is the highest throughput rate achieved so far for micro grinding elements in an industrial application. What is more, the micro grinding beads require much less energy in order to provide the same grinding power: The energy required to produce high-quality printing inks is 30 to 40 % lower, thanks in part to the high number of grinding elements. The MicroMedia technology was initially developed for the production of color filters for LCD and LED screens. In conjunction with a major printing ink manufacturer, Bühler has been able to successfully adapt the high-tech application for use in the printing ink industry. Today, three of the five largest manufacturers of printing inks for food packaging use the innovative MicroMedia grinding technology. However, even owners of older bead mills, such as the Advantis or SuperFlow types, can benefit from the improved efficiency of micro grinding elements. A kit is available for retrofitting plants with the MicroMedia technology, enabling them to improve the productivity of existing machinery by up to 40 %.

B端hler Annual Report 2014

Technology & Solutions.

Efficiency for cereal production. Up to 75 % faster cleaning, double the operating time between cleaning intervals, improved hygiene, and a significant rise in productivity: The Ceres hygienic dryer, which was developed by Bühler Aeroglide in just 18 months, optimizes all key areas of the manufacturing process for coated readyto-eat cereals. Bühler presented this innovation for the first time at the Interpack 2014 trade fair. The first prototype was installed in South America, and a second installation is planned in North America for the start of 2015. The numerous improvements can be attributed in no small part to Bühler’s open innovation approach: Various end customers were involved in the development process from a very early stage in order to ascertain their key requirements for a cereal dryer. The results showed that customers’ main priorities were quick and easy cleaning, improved hygiene, and high productivity. The challenge when drying cereals is that large amounts of sugar are deposited inside the machine. The plants must, therefore, be cleaned regularly and thoroughly to ensure high product quality and safety. With the Ceres dryer, this process only takes around two hours, which represents a time saving of up to 75 % compared to conventional dryers. This is parti cularly significant for producers who want to manufacture multiple batches of different products one after another. This increase in efficiency is made possible thanks to a completely new machine design and a number of structural modifications which have resulted in improved hygiene. What is more, the new design also extends the operating life: While some conventional dryers have to be cleaned after just eight hours, this interval can be up to twenty hours with the Ceres dryer. High productivity is also important. Ceres was therefore designed as a downdraft dryer, in which the air flow is up to four times faster than in conventional dryers. This means that the heat gets into the cereals more quickly, shortening the drying process and making the product quality more consistent. Ceres can process up to four tons of cereals an hour. The intelligent arrangement of the air flow and the new, precise system for controlling the drying process also improves the energy efficiency of the plant, thereby reducing operating costs.

Bühler Annual Report 2014

Sustainability through training. Demand for staple foods has risen sharply in Africa due to population growth and increasing urbanization. Food companies – particularly those that process grain – are investing heavily in new capacities. Frequently though, these efforts are hindered b y the lack of trained staff. In response to this problem, Bühler has founded the African Milling School (AMS) – a vocational school in Nairobi (Kenya) which trains millers from all over Africa. The first students will start their training in spring 2015. The AMS provides employees of African milling companies with the theoretical and practical skills they need to operate a flour mill. In this way, we are contributing not just technology, but knowledge too in order to improve food supply in Africa and free people from starvation.

Sustainability Report.

Sustainability Inside. We do not see sustainability as an add-on; to us, it is an integral part of the way we do business. This means that we can only be sustainable if our ecological and social activities are also economically viable. In 2014, we made significant progress in our efforts to make sustainability a comprehensive and inherent part of our company. The number of sites where reporting is in line with the Global Reporting Initiative grew from 5 to 10 in 2014. This year we are planning to extend this number to 5 more branches which would then correspond to more than 80â&#x20AC;&#x160;% of our turnover. This level of transparency is a key prerequisite for us in order to identify required measures, document improÂveÂ ments, and learn from one another on the basis of best practices.

Bühler Annual Report 2014

Foundation of Business Development. At a Glance. Bühler’s success story spans more than 150 years and is based on an independent and sustainable business policy. This policy includes providing our employees with further training and education, being innovative and relying on co operation, as well as committing ourselves to improving the quality of living wherever we operate. The principles of running a socially, ecologically, and economically sustainable business are in our genes. We deliberately set our standards high for improvements in all business units, products, and locations through our commitment to sustainability, not to mention the clearly defined and measurable objectives that stem from this. Our sustainability report brings together the components of our sustainability policy and, at the same time, serves as a report on our progress and as a guide for present and future social, environmental, and commercial challenges.

Why sustainability is important to us. 1. We contribute to sustainable added value chains. We’re committed to contributing to the sustainable success of our customers by offering solutions for improving resource efficiency, enhancing quality and functionality, and ensuring competitive total cost of ownership. We do our part in facing central global challenges by offering innovative products and processes for improving food safety and reducing food losses. We work closely with our suppliers and partners to improve the environmental footprint of our products and our own operational activity. 2. We ensure a winning organization. Motivated employees committed to performance and dedicated management teams are the key to our success. Their passion, expertise, creativity, and openness give rise to innovative solutions which benefit not only the company, our employees, customers, and partners, but also society as a whole. We’re committed to developing our corporate and management culture as well as our employee further training and education programs, which, in turn, will allow us to strengthen our organization. 3. We operate independently to ensure profitable growth. Our sustainable and independent economic development comes from being able to offer our customers products and services that go above and beyond their expectations. The success of our customers manifests itself as profitable volume growth for Bühler that allows us to invest in our employees, locations, and innovations.

Sustainability Report.

We have the broadest coverage of our customers’ value chain.

Raw Materials

Collection Points

Primary Processing

Secondary Processing

Consumer Goods

Efficient processing solutions Safe and healthy food Reduced material losses Reduced energy use

Bühler Solutions

Bühler Suppliers

Main influence of Bühler.

1 Customers’ Sustainable Value Chain. We strive for continuous improvement of our products and services to engineer sustainable added value for our customers by: reducing raw material losses, setting the industry standard in safe and healthy food, setting the industry standard in resource e fficiency and reducing water requirement. We build, share, and a pply knowlegde in-house and together with our customers, aiming to create best solutions.

2 Bühler’s Sustainable Value Chain. We aim for continuous improvement at our own production sites through: reduction of specific energy usage, reduction of material usage, reduction of water usage, reduction of waste, reduction of transport, and sustainable sourcing.

Bühler Annual Report 2014

Sustainability at Bühler.

Transparent reporting according to the Global Reporting Initiative (GRI) We follow the requirements of the Global Reporting Initiative (GRI) – namely guideline G3.1 – when it comes to measuring and reporting on our progress. These represent transparency and credibility and ensure the use of consistent terminology. In terms of structure and content, the sustainability report follows GRI Level C to the extent that is possible and reasonable, based on the present data situation, and includes 19 performance indicators. The Uzwil, Braunschweig, Johannesburg, Bangalore, and Wuxi branches followed the uniform GRI requirements in their reports for the 2014 reporting year and are included in this report. From 2015 onward, all nine Bühler sites will submit reports according to the GRI, which will allow us to perform an extensive review of the success of our sustainability objectives and compare our branches with one another and with our peers.

Social sustainability.

We ensure a winning organization. Commitments. 1.1 W e pursue our culture of continuous learning. 1.2 W e foster our culture of openness and partnership.

Braunschweig Uzwil

1. 3 W e strengthen our culture of health and safety.

Bangalore Wuxi

Johannesburg

Proudly advancing along the path of our sustainability commitment. Two years after the announcement of our sustainability commitment, we can look with joy and pride at the progress that we have achieved so far. To date, we have developed innovations that have helped saving precious environmental resources like water, energy, and raw materials. We have developed inspiring educational programs that will be adopted across continents. We have further enlarged the scope of our environmental footprint reduction worldwide. These achievements have strengthened our belief that corporate sustainability is in the DNA of our business culture and operations. We know that this progress is laudable, but we are also aware that we still have a long way to go to meet society’s needs and our ambitious targets. Our commitment to proceed on this journey is indefatigable.

Achievements. ur apprentice training was O awarded with the Leornardo Prize and visit of American Second Lady. The African Milling School was established, two projects were successfully conducted with Partners in Food Solutions in Africa. The employee program Viva Health Management was launched.

Sustainability Report.

Ecological sustainability.

Economical sustainability.

We enhance sustainable value chains.

We ensure independent profitable growth.

Commitments.

2.1 W e reduce the environmental footprint of our sites.

3.1 W e deliver long-term profitability.

2. 2 W e set the standards in safe and healthy foods and resource-efficient solutions.

3. 2 W e ensure modern corporate governance.

2. 3 W e provide solutions for reducing food losses and improving food security.

Achievements. he Global Reporting Initiative T was extended to 11 factories worldwide. Breakthrough solutions for mycotoxin reduction in grains, hygienic food drying and instant maize meals were introduced. Focus was set on the techno足 logy development program for sustainable mobility and energy-efficient buildings.

3. 3 W e contribute to the devel足 opment of local economies.

Achievements. The local supply chain was further built up. The diversification of product portfolio across markets progressed. Regional Compliance Officers and reporting process were established in all regions.

B端hler Annual Report 2014

Partners in Food Solutions (PFS) is a non-profit organization which supports African food producers and processors with technical and economic expertise provided by volunteer employees from the companies involved. The organization was founded in 2009 by the American food producer General Mills. The aim of PFS is for employees of the partner firms to share their knowledge with employees of food producers and mill operators in Africa. Employees from all areas of the firms invest their knowledge to help small businesses in Africa make the right business decisions, optimize the capacity and cost effectiveness of their plant, and improve the quality of their products, so that they can produce more affordable and nutritious food for the local people. To date, PFS has worked on more than 150 projects with over 50 firms in Kenya, Ethiopia, Zambia, Malawi, and Tanzania, and has provided training and specialist knowledge to a further 250 companies. Since it was founded, almost 500 employees from General Mills, Cargill, and Royal DSM have amassed a total of 40,000 hours of voluntary work. PFS is aiming to extend the partnership to ten companies by 2018 and hopes to be working with 500 small businesses in Africa by then.

Sustainability Report.

Expertise for African Food Producers. Stefan Lutz represents Bühler in the Partners in Food Solutions organization, which supports East African food producers. The aim is to share knowledge in or der to help the companies produce more affordable and nutritious food for the local population. Around a third of food harvested around the world, or 1.3 billion tons, never reaches the plate: Valuable food is lost due to a lack of expertise in agricultural production, incorrect processing, a lack of transport or storage infrastructure, outdated technologies, or – primarily in industrialized countries – through wastage. This loss is particularly serious in southern (Sub-Saharan) Africa, where almost a quarter of the population is still suffering from starvation or malnutrition even today (source: FAO Report 2014). As a member of Partners in Food Solutions (PFS), Bühler supports African food producers by sharing its specialist knowledge. Stefan Lutz represents the company in Kenya, where he looks after the PFS projects in his role as a food technologist: “I see lots of people with good ideas. Unfortunately they don’t have the things they need to put these ideas into practice.” Through the partnership with PFS, people can be trained and projects can be realized. “It’s great to visit the participants again later and find that we can have technical discussions on a different level.” Flour mills in Tanzania. Lutz helps local small businesses to create a business plan, gain certifications, and develop products, and also provides on-site training. One of the projects he is involved in supports rice millers in Morogoro (Tanzania) and is run by PFS in conjunction with the local university. Stefan Lutz visited the rice millers in the village of Ifakara, where there are 80 very basic rice mills. “Almost every other house there is a rice mill. The millers work on contract.” The on-site training has shown the local millers what they need to do to keep up with imported rice in terms of both quality and yield.

New rice drying plant in Senegal. Another PFS project in which Bühler is involved is the creation of a rice drying plant in Senegal. Bühler already had experience with similar projects in Korea and Thailand, which could be transferred to Senegal because of the similar climate. The rice plant in Senegal is a good example of sustainable involvement: Experiences from other countries can be adapted to the local conditions. The use of simple technology means that the plant can be built by local workers and added value is created at the site itself, where the expertise required for operation and maintenance can also be built up to ensure that there are no high follow-up costs. Social commitment pays off. By working with these projects, Stefan Lutz hopes to pass on what he learned in his training to people who have not had the same opportunities. “It’s great to see the projects working and people enjoying success.” The commitment shown by PFS and Bühler makes a lasting contribution to the welfare of the African population in various respects: More nutritious food promotes health, more efficient production processes protect the environment, and sharing knowledge can spark a positive development trend from which Bühler itself could also benefit in the long term. The focus, however, is very much on the company’s desire to have a positive impact on other people.

Bühler Annual Report 2014

Social Sustainability.

Benefiting employees, customers, partners, and society. Bühler owes its success to its well-trained and motivated employees. It is based on a shared corporate culture which promotes personal initiative and responsibility. The company is committed to employee training and continuing education at all levels. As a global corporation, Bühler considers the cultural variety of its employees as one of its greatest strengths. This is reflected in the fact that, whenever possible, management-level positions are occupied by local candidates, a target with a current success rate of around 90 %. All employees have equal rights, regardless of their nationality, religion, upbringing, or gender. With our social sustainability promise, we want to exert a positive influence and continuously improve the impact of our activities on all stakeholders such as employees, customers, suppliers, partners, and society at large.

Commitment 1.1 We pursue our corporate culture of continuous learning. Bühler is convinced that long-term corporate success can only be achieved if you have the right people with the right skills in the right places, and pledges to support and encourage employees at all levels, thereby developing the necessary skills within the company itself. The extent to which this commitment to employee training is ingrained in the company’s philosophy is shown by Bühler’s 100 years of experience in vocational education, and the fact that it is seen as a pioneer in this field, whose expertise is highly sought-after by foreign decision makers in politics and economics. On September 15, 2014, we welcomed the American Second Lady, Dr. Jill Biden, to Uzwil. Dr. Biden wanted to learn more about the dual system of training and education in Switzerland and, in particular, how Bühler shapes vocational education for technical professions. Leonardo Award for innovative apprentice training. In 2014, Bühler was honored to receive the distinguished Leonardo Award for innovative apprentice training at a ceremony in Bonn. Bühler offers its apprentices attractive placements abroad, which open up opportunities for the young people to work in a foreign company later on, as well as promoting intercultural exchanges. The placements last between two and four months, and the idea is that the apprentices can continue their vocational studies at the same time. With “Class Unlimited”, Bühler has developed an innovative didactic concept for precisely this purpose. While living in China, the USA, or elsewhere, the apprentices can participate in the lessons in such a realistic way that some

only remember they are not physically present when it gets to the coffee break. The appeal and success of our apprentice training are clear from the fact that Bühler never has trouble filling the 70 – 8 0 places available each year with qualified young people. Quite the opposite, in fact: The best candidates are selected every year from a pool of 400 to 500 candidates. In 2014, three quarters of the apprentices (52 out of 71) were kept on at the company once they had completed their vocational training, a testament to the quality of our selection procedure and our attractiveness as an employer. Two days in training. The Bühler Learning Center, established in 2012, is the umbrella under which all training programs reside. Centered in the Corporate Learning Center in Uzwil, it is divided into five local centers in Europe, North America, South America, Asia, and South Asia. Its focus is on high-quality training programs along Bühler’s core processes. With continuous learning at all levels, we ensure that employees’ skills are attuned to the requirements of the business. In order to ensure the sustainability of the programs offered by the Learning Center, a qualitative and quantitative controlling system was set up in 2013 to monitor continuing education. Analyses revealed that 868 global and regional training programs were held in 2013, with a total of 7,165 participants. This resulted in 13,351 training days for the entire year, or 1.25 days’ training for each full-time employee. From 2015, our controlling system will also take into account external training and continuing education – this prerequisite will check whether we reach our target which states that each employee should invest at least two days a year in continuing education. Careful development of leadership skills. International cooperation requires a shared understanding of values, targets, and performance. With this in mind, we carried out the Employee Performance Management (EPM) process, which was established in 2011, for the fourth time in 2014. The EPM process also serves as a basis for the subsequent Talent Management and Succession Planning processes. The Bühler Lead Program enables us to fill our top management and group expert positions (1 %) with internal employees. Every year, 8 –10 “High Potentials” undergo an internal assessment in order to determine their potential. An individual development plan is then drawn up for every candidate accepted into the Bühler Lead Program.

Sustainability Report.

Bühler Innovation Challenge. The fourth Bühler Innovation Challenge took place in 2014 under the motto “We create the future together”. 9,500 employees registered on the website in order to follow or take part in the internal innovation competition which takes place every two years. From over 220 ideas submitted by Bühler employees and teams from all over the world, a judging panel selected four promising projects which were then presented to the Executive Board (EB) by the well-prepared, highly motivated entrants.

What we are doing

What we are aiming at

We develop our employees

80 % of all employees undergo the EPM process every year The number of training days per full-time employee will be two days worldwide by 2015 The training costs per local Learning Center will be at least 1 % of total staff costs by 2015

Talent Management

Worldwide, we have at least 5 % High Potentials with development plans

Succession Planning

The key positions for the senior functions at management levels 1, 2, and 3 have been defined and potential successors have been determined

Bühler Lead and Expert Every year, four candidates Program qualify for the Management and one p erson for the Expert Program in the Bühler Lead Apprentices

Three quarters of all apprentices who successfully pass their final apprenticeship examinations continue their careers at Bühler

In-house Innovation Challenge competition

Institutionalization and inclusion of more employees

Courses for customers and suppliers

By the first half-year of 2014, centralization to ensure efficiency and quality

achieved

planned

not yet achieved

2014

2013

Commitment 1.2 We foster our corporate culture of openness and partnership. We cannot master the global challenges that we face alone. With this in mind, Bühler plans to establish more partnerships and collaborations with all stakeholders in the coming years, both in the private and public sector: Innovation partnerships with customers, suppliers, universities, governments, or non-profit organizations, coupled with an open innovation culture, combine our internal expertise with external know-how. This enables us to strengthen the impact of our social and commercial commitment along the entire value chain. Bühler is a “Partner in Food Solutions”. As a member of Partners in Food Solutions (PFS), Bühler supports African food producers by sharing its specialist knowledge. The non-profit organization was founded in 2009 by the American food producer General Mills, and enables employees from the companies involved, working on a voluntary basis, to help small businesses in Africa make the right business decisions, optimize the capacity and cost effectiveness of their plant, and improve the quality of their products, so that they can produce more affordable and nutritious food for the local people. In 2014, two Bühler employees completed voluntary placements with PFS and Bühler is the only partner company to provide a food technologist who looks after the PFS projects from Kenya.

What we are doing

What we are aiming at

Research and development 20 % of R & D spending in the form of partnership projects (including external alliances) Supplier Innovation Challenge initiative with suppliers

10 partner projects by 2014

Innovation partnerships

CHF 200 million new business through partnerships

achieved

planned

not yet achieved

2014

2013

Bühler Annual Report 2014

Successfully completed apprenticeships. 103

86 70

2005

2006

2007

2008

Employees by region.

2009

2010

2011

2012

2013

2014

Employees who have taken part in the Innovation Challenge.

>4,000

2014

Injuries and illnesses per 100 employees.

1 North America (7 %) 2 South America (4 %) 3 Europe (47 %) 4 Middle East and Africa (5 %)

4.2 3.4

5 Asia (37 %)

Bühler

Manufacturing Industry

Partnerships with universities and research institutes.

>20

Sustainability Report.

Commitment 1.3 We strengthen our corporate culture of health and safety. “Bühler Essentials” – central corporate principles. The Bühler Essentials define how we behave and interact with one another inside and outside the company. These conduct guidelines are based on our five core corporate principles: trust, recognition, respect, involvement, and passion. These guidelines are a consequence of several global employee surveys. Occupational health and safety protection. The health and safety of our employees and their protection against physical and mental harm are a core concern of Bühler. Bühler strives to offer all employees a safe and healthy work environment. In addition, we also ensure the safety of our visitors while they are on our premises. For this purpose, Bühler has compiled the most important safety information and rules from around the world in a short video, based on our mission: no accidents at Bühler and no accidents in Bühler customer plants. The safety course at the Bühler site in Uzwil has also been extended and is now also available to external firms. In South Africa, video training programs and improvements to assessments have reduced the time lost between an incident occurring and the right measures being taken by an average of 20 %. Company-wide health management system. In 2014, around 300 employees took part in a course or information day as part of the company-wide Viva Health Management system, which was introduced for all divisions in Switzerland in 2013. The global rollout is scheduled for completion by 2017. The concept for a healthy, well-balanced work environment was developed with experts and is based on the principles of improving health, reducing absences, and ensuring that people are able to work. This relies on employees’ personal responsibility and the cultivation of an appropriate health culture. In the context of Bühler’s concept for specialist personnel, Viva should also help to maintain employees’ performance levels as they get older.

What we are doing

What we are aiming at

Prevention of accidents Zero accidents at our throughout the lifecycles locations and at the of our products locations of our customers Research and devel opment projects take operator safety into account

In 100 % of all projects

Company-wide Viva Health Management program

Global rollout by 2017

achieved

planned

not yet achieved

2014

2013

Bühler Annual Report 2014

657 million tons of feed are fed to livestock every year, representing around a third of global grain production. The Kubex™ T pellet mill from Bühler is an innovative machine which, on average, uses 30 % less energy per ton of concentrated feed pellets produced, compared to conventional pellet mills. Admittedly, the energy costs only make up 10 % of the total manufacturing costs. However, unlike grain prices, which are subject to the daily ups and downs of the raw materials markets, this is an opportunity for calculable potential savings in an industry which has to get by on extremely low margins. The Kubex™ T won the prize for innovation at “Victam 2011”, the leading trade fair in the industry, and immediately became a highly sought-after product on an international scale. Since then, the machine has been sold on all continents.

Sustainability Report.

Collaborating with Customers in the Development Phase Paid Off. The Kubex™ T pellet mill was developed in collabora tion with customers. This meant additional work at the time, but it was worth it in the end: The machine, which uses 30 % less energy, has been awarded a prize for innovation and immediately became a highly sought-after product around the world. Developed with customers. The Kubex™ T was developed in collaboration with four pilot customers. As Bühler product manager Stefan Hoh says, this meant that more coordination was required in the development phase, but it has since proved to be one of the product’s success factors. This procedure could, in fact, become standard practice in this industry in the future. “When we presented the pellet mill – which has much lower friction losses thanks to the direct drive – at Victam, there was already a machine in operation at a customer’s premises nearby. A shuttle service was provided so that interested trade fair visitors could go and see the pellet mill in operation on site.” In a fairly conservative market, where innovations tend to be greeted with a certain amount of skepticism at first, good references are very important. No one wants to risk investing in a new system that has not yet proven itself in a production environment. An investment in a new pellet mill with a service life of 20 to 30 years has to pay itself off quickly: “The extra expense for the Kubex™ T will be amortized in around three years for a medium-sized feed plant with annual production of 100,000 tons.”

Demand for animal products is growing. Economic sustainability is crucial for customers. Ecological sustainability is regarded as a welcome side effect – although it is not insignificant, given that consumption of animal products is rising all over the world as a consequence of population growth and increasing prosperity. Average meat consumption per head has risen in the last 50 years from 24 kg (1964) to 41 kg (2014). Although consumption has stagnated at a high level in industrialized countries, there are high growth rates in the emerging markets. However, the consumption of animal products causes major problems for the environment: Producing a kilogram of beef requires around 15,000 liters of water. The global cattle population is responsible for 14.5 % of all greenhouse gases, or 7.1 gigatons of CO² equivalent. Feed crops and feed production are responsible for 45 % and 39 % of these emissions respectively. In light of these figures, each link in the value chain for animal products, from the grower to the consumer, has a duty to help improve the ecobalance. In this context, the Kubex™ T pellet mill is a further example of the fact that ecological and economic sustainability are not mutually exclusive. Quite the contrary: An ecological innovation will only succeed on the market if it proves to be economically sustainable too – and it is only then that its ecological benefits will be revealed to their full extent.

Bühler Annual Report 2014

Ecological Sustainability.

We contribute to sustainable value chains. Our ecological sustainability promise is not limited to our own locations. A substantial proportion of the environmental impact is down to the energy consumed by our machines when they are in operation at our customers’ sites. We have therefore set ourselves the goal of reducing not only the environmental footprint of our own locations, but also that of our customers along their entire value chains. By setting the standard for resource-efficient products, we can make a significant contribution to the creation of sustainable value chains. Reducing the environmental footprint involves the use of new technologies which help to conserve resources while producing healthy, nutritious food, lowering costs, and improving productivity.

Commitment 2.1 We reduce the environmental footprint of our locations. Measurement and sustainable reduction of the environmental footprint. In order to achieve our environmental sustainability goals, we have to measure and reduce not only the environmental footprint of our own locations, but also that of our products along their value chains with the customer. To this end, the annual CO² footprint of our North American location, BühlerPrince Inc., in Holland, Michigan, corresponds to the annual CO² emissions of approximately 330 American households or the equivalent of less than 3 % of New York’s daily CO ² emissions. We have also managed to reduce CO² emissions per hour of production by a remarkable 21 % over the last four years. Over the coming years, the aim is to measure the environmental footprint of other Bühler locations around the world and to draw up an environmental record for all Bühler products over their entire life cycle. Continuously improving environmental performance. The international environment management standard ISO 14001 defines globally recognized requirements for environment management systems. The Bühler Group was successfully recertified as compliant with ISO 9001/14001 by SGS in autumn 2014, showing its commitment to a continuous improvement process as a means to achieving its environmental performance objectives. Boosting energy efficiency. In the last five years, Bühler has managed to achieve a substantial reduction of 8 % in its energy consumption per hour of production at its global locations. By implementing suitable measures, we are also aiming to significantly lower our energy consumption and therefore also our CO² emissions at the various Bühler locations. Saving energy during transportation. Bühler has set itself the goal of reducing CO² emissions resulting from transportation and from employees’ travel activities by 5 % in each case. This goal has been more than met, not least thanks to the increased use of video conferencing. Sustainable procurement. In its attempts to further reduce its environmental footprint, Bühler also involves its suppliers’ know-how. By the year 2020, they must comply with our global quality, safety, and environmental standards on the basis of the standards ISO 9001/14001, ISO 50001 and OHSAS 18001.

Sustainability Report.

Reducing water consumption. Though we do not consume large volumes of water in our own production facilities, we plan to reduce annual water consumption by 5 % and separate it from our growth in sales revenues. In the last five years, Bühler has already managed to reduce its consumption of water per production hour by around 3 %.

Commitment 2.2 We set the standards for safe and healthy foods and for resourceefficient solutions. Improving food safety is one of the main aims of our research and development activities. Given the world’s growing population, it is all the more crucial to combine food safety with efficiency and loss minimization along the entire value chain. Changing climate conditions have led to increased occurrences of microorganism infestations (mold, bacteria) in grain. As a major market player along the entire food value chain, Bühler shares responsibility for producing safe, nutritious, healthy food. In order to promote the relevant expertise throughout the company, the subject of food safety once again plays a key role in employees’ training and continuing education. Safe food production. Three types of risks can be reduced during food production with a hygienic design: 1. Biological risks caused by microorganism infestations in food (bacteria, mold) 2. Chemical dangers caused by lubricants or chemical substances which get into the food during processing 3. Physical dangers caused by foreign particles, e.g., glass or wood splinters Bühler solutions comprise hygienic machine designs and plants, technologies for cleaning and decontaminating raw materials, intelligent automation solutions for safe food processing, and reliable traceability along the value chain, plus services that ensure the safety and efficiency of the processes. Quantum leap in hygienic design. In 2014, Bühler made a quantum leap forward in terms of hygienic design with the newly designed Cerex™ dryer for the production of coated ready-to-eat breakfast cereals. As the cereals are no longer heated before eating, and as sugar is left behind in the machine, the hygiene and cleaning requirements in this area are particularly high. Cerex™ reduces cleaning time by 70 %, lowers the consumption of water and detergents, and reduces the risk of bacterial or chemical contamination in the cereals. In addition to the hygienic design, the clever, lightweight

What we are doing

What we are aiming at

Reduction of the energy consumption of plants and products at customers’ sites per ton of end product

5 % per year

Reduction of the energy consumption at Bühler locations relative to productive hours

5 % per year

Carbon reduction in shipping

5 % per year

Carbon reduction in employee travel

5 % per year

Reduction of water consumption

5 % per year

All components externally procured from suppliers that have been p requalified according to the global quality, safety, environmental, and ethic standards of Bühler

For all suppliers by 2020

achieved

planned

2014

2013

not yet achieved

construction of the Cerex™ reduces the total weight of the dryer by a third. What’s more, the new design of the Cerex™ panels prevents heat loss and means that 10 % less energy is required during operation. This in turn results in sustainable, tangible savings in energy costs for Bühler customers. Reducing mycotoxins in grain. Changing climate conditions such as longer, delayed periods of rain followed by extreme dryness have led to a sharp increase in mold infestations in cereal grains. The resulting heat-resistant mycotoxins, particularly the highly toxic aflatoxin, pose a danger to the health of both humans and animals. The targeted removal of individual infested grains at an early stage is important, as the toxins will not yet have spread further at this point. In conjunction with the University of Bari (Italy), Bühler has developed a new process for reducing aflatoxin in maize (corn). The combination of mechanical cleaning and optical sorting, based on our SORTEX technology, makes it possible to maximize quality and safety. Affordable, healthy food. Bühler processes aim to produce food that is safe, affordable, and healthy in equal measures. In cooperation with various partners, we are researching solutions that will help to eradicate malnutrition – for example, by tapping new protein sources (e.g., algae), by enhancing food with important nutrients and active ingredients (e.g., micronutrients, vitamins), or by sharing specialist knowledge to support the production of safe, healthy food (as a member of Partners for Food Solutions).

Bühler Annual Report 2014

In conjunction with TNO Netherlands, Bühler is researching solutions to improve the utilization of new protein sources from plants, particularly algae. The challenge is to develop a way of carefully releasing the proteins stored inside the algae cells. Utilizing the potential of pulses. Pulses could be a key way of improving the global food situation: They are rich in proteins and require little water and no nitrogen fertilizer. They constitute a basic food in India and the Middle East, while the rest of the world has some catching up to do. The Global Pulse Partnership Task Force brings together representatives of the global food value chain around one table. In 2014, Pulse Canada, Cargill, Nestle, and General Mills developed a strategy for improving the global utilization of pulses, with the process chaired by Bühler. It is important to find solutions for the different taste preferences of different cultures: Particularly in the West, the taste of pulses is met with limited enthusiasm. Possible solutions involve including pulses in pasta and baked goods, so that they contain the healthy properties without tasting of lentils, beans, or chickpeas. As the market leader in India for the processing of pulses, Bühler can bring a lot of experience to the table.

What we are doing

What we are aiming at

Research and development projects take account of food safety

100 % of all projects by 2015

Number of employees in key positions who have received training in food safety

500 employees by 2015

Research and development projects in the area of foods focus on improved nutrition

30 % of all projects by 2015

Solutions for reducing energy 25 % higher energy consumption at our customers’ efficiency per ton of sites end product by 2020 New products undergo Life Cycle Assessment (LCA) achieved

50 % of all new products by 2020

planned

not yet achieved

2014

2013

Improving energy efficiency. Focus on consumers. The consumer is at the center of our efforts to improve energy efficiency: By the year 2020, we aim to substantially reduce energy consumption per ton of end product made by our customers. For this purpose, each business unit has defined a specific energy indicator for one of its core processes. This serves as a basis for achieving the goal of 25 % higher energy efficiency by 2020. Such solutions increase the profitability of our customers’ operations by cutting their operating costs while reducing their environmental footprint. Lower energy consumption means lower costs and reduced resource consumption, and can also result in time savings and increased convenience for the end consumer. Instant maize (corn) for urban Africa. Bühler developed its Instant Maize Flour™ product specifically for urban Africa. Maize (corn) is traditionally prepared on a wood stove in Africa and requires cooking time of at least 30 minutes – an inefficient and time-consuming process which requires lots of resources. Thanks to a thermal pretreatment, the instant maize (corn) cooks more quickly, reducing the cooking time considerably to just five minutes. Energy-optimized pasta drying. Ecothermatic™ is a new method developed by Bühler for drying pasta, which reduces thermal energy consumption by 40 %, cooling energy consumption by 20 %, and electrical energy consumption by 10 %. The new method also reduces the amount of cracks in the pasta. The energy savings and improvements in quality have resulted in a 1 % rise in profits for the customer since the machine was introduced in Germany in 2013. Bühler has set itself the goal of further developing the dryer, which was initially designed for smaller capacities (1.2 tons/h) and long-goods pasta (spaghetti), so that the method can also be used for larger capacities and short-goods pasta (e.g., penne). Another product ready for the market was a new technology for processing large quantities of rice more efficiently. The complex procedure which once required two machines per pass can now be carried out on a single machine. This reduces energy consumption by 20 %, as well as lowering space requirements. This can lead to significant savings, particularly when constructing new plants.

Sustainability Report.

Successful re-certification for the quality and environmental standards ISO 9001/14001.

Re-certification Energy/ Water consumption.

Cooking time for Instant Maize Flour™.

Reduction of energy consumption per production hour [MJ/h] between 2010 and 2014.

Reduction of water consumption per production hour [m³/h] between 2010 and 2014.

2010 – 2014

4 min

– 2.7 %

The new Cerex™ dryer has a quicker cleaning time.

– 8 %

70%

Bühler Annual Report 2014

Life Cycle Assessment (LCA) of all products. The majority of the environmental impact is down to the energy consumed by our machines when they are in operation at our customers’ sites. The remaining product cycle phases – from the raw material to recycling – have much less impact. In 2014, Bühler developed a study in conjunction with Loughborough University for an ecological Life Cycle Assessment of all products by 2020. By this time, it should be possible to organize all machines into different energy classes over their entire life cycle. When developing a standard method, it is important to remember that it is not generally the energy efficiency of the individual machine that counts for our customers, but that of the entire plant and process. Optimized manufacturing procedures for energy-efficient end products. The Advanced Materials division develops and sells manufacturing systems that are capable of transforming raw materials, such as metals or chemical base materials, into more valuable intermediate products, such as parts for the automotive industry, suspensions and pastes, and functional coats for a multitude of applications. These intermediate products facilitate the production and energy-efficient operation of top-quality end products: When producing energy-efficient vehicles, or when coating architecture glass for an insulated building envelope, Bühler helps to improve the energy efficiency of the end products through the production solutions it supplies. By developing more cost-effective technologies, Bühler ensures that these energy-efficient products can also spread to growing emerging markets such as China or India. Lightweight vehicle components mean greater energy efficiency. The development of energy-efficient vehicle fleets is being given an additional push by the EU requirement which states that the average CO² emissions of the vehicle fleet (new vehicles) of any one manufacturer must not exceed 95 g of CO² per kilometer as of 2020. The CO² emissions of a vehicle can be significantly reduced by reducing its weight. The constant improvement of vehicle weight is one of the ongoing tasks of automotive manufacturers and all components are tested for their reduction potential in each new vehicle generation. Making lots of little improvements can reduce the weight of a medium-sized vehicle by up to 100 kg by using lighter materials (aluminum) and by replacing several individual die casting parts with a single integrated one. For Bühler’s Die Casting business area, the many years of working with market and technology leaders really pay off when it comes to these improvements.

Batteries for electric vehicles. Increasing urbanization and the challenges of traffic congestion and inner-city air pollution that comes along with it demand the use of electrical drive solutions for both private travel and public transport, such as electric buses. Significant improvements must be made to battery costs and quality for electric and hybrid vehicles and other fuel-saving measures, such as automatic start-stop systems, to be used on a wider scale. It is not just relatively expensive European and American electric vehicles that are currently in the foreground, but also cost-effective solutions such as e-scooters and the introduction of electric buses in large towns and cities in China or India. The Grinding & Dispersion business area has set an objective to significantly reduce Li-ion battery production costs and is working in close cooperation with the biggest battery manufacturer in China to do so. Coatings for facade glass. Glass is becoming increasingly important as a construction and facade material, but it does have the disadvantage of poor insulation performance. Bühler Leybold Optics is developing efficient production methods for coating architectural glass and improving its insulating effect. A typical glass coating production plant installed on site produces 4 million m² of glass a year, which results in an annual, repeated CO² emissions saving of 150,000 t. While the glass coating rate in Europe is already fairly high, the rate in China is just 5 %. In conjunction with solar energy, improving the insulating properties of glass is sure to bring about a significant drop in energy costs, especially since a quarter of the energy consumed globally is used for heating or cooling buildings.

Sustainability Report.

Commitment 2.3 We provide solutions for reducing food losses along the value chain. Fighting against losses and for the availability of foods. Two thirds of Bühler’s business is closely related to the food and feed industries. According to estimates of the FAO, 30 % of the total harvest of agricultural commodities worldwide is lost somewhere between farmers and consumers. In order to correct this situation, Bühler develops solutions for storing, cleaning, sizing, and sorting commodities as well as for other process operations, including alternative processes for nonedible by-products. Because the greatest potential for optimizing resource efficiency and reducing losses is located upstream and downstream of the areas over which we have direct control, Bühler is teaming up with partners to take up this challenge. Fewer fungal infestations, fewer losses. The newly developed SORTEX™ grain sorting machine checks 250,000 cereal grains per minute – several tons per hour – by means of a camera. Grains which do not meet the strict quality requirements are identified using algorithms and removed individually by a stream of air. This process, which was originally developed for carrying out final optical inspections on white rice, is used to eliminate mycotoxins from the grain at an early stage. The innovative process is a major step toward improving food safety and preventing losses in processing, as batches of grains which exceed the mycotoxin threshold value have to be completely incinerated or turned into biodiesel. The new Bühler maize dryer also helps to reduce losses due to fungal infestations. Thanks to improved moisture control, the maize (corn) is dried more homogeneously and the residual moisture is measured precisely at the end of each drying process.

What we are doing

What we are aiming at

Solutions for reducing post-harvest losses

Significant reduction by 2020 thanks to Bühler solutions

achieved

planned

2014

2013

not yet achieved

Water scarcity. Availability and efficient utilization of water have become critical factors in the debate on secure supplies of this vital commodity. As most Bühler processes are based on dry processes, they are by their very nature not water-intensive. Moreover, Bühler is making efforts to substitute water-intensive production processes with our low-water-usage process technologies such as Prime Masa™, Bühler’s new innovative process for making tortilla flour. It consumes six times less water than traditional production processes to make one metric ton of corn flour. Furthermore, it enables solid and liquid wastes to be reduced to zero, in contrast to the benchmark figure of about 500 kg per metric ton of corn flour produced.

BĂźhler Annual Report 2014

While machines and plants are in productive operation, there is often considerable potential for increasing productivity and reducing costs. In order to identify this potential and exploit it in a targeted manner, BĂźhler offers its customers the SoliX optimization service â&#x20AC;&#x201C; an advisory mandate to optimize the performance of machines and plants in the grain processing industry over their entire lifetime. With the experience and specialist knowledge encapsulated in SoliX, existing mills can be upgraded to state-ofthe-art plants.

Sustainability Report.

Extensive Specialist Knowledge Boosts Profits. With the SoliX advisory mandate, Bühler is using its experience and specialist knowledge in the field of grain milling to boost productivity in existing plants. Flour mills remain in operation for a long time: “Two thirds of all plants worldwide are over 10 years old and require extensive overhauling with regard to quality, efficiency, hygiene, and safety considerations.” This is how Walter Eugster, head of Milling Technology at Bühler, explains the increasing d emand for help with optimizing performance in existing plants. Changes to general conditions – for example, a rise in energy prices or the cost of raw materials, increased competitive pressure, or technological advances – can affect the profitability of the plants, which usually operate round the clock. Less energy, more flour. Take SASKO, for example: The South African company modernized its wheat mills in 2006, but the limited capacity of the outdated South African power grid then meant that they suffered from repeated power cuts while, at the same time, electricity prices soared. “The energy costs for the mills have doubled in the last five years,” says Jabus Wessels, operations manager at SASKO, adding that this was having a growing impact on the cost effectiveness of the plant. For various reasons, it was not possible to replace the plant: partly due to the costs, but also because the machines operate round the clock in the highly competitive South African market, and can only be interrupted for brief periods for routine maintenance work. Bühler Consulting was tasked with examining the company’s operating efficiency. A team of technologists, energy experts, and engineers drew up a SoliX master plan with the aim of improving the plant’s performance and reducing energy costs. Mission accomplished: “Plant capacity at the SASKO mill increased by 5 % with the same extraction rate, and energy consumption fell by 5.8 %,” reports senior milling technologist and project manager David Austin. Jabus Wessels was equally happy with the result: “We were very impressed by the fact that it was possible to boost performance as promised without requiring huge investments and prolonged stoppages. The only new components we had to install were variable speed drives and pressure transducers. The rest was down to extensive specialist knowledge in the field of grain milling.”

Committed to sustainability. “Customers expect sustainable solutions,” says Walter Eugster. This requires Bühler to commit to maintaining maximum plant performance in the long term, but also means that the optimization service has to produce substantial savings and optimize profit quickly: “The project investment should pay itself off in less than two years.” The advisory mandate is also the perfect way to really find out about customers’ needs. Successful projects ensure customer loyalty for the future. Bühler’s high-quality consulting services are opening up a lucrative business area – information gained from customers at first hand can be applied to the company’s own product development. Not forgetting the environment and the company’s employees, both of whom also benefit from improved efficiency. The step-by-step process with minimal downtimes involves the local staff, creating a platform for exchanging specialist knowledge and experience.

Bühler Annual Report 2014

Economic Sustainability.

The preconditions for long-term success.

Commitment 3.1

Sustainable business success is a basic condition for Bühler to fulfill the environmental and social requirements that our organization is expected to meet. In this, we set our sights on long-term profitable growth and on maintaining our financial independence status. It is important that all of our market regions benefit from the added value.

We deliver long-term profitability. On average across several years, Bühler aims at achieving an operating profit margin (EBIT) of 10 % plus organic revenue growth of 10 %. This enables us to generate the cash flow we need to invest in future innovations and acquisitions and to secure our financial independence. In 2014, we have not met these targets completely. However, Bühler’s investment policy is based on a long-term perspective. It aims at deepening our knowledge of local markets, gaining everbetter insights into customer needs, and turning around a number of our market segments to condition them for the future. With this, we want to increase our market share on a sustainable and profitable basis. Every new product must generate tangible added value for our customers. Moreover, Bühler plans to increasingly support customers by providing products and services from a single source within the scope of its defined core competencies and along the entire value chain. Minimizing risk by diversifying the product portfolio. To balance risks, Bühler operates in a wide variety of markets and segments, a fact that is reflected in its business unit structure. Whereas some business units such as Grain Logistics or Aeroglide faced a difficult market environment, others such as Sortex & Rice; Chocolate, Cocoa & Coffee; or Die Casting benefited from the upswing in their markets.

What we are doing

What we are aiming at

10/10 model

10 % growth in sales revenues and 10 % operating profit margin (average across several years)

Financing of growth

100 % independent

achieved

planned

not yet achieved

2014

2013

Sustainability Report.

Commitment 3.2

What we are doing

We ensure a modern corporate governance approach.

Online training program to fight 100 % of all employees corruption and bribery in the sales, purchasing, and management functions have attended the online training program against corruption and bribery

Regional Compliance Officers: Closer to the market. In 2014, Regional Compliance Officers were introduced in each of the eight Bühler regions to act as the first point of contact for compliance issues. Cases with special risks (blacklist, commission payments, etc.) still go straight to the head of Corporate Compliance & Integrity. Moving this responsibility to the various regions has made processes much simpler and quicker, partly because there are no language barriers and because the Compliance Officers are familiar with the relevant local regulations. To ensure a common understanding of the processes and responsibilities, the Regional Compliance Officers met at a round-table event at the International Finance Conference (held in June 2014 in London), in conjunction with a training session on global compliance processes. In connection with this regionalized approach to compliance, it is worth noting that almost all of the nominated Bühler employees had completed the web-based training featuring the ABC rules by the end of 2014, and are therefore familiar with the global compliance rules. In addition, first-level support was set up in the regions in 2014 to support applicants with the process of consulting agents. In this case too, the aim was to simplify and speed up the existing procedure. Equipped with the necessary skills, the regions are now responsible for correct procedures when consulting agents. Corporate Compliance will continue to subject cases with particular risks to a central check. Compliance reporting: Learning from previous incidents. What do you do with a forged check? How can you prevent attacks from hackers? A new compliance reporting system was introduced in 2014 at the behest of the Audit Committee (AC). The Audit Committee will now be informed of new, ongoing, and concluded compliance cases on a quarterly basis and can draw the necessary lessons and measures from this information. The plan for 2015 is to optimize the implementation of measures to ensure that lessons are learned and measures are implemented throughout the entire organization.

What we are aiming at

Periodic internal audits on c orruption prevention

In 2014, 10 companies were audited

Corruption risk assessments

The corruption risk of all business units is annually assessed

Introduction of a regional c ompliance organization

Appointment of regional Compliance Officers in all eight regions (China, South East Asia, South Asia, East Asia, Middle East & Africa, Europe, North America, South America)

achieved

planned

not yet achieved

2014

2013

Bühler Annual Report 2014

Growth and profit.

Order intake ( in CHF m) 2,345

2012

2,363

2013

2,582

2014

Compliance questions solved worldwide.*

Turnover ( in CHF m) 2,409

2012

2,322

2013

EBIT ( in CHF m) 2,332

2014

168

2012

139

145

2013

2014

Applicants for compliance cases receive first level support in the regions.

First Level Support

* Registered in 2014 for the first time.

Since 2014, there has been a Compliance Officer in each Bühler region.

Complete

Sustainability Report.

Commitment 3.3 We contribute to local economies.

What we are doing

What we are aiming at

Local recruitment of employees and management staff

90 % of our management staff are locally recruited

achieved

Regional orientation for business policies. True to its motto “In the markets, for the markets”, Bühler attaches great importance to having firm local roots. For one thing, this shortens the supply chain. For another, fast and effective adaptation of our products to suit local preferences is facilitated by product development that is increasingly carried out in the various market regions. Importantly, this localization also applies to our management staff. Today, Bühler fills about 90 % of all positions at the senior management level with employees from the respective regions. More and more employee training is also taking place in the regions, either through Bühler seeking partnerships with local universities or training centers, or by introducing well-tested concepts such as internal apprentice training at other sites. With this regionally oriented business policy, Bühler is also making a contribution to the development of local economies.

planned

not yet achieved

2014

2013

B端hler Annual Report 2014

Organization.

Board of Directors Calvin Grieder (Chairman) Peter Quadri (Vice-Chairman) Dr. Konrad Hummler Josef M. Müller Ruth Metzler-Arnold Karin Bühler Linda Yang Frank N.J. Braeken

Urs Bühler Innovation Fund Urs Bühler (Chairman)

Executive Board CEO Group Calvin Grieder

CFO Group Andreas R. Herzog

CEO Grains & Food Stefan Scheiber

CEO Advanced Materials Samuel Schär

Manufacturing & Logistics Holger Feldhege

Asia Pacific Dieter Voegtli

Corporate Technology Ian Roberts*

Human Resources Christof Oswald*

Grain Logistics Marcel Scherrer

Sortex & Rice Hamid Kefayati

Consumer Foods Serge Entleitner

Grinding & Dispersion Cornel Mendler

Grain Milling Johannes Wick

Value Nutrition Marcel Natterer

Die Casting Jonathan Abbis

Leybold Optics Antonio Requena

North America René Steiner

South America Edwin Boller

Europe Anders Kristensen

Middle East & Africa Andreas Flückiger

South Asia Dipak Mane

Asia Dieter Voegtli

East Asia Max Klinger

Business Areas

Regions

* Member of the extended Executive Board.

B체hler Annual Report 2014

Executive Board.

Christof Oswald, Stefan Scheiber, Andreas R. Herzog, Samuel Sch채r, Ian Roberts, Calvin Grieder, Holger Feldhege, Dieter Voegtli (from left to right).

Executive Board.

Calvin Grieder

Andreas R. Herzog

Dieter Voegtli

Stefan Scheiber

(1955, Swiss) Chief Executive Officer

(1957, Swiss) Corporate Finance & Communication

(1958, Swiss) Head of Asia Pacific

(1965, Swiss) Chief Executive Officer Grains & Food

After having been raised in the U.S., he graduated in Process Engineering from the Swiss Federal Institute of Technology in Zurich (ETH). He then held various management positions in Swiss and German companies (Georg Fischer, Bürkert, Mikron und SIG) in the fields of measurement and control, a utomation and engineering. In these functions, he was primarily in charge of successfully e stablishing and expanding international businesses. In 2001, Calvin Grieder changed from Swisscom to Bühler Group as CEO. As of February 2014, he is also chairman of the Board of Directors. He is member of the board of the companies Implenia AG and Givaudan SA.

After graduating in Business Administration, he continued his studies in various postgraduate courses in marketing and finance management at business schools in France, Canada, and the U.S. He occupied management positions in finance, controlling, audit, and logistics at Ciba-Geigy and Swatch. Before joining Bühler, he was Vice-President Finance at Swarovski. During his pro fessional career he has worked in Switzerland, Germany, Latin America, and West Africa. Andreas R. Herzog has been CFO of the Bühler Group since 2002. He is member of the board of the companies CCS Holding AG, Leicom AG and in the Advisory Board of Commerzbank in Germany.

He is a mechanical engineer (Swiss Federal Institute of Technology Zurich, ETH) by training and holds an MBA from INSEAD. He started his career in global power plant commissioning and as a software d evelopment manager for ABB. Following that, he worked for eight years as Technical D irector of Roche China Ltd. Dieter Voegtli is President of Bühler Group China and Asia Pacific since 2009, having a lready served as President of Bühler China since 2004.

He graduated in Business A dministration from the University of Applied Science in St. Gallen and later on continued his education at the IMD Lausanne and other institutes. From 1988, he worked for 15 years in various management positions abroad, including East and South Africa, Eastern Europe and Germany. In 1999, he took charge of the global organization of the Brewing and Rice business units and then assumed overall responsibility for Bühler Ger many. From mid-2005, Stefan Scheiber headed the Sales & Services division as a member of the Executive Board. He has been in charge of the Food Processing division since 2009.

Samuel Schär

Holger Feldhege

Christof Oswald*

Ian Roberts*

(1975, Swiss) Chief Executive Officer Advanced Materials

(1968, German) Head of Manufacturing & Logistics

(1961, Swiss) Human Resources

(1970, British) Corporate Technology

After obtaining a degree as a physics engineer from the Swiss Institute of Technology in Lausanne (EPFL) and accum ulating three years of experience with the consultancy McKinsey, he joined Bühler in 2002, where he took charge of the Nanotechnology business unit in 2005. From 2009 through 2013, he bore overall responsibility for the Grinding & Dispersion business unit into which he integrated the Nanotechnology business unit. He has headed the Advanced Materials division since 2013.

He graduated in Business Studies and holds a PhD in Production Management. Holger Feldhege has extensive experience in Production, Engineering, and Logistics. For the past 13 years, he worked at ThyssenKrupp Elevator, spending more than seven years in Asia. Returning to Germany in 2010, Holger Feldhege took on the position of CEO Manu facturing Central, Eastern, Northern Europe and later Senior Vice-President Manufacturing Elevator for the worldwide group. 2014, Holger Feldhege joined Bühler as new Head of Manufacturing & Logistics.

After completing his apprenticeship at Bühler, he continued his education in commerce and held various functions in development and customer projects for all divisions. In the course of this activity, he acquired broad management experience which he continuously deepened as Information Technology project manager and Controlling Unit manager. From 1993 through 2005, Christof Oswald was the commercial manager of the Manufacturing & Logistics d ivision. He has headed Corpor ate Human Resources since 2006. Furthermore, he is chairman of the Raiffeisenbank Regio Uzwil and committee member of the Retirement Fund of Raiffeisen Switzerland.

He graduated in Chemical E ngineering and obtained a PhD in Process Engineering from the University of Wales, Great Britain. From 1997 through 2009, he held various management positions at Nestlé, acting among other things as internal Management Consultant at Swiss head quarters, as Director of Innovation for Nestlé Mexico, and as Director of the Chocolate Centre of Excellence in Switzerland. He has been Chief Technology Officer at Bühler since 2010.

* Member of the extended Executive Board

Bühler Annual Report 2014

Board of Directors.

Frank N.J. Braeken

Josef M. Müller

Ruth Metzler-Arnold

Calvin Grieder

(1960, Belgian)

(1947, Swiss)

(1964, Swiss)

(1955, Swiss) Chairman

Frank N.J. Braeken graduated in Law and holds an MBA degree in Finance from the University Leuven (Belgium). He is an alumnus of the Wharton Executive Program, Penn University, Philadelphia. In his professional career he specialized in Finance and in General Management. From 1996 through 2013, he held various management functions in different countries for Unilever, including a position as Group Vice-President of Unilever China (Shanghai), Executive Vice-President of Unilever Namca (Dubai), and Executive Vice President of Unilever Africa (Dubai/Durban). Since 2013, Frank N.J. Braeken has acted as Chief Investment Officer of Amatheon Agri Holding (Berlin). He was elected to the Board of Directors of Bühler in 2014.

With a degree in Business Administration, he joined the Nestlé Group in 1972, with subsequent assignments in Switzerland, Europe, the U.S., and South Africa. He then spent several years as a sales and marketing manager in the Far East. From 1992 to 1995, he headed Nestlé Pakistan and from 1995 to 1998 Nestlé Korea. In mid-1998, Josef M. Müller took charge of Nestlé China, and from mid-2000 to 2007 of the Nestlé Greater China Region. Josef M. Müller has been a member of the board of Bühler since 2007. He has served as president of PROMARCA, the Swiss Association of Branded Goods ( Schweizerischer Markenartikelverband), since 2010. He is also member of the board of Crown Holdings Inc, Philadelphia/USA and of Packages Ltd. Lahore, Pakistan.

Studied Legal Science at the University of Freiburg i.Ue. and is a Federally Certified Auditor. From 1990 through 1999, she was active for PricewaterhouseCoopers in St.Gallen. In addition, she was member of the Cantonal Government of Appenzell IR (Director of Finance) during three years. From 1999 through 2003, she headed the Federal Department of Justice and Police as Swiss Federal Councilor. Ruth Metzler then held leading positions at Novartis and was member of the board and of the Audit Committee of SIX Group. She is a partner in a consultancy firm, Chairperson of the board of Switzerland Global Enterprise, member of the board of AXA Winterthur and of the Board of Directors of the Hospital Association AR, and Member of the Council of the University of St.Gallen (HSG). In December 2011, she was elected as member of the board of Bühler.

After having been raised in the U.S., he graduated in process engineering from the Swiss Federal Institute of Technology in Zurich (ETH). He then held various management positions in Swiss and German companies (Georg Fischer, Bürkert, Mikron, and SIG) in the fields of measurement and control, automation and engineering. In these functions, he was primarily in charge of successfully establishing and expanding international businesses. In 2001, Calvin Grieder changed from Swisscom to Bühler Group as CEO. As of February 2014, he is also Chairman of the Board of Directors. He is member of the board of the companies Implenia AG and Givaudan SA.

Board of Directors.

Karin Bühler

Linda Yang

Peter Quadri

Dr. Konrad Hummler

(1978, Swiss)

(1971, Chinese)

(1945, Swiss) Vice-Chairman

(1953, Swiss)

After obtaining her university entry qualifications, Karin B ühler completed her basic studies at the University of St.Gallen, after which she acquired a degree in Marketing. Following a number of activities in the fields of marketing, communications, and equestrian sports, she became General Manager of Horse Vision AG as owner in 2008. Since 2011, she has been with BühlerImmo AG and UZE AG, first as Manager Marketing, then as member of the General Management in charge of Human Resources & Marketing and since 2014 as General Manager. Karin Bühler was elected to the Board of Directors in 2014. She is also a member of the board of Clientis Bank Oberuzwil and of Horse Vision AG, Uzwil.

Linda Yang holds one Bachelor degree each in Mathematics and Business/Finance from the Nan Kai University (Tianjin, China). She attended an Executive MBA program at the China Europe International Business School (CEIBS). Following various assignments in China in the fields of research, consulting, and marketing, among other companies at Procter & Gamble (China) Ltd., she acted from 2001 through 2004 for Nestlé (China) Ltd. as Head of Consumer Insight. Since then she has been the General Manager of BSI (Tianjin) Foods Co. Ltd., a subsidiary of Bongrain S.A. Thanks to her experience and training, Linda Yang has a proven understanding of the Chinese market. She has been a member of the Board of Directors since 2014.

Graduated in 1969 in Economy and Business Administration from the University of Zurich as lic. oec. publ. In 1970, he joined IBM as a systems engineer and specialist for software and operating systems. Following various positions in the U.S., Denmark, and Switzerland, he was president of IBM Switzerland from 1998 to April 2006. Peter Quadri was appointed member of the board of Bühler in 2006, and has been its Vice-Chairman since 2014. He is also Chairman of the board of TriplEat Holding AG and member of the board of Vontobel Holding AG, of Run my Accounts AG, and of Investiere (Verve Capital Partners AG) and advisor of the Quadriga Senior Executive Board. Until May 2014, Peter Quadri was Chairman of the board of Unitectra AG and until the end of April 2014 member of the board of Swiss Life Holding AG.

He graduated in Law from the University of Zurich and in Economic Science from the U.S. University of Rochester. In the eighties, he acted as the personal assistant to the Chairman of the Board of Directors of former UBS, Dr. Robert Holzach. From 1991 through 2012, he was instrumental in his function as Managing Partner with unlimited liability in the unprecedented success story of Wegelin & C o. Private Bankers, St.Gallen. In addition to his bank activities, he was a member of the board of various companies, including Neue Zürcher Zeitung (NZZ), Swiss National Bank (SNB), or the German Stock Exchange. Since 2013, Konrad Hummler has headed M1 AG, a private think tank dealing with strategic issues of current interest. Dr. Konrad Hummler was appointed member of the board of Bühler in 2010. Furthermore, Dr. Konrad Hummler is a board member of other companies such as Layzapp ag, Zug, and McMRI AG, Stans.

Bühler Annual Report 2014

Innovation Board of Urs Bühler Innovation Fund.

Urs Bühler

Hal Gurley

Matthias Kaiserswerth

(1943, Swiss) Chairman

(1955, American) Managing Director, Service Management Solutions, Cisco Systems (Switzerland) GmbH)

(1956, Swiss and German) Vice-President Europe, IBM Research, Director IBM Research – Zurich GmbH

Graduate mechanical engineer from the Swiss Federal Institute of Technology Zurich (ETH). After a number of positions inside and outside Switzerland, he was a ppointed to the Corporate Management of Bühler AG in 1975, in charge of sales and development. From 1980 to 1984, he was president of Bühler GmbH, Braun schweig (Germany). In 1986, Urs Bühler was a ppointed CEO of Bühler, Uzwil. He handed over the executive management duties of the company to Calvin Grieder at the start of 2001. Urs Bühler has been a member of the board since 1981, from 1991 as its Vice-Chairman and from 1994 to 2014 as its Chairman. He is member of the board of several Swiss companies as well as of the Center for Young Entre preneurs, Flawil (CH).

Hal Gurley holds Bachelor’s and Master’s degrees in Electrical Engineering from the Georgia Institute of Technology (U.S.), and an executive MBA from IMD in Switzerland. Before moving to Switzerland in 1995, G urley was President and Founder of Automation Intelligence, an advanced systems integration and software development firm based in the USA specializing in real-time communications and control s ystems for industrial, robotic, and military applications. Prior to joining Cisco in 2000, Gurley was Director Internet/IP at Swisscom, the Swiss incumbent telecom operator. Before he m oved into a global sales role in 2013, Gurley worked for over ten years in Cisco’s management and strategy con sulting organization engaging with S ervice P rovider customer executives to accelerate business success using internet and cloud technologies for competitive a dvantage. Hal Gurley serves in a global sales leadership role responsible for C isco’s Cloud/ Network System Management software portfolio and go-to-market execution. He also serves as sole M anaging Director and legal representative of Cisco Systems (Switzerland) GmbH.

Matthias Kaiserswerth studied Computer Science at the University of ErlangenNuremberg, Germany, and at McGill University in Montreal, Canada. He obtained his PhD in Computer Science at Erlangen University, Germany. He has worked for IBM Research in Switzerland and the USA since 1988. From the middle of 2002 to the end of 2005, Dr. Kaiserswerth headed up the business unit globally responsible for all IBM business relations with a large international industrial customer. Matthias Kaisersw erth has been Director of the IBM Research Laboratory in Rüschlikon, Switzerland, since June 2006. He has also been in charge of the IBM Research L aboratory in Dublin, Ireland, established in 2011, since January 2014.

Innovation Board.

Edward S. Steinfeld

Ian Roberts

(1966, American) Professor of Political Science Director of the Brown University China Initiative at Brown University

(1970, British) Corporate Technology

Edward S. Steinfeld studied Government and Political Science at the Harvard University (USA), and holds a PhD in Poli tical S cience. From 1996 through 2013, Steinfeld was a professor of Political Economy and Management at the Massa chusetts Institute of Technology (USA). He also served as a visiting scholar at the Tsinghua University School of Public Policy and Management in Beijing from 2012 to 2013. From 2005 to 2013, he was director of the China Energy Program at the MIT I ndustrial Performance Center. In 2013, Steinfeld moved to Brown University (USA), where he is the Dean’s Professor of China Studies, Professor of Political Science, and Director of the Brown University China Initiative. At Brown University, Steinfeld also is a faculty fellow of the Watson Institute for International Studies. Beside his uni versity engagement, Ed Steinfeld is member of various boards of directors, academic and advisory boards in the USA, Asia, and Europe. In 2012, he was appointed as member of the China Advisory Board of the Bühler Technology Group.

He graduated in Chemical Engineering and obtained a Ph.D. in Process Engineering from the University of Wales, Great Britain. From 1997 through 2009, he held various management positions at Nestlé, acting among other things as internal Management Consultant at Swiss headquarters, as Director of Innovation for Nestlé Mexico, and as Director of the Chocolate Centre of Excellence in Switzerland. He has been Chief Technology Officer at Bühler since 2010.

B端hler Annual Report 2014

Financial report.

72 74 78 79 80 81 82 84 85 120

01_FR2014_Buhler_Group_en.indd 71

Financial commentary. Business development. Financial report Bühler Group. Consolidated statement of income. Consolidated statement of comprehensive income. Consolidated statement of financial position. Consolidated statement of changes in equity. Consolidated statement of cash flows. Notes to the financial statements. Report of the statutory auditor.

04.02.2015 16:38:31

Bühler Financial Report 2014

Financial commentary.

2014: Strong order intake, stable turnover and EBIT and improved cash flow. Key points in brief. Bühler is back on the growth path. After a 1% growth of orders in 2013, we were able to grow our orders by 9.3 % to CHF 2,582 million in 2014. With this very satisfying development Bühler has prepared the ground for a profitable growth of its business. In line with the nature of the plant and equipment business, and as the order intake has taken up speed only in the second half of 2014, the turnover of CHF 2,332 million remained basically unchanged in comparison with the previous year (2013: CHF 2,322 million; + 0.5 %). Thanks to diligent management of customer projects the group has made substantial progress in its operational profitability. Two major negative impacts on EBIT were overcapacities in individual European factories and the corresponding one-time restructuring costs in Germany and Spain of around CHF 50 million. As a result the EBIT-level of the reporting year with CHF 144.6 million or 6.2 % of turnover did not surpass the result of the previous year (2013: CHF 139.5 million or 6.0 %) by much. Adjusted for these negative special effects the EBIT would have surpassed the group’s minimum target level of above 8 %. The strong growth of order intake shows that the group successfully mastered a number of major macroeconomic challenges such as volatile currencies, pandemics, regional crises and wars. All Business Areas were able to increase their order intake. The Business Area Die Casting stood out with its increase of 13 % to CHF 278 million (2013: CHF 246 million) and achieved its best year ever. Leybold Optics – our 2012 acquisition in the field of vacuum depositing systems – also showed an excellent improvement of 41% to

Orders released (in CHF m)

2,345

2012

2,363

2013

01_FR2014_Buhler_Group_en.indd 72

Orders on Hand (in CHF m)

2,582

2014

1,582 1,347

1,319

2012

2013

2014

CHF 171 million (2013: CHF 121 million). All sales regions made good progress in comparison to 2013 with respect to the order intake. The markets India and China led this improvement with a plus of 73 % and 23 %, followed by South America with +13 % and North America with +11%. The group has also heavily worked on extending its customer service network to around 80 service stations around the world with somewhat 1,400 specialists ready to support the customers as close and as efficiently as possible. The investments into product development and innovation amounted to CHF 99 million or 4.2 % of turnover (2013: CHF 109 million or 4.7 %). As in the past, these costs are fully expensed in the year when they arise. The return on the net operational assets (RONOA) of 18.1% has increased slightly compared to 2013 with 17.6 %. Thus, the capital costs of the group are more than covered, and the RONOA again represents a top value in comparison to other industry peers. The number of employees (exclusive of temporary staff and apprentices) could be kept on the same level on 10,575 (– 84 persons). Profitability secured, positive financial result and low tax rate. The net profit in 2014 amounted to CHF 121 million or 5.2 % of turnover and was thus on the same level as the prior year (2013: CHF 123 million or 5.3 %). The financial result of CHF 2.7 million remained below the value of prior year (2013: CHF 6.7 million). Our financial assets continue to be managed very prudently by not taking unnecessary risks. Reflecting sustainable tax management and the absence of one-time impacts, the tax rate rose back to 17.9 % from the all-time low of 16.0 % in 2013.

Turnover (in CHF m)

2,409

2012

EBIT (in CHF m)

2,322

2,332

2013

2014

168

2012

139

145

2013

2014

04.02.2015 16:38:31

Financial commentary.

Strong balance sheet and operating cash flow. The equity as of December 31, 2014 amounted to CHF 1,146 million (2013: CHF 1,063 million). The equity ratio has thus increased to 45.2 % (2013: 44.6 %). Apart from loans granted by related parties in the amount of CHF 159 million (2013: CHF 193 million), the group does not have any material financial liabilities to third parties. The cash flow from operating activities of CHF 187 million has again increased substantially (2013: CHF 124 million) due to a strong focus on net working capital management. Net liquidity rose to CHF 464 million (2013: CHF 377 million), thanks to our disciplined investment approach and due to the fact that no major acquisitions were made in the reporting year. As a result the future growth of Buhler can be financed without incurring third party debt.

Sales by Business

Conclusion and outlook. In 2014 Bühler has found its way back to growth thanks to an excellent order intake. Overcapacities in some European factories and substantial restructuring costs have kept us from enhancing the EBIT above the level of 2013. However the necessary decisions and actions have been put in place in order to raise the operational result to the minimum target level of 8 % again. In January 2015, the Swiss National Bank decided to abolish the cap on the EUR / CHF exchange rate. In view of the free float of the Swiss Franc since this decision, a particularly strong management focus in 2015 and beyond will be on further improving the productivity and cost-effectiveness of our operations. We are convinced that Bühler is ready to face these challenges and remain optimistic for the future development for the group.

6 Die Casting (12 %)

8 1

2 4

1 Grain Milling (31 %) 2 Grain Logistics (7 %) 3 SORTEX & Rice (9 %) 4 Value Nutrition (21%) 5 Consumer Foods (12 %) 7 Grinding & Dispersion (3 %) 8 Leybold Optics (5 %)

Sales by Region 1 5 2

1 North America (15 %) 2 South America (9 %) 3 Europe (31%) 4 Middle East & Africa (15 %) 5 Asia (30 %)

Operating Cash flow (in CHF m)

Net liquidity (in CHF m)

Total Equity (in CHF m)

Equity ratio (in %)

187 980

124

317

377

1,063

1,146

464

41.0

44.6

45.2

2012

2013

2014

2012

01_FR2014_Buhler_Group_en.indd 73

2013

2014

2012

2013

2014

2012

2013

2014

04.02.2015 16:38:31

Bühler Financial Report 2014

Business development. Grain Milling

Grain Logistics

Total sales

698

CHF m

Share of group sales

Business Area Grain Milling The overall market environment for Grain Milling was positive. Order intake grew by +4 % to CHF 759 million, order backlog was CHF 548 million and turnover was CHF 698 million. Industrial Milling, the largest business, remained stable while Specialty Milling grew its market share by winning many important projects in different parts of the world. Two successful innovations marked 2014: the new Maltomat for the brewing industry, which was sold over 15 times before even entering the market, and the fully automatic new Maia packer for the packing of finished products. Additionally, the investments made into the development of the new Atta grinding technology started to pay off. New lines in India and plants are being installed in Lebanon and Bangladesh. Europe remained a very important but challenging region with a focus on upgrading existing plants and Customer Service. The Commonwealth of Independent States (CIS) countries continued to disappoint. The milling industry in South America, especially Brazil, went through a large investment phase, resulting in record order entries, while in North and Central America the industry faced consolidation. South Asia grew fast, driven by Bangladesh, while the Chinese market faced a slowdown. 2015 looks promising. Population growth and urbanization will drive consumption of grain based food, opening up new opportunities for the traditional grain milling customers as well as industrial food producers. Furthermore, the group of health and convenience conscious consumers is increasing rapidly, resulting in higher demand of special grain products.

01_FR2014_Buhler_Group_en.indd 74

166

CHF m

Share of group sales

Business Area Grain Logistics Grain Logistics concluded the year 2014 with overall positive results. Order intake grew by 8 % to CHF 211 million. Turnover grew by 3 % from CHF 161 million to CHF 166 million. The projects secured recently showed that standardized solutions including multi pass cleaning and drying sections as well as the new moisture control system for dryers are key for success. Several Customer Service products & services like the automatic inlet control or the maintenance platform for cleaning machines as well as the Ecomation for the dryers have been launched in 2014. Germany accounts for the majority of Grain Logistics turnover. Developments in South East Asia and South Asia are encouraging, while the Middle East continued its upward trend in 2014. African markets fell short of expectation for Grain Logistics. In South American’s malting business, Grain Logistics has secured large-scale orders and the single machine sales success from 2013 has been surpassed again 2014. The outlook for 2015 is positive. The Grain Logistics markets are expected to develop favourably. The ongoing demand for engineering contracts in malting are good indi cations that the malting industry will continue with their investments into new facilities.

04.02.2015 16:38:32

Business development.

SORTEX & Rice

Value Nutrition

Total sales

208

CHF m

Share of group sales

461

CHF m

Share of group sales

Business Area SORTEX & RICE SORTEX & Rice registered double-digit growth (12 %) in orders intake growing to CHF 244 million and record numbers of orders in hand (CHF 87 million). Turnover reached CHF 208 million (– 2 %). Strong growth in Asia, due to landmark orders for key processing projects, and solid performance in Europe, South Asia and South East Asia, were the main drivers. The business in Africa and Middle East, except Turkey, which performed well, was affected by political and economic turmoil.

Business Area Value Nutrition The Business Area Value Nutrition showed an overall positive result in 2014. Orders Released grew by 9 % to CHF 480 million. Turnover decreased by 2.4 % to CHF 461 million. The positive drivers for this development were the Feed segment and the Nutrition segment with approximately 70 % growth compared to previous year, with Petfood contributing a substantial portion to this growth. The Pasta, Asian Food and Oil segments contributed in varying extent to this overall result.

In optical sorting, Bühler Sanmak continued to strengthen its market dominance in Brazil. In China, Bühler’s Yijiete brand expanded its footprint, while the Bühler Shenzhen factory delivered a record number of exports for optical sorting machines. The SORTEX S UltraVision intelligent rice sorter has been launched successfully, resulting in notable large machine orders.

Geographically, one of the main drivers for growth was once again China with strong development in plant sales. Spain and Switzerland registered significant orders of standard food & feed ingredients, whereas Eastern Europe was rather weak due to political turmoil in Ukraine and the weakening of the Russian Ruble. The Middle East /Africa region played a significant role for establishing new market segments such as performance lines for the feed industry and new solutions for Asian Food.

The outlook for 2015 is promising. Significant growth opportunities and large capacity mill projects are expected in rice and pulses processing equipment across Asia and Africa. In optical sorting, there is increasing customer demand for the latest SORTEX A sorting technology. Bühler is well positioned to act as the technology partner of choice for safe and hygienic food processing.

01_FR2014_Buhler_Group_en.indd 75

The outlook for 2015 is stable with varying degrees for the different segments: Since the market shows an increasing demand for meat, higher capacities for Feed production are expected in the future. In the Pasta segment, there is a clear trend for gluten-free solutions where Bühler is in a leading position. The integration and promotion of Asian Food & Aqua Feed in the Bühler Value Nutrition portfolio will be one of the most promising opportunities in 2015.

04.02.2015 16:38:32

Bühler Financial Report 2014

Consumer Foods

Die Casting

Total sales

275

CHF m

Share of group sales

Business Area Consumer Foods Consumer Foods showed a strong growth in 2014, mainly driven by new customer development and need for production capacity. Order intake grew by 2 % to CHF 295 million and Turnover rose to CHF 275 million (+7 %). In North America growth came from new customers, and in the Asian market from the need of production capacity to satisfy growing local demand. Europe and South America remained on high level whereas the Middle East & Africa and South Asia showed a slight decrease in volumes. Local Customer Service hubs in India and China are paying off. Big Multinationals took advantage of Bühler’s broad service offering on the spot and invested in its full plant solutions, delivering complete processing lines and also In-Plant service engineers. In 2014, the business area introduced 11 new machines and solutions for cocoa, chocolate and coffee processing on Interpack in Düsseldorf and thus underlined once more its commitment to innovation. By launching a full series of “Compact” solutions, Bühler demonstrated that also small and mid-size companies can benefit from its vast know how and expertise in processing of cocoa, chocolate, coffee and nuts. The outlook for 2015 is positive. The market shows sustainable growth in consumption of chocolate and coffee and the producers keep investing in their production facilities.

01_FR2014_Buhler_Group_en.indd 76

273

CHF m

Share of group sales

Business Area Die Casting 2014 was a record year for orders and turnover for Die Casting. Orders grew by 13 % to CHF 278 million, mainly driven by the strong growth in China and the global automotive industry’s focus on lightweight solutions, increasing aluminum die cast parts used in cars. Turnover increased by 27 % to CHF 273 million. China, Germany as well as Eastern and Central Europe mainly contributed to the order growth. The new sales & services stations in India, Mexico and Japan generated immediate positive results. Together with the opening of the new factory in Wuxi, Die Casting strengthened its global market presence. The Ecoline product line doubled its sales. Furthermore, the Event Analyzer together with the progress made in thermal balance, helped customers to improve their equipment effectiveness significantly. The Lost Core technology allowed to realize promising projects for closed-deck engine block production. In 2015, the automotive industry continues to be the main driver for the die casting activity. China as a market is expected to lead overall business growth, followed by South Asia, Mexico and Eastern Europe. Customer Service and innovation remain areas of focus.

04.02.2015 16:38:32

Business development.

Grinding & Dispersion

Leybold Optics

Total sales

CHF m

Share of group sales

Business Area Grinding & Dispersion The overall development for Grinding & Dispersion was very positive. Order intake grew by 22 % to CHF 82 million. Turnover remained stable at CHF 70 million. Besides pioneering process innovations, the MicroMedia™ X bead mill technology now sets the industry standard for manufacturing liquid ink in the fast growing area of packaging. An additional highlight in 2014 was the opening of the extended Euro pean principal laboratory in Uzwil, offering customers to test the full spectrum of Bühler solutions. The Asian counterpart will be opened in Wuxi, China in 2015. Geographically, growth in Asia was driven by the highly competitive Performance Line Equipment and the innovative process solutions, and in North America and Europe by replacements or enhancements of existing capacity. The development of the Middle Eastern and African regions, with the realization of new capacities in the coating and ink industry, was encouraging. Conversely, the achievements in Southern and Eastern Asia fall behind expectations. The outlook for 2015 is positive for traditional and new business, with further growth expected in Asia, the Middle East and Africa and recovery in Southern and Eastern Asia.

116

CHF m

Share of group sales

Business Area Leybold Optics 2014 was a highly successful year in order intake for Leybold Optics. Orders grew by 41 % to CHF 171 million, while turnover decreased by – 13 % to CHF 116 million. Leybold Optics strengthened its position in the market segment Large Area Coating and held it in the Ophthalmic Optics and Precision Optics industry. Two new machines, BOXER 900 and STARpro, have been launched, and the transparent packaging industry was entered with LEYBOLD OPTICS PAK 2100T. Furthermore, Leybold Optics extended its worldwide presence, integrating all sales and service offices into the Bühler network, further expanding its customer service. Geographically, growth in Asia and Middle East Africa was mainly driven by the need for further production capacity, while North and South America showed a slight decrease in volumes due to challenges in the Ophthalmic Optics market. The outlook for 2015 is positive. The majority of markets show sustainable growth. Growing demand for sunglasses and an increasing altering population is driving the Ophthalmic Optics industry. In the packaging industry, demand is driven by intelligent packaging with transparent foil. As of January 1, 2015, Leybold Optics GmbH will be operat ing as Bühler Alzenau GmbH.

01_FR2014_Buhler_Group_en.indd 77

04.02.2015 16:38:32

B端hler Financial Report 2014

Financial report B端hler Group.

01_FR2014_Buhler_Group_en.indd 78

04.02.2015 16:38:32

Consolidated Financial Statements.

Consolidated statement of income.

Sales revenue

Notes

2014 CHF m

2013 CHF m

2,332.2

2,321.8

– 6.9

– 10.9

31.6

69.1

Changes in inventories of finished goods and work in progress Other operating income

Total operating income Cost of materials

2,356.9

2,380.0

– 989.5

– 1,005.3

Employee benefit expenses

– 759.9

– 732.5

Other operating expenses

– 402.6

– 427.1

204.9

215.1

– 60.3

– 75.6

144.6

139.5

2.7

6.7

147.3

146.2

– 26.4

– 23.4

120.9

122.8

113.9

115.0

7.0

7.8

Operating result before interest, taxes, depreciation and amortization (EBITDA) Depreciation and amortization

7/8

Operating result before interest and taxes (EBIT) Financial result

Profit before taxes Income taxes Net profit

Attributable to: AA Owners of the parent AA Non-controlling interests

01_FR2014_Buhler_Group_en.indd 79

04.02.2015 16:38:32

Bühler Financial Report 2014

Consolidated statement of comprehensive income. Notes

Net profit

2014 CHF m

2013 CHF m

120.9

122.8

25.1

– 12.5

0.0

Other comprehensive income Translation differences of foreign operations – Tax effect Available-for-sale financial assets – Change in fair value – Realized through statement of income – Tax effect

0.0

0.1

– 1.0

0.0

0.2

0.0

Cash flow hedges – Change in fair value

– 6.9

0.2

– Realized through statement of income

– 4.7

– 3.4

2.0

0.4

– Tax effect Net gain on hedge of net investment

– 3.9

3.3

0.5

– 0.5

11.3

– 12.4

– 42.4

– 3.3

8.3

0.3

Other comprehensive income not to be reclassified to profit or loss in subsequent periods

– 34.1

– 3.0

Total other comprehensive income

– 22.8

– 15.4

98.1

107.4

88.7

99.7

9.4

7.7

– Tax effect Other comprehensive income to be reclassified to profit or loss in subsequent periods Actuarial gains and losses on defined benefit plans – Tax effect

Total comprehensive income

17.3

Attributable to: AA Owners of the parent AA Non-controlling interests

01_FR2014_Buhler_Group_en.indd 80

04.02.2015 16:38:32

Consolidated Financial Statements.

Consolidated statement of financial position. Notes

2014 CHF m

2013 CHF m

Property, plant and equipment

407.3

382.8

Intangible assets

301.0

298.2

Investments in associates

18.0

17.9

Long-term financial assets

99.0

103.4

Deferred tax assets

41.7

30.0

867.0

832.3

Assets

Non-current assets Inventories

357.5

335.0

Net assets of production orders in progress

202.1

208.0

Trade accounts receivable

503.3

508.2

Other accounts receivable, prepayments and accrued income

118.8

111.1

Current income tax assets

4.4

6.8

43.3

32.5

436.1

347.4

Current assets

1,665.5

1,549.0

Total assets

2,532.5

2,381.3

Marketable securities

16.2

Cash and cash equivalents

Equity and liabilities Share capital

15.0

Capital reserves

185.1

Other reservesâ&#x20AC;&#x160;/â&#x20AC;&#x160;retained earnings

904.3

830.6

1,104.4

1,030.7

41.4

31.9

1,145.8

1,062.6

Equity attributable to the owners of the parent Non-controlling interests Total equity Long-term financial liabilities Deferred tax liabilities Defined benefit obligations Long-term provisions

150.8

172.6

82.6

87.8

17.4

111.0

62.6

25.8

27.6

370.2

350.6

Non-current liabilities Short-term financial liabilities

15.7

2.7

Trade accounts payable

196.8

195.9

Net liabilities of production orders in progress

388.2

333.1

Short-term provisions

60.1

62.8

Other short-term liabilities, accruals and deferred income

341.1

353.4

14.6

20.2

Current liabilities

1,016.5

968.1

Total liabilities

1,386.7

1,318.7

Total equity and liabilities

2,532.5

2,381.3

Current income tax liabilities

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Bühler Financial Report 2014

Consolidated statement of changes in equity.

January 1, 2013

Share capital CHF m

Capital reserve CHF m

Retained earnings CHF m

15.0

185.1

892.3

Dividends paid

– 18.0

Changes in non-controlling interests Net profit

115.0

Other comprehensive income

– 3.0

December 31, 2013

15.0

185.1

986.3

January 1, 2014

15.0

185.1

986.3

Dividends paid

– 15.0

Changes in non-controlling interests Net profit

113.9

Other comprehensive income

– 34.1

December 31, 2014

01_FR2014_Buhler_Group_en.indd 82

15.0

185.1

1,051.1

04.02.2015 16:38:32

Consolidated Financial Statements.

Hedge reserve CHF m

Available-for-sale reserve CHF m

Foreign currency translation reserves CHF m

8.2

1.5

– 153.1

01_FR2014_Buhler_Group_en.indd 83

Total reserves CHF m

Equity attributable to the owners of the parent CHF m

Non-controlling interests CHF m

Total equity CHF m

934.0

949.0

31.2

980.2

– 18.0

– 7.1

– 25.1

0.0

0.1

115.0

7.8

122.8

– 2.8

0.1

– 9.6

– 15.3

– 0.1

– 15.4

5.4

1.6

– 162.7

1,015.7

1,030.7

31.9

1,062.6

5.4

1.6

– 162.7

1,015.7

1,030.7

31.9

1,062.6

– 15.0

– 6.2

– 21.2

0.0

6.3

113.9

7.0

120.9

– 9.6

– 0.8

19.3

– 25.2

2.4

– 22.8

– 4.2

0.8

– 143.4

1,089.4

1,104.4

41.4

1,145.8

04.02.2015 16:38:33

Bühler Financial Report 2014

Consolidated statement of cash flows.

Notes

Profit before taxes Financial result

Operating result before interest and taxes (EBIT) Depreciation and amortization

7/8

2014 CHF m

2013 CHF m

147.3

146.2

– 2.7

– 6.7

144.6

139.5

60.3

75.6

Other items not affecting cash flow

– 3.3

11.5

Changes in provisions

– 2.3

– 121.6

Changes in trade accounts receivable

12.5

29.6

Changes in inventories

– 8.5

– 22.0

– 11.9

– 13.9

62.6

35.6

– 41.3

24.3

212.7

158.6

Gains / losses on disposal of fixed assets

0.4

0.3

Interest received

2.9

3.2

– 2.9

– 2.6

– 25.9

– 35.7

187.2

123.8

– 55.1

– 85.1

Changes in trade accounts payable Changes in net assets / liabilities of production orders in progress Changes in other net operating assets Cash flow generated from operations

Interest paid Income taxes paid Cash flow from operating activities Purchase of property, plant and equipment Disposal of property, plant and equipment Purchase of intangible fixed assets Cash flow from business combinations / disposals of group companies, net of cash

8.6

– 2.7

– 2.9

– 10.8

– 0.2

Purchase of non-consolidated participations

– 1.6

0.0

Disposal of non-consolidated participations

0.0

0.2

Purchase of marketable securities

– 25.4

– 14.6

Disposal of marketable securities

13.0

58.0

Purchase of long-term financial assets

– 1.8

– 0.6

Disposal of long-term financial assets

3.9

2.2

Dividends received

1.6

0.8

– 76.4

– 33.6

Cash flow from investing activities Proceeds from financial liabilities Repayment of financial liabilities Proceeds from capital increases from non-controlling interests Dividends paid of Bühler Holding AG Dividends paid to non-controlling interests Cash flow from financing activities Translation differences Changes in cash and cash equivalents

2.5

0.2

0.0

– 15.6

– 12.5

2.4

0.0

– 15.0

– 18.0

– 6.2

– 7.1

– 34.2

– 37.6

12.1

– 11.0

88.7

41.6

Cash and cash equivalents at the beginning of period

347.4

305.8

Cash and cash equivalents at the end of period

436.1

347.4

EBIT includes share of profit of associates in the amount of CHF 1.1 million (prior year: CHF 1.3 million); thereof cash-effective CHF 0.9 million (prior year: CHF 0.2 million). Changes in provisions include changes in short- and long-term provisions, defined benefit obligations and deferred taxes.

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Consolidated Financial Statements.

Notes to the financial statements.

Accounting policies Basis of preparation. The consolidated financial statements of the Bühler Group have been prepared in accordance with the International Financial Reporting Standards (IFRS) and comply with the Swiss law. The consolidated financial statements are based on the audited single-entity financial statements of the Group companies, which are prepared in accordance with consistent accounting principles. The consolidated financial statements are prepared under the historical cost convention. Any exceptions to this general rule are outlined in the following accounting policies. Due to rounding, the numbers do not necessarily correspond exactly with the totals.

Adoption of revised and new IFRS and new interpretations. The a ccounting policies adopted are consistent with those of the previous fiscal year, except for the following new and amended IFRS and IFRIC interpretations effective as of January 1, 2014. Only revised and new IFRS have been included in the following list which are rele vant to the Group: Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). These amendments provide an exception to the consolidation requirement for entities that meet the definition of an investment entity under IFRS 10 Consolidated Financial Statements and must be applied retrospectively, subject to certain transition relief. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss. These amendments have no impact on the Group, since none of the entities in the Group qualifies to be an investment entity under IFRS 10. Offsetting Financial Assets and Financial Liabilities – Amendments to IAS 32. These amendments clarify the meaning of “currently has a legally enforceable right to set-off” and the criteria for non-simultaneous settlement mechanisms of clearing houses to qualify for offsetting and is applied retrospectively. These amendments have no impact on the Group, since none of the entities in the Group has any offsetting arrangements. Novation of Derivatives and Continuation of Hedge Accounting – Amendments to IAS 39. These amendments provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria and retrospective application is required. These amendments have no impact on the Group as the Group has not novated its derivatives during the current or prior periods.

Standards, interpretations, and amendments published but not yet applied. Standards, interpretations, and amendments published but not yet applied up to the date of issuance of the Group’s financial statements are listed below. The Group intends to adopt these standards when they become effective. They may have an impact on future consolidated financial statements and are being monitored and analyzed. IFRS 9 Financial Instruments. In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments which reflects all phases of the financial instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. IFRS 9 is e ffective for annual periods beginning on or after January 1, 2018, with early application permitted. Amendments to IAS 19 Defined Benefit Plans: Employee Contributions. IAS 19 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognize such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. This amendment is effective for annual periods beginning on or after July 1, 2014. IFRS 15 Revenue from Contracts with Customers. IFRS 15 was issued in May 2014 and establishes a new five-step model that will apply to revenue arising from contracts with customers. Under IFRS 15 revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in IFRS 15 provide a more structured approach to measuring and recognizing revenue. The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under IFRS. Either a full or modified retrospective application is required for annual periods beginning on or after January 1, 2017 with early adoption per mitted. The Group is currently assessing the impact of IFRS 15 and plans to adopt the new standard on the required effective date.

IFRIC 21 Levies. IFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity occurs that triggers payment, as identified by the relevant legislation. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be anticipated before the specified minimum threshold is reached. Retrospective application is required for IFRIC 21. This interpretation has no impact on the Group as it has applied the recognition principles under IAS 37 Provisions, Contingent Liabilities and Contingent Assets consistent with the requirements of IFRIC 21 in prior years.

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Bühler Financial Report 2014

Use of estimates. The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the related disclosures at the date of the financial statements. These estimates are based on management’s best knowledge of current events and possible future measures. However, actual results could differ from those estimates. If in future such estimates and assumptions, which are based on management’s best knowledge at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. The estimates and assumptions that may have a higher risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial periods relate primarily to long-term construction contracts, goodwill, and to a lesser extent defined benefit obligations, deferred tax assets, provisions and disclosure of contingent liabilities at the end of the reporting period. The Group accounts for long-term customer projects using the p ercentage-of-completion method. Revenue (including a carefully estimated share of the outcome of the contract) is recognized by reference to the stage of completion. The stage of completion is determined according to the cost-to-cost method. The percentage-ofcompletion method involves the use of estimates and forecasts concerning future costs; actual costs may differ from these e stimates. The forecasts are reviewed on a regular basis and adapted where necessary. These changes affect costs, the stage of completion, and both realized and anticipated profits. Any changes in estimates are recognized in the period in which they occur. Losses identified on long-term construction contracts are recognized as an expense immediately. Losses on long-term construction contracts occur when the expected contract costs exceed the expected revenue. The Group tests annually whether goodwill has suffered any impairment in accordance with its accounting policy. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates. The cost of defined benefit pension plans and other long-term employee benefits is determined using actuarial valuations. Actuarial valuations involve making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. The Group recognizes a collective valuation allowance based on its past experience of warranty costs on projects with similar conditions. Other known risks and risks related to projects with special conditions are estimated on a case-by-case basis and measured individually. The actual warranty costs incurred may differ from the costs provided for.

Scope of consolidation. These financial statements are the consolidated financial statements of Bühler Holding AG, a company registered in Uzwil, Switzerland, and its subsidiaries. The list of subsidiaries is presented in Note 30 “Significant group companies”.

Principles of consolidation. Subsidiaries, which are those entities in which the Group has an interest of more than one half of the voting rights or otherwise has the power to exercise control over the operations, are consolidated. The cost of an acquisition is measured at the fair value of the consideration transferred at the date of exchange. For each business combination, the acquirer measures the noncontrolling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed in the statement of income. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at fair value at the date of acquisition, irrespective of the extent of any non-controlling interest assumed. When the Bühler Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. If the business combination is achieved in stages, the acquisition date fair value of the Bühler Group’s previously held equity interest in the acquiree is remeasured to fair value as at the acquisition date in the statement of income. Any contingent consideration to be transferred by the Group is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration are recognized in the statement of income. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. All intercompany transactions and balances between Group companies are eliminated in full. Investments in associated companies are accounted for using the equity method of accounting. These are companies over which the Group generally holds between 20 % and 50 % of the voting rights and has significant influence but does not exercise control. Goodwill arising on the acquisition is included in the carrying amount of the investment in associated companies. Equity accounting is discontinued when the carrying amount of the investment together with any long-term interest in an associated company reaches zero, unless the Group has in addition either incurred or guaranteed additional obligations in respect to the associated company. Investments below 20 % are recognized at fair value and presented as non-current financial assets. Changes in fair value are recognized directly in other comprehensive income.

All estimates mentioned above are further detailed in the corresponding disclosures.

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Consolidated Financial Statements.

Changes in the scope of consolidation. In the reporting period the scope of consolidation changed as follows: Additions. A A Buhler (Guangzhou) Food Machinery Co. Ltd., China A A Wuhan Mingbo Electromechanical Equipment Co. Ltd., China A A Buhler Malaysia Sdn. Bhd., Kuala Lumpur Deletions. A A Jiangsu Buhler Industry Development Co. Ltd., China A A Buhler Equipment Engineering (Wuxi) Co. Ltd., China

Foreign currency translation. The individual financial statements of the Group companies are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”) and are translated into Swiss francs for consolidation. Year-end exchange rates are used for the statement of financial position and annual average exchange rates for the statement of income. The consolidated statement of cash flows is also translated at annual average exchange rates.

Goodwill arising on the acquisition of a foreign entity is expressed in the functional currency of the foreign operation and is translated at the closing rate. Foreign currency transactions translated into the functional currency are accounted for at the exchange rates prevailing at the date of the transactions; gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of income, except when they are deferred outside the statement of income as qualifying cash flow hedges. Foreign exchange differences arising on monetary items that form part of a company’s net investment in a foreign operation are reclassified to equity (currency translation adjustment) in the consolidated financial statements and are only fully recycled to the statement of income when Bühler Group loses control of a subsidiary or loses significant influence in an associate. For foreign currency translation, the Bühler Group used the following exchange rates:

Differences resulting from the application of these different exchange rates for the statement of financial position and the statement of income and from equity transactions are recognized directly in the consolidated statement of comprehensive income.

Average exchange rates

Closing rates 31.12.

2014 CHF

2013 CHF

2014 CHF

2013 CHF

Europe

1.214500

1.230500

1.203000

1.228000

Great Britain

1.507000

1.449000

1.529000

1.469000

Czech Republic

0.044200

0.047400

0.043500

0.045000

USA

0.915500

0.927100

0.985000

0.893000

Canada

0.828700

0.900800

0.846000

0.840000

Brazil

0.389000

0.431300

0.370000

0.380000

Argentina

0.113000

0.170400

0.115000

0.138000

Japan

0.008653

0.009509

0.008200

0.008500

India

0.015000

0.015900

0.015600

0.014400

China

0.148600

0.149600

0.158200

0.147000

Mexico

0.068800

0.072700

0.067200

0.068400

South Africa

0.084400

0.096500

0.084900

0.086300

Thailand

0.028190

0.030200

0.029900

0.027250

Singapore

0.722300

0.741100

0.745200

0.705600

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Bühler Financial Report 2014

Property, plant and equipment. Property, plant and equipment is valued at acquisition or construction cost less depreciation and writedowns for impairment. Items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful life, except for land, which is not depreciated. Estimated useful lives of major classes of depreciable assets are as follows:

Goodwill is tested annually for impairment or whenever there are i mpairment indicators and is carried at cost less accumulated impairment losses.

Buildings AA Building shell AA Installations / extensions Machinery and technical equipment

25 – 100 years 15 – 35 years 8 – 16 years

IT hardware

2 – 4 years

Other tangible fixed assets

3 – 7 years

The estimated useful life of the assets is regularly reviewed and, if necessary, the future depreciation charge is accelerated. Costs are only included in the asset’s carrying amount when it is probable that economic benefits associated with the item will flow to the Group in future periods and the cost of the item can be measured reliably.

Investment properties. Investment properties are capitalized in the statement of financial position at cost less depreciation and writedowns for impairment. The fair values of such properties, which are reported separately in the notes, are based mainly on in-house calculations (comparison with valuations of similar properties). Repair and maintenance expenses are expensed as incurred.

Leases. Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance lease. Property, plant and equipment acquired through a finance lease is capitalized at the date of the commencement of the lease term at the present value of the minimum future lease payment or, if lower, at the amount equal to the fair value of the leased asset as determined at the inception of the lease. The associated liabilities are recognized as either current or non-current financial liabilities, depending on their due dates. Leases where substantially all the risks and rewards of ownership are not transferred to the Group are classified as operating leases. Payments under operating leases are charged to the statement of income on a straight-line basis over the period of the lease. Assets under finance leases where the Bühler Group acts as lessor are recognized as receivables in the amount of the net investment. The risks and rewards incidental to ownership are transferred to the lessee. Lease income from these finance leases are subsequently recognized over the term of the lease based on the effective interest method.

02_FR2014_Notes_risk_management_en.indd 88

Intangible assets. Goodwill represents the excess of the aggregate of the consideration transferred and the amount recognized for the non-controlling interest over the fair value of the net identifiable a ssets acquired and liabilities assumed. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates.

If the consideration transferred is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized d irectly in the statement of income. On disposal of a subsidiary, associate or joint venture, the related goodwill is included in the determination of profit or loss on disposal. Goodwill on acquisitions of subsidiaries and interests in joint ventures is allocated to cash-generating units for the purpose of impairment testing. Impairment losses relating to goodwill cannot be reversed in future periods. Acquired patents, licenses, trademarks, and similar rights are initially recorded at cost and amortized on a straight-line basis over their estimated useful life or a period not exceeding 15 years. Intangible assets acquired through business combinations are carried in the statement of financial position at the fair value allocated in the acquisition accounting and amortized over their estimated useful life.

Impairment of assets. At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the smallest cash-generating unit to which the asset belongs. The recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cashgenerating unit is reduced to its recoverable amount. Impairment losses are recognized immediately in the statement of income. Where an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount. However, this increased amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognized for that asset or cash-generating unit in prior periods. A reversal of an impairment loss is recognized immediately in the statement of income.

04.02.2015 16:39:07

Consolidated Financial Statements.

Financial assets and liabilities. A distinction is made between the following four categories: A A Financial assets “at fair value through profit or loss” are generally acquired with the intention of generating a profit from short-term fluctuations in price. A A “Held to maturity” investments are those with a fixed maturity that the Bühler Group has the positive intention and ability to hold to maturity. A A “Loans and receivables” include loans granted and accounts r eceivable. A A A ll other financial assets are classified as “available for sale”. Financial assets “at fair value through profit or loss” are recognized on acquisition at cost and subsequently measured at fair value, with fair value changes recognized in the financial result in the period in which they arise. “Held to maturity” investments as well as “Loans and receivables” are measured at amortized costs using the effective interest method. “Available for sale” financial assets are measured subsequent to their initial recognition at fair value, with unrealized gains and losses recognized in other comprehensive income. When the financial asset is either impaired or disposed of, the cumulative gain or loss previously recognized in the other comprehensive income is reclassified from equity to the statement of income. Purchases and sales are recognized at the trade date rather than at the settlement date. The fair values of financial assets that are traded in an active market are based on the fair values at the end of the reporting period. The fair values of financial assets that are not traded in an active market are determined using established valuation techniques. Financial liabilities consist mainly of borrowings, which are initially recognized with the proceeds received, net of transaction cost incurred. Subsequently, the borrowings are measured at amortized cost using the effective interest method with any difference between net proceeds and the principal value due on redemption being recognized in the statement of income over the term of the borrowings. Financial assets are derecognized when the Bühler Group relinquishes control over them, that is when the contractual cash flows from the asset are sold or expired. Financial liabilities are derecognized when its contractual obligations are discharged, cancelled or expired.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than twelve months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than twelve months. Trading derivatives are classified as a current asset or lia bility. The hedging of cash flows is undertaken for certain anticipated Group-internal transactions as well as for the foreign currency risk of firm commitments. The effective portion of the change in fair value of derivatives used for the hedging of cash flows is recognized in other comprehensive income. The ineffective portion of the hedging instrument is immediately recognized as financial result in the statement of income. Amounts accumulated in other comprehensive income are recycled in the statement of income in the periods when the hedged item a ffects profit or loss. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was recorded in other comprehensive income is immediately transferred to the statement of income. Derivatives not designated as hedging instruments are accounted for at fair value through profit or loss. Changes in the fair value of these derivative instruments are recognized immediately as financial result in the statement of income.

Non-current assets (or disposal groups) classified as held for sale. Any non-current assets held for sale and discontinued operations are presented under this item. This includes all those assets associated with the discontinuation of entire lines of business or geographical areas of operation, which are to be realized through a sale transaction rather than through continued use. Reclassifications are only made if management is committed to the sale and has started seeking buyers. In addition, the asset or disposal group must be available for sale in its current condition and its sale must be highly probable within one year. Non-current assets or disposal groups classified as held for sale are no longer depreciated. If necessary, they are written down for impairment. The income and expenses of discontinued operations are separated from ordinary income and expenses in the statement of income for both the reporting period and the prior-year down to the “profit after tax” level. The resulting gain or loss (after taxes) is presented separately in the statement of income.

Derivative financial instruments and hedge accounting. Derivative financial instruments are initially recognized at cost and subsequently at fair value (replacement cost). The method applied in recognizing the resulting profits or losses depends on whether a derivative was designated for hedging purposes, and if so, on the type of position being hedged. Certain derivatives may be used to hedge foreign currency risks in connection with a transaction that is highly likely to take place in future, or to hedge a fixed commitment (hedging of cash flows). When the hedge is implemented, the Group documents the relationship between the hedging instrument and the risk being hedged, as well as setting out risk management objectives and strategies. Furthermore, the Group records its assessment of the effectiveness of the hedging instrument with respect to the hedged cash flows, both when the hedging transaction is concluded and on an ongoing basis.

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Bühler Financial Report 2014

Inventories. Inventories are carried at the lower of cost or net realizable value. The cost of finished goods, semi-finished goods and work in progress includes raw materials, direct labor and other directly attributable costs and overheads based on the normal capacity of production facilities, excluding borrowing costs. Cost is determined using the standard cost method. Standard costs are regularly reviewed and, if necessary, revised in light of current conditions. Net realizable value is the estimated selling price less cost to completion and selling expenses. Obsolete inventories and goods with a low rate of inventory turnover are written down. Advance payments to suppliers are also included in inventories.

Accounts receivable. Trade and other accounts receivable are carried at the original invoice amount less allowances made for doubtful accounts, trade discounts, volume rebates and similar items. Financing of customer orders using the Group’s own funds as part of its treasury strategy is included in this item.

Marketable securities. Marketable securities include those that are held for trading without participation features. Securities included in financial assets are categorized as available for sale.

Cash and cash equivalents. Cash and cash equivalents include cash on hand, time, call and current balances with banks and similar institutions. Cash and cash equivalents are carried at nominal amount. Such balances are only reported as cash and cash equivalents if they are readily convertible to known amounts of cash, are subject to insignificant risk of changes in value and have a maturity of three months or less from the date of acquisition.

Employee benefits. The company has, apart from legally required social security arrangements, numerous independent pension plans, which are either defined contribution plans or defined benefit plans. Further on, the company sponsors numerous other long-term employee benefit plans.

02_FR2014_Notes_risk_management_en.indd 90

Employee benefits – defined benefit plans. These plans are generally funded through payments to legally independent pension or insurance funds. The aggregate of the present value of the defined benefit obligation and the fair value of plan assets for each plan is recorded in the balance sheet as net defined benefit liability or net defined benefit asset under long-term financial assets. The defined benefit obligation is determined annually by independent actuaries using the projected unit credit method. If the fair value of the plan assets exceeds the present value of the defined benefit obligation, only a net pension asset is recorded, taking account of the asset ceiling. Pension costs consist of three elements: service costs, net interest, and remeasurements of employee benefits. Service costs are part of personnel expenses and consist of current service costs, past service costs (including gains / l osses from plan amendments or curtailments) and gains / losses from plan settlements. Net interest is recorded as part of personnel expenses and is determined by applying the discount rate to the net defined liability or net defined asset that exists at the beginning of the year. The gains and losses resulting from the actuarial valuation are immediately recorded in other comprehensive income as remeasurements employee benefits. The return on plan assets (excluding interest based on the discount rate) and any change in the effect of an asset ceiling are also recorded in this item. Remeasurements of employee benefits are not recycled through the income statement at any later point in time. Pension assets and pension liabilities in different defined benefit plans are not offset unless the Group has a legally enforceable right to use the surplus in one plan to settle obligations in the other plan.

Employee benefits – defined contribution plans. In addition to the defined benefit plans described above, some Group companies sponsor defined contribution plans based on local practices and regulations. The Group’s contributions to defined contribution plans are charged to the statement of income in the period to which the contributions relate.

04.02.2015 16:39:07

Consolidated Financial Statements.

Employee benefits – other long-term employment benefits. Other long-term employment benefits include jubilee, early retirement or other long service benefits, as well as deferred compensation, if not due to be settled within twelve months after the year end. The Bühler Group operates deferred compensation plans for members of the management. The deferred compensation plans comprise a vesting period of three years and an execution period of ten years from the grant date. The amounts are charged to the statement of income over the relevant vesting periods and are adjusted to reflect actual and expected levels of vesting. The value of the deferred compensation is determined annually based on the Group’s annual profit for the three preceding years and equity at year end. The obligations for other long-term employment benefits are disclosed as provisions for personnel expenses. The measurement of these obligations differs from defined benefit plans in that all actuarial gains and losses are recognized immediately in the statement of income.

Provisions. Provisions are recognized when Bühler has a legal or constructive obligation arising from past events, an outflow of resources embodying economic benefits to settle the obligation is probable, and a reliable estimate can be made of this amount.

Taxes. Income taxes comprise the tax expense in respect of all recognized profits for the reporting period. They include current and deferred income taxes. Current income taxes are calculated on taxable profit. Provisions for deferred taxes are calculated according to the liability method. Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities in the consolidated statement of financial position and their tax base taking into account actual or expected local tax rates. Changes in deferred tax balances are recognized in the statement of income, except when they relate to items recognized outside the statement of income, in which case the deferred tax is treated accordingly. Deferred tax assets are only recognized for temporary differences and unused tax loss carry-forwards to the extent that it is probable that future taxable profit will be available against which temporary differences or unused tax losses can be utilized.

Borrowing costs. Borrowing costs which are directly attributable to the acquisition, construction or production of a qualified asset are capitalized as part of the cost of that asset.

Research and development costs. Research costs are recognized in the statement of income in the period in which they are incurred. Development costs are capitalized only if, and to the extent that, the IFRS criteria are met and it is highly probable that the present value of the expected returns will exceed the development costs. Capitalized development costs are amortized on a systematic basis over the period in which the returns are expected to flow to the Group.

Construction contracts, revenue and profit recognition. Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the entity and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received net of sales taxes and discounts. Revenue from the sale of goods is recognized when delivery has taken place and the transfer of risks and rewards of ownership has been completed. Long-term construction contracts are accounted for using the percentage-of-completion method. The stage of completion is determined using the cost-to-cost method. The costs include a risk premium. The consolidated statement of income includes the pro-rata revenue and a carefully estimated share of the outcome of the contract; the consolidated statement of financial position includes the relevant assets or liabilities after offsetting advance payments.

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Bühler Financial Report 2014

Financial risk management As a result of its global activities, the Group is exposed to financial market risks (currency risk, interest rate risk, price risk), credit risks and liquidity risks. Financial risk management focuses on the man-

agement of currency risk and credit risk. Derivative financial instruments are used to hedge certain risks. The risk management function is exercised by the Group Treasury department in close collaboration with the operating units, as well as in accordance with treasury directives.

Financial assets 2014 Cash reserves

Cash and cash equivalents CHF m

Securities CHF m

Receivables & accruals CHF m

436.1

Financial assets “at fair value through profit or loss”

622.1

Financial assets “available for sale”

2013 Cash reserves

Total market value CHF m

436.1

43.3

90.5

712.6

6.1

436.1

43.3

622.1

96.6

1,198.1

Cash and cash equivalents CHF m

Securities CHF m

Receivables & accruals CHF m

Financial assets CHF m

Total book value CHF m

Total market value CHF m

347.4

Financial assets “at fair value through profit or loss”

32.5

Receivables and loans

619.3

Financial assets “available for sale” Total financial assets

Total book value CHF m

43.3

Receivables and loans

Total financial assets

Financial assets CHF m

347.4

32.5

619.3

32.5

92.0

711.3

6.3

98.3

1,097.5

Financial liabilities 2014 Financial liabilities at amortized acquisition costs Financial liabilities “at fair value through profit and loss” Total financial liabilities

2013 Financial liabilities at amortized acquisition costs Financial liabilities “at fair value through profit and loss” Total financial liabilities

02_FR2014_Notes_risk_management_en.indd 92

Financial liabilities CHF m

Payables / accruals and deferred income CHF m

Total book value CHF m

Total market value CHF m

150.8

537.8

688.6

15.7

15.7 166.5

537.8

704.3

Financial liabilities CHF m

Payables / accruals and deferred income CHF m

Total book value CHF m

Total market value CHF m

172.7

549.3

722.0

2.6

724.6

2.6 175.3

549.3

04.02.2015 16:39:07

Consolidated Financial Statements.

Market risk. Bühler is exposed to market risks that relate primarily to exchange rates, interest rates and the fair value of investments in liquid financial assets. The Group monitors these risks on an ongoing basis and reports to the Finance Committee every month. In order to manage the volatility associated with these risks, the Group employs financial derivative instruments such as forward contracts and options.

Exchange rate risk. The Group reports in Swiss francs and is therefore exposed to exchange rate movements primarily in European, North American, South American, and Asian currencies. Various contracts are concluded with a view to offsetting exchange rate-related changes in the value of assets, liabilities and future transactions. Bühler also uses currency forwards and options for this purpose. Net investments in foreign Group companies are long-term in nature. Their fair value changes with exchange rates. Over the very longterm, however, the change in the inflation rate should match the corresponding exchange rate movements, so that changes in the fair value of foreign investments will offset the exchange rate-related changes in value. For this reason, Bühler only hedges its investments in foreign Group companies in exceptional cases. The following table shows the hypothetical repercussions of changes in the key currency pairs on profit after taxes. The volatility value used in the calculation is that of one-year historical volatility as per December 31. Refer to note 33 for further information to the exchange rate fluctuation after the balance sheet date.

2014

Currency pair

Volatility

EUR / CHF

USD / CHF

2.7 %

7.4 %

Effect in profit and loss (rate increase) CHF m

1.4

– 5.1

Effect in profit and loss (rate decrease) CHF m

– 1.6

2.9

EUR / CHF

USD / CHF

2013

Currency pair

Volatility

4.5 %

8.8 %

Effect in profit and loss (rate increase) CHF m

5.4

– 2.5

Effect in profit and loss (rate decrease) CHF m

– 6.2

1.6

Interest rate risk. Interest rate risk arises from changes in interest rates that may affect the net assets and results of the Bühler Group. These risks are managed and monitored centrally. The robust liquidity situation and the fact that the Group is not reliant on external financing mean that interest rate changes have no material impact on the financial result of the Group. Changes in market interest rates may have an impact on the value of bonds in the category of financial assets stated at fair value. Assuming that the interest rate for all currencies had increased by 100 basis points while all other factors remained constant, the increased interest rates would have had an effect on the profit after taxes of CHF – 0 .3 million (prior year: CHF 0.0 million). A reduction of the interest rate by 100 basis points would have the opposite effect on profit after taxes to the value of CHF 0.3 million (prior year: CHF 0.0 m illion).

Credit risk. Credit risks arise in connection with liquid funds, derivative financial instruments, investments with banks, marketable securities, and receivables from customers. In order to minimize potential losses on customers receivables, an Operational Risk Management (ORM) guideline has been drawn up. The evaluation of our customers’ financial reliability and / o r the terms of payment and hedging on our deliveries are key concerns in this respect. In addition, it can be stated that none of our customers has outstanding payments accounting for more than 5 % of Group sales. The nominal value of the trade accounts receivable less valuation allowances is considered an approximation of the receivables’ fair value. The book values stated represent the maximum credit risk. The default risk on marketable securities, derivative financial instruments, money market contracts, current-account deposits, and time deposits is minimized on one hand through the exclusive purchase of securities with at least an A rating, and on the other by selecting only financial institutions with at least an A rating as the Group’s main global banks. The risks are monitored rigorously and kept within stipulated parameters. Group guidelines ensure that the Group’s credit risk vis-à-vis financial insti tutions is limited. The limits set are regularly monitored and adjusted. The Group does not expect to incur any loss as a result of its counterparties being unable to meet their contractual obligations, nor does it have any cluster risks with respect to individual sectors or countries.

Commodity risk. Bühler is exposed to a certain degree of comm odity price risk due to fluctuations in the prices of commodities required for production process. The Group does not conclude any significant futures, forwards or options to hedge future commodity purchases.

Equity security risk. The Group buys shares in other companies in order to invest its liquid funds. It does so in accordance with the treasury strategy approved by the Board of Directors. This sets precise limits, including investments in shares. Bühler limits the risk across all asset classes by holding less than 5 % of the Group’s invested funds in any single outside company. Call or put options are covered by securities or cash positions.

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Bühler Financial Report 2014

Receivables outstanding analysis 2014 Accounts receivable trade and other Allowance for bad debts Associated companies and other related parties Total accounts receivable, net

Overdue

Total book value Dec 31, 2014 CHF m

Not due CHF m

< 3 months CHF m

4 – 6 months CHF m

625.3

528.6

54.5

13.0

– 9.7

0.0

– 1.3

0.0

6.5

622.1

535.1

53.2

13.0

10 – 12 months CHF m

> 12 months CHF m

5.4

7.2

16.6

– 0.3

– 1.5

– 6.6

5.1

5.7

10.0

7 – 9 months CHF m

10 – 12 months CHF m

> 12 months CHF m

7 – 9 months CHF m

Overdue

Total book value Dec 31, 2013 CHF m

Not due CHF m

< 3 months CHF m

4 – 6 months CHF m

Accounts receivable trade and other

618.8

497.1

74.1

15.4

7.8

10.2

14.2

Allowance for bad debts

– 10.9

0.0

– 0.7

– 0.1

– 0.2

– 0.4

– 9.5

11.4

619.3

508.5

73.4

15.3

7.6

9.8

4.7

2013

Associated companies and other related parties Total accounts receivable, net

Allowance for bad debts 2014 CHF m

2013 CHF m

January 1

– 10.9

– 12.0

Additions

– 4.5

– 3.7

Consumption

0.6

3.2

Release

5.2

2.5

0.0

– 0.7

Changes in scope of consolidation Translation differences

– 0.1

– 0.2

December 31

– 9.7

– 10.9

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Consolidated Financial Statements.

Liquidity risk. Liquidity risk refers to the risk of the Group being unable to fulfill its obligations when due or at a reasonable price. The Group Treasury department is responsible for monitoring liquidity, financing, and repayment. In addition, liquidity and financing risks and the related processes and guidelines are checked by corporate management. Bühler manages its liquidity risk on a consolidated b asis, taking into account business policy, tax, financial and regulatory considerations. Free cash flow represents the main source of financing. If required, the Group also has recourse to approved lines of credit. Corporate management monitors the Group’s net liquidity position by means of ongoing forecasts based on expected cash flows.

Capital management. One of the Group’s main objectives is to apply a well-managed capital management system in order to ensure the continuity of the Group and generate added value for all stakeholders. Another goal is to optimize the cost of capital. Bühler does not have to comply with any capital requirements imposed by third parties, since the extent of its financial liabilities to third parties is of a negligible magnitude. Group management reviews the capital structure of the Group and the equity of Group companies on a regular basis. As at December 31, 2014 the equity ratio stood at 45.2 % (December 31, 2013: 44.6 % ).

Book value Dec 31, 2014 CHF m

Cash outflow Total CHF m

< 1 year CHF m

1 – 5 years CHF m

> 5 years CHF m

193.0

0.0

Liabilities to associates, non-consolidated companies and related parties

166.0

20.3

Liabilities others / accruals and deferred income

344.5

90.7

55.0

344.5

339.4

5.1

6.7

6.0

0.7

710.2

558.7

96.5

55.0

Total CHF m

< 1 year CHF m

1 – 5 years CHF m

> 5 years CHF m

191.8

0.4

Liabilities to associates, non-consolidated companies and related parties

200.1

34.1

111.0

55.0

Liabilities others / accruals and deferred income

332.2

326.1

6.1

– 1.3

– 1.1

– 0.2

723.2

551.3

116.9

2014 Trade accounts payable to third parties Financial liabilities to banks

Derivative financial instruments held for hedging net Total

2013 Trade accounts payable to third parties Financial liabilities to banks

Derivative financial instruments held for hedging net Total

02_FR2014_Notes_risk_management_en.indd 95

Book value Dec 31, 2013 CHF m

Cash outflow

55.0

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Bühler Financial Report 2014

Risk assessment. The Board of Directors of Bühler Group assesses corporate risks by undertaking systematic risk identification and analysis. Based on this assessment, the measures required for risk management in the company are defined and monitored. The corresponding meeting of the Board of Directors took place on December 15, 2014.

2014

Estimation of fair values. The fair values of financial instruments that are actively traded on markets are based on the relevant trading e xchange prices (offer prices) on the balance sheet reference date. Instruments of this nature are classified as Level 1. The fair values of financial instruments that are not actively traded on markets (e.g., derivative OTC instruments) are determined using valuation models. If all the parameters required for the valuation are based on observable market data, the instrument in question is classified as Level 2. If one or more parameters are based on unobservable market data, the instrument is classified as Level 3. In the period under review as well as in the prior year no transfer occurred within the Levels.

CHF m

Financial assets “at fair value through profit or loss”

Level 1

Level 2

39.6 3.8

Financial assets “available for sale”

6.1

Total financial assets

39.6

9.9

0.0

Level 1

Derivative financial liabilities

Financial assets “at fair value through profit or loss”

49.5

16.4

0.0

16.4

CHF m

Level 2

Level 3

Total

24.3

Financial assets “available for sale”

6.3 24.3

14.7

0.0

2.6

Derivative financial liabilities

02_FR2014_Notes_risk_management_en.indd 96

16.4

24.3 8.4

Total financial liabilities

6.1 0.0

Derivative financial assets Total financial assets

3.8

16.4

Total financial liabilities

Total

39.6

Derivative financial assets

2013

Level 3

8.4 6.3 0.0

39.0

0.0

2.6

04.02.2015 16:39:08

Consolidated Financial Statements.

1 Sales revenue CHF 1,513.7 million (prior year: CHF 1,478.5 million) of the total oper ating income was determined using the percentage-of-completion method in the reporting period.

2 Other operating income 2014 CHF m

2013 CHF m

Earnings from coordination of consortium business

2.1

10.2

Interest income from trade finance

2.2

1.4

Rental income

0.3

0.4

Gains from sale of fixed assets

0.4

0.8

Gains from sale of part of businesses

0.0

22.5

Net result from investments in associates

1.1

Other operating income related parties

0.0

1.2

Others

25.5

31.5

Total

31.6

69.1

2014 CHF m

2013 CHF m

Wages and salaries

591.1

584.2

Social security and employee benefit expenses

110.6

94.0

58.2

54.3

759.9

732.5

“Others” comprises a number of individually immaterial items which cannot be allocated to another line item.

3 Employee benefit expenses

Other personnel expenses Total

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Bühler Financial Report 2014

4 Other operating expenses Administration expenses

2014 CHF m

2013 CHF m

101.5

100.4

Rental and leasing expenses, dues

31.5

33.2

Energy, maintenance and repairs

31.6

32.5

Travel expenses

72.1

75.9

Outbound freight costs

64.1

70.8

Consultancy fees

10.6

15.1

Marketing costs

18.0

15.7

Agency fees

14.0

18.2

Warranty costs, loss orders

3.7

1.4

Other operating expenses related parties

24.9

25.2

Others

30.6

38.7

402.6

427.1

2014 CHF m

2013 CHF m

Total

5 Financial result Interest income

5.4

4.3

– 0.7

– 0.9

Total interest result

4.7

3.4

Interest expenses

Realized gains from securities

5.9

4.7

Realized losses from securities

0.0

– 5.0

Total securities result

5.9

– 0.3

Interest income from related parties

1.4

Interest expenses from related parties

– 2.5

– 2.3

Total interest result from related parties

– 1.1

– 0.9

Fair value adjustments

– 0.7

0.1

Foreign exchange gains and losses

– 4.0

4.5

Other financial income and expenses

– 2.1

– 0.1

2.7

6.7

Total

The securities gain of CHF 5.9 million (prior year: loss of CHF – 0 .3 mil lion) was influenced by a positive development in most major equit y markets. The interest gain including interest from related parties amounts to CHF 3.6 million (prior year: CHF 2.5 million) and remained low due to the historically low interest rates in most currencies. The positive impact from the asset allocation was partly offset by the foreign exchange losses of CHF – 4.0 million (prior year: gain of CHF 4.5 million). Although volatility in major currencies remained low, several minor currencies (e.g. RUB) further devalued against CHF.

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Consolidated Financial Statements.

6 Taxes 6.1 Income taxes

2014 CHF m

2013 CHF m

Income taxes relating to the reporting period

– 38.6

– 37.6

Income taxes relating to prior periods

3.3

Deferred taxes due to temporary differences

– 1.0

– 2.1

Deferred taxes due to recognition of tax loss carry-forwards

10.3

13.1

Deferred taxes due to changes in tax rates

– 0.4

– 0.1

– 26.4

– 23.4

11.0

0.2

6.2 Reconciliation of income taxes

2014 CHF m

2013 CHF m

Profit before taxes

147.3

146.2

– 28.9

– 22.8

– 0.4

– 3.7

Total Taxes recognized directly in shareholders’ equity

Components of tax expenses: Income taxes at anticipated tax rate Income and expenses not subject to tax Income taxes relating to prior periods Deferred taxes due to changes in tax rates Effect of tax loss carry-forwards

3.3

– 0.4

– 0.1

1.9

0.1

– 4.6

– 2.1

2.7

1.9

– 26.4

– 23.4

17.9 %

16.0 %

2014 CHF m

2013 CHF m

Unlimited

85.4

68.1

In more than 5 years

20.5

8.5

In 2 – 5 years

23.0

8.7

Within 1 year

2.3

1.5

131.2

86.8

108.9

70.8

5.8

4.9

Effect of losses without recognition of deferred tax assets Other impacts Total income taxes Total income taxes in % of profit before taxes

The anticipated tax rate was 19.6 % (prior year 15.6 % ) and consisted of the weighted average of the applicable local tax rates for income taxes. The tax rate increased to 17.9 % in 2014 from 16.0 % in 2013. Contributory factors for the resulted tax rate included a sustainable tax management and the non-existence of a special German tax e ffect as accounted for in prior year.

6.3 Tax loss carry-forwards Expiry

Total Tax loss carry-forwards accounted for in deferred taxes Tax effect on tax loss carry-forwards unaccounted for

The change in tax loss carry-forwards results from the use of tax losses in particular in Brazil and in the USA as well as from the impact of additional tax loss carry-forwards in particular in Germany, Spain, South East Asia and China.

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100

Bühler Financial Report 2014

7 Movements of property, plant and equipment Machinery and technical Other tangible equipment assets CHF m CHF m

Investment properties CHF m

Land and buildings CHF m

Assets under construction CHF m

Total CHF m

January 1, 2013

0.4

249.1

248.5

Additions

0.0

6.6

15.4

130.0

24.4

652.4

10.9

52.3

Disposals

0.0

– 0.3

85.2

– 7.3

– 5.5

– 4.6

– 17.7

Changes in the scope of consolidation

0.0

Reclassifications

0.0

1.9

1.2

– 0.6

0.0

2.5

1.1

14.3

2.5

– 14.9

Translation differences

3.0

0.0

– 3.3

– 2.9

– 2.0

– 1.4

– 9.6

December 31, 2013

0.4

255.1

269.2

135.3

55.8

715.8

Additions

0.0

11.6

21.5

7.6

14.4

55.1

Disposals

0.0

– 0.3

– 9.0

– 13.3

– 0.3

– 22.9

Changes in the scope of consolidation

0.0

0.3

0.6

0.0

0.9

Reclassifications

0.0

25.4

16.2

2.8

– 44.1

0.3

Translation differences

0.0

6.0

5.1

1.0

2.0

14.1

December 31, 2014

0.4

297.8

303.3

134.0

27.8

763.3

January 1, 2013

0.0

– 64.4

– 144.0

– 96.4

– 0.3

– 305.1

Additions

0.0

– 6.9

– 17.4

– 12.5

0.0

– 36.8

Disposals

0.0

0.2

4.8

4.3

0.0

9.3

Changes in the scope of consolidation

0.0

Impairment

0.0

Reclassifications

0.0

– 3.5

0.4

0.0

– 3.1

Translation differences

0.0

0.5

0.9

1.3

0.0

2.7

December 31, 2013

0.0

– 70.6

– 159.2

– 102.9

– 0.3

– 333.0

Additions

0.0

– 7.3

– 19.0

– 11.4

0.0

– 37.7

Disposals

0.0

0.1

8.1

12.3

0.0

20.5

Changes in the scope of consolidation

0.0

Impairment

0.0

– 2.1

– 0.3

0.0

– 2.4

Reclassifications

0.0

– 0.3

0.0

– 0.6

Translation differences

0.0

– 0.9

– 1.3

– 0.6

0.0

– 2.8

December 31, 2014

0.0

– 78.7

– 173.8

– 103.2

– 0.3

– 356.0

January 1, 2014

0.4

184.5

110.0

32.4

55.5

382.8

December 31, 2014

0.4

219.1

129.5

30.8

27.5

407.3

Acquisition cost

Depreciation

Net book values

The impairment of CHF – 2 .4 million refers to the restructuring of a factory in Germany. The market value of investment properties amounted to CHF 1.5 million in the reporting year (prior year: CHF 1.5 million). As in previous year, the Group did not enter in financial lease contracts as lessee. The fire insurance values (usually reinstatement values) of tangible fixed assets as at December 31, 2014 amounted

03_FR2014_Notes_part1_en.indd 100

to CHF 939.4 million (prior year: CHF 979.8 million). Net loss on dis posal of tangible fixed assets amounted to CHF – 0 .4 million (prior year: net gain CHF 0.1 million). Commitments relating to property, plant and equipment, which are not shown in the balance sheet, amounted to CHF 69.8 million (prior year: CHF 17.3 million) related to investments in the factory in China.

04.02.2015 17:06:39

Consolidated Financial Statements.

101

8 Movements of intangible assets Acquisition cost January 1, 2013

Goodwill CHF m

Other intangible assets CHF m

Total CHF m

396.1

252.8

143.3

Additions

0.0

2.9

Disposals

0.0

– 0.8

Changes in the scope of consolidation

5.8

3.9

9.7

Reclassifications

0.0

– 3.1

Translation differences

1.3

– 0.3

1.0

259.9

145.9

405.8

December 31, 2013 Additions

0.0

2.7

Disposals

0.0

– 2.2

Changes in the scope of consolidation

8.8

7.1

15.9

Reclassifications

0.0

0.1

Translation differences

4.4

1.7

6.1

273.1

155.3

428.4

December 31, 2014

Amortization January 1, 2013

– 11.0

– 61.8

– 72.8

Additions

0.0

– 20.5

Disposals

0.0

0.4

– 18.3

0.0

– 18.3

Changes in the scope of consolidation

0.0

Reclassifications

0.0

3.1

Translation differences

0.3

0.2

0.5

– 29.0

– 78.6

– 107.6

Additions

0.0

– 20.2

Disposals

0.0

2.2

Impairment

0.0

Changes in the scope of consolidation

0.0

Reclassifications

0.0

– 0.7

– 1.1

– 1.8

– 29.7

– 97.7

– 127.4

January 1, 2014

230.9

67.3

298.2

December 31, 2014

243.4

57.6

301.0

Impairment

December 31, 2013

Translation differences December 31, 2014

Net book values

Additions to goodwill and intangible assets are mainly attributable to acquisitions in the year under review (see note 22). Other intangible assets mainly comprise customer relationships, technologies, patents and software.

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102

Bühler Financial Report 2014

9 Investments in associates Net book values January 1 Reclassifications

Share in equity CHF m

Goodwill CHF m

Total 2014 CHF m

Total 2013 CHF m

10.6

7.3

17.9

9.9

0.0

0.0 6.8

Additions

0.0

Impairment

0.0

Share of net profit

1.1

0.0

1.1

1.3

Dividends received

– 0.9

0.0

– 0.9

– 0.2

Translation differences

– 0.1

0.0

– 0.1

0.1

December 31

10.7

7.3

18.0

17.9

2014 CHF m

2013 CHF m

19.7

18.8

1.1

1.3

Non-current assets

11.2

11.9

Current assets

16.6

15.5

Non-current liabilities

10.9

11.7

Translation differences are recognized in other comprehensive in come. The attributable net result is shown under “other operating income” in the statement of income.

Cumulative values of the associated companies Share of sales revenue Share of net profit Balance sheet values:

Current liabilities Shareholders’ equity

6.6

5.1

10.3

10.6

The associated companies mainly comprise three companies, two in Southern Europe and one in Switzerland. Bühler has a shareholding of 26 % , 30 % and 35 % respectively. The figures are based on avail able preview closing data as of December 31, 2014.

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Consolidated Financial Statements.

103

10 Long-term financial assets Due 1 – 5 years CHF m

> 5 years CHF m

Total CHF m

Securities

0.0

Overfunding of post-employment benefit plans

0.0

2.4

Loans to non-consolidated companies

0.9

0.0

0.9

Loans to associated companies

17.3

0.0

17.3

Other non-current financial assets

72.3

6.1

78.4

Total

90.5

8.5

99.0

Due 1 – 5 years CHF m

> 5 years CHF m

Total CHF m

Securities

0.0

1.7

Overfunding of post-employment benefit plans

0.0

5.0

Loans to non-consolidated companies

1.6

0.0

1.6

Loans to associated companies

18.4

0.0

18.4

Other non-current financial assets

72.1

4.6

76.7

Total

92.1

11.3

103.4

Net book values

2014 CHF m

2013 CHF m

Tangible fixed assets

December 31, 2014

December 31, 2013

11 Deferred tax assets and liabilities – 16.6

– 15.9

Post-employment benefits

24.0

14.0

Provisions

– 3.3

– 0.1

– 75.5

– 76.0

30.5

20.2

Total

– 40.9

– 57.8

Recognized on the balance sheet as deferred tax liabilities

– 82.6

– 87.8

41.7

30.0

Other items Tax loss carry-forwards

Recognized on the balance sheet as deferred tax assets

Change of deferred tax assets for post-employment benefits is pri marily due to a significant increase in the net defined benefit obliga tion (see note 17). Deferred tax assets and liabilities are offset if there is a legally enforceable right to set them off and if the calculations of income taxes relate to the same taxation authority.

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104

Bühler Financial Report 2014

12 Inventories Raw materials and supplies

Gross value CHF m

Value adjustments CHF m

2014 CHF m

2013 CHF m

149.5

– 19.2

130.3

123.2

Unfinished goods

53.8

– 11.3

42.5

41.8

Finished goods and merchandise

78.5

– 4.9

73.6

68.5

Work in progress

89.5

– 3.5

86.0

84.3

Advance payments to suppliers

25.1

0.0

25.1

17.2

396.4

– 38.9

357.5

335.0

2014 CHF m

2013 CHF m

Total

In prior year, value adjustments deducted from inventories amounted to CHF – 3 7.6 million. No material reversals of value adjustments of the prior year were recognized in the reporting year.

13 Production orders in progress Production orders in progress

308.4

353.8

Advance payments from customers

– 106.3

– 145.8

Net assets of production orders in progress

202.1

208.0

Production orders in progress

– 24.4

– 54.0

– 363.8

– 279.1

Net liabilities of production orders in progress

– 388.2

– 333.1

Accumulated costs and recognized profits

1,690.1

1,586.8

2014 CHF m

2013 CHF m

Advance payments from customers

14 Trade accounts receivable AA from third parties

508.1

513.6

AA from non-consolidated companies

4.2

3.3

AA from associates

0.6

1.3

AA from related parties

0.1

– 9.7

– 10.1

503.3

508.2

Allowance for bad debts Total

Trade accounts receivable include supplier credits of CHF 79.4 mil lion (prior year: CHF 106.1 million), which are financed in accordance with the treasury strategy. A generally high degree of liquidity char acterizes these items. CHF 34.5 million (prior year: CHF 50.3 million) of these will not be due within the next twelve months.

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Consolidated Financial Statements.

105

15 Other accounts receivable, prepayments and accrued income Value added tax credits

2014 CHF m

2013 CHF m

37.9

38.0

Other accounts receivable AA from third parties

56.8

39.1

AA from non-consolidated companies

1.1

3.9

AA from associates

0.4

0.2

AA from related parties

0.0

2.6

22.6

28.1

0.0

– 0.8

118.8

111.1

Prepayments and accrued income Allowance for bad debts Total

16 Marketable securities and derivative financial instruments Futures and options were entered into with banks mainly to hedge currency risks. The following positions were open as at Decem ber 31, 2014: Contract or underlying principal amount

Positive fair values

Negative fair values

2014 CHF m

2013 CHF m

2014 CHF m

2013 CHF m

2014 CHF m

2013 CHF m

Forward foreign exchange rate contracts

745.2

584.7

3.6

6.8

16.0

2.0

AA held for trading

443.0

222.1

1.4

4.1

7.1

0.6

AA cash flow hedges (effective part)

302.2

362.6

2.2

2.7

8.9

1.4

Over the counter currency options

61.7

194.0

0.2

1.6

0.4

0.6

Total of currency-related instruments

806.9

778.7

3.8

8.4

16.4

2.6

Total derivative financial instruments

806.9

778.7

3.8

8.4

16.4

2.6

781.5

738.8

3.7

8.2

15.6

2.6

25.4

39.9

0.1

0.2

0.8

0.0

16.1 Derivative financial instruments Currency-related instruments

Thereof included in securities and in short-term financial liabilities Thereof included in other long-term financial assets and financial liabilities

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B端hler Financial Report 2014

USD CHF m

EUR CHF m

Other currencies CHF m

Total 2014 CHF m

Total 2013 CHF m

Forward foreign exchange rate contracts

256.2

375.1

113.9

745.2

584.7

AA held for trading

159.6

172.5

110.9

443.0

222.1

AA cash flow hedges

96.6

202.6

3.0

302.2

362.6

Over the counter currency options

13.8

47.9

0.0

61.7

194.0

Total of currency-related instruments

270.0

423.0

113.9

806.9

778.7

Total derivative financial instruments

270.0

423.0

113.9

806.9

778.7

2014 CHF m

2013 CHF m

4.2

4.4

Currency-related instruments

Positive replacement values are included in securities or long-term financial assets and negative replacement values are included in finan足 cial liabilities.

16.2 Marketable securities Equity securities Bonds Derivative financial instruments Accrued interest on debt securities

10.4

0.0

3.7

8.2

0.1

0.0

Other securities

24.9

19.9

Total marketable securities

43.3

32.5

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Consolidated Financial Statements.

17 Defined benefit obligations The company’s main defined benefit pension plans are in Switzerland and Germany. The defined benefit plans in Switzerland are funded through legally separate trustee administered funds. The cash funding of these plans, which may from time to time involve special payments, is designed to ensure that present and future contributions should be sufficient to meet future liabilities. The defined benefit plans in Germany are partially unfunded. Pension plans in Switzerland. The company’s Swiss pension plans contain a cash balance benefit formula, accounted for as a defined benefit plan. Employer and employee contributions are defined in the pension fund rules in terms of an age related sliding scale of percentages of salary. Under Swiss law the pension fund guarantees the vested benefit amount as confirmed annually to members. Interest may be added to member balances at the discretion of the Board of Trustees. At retirement date members have the right to take their retirement benefit as a lump sum, an annuity or part as a lump sum with the balance converted to a fixed annuity at the rates defined in the fund rules. The Board of Trustees may change the annuity at their discretion subject to the plan’s funded status including sufficient free funds as determined according to Swiss statutory valuation rules.

17.1 Actuarial assumptions

In the previous year a gain from a change in planned annuity of CHF 25.1 million was recognized in the statement of income, resulting in a significant decrease in the net defined benefit obligation. Additionally, Bühler AG pledged to assure any deficit of the pension fund in 2013. After the restructuring, the pension fund reached a coverage of more than 100 % , which is why the accrued amount (CHF 13.8 million) was released in 2014. Pension plans in Germany. The company’s German pension plans have defined benefit rights based on their length of service and / o r final pensionable pay. The employer gives a direct promise to the employee to pay him a certain amount once he retires. At retirement date the value of their benefits is paid as an annuity. The company is required by German law to increase pensions in payment all three years according to price inflation, as measured by the Consumer Price Index or according to comparable pay grades. Direct pension promises are usually funded via book-reserve accruals. In 2008 the company set up a trust fund to fund their pension liabilities for Bühler GmbH, Braunschweig. No material business combinations / c urtailments / s ettlements occurred during the reported financial period. Status of the Company’s defined benefit plans. The status of the company’s defined benefit plans using actuarial assumptions determined in accordance with IAS 19 is summarized below.

2014

2013

Discount rate

2.1 %

2.7 %

Future salary increases

1.4 %

Future pension increases

0.2 %

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Bühler Financial Report 2014

17.2 Reconciliation of defined benefit obligation and fair value of plan assets Defined benefit obligation at January 1

2014 CHF m

2013 CHF m

1,202.7

1,207.8

Interest costs

32.1

32.0

Current service costs (employer)

21.5

25.1

Contributions by plan participants

17.4

21.9

0.0

– 25.1

Past service costs Benefits (paid) / deposited

– 64.9

– 68.9

Business combinations

0.0

– 16.0

Curtailment and settlements

0.0

Other effects

1.2

0.7

Actuarial (gain) loss on obligation

73.8

24.4

Currency translation adjustments

– 0.6

0.8

1,283.2

1,202.7

1,157.7

1,055.8

Defined benefit obligation at December 31 Reconciliation of the fair value of plan assets Fair value of plan assets at January 1 Expected return on plan assets

30.5

28.7

Contributions by the employer

14.7

100.8

Contributions by plan participants

17.4

21.9

– 64.9

– 68.9

Business combinations

0.0

– 14.3

Curtailment and settlements

0.0

Other effects

0.0

29.7

33.1

0.0

0.6

1,185.1

1,157.7

60.2

61.8

17.3 Remeasurements of employee benefits

2014 CHF m

2013 CHF m

Return on plan assets excl. interest income

– 29.7

– 33.1

0.0

47.8

Benefits (paid) / deposited

Return on plan assets excl. interest income Currency translation adjustments Fair value of plan assets at December 31 Actual return on plan assets

Current year actuarial loss (gain) on benefit obligation: AA change in demographic assumptions AA change in financial assumptions

83.4

3.5

AA experience adjustments

– 9.6

– 26.9

Change in effect of asset ceiling

– 2.4

12.0

0.7

0.0

42.4

3.3

246.3

203.9

Other effects Remeasurements recognized in other comprehensive income Cumulative amount recognized in other comprehensive income

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Consolidated Financial Statements.

17.4 Reconciliation of the amount recognized in the statement of financial position at year-end

2014 CHF m

2013 CHF m

Present value of funded defined benefit obligation

1,283.2

1,202.7

Fair value of plan assets

1,185.1

1,157.7

Deficit / (surplus)

98.1

45.0

Adjustment to asset ceiling

10.5

12.6

108.6

57.6

Liability (asset) recognized in the statement of financial position Thereof recognized as separate asset

– 2.4

– 5.0

Thereof recognized as separate liability

111.0

62.6

17.5 Pension expenses recognized in the statement of income

2014 CHF m

2013 CHF m

22.0

25.1

Current service costs (employer) Net interest employee benefit

1.6

3.4

Past service costs

0.0

– 25.1

Effect of curtailment and settlements

0.0

Other effects

0.9

0.6

Interest (income) on reimbursement right

0.0

Expenses recognized in the statement of income

24.5

4.0

Thereof service costs and administration costs

22.6

0.6

1.9

3.4

Thereof net interest on the net defined benefit liability (asset)

2015 CHF m

17.6 Best estimate of contributions Contributions by the employer

27.8

17.7 Plan assets at fair value consist of

2014 CHF m

2013 CHF m

Equity instruments third parties

367.4

356.0

Debt instruments third parties

277.3

274.9

Real estate

290.7

284.9

Cash and cash equivalents

150.2

148.9

99.5

93.0

1,185.1

1,157.7

Others Total plan assets at fair value

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Bühler Financial Report 2014

2014 Switzerland

2014 Germany

2013 Switzerland

2013 Germany

Discount rate

2.0 %

2.5 %

2.6 %

3.5 %

Future salary increases

1.5 %

0.0 %

1.5 %

0.0 %

Costs of defined benefit plans

22.4

1.6

1.7

1.8

Remeasurements employee benefits

32.2

8.4

4.6

– 0.5

2014 CHF m

2013 CHF m

5.8

5.6

17.8 Information about the significant plans

17.9 Defined contribution plan Expenses for defined contribution plan

The discount rates are determined by reference to market yields at the end of the reporting period on AA and AAA rated corporate bonds. In recent years, longevity has increased in all major countries in which the company sponsors pension plans. The company sets mortality assumptions after considering the most recent statistics availabe and uses generational mortality tables to estimate probable future mortality improvements.

A A 0 .25 % increase / d ecrease in the discount rate would lead to

a decrease / i ncrease of 3 % in the defined benefit obligation. A A 0 .25 % increase / d ecrease in the expected increase in salaries

would lead to an increase / d ecrease of less than 1% in the defined benefit obligation. The sensitivity analysis is based on realistically possible changes as of the end of the reporting year.

Sensitivities of significant actuarial assumptions. The discount rate and the future increase in salaries were identified as significant actuarial assumptions. The following impacts on the defined benefit obli gation are to be expected:

18 Short- and long-term provisions Provisions for warranties CHF m

Provisions for personnel expenses CHF m

Other provisions CHF m

2014 CHF m

2013 CHF m

January 1

40.6

32.2

17.6

90.4

108.8

Additions

23.1

5.4

18.2

46.7

44.7

Utilization

– 15.7

– 9.3

– 13.8

– 38.8

– 46.4

Release

– 7.1

– 2.9

– 2.4

– 12.4

– 15.7

Changes in the scope of consolidation

0.0

0.6

0.0

0.6

– 0.3

Reclassification

0.0

0.2

– 0.2

0.0

0.3

Present value adjustment

0.0

Translation differences

– 0.3

– 0.1

– 0.2

– 0.6

– 1.0

December 31

40.6

26.1

19.2

85.9

90.4

Thereof short-term

33.9

9.0

17.2

60.1

62.8

Thereof long-term

6.7

17.1

2.0

25.8

27.6

Warranty provisions are created with a view to meet potential guarantee obligations arising from the sale of machinery and technical equipment. The calculation is based on historic values as well as recognized claims.

Among other things the remaining provisions include provisions for pending legal cases, other project risks as well as a provision for restructuring of CHF 12.1 million mainly in Germany and Spain.

Provisions for personnel expenses mainly include long-term employee benefits, such as long-service benefits, partial retirement, jubilee benefits and deferred compensation plans.

04_FR2014_Notes_part2_en.indd 110

Approximately 39 % (prior year: 29 % ) of the cash out-flows of the long-term provisions are expected to materialize within the next three years.

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Consolidated Financial Statements.

111

19 Share capital As of December 31, 2014 share capital amounted to CHF 15.0 million (prior year: CHF 15.0 million) and consisted of 105,000 (prior year: 105,000) registered shares with nominal value of CHF 100 each and 112,500 (prior year: 112,500) with nominal value of CHF 40 each.

20 Trade accounts payable AA to third parties

2014 CHF m

2013 CHF m

193.0

191.8

AA to associates

1.4

AA to non-consolidated companies

0.7

0.8

AA to related parties

1.7

1.9

196.8

195.9

2014 CHF m

2013 CHF m

Total

21 Other short-term liabilities, accruals and deferred income Value added tax owed Advance payments

18.7

13.0

132.5

137.9

34.7

42.1

Other liabilities AA to third parties AA to non-consolidated companies

2.1

1.9

AA to related parties

14.3

28.0

Personnel related accruals

72.2

60.8

Other accruals and deferred income

66.6

69.7

341.1

353.4

Total

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Bühler Financial Report 2014

22 Additions and disposals of Group companies Book value 2014 CHF m

Market value 2014 CHF m

Market value 2013 CHF m

Cash and cash equivalents

2.9

– 2.6

Trade accounts receivable

2.3

3.4

Other receivables

0.8

0.9

– 12.9

Inventories

5.9

6.1

0.6

Net assets of production orders in progress

0.0

11.2

11.9

12.2

– 0.3

Current assets Property, plant and equipment

0.9

2.5

Intangible assets

4.9

7.1

3.9

Financial assets

0.0

0.2

Deferred tax asset

0.0

0.6

– 0.3

Non-current assets

5.8

8.6

6.3 – 14.9

Trade accounts payable

– 5.4

Net liabilities of production orders in progress

0.0

2.3

Short-term provisions

0.0

– 6.7

– 7.2

– 1.6

– 12.1

– 12.6

– 14.2

– 0.4

– 1.5

– 1.0

0.0

1.5

– 0.4

– 1.5

0.5

6.7

– 7.7

– 1.8

0.0

Other short-term liabilities, accruals and deferred income Current liabilities and provisions Deferred tax liabilities Non-current liabilities and provisions Non-current liabilities and provisions Change in net assets Non-controlling interests

5.2

Goodwill arising on acquisitions

8.8

5.8

Gain on sale of Business

0.0

– 22.5

Addition (+) to- / disposal (–) from the Group

13.7

– 24.4

Outstanding sale / purchase price payment and other non-cash items

0.0

– 22.0

Cash disposed (–) / acquired (+)

2.9

– 2.6

– 10.8

– 0.2

Cash flow from changes in the scope of consolidation

The goodwill in the amount of CHF 8.8 million (prior year: CHF 5.8 million) comprises the value of expected synergies arising from the a cquisitions.

As in prior year, the acquisition related costs were not material. They were recognized as other operating expenses in the statement of income.

In the reporting period, the acquisition of Wuhan Mingbo Electro mechanical Equipment Co. Ltd., China, with an addition to the Group in the amount of CHF 9.8 million had the most substantial impact.

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Consolidated Financial Statements.

2014 Acquisition of Buhler (Guangzhou) Food Machinery Co. Ltd, China. On April 30, 2014 the Group acquired 80 % of the shares in Guangzhou Jinfu Electromechanical Technology Co. Ltd. (“Jinfu”) which was subsequently renamed. The company manufactures and sells various kinds of rice and wheat flour noodle production equipment. The main objective of this acquistion is to enter the Asian Noodles market in China and outside China. Acquisition of Wuhan Mingbo Electromechanical Equipment Co. Ltd, China. On July 17, 2014 the Group acquired 80 % of the shares in Wuhan Mingbo Electromechanical Equipment Co. Ltd., China. The company manufactures and sells feed machines for Aqua market in China. Establishment of Buhler Malaysia Sdn. Bhd., Kuala Lumpur. On July 7, 2014 the Group founded Buhler Malaysia Sdn. Bhd. with a capital of MYR 1.0 million. The company conducts sales activities and provides services to our customers in Malaysia. 2013 Acquisition of Bühler Haguenau S.A.S. in Haguenau, France. On January 8, 2013 the Group acquired 100 % of the shares in Maes SA which was subsequently renamed. The company provides customer services for the grain milling market in France. Establishment of Buhler Philippines Inc., Philippines. On January 31, 2013 the Group founded Buhler Philippines Inc. with a capital of PHP 9.0 million. The company conducts sales activities and provides services to our customers in Philippines.

113

23 Impairment tests The recoverable amounts have been determined based on a valuein-use calculation. This calculation uses cash flow projections based on financial budgets approved by the respective division management covering a five-year period. Key assumptions used in value-in-use calculations. The calculations of values in use are most sensitive to the following assumptions: A A Gross margin A A Discount rate A A Growth rate used to extrapolate cash flows beyond the budget period A A Raw materials price inflation A A Market share assumptions Gross margin – Gross margins are based on average values reported in the three years preceding the start of the forecast period. These gross margins are adjusted based on the latest available information regarding the actual gross margins as well as anticipated efficiency improvements over the forecast period. Discount rate – The discount rates which are used to calculate the discounted present value of the future cash flows are derived from a capital asset pricing model using market data such as the yield on a ten-year government bond of the respective country or specific country risk premiums. Growth rate estimates – The assumptions used in the calculation reflect the long-term expected growth rate of the operational business and are based on the growth strategy of the Group.

Establishment of Buhler Farmila Vietnam Ltd., Vietnam. On February 7, 2013 the Group founded Buhler Farmila Vietnam Ltd. with a total capital of VND 41,760 million and a 96 % ownership. The company conducts sales activities and provides services to our customers in Vietnam.

Raw materials price inflation – Estimates are obtained from published indices relating to specific commodities. Past actual raw materials price movements have been used as an indicator of future price movements.

Establishment of Buhler (Cambodia) Ltd., Cambodia. On May 21, 2013 the Group founded Buhler Cambodia Ltd Inc. with a capital of KHR 200.0 million. The company conducts sales activities and provides services to our customers in Cambodia.

Market share assumptions – The management assumes that the unit’s position, relative to that of its competitors, may not change significantly over the forecast period. Market share is expected to be stable over the forecast period.

Acquisition of Wuxi NutriRice Co. Ltd., China. On June 7, 2013 the Group acquired 50 % shares from DSM joint venture partner leading to a 100 % shareholding. The company produces and sells fortified rice kernels, a highly innovative nutrition process aimed at reducing deficiencies caused by malnutrition. Establishment of Buhler Limited., Nigeria. On October 24, 2013 the Group founded Buhler Ltd. with a capital of NGN 15.0 million. The company provides services to our customers in Nigeria.

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Bühler Financial Report 2014

Result of the impairment test. The impairment tests performed on December 31, 2014 support the value of the carrying amount. In prior year, an impairment of CHF 18.3 million was recognized due to the reorganization and the underperformance of the Leybold business.

Goodwill 2014

Sensitivity to changes in assumptions. A possible increase in the discount rate of 1 percentage point would result in an impairment of CHF 4.2 million (prior year: CHF 12.7 million). A drop in sales of 5 percentage points would cause the carrying amount to exceed its recoverable amount by CHF 6.6 million (prior year: CHF 19.2 million).

Book value CHF m

Base data used Discount rate

Growth rate

Leybold Optics Verwaltungs GmbH, Alzenau

87.9

10.0 %

1.2 %

Buhler Aeroglide Corporation, Cary

61.1

10.4 %

1.2 %

Bühler Deutschland GmbH, Beilngries

41.2

10.0 %

1.2 %

Bühler Barth GmbH, Freiberg a.N.

17.8

10.0 %

1.2 %

Buhler Yijiete Color Sorting Machinery (Hefei) Co. Ltd., Hefei

7.5

11.9 %

3.1 %

Bangsheng Bio-Technology Co. Ltd., Guangzhou

7.1

11.9 %

3.1 %

Bühler Haguenau S.A.S., Haguenau

5.7

9.4 %

0.9 %

Wuhan Mingbo Electromechanical Equipment Co. Ltd., Wuhan

6.4

11.9 %

3.1 %

Others

8.7

10.4 % – 12.3 %

0.9 % – 3.5 %

Total at December 31, 2014

Goodwill 2013

243.4

Book value CHF m

Base data used Discount rate

Growth rate

Leybold Optics Verwaltungs GmbH, Alzenau

89.7

10.7 %

1.2 %

Buhler Aeroglide Corporation, Cary

55.4

10.7 %

1.2 %

Bühler Deutschland GmbH, Beilngries

42.1

10.7 %

1.2 %

Bühler Barth GmbH, Freiberg a.N.

18.2

10.7 %

1.2 %

Buhler Yijiete Color Sorting Machinery (Hefei) Co. Ltd., Hefei

7.0

11.7 %

3.1 %

Bangsheng Bio-Technology Co. Ltd., Guangzhou

6.6

11.7 %

3.1 %

Bühler Haguenau S.A.S., Haguenau

5.8

11.1 %

0.9 %

Others

6.1

10.7 % – 12.7 %

0.9 % – 3.1 %

2014 CHF m

2013 CHF m

Sureties, guarantees and other obligations

0.7

0.5

Total

0.7

0.5

Total at December 31, 2013

230.9

24 Contingent liabilities

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Consolidated Financial Statements.

115

25 Off-balance sheet obligations under operating leases 2014 CHF m

2013 CHF m

Leasing obligation up to 1 year

18.3

22.1

Leasing obligation as of 1– 5 years

26.4

21.0

7.1

7.0

51.8

50.1

Leasing obligation over 5 years Total

This item mainly includes obligations under long-term leasing agreements relating to properties in Brazil, Germany, Switzerland and China.

26 Assets pledged or assigned to secure own liabilities In connection with the long-term loan from the shareholders of CHF 55 million and open legal cases, assets of CHF 45.0 million and CHF 1.3 million respectively (prior year: CHF 45.0 million and CHF 0.8 million) serve as collateral for own liabilities where the right of disposal is limited.

29 Government grants Government grants are offset with the items of expense which they finance. Government grants related to assets are deducted from the assets in deriving the carrying amount of the asset. In 2012, the construction of a new Die Casting factory in China has been subsidised by the government amounting to CHF 5.3 million. This government grant was recorded in 2012 whereas payments of CHF 3.7 million were received in 2013 and another payment of CHF 1.6 million is expected to be received in 2015. In 2014, the Group received no government grants (prior year: CHF 0.4 million).

27 Research and development costs Research and development costs directly charged to the statement of income in the reporting period amounted to CHF 98.9 million (prior year: CHF 108.6 million).

28 Related parties Related party transactions. A loan towards the shareholders in the amount of CHF 70.0 million (prior year: CHF 70.0 million) is disclosed under other non-current financial assets. Loans from the shareholders of CHF 132.2 million (prior year: CHF 139.1 million) are disclosed under long-term financial liabilities. Liabilities to pension plans amounted to CHF 27.0 million as per 2014 (prior year: CHF 54.3 million) and are mainly related to a comprehensive restructuring of the Swiss pension fund. From this amount CHF 13.5 million (prior year: 27 million) are shown under long-term financial liabilities whereas CHF 13.5 million (prior year: 27.3 million) are included in other shortterm liabilities. Other related party positions are disclosed separately in the notes. Related party transactions are conducted at arm’s length. Key management compensation. Key management (defined as Group Management and Board of Directors) received a total shortterm compensation of CHF 7.2 million (prior year: CHF 8.1 million). In addition, pension and social security contributions of CHF 1.0 million (prior year: CHF 1.1 million) are recorded as expense. The provisions for other long-term benefits amount to CHF 1.6 million (prior year: CHF 2.0 million).

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Bühler Financial Report 2014

30 Significant group companies B Production C Engineering B Distribution C Services / Financing

Country

Share capital in millions of local currency

Bühler Holding AG, Uzwil

CHF 15.0

Bühler AG, Uzwil

CHF 30.0

100.0 %

Bühler Holding AG, Uzwil

Bühler-Immo Betriebs AG, Uzwil

CHF 0.1

100.0 %

Bühler Holding AG, Uzwil

Bühler Management AG, Uzwil

CHF 0.1

100.0 %

Bühler Holding AG, Uzwil

Bühler + Scherler AG, St. Gallen

CHF 0.8

60.0 %

Bühler CZ s.r.o., Zamberk

CZK 265.2

100.0 %

Bühler Deutschland GmbH, Beilngries

EUR 0.025

100.0 %

Bühler GmbH, Beilngries

EUR 16.0

100.0 %

Bühler Deutschland Holding GmbH, Braunschweig

EUR 0.025

100.0 %

Bühler Barth GmbH, Freiberg a. N.

EUR 1.137

100.0 %

Bühler Deutschland Holding GmbH, Braunschweig

Bühler GmbH, Bergneustadt

EUR 0.275

100.0 %

Bühler Deutschland Holding GmbH, Braunschweig

Bühler GmbH, Braunschweig

EUR 12.629

100.0 %

Bühler Deutschland Holding GmbH, Braunschweig

Leybold Optics Verwaltungs GmbH, Alzenau

EUR 0.444

100.0 %

Leybold Optics GmbH, Alzenau

EUR 0.05

100.0 %

Buhler S.A., Madrid

EUR 2.176

100.0 %

Bühler Haguenau S.A.S., Haguenau

EUR 0.2

100.0 %

Buhler S.A.R.L., Paris

EUR 2.55

100.0 %

Buhler UK Holdings Ltd., London

GBP 3.6

100.0 %

Buhler Ltd., London

GBP 1.0

100.0 %

Buhler SORTEX Ltd., London

GBP 1.25

100.0 %

Control Design & Development Ltd., Peterborough

GBP 0.0001

100.0 %

SORTEX Ltd., London

GBP 0.001

100.0 %

Buhler Brescia Presse S.R.L., Brescia

EUR 0.01

100.0 %

Buhler S.p.A., Milano

EUR 2.665

100.0 %

Bühler B.V., Oldenzaal

EUR 0.034

100.0 %

Name of company

Participation rate

Held by

Switzerland C B

Bühler Holding AG, Uzwil

Europe

04_FR2014_Notes_part2_en.indd 116

Bühler Holding AG, Uzwil

B C

Bühler AG, Uzwil Bühler Deutschland GmbH, Beilngries

Bühler AG, Uzwil

Bühler AG, Uzwil Leybold Optics Verwaltungs GmbH, Alzenau Bühler Holding AG, Uzwil

Bühler Holding AG, Uzwil Bühler Holding AG, Uzwil

B C

Bühler Holding AG, Uzwil

Buhler UK Holdings Ltd., London

Bühler AG, Uzwil

Bühler Holding AG, Uzwil

C B

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Consolidated Financial Statements.

B Production C Engineering B Distribution C Services / Financing

Country

Share capital in millions of local currency

Buhler US Holding Inc., Minneapolis

USD 0.05

100.0 %

Buhler Aeroglide Corporation, Cary

USD 0.004

100.0 %

Buhler US Holding Inc., Minneapolis

Buhler Inc., Minneapolis

USD 3.2

100.0 %

Buhler US Holding Inc., Minneapolis

BuhlerPrince Inc., Holland

USD 0.375

100.0 %

Buhler US Holding Inc., Minneapolis

Buhler SORTEX Inc., Stockton

USD 1.0

100.0 %

Buhler US Holding Inc., Minneapolis

Leybold Optics USA Inc., Cary

USD 0.1

100.0 %

Buhler US Holding Inc., Minneapolis

Buhler S.A., Buenos Aires

ARS 1.1

100.0 %

Bühler Holding AG, Uzwil

Buhler S.A., Joinville

BRL 20.685

100.0 %

Bühler Holding AG, Uzwil

Bühler Sanmak Industria de Maquinas S.A., Blumenau

BRL 10.0

100.0 %

Buhler S.A. de C.V., Metepec

MXN 50.0

100.0 %

Buhler (Private Joint Stock Co.), Teheran

IRR 9250,0

100.0 %

Buhler Limited, Nairobi

KES 150.0

100.0 %

Buhler (Pty) Ltd., Johannesburg

ZAR 11.371

100.0 %

Buhler Properties (Pty) Ltd., Johannesburg

ZAR 0.0001

100.0 %

Name of company

Participation rate

117

Held by

North America C

Bühler Holding AG, Uzwil

Latin America

Bühler Holding AG, Uzwil

Middle East and Africa

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Buhler (Pty) Ltd., Johannesburg

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118

Bühler Financial Report 2014

Country

Share capital in millions of local currency

Bangsheng Bio-Technology Co. Ltd., Guangzhou

CNY 8.51

Buhler (Changzhou) Machinery Co. Ltd., Liyang City

Buhler (China) Holding Co. Ltd., Wuxi

Buhler (China) Machinery Manufacturing Co. Ltd., Wuxi Buhler (Guangzhou) Food Machinery Co. Ltd., Guangzhou City Buhler (Wuxi) Commercial Co. Ltd., Wuxi

Name of company

Participation rate

B Production C Engineering B Distribution C Services / Financing

Held by

Asia

100.0 %

Bühler Holding AG, Uzwil

CNY 80.0

80.0 %

USD 65.5

100.0 %

CNY 100.0

100.0 %

CNY 51.0

80.0 %

USD 5.5

100.0 %

Buhler Yijiete Color Sorting Machinery (Hefei) Co. Ltd., Hefei

CNY 18.0

70.0 %

Buhler (China) Holding Co. Ltd., Wuxi

Wuhan Mingbo Electromechanical Equipment Co. Ltd., Wuhan

CNY 5.0

80.0 %

Buhler (China) Holding Co. Ltd., Wuxi

Buhler Equipment (Xian) Co. Ltd., Xi’an

CNY 28.0

100.0 %

Bühler Holding AG, Uzwil

Buhler Food Ingredients (Guangzhou) Co. Ltd., Guangzhou

USD 3.8

100.0 %

Bühler Holding AG, Uzwil

Buhler Mechanical Equipment (Shenzhen) Co. Ltd., Shenzhen

USD 0.6

100.0 %

Bühler Holding AG, Uzwil

Wuxi Buhler Machinery Manufacturing Co. Ltd., Wuxi

USD 23.0

51.0 %

Leybold Optics (Beijing) Co. Ltd., Beijing

CNY 10.1

100.0 %

Buhler (India) Private Ltd., Bangalore

INR 100.0

100.0 %

Buhler K.K., Yokohama

JPY 250.0

Buhler Asia Private Limited., Singapore

Buhler Malaysia Sdn. Bhd., Kuala Lumpur

Bühler Holding AG, Uzwil C

Bühler Holding AG, Uzwil Buhler (China) Holding Co. Ltd., Wuxi Buhler (China) Holding Co. Ltd., Wuxi

B C

Buhler (China) Holding Co. Ltd., Wuxi

Bühler Holding AG, Uzwil

Bühler Alzenau GmbH, Alzenau

Bühler Holding AG, Uzwil

100.0 %

USD 1.0

100.0 %

MYR 1.0

100.0 %

Buhler Asia Private Limited, Singapore

Buhler (Thailand) Ltd., Bangkok

THB 110.0

100.0 %

Buhler Asia Private Limited, Singapore

PT Buhler Indonesia, Jakarta

IDR 10.5

100.0 %

Buhler Asia Private Limited, Singapore

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Bühler Holding AG, Uzwil C

Bühler Holding AG, Uzwil

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Consolidated Financial Statements.

119

31 Proposal of the Board of Directors At the General Meeting, the Board of Directors proposes a dividend of CHF 15.0 million (prior year: CHF 15.0 million) or CHF 100 (prior year: CHF 100) per registered share with a nominal value of CHF 100 and CHF 40 (prior year: CHF 40) per registered share with a nominal value of CHF 40. The dividend payment to the shareholders of the Bühler Holding AG amounted to CHF 15.0 million in the financial year 2014 (prior year: CHF 18.0 million).

32 Release for publication of the consolidated financial statements The consolidated financial statements were released for publication by the Board of Directors of the Bühler Holding AG on February 9, 2015.

33 Subsequent events Acquisition of remaining 20 % of shares in Buhler (Changzhou) Machinery Co. Ltd. On January 18, 2015 the Group acquired the remaining 20 % shares in Buhler (Changzhou) Machinery Co. Ltd. In 2006 at the initial acquisition date, the goal of the minority shareholding was to secure the management of the company. After nine years, four out of seven management members are not actively engaged in the company anymore and more will retire. The minority shareholders jointly agreed that all shareholders, also management members, sell their shares to the Group.

Swiss national bank abandons minimum exchange rate. On January 15, 2015 the Swiss National Bank (SNB) decided to stop enforcing a minimum exchange rate of CHF 1.20 per Euro, which resulted in an immediate significant drop of the Euro against the Swiss Franc. In the days after the SNB decision, the exchange rate stabilized around parity. Assuming an exchange rate of CHF 1 per Euro would not have a significant impact on the Balance Sheet as per December 31, 2014. The Management continues to closely monitor the situation and will take the necessary decisions and actions to safeguard and strengthen the competitiveness of the Group.

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120

Bühler Financial Report 2014

Report of the statutory auditor on the consolidated financial statements To the General Meeting of Bühler Holding AG, Uzwil, St. Gallen, February 9, 2015 As statutory auditor, we have audited the consolidated financial statements of Bühler Holding AG, which comprise the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and notes (pages 79 to 119) for the year ended December 31, 2014. Board of Directors’ responsibility. The Board of Directors is responsible for the preparation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards and International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal c ontrol system relevant to the entity’s preparation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes e valuating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion. In our opinion, the consolidated financial statements for the year ended December 31, 2014 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with IFRS and comply with Swiss law.

Report on other legal requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO) and that there are no circumstances incompatible with our i ndependence. In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated f inancial statements according to the instructions of the Board of Directors. We recommend that the consolidated financial statements submitted to you be approved.

Ernst & Young Ltd Daniel Wüst Licensed audit expert (Auditor in charge)

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Bernhard Joehr Licensed audit expert

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Publisher Bühler AG, 9240 Uzwil Concept/design New Identity Ltd., Basel Publishing system ns.publish by Multimedia Solutions AG Prepress: Neidhart + Schön AG Copywriting and editing Bühler AG Corporate Communications, Uzwil Simone Hofer, Zürich Boris Schneider, Zürich Photographs Ira Block, National Geographic Jim Richardson, National Geographic Thomas Schuppisser, Zürich George Steinmetz, National Geographic Raffael Waldner, Zürich Lithography Roger Bahcic, Zürich Printers galledia ag, Flawil

This Annual Report is published in English and in German. The binding version is English.

B端hler AG CH-9240 Uzwil, Switzerland T +41 71 955 11 11 F +41 71 955 33 79 www.buhlergroup.com