2018 Annual Report Swiss Txt Corp. Swiss Txt Corp

2018 ANNUAL REPORT SWISS TXT CORP. SWISS TXT CORP. – ANNUAL REPORT 2018 REPORT CORP. –ANNUAL TXT SWISS 3 2018 REPORT CORP. –ANNUAL TXT SWISS 2 CONTENTS • • • • • • 11 • FINANCIAL STATEMENTS • • 7 • COMPANY 9 ACCESS SERVICES MARKET D F HIGHLIGHTS 4 3 CHAIRMAN’S FOREWORD

8 HUMAN RESOURCES 11 THE BUSINESSAT AGLANCE 10 CORPORATE BODIES

ACTS &FIGURES A APPENDIX CASH FL INC APPLICA BALANCE SHEETFORTHEYEAR ORGANIGRAM THE APPROPRIA ENDED 31DECEMBER2018 UDIT REPORT OME STATEMENT 2018 OW STATEMENT 2018 TION REGARDING

T N IUE 7 ATA AND FIGURES

TION OFNETINCOME

21 12 22 15 14 14 6 • FOREWORD CHAIRMAN’S Some highlightsfr ness, withoutlosingourf As partof land), itbecameclearthatgoingf The yearof2018wasverychallengingf ment andgr SWISS TXTsuccessfullyover • • • worth mentioning: same time,wemustpushaheadwithexistingbusi in theform offurtherefficiency savings.Atthe be expectedtomake acontributiontothis,mainly be savedperyearwithinthegroup. SWISSTXTwill have totightenourbelts. abolition ofradio andTVlicencefees inSwitzer SRG ofthe «No Billag» initiative(acampaignfor the and SWISSTXT. Following thepositiveoutcomefor the companyworked hard onthefurtherdevelop Admeira, iswellacquaintedwiththemediaworld, Schneider atthehelm,who, astheformer CEOof CHF 191’128wasrecorded. WithnewCEOMartin of the2018financialyear, andacompanyprofit of

ball W A r The captioningplatf tionising themark In thefieldoflivesubtitling,SWISSTXTisr test phaseandintooperation. impaired studentscouldbebrought outofthe of location. more convenientlyandmore quickly,irrespective Thanks tothis,livesubtitlingcanbecarriedout offers anSaaSsolution for thebroadcaster. infrastructure toitsowncloud,andtherefore benefits ofapubliccloud. a privatecloud,aswellthecomfort andcost customers withthedatacontrol andsafety of scalable hybridcloudsolution.Thisprovides SWISS TXT, jointlywithClavisIT, offers amodern, ecord wasachieved duringthe2018Foot orld Cup: intotal,7.2millionhourswere a savings package, CHF 100 millionshould owth ofSWISSTXT. om the2018financialyearare et: itismigrating thesubtitling orm for deaforhearing- ocus oninnovation. came thechallenges orward, wewill or bothSRG evolu • Mar sistence duringthefinancialyear I wouldlik tive manner developing innovativesolutionsf SWISS TXTisfurtherengagedandmotivatedby SWISS TXTwasalsopr take thisfor granted. difficult bythe «NoBillag» initiative. Wedidnot working inanevenmore efficient andcost-effec customers andpartners,atthesametime, the bottomofmyheartfor theirefforts andper confirms this. treasuring. Thesuccessful yearwehadin2018 the SRGknowsthatthiscollaboration isworth contacts. promote itselfanditsservices,tomake new and conferences inSwitzerland andelsewhere, to SWISS TXTCORP. Chairman oftheBoard ofDirectors

connectors. general publicwiththehelpofsocialmedia journalism andenabletheparticipationof This platform shouldpromote high-quality desktop/mobile iscontinuing. This clearlyshowsthattheshiftfrom linearTVto Traffic wastripledcompared toEURO2016. PB ofdata)for theSRGanditsEnterpriseUnits. mission isfundingthethr As partofaEur played outonstr companies andTVstations.TheEuropean Com delivery platform for eventorganisers,media from alloverEurope, isdevelopinganewvideo SWISS TXT, togetherwithrenowned partners co Derighetti e tothankSWISSTXTemployeesfrom . Asthemainbuyerofourservices, opean research project, eaming (corresponding to10.7 esent atvarioustrade shows ee-year longproject. , whichwasmade or andwithits

03. 09. MARCH 07. SEPTEMBER SWISS TXT @ IBC2018 01. SWISS TXT @ NAB SHOW IN JULY LAS VEGAS 05. The- IBC (International Broad casting Convention) took place in FOOTBALL WORLD CUP 2018: At the NAB Show in Las Vegas Amsterdam from 14 to 18 Septem JANUARY MAY 10,7 PB DATA STREAMED SWISS TXT was introducing a fully ber 2018. The theme of this year’s 02. automated workflow – from report For the duration of the World Cup, LIVE-SUBTITLING FOR THE HYBRID CLOUD: IBC was Web First. to newsroom with the help of arti from 14 June to 15 July 2018, 10.7 EUROPEAN HANDBALL THE BEST OF TWO WORLDS FEBRUARY ficial intelligence. PB of data was transmitted in to CHAMPIONSHIPS IN CROATIA 11. clavis IT together with SWISS TXT is tal (SWISS TXT and Akamai CDN) – A SOLUTION FOR MTG TV offering a modern, scalable cloud for our customers across 6 streams NORWAY WINTER OLYMPICS IN PYEONGCHANG: solution. For customers, this pro dedicated to just the World Cup NOVEMBER By migrating subtitling infrastruc SWISS TXT WAS ALSO THERE vides the data control and security and our servers received 8 trillion ture to its own cloud, SWISS TXT features of a private cloud as well hits (requests). PRO AUDITO SCHWEIZ AND was revolutionising the live sub The Event Player covered this ma as the comfort and cost advantages SWISS TXT: titling market with a reasonably- jor sporting event by providing of a public cloud. 12. priced SaaS solution. The service multimedia content on desktops, INFORMATION EVENING was first used for MTG TV Norway mobiles and tablets. The editorial ABOUT SPEECH-TO-TEXT DECEMBER at the European Handball Champi offices were focusing heavily on live- INTERPRETING IN THE FIELD on-ships in Croatia. streaming via HbbTV, where view OF EDUCATION SWISS TXT @ EDUCATION ers could access additional sports Thanks to speech-to-text interpret FORUM content in parallel with the linear ing, students and trainees with television broadcasts. Live prime- hearing impairments can follow CREALOGIX Digital Learning hosted time programmes and evening the class in real time on a laptop the annual Education Forum for the round-ups of the Olympic Games or a tablet. twelfth time. Participants were up were subtitled by the SWISS TXT to exciting presentations on the subtitling teams. In readiness for 10. future of vocational education and go-live, all services provided for training. SWISS TXT was presenting the Olympic Games had been 04. the latest interactive video solution put through their paces in the in- OCTOBER at the market stand, which is ideally house Testing Center to ensure WATCH THE VIDEO suited for the use of e-learning. that nothing can spoil viewers’ en APRIL SWISS TXT @ SWISS TOP joyment of the athletes’ outstand 08. SPORT EVENT FORUM ing performances. All services and BERN UNIVERSITY OF APPLIED applications were running on the SCIENCES: SWISS TXT has been on site as a in-house infrastructure or in the VIDEO DELIVERY PLATFORM 06. AUGUST premium sponsor during these two SWISS TXT Media Cloud. exciting days and presented the lat Bern University of Applied Sciences est event solutions from the areas SWISS TXT @ SUISSE EMEX was supplementing its existing LMS JUNE of interactive video and subtitling (Moodle) with a SWISS TXT video SWISS TXT participated in the at a stand. delivery platform. Videos make it SWISS TXT IS DEVELOPING THE Suisse EMEX in Zurich from 28 to possible to use new forms of teach NEXT-GENERATION OF VIDEO 29 August 2018. At our stand, we ing and communication. DELIVERY PLATFORMS showcased the newest trends on the theme of video. SWISS TXT is developing a new version of its video delivery plat form for event organisers, media enterprises and TV stations. The European Commission is support ing the three-year project.

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SWISS5 TXT CORP. – ANNUAL REPORT 2018 4 SWISS TXT CORP. – ANNUAL REPORT 2018 FACTS & FIGURES

ANNUAL REVENUES PROFIT FOUNDED OWNER CHF 22.6 MILLION CHF 0.191 MILLION 23 DECEMBER 1983 SRG SSR*

OUR CLOUD

Internet peering 76 ESX hosts Virtual machines Storage Streaming bitrate CDN 2×31 Gb/s 17 TB RAM 2’000 8.8 PB 12 Gb/s 7.7 billion requests/month 6.6 PB transferred ACCESS SERVICES SUBTITLING FOR SRG

GERMAN SPEAKING SWITZERLAND: 13’786 hours corresponding to 56.1% of SRG broadcasts As part of our core mission of subtitling, we subtitled quiz show and various SRF own-productions for the 30’091 hours out of the entire broadcasting time. This blind. The range on offer at RSI could be maintained. FRENCH SPEAKING SWITZERLAND: 8’149 hours corresponding to 48.9% of SRG broadcasts corresponds, by conservative estimates, to a share Initial tests with signed programmes are underway. of 51.7% and an increase of 2.2% compared to the We will continue to provide open captioning of RTR ITALIEN SPEAKING previous year. programmes for RTS and RSI via the mediahub. SWITZERLAND: 8’155 hours corresponding to 48.1% of SRG broadcasts

Performances differed across the various linguistic The subtitling platform is also developing well. We EMPLOYEES LOCATIONS regions. Whereas SWISS TXT in Zurich reported a were able to recruit a number of new students for 179 (113 FTES) share of 56.1%, in Geneva the share was 48.9% and this service. in Comano 48.1%. This is despite the fact that we em ployed more means in French-speaking Switzerland AVERAGE and in Italian-speaking Switzerland. The reason for AGE LANGUAGES ZURICH this is the different number of repeats. 37,7 BIEL YEARS DE In addition to subtitling, this year we were also able FR to build on audio description, particularly in Zurich. As IT part of this, we provide audio descriptions of a weekly GENEVA 52% 48% EN COMANO MEN WOMEN

*Schweizerische Radio- und Fernsehgesellschaft (Swiss Broadcasting Corporation)

SWISS7 TXT CORP. – ANNUAL REPORT 2018 6 SWISS TXT CORP. – ANNUAL REPORT 2018 ACCESS SERVICES

FIGURES BY TV CHANNELS

HOURS PROPORTION % CHANGE IN % ON THE PREVIOUS YEAR SRF 1 4’371 54.8 2.6 SRF zwei 4’460 53.6 3.5 COMPANY SRF info 4’956 60.0 0.8 TOTAL SRF 13’786 56.1 2.2 RTS Un 4’145 50.4 -0.4 RTS Deux 4’005 47.3 1.3 TOTAL RTS 8’149 48.9 0.4 STAFF DEVELOPMENT RSI LA 1 4’293 51.0 0 RSI LA 2 3’862 45.1 8.4 TOTAL NUMBER OF EMPLOYEES: COMPARISON OF DECEMBER 2018 VS DECEMBER 2017 (NOMINAL) TOTAL RSI 8’155 48.1 3.8 TOTAL IN HOURS CH 30’091 51.7 2.2 2018 2017 PERS. IN % FTEs* PERS. IN % FTEs* Proportion calculated based on airtime EMPLOYEES 179 113 168 110 - Women 86 48 75 45 - Men 93 52 93 55 FIGURES BY TYPE OF PRODUCTION DIVISIONS - Management and Services 20 11 14 19 11 12 SRF +/- % RTS +/- % RSI +/- % TOTAL CHANGE - Access Services 109 61 54 95 57 48 IN % ON THE - Content Solutions 20 11 18 23 14 20 PREVIOUS YEAR - Managed Services / DMO 26 15 23 24 14 23 News 403 0.2 263 0.6 377 0.2 1’042 0.3 - Sales & Consulting 4 2 4 7 4 7 Live 1’542 9.3 1’473 19.4 1’426 21.7 4’441 16.3 TOTAL 179 168 Semi-Live 307 3.2 59 -39.0 133 11.0 499 -2.9 Time-Code 344 -8.8 478 -0.2 455 -13.6 1’277 -7.6 FTEs* = full-time equivalents, converted to 100% TOTAL IN-HOUSE PRODUCTION 2’595 4.3 2’273 9.7 2’391 8.9 7’259 7.5 Exchanges 563 -14.2 12 0 575 -12.3 Purchases abroad 221 -21.4 787 6.5 843 56.0 1’850 18.6 ANALYSIS OF FULL-TIME TOTAL NUMBER OF EMPLOYEES Puchases in Switzerland 114 0 0 114 EQUIVALENTS (FTEs) IN THE REGIONS AS AT END OF Reruns 7’571 3.8 1’932 -14.3 2’552 -5.9 12’054 -1.7 2018 Night 2’475 -0.5 3’125 3.1 2’348 -2.2 7’948 0.4 COMPARISON OF DECEMBER 2018 VS Miscellaneous 141 -18.7 0 0 141 -18.7 DECEMBER 2017 LOCATION NUMBER OF IN FULL-TIME Romansh 107 -2.7 21 16.7 21 162.5 149 9.6 Full-time equivalents (FTEs) increased between 2017 EMPLOYEES EQUIVALENTS TOTAL HOURS 13’786 2.2 8’149 0.4 8’155 3.8 30’091 2.2 (FTEs) and 2018 on average by 3.43 FTEs (+3.12%) overall. Biel 77 63.38 This increase can be attributed to an expansion in the Zurich 41 18.13 duties of the Access Services Department. The aim is Geneva 31 17.40 to prepare for a gradual rise in subtitling to 80% by Comano 30 14.21 2022. At the same time, subtitling services should be developed further outside of the core mission – with The average age of the company’s employees in 2018 audio description and captioning for students and in was 37,7 years. parliaments.

SWISS9 TXT CORP. – ANNUAL REPORT 2018 8 SWISS TXT CORP. – ANNUAL REPORT 2018 COMPANY

ORGANIGRAM

EXECUTIVE BOARD

DIRECTION Martin Schneider FINANCIAL STATEMENTS

SALES & MANAGED CONTENT ACCESS SERVICES CONTROLLING ADMINISTRATION COMMUNICATION HUMAN RESOURCES INNOVATION & CONSULTING SERVICES SOLUTIONS & FINANZEN & PR BUSINESS DEVELOP. Beat Schneider Sascha Quillet Patrick Lüthi Gion Linder Reto Casanova Gabriele Hahn Julien Kurt Jsabella Stampﬂi Robin Ribback THE BUSINESS AT A GLANCE

CENTRAL SERVICES In- the 2018 financial year, the company achieved pro The depreciations are due to decreasing fixed assets fits of CHF 0.19 million, meaning that net income was and deferred investments, and are lower than the CHF 0.13 million (49%) lower than in the previous previous year by around CHF 0.4 million (23%). CORPORATE BODIES year. Profit from the «Content4all» innovation project BOARD OF DIRECTORS SWISS TXT generated operating revenues of CHF 22.6 (online platform for sign language) as part of the million this year, around CHF 0,3 million (1%) above EU «Horizon2020» programme yielded an additional CHAIRMAN Marco Derighetti Director of Operations, SRG SSR that of the previous year. CHF 0.26 million as revenue from secondary business. VICE CHAIRMAN Hansruedi Schoch Director of Programming, SRF MEMBERS Thierry Zweifel Director of Strategy and Programming, RTS The strategic business areas of Managed Services Overall, the company result is below the previous Larissa M. Bieler Director and Editor-in-Chief SWI swissinfo.ch (MGS) and Access Services appear to be mainly re year. Carole Ackermann Entrepreneur, Director and Lecturer (external) sponsible for the increase in revenue. Existing services Daniel Benninger Entrepreneur, Consultant and Lecturer (external) such as IT infrastructure services and newer services such as the video delivery platform and captioning for EXECUTIVE BOARD hearing-impaired people overcompensate for the de cline in orders from the project business with the SRG. DIRECTOR Martin Schneider Director (from 1 February 2018) Operating expenses of CHF 22.7 million increased by Daniel Benninger Interim Director CHF 0.4 million – or 2% – against the previous year. (until 31 January 2018) MEMBERS Reto Casanova Head of Controlling & Finances The increase in expenses is due chiefly to staff costs Gion Linder Head of Access Services and depreciations. The expenses for materials and Patrick Lüthi Head of Content Solutions third-party services rose by around CHF 0.6 million Sascha Quillet Head of Managed Services (9%) compared to the previous year, and staff ex Beat Schneider Head of Sales & Consulting penditure grew by around CHF 0.2 million (2%) due to additional FTEs. AUDITOR BD O LTD As at: 31.12.2018

SWISS TXT CORP. – ANNUAL REPORT 2018 10 SWISS TXT CORP. – ANNUAL REPORT 2018 11 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

BALANCE SHEET AS AT 31 DECEMBER 2018 BALANCE SHEET AS AT 31 DECEMBER 2018

ASSETS LIABILITIES AND EQUITY Amount in CHF APPENDIX 31.12.2018 31.12.2017 Amount in CHF APPENDIX 31.12.2018 31.12.2017

CURRENT ASSETS SHORT-TERM LIABILITIES Cash and cash equivalents 3.1 7’912’886 7’769’738 Trade payables 3.4 Trade receivables 3.2 Third parties 761’366 1’320’552 Third parties 785’887 1’303’690 Stakeholders 336’530 147’849 - Del credere -84’692 -55’874 Other short-term liabilities 3.4 Stakeholders 1’184’928 922’840 Third parties 567’632 483’476 Other short-term receivables 39’998 51’162 Deferred income 3.5 2’035’993 2’377’933 Deferred expenses 682’290 724’450 TOTAL SHORT-TERM LIABILITIES 3’701’521 4’329’810 TOTAL CURRENT ASSETS 10’521’296 10’716’006 in % of total assets 29% 33% in % of total assets 82% 81% TOTAL LIABILITIES 3’701’521 4’329’810 FIXED ASSETS 3.3 in % of total assets 29% 33% Property, plant and equipment SHAREHOLDERS’ EQUITY 3.7 Means of production 1’656’986 1’679’968 Share capital 1’000’000 1’000’000 IT 3’708 23’657 Statutory reserves 1’000’000 1’000’000 Other fixed assets 153’000 162’373 Voluntary reserves 7’106’812 6’915’685 Assets under construction 204’178 80’545 Profit brought forward 2’184 2’425 Intangible assets 269’164 582’946 Net income 191’128 324’760 TOTAL FIXED ASSETS 2’287’037 2’529’489 Net profit 193’312 327’185 in % of total assets 18% 19% Other voluntary reserves 6’913’500 6’588’500 TOTAL ASSETS 12’808’333 13’245’495 TOTAL SHAREHOLDERS’ EQUITY 9’106’812 8’915’685 in % of total assets 71% 67% TOTAL LIABILITIES AND EQUITY 12’808’333 13’245’495

SWISS TXT CORP. – ANNUAL REPORT 2018 12 SWISS TXT CORP. – ANNUAL REPORT 2018 13 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

INCOME STATEMENT 2018 APPENDIX AS AT 31 DECEMBER 2.4 FIXED ASSETS / INTANGIBLE ASSETS 2017 The valuation of fixed assets / intangible assets is Amount in CHF APPENDIX 2018 2017 based on acquisition and production costs less any PRODUCTION INCOME STATEMENT (TOTAL COST METHOD) 1. LEGAL BASIS depreciation and value adjustments deemed com Net sales revenues 3.8 22’646’195 22’394’107 The 2018 annual financial statements for SWISS TXT mercially necessary. The assets under construction Cost of materials and services 3.9 6’397’429 5’842’891 Corp. (formerly Schweizerische Teletext AG), based include accumulated, capitalised project costs. Un- Staff expenses 3.10 13’398’898 13’169’356 in Biel were prepared according to the provisions of capitalised expenses and any interest costs are Other operating expenses 3.11 1’628’937 1’598’173 the Swiss Accounting Law (art. 957–963b, valid from charged to the income statement as appropriate to EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND 1 January 2013). the period. Assets worth less than CHF 5’000 are not AMORTISATION (EBITDA) 1’220’932 1’783’688 capitalised. Instead, they are charged directly to the Depreciation and value adjustments for fixed assets 3.12 1’297’086 1’683’789 income statement at the time of acquisition. EARNINGS BEFORE INTEREST AND TAX (EBIT) -76’155 99’898 2. ACCOUNTING PRINCIPLES Financial expenses 14’925 15’059 Depreciation is calculated based on the acquisition Financial income 23’605 21’755 2.1 FOREIGN CURRENCY CONVERSION or production value. All assets are depreciated on a EARNINGS BEFORE TAX (EBT) -67’475 106’594 The annual financial statements were calculated linear basis over the estimated useful life of the as Non-operating expenses 1’883 763 in the local currency, the Swiss Franc (CHF). For set (three to five years). The first depreciation takes Non-operating revenues 3.13 258’091 120’083 eign exchange valuation at the end of the year was place from commissioning, completion or the date Extraordinary, non-recurring and off-period revenues 3.14 17’434 203’597 based on the exchange rate on the reporting date of of transfer of ownership in proportion to the useful ANNUAL RESULT BEFORE TAX 206’168 429’511 31.12.2018. Exchange rate gains and losses arising life of the asset. Direct taxes 15’040 104’752 from transactions in foreign currencies are recorded NET INCOME 191’128 324’760 as affecting net income. 2.5 PROVISIONS FOR LIABILITIES AND CHARGES Provisions for liabilities and charges are made based 2.2 ACCOUNTING AND VALUATION PRINCIPLES on probable obligations arising from an event in CASH FLOW STATEMENT 2018 For SWISS TXT Corp.’s annual financial statements, the past, whose amount and/or maturity is uncer assets were generally valued as acquisition or pro tain, but can be estimated. These obligations create Amount in CHF 2018 2017 duction costs. This corresponds to the principle of a liability. Provisions for liabilities and charges are Net income 191’128 324’760 individual valuation of assets and liabilities. The not used to make value adjustments to assets. The Depreciation / value impairment of fixed assets 1’297’086 1’683’789 existence of asset impairment indicators is assessed obligating event in the past must have taken place Changes to provisions for liabilities and charges 0 -457’127 at each reporting date. If a value impairment exists, before the reporting date. The provisions for liabilities Changes to short-term receivables 295’698 471’365 the book value is reduced to the recoverable value and charges correspond to actual obligations on the Changes to deferred expenses 42’160 116’251 and this is recorded in the income statement. If, at reporting date. Changes to short-term liabilities a later point in time, the reason for the value im (excl. financial liabilities) -286’350 346’182 pairment is (partially) removed, an appreciation is Changes to deferred income -341’940 1’466’546 recorded as affecting net income. 3. EXPLANATORY NOTES FOR THE OPERATING CASH FLOW 1’197’783 3’951’766 BALANCE SHEET AND INCOME Investments in fixed assets -920’975 -1’587’108 2.3 RECEIVABLES STATEMENT Investments in intangible assets -133’659 -323’027 The receivables include all unmet claims against third CASH FLOW FROM INVESTING ACTIVITIES -1’054’635 -1’910’135 parties and are recorded at their nominal value less 3.1 CASH AND CASH EQUIVALENTS Distribution of profit 0 0 any value adjustments. After deducting individual Cash and cash equivalents amounted to CHF 7,9 mil CASH FLOW FROM FINANCING ACTIVITIES 0 0 value adjustments, the remaining reserve is calculated lion at the end of the year, representing an increase CHANGE IN NET CASH AND CASH EQUIVALENTS 143’148 2’041’631 with a fixed allowance of 2% for general credit and against the previous year. As SWISS TXT Corp. is cur as at 1 January 7’769’738 5’728’107 interest risks. rently making a fresh start, it is important that the as at 31 December 7’912’886 7’769’738 company has a certain amount of financial leeway in CHANGE IN NET CASH AND CASH EQUIVALENTS 143’148 2’041’631 order to arrange any investments or shareholdings.

SWISS TXT CORP. – ANNUAL REPORT 2018 14 SWISS TXT CORP. – ANNUAL REPORT 2018 15 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

3.2 RECEIVABLES year, SWISS TXT arranged investments in fixed and 3.4 LIABILITIES 3.6 PPROVISIONS FOR LIABILITIES AND CHARGES There was a net decrease in trade receivables, due intangible assets worth around CHF 1.1 million. The The receivables include all unmet claims against third They were no short or long-term provisions. mainly to the positive payment behaviour of custom largest investments concerned new acquisitions for parties and participants and are recorded at their ers. means of production (in particular, storage for Quick nominal value less any value adjustments. They fell line, elimination of safety gaps following Spectre/ during the year by CHF 0.3 million. 3.3 FIXED ASSETS Meltdown, and the purchase of a replacement for At the end of 2018, fixed assets ran to CHF 2.3 million, the teletext platform), and developments for the 3.5 DEFERRED INCOME representing a decrease of around CHF 0.2 million expansion of the subtitling offer. Deferred income was up by CHF 0.4 million in 2018. compared to the previous year. In the 2018 financial

STATEMENT OF FIXED ASSETS 2018 STATEMENT OF SHORT-TERM PROVISIONS FOR LIABILITIES AND CHARGES ACQUISITION VALUE AS AT 1.1 RECLASSIFI ADDITIONS DISPOSALS AS AT 31.12 Amount in CHF PROVISION PROVISION FOR PROVISION FOR TOTAL CATIONS FOR PENSION RESTRUCTURING MISCELLANEOUS LIABILITIES PROPERTY, PLANT AND EQUIPMENT Book value on 01.01.2017 368’000 89’127 0 457’127 Assets under construction 80’545 123’633 204’178 Formation 0 Means of production 5’277’095 856’721 6’133’816 Appropriation -243’269 -25’514 -268’783 IT 127’784 127’784 Dissolution -124’731 -63’613 -188’344 Other fixed assets 1’352’178 64’255 1’416’433 Reclassification (short/long-term) 0 TOTAL FIXED ASSETS 6’837’602 0 1’044’609 0 7’882’211 BOOK VALUE ON 31.12.2017 PREVIOUS YEAR ON 01.01.2018 0 0 0 0 INTANGIBLE ASSETS Formation 0 Licences / rights 408’281 408’281 Appropriation 0 Software ownership 1’713’417 10’026 1’723’443 Dissolution 0 TOTAL INTANGIBLE ASSETS 2’121’698 0 10’026 0 2’131’724 Reclassification (short/long-term) 0 TOTAL FIXED ASSETS 8’959’300 0 1’054’634 0 10’013’934 BOOK VALUE ON 31.12.2018 0 0 0 0

ACCUMULATED AS AT 1 RECLASSIFI ADDITIONS DISPOSALS AS AT BOOK VALUE ADJUSTMENTS January CATIONS 31 Decem VALUE ber 31 Decem ber PROPERTY, PLANT AND EQUIPMENT Assets under construction 0 0 204’178 Means of production 3’597’127 879’702 4’476’829 1’656’987 IT 104’127 19’949 124’076 3’708 Other fixed assets 1’189’805 73’628 1’263’433 153’000 TOTAL FIXED ASSETS 4’891’059 0 973’279 0 5’864’338 2’017’873 INTANGIBLE ASSETS Licences / rights 355’470 51’070 406’540 1’741 Software ownership 1’183’282 272’738 1’456’020 267’423 TOTAL INTANGIBLE ASSETS 1’538’752 0 323’808 0 1’862’560 269’164 TOTAL FIXED ASSETS 6’429’811 0 1’297’086 0 7’726’897 TOTAL BOOK VALUE 2’529’489 0 -242’452 0 2’287’037

SWISS TXT CORP. – ANNUAL REPORT 2018 16 SWISS TXT CORP. – ANNUAL REPORT 2018 17 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

3.7 SHAREHOLDERS’ EQUITY 3.9 COST OF MATERIALS AND SERVICES 3.11 OTHER OPERATING EXPENSES Shareholders’ equity increased to CHF 9.1 million due The cost of materials and services rose by around The other operating expenses are equivalent to those to the appropriation of the previous year’s profits and CHF 0.6 million (9%) against the previous year. The for the previous year. the net income in 2018. At the end of 2018, share main reasons for this include, on the one hand, the holders’ equity amounted to 71%. implementation of a buying/selling server on Quick Amount in CHF 2018 2017 line, and the increased use of the Content Delivery Office space costs 823’068 796’217 Amount in CHF CAPITAL RETAINED PROFIT PROFIT PER TOTAL SHARE Network (CDN) through Akamai on the other hand. Maintenance, repair, replace STOCK EARNINGS CARRIED FORMANCE HOLDERS’ ment and vehicle costs 73’861 40’959 FORWARD CAPITAL Amount in CHF 2018 2017 Insurance premiums and duties 19’306 15’939 Material costs 965’414 678’472 BALANCE ON 01.01.2017 1’000’000 7’218’500 2’112 370’313 8’590’925 Administrative and IT costs 296’502 287’492 Third-party services costs 5’432’015 5’164’419 Reclassification of the 2016 result 370’000 313 -370’313 0 Advertising and marketing COST OF MATERIALS AND costs 415’603 456’846 Dividends 0 SERVICES 6’397’429 5’842’891 Other operating expenses 597 720 Company result 324’760 324’760 OTHER OPERATING BALANCE ON 31.12.2017 1’000’000 7’588’500 2’425 324’760 8’915’685 3.10 STAFF EXPENSES EXPENSES 1’628’937 1’598’173 Reclassification of the 2017 result 325’000 -240 -324’760 0 Staff expenses increased by around CHF 0.2 million Dividends 0 (2%) against the previous year. As a service-based 3.12 DEPRECIATION Company result 191’128 191’128 company, this is once again the single largest com Depreciations ran to CHF 1.3 million. Due to invest BALANCE ON 31.12.2018 1’000’000 7’913’500 2’184 191’128 9’106’812 pany expense in 2018. Staff expenses of around CHF ments made in 2017, this represented an decrease 13.4 million represented around 59% of SWISS TXT’s of CHF 0.4 million (23%) against the previous year.

3.8 NET SALES REVENUES Amount in CHF 2018 2017 total operating expenses. In the 2018 financial year, operating revenues grew by OPERATING REVENUES 3.13 NON-OPERATING REVENUES around CHF 0.3 million (1%) on the previous year. The Managed Services 9’797’451 8’892’825 Wages and salaries increased by CHF 0.2 million (1%) We won the «Content4all» innovation project within main reasons for this are long-term services, such as Content Solutions 3’269’790 4’354’489 against the previous year to CHF 10.9 million. The rise the EU «Horizon2020» programme. The project in IT infrastructure services, and newer services, such as Access Services 8’898’982 8’201’554 is due to the increase in average full-time equivalents volves an online platform for sign language and will the video delivery platform and captioning for hear Media Consulting 869’863 967’542 and the work done by third parties for the interim last around 3 years. The project is being developed ing-impaired people, which compensate for the huge mediahub 115’293 61’163 Executive Board. Higher social security contributions with international partners. The proportionate reve decline in project orders from the SRG due to the Capitalised internal services 123’633 357’675 and costs associated with the employee benefits in nue in 2018 amounts to CHF 0.2 million. The remai- «Panorama» corporate project. GROSS SERVICE REVENUES 23’075’013 22’835’248 stitution are due mainly to the increase in the number ning external revenue, which included the previous Revenue reductions -428’818 -441’141 of full-time equivalents. year’s financial income, will be left off from 2018 be The three strategic enterprise areas Managed Services NET SERVICE REVENUES 22’646’195 22’394’107 cause it is accounted for separately in the income (MGS), – plus CHF 0.9 million (9%), – Access Services The remaining staff expenses of around CHF 0.4 mil statement. (AS) – plus CHF 0.7 million (8%) – and Digital Media lion were roughly equivalent to those for the previous Operations (DMO) – plus CHF 0.1 million (47%) – all year. These expenses include travel and food allow Amount in CHF 2018 2017 increased their annual turnover against the previous ances, recruitment costs, hired staff expenses and the Non-operating revenues 258’091 120’083 year. cost of staff training. Other non-operating revenues 0 21’755 NON-OPERATING REVENUES 258’091 141’838 The two strategic enterprise areas Content Solu Amount in CHF 2018 2017 tions (CS) and Media Consulting (MC) were unable Wages and salaries 10’941’593 10’789’353 to match their previous year’s figures. Whilst revenues Social security and allowances 986’449 950’314 in the Media Consulting area fell by CHF 0.1 million Employee benefits institution 1’110’343 1’047’043 (11%), the Content Solutions area suffered a drop in Other staff expenses 360’512 382’646 revenues of CHF 1.1 million (33%). STAFF EXPENSES 13’398’897 13’169’356

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3.14 EXTRAORDINARY, NON-RECURRING AND 4.4 RISK ASSESSMENT APPLICATION REGARDING THE APPROPRIATION OF NET INCOME OFF-PERIOD REVENUES At its meeting on 12 November 2018, the SWISS TXT In 2017, the two provisions for the SWISS TXT Inter Board of Directors conducted an appropriate risk as Amount in CHF 31.12.2018 31.12.2017 active social plan and for the reduction in the tech sessment and introduced any measures highlighted Profit brought forward from previous year 2’184 2’425 nical interest rate on the SRG SSR pension fund were by the same to ensure that the risk of materially false Annual result after tax 191’128 324’760 dissolved. accounting statements is small. NET PROFIT 193’312 327’184 Dividends 0 0 Amount in CHF 2018 2017 4.5 EVENTS AFTER THE REPORTING DATE Allocation to the statutory reserves 0 0 Extraordinary provisions for After the reporting date and up to the approval of the Allocation to the declared reserves -190’000 -325’000 liabilities and charges 0 188’344 annual financial statements by the Board of Directors PROFIT BROUGHT FORWARD TO NEW ACCOUNT 3’312 2’184 Other extraordinary revenues 17’434 15’253 on 11 March 2019, no significant events occurred EXTRAORDINARY, NON-RE that could adversely affect the validity of the 2018 CURRING AND OFF-PERIOD REVENUES 17’434 203’597 financial statements, nor did any significant events occur that must be disclosed at this time.

4.6 REMUNERATION OF THE BOARD OF DIRECTORS AND THE EXECUTIVE BOARD 4. OTHER DATA In 2018, five non-executive members of the Board of Directors received remuneration of around CHF 4.1 LIABILITIES TOWARD THE EMPLOYEE BENEFITS 0.1 million. INSTITUTION The annual total remuneration for members of the Amount in CHF 2018 2017 Executive Board came to around CHF 1.2 million. This LIABILITIES TOWARD includes basic salary, variable remuneration and ad THE EMPLOYEE BENEFITS ditional benefits. INSTITUTION 0 0

4.2 NUMBER OF FULL-TIME POSITIONS In both 2017 and 2018, the average annual number of full-time positions was between 50 and 249 FTEs.

4.3 LEASING OBLIGATIONS / LONG-TERM RENTAL AGREEMENTS As at 31 December 2018, obligations arising from leasing and long-term rental agreements ran to CHF 1.1 million.

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AUDIT REPORT Phone +41 31 327 17 17 BDO Ltd Fax +41 31 327 17 38 Hodlerstrasse 5 www.bdo.ch 3001 Berne

Phone +41 31 327 17 17 BDO Ltd Fax +41 31 327 17 38 Hodlerstrasse 5 REPORT OF THE STATUTORY AUDITOR www.bdo.ch 3001 Berne To the General Meeting of SWISS TXT Corporation, Biel/Bienne Report on Other Legal Requirements Report of the Statutory Auditor on the Financial Statements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act AsREPORT statutory OF THE auditor, STATUTORY we have AUDITOR audited the accompanying financial statements of (AOA) and independence (article 728 Code of Obligations (CO)) and that there are no circumstances SWISSTo the TXT General Corporation Meeting, whichof SWISS comprise TXT Corporation the balance, Biel/Bienne sheet as at 31 December 2018, and the income incompatible with our independence. statement, statement of cash flows and notes for the year then ended. Report of the Statutory Auditor on the Financial Statements In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we confirm that Board of Directors’ Responsibility an internal control system exists, which has been designed for the preparation of financial state- As statutory auditor, we have audited the accompanying financial statements of The Board of Directors is responsible for the preparation of these financial statements in accord- ments according to the instructions of the Board of Directors. SWISS TXT Corporation, which comprise the balance sheet as at 31 December 2018, and the income ance with the requirements of Swiss law and the company’s articles of incorporation. This responsi- statement, statement of cash flows and notes for the year then ended. We further confirm that the proposed appropriation of available earnings complies with Swiss law bility includes designing, implementing and maintaining an internal control system relevant to the and the company’s articles of incorporation. We recommend that the financial statements submit- preparationBoard of Directors’ of financial Responsi statementsbility that are free from material misstatement, whether due to fraud ted to you be approved. or error. The Board of Directors is further responsible for selecting and applying appropriate ac- The Board of Directors is responsible for the preparation of these financial statements in accord- counting policies and making accounting estimates that are reasonable in the circumstances. ance with the requirements of Swiss law and the company’s articles of incorporation. This responsi- Berne, 1 March 2019 Auditor’bility includess Responsibility designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud Our responsibility is to express an opinion on these financial statements based on our audit. We con- or error. The Board of Directors is further responsible for selecting and applying appropriate ac- BDO Ltd ducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards re- counting policies and making accounting estimates that are reasonable in the circumstances. quire that we plan and perform the audit to obtain reasonable assurance whether the financial statementsAuditor’s Responsibility are free from material misstatement. AnOur audit responsibility involves performingis to express procedures an opinion to on obtain these audit financial evidence statements about thebased amounts on our andaudit. disclosures We con- inducted the financial our audit statements. in accordance The with procedures Swiss law selected and Swiss depend Auditing on the Standards. auditor’s Those judgment, standards including re- thequire assessment that we plan of the and risks perform of material the audit misstatement to obtain reasonable of the financial assurance statements, whether whetherthe financial due to Matthias Hildebrandt ppa. Sibylle Schmid fraudstatements or error. are Infree making from thosematerial risk misstatement. assessments, the auditor considers the internal control system Auditor in Charge relevant to the entity’s preparation of the financial statements in order to design audit procedures An audit involves performing procedures to obtain audit evidence about the amounts and disclosures Licensed Audit Expert Licensed Audit Expert that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the in the financial statements. The procedures selected depend on the auditor’s judgment, including effectiveness of the entity’s internal control system. An audit also includes evaluating the appropri- the assessment of the risks of material misstatement of the financial statements, whether due to ateness of accounting policies used and the reasonableness of accounting estimates made, as well fraud or error. In making those risk assessments, the auditor considers the internal control system as evaluating the overall presentation of the financial statements. We believe that the audit evi- relevant to the entity’s preparation of the financial statements in order to design audit procedures dence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Opinioneffectiveness of the entity’s internal control system. An audit also includes evaluating the appropri- ateness of accounting policies used and the reasonableness of accounting estimates made, as well In our opinion, the financial statements for the year ended 31 December 2018 comply with Swiss law as evaluating the overall presentation of the financial statements. We believe that the audit evi- and the company’s articles of incorporation. dence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements for the year ended 31 December 2018 comply with Swiss law and the company’s articles of incorporation.

Enclosures Financial statements BDO Ltd, a limited company under Swiss law, incorporated in Zurich, forms part of the international BDO Network of independent member firms. Proposed appropriation of available earnings

BDO Ltd, a limited company under Swiss law, incorporated in Zurich, forms part of the international BDO Network of independent member firms.

SWISS TXT CORP. – ANNUAL REPORT 2018 22 SWISS TXT CORP. – ANNUAL REPORT 2018 23 SWISS TXT Corp. Alexander-Schöni-Strasse 40 PO Box 1136 CH-2501 Biel-Bienne

T: +41 32 329 29 29 swisstxt.ch