Annual Report 2 Saurer Annual Report 2018 Key Figures
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2018 Annual report 2 Saurer Annual Report 2018 Key figures R&D investments 1 498 Patents 965 Applications +53 % YoY Group highlights → Revenue increased by Dividend policy: payout ratio 5.8 % to RMB 9 220 million → Net profit grew by 14.3 % → Strong sales performance in Bangladesh (64.5 %), Germany (34.7 %), Switzerland (34.7%) and the USA (33.5%) 2018 30.2 % → Launch of new technology 2017 31 % centre to support R&D Key figures 3 Revenue by region in % 20 % Asia (excl. China/India) 8 % Europe, Africa, others (excl. Turkey) 44 % 10 % China Turkey 10 % India 8 % Americas Revenue by region in thousand RMB 2018 China 4 087 878 India 926 397 Turkey 880 848 Asia (excl. China/India) 1 840 587 Americas 746 377 Europe, Africa, others (excl. Turkey) 738 671 Revenue by segment Operating margin in thousand RMB in % 1 876 671 1 809 697 7 421 453 1 487 895 6 977 092 1 477 864 12.4 5 185 038 4 897 647 11.4 10.6 Saurer Spinning Solutions Saurer Technologies 4 Saurer Annual Report 2018 Letter from the Chairman and CEO Pan Xueping Clement Woon Chairman CEO Dear shareholders, This past year we at Saurer have intensified our efforts to put customers at the centre of our decision-making process and strengthen our outside-in strategy, which repositions the Group as a solutions provider. Our results from 2018 show that we are heading in the right direction. Letter from the Chairman and CEO 5 Forging ahead in challenging conditions The Group’s plant in Urumqi in China’s Xinjiang Province Saurer posted revenue growth amounting to RMB 9.22 serves as a beacon for other Saurer locations as it is the billion, a year-on-year (YoY) increase of 5.8 % (2017: first to produce both pre-spinning and spinning machines. RMB 8.713 billion). Net profit attributable to shareholders This modern site, which started production in the third rose by 23.1 % to RMB 810 million (2017: RMB 658 million). quarter of 2018, demonstrates how Saurer uses intelligent The Group’s sales in its biggest market, China, went up concepts related to Industry 4.0 within its own operations. by 11.2 %. This was despite the uncertainty across the globe in the second half of 2018, which saw this economy Last year also saw a significant reorganisation of our growing at its slowest rate in almost three decades – sales and service department. This change has already 6.6 %. In Europe, Group revenue experienced a boost of proved fruitful in the Americas, Europe, Middle East and 9.3 %. Germany and Switzerland were the best per - Africa (AEMEA) region as Saurer aims further to improve formers in the region with growth of almost 35 % each. its proximity to customers in all the regions it serves. New developments A reinvigorated Saurer Saurer is committed to expanding its R&D efforts and As the Group makes the final arrangements for ITMA therefore increased spend in this regard by approxi- Barcelona, we are confident that our innovations will win mately 50 % YoY. In line with this, the Group launched over new customers. This important exhibition will play the Saurer Technology Centre (STC) and introduced a major role in anchoring the new Saurer for the future. focused activities related to automation and sensor technology. With these projects, the STC will support Acknowledgements the Group as it integrates smart technology into its On behalf of the Board of Directors and management, offering, optimising customers’ operations. we would like to express our thanks to our employees, whose efforts make our endeavours possible. We are grateful for the unstinting support of our customers, suppliers and business partners – we look forward to forging even stronger bonds in the coming years. Lastly, we acknowledge the vital role that you, our share- holders, play – thank you for putting your trust in us. Wattwil/Shanghai, 25 April 2019 Pan Xueping Clement Woon Chairman CEO 6 Saurer Annual Report 2018 Table of contents Table of contents 7 008 → We power creation 019 → Definitions 020 → Company profile and financial summary 024 → Business overview 028 → Discussion and analysis of operations 038 → Significant events 050 → Changes in common shares and shareholders 054 → Directors, Supervisors, Senior Executives and Employees 059 → Corporate governance report 063 → Financial statements and auditor's report 138 → Catalogue of documents available for inspection 8 Saurer Annual Report 2018 We power creation. We power creation 9 We power creation. Introduction Our customers produce a large variety of yarns and garments with the help of Saurer machines and services. End products range from tire cord to delicate embroideries for the high fashion industry. At Saurer we take great pride in being involved at the start of many of these creations. 10 Saurer Annual Report 2018 From our inception In our 165-year history, we moved from being an iron foundry to becoming a pioneering technology company offering textile machines and commercial vehicles. Today, we are known for our quality excellence in the textile industry. We power creation 11 History shows that we have always been able to adapt and drive innovation. We are con- vinced that we can further grow by differen tiating our product offering and business model. More- over, we see opportunities with new technologies in the fields of sensors, automation and big data. to the future 12 Saurer Annual Report 2018 From quality We are known to offer technologi- cally advanced and customer- specific solutions for processing staple fibre from bale to yarn. Our dedication goes towards further improving the quality of our products as well as the range of services we offer. We power creation 13 In order to explore new opportunities and foster our drive for innovation, we have established a new Sensors Business Line. Automation is also a key focus area. These efforts will aid us in providing state-of-the-art technology in and outside of textile. In addition, our new Technology Centre in Arbon, Switzerland, works closely with engineers across the Group to integrate smart technology into our products. to innovation 14 Saurer Annual Report 2018 From manpower Our aim is to move beyond supply- ing our customers with textile machinery to partnering with them. We want to analyse their needs and turn these into smart, fit-for-pur- pose solutions and services for their operations in order to help them achieve their business aspirations. We power creation 15 Automation, sensor technology and big data are becoming increasingly important in manufacturing. Intel- ligent processes and technologies, such as data analysis, enable an unpreceded level of productivity and quality management. By using our E³ approach, which focuses on opti- mising energy, economics, ergonom- ics and adding more and more intelligence, we ensure that we can deliver on these developments. to automation 16 Saurer Annual Report 2018 From cosy Through our segment Saurer Spinning Solutions, we offer our clients high-quality, techno- logically advanced and customer- specific solutions for processing staple fibre from bale to yarn. We power creation 17 Our segment Saurer Technologies specialises in twisting and embroidery as well as engineered and polymer solutions. Our aim is to constantly develop innovative and economically interesting products for the benefit of our customers. to functional 18 Saurer Annual Report 2018 Important notes 1. The Board of Directors, the Board of Supervisors, After the reserves were set aside, the net profit attrib- Directors, Supervisors and Senior Executives of Saurer utable to the parent company in 2018 was RMB Intelligent Technology Co. Ltd (“the Company”), –114 346 000. Including the undistributed profit of RMB hereby confirm that the content set out in this Annual 631 302 000 at the beginning of the year, the residual Report is true, accurate and complete, and free from profit of the parent company distributable to the any false representations, misleading statements or shareholders was RMB 498 002 000. According to the material omissions, and are individually and collec- relevant laws and regulations and the Articles of Asso- tively responsible for the content therein. ciation, and considering the interests of the share- holders and the long-term development of the Com- 2. All members of the Board of Directors attended the pany, the Company’s profit distribution plan for 2018 board meeting to review this Annual Report. was that, based on the total number of shares of 1 895 412 995, cash dividends of RMB 1.293 (before tax) 3. PwC Mainland China (special general partnership) for every 10 shares (a total of RMB 245 000 000 (before presented a standard, unqualified Auditor’s Report for tax)) were distributed to all shareholders from the the Company. undistributed profit. No other forms of profit distribu- tion or capital reserve plan were implemented. 4. Pan Xueping, Chairman of the Board of Directors, and Lu Yimin, Chief Financial Officer and accountant in 6. Disclaimer with respect to forward-looking statements charge, confirm the truthfulness, accuracy and com- None of the forward-looking statements contained in pleteness of the financial statements in this Annual this Report, such as the development strategies or Report. future business plans, constitute a commitment by the Company to investors. Investors are advised to be 5. Proposed profit distribution and capital reserve plan aware that investments involve risks. for the reporting period, as reviewed by the Board of Directors. 7. Important risk warning According to the Articles of Association and the rele- The risks faced by the Company are detailed in “Com- vant laws and regulations, and considering factors pany’s Future Development” under Section 4, “Discus- such as shareholders’ returns and the Company’s sion and Analysis of Operations”.