Annual Report 2016 Swiss Txt Ag Contents Chairman’S Foreword

ANNUAL REPORT 2016 SWISS TXT AG CONTENTS CHAIRMAN’S FOREWORD

CHAIRMAN’S FOREWORD 3

HIGHLIGHTS 4

FACTS & FIGURES 6

MARKET DATA AND FIGURES 7 ACCESS SERVICES 7 Changes to a company’s brand image and name At the start of the year, an amendment to our are not always a sign of innovation and forward- entry in the Commercial Register and a new logo looking development, but this is certainly the case launched our long-awaited transition from COMPANY 8 for SWISS TXT. Schweizerische Teletext AG to SWISS TXT AG. This HUMAN RESOURCES 8 change is most visible on our website, which has ORGANIGRAM / CORPORATE BODIES 10 In 2016, SWISS TXT pursued a logical and consis- now been completely redeveloped with a fresh, tent development strategy as a multimedia service modern design. We now share success stories and provider. customer testimonials on our website using care- FINANCIAL STATEMENTS 11 fully crafted video messages. Our internal processes THE BUSINESS AT A GLANCE 11 n We offer consulting and solutions for digital and methods are also fresh and agile. Thanks to BALANCE SHEET FOR THE YEAR ENDED 31 DECEMBER 2016 12 media, video streaming and access services, extensive training in the agile development method INCOME STATEMENT 2016 14 boasting a broad portfolio of services that makes SCRUM, we all work efficiently and with a clear CASH FLOW STATEMENT 2016 14 big promises and big demands. focus on customer solutions. APPENDIX 15 n We cover major sporting events with the Event APPLICATION REGARDING THE APPROPRIATION OF NET INCOME 21 Player, the sports results center and excellent Finally, our annual report has also received a facelift, AUDIT REPORT 22 infrastructure for high-quality live streaming – meaning it now presents our latest and most such as at UEFA EURO 2016 and the 2016 exciting news with only the most interesting and Olympic Games in Rio. important facts and figures. n The strategic partnership with Kaltura and their platform for enterprise video content manage- This is our model for the future: efficient, innovative ment has opened up new acquisition oppor- and always ahead of the curve. This encapsulates tunities for us in a wide variety of sectors and my vision for SWISS TXT as Chairman over the markets. coming years, and I remain convinced that it will n Accessibility in moving-image information: allow us to continue to drive change at SWISS TXT thanks to audio description, we are breaking and easily overcome any challenges as they arise. new ground in services for the blind and visually impaired. As a result of spoken image description, these individuals have been able to access RSI programmes since 2016. The implementation of audio description for further applications of Marco Derighetti this Access Service internally and externally is Chairman of the Board of Directors now in the pipeline at SRG. SWISS TXT AG

SWISS TXT AG – ANNUAL REPORT 2016 2 SWISS TXT AG – ANNUAL REPORT 2016 3 HIGHLIGHTS

FEBRUARY MARCH A FEAST FOR THE EARS OF OUR WAY IS MULTIMEDIA THE VISUALLY IMPAIRED SWISS TXT repositions itself and offers companies as well Audio descriptions – spoken film des- as Swiss Radio and Television consulting and solutions criptions – produced by SWISS TXT for digital media, video streaming and access services. The are broadcast for the first time by TV website swisstxt.ch is completely redesigned. JANUARY broadcaster RSI. The blind and visually NEW YEAR, NEW IMAGE impaired thus benefit from an out- standing extra service. As set out in the Commercial Register, the company name was changed from SWISS TXT Schweizerische Teletext AG APRIL to SWISS TXT AG on 1 January 2016. CHEAPER WITH THE SWISS TXT CLOUD SWISS TXT helps SRG to achieve substantial cost savings thanks to its competitive cloud services. MAY SMALL STEPS TOWARDS ACHIEVING OUR GOALS Agile methods constitute a paradigm shift whereby the budget received defines the scope of a project and the time al- located to it. Instead of large phases, SCRUM sees each AUGUST project broken down into EVENT PLAYER MAKES A SECOND APPEARANCE small steps. However, this re- quires new roles, skills, rules The Summer Olympic Games in Rio is a truly memorable and processes. event thanks to its multimedia presence in the Event Player.

JUNE A GLIMPSE BEHIND THE SPORTING SCENES OCTOBER STRATEGIC PARTNERSHIP The annual Get-Together takes place on 15 June 2016. In the 2016 sports year, the European Cham- With the leading video platform from Kaltura and pionship is a central theme. The programme offers the high-powered Media Cloud infrastructure from participants a look behind the scenes at SRF and SWISS TXT, European customers live reporting. Everyone cheers on the national can offer their target audiences a SEPTEMBER team at the Switzerland-Romania game. unique video experience in the POSITIVE AND PROFESSIONAL areas of education and training, corporate communications and SWISS TXT publishes its new HR film – an JULY media. absolute must-watch: www.swisstxt.ch/ GOALS FROM EVERY ANGLE de/swiss-txt/karriere. All we can say is: «the force is with you». SWISS TXT deploys the Event Player for the UEFA EURO 2016. The SRF, RTS and RSI TV sta- tions offer re-playable game highlights and a sports results centre for an overview of the championship.

NOVEMBER SOFTWARE DEVELOPMENT AT EU LEVEL DECEMBER The annual European Broadcasting Union Developer CERTIFIED ACCESSIBILITY Conference presents a unique opportunity for the community to meet for dialogue, presentations, swisstxt.ch receives a certificate for achieving the workshops and general discussion of the EBU mem- second-highest conformity level for accessibility bers’ software development issues. SWISS TXT attends from the Access for All foundation. and gives two presentations.

SWISS TXT AG – ANNUAL REPORT 2016 4 SWISS TXT AG – ANNUAL REPORT 2016 5 FACTS & FIGURES MARKET DATA AND FIGURES

SWISS TXT CLOUD ACCESS SERVICES – SUBTITLING Internet peering: 2×31 Gbit/s Hours Proportion % Change % 66 ESX hosts with a total of 16 TB RAM SRF 1 4’229 52.9 3.1 SRF zwei 4’021 48.7 8.0 SRF info 4’565 55.8 4.8 Streaming bitrate: 10 GB/s 1’600 active VMs GERMAN SPEAKING SWITZERLAND 12’815 52.4 5.2 RTS Un 4’383 53.6 -2.0

Storage: 5.5 PB CDN: 1 billion requests and RTS Deux 4’132 49.3 6.7 800 TB transferred per month FRENCH SPEAKING SWITZERLAND 8’515 51.4 2.0 RSI LA 1 4’811 57.2 0.7 RSI LA 2 3’716 43.4 1.0 ITALIAN SPEAKING SWITZERLAND 8’527 50.2 0.8 Annual revenues ProfitCHF 0.37 million TOTAL CH 29’857 51.5 3.0 CHF 21.4 million Data in hours. Proportion calculated based on airtime. Offices inBiel, Zurich, Geneva Total number of employees and Comano 159 (108 FTEs) SRF RTS RSI Total News 405 267 388 1’060 Founded: Owner: SRG SSR Live 1’470 1’386 1’223 4’079 23 December 1983 Schweizerische Radio- und Fernsehgesellschaft Semi-live 319 103 113 535 (Swiss Broadcasting Corporation) Time code 387 492 509 1’388 TOTAL IN-HOUSE PRODUCTION 2’581 2’248 2’233 7’062 Exchanges 696 11 0 707 Purchases 268 810 504 1’582 Reruns 6’658 2’396 3’008 12’062 Night 2’283 3’033 2’782 8’098 Open subtitling 157 0 0 157 Interregional 70 0 0 70 Romansh 102 17 0 119 TOTAL 12’815 8’515 8’527 29’857

Data in hours.

2016 was a year punctuated by several major spor- artificially produced speech – speech synthesis – and Average age: 38 years SUBTITLING FOR SRG ting events. This and an increase in the number of the awarding of scripting to third parties, we were 52% men, 48% women GERMAN SPEAKING SWITZERLAND reruns in the schedule resulted in a higher subtitling able to add audio descriptions to programmes rela- Languages: DE, FR, IT, EN 12’815 hours, corresponding to 52.4% of SRG broadcasts rates – representing an increase of 3%. At the same tively economically. We have now tested pilot audio FRENCH SPEAKING SWITZERLAND time, we reduced internal costs and the costs of ex- description services for SRF. 8’515 hours, corresponding to 51.4% of SRG broadcasts ternal purchases by almost one third. ITALIAN SPEAKING SWITZERLAND Since autumn 2016, we have also added subtitles to 8’527 hours, corresponding to 50.2% of SRG broadcasts The introduction of audio description on RSI for the Bundesliga live games for Sky Deutschland. blind and visually impaired was a success. Thanks to 20 million viewers reached by video 2.12 PB data transferred during the UEFA Euro 2016 2.41 PB data transferred during the Olympic Games in Rio

SWISS TXT AG – ANNUAL REPORT 2016 6 SWISS TXT AG – ANNUAL REPORT 2016 7 COMPANY COMPANY

STAFF DEVELOPMENT NUMBER OF STAFF AT THE END OF 2016 FURTHER TRAINING DECEMBER 2016 VS. DECEMBER 2015 LOCATION NUMBER OF IN FULL-TIME Agile methods are top of the agenda for virtually all EMPLOYEES EQUIVALENTS In total, the number of full-time equivalents (FTEs) (FTES) projects today. In 2016, SWISS TXT introduced SCRUM was reduced by 3 FTEs between 2015 and 2016. Biel 73 61.84 more or less universally throughout the company. This Zurich 38 17.45 means projects can now be conducted more flexibly Due to the closure of the SWISS TXT Interactive (SI) Geneva 25 14.15 using simpler, more streamlined processes. Around division at the end of 2015, 11 FTEs left the com- Comano 23 14.25 50 individuals received intensive training and 80% pany. In the remaining strategic SWISS TXT enterprise of these received a certificate on completing their areas, the number of full-time equivalents increased The average age of the company’s employees in 2016 training. by 7.80 FTEs in the same period. This increase is a was 38.0 years. direct result of the development of our company in the third market. We were able to create new jobs TOTAL NUMBER OF EMPLOYEES: COMPARISON OF DECEMBER 2016 VS DECEMBER 2015 as shown below: (NOMINAL)

DIVISIONS FULL-TIME CHANGE IN % 2016 IN % FTEs* 2015 IN % FTEs* EQUIVALENTS ON THE EMPLOYEES EMPLOYEES Content Solutions + 2.0 PREVIOUS YEAR Managed Services + 3.3 Access Services + 2.0 EMPLOYEES -2.45 159 108 163 111 Communication & PR + 0.5 - Women -6.33 74 48 79 48 - Men +1.19 85 52 84 52 DIVISIONS The budget was respected in 2016 with an average - Management and Services 22 14 15 21 13 15 of 106.60 FTEs. - Access Services 89 56 48 88 54 47 - Multimedia Solutions 39 24 36 - Content Solutions 23 14 21 - Managed Services 21 13 20 - Media Consulting 3 2 3 - Digital Media Operations 1 1 1 - Marketing and Sales 0 0 0 15 9 14 TOTAL 159 163

Key figures FTEs* = full-time equivalents, converted to 100%

SWISS TXT AG – ANNUAL REPORT 2016 8 SWISS TXT AG – ANNUAL REPORT 2016 9 COMPANY FINANCIAL STATEMENTS

ORGANIGRAM THE BUSINESS AT A GLANCE Operating expenses of CHF 20.9 million decreased by CHF 3.3 million – or 14% – against the previous In the 2016 financial year, the company achieved prof- year. This reduction in costs was chiefly due to the EXECUTIVE BOARD its of CHF 0.37 million, meaning net income was CHF aforementioned closure of SGF SI. The cost of mate- INTERIM DIRECTOR 1.9 million (84%) lower than in the previous year. rials and services decreased by CHF 1.8 million (24%) Daniel Benninger on the previous year, as SRG SSR no longer received SWISS TXT generated operating revenues of CHF 21.4 payments for TELETEXT advertising space. million this year, around CHF 6.2 million (22%) below that of the previous year. The main reason for this fall Due to the lower number of full-time equivalents in earnings is the closure of the strategic enterprise (closure of SI) and the employer contribution re- area (SEA) SWISS TXT Interactive (SI) – which was serves from the previous year (CHF 0.5 million), staff

MEDIA MEDIA MANAGED CONTENT ACCESS CONTROLLING ADMINI- BUSINESS COMMUNI- HUMAN responsible for classic TV TELETEXT marketing and expenses fell by CHF 1 million (8%). Other operating HUB CONSULTING SERVICES SOLUTIONS SERVICES & FINANCES STRATION DEVELOPMENT CATION & PR RESOURCES other vectors (online / mobile) – at the end of 2015. expenses decreased by CHF 0.6 million (29%) against Sascha Klement Beat Schneider Sascha Quillet Patrick Lüthi Gion Linder Reto Casanova Gabriele Hahn Mike Solan Julien Kurt Sandrine Chassot This caused revenues to decline by around CHF 9 the previous year. Only depreciations of fixed assets million against the previous year. SRG SSR also intro- increased against the previous year, by CHF 0.19 mil- duced the cost reduction programme 16+, which led lion or 19%. CENTRAL SERVICES to a loss of revenues at SWISS TXT. Access Services generated CHF 0.4 million less for its central subtitling The change in the annual result is largely due to re- CORPORATE BODIES service; overall, this resulted in CHF 0.1 million (1%) duced operating revenues following the closure of SI. lower revenues for SGF – while Managed Services BOARD OF DIRECTORS returned CHF 0.2 million in revenues from the Media Playout Center (MPC) to the parent company. CHAIRMAN Marco Derighetti Director of Operations, SRG SSR VICE CHAIRMAN Hansruedi Schoch Director of Programming, SRF The drop in revenues was partially compensated by MEMBERS Thierry Zweifel Director of Strategy and Programming, RTS new and residual services. Peter Schibli Director of SWI swissinfo.ch Adrian Bult Multiple Boards of Directors and Investor (external) Daniel Benninger Entrepreneur, Consultant and Lecturer (external)

EXECUTIVE BOARD

DIRECTORS Daniel Benninger Interim Director Franziska Füglistaler Director (until 30.09.2016) MEMBERS Beat Schneider Head of Media Consulting Sascha Quillet Head of Managed Services Patrick Lüthi Head of Content Solutions Gion Linder Head of Access Services Reto Casanova Head of Controlling & Finances

AUDITOR

BDO Visura As at: 31.12.2016

SWISS TXT AG – ANNUAL REPORT 2016 10 SWISS TXT AG – ANNUAL REPORT 2016 11 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

BALANCE SHEET AS AT 31 DECEMBER 2016 BALANCE SHEET AS AT 31 DECEMBER 2016

ASSETS LIABILITIES AND EQUITY Amount in CHF APPENDIX 31.12.2016 31.12.2015 Amount in CHF APPENDIX 31.12.2016 31.12.2015

CURRENT ASSETS SHORT-TERM LIABILITIES Cash and cash equivalents 3.1 5’728’107 6’577’985 Trade payables 3.4 Trade receivables 3.2 Third parties 646’731 1’336’057 Third parties 736’502 891’490 Stakeholders 234’313 609’365 - Del credere -14’733 -17’085 Other short-term liabilities 3.4 Stakeholders 1’956’269 3’097’564 Third parties 724’651 1’277’843 Other short-term receivables 15’145 375 Stakeholders 0 0 Deferred expenses 840’701 310’256 Deferred income 911’387 1’181’200 TOTAL CURRENT ASSETS 9’261’991 10’860’585 Provisions for liabilities and charges (short-term) 3.5 457’127 407’045 in % of total assets 80% 81% TOTAL SHORT-TERM LIABILITIES 2’974’209 4’811’510 FIXED ASSETS 3.3 in % of total assets 26% 36% Property, plant and equipment LONG-TERM LIABILITIES Means of production 1’224’026 1’367’066 Provisions for liabilities and charges (long-term) 3.5 368’000 IT 57’684 60’357 TOTAL LONG-TERM LIABILITIES 0 368’000 Other fixed assets 160’227 141’705 in % of total assets 0% 3% Assets under construction 589’304 576’699 TOTAL LIABILITIES 2’974’209 5’179’510 Intangible assets 271’902 393’710 in % of total assets 26% 39% TOTAL FIXED ASSETS 2’303’142 2’539’537 SHAREHOLDERS’ EQUITY 3.6 in % of total assets 20% 19% Share capital 1’000’000 1’000’000 TOTAL ASSETS 11’565’133 13’400’122 Statutory reserves 1’000’000 1’000’000 Voluntary reserves 6’590’925 6’220’612 Profit brought forward 2’112 6’057 Net income 370’313 2’321’055 Net profit 372’425 2’327’112 Other voluntary reserves 6’218’500 3’893’500 TOTAL SHAREHOLDERS’ EQUITY 8’590’925 8’220’612 in % of total assets 74% 61% TOTAL LIABILITIES AND EQUITY 11’565’133 13’400’122

SWISS TXT AG – ANNUAL REPORT 2016 12 SWISS TXT AG – ANNUAL REPORT 2016 13 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

INCOME STATEMENT 2016 APPENDIX AS AT 31 DECEMBER 2016 2.4 FIXED ASSETS / INTANGIBLE ASSETS The valuation of fixed assets / intangible assets is Amount in CHF APPENDIX 2016 2015 1. LEGAL BASIS based on acquisition and production costs less any PRODUCTION INCOME STATEMENT (TOTAL COST METHOD) The 2016 annual financial statements for SWISS TXT depreciation and value adjustments deemed com- Net sales revenues 3.7 21’420’227 27’580’885 AG (formerly Schweizerische Teletext AG) based in mercially necessary. The assets under construction Cost of materials and services 3.8 5’773’814 7’581’659 Biel were prepared according to the provisions of include accumulated, capitalised project costs. Un- Staff expenses 3.9 12’425’045 13’439’949 the Swiss Accounting Law (art. 957–963b, valid from capitalised expenses and any interest costs are Other operating expenses 3.10 1’516’050 2’130’957 1 January 2013). charged to the income statement as appropriate to EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND the period. Assets worth less than CHF 5’000 are not AMORTISATION (EBITDA) 1’705’318 4’428’320 capitalised. Instead, they are charged directly to the Depreciation and value adjustments for fixed assets 3.11 1’206’674 1’016’269 2. ACCOUNTING PRINCIPLES income statement at the time of acquisition. EARNINGS BEFORE INTEREST AND TAX (EBIT) 498’644 3’412’051 Financial expenses 9’827 28’154 2.1 FOREIGN CURRENCY CONVERSION Depreciation is calculated based on the acquisition Financial income 29’698 31’498 The annual financial statements were calculated in or production value. All assets are depreciated on a EARNINGS BEFORE TAX (EBT) 518’515 3’415’395 the local currency, the Swiss Franc (CHF). Foreign linear basis over the estimated useful life of the as- Non-operating expenses 672 1’822 exchange valuation at the end of the year was set (three to five years). The first depreciation takes Non-operating revenues 45’689 49’485 based on the exchange rate on the reporting date of place from commissioning, completion or the date Extraordinary, non-recurring and off-period expenses 3.12 95’923 508’526 31.12.2016. Exchange rate gains and losses arising of transfer of ownership in proportion to the useful Extraordinary, non-recurring and off-period revenues 12’781 8’732 from transactions in foreign currencies are recorded life of the asset. ANNUAL RESULT BEFORE TAX 480’390 2’963’264 as affecting net income. Direct taxes 110’077 642’209 2.5 PROVISIONS FOR LIABILITIES AND CHARGES NET INCOME 370’313 2’321’055 2.2 ACCOUNTING AND VALUATION PRINCIPLES Provisions for liabilities and charges are made based For SWISS TXT AG’s annual financial statements, on probable obligations arising from an event in assets were generally valued as acquisition or pro- the past, whose amount and/or maturity is uncer- CASH FLOW STATEMENT 2016 duction costs. This corresponds to the principle of tain, but can be estimated. These obligations create individual valuation of assets and liabilities. The exi- a liability. Provisions for liabilities and charges are Amount in CHF 2016 2015 stence of asset impairment indicators is assessed at not used to make value adjustments to assets. The Net income 370’313 2’321’055 each reporting date. If a value impairment exists, the obligating event in the past must have taken place Depreciation / value impairment of fixed assets 1’222’199 1’016’269 book value is reduced to the recoverable value and before the reporting date. The provisions for liabili- Changes to provisions for liabilities and charges -317’918 -683’674 this is recorded in the income statement. If, at a later ties and charges correspond to actual obligations on Changes to short-term receivables 1’279’162 -125’296 point in time, the reason for the value impairment is the reporting date. Changes to deferred expenses -530’445 -82’825 (partially) removed, an appreciation is recorded as Changes to short-term liabilities (excl. financial liabilities) -1’617’570 187’743 affecting net income. Changes to deferred income -269’814 331’219 3. EXPLANATORY NOTES FOR THE BALANCE OPERATING CASH FLOW 135’927 2’964’491 2.3 RECEIVABLES SHEET AND INCOME STATEMENT Investments in fixed assets -930’776 -1’731’167 The receivables include all unmet claims against third Investments in intangible assets -55’029 -81’170 parties and are recorded at their nominal value less 3.1 CASH AND CASH EQUIVALENTS CASH FLOW FROM INVESTING ACTIVITIES -985’805 -1’812’338 any value adjustments. After deducting individual Cash and cash equivalents amounted to CHF 5.7 mil- Distribution of profit 0 0 value adjustments, the remaining reserve is calculated lion at the end of the year, representing a decrease CASH FLOW FROM FINANCING ACTIVITIES 0 0 with a fixed allowance of 2% for general credit and against the previous year. As SWISS TXT AG is cur- CHANGE IN NET CASH AND CASH EQUIVALENTS -849’878 1’152’153 interest risks. rently making a fresh start, it is important that the as at 1 January 6’577’985 5’425’832 company has a certain amount of financial leeway in as at 31 December 5’728’107 6’577’985 order to arrange any investments or shareholdings. CHANGE IN NET CASH AND CASH EQUIVALENTS -849’878 1’152’153

SWISS TXT AG – ANNUAL REPORT 2016 14 SWISS TXT AG – ANNUAL REPORT 2016 15 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

3.2 TRADE RECEIVABLES chases for IT infrastructure services (production 3.4 LIABILITIES The change is largely due to the use of provisions Trade receivables dropped by around one third due resources like storage and computing, etc.) and the Liabilities fell by around half due to the cessation of for the SWISS TXT Interactive (SI) social plan, which to the cessation of TV TELETEXT marketing. initialisation of a software-as-a-service (SaaS) solu- TV TELETEXT marketing. ran to around CHF 0.32 million, and the reclassifi- tion. In order to fully secure SWISS TXT’s position as cation of long-term provisions as short-term provi- 3.3 FIXED ASSETS a video specialist, the company also invested in two 3.5 PROVISIONS FOR LIABILITIES AND CHARGES sions to the tune of CHF 0.37 million. At the end of 2016, fixed assets ran to CHF 2.3 million, editing booths. Provisions for liabilities and charges are divided into representing a decrease of around CHF 0.2 million short and long-term provisions. At the end of 2016, The provisions for liabilities and charges for the re- compared to the previous year. In the 2016 finan- short-term provisions for liabilities and charges ran to duction in the technical interest rate on the SRG SSR cial year, SWISS TXT arranged investments in fixed CHF 0.46 million, representing an increase of around pension fund were reclassified as the reduction is and intangible assets worth around CHF 1 million. CHF 0.05 million against the previous year. expected to be implemented in 2017. Long-term The largest investments involved replacement pur- provisions for liabilities and charges amounted to CHF 0 million at the end of the year.

STATEMENT OF FIXED ASSETS 2016 STATEMENT OF SHORT-TERM PROVISIONS FOR LIABILITIES AND CHARGES ACQUISITION VALUE AS AT 1.1. RECLASSI- ADDITIONS DISPOSALS AS AT 31.12. Amount in CHF PROVISION PROVISION FOR PROVISION FOR TOTAL FICATIONS FOR PENSION RESTRUCTURING MISCELLANEOUS LIABILITIES PROPERTY, PLANT AND EQUIPMENT Book value on 01.01.2015 0 653’350 430’369 1’083’719 Assets under construction 576’698 12’605 589’303 Formation 140’000 140’000 Means of production 3’469’888 794’323 427’315 3’836’896 Appropriation -761’305 -430’369 -1’191’674 IT 162’242 38’733 64’353 136’622 Dissolution 0 Other fixed assets 1’256’175 85’113 55’474 1’285’814 Reclassification (short/long-term) 375’000 375’000 TOTAL FIXED ASSETS 5’465’003 0 930’774 547’142 5’848’635 BOOK VALUE ON 31.12.2015 PREVIOUS YEAR ON 01.01.2016 0 407’045 0 407’045 INTANGIBLE ASSETS Formation 0 Licences / rights 435’050 26’769 408’281 Appropriation -317’918 -317’918 Software ownership 1’110’931 55’028 199’161 966’798 Dissolution 0 TOTAL INTANGIBLE ASSETS 1’545’981 0 55’028 225’930 1’375’079 Reclassification (short/long-term) 368’000 368’000 TOTAL FIXED ASSETS 7’010’984 0 985’802 773’072 7’223’714 BOOK VALUE ON 31.12.2016 368’000 89’127 0 457’127

ACCUMULATED AS AT 1.1. RECLASSI- ADDITIONS DISPOSALS AS AT 31.12. BOOK VALUE ADJUSTMENTS FICATIONS VALUE STATEMENT OF LONG-TERM PROVISIONS FOR LIABILITIES AND CHARGES 31.12. Amount in CHF PROVISION PROVISION FOR PROVISION FOR TOTAL PROPERTY, PLANT AND FOR PENSION RESTRUCTURING MISCELLANEOUS EQUIPMENT LIABILITIES Assets under construction 0 0 589’303 Book value on 01.01.2015 375’000 375’000 Means of production 2’102’823 937’352 427’304 2’612’871 1’224’025 Formation 368’000 368’000 IT 101’885 41’404 64’351 78’938 57’684 Appropriation 0 Other fixed assets 1’114’469 66’591 55’474 1’125’586 160’228 Dissolution 0 TOTAL FIXED ASSETS 3’319’177 0 1’045’347 547’129 3’817’395 2’031’240 Reclassification (short/long-term) -375’000 -375’000 INTANGIBLE ASSETS BOOK VALUE ON 31.12.2015 PREVIOUS YEAR ON 01.01.2016 368’000 0 0 368’000 Licences / rights 267’091 71’615 34’307 304’399 103’882 Formation 0 Software ownership 885’180 89’709 176’111 798’778 168’020 Appropriation 0 TOTAL INTANGIBLE ASSETS 1’152’271 0 161’324 210’418 1’103’177 271’902 Dissolution 0 TOTAL FIXED ASSETS 4’471’448 0 1’206’671 757’547 4’920’572 Reclassification (short/long-term) -368’000 -368’000 TOTAL BOOK VALUE 2’539’536 0 -220’869 15’525 2’303’142 BOOK VALUE ON 31.12.2016 0 0 0 0

SWISS TXT AG – ANNUAL REPORT 2016 16 SWISS TXT AG – ANNUAL REPORT 2016 17 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

3.6 SHAREHOLDERS’ EQUITY 3.8 COST OF MATERIALS AND SERVICES etc.). The remaining staff expenses of around CHF Shareholders’ equity increased to CHF 8.6 million its and the net income in 2016. At the end of 2016, The cost of materials and services dropped by around 0.3 million came in at approximately CHF 0.05 mil- due to the appropriation of the previous year’s prof- shareholders’ equity amounted to 74%. CHF 1.8 million (24%) against the previous year. The lion more than in the previous year. These expenses main reason for this was third-party service expen- include travel and food allowances, recruitment costs, Amount in CHF CAPITAL RETAINED PROFIT PROFIT TOTAL SHARE- ses, which include a CHF 1.7 million drop in expenses hired staff expenses and the cost of staff training. STOCK EARNINGS CARRIED PERFOR- HOLDERS’ for the purchase of TELETEXT advertising space, in FORWARD MANCE CAPITAL direct relation to the closure of SI. Amount in CHF 2016 2015 Wages and salaries 10’189’663 10’586’714 BALANCE ON 01.01.2015 1’000’000 3’785’000 1’885 1’112’672 5’899’557 Amount in CHF 2016 2015 Social security and allowances 925’423 941’809 Reclassification of the 2014 result 1’108’500 4’172 -1’112’672 0 Material costs 467’548 408’518 Employee benefits institution 991’965 1’646’327 Dividends 0 Third-party services costs 5’306’267 7’173’142 Other staff expenses 317’994 265’100 Company result 2’321’055 2’321’055 COST OF MATERIALS AND STAFF EXPENSES 12’425’045 13’439’949 BALANCE ON 31.12.2015 1’000’000 4’893’500 6’057 2’321’055 8’220’612 SERVICES 5’773’815 7’581’659 Reclassification of the 2015 result 2’325’000 -3’945 -2’321’055 0 3.10 OTHER OPERATING EXPENSES Dividends 0 3.9 STAFF EXPENSES Other operating expenses decreased by CHF 0.6 mil- Company result 370’313 370’313 Staff expenses declined by around CHF 1 million (8%) lion (29%) against the previous year. The main reason BALANCE ON 31.12.2016 1’000’000 7’218’500 2’112 370’313 8’590’925 against the previous year. As a service-based com- for this is the change in advertising and marketing pany, this is once again the single largest company costs, which was strongly influenced by the closure 3.7 NET SALES REVENUES Media Hub’s revenues hovered more or less around expense. Staff expenses of around CHF 12.4 million of SWISS TXT Interactive (SI). In the 2016 financial year, operating revenues last year’s figures due to product launch delays. The represented around 59% of SWISS TXT’s total ope- dropped by around CHF 6.2 million (22%) on the strategic enterprise area Access Services was unable rating expenses. Wages and salaries decreased by Amount in CHF 2016 2015 previous year. This is partly due to the closure of to fully offset a CHF 0.4 million drop in revenues for CHF 0.4 million (4%) to CHF 10.2 million against the Office space costs 859’720 866’841 SWISS TXT Interactive (SI), which led to an approx- its central subtitling service (cost reduction pro- previous year. This reduction resulted from a decrease Maintenance, repair, replace- imate CHF 9 million drop in revenues, as well as to gramme 16+) with new orders. This resulted in a CHF in the average number of full-time employees (clo- ment and vehicle costs 27’247 110’567 SRG SSR’s cost reduction programme 16+, which af- 0.1 million (1%) drop in revenues. sure of SWISS TXT Interactive (SI) and development Insurance premiums and duties 14’112 14’412 fected SWISS TXT revenues to the tune of CHF 0.6 of other strategic enterprise areas). The decrease in Administrative and IT costs 331’696 298’550 million. Amount in CHF 2016 2015 costs associated with the employee benefits insti- Advertising and marketing OPERATING REVENUES tution is largely a result of the cessation of further costs 282’418 838’530 The strategic enterprise areas Managed Services SI - Advertising TELETEXT 0 2’787’187 increases in the employer contribution reserves Other operating expenses 857 2’058 (MGS), Content Solutions (CS) and Media Consulting SI - Advertising other vectors 24’231 434’309 (CHF 0.5 million in 2015). OTHER OPERATING (MC) were all affected by changes to the accoun- SI - Advertising programme 0 948’000 EXPENSES 1’516’050 2’130’958 ting logic applied (income is recorded instead of info The use of part of the provisions for the social plan a minus expense). Almost the entire boost in MGS SI - Advertising gross total 24’231 4’169’496 was also recorded under staff expenses due to the 3.11 DEPRECIATION revenues is a result of these circumstances. At MC SI - Content -7’662 383’850 closure of SWISS TXT Interactive (SI). Under the social Depreciations ran to CHF 1.2 million due to replace- and CS, this accounted for CHF 0.4 million and SI - TELETEXT service mandate 0 4’800’000 plan, it is intended that each terminated employee ment purchases made in 2016, representing an in- CHF 0.3 million respectively. In addition, CS gene- Managed Services 8’515’642 7’225’279 will receive severance pay based on their years of crease of CHF 0.2 million (19%) against the previous rated around CHF 0.4 million lower revenues in Content Solutions 3’988’692 2’834’405 service. In 2016, the severance pay bill ran to around year. the previous year as it worked on warranty ser- Access Services 7’892’161 7’983’514 CHF 0.3 million (incl. social security contributions, vices (provisions for liabilities and charges). Due to Media Consulting 1’110’365 181’704 an increase in project orders relating to two major Media Hub 96’844 71’876 sporting events (European football championship Capitalised internal services 0 95’923 and Summer Olympics), CS generated around GROSS SERVICE REVENUES 21’620’273 27’746’047 CHF 0.4 million more in revenues this year. While Revenue reductions -200’046 -89’419 Media Consulting increased revenues by CHF 0.15 Commissions 0 -75’743 million (excl. the effect of changing the accoun- NET SERVICE REVENUES 21’420’227 27’580’885 ting logic and the integration of Content Providing),

SWISS TXT AG – ANNUAL REPORT 2016 18 SWISS TXT AG – ANNUAL REPORT 2016 19 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

3.12 EXTRAORDINARY, NON-RECURRING AND 4.3 LEASING OBLIGATIONS / LONG-TERM APPLICATION REGARDING THE APPROPRIATION OF NET INCOME OFF-PERIOD EXPENSES RENTAL AGREEMENTS At the end of 2016, the asset under construction in As at 31 December 2016, obligations arising from Amount in CHF 31.12.2016 31.12.2015 2015 included a part that could not be capitalised leasing and long-term rental agreements ran to CHF Profit brought forward from previous year 2’112 6’057 and that was therefore written off. In the previous 1.6 million. Annual result after tax 370’313 2’321’055 year, increased provisions of CHF 0.1 million were NET PROFIT 372’425 2’327’112 made for the SWISS TXT Interactive (SI) social plan, 4.4 RISK ASSESSMENT Dividends 0 0 while provisions of CHF 0.4 million were made for the At its meeting on 30 November 2016, the SWISS TXT Allocation to the statutory reserves 0 0 reduction in the technical interest rate on the SRG Board of Directors conducted an appropriate risk as- Allocation to the declared reserves -370’000 -2’325’000 SSR pension fund. sessment and introduced any measures highlighted PROFIT BROUGHT FORWARD TO NEW ACCOUNT 2’425 2’112 by the same to ensure that the risk of materially false Amount in CHF 2016 2015 accounting statements is small. Extraordinary provisions for liabilities and charges 0 -508’000 4.5 EVENTS AFTER THE REPORTING DATE Other extraordinary expenses -95’923 -526 After the reporting date and up to the approval of EXTRAORDINARY, NON-RE- the annual financial statements by the Board of Direc- CURRING AND OFF-PERIOD EXPENSES -95’923 -508’526 tors on 6 March 2017, no significant events occurred that could adversely affect the validity of the 2016 financial statements, nor did any significant events 4. OTHER DATA occur that must be disclosed at this time.

4.1 LIABILITIES TOWARD THE EMPLOYEE BENEFITS INSTITUTION

Amount in CHF 2016 2015 LIABILITIES TOWARD THE EMPLOYEE BENEFITS INSTITUTION 2’923 517’845

4.2 NUMBER OF FULL-TIME POSITIONS In both 2015 and 2016, the average annual number of full-time positions was between 50 and 249 FTEs.

SWISS TXT AG – ANNUAL REPORT 2016 20 SWISS TXT AG – ANNUAL REPORT 2016 21 FINANCIAL STATEMENTS FINANCIAL STATEMENTS

AUDIT REPORT

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

REPORT OF THE STATUTORY AUDITOR Report on Other Legal Requirements To the General Meeting of SWISS TXT AG, Biel/Bienne e confirm that we meet the legal requirements on licensing according to the Auditor versight Act AA and independence article ode of bligations and article AA and that there Report of the Statutory Auditor on the Financial Statements are no circumstances incompatible with our independence. As statutory auditor, we have audited the accompanying financial statements of SWISS TXT AG, n accordance with article a para. item and Swiss Auditing Standard , we confirm that which comprise the balance sheet as at 31. December 2016, and the income statement, statement an internal control system eists, which has been designed for the preparation of financial state- of cash flows and notes for the year then ended. ments according to the instructions of the Board of Directors. Board of Directors’ Responsibility e further confirm that the proposed appropriation of available earnings complies with Swiss law The Board of Directors is responsible for the preparation of these financial statements in accord- and the company’s articles of incorporation. e recommend that the financial statements submit- ance with the requirements of Swiss law and the company’s articles of incorporation. This responsi- ted to you be approved. bility includes 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 or error. The Board of Directors is further responsible for selecting and applying appropriate ac- Berne, . ebruary counting policies and making accounting estimates that are reasonable in the circumstances. BD td Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards re- quire that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. atthias ildebrandt Thomas Bigler An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including Auditor in harge the assessment of the risks of material misstatement of the financial statements, whether due to icensed Audit pert icensed Audit pert fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the 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 evaluating the appropri- ateness of accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the 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 financial statements for the year ended 31. December 2016 comply with Swiss law and the company’s articles of incorporation. Other Matter The financial statements of SWISS TXT AG for the year ended 31. December 2016, were audited by another auditor who expressed an unmodified opinion on those statements on 3. March 2016.

nclosures inancial statements roposed 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 AG – ANNUAL REPORT 2016 22 SWISS TXT AG – ANNUAL REPORT 2016 23 SWISS TXT AG Alexander-Schöni-Strasse 40 Postfach 1136 CH-2501 Biel-Bienne

T: +41 32 329 29 29 swisstxt.ch

SWISS TXT AG – Annual report 2015 24