Content

4.1 segment reporting by business units
4.2 sales to customers and tangible assets by countries and regions
4.3 sales revenue with key accounts
4.4 total income
4.5 other operating income
4.6 personnel expenditure
4.7 other operating expenses
4.8 financial result
4.9 income tax expenses
4.10 earnings per share

4.1 segment reporting by business units

As mentioned in paragraph 2.1 business activities of Orell Füssli Group are designated into three segments that provide the basis for the internal segment reporting by business units. Segment reporting provides information on tangible assets and the income statement to the level of earnings before interest and taxes. It follows the accounting principles in accordance with IFRS.

Industrial Systems

Disclosures in connection with the production and marketing of machineries and systems for encoding and personalisation of any printable products.

Security Printing

Disclosures in connection with the production and marketing of bank notes, security documents, passports and further documents with high and highest security requirements.

Book Retailing

Disclosures in connection with the sale of books and similar products in numerous bookstores of the German-speaking part of Switzerland and on the Internet (www.books.ch).

Business activities disclosed as “Other” include the publishing units as well as infrastructure services. Their size is not sufficiently material to be disclosed separately in the segment reporting.

Financial results, results from associates and income taxes remain unallocated, as these positions are governed on a Group level rather than by business units. Inter-segment sales and expenses are eliminated based on normal commercial terms and conditions that would be provided to third parties. The consolidation effects are also disclosed as unallocated.

segment results 2009
in CHF '000
Industrial
Systems		Security
Printing		Book
Retailing
Other
Total segments
Unallocated		Total
Group
Total gross segment sales
72,35585,322123,60621,094302,377–302,377
Inter-segment sales
18112332237–237–
Sales to customers
72,53685,323123,62921,126302,614–237302,377
Depreciation and impairment
–2,880–4,061–2,938–331–10,210–87–10,297
Earnings before interest and taxes (EBIT)
–4,42716,7046,308–21718,3684,76023,128
Financial result
–2,003–2,003
Share of profit from associates (Note 4.23)
––
Income tax expenses
–2,993–2,993
Net income for the period
18,132
Total tangible assets at 31 December 2009
16,63381,08012,614335110,662173110,835

segment results 2008
in CHF '000
Industrial
Systems		Security
Printing		Book
Retailing
Other
Total segments
Unallocated		Total
Group
Total gross segment sales
105,004102,945122,74234,626365,317–365,317
Inter-segment sales
–203556888–88–
Sales to customers
104,984102,980122,74734,694365,405–88365,317
Depreciation and impairment
–4,511–6,611–3,518–693–15,333–163–15,496
Earnings before interest and taxes (EBIT)
7,27523,9833,42324,31758,99881159,809
Financial result
–2,151–2,151
Share of profit from associates (Note 4.23)
–70–70
Income tax expenses
–7,860–7,860
Net income for the period
49,728
Total tangible assets at 31 December 2008
16,45177,28016,546472110,749154110,903

4.2 sales to customers and tangible assets by countries and regions

Industrial Systems and Security Printing are the two business units whose customer relations exist worldwide without any geographic market specifications. The business segment Book Retailing and other activities find their customers mainly in Switzerland and the neighbouring countries. In the 2009 and 2008 financial years, no recorded sales revenue of a single country was material in an extent that would require separate disclosure, apart from Switzerland.

Therefore, the Group allocates its sales revenue in the following geographic segments as hitherto:

sales to customers by region
in CHF '000
20092008
Switzerland
180,105201,970
Germany
14,32614,551
The rest of Europe and Africa
69,06174,070
North and South America
11,23513,912
Asia and Oceania
27,65060,814
Total sales by region
302,377365,317

Total sales are allocated based on the country in which the customer is located.

The Orell Füssli Group owns tangible assets in the following regions:

tangible assets by region
in CHF '000 at 31 December
20092008
Switzerland
94,20294,451
Germany
14,56314,273
The rest of Europe and Africa
679646
North and South America
1,3911,533
Total segment assets
110,835110,903

4.3 sales revenue with key accounts

Each business unit of the Orell Füssli Group serves a large number of different customers. In the 2009 and 2008 financial years, none of them has generated sales revenue for the Group in an extent that would require separate disclosure. The business segment Security Printing generates the most significant sales revenue with key accounts; among them are national bank institutions and public authorities. The Group does not provide names or details about these customers. However, Swiss National Bank Ltd. is a major shareholder of the Orell Füssli Group and, therefore, further information on related-party transactions has to be disclosed in note 4.38.

4.4 total income
in CHF '000
20092008
Sales of goods and products
305,758354,533
Revenues from services
–12,109
Revenues from license fees
528562
Total income
306,286367,204

4.5 other operating income
in CHF '000
20092008
Rental income from operating leases
764222
Other income
3,1451,665
Total other operating income
3,9091,887

4.6 personnel expenditure
in CHF '000
20092008
Wages and salaries
74,44083,484
Social security costs
5,4476,126
Pension costs by contribution plans
2,1352,245
Pension costs by defined benefit plans (refer to note 4.28)
1,559575
Other personnel expenditure
5,0886,386
Total personnel expenditure
88,66998,816

4.7 other operating expenses
in CHF '000
20092008
Marketing and distribution expenses
14,75015,676
Operating lease expenses
11,8709,238
Repairs and maintenance
4,4915,881
Administration expenses
6,6507,318
Other operating expenses
6,9258,199
Total other operating expenses
44,68646,312

4.8 financial result
in CHF '000
ExpenseIncomeBalance 2009ExpenseIncomeBalance 2008
Interest income and expenses
Bank borrowings
–602500–102–963383–580
Finance lease liabilities
–22715–212–26744–223
Total interest income and expenses
–829515–314–1,230427–803
Other finance income and expense
Net gains (losses) from securities held for trade
–297–313–610–58663145
Dividend income
–145145–123123
Share of profit/(loss) of associates
–8888–7037–33
Net gains (losses) from foreign exchange differences
–2,2121,251–961–2,8631,828–1,035
Bank charges and other finance cost
–351––351–518––518
Total other finance income and expense
–2,8601,171–1,689–4,0372,619–1,418
Total financial result
–3,6891,686–2,003–5,2673,046–2,221

4.9 income tax expenses
in CHF '000
20092008
Current income tax
3,2938,085
Deferred income tax (refer to note 4.29)
–300–225
Total income tax expenses
2,9937,860

The income taxes on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated companies as follows:

reconciliation of the income taxes
in CHF '000
20092008
Profit before income tax
21,12557,588
Weighted average applicable tax rate of the Group
14.2%16.8%
Income tax calculated
2,9939,691
Different income tax rates
–23–63
Upcoming income tax rate changes
–2–
Expenses not deductible for income tax purposes
145300
Revenue not subject to income tax
–361–2,250
Utilisation of tax losses recognised as tax assets
–2–70
Adjustments to deferred tax assets
459–42
Tax effects related to other periods
–213275
Other
–319
Income tax recognised in the income statement
2,9937,860

The Group’s profit was exceptionally high in the financial year 2008 due to the disposal of two subsidiaries. Orell Füssli Holding Ltd. is entitled to claim the participation exemption on the gain of such disposals. Also in the 2009 financial year, an additional profit could be recorded on the disposal of that investment. Furthermore, certain foreign entities based in countries with higher income tax rates than in Switzerland did not generate any taxable profits in 2009. Consequently, the Group’s weighted average applicable tax rate was lower than in the previous period.

4.10 earnings per share
At 31 December
20092008
Net income for the period in CHF '000
14,69947,962
Weighted average numbers of shares in issue (in thousands)
1,9601,960
Earnings per share (in CHF)
7.5024.47

In terms of IAS 33 no dilution effects per share occurred either in 2009 or 2008.