For more than two centuries, customers trust the high quality and reliability of GF’s products and services. With worldwide production locations, customer proximity and performance are ensured around the globe. The decentralized research and development centers in the major markets allow GF to better understand customer needs and quickly act upon them.
|Million CHF ||2014||2013 ||2012|
|Return on sales (EBIT margin) %||7.2||6.7||6.0|
|Return on invested capital (ROIC) %||17.9||16.7||15.7 |
|Free cash flow before acquisitions/divestitures||110||174 ||99 |
|Dividend (proposed) per registered share in CHF||17||16||15|
|Employees at year-end||14 140||14 066||13 412|
Service at GF
All about GF
Our Profile //
GF comprises three divisions: GF Piping Systems, GF Automotive, and GF Machining Solutions. Founded in 1802, the Corporation is headquartered in Switzerland and is present in 31 countries with 126 companies, 47 of them production facilities. Its approximately 14 100 employees generated sales of CHF 3.80 billion in 2014. GF is the preferred partner of its customers for the safe transport of liquids and gases, lightweight casting components in vehicles, and high-precision manufacturing technologies.
GF Piping Systems
GF Piping Systems is a leading supplier of piping systems made of plastics and metal. The division focuses on system solutions and high-quality components for the safe transport of water and gas in industry, utilities, and building technology. Its product line includes fittings, valves, pipes, automation and jointing technology and covers all water cycle applications.
GF Piping Systems supports its customers in over 100 countries
through its own sales companies and representatives. The division is
present in Europe, Asia and the Americas with more than 30
manufacturing sites and research and development centers, which also
energy-saving use of raw materials and resources.
GF Automotive is a technologically pioneering development partner and manufacturer of lightweight cast components and systems made of ductile iron, aluminum and magnesium for the global automotive industry as well as a variety of industrial applications. The highly complex lightweight components contribute to making modern vehicles lighter and reducing the CO2 emissions.
GF Automotive manufactures at 9 production plants in Germany, Austria, and China. In those countries as well as in Switzerland, Korea and Japan it operates sales offices. The lightweight research and development competency is in Schaffhausen (Switzerland) and Suzhou (China).
GF Machining Solutions
GF Machining Solutions’ electrical discharge, high-speed milling and laser texturing machines, along with automation solutions, make it the world’s leading provider to the tool and mold making industry and to manufacturers of precision components. Most important customer segments are information and communication technology, aerospace, and the automotive industry.
The division has its own sales companies in more than 50 countries
and production plants in Switzerland, Sweden, and China. GF Machining
Solutions operates research and development centers in Meyrin, Losone,
and Nidau (Switzer-
land), Vällingby (Sweden), Beijing, and Changzhou (China).
Being close to the market is crucial to develop the best solutions for customers. GF has 38 Centers of Competence (CoCs) around the globe. Extensive training centers and large product demonstration areas provide customers with tailor-made services and personal support worldwide.
Letter to the Shareholders
GF keeps its earnings growth path
GF generated sales of CHF 3 795 million in 2014 for an increase of 1%. The operating profit (EBIT) rose 9% to CHF 274 million mainly thanks to significant productivity gains.
The EBIT margin went up from 6.7% to 7.2% and the return on invested capital (ROIC) from 16.7% to 17.9%. All three divisions generated ROICs well above their cost of capital.
Free cash flow before acquisitions and divestments stood at CHF 110 million compared to CHF 174 million in 2013 mainly on account of higher investments in fixed assets, especially at GF Automotive. Furthermore, the high turnover in December led to a clear increase of the net working capital at year-end compared to 2013.
The number of employees rose slightly from 14 066 to 14 140. The increase due the acquisition of Meco Eckel (Germany) and Liechti Engineering (Switzerland) has been nearly offset by the divestment of the gravity-die-casting operations in Herzogenburg (Austria).
Net profit grew 34% to CHF 195 million and earnings per share 32% to CHF 45 also supported by the disposal of non-operative real estate. The Board of Directors will propose a dividend of CHF 17 (CHF 16 for 2013) at the Annual Shareholders’ Meeting.
Strategy implementation well under way //
For the first time ever, GF Piping Systems became the largest division of GF, a change which continues to reduce the corporation’s overall exposure to economic cycles and increases its overall profitability.
GF Automotive has divested its non-core activities and significantly improved its position in the pressure die-casting sector by entering in July into a strategic partnership, including a majority stake, with Meco Eckel, a leading German manufacturer of pressure die-casting molds.
GF Machining Solutions
is now well focused on less cyclical, more profitable
market segments such as the promising electronics and
aerospace sectors. In the latter, it became a leading actor in
2014 by acquiring Liechti Engineering AG, the specialist of
5-axis milling machines for the production of the key rotating
components of aircraft engines and power generating
All three divisions increased their operating results, GF Automotive the most
All together at the service of our customers //
We highly value the constructive feedback and the close cooperation we enjoy with our customers. Our before and after sales services stand at the heart of our constant efforts to keep in touch with them, adapt our offering and quicken our innovation pace.
We express our
heartfelt gratitude to our shareholders for their
continuing trust. Our deepest thanks go to our employees.
Their willingness to act as a team, their dedication,
flexibility and tremendous commitment to GF make outstanding
Chairman of the Board of Directors
President and CEO
Corporate Report 2014
Topics of the Corporate Report
“Today’s services bring the orders of tomorrow”
Is GF a service company?
Yves Serra: Yes. All three divisions of GF are selling solutions, not only products. Services are essential to our solutions offering, before and after sales are concluded. In fact, they often play a decisive role to convince customers and certainly to retain them. Today’s services bring tomorrow’s orders.
What does service mean for GF Piping Systems?
At first glance, service in this sector consists in the availability of all components and products wherever our customers need them. This we ensure by maintaining a proper stock in each region or each country. In fact, GF Piping Systems offers much more than that. GF Piping Systems has developed the most comprehensive handbook regarding the use of plastic piping systems for virtually any industrial application, a reference which is used by our customers to select, joint, and inspect every kind of plastic piping systems. Our skilled engineers provide technical support during the design phase as well as by selecting the right piping materials for aggressive media. We also train every year more than 10 000 customers worldwide to ensure a proper layout and installation. GF Piping Systems is present in virtually all sites where construction happens.
And for GF Automotive?
GF Automotive is specialized on offering lightweight solutions to its customers, the car and truck manufacturers. The division acts as a partner, developing its own materials and component designs in close contact with its customers. Its test centers can handle the largest car and truck components, even whole vehicles. Thanks to its extensive production facilities in Europe and China and production partners in the US and Japan, it offers to international car customers the same solutions worldwide. In addition, the division develops and builds its own molds and patterns and undertakes their maintenance including at our customers’ premises, 24 hours a day.
“Services are essential to our solutions offering, before and after sales are concluded.”
GF Machining Solutions is a machine tool business. Can service be described as the delivery of spare parts?
Not only. Service starts with advising of our customers regarding their projects. For example the development of automated solutions, typically tailored to each client’s needs. GF Machining Solutions also offers in each and every one of its worldwide facilities the necessary test cuts to prove the validity of its offering. The exclusive training of customers’ operators upon delivery and the availability of application engineers plays thereafter a key role to maximize the efficiency and utilization of the proposed solutions. Finally, GF Machining Solutions ensures a prompt delivery of components and parts close to its customers and a whole array of preventive maintenance contracts for each and every one of its clients. All the above account for 30% of the turnover of GF Machining Solutions.
Where do you see opportunities for the service business of GF Piping Systems?
GF Piping Systems recently developed geolocalisation tools and services to enable customers to trace the location of the components they install, a real novelty in this business. We also see opportunities in the offering of novel plastic weld inspection technologies but also in innovations regarding leak detection across plastic pipe networks.
Will service be more relevant for GF Automotive in the future?
With the development of electric cars or even the strict application of CO2 reduction targets, the expertise of GF Automotive in lightweight component construction will certainly be an asset regarding the competitiveness of its offering. Also, the upstream support of our customers at the R&D and component design stage will become even more relevant. For example for aluminum die-casting components we also offer the relevant molds, an essential part of their design.
Can you describe how GF Machining Solutions can expand its service business?
With internet chips inside the machine controls, remote services will certainly be expanded, just like the services offered in cars. They include for example software additions and advanced diagnostics.
How can GF benefit from a further enhancement of its service business?
Service activities are less cyclical, especially in the machine-tool business. They are an important and growing source of revenues. Services offered worldwide are also a key differentiator, especially for our international customers in the car, aerospace or electronics sectors, for example. Finally, services bring us closer to our customers, to their needs and allow us to quickly adapt our offering, in other words to quicken our innovation pace.
Each customer can count on us
This team from the Competence Center in Irvine (USA) is exemplary for all 14 140 employees of GF who put their heart and soul into their work. Thanks to the personal dedication and passion of each of them, GF delivers exceptional products and services to customers worldwide.
Individual service for your needs //
Customer needs are in the center of whatever GF does. From on-site training to adapted design and tailor-made processes – GF provides individual service which fits customers best.
GF Piping Systems
GF Machining Solutions
Organization of GF
Georg Fischer Ltd, the Holding Company of the GF Corporation, is
organized under Swiss law, headquartered in Schaffhausen
(Switzerland), and listed on the SIX Swiss Exchange.
Board of Directors //
The ten members of the Board of Directors, elected individually by the Shareholders’ Meeting, are responsible for determining the Corporation’s strategic direction, the design of accounting, the financial controlling and financial planning. It appoints the Executive Committee and has ultimate responsibility for supervising and monitoring the management of Georg Fischer Ltd. All members of the Board of Directors are non-executive.
A shared corporate culture is becoming increasingly important with the spread of globalization.
Executive Committee //
The Chief Executive Officer is responsible for the management of the Corporation. Under his leadership, the Executive Committee addresses all issues of relevance to the Corporation, takes decisions within its remit and submits proposals to the Board of Directors. The Heads of the Divisions and the Corporate Staff Units are responsible for drafting and achieving their business objectives and for managing their units autonomously.
Corporate structure //
GF Corporation is organized in the three divisions GF Piping Systems,
GF Automotive and GF Machining Solutions and the two Corporate Staff
Units Finance & Controlling and Corporate Development. The Heads
of the Divisions and the Corporate Staff Units are responsible for
managing their businesses and for achieving their business
Corporate Center //
The CEO and the CFO form the Corporate Center in the narrower sense. The Corporate Center is closely involved in management, planning, IT, communications, finance, management development, and corporate culture and is supported in these tasks by a team of about 50 people. The Corporate Center ensures that risk management, transparency, corporate governance, sustainability, and compliance practices meet the requirements of the owners and the public, and it supports the Board of Directors in meeting its responsibilies.
Corporate Finance & Controlling uses powerful information systems to ensure the time-critical financial management of the Corporation. A standardized system of financial reporting is used throughout the entire Corporation, guaranteeing immediate and complete transparency. Currency, interest-rate, and credit risks are monitored and managed at Corporation level.
Management development //
Strategically important competencies and information are shared and made available throughout the Corporation. Considerable importance is attached to internal training and to the focused nurturing and development of leaders and managers.
Thanks to the long history and the consistent enhancements, the
Corporation has a strong brand with GF. In 2013, the company has
implemented a rebranding and an alignment of its brand architecture.
As part of this rebranding, a new Corporate Design will be adopted
worldwide throughout all three divisions by 2015. The Corporation
builds confidence in its products and services with an open and active
communication policy to the customers, employees, media, analysts, and
Corporate values //
Shared corporate values are the basis for overall sustainable development and are becoming increasingly important with the spread of globalization. The Corporate center conveys and promotes the fundamental corporate values throughout the company, thereby nurturing and fostering its corporate culture.
Corporate Governance //
For detailed information about the Corporate Governance of GF see
pages 42 to 51.
Download Organization of GF
The Board of Directors and the Executive Committee of GF attach great importance to good Corporate Governance in the interest of shareholders, customers, business partners, and employees. The implementation and ongoing improvement of the generally accepted principles of Corporate Governance ensure the necessary transparency to enable investors to judge the quality of the Corporation. This Report provides information on structures and processes, areas of responsibility and decision-making procedures, control mechanisms, as well as the rights and obligations of the various stakeholders.
The present publication fulfills all obligations of the relevant SIX Swiss Exchange directive on information relating to Corporate Governance in terms of content and order and is based on the Swiss Code of Best Practice for Corporate Governance of Economiesuisse, the Swiss Business Federation. The Compensation Report is presented in a separate chapter on pages 52 to 61. All data and information apply to the cutoff date of 31 December 2014, unless otherwise noted. Any changes occurring before the copy deadline on 13 February 2015 are listed at the end of this chapter. Any changes occurring after the copy deadline can be found on our website. GF also publishes the Articles of Association of Georg Fischer Ltd, the internal Organization and Business Rules, its policies, and much more information online Corporate Governance - Policies.
More information about Corporate Governance
Introduction by the Chairman of the Compensation Committee
On behalf of the Board of Directors of GF and of the Compensation Committee, I am pleased to present the 2014 Compensation Report.
2014 has been a good year for GF; due to improved productivity, profitability was increased. All divisions achieved a ROIC well above their financial costs.
From a compensation perspective, the Committee has prepared the amendments to the Articles of Association relative to the requirements of the new Ordinance against excessive pay. These amendments will be submitted to shareholders’ vote at the upcoming Annual Shareholders’ Meeting in parallel to the binding shareholders’ vote on the compensation amounts of the Board of Directors and the Executive Committee. Further, the Compensation Committee has undertaken a thorough review of the compensation model of the Board of Directors, considering that it has been in place for several years. Based on this review we will simplify the remuneration structure of the Board of Directors in 2015.
At the upcoming Annual Shareholders’ Meeting, we will ask you to approve the principles of compensation, included in the Articles of Association as well as to approve prospectively in a binding vote the maximum amounts of compensation for the Board of Directors and for the Executive Committee. In addition, we will also ask you to vote on a consultative basis on the Compensation Report 2014.
Looking ahead, the Committee will continue to review and fine-tune the compensation programs, in order to ensure that they remain aligned with market levels and the business strategy of GF as well as the long-term interests of our shareholders, while being compliant with the various regulations.
We would like to thank you for sharing your views on compensation with us and we trust that you will ind this report interesting and informative.
Ulrich Graf, Chairman of the Compensation Committee
The Compensation Report provides information about the compensation
policy, the compensation programs, and the process of determination of
compensation applicable to the Board of Directors and to the Executive
Committee of GF. It also includes details on the compensation payments
related to 2014. This report is written in accordance to the Ordinance
against excessive pay in stock exchange listed companies, the
standards related to information on Corporate Governance issued by the
SIX Swiss Exchange and the principles of the Swiss Code of Best
Practice for Corporate Governance of Economiesuisse.