Annual Report 2010 - Aebi Schmidt

Annual Report 2010

KEY FIGURES AEBI SCHMIDT

1

Net sales by segments (in 1`000 Euro) 2010 in % 2009 in %

Aebi products 39'479 12% 41'228 14%

Schmidt products 188'993 60% 189'059 63%

After sales 87'798 28% 68'116 23%

Total net sales 316'270 100% 298'403 100%

Number of employees (full time equivalents) 2010 in % 2009 in %

Germany 413 31% 393 30%

Switzerland 239 18% 259 20%

Poland 279 21% 237 18%

The Netherlands 206 16% 195 15%

Others 178 14% 216 17%

Total employees 1'315 100% 1'300 100%

Balance sheet (in 1´000 Euro) 2010 in % 2009 in %

Current assets 150'272 71% 125'394 66%

Fixed assets 61'709 29% 63'307 34%

Total assets 211'981 100% 188'701 100%

Liabilities 137'702 65% 123'974 66%

Equity (incl. shareholders´ loan) 74'279 35% 64'727 34%

Total liabilities and equity 211'981 100% 188'701 100%

1

Introduction Page 1

Affiliated Companies Page 2

About Aebi Schmidt Page 3

Management Board Page 4

Board of Directors and Shareholders Page 5

Division Sales & Service Page 6

Customer Events Page 11

Division Aebi Page 12

Division Schmidt Page 16

Refinancing Page 20

History Page 22

Sustainability Report Page 23

2

CONTENTS

2

INTRODUCTION

At the beginning of 2010, uncertain economic forecasts and budget cutbacks of the public authorities made us

expect a drop in the business volume. Over the course of the year, these took place in various countries and

partially entailed significant reductions of the market volume. Especially for the Aebi Division, the increasingly

strong Swiss franc additionally diminished the prospects. The fact that Aebi Schmidt is nevertheless able to exhibit

considerable growth in sales and another increase in profit is attributable to three fundamental factors. First of all,

the attractiveness of the product range could once again be increased by introducing new products and services;

as a result of this, further market share improvements could be achieved in various highly competitive segments.

In the second place, the large-scale project business at airports and with important service providers has

undergone another enormous development. Thirdly, heavy snowfalls at the beginning and the end of the business

year provided for a huge demand for servicing and spare parts.

We made especially great efforts regarding the improvement of our service organisation’s customer orientation and

efficiency. Following the challenging winter season, the processes could be significantly streamlined due to the

central spare-parts warehouse setup in 2009. In combination with targeted warehouse expansion measures for fast

moving parts, the availability of spare parts could be substantially improved also in extreme situations such as last

December. Our customers and sales partners equally benefit from these measures.

Aebi Schmidt products substantially contribute to the cleanness and safety of traffic areas and are important tools

for the cultivation of sensitive agricultural areas. We believe that diligence and sustainability in dealing with the

environment are of strategic significance, in particular in respect of these core fields of application. For this reason,

we have subjected our sustainability efforts to the stringent criteria of the independent organisation GRI for the

first time. We are convinced that this investment will be positively reflected both in the sales success and the

economic result.

Substantial investments at the production sites have laid the foundation for further productivity progress. In

particular, we were able to start up the new container production in Holten (Netherlands) at the beginning of the

year and officially open the brand-new factory in Burgdorf (Switzerland) in the spring. However, also the gradual

improvements in St. Blasien (Germany) and the further expansion in Kielce (Poland) are important milestones on

the way to additional optimisations of the production process. The shutdown of the small production plant in

Oerbyhus (Sweden), which has been operating unprofitably for several years, will also contribute to achieving

this goal. The manufacture of products, which cover interesting niche applications in the field of road repair, was

relocated to the Dutch factory.

In financial terms, the Aebi Schmidt has strengthened its position for the future. With an improved equity

capital base and the outside financing newly arranged in summer 2010, we are well-prepared for the next

challenges. We approach 2011 with careful optimism. As a result of the strategically founded significant invest-

ments in innovations, we will again launch various new products in 2011 which we believe will further strengthen

the good market position of our group.

Peter Spuhler Walter T. Vogel

Chairman of the Board of Directors CEO

1

Holding

Aebi Schmidt Holding AG

Thurgauerstrasse 40

8050 Zürich

Rechtssitz:

Bahnhofstrasse 7

9565 Bussnang

Germany

Aebi Schmidt Deutschland GmbH

Albtalstrasse 36

79837 St.Blasien

Aebi Schmidt Deutschland GmbH

Am Rain 53

83088 Kiefersfelden

Schmidt Winterdienst- und

Kommunaltechnik GmbH

Albtalstraße 36

79837 St. Blasien

UK

Aebi Schmidt UK Limited

Southgate Way/

Orton Southgate

Peterborough

PE2 6GP United Kingdom

Italy

Aebi Schmidt Italia s.r.l.

Via dei Pinali, 11

Frazione Cimpello

33080 Fiume Veneto

The Netherlands

Aebi Schmidt Nederland BV

Handelsweg 8

7451 PJ Holten

Belgium

Aebi Schmidt Belgium

Boomsesteenweg 74

2630 Aartselaar

Norway

Schmidt Norge AS

Paradisveien 2

2836 Biri

Austria

Aebi Schmidt Austria GmbH

Schiessstand 4

6401 Inzing

Aebi Schmidt Austria GmbH

Aichegg 20

8541 Schwanberg

Poland

Schmidt Polska Sp.z.o.o.

Ul. Skrajna 80a

25 -650 Kielce

Schmidt Polska Sp.z.o.o.

Ul. Mariensztat 8

00 -302 Warschau

Sweden

Aebi Schmidt Sweden AB

Idrottsvägen 3

596 23 Skänninge

Switzerland

Aebi & Co. AG

Maschinenfabrik

Buchmattstrasse 56

3401 Burgdorf

Aebi & Co. AG

Maschinenfabrik

Huwilstrasse 11

6280 Hochdorf

Spain

Aebi Schmidt Ibérica SA

C/ de la Perdiz,

Parcelas 18 y 19

45950 Casarrubios del Monte

AFFILIATED COMPANIES

2

Competence centre St. Blasien

Competence centre Burgdorf

Competence centre Holten

Competence centre Kielce

Aebi Schmidt

Aebi Schmidt is the leading system provider of

innovative technical solutions for the cleaning

and clearing of traffic areas as well as

the mowing of green spaces on difficult

terrains. Our product range includes vehicles,

attachments and demountable devices as well

as the corresponding services. Due to our many

years of international experience, we are part-

ners and attendants to our customers. By

means of a service programme tailored to

our customers’ requirements, we offer our

customers the appropriate solution for nearly

any problem!

Geographical coverage

Aebi Schmidt is covering on the European

market with its own sales companies. Custo-

mer outside Europe are either served directly

by the own export department or by our autho-

rized dealers world wide. The development and

manufacture of the products is concentrated at

the 4 competence centres in Switzerland (Burg-

dorf), Germany (St. Blasien), Netherlands (Hol-

ten) and Poland (Kielce).

Product range

Brands

In addition to the main product brands Aebi and

Schmidt, our portfolio also includes the regio-

nally focussed brands Beilhack and Nido as well

as the product names Broddway, and MFH.

ABOUT AEBI SCHMIDT

Street cleaning

Compact sweepers

Mountable sweepers

Interchangeable sweepers

Mounted sweepers

Demountable sweepers

Street washers

Municipal equipment

Multipurpose transporters

Implement carriers

Road repair

Reflector post washers

Water barrels

Motor mowers / Singleaxle tractors

Agricultural equipment

Implement carriers for sleep slopes

Multipurpose transporters

Motor mowers / Singleaxle tractors

Winter maintenance

Snow ploughs

Rotary snow clearance

Spreaders

Spreading & Spraying Combina-

tion machines

Salt solution stations

Airport technology

Snow ploughs

Rotary snow clearance

Jet sweepers

Spreaders and sprayers

Spreading & Spraying Combination

machines

Attachable spreaders

Airport sweepers

Railway technology

Snow clearance

Vehicle equipment

Attachments

Hydraulicsystem

Vehicle modification

Control system

Control panels

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3

MANAGEMENT BOARD

Management Board

Walter T. Vogel

Born 1957, Swiss citizen

Dipl. Masch.-Ing. ETH Zürich

CV: Since 2007: CEO Aebi Schmidt, 2003-2007:

CEO Von Roll Holding AG, 1999-2003: Von Roll

Group, Manager of the Infratec division and mem-

ber of the Group Management, 1995-1999: HILTI

AG, Manager of the business unit Direct Fastening

and member of the extended Group Management,

1992-1995: Aliva AG, Marketing and Sales Director

and member of the Management Board

Stephan Naef


lic. oec. publ., Universität Zürich

CV: Since 2008: CFO Aebi Schmidt, 2006-2007:

CFO Von Roll Holding AG, 1998-2005: Manager of

Finance and Controlling Danzas Switzerland, after

merger and renaming Manager of Finance and Ad-

ministration DHL Switzerland and member of the

Management Board, 1994-1997: Controller Siber

Hegner Management AG, Before 1994: Various

activities

Walter Schmitz

Born 1953, German citizen

Diplom-Kaufmann Universität Regensburg

CV: Since 2009: Manager of the Division Sales &

Service Aebi Schmidt, 2003-2009: Managing Di-

rector Schmidt Holding AG, 2000-2002: Member

of the Executive Board Sick AG, 1995-2000: Mem-

ber of the Management Board Bosch Telecom Pri-

vate Networks, Before 1995: Various activities

Holger Stehling

Born 1965, German citizen

Dipl. Inc. Luft- und Raumfahrttechnik, Universität

Stuttgart

CV: Since 2008: Manager of the Division Schmidt

2005-2008: Zumtobel AG, Director of Central Tech-

nical Divisions, member of the extended Group

Management, 1992-2005: Linde AG, various posi-

tions at home and abroad, in his last position re-

sponsible for quality management and controlling

Marco Studer


Dipl. Automobil.-Ing. FH

CV: Since 2011: Manager of the Division Aebi,

2010-2011: Operative Manager of the Division

Aebi, 2008-2010: Aebi & Co Maschinenfabrik,

Chief Production, 2006-2008: Mercedes-Benz Au-

tomobil AG, Branch Manager NF Wetzikon, 2001-

2006: Mercedes-Benz Automobil AG, Service

Manager and Deputy Manager NF Schlieren

Walter T. Vogel Stephan Naef

Holger Stehling Marco StuderWalter Schmitz

4

Verwaltungsrat

Der Verwaltungsrat der Aebi Schmidt Holding AG

trägt die Verantwortung für die strategische Füh-

rung der Unternehmung und besteht aus den fol-

genden Personen:

Board of Directors

Peter Spuhler,

Chairman of the Board of Directors


Entrepreneur and member of the National

Council Switzerland

Since 1989: CEO Chairman of the Board of

Directors of the Stadler Rail Group, Mandates:

Member of the board of directors of Rieter

Holding AG and Autoneum Holding AG

Dr. Gero Büttiker

Vice President


Dipl. Bau-Ing. ETH Zürich, Dr. oec. publ.

CV: Since 1993: Self-employed entrepreneur

1985-1993: NUEVA Holding AG (former

Schweizerische ETERNIT Holding AG) delegate

of the Board of Directors, Before 1985: Various

activities

Hansruedi Geel

Member of the Board of Directors


lic. oec. HSG, Qualified Public Accountant

CV: Since 2001: CFO Stadler Rail Group, 1997-

2001: CFO Benninger AG / Benninger Group,

1994-1997: CFO Lüchinger + Schmid Group,

1990-1994: CFO Elektronikgruppe FELA, 1981-

1990: PwC, Public Accountant

Peter Muri


lic. iur., Solicitor

CV: Since 1994: Owner of a medium-sized law

firm in Weinfelden specialised in economic and

revenue law, Before: Legal service in a cantonal

government; Collaboration in a law firm in

Eastern Switzerland; Collaboration in a district

court; Legal service in a cantonal tax admini-

stration office

The Aebi Schmidt Holding AG with its registe-

red office in 9565 Bussnang, Bahnhofstrasse 7,

and with its business address in 8050 Zurich,

Thurgauerstrasse 40, is organized in accordance

with Swiss law and has the following sharehol-

ders:

58.0 % PCS Holding AG, Switzerland

(Owner: Peter Spuhler)

39.3 % Gebuka AG, Switzerland

(Owner: Dr. Gero Büttiker)

2.7 % other members of the Board of

Directors and the Management

Board

The Aebi Schmidt Group („Aebi Schmidt“)

consists of Aebi Schmidt Holding AG and its

subsidiaries as disclosed on page 2.

BOARD OF DIRECTORS AND SHAREHOLDERS

Peter Spuhler

Peter MuriDr. Gero Büttiker Hans-Ruedi Geel

5

Overall economic situation

Although the most severe effects of the finan-

cial crisis have been dampened by measures of

the EU in some European markets, the public fi-

nancial sector is still substantially weakened.

Yet the public sector invested in municipal ma-

chines in the past business year. Although

there was a considerable drop in some mar-

kets, especially in the product segment of

sweepers, these setbacks could be compensa-

ted by project development business in Eastern

Europe and Asia. Furthermore, the tough win-

ter in January, March and December created an

outstandingly strong demand, especially for

spare parts and servicing. The well-developed

sales and service organisation of Aebi Schmidt

once again proved successful in 2010. The de-

mand setbacks in individual countries could be

compensated through targeted sales activities

by using the entire range of the product spec-

trum. All in all, the group was able to generate

a satisfactory growth in sales of 6% compared

to the previous year.

Winter service

The tough winter also had a positive effect on

the demand of the public authorities in respect

of the procurement of new machines. Never-

theless, the competition became even fiercer

in some markets. In spite of the actually good

situation in the winter service segment, the ex-

tremely aggressive price policy of our competi-

tors led to the overall erosion of the market

prices. We want to continue to maintain our lea-

ding market position in this segment by the

consistent further development of ecological

and environmentally friendly technologies; the

issue of environmental protection is attached

special significance. Moreover, the proportion

of privately financed motorways, their con-

struction and maintenance, is constantly in-

creasing in Europe. Since these projects involve

complex technologies, the investors set a high

value on Aebi Schmidt’s many years of experi-

ence.

DIVISION SALES & SERVICE

6

Summer service

Sweeping

The demand for compact and truck mounted

sweepers in 2010 substantially decreased com-

pared to the previous years. Whereas the set-

backs in individual European markets amounted

up to 30% by the middle of the year, a clear in-

crease in the demand for sweepers could be

noticed in the second half of the year. In spite

of this, last year’s overall sales figures clearly

fall short of the values of the previous years.

With few exceptions, the drop in the demand,

which was clearly perceptible in certain mar-

kets, could be compensated by increasing the

market shares in other regions.

Road repair

The poor condition of European roads, mainly

as a consequence of the severe effects of win-

ter, will considerably increase the demand for

road repair machines in the future. For this rea-

son, several organisational measures were

taken in respect of the road repair machine

“Road Repair Patcher”. On the one hand, the

production was relocated from Sweden to our

Dutch factory in Holten and the product was

further developed. On the other hand, a Euro-

pean road show with accompanying marketing

campaigns took place during the summer

months, which evoked an extremely positive

response among our customers and prospec-

tive customers. In the future, the sales organi-

sation will attach even greater significance to

the cultivation of this market segment.

Agriculture

In spite of the perceptible setback of the de-

mand for steep-slope implement carriers and

transporters, we succeeded in maintaining the

market shares in the core markets of Switzer-

land and Austria by the end of the year. The

new products TT275, TP460 and the single-axle

machine CC36 introduced within the scope of

the Agrama 2011 in Bern generated a good deal

of orders within a short period of time. With

these new products, we were able to improve

significantly the three segments implement

carriers for sleep slope and single axes tractors.


7

Airport technology

The already positive development of 2009 con-

tinued in the past business year 2010. Jet

sweepers and airport sweepers by Aebi

Schmidt set new trends and are considered

among airport operators worldwide as the stan-

dard in this sector. The airport machines brilli-

antly cope with challenges, such as unexpected

winter conditions involving extraordinarily large

amounts of snow, as shown by the example of

Leipzig/Halle airport. The logistic hub Leip-

zig/Halle even had the sudden heavy snowfalls

in December perfectly under control. The high-

performance snow cutter TS 10 000 launched

in 2009 also met the high expectations. In order

to cover the increasing demand of airport ope-

rators for maintenance machines that are both

economic and environmentally-friendly, the

Green TJS 560 was developed, which is cur-

rently being used by Swedavia, the operator of

the Arlanda Airport in Stockholm and the airport

in Kiruna. The Green TJS 560 is the first CO2-

neutral sweeper blower designed for airports

and their high standards.

After Sales

Good results were achieved in the servicing

and spare-parts sector. The tough winter at the

beginning and the end of the year created an

extremely high demand for spare parts and ser-

vicing. Thanks to the reorganisation of the in-

ternational logistic centre in Hannover/Laatzen,

the associated logistic challenges were maste-

red to the customers’ full satisfaction. In spite

of the enormous increase in the demand for

spare parts - the demand partially increased fi-

vefold - we had no long-term delivery difficul-

ties. The winter spare-parts supply of our

vendors initiated as early as in the middle of the

year also had a positive effect on the short-no-

tice demand during the winter months. At the

same time, the spare-parts supply for Aebi pro-

ducts was excellently mastered due to the now

coordinated condition of the central logistic or-

ganisation.

Events

In addition to the numerous regional events and

trade fairs, which were conducted by the local

responsible sales subsidiaries, 2010 was domi-

nated by three large-scale events.

At the beginning of April, the customers and

partners were able to see for themselves the

efficiency of the Aebi Schmidt products in front

of overwhelming scenery within the scope of

the pass clearance at St. Gotthard. An accom-

panying exhibition on the issue of winter ser-

vice and de-icing as well as the lecture of a

subject specialist on the issue of “salt and

brine” completed the event.

With the “Eidgenössischen Schwing- und Älp-

lerfest” (ESAF) in Frauenfeld, another highlight

followed in August. For the first time, Aebi, to-

gether with Stadler Rail, presented itself as the

major sponsor of this unique sports event. The

extraordinarily positive response can be attri-

buted to the increased awareness of the broad

public and the VIP care of selected vendors du-

ring the event. Nearly 1,000 tickets were sent

out within the scope of a selective invitation


Reference projects 2010

The following large-scale projects contributed to our success to a sub-

stantial extent:

• St. Petersburg (RU)

Overall concept road cleaning summer / winter:

40 x compact sweepers, 70 x combined winter service machines

• Ministry of Defense (UK)

30 x mounted sweepers, 28 x jet sweepers

• Fuxin (CN)

Machine kits: 200 x ploughs, 110 x snow cutters, 150 x spreaders

• Highway Agency (UK)

47 x combined winter service machines

• Balfour Beatty (UK)

32 x combined winter service machines

• Leipzig Airport (DE)

6 x jet sweepers, 2 x snow cutters,

1 x high-performance snow cutter TS 10 000

8

campaign and 500 guests were spoiled daily in

the event restaurant.

In November another great success could be

achieved at the Agrama in Bern. Just in time for

the beginning of the trade fair, the new factory

in Burgdorf delivered three additional top-ran-

king products. With the launch of the TT275

steep-slope implement carrier, the TP460 trans-

porter and the CC36 single-axle machine, im-

portant innovations were presented. The

brilliant stand design and the presentation of

these three innovations invited a great number

of visitors to stay at the fair stand, so that a mul-

titude of contacts could be established and

many inquiries were received already on site.

Outlook

Due to the slowly recovering economic situa-

tion, the revenue receipts of the public authori-

ties will improve in several countries in the near

future. By contrast, the critical financial frame-

work conditions in other European countries

constitute enormous risk factors for 2011. Ta-

king the results of 2010 as a basis, we expect

an altogether stable economic situation within

our market segments. The additionally provided

budget for the fields of winter service and road

repair bears large potentials. Due to the winter

problems at many European airports, airport

operators are subject to increasing pressure on

part of the airlines and the government. We ex-

pect an increased demand, in particular in the

field of special machines for airports.

In order to facilitate the spare-parts procure-

ment process for our customers in the future,

we will develop a web-based online portal.

More focus will be the placed on the intensive

expansion of the tractor construction segment

and the distribution of Aebi products outside

the Alpine region. The state-of-the-art VT450

multi-purpose implement carrier will be exten-

ded by additional municipal applications and in-

troduced to most European markets in this

variant. Specific solutions will be developed for

the growing customer group of service provi-

ders and agricultural contractors. We will meet

the ecological market requirements by introdu-

cing new technologies, such as Euro 5 engines

and improved functions, e.g. the improved

compact sweepers Swingo 200+, Cleango 500

and MFH 5500.


Pass clearance at St. Gotthard

At the end of April 2010, about 500 customers,

partners and employees were present in An-

dermatt (Switzerland) in Canton Uri, when the

current product range of snow clearing machi-

nes was presented within the scope of a large-

scale international pass clearing customer

event. In the middle of a breathtaking winter Al-

pine landscape, the issue of "methods, machi-

nes and devices in winter service" dominated

the unique mountain world of St. Gotthard for

three days. At the top of the pass, at a height of

about 2,100 meters, the audience watched the

live demonstrations along with the extremely

impressing annual pass clearance. An imposing

product presentation, impressive products

along with a brilliant supporting programme -

this was the positive feedback of all partici-

pants.

High spirits at the "ESAF 2010" in Frauenfeld

In August about 250,000 spectators visited the

42th “Eidgenössischen Schwing- und Älpler-

fest” in Frauenfeld in bright sunshine, the so far

largest Swiss wrestling festival of all time. Many

fans of this traditional Swiss sport can be found

above all in the agricultural environment, since

wrestling embodies the traditional and charac-

teristic values of Switzerland. Together with

Stadler Rail and 4 other companies, Aebi pre-

sented itself as the major sponsor of this large-

scale event. Joint advertising campaigns of the

major sponsors, the presence of numerous ma-

chines on the festival grounds and the partici-

pation in the traditional procession provided for

a high degree of public awareness. Nearly 1,000

invited guests watched the exciting competiti-

ons directly in the arena and indulged themsel-

ves for two days in the restaurant "Kanönli" spe-

cifically refashioned for this occasion.

CUSTOMER EVENTS

11

General

In spite of a slight economic upswing in 2010,

there was still some uncertainty among the

municipalities and farmers. Although the sales

figures could once again be increased compa-

red to the previous year, the set budget was

just failed. In the past year, particularly the

Terratrac series enjoyed a considerably increa-

sed demand and thus successfully established

themselves in the market. The trend towards

hydrostatic drives proved true both in the

single-axle machines and the Terratracs. The

shortfall in receipts caused by the strong Swiss

franc could be compensated by an increase in

productivity. The personnel restructuring of the

Management Board was completed by the

middle of the year with the new development

and construction manager and the new pro-

duction manager taking office. Also in other

terms, the year was marked by process and

organisational adaptations, which were enabled

by the new building and the thus improved

communication and transportation channels.

Our customers took notice of the increased

spare-parts availability and the optimisation of

already established machines with satisfaction.

After the final works in and around the new

factory premises had been completed, one

highlight followed the other. The new factory

was officially opened in April. While the

employees together with their partners opened

the new factory within the scope of a festive

event on 22 April 2010, another festive

event followed on the next day for the invited

guests from the circle of vendors as well

as representatives from politics and industry.

In the summer, Aebi, together with Stadler Rail,

was represented at the ESAF Festival in Frau-

enfeld as one of the five major sponsors. With

a huge presence, amongst others with a multi-

tude of machines which were in use for the lo-

gistics of the organisational committee, Aebi

was able to draw maximum benefit from this

platform. In the autumn, the documentary film

"Factor Tractor", which had been produced at

Aebi's premises by the TV station of the “Neue

Zürcher Zeitung” and broadcast on Swiss tele-

vision, was shown for the first time. The culmi-

nation followed at the end of November with

the agricultural machine exhibition Agrama in

Bern, at which three new machine types were

presented. Aebi was able to use the entire year

2010 for image building.

Product range

With the new Euro 5 engine, the VT450

ideally meets the demands of municipal areas

for low-emission machines. The TP450 was

replaced by the TP460 and now exhibits an

engine tailored to agricultural requirements,

which generates high torque already at low

rotational speed. By extending the product

range with a high-performance hydraulic

system allowing for the drive of front-mounted

implements, a front hoisting gear and creep-

speed gear, the fields of applications were once

considerably again extended. Snow cutters

and flail mowers can now be used in the

municipal sector or a front mower in the

agricultural sector. Thus, mowing and loading

can be rendered in one single operation. The

new Terratrac Aebi TT275 was launched just

in time for the Agrama. The TT275 extends

the top-class Terratrac series and offers

considerably increased efficiency and more

user friendliness. The interaction between

the engine performance and the application

is electronically monitored and adjusted to the

required performance. By making adaptations

to the design on the basis of the transporter,

the appearance was refreshed and an optical

DIVISION AEBI

12

connection established between the two

product lines. The series of compact hydrosta-

tic single-axle machines was complemented

by introducing the Combicut CC36. Based on

the technology of the thousand-fold tried and

tested CC56 and CC66, the new mower is the

ideal beginner's model among the comfort

single-axle machines with active steering.

Thanks to the newly introduced product

management in 2010, trends and market requi-

rements can now be recognised and the corre-

sponding steps initiated at an earlier point.

Product-specific documentations and qualifying

trainings increase the professional competence

of the sales representatives regarding Aebi

products.

Purchase

The «design-to-cost projects» started in the

fourth quarter of 2009 bore first fruits in 2010.

The expected savings could be achieved even

without the currency effect, which had a

positive effect on the purchase. The bundling

of volumes and the joint appearance of the

two product divisions Aebi and Schmidt

towards the suppliers had a supportive effect

on the achievement of the cost savings. The

improved data quality in the ERP system had a

positive effect on the reduction of the supplier

diversity and the standardisation of compo-

nents of different machine types.

Due to the slight economic upswing, the

material availability, which was very good

at the beginning of the year, progressively

worsened over the course of the year. Particu-

larly the foundries reduced their capacity to

such an extent that the replacement periods

of castings exceeded the critical threshold.

Additional delays occurred due to the relocation

of the largest supplier, who transferred his

manufacture to a new building. By conducting

detailed analyses and fostering regular contact

with this supplier, however, the most urgently

needed components could usually be procured

within a buffer period. In order to keep the

manufacturing costs of also future machines as

low as possible, the development projects will

increasingly be supervised by the purchasing

department and the cooperation between

the departments intensified. Beyond the cost

savings, this cooperation effected the earlier

involvement of the suppliers and thus the

prompter availability of the prototype compo-

nents

Production

The major focus was the fine adjustment of the

assembly processes to the new continuous

assembly line. Due to the considerably impro-

ved infrastructure, various saving potentials

were determined and the assembly steps

accordingly adapted over the course of the

year. As expected, particularly the shorter 13

communication channels and the associated

rapid information flow allowed for quality and

efficiency improvements.

The production department developed to

become a flexible and powerful team within

one year. Thanks to the high efficiency of the

new factory and the substantial commitment of

the employees, the great number of orders,

which occurred due to the relocation at the be-

ginning of the year, could be rapidly processed.

The multitude of orders at the beginning of the

season, in particular in the assembly line of the

compact Terratracs, was equally coped with

within the desired delivery period.

The increase of adding value and the more

broadly-based fixed cost coverage were the

main focus of the production department. Va-

rious projects started for this purpose were im-

plemented over the course of the year and

substantially contributed to compensating the

shortfall of receipts caused by the currency

effect. In order to achieve the optimisation of

the material flow, the warehouse management

module available in SAP was activated. The

detailed information obtained in this connection

was used to further reduce the lot sizes and

thus the warehouse.

Burgdorf had to make nearly no investments.

On the occasion of the relocation to the new

building, all machines and systems that no

longer complied with the state-of-the-art

standards were replaced.

On the edge of the company premises, a test

ramp with an inclination of 70% was installed

including a turn-around. This is used to test

the new machines for optimum functionality of

the drive train and the arresting brake prior to

leaving the factory. The outer edges arranged

on the sides of the test ramp are much steeper

than the test ramp itself, which allows for

checking the torsional attenuation of the

machines. These tests significantly increase

the safety, so that only machines of flawless

quality leave the factory.

Development/Projects

General

The reduction of development projects having

the goal to push on selected projects and

thus bring them onto the market more rapidly

proved successful. The concentration of the

employees on individual projects reduced the

development period and at the same time led

to an outstanding quality improvement of the

work results. Another quality improvement was

achieved by splitting up the competencies into

new developments and product management.

VT450/TP460

In addition to the installation of the two motor

variants Euro 5 in the VT450 and Euromot 3A

in the TP460, the extension of the fields of

application of both types was top priority. By

concentrating the development capacity, va-

rious customer requirements could be fulfilled

within a short period of time. For instance, the

payload was increased and the customers now

have a high-performance hydraulic system,

a creep-speed gear, a front hoisting gear and a

comfort seat at their disposal. These upgrades

make the VT450/TP460 a real multi-purpose

vehicle.

TT275

Clearly recognisable from the outside by the

new roof with integrated working lamps, the

innovative improvements of the TT275 can be

found under the engine hood. For the first time

in the Terratrac top-range sector, the VM turbo

diesel engine exhibits an output of more

than 100 HP. The hydrostatic wheel drive is

electronically controlled and exhibits the four

driving programmes road operation ECO-drive,

mowing, snow cutting and proportional.

The driving speed automatically adapts to the

required performance of the attachments. The

speed is reduced when mowing large amounts

of crop and automatically increased again when

the amount of crop decreases, without the

driver having to intervene. The most important

functions are actuated via the multifunctional

control lever, as also used in the VT450/TP460.

By means of the TipTronic, the lever can be split

up into six steps and the various speed ranges

activated by the touch of a button. These

DIVISION AEBI

14

simplifications allow for even more relaxed

working and additionally save fuel. The TT275 is

a real top product and sets completely new

standards.

CC36

The specifications were lightweight, modern,

reliable and an excellent price-performance

ratio. The Combicut CC36 outstandingly com-

plies with these requirements. The stepless

hydrostatic wheel drive, which can be operated

with the thumb in forward (0-8km/h) and

reverse (0-4km/h) directions, is based on

the tried and tested technology of the large

Combicut variants. Furthermore, even the smal-

lest comfort single-axle machine exhibits three

different types of steering. Two of them are

active and allow for steering virtually without

any effort. The 10-HP Basco-Vanguard engine

allows for mounting various attachments. As a

result, an investment in the CC36 pays off even

for smaller companies within a short period of

time.

Outlook

2011 will be the year of affirmation. The posi-

tive impulses and the basis created over the

last two years now have to be strengthened

and continued. The new vehicle types Combi-

cut Aebi CC36, Terratrac Aebi TT275 and Trans-

porter Aebi TP460 ideally meet the needs of the

customers; they are the image of the many

years of innovative strength that characterises

Aebi. The optimisation of the delivery periods

both in the field of spare parts and new machi-

nes is supposed to meet the customer require-

ments even more effectively and strengthen

the relationship between Aebi and its custo-

mers in the long term. In addition, our efforts in

the upcoming year will be focussed on the furt-

her reduction of stocks and material costs.

The continuous increase of our productivity

over the next few years is of central signifi-

cance. The constantly increasing value of the

Swiss franc compared to the euro increasingly

weakens the profit situation in the European

area. The division is required to compensate

this negative effect by appropriate measures.

Aebi has to continue to succeed in standing

out against competitors by offering more

customer benefit.

By means of the special offer “Aebi VT450 win-

ter”, an Aebi Schmidt overall package will be

launched at the beginning of 2011. This pak-

kage consists of a basic vehicle by Aebi as well

as a spreader and a snow plough by Schmidt.

This package will also make the great number

of convinced "Schmidt" customers open-min-

ded about Aebi products.

General

The normalisation of the municipal technology

market led to a satisfactory increase in sales,

in particular in the second half of the year. In

addition to the general improvement of the

willingness to make investments, this was

driven by a multitude of product launches.

Great importance was attached to the impro-

vement of business processes. In particular in

the field of fulfilment, the employees were

imparted standardised working methods within

the scope of numerous workshops and

best-practice analyses. The fields of quality

assurance, process planning and production

support were given top priority in 2010 and will

also be the focus of attention in 2011. All in all,

these measures resulted in a considerable

and sustainable improvement of the cost situa-

tion of the three Schmidt locations St. Blasien

(Germany), Holten (Netherlands) and Kielce

(Poland).

Product range

As the continuation of the consolidation of the

product range over the last few years, the

product variety was further reduced. At the

same time, new products meet the market-

specific requirements more and more effi-

ciently. One of these products is the spreader

series Galeox, which was developed for the

French market. The generation of new unique

selling propositions resulted in us setting apart

from our competitors more efficiently and thus

in better market opportunities. We stick to the

need-based creation of individual customer

solutions and will also do so in the future.

Purchase

The centralisation of commodity groups, which

was started in 2009 within the scope of the

lead buyer concept was continued in the past

business year. Following the concept, respon-

sibilities were allocated to the respective

commodity groups and corresponding procure-

ment strategies created for the central

commodity groups. The implementation of

these strategies formed the basis for the

purchase activities within the reporting period.

Supported by the group-wide standardised

purchasing processes, the purchasing depart-

ment could be strengthened further, which in

turn had a positive effect on the company

results. Based on the positive results of the last

few business years, the further reduction of

procurement costs and the improvement of

the supplier structure were also focussed on

this year. The results could be achieved by

consistent supplier development, the early

involvement of the purchasing department in

the development and key account projects as

well as the steady search for saving potentials

for series-produced goods. The situation in the

supply markets has drastically worsened since

the beginning of the year and thus constituted

a special challenge for the purchasing depart-

ment.

The noticeable economic upswing led

to a substantial improvement of the order

situation of nearly all suppliers. The considera-

bly reduced capacities could not be built up

again and entailed the shortage of resources

and corresponding price increases as early as

from the second quarter of the year. Particularly

in case of metal sheets and steel and stainless

steel sections, the market responded over the

course of the year with price increases of more

than 30%. Due to a high degree of flexibility

DIVISION SCHMIDT

16

and intensive efforts regarding procurement,

we were able to successfully avert price

increases, implement the planned saving

potentials and secure the supply of the

factories with production material. The past

business year once again was marked by

development projects and the further improve-

ment of the vertical integration at the locations

Kielce and Holten. For instance, the purchasing

department actively supported the introduction

of engines with Euro 5 emission class as well

as the innovative projects for the compact

sweepers Swingo and Cleango. In doing so,

the securing of budget, quality and timescale

targets was the focus of attention and will

be guaranteed in cooperation with the deve-

lopment teams until completion of the projects.

The improvement of the vertical integration

at the above-mentioned locations was

successfully continued. In cooperation with the

factories Kielce and Holten, a total of 45,000

production hours could be transferred to in-

house manufacture. In the upcoming business

year, the purchasing department will have to

face the challenges involving the further shor-

tage of raw materials in the supply markets.

The worldwide economic upswing will have a

decisive influence on the demand for resources

and thus their availability and price trend.

The ongoing standardisation and design-to-cost

projects will be continued and the efficiency of

our procurement processes further improved.

Production

In autumn 2010 the production capacities

touched their limits for the first time - but all

the more - since the merger. In view of the

problems regarding the availability of materials,

capacities had to be released, which exceeded

the budget by up to 50% by the end of the year

at some locations. We owe the successful

management of the order peaks to the extraor-

dinary commitment of our employees, who

were actively supported by temporary subcon-

tracted workers and colleagues from other

locations.

Location St. Blasien

The strong seasonal capacity fluctuations at

the location St. Blasien have been the focus of

attention not only since the financial crisis. In

this respect, the completed production start of

the MFH 2500 relocated from Hochdorf (Swit-

zerland) to St. Blasien (Germany) was another

step in the right direction. Upon integration of

the MFH sweepers, the layout of the compact

sweeper assembly hall had to be adapted,

which has had a productivity-increasing effect

since the shutdown in summer. Following the

completed centralisation of the warehouse, the

17

Via Solutions Thüringen - BAB A4 - Germany

excellent project situation of large machines

could be taken account of by establishing two

additional production lines. As a result of this,

the throughput of large machines increased

from 3 to 6 machines per week.

Location Holten

The start of the normal production activity of

the newly invested manufacturing methods

welding (steel and stainless steel), robot

blasting and powder paint coating formed

the main focus of the work at the location

Holten. Due to the intensive efforts, about

35,000 additional working hours could be

performed by the end of the year, which corre-

sponds to nearly twice the previous capacity.

The set capacity budget and quality targets

were all achieved. In November the airport

sprayer and Road Repair Patcher assembly was

relocated to the spreader assembly hall, which

is expected to mobilise additional productivity

reserves in 2011.

Location Kielce

Just like in the factory Holten, the first few

months of 2010 were marked by the start of

the newly invested metal sheet manufacture

at the end of 2009. In addition to the acquisi-

tion and training of the required know-how,

the organisational management of the transfer

of more than 1,000 components to in-house

manufacture involved the greatest challenges

in this case. The greatest challenge, which

was mastered largely on schedule, was the

management of the snow plough orders, which

were favoured by the Europe-wide and unex-

pectedly heavy onset of winter.

Development

Swingo

The design of the Swingo series was subjected

to a facelift, which will dominate the appea-

rance of the machine in the upcoming years.

The outer appearance and the interior design

of the driver's cab were adapted in terms of

optics and ergonomics in cooperation with a

design studio. Technical optimisations were

made to the cooling, air conditioning, hydraulic

and break systems. An optional third brush now

allows for more efficient cleaning of pedestrian

ways and parking areas.

Airport equipment

The TS 10 000 presented at the Inter Airport

in October was able to prove its efficiency in

practice at Stuttgart Airport. Following additio-

nal in-house tests within the operating limit

range, the first machine was delivered to Leip-

zig Airport in autumn. It clearly exceeded the

expectations in snowy December 2010.

The demand for CO2-neutral snow clearing

machines, especially at airports, entailed the

development of the "Green TJS 560" in coope-

ration with the customer Swedavia. This ma-

chine is driven by a Euromot 3B diesel engine

and can be operated with both biodiesel and

biogas. Upon request of the customers, a con-

necting unit "front-end axle" was developed for

the TJS family. This allows for the manufactu-

rer-independent use of towing vehicles equip-

DIVISION SCHMIDT

ped with a yoke. The new once again optimi-

sed suction vehicle of the AS 990 airport swee-

per proved its superiority above competitive

machines in various customer tests. This resul-

ted in a large-scale order for 30 machines by

the British Ministry of Defence. Furthermore,

the AS 990 was extended by retractable suc-

tion nozzle in order to improve the dirt collec-

tion in the kerbstone area.

The software "Airportlogic" was developed

to reduce the operating costs of de-icing at

airports; in combination with GPS, this allows

for a precise application of de-icing agents.

Amongst others the spraying nozzles are swit-

ched on and off via this system to avoid double

application. A part width section monitoring

system ensures the functional safety of the

spraying nozzles.

Spreaders

By equipping the spreader series with a contai-

ner volume of 10-14 m3, the desire of custo-

mers for even longer application distances,

especially on motorways, was fulfilled. The Ga-

leox series, a fertiliser spreader in stainless

steel finish, was developed for specific mar-

kets.

The "Autologic Guide" was developed as a com-

plement to the already existing spreader con-

trol units. The flexibly upgradeable solution

combines spread management with navigation.

The new salt dissolving unit S 3000 serves to

prepare brine for spreading and spraying appli-

cations.

By its fully automatic concentration regulation,

it allows for preparing up to 3000 litres of brine

per minute.

Investments

In 2010 the project "step by step" was also

continued in St. Blasien. This required minor

investments in refurbishments and layout

adaptations. Furthermore, investments were

made in exhaust systems and better hall illumi-

nation to improve the working conditions.

An area of approx. 600 m2 was allocated to a

new assembly hall at the location Holten. The

airport sprayer already included in the product

range and the Road Repair Patcher relocated to

Holten were transferred to this area, which

made minor investments necessary.

Outlook

2011 will be marked by a multitude of market

launches; a year that already started with a

good order backlog and a cold and snowy

winter. Numerous traffic holdups caused by the

third hard winters in succession promise in-

creased investment needs by municipalities as

well as road and airport operators.

The supply markets in 2011 seem to be less

encouraging in terms of costs and schedules;

the once again stiffened Euromot 3B emission

standard will also put increased pressure on

the product costs. The intensified measures to

increase and communicate customer benefit,

however, show first positive trends.

All in all, the Schmidt Division is well-prepared

for the upcoming challenges and is thus looking

forward to business year already started with

great confidence.

19

REFINANCING

As one of the last open issues from the merger

of the Aebi and the Schmidt Groups to form Aebi

Schmidt, the issue of “refinancing” remained

unsettled until last year.

Apart from holding all important investments,

one of the major functions of the Aebi Schmidt

Holding AG is supposed to be the financing

function. So that the banks grant new loans,

however, some requirements had to be met.

The prerequisite of actively addressing the issue

was fulfilled with the Annual Financial Statement

2009. As a result, Aebi Schmidt had three

audited financial statements under true and fair

reporting, the financial KPIs were within an ac-

ceptable range and the new management team

could exhibit a (short) history.

Within the scope of its meeting of 19 March

2010, the Board of Directors gave the go-ahead

for the refinancing concept. On 23 April 2010,

the date of the official opening of the new loca-

tion in Burgdorf, a “banking day” was conduc-

ted at the same time, on which the Annual

Financial Statement 2009 and the Budget 2010

were presented and the refinancing was

announced. In the first phase the lead banks to

be involved in the organisation of the business

and the specific conditions on which the refi-

nancing was supposed to take place had to be

determined.

Within the scope of its meeting of 15 July 2010,

the Board of Directors approved of the term

sheet, according to which the Aebi Schmidt

Holding AG would receive a credit facility

amounting to Euro 80 million over a term

of 5 years. From this, Euro 30 million are to be

amortised over the term and the remaining Euro

50 million are arranged in such a way that they

can be utilised on the base of a borrowing

base (accounts receivable plus inventory minus

By concluding the syndicated credit agreement of Euro 80 mil-

lion, the last big step towards the merger of Aebi Schmidt was

taken and Aebi Schmidt is able to approach the next develop-

ment steps with a good financing structure.

REFINANCING

advance payments of customers). This variant

was selected in order to satisfy the extremely

fluctuating credit demand of Aebi Schmidt

during the year. The financing costs are based

on the EURIBOR res. LIBOR for other currencies

and are dependent upon the financial KPIs achie-

ved.

Following the decision of the Board of Directors,

the syndicated agreements and the security

agreements were drawn up and negotiated on

with the banks in lead on the one hand. On

the other, the agency banks were addressed,

presented the business case of Aebi Schmidt

and subsequently invited to participate in the

financing. We were able to take cognisance of

the fact that our credit was even oversubscri-

bed.

On 28 September 2010 the Board of Directors

approved of the new syndicated agreements of

Aebi Schmidt, which were subsequently signed

on 28 September 2010. All major existing credit

agreements were dissolved and replaced by the

new credits agreements by the end of the year.

The refinancing was successfully completed

upon release of the securities of the German

pool banks by 31 December 2010.

21

HISTORY

Corporate profile

Aebi Schmidt was formed in 2007 by the

merger of the two corporate groups Aebi and

Schmidt. Both companies can look back on

long company histories steeped in tradition:

Aebi

In 1883, Johann Ulrich Aebi opened a mechanic

workshop in Burgdorf, Switzerland, and thereby

laid the foundation for an exceptionally suc-

cessful company history. In the early days, Mr.

Aebi built seed drills, horse-drawn mowers, fire

extinguishers and turbines, which soon earned

him international recognition. After 1950, Aebi

increasingly focused on mechanised agriculture

for hilly and mountainous terrain. Initially ma-

nufacturing motor mowers and single-axle trac-

tors and later transporters with various

attachments, Aebi expanded its range of vehi-

cles in 1975 by introducing the Terratrac, the

world’s first steep-slope implement carrier.

Today, the Terratrac is the flagship product of

the Aebi manufacturing company. “Swiss qua-

lity”, innovative technology, continuous impro-

vement and reliability characterise the quality

products of the brand name Aebi.

Schmidt

For 90 years now, the company’s striking, blue-

framed lettering has been standing for quality,

longevity, intelligent technology and innovation

on an international scale. The history of the

long-established company dates back to 1920;

Alfred Schmidt Senior opened a car repair shop

and successfully specialised in snow clearance.

In addition to manufacturing snow ploughs, he

was already consistently working on the con-

cept of rotating snow clearing. At the same

time, de-icing techniques were being explored

and the first spreaders were built. Additionally,

the development of a high-performance snow

blower made it possible to enter the airport

business. The newly introduced product

groups, compact sweepers and high-perfor-

mance sweepers for airports, were systemati-

cally expanded. The range of products was

complemented by new clearing systems, the

development of multi-purpose sweepers, a

new generation of environmental friendly

spreaders, steering systems and special vehi-

cles for the clearing of airport runways. Today,

Schmidt provides for clean and safe circulation

areas throughout the world.

SUSTAINABILITY

Sustainability - Interview with Walter T. Vogel, CEO Page 24

Sustainability - Introduction Page 26

Sustainability - Customers Page 27

Sustainability - Employees Page 28

Sustainability - Environment Page 30

Sustainability - Community Page 33

Sustainability - Statement GRI Application Check Page 34

23

Interview with Walter T. Vogel,

CEO

What does sustainable business

management mean for Aebi

Schmidt?

I think reliability is a term that aptly

describes Aebi Schmidt: Our custo-

mers can rely on our products; we

are a reliable employer for our staff as well as a

partner for the regions in which we invest and

where we manufacture. Our daily operations

are therefore also characterised by long-term

responsibility. We work in a field where sustai-

nability represents a great opportunity and a

challenge. Sustainable procurement is in high

demand among our customers, especially in

the public sector. We offer technical solutions

that are as environmentally friendly as possible

and at the same time affordable, which gives

us competitive advantages in our business

sector.

What are the greatest challenges?

Our products are the greatest leverage for

sustainability. As a consequence of climate

change, the European public sector and com-

munities are increasingly adopting specific

reduction targets for CO2 emissions. This is

why we need to integrate cutting-edge engine

technology into our vehicles. At the same time,

the pollution restrictions for particulate matter

and road gritting materials are becoming

increasingly severe. Our customers want

solutions that are both clean and efficient. For

this reason, we are investing in innovations

such as special filter technologies for swee-

pers or intelligent guiding systems for operators

of winter service vehicles. In 2010, we introdu-

ced a new technology to avoid excess salting of

surfaces. Another important trend concerns

the issue of noise pollution. Our vehicles are

SUSTAINABILITY - INTERVIEW

often employed on public roads and in inner

cities, and therefore must not cause too much

noise to ensure that residents are not disturbed.

This issue is becoming increasingly important in

general, and many are probably not fully aware

of it yet. With this in mind, we focus on alter-

native and quieter sweeping technologies. At

the same time, electric drive motors represent

an increasingly important aspect that will chal-

lenge our affiliated drive unit manufacturers for

years to come.

Are there any other areas where sustainabi-

lity plays a special role?

Alongside innovative and environmentally

friendly products, we place special emphasis on

responsibility in our in-house production. Our

newly opened production facility in Burgdorf

distinguishes itself by its high level of efficiency

in terms of production processes and energy.

The state-of-the-art technologies used in our

new sandblasting and paint-coating facility in

the Netherlands also enable environmentally

friendly, faster, more flexible and cost-efficient

operations. This is confirmed by the monito-

ring results of the energy and environmental

performance data of our production sites, which

are published in this report for the first time. In

the field of employment, the completion of the

first phase of the new leadership programme

“Lead the Change” marked a milestone. In this

effort, the primary focus is on developing and

promoting competencies and strengthening

employee loyalty. In the interest of our custo-

mers, we have invested heavily in optimising

delivery times. By streamlining the spare part

storage of the Schmidt Division in Germany

and expanding the availability of spare parts,

we were able to improve our processes regar-

ding delivery times.

What are the goals for the next few years?

It is our vision to become the leading European

provider of vehicles for cleaning and snow

clearance in traffic areas as well as mowing

of grassland on difficult terrain. This is why

we will continue to invest in affordable

green technology. In terms of employment, the

competition over new talents will get tougher.

We are consistent in our endeavour to further

improve the training and education of our

employees and to recruit young people from

the regions of our production facilities for Aebi

Schmidt. We will also extend our efforts for

sustainability and will provide further insight

into our services within the scope of transpa-

rent reporting. In doing so, we are aiming to

convince our stakeholders of Aebi Schmidt’s

sustainable business model.

SUSTAINABILITY - INTERVIEW

For the first time, this business report contains a special

chapter on sustainable business management. It addresses the

stakeholders of Aebi Schmidt, who are crucial for our success

and are directly affected by our business operations: custo-

mers, employees, environment and communities, including

the regions of our production sites as well as suppliers. This

employs the voluntary guidelines of the Global Reporting

Initiative (GRI). They represent the global standard for sustai-

nability reporting. GRI examined the corporate communications

of Aebi Schmidt and concluded that this year the business

report together with its detailed GRI content index online

(www.aebi-schmidt.com) meets the GRI-G3 guidelines for the

first time at application level C.

25

Sustainable business management

Sustainable business management means

meeting the needs of today’s generation

without burdening or limiting future generati-

ons. It is about finding a balance between eco-

nomic, social and environmental criteria in the

setting of goals and business measures. This

is in line with Aebi Schmidt’s guiding principle

of connecting a high level of customer and staff

satisfaction with the goal of efficient and profi-

table business processes. In implementing its

vision, Aebi Schmidt does its share to create a

more sustainable public infrastructure as well

as more sustainable agricultural farming with a

positive impact on people’s health and environ-

mental protection.

Clear processes with personal responsibility

Aebi Schmidt integrates sustainable business

processes into its management system. Opti-

mised product costs and improved business

processes play a central role in the continued

increase of customer benefit through innova-

tive solutions and differentiating characteristics

in contrast to competitors. Receiving the ISO

9001:2008 TÜV-SÜD matrix certification for all

business locations in December 2009 marked

the start of initiatives across all facilities to furt-

her optimise the cooperation of the individual

business locations. Additionally, the facility and

the distribution organisation in Holten, Nether-

lands, as well as the distribution organisations

in Peterborough (United Kingdom) and Fiume

Venete (Italy) are ISO 14001-certified for their

environmental management systems.

At Aebi Schmidt, personal responsibility of em-

ployees is given high priority, while the frame-

work conditions are clearly defined. The

standards and values of Aebi Schmidt’s opera-

tions are recorded in a code of conduct. It defi-

nes the proper behaviour in business practices,

fair dealings with competitors and business

partners as well as fair and appropriate beha-

viour including the avoidance of discrimination

and ensuring high standards of environmental

protection and data protection. Within the cor-

poration, employees are given a clear set of

rules to comply with voluntary and mandatory

measures. This global code of conduct was in-

troduced in August 2010 and signed by 87 per-

cent of all employees.

Recognition from the inside and the outside

In the reporting year 2010, the first employee

survey showed that the company’s guiding

principle is put into practice at a very high level.

Our efforts in development services were also

acknowledged: After winning the Design Prize

Switzerland for the Aebi VT 450 in 2009, the

snow clearing vehicle TS 10000 of the Schmidt

Division was the only product in its category to

be awarded with the honour “Focus in Silver”

at the International Design Award Baden-Würt-

temberg in 2010.

SUSTAINABILITY - INTRODUCTION

Germany 20%

Others 16%

Switzerland 12%

Netherlands 9%

England 8%

France 7%

Russia 7%

Spain 6%

Italy 6%

Austria 5%

Poland 4%

Sales by countries in 2010

26

Customers

The customers of Aebi Schmidt come from a

wide range of backgrounds. This includes com-

munities and public administrations, airports,

business service providers and agriculture as

well as the military and the industrial sector.

Aebi Schmidt has many years of experience

with these customer groups and distinguishes

itself by its clear customer focus. Aebi Schmidt

sets high standards for its performance in this

area and is dedicated to being a leader in pro-

duct quality, know-how, consulting and overall

service by creating a strong customer relati-

onship.

Competent application thanks to expert

training

Maintaining good relations with the operators

of its vehicles and products is of great impor-

tance to Aebi Schmidt. As a manufacturer of in-

novative equipment, it is becoming increasingly

important to provide customers with hands-on

instruction to ensure ideal application of pro-

ducts. During this reporting year, a total of 400

customers in Germany and 800 customers

in the Netherlands received training. There are

also plans to expand the training concepts

into other core markets. The most important

instructional topics of this reporting year were

primarily the use of functions, drive models and

specific settings of the available sweepers

and spreaders as well as topics in the area of

vehicle technologies.

Customer safety as a top priority

All products that leave our facilities have to

meet highest quality standards for the health

and safety of our customers. The correspon-

ding safety criteria are taken into account at all

stages; from development to application and

disposal of products. The components of our

products are systematically checked. Additio-

nally, all products are subject to final inspection

and product audits are performed on a regular

basis. All self-propelled vehicles are licensed

either by individual homologation (Schmidt pro-

ducts) or type homologation with EU Type Ap-

proval (Aebi products). Within the homologation

process, the compliance with legal require-

ments and standards is checked by state

authorities.

High customer satisfaction in terms of

product quality

Customer satisfaction has been measured

on an annual basis since 2010. The level of

customer satisfaction is recorded in terms of

product quality, customer care & service, sales

& marketing and order processing. In the

reporting year, more than 500 customers were

asked to participate in a survey conducted

by Aebi Schmidt. The results indicate a high

level of satisfaction with the customer service.

Product quality and functionality also received

very positive feedback. The survey showed

room for improvement particularly as far as

delivery times of spare parts are concerned,

which is why Aebi Schmidt will be placing

special emphasis on continually improving

delivery times in the upcoming year.

Direct feedback for quality assurance

Customer feedback is very important to Aebi

Schmidt. This is why the reporting year 2010

saw the reintroduction of end-of-season

meetings between the sales, development and

product management departments. The aim

of these meetings is to identify room for

improvement in product development. Aspects

that are of particular interest to our customers

can thereby be incorporated into product

development. In the reporting year 2010,

primarily service-related customer suggestions

were put into practice. At the same time,

the quality management was reinforced by

introducing a new warranty process. This

ensures that all information relating to warranty

claims is forwarded by the sales organisations

to the production facilities so that quality

improvements can be directly integrated into

the production process.

SUSTAINABILITY - CUSTOMERS

27

SUSTAINABILITY - EMPLOYEES

Employees

Dedicated and qualified staff is crucial for the

economic success of Aebi Schmidt Holding AG.

Conversely, Aebi Schmidt has great responsibi-

lity as an employer. As of the end of 2010, Aebi

Schmidt employed a staff of 1,315 (2009:

1,300) full-time employees (FTE) worldwide. Its

production facilities in Switzerland, Germany,

the Netherlands and Poland have a total of

1,137 FTEs (2009: 1,084 FTE), 167 FTE (2009:

93 FTE) of which are fixed-term workers. 39

(2009: 42) employees were in training at that

time. Women accounted for 12.5% (2009:

13%), with 0.9% (2009: 1.0%) being employed

in management positions. In 2010, the average

fluctuation rate including reductions due to re-

tirement was 10.3% (2009: 9.06%).

Competencies through training and educa-

tion

The most important elements of the personnel

strategy are staff competencies that were

developed on the basis of the corporate

strategy, the corporate vision and the corporate

guiding principle. These competencies repre-

sent the company’s central potential for inno-

vation and a carefully designed competency

model is of great significance to Aebi Schmidt.

Based on this approach, Aebi Schmidt has

developed a training programme for its ma-

nagement staff titled “Lead the Change” to

support the management staff in its strategic

and operational responsibilities and to contri-

bute to a common leadership philosophy within

the company. A total of 170 management staff

members participated in this training in 2009

and 2010. Aebi Schmidt will continue to expand

its staff training and education in the future:

A sales training for all office and field staff is

planned for 2011.

In dialogue with the employees

In order to ideally visualise and harness the

potential and competencies of its staff, Aebi

Schmidt introduced appraisal interviews in

August 2009. Appraisal interviews are designed

to evaluate competencies and deduce measu-

res for staff training and education at all levels

as well as systematic staff development.

Aebi Schmidt conducts two types of staff

interviews: the potential assessment interview

(ICD) for management staff at all levels and

employees with leadership potential and

the appraisal interview for employees at all

remaining levels. At the beginning of each year,

goals are defined and agreed upon; and at the

end the year, the achievements are evaluated

to determine possible variable remuneration.

Altogether, 81.6% (2009: 75.0%) of all staff

members participated in the management and

employee interviews.

Safety and protection as a top priority

Aebi Schmidt places a strong emphasis on

creating a safe work environment. Before staff

members start their employment, they receive

Employees by countries as of the end of 2010

Switzerland

14%

16%

21% 18%

31%

Others

Netherlands

Poland

Germany

Employees by functions as of the end of 2010

12%

10%

25%42%

Production

Sales

Development

After Sales

Administration

8%Trainees

3%

28

thorough instructions on safe practices in the

workplace. Safety inspectors are provided with

both internal and external training including

regular safety inspections. In the event that a

workplace accident does happen, an accident

investigation will be carried out and necessary

measures will be taken for future accident

prevention. In the reporting year 2010, a total

of 61 workplace accidents were reported,

some of which required medical attention (14

in Germany, 22 in the Netherlands, 15 in

Poland, 10 in Switzerland). When measured

in days, there were altogether 502 missed work

days. In addition to workplace safety, health-

care also plays an essential role. Aebi Schmidt

offers its staff occupational health services

such as annual flu vaccination, for example.

Furthermore, various health initiatives including

health awareness days and back exercise

courses are planned for 2011 at the facility in

St. Blasien, Germany, in cooperation with he-

alth insurance carriers.

Behaviour standards are set out in the employ-

ment agreement and in the code of conduct,

which prohibits discrimination based on age,

country of origin, religion or gender. Violations

can be reported in confidence to the chief

compliance officer of Aebi Schmidt. In the

year under review, however, no complaints

or incidents were reported.

Employee satisfaction

In the reporting year 2010, an employee survey

was carried out for the first time at its four

production sites in Germany, the Netherlands,

Poland and Switzerland, respectively. The

primary goal of the survey was to evaluate

employee satisfaction. It contained various

questions from categories such as corporate

culture, leadership culture, workplace, working

environment and others, with primary focus on

Aebi Schmidt’s reputation as an employer,

the likelihood to recommend the company to

others and its perceived image in general. Alto-

gether, more than 1,100 employees received

an employee-satisfaction questionnaire. The

survey’s highly positive results show that Aebi

Schmidt is on the right track, not least because

of the numerous projects that have already

been launched, such as its leadership training

programme “Lead the Change” or the intro-

duction of appraisal interviews. The employees

in Germany as well as Switzerland were

particularly pleased with the good relations

between staff members and described their

work as being diverse and interesting. Never-

theless, they saw room for improvement

especially as far as further training opportuni-

ties are concerned.

SUSTAINABILITY - EMPLOYEES

SUSTAINABILITY - ENVIRONMENT

Environmental performance of Aebi Schmidt

products

Environmental considerations are of great im-

portance to Aebi Schmidt and are therefore di-

rectly incorporated into product development.

Environmentally friendly products additionally

have a clear market advantage, particularly

among customers in the municipal sector,

where strict environmental regulations are

becoming increasingly prevalent. Aebi Schmidt

is making an effort to continually lower the

energy consumption of its engines by employ-

ing efficient drive systems and exploring the

possibilities of partial substitution of fossil fuels.

Compliance with the emission regulations

Euro5 and Euromot 3B and the use of particle

filters to remove particulate matter are impor-

tant elements of its environmental strategy.

Moreover, Aebi Schmidt is committed to redu-

cing the required amount of salt in winter

service vehicles by employing more efficient

application techniques, and minimizing the

release of dust in sweepers. In order not to

potentially expose the environment to harmful

motor oil, the transmissions and engines of

Aebi Schmidt vehicles are lubricated with

biodegradable motor oil whenever possible, so

that in the event of leakage the environmental

burden can be kept at minimum. Certain con-

struction components such as in the spreader

consist up to 96% of recycling materials.

The environmental performance of Aebi

Schmidt in the four business areas below is as

follows:

Winter service

The efficient use of road salt is a top priority in

winter service to keep the resulting environ-

mental burden at minimum. The Thermo-Logic

system takes environmental circumstances into

account and makes it possible to reduce salt

expenditure by up to 15%. Furthermore, pilot

studies have been initiated on the subjects of

combination vehicles and liquid de-icers as well

as projects on the reduction of particulate

matter. The winter service products have a good

price/performance ratio and a high-quality image

on the market. The compatibility of the indivi-

dual machine components with various carrier

vehicles creates high customer value.

Summer service

The issue of particulate matter and the

introduction of the new Euro 5 emission guide-

line have a major impact on the demand beha-

viour regarding summer service products. The

latest generation of sweepers has considerable

environmental advantages and quality charac-

teristics: Multi-functional high-performance

vehicles in the higher price range reduce the

release of dust on the basis of the Coanda

effect. All compact sweepers are equipped with

Euro 5-compliant low-emission engines featu-

ring PM10 particulate matter certification.

Owing to a flow-optimized suction inlet and

noise-reducing components, they are highly

efficient and quiet-running.

Agriculture

Aebi Schmidt’s range of vehicles for difficult

terrain is based on state-of-the-art tractor tech-

nology. The latest vehicles are equipped with in-

telligent electronic control systems to maintain

an ideal balance between engine performance

and application. The Terratrac TT275 additio-

nally features an ECO-drive mode to enable lo-

wer fuel consumption, smooth engine perfor-

mance and minimal engine noise in the driver’s

cab. The use of increasingly large and heavy

agricultural vehicles is causing considerable soil

compaction, which reduces the soil’s ability to

absorb water and affects its overall quality. By

employing lightweight designs and construc-

tion materials, Aebi vehicles are optimised in

terms of soil protection.

Airports

Reliability, efficiency and speed are key factors

for airport services. The precise dosing techni-

ques and the high performance of vehicles for

the application of solid de-icing agents make it

possible to quickly establish safe conditions on

icy surfaces. Schmidt spraying vehicles preci-

sely apply liquid de-icing agents in exact, sur-

face-covering doses. The Airport-Logic system

30

prevents excess spraying of surfaces and en-

ables the efficient use of de-icing agents. With

its Green TJS model, which was delivered to Ar-

landa Airport (Sweden) in late 2010, Schmidt in-

troduced a particularly environmentally-friendly

vehicle to the market. By employing Agro-Die-

sel and biogas, its dual-fuel Volvo D9 engine

even enables CO2-neutral performance.

Corporate environmental performance

Comprehensive safety and resource manage-

ment are key elements of the production pro-

cess at Aebi Schmidt facilities. For the first

time, Aebi Schmidt is publishing its environ-

mental performance data for its facilities in

Burgdorf (Switzerland), St. Blasien (Germany),

Holten (Netherlands) und Kielce (Poland):

In 2010, total energy consumption and waste

generation rose by roughly 6% due to produc-

tion increases and various formerly external

production processes, which have been perfor-

med in-house since 2010.


Environmental performance data:

Unit 2010 2009

Energy Total energy consumption MWh 21'998 20'687

Direct energy:

Fuel oil 1) MWh 4'814 6'741

Natural gas (stationary) 1) MWh 4'781 2'754

Diesel (stationär) 2) MWh 8 33

Diesel (vehicles) MWh 4'627 4'253

Petrol (vehicles) MWh 2'496 2'543

Liquefied petroleum gas (LPG) 3) MWh 104 67

Indirect energy:

Electricity consumption 3) MWh 5'168 4'295

Water Potable water m³ 9'457 10'666

Service/process water 4) m³ 25 156'265

Waste water m³ 9'005 10'666

Waste Total waste t 705 666

in combustion t 106 180

in waste recycling t 95 84

in landfill t 39 8

in external recycling t 465 394

other 5) t 0.1 0.2

1) The long and cold winter led to increased heating energy consumption. The new facility in Burgdorf is heated with natural gas instead of fuel oil, which was used in the past.

2) for emergency backup generators 3) At the facility in Holten, a powder-coating unit with an incorporated oven, a welding shop and a sandblasting unit were put into operation, causing an increase in natural gas/ liquefied petroleum gas and electricity consumption. 4) Service water for testing airport spraying vehicles. The significant reduction in process water consumption can be attributed to the closing of the heat-treatment shop at theBurgdorf facility and the repair of a leak in Holten.5) Absorption and filter materials, cleaning cloths, protective wear

31


Optimised processes save resource

Optimised processes are particularly important

to ensure fast production and low manufactu-

ring and storage costs while making efficient

use of energy and other resources. At the new

facility in Burgdorf, the assembly process has

been restructured and centralised on one floor.

Internal transport distances are thereby shorte-

ned and duplicate process elements are redu-

ced. For instance, several decentralised air

compressors have been replaced by a one

large, energy-efficient compressor.

Avoiding packaging material and transport costs

are further measures to improve the environ-

mental production performance. CO2 emissi-

ons are additionally reduced by insourcing as

well as by primarily purchasing gas in unbottled

form. Wrapping and padding materials of com-

ponent shipments are collected and, if possi-

ble, handed over to Aebi Schmidt’s freight

forwarder for re-use.

32

Fair and responsible local partners

Aebi Schmidt makes a contribution to its busi-

ness locations as both an employer and an eco-

nomic factor. With a staff of more than 200

employees, the Aebi Division located in Burg-

dorf, a canton of Bern, Switzerland, is regarded

as an important regional employer by the po-

pulation of Burgdorf and the greater Emmental

area. Almost all suppliers are located in the

immediate vicinity, which enables greater flexi-

bility and efficiency for the company. Regular

visits to regional partners and the participation

in the Emmental trade and industry association

as member of the management board maintain

strong partnerships. Aebi Schmidt also takes

care to ensure that its workforce is knowled-

geable about the local market. More than 75%

of the Aebi Division’s employees are therefore

from the immediate vicinity of the Emmental

region. The significance of Aebi as a regional

employer was further strengthened by the ef-

forts the city of Burgdorf made to secure the

construction of the new Aebi facility in Burg-

dorf. The Schmidt Division’s three business

locations, St. Blasien (Germany), Holten (Net-

herlands) and Kielce (Poland), are firmly rooted

in their local communities. This also generates

profit for a network of smaller suppliers in these

regions, who partly provide finishing services

for Schmidt. Great care is also taken to main-

tain strong relations with community represen-

tatives and suppliers.

Further social contributions are made in the

form of sponsoring. In cooperation with Stadler

Rail, Aebi sponsored the ESAF 2010 (Eidge-

nössisches Schwing- und Älplerfest) as one of

its major sponsors. Additionally, smaller finan-

cial and material donations are made to the SAZ

training and work centre for disabled people in

Burgdorf, which also receives small orders

from time to time. Regional sponsoring is also

taking place at the business location in Holten

(Netherlands) in connection to its workforce.

The primary focus is on sporting events, inclu-

ding the sponsorships of the Holten Triathlon

Organisation for the European Triathlon Cham-

pionship in 2009 and the KNSB speed skating

team in 2010, which also provides entertain-

ment for customer activities.

Fair play – an important principle

Aebi Schmidt takes great care to ensure fair

treatment of social protagonists such as asso-

ciations or competitors. The code of conduct

sets out the corresponding rules of behaviour,

which are verified within the scope of risk ma-

nagement.

There were no incidents of corruption at Aebi

Schmidt up to and including the reporting year

2010. During the year under review, Aebi

Schmidt was not involved in any lawsuits for

anti-competitive practices, nor were there any

fines or non-monetary penalties for violations

of other rules or regulations.

Good supplier relations as a strong founda-

tion

Maintaining good relations with its roughly

2,000 suppliers is a critical success factor for

Aebi Schmidt. The facilities’ range of suppliers

includes small, medium-sized and large enter-

prises from a variety of business sectors. The

primary focus is on material groups such as

steel, stainless steel, welding parts, engines

and hydraulic components. In addition to steel

and stainless steel as raw materials, purchasing

includes assembly components as well as DIN

and standardised parts. The purchase costs in

the reporting year amounted to approx. EURO

120 million. Starting in 2011, an extended cate-

gorisation of suppliers according to risk of loss

and purchase volume is to be made. Educating

employees about the selection process of sup-

pliers and the timely integration of purchasing

into development projects reduces the risks for

Aebi Schmidt and promotes good relations with

important suppliers. The risk of suppliers viola-

ting Aebi Schmidt’s environmental and social

standards is rather small. Nevertheless, related

criteria such as the use of reusable packaging

and eco-friendly packaging materials are taken

into account in the evaluation of suppliers whe-

never possible.

SUSTAINABILITY - COMMUNITY

33

SUSTAINABILITY - GRI

34

Imprint:

Publisher:

Aebi Schmidt Holding AG

Thurgauerstrasse 40

CH - 8050 Zurich

Tel: + 41 44 308 58 00

Fax: + 41 44 308 58 30

Internet: www.aebi-schmidt.com

Consulting Sustainability Report

sustainserv GmbH,

Zürich (CH) und Boston (US)

Copyright:

Copyright 2010 Aebi Schmidt Holding AG. All

rights reserved. All texts, pictures, graphic de-

sign, including arrangements thereof are sub-

ject to the laws of copyright and other laws

concerning the protection of intellectual

property rights. The contents may not be co-

pied, distributed, altered or made available to

third parties for commercial purposes. Some

pages of the Aebi Schmidt Holding AG Annual

Report 2010 contain pictures which are subject

to the copyright of those people who provided

them.

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Documents

Annual Report 2010 - Aebi Schmidt